Profile

Since its establishment in 1948, Chiyoda Corporation has engaged in engineering andconstruction work and services at numerous industrial plants both in Japan and overseas
in the fields of oil, natural gas and other energy sources; petrochemicals and chemicals;
pharmaceuticals; and general industrial machinery.
Thirty-seven years ago in 1972, Chiyoda’s founder was already emphasizing in a booklet entitled Legacy for the Twenty-first Century that sustainable social development should
progress by harmonizing nature and industrial development.
We were one of the first companies to state our intention to contribute to sustainablesocial development through our engineering and technology by providing appropriate solutions to the various energy and environmental issues we currently face, and have been
putting those words into action ever since. This booklet is available on our website.
With over 60 years of technological experience, Chiyoda is working to build on its position as the “Reliability No. 1” project company with a high level of customer and investor trust, not only in terms of technology but also in terms of our people and management.
At the same time, we will continue to improve our financial strength and to raise our corporate value.

Corporate
Philosophy

Enhance our business in aiming for harmony
between energy and the environment, andcontribute to the sustainable development of asociety as an integrated engineering company
through the use of our collective wisdom andpainstakingly developed technology.

Forward-Looking Statements:
This annual report contains forward-looking statements about Chiyoda Corporation’s outlooks, plans, forecasts, results andother items that may take place in the future. Such statements are based on data available as of June 24, 2009. Unknown risks
and other uncertainties that happen in the future may cause our actual results to be different from the forward-looking statements contained in this report. The risks and uncertainties include business and economic conditions, competitive pressure,changes in laws and regulations, addition or elimination of products, and exchange rate fluctuation, among others.

Photo: Courtesy of Sakhalin Energy Investment Company Ltd.

Contents
1 Profile
2 Financial Highlights

4 To Our Stakeholders
8 Medium-term Management Plan
Topics10 Topics: Qatar LNG Projects
Photo: Courtesy of Qatargas

12 Topics: Sakhalin LNG Project

Corporate Governance
14 Management Structures
14 Internal Control Structure
15 Compliance
16 Board of Directors, Corporate Auditors and Executive Officers

Photo: Courtesy of Sakhalin Energy Investment Company Ltd.

17 Management’s Discussion and Analysis
21 Consolidated Financial Statements
54 Global Network
56 Corporate Information
Photo: Courtesy of Qatargas

Financial Highlights

Years Ended March 31, 2009, 2008, 2007, 2006 and 2005
Thousands of
U.S. dollars

Millions of yen

2009

2008

2007

2006

2005

2009

Revenues¥446,438¥603,560¥484,895¥390,875¥267,655$4,555,497

Cost of revenues

427,461

583,035

445,159

360,322

247,905

4,361,852

Operating income

7,227

8,840

28,70020,72911,07873,747

Income before income taxes
and minority interests

9,651

18,99237,935

21,906

12,04998,479Net income

6,498

9,641

23,532

19,40012,863

66,311

Total assets¥357,816¥378,820¥442,953¥279,721¥182,893$3,651,193

Total equity

145,917

81,63877,41555,50936,873

1,488,956

Long-term debt

10,00422

10,067

10,169215

102,081

Current ratio (%)

161.1

115.0

118.9

125.1

115.9

Earnings per share (EPS)¥25.58¥50.15¥122.41¥101.27¥68.62

Book value per share (BPS)

561.12422.24400.56288.88193.22

7.5

10.0

15.0

10.0

6.0

Return on assets < ROA>

3.1

4.7

10.2

10.0

7.1

Return on equity < ROE >

5.7

12.2

35.5

42.0

43.1

For the YearAt Year-End

Per Common Share(Yen and U.S. dollars)

Dividends per share

Ratios (%)

Note: 1. U.S. dollar amounts are translated, for convenience only, at the rate of ¥98 = US$1, the approximate exchange rate at March 31, 2009.
2. Yen amounts are rounded to the nearest million. U.S. dollar amounts and percentages are rounded to the nearest unit.
3. Total equity of fisical years prior to FY2006 are calculated on the basis of the former accounting standards.

2 CHIYODA CORPORATION ANNUAL REPORT 20090.08

Revenues

Operating Income

Billions of yen

Net Income

Billions of yen

800

Billions of yen

30

700

30

28.7

25

23.5

603.6

600

20.7
446.4

390.9

400

15

12.9
11.1

300 267.7

10

9.6

10

8.8
7.2

200

6.5

5

100
0

19.4

20

20

484.9

500

2005

2006

2007

2008

0

2009

2005

2006

2007

2008

0

2009

2005

2006

2007

2008

Shareholders’ Equity, Return on Equity <ROE>
Dividends per Share and Payout Ratioand Shareholders’ Equity Ratio

Total Assets andReturn on Assets <ROA>
Billions of yen

（%）

480

40

443.0

（%）

Billions of yen

150

（%）

Billions of yen

145.5 120

20

30
29.3

378.8
360

357.8

16

24

15

90

30
100

19.9

279.7

182.9

43.1

55.5

50

10.0

10.2

7.1

36.9
20.2

10

2005

2006

2007

2008

2009

10
12.3

8

40.7

35.5
19.8

4.7

18
10

60

42.0

17.4

3.1
0

12

81.2

77.0

20

240

120

2009

6

7.5

8.7

30

6

4

21.4
12.2

12

9.9

5.7
0

0

2005

2006

2007

2008

2009

0

Revenues by Industry

2005

2006

2007

2008

2009

0

Dividends per Share
Payout Ratio

Shareholders’ Equity
Return on Equity < ROE >Shareholders’ Equity Ratio

Total Assets
Return on Assets <ROA>

0

Revenues by Region
11.7%

LNG Plants
Gas & Power Utilities

16.7%

Overseas
43.2%

Petroleum & Petrochemicals
Fine Industries & Others

Domestic

27.6
%
72.4
%

28.4%

CHIYODA CORPORATION ANNUAL REPORT 2009 3

To Our Stakeholders

Takashi Kubota
President & CEO

Career Summary
1969: Joined Chiyoda Corporation
1995: Project General Manager, Second Overseas Project Division
1998: Director; General Manager, Asia & Australia Project Division
2001: Managing Director, International Project Operation
2004: Director; Deputy General Manager, Domestic Project Operation
2005: Managing Director, Technology & Engineering
2007: President & CEO

CHIYODACORPORATIONCORPORATIONANNUAL
ANNUALREPORTREPORT2009
2009
44CHIYODA

Notable Developments in Fiscal 2008
I am pleased to present some of the highlights that took
place during fiscal 2008—Chiyoda Group’s 81st fiscal term that
ended March 31, 2009.
Fiscal 2008 marked the completion of construction andsubsequent operational starts of several large-scale liquefied
natural gas (LNG) projects that the Chiyoda Group has been
involved in for several years. These included Russia’s first LNG
plant on Sakhalin Island and the first of six LNG trains currently
under construction in Qatar that ranks as the world’s largest
operating plant.
Chiyoda’s plant engineering business has not been immune
to international financial volatility or the serious ramifications
that this disruption had on the global real economy. A notableconsequence for the Chiyoda Group was the growing trend
among clients to review investment plans, which led to someproject rescheduling. However, we will strive to expand orders
for new overseas projects and maintain progress on the backlog of projects already under construction to achieve higher
profitability.
To cope with these changes, and to rise far above the challenges created by the current operating environment, the Chiyoda Group embarked on a new medium-term management
plan— “Engineering Excellence, Value Creation 2012”—for the
fiscal years from 2009 through 2012. A key component of thisfour-year blueprint for growth is higher corporate value, and our
executives are united in their determination to accomplish thisgoal.

CHIYODA CORPORATION ANNUAL REPORT 2009 5

Medium-term Management Planue of the Group. Through this plan, Chiyoda
will effectively utilize its abundant capital re-

The corporate philosophy that defines andsources while reinforcing the Group’s operat-

influences the activities of the entire Chiyoda

ing platform to complement its overall core

Group is as follows: Expand business activi-

competence in the engineering, procurementties and contribute to sustainable social devel-

and construction (EPC) business with greater

opment as an integrated engineering organi-activity in the energy, environmental and re-zation, while drawing on accumulated insights

source development fields.

and sophisticated technologies to ensure

Efforts will be channeled to realize threeharmony between energy needs and environ-themes that will fuel a shift toward preeminent

mental responsibility. Guided by this philoso-

engineering services, create added value andphy, we will realize Groupwide management

secure the Company’s place at the top of thepractices worthy of the trust and support of allindustry ladder in terms of profitability. The

stakeholders, including shareholders, clients,

three themes are:suppliers, employees and the communities in

1. Technology challenge: Enhance, acquire,

which members of the Group maintain a pres-accumulate and promote new technolo-

ence.

gies.

Engineering Excellence, Value Creation

2. Optimum solutions: Present environmen-

2012 is designed to raise the corporate val-tally responsible, optimum solutions that
address client and social needs.
3. Global diversification: Expand global operations.

CHIYODACORPORATIONCORPORATIONANNUAL
ANNUALREPORTREPORT2009
2009
66CHIYODA

The Group has honed a sharp competi-

Return to Shareholders

tive edge by executing its projects with exceptional results, a strength backed by leading-

Targeting a payout ratio of 30%, based onedge, constituent technologies. Engineering

consolidated net income, management main-

Excellence, Value Creation 2012 will chart thetains a dividend policy that emphasizes theGroup’s next stage of development throughreturn of profits to shareholders while retaining

strategic business alliances, mergers and ac-

sufficient internal reserves to fund future busi-

quisitions, technology-oriented R&D, a stron-

ness development.

ger overseas network, personnel recruitment

The dividend for fiscal 2008 has been set

and training, and an enhanced information

at ¥7.50 per share. Given the difficulties pre-technology infrastructure.

sented by the current business environment,

The Company is promoting three additional strategies to cement a solid foundation
for future growth.

management anticipates a dividend of ¥6.0
per share for fiscal 2009.
I ask for your understanding of the chal-

1. Reinforce core businesses.

lenges faced by the Chiyoda Group and re-

2. Establish a well-balanced business portfolio

spectfully request your continued support.

for stable growth.
3. Strengthen integrated operations within theGroup.
August 2009

Takashi Kubota
President & CEO

CHIYODA CORPORATION ANNUAL REPORT 2009 7

Medium-term Management Plan

The corporate philosophy that defines and influences

new medium-term management plan, Engineering Ex-

the activities of the entire Chiyoda Group is as follows:cellence, Value Creation 2012(“the medium-term plan”)

Enhance our business in aiming for harmony between

commencing in fiscal year 2009 (ending on March 31,

energy and the environment and contribute to the sus-

2010), and runs through fiscal year 2012 (ending on

tainable development of a society as an integrated engi-

March 31, 2013).

neering company through the use of our collective wisdom and painstakingly developed technology.

The medium-term plan aims for sustainable andstable earnings growth with Chiyoda Group’s EPC core

Every Chiyoda Group employee engages in ourcompetence through further reinforcement of its busi-

corporate activities with this philosophy in mind as weness fundamentals by way of its steadily increased capi-

strive for corporate Group management that earns thetal strength.

trust and empathy of all of our stakeholders, including

In our business fields, i.e., Energy, Resource Devel-

shareholders, customers, business partners, employees

opment, and Environment, we will exercise our top qual-

and local communities.

ity services by way of following three concepts aiming at

In order to achieve continuous growth into the future and expanding corporate value, we formulated asuch sustainable and stable growth that also contributes
to customers and society.

1 Challenge

The Chiyoda Group is constantly focused on the leading-edge technologies for in-depth
research and development and to further its applications. We are always engaging ontechnological challenges such as the renewable energy field and those required forstrengthening our project execution capabilities to cope with tighter environmental restrictions under harsh conditions such as extremely cold weather, offshore locations, etc.

Optimum
2 Solutions

We will provide environmentally responsible, optimum solutions to meet the needs ofcustomers and society. From feasibility studies (FS) to decommissioning of plants, wewill provide these optimum solutions from various angles, ranging from EPC to technology consulting services.

Technology

Global3 Diversification

In addition to diversifying our business regions purporting to manage various risks,
we will strengthen and diversify our global network through business and/or capitalalliances (M&As) and other measures. Furthermore, by enhancing global operational
efficiency with the expansion of Global Engineering Satellites (GES) responsibilities,
our cost competitiveness will be strengthened.

EnergyEnvironment
Resource
Development

CHIYODA GroupEngineering Excellence,
Value Creation

Technology ChallengeCore Competence

Optimum Solutions
Global Diversification

8 CHIYODA CORPORATION ANNUAL REPORT 2009

FY 2012 Performance
Assumption(Billions of yen)

550
Operating income 34
38
Ordinary income
23
Net income
Revenues

Business Targets
Strategies to Achieve Plan Target
1 Strengthen Core Businesses
1. Expand to new countries
and regions
Establish offices in regions withprofit potential, including Australia and Brazil
Strengthen relationships with
NOCs
Promote business development
in new regions through collaboration with Mitsubishi Corporation

2. Respond to diversified
project environment
Pursue floating LNG
business (established FPSO
Department)
Broaden opportunities throughdiverse contracting strategy
Seek strategic partners (by region/technical specialty)

3. Adhere to safety- andenvironment-first policy
in plant design andconstruction

2 Build a Balanced Portfolio
2. Expand environmental
business field
Expand into renewable energy
segment
Carbon management businessfor a low-carbon society

1. Differentiate to acquire
refinery, petrochemical,
synthetic gas andother projects
Strategic application of Chiyoda’s
proprietary technologies andlicensors’ technologies.

3. Expand into non-EPC
business fields
Build a technology consulting
business
Expand licensing business
Strengthen IT solutions business

3 Strengthen Unified Group Operation
1. Strengthen regional sales
and execution focus

2. Enhance global
operational efficiency

Expand subsidiaries’ operationsin Singapore and Saudi Arabia

Expand and promote GES (Global
Engineering Satellite) operations

Full-scale operation of subsidiary
in Qatar

3. Develop business in
new regions throughcapital and businessalliances with othercompanies

Main Strategies
Further strengthencore businesses

Build a balanced portfolio

Strengthen unified Group operations
Create an energetic corporate culture anddevelop human resources

CHIYODA CORPORATION ANNUAL REPORT 2009 9

Topics

Qatar LNG Projects

Completed Train 4 for Qatargas 2, World’s Largest LNG Plant

On April 6, 2009, the inauguration ceremony
for the world’s largest LNG plant took placeat Ras Laffan Industrial City in Qatar, a country on a peninsula that juts out from the eastern coast of the Arabian Peninsula into the
Persian Gulf.
Chiyoda’s involvement in the construction of this plant—Train 4 of the Qatargas
2 Project—lasted for more than four years.
Construction was completed in March 2009,
and Train 4 is now producing LNG for export
to the United Kingdom.
Capable of producing 7.8 million tonnesof LNG per year, Train 4 boasts a massive
increase in capacity—more than 50%—oversimilar facilities that previously held the dis-

10 CHIYODA CORPORATION ANNUAL REPORT 2009

tinction of being the world’s largest. The
achievement of such an immense undertaking is the culmination of a successful journey
through uncharted territory, which requiredthat many facets of design and execution
needed a new or innovative approach.
Chiyoda is currently involved in the construction of another 5 LNG trains of the same
scale, and is steadily moving toward delivery,
currently scheduled for the end of 2010.
Once all 6 trains are in operation, Qatar
will have an LNG production capacity of 77
million tonnes per year, which will accountfor 30% of global production capacity. As
many as 75,000 people from more than 80
countries were engaged at the peak of construction for the 6 trains.
Train 4 for the Qatargas 2 Project, which
will be an important milestone in our project
history, was completed with a record of 20
million man-hours without a lost time incident.
As for the remaining 5 trains, we will demonstrate our capabilities in project execution
beyond any doubt and strive diligently to add
another success to our project history. Solid
results will cement a position of excellence
for the Chiyoda Group in the field of EPC services for LNG plant construction.

Established Chiyoda Almana Engineering L.L.C.
Qatar is one of the most important markets
for Chiyoda, where the Company has completed a considerable number of plants. Indeed, management also views Qatar as fertile
ground for new contracts—with EPC services
not limited to only mega-sized projects but
also extending to small and medium-sized
projects as well—and a source of stable demand for a variety of other services.
In March 2008, we established a local subsidiary, Chiyoda Almana Engineering L.L.C. (CAEL), with the Almana Group, aprominent conglomerate with whom we havedeveloped an amicable, long-term relationship.
In March 2009, CAEL inked an all-encompassing contract with RasGas Company
Limited to provide EPC services for small andmedium-sized projects. The four-year contract responds to the needs of RasGas andfacilitates access to the services that not only
CAEL but also Chiyoda will provide under abusiness model, Plant Lifecycle Engineering(PLE).
CAEL plans to offer its services under
this business model to other clients in Qatar
and will use the format to underpin its contribution to the economic and social development of this Middle East emirate through its
engineering capabilities.
PLE:
A business model providing feasibility studies,
front end engineering design (FEED), detailed engineering, procurement and construction (EPC),
operation, maintenance, expansion, modification,
upgrading and revamping from the client’s perspective.

Photo: Courtesy of RasGas

Photos: Courtesy of Qatargas
CHIYODA CORPORATION ANNUAL REPORT 2009 11

Sakhalin LNG Project
Russian resources and Japanese technologies came together to realize Russia’s
first LNG plant.
The contract to build an LNG plant on Sakhalin Island was awarded in 2003
and the project was completed in 2008.
In February 2009, Taro Aso, prime minister of Japan, and Dmitry Medvedev,
president of Russia, attended a ceremony to mark the start of operations. The
first shipment of LNG left the port of Prigorodnoye in March 2009.

Dealing with Extreme Cold
Harsh weather conditions, exemplified by winter temperatures dipping as low as -30˚C, createda challenging project environment. With a limited
window of opportunity for large-scale construction
activities, minor mistakes in work management—such as not properly addressing working conditions—could have delayed annual progress by six
months. Through various efforts, Chiyoda overcame
the challenges caused by Sakhalin’s bitter climate tofinish the project on schedule.
In constructing the plant, we kept environmental impact to a minimum, emphasized projectsafety and applied our ingenuity and resourcefulness to surmount difficult circumstances. In
the end, the project to build Russia’s first LNG plant was successfully accomplished.

Safety Initiatives
When constructing the plant, Chiyoda placed considerable weight on project safety, and wellthought-out safety initiatives led to more than 20 million man-hours logged without a single
lost-time incident and some 40 million kilometers traveled without accident. Our emphasis on
safety was also recognized by Royal Dutch Shell plc, an investor in Sakhalin Energy Investment
Company Ltd.,—our client—and earned us the inaugural Shell Chief Executive HSE Award in2007. HSE stands for health, safety and environment.

12 CHIYODA CORPORATION ANNUAL REPORT 2009

Contributing to the Local Community,Protecting the Environment
In the Sakhalin LNG Project, Chiyoda implemented sustainable development initiatives to enable the local community to foster continuous growth. We contributed tothe development of the local economy through personnel
training and job creation programs, including training forjunior engineers. At the peak of construction, we employed
more than 5,000 Russians in the project.
This project is also noteworthy for a heightened emphasis on environmental protection. We demonstrated
good stewardship of the natural surroundings aroundthe salmon rivers that run through the project site, andwe complied with strict ecological requirements. We also
monitored the results of restoration efforts following construction, based on environmental assessments, and submitted reports to the Russian authorities.

Connection to JapanThe LNG produced from Sakhalin reserves is exported
to several markets, including Japan. The project was important to Russia, for many reasons, but it carried greatsignificance for Japan, as well.
It was an event that brought Russian resources and Japanese technology together and secured an energy sourceright next door, so to speak, rather than half a world away, in
the Middle East and elsewhere, which Japan has previously
had to rely upon. The project was presented to the childrenof Sakhalin as a link between Russia and Japan.
These aspects of the project drew positive attention,
exemplified in March 2009 by the receipt of a Japan Project International Award by the Minister of Land, Infrastructure, Transport and Tourism.

Photos: Courtesy of Sakhalin Energy Investment Company Ltd.

CHIYODA CORPORATION ANNUAL REPORT 2009 13

Corporate GovernanceThe basic premise behind corporate governance within the Chiyoda Group is that the management practices that underpin operations must emphasize corporate social responsibility (CSR)
and earn the trust and support of all stakeholders, including shareholders, customers and employees.
To sustain quality growth over the medium to long term, we are continuously striving to reinforce our business platform, ensure sound management practices and enhance managementtransparency. Along with steady progress toward the goals laid out in our new medium-term
management plan—Engineering Excellence, Value Creation 2012—upon which we embarked
April 1, 2009, we will prioritize measures to improve corporate governance and fortify our internal control structure.

Management Structures

engages in the preliminary discussion of issues that will
be brought before the Board of Directors for final ap-

Chiyoda has adopted the corporate auditor system. The

proval.

Company has also embraced the executive officer sys-

The Corporate Auditors Committee has four mem-tem to promote decision-making that accurately match-bers, three of whom are full-time auditors. Three of thees the fast-paced changes which characterize current

committee members are external auditors. Corporatesocial and economic conditions. Under this structure,auditors maintain close ties with the independent audi-

executive officers and directors assume separate func-

tors of the Company’s accounting firm and meet regu-

tions, with the former shouldering responsibility for day-larly with them to keep apprised of such events as the

to-day operations, thus leaving the latter able to focus

annual audit plan and the year-end audit of the Compa-

on decision-making and management supervision. Thisny’s financial statements. The Corporate Auditors Office,separation of functions ensures the appropriate execu-

with one full-time employee, assists corporate auditors

tion of duties and business activities. Executive officers

in the execution of their duties.

provide regular reports on the status of operations within

The Company established the Operational Auditing

their respective areas of authority at the monthly meet-

Office to determine, from an independent perspective,

ing of the Executive Committee, at which directors arewhether the overall framework for internal controls is

also present.

well structured and also if the various components of

The Board of Directors comprises nine directors,
including four representative directors, and meets once

this framework are performing as intended. The office isstaffed by 10 full-time employees.

a month. This management group monitors the activities of executive officers and makes decisions pertaining

Internal Control Structure

to management policy and the execution of operations.
To accelerate the decision-making process and fine-

Chiyoda seeks to maintain effective and efficient opera-

tune decisions according to rapidly changing social andtions, ensure reliable financial reporting, comply witheconomic conditions, the Board of Directors delegates

prevailing laws and regulations, and protect its assets.

some decision-making authority to the representative

Toward this end, the Company has created the follow-

directors on the Executive Committee.

ing internal control structure, based on the features thatThe Executive Committee, which consists of four
representative directors, undertakes decisions within its
authority regarding the execution of operations and also

14 CHIYODA CORPORATION ANNUAL REPORT 2009

define its business activities.

Corporate Governance andInternal Controls Correlation Chart

Compensation for Directors andCorporate Auditors in Fiscal 2008

General Meeting of Shareholders
Appointment

Appointment

Discussion,
ReportAppointment

ReportCorporate Auditors
Corporate Auditors Committee

Board of Directors
Appointment Audit

Executive Officers
Board of Executive
Officers

Audit
Discussion,
ReportRepresentative Directors
Executive Committee
Discussion,
ReportDelegates(Proposals)Internal Control
Steering Committee

ReportOperational Auditing OfficeBusiness execution divisions Project Management Administration Dept. CSR Division
Compliance Management Office(Risk managers)
Group Operation Management Dept.
Social Environment Office
Corporate Planning Division
Information Security Management Office
Export Control Office
Administration & Personnel Division
Self-assessment
Crisis managers

Finance Division

Accounting audit

Group companies

Safety, Quality and Environmental (SQE)Division
Health, Safety and Environment (HSE)Internal controls for each area Management Office
Quality Management Office(Units with internal control function)

Arranges organizations
Regular reports, and human resources
including results

ReportInvestigate,
Reference

Independent Auditors

Directors
Appointment

NumberReportBasicCompensation

Addition to Reserve
Performancefor Directors’ andlinkedCorporate Auditors’Compensation
Retirement Benefits

Directors

11¥222 million ¥53 million¥70 million

Corporate
Auditors

6¥63 million¥11 million—

Notes:
1.Total compensation for directors was ¥346 million and for corporate auditors, ¥74
million. Total compensation for the four outside executives—four external auditors—was¥51 million. The total compensation amount includes provision to reserve for directors’
retirement benefits. The number of directors includes one director who did not receive
compensation.
2.The compensation limit for directors, excluding the portion paid as salary to directors
holding concurrent positions as employees of the Company, was ¥25 million per month,
based on shareholder approval of a proposal put forward at the 73rd Ordinary General
Meeting of Shareholders on June 28, 2001. The compensation limit for corporate
auditors was ¥7 million per month, based on shareholder approval of a proposal put
forward at the 67th Ordinary General Meeting of Shareholders on June 29, 1995.
3.Performance-linked compensation for directors is held to 1% of consolidated net
income, with a limit of ¥200 million annually, in accordance with shareholder approval ofa proposal put forward at 78th Ordinary General Meeting of Shareholders on June 22,
2006.

ance,” which translates roughly as “the anything-you-Compliancewant-to-know-about-compliance office.” The office
Chiyoda believes that the trust and affinity of society

acts as a processing point for advice and reports onand customers underlie the foundation of the Group’s

perceived illegal or unethical behavior by individuals or

corporate activities. To ensure that the Group’s busi-organizations within the Group and thereby facilitates

ness pursuits conform to social standards, manage-

quick detection of improper conduct, remedies the sit-

ment seeks unconditional respect from all members

uation or, better yet, prevents problems from appearingof the Group for domestic and international laws andin the first place.

regulations, global agreements and internal rules.

The hotline itself is run jointly by nine Group com-

To this end, the Company instituted the Group

panies and has an external link to a lawyer as well as

code of conduct in April 2006 and established thestaff who specialize in women’s workplace issues. Ev-

Compliance Management Office to promote wide-eryone employed by Chiyoda and its Group companies

spread understanding of compliance issues.

may take advantage of the hotline.

Group companies have access to a compliance-

In fiscal 2008, the hotline received 11 reports, andoriented consultation and reporting system—a hotline

the Company duly provided feedback about the mea-

casually referred to as “Welcome to All About Compli-sures it took to deal with the reports.

Compliance Consultation and Reporting System “Welcome to All About Compliance”

Corporate Auditors

Executive Committee

President & CEO
Instruction(Remedial Action and Prevention)

External Consultation Center(Lawyer)Contact

ReportCSR Division/Compliance Management OfficeCompliance Staff

Manager
Consultation andReporting

ReportConsultation andReporting

Feedback

Consultation andReportingExployees and Temporary Staff (Including Those of Subsidiaries)

CHIYODA CORPORATION ANNUAL REPORT 2009 15

Board of Directors, Corporate Auditors and Executive Officers

Board of Directors

Corporate Auditors

President & CEO

Takashi Kubota *Executive Vice President

Yoichi Kanno *Executive Vice President

Hiroshi Shibata *Senior Managing Executive Officer

Madoka Koda *Managing Executive Officer

Sumio Nakashima

Managing Executive Officer

Satoru Yokoi

Managing Executive Officer

Hiroshi Ogawa

Managing Executive Officer

Kazuo Obokata

Executive Officer

Seiji Shiraki

Hiroshi Ida **Wataru Shimono

Masanori Ito **Technology & Engineering

Yukihiro Imadegawa **Business Development Operation** Outside Corporate Auditor

Project Operations

Projects Logistics & Construction* Representative Directors / Members of Executive Committee

Executive Officers
Managing Executive Takaharu Saegusa
Officer
Corporate Planning, Management & FinanceManaging Executive Hideo Kobayashi
Project Operations
Officer
Project Director
Managing Executive Toshiyuki Ohnuma
Officer
Corporate Planning, Management & FinanceManaging Executive Manabu Mitani
Officer
Projects Logistics & Construction

Executive Officer

Tsuyoshi Kakizaki
General Manager, SQE Division

Eisaku Yamashita
Executive Officer

Business Development Operation
General Manager, Business Development
Division 1

Koichi Shirakawa
Executive Officer

Project Operations
General Manager,
International Project Division 2

16 CHIYODA CORPORATION ANNUAL REPORT 2009

Executive Officer

Takao Kamiji
Business Development Operation

Katsutoshi Kimura

Executive Officer Corporate Planning, Management & Finance
General Manager, Finance Division

Kenjiroh Miura

Executive Officer Project Operations
General Manager, Project Planning & Administration
Executive Officer

Hiromi Koshizuka

Executive Officer

Shougo Shibuya

Project Operations

Technology & Engineering

Ryosuke Shimizu
Executive Officer Corporate Planning, Management & Finance
General Manager, Corporate Planning
Division

Masahiko Kojima

Executive Officer General Manager,
Corporate Plan Implementation OfficeManagement’s Discussion and Analysis

Business Results

by national and international oil companies. For the
fiscal year ended March 31, 2009, in addition to an

Regarding the market environment for Chiyoda during

LNG plant project in Algeria, Chiyoda was awarded

the year ended March 31, 2009, major crude oil andcontracts including the FEED and Execution Planning

natural gas producing countries as well as energy ma-

Order for the Barzan onshore gas processing project

jors had planned substantial capital investment. How-in Qatar, an EPC Competition Contract for participa-

ever, with a downturn in the product market, shrinking

tion in an EPC design competition for an LNG plant indemand and other effects of the rapidly worsening

Papua New Guinea and the FEED services for the Ich-economy, conditions became uncertain, including athys LNG project in Australia. In addition, in promoting

growing trend toward revising timing and other condi-

its plant life cycle engineering business, Chiyoda wastions of investment.

awarded a long-term Engineering, Procurement, Con-

Under these circumstances, the Chiyoda Groupstruction Management (EPCm) Services Contract formade concentrated efforts to properly execute ongo-

LNG and gas processing plants through its subsid-

ing projects. These efforts included completing andiary in Qatar. Furthermore, Chiyoda worked to secure

handing over the first liquefied natural gas (LNG) plant

contracts for floating LNG facilities, in which invest-

in Russia and the first of six trains of the world-largest

ment is expected to grow.

LNG plants (7.8 million tonnes per annum) in Qatar.

In Japan’s gas and electric power sector, newWhile the prolonged commercial discussions with Qa-

construction and expansion of LNG receiving termi-

tar Liquefied Gas Co., Ltd. (3) and (4) to extend thenals are being planned as a result of the shift to LNG

construction period and increase the contracted priceas an energy source for reasons including demands tofor construction of Train 6 and Train 7 of the LNG plant

curb CO2 emissions and growth in gas-related busi-

have concluded, the construction budget could notnesses. Amid these conditions, the Group acquired

be maintained because the price increase secured fell

contracts including the FEED for large-scale LNG re-short of projected additional costs to be paid to sub-ceiving terminal in addition to the three terminals un-

contractors and other parties.

der construction.

As a result, on a consolidated basis, new contracts were ¥209,422 million, a 19.1% decrease com-Petroleum, Petrochemicals and Gas Chemicals

pared with the same period of the previous year, andIn the overseas petroleum sector, despite uncertainty

the backlog of contracts was ¥425,043 million, aabout the future, Chiyoda worked to acquire contracts

decrease of 36.6%. Revenues decreased 26.0% torelated to planned investments in petroleum refineries¥446,438 million, operating income decreased 18.2%

in the Middle East and Southeast Asia.

to ¥7,227 million, ordinary income decreased 40.1%

In Japan’s petroleum sector, Chiyoda steadilyto ¥11,449 million, and net income decreased 32.6%

promoted ongoing projects and worked to acquireto ¥6,498 million.

new contracts for various investment projects including those for strengthening the competitiveness of industrial areas and environmental measures centered

Results by Business Segment

on energy conservation.
In the petrochemicals sector, although some in-

Natural Gas and Electric Power

vestment projects were delayed due to the economic

Overseas, the Chiyoda Group focused on acquiring

downturn, the Group focused on acquiring contracts

contracts for study and Front-End Engineering andfor facility maintenance and repair while promoting

Design (FEED) under gas-related investment plansdevelopment projects including pilot facilities.

CHIYODA CORPORATION ANNUAL REPORT 2009 17

General Chemicals and Industrial Machineryreason for the decline in asset value was a decrease

The Group has worked to enter into the promisingof ¥92,256 million in the jointly-controlled asset fund

fields of solar battery components, reflecting globalof joint ventures through outgoing payments to ven-

policies to promote wider use of solar batteries, anddors and subcontractors as large-scale joint venture

lithium batteries for automobiles.

projects progressed. As a result, total assets de-

The Group has steadily acquired new contracts increased ¥21,003 million from the end of the previous

the pharmaceuticals sector due to an increasing drive

fiscal year.

to invest in new construction and expansion of exist-• Liabilities

ing plants in order to adapt to recent changes in the

Total liabilities decreased ¥85,283 million. This wasbusiness environment.

mainly due to a ¥93,360 million decrease in the balance of advances received on uncompleted construc-

Environment and Others

tion contracts.

Chiyoda continued to conduct marketing activities in• Net Assets

Japan and overseas for its original CT-121 flue gas

Total net assets were ¥145,917 million due to adesulfurization process technology. In Europe, where¥30,457 million increase from the third-party alloca-

environmental restrictions are severe, Chiyoda li-tion that Chiyoda implemented, and a ¥65,377 million

censed its proprietary technologies for use at a major

increase in shareholders’ equity due to factors includ-

power station in Denmark.

ing a ¥30,390 million increase in retained earnings.

Major Completed Construction

The equity ratio increased 19.3 points compared with•

Feed gas preparation works of Pearl GTL project for
Qatar Shell GTL Ltd. in Qatar (*)•

LNG plant Trains 6 & 7 for Ras Laffan Liquefied
Natural Gas Co., Ltd. (3) in Qatar (*)•

LNG plant Trains 6 & 7 for Qatar Liquefied Gas
Company Limited (3) & (4) in Qatar (*)•

LNG plant Trains 4 & 5 for Qatar Liquefied Gas
Company Limited (2) in Qatar (*)•

Al Khaleej Gas Phase 2 project for ExxonMobil in
Qatar (*)•

Sakhalin II LNG project in Russia•

CCR unit for Seibu Oil Co., Ltd. (*)•

Expansion of Mizushima LNG receiving terminal for
Mizushima LNG Company, Limited (*)

Overseas

the end of the previous fiscal year to 40.7%.
Cash Flow• Cash flow from operating activities
Net cash provided by operating activities was ¥8,971
million. Contributing factors included:
a decrease of ¥104,124 million in working capital- total notes and accounts receivable for trade, costs
on uncompleted construction projects, andDomestic•

RFCC complex for Taiyo Oil Co., Ltd. (*)(*) Completed portion- notes and accounts payable for trade and advances
received on uncompleted construction projects
income before income tax and minority interests of¥9,651 million
depreciation and amortization of ¥1,957 million

Cash Flow Analysis

a decrease of ¥92,256 million in jointly controlled assets of joint venture due to the progress of large-

Assets, Liabilities and Net Assets• Assets

scale joint venture projects
interest and dividend income of ¥1,347 million

Despite an increase in cash and cash equivalents andcertificates of deposit (short-term investment securi-• Cash flow from investment activitiesties) of ¥64,604 million, which included an amountNet cash used for investment activities was ¥1,072 mil-received for allocation of new shares to a third party,

lion, due to capital expenditure on, for example, the pur-current assets decreased by ¥17,359 million. A majorchase of software for ¥1,720 million and other factors.

18 CHIYODA CORPORATION ANNUAL REPORT 2009

• Cash flow from financing activities

In Japan, the objective will be to look beyond ex-

Net cash provided by financing activities was ¥58,548

isting fields of pursuit to maximize the Group’s over-million. Factors included ¥60,577 million from the al-seas presence and develop business activities thatlocation of new shares to a third party, and cash divi-

will lead to orders for various industrial facilities anddends paid totaling ¥1,920 million.

for projects by domestic clients expanding their op-

As a result of this, net cash and cash equivalents

erations abroad.

as of March 31, 2009 totaled ¥135,536 million, an increase of ¥65,447 million from the end of the previous
fiscal year.

Complete existing orders
The profitability of some LNG projects under construction in Qatar is being squeezed, due mainly to factors

Issues Requiring the Group’s
Attentionsuch as a shortage of workers causing costs to exceed initial estimates. The Group must therefore carefully manage the progress of big projects at home and

It is clear that the turmoil in the international financeabroad, including existing LNG projects, and reinforce

community, triggered by the U.S. subprime mortgage

its reputation for reliability among clients by taking

crisis, has had serious repercussions for the realan even stronger stance on safety and ensuring the

global economy. A major short-term consequence

steady execution of construction work.

of worldwide recession for the Chiyoda Group is the
postponement of projects caused by a sluggish de-Cultivate new businesses

mand for energy and the general expectation that

Efforts will be directed into areas in the environment

plant costs will drop. It will be imperative that man-sector where the Company boasts a superior techno-

agement closely watches market trends and is readylogical capability. The Group will foster opportunities

to act on business opportunities when they emerge.

to provide software services, such as feasibility stud-

The targets and strategies laid out in the newies, and develop processes that can be turned into

medium-term management plan—Engineering Ex-

marketable activities. An internal business executioncellence, Value Creation 2012—were formulated withstructure will be established for non-engineering, pro-the challenges of the current business environment incurement and construction businesses to underpin

mind. To achieve stated targets and successfully exe-

new business development.

cute the strategic blueprint, the Group will emphasize
the following issues during fiscal 2010, the first year ofEngineering Excellence, Value Creation 2012.

Add new points to the Group’s overseas map
Management plans to attract essential personnel toexecute projects and run operations at local subsid-

Secure orders for new projects

iaries throughout the Group network. This will create

Given the swiftly changing economic situation over-a business and execution structure that is fine-tuned

seas, Group companies will track the investment

to each region. The Group will utilize its international

trends of respective clients and focus efforts on win-

specialized capabilities to underpin its cost-competi-ning new orders, not only in the areas of LNG- andtiveness, along with measures to reinforce and extend

gas-related projects but in other industry sectors

the function of our overseas design subsidiaries.

such as oil and petrochemicals. Toward this end,
measures will be drawn up to reinforce R&D capabilities and cost competitiveness, and to retain and train
essential personnel.

CHIYODA CORPORATION ANNUAL REPORT 2009 19

Business Risks

ing of business partners, while monitoring economic
trends, to confirm whether and under what conditions

The primary issues that could affect investor deci-to transact business.

sions regarding investment risk, such as material issues related to the Chiyoda Group’s financial position,

Terrorism, Conflicts and Other Force

performance and cash flow, and the Chiyoda Group’s

Majeure Events

response to such issues, include but are not limited

Force majeure events such as terrorism or conflicts

to the issues outlined below. The Chiyoda Group rec-may cause direct losses, delays in procuring or deliv-

ognizes the potential occurrence of these risks andering materials and equipment, threats to the safety

works to avoid them to the maximum extent possible.

of workers, cessation of construction work and other

The Chiyoda Group also moves to respond as quickly

problems at construction sites in Japan and over-as possible to minimize the impact of issues that pres-seas.

ent risks if and when they occur.

While placing top priority on the avoidance of hu-

Chiyoda Group management acknowledges thatman injury, the Chiyoda Group has structured a threat

the issues outlined below may present risks in the fu-

management system that includes cooperation withture outlined below and has made them the focus ofcustomers and other related parties to support rapid

risk management.

initial response should such events occur. In addition,
the Chiyoda Group will take other steps to avoid or

Changes in Exchange Rates

minimize these risks, including negotiating contractual

In overseas construction projects, payments made toprovisions that rationally allocate additional costs to

Chiyoda for construction are often in currencies differ-customers.

ent to those made by Chiyoda to vendors for equipment
and materials and/or subcontractors. Foreign curren-

Plant Accidents

cy exchange rates may therefore affect the financial

The possibility exists that a serious incident such as an

results of the projects. The Chiyoda Group works to

explosion or fire may occur at plants that the Chiyoda

avoid and minimize such foreign currency fluctuation

Group is constructing or has completed. The Chiyoda

risks by using forward foreign exchange contracts andGroup could be judged responsible for such acci-

matching planned outlays in multiple currencies withdents, including being held liable for damages, whichconstruction payments and receivables.

could impact the Chiyoda Group’s performance.
The Chiyoda Group works to avoid or minimize

Rapid Changes in Economic Trends

this risk in ways such as taking all possible measures

Cancellation, delays or revisions of the investment

to preclude the occurrence of such incidents, includ-plans of customers, or other factors resulting froming quality control and safety management. Otherchanges in economic trends exceeding forecasts,

countermeasures include maintaining the appropriate

could impact the Chiyoda Group’s performance. In

insurance coverage and negotiating contracts that ra-

addition, construction execution plans and budgets

tionally allocate customer responsibility for damages.

and collection of receivables may be affected byworsening business conditions of business partners
involved in plant construction, including subcontractors and suppliers of equipment and materials.
The Group will work to avoid and minimize risk inways such as sufficiently analyzing the credit stand-

20 CHIYODA CORPORATION ANNUAL REPORT 2009

Chiyoda Corporation andConsolidated Subsidiaries
Consolidated Financial Statements for theYears Ended March 31, 2009 and 2008,
and Independent Auditors' Report

CHIYODA CORPORATION ANNUAL REPORT 2009 21

Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Balance Sheets
March 31, 2009 and 2008

Millions of Yen
2009
2008

ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Short-term investments
Notes and accounts receivable—trade (Note 4)
Allowance for doubtful accounts
Costs and estimated earnings on long-term construction
contracts (Note 5)
Costs of construction contracts in process
Accounts receivable—other (Note 4)
Jointly controlled assets of joint venture
Deferred tax assets (Note 13)
Prepaid expenses and other

70,089895
27,230(5)$ 1,383,025
533
337,662(38)

17,56016,920
5,177
100,426
9,872
2,215

9,139
16,802
10,441
192,684
5,337
5,596

179,184
172,656
52,827
1,024,764
100,742
22,605

Total current assets

320,848

338,208

3,273,964

PROPERTY, PLANT AND EQUIPMENT (Note 9):Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Construction in progress
Total
Accumulated depreciation

11,953
14,752870
5,010
132,588(10,586 )

11,936
14,894
1,261
5,467
33,558(10,485)

121,979
150,534
8,881
51,127
10
332,533(108,028)

22,001

23,073

224,504

3,765

5,583

38,423

3,203
3,546
1,348
3,435
(333 )

3,734
3,566
1,650
3,496
(490)

32,692
36,18913,76435,055(3,401)

14,967

17,539152,724¥ 357,816¥ 378,820$ 3,651,193

Net property, plant and equipment
INVESTMENTS AND OTHER ASSETS:
Investment securities (Note 6)
Investments in and advances to unconsolidated
subsidiaries and associated companies (Note 8)
SoftwareDeferred tax assets (Note 13)
Other assets (Note 10)
Allowance for doubtful accounts
Total investments and other assets

TOTAL

See notes to consolidated financial statements.

22 CHIYODA CORPORATION ANNUAL REPORT 2009¥ 135,536
52
33,090(3 )¥Thousands of
U.S. Dollars(Note 1)
2009

Millions of Yen
2009
2008

LIABILITIES AND EQUITYCURRENT LIABILITIES:Current portion of long-term debt (Note 9)
Notes and accounts payable—trade (Note 4)
Advance receipts on construction contracts
Income taxes payable
Deposits received
Allowance for warranty costs for completed works
Allowance for losses on construction contracts
Accrued expenses and other (Note 4)
Total current liabilities
NON-CURRENT LIABILITIES:Long-term debt (Note 9)
Liability for retirement benefits (Note 10)
Other liabilities
Total non-current liabilities¥

18
77,02091,661
5,457
4,468
3,801
4,302
12,488¥10,03974,038185,023
1,408
4,970
2,099
4,045
12,364

Thousands of
U.S. Dollars(Note 1)
2009

$

183
785,925
935,326
55,69045,59238,78943,900127,430

199,218

293,986

2,032,838

10,004
2,288
388

22
2,226
948

102,081
23,352
3,964

12,681

3,196

129,398

43,392

12,935442,782

37,10869,730(775)(1,368)(1,469)6,718
65,155(847)(1,668)(6)

378,662
711,539(7,912)(13,961)(14,993)(1,105)145,513404(1,059)81,228410(11,285)
1,484,831
4,125

145,917

81,6381,488,956¥ 357,816¥ 378,820$ 3,651,193

COMMITMENTS AND CONTINGENT LIABILITIES(Notes 4, 15, 16 and 17)
EQUITY (Notes 11, 16 and 19):
Common stock—authorized, 570,000 thousand shares;
issued, 260,292 thousand shares in 2009 and
193,183 thousand shares in 2008
Preferred stock—authorized, 80,000 thousand shares
Capital surplus
Retained earnings
Unrealized loss on available-for-sale securities
Deferred loss on derivatives under hedge accounting
Foreign currency translation adjustments
Treasury stock—at cost, 963 thousand shares in 2009
and 904 thousand shares in 2008
Total
Minority interests
Total equityTOTAL

CHIYODA CORPORATION ANNUAL REPORT 2009 23

Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2009 and 2008
Thousands of
U.S. Dollars(Note 1)
2009

Millions of Yen
2009
2008
REVENUE (Notes 4 and 5)¥ 446,438¥ 603,560$ 4,555,497

COST OF REVENUE (Notes 4 and 5)

427,461

583,035

4,361,852

Gross profit

18,977

20,525

193,644

11,749

11,685

119,897

7,227

8,840

73,747

5,101
(340)
137
(435)

10,901(405 )
435(979 )

52,052(3,477)
1,405(4,440)SELLING, GENERAL AND ADMINISTRATIVE EXPENSES(Notes 4 and 14)
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Equity in earnings of associated companies
Foreign exchange loss
Loss on a partial termination of a defined benefit
pension plan (Note 10)
Reversal of allowance for doubtful accounts
Gain on sales of investment securities (Note 6)
Reversal of impairment loss (Note 7)
Loss on valuation of investment securities
Other—net
Other income—net(1,859)(306)(485 )
72
644
268(617 )
318(18,978)(3,126)

2,423

10,152

24,732

INCOME BEFORE INCOME TAXES AND MINORITY
INTERESTS

9,651

18,992

98,479INCOME TAXES (Note 13):
Current
Deferred

7,120(3,996)

7,355
1,968

72,656(40,784)

Total income taxes

3,123

9,323

31,871MINORITY INTERESTS IN NET INCOME

29

28

296

NET INCOME

24 CHIYODA CORPORATION ANNUAL REPORT 2009

127

¥

6,498

¥

9,641

1,296

$

66,311Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2009 and 2008
Yen

PER SHARE OF COMMON STOCK (Notes 2.s and 18):
Basic net income
Diluted net income
Cash dividends applicable to the year

2009

2008

U.S. Dollars
2009¥ 25.58
25.58
7.50¥ 50.15
50.12
10.00

$ 0.260.26
0.08

See notes to consolidated financial statements.

CHIYODA CORPORATION ANNUAL REPORT 2009 25

Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Statements of Changes in Equity
Years Ended March 31, 2009 and 2008

Thousands
Outstanding
Number of
Shares ofCommonStockCommonStockCapitalSurplusRetained
Earnings

192,289¥ 12,928¥ 6,712¥ 58,398

BALANCE, APRIL 1, 2007
Net income
Issuance of common stock by stock option plan
(Notes 11 and 12)
Cash dividends, ¥15.00 per share
Repurchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2008
Net income
Issuance of common stock to a third party (Note 11)
Issuance of common stock by stock option plan
(Notes 11 and 12)
Cash dividends, ¥10.00 per share
Repurchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2009

9,641
57

7

6
(2,884)(67 )

192,279

12,935

6,718

67,08030,45430,387

30

3

3

6,498

(1,922)(60 )

259,328¥ 43,392¥ 37,108

CommonStock
BALANCE, MARCH 31, 2008
Net income
Issuance of common stock to a third party (Note 11)
Issuance of common stock by stock option plan
(Notes 11 and 12)
Cash dividends, $0.10 per share
Repurchase of treasury stock
Net change in the year
BALANCE, MARCH 31, 2009

See notes to consolidated financial statements.

26 CHIYODA CORPORATION ANNUAL REPORT 2009

65,155$ 131,988$¥ 69,730

CapitalSurplusRetained
Earnings

68,553$ 664,848
66,311

310,758

310,07335

35(19,620)$ 442,782$ 378,662$ 711,539

Unrealized(Loss) Gainon Availablefor-sale
Securities¥

248

Millions of Yen
Deferred
Loss onForeign
Derivatives
Currency
under Hedge
Translation
Accounting
Adjustments
¥

(408)

¥

50

TreasuryStock¥(905 )¥(154 )(1,095)(1,260)

(56 )

(847)

(1,668)(6 )(1,059 )

(46 )
71

299

(1,462 )¥ (775)¥ (1,368)¥ (1,469 )Unrealized
Loss onAvailablefor-sale
Securities$ (8,644)

Thousands of U.S. Dollars (Note 1)
Deferred
Loss onForeign
Derivatives
Currency
under Hedge
Translation
Accounting
Adjustments$ (17,016)

$

(70)

¥ (1,105 )TreasuryStock$ (10,813 )(471 )
732

3,055(14,922)$ (7,912)$ (13,961)$ (14,993)$ (11,285 )

$

Total

Minority
Interests

77,023

¥ 392

Total
Equity¥77,415

9,641

9,641

13
(2,884)(154)(2,411)18

13(2,884)(154)(2,393)

81,228410

81,638

6,498
60,841

6,498
60,841

6(1,922)(46)(1,091)(6)

6(1,922)(46)(1,097)¥ 145,513¥ 404¥ 145,917

Total

Minority
Interests

Total
Equity828,845$ 4,193$

833,038

66,311
620,832

66,311
620,83271(19,620)(471)(11,135)(68)

71(19,620)(471)(11,203)$ 1,484,831$ 4,125$ 1,488,956

CHIYODA CORPORATION ANNUAL REPORT 2009 27

Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2009 and 2008

Millions of Yen
2009
2008
OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Income taxes paid
Depreciation and amortization
Reversal of allowance for doubtful accounts—net
Provision for warranty costs for completed works
Provision for loss on construction contracts
Reversal of retirement benefits—net
Reversal of impairment loss
Gain on sales of investment securities—net
Loss on valuation of investment securities
Foreign exchange (gain) loss—net
Equity in earnings of associated companies
Loss on a partial termination of a defined benefit
pension plan
Changes in operating assets and liabilities:(Increase) decrease in trade notes and accounts
receivable, and costs and estimated earnings onlong-term construction contracts
Decrease in costs of construction contracts in process
Decrease in jointly controlled assets of joint venture
Increase in interest and dividend receivable
Increase (decrease) in trade notes and accounts payable
Decrease in advance receipts on construction contracts(Decrease) increase in deposits received
Decrease in accounts receivable—other
Decrease in accrued liability of a defined contribution
pension plan
Other—net
Total adjustments
Net cash provided by operating activities—(Forward)

28 CHIYODA CORPORATION ANNUAL REPORT 2009

¥ 9,651¥ 18,992

(72 )
1,957
(158 )
1,754
43
(56 )

(20,913 )
1,594
(77 )
522
4,035
(473 )(268 )(644 )
617
81(435 )

1,859(26 )(137 )

Thousands of
U.S. Dollars(Note 1)
2009$

98,479(741)
19,971(1,616)
17,899447(576)

18,978(270)(1,405)

485(13,859 )171
92,256(3,753 )2,772(93,209 )(511 )
2,654

2,216
10,85563,377(9,874 )(12,740 )(46,788 )183
978(141,420)
1,748
941,396(38,303)
28,293(951,113)(5,221)
27,083(811 )
8,446(679 )(833 )
3,384(4,718 )(8,279)86,192(6,938)¥ 8,971¥ 14,274$

91,541Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2009 and 2008

Millions of Yen
2009
2008
Net cash provided by operating activities—(Forward)
INVESTING ACTIVITIES:Payments for time deposits
Proceeds from withdrawal of time deposits
Payments for purchases of investment securities
Proceeds from sales of investment securities
Purchases of property, plant and equipment
Purchases of intangible assets
Proceeds from collections of long-term loans
Payments for acquisition of shares in subsidiary affecting
scope of consolidation, net of cash acquired (Note 3)
Other—net

¥

8,971

888
(65)
(563)
(1,156)¥ 14,274(827 )
68(2,306 )839(360 )(1,257 )35

Thousands of
U.S. Dollars(Note 1)
2009$

91,541

9,067(672)(5,751)(11,803)(215)
40(116 )
7(2,196)410(1,072)(3,917 )(10,945)

FINANCING ACTIVITIES:
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of common stock
Payments of cash dividends
Payments of cash dividends to minority shareholders
Other—net

10,000(10,039)
60,577(1,920)(10)(59)(14,186 )13(2,880 )(12 )(155 )

102,040(102,438)
618,133(19,592)
(105)
(605)

Net cash provided by (used in) financing
activities

58,548(17,220 )597,432(999)(100 )(10,199)

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS

65,447(6,963 )667,828

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

70,08977,052

715,196¥ 135,536¥ 70,089$ 1,383,025

Net cash used in investing activities

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, END OF YEARCHIYODA CORPORATION ANNUAL REPORT 2009 29

Chiyoda Corporation and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2009 and 2008

ADDITIONAL INFORMATION:
IT Engineering Ltd. was included in the scope of
consolidation for the year ended March 31, 2009,
through the acquisition of shares. The acquisition costand payments for the acquisition were as follows:
Current assets
Investments and other assets
Current liabilities
Long-term liabilities
Net assets acquired
Goodwill
Pre-acquisition carrying amount of investment
Cash acquired
Net of cash acquired

See notes to consolidated financial statements.

30 CHIYODA CORPORATION ANNUAL REPORT 2009

Millions of Yen
2009

Thousands of
U.S. Dollars
2009¥ 3,238122(1,829 )(250 )
1,280
225(441 )(849 )$ 33,043
1,254(18,671)(2,555)
13,071
2,298(4,505)(8,668)¥$ 2,196215

Chiyoda Corporation and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
Years Ended March 31, 2009 and 2008

1.

BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forthin the Japanese Financial Instruments and Exchange Act and its related accounting regulations and in conformity
with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects
as to application and disclosure requirements of International Financial Reporting Standards.
Japanese yen figures less than a million yen are rounded down to the nearest million yen, except for per share data,from the year ended March 31, 2009.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to
the consolidated financial statements issued domestically in order to present them in a form which is more familiar
to readers outside Japan. In addition, certain reclassifications and rearrangements have been made in the 2008
financial statements in order for them to conform to classifications and presentations used in 2009.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Chiyoda
Corporation (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 therate of ¥98 to $1, the approximate rate of exchange at March 31, 2009. 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.
U.S. dollar figures less than a thousand U.S. dollars are rounded down to the nearest thousand U.S. dollars, except
for per share data, from the year ended March 31, 2009.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation—The consolidated financial statements for the year ended March 31, 2009 include the accountsof the Company and its 17 significant (16 in 2008) subsidiaries (together, the "Group").
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able
to exercise control over operations are fully consolidated and those companies over which the Group has asignificant influence are accounted for by the equity method.
Investments in 3 (5 in 2008) associated companies are accounted for by the equity method. Investments in theremaining unconsolidated 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 fair value of the net assets at the respective dates ofacquisition, was charged to income at the time of acquisition as the amount involved was not material.

CHIYODA CORPORATION ANNUAL REPORT 2009 31

All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group is eliminated.
b.

Business Combination—In October 2003, the Business Accounting Council issued a Statement of Opinion,"Accounting for Business Combinations," and on December 27, 2005, the Accounting Standards Board ofJapan (the "ASBJ") issued ASBJ Statement No. 7, "Accounting Standard for Business Divestitures" and ASBJ
Guidance No. 10, "Guidance for Accounting Standard for Business Combinations and Business Divestitures."
These new accounting pronouncements were effective for fiscal years beginning on or after April 1, 2006.
The accounting standard for business combinations allows companies to apply the pooling of interests methodof accounting only when certain specific criteria are met such that the business combination is essentiallyregarded as a uniting-of-interests. For business combinations that do not meet the uniting-of-interests criteria,
the business combination is considered to be an acquisition and the purchase method of accounting is required.
This standard also prescribes the accounting for combinations of entities under common control and for joint
ventures.
On November 28, 2007, the Company acquired 85.1% of the shares of Sunrise Real Estate Co., Ltd.
("Sunrise"), which trades and leases land and buildings, and merged with Sunrise on January 1, 2008. The
Company accounted for the acquisition by the purchase method of accounting. The negative goodwill arisingin the transaction was charged to income.

c.

Revenue—Revenues on construction contracts greater than ¥100 million and having a construction duration
exceeding one year are recognized on the percentage-of-completion method based on the ratio of costs
incurred to total estimated costs. Under this method, related costs and estimated earnings in excess of progressbillings are presented as a current asset.
Unbilled costs on the other contracts, which are accounted for by the completed-contract method, are stated ascost 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 payments received on the other contracts are presented as current
liabilities.
Costs of preparation work for unsuccessful proposals and other projects which are not realized are charged toincome and are included in costs of revenue.

d.

Cash Equivalents—Cash equivalents are short-term investments that are readily convertible into cash and thatare exposed to insignificant risk of changes in value. Cash equivalents include time deposits and certificate ofdeposits both of which mature or become due within three months of the date of acquisition.

e.

Investment Securities—All marketable securities are classified as available-for-sale securities and are reported
at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate component ofequity. The cost of securities sold is determined based on the moving-average method.
Non-marketable securities are stated at cost determined by the moving-average method. For other than
temporary declines in fair value, non-marketable securities are reduced to net realizable value by a charge toincome.

32 CHIYODA CORPORATION ANNUAL REPORT 2009f.

Allowance for Doubtful Accounts—The allowance for doubtful accounts is stated in amounts considered to beappropriate based on the Group's past credit loss experience and an evaluation of potential losses in thereceivables outstanding.

g.

Property, Plant and Equipment—Property, plant and equipment are stated at cost. Depreciation is computedby the declining-balance method, except for buildings owned by the Company which are depreciated using thestraight-line method, at rates based on the estimated useful lives of the assets. The range of useful lives isfrom 11 to 57 years for buildings and structures, from 4 to 13 years for machinery and equipment, and from 2
to 15 years for tools, furniture and fixtures. Equipment held for lease is depreciated by the straight-line
method over the respective lease periods.

h.

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

i.

Other Assets—Intangible assets are carried at cost less accumulated amortization, which is calculated by thestraight-line method over their estimated useful lives. Software for internal use is amortized on a straight-line
basis over its estimated useful life (five years at the maximum).

j.

Allowance for Warranty Costs for Completed Work—The allowance for warranty costs for completed work isprovided based on past rate experience.

k.

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

l.

Retirement Benefits—Employees of the Company are, under most circumstances, entitled to payments fromthe defined contribution pension plan and the qualified defined benefit pension plan. Employees of certain of
the Company's consolidated subsidiaries are, under most circumstances, entitled to certain lump-sum
severance payments and pension payments.
Effective April 1, 2000, the Company and its domestic consolidated subsidiaries adopted a new accounting
standard for employees' retirement benefits and accounted for the liability for retirement benefits based on the
projected benefit obligations and plan assets at the balance sheet date.
The transitional obligation of ¥5,696 million ($58,126 thousand) is being amortized and charged to income
over 15 years using the straight-line amortization method and presented as an operating expense in the
consolidated statements of income for the years ended March 31, 2009 and 2008.
Retirement benefits to directors, officers and corporate auditors are provided at the amount which would be
required if all directors, officers and corporate auditors terminated at the end of each period.

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

CHIYODA CORPORATION ANNUAL REPORT 2009 33

n.

Leases—In March 2007, the ASBJ issued ASBJ Statement No. 13, "Accounting Standard for Lease
Transactions," which revised the previous accounting standard for lease transactions issued in June 1993. The
revised accounting standard for lease transactions is effective for fiscal years beginning on or after April 1,2008 with early adoption permitted for fiscal years beginning on or after April 1, 2007.
Under the previous accounting standard, finance leases that deem to transfer ownership of the leased property
to the lessee were to be capitalized. However, other finance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized" information is disclosed in the note to the lessee's
financial statements. The revised accounting standard requires that all finance lease transactions should becapitalized to recognize lease assets and lease obligations in the balance sheet. In addition, the accounting
standard permits leases which existed at the transition date and do not transfer ownership of the leased
property to the lessee to be accounted for as operating lease transactions.
The Group applied the revised accounting standard effective April 1, 2008. In addition, the Group accounted
for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee
as operating lease transactions. The effect of this change was not material.
All other leases are accounted for as operating leases.

o.

Income Taxes—The provision for income taxes is computed based on the pretax income included in the
consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets
and liabilities for the expected future tax consequences of temporary differences between the carrying amounts
and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted tax laws
to the temporary differences.
The Group has filed a tax return under the consolidated corporate-tax system from the fiscal year ended March
31, 2003, which allows companies to base tax payments on the combined profits or losses of the parent
company and its wholly owned domestic subsidiaries.

p.

Foreign Currency Transactions—All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at the exchange rates at the balance sheet
date.
The foreign exchange gains and losses from translation are recognized in the income statement to the extent
that they are not hedged by forward exchange contracts.

q.

Foreign Currency Financial Statements—The balance sheet accounts of the consolidated foreign subsidiaries
are translated into Japanese yen at the current exchange rate as of the balance sheet date except for equity,which is translated at the historical rate. Differences arising from such translation were shown as "Foreign
currency translation adjustments" in a separate component of equity.
Revenue and expense accounts of consolidated foreign subsidiaries are translated into Japanese yen at thecurrent exchange rate as of the balance sheet date.

r.

Derivative Financial Instruments—The Company uses a variety of derivative financial instruments, including
foreign currency forward exchange contracts as a means of hedging exposure to foreign currency risks. The
Company does not enter into derivatives for trading or speculative purposes.

34 CHIYODA CORPORATION ANNUAL REPORT 2009

Derivative financial instruments and foreign currency transactions are classified and accounted for as follows:(a) all derivatives are recognized as either assets or liabilities and measured at fair value, with gains or losses
recognized in the income statement and (b) for derivatives used for hedging purposes, if derivatives qualify forhedge accounting, because of high correlation and effectiveness between the hedging instruments and thehedged items, gains or losses on derivatives are deferred until maturity of the hedged transactions.
The foreign currency forward exchange contracts are utilized to hedge foreign exchange risks. Certain assets
and liabilities on construction contracts denominated in foreign currencies are translated at the contracted rates
if the forward contracts qualify for hedge accounting.
s.

Per Share Information—Basic net income per share is computed by dividing net income available to commonshareholders by the weighted-average number of common shares outstanding for the period, retroactively
adjusted for stock splits.
Diluted net income per share reflects the potential dilution that could occur if securities were exercised orconverted into common stock. Diluted net income per share of common stock assumes full conversion of theoutstanding convertible notes and bonds at the beginning of the year (or at the time of issuance) with anapplicable adjustment for related interest expense, net of tax, and full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated statements of income are dividends
applicable to the respective years including dividends to be paid after the end of the year.

t.

New Accounting Pronouncements
Business Combinations—On December 26, 2008, the ASBJ issued a revised accounting standard for businesscombinations, ASBJ Statement No. 21, "Accounting Standard for Business Combinations." Major accountingchanges under the revised accounting standard are as follows:(1) The current accounting standard for business combinations allows companies to apply the pooling ofinterests method of accounting when certain specific criteria are met such that the business combination isessentially regarded as a uniting-of-interests. The revised standard requires to account for such businesscombination by the purchase method and the pooling of interests method of accounting is no longer
allowed.
(2) The current accounting standard accounts for the research and development costs to be charged to income
as incurred. Under the revised standard, an in-process research and development (IPR&D) acquired by
the business combination is capitalized as an intangible asset.
(3) The current accounting standard accounts for a bargain purchase gain (negative goodwill) to besystematically amortized within 20 years. Under the revised standard, the acquirer recognizes a bargain
purchase gain in profit or loss on the acquisition date after reassessing whether it has correctly identified
all of the assets acquired and all of the liabilities assumed with a review of such procedures used.
This standard is applicable to business combinations undertaken on or after April 1, 2010 with early adoption
permitted for fiscal years beginning on or after April 1, 2009.

CHIYODA CORPORATION ANNUAL REPORT 2009 35

Unification of Accounting Policies Applied to Foreign Associated Companies for the Equity Method—The
current accounting standard requires to unify accounting policies within the consolidation group. However,the current guidance allows to apply the equity method for the financial statements of its foreign associatedcompany which have been prepared in accordance with generally accepted accounting principles in theirrespective jurisdictions without unification of accounting policies.
On December 26, 2008, the ASBJ issued ASBJ Statement No. 16 (Revised 2008), "Revised AccountingStandard for Equity Method of Accounting for Investments." The new standard requires adjustments to bemade to conform the associate's accounting policies for similar transactions and events under similar
circumstances to those of the parent company when the associate's financial statements are used in applying
the equity method unless it is impracticable to determine adjustments. In addition, financial statements
prepared by foreign associated companies in accordance with either International Financial ReportingStandards or the generally accepted accounting principles in the United States tentatively may be used inapplying the equity method if the following items are adjusted so that net income is accounted for inaccordance with Japanese GAAP unless they are not material: (1) amortization of goodwill; (2) scheduled
amortization of actuarial gain or loss of pensions that has been directly recorded in the equity; (3) expensing
capitalized development costs of R&D; (4) cancellation of the fair value model accounting for property, plantand equipment and investment properties and incorporation of the cost model accounting; (5) recording theprior years' effects of changes in accounting policies in the income statement where retrospective adjustments
to the financial statements have been incorporated; and (6) exclusion of minority interests from net income, if
contained.
This standard is applicable to equity method of accounting for investments effective on or after April 1, 2010
with early adoption permitted for fiscal years beginning on or after April 1, 2009.
Construction Contracts—Under the current Japanese GAAP, either the completed-contract method or thepercentage-of-completion method is permitted to account for construction contracts. In December 2007, the
ASBJ issued a new accounting standard for construction contracts. Under this new accounting standard, theconstruction revenue and construction costs should be recognized by the percentage-of-completion method, if
the outcome of a construction contract can be estimated reliably. When total construction revenue, total
construction costs and the stage of completion of the contract at the balance sheet date can be reliably
measured, the outcome of a construction contract can be estimated reliably. If the outcome of a construction
contract cannot be reliably estimated, the completed-contract method shall be applied. When it is probablethat total construction costs will exceed total construction revenue, an estimated loss on the contract should be
immediately recognized by providing for loss on construction contracts. This standard is applicable toconstruction contracts and software development contracts and effective for fiscal years beginning on or after
April 1, 2009 with early adoption permitted for fiscal years beginning on or before March 31, 2009 but after
December 27, 2007.
3.

BUSINESS COMBINATIONOn November 28, 2007, the Company acquired 85.1% of the shares of Sunrise. As a result, Sunrise became awholly owned subsidiary of the Company and the Company merged with Sunrise on January 1, 2008. The businessof Sunrise was to trade and lease real estate and the Company was leasing real estate from Sunrise. This acquisition
was made to own and manage the real estate which the Company was previously leasing from Sunrise. The resultsof operations of Sunrise are included in the Company's consolidated statements of income from November 28,
2007.

36 CHIYODA CORPORATION ANNUAL REPORT 2009

The Company accounted for this business combination by the purchase method of accounting. The acquisition
cost, ¥284 million, was determined based on the net assets of Sunrise.
The total cost of acquisition has been allocated to the assets acquired and the liabilities assumed based on theirrespective fair values. Negative goodwill recorded in connection with the acquisition totaled ¥297 million. The
negative goodwill was charged to income due to immateriality.
The estimated fair values of the assets acquired and the liabilities assumed at the acquisition date are as follows:
Millions of Yen
Current assets
Investments and other assets
Total assets acquired
Current liabilities
Long-term liabilities
Total liabilities assumed
Net assets acquired
Negative goodwill
Pre-acquisition carrying amount of investment in Sunrise
Cash acquired¥

287
16,51816,805(902)(15,306)(16,208)
597
(297)
(15)
(169)

Net of cash acquired¥

116

Pro forma results of operations for the above business combination have not been presented because the effects
were not material to the consolidated financial statements.
4.

TRANSACTIONS WITH UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATED COMPANIES
Significant transactions with and balances due from/(to) unconsolidated subsidiaries and associated companies are
summarized as follows:

Millions of Yen
2009
2008

Transactions for the Year Ended March 31
Revenue
Cost of revenue
Selling, general and administrative expenses¥

122(6,041)(1,290)¥Thousands of
U.S. Dollars
200931(7,158 )(1,652 )$ 1,253(61,650)(13,168)31
59(472 )(318 )

238
189(3,031)(1,088)

Balances at March 31
Notes and accounts receivable—trade
Accounts receivable—otherNotes and accounts payable—trade
Accrued expenses and other

23
18
(297)
(106)

The Company guaranteed the indebtedness of a certain unconsolidated subsidiary in the amount of ¥288 million($2,946 thousand) at March 31, 2009.

CHIYODA CORPORATION ANNUAL REPORT 2009 37

5.

REVENUE
Costs and estimated earnings recognized with respect to revenue which is accounted for by thepercentage-of-completion method at March 31, 2009 and 2008, were as follows:
Thousands of
U.S. Dollars
2009

Millions of Yen
2009
2008

6.

Costs and estimated earnings
Amounts billed¥ 1,191,100(1,173,540)¥ 1,115,404(1,106,265 )$ 12,154,089(11,974,905)

Net

¥

¥

$

17,5609,139

179,184

INVESTMENT SECURITIESInvestment securities at March 31, 2009 and 2008, consisted of the following:Thousands of
U.S. Dollars
2009

Millions of Yen
2009
2008
Equity securities¥ 3,765¥ 5,583$ 38,423

The carrying amounts and aggregate fair values of investment securities with readily determinable fair values at
March 31, 2009 and 2008, were as follows:
Millions of Yen
Unrealized
Unrealized
Gains
LossesFair
Value

March 31, 2009

Cost

Available-for-sale—Equity securities¥ 3,400

¥ 193

¥ 966

¥ 2,626

5,259

170

982

4,447

March 31, 2008
Available-for-sale—Equity securities

March 31, 2009
Available-for-sale—Equity securities

Cost$ 34,693

Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
Losses$ 1,971$ 9,861

Fair
Value$ 26,804

Available-for-sale securities whose fair value was not readily determinable at March 31, 2009 and 2008, were as
follows:
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2009
2008
2009
Equity securities

38 CHIYODA CORPORATION ANNUAL REPORT 2009

¥ 1,138¥ 1,136$ 11,619

Proceeds from sales of available-for-sale securities for the year ended March 31, 2008, were ¥839 million. Grossrealized gains on these sales, computed on the moving average cost basis, were ¥644 million for the year ended
March 31, 2008.
7.

REVERSAL OF IMPAIRMENT LOSS
Reversal of impairment loss of ¥268 million represents that impairment loss recognized in prior periods forbuildings and structures of a foreign subsidiary which was reversed under the generally accepted accounting
principles applied to the foreign subsidiary.

8.

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED SUBSIDIARIES AND ASSOCIATEDCOMPANIES
Investments in and advances to unconsolidated subsidiaries and associated companies at March 31, 2009 and 2008,
were as follows:

Millions of Yen
2009
2008

9.

Thousands of
U.S. Dollars
2009

Investments
Long-term receivables¥ 3,19013¥ 3,72014$ 32,553
138

Total

¥ 3,203¥ 3,734$ 32,692

LONG-TERM DEBT
Long-term debt at March 31, 2009 and 2008, consisted of the following:

Millions of Yen
2009
2008
Long-term loans from banks, maturing seriallythrough 2012, with interest rates ranging
from 2.5% to 5.8% at 2009 and 2008:
Collateralized
Uncollateralized
Total
Less current portion¥

22
10,00010,022(18)¥

61
10,00010,061(10,039 )Long-term debt, less current portion¥ 10,004¥

22

Thousands of
U.S. Dollars
2009

$

224
102,040
102,265(183)$ 102,081

Subordinated loan in the amount of ¥10,000 million from The Bank of Tokyo-Mitsubishi UFJ, Ltd. was included in'Uncollateralized' at March 31, 2008.

CHIYODA CORPORATION ANNUAL REPORT 2009 39

Annual maturities of long-term debt at March 31, 2009, were as follows:Year Ending
March 31

Millions of Yen
18
4
10,000Thousands of
U.S. Dollars

2010
2011
2012

¥

$

183
40
102,040

Total¥ 10,022$ 102,265

Millions of Yen

Thousands of
U.S. Dollars

Commitment-line contracts¥ 15,000$ 153,061

Unused commitments¥ 15,000$ 153,061

Commitment-line contracts at March 31, 2009, were as follows:

The following assets were pledged as collateral for long-term debt at March 31, 2009:10.

Millions of Yen

Thousands of
U.S. Dollars

Land
Buildings and structures—net of accumulated
depreciation¥ 381$ 3,889

472

4,821

Total

¥ 853

$ 8,710RETIREMENT BENEFITS
Employees of the Company are, under most circumstances, entitled to payments from the defined contribution
pension plan and the qualified defined benefit pension plan upon retirement or termination.
Employees of certain of the Company's domestic consolidated subsidiaries are, under most circumstances, entitledto certain lump-sum severance payments and pension payments upon retirement or termination.
Two of the Company's domestic consolidated subsidiaries, Chiyoda Keiso and Chiyoda Kosho, transferred theirretirement benefit plan to a defined contribution pension plan and the reformed qualified defined pension plan as ofApril 1, 2008. As a result of this transfer, "loss on a partial termination of a defined benefit pension plan" of¥485 million was recorded in other expenses for the year ended March 31, 2008.
Liability for retirement benefits includes retirement benefits to directors, officers and corporate auditors in theamount of ¥681 million ($6,956 thousand) and ¥536 million for the years ended March 31, 2009 and 2008,
respectively. The retirement benefits to directors and corporate auditors are paid subject to the approval of theshareholders.

40 CHIYODA CORPORATION ANNUAL REPORT 2009

The liability for employees' retirement benefits at March 31, 2009 and 2008, consisted of the following:

Millions of Yen
2009
2008
Projected benefit obligation
Fair value of plan assets
Unrecognized transitional obligation
Unrecognized actuarial loss
Unrecognized prior service cost
Net accrued pension liabilities
Prepaid pension cost
Loss on a partial termination of a defined
benefit pension plan

¥ 26,682(17,827)(3,661)(5,287)
1,204
1,110
496

Liability for employees' retirement benefits¥ 1,606¥ 27,455(20,338 )(4,307 )(3,634 )
1,381
557
648

Thousands of
U.S. Dollars
2009$ 272,268(181,909)(37,365)(53,954)
12,29011,3295,067

485¥ 1,690$

16,396The components of net periodic benefit costs for the years ended March 31, 2009 and 2008, were as follows:

Millions of Yen
2009
2008
Service cost
Interest cost
Expected return on plan assets
Amortization of transitional obligation
Recognized actuarial loss
Amortization of prior service cost
Subtotal
Loss on a partial termination of a defined
benefit pension plan
Payment to defined contribution pension trust¥ 1,027
381
(303)
610
610
(176)
2,149

Net periodic benefit costs¥

Thousands of
U.S. Dollars
2009

903
371
(532 )
615
335(176 )
1,516$ 10,482
3,894(3,093)6,225
6,228(1,798)21,938

237

485
176

2,427

¥ 2,387¥ 2,177$ 24,366

Assumptions used for the years ended March 31, 2009 and 2008, are set forth as follows:

Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss
Amortization period of transitional obligation
Amortization period of prior service cost

2009

2008

1.5%
1.6%
10 years
15 years
10 years

1.5%
2.7%
10 years
15 years
10 years

CHIYODA CORPORATION ANNUAL REPORT 2009 41

11.

EQUITY
Since May 1, 2006, Japanese companies have been subject to the Companies Act of Japan (the "Companies Act").
The significant provisions in the Companies Act that affect financial and accounting matters are summarized below:a.

Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders meeting. For companies that meet certain criteria suchas; (1) having the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate
Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years of normal
term by its articles of incorporation, the Board of Directors may declare dividends (except for dividends inkind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation.
However, the Company cannot do so because it does not meet all the above criteria.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained
at no less than ¥3 million.

b.

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

c.

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

42 CHIYODA CORPORATION ANNUAL REPORT 2009d.

Issuance of New Ordinary Shares to a Third Party
On April 30, 2008, the Company issued new ordinary shares to a third party based on the resolution of theBoard of Directors meeting held on March 31, 2008. Details are as follows:
(1)
(2)
(3)
(4)

Allocated third party:
Number of shares issued:
Issue price:
Aggregate issue amount:

Mitsubishi Corporation
Ordinary shares, 67,080 thousand shares¥907 per share¥60,841 million ($620,832 thousand)

The Company's common stock and capital surplus were increased by ¥30,454 million ($310,758 thousand) and¥30,387 million ($310,073 thousand), respectively.
12.

STOCK OPTIONSThe stock options outstanding as of March 31, 2009 were as follows:
Stock
OptionPersons
GrantedNumber of
Options Granted

Date ofGrant

2002 Stock
Option8 directors
8 officers
623 employees

7,896,000 shares

June 27, 2002

Exercise
Price

Exercise Period¥232 From July 1, 2004
( $2.37 )to June 30, 2009

The stock option activity was as follows:
2002 Stock Option(Shares)
For the Year Ended March 31, 2008
Vested:March 31, 2007—outstanding
Exercised
March 31, 2008—outstanding

123,000(57,000)
66,000For the Year Ended March 31, 2009
Vested:March 31, 2008—outstanding
Exercised
March 31, 2009—outstanding
13.

66,000(30,000)
36,000

INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in theaggregate, resulted in a normal effective statutory tax rate of approximately 41% for the years ended March 31,
2009 and 2008.

CHIYODA CORPORATION ANNUAL REPORT 2009 43

The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets
and liabilities at March 31, 2009 and 2008, are as follows:

Millions of Yen
2009
2008
Deferred tax assets:
Cost of revenue
Allowance for employees' bonus
Allowance for warranty costs for completed works
Allowance for losses on construction contracts
Deferred loss on derivatives under hedge
accounting
Other
Less valuation allowanceThousands of
U.S. Dollars
2009¥ 5,600
1,367
1,422
1,661

¥ 4,182
1,610
731
1,644

1,033
4,714
(1,278)

1,368
4,046
(766 )

10,545
48,109(13,044)

14,521

12,815

148,179

Deferred tax liabilities

3,309

5,828

33,769Net deferred tax assets¥ 11,212¥ 6,987$ 114,410

Total

$

57,147
13,94914,518
16,953Net deferred tax assets as of March 31, 2009 and 2008 were recorded in the accompanying consolidated balance
sheets as follows:

Deferred tax assets—current assets
Deferred tax assets—investments and other assets

Millions of Yen
2009
2008

Thousands of
U.S. Dollars
2009¥ 9,872
1,348$ 100,742
13,764¥ 5,337
1,650

A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in theaccompanying consolidated statements of income for the years ended March 31, 2009 and 2008, is as follows:
2009

2008

Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Non-taxable dividend income
Tax credit
Temporary difference on change in tax act
Increase in valuation allowance for deferred tax assets
Equity in earnings of associated companies
Lower income tax rates applicable to subsidiaries
Lower tax basis of enterprise tax
Corporate income tax for previous years
Earnings retained by tax haven company
Other—net

41 %
2
(1)
(2)
(5)
3
(1)
(4)
(1)

41 %
1
(1)
(2)

Actual effective tax rate

32 %

49 %

44 CHIYODA CORPORATION ANNUAL REPORT 2009

(3)
1
1
10
1

14.

RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥1,797 million ($18,344 thousand) and ¥1,659 million for theyears ended March 31, 2009 and 2008, respectively.

15.

LEASESThe Group leases certain machinery, computer equipment and other assets. Total lease payments under finance leases
were ¥138 million ($1,408 thousand) and ¥128 million for the years ended March 31, 2009 and 2008, respectively.
As discussed in Note 2.n, the Group accounts for leases which existed at the transition date and do not transfer
ownership of the leased property to the lessee as operating lease transactions. Pro forma information of such leases
existing at the transition date, such as acquisition cost, accumulated depreciation, obligations under finance leases,
depreciation expense and interest expense on an "as if capitalized" basis for the years ended March 31, 2009 and 2008
was as follows:Year Ended March 31, 2009
Millions of Yen

Thousands of U.S. Dollars

Buildings
Tools,
andFurniture
Structures and Fixtures Other Total

Buildings
andStructures

Tools,
Furnitureand Fixtures

Other

Total

Acquisition cost
Accumulated depreciation

¥ 67
12

¥ 475
244

¥ 77 ¥ 619
43
299

$ 689
126

$ 4,8512,495$ 785 $ 6,326
439
3,061

Net leased property

¥ 55

¥ 230

¥ 33 ¥ 319$ 562$ 2,355$ 346 $ 3,265

Obligations under finance leases:
Millions of Yen

Thousands of
U.S. Dollars

Due within one year
Due after one year

¥ 110
209

$ 1,125
2,139

Total

¥ 319

$ 3,265

Year Ended March 31, 2008
Buildings
andStructures

Millions of Yen
Tools,
Furnitureand Fixtures
Other

Total

Acquisition cost
Accumulated depreciation

¥ 68
6

¥ 450
219

¥ 76
34

¥ 594
259

Net leased property

¥ 62

¥ 231

¥ 42

¥ 335

CHIYODA CORPORATION ANNUAL REPORT 2009 45

Obligations under finance leases:
Millions of Yen
Due within one year
Due after one year

¥ 109
226

Total

¥ 335

Depreciation expense as lessee, which is not reflected in the accompanying consolidated statements of income,computed by the straight-line method was ¥138 million ($1,408 thousand) and ¥128 million for the years ended
March 31, 2009 and 2008, respectively.
The amounts of obligations, acquisition cost and depreciation under finance leases include the imputed interest
income portion and interest expense portion, respectively.
The minimum rental commitments under noncancelable operating leases at March 31, 2009 and 2008 were as
follows:
Year Ended March 31, 2009

Millions of Yen

Thousands of
U.S. Dollars

Due within one year
Due after one year

¥

144
1,545

$ 1,471
15,773

Total¥ 1,690$ 17,245

Year Ended March 31, 2008
Millions of Yen

16.

Due within one year
Due after one year

¥ 105
751

Total

¥ 856

DERIVATIVESThe Company enters into foreign currency forward exchange contracts to hedge foreign exchange risk associatedwith certain assets and liabilities on construction contracts denominated in foreign currencies. It is the Company's
policy to use derivatives only for the purpose of reducing foreign exchange risks associated with such 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.

46 CHIYODA CORPORATION ANNUAL REPORT 2009

The basic policies for the use of derivatives are approved by the executive committee and the execution and control
of derivatives are controlled by the financing department. The hedging effectiveness in reducing foreign exchangerisks is periodically assessed and reported to the accounting department and executive officers.
The Company had the following foreign currency forward exchange contracts outstanding at March 31, 2009 and2008.

Contract
AmountBuying:Euro
U.K.£
Selling:
U.S.$
Euro

¥

19
21

¥

14,9901,331

Contract
AmountBuying:U.S.$
EuroSelling:
U.S.$
Euro

Millions of Yen
2009
Fair
Unrealized
Loss
Value

¥

9
14
20,621
2

Thousands of U.S. Dollars
2009
Fair
Unrealized
Contract
Amount
Value
Loss

18
14

¥ (6)

$

194
217

15,022
1,332

(31)
(1)

152,965
13,589$188
152
153,288
13,599

$

(5)
(64)
(323)
(10)

Millions of Yen
2008
Unrealized
Fair
Value
Gain

¥

9
15
20,5222¥ 1
99

Foreign currency forward exchange contracts which qualify for hedge accounting for the years ended March 31,
2009 and 2008, are excluded from the disclosure of market value information.
The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Company's exposure to credit or market risk.
17.

CONTINGENT LIABILITIESAt March 31, 2009, the Group had the following contingent liabilities:

Guarantees on employees' housing loans
Performance bond for an unconsolidated subsidiary

Millions of Yen

Thousands of
U.S. Dollars

¥ 511
288

$ 5,217
2,946

CHIYODA CORPORATION ANNUAL REPORT 2009 47

18.

NET INCOME PER SHARE
Reconciliation of the differences between basic and diluted net income per share ("EPS") for the years ended March
31, 2009 and 2008 is as follows:
Millionsof YenYear Ended March 31, 2009

Net
IncomeThousandsof Shares
Weightedaverage
SharesYen

U.S. Dollars

EPS

Basic EPS—Net income available tocommon shareholders
Effect of dilutive securities—Stock options¥ 6,498

254,000
42¥ 25.58$ 0.26

Diluted EPS—Net income for computation¥ 6,498

254,043¥ 25.58$ 0.26

Basic EPS—Net income available tocommon shareholders
Effect of dilutive securities—Stock options¥ 9,641

192,25695¥ 50.15

Diluted EPS—Net income for computation¥ 9,641

192,351¥ 50.12

Year Ended March 31, 2008

19.

SUBSEQUENT EVENT
The following appropriation of retained earnings at March 31, 2009, is scheduled for approval at the Company's
shareholders meeting on June 23, 2009:

Year-end cash dividends, ¥7.50 ($0.08) per share

48 CHIYODA CORPORATION ANNUAL REPORT 2009

Millions of Yen

Thousands of
U.S. Dollars¥ 1,944$ 19,846

20.

SEGMENT INFORMATION
Information about geographical segments and sales to foreign customers of the Company and consolidated subsidiaries
for the years ended March 31, 2009 and 2008, was as follows:(1) Geographical Segments
Millions of Yen
Year Ended March 31, 2009 Japan

Asia

Other

Subtotal

Eliminations(Corporate)

¥

9
42

¥ 446,438
2,161¥ (2,161)

Consolidated

Revenue:
Outside customers
Intersegment¥ 429,879
16¥ 16,548
2,103

Total

429,896

18,651

52

448,600(2,161)

446,438

Operating expenses

424,825

16,49746

441,369(2,157)439,211

Operating income

¥

5,070

¥ 2,154¥

5

Assets¥ 347,936¥ 10,338

¥ 636

¥

7,230

¥ 358,912¥ 446,438¥(3)¥ (1,095)

¥

7,227

¥ 357,816

Thousandsof U.S.
Dollars
Dollars
Thouof U.S.
Eliminations
Other
Subtotal(Corporate)

Consolidated$$ 4,555,497

Japan

Asia

Revenue:
Outside customers
Intersegment$ 4,386,530
164$ 168,865
21,459Total

4,386,695

190,324531

4,577,551(22,053)

4,555,497

Operating expenses

4,334,952

168,339473

4,503,766(22,015)

4,481,750

Year Ended March 31, 2009

Operating income$

51,742

Assets$ 3,550,376$

21,984$ 105,493$

102 $ 4,555,497
429
22,05358 $

73,785$ 6,497 $ 3,662,367$ (22,053)

$

(37)

$ (11,174)$

73,747$ 3,651,193

CHIYODA CORPORATION ANNUAL REPORT 2009 49

Millions of Yen
Japan

Asia

Other

Subtotal

Eliminations(Corporate)

Revenue:
Outside customers
Intersegment¥ 588,606¥ 14,954
1,638

¥ 63

¥ 603,560
1,701¥ (1,701)

Total

588,606

16,592

63

605,261(1,701)

603,560

Operating expenses

581,030

15,323

77

596,430(1,710)594,720

Year Ended March 31, 2008

Operating income (loss)

¥

7,576

¥ 1,269¥ (14)¥

Assets¥ 369,452¥ 9,620¥ 815¥ 379,887

Notes:

8,831

Consolidated¥ 603,560¥

9¥ (1,067)

¥

8,840

¥ 378,820

1. The Company and consolidated subsidiaries operate within three geographic segments based on the countries where
the companies are located.
The segments consisted of the following countries in 2009 and 2008:
Asia:
Other:

Indonesia, Singapore, Philippines, Myanmar, Malaysia and Thailand
United States of America and Nigeria

2. Corporate assets mainly consist of long term loans and investment securities of the Company. Corporate assets asof March 31, 2009 and 2008 were ¥3,273 million ($33,398 thousand) and ¥2,153 million, respectively.

50 CHIYODA CORPORATION ANNUAL REPORT 2009

(2) Sales to Foreign Customers
Millions of Yen

Year Ended March 31, 2009
Overseas sales (A)Consolidated sales (B)(A)/(B)

Year Ended March 31, 2009
Overseas sales (A)Consolidated sales (B)(A)/(B)Asia

The Middle
andNear East

Russia andCentral Asia

Other

Total

¥ 20,380¥ 277,627¥ 23,308¥ 1,966

4.56%

62.19%

5.22%

0.44%

¥ 323,282
446,438
72.41%

Asia

Thousands of U.S. Dollars
The Middle
andRussia andCentral Asia
Other
Near East$ 207,961$ 2,832,934$ 237,839$ 20,066

4.56%

62.19%

5.22%

0.44%

Total
$ 3,298,801
4,555,497
72.41%CHIYODA CORPORATION ANNUAL REPORT 2009 51

Millions of Yen

Year Ended March 31, 2008
Overseas sales (A)Consolidated sales (B)(A)/(B)Asia

The Middle
andNear East

Russia andCentral Asia

Other

Total

¥ 17,093¥ 425,970¥ 49,408¥ 1,015

2.83%

70.58%

8.19%

0.16%

¥ 493,486
603,560
81.76%

Note: The Company and consolidated subsidiaries are summarized into four segments by geographic area
based on the countries where the companies are located.
The segments consisted of the following countries in 2009 and 2008:
Asia:
The Middle and Near East:
Russia and Central Asia:
Other:

Singapore, Indonesia, Malaysia and others
Qatar, UAE and others
RussiaAustralia, Algeria and others

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 Japanese accounting standards.

******

52 CHIYODA CORPORATION ANNUAL REPORT 2009

INDEPENDENT AUDITORS' REPORTTo the Board of Directors and Shareholders of
Chiyoda Corporation:
We have audited the accompanying consolidated balance sheets of Chiyoda Corporation (the "Company") andconsolidated subsidiaries as of March 31, 2009 and 2008, and the related consolidated statements of income,changes in equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated
financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of Chiyoda Corporation and consolidated subsidiaries as of March 31, 2009 and2008, and the consolidated results of their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in Japan.
Our audits 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 12, 2009CHIYODA CORPORATION ANNUAL REPORT 2009 53

Global Network (As of July 1, 2009)

Head Office

The Hague Representative Office

Al-Khobar Office

Yokohama Head Office

Parkstraat 83, 2514 JG

P.O. Box 31707, Al-Khobar 31952

12-1, Tsurumichuo 2-chome, Tsurumi-ku

The Hague, The Netherlands

The Kingdom of Saudi Arabia

Yokohama 230-8601, JapanTe l : (31) 70-385-9453

Tel: (966) 3-864-0839

Te l : (81) 45-521-1231

Fax: (31) 70-346-3779

Fax: (81) 45-503-0200
Koyasu Office & Research Park
13, Moriya-cho 3-chome, Kanagawa-ku

Major Subsidiaries & AffiliatedCompanies

Services: Design
Chiyoda Bldg. Meralco Avenue Corner,
General Araneta Street, San Antonio,

Yokohama 221-0022, JapanTe l : (81) 45-441-1268

Fax: (966) 3-864-0986
Chiyoda Philippines Corporation

Overseas

Pasig City, Metro Manila, Philippines

Fax: (81) 45-441-1297

Chiyoda Almana Engineering LLC

Tel: (63) 2-636-1001/1008

Research & Development Center

Services: Design and construction of

Fax: (63) 2-636-1013/1023

Te l : (81) 45-441-9132

industrial facilities

URL: http://www.chiyodaphil.com.ph

Fax: (81) 45-441-9728

Almana Tower, 5th floor, Airport RD,

Chiyoda & Public Works Co., Ltd.

Osaka Office

P.O. Box 22961, Doha, Qatar

Services: Design and construction of

14-10, Nishinakajima 5-chome,

Te l : (974) 462-2926

industrial facilities

Yodogawa-ku Osaka 532-001, Japan

Fax: (974) 462-6404

SEDONA HOTEL Room 308 ~ 309 No. 1,

Te l : (81) 6-6390-3411

Chiyoda Corporation (Shanghai)

Kaba Aye Pagoda Road, Yankin Township,

Fax: (81) 6-6889-5101

Services: Project consulting

Yangon, Myanmar

29F-Room E, Pufa Tower, No. 588,

Tel: (95) 1-545605

Pudong Rd. (S), Pudong New Area,

Fax: (95) 1-545227

Abu Dhabi Office

Shanghai 200120, China

Chiyoda Singapore (Pte) Limited

Clock Tower Bldg. Al Najda Street,

Te l : (86) 21-5877-6266

Services: Design and construction of

P.O. Box 43928, Abu Dhabi, U.A.E.

Fax: (86) 21-5877-6366

industrial facilities

Te l : (971) 2-671-7161

Chiyoda do Brasil Representações Ltda.

14 International Business Park Jurong

Fax: (971) 2-671-7162

Services: Business activities in South America

East, Singapore 609922

Beijing Office

Praia de Botafogo, 228-5 andar,

Tel: (65) 6563-3488

Room No. 1028, China World Tower No.1,

22250-040 Rio de Janeiro -RJ- Brasil

Fax: (65) 6567-5231

Jianguomenwai Street, Chaoyang District,

Te l : (55) 21-3738-8280

URL: http://www.chiyoda.com.sg/

Beijing, 100004, China

Fax: (55) 21-3738-6835

Chiyoda (Thailand) Limited

Te l : (86) 10-6505-2678

Chiyoda International Corporation

Services: Design and construction of

Fax: (86) 10-6505-1118

Services: Business activities in the U.S.A.

industrial facilities

Jakarta Office1177 West Loop South, Suite 680

140/42 ITF Tower II, 20th Floor,

9th Floor, Mid-Plaza Bldg. Jalan Jenderal

Houston, TX 77027, U.S.A.

Silom Road, Kwaeng Suriyawong,

Sudirman Kav. 10-11 Jakarta, 10220, Indonesia

Te l : (1) 713-965-9005

Khet Bangrak, Bangkok 10500, Thailand

Te l : (62) 21-570-7579

Fax: (1) 713-965-0075

Tel: (66) 2-231-6441/6442

Fax: (62) 21-570-6276

Chiyoda Malaysia Sdn. Bhd.

Fax: (66) 2-231-6443

Korea Representative OfficeServices: Design and construction of

L&T-Chiyoda Limited

1358-8, Tal-dong Nam-ku, Ulsan, Korea

industrial facilities

Services: Design

Te l : (82) 52-256-5721/5722

15th Floor, Menara Maxisegar Jalan Pandan

B.P. Estate, National Highway No. 8,

Fax: (82) 52-256-5723

Indah, 4/2 Pandan Indah, 55100

Chhani Baroda-391740, Gujarat State, India

Middle East Headquarters Doha Office

Kuala Lumpur, Malaysia

Tel: (91) 265-2771003/2772855

Al Mana Tower Airport Road,

Te l : (60) 3-4297-0988

Fax: (91) 265-2774985

P.O. Box 20243, Doha Qatar

Fax: (60) 3-4297-0800

URL: http://www.lntchiyoda.com/

Te l : (974) 462-2875/2876

URL: http://www.chiyoda.com.my/

PT. Chiyoda International Indonesia

Fax: (974) 462-2716

Chiyoda Oceania Pty Limited

Services: Design and construction of

Milan Representative OfficeServices: Design and construction ofindustrial facilities

Viale Della Liberazione 18, 20124 Milan, Italy

industrial facilities

9th Fl. Midplaza Bldg. J1. Sudirman Kav. 10-11

Te l : (39) 02-303517-111

Level 28, AMP Tower 140 St Georges Terrace,

Jakarta 10220, Indonesia

Fax: (39) 02-303517-35

Perth WA 6000, Australia

Te l : (62) 21-570-4693

Singapore Human Resources Office

Te l : (61) 8-9278-2599

Fax: (62) 21-573-5723

10 Anson Road, #03-02, International Plaza,

Fax: (61) 8-9278-2727

Singapore 079903

Chiyoda Petrostar Ltd.

Te l : (65) 6324-0080

Services: Design and construction of

Fax: (65) 6324-0090

industrial facilities

Overseas Offices

54 CHIYODA CORPORATION ANNUAL REPORT 2009

Project Companies
Oman, Qatar, Russia

The Netherlands

Russia

Italy
Korea

Japan

U.S.A.

China
Saudi Arabia
MyanmarOman
The Philippines
India
Thailand
Malaysia
Singapore
U.A.E.
Indonesia
Qatar

Head Office
Overseas Offices
Major Subsidiaries & Affiliated Companies
BrazilProject Companies
Australia

Major Subsidiaries & AffiliatedCompanies
Domestic• Engineering BusinessChiyoda Advanced Solutions Corporation
Services: Advanced engineering consulting
1-25, Shinurashima-cho 1-chome
Kanagawa-ku, Yokohama 221-0031, JapanTe l : (81) 45-441-1260
Fax: (81) 45-441-1264
URL: http://www.chiyoda-as.co.jp/
Chiyoda Keiso Co., Ltd.
Services: Design, procurement and construction for electrical and instrumentation

Chiyoda TechnoAce Co., Ltd.

Arrowhead International Corporation

Services: Design and construction for

Services: Travel services and supply of spare

pharmaceutical facilities

parts

13, Moriya-cho 3-chome, Kanagawa-ku

7-8, Shibakoen 1-chome, Minato-ku

Yokohama 221-0022, JapanTokyo 105-0011, JapanTe l : (81) 45-441-9600

Te l : (81) 3-5470-0880

Fax: (81) 45-450-5236

Fax: (81) 3-5470-0890

URL: http://www.cta.chiyoda.co.jp/

URL: http://www.arrowhead.co.jp/

Chiyoda U-Tech Co., Ltd.

Arrow Mates Co., Ltd.

Services: Consulting and human resources

Services: Placement of technicians andplacement

office staff and reemployment support

15-19, Tsurumichuo 2-chome, Tsurumi-ku

43, Hon-cho 4-chome, Naka-ku

Yokohama 230-0051, Japan

Yokohama 231-0005, JapanTe l : (81) 45-502-7618

Te l : (81) 45-662-1126

Fax: (81) 45-503-5399

Fax: (81) 45-662-1173

URL: http://www.utc-yokohama.com/

facilities
13, Moriya-cho 3-chome, Kanagawa-ku• Other Businesses

Yokohama 221-0022, Japan

Arrow Business Consulting Corporation

Te l : (81) 45-441-1433

Services: Consulting for finance and accounting

Fax: (81) 45-441-1434

32-1, Tsurumichuo 4-chome, Tsurumi-ku

URL: http://www.ckc.chiyoda.co.jp/

Yokohama 230-0051, Japan

Chiyoda Kosho Co., Ltd.

Te l : (81) 45-502-5774

Services: Design, construction and maintenanceFax: (81) 45-502-5753

URL: http://www.arrowmates.co.jp/
IT Engineering Limited
Services: IT consulting and solution provider
1-25, Shinurashima-cho 1-chome,
Kanagawa-ku, Yokohama 221-0031, JapanTe l : (81) 45-441-9123
Fax: (81) 45-441-1466
URL: http://www.ite.co.jp/

for domestic projects
34-26, Tsurumichuo 4-chome, Tsurumi-ku
Yokohama 230-0051, JapanTe l : (81) 45-506-7662
Fax: (81) 45-506-7667
URL: http://www.cks-ykh.co.jp/

CHIYODA CORPORATION ANNUAL REPORT 2009 55

Corporate Information (As of March 31, 2009)

Chiyoda Corporation
Head Office12-1, Tsurumichuo 2-chome, Tsurumi-ku,
Yokohama 230-8601, Japan
Tel: (81) 45-521-1231
Fax: (81) 45-503-0200
Established
January 20, 1948
Paid-in Capital¥43,392 million
Number of Employees:
1,290 (Non-Consolidated)
3,376 (Consolidated)

Annual Fiscal Close
March 31
Shareholders’ Meeting
June
Number of Shares per Unit
1,000
Stock CodeISIN:
JP3528600004
SEDOL 1:6191704 JP
TSE:
6366

Transfer Agent of Common Stock
Mitsubishi UFJ Trust and Banking
Corporation
1-4-5 Marunouchi, Chiyoda-ku, Tokyo
Authorized Shares
650,000,000
Capital Stock Issued
260,292,529
Number of Shareholders
16,521
URL
http://www.chiyoda-corp.com

Organization Chart
Shareholders’ Meeting

Corporate Auditors Committee

Board of Directors
Executive Committee
CSR Division

SQE Division
Operational Auditing Office

Corporate Plannning,
Management & FinanceCorporate Planning Division
Administration & Personnel Division
Finance Division
Project Management
Administration Division

Technology & Engineering
Engineering Operation
Division
Innovation Business
Division
Technology Development
Division
Process Technology
Division

Research Institute ofTechnology Innovation & Strategy
Mechanical Engineering Division

Projects Logistics & Construction
Procurement Division
Construction Division

Electrical and Control System
Engineering Division
Piping and Civil Engineering
Division

Project Operations
Domestic Project Division 1

International Project Division 1

Domestic Project Division 2

International Project Division 2

Domestic Project Division 3

International Project Division 3

Green Energy Project DivisionInternational Project Division 4
Project Management Services Division

Business Development Opeartion
Strategic Business Plannning& Development Division
Business Development Division 1
Business Development Division 2
Business Development Division 3(As of August 10, 2009)56 CHIYODA CORPORATION ANNUAL REPORT 2009

Major Shareholders
Ratio of Number of
Number of
Shares Owned toShares Owned
Aggregate Number of(thousands of shares)
Shares Issued (%)

Breakdown by Shareholder

Mitsubishi Corporation

86,931

33.39

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

11,357

4.36

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

9,033

3.47

Japan Trustee Services Bank, Ltd. (Trust Account)

8,617

3.31

Mitsubishi UFJ Trust and Banking Corporation

8,032

3.08

Japan Trustee Services Bank, Ltd. (Trust Account 4G)

7,694

2.95

The Bank of New York, Treaty JASDAEC Account

6,311

2.42

Financial institutions

JPMCB Omnibus US Pension, Treaty JASDEC 380052

3,669

1.40

Securities companies

Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

3,495

1.34

Tokio Marine & Nichido Fire Insurance Co., Ltd.

2,760

1.06

12.94%

22.90
%

23.38
%

Total
260,292
thousand

1.85%

38.93%

Other corporations
Foreign investors and others
Individuals and others

Monthly Stock Price Range on the Tokyo Stock Exchange

3,600

(Yen)

(Yen)

24,000Share Price (left)
VolumeNikkei Stock Average (right)

2,400

16,000

1,200

8,000
(Thousandsof shares)

0

160,000

80,000

0
2004

2005

2006

2007

2008

2009

4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4

CHIYODA CORPORATION ANNUAL REPORT 2009 57