ENGINEERING A BETTER TOMORROWANNUAL REPORT 1998
Fiscal Year Ended March 31, 1998

Non-Consolidated Financial Highlights
Chiyoda Corporation
Years ended March 31, 1998 and 1997

Thousands of
U.S. Dollars

Millions of Yen

1998

1997

1998

Contracts awarded .................................................................................................. ¥367,178¥327,600$2,781,652

Revenue from construction contracts ...................................................................

272,674

411,976

2,065,712

Net loss ....................................................................................................................

(53,754)(48,265)(407,227)

Total assets .............................................................................................................. ¥233,383¥317,403$1,768,053

3,019

26,424

For the Year:At Year-End:Long-term debt ........................................................................................................

3,488

Total shareholders’ equity ......................................................................................

5,330

59,08440,379Backlog of contracts ................................................................................................

517,318

436,851

3,919,076

Per Common Share (Yen and U.S. Dollars):
Net loss .................................................................................................................... ¥(275) ¥

(247)

Cash dividends applicable to the year...................................................................

0

0

$

(2.08)

Note: The U.S. dollar amounts are given solely for convenience and have been calculated at the rate of ¥132 to US$1, the approximate rate of exchange prevailing at March 31, 1998.

Revenue from
Construction Contracts

Composition of
Total Capital Employed(Billions of Yen)

(Billions of Yen)

500

200

150

317.4
59.1

317.7
109.0

255.3
204.6

163.4

154.1

272.7

200

233.4
224.6
5.3

412.0
364.3

250

319.1

356.4

300

295.9
105.5

300
400

307.9
108.5

350

100
100

96

97

98

CONTENTS
ProfileA Message from the Management
Review of Operations
Hydrocarbon Sector
Non-Hydrocarbon Sector
Main Projects
Board of Directors
Financial Section
Corporate Directory
Corporate Data

1
2
4
6
8
10
12
42
43

96

3.5

95

Total Assets

3.0

FY 94

0

95

4.1

36.0

0

FY 94

36.3

50

97

98

Total Shareholders’ Equity
Other Liabilities
Long-Term Debt

0Profile

Since its foundation in 1948, Chiyoda Corporation has earned a strong reputation as
an international engineering company, with roots in the hydrocarbon processing industry. Leveraging its vast accumulated experience, Chiyoda has set its sights on becoming a comprehensive provider of engineering and construction services to customers
around the world. The Company is now applying its technological and engineeringexpertise to such areas as environmental preservation, automotive plants, nonferrous
metal processing, pharmaceutical manufacturing, food processing, factory automation,and theme park and aerospace development. To better serve globally competitivemarkets, Chiyoda is in the midst of an ongoing renewal process to develop its corestrengths in engineering.

Our 50th Year
Over the past 50 years, Chiyoda has become a worldwide leader inhydrocarbon-related engineering, procurement, and construction, with

1948 1958 1968 1978 1988 1998
1948 1958 1968 1978 1988
1948 1958 1968 1978
1948 1958 1968
1948 1958
1948
growing capabilities in non-hydrocarbon fields. Chiyoda now stands

ready to make more diversified, value-added contributions to its clientsin every business domain. We firmly believe that the skills, knowledge,
and track record built over our history will serve as the foundation forfurther advances in the 21st century.

1

A Message from the Management

Dear shareholders and friends,
We believe that fiscal 1998, ended March 31, 1998, was a major
turning point for Chiyoda. It was a year in which we reached ahistoric milestone—our 50th anniversary—but also one in which
we set the course for a new Chiyoda. To be frank, however, ourfinancial performance for the year was disappointing. We aredetermined to use the lessons learned from this recent phase of
our history to shape tomorrow’s Chiyoda, a company that will bestronger, more productive, and more profit-driven. And it is ourcore capability in engineering from which we will grow.
Reductions in capital expenditures in Japan and the effectsof the Asian financial crisis created a tough environment for
Chiyoda both at home and abroad. Nonetheless, we are pleased
to report that new orders rose 12.1%, to ¥367.2 billion (US$2,782
million), of which domestic orders accounted for ¥152.4 billion(US$1,154 million) and overseas orders for ¥214.8 billion (US$1,627
million). We commend our employees for these results; thisremarkable performance came under very adverse conditions.
It is this spirit that will drive Chiyoda’s growth in the future.
Masato Kitagawa
President

The good news, unfortunately, was not without the bad. Revenue from construction contracts during fiscal 1998 fell 55.4%
in Japan, to ¥72.2 billion (US$547 million), and 19.9% overseas,to ¥200.5 billion (US$1,519 million). Projects booked several years
ago that turned unprofitable once again hurt our bottom line.
In addition, Chiyoda recognized a special loss of ¥13.7 billion(US$104 million) on loan provisions to subsidiaries and affiliates
and the carrying forward of proceeds from the liquidation ofassets. Consequently, Chiyoda recorded a net loss for the fiscal
year of ¥53.8 billion (US$407 million). In light of these results, we
regret that we will not pay cash dividends for the period.

Renewal for the Future
We are confident that the worst is behind us. All unprofitableprojects are scheduled to be completed by the end of fiscal 1999.
To assist our renewal process, we are receiving the support of2

CHIYODA CORPORATION

Mitsubishi Corporation and the Bank of Tokyo-Mitsubishi, Ltd.

• To secure profits, we have established a system to analyze,

Members of these companies have been seconded to Chiyoda tocontrol, and manage the risks of projects awarded and wehelp with management, sales, and other matters. We believe that

continuously monitor the financial status of current projects.

with the support of these major shareholders, we are creating a• Becoming more productive and strengthening our engineeringstronger corporate structure that enables Chiyoda to capture

capabilities will be accompanied by reductions in headquarters

opportunities emerging in globally competitive markets.

staff to 2,200 by March 2000. Subsidiaries and affiliates both in

The consecutive losses we have recorded underscore theJapan and abroad will also undergo a thorough review, andneed for change. A team effort by all Chiyoda Group employees

steps toward restructuring and consolidation will be imple-

is essential to realize our vision of becoming a highly productive

mented where necessary. We believe that these cutbacks are

and profitable, fully integrated engineering company. To achieve

inevitable if the Chiyoda Group is to remain globally competitive.

this vision, we are implementing the strategies described below• We continue to promote alliances, partnerships, and joint

as part of a Groupwide restructuring program. We are confident

ventures to enhance the global focus of our sales activities.

that they will create a leaner Chiyoda, better able to serve the

We strongly believe that it will not be long before theseneeds of our customers.

strategies take full effect and renew Chiyoda, making us• We clarified the lines of accountability and ownership in ourmore competitive than ever before.

core businesses. The Hydrocarbon Processing Industry (HPI)

Our renewal program will enable Chiyoda to provide services

Consolidated Division (petroleum-, petrochemical-, and gas-that exceed customer expectations, both now and in the future.

related industries), Non-Hydrocarbon (Non-HPI) Consolidated

Chiyoda will become an engineering company with the skills

Division, and Technology, Engineering, and Logistics Division haveneeded in a more information-intensive society. Throughbeen realigned with independent profit and loss responsibility

alliances and partnerships, we will work in cooperation withand their own operations departments. These divisions are being

outstanding companies around the world. We will also apply

led by senior Chiyoda executives who have been given a man-the expertise in environmental engineering gained throughdate to revitalize sales and manage projects more strategically,

our domestic operations to help create more ecologicallythus enhancing profitability.

sound facilities worldwide.

• To improve the efficiency of project control and management

Change is never easy. It requires the support and understand-and raise the profitability of projects, we are prioritizing initial

ing of our shareholders, partners, customers, and employees.

project planning and front-end engineering works. We are also

We keep striving to reciprocate your commitment to Chiyoda bydeploying the latest information technology and strengthening

building a company that contributes to the development of soci-our technical competence to make our operations more cost-

ety’s core infrastructure, provides a stimulating and rewarding

effective and productive. In fact, our efficiency of project imple-

work environment for employees, and earns a reasonable profit

mentation has already been greatly improved by these means.

for its shareholders.

March 31, 1998

3

Review of Operations

PETROLEUM-, PETROCHEMICAL-, AND GAS-RELATED INDUSTRIESHYDROCARBON SECTOR
Building on our leading technological and engineering expertisescheduled for completion by September 2000 from Exxon
Chemical Singapore Private Ltd., a division of Esso Singapore
Private Ltd., in a joint venture with the M. W. Kellogg Company,
a U.S. engineering firm. The Chiyoda and Kellogg joint venture
will build an 800,000 t/y ethylene plant on Jurong Island, Singapore. In the same month, Chiyoda signed a contract with China
Petrochemical Development Corp. (CPDC), of Taiwan, to build oneof the world’s largest caprolactam plants, in Kaohsiung, Taiwan.
Using the Dutch Stamicarbon process, the plant will have an
A purified terephthalic acid (PTA) plant, built in
Merak, Indonesia, by Chiyoda and PT. Chiyoda
International Indonesia for PT AMOCO MITSUI PTAINDONESIA, was opened in September 1997.

annual capacity of 120,000 tons.
• Middle East
Chiyoda maintained its leading position in the Middle East amid
tough market conditions brought on by the severe recession inSoutheast Asian countries, downturns in the major Middle East-

In the year under review, the HPI Consolidated Division made sig-

ern petroleum and petrochemical product markets, and a sharp

nificant strides toward a return to profitability. We clarified our

decline in crude oil prices in the latter half of the fiscal year.

core competencies with regard to how we may best serve theglobal hydrocarbon market and won significant orders with thecooperation of major Japanese trading companies. In Asia, anumber of major projects were delayed, as the currency crisis
hampered fund-raising activities in that region.
• Southeast Asia
The currency crisis that struck Southeast Asia starting in summer
1997 has made business difficult in the region. From a longer-term
perspective, however, the growing population in Asia and theeventual recovery of economies in the region will continue tosupport rising demand for hydrocarbon-related projects. In
October 1997, Chiyoda won a contract for an ethylene plant

4

CHIYODA CORPORATIONIn November 1997, Chiyoda, in collaboration withIKPT, a leading Indonesian engineering contractor,
completed the Bontang LNG Plant (Train G), which is
the third liquefied natural gas (LNG) project in the
Bontang region that Chiyoda has built for PERTAMINA,
Indonesia’s state-owned oil company.

• Japan
The protracted economic slump is restraining capital investment
in Japan, particularly for large-scale projects. In addition, we are
currently in a downturn in the investment cycle for hydrocarbon
plants. A major growth area in the domestic market is in power
generation plant facilities operated by independent power producers (IPPs). Chiyoda is working to capture business opportunities in this area. The Company has a growing business in helping
Japanese chemical companies transfer competitive technologies
In February 1998, Chiyoda signed a contract for thesecond-stage extension work on an ethylene glycol
plant for Eastern Petrochemical Company (SHARQ)
in Al-Jubail Industrial City, Saudi Arabia.

to production facilities at overseas sites. We will continue to market our capabilities aggressively and work with alliance partners
to win orders in Japan. Completed orders during the year included
an LNG receiving terminal in Sendai for Tokyo Gas Engineering
Co., Ltd.

In February 1998, Chiyoda signed a contract for the secondstage extension work on an ethylene glycol plant for Eastern
Petrochemical Company (SHARQ), in Al-Jubail Industrial City,
Saudi Arabia. Also, in parallel with Chiyoda’s engineering andprocurement work, Chiyoda Petrostar Ltd., a Chiyoda affiliate,
began the construction of a plant that will produce 480,000 t/yof benzene and 220,000 t/y of cyclohexane for Saudi Chevron
Petrochemical Co. In addition, Chiyoda started work on a plantin Mesaieed, Qatar, that will manufacture 2,500 t/d of methanoland 1,830 t/d of methyl tertiary butyl ether (MTBE), an additive
for methanol and gasoline, for Qatar Fuel Additives Company
Limited (QAFAC).

The Third LNG Train for Qatar Liquefied Gas Company
Limited is under construction in Ras Laffan, Qatar.

• Other regions
In the CIS and Eastern Europe, development projects for petroleum and natural gas in Sakhalin, Siberia, and the Caspian Sea areproceeding on course. Chiyoda won a contract for the utility modernization of an ethylene plant in Sumgait, Azerbaijan. The Company is also expanding its business in Poland and other central
European countries.
In Turkmenistan, Chiyoda continued work on a contract won
with Gama Endüstri Tesisleri Ìmalât ve Montaj A.S., of Turkey, for
a 750,000 t/y naphtha hydrotreater and reformer from the Ministryof Oil and Gas Industry and Mineral Resources of Turkmenistan.

5

NON-HYDROCARBON SECTOR
Exploring new opportunities in engineering

Chiyoda’s Non-HPI Consolidated Division comprises a diverse
range of businesses that leverage its core strengths in engineering. We have a strong record in building facilities in the electric
power, automotive, copper smelting and mining, pharmaceutical,
food processing, environmental preservation, and waste processing industries. In addition, Chiyoda has a strong reputation inengineering related to industrial facilities, amusement facilities,
and infrastructure development projects. Through balanced
growth in this sector, Chiyoda aims to have its Non-HPI Consolidated Division account for 50% of both total orders completed
and gross sales profit by the fiscal year ending in March 2004.
• Environmental preservation

Chiyoda completed the third phase of the Tokaichiba
Municipal Housing Complex in Yokohama in
August 1997.

Chiyoda applied its experience in engineering for environmental
preservation and energy-saving systems gained in Japan to theplastic-recycling technology, biological wastewater treatment

operations of overseas customers. The Company has a strong

units, refuse-derived fuel generation facilities, and sludge pro-

reputation for its pollution control technology for environmental

cessing technology. Projects in progress include a cogeneration

preservation: the flue gas desulfurization process called “CT-121,”

system for the Tokyo Metropolitan Government’s Toshima Ward
Municipal Hospital and a flue gas desulfurization project in the
Czech Republic.
Investment in environmental systems by electric power companies continued to be strong in Japan. Chiyoda was awarded several contracts for flue gas desulfurization facilities from Tohoku
Electric Power Co., Inc., and other companies and entered negotiations for such facilities with several IPPs. Completed orders
during the year included flue gas desulfurization equipment for
the Nanao Power Station of Hokuriku Electric Power Company.
• Automotive plants
While continuing to support the operations of Isuzu Motors Ltd.,In October 1997, Chiyoda completed the constructionof flue gas desulfurization plant no. 2 for Hokuriku
Electric Power Company’s facility in Nanao,
Ishikawa Prefecture.

6

CHIYODA CORPORATION

Chiyoda is marketing its skills to automakers in the United Statesand Europe. During the year under review, Chiyoda was awarded
a contract from Opel Polska Sp. Zo.o, for the engineering, procurement, and construction (EPC) of a new general assembly shop
in Gliwice, Poland. The plant will have a capacity of 70,000 vehicles per year. Projects in progress include a casting plant for
IC Engineering Corp. in Indonesia as well as a press bodyassembly shop for General Motors (Thailand) Ltd.
• Copper smelting and mining
In September 1997, Chiyoda signed a contract with Myanmar
Ivanhoe Copper Company Ltd. (MICCL) to build a copper smelting
plant in Monywa, Myanmar. The plant will use a new smelting
process called Solvent Extraction–Electro Winning (SX-EW).

In February 1998, Chiyoda completed this logistics
center for Fuji Coca-Cola Bottling Co., Ltd. The centerhas a capacity of 18,400 pallets and is fully automatedfor 24-hour operation.

Projects in progress during the fiscal year included a 200,000 t/y
copper smelting plant for P.T. Smelting Co., in Indonesia, a joint
venture between Mitsubishi Materials Corp. and its Indonesianto the Product Liability Law. During the year, Chiyoda completed

partner. The plant uses the Mitsubishi Continuous Smelting Method,a factory for producing tablets for Shionogi & Co., Ltd.

which features high throughput with minimal environmental impact,• Industrial machineryand is expected to boost Chiyoda’s profile in the market for non-Chiyoda assists customers in the machine assembly, printing, andferrous smelting facilities.

product distribution industries to upgrade and modernize their facil-• Pharmaceutical manufacturing and food processing

ities. The Company is particularly active in lube oil blending plants

Pharmaceutical companies have been investing extensively to make

(LOBPs) and liquefied petroleum gas (LPG) receiving terminals

their facilities compliant with the guidelines for Good Manufactur-throughout the world. Projects under way include LOBPs for Esso

ing Practices and Good Clinical Practices. In the food processing(Tianjin) Co., Ltd., and Esso (Zhejiang) Co., Ltd., in China. In addition,

field, companies are investing in response to regulations related

we completed a logistics center for Fuji Coca-Cola Bottling Co., Ltd.,in Japan.
• Other sectors
In theme park operations, Chiyoda received an order from Shima
Spain Village Co., Ltd., for a theater attraction facility in Shima,
Mie Prefecture.
In the area of space development, Chiyoda was awarded
a contract from the National Space Development Agency ofJapan (NASDA) for the preliminary design and prototypes ofa cell culture unit for the Japanese Experimental Module.
The facility will be used to conduct experiments on plant
and animal cells under microgravity conditions.

The Niigata Plastic-to-Oil Conversion Center has thecapacity to convert 6,000 t/y of waste plastic into oilfor use as fuel in public facilities.

7

Main Projects

PETROLEUM-, PETROCHEMICAL-, AND GAS-RELATED INDUSTRIESHYDROCARBON SECTORNEW CONTRACTS• Eastern Petrochemical Company (SHARQ)
Project type: Ethylene glycol
production plant
Location: Al-Jubail Industrial City,
The Kingdom of Saudi Arabia
Capacity: 450,000 t/y
Scheduled completion: August 2000
• Exxon Chemical Singapore Private Ltd.
Project type: Ethylene plant
Location: Chawan, Jurong Island,
Singapore
Capacity: 800,000 t/y
Scheduled completion: September 2000
• Seibu Oil Co., Ltd.
Project type: Sulfolane extraction unit
Location: Yamaguchi, Japan
Capacity: 453 t/dScheduled completion: November 1998
• Kashima-Kita Electric Power
Corporation
Project type: Boiler flue gas desulfurization plant
Location: Kashima, Ibaraki, Japan
Capacity: 170 MW
Scheduled completion: May 1999
• Nippon Petroleum Refining Co., Ltd.
Project type: Diesel gas oil
blending facility
Location: Negishi, Yokohama, Japan
Capacity: 2,000 kl/hScheduled completion: June 1998
• State Concern Azerchimia
Project type: Utility modernization of
ethylene plant
Location: Sumgait, Azerbaijan
Scheduled completion: December 2000
• China Petrochemical
Development Corp. (CPDC)
Project type: Caprolactam plant
Location: Kaohsiung, Taiwan
Capacity: 120,000 t/y
Scheduled completion: December 1999
BACKLOG OF CONTRACTS• China PetrochemicalInternational Company
Project type: PTA plant
Location: Luoyang, China
Capacity: 225,000 t/y
Scheduled completion: October 2000
• Qatar Fuel Additives Company Limited(QAFAC)
Project type: Methanol/MTBE plant
Location: Mesaieed, Qatar
Capacity: 2,500 t/d (methanol),
1,830 t/d (MTBE)
Scheduled completion: June 1999

8

CHIYODA CORPORATION• Malaysian Refining Company
Sdn Bhd (MRC)
Project type: Petroleum refinery
Location: Melaka, Malaysia
Capacity: 100,000 BPSD
Scheduled completion: August 1998
• Oman LNG L.L.C.
Project type: LNG plant
Location: Qalhat, Oman
Capacity: 3,300,000 t/y x 2
Scheduled completion: May 2000
• Qatar Liquefied Gas
Company Limited
Project type: LNG plant
Location: Ras Laffan, Qatar
Capacity: 2,000,000 t/y (3rd train)
Scheduled completion: November 1998
• Shoseki Engineering & Construction
Co., Ltd./Showa Yokkaichi Sekiyu Co., Ltd.
Project type: Benzene reduction plant
Location: Mie, Japan
Capacity: Bensat 471 t/d,
Sulfolane revamp 971 t/dScheduled completion: June 1998
• Ministry of Oil and Gas Industry andMineral Resources of Turkmenistan
Project type: Naphtha hydrotreater,reformer with continous catalytic
reforming (CCR), and utilities andoff-site facilities
Location: Turkmenbashi, Turkmenistan
Capacity: 750,000 t/y (naphthahydrotreater), 750,000 t/y(reformer with CCR)
Scheduled completion: August 1999
• Chevron Chemical (Far East) Pte. Ltd.
Project type: Lubricant additives
manufacturing plant
Location: Pulau Sakra, Singapore
Capacity: More than 100,000 t/y
Scheduled completion:
September 1998
• Tokyo Gas Co., Ltd.
Project type: Piping system for LNG
receiving terminal (marine andmachinery yard)
Location: Ohgishima, Kanagawa,Japan
Scheduled completion:
September 1998
• Saudi Chevron Petrochemical Co.
Project type: Benzene plant andcyclohexane plant
Location: Al-Jubail Industrial City,
The Kingdom of Saudi Arabia
Capacity: 480,000 t/y (benzene plant),
220,000 t/y (cyclohexane plant)
Scheduled completion: May 1999

PROJECTS COMPLETED• Petromin Lubricating Oil
Refining Company
Project type: Lube oil production plant
Location: Madinat Yambu-Al-Sinaiyah,
The Kingdom of Saudi Arabia
Capacity: 2.0 MM BPY
Completion: December 1997
• Perusahaan Pertambangan Minyak
Dan Gas Bumi Negara (PERTAMINA)
Project type: LNG plant
Location: Bontang, Indonesia
Capacity: 2,700,000 t/yCompletion: November 1997
• Abu Dhabi National Oil Company(ADNOC)
Project type: Utility plant
Location: Ruwais, U.A.E.
Capacity: 38 MW GTG’ with
WHRB/13,000 m3/D MSF/
desalination unit/water tanks/
refurbishment of the existing
DCS system
Completion: April 1997
• PT AMOCO MITSUI PTA INDONESIA
Project type: PTA plant
Location: Merak, Indonesia
Capacity: 350,000 t/yCompletion: July 1997
• Tonen Corporation
Project type: Bottom desulfurization
cracker unit (H-OIL)
Location: Kawasaki, Japan
Capacity: 25,000 BPSD
Completion: July 1997
• Mitsubishi Chemical Corporation
Project type: Bisphenol-A
manufacturing plant
Location: Kashima, Ibaraki, Japan
Completion: November 1997
• P.T. Teijin Indonesia Fiber
Corporation/CII
Project type: Polyester polymerization, staple fiber, and filament plant
Location: Tangerang, Indonesia
Completion: September 1997
• Tokyo Gas Engineering Co., Ltd.
Project type: LNG receiving terminal
Location: Sendai, Japan
Completion: July 1997

NON-HYDROCARBON SECTOR• IC Engineering Corp.
Project type: Casting plant
Location: Karawan Industrial City,
Indonesia
Scheduled completion: August 1998

NEW CONTRACTS• Opel Polska Sp. Zo.o
Project type: EPC of new general
assembly shop
Location: Gliwice, Poland
Capacity: 70,000 vehicles/yScheduled completion: November 1998

BACKLOG OF CONTRACTS• Korean Electric Power Corporation
Project type: Flue gas desulfurization
for Ulsan P/S units nos. 4, 5, and 6
Location: Ulsan, South Korea
Capacity: 3 x 400 MW
Scheduled completion: June 1999

• Isuzu Motors Polska Sp. Zo.o
Project type: Procurement and installation for new diesel engine plant
Location: Tychy, Poland
Capacity: 300,000 units/yScheduled completion: October 1998

• Tohoku Electric Power Co., Inc.
Project type: Flue gas desulfurizationfor Haramachi P/S unit II
Location: Haramachi, Japan
Capacity: 1 x 1,000 MW
Scheduled completion: July 1998

PROJECTS COMPLETED• Societe Anonyme Renault
Project type: Basic engineeringof general assembly for Brazil
new plant
Location: Douai, France
Capacity: 80,000 vehicles/yCompletion: December 1997

• SK POWER COMPANY, DENMARK
Project type: Flue gas desulfurizationfor Stigsnæs P/S unit II
Location: Skælskør, Denmark
Capacity: 1 x 250 MW
Scheduled completion: December 1999

• General Motors (Thailand) Ltd.
Project type: EPC of press bodyassembly shop
Location: Rayong, Thailand
Capacity: 90,000 vehicles/yScheduled completion: February 1999

• Automobile Foundry Co., Ltd.
Project type: EP of new
foundry project
Location: Iwate, Japan
Capacity: 40,000 t/yCompletion: October 1997

• Kirin Kunpeng (China)
Bio-Pharmaceutical Co., Ltd.
Project type: Construction ofpharmaceutical plant
Location: Pudong, Shanghai, China
Scheduled completion: September 2000

• Isuzu Autoparts Manufacturing
Company
Project type: EPC of newtransmission plant
Location: Laguna, Philippines
Capacity: 60,000 units/yScheduled completion: July 1998

• Rekisei Koyu K.K./Plastic Waste
Management InstituteProject type: Plastic waste oilrecovery plant
Location: Niigata, Japan
Capacity: 6,000 t/yCompletion: September 1997

• Tokyo Metropolitan Government
Project type: Cogeneration system
for Toshima Ward Municipal Hospital
Location: Tokyo, Japan
Capacity: 600 kw x 3
Scheduled completion: March 1999

• Yokohama City Housing Authority
Project type: Public housing
Location: Yokohama, Japan
Capacity: 3,954 m2 (7 floors)
Completion: August 1997

• Gujarat Pipavav Port Limited
Project type: Construction of
ship-breaking yard
Location: Pipavav, Gujarat, India
Capacity: 8 VLCC/y
Scheduled completion: October 1999
• Myanmar Ivanhoe Copper
Company Ltd. (MICCL)
Project type: SX-EW plant (for copper)
Location: Monywa, Myanmar
Capacity: 25,000 t/y
Scheduled completion: December 1998
• Yokohama City
Project type: Building(assembly hall & protective institution)
Location: Yokohama, Japan
Capacity: 2,815 m2 (2 floors)
Scheduled completion: June 1999
• Shima Spain Village Co., Ltd.
Project type: Theater attraction(theme park)
Location: Shima-gun, Mie, Japan
Capacity: 2,600 persons/1 show
Scheduled completion: February 1999
• National Space Development Agencyof Japan (NASDA)
Project type: Preliminary design
and prototypes of cell culture unit
Location: Ibaraki, Japan
Scheduled completion: July 1999

• P.T. Smelting Co.
Project type: EPC of copper smelter
and refinery
Location: Gresilk, Indonesia
Capacity: 200,000 t/y
Scheduled completion: August 1998
• Esso (Tianjin) Co., Ltd.
Project type: EPC of LOBP
Location: Tianjin, China
Capacity: 250,000 t/y
Scheduled completion: Mid-1998• Esso (Zhejiang) Co., Ltd.
Project type: EPC of LOBP
Location: Ningbo, China
Capacity: 270,000 t/y
Scheduled completion: Late 1998
• CE Z, a.s.
Project type: Flue gas
desulfurization plant
Location: Tusimice, Czech Republic
Capacity: 200,000 kw x 4 units
Scheduled completion: November 1997

• Fuji Coca-Cola Bottling Co., Ltd.
Project type: Logistics center
Location: Kanagawa, Japan
Capacity: 18,400 pallets
Completion: February 1998
• Shionogi & Co., Ltd.
Project type: Construction ofpharmaceutical plant
Location: Kitakami, Iwate, Japan
Capacity: 100 million tablets/yCompletion: March 1998
• Hokuriku Electric Power Company
Project type: Flue gas desulfurization
plant no. 2
Location: Nanao, Ishikawa,Japan
Capacity: 700 MW
Completion: October 19979

Board of Directors

President
Masato Kitagawa* (1)Senior Managing
Director
Toshikuni Hirai* (4)Executive Vice Presidents
Kiyomitsu Nishio* (2)Naoyoshi Uehara* (3)(4)*Representative Director

(2)

10

CHIYODA CORPORATION

(1)

(3)

(9)

(8)

(6)

(10)

(5)

(7)

Managing Directors

Corporate Auditors

Hiromi Mitsutake(5)
Youichi Satoh(6)
Munekazu Nakamura (7)Hiroshi Ohtsuka(8)
Minoru Matsushima (9)Nobuo Seki
(10)

Michihiko Kawana
Hisatomi Uga
Kazuo Takayanagi
Tsuneyoshi Kajiwara

Directors(As of June 26, 1998)

Naotake Naritomi
Masayuki Ishikura
Shiro Oshikawa
Shoei Kaneko
Hiroshi Sasaki
Ken Suzuki
Yoshihiro Shirasaki
Takashi Kubota

11

Financial Section
Non-Consolidated Five-Year
Financial Summary
Chiyoda Corporation
Years ended March 31

Millions of Yen

1998

1997

1996

1995

1994

For the Year:
Revenues ................................................................................... ¥277,311
Costs and expenses.................................................................. 329,632
Income (loss) before income taxes ......................................... (52,321)
Net income (loss)...................................................................... (53,754)¥418,199
465,330(47,131)(48,265)¥370,384
366,337
4,047
2,170

¥322,836
313,199
9,637
4,750

¥361,302
348,194
13,108
4,303

At Year-End:Total assets ............................................................................... ¥233,383
Total shareholders’ equity .......................................................
5,330
Working capital ......................................................................... (31,248)
Current ratio (%) .......................................................................
85.6
Long-term debt .........................................................................
3,488¥317,403
59,084
19,626108.0
3,019¥317,680
109,031
70,562136.1
4,089¥307,952
108,543
104,963167.8
36,039¥295,856
105,475
102,497170.3
36,329

(247)
0
303

¥000,0118
558¥000,0248556¥000,0228
540¥327,600
436,851
195,224
9,461
2,954

¥274,699
538,328
195,224
9,336
2,960

¥358,345
628,681
195,224
9,624
2,952

¥443,802
613,693
195,224
10,6802,909

Per Common Share (Yen):
Net income (loss)...................................................................... ¥Cash dividends applicable to the year ....................................
Shareholders’ equity ................................................................

(275) ¥
0
27

Other Statistics:
Contracts awarded ................................................................... ¥367,178
Backlog of contracts* ............................................................... 517,318
Number of shares outstanding* (thousands) ........................ 195,224
Number of shareholders* ........................................................
12,532
Number of employees* ...........................................................
2,825*At year-end

Revenue from Construction Contracts in Fiscal 1998
(Billions of Yen)

200.5

72.2

Domestic
Overseas

64.0

73.9

67.6

14.4

52.8

Petroleum
Gas and Electric Power

Contracts Awarded in Fiscal 1998

Petrochemical(Billions of Yen)

Chemical
152.4
19.4

12

CHIYODA CORPORATION

98.9

214.8
159.1

23.1

66.7

Other

Non-Consolidated Financial Review

Operating Results

Financial Position

In fiscal 1998, ended March 31, 1998, revenues on a
non-consolidated basis totaled ¥277,311 million(US$2,101 million), a decrease of 33.7% from theprevious fiscal year. Revenue from construction
contracts accounted for ¥272,674 million (US$2,066
million), or 98.3%, of the total. Domestic construction contracts amounted to ¥72,221 million (US$547
million), and overseas construction contracts
totaled ¥200,453 million (US$1,519 million). For further information on overall revenue from construction contracts by sector during the period, see thegraphs on page 12.
Revenue from construction contracts dropped¥139,302 million (US$1,055 million), or 33.8%, fromthe previous term, and the cost of construction contracts decreased 33.1%, to ¥298,256 million(US$2,260 million).
As a result, loss before income taxes increased¥5,190 million (US$39 million), to ¥52,321 million(US$396 million), and net loss grew ¥5,489 million(US$42 million), to ¥53,754 million (US$407 million).
Net loss per common share increased ¥28(US$0.21) per share from the previous period, to¥275 (US$2.08). Thus, the Company decided to forgo the payment of dividends for fiscal 1998.
During the term, the Company was awarded a
total of ¥367,178 million (US$2,782 million) in contracts. Overseas contracts accounted for ¥214,798
million (US$1,627 million), or 58.5% of the total,
with domestic contracts making up the remaining¥152,380 million (US$1,154 million). For further
information on contracts awarded by sector during
the period, see the graphs on page 12.
The backlog of contracts at fiscal year-end stoodat ¥517,318 million (US$3,919 million), with domestic contracts accounting for ¥195,791 million(US$1,483 million) of the total and overseas contracts for ¥321,527 million (US$2,436 million).

At the end of the fiscal year, total assets amounted
to ¥233,383 million (US$1,768 million), ¥84,020 million (US$637 million) lower than a year earlier. Thisdecline centered on costs and estimated earnings
on long-term construction contracts, which
decreased ¥41,658 million (US$316 million), andnotes and accounts receivable—trade, which were
down ¥23,757 million (US$180 million).
Total current liabilities decreased ¥29,975 million(US$227 million), to ¥216,663 million (US$1,641
million), mainly because of a ¥37,748 million(US$286 million) drop in notes and accounts
payable—trade.
As a result, the current ratio fell 22.4 percentage
points, to 85.6%, compared with the previous yearend.
Total shareholders’ equity decreased ¥53,754
million (US$407 million), to ¥5,330 million (US$40
million). The shareholders’ equity ratio was 2.3%,
down 16.3 percentage points from a year earlier.

Cash FlowsNet cash used in operating activities totaled ¥6,192
million (US$47 million), comprising ¥39,917 million(US$302 million) in net loss and other non-cash
items and ¥33,725 million (US$255 million) provided by net changes in operating assets and liabilities.
Net cash provided by investing activities amounted to ¥15,823 million (US$120 million), as ¥18,864
million (US$143 million) in cash inflows, comprisedof proceeds from sales of marketable securities—
net and sales of property, plant and equipment—
net more than offset ¥3,041 million (US$23 million)
in cash outflows, including payment for long-termloans—net, proceeds from investments in subsidiaries and associated companies—net, and proceedsfrom investments in investment securities—net.
Net cash used in financing activities totaled¥5,218 million (US$40 million), comprising cash
outflows for the repayment of short-term bankloans and the repayment of long-term debt.
As a result, cash, end of year, increased ¥4,413
million (US$33 million), to ¥31,439 million (US$238
million).

13

Non-Consolidated Balance Sheets
Chiyoda Corporation
March 31, 1998 and 1997

ASSETS

Thousands of
U.S. Dollars(Note 1)Millions of Yen

1998

1997

1998

¥015,841$0,216,023

Current Assets:
Cash .......................................................................................................................... ¥028,515
Time deposits...........................................................................................................

2,924

11,185

22,152Marketable securities (Notes 5 and 6)....................................................................

42,89963,813324,992

Notes and accounts receivable—trade (Notes 3 and 6).........................................

57,506

81,263435,652

Costs and estimated earnings onlong-term construction contracts (Note 4)...........................................................

21,46963,127

162,644

Allowance for doubtful notes and accounts..........................................................

(316)

(518)

(2,394)

Costs of construction contracts in process (Note 4) .............................................

20,386

19,530154,439

Prepaid expenses and other (Note 3).....................................................................

12,032

12,02391,151

Total current assets .........................................................................................

185,415

266,264

1,404,659

Property, Plant and Equipment (Note 6):
Land ..........................................................................................................................

6,143

6,584

46,538

Buildings and structures .........................................................................................

23,24523,610176,099

Machinery and equipment ......................................................................................

9,638

10,45273,015Construction in progress.........................................................................................

37

69

280

Total ..................................................................................................................

39,06340,715295,932

Accumulated depreciation ......................................................................................

(21,201)(21,210)(160,614)

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

17,862

19,505

135,318

Investments and Other Assets:
Investment securities:
Subsidiaries and associated companies............................................................

10,16011,42076,970

Other (Note 5) ......................................................................................................

2,472

4,441

18,727

Total investment securities .............................................................................

12,632

15,861

95,697Long-term loans (Note 3) ........................................................................................

4,307

8,845

32,629Long-term receivables (Note 3) ..............................................................................

7,357

569

55,735

Other .........................................................................................................................

5,888

6,410

44,606

Allowance for doubtful accounts ...........................................................................

(78)

(51)

(591)

Total investments and other assets ...............................................................

30,106

31,634228,076

Total .............................................................................................................................. ¥233,383¥317,403$1,768,053

See notes to non-consolidated financial statements.

14

CHIYODA CORPORATION

LIABILITIES AND SHAREHOLDERS’ EQUITY

Thousands of
U.S. Dollars(Note 1)Millions of Yen

1998

1997

1998

¥114,905$0,842,007

Current Liabilities:
Short-term bank loans (Note 6) .............................................................................. ¥111,145
Current portion of long-term debt (Note 6) ...........................................................

543

1,470

4,114

Notes and accounts payable—trade (Note 3)........................................................

63,222

100,970

478,954

Advance receipts on construction contracts .........................................................

28,444

15,546215,485

Provision for financial support to subsidiaries......................................................

4,239

Accrued expenses and other ..................................................................................

9,070

13,747

68,712

Total current liabilities.....................................................................................

216,663

246,638

1,641,386

Long-term debt (Note 6)..........................................................................................

3,488

3,019

26,424Retirement benefits (Note 7)...................................................................................

7,690

8,445

58,258Other non-current liabilities ....................................................................................

212

217

1,606

Total non-current liabilities .............................................................................

11,39011,681

86,288

Shareholders’ Equity (Note 8):
Common stock, ¥50 par value—authorized, 600,000 thousand shares;
issued and outstanding, 195,224 thousand shares.............................................

14,753

14,753

111,765

Additional paid-in capital ........................................................................................

18,022

18,022

136,530

Legal reserve ............................................................................................................

2,815

2,815

21,326(Deficit) retained earnings.......................................................................................

(30,260)

23,494(229,242)

Total shareholders’ equity ..............................................................................

5,330

59,08440,379Total .............................................................................................................................. ¥233,383¥317,403$1,768,053

32,114

Non-Current Liabilities:

Contingent Liabilities (Notes 3, 12 and 13)15

Non-Consolidated Statementsof Operations
Chiyoda Corporation
Years ended March 31, 1998 and 1997

Thousands of
U.S. Dollars(Note 1)Millions of Yen

1998

1997

1998

¥411,976$2,065,712

Revenues:
Construction contracts (Note 3).............................................................................. ¥272,674
Interest and dividend income (Note 3) ..................................................................

2,055

3,300

15,568Exchange gain—net.................................................................................................

817

2,297

6,190

Other (Note 10) ........................................................................................................

1,765

626

13,371

Total revenues .................................................................................................

277,311418,199

2,100,841

Construction contracts ............................................................................................

298,256

446,001

2,259,515

Selling, general and administrative .......................................................................

13,89916,166105,296

Interest ......................................................................................................................

1,847

1,254

13,992

Provision for doubtful accounts .............................................................................

5,637

173

42,705

Provision for financial support to subsidiaries......................................................

4,239

Other (Note 11) ........................................................................................................

5,754

1,736

43,590Total costs and expenses ................................................................................

329,632

465,330

2,497,212

Loss before Income Taxes ..........................................................................................

(52,321)(47,131)(396,371)

Income Taxes (Note 9) ................................................................................................

1,433

1,134

10,856

Net Loss........................................................................................................................ ¥ (53,754)¥ (48,265)$ (407,227)

Costs and Expenses:

32,114

U.S. Dollars(Note 1)Yen

Net Loss per Common Share (Note 15)..................................................................... ¥See notes to non-consolidated financial statements.

16

CHIYODA CORPORATION

(275)

¥

(247)

$

(2.08)

Non-Consolidated Statements ofShareholders’ Equity
Chiyoda Corporation
Years ended March 31, 1998 and 1997

Thousands
Shares ofCommonStock

Balance, April 1, 1996 ................................................................ 195,224

Millions of Yen
CommonStock

Additional
Paid-in
CapitalLegal
Reserve(Deficit)
Retained
Earnings¥14,753¥18,022¥2,646¥(73,610

Net loss ...................................................................................

(48,265)

Transfer to legal reserve........................................................

169

(169)

Cash dividends, ¥8 per share (Note 8) .................................

(1,562)

Bonuses to directors ..............................................................

(120)

Balance, March 31, 1997 ............................................................ 195,224

14,75318,022

2,815

23,494

Net loss ...................................................................................
Balance, March 31, 1998 ............................................................ 195,224(53,754)¥14,753¥18,022¥2,815¥(30,260)

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

Additional
Paid-in
CapitalLegal
Reserve(Deficit)
Retained
Earnings

Balance, March 31, 1997..................................................................................... $111,765$136,530$21,326$(177,985

Net loss ............................................................................................................
Balance, March 31, 1998..................................................................................... $111,765(407,227)$136,530$21,326$(229,242)

See notes to non-consolidated financial statements.

17

Non-Consolidated Statementsof Cash Flows
Chiyoda Corporation
Years ended March 31, 1998 and 1997

Millions of Yen

1998

1997

Operating Activities:
Net loss........................................................................................................................ ¥(53,754) ¥(48,265)
Adjustments to reconcile net loss to net cashused in operating activities:
Depreciation and amortization ..............................................................................
2,058
2,233
Loss (gain) on disposal of property, plant and equipment—net ........................
(1,071)
330
Loss (gain) on sales of marketable securities—net .............................................
1,799
(35)
Loss on devaluation of marketable securities......................................................
1,672
Reversal of retirement benefits—net ....................................................................
(755)
(200)
Provision for allowance for doubtful accounts—net ...........................................
5,637
220
Provision for financial support to subsidiaries ....................................................
4,239
Provision for (reversal of) loss on investment in subsidiaries andassociated companies and investment securities .............................................
1,326
(115)
Other—net...............................................................................................................
(1,068)(1,735)
Changes in operating assets and liabilities:(Increase) decrease in notes and accounts receivable and costs
and estimated earnings on long-term construction contracts...................... 63,389(31,267)(Increase) decrease in costs of construction contracts in process .................
(856)
4,782
Increase in other assets .....................................................................................
(276)
(433)
Increase (decrease) in trade notes and accounts payable .............................. (37,748)
14,857
Increase (decrease) in advance receipts on construction contracts............... 12,898(22,910)Decrease in other liabilities ...............................................................................
(3,682)(51)
Net cash used in operating activities ............................................................

Thousands of
U.S. Dollars(Note 1)

1998$(407,227)

15,591(8,114)
13,62912,667(5,720)42,705
32,114
10,045(8,091)

480,220(6,485)(2,091)(285,970)
97,712(27,894)(6,192)(82,589)(46,909)

17,443
1,421

6,668(1,391)132,144
10,765(66)(31)(2,944)8
460(3,518)

(500)
(235)
(22,303)

Net cash provided by investing activities.....................................................

15,823

2,227

119,871

Financing Activities:
Proceeds from (repayment of) short-term bank loans ............................................
Repayment of long-term debt ...................................................................................
Payment of dividends ................................................................................................

(3,760)(1,458)90,000(31,916)(1,562)(28,485)(11,045)

Net cash (used in) provided by financing activities.....................................

(5,218)56,522(39,530)Net Increase (Decrease) in Cash ...................................................................................

4,413(23,840)

33,432

Cash, Beginning of Year ................................................................................................

27,02650,866

204,743

Cash, End of Year ........................................................................................................... ¥(31,439¥(27,026$(238,175

Additional Cash Flow Information:
Interest paid ................................................................................................................ ¥(01,945
Income taxes paid ......................................................................................................
1,435¥(01,483
1,199$(014,735
10,871

Investing Activities:
Proceeds from sales of marketable securities—net ................................................
Proceeds from sales of (purchases of) property, plant and equipment—net .......
Proceeds from sales of (investments in) subsidiaries andassociated companies—net ....................................................................................
Proceeds from sales of (investments in) investment securities—net ....................
Payment for long-term loans—net ...........................................................................

See notes to non-consolidated financial statements.

18

CHIYODA CORPORATION

Notes to Non-Consolidated
Financial Statements
Chiyoda Corporation
Years ended March 31, 1998 and 1997

1. Basis of Presenting Non-Consolidated Financial Statements
The accompanying non-consolidated financial statements have been prepared from the accounts maintained by
Chiyoda Corporation (the “Company”) in accordance with the provisions set forth in the Commercial Code of Japan(the “Code”) and in conformity with accounting principles and practices generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International Accounting Standards. The nonconsolidated statements of cash flows are not required as part of the basic financial statements in Japan but arepresented herein as additional information.
In preparing these non-consolidated financial statements, certain reclassifications and rearrangements have been
made to the Company’s financial statements issued domestically in order to present them in a form which is morefamiliar to readers outside Japan. Also, certain reclassifications have been made to the 1997 financial statements inorder for them to conform to the classifications used in 1998.
The non-consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and principally operates. The translations of Japanese yen amounts into U.S. dollar
amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥132
to $1, the approximate rate of exchange at March 31, 1998. 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.

2. Summary of Significant Accounting Policies
a. Construction Contracts
Income on contracts in the amount of more than ¥5 billion and having a construction duration of more than 18
months is recognized on the percentage-of-completion method in the ratio that costs incurred bear to total estimatedcosts. Under this method, related costs and estimated earnings in excess of progress billings are presented as acurrent asset.
Unbilled costs on the other contracts, which are accounted for by the completed-contract method, are stated ascosts of construction contracts in process.
Payments received in excess of costs and estimated earnings on the contracts, which are accounted for by thepercentage-of-completion method, and costs incurred on the other contracts are presented as a current liability.
Costs of preparation work for unsuccessful proposals and other projects which are not realized are charged
to income and are included in costs of construction contracts.
b. Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all time deposits to be cash equivalents.
Time deposits have original maturities of one year or less and can be withdrawn on demand with no diminutionof principal.
c. Foreign Currency Translations
Short-term receivables and payables (including the current portion of long-term debt) denominated in foreign currencies are translated into Japanese yen at rates prevailing at the respective balance sheet dates.
Long-term receivables and payables denominated in foreign currencies are translated into Japanese yen at rates
prevailing at the transaction dates except for those which are translated using the exchange rate set forth in theapplicable forward exchange contract.
Foreign exchange gains and losses are recognized in the fiscal periods in which they occur.
d. Marketable and Investment Securities
Marketable securities and other investment securities are stated at cost as determined by the moving-averagemethod. However, where the market value declines to less than half of the carrying value and such decline is deemed
to be other than temporary, the value of the securities is written down to market.
Certain securities with a cost of ¥8,377 million ($63,462 thousand) had market values of approximately half the carrying value but were carried at cost since the decline was deemed temporary as of March 31, 1998.
Investments in subsidiaries and associated companies (companies in which the Company’s ownership is from 20%
to 50%) are stated at cost as determined by the moving-average method.
e. Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed using the declining-balance method basedon the estimated useful lives of the assets.
f. Leases
All leases are accounted for as operating leases. Under Japanese accounting standards for leases, finance leases thatdeem to transfer ownership of the leased property to the lessee are to be capitalized, while other finance leases are
permitted to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed in
the notes to the lessee’s non-consolidated financial statements.
19

g. Income Taxes
Income taxes are provided for amounts currently payable for each year. The tax effect of temporary differences
between financial and tax reporting has not been recognized in the non-consolidated financial statements.
h. Retirement Benefits
The provision for employees’ retirement benefits is calculated to state the liability at the actuarially computed present
value of severance payment costs for employees eligible for severance payments at each balance sheet date, less theamount funded in the pension plan.
The amounts contributed to the fund, including prior service costs, are charged to income when paid.
Retirement benefits to directors and corporate auditors are provided at the amount which would be required basedon the Company’s regulations, if all directors and corporate auditors terminated their offices at the end of each period.

3. Transactions with Subsidiaries and Associated Companies
Significant transactions with and balances due from/(to) subsidiaries and associated companies at March 31, 1998
and 1997, are summarized as follows:
Millions of Yen

1998

1997

Transactions:
Construction contract revenues .................................................................................... ¥41,020 ¥19,817
Interest and cash dividend income...............................................................................
566
1,442
Due from/(to):Notes and accounts receivable—trade.........................................................................
Short-term loans included in “Prepaid expenses and other” ....................................
Long-term loans .............................................................................................................
Long-term receivables ...................................................................................................
Notes and accounts payable .........................................................................................

5,239
4,451
987
8,744
(3,343)

2,699
5,676
6,029
(6,256)

Thousands of
U.S. Dollars

1998$310,758
4,288
36,68933,7207,477
66,242(25,326)

The Company has guaranteed the indebtedness of certain subsidiaries and associated companies in the amountof ¥30,347 million ($229,902 thousand) at March 31, 1998.

4. Construction Contracts
Costs and estimated earnings recognized with respect to construction contracts which are accounted for by thepercentage-of-completion method at March 31, 1998 and 1997, are as follows:
Millions of Yen

1998

1997

Costs and estimated earnings..................................................................................... ¥217,034 ¥230,367
Amounts billed ............................................................................................................. (195,565) (167,240)
Total ...................................................................................................................... ¥021,469¥063,127

Thousands of
U.S. Dollars

1998$1,644,197(1,481,553)$0,162,644

Costs of construction contracts in process which are accounted for by the completed-contract method at March 31,
1998 and 1997, are as follows:
Millions of Yen

1998

Thousands of
U.S. Dollars

1997

1998

Costs incurred .................................................................................................................. ¥42,716
Amounts billed................................................................................................................. (22,330)¥36,250(16,720)$323,606(169,167)

Total .......................................................................................................................... ¥20,386¥19,530$154,439

20

CHIYODA CORPORATION

5. Marketable and Investment Securities
Marketable and investment securities as of March 31, 1998 and 1997, consisted of the following:
Millions of Yen

1998

Thousands of
U.S. Dollars

1997

1998

Current:
Marketable equity securities ....................................................................................... ¥42,393
Government and corporate bonds .............................................................................
506¥48,807
15,006$321,159
3,833

Total .......................................................................................................................... ¥42,899¥63,813$324,992

Non-current:
Unquoted securities .................................................................................................... ¥02,455
Corporate bonds and other.........................................................................................
17¥02,424
2,017$018,598
129

Total .......................................................................................................................... ¥02,472¥04,441$018,727

The carrying amounts of marketable securities, debt securities and the related aggregate market values excluding
certain securities for which market information was not available and without any risk of market price fluctuation
at March 31, 1998 and 1997, were as follows:
Millions of Yen

1998

Thousands of
U.S. Dollars

1997

1998

Carrying amount .............................................................................................................. ¥42,398
Aggregate market value .................................................................................................. 40,564¥48,81352,078$321,197
307,303

Net unrealized gain (loss) ....................................................................................... ¥ (1,834)¥03,265$ (13,894)

6. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans at March 31, 1998, bear interest principally at 1.6% per annum.
Long-term debt at March 31, 1998 and 1997, consisted of the following:
Millions of Yen

1998

Thousands of
U.S. Dollars

1997

1998

Long-term loans from banks and insurance companies,
maturing serially through 2010, with interest rates at 2.10% to 7.70%:
Collateralized .................................................................................................................. ¥2,715
Uncollateralized.............................................................................................................. 1,316¥3,0891,400$20,568
9,970

Total ............................................................................................................................ 4,031
Current portion ................................................................................................................... (543)4,489(1,470)30,538(4,114)..................................................................................................................................... ¥3,488¥3,019$26,424

21

Annual maturities of long-term loans from banks and insurance companies are as follows:
Millions of Yen

Thousands of
U.S. Dollars

1999 .............................................................................................................................................
2000 .............................................................................................................................................
2001 and thereafter ....................................................................................................................

¥1,543606
2,882$04,114
4,591
21,833

Total ....................................................................................................................................

¥4,031$30,538

Millions of Yen

Thousands of
U.S. Dollars

Marketable securities .................................................................................................................
Notes and accounts receivable—trade.....................................................................................
Property, plant and equipment .................................................................................................

¥2,7891,684
1,635$21,129
12,75812,386

Total ....................................................................................................................................

¥6,108$46,273

Years Ending March 31,

The following assets were pledged as collateral for long-term loans at March 31, 1998:

7. Retirement and Pension Plan
Employees who terminate their services with the Company are, under most circumstances, entitled to receive lump-sum
retirement benefits based upon their rate of pay at the time of termination, years of service and certain other factors.
However, an employee who terminates at the age of over 50 years old with service of at least 20 years is entitled
to receive an annuity from the trustee under the pension plan which covers such employees. If the annuity does notreach the level of total retirement benefits due, the remainder would be paid by the Company.
Retirement benefits at March 31, 1998, include retirement benefits to directors and corporate auditors in the amountof ¥914 million ($6,924 thousand). The retirement benefits to directors and corporate auditors are paid subject to theapproval of the shareholders.
The assets of the fund as of March 31, 1998, totaled ¥8,224 million ($62,303 thousand).
Severance and pension expenses aggregated ¥2,113 million ($16,008 thousand) and ¥2,026 million for the years
ended March 31, 1998 and 1997, respectively.

8. Shareholders’ Equity
Under the Code, at least 50% of the issue price of new shares, with a minimum of the par value thereof, is required to
be designated as stated capital. The portion which is to be designated as stated capital is determined by resolution of
the Board of Directors. Proceeds in excess of the amounts designated as stated capital are to be credited to additional
paid-in capital.
Under the Code, amounts equal to at least 10% of the aggregate amount of cash dividends and certain otherappropriations of retained earnings associated with cash outlays applicable to each fiscal period must be set aside
as a legal reserve until such reserve equals 25% of stated capital. This reserve is not available for dividends but may
be used to reduce a deficit or may be transferred to stated capital.
The Company may also transfer, upon approval of the shareholders, a portion of unappropriated retained earnings
available for dividends to the capital stock account.

22

CHIYODA CORPORATION

9. Income Taxes
The Company is subject to a corporate tax, inhabitants tax and enterprise tax, all based on income, which in theaggregate resulted in a normal effective statutory tax rate of approximately 52% for the years ended March 31, 1998
and 1997.
Under the current Japanese tax regulations, a net operating loss can be carried forward for five years and deductedfrom any taxable income. The Company has a net operating loss carryforward of approximately ¥54,230 million($410,833 thousand) at March 31, 1998.
The net operating loss carryforwards, if not utilized, will expire as follows:
Millions of Yen

Thousands of
U.S. Dollars

2002 .............................................................................................................................................
2003 .............................................................................................................................................

¥35,381
18,849$268,038
142,795

Total ....................................................................................................................................

¥54,230$410,833

Years Ending March 31,

Foreign income taxes of ¥1,383 million ($10,477 thousand) are included in “Income Taxes” for the year ended
March 31, 1998.

10. Revenues—Other
Revenues—other consisted of the following:
Millions of Yen

1998

Thousands of
U.S. Dollars

1997

1998

Gain on sales of property, plant and equipment ................................................................. ¥1,387
Other ........................................................................................................................................
378

¥626

$10,507
2,864

Total ................................................................................................................................. ¥1,765¥626$13,371

11. Costs and Expenses—Other
Costs and expenses—other consisted of the following:
Millions of Yen

1998

1997

Loss on sales of marketable securities—net ..................................................................... ¥1,799
Loss on devaluation of marketable securities .................................................................. 1,672
Provision for loss on investment in subsidiaries andassociated companies and investment securities .......................................................... 1,326
Additional retirement benefits paid to employees ...........................................................
462
Loss on disposal of fixed assets ........................................................................................
316
Damage settlement .............................................................................................................
Other.....................................................................................................................................
179¥0,3301,200
206

Total.............................................................................................................................. ¥5,754¥1,736

Thousands of
U.S. Dollars

1998$13,629
12,666
10,045
3,500
2,394
1,356
$43,59023

12. Leases
The Company leases certain machinery, computer equipment, office space and other assets. Total rental expenses
under the above leases were ¥688 million ($5,212 thousand) and ¥823 million for the years ended March 31, 1998
and 1997, respectively.
Pro forma information of leased property such as acquisition cost, accumulated depreciation, obligations underfinance lease, depreciation expense and interest expense of finance leases that do not transfer ownership of theleased property to the lessee on an “as if capitalized“ basis for the years ended March 31, 1998 and 1997, was as follows:Year Ended March 31, 1998

Millions of Yen
Machinery andEquipment

Other

Total

Acquisition cost .........................................................................................................................
Accumulated depreciation ........................................................................................................

¥2,952
2,076

¥72
59

¥3,0242,135

Net leased property ...........................................................................................................

¥0,876¥13¥0,889Thousands of U.S. Dollars
Machinery andEquipment

Other

Total

Acquisition cost .........................................................................................................................
Accumulated depreciation ........................................................................................................

$22,364
15,727$545
447$22,909
16,174

Net leased property ...........................................................................................................

$06,637$098$06,735

Obligations under finance leases:
Millions of Yen

Thousands of
U.S. Dollars

Due within one year ...................................................................................................................
Due after one year......................................................................................................................

¥402
487

$3,046
3,689

Total ....................................................................................................................................

¥889$6,735

Year Ended March 31, 1997

Millions of Yen
Machinery andEquipment

Other

Total

Acquisition cost .........................................................................................................................
Accumulated depreciation ........................................................................................................

¥3,356
1,906

¥62
43

¥3,418
1,949

Net leased property ...........................................................................................................

¥1,450¥19¥1,469Obligations under finance leases:
Millions of Yen

Due within one year ...............................................................................................................................................
Due after one year ..................................................................................................................................................

¥0,700769

Total .................................................................................................................................................................

¥1,469Depreciation expense which is not reflected in the accompanying statements of operations, computed by thestraight-line method, was ¥688 million ($5,212 thousand) and ¥823 million for the years ended March 31, 1998 and1997, respectively.
The amounts of obligations, acquisition cost and depreciation under finance leases include the imputed interest
expense portion.

24

CHIYODA CORPORATION

13. Derivatives
The Company enters into foreign exchange forward contracts and currency option contracts to hedge foreignexchange risk associated with certain assets and liabilities denominated in foreign currencies. It is the Company
policy to use derivatives only for the purpose of reducing market risks associated with assets or liabilities. The
Company does not hold or issue derivatives for trading purposes.
Because the counterparties to these derivatives are limited to major international financial institutions, the Company does not anticipate any losses arising from credit risk.
The basic policies for the use of derivatives are approved by the management and the execution and control ofderivatives are controlled by the Financing Department. Each derivative transaction is periodically reported to the
Accounting Department and management.
Forward exchange contracted amounts which are assigned to associated assets or liabilities and are reflected on
the balance sheet at year end are not subject to the disclosure of market value information.
The total of forward exchange contracted amounts which were not reflected on the non-consolidated balance sheet
and currency option contracts as of March 31, 1998 and 1997, were as follows:Year Ended March 31, 1998

Millions of Yen

Amount ofForeign Currency

Foreign exchange forward contracts:
Buying forward:
U.S. dollars..................................................................... 181,680 thousand
German marks ............................................................... 085,478 thousand
Singapore dollars .......................................................... 040,315 thousand
Other ...............................................................................
Total ............................................................................
Selling forward:
U.S. dollars..................................................................... 276,894 thousand
Other ...............................................................................
Total ............................................................................

Amount in
Equivalent of Yen
Valued at Forward
Exchange Rate

Amount in Equivalentof Yen Valued at
Forward Exchange
Rate as ofMarch 31, 1998

¥21,490
5,893
3,331
7,886

¥23,333
6,023
3,204
7,658

¥38,600¥40,218¥34,356
3,107¥36,074
3,111¥37,463¥39,185

Millions of Yen
Contract Amount

Fair Value

Currency options contracts:
Call:
U.S. dollars ..........................................................................................................
(Option premiums on balance sheet)................................................................
German marks.....................................................................................................
(Option premiums on balance sheet)................................................................

¥5,211
(213)
1,460
(42)

Total .................................................................................................................

¥6,671¥433

Put:
U.S. dollars ..........................................................................................................
(Option premiums on balance sheet)................................................................

¥4,400
(213)

¥095

¥410
23

25

Millions of Yen

Year Ended March 31, 1997

Amount ofForeign Currency

Foreign exchange forward contracts:
Buying forward:
U.S. dollars..................................................................... 105,209 thousand
German marks ............................................................... 036,532 thousand
Dutch guilders................................................................ 030,879 thousand
Other ...............................................................................
Total ............................................................................
Selling forward:
U.S. dollars..................................................................... 276,894 thousand
Other ...............................................................................
Total ............................................................................

Amount in
Equivalent of Yen
Valued at Forward
Exchange Rate

Amount in Equivalentof Yen Valued at
Spot Rate as ofMarch 31, 1997

¥11,526
2,296
2,043
3,318

¥13,056
2,698
2,028
3,381

¥19,183¥21,163¥41,604
1,343¥45,333
1,409¥42,947¥46,742

14. Subsequent Event
The following proposed disposition of accumulated deficit at March 31, 1998, was approved at the shareholders’meeting held on June 26, 1998:

Balance of accumulated deficit at March 31, 1998 ..................................................................
Accumulated deficit to be carried forward ..............................................................................

Millions of Yen

Thousands of
U.S. Dollars¥30,260
30,260$229,242
229,242

15. Per Common Share Information
Net loss per common share is based upon the weighted average number of shares outstanding during each year.
The average number of common shares used in the computation was 195,224 thousand shares for 1998 and 1997.
Fully diluted net income per share is not disclosed because of the Company’s net loss position.

26

CHIYODA CORPORATION

Opinion of Independent
Public Accountants

Independent Auditors’ Report
To the Board of Directors and Shareholders of Chiyoda Corporation:
We have examined the non-consolidated balance sheets of Chiyoda Corporation as of March 31, 1998 and1997, and the related non-consolidated statements of operations, shareholders’ equity, and cash flows forthe years then ended, all expressed in Japanese yen. Our examinations were made in accordance withauditing standards generally accepted in Japan and, accordingly, included such tests of the accounting
records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the non-consolidated financial statements referred to above present fairly the financial
position of Chiyoda Corporation as of March 31, 1998 and 1997, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles generally accepted in Japanapplied on a consistent basis.
Our examinations also comprehended the translation of Japanese yen amounts into U.S. dollar amounts
and, in our opinion, such translation has been made in conformity with the basis stated in Note 1. Such
U.S. dollar amounts are presented solely for the convenience of readers outside Japan.

June 26, 199827

Consolidated Balance Sheets
Chiyoda Corporation and Consolidated Subsidiaries
March 31, 1998 and 1997

ASSETS

Thousands of
U.S. Dollars(Note 1)Millions of Yen

1998

1997*

1998

¥020,742$0,248,576

Current Assets:
Cash .......................................................................................................................... ¥032,812
Time deposits...........................................................................................................

7,237

19,39954,826

Marketable securities (Notes 5 and 6)....................................................................

46,45470,289351,924

Notes and accounts receivable—trade (Notes 3 and 6) .......................................

59,28586,479449,129

Costs and estimated earnings onlong-term construction contracts (Note 4)...........................................................

26,161

63,620

198,189

Allowance for doubtful notes and accounts..........................................................

(413)

(692)

(3,129)Costs of construction contracts in process (Note 4) .............................................

20,784

21,491

157,455

Prepaid expenses and other (Note 3).....................................................................

13,337

14,363101,038

Total current assets .........................................................................................

205,657

295,691

1,558,008

Property, Plant and Equipment (Note 6):
Land ..........................................................................................................................

6,883

7,331

52,144

Buildings and structures .........................................................................................

31,49230,815

238,576

Machinery and equipment ......................................................................................

19,441

20,736147,280

Construction in progress.........................................................................................

37

271

280

Total ..................................................................................................................

57,85359,153438,280

Accumulated depreciation ......................................................................................

(31,482)(31,390)(238,500)

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

26,371

27,763

199,780

Investments and Other Assets:
Investment securities:
Non-consolidated subsidiaries and associated companies .............................

4,964

5,319

37,606

Other (Note 5) ......................................................................................................

2,917

4,843

22,098

Total investment securities .............................................................................

7,881

10,16259,704Long-term loans—net (Note 3) ...............................................................................

4,309

8,070

32,644Long-term receivables—net (Note 3) .....................................................................

6,322

569

47,894

Other investments (Note 6).....................................................................................

7,012

7,640

53,121

Allowance for doubtful accounts ...........................................................................

(78)

(52)

(591)

Translation adjustments .........................................................................................

272

694

2,061

Total investments and other assets ...............................................................

25,71827,083

194,833

Total .............................................................................................................................. ¥257,746¥350,537$1,952,621*Reclassified to conform to 1998 classifications.
See notes to consolidated financial statements.

28

CHIYODA CORPORATION

LIABILITIES AND SHAREHOLDERS’ EQUITY

Thousands of
U.S. Dollars(Note 1)Millions of Yen

1998

1997*

1998

¥115,155$0,846,402

Current Liabilities:
Short-term bank loans (Note 6) .............................................................................. ¥111,725
Current portion of long-term debt (Note 6) ...........................................................

1,844

2,771

13,970Notes and accounts payable—trade (Note 3)........................................................

75,870120,462

574,773

Advance receipts on construction contracts .........................................................

32,544

21,121

246,545

Provision for financial support to a subsidiary .....................................................

1,481

Accrued expenses and other ..................................................................................

11,817

15,23789,522

Total current liabilities.....................................................................................

235,281274,746

1,782,432

Long-term debt (Note 6)..........................................................................................

7,569

8,401

57,341Retirement benefits (Note 7)...................................................................................

8,541

9,219

64,705

Other non-current liabilities ....................................................................................

156

171

1,181

Total non-current liabilities .............................................................................

16,266

17,791

123,227

Minority Interest ..........................................................................................................

268

239

2,030

Shareholders’ Equity (Note 8):
Common stock, ¥50 par value—authorized, 600,000 thousand shares;
issued and outstanding, 195,224 thousand shares.............................................

14,753

14,753

111,765

Additional paid-in capital ........................................................................................

18,022

18,022

136,530

Legal reserve ............................................................................................................

2,903

2,895

21,992

11,220Non-Current Liabilities:

Contingent Liabilities (Notes 3 and 12)(Deficit) retained earnings ......................................................................................

(29,746)

22,092(225,348)

Treasury stock ..........................................................................................................

(1)

(1)

(7)

Total shareholders’ equity ..............................................................................

5,931

57,761

44,932

Total .............................................................................................................................. ¥257,746¥350,537$1,952,621

29

Consolidated Statements of Operations
Chiyoda Corporation and Consolidated Subsidiaries
Years ended March 31, 1998 and 1997

Thousands of
U.S. Dollars(Note 1)Millions of Yen

1998

1997*

1998

¥445,350$2,299,061

Revenues:
Construction contracts (Note 3).............................................................................. ¥303,476Interest and dividend income .................................................................................

2,198

2,458

16,652

Exchange gain—net.................................................................................................

2,743

3,143

20,780

Other (Note 10) ........................................................................................................

1,900

696

14,393

Total revenues .................................................................................................

310,317451,647

2,350,886

Construction contracts ............................................................................................

329,446

478,0312,495,803

Selling, general and administrative .......................................................................

16,58920,674

125,674

Interest ......................................................................................................................

1,845

1,266

13,977

Provision for doubtful accounts .............................................................................

4,413

173

33,432Other (Note 11) ........................................................................................................

6,391

1,808

48,417

Total costs and expenses ................................................................................

358,684

501,952

2,717,303

Loss before Income Taxes and Other Items .............................................................

(48,367)(50,305)(366,417)

Income Taxes (Note 9) ................................................................................................

1,967

1,509

14,901

Loss before Minority Interest andEquity in Loss of Associated Companies ................................................................

(50,334)(51,814)(381,318)

Minority Interest in Net Income (Loss) of Associated Companies .........................

(32)

48

(242)

Equity in Loss of Associated Companies ..................................................................

(1,429)(1,554)(10,826)

Net Loss........................................................................................................................ ¥ (51,795)¥ (53,320)$ (392,386)

Costs and Expenses:

U.S. Dollars(Note 1)Yen

Net Loss per Common Share (Note 15)..................................................................... ¥*Reclassified to conform to 1998 classifications.
See notes to consolidated financial statements.

30

CHIYODA CORPORATION

(265)

¥

(273)

$

(2.01)

Consolidated Statements ofShareholders’ Equity
Chiyoda Corporation and Consolidated Subsidiaries
Years ended March 31, 1998 and 1997

Thousands
Shares ofCommonStock

Balance, April 1, 1996 ..................................................... 195,224

Millions of Yen
CommonStock

Additional
Paid-in
CapitalLegal
Reserve(Deficit)
Retained
Earnings

Treasury
Stock¥14,753¥18,022¥2,715¥(77,329¥(2)

Net loss........................................................................

(53,320)

Decrease due to consolidation of subsidiaries
not consolidated in the previous year ....................

(44)

Increase due to additional applicationof equity method ......................................................

21

Transfer to legal reserve ............................................

180

(180)

Cash dividends, ¥8 per share (Note 8) ......................

(1,562)

Bonuses to directors and corporate auditors...........

(152)

Decrease in treasury stock .........................................
Balance, March 31, 1997 ................................................ 195,224

1
14,75318,022

2,895

Net loss........................................................................
Transfer to legal reserve ............................................

8

Bonuses to directors and corporate auditors...........
Balance, March 31, 1998 ................................................ 195,224

22,092(1)(51,795)(8)(35)¥14,753¥18,022¥2,903¥(29,746)¥(1)

CommonStock

Additional
Paid-in
CapitalLegal
Reserve(Deficit)
Retained
Earnings

Treasury
Stock

Balance, March 31, 1997 .................................................................... $111,765$136,530$21,932 $(167,364$(7)Thousands of U.S. Dollars (Note 1)

Net loss............................................................................................

(392,386)

Transfer to legal reserve ................................................................

60

Bonuses to directors and corporate auditors...............................
Balance, March 31, 1998 .................................................................... $111,765

(60)
(266)

$136,530$21,992 $(225,348)$(7)

See notes to consolidated financial statements.

31

Consolidated Statements of Cash Flows

Millions of Yen

1998

1997

Operating Activities:
Net loss........................................................................................................................ ¥(51,795) ¥(53,320)
Adjustments to reconcile net loss to net cashused in operating activities:
Depreciation and amortization ..............................................................................
3,767
3,972
Loss (gain) on sales and disposal of property, plant and equipment—net .......
(1,132)
264
Loss (gain) on sales of marketable securities—net .............................................
1,799
(38)
Loss on devaluation of marketable securities......................................................
1,672
Reversal of retirement benefits—net ....................................................................
(678)
(131)
Provision for allowance for doubtful accounts—net ...........................................
4,257
219
Provision for financial support to a subsidiary ....................................................
1,481
Provision for (reversal of) loss on investment in subsidiaries andassociated companies and investment securities .............................................
530
(115)
Other—net ...............................................................................................................
1,372(1,783)
Changes in operating assets and liabilities:(Increase) decrease in notes and accounts receivable and costs
and estimated earnings on long-term construction contracts...................... 62,627(28,566)
Decrease in costs of construction contracts in process ..................................
707
6,363
Increase in other operating assets ...................................................................
(2,191)(2,236)
Increase (decrease) in trade notes and accounts payable .............................. (44,592)
14,060
Increase (decrease) in advance receipts on construction contracts............... 11,423(19,065)
Increase (decrease) in other operating liabilities .............................................
(3,435)251
Net cash used in operating activities ............................................................

Thousands of
U.S. Dollars(Note 1)

1998$(392,386)

28,538(8,576)
13,62912,667(5,136)32,250
11,220
4,015
10,393

474,447
5,356(16,598)(337,818)
86,538(26,023)(14,188)(80,125)(107,484)

20,364(358)

6,316(2,654)

154,273(2,712)

(175)
(74)
(472)

1,146
442
(2,736)(1,326)(561)(3,576)

Net cash provided by investing activities.....................................................

19,2852,514

146,098

Financing Activities:
Proceeds from (repayment of) short-term bank loans ............................................
Repayment of long-term debt ...................................................................................
Payment of dividends ................................................................................................

(3,430)(1,759)89,150(31,455)(1,562)(25,985)(13,326)

Net cash (used in) provided by financing activities.....................................

(5,189)56,133(39,311)

Net Decrease in Cash .....................................................................................................

(92)(21,478)(697)

Cash and Cash Equivalents, Beginning of Year...........................................................

40,141

61,619304,099

Cash and Cash Equivalents, End of Year ..................................................................... ¥(40,049¥(40,141$(303,402

Additional Cash Flow Information:
Interest paid ................................................................................................................ ¥(01,946
Income taxes paid ......................................................................................................
1,894¥(01,593
2,237$(014,742
14,348Investing Activities:
Proceeds from sales of marketable securities—net ................................................
Purchases of property, plant and equipment—net..................................................
Net (increase) decrease in investments in non-consolidated
subsidiaries and associated companies .................................................................
Net (increase) decrease in investment securities ....................................................
Net increase in long-term loans ................................................................................

See notes to consolidated financial statements.

32

CHIYODA CORPORATION

Notes to Consolidated Financial
Statements
Chiyoda Corporation and Consolidated Subsidiaries
Years ended March 31, 1998 and 1997

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forthin the regulations concerning consolidated financial statements issued by the Ministry of Finance and in conformity
with accounting principles and practices generally accepted in Japan, which are different in certain respects as toapplication and disclosure requirements of International Accounting Standards. The consolidated statements of cash
flows are not required as part of the basic financial statements in Japan but are presented herein as additional information.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been madeto the consolidated financial statements issued domestically in order to present them in a form which is more familiar
to readers outside Japan. Also, certain reclassifications have been made to the 1997 financial statements in order forthem to conform to the classifications used in 1998. In addition, the accompanying notes include certain information
which is not required under accounting principles and practices generally accepted in Japan but is presented herein
as additional information.
The consolidated financial statements include the accounts of Chiyoda Corporation (the “Company”) and all of its
significant subsidiaries. Significant intercompany transactions and accounts have been eliminated.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company is incorporated and principally operates. The translations of Japanese yen amounts into U.S. dollar amounts
are included solely for the convenience of readers outside Japan and have been made at the rate of ¥132 to $1, theapproximate rate of exchange at March 31, 1998. 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.

2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements include the accounts of the Company and its significant 12 majority-owned
subsidiaries (together, the “Companies”) in 1998 and 1997.
Investments in 3 associated companies (companies owned 20% to 50%) are accounted for by the equity method.
Investments in other subsidiaries and associated companies are stated at cost. If the equity method of accounting
had been applied to the investments in these companies, the effect on the accompanying consolidated financial
statements would not be material.
The excess of the cost of the Company’s investments in consolidated subsidiaries and associated companies
accounted for by the equity method, over its equity in the net assets at the respective dates of acquisition, wascharged to income at the time of acquisition as the amount involved was not material.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profits included in assets resulting from transactions within the Companies are eliminated.
b. Construction Contracts
Income on contracts in the amount of more than ¥5 billion and having a construction duration of more than 18
months is recognized on the percentage-of-completion method in the ratio that costs incurred bear to total estimatedcosts. Under this method, related costs and estimated earnings in excess of progress billings are presented as acurrent asset.
Unbilled costs on the other contracts, which are accounted for by the completed-contract method, are statedas costs of construction contracts in process.
Payments received in excess of costs and estimated earnings on the contracts, which are accounted for by thepercentage-of-completion method, and costs incurred on the other contracts are presented as a current liability.
Costs of preparation work for unsuccessful proposals and other projects which are not realized are charged toincome and are included in costs of construction contracts.
c. Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Company considers all time deposits to be cash equivalents,
effective April 1, 1997. Time deposits have original maturities of one year or less and can be withdrawn on demandwith no diminution of principal. Reclassifications have been made to the consolidated statement of cash flows for1997 to conform to classifications used in 1998.

33

d. Allowance for Doubtful Accounts
Long-term loans and long-term receivables are presented net of specific reserves for doubtful accounts provided forindividual customers in the amounts of ¥4,296 million ($32,546 thousand) and ¥1,512 million for the years ended
March 31, 1998 and 1997, respectively.
An additional allowance for doubtful accounts is provided as a general reserve for possible losses arising from noncollection of notes, accounts and loans receivable and is calculated based on the maximum amount allowable for tax
purposes.
e. Foreign Currency Translations
Short-term receivables and payables (including the current portion of long-term debt) denominated in foreign
currencies are translated into Japanese yen at rates prevailing at the respective balance sheet dates.
Long-term receivables and payables denominated in foreign currencies are translated into Japanese yen at
rates prevailing at the transaction dates except for those which are translated using the exchange rates set forthin the applicable forward exchange contract.
Foreign exchange gains and losses are recognized in the fiscal periods in which they occur.
The financial statements of foreign subsidiaries and associated companies are translated into Japanese yen at theexchange rates in effect at their respective balance sheet dates in compliance with Japanese accounting practices.
“Translation adjustments” in the consolidated financial statements result from such accounting practices.
f. Marketable and Investment Securities
Marketable securities and other investment securities are, in principle, stated at cost as determined by the movingaverage method. However, where the market value declines to less than half of the carrying value and such decline
is deemed to be other than temporary, the value of the securities is written down to market. Major investments inassociated companies (20% to 50% ownership interests) are accounted for by the equity method.
g. Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed using the declining-balance method
except for leased property owned by a certain leasing subsidiary which is computed using the straight-line method,
based on the estimated useful lives of the assets.
h. Leases
All leases are accounted for as operating leases. Under Japanese accounting standards for leases, finance leases thatdeem to transfer ownership of the leased property to the lessee are to be capitalized, while other finance leases are
permitted to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed in
the notes to the lessee’s consolidated financial statements. The disclosure requirements of these new standards arebeing applied on a step-by-step basis beginning with the fiscal year starting on April 1, 1997, with full implementation
expected for the fiscal year starting on April 1, 1998.
i. Income Taxes
Income taxes are provided for amounts currently payable for each year. The tax effect of temporary differences
between financial and tax reporting has not been recognized in the consolidated financial statements.
j. Retirement Benefits
The Company’s provision for employees’ retirement benefits is calculated to state the liability at the actuariallycomputed present value of severance payment costs for employees eligible for severance payments at eachbalance sheet date, less the amount funded in the pension plan.
The amounts contributed to the fund, including prior service costs, are charged to income when paid.
Retirement benefits to directors and corporate auditors are provided at the amount which would be required
based on the Company’s regulations, if all directors and corporate auditors terminated their offices at the endof each period.

34

CHIYODA CORPORATION

3. Transactions with Non-Consolidated Subsidiaries and Associated Companies
Significant transactions with and balances due from/(to) non-consolidated subsidiaries and associated companies
at March 31, 1998 and 1997, are summarized as follows:
Millions of Yen

1998

Transactions—construction contract revenues............................................................. ¥39,243
Due from/(to):Notes and accounts receivable—trade ......................................................................
2,122
Short-term loans included in “Prepaid expenses and other”..................................
4,421
Long-term loans...........................................................................................................
987
Long-term receivables.................................................................................................
6,484
Notes and accounts payable—trade ..........................................................................
(971)

Thousands of
U.S. Dollars

1997

1998

¥17,091$297,295

1,415
6,643
5,247

16,07633,492
7,477
49,121(7,356)(1,998)The Company has guaranteed the indebtedness of certain non-consolidated subsidiaries and associated companies
in the amount of ¥23,625 million ($178,977 thousand) at March 31, 1998.

4. Construction Contracts
Costs and estimated earnings recognized with respect to construction contracts which are accounted for by thepercentage-of-completion method at March 31, 1998 and 1997, are as follows:
Millions of Yen

1998

1997

Costs and estimated earnings..................................................................................... ¥226,707 ¥230,860
Amounts billed ............................................................................................................. (200,546) (167,240)
Total ...................................................................................................................... ¥026,161¥063,620

Thousands of
U.S. Dollars

1998$1,717,477(1,519,288)$0,198,189

Costs of construction contracts in process which are accounted for by the completed-contract method at March 31,
1998 and 1997, are as follows:
Millions of Yen

1998

Thousands of
U.S. Dollars

1997

1998

Costs incurred .................................................................................................................. ¥43,172
Amounts billed................................................................................................................. (22,388)¥38,866(17,375)$327,061(169,606)

Total .......................................................................................................................... ¥20,784¥21,491$157,455

35

5. Marketable and Investment Securities
The carrying amounts of marketable securities, debt securities and the related aggregate market values excluding
certain securities for which market information was not available and without any risk of market price fluctuation
at March 31, 1998 and 1997, were as follows:
Millions of Yen

1998

Thousands of
U.S. Dollars

1997

1998

Current:
Carrying amount .......................................................................................................... ¥42,539
Aggregate market value .............................................................................................. 40,829¥49,300
52,704$322,265
309,311

Net unrealized gain (loss) ....................................................................................... ¥ (1,710)¥03,404$ (12,954)

Non-current:
Carrying amount .......................................................................................................... ¥00,005
Aggregate market value ..............................................................................................
2¥00,0055$000,038
15

Net unrealized gain (loss) ....................................................................................... ¥¥00,000

$

(3)

(23)

6. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans at March 31, 1998, bear interest principally at 1.6% per annum.
Long-term debt at March 31, 1998 and 1997, consisted of the following:
Millions of Yen

Thousands of
U.S. Dollars

1998

1997

1998

Long-term loans from banks and insurance companies, maturing
serially through 2010, with interest rates at 1.87% to 7.70%:
Collateralized................................................................................................................
Uncollateralized ...........................................................................................................

¥3,055
6,358¥03,429
7,743$23,144
48,167

Total ..........................................................................................................................
Current portion ................................................................................................................

9,413(1,844)

11,172(2,771)

71,311(13,970)

Total ..........................................................................................................................

¥7,569¥08,401$57,341

Annual maturities of long-term loans from banks and insurance companies are as follows:
Millions of Yen

Thousands of
U.S. Dollars

1999 .............................................................................................................................................
2000 .............................................................................................................................................
2001 and thereafter ....................................................................................................................

¥1,844
2,271
5,298$13,970
17,205
40,136

Total ....................................................................................................................................

¥9,413$71,311

Millions of Yen

Thousands of
U.S. Dollars

Marketable securities .................................................................................................................
Notes and accounts receivable—trade.....................................................................................
Property, plant and equipment .................................................................................................
Other assets ................................................................................................................................

¥2,788
1,684
1,635
339

$21,12112,75812,386
2,568

Total ....................................................................................................................................

¥6,446$48,833

Years Ending March 31,

The following assets were pledged as collateral for long-term loans at March 31, 1998:

36

CHIYODA CORPORATION

7. Retirement and Pension Plan
Employees who terminate their services with the Company are, under most circumstances, entitled to receive
lump-sum retirement benefits based upon their rate of pay at the time of termination, years of service and certain
other factors.
However, an employee who terminates at the age of over 50 years old with service of at least 20 years is entitled
to receive an annuity from the trustee under the pension plan which covers such employees. If the annuity does notreach the level of total retirement benefits due, the remainder would be paid by the Company.
Certain consolidated subsidiaries also have severance payment and pension plans similar to those of the Company.
Retirement benefits at March 31, 1998, include retirement benefits to directors and corporate auditors in theamount of ¥1,226 million ($9,288 thousand). The retirement benefits to directors and corporate auditors are paid subject to the approval of the shareholders.
The assets of the fund as of March 31, 1998, totaled ¥8,457 million ($64,068 thousand).
Severance and pension expenses aggregated ¥2,277 million ($17,250 thousand) and ¥2,225 million for the years
ended March 31, 1998 and 1997, respectively.

8. Shareholders’ Equity
Under the Commercial Code of Japan (the “Code”), at least 50% of the issue price of new shares, with a minimum of
the par value thereof, is required to be designated as stated capital. The portion which is to be designated as statedcapital is determined by resolution of the Board of Directors. Proceeds in excess of the amounts designated as statedcapital are to be credited to additional paid-in capital.
Under the Code, amounts equal to at least 10% of the aggregate amount of cash dividends and certain other appropriations of retained earnings associated with cash outlays applicable to each fiscal period must be set aside as alegal reserve until such reserve equals 25% of stated capital. This reserve is not available for dividends but may be
used to reduce a deficit or may be transferred to stated capital.
The Company may also transfer, upon approval of the shareholders, a portion of unappropriated retained earnings
available for dividends to the capital stock account.

9. Income Taxes
The Company and its domestic consolidated subsidiaries are subject to a corporate tax, inhabitants tax and enterprisetax, all based on income, which in the aggregate resulted in a normal effective statutory tax rate of approximately 52%
for the years ended March 31, 1998 and 1997.
Foreign subsidiaries are subject to income taxes of the countries in which they operate.
The effective tax rates in the consolidated statements of operations differ from the normal effective statutory tax rates
primarily due to the effect of timing differences and the effect of permanently non-deductible expenses.
Under the current Japanese tax regulations, a net operating loss can be carried forward for five years and deductedfrom any taxable income. The Company has a net operating loss carryforward of approximately ¥54,230 million($410,833 thousand) at March 31, 1998.
The net operating loss carryforwards, if not utilized, will expire as follows:
Millions of Yen

Thousands of
U.S. Dollars

2002 .............................................................................................................................................
2003 .............................................................................................................................................

¥35,381
18,849$268,038
142,795

Total ....................................................................................................................................

¥54,230$410,833

Years Ending March 31,

37

10. Revenues—Other
Revenues—other consisted of the following:
Millions of Yen

1998

Thousands of
U.S. Dollars

1997

1998

Gain on sales of property, plant and equipment ................................................................. ¥1,388
Other ........................................................................................................................................
512

¥696

$10,515
3,878

Total ................................................................................................................................. ¥1,900¥696$14,393

11. Costs and Expenses—Other
Costs and expenses—other consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

1998

1997

1998

Loss on sales of marketable securities—net...................................................................... ¥1,799
Loss on devaluation of marketable securities ................................................................... 1,672
Provision for financial support to a subsidiary.................................................................. 1,481
Damage settlement ..............................................................................................................
Other ..................................................................................................................................... 1,439$13,629
12,667
11,220¥1,200608

10,901

Total .............................................................................................................................. ¥6,391¥1,808$48,417

12. Leases
Income from equipment leases for the years ended March 31, 1998 and 1997, was ¥475 million ($3,598 thousand) and¥583 million, respectively.
The Company leases certain machinery, computer equipment, office space and other assets, and a certain subsidiary has a leasing operation. Total rental expenses under the above leases were ¥232 million ($1,758 thousand)and ¥380 million for the years ended March 31, 1998 and 1997, respectively.
Pro forma information as lessor and lessee for leased property under finance leases that do not transfer ownershipof the leased property to the lessee on an “as if capitalized” basis for the year ended March 31, 1998, was as follows:
Millions of Yen

Thousands of
U.S. Dollars

Unearned
Lease Income(as lessor)

Obligations
under
Finance Lease(as lessee)

Unearned
Lease Income(as lessor)

Obligations
under
Finance Lease(as lessee)

Due within one year .....................................................................
Due after one year........................................................................

¥0,398909¥33
7$3,015
6,886

$250
53

Total ......................................................................................

¥1,307¥40$9,901$303

The amounts of unearned lease income and obligations under finance leases include the imputed interest income
portion and interest expense portion, respectively.

13. Segment Information
Japanese accounting standards on the disclosure of segment information are applied on a step-by-step basis beginning with fiscal years starting on or after April 1, 1995, with full implementation expected for fiscal years starting on
or after April 1, 1997. Retroactive restatement is not required.

38

CHIYODA CORPORATION

Information about foreign operations and sales to foreign customers of the Company and consolidated subsidiaries
for the years ended March 31, 1998 and 1997, was as follows:(1) Foreign Operations
Millions of yen
Japan

Asia

EuropeNorth
America

Subtotal

Eliminations(Corporate)

Construction contract revenue:
Outside customers ......................
Intersegment ...............................

¥287,979
29,958¥11,794
2,486¥0,062
2,861¥3,641
281¥303,476
35,586¥(35,586)

Total .........................................
Operating expenses ........................

317,937
357,456

14,28017,001

2,923
2,908

3,922
3,761

339,062
381,126(35,586)(35,091)

303,476
346,035

Operating profit (loss).....................

¥ (39,519)¥ (2,721)¥0,015¥0,161¥ (42,064)¥00,(495)(42,559)

Year Ended March 31, 1998

Consolidated¥303,476

Other income and expenses—net ..

(5,808)Loss before income taxes
and other items .............................

¥ (48,367)

Assets...............................................

¥271,078¥06,217¥0,363¥2,761¥280,419¥00,(286)¥280,133

Consolidated

Thousands of U.S. Dollars
Asia

EuropeNorth
America

Subtotal

Eliminations(Corporate)

Construction contract revenue:
Outside customers ...................... $2,181,659
Intersegment ...............................
226,955$089,349
18,833$00,470
21,674$27,5832,129$2,299,061
269,591$(269,591)

Total ......................................... 2,408,614
Operating expenses ........................ 2,708,000

108,182
128,796

22,14422,03029,71228,492

2,568,652
2,887,318(269,591)(265,841)

2,299,061
2,621,477

Operating profit (loss)..................... $ (299,386) $ (20,614) $00,114$01,220$ (318,666)$00(3,750)(322,416)

Year Ended March 31, 1998

Japan

$2,299,061

Other income and expenses—net ..

(44,001)

Loss before income taxes
and other items .............................

$ (366,417)

Assets............................................... $2,053,621$047,098$02,750$20,917$2,124,386$00(2,166)$2,122,220

Notes: 1. The Company and consolidated subsidiaries are summarized in four segments by geographic area based on the countries
where the Companies are located.
Notes: 1. The segments consisted of the following countries:
Asia:
Indonesia, Singapore
Europe:United Kingdom
North America:
United States of America
Notes: 2. Corporate assets mainly consist of long-term loans and investment securities of the Company. Corporate assets as ofMarch 31, 1998, were ¥12,656 million ($95,879 thousand).
Millions of Yen
Domestic

Overseas

Subtotal

Eliminations(Corporate)

Construction contract revenue:
Outside customers ........................................................... ¥429,880
Intersegment .....................................................................
46,029¥15,470
7,083¥445,350
53,112¥(53,112)

Total ...............................................................................
Operating expenses .............................................................

475,909525,949

22,553
24,668498,462
550,617(53,112)(51,912)445,350
498,705

Operating loss....................................................................... ¥ (50,040)¥ (2,115)¥ (52,155)¥0(1,200)(53,355)

Year Ended March 31, 1997

Consolidated¥445,350

Other income and expenses—net .......................................

3,050

Loss before income taxes and other items ........................

¥ (50,305)

Assets .................................................................................... ¥343,684¥09,836¥353,520¥0(2,983)¥350,53739

(2) Sales to Foreign Customers
Millions of Yen

Year Ended March 31, 1998

Asia

Overseas sales (A) ...................................................................................... ¥97,983
Consolidated sales (B) ................................................................................
(A)/(B) ........................................................................................................... 32.29%

The Near andMiddle East

Other

Total

¥101,580¥14,965

33.47%

4.93%¥214,528
303,476
70.69%

Thousands of U.S. Dollars

Year Ended March 31, 1998

Asia

Overseas sales (A)..................................................................................... $742,295
Consolidated sales (B) ..............................................................................

The Near andMiddle East

Other

Total

$769,546$113,371$1,625,212
2,299,061

Note: The Company and consolidated subsidiaries are summarized in three segments by geographic area based on the countries
where the Companies are located.
Note: The segments consist of the following countries:
Asia:
Indonesia, Singapore, Malaysia, etc.
The Near and Middle East:
Qatar, Oman, Saudi Arabia, etc.
Other:
Turkmenistan, Slovakia, etc.
Year Ended March 31, 1997

Millions of Yen

Overseas sales (A) ..................................................................................................................................................
Consolidated sales (B) ............................................................................................................................................
(A)/(B) .......................................................................................................................................................................

¥265,168
445,350
59.56%The Company and its consolidated subsidiaries operate predominantly in the engineering business, while certain
subsidiaries operate in leasing and software producing businesses which are minor in relation to the total business.
Accordingly, the presentation of industry segment information is not required under the related regulations.

14. Subsequent Event
The following proposed disposition of accumulated deficit of the Company at March 31, 1998, was approved at theshareholders’ meeting held on June 26, 1998:

Balance of accumulated deficit at March 31, 1998 ..................................................................
Accumulated deficit to be carried forward ..............................................................................

Millions of Yen

Thousands of
U.S. Dollars¥30,260
30,260$229,242
229,242

15. Per Common Share Information
Net loss per common share is based upon the weighted average number of shares outstanding during each year.
The average number of common shares used in the computation was 195,224 thousand shares for 1998 and 1997.
Fully diluted net income per share is not disclosed because of the Company’s net loss position.

40

CHIYODA CORPORATION

Opinion of Independent Public
Accountants

Independent Auditors’ Report
To the Board of Directors and Shareholders of Chiyoda Corporation:
We have examined the consolidated balance sheets of Chiyoda Corporation and consolidated
subsidiaries as of March 31, 1998 and 1997, and the related consolidated statements of operations,shareholders’ equity, and cash flows for the years then ended, all expressed in Japanese yen. Our
examinations were made in accordance with auditing standards generally accepted in Japan and,accordingly, included such tests of the accounting records and such other auditing procedures as
we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the financial
position of Chiyoda Corporation and consolidated subsidiaries as of March 31, 1998 and 1997, and theresults of their operations and their cash flows for the years then ended in conformity with accounting
principles generally accepted in Japan applied on a consistent basis.
Our examinations also comprehended the translation of Japanese yen amounts into U.S. dollar
amounts and, in our opinion, such translation has been made in conformity with the basis stated in
Note 1. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.

June 26, 1998

41

Corporate Directory

OFFICES
Yokohama Head OfficeBldgs. No. 1, 2, and 3,
12-1, Tsurumichuo 2-chome,
Tsurumi-ku, Yokohama 230-8601, Japan
Tel: 81-45-521-1231 Fax: 81-45-503-0200
Tlx: CHIYO J47726
Tokyo Engineering Center
Omori Bellport Bldg. D,
26-3, Minami-ohi 6-chome,
Shinagawa-ku, Tokyo 140-0013, Japan
Tel: 81-3-5762-8300 Fax: 81-3-5762-8301
Chiyoda Research Park
13, Moriya-cho 3-chome,
Kanagawa-ku, Yokohama 221-0022, Japan
Tel: 81-45-441-1268 Fax: 81-45-453-3416
Technowave Office
Technowave 100,
1-25, Shin-Urashima 1-chome,
Kanagawa-ku, Yokohama 221-0031, Japan
Tel: 81-45-411-9077 Fax: 81-45-441-9078
Hokkaido Sales Office
Sapporo MT Bldg.,
6-1, Kitasanjoh, Nishi 2-chome,
Chuo-ku, Sapporo 060-0003, Japan
Tel: 81-11-232-1320 Fax: 81-11-232-1318
Chubu Sales Office
Tohmei Kaihatsu Bldg.,
1-1, Ohzone 2-chome,
Kita-ku, Nagoya 462-0825, Japan
Tel: 81-52-916-2556 Fax: 81-52-914-7430
Osaka Sales Office
Green Bldg.,
6-26, Kitahama 2-chome,
Chuo-ku, Osaka 541-0041, Japan
Tel: 81-6-202-8561 Fax: 81-6-202-8563
Hiroshima Sales Office
Towa Fudosan Bldg. 802,
1-3, Ohtemachi 3-chome,
Naka-ku, Hiroshima 730-0051, Japan
Tel: 81-82-246-1805 Fax: 81-82-243-6476
Okinawa Sales Office
Kokuba Bldg., 21-1, Kumoji 3-chome,
Naha-shi, Okinawa 900-0015, Japan
Tel: 81-98-861-2696 Fax: 81-98-867-6093

REPRESENTATIVE OFFICES
Singapore Human Resources Office
10 Anson Road, #28-06A International Plaza,
Singapore 079903, Singapore
Tel: 65-324-0080 Fax: 65-324-0090
Chiyoda Beijing Representative Office
Room No. 1028, China World Tower No. 1,
Jianguomenwai Avenue,
Beijing 100004, China
Tel: 86-10-6505-2678 Fax: 86-10-6505-1118
Chiyoda Jakarta Representative Office
9th Floor, Mid-Plaza Bldg.,
Jalan Jenderal Sudirman Kav. 10-11,
Jakarta 10220, Indonesia
Tel: 62-21-570-7579 Fax: 62-21-570-6276

Chiyoda Tehran Branch Office
2nd Floor, No. 16, Mahtab Street,
Vanak Avenue, Tehran 19949, Iran
Tel: 98-21-8058592 Fax: 98-21-8058967
Chiyoda Doha Representative Office
6th Floor, Almana Centre,
Airport Road, Doha, Qatar
Tel: 974-621673 Fax: 974-622716
Chiyoda Milan Representative Office
Viale Della Liberazione 18, 20124 Milan,
Casella Postale 11126, Italy
Tel: 39-02-66986010 Fax: 39-02-66713444
Chiyoda Hague Representative Office
5th Floor, Koningin Julianaplein 30-5B,
Kantoren B 2595 AA, The Hague,
The Netherlands
Tel: 31-70-385-9453 Fax: 31-70-347-9174
Chiyoda Corporation
Singapore Office
14 International Business Park, Jurong East,
Singapore 609922, Singapore
Tel: 65-560-1274 Fax: 65-560-2563

OVERSEAS SUBSIDIARIES
Chiyoda International Corporation
Seattle Head Office
Metropolitan Park West Tower,
1100 Olive Way, Suite 500,
Seattle, WA 98101-1827, U.S.A.
Tel: 1-206-464-0034 Fax: 1-206-464-0739
Houston Office1177 West Loop South, Suite 1302,
Houston, TX 77027, U.S.A.
Tel: 1-713-965-9005 Fax: 1-713-965-0075
Chiyoda Hawaii Corporation
220 South King Street, Suite 890,
Honolulu, HI 96813, U.S.A.
Tel: 1-808-531-5777 Fax: 1-808-531-5886
Chiyoda Panamericana S.A. de C.V.
Reforma 39, 3er Piso Col.,
Revolucion, 06030 Mexico, D.F., Mexico
Tel: 52-5-703-3977 Fax: 52-5-705-4754
Chiyoda International Limited
33 Cavendish Square,
London W1M OLX, U.K.
Tel: 44-171-867-1221 Fax: 44-171-867-1414
Tlx: 94083136 CHYODA L
Chiyoda Deutschland GmbHTechnologie Park, Bergisch Gladbach,Friedrich-Ebert-Strasse, 51429 Bergisch
Gladbach, Germany
Tel: 49-2204-843080 Fax: 49-2204-843090
BCS International Ltd.
UL. Dominikanska 3/26,
31-043 Krakow, Poland
Tel: 48-12-423-1193 Fax: 48-12-423-1186
Chiyoda Singapore (Pte) Limited
14 International Business Park, Jurong East,
Singapore 609922, Singapore
Tel: 65-563-3488 Fax: 65-567-5231
Chiyoda Malaysia Sdn. Bhd.
15th Floor, Menara Maxisegar,
Jalan Pandan Indah, 4/2, Pandan
Indah 55100, Kuala Lumpur, Malaysia
Tel: 60-3-497-0988 Fax: 60-3-497-0800

Chiyoda (Thailand) Limited
Bangkok Head Office
5th Floor, Dusit Thani Office Bldg.,
No. 946, Rama IV Road,
Bangkok 10500, Thailand
Tel: 66-2-236-8037 Fax: 66-2-236-6841
Sriracha Office
P.O. Box 7, Ao-Udom,
Sriracha, Cholburi 20230, Thailand
Tel: 66-38-352-315/8 Fax: 66-38-352-321
PT. Chiyoda International Indonesia
Graha Mobisel 4th Floor, Jalan Buncit
Raya No. 139, Jakarta 12740, Indonesia
Tel: 62-21-790-2801 Fax: 62-21-797-1472
L&T–Chiyoda Limited
B.P. Estate, National Highway No. 8,
Chhani, Baroda–391740,
Gujarat State, India
Tel: 91-265-791902/3 Fax: 91-265-791596
C&E Corporation
C&E Corporation Bldg.,
Meralco Avenue Corner,
General Araneta Street,
Pasig, Metro Manila, Philippines
Tel: 63-2--636-1001/8 Fax: 63-2-636-1013
Chiyoda Australia Pty. Limited
Level 67, MLC Centre, Martin Place,
Sydney, NSW 2000, Australia
Tel: 61-2-9238-2132 Fax: 61-2-9238-2422
Chiyoda Petrostar Ltd.
Al-Khobar Office
P.O. Box 602, Dhahran Airport 31932,
Saudi Arabia
Tel: 966-3-864-0839/966-3-898-0034
Fax: 966-3-864-0986
Chiyoda Nigeria Limited
Lagos Head Office
Plot PC-12, 1st Floor, (AI I CO Plaza),
Afribank Street, Victoria Island,
Lagos, Nigeria
Tel: 234-1-2613291 Fax: 234-1-2612565
Tlx: 21218 THRU C.I. TOKYO
Kaduna Branch Office
Kachia Road, 17KM, P.O. Box 1144,
Kaduna, Nigeria
Chiyoda Polska Sp. Zo.o
UI.P. Skargi 8, #230, 40-091 Katowice, Poland
Tel/Fax: 48-32-587-000
Chiyoda Star Company
1177 West Loop South, Suite 1302,
Houston, Texas 77027, U.S.A.
Tel: 1-713-965-9005 Fax: 1-713-965-0075
Chiyoda & Public Works Co., Ltd.
No. 1 A, Thanthumar Road, 29 Ward,
Thuwunna, Thingangyun Township,
Yangon, The Union of Myanmar
Tel: 95-1-565615/579330
Fax: 95-1-579870
Kellogg-Chiyoda Service Ltd.
c/o W.S. Walker & Company,
1st Floor, Caledon House, Mary Street,
P.O. Box 265G George Town,
Grand Cayman, Cayman Island(As of August 1, 1998)

42

CHIYODA CORPORATIONCorporate Data

Established
January 20, 1948
Number of Employees
2,825
Main Business Activities
Planning, design, procurement, construction, commissioning, and operation assistance of public- and private-sector
facilities in such areas as petroleum, gas, petrochemicals,
general chemicals, coal, electric power, nonferrous metal
processing, waterworks, food processing, biochemistry,
pharmaceutical manufacturing, medical treatment, factory
automation and computer-integrated manufacturing, theme
park development, space development, and distribution as
well as related facilities for pollution prevention, environmental preservation and enhancement, and disaster prevention
Paid-in Capital¥14,753,322,890
Capital Stock Issued
195,224,059 shares
Number of Shareholders
12,532
Stock Exchange Listings
Tokyo, Osaka
Transfer Agent of Common Stock
The Mitsubishi Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku,
Tokyo 100, Japan(As of March 31, 1998)

43

Printed in Japan