CHIYODA CORPORATION
Consolidated Financial Results

for the Six-Month Period Ended September 30, 2002

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

Summary of Financial Statements (Consolidated)
for the Six-Month Period Ended September 30, 2002

Listed Exchanges
Head Office
Stock CodeInquiries

Tokyo, Osaka, Nagoya, and Sapporo
Kanagawa, Japan
6366
Kazuo Tokunaga,
General Manager, Accounting Department+81 45 506 7538
November 21, 2002

Telephone
Date of the Meeting of the Board of Directors
Concerning Consolidated Settlementof Year-End Accounts
U.S. GAAP Accounting Principles

Not adopted

Consolidated Business Results
for the Six-Month Period Ended September 30, 2002

1) Consolidated Business Results
Apr. 1, 2002 –Sept. 30, 2002
Change (%)

Net Sales........................................................
Operating Profit（Loss） ...........................
Ordinary Profit（Loss）.............................
Net Income....................................................
Net Income per Share (¥) ............................
Fully Diluted Net Income per Share (¥)...

69,344
1,029
1,631
2,479
13.38
13.36

(3.2)
—
—
—

Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
Change (%)

71,620(1,930)(1,770)
214
1.15
—

10.5
—
—
—

Apr. 1, 2001 –Mar. 31, 2002

141,505(5,146)(3,366)121
0.65—(Notes)(1)Gain from investments in subsidiaries and affiliates accounted for by the equity method:
Six-month period ended September 30, 2002:
818 million yen
Six-month period ended September 30, 2001:
397 million yen
Year ended March 31, 2002:
526 million yen(2)
Average number of outstanding shares (consolidated) during the period:
Six-month period ended September 30, 2002:
185,348,769 shares
Six-month period ended September 30, 2001:
185,427,676 sharesYear ended March 31, 2002:
185,415,321 shares(3)
Changes to accounting principles:
Changes to accounting principles are noted on page 21(4)Percentages for net sales, operating income, recurring income, and net income represent year-on-year changes.

2) Changes in Consolidated Financial Position
Apr. 1, 2002 –Sep. 30, 2002

Total Assets..................................................... ........................
Shareholders’ Equity..................................... ........................
Equity Ratio (%)............................................. ........................
Shareholders’ Equity Per Share (¥)............. ........................

134,500
17,127
12.7
92.42

Millions of Yen
Apr. 1, 2001 –Sep. 30, 2001

130,943
15,112
11.5
81.50

April 1, 2001 –Mar. 31, 2002

129,314
15,103
11.7
81.47(Notes)Outstanding shares (consolidated) at the end of the period:
Six-month period ended September 30, 2002:
Six-month period ended September 30, 2001:
Year ended March 31, 2001:

185,321,760 shares
185,427,676 shares
185,388,008 shares23) Consolidated Cash Flows
Apr. 1, 2002 –Sep. 30, 2002

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

Millions of Yen
Apr. 1, 2001 –Sep. 30, 2001

5,103
(289)
(4,591)
38,828

April 1, 2001 –Mar. 31, 2002

4,248
365
(6,192)32,546

10,418(204)(5,875)38,6774) Consolidated Subsidiaries and Affiliates Accounted forby the Equity Method
Number of consolidated subsidiaries:
Number of non-consolidated subsidiaries accounted for by the equity method:
Number of affiliates accounted for by the equity method:

25075) Changes in the Scope of Consolidation and Companies
Accounted for by the Equity Method
Consolidated subsidiaries:(Newly included)(Excluded)(Newly included)(Excluded)

Companies accounted for by the equity method:

1
3
1
0

Consolidated Operations Forecast
for the Year Ending March 31, 2003
Millions of Yen
Apr. 1, 2002 – Mar. 31, 2003

Net Sales................................................................................................................
Ordinary Profit.....................................................................................................
Net Income............................................................................................................

170,000
1,900
1,800

(Note)
Projected net income per share for the entire accounting period ending March 31, 2003:

9.71 yen

Any forward-looking statements made in this report represent management’s best judgment as to what may occur in the future.
However, corporate developments at the Company and actual results for the current and future fiscal periods will depend on anumber of economic, competitive, and other factors, including some that will be outside the control of the Company. Suchfactors could cause the Company’s actual results for future periods to differ materially from those expressed in any forwardlooking statements made in this report.

3

State of the GroupThe Company is composed of the parent company, 33 subsidiaries, and 12 affiliated companies. The core functionof the engineering group is to provide customers with the most effective solutions for their needs. By combining
and deploying the resources of each group company, the Company is able to flexibly meet current demand andthe needs of each region and its customers. Industry segmentation has been divided into Engineering Businesses
and Other Businesses, and the corporate structure is outlined in the diagram below.
Chiyoda Corporation
Planning, designing, construction, supplying, and testing for various plants
Engineering Businesses
Domestic Engineering*Chiyoda Keiso Co., Ltd.
Electrical, instrumentation installation*Chiyoda Kosho Co., Ltd
Domestic small/medium-scale construction*Chiyoda Techno Ace Co., Ltd.
Research, medical/health-related
construction
Consulting*U-Tech Consulting Co., Ltd.
Overall consulting for facilities, etc., of eachindustry
Overseas Procurement*Chiyoda International Limited
Mechanical components procurement andsales activities

Overseas Businesses*Chiyoda Singapore (Pte) Limited*Chiyoda International Corporation*Chiyoda Malaysia Sdn. Bhd.
+Chiyoda Petrostar Ltd.
*Chiyoda (Thailand) Limited, P.T.
*Chiyoda International Indonesia*C&E Corporation*Chiyoda Public Works Co., Ltd.
+L&T Chiyoda Ltd.
Advanced Engineering*Chiyoda Advanced Solutions Corporation
Overall consulting and provision of viable
solutions in advanced technological fields
including computer-aided engineering
analysis, plant life-cycle engineering, risk
management, space-related industries byintegrating technologies of excellence.

Other Businesses
Finance, Accounting, Tax*Arrow Business Consulting Corporation
Overall consulting for finance, accounting,and tax services, lease operations etc.

Air Freight Agent*Arrowhead International Corporation
Travel industry, air freight agent industry

Computer Management System
Development+IT Engineering Limited
Computer system software development
and sales

Overseas Management / Finance*Chiyoda Asia Pacific (Pte) Limited
Overall consulting for management andfinance

Human Resources and Training*Arrow Human Resources Co., Ltd.
Executive recruitment, temporary
employment, education research*：Consolidated subsidiary +：Affiliated company accounted for by the equity method
As of September 30, 2002, Arrow Human Resources Co., Ltd. was a consolidated subsidiary. Since then, however,
the Company sold a 51% stake in Arrow Human Resources to Mates Co., Ltd. As a result Arrow Human Resources
is now an affiliated company.

4Management Policies
1. Basic Management Policies
Chiyoda’s business philosophy is to employ technology to contribute to the development of society and theeconomy. We will continue providing engineering services for industrial plants in the areas of petroleum,
petrochemical, and energy. In the future, we aim to develop services such as design, procurement, operations,and after-service support across group operations at domestic and overseas enterprises in order to provide highquality services. By devoting ourselves to building customer trust in Japan and overseas we aim to strengthen thefoundation of our business.

2. Medium- and Long-Term Business Strategy
Chiyoda has a solid business foundation in Japan and overseas. The Company delivers stable earnings and aims
to become a leading engineering company. In addition to eliminating accumulated losses as soon as possible,
Chiyoda intends to provide an ample return to shareholders, to contribute to society, and to improve employee
benefits. As such the Company plans to increase orders and to improve the profitability of its construction
divisions.

Increasing Orders
Chiyoda operates in the areas of LNG, ethylene, and special chemicals where it maintains technological superiority.
To increase orders from our main customers in the public and private sectors, we established a competitive
corporate structure by focusing the deployment of corporate resources, fostering IT integration across the group,and promoting overseas Low Cost Engineering Centers (LCE).

Stabilizing Earnings
Chiyoda aims to minimize negative market effects and to transform its business structure so as to steadily
increase earnings. Specific measures include reducing fixed costs including the workforce at headquarters to
1,100 as of March 31, 2002. Even with this reduced headcount we received orders of more than 150 billion yen
on a non-consolidated basis. We achieved this by closely coordinating group enterprises, establishing a system of
expanded LCE projects, and building relationships with strategic partners. Furthermore, general administrativeand bidding costs fell from the same period the year before following the introduction of an overall budget
program.

Building Alliances
To strengthen business development and secure its technological advantage, the Company has developed
alliances in many areas of technology and administration with large domestic and overseas corporations.

Pioneering Strategic Business Sectors

As part of its medium- and long-term plans, Chiyoda is studying ways to move its business forward into areas ofhigh added value. One area currently under consideration is software development and we have established aninternal committee to investigate developing a new type of engineering business. To this end Chiyoda’s advanced
business division, which focuses on developing simulation technology and computer analysis technology for plantengineering, was spun off and made into an independent company called Chiyoda Advanced Solutions Inc. (ChAS),
which develops high value-added businesses in leading technology areas.

Current Status of the Restructuring Plan
In March 2001 Chiyoda released a Restructuring Plan. Thanks to the support and understanding of ourshareholders, customers, partners, and associated financial institutions the results of this plan are either onschedule or, in some cases, better than expected.
By the end of September 30, 2001, Chiyoda had already completed on schedule certain areas of financial
restructuring, a reduction of fixed costs and personnel, and a review of business sectors, while a review of groupcompanies was completed as of September 30, 2002.
As for increasing orders, for the year to March 31, 2002, the Company secured orders on a non-consolidated
basis of 180 billion yen, 30 billion yen higher than expected, while orders for the year to March 31, 2003 are
expected to rise a little above 180 billion yen.
As noted above, business alliances have helped to strengthen the organization and have already yielded
measurable results. We are making extra efforts to continue to improve results.
Profit for the year to March 31, 2002 was as expected while we expect recurring profit and net income for the fullyear ending March 31, 2003, to be better than originally forecast.

5

3. Business Targets
The company aims to report an ordinary profit for the year ending March 31, 2003 and to eliminate accumulated
losses for the year ending March 2006. In order to reach our goals as soon as possible, we launched a companywide program called “Project Super X.”

4. Basic Policies Pertaining to Profit Redistribution
Chiyoda is transforming its business structure to improve flexibility in regard to changes in the economic
environment and to stabilize earnings growth and feels a great responsibility to all of its shareholders.
Once we have completed strengthening the financial structure we will of course redistribute profit to shareholders
that reflects our business performance and we are making every effort to achieve stable dividend payments assoon as possible.

5. Management Targets
Chiyoda has begun implementation of various measures of the Restructuring Plan that was released in March
2001. These measures include securing order targets and improving the profitability of the construction division.
The results for the period under review are as follows.

Strengthening CompetitivenessAchieved improvement in competitiveness through reducing design costs by expanding functions and increasing
key personnel at LCEs.
Acetic acid has drawn attention for its purported ability to stretch petro-fibers, plastics, and others. In accordancewith Chiyoda’s goal of enhancing its competitive advantage through superior technology, the Company has
succeeded in commercializing its methanol-based acetic acid production technology (ACETICA ®). Chiyoda signed
a contract with China’s Guizhou Crystal Organic Chemical Group Co. to license the technology and to provide
process design package (PDP) for the first commercial plant adopting the technology.

Integrating Group Companies
Chiyoda is redefining the core business of each group company, clarifying their functions and targets. Every threemonths, the accomplishments and business condition of each group company is reviewed in order to eliminate
ineffective activities and the duplication of functions within the group. This creates a total service network founded
on a truly unified group.

Securing Human Resources
Chiyoda has built relationships with Arrow Human Resources Inc., a wholly-owned subsidiary company known for
its strength in the placement of engineering and technical personnel, and Mates Co. Ltd., a large human resources
company related to the trading industry. By strengthening the business structure of Arrow Human Resources Inc.,
the Company intends to secure external manpower resources.

IT Development

In addition to developing a shared IT platform centered on project execution, the Company has installed a virtual
single office operation system for all domestic and overseas group companies. The system works through ashared IT platform to allow smooth business execution as if all business were conducted from a single location.
Chiyoda is also developing an integrated IT management system for group companies and which should becompleted by March 2004.

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

6. Implementing a Business Management Organization
The management of each project contains numerous inherent risks that must be identified accurately as soon as
possible. In order to devise accurate risk-prevention mechanisms, Chiyoda strengthened its Design Review
System and Milestone Monitoring System, both of which are carried out at each phase of a project.
In addition, Chiyoda also improved the management division’s double-checking function known as the Cold Eye
Review system, to strengthen verification functions and transparency.

6

Information assets deemed essential for Chiyoda's business are handled and stored systematically according to
the guidelines of "Chiyoda Information Security Management System," which conforms to BS7799, Part 2, aworldwide information security management system standard created by BSI of the U.K.
Chiyoda has restructured the risk management for the business organization. A manager has been appointed to
manage the prevention of and to minimize the damage resulting from any emergencies. A crisis manager has also
been appointed to activate quick and appropriate steps to limit the spread of a crisis. Thus, a clearly definedsystem has been implemented for risk and crisis management.

Business Results and Financial Conditions
1. Consolidated Business Results for the Six-Month Period Ended
September 30, 2002
Japan’s economy continued to stagnate during the six-month period ended September 30, 2002 due to continuing
uncertainty about the outlook for the global economy, and because of a slump in stock prices and problems
relating to non-performing loans.
Overseas, in Europe and the U.S., personal consumption remained sluggish despite a comparatively strong base,while concern regarding the outlook for global economy is increasing due to factors such as the slump in the IT
industry, doubts about corporate accounting, and uncertainty about the situation in Iraq and other parts of the
Middle East.
In Asia, China position as the world’s growth center remains unchanged, and the market continues to expand
following the country’s accession to the World Trade Organization. In ASEAN countries and other regions inSouth-East Asia, political trends have stabilized and the region continues to recover from the effects of thecurrency crisis of 1997-1998.
Despite these positive factors, however, it is hard to claim this is a strong recovery, partly because of thenegative effects of the economies of Europe and the U.S. On the other hand, Middle Eastern economies remainstrong thanks to the recent rises in the price of crude oil.
The Japanese plant market has benefited from capital investment by pharmaceuticals companies looking toincrease their international competitiveness by “scrapping and building” their manufacturing facilities. On thewhole, however, demand has been weak because of economic weakness.
In the chemical and general industrial facilities field, capital investment continued to shift to China, while in theenergy industry investment in production facilities floundered as a result of weak demand. On the other hand,
capital investment was as expected in national LPG storage, LNG receiving terminals and other related areas.
Overseas, the demand for production facilities in China and the Middle East continued to recover, while capital
investment related to environmental projects increased.
Capital investment related to the production of clean automobile fuels rose, in particular in South-East Asia, while
there was an increase in projects relating to natural gas and LNG (liquid natural gas), the main fuels used in clean
power generation. Projects targeting the commercialization of next-generation clean energy sources such as GTL(Gas to Liquid) and DME (dimethyl ether).
Petrochemical projects increased as a result of the recovery in demand for end products and activity was seen inareas such as large-scale capital investment in natural gas-producing countries seeking lower-priced raw
materials. With an eye on the Chinese market, investment in China also increased.
Within this operating backdrop, Chiyoda focused its energies into securing new orders. As a result, consolidated
domestic new orders rose 6.8% to 41.5 billion yen while overseas new orders fell 0.9% to 59.7 billion yen. This
led to a total of 101.2 billion yen of new orders awarded to Chiyoda during the six-month period ended
September 2002, a gain from the same period the year before of 2.1%.
The main new orders received were as follows:
・A contract to construct a methanol plant in Saudi Arabia
・The design and construction of a national LPG storage project (Namikata terminal and Kurashiki terminal)
・The addition of the No. 4 train for an LNG liquefaction plant in Qatar
・The renovation of a specialty chemicals facility for Mitsubishi Gas Chemical Co., Inc.
Revenues from domestic construction contracts fell 44.7% to 30.4 billion yen, while revenue from overseas
construction contracts rose 134.9% to 38.9 billion yen. Total revenue from construction contracts came to 69.3
billion yen, a decrease of 3.2% from the year before.

7

The main construction contracts were as follows:
・The addition of the No. 3 train for an LNG liquefaction plant in Qatar
・The renovation of Pertamina LNG facility in Indonesia
・The construction of an LPG underground storage terminal in China for British Petroleum Plc.
・Construction of an ash processing facility for the new Isogo Thermal Power Station Unit No.1 (J-Power/EPDC)
・The fortification of a specialty chemicals plant for Sumika Bayer Urethane Co., Ltd.
・Work on a Gas/Oil Ultra Deep HDS for Nippon Oil Corp.
In profits and losses, as a result of improvements to contract profitability, gross profit came to 5.4 billion yen,while operating profit came to 1.0 billion yen and ordinary profit was 1.6 billion yen. Furthermore, because of the
profit from a reversal of allowance for doubtful accounts following a collection of long-term receivables from
Nigerian National Petroleum Corporation and some other factors, net income for the six-month period ended
September 2002 was 2.4 billion yen.
Meanwhile, on a non-consolidated basis, the Company secured 28.7 billion yen in new domestic orders, 16.4%
higher than the year before, and 52.2 billion yen in overseas new orders, a decrease of 6.5%, for a total of 80.9
billion yen, an increase of 0.5%.
In profits and losses, revenue from domestic construction contracts was 14.0 billion yen, a decrease of 65.3%,
and 35.9 billion yen from overseas construction contracts, an increase of 217.6%, for a total of 50.0 billion yen, adecrease of 3.5%.
Gross profit was 3.5 billion yen, operating profit was 0.2 billion yen, ordinary profit was 1.8 billion yen, and net
income for the six-month period ended September 2002 was 2.9 billion yen.

Change in Business Results (Consolidated)
Apr. 1, 2002 –Sept. 30, 2002

New Orders
Construction contracts
Gross Profit
Operating profit
Ordinary profit
Net Income

101.2
69.3
5.4
1.0
1.6
2.4

Billions of Yen
Apr. 1, 2001 –Sept. 30, 2001

99.1
71.6
2.9
(1.9)
(1.7)
0.2

Apr. 1, 2001 –Mar. 31, 2002

217.9
141.5
4.6
(5.1)
(3.3)
0.1

2. Financial Conditions for the Six-Month Period Ended
September 30, 2002
Assets, Liabilities, and Shareholder’s Equity as of September 30, 2002
AssetsTotal assets as of September 30, 2002 were 5.1 billion yen higher than at the end of March 2002. Specifically,
property, plant and equipment fell 2.8 billion yen due to a collection of long-term receivables from Nigerian
National Petroleum Corporation and other factors. Meanwhile, current assets increased by 8.0 billion yen.
Increases in cost of construction contracts in process due to an increase in the backlog of orders and posted
receivables for consumption tax refunds exceeded the decrease in ゛notes and accounts receivable゛ and ゛costs andestimated earnings on long-term construction contracts゛.

Liabilities
Despite a decrease of 4.5 billion yen in long- and short-term loans resulting from a repayment of loans, total
liabilities as of September 30, 2002 were 3.1 billion yen higher than at the end of March 2002, in part because of
an increase of 8.3 billion yen in advance receipts on construction contracts that resulted from strong movement in
new contracts.

Shareholder’s equity

Shareholder’s equity increased by 2.0 billion yen compared to the end of the previous fiscal year, due to a gain in
net income for the six-month period ended September 2002. Shareholders’ equity per total assets was 12.7%, an
improvement of 1.0 point compared to the end of the previous fiscal year.

8Cash Flow for the Six-Month Period Ended September 30, 2002
Net cash provided by operating activities
In addition to posting 2.4 billion yen in income for the six-month period ended September 2002, cash flow fromoperating activities (total increase or decrease for ゛notes and accounts receivable゛, ゛costs and estimated earnings
on long-term construction contracts゛, ゛costs of construction contracts in process゛, ゛trade payables゛, and ゛advancereceipts on construction contracts゛) showed an increase of 2.7 billion yen. As a result, net cash provided byoperating activities was 5.1 billion yen.

Net cash used in investing activities

There was some income from the sale of subsidiary company stocks and the recovery of long-term loans, but as aresult of special loans for employees and IT-related software investment, net cash used in investing activities was
200 million yen.

Net cash used in financing activities
Net cash used in financing activities was 4.5 billion yen due to repayment of loans.
As a result of the above factors, the balance of cash and cash equivalents as of the end of September 2002 was
38.8 billion yen, an increase of 100 million yen from a year before.

As of Sept. 30, 2002

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

Billions of Yen
As of Sept. 30, 2001

As of Mar. 31, 2002

134.5
117.3
17.1

130.9
115.8
15.1

129.3
114.2
15.1

5.1
(0.2)
(4.5)
0.4

4.2
0.3
(6.1)
0.3

10.4
(0.2)
(5.8)
38.6

*) Includes minority interests

3. Outlook for FY2002 Business Results
In Japan the economic slump is expected to continue due to delays in writing off non-performing loans by thebanking sector. On the other hand, new investment is expected to accompany changes in the businessenvironment, including industry reorganizations brought about by structural reform that is being accelerated by
the Japanese government.
Overseas, given the negative outlook for the U.S. economy, which drives the global economy, uncertainty
remains in regards to the environment for capital investment. Nevertheless, the LNG and ethylene markets,
where Chiyoda maintains technical superiority, continue to benefit from demand in China, South-East Asia, theMiddle East, and Europe, fueling projections for continued investment.
Based on the environment for orders described above, for the fiscal year ending March 2003, the Company
expects new orders to come to 220 billion yen, revenue from construction contracts of 170 billion yen,consolidated ordinary profit of 1.9 billion yen, and consolidated income of 1.8 billion yen (assuming an exchange
rate of 1 dollar = 122.60 yen).
These projections have been in regards to the basic design operations for LNG facility plans, an area where
Chiyoda has received many orders in the past. The Company will be able to conduct activities placing priority on
securing new orders, as these plans move into the actual construction stage.
Regarding non-consolidated new orders, the Company expects to be able to achieve its goal for the fiscal year of
180 billion yen in new orders. In terms of profits and losses, Chiyoda expects revenue from construction contracts
totaling 130 billion yen, ordinary profit of 1.8 billion yen, and income of 2.1 billion yen for FY2002.
The Company plans to suspend payment of year-end dividends.
[Cautions regarding Forward-looking Statements]
Please note that the Outlook for Business Results contained in these materials is comprised of future projections
based on various presuppositions, and that actual results may differ significantly from these projected results due
to a wide range of factors. We therefore ask that you refrain from making any judgments that are based only onthese projections.

9Financial Statements
1. Consolidated Balance Sheets
As of Sept. 30, 2002%

Millions of Yen
As of Sept. 30, 2001%

As of March 31, 2002%

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

40,09025,39230,943
263
8,914
5,505
(721)
110,387

Fixed Assets
Property, plant and equipment
Buildings and structures........................
Machinery and equipment ....................
Tools, furniture and fixtures .................
Land..........................................................
Accumulated depreciation ....................
Total property, plant and equipment...........

6,582
1,158
5,186
2,526
(8,350)
7,102

6,700
1,440
5,757
2,691
(9,021)
7,567

6,730
1,220
5,423
2,691
(8,523)
7,541

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

2,160

2,024

2,247

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

3,917
555
5,853
6,713
264
2,868
(5,323)
14,850

5,516
33
5,541
9,625
89
3,780
(6,550)18,037

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

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

24,112

17.9

27,62921.1

27,011

20.9

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

134,500

100.0

130,943100.0

129,314100.0

33,91636,59425,614
101

82.1

7,399
(313)
103,31378.9

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

79.1

10

As of Sept. 30, 2002%

Millions of Yen
As of Sept. 30, 2001%

As of March 31, 2002%

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

39,60813,020483
42,02812

43,62920,004415
28,60023

40,343
17,456488
33,713
17

961
1,250
800
5,456
103,621

77.0

1,893
1,247
—
6,322
102,135

78.0

834
1,217
—
6,845
100,915

78.0

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

10,528
11
2,433
211
85
13,2709.9

11,055
36
1,890
139
75
13,196

10.1

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

9.9

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

116,892

86.9

115,33188.1

113,718

87.9

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

480

0.4

498

0.4

492

0.4

12,027
5,818
(16)

8.9
4.3
(0.0)

11
(692)
(21)
17,127

0.0
(0.5)
(0.0)
12.7

12,027
5,818
17,846

9.2
4.4
13.6

12,027
5,818
17,846

9.3
4.5
13.8

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

(2,423)(1.9)(2,516)

(1.9)

3
(313)
(0)
(2,733)

0.0
(0.2)
(0.0)
(2.1)

(1)
(219)
(5)
(2,741)

(0.0)
(0.2)
(0.0)
(2.1)

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

15,112

11.5

15,10311.7

130,943100.0

129,314100.0

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

Liabilities, Minority Interests andShareholders’ Equity.....................................

134,500

100.0

11

2. Consolidated Statements of Income

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

Apr. 1, 2002 –Sept. 30, 2002
Ratio
(%)

Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
Ratio
(%)

69,34463,852
5,492

100.0
92.1
7.9

71,62068,631
2,988

100.0
95.8
4.2

141,505
136,825
4,679

100.0
96.7
3.3

4,462
1,029
—

6.4
1.5
—

4,919
—
1,930

6.9
—
(2.7)

9,826

6.9

5,146

(3.6)

Apr. 1, 2001 –Mar. 31, 2002
Ratio
(%)

147
20
—

251
10
—

645
16
870

—

66

436

818
263
1,250

1.8

397
201
927

1.3

526
269
2,765

1.9

284
242
121
648

0.9

419
208
138
766

1.1

844
—
140
984

0.7

1,631
—

2.4
—

—
1,770

—
(2.5)

—
3,366

—
(2.4)

—

—

2,871

314

1,385

1,385

—

362

964

—

800

800

383

383

1,461
239
2,015

—
2.9

4
2,936

4.1

32
6,436

4.6

12

2. Consolidated Statements of Income (Continued)

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

Apr. 1, 2002 –Sept. 30, 2002
Ratio
(%)

Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
Ratio
(%)

69,344

71,620Extraordinary Loss
Allowance for doubtful accounts..........
Loss on devaluation of
investment securities..............................
Loss on disposal of property
and land ...................................................
Loss on disposal of property,
plant and equipment ..............................
Loss on devaluation of golf
membership.............................................
Compensation payments .......................
Allowance for contingency loss ............
Other.........................................................
Total Extraordinary Loss ..............................
Income (loss) before income
taxes and minority interests ..........................
Income taxes current .....................................
Foreign tax refunded......................................
Income taxes deferred ....................................
Minority interests in net income...................
Net income ......................................................

2,677
888
(317)
(388)
15
2,479

100.0

100.0

Apr. 1, 2001 –Mar. 31, 2002
Ratio
(%)

141,505

—

40

580

—

116

334

—

190

143

75

—

—
—

800
94
970

66
76
—
2
492

1.4

3.9

(0.0)
3.6

673
461
—
(38)
36
214

0.7

0.9

(0.1)
0.3

—
—
150
1,208

1,860
1,786
—
(88)
41
121

100.0

0.9

1.3

(0.0)
0.1

13

3. Consolidated Statements of Retained Earnings
Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
AmountApr. 1, 2002 –Sept. 30, 2002
AmountAdditional Paid-in Capital
Additional Paid-in Capital at
Beginning of Period
Additional paid in capital at
beginning of period ........................................
Additional Paid-in Capital at
End of Period..................................................
Retained Earnings
Retained Earnings at Beginning of Period
Consolidated retained earnings at
beginning of period ........................................
Increase in Retained Earnings
From net income .............................................
From increase in consolidated
subsidiaries......................................................
Retained Earnings at End of Period ...........

Balance at Beginning of Period ...................
Decrease in Balance
From reversal of additional
paid-in capital .................................................
Increase in Balance
From increase in consolidated
subsidiaries......................................................
Net Income (Loss) ..........................................
Balance at End of Period...............................

Apr. 1, 2001 –Mar. 31, 2002
Amount

5,818
5,818

(2,516)
2,479
20
(16)

26,28826,288(23,654)(23,654)

3
(214)
2,423

3
(121)
2,516

14

4. Consolidated Statements of Cash FlowMillions of Yen
Apr. 1, 2001 –Sept. 30, 2001
AmountApr. 1, 2002 –Sept. 30, 2002
AmountCash from Operating Activities
Income (loss) before income
taxes and minority interests ..................
Depreciation and amortization .............
Decrease in allowancefor doubtful accounts .............................
Interest and dividend income ..............
Interest expense.......................................
Foreign exchange (net) ..........................
Equity in earnings
of associated companies.........................
Gain (loss) on salesof investment in securities .....................
Gain (loss) on salesof investment in subsidiaries ................
Gain on salesof intellectual property rights................
Loss on devaluationof investment securities..........................
Loss on sales and disposal of property,
plant and equipment ..............................
Gain on discharge of liabilities..............
Reversal of additional
retirement benefits to employees..........
Increase in trade notes
and accounts receivable .........................
Decrease in costs ofconstruction contracts in process ..........
Increase in trade notes
and accounts payable .............................
Increase in advance receipts
on construction contracts .......................
Decrease (increase) in
accrued bonuses ......................................
Increase in retirement
and severance benefits ...........................
Indemnity allowance forcompleted contracts................................
Increase in allowance forcontingency loss ......................................
Increase in consumption taxes
payable .....................................................
Other.........................................................
Subtotal ............................................................
Interest and dividend income ...............
Interest paid.............................................
Additional retirement benefits
paid to employees...................................
Gain on sale of intellectual
property rights ........................................
Income taxes paid ...................................
Net Cash Provided by (Used in)Operating Activities ......................................

Apr. 1, 2001 –Mar. 31, 2002
Amount

2,677
623

673
623

1,860
1,025

(1,187)
(168)
284
640

(561)
(261)
419
212

(192)
(661)
844
(493)

(818)

(397)

(526)

—

(66)

(436)

(314)

(1,385)(1,385)

—

(800)

(800)

50

116

334

75
—

157
—

143
(2,871)

—

(362)

(964)

2,187

(4,362)

4,651(7,033)

7,253

8,958

(734)

1,591

(1,694)8,315(2,034)

3,077

33

(192)

(222)

604

94

33

126

1,010

(47)

800

—

—

(1,961)
255
4,456
1,390
(364)

929
1,502
4,160
172
(281)

1,414
(961)
11,087
1,421
(594)

—

(143)

(577)

—
(379)

800
(458)

800
(1,718)

5,103

4,248

10,41815

4. Consolidated Statements of Cash Flow (Continued)
Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
AmountApr. 1, 2002 –Sept. 30, 2002
AmountCash Flow From Investing Activities
Payment for time deposits.....................
Proceeds from refundsof time deposits with maturities ...........
Payments for purchaseof investment securities .........................
Proceeds from salesof investment securities .........................
Purchase of investment
in consolidated subsidiaries ..................
Proceeds from salesof investment in subsidiaries
within the scope of consolidation .........
Purchase of property, plantand equipment ........................................
Proceeds from sale of property,
plant and equipment ..............................
Purchase of intangible fixed assets.......
Proceeds from saleof intangible fixed assets........................
Net decrease in short-term loans ..........
Long-term loans ......................................
Proceeds from collectionsof long-term loans...................................
Other.........................................................
Net Cash Provided by (Used in) Investing
Activities .........................................................

Apr. 1, 2001 –Mar. 31, 2002
Amount

(50)

(33)

(362)

489

395

409

(12)

(165)

(477)

2

525

1,152

—

—

(23)

115

748

748

(144)

(200)

(484)

127
(408)

31
(341)

112
(697)

—
14
(530)

1
43
（684)

4
52
(685)

0
107

0
45

0
47

(289)

365

(204)

Cash Flow From Financing Activities
Net decrease in short-termbank loans................................................
Proceeds from long-term debt ..............
Repayments of long-term debt .............
Other ........................................................
Net Cash Used in Financing Activities ......

(4,148)
0
(427)
（15）
（4,591)(5,914)
80
（358)
(0)
（6,192)(5,266)80(698)
8(5,875)

Foreign Currency Translation
Adjustments on Cashand Cash Equivalents ...................................

(271)

213

427

(48)

(1,365)

4,765

38,67733,912

33,912

200

—

—

—

(1)

(1)

38,82832,546

38,677Net Increase in Cashand Cash Equivalents ...................................
Cash and Cash Equivalents
at Beginning of Period ..................................
Increase in Cash and Cash Equivalents
Elimination From Consolidation ................
Decrease in Cash and Cash Equivalents
Elimination From Consolidation ...............
Cash and Cash Equivalents at End of
Period...............................................................

16

Segment Information
1. Industry Segments
The Company’s latest six-month period was from April 1, 2002 to September 30, 2002. The previous six-month
period was from April 1, 2001 to September 30, 2001, and the latest fiscal year was from April 1, 2001 to March
31, 2002. The main business of the Chiyoda Group is engineering that focuses on the planning, design,
construction, and operations assistance of public- and private-sector facilities, as well as facilities for pollution
prevention and environmental preservation and enhancement. In non-engineering businesses, there are no
segments that account for 10% or more in terms of either sales or operating profits, and as such these segments
have been omitted.

2. Geographic Segments
Latest Six-Month Period (From April 1, 2002 to September 30, 2002)
Millions of Yen

Revenues
Outside customers.............
Inter-segment .....................
Total ....................................
Operating expenses ...........
Operating Profit (Loss) ....

Japan

Asia

EuropeNorth
America

66,834
10,22577,05975,715
1,343

2,402
260
2,663
2,699
(35)

3
109
112
113
(0)

103
20
124
145
(20)

Others

Total

0
0
0
11
(11)

69,344
10,61579,96078,685
1,274

Eliminations(Corporate)

Consolidated—(10,615)(10,615)(10,370)( 245)

69,344—
69,34468,315
1,029(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries included in regions other than Japan:
Asia: Indonesia, Singapore, Philippines, Myanmar, Malaysia and Thailand.
Europe: England, Germany and Poland.
North America: America.
Other regions: Nigeria.
(3)
Changes in Accounting Principles:
1) As noted in Changes in accounting processing, starting from the six-month period ending September 2002, theCompany has implemented a change to a new accounting method by which income and expenses related to leases forthe purpose of real estate business are included in non-operating profit and loss. As a result of the above factors,
operating income of Japan was ¥41 million less than it would have been under previous accounting principles. Thischange had no effect on segments outside of Japan.
2) As noted in Important basic items for the creation of interim financial statements, Allowance for retirement benefits on page 21,
starting from the six-month period ended September 2002, the Company has changed the fixed number of years for theprocessing of operating expenses for differences in mathematical calculations related to liability for retirement benefits
to 13 years, from the previous 12 years. This change will have only a slight effect on each segment.

Previous Six-Month Period (From April 1, 2001 to September 30, 2001)
Millions of Yen
Japan

６７，
Revenues
Outside customers............. 67,206
Inter-segment .....................
9,276
Total .................................... 76,482
Operating expenses ........... 78,652
Operating Profit (Loss) .... (2,169)

Asia

EuropeNorth
America

4,392
235
4,628
4,530
97

4
117
121
130
(9)

16
6
23
115
(92)

Others

Total

0
0
0
12
(12)

71,6209,635
81,25583,441(2,186)

Eliminations(Corporate)(9,635)(9,635)(9,890)255

Consolidated

71,620—71,62073,551(1,930)(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries included in regions other than Japan:
Asia: Indonesia, Singapore, Philippines, Myanmar, Malaysia and Thailand.
Europe: England, Germany and Poland.
North America: America
Other regions: Nigeria

17

Previous Fiscal Year (April 1, 2001 to March 31, 2002)
Millions of Yen
Japan

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

Asia

EuropeNorth
America

8,112
521
8,633
8,291
342

13
235
248
251
(2)

396
13
409
575
(166)

Others

Total

0
0
0
25
(25)

141,505
22,681
164,186
169,631(5,444)

Eliminations(Corporate)

Consolidated—(22,681)(22,681)(22,978)297

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

3. Overseas Sales
Latest Six-Month Period (April 1, 2002 to September 30, 2002)
Millions of Yen
Asia

Overseas sales .................................................
Consolidated net sales ...................................
Ratio of overseas to consolidated net sales .

Middle East

Other Regions

13,905

18,831

6,180

20.05%

27.16%

8.91%

Total

38,91869,34456.12%(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries and areas included in each region:
Asia: China, Singapore and Indonesia.
Middle East: Qatar and Saudi Arabia.
Other regions: Venezuela.
(3)
Overseas sales are those sales of the Company and its consolidated subsidiaries that take place in countries or regions
other than Japan.

Previous Six-Month Period (April 1, 2001 to September 30, 2001)
Millions of Yen
Asia

Overseas sales .................................................
Consolidated net sales ...................................
Ratio of overseas to consolidated net sales .

Middle East

Other Regions

10,676

3,762

2,128

14.91%

5.25%

2.97%

Total

16,567
71,62023.13%(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries and areas included in each region:
Asia: Singapore and Indonesia.
Middle East: Qatar, Oman, and Iran
Other regions: Venezuela and Egypt.
(3)
Overseas sales are those sales of the Company and its consolidated subsidiaries that take place in countries or regions
other than Japan.

18

Previous Fiscal Year (April 1, 2001 to March 31, 2002)
Millions of Yen
Asia

Overseas sales .................................................
Consolidated net sales ...................................
Ratio of overseas to consolidated net sales .

Middle East

Other Regions

21,587

16,5396,955

15.26%

11.69%

4.91%

Total

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

Production, Orders and Sales Situation
1. Orders
Apr. 1, 2002 –Sept. 30, 2002
New Orders
Backlog
Amt
%
Amt
%

Business
Segment
Engineering
Oil-related ........

4,719
4.7
(14.4%)Petrochemical17,533 17.3
related ............... 49.9%
Ordinary
25,978 25.7
chemicals106.4%
related ...............
Gas and28,789 28.4
engineering(33.4%)
related ...............
Corporate557
0.5
development(82.8%)
related ...............
Ordinary
1,988
2.0
manufacturing
51.6%
machineryrelated ...............
Other ................. 18,987 18.8
(0.1%)
Total
98,554 97.4
Engineering
2.0%
Other .................

2,677
2.6
6.4%
Total.................. 101,232 100.0
2.1%

33,133 12.4[-2,952]
55,706 20.8[-1,845]
35,451 13.3[-238]
107,675 40.3[-5,014]

Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
New Orders
Backlog
Amt
%
Amt
%

Apr. 1, 2001 –Mar. 31, 2002
New Orders
Backlog
Amt
%
Amt
%

5,510

5.6

11,698

11.8

12,58912.7

43,23934,758[7,419]29,185[-146]
22,955[-44]

17.5

18,0998.3

42,439[8,460]44,181[377]
15,870
[-63]

17.2

14.7

33,95915.6

11.5

13,4056.2

43.6

64,060[-322]

32.3

103,935

47.7

106,590
[-50]

43.3

18.0
6.4

3,759
[-40]

1.4

3,244

3.3

3,881
[1,805]

2.0

4,843

2.2

3,417
[1,829]

1.4

4,529
[-7]

1.7

1,311

1.3

8,050
[-6]

4.1

3,953

1.8

4,050
[-101]

1.7

26,972 10.1[-680]
267,228 100.
0[-10,779]

19,00919.2

35,589 17.9[-1,909]97.5 198,481 100.0[6,795]35,14016.1

213,337

97.9

— —
[-17]
267,228 100.
0[-10,797]

2,517

4,660

2.1

96,603

2.5

—
—
[-63]
99,120 100.0 198,481 100.0[6,731]217,997 100.0

29,587 12.0[-5,131]
246,137 100.0[5,319]——[76]
246,137 100.0[5,395](Note)
Numbers in brackets [] under “Backlog of orders” indicate the total of increases or decreases accompanying foreign
currency translation adjustments related to foreign currency business, increases resulting from adjustments for neworders, and decreases resulting from contractual changes in orders received before the previous fiscal year.

19Breakdown of Domestic and Overseas Orders
Apr. 1, 2002 –Sept. 30, 2002
New Orders
Backlog
Amt
%
Amt
%

Domestic ....

41,509 41.0 109,177 40.9[-543]
6.8%
Overseas..... 59,722 59.0 158,050 59.1[-10,253](0.9%)
Total ........... 101,232 100.0 267,228 100.0
2.1%[-10,797]

Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
New Orders
Backlog
Amt
%
Amt
%

Apr. 1, 2001 –Mar. 31, 2002
New Orders
Backlog
Amt
%
Amt
%

38,87589,92841.3

128,069

58.7

39.2

92,563 46.6
[160]
60,245 60.8 105,918 53.4
[6,571]
99,120 100.0 198,481 100.0[6,731]217,997 100.0

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

2. SalesApr. 1, 2002 –Sept. 30, 2002
Amt%

Engineering
Oil-related ........................................................................................
Petrochemical-related .....................................................................
Ordinary chemicals-related ...........................................................
Gas and engineering-related..........................................................
Corporate development-related ....................................................
Ordinary manufacturing machinery-related ...............................
Other .................................................................................................
Total Engineering
Other .................................................................................................
Total..................................................................................................

11,073 16.0
303.4%
4,162
6.0
22.4%
6,160
8.9
(61.8%)
22,690 32.7
98.1%
175
0.2
(98.3%)
1,502
2.1(43.1%)
20,921 30.2
(7.5%)
66,685 96.1
(3.5%)
2,659
3.9
5.8%
69,344 100.0(3.2%)

Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
Amt%

Apr. 1, 2001 –Mar. 31, 2002
Amt
%

2,745

3.8

8,693

6.1

3,401

4.8

11,1897.916,10722.4

23,98817.0

11,45616.0

29,89321.1

10,142

14.2

12,230

8.6

2,640

3.7

9,187

6.5

22,612

31.6

41,52429.4

69,10596.5 136,708

96.6

2,514

3.5

3.4

4,797

71,620 100.0 141,505 100.0

20

Breakdown of Domestic and Overseas Sales
Apr. 1, 2002 –Sept. 30, 2002
Amt%

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

30,426 43.9
(44.7%)
Overseas ........................................................................................... 38,918 56.1
134.9%
Total.................................................................................................. 69,344 100.0(3.2%)

Millions of Yen
Apr. 1, 2001 –Sept. 30, 2001
Amt%

Apr. 1, 2001 –Mar. 31, 2002
Amt%

55,052

76.9

96,422

68.1

16,56723.1

45,08331.9

71,620 100.0 141,505 100.0(Notes)(1)“Status of production” is not listed, because it is difficult to define production results for the Chiyoda Group.
(2)
Sales results and percentages of total sales for main customers are shown below.

Apr. 1, 2002 – Sept. 30, 2002
CustomerAmt%

Ras Laffan LNG
Co., Ltd.
(3)

13,310Millions of Yen
Apr. 1, 2001 – Sept. 30, 2001
CustomerAmt%

19.2 Teijin
Polycarbonate
Singapore PTE Ltd.

2,703

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

3.8 Ras Laffan LNG
Co., Ltd.

10,818%

7.6

Amounts contained in these tables do not include consumption tax.

Changes in Accounting Principles
Current consolidated interim period
From April 1, 2002 to September 30, 2002
In the past, Chiyoda accounted for income and expenses from leases for its real estate business respectively
under “Construction contracts” and “Cost of construction contracts.” Since the Company withdrew from the realestate business, however, from the six-month period ended September 2002, these income and expenses will be
accounted for under non-operating profit and loss, respectively.
As a result of this change, “Construction contracts” and “Cost of construction contracts” each fell 41 million yen.
These changes will not affect profit, including ordinary profit and income before income taxes.

Important basic items for the creation of interim financial tables
Allowance for retirement benefits
To prepare for employees’ retirement benefits, the Company posts an amount recognized as being applicable atthe end of the current consolidated interim period, based on the projected amount of pension assets andobligations for retirement benefits at the end of the current consolidated fiscal year.
Regarding the difference at the time of the change in accounting standards (12,123 million yen), an average over
15 years is processed as operating expenses; in the context of consolidated interim accounting periods, one halfof the amount processed as expenses for the one-year term is processed as operating expenses. Differences inmathematical calculations at Chiyoda are processed as operating expenses from the subsequent consolidated
fiscal year, based on the “Fixed amount method” and using a set number of years (12 years) equal to or less than
the average remaining period of employment for employees working at the time that the difference occurred. In
the context of consolidated interim accounting periods, one half of the amount processed as expenses for the
one-year term is processed as operating expenses.
Additional information
For differences in mathematical calculations related to liability for retirement benefits, since the averageremaining period of employment for employees has dropped below 13 years, the fixed number of years forprocessing of operating expenses based on the “Fixed amount method” has been changed to 12 years from 13
years as of the consolidated six-month period ended September 2002. This change will have only a slight effecton operating profit, ordinary profit, income before income taxes, and other profit.

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