Engineering a Better Tomorrow

ANNUAL REPORT 2000
Fiscal Year Ended March 31, 2000

CHIYODA CORPORATIONCONTENTS

1

Profile2

A Message from the Management

4

Review of Operations
4

Hydrocarbon Sector

6

Non-Hydrocarbon Sector

8

Main Projects

10

Financial Section

30

Corporate Directory

31

Board of Directors

31

Corporate Data

PROFILE

Since its founding in 1948, Chiyoda Corporation has earned a strong reputation
as a global engineering company with roots in the hydrocarbon processing
industry. Leveraging its vast accumulated experience, Chiyoda has set its
sights on becoming an integrated provider of engineering and construction
services to customers around the world. The Company is now applying its
technological and engineering expertise to the development of such areas
as environmental systems, nonferrous metal processing, pharmaceuticalmanufacturing, food processing, factory automation, automotive plants,
theme parks, and aerospace development. To better serve globally competitive markets, Chiyoda believes in continuous renewal to realize its missionof becoming the engineering company of choice for customers worldwide.

Ethylene Plant (800,000 t/y)

Ethylene Glycol Plant (450,000 t/y)

LNG Plant (3,300,000 t/y x 2)

Exxon Chemical Singapore Private Ltd.



Eastern Petrochemical Company (SHARQ)

Oman LNG L.L.C.

(Chawan, Jurong Island, Singapore)(Al-Jubail, The Kingdom of Saudi Arabia)(Qalhat, Sultanate of Oman)CHIYODA CORPORATION

1A MESSAGE FROM THE MANAGEMENT

Domestic orders continued to be firm overall
and totaled ¥53 billion, with impressive resultsfrom the chemical, pharmaceutical, and energy
sectors. Regrettably, new international hydrocarbonrelated orders fell short of expectations, andChiyoda was only able to book orders worth¥27 billion. This resulted in total orders of ¥80
billion for both domestic and international operations, in contrast to a target of ¥120 billion. Theinternational market, particularly Asia and the
Middle East, continued to be distinguished byintense competition and a dearth of major projects during fiscal 2000.
During fiscal 2000, the Company undertook
significant rationalization measures, including
most notably a reduction in personnel, which
will enable it to reduce fixed costs by 13% as wemove forward. Although the number of employees
has been reduced, we have been diligent in ensuring that highly skilled employees were retained inorder that core competencies necessary for projKiyomitsu Nishio
President

2 CHIYODA CORPORATION

Dear shareholders, employees, and friends,

ect execution remain intact. In addition, several

For the fiscal year ending 31 March 2000, ournon-performing Group companies were liqui-

operating and net income improved significantly,

dated, while the remaining companies were either

thereby returning Chiyoda to profitability for the

streamlined or consolidated.

first time in four years. Earnings from construction

Environmental issues are of deep concern toorders improved, and the Company managed to

Chiyoda and a key issue in Japan. In June 1999,

complete all unprofitable projects—which had

the Company established an Environmental Project

severely burdened operating results in the past.

Division to consolidate Chiyoda’s environment-

Although Chiyoda has managed to return to mod-related skills and technologies. We have recently

est profitability in fiscal 2000, it is with great regret

successfully completed the development of ourthat I have to inform our shareholders that weambient-temperature catalytic dioxin decomposi-

were not able to pay dividends for the year.

tion technology for fly ash from incinerators.

Since our alliance with Kellogg Brown & Root,

I am pleased to announce that the LNG plant

Inc. (KBR), was concluded, exchanges between

constructed by Chiyoda for the Qatar Liquefied

the two companies have grown, as both parties

Gas Co., Ltd. (QATARGAS), was chosen as theare committed to expanding the relationship. We

1999 International Project of the Year by thehave enhanced our mutual understanding throughProject Management Institute (PMI), the leadingthese efforts and are convinced that the relation-international nonprofit professional association

ship will result in significant contributions to thein the area of Project Management. It was a real

profitability of both companies.

honor for Chiyoda to be presented with sucha prestigious award.

Resolutions for Fiscal 2001

Finally, I would like to acknowledge the support

The most important issue facing Chiyoda is theof various individuals and corporations this pastneed to secure a steady flow of orders that will

year, in particular Mitsubishi Corporation, thesustain profitability. During fiscal 2001, we antici-

Bank of Tokyo-Mitsubishi, Ltd., and KBR.

pate a modest improvement in capital spending in

Chiyoda will do its very best to live up to the

Asia and the Middle East. We will focus our efforts

hopes placed in us by all concerned and we willon improving international bookings while main-

approach fiscal 2001 determined to improve alltaining a healthy domestic order book. Chiyoda is

aspects of our operations. I hope that we canresolved not to lose the trust of its customers andbenefit from your continuing support in theto make the improved financial results of fiscalmonths and years to come.

2000 a solid foundation for future growth.
The Company continues to focus on client sat-

June 29, 2000

isfaction and continuous work process improvement in order to improve the competitiveness of
its operations. Specific efforts include reducing
overall project costs and schedules, reducing indi-

Kiyomitsu Nishio

rect costs, increasing use of low-cost engineering

President

centers, and improving asset productivity throughthe use of advanced IT applications. We will continue to refine existing proprietary technologies
and will only commit to R&D projects that havewell defined business goals. In addition, we willcontinue our efforts to acquire new technologies
with global applications in order to provide differentiation through technology.

CHIYODA CORPORATION

3REVIEW OF OPERATIONSPetroleum-, Petrochemical-, and
Gas-Related Industries

with the first shipment of 5,000 tons of methanol being
exported to Canada in August 1999. Chiyoda’s ethyleneoxide/ethylene glycol (EO/EG) project in Saudi Arabia isHydrocarbon Sector

proceeding very smoothly and is expected to be completed in advance of the contract date. One Middle East
project was suspended and, although Chiyoda vigorously pursued two other major projects in the region,
the Company was not ultimately awarded either contract.
In the LNG sector, Chiyoda has won high praise from
Shell and other shareholders in Oman LNG L.L.C. for
the Company’s role in completing the largest grassroots
LNG project in the world in just 38 months, well aheadof the contract date. Chiyoda’s quality control procedures, Health Safety and Environment (HSE), and technical standards have also been highly praised by all interested• Overview of the International Market

Co., Ltd. (RASGAS), awarded Chiyoda an important

production plant inSoutheast Asian countries have partially recovered

contract to supply Front End Engineering Design (FEED)from the financial and economic crises precipitated byfor two new trains, each of which are to be designed tothe currency crisis of 1997, but investment in large-

have a capacity of 4.4 million tons a year.

Chiyoda completed apolycarbonate resin
September 1999 atJurong Island,
Singapore, for Teijin
Polycarbonate
Singapore Pte., Ltd.

parties. In Qatar, the Ras Laffan Liquefied Natural Gas

scale projects remains weak, which has resulted inshrinking demand for Chiyoda plants and other facilities• Asia and China

in the region. There has also been a knock-on effect—

In the Southeast Asian petrochemical sector, Chiyoda

as demand for hydrocarbon products in Asia remains

currently has one major project under way—the con-slack, exporters to Asia located in other regions havestruction of an ethylene plant for ExxonMobil Chemicalalso delayed or canceled investments in new facilities.

Company, as part of a world-scale US$2 billion petro-

Capital tie-ups and mergers among major oil companies

chemical complex at Jurong Island in Singapore. The

throughout the world have resulted in all our planned

chemical complex, which is fully integrated with existing

new projects being put on hold. Given these adverse

facilities, includes a 480,000 tons a year polyethylene

circumstances, Chiyoda did not have many projects tounit and a 275,000 tons a year polypropylene unit and ispursue in fiscal 2000, and the volume of new orders

due for start up in the fourth quarter of calendar 2000.

was substantially less than the Company had anticipated.

The Company completed two remarkable projects in
Asia. One is a condensate splitter unit for Shell Eastern• Middle East

Petroleum Pte., Ltd., and Petrochemical Corporation of

Chiyoda is engaged in several major projects in the

Singapore Pte., Ltd., and the other is Taiwan CPDC’s

Middle East, which remains a major area of operations

caprolactam plant with the world’s largest production

for the Company. Two large-scale petrochemical proj-

capacity of 120,000 tons a year.

ects were completed—an aromatics project in Saudi

4 CHIYODA CORPORATION

Investment in Southeast Asia is gradually picking up,

Arabia and a methanol/methyl tertiary-butyl ether (MTBE)

and Chiyoda received an important order from Teijin

project in Qatar. The Qatar plant started methanol pro-Polycarbonate Singapore Pte., Ltd., for a polycarbonate

duction in June 1999 and MTBE production in July 1999,

plant.



Chiyoda successfully completed the 480,000 t/y Benzene and220,000 t/y Cyclohexane production plant on schedule with 9.3
million incident-free manhours, in Al-Jobail, Saudi Arabia.

China is a key emerging market where many major oiland chemical companies have large-scale investment
plans. Chiyoda won two important contracts in China—
the Company became the first Japanese contractor to

East and Asia. In the fiscal year under review, Chiyoda

In April 2000, an LNG

underground storage terminal, a project undertaken

was awarded a contract by the Tokyo Electric Power

complex of 6.6 million

for BP Ningbo Huadong LPG Co., Ltd.

Company to improve its LNG facilities

LNG L.L.C. was com-be engaged in China on the construction of an LPG

t/y capacity for Oman
pleted and started

The other order is for a petrochemical project.

LNG shipment at• Outlook and Strategies

Qalhat, the Sultanate

demonstrating its superior ability in the execution of

Chiyoda is confident that, from the beginning of fiscalof Oman. The complex

these projects.

2000, the Company will be able to boost the flow of newof the contractual

In LNG operations, Chiyoda has been awarded thepetroleum and petrochemical contracts, given the con-schedule with many

FEED contract for Indonesia’s next multi-train LNG proj-

tinuing recovery in the economies of Southeast Asia. The

Chiyoda’s contribution

ect, Tangguh, with facilities to be constructed at Telukwave of mergers in the oil and petrochemical industries

to the successful com-

Berau. When construction starts, this will be one of theappears to be abating, and this gives the Company

biggest ongoing multi-billion dollar projects in the world.

cause for hope that the newly merged giants will now

Also in Indonesia, Chiyoda has been selected by PT

embark on new projects that have been stalled because

Badak NGL. to carry out engineering, procurement andof the uncertainties surrounding the mergers. Oil priceconstruction (EPC) work in connection with the modern-hikes have greatly improved the financial position of

ization of trains constructed in the 1980s at the Batak

many major oil producers; to take one example, theplant in Bontang, the largest gas liquefaction complex

Saudi Arabian Oil Company (Saudi Aramco) is poisedever constructed.

to embark on several contracts and will decide which

Chiyoda hopes to secure follow-up contracts by

was completed ahead

excellent achievements.

pletion was enormous.

contractors to use in fiscal 2001. In the coming fiscal• CIS and South America

year, in alliance with KBR, Chiyoda intends to reinforce

The Commonwealth of Independent States (CIS) and

its Rainbow Service® operations in the United States,

South America are also important markets for us—wewhich can provide EPC services of the high standard

are encouraged by the prospects of winning new con-demanded by Japanese companies there. Chiyoda istracts for natural gas projects in Sakhalin and otheralso committed to the continued and sustained explo-

parts of Russia. In South America, we have been bid-

ration of promising markets in the Middle East, Southeast

ding for a variety of contracts in Venezuela andAsia, the CIS, and Latin America. We are optimistic, too,Argentina. The bid selection processes are underwaythat fiscal 2001 will bring an impressive array of new

and the results will be announced in fiscal 2001.

contracts in the domestic petroleum sector.
In LNG, the traditional import markets of Japan,• JapanTaiwan, and Korea are witnessing a trend towards the

In the domestic hydrocarbon sector, investment in new

abolition of regulations governing electricity supply, andfacilities has been restrained but Chiyoda has been

gas and power companies throughout the region areawarded several crucial consulting contracts, including

thus cautious in their attitude to new large-volume pur-the Pacesetting Programme in partnership with Shellchasing contracts. This is delaying the start of LNG proj-

Global Solutions International B.V. Since LNG is becom-

ects in Australia and Southeast Asia. Consequently,

ing ever more important as its environmental impact isthere is a movement visible on the part of LNG ventures

much less than that of other fuels, Japanese energy

to capital participation in LNG receiving terminal projects

companies have been importing LNG from the Middle

in emerging LNG-consuming countries. Competition is
CHIYODA CORPORATION

5intensifying among enterprises based on the Arabianpeninsula that want to start grassroots and expansion
projects targeting LNG-consuming India. Meanwhile,
grassroots and expansion projects are shifting into ahigher gear in Africa and Venezuela to cater to the North
American and European markets, where deregulation ofgas supplies is progressing. With an eye to these developments, Chiyoda intends to secure as many orders as
it can in the coming year through alliances with otherhighly competitive contractors, leveraging the success it
has had in the past year in Oman and in winning FEED

Non-Hydrocarbon Sector• Environmental Systems
In the course of the year under review, Chiyoda received
several substantial orders for incinerators from companies in the waste products management industry inaddition to undertaking a variety of land improvement
and water management projects. Chiyoda was alsochosen to install flue gas desulphurization equipment at
the new electric power station being built by Kobe Steel,Ltd., in its hometown of Kobe.

contracts for other LNG ventures.
• General Industrial Projects• Technology Spotlight
CT-BISA®, Chiyoda’s new proprietary Bisphenol-A
production technology, has established an excellent
reputation in the industry because of the high quality
Bisphenol-A produced using the technology. Prospects
for Bisphenol-A are bright given continuing strong
demand for polycarbonates in the world. Chiyoda wasable to secure a plant expansion order in Japan in 1999

In the general industrial sector, Chiyoda has always put
the customer first and was rewarded in fiscal 2000 witha number of significant improvement and refurbishment
construction orders. The Company completed construction of a tri-acetate cellulose (TAC) film production
line for Konica Corp. TAC film is used in LCD polarizing
plates and the factory where it will be manufactured wascompleted in Kobe in March 2000.

and has been received many requests and contacts
from the clients. The CT-BISA® process won a 1999
Chiyoda completed

Institute Award from Japan Petroleum Institute. We are

Taiwan CPDC’s

confident that we will be able to win major petrochemi-

Caprolactam Plant
Project with thecal contracts as the recovery in Asian economies con-world’s largest pro-tinues, and have had many inquiries for CT-BISA®

duction capacity of
120,000 t/y. Chiyoda’s
biofiner carrier was
installed in the waste
water treatment facili-ties of the project.

technology from all over the world.

• Pharmaceuticals and Chemicals
In the pharmaceuticals sector, among several contracts
won during fiscal 2000, two are worthy of particularnote—one from Nippon Shinyaku Co., Ltd., for the construction of a new drug manufacturing plant, andanother from Bayer Yakuhin, Ltd., for a chemical compounds R&D facility.
Chiyoda successfully completed its first overseas
full-scale EPC pharmaceutical project in China, for Kirin
Kunpeng (China) Bio-Pharmaceutical Co., Ltd.
Chiyoda received several orders for the refurbishment
and expansion of facilities from the Japanese chemicalindustry despite a feeling among industry insiders that
there is excess capacity in the sector.

6 CHIYODA CORPORATIONIn September 1999, Chiyoda completed a pharmaceutical plantin Shanghai, China, for Kirin Kunpeng (China) Bio-PharmaceuticalCo., Ltd.

• Automotive Plants
In the automobile sector, Chiyoda successfully completed many innovative projects. Chiyoda was the managing contractor for the construction of the mostadvanced diesel engine production facility in North• Technology Outlook

In August 1999,
Chiyoda completed

America. This was a factory built in Ohio for DMAX, Ltd.,At the end of June 1999, Chiyoda completed a movablea joint venture between General Motors Corp. and Isuzu

demonstration plant using ambient-temperature catalytic

Motors Ltd., and which has recently begun production ofdioxin decomposition technology, and is currently

Engineering Co., Ltd.,

direct injection common rail V-8 diesels for General

conducting demonstration tests at local government

leading tissue engi-

Motors’ 2000 medium-duty pickup range.

incineration facilities on actual fly ash. The data Chiyoda

Chiyoda achieved new standards in body-in-white

has amassed from these demonstration tests shows

quality assurance for General Motors (Thailand) Ltd.

excellence of the technology. The results have been

through turnkey delivery of body shop tooling and sup-announced at academic conferences and in specialist

ply of stamping dies and their close matching, whichmagazines, and Chiyoda thinks this success will lead toraises the precision of the alignments of parts in theincreased demand for the technology. In November

post-welded automobile body. Chiyoda also simultane-

1999, Chiyoda displayed this demonstration plant atously completed integrated assembly shop turnkey proj-

INCHEM TOKYO ’99, where it was a resounding suc-ects for Opel Polska Sp.zo.o. and GM (Thailand), andcess. In March 2000, a second movable demonstrationa body shop turnkey project for GM India, Ltd.,model was completed in response to requests from cus-

was realized within a very limited time frame. The suc-

tomers, and Chiyoda is promoting sales by conducting

cess of these projects has led to new engineering con-further demonstration tests at local government facilities.

tracts in the United States and Thailand.

this research center
for Japan Tissue
one of the world’s
neering companies, inGamagori, Aichi
Prefecture.

The Company is currently developing new applications
for the technology used in these plants, including the• Short- and Medium-Term Outlook

simultaneous treatment of fly ash and flue gas. ThisIn the chemical and pharmaceutical sectors, Chiyoda

project is being sponsored by NEDO (New Energy

has high hopes that the coming few years will see an

and Industrial Technology Development Organization–

improvement in investments in comparatively large

Government Agency).

facilities overseas by our Japanese customers. Chiyoda

A Dioxin Task Team was set up within the Environ-anticipates that demand will continue to be firm formental Project Division with the main responsibility forsmall- and medium-scale plant investments in Japan,

turning the technology into a commercially viable

and the Company is focusing on securing firm orders

product. Chiyoda’s Research and Development Centerin these two sectors.

conducted the applied research, in fields ranging fromIn the non-ferrous metals sector, and in particular in
the copper refinery market, overseas there is a real thirstdioxin analysis technology to data accumulation andoperational responsiveness.

for investment in plant, and Chiyoda is aiming to leverage its vast expertise and secure a significant proportionof new orders in this market.

CHIYODA CORPORATION

7MAIN PROJECTSPetroleum-, Petrochemical-, and Gas-Related Industries

Hydrocarbon Sector
NEW CONTRACTS•P.T. Badak NGL
Project type: LNG Plant (DCS Retrofit)
Location: Bontang, Indonesia
Scheduled completion: September 2002
•PERTAMINA/BP Amoco Arco
Project type: LNG Plant (FEED)
Location: Irian Jaya, Indonesia
Capacity: 3,000,000 t/y
Scheduled completion: March 2001
•Abu Dhabi Gas Liquefaction
Company, Ltd.
Project type: LP & BOG Capture
Maximization (FEED)
Location: Das Island, U.A.E.
Scheduled completion: December 2000
•Ras Laffan Liquefied Natural Gas
Co., Ltd.
Project type: LNG Plant Expansion (FEED)
Location: Ras Laffan, Qatar
Capacity: 4,400,000 t/y x 2
Scheduled completion: September 2000
•BF Goodrich Company
Project type: Speciality Chemicals
Plant (FEED)
Location: Jurong, Singapore
Capacity: 27,000 t/y (Phenol)
Completion: September 1999
•SAL Petrochemical (Zhanjiagang)Co., Ltd.
Project type: Polystyrene Plant
Location: Zhanjiagang, China
Capacity: 120,000 t/y
Scheduled completion: April 2002
•Mitsubishi Gas Chemical Company, Inc.
Project type: Expansion of Chemical Plant
Location: Niigata, Japan
Scheduled completion: April 2000
•Teijin Polycarbonate Singapore
Pte. Ltd.
Project type: Polycarbonate Plant No.2
Location: Sakra, Singapore
Scheduled completion: November 2000
•Tokyo Electric Power Company
Project type: LNG Facility
Location: Japan
Scheduled completion: January 2000
•Tokyo Electric Power Company
Project type: LPG Facility
Location: Chiba, Japan
Scheduled completion: July 2000
•BP Ningbo Huadong LPG Co., Ltd.
Project type: LPG Underground Storage
Terminal
Location: Daxie Development Zone,
Ningbo, China
Capacity: 1,600,000 t/y
Scheduled completion: June 2002
8 CHIYODA CORPORATIONBACKLOG OF CONTRACTS•Oman LNG L.L.C.
Project type: LNG Plant
Location: Qalhat, Sultanate of Oman
Capacity: 3,300,000 t/y x 2
Scheduled completion: April 2000
•Exxon Chemical Singapore Private Ltd.
Project type: Ethylene Plant
Location: Chawan, Jurong Island,
Singapore
Capacity: 800,000 t/y
Scheduled completion: September 2000
Eastern Petrochemical Company(SHARQ)
Project type: Ethylene Glycol Plant
Location: Al-Jubail Industrial City,
Saudi Arabia
Capacity: 450,000 t/y
Scheduled completion: August 2000
•State Concern Azerchimia
Project type: Utility Modernizationof Ethylene Plant
Location: Sumgait, Azerbaijan
Scheduled completion: March 2001
•China Petrochemical International
Company
Project type: PTA Plant
Location: Luoyang, China
Capacity: 225,000 t/y
Scheduled completion: June 2000
•Kansai International Airport Co., Ltd.
Project type: Expansion work for Tank
Location: Osaka, Japan
Scheduled completion: August 2000
•Tokyo Electric Power Company
Project type: LNG Facility
Location: Chiba, Japan
Scheduled completion: July 2001

PROJECTS COMPLETED•Ministry of Oil and Gas Industry
and Mineral Resources
Project type: Naphtha Hydrotreater, Reformer
with Continuous Catalytic Reforming (CCR),
and Utilities and Off-site Facilities
Location: Turkmenbashi, Turkmenistan
Capacity: 750,000 t/y (Naphtha Hydrotreater),
750,000 t/y (Reformer with CCR)
Completion: January 2000
•Saudi Chevron Petrochemical Co.
Project type: Benzene Plant
and Cyclohexane Plant
Location: Al-Jubail Industrial City, Saudi Arabia
Capacity: 480,000 t/y (Benzene Plant),
220,000 t/y (Cyclohexane Plant)
Completion: May 1999
•Qatar Fuel Additives Co., Ltd. (QAFAC)
Project type: Methanol/MTBE Plant
Location: Mesaieed, Qatar
Capacity: 2,500 t/d (Methanol),
1,830 t/d (MTBE)
Completion: June 1999
•China Petrochemical Development
Corp. (CPDC)
Project type: Caprolactam Plant
Location: Kaohsiung, Taiwan
Capacity: 120,000 t/yCompletion: December 1999
•Teijin Polycarbonate Singapore
Pte. Ltd.
Project type: Polycarbonate Plant No.1
Location: Sakra, Singapore
Completion: September 1999

•Tokyo Electric Power Company
Project type: LNG Facility
Location: Chiba, Japan
Completion: February 2000

•Tokyo Gas Co., Ltd.
Project type: Isolde Plant
Location: Tokyo, Japan
Completion: April 1999

(As of March 31, 2000)

Non-Hydrocarbon Sector
NEW CONTRACTSBACKLOG OF CONTRACTSPROJECTS COMPLETED•Nippon Shinyaku Co., Ltd.
Project type: Finishing Plant
Location: Odawara, Japan
Scheduled completion: April 2001

•Fujisawa Pharmaceutical Co., Ltd
Project type: Finishing Facility
Location: Toyama, Japan
Scheduled completion: June 2001

•Kyowa Hakko Kogyo Co., Ltd.
Project type: Bulk Pharmaceutical Plant
Location: Yamaguchi, Japan
Completion: January 2000

•Bayer Yakuhin, Ltd.
Project type: Chemistry Building
Location: Kyoto, Japan
Scheduled completion: May 2001

•Department of Foreign Affairs andInternational Trade
Project type: Canadian Embassy Staff Quarters
Location: Tokyo, Japan
Capacity: 4,950m2 (total floor area)
Scheduled completion: March 2001

•Central Glass Co., Ltd.
Project type: Bulk Pharmaceutical Plant
Location: Yamaguchi, Japan
Capacity: 800 t/yCompletion: March 2000

•Banyu Pharmaceutical Co., Ltd.
Project type: Bulk Pharmaceutical Plant &Research Building
Location: Okazaki, Japan
Scheduled completion: 2001
•Konica Corporation
Project type: Enhancing the TAC Film
Products Plant
Location: Kobe, Japan
Scheduled completion: March 2001
•Jyogashima Suisan Co., Ltd.
Project type: Seafood Processing Factory
Location: Miura-city, Japan
Capacity: 2,400 Kg/d
Scheduled completion: September 2000
•Fuji Coca-Cola Bottling Co., Ltd.
Project type: Office & Storehouse
Location: Shizuoka, Japan
Capacity: 1,979 m2
Scheduled completion: July 2000
•Kobe Steel, Ltd.
Project type: Flue Gas Desulfurization Plant
Location: Kobe, Japan
Capacity: 700MW
Scheduled completion: March 2004
•AM General Corporation
Project type: Program Management (Body,
Paint, G/A Shops)
Location: Mishawaka, Indiana, U.S.A.
Capacity: 40,000 Cars/yScheduled completion: December 2002

•Oriental Land Co., Ltd.
Project type: 5 Ride-attractions (Theme park)
Location: Chiba, Japan
Scheduled completion: August 2001
•Ishiya Co., Ltd.
Project type: Procurement of Façade
Materials for Curling Hall
Location: London, England
Capacity: 50 Containers
Scheduled completion: September 2000

•Konica Corporation
Project type: TAC Film Products Plant
Capacity: 20,000,000 m2/yCompletion: March 2000
•C.E.Z. a.s.
Project type: Flue Gas Desulfurization Plant
Location: Tusimice, Czech
Capacity: 4 x 200MW(Lignite Fired Power Station)
Completion: December 1999

•Japan Nuclear Fuel Limited
Project type: Utility Facility
Location: Aomori, Japan
Scheduled completion: January 2003

•Onahama Smelting & Refining Co., Ltd.
Project type: Neutraized Gypsum Plant
Location: Fukushima, Japan
Capacity: 8,000 t/m
Completion: November 1999

•National Space Development Agencyof Japan (NASDA)
Project type: Development of Image
Processing Unit
Location: Japan
Scheduled completion: March 2001

•Pipavav Ship Dismantlingand Engineering Limited
Project type: Ship-Breaking Yard
Location: Pipavav, India
Capacity: 8 VLCCs (120,000GT)
Completion: March 2000
•Kirin Kunpeng (China)
Bio-Pharmaceutical Co., Ltd.
Project type: Parenteral Drug Facility
Location: Pudong New Area, Shanghai, China
Completion: September 1999
•General Motors (Thailand) Limited
Project type: Body Shop & Die Supply
Location: Rayong, Thailand
Capacity: 40,000 Vehicles/yCompletion: March 2000
•General Motors (Thailand) Limited
Project type: General Assembly Shop
Location: Rayong, Thailand
Capacity: 40,000 Vehicles/yCompletion: March 2000
•General Motors India Limited
Project type: Body Shop
Location: Halol, India
Capacity: 137,000 Vehicles/yCompletion: December 1999
•Opel Polska Sp. Zo. o.
Project type: General Assembly Shop
Location: Gliwice, Poland
Capacity: 24,000 Vehicles/yCompletion: March 2000

(As of March 31, 2000)
CHIYODA CORPORATION

9FINANCIAL SECTIONCONSOLIDATED FIVE-YEAR FINANCIAL SUMMARY

Years ended March 31

Millions of Yen

2000

1999

1998

1997

1996

For the Year:
Construction contracts ................................................................ ¥168,963
Cost of construction contracts .................................................... 154,112
Income (loss) before income taxes and minority interests.............
1,553
Net income (loss).........................................................................
698¥312,234
308,703(10,534)(11,623)¥303,476
329,446(49,796)(51,795)¥445,350
478,031(50,305)(53,320)¥389,671
371,875
3,449
1,597

At Year-End:Total assets ................................................................................. ¥153,099
Total shareholders’ equity............................................................
8,181
Working capital............................................................................ (19,594)
Current ratio (%) ..........................................................................
84.5
Long-term debt ...........................................................................
12,545¥213,920
6,208(22,942)87.7
13,518¥257,746
5,931(29,624)
87.4
7,569

¥350,537
57,761
20,945107.6
8,401¥352,913
112,81774,019
133.4
8,936

¥

¥

¥

¥

Per Common Share (Yen):
Net income (loss)......................................................................... ¥Shareholders’ equity....................................................................
Other Statistics:
Number of shares outstanding* (thousands) ................................
*At year-end

10 CHIYODA CORPORATION3
28

248,357(58)
25

248,357(265)
30

195,224(273)
296

195,224

8
578
195,224

CONSOLIDATED FINANCIAL REVIEW

Operating Results(US$239 million), a ¥14,249 million downturn in notes andIn fiscal 2000, ended March 31, 2000, total revenues fromaccounts receivable—trade, to ¥22,867 million (US$216 mil-construction contracts on a consolidated basis reachedlion), and a ¥14,070 million contraction in cash and cash

¥179,028 million (US$1,689 million), a decrease of 45.8%

equivalents, to ¥33,286 million (US$314 million).

from the previous year.
The cost of construction contracts decreased 50.1%, to¥154,112 million (US$1,454 million).
The cost of construction contracts as a percentage of con-

Total investments and other assets decreased ¥2,753 million, to ¥33,064 million (US$312 million), primarily from thedecrease of other investments.
On the other side of the balance sheet, total current liabilities

struction contract revenues was 91.2%, an improvement ofdecreased ¥59,739 million, to ¥126,723 million (US$1,196 mil-

7.7 percentage points from the previous fiscal year due to anlion), mainly because of reductions in notes and accounts

improvement in gross profit from ongoing engineering andpayable—trade, advance receipts on construction contracts,

construction projects. Selling, general and administrativeand short-term bank loans. As a result, the current ratio was

expenses decreased ¥1,476 million, to ¥15,004 million (US$142

down from the previous fiscal year-end, to 84.5%.

million) by the reduction of fixed costs. As a result, income

Total shareholders’ equity rose ¥1,973 million, to ¥8,181

before taxes and minority interests was ¥1,553 million (US$15

million (US$77 million). The shareholder’s equity ratio was

million), up from a loss in the previous year, and net income

5.3%, up from a year earlier.

per common share became ¥3 (US$0.03). In light of this performance, the Company decided to forgo the payment of divi-

Cash Flowsdends for fiscal 2000.

Net cash used in operating activities totaled ¥16,524 million

During the term, the Company was awarded a total of(US$156 million), comprising ¥698 million (US$7 million) in net¥79,297 million (US$748 million) in contracts. International

income and ¥10,161 million (US$95 million) in outflows fromcontracts accounted for ¥26,322 million (US$248 million),

non-cash adjustments, and ¥16,028 million (US$151 million)or 33.2% of the total, with domestic contracts making up

used by net changes in operating assets and liabilities.

the remaining ¥52,975 million (US$499 million). The backlog ofNet cash provided by investing activities amounted tocontracts at March 31, 2000, stood at ¥133,955 million¥20,716 million (US$195 million), down ¥9,235 million, due(US$1,264 million), with domestic contracts accounting forprimarily to proceeds from sales of marketable securities¥86,635 million (US$817 million) of the total and internationalof ¥17,392 million (US$164 million).

contracts for ¥47,319 million (US$445 million).

Net cash used in financing activities totaled ¥17,468 million(US$165 million), as net decrease in short-term bank loans

Financial Position

and repayments of long-term debt more than offset proceeds

As of March 31, 2000, total assets amounted to ¥153,099 mil-from long-term debt.

lion (US$1,444 million), ¥60,821 million lower than a year earlier.
Underpinning this decline was a ¥56,391 million fall in total

As a result, cash and cash equivalents, end of year,
decreased ¥14,070 million, to ¥33,286 million (US$314 million).

current assets, to ¥107,129 million (US$1,011 million). This fallin total current assets was due mainly to a ¥14,957 million
downturn in marketable securities, to ¥25,321 million

CHIYODA CORPORATION

11

CONSOLIDATED BALANCE SHEETS

Chiyoda Corporation and Consolidated Subsidiaries
March 31, 2000 and 1999ASSETS

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

2000

1999*

2000

¥ 47,356$ 314,019

Current Assets:
Cash and cash equivalents .......................................................................................... ¥ 33,286
Marketable securities (Notes 5 and 8) ..........................................................................

25,321

40,278238,877

Short-term investments................................................................................................

1,460

1,774

13,774

Notes and accounts receivable—trade (Notes 3 and 8)................................................

22,867

37,116

215,726

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

(182)

(177)

(1,717)long-term construction contracts (Note 4) ..................................................................

4,887

9,668

46,104

Costs and estimated earnings on
Costs of construction contracts in process (Note 4) .....................................................

12,005

18,211

113,255

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

7,485

9,294

70,613

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

107,129

163,520

1,010,651

Land ............................................................................................................................

3,937

4,089

37,142

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

10,07911,022

95,085

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

15,267

17,342

144,028

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

26

10

245

Property, Plant and Equipment (Note 8):

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

29,30932,463

276,500

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

(16,403)(17,880)(154,745)

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

12,906

14,583

121,755

2,295

2,393

21,651

Investments and Other Assets:
Investment securities (Note 5) ......................................................................................
Investments in and advances to unconsolidated subsidiaries
and associated companies (Note 6) ...........................................................................

3,674

4,580

34,660Long-term loans—net (Note 7).....................................................................................

3,310

3,446

31,226Long-term receivables—net (Note 7)............................................................................

16,256

17,091

153,358

Other investments........................................................................................................

6,743

8,406

63,614(99)(1,236)

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

(131)

Foreign currency translation adjustments .....................................................................

917

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

33,06435,817

311,924

Total ............................................................................................................................... ¥153,099¥213,920$1,444,330

See notes to consolidated financial statements.

12 CHIYODA CORPORATION

8,651

LIABILITIES AND SHAREHOLDERS’ EQUITY

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

2000

1999*

2000

¥ 81,311$ 650,255

Current Liabilities:
Short-term bank loans (Note 8)................................................................................... ¥ 68,927
Current portion of long-term debt (Note 8) ..................................................................

2,472

3,683

23,321

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

36,596

59,664345,245

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

9,588

28,21690,453

Allowance for financial support to subsidiaries ............................................................

1,000

2,997

9,434

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

8,140

10,591

76,792

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

126,723

186,462

1,195,500

Long-term debt (Note 8) .............................................................................................

12,545

13,518118,349

Liabilities for retirement benefits (Note 9).....................................................................

5,168

6,952

48,755

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

80

62

755

Non-Current Liabilities:

Foreign currency translation adjustments ....................................................................

34

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

17,793

20,566

167,859

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

402

684

3,792

Shareholders’ Equity (Note 10):
Common stock, ¥50 par value—authorized, 700,000 thousand shares;
issued and outstanding, 248,357 thousand shares...................................................

20,385

20,385

192,311Additional paid-in capital.............................................................................................

23,65423,654

223,151

Contingent Liabilities (Notes 3 and 13)

Accumulated deficit ....................................................................................................

(35,858)(37,831)(338,283)

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

(0)

(0)

(0)

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

8,181

6,208

77,179Total .............................................................................................................................. ¥153,099¥213,920$1,444,330

CHIYODA CORPORATION

13

CONSOLIDATED STATEMENTS OF OPERATIONS

Chiyoda Corporation and Consolidated Subsidiaries
Years ended March 31, 2000 and 1999

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

2000

1999

2000

Construction Contracts (Note 3) ................................................................................. ¥168,963¥312,234$1,593,991

Cost of Construction Contracts .................................................................................

154,112308,703

1,453,887

Gross profit.........................................................................................................

14,851

3,531

140,104

Selling, General and Administrative Expenses .........................................................

15,004

16,480141,547

Operating loss ....................................................................................................

153

12,949

1,443

Other Income (Expenses):
Interest and dividend income (Note 3).........................................................................

1,236

1,689

11,660Interest expense .........................................................................................................

(1,556)(1,935)(14,679)

Gain (loss) on sales of marketable and investment securities.......................................

4,962(3,233)46,810Loss on devaluation of marketable securities ..............................................................

(1,630)(990)(15,377)

Equity in earnings of associated companies................................................................

791

711

7,462

Foreign exchange gain (loss).......................................................................................

(414)

316

(3,906)

Amortization of negative goodwill................................................................................

186

—

1,755

Reversal of allowance for financial support to subsidiaries ..........................................

1,474

—

13,906

Additional retirement benefits paid to employees ........................................................

(2,639)(3,693)(24,896)

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

(1,043)(1,769)(9,840)Gain on sales of property, plant and equipment ..........................................................

168

14,663

1,585

Gain on liquidation of subsidiaries ...............................................................................

386

—

3,642

Loss on devaluation of land ........................................................................................

(210)

—

(1,981)

Provision for loss on investment in subsidiaries and associated companies
and investment securities .........................................................................................

—(1,437)—

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

—(1,515)—

Other—net..................................................................................................................

(5)

(392)

(47)

Other income—net .............................................................................................

1,706

2,415

16,094

Income (Loss) before Income Taxes and Minority Interests ...................................

1,553(10,534)

14,651

Current ........................................................................................................................

756

1,151

7,132

Deferred.......................................................................................................................

87

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

843

1,151

7,953

Minority Interests in Net (Income) Loss......................................................................

(12)

62

(113)

Net Income (Loss) ......................................................................................................... ¥698¥ (11,623)

Income Taxes (Note 11):821

See notes to consolidated financial statements.
14 CHIYODA CORPORATION

3

6,585

U.S. Dollars(Note 1)Yen

Net Income (Loss) per Common Share (Note 2.1) ...................................................... ¥

$

¥

(58)

$

0.03

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Chiyoda Corporation and Consolidated Subsidiaries
Years ended March 31, 2000 and 1999

Thousands
Shares ofCommonStock

Balance, April 1, 1998 .............................................................. 195,224

Millions of Yen
CommonStock

Additional
Paid-in
CapitalAccumulated
Deficit

Treasury
Stock¥14,753¥18,022¥(26,843)

¥(1)

5,632

5,632

Issuance of common stock (issued on March 30,
1999, at ¥212 per share) ....................................................... 53,133
Net loss...................................................................................

(11,623)

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

(7)

Adjustment of deficit for newly
consolidated subsidiaries ......................................................

642

Decrease in treasury stock ......................................................
Balance, March 31, 1999 ......................................................... 248,357

1
20,38523,654(37,831)(0)

Adjustment of deficit for:
The adoption of deferred tax accounting method ................

348

Newly consolidated subsidiaries ..........................................

(57)

Liquidation of consolidated subsidiaries...............................

150

Additional application of equity method ...............................

840

Net income .............................................................................

698

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

(6)

Increase in treasury stock........................................................
Balance, March 31, 2000 ......................................................... 248,357(0)¥20,385¥23,654¥(35,858)¥(0)Thousands of U.S. Dollars (Note 1)
CommonStock

Additional
Paid-in
CapitalAccumulated
Deficit

Treasury
Stock

Balance, March 31, 1999 .............................................................................. $192,311$223,151$(356,905)$(0)Adjustment of deficit for:
The adoption of deferred tax accounting method .....................................

3,292

Newly consolidated subsidiaries...............................................................

(538)

Liquidation of consolidated subsidiaries ...................................................

1,415

Additional application of equity method ....................................................

7,925

Net income ..................................................................................................

6,585

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

(57)

Increase in treasury stock.............................................................................
Balance, March 31, 2000 .............................................................................. $192,311(0)$223,151$(338,283)$(0)

See notes to consolidated financial statements.

CHIYODA CORPORATION

15

CONSOLIDATED STATEMENTS OF CASH FLOWS

Chiyoda Corporation and Consolidated Subsidiaries
Years ended March 31, 2000 and 1999

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

2000

Operating Activities:
Income (loss) before income taxes and minority interests ................................................. ¥ 1,553
Adjustments for:
Income taxes paid .......................................................................................................
(604)
Depreciation and amortization......................................................................................
2,134(Reversal of ) provision for allowance for doubtful accounts—net.................................. (4,788)
Provision for loss on investment in subsidiaries and associated companies
and investment securities...........................................................................................
Reversal of retirement benefits—net............................................................................. (1,784)(Reversal of ) provision for financial support to subsidiaries ........................................... (1,681)(Gain) loss on sales of marketable and investment securities—net ............................... (4,962)
Loss on devaluation of marketable securities ...............................................................
1,630
Gain on sales of property, plant and equipment—net...................................................
Foreign exchange loss—net.........................................................................................
379
Bonuses to directors....................................................................................................
(6)
Equity in earnings of associated companies .................................................................
(791)
Changes in operating assets and liabilities:
Decrease in notes and accounts receivable and costs
and estimated earnings on long-term construction contracts ................................. 19,030
Decrease in costs of construction contracts in process............................................
6,206
Decrease in interest and dividend receivable ............................................................
432
Decrease in trade notes and accounts payable........................................................ (23,068)
Decrease in advance receipts on construction contracts.......................................... (18,628)
Other—net...................................................................................................................
8,424
Total adjustments ................................................................................................ (18,077)
Net cash used in operating activities .................................................................... (16,524)
Investing Activities:
Proceeds from sales of marketable securities .................................................................. 17,392
Proceeds from sales of investment securities ...................................................................
734
Purchases of property, plant and equipment.................................................................... (1,101)
Proceeds from sales of property, plant and equipment ....................................................
1,300
Other—net.......................................................................................................................
2,391
Net cash provided by investing activities .............................................................. 20,716
Financing Activities:
Net decrease in short-term bank loans ............................................................................ (15,199)
Proceeds from long-term debt .........................................................................................
2,437
Repayments of long-term debt ........................................................................................ (4,621)
Proceeds from issuance of common stock ......................................................................
Other—net.......................................................................................................................
(85)
Net cash used in financing activities ..................................................................... (17,468)
Foreign Currency Translation Adjustments on Cash and Cash Equivalents ..............
(967)
Cash and Cash Equivalents of Newly Consolidated Subsidiaries,
Beginning of Year ...........................................................................................................
1,026
Cash and Cash Equivalents of Exclusion of Consolidated Subsidiaries,
Beginning of Year ...........................................................................................................
(853)
Net Increase (Decrease) in Cash and Cash Equivalents............................................... (14,070)
Cash and Cash Equivalents, Beginning of Year ............................................................ 47,356
Cash and Cash Equivalents, End of Year ....................................................................... ¥33,286
See notes to consolidated financial statements.

16 CHIYODA CORPORATION

1999*

2000

¥(10,534)$ 14,651(1,199)3,126
356(5,698)20,132(45,170)

1,437(1,589)
1,515
3,233
990
(14,626)(16,830)(15,858)(46,810)
15,377

(7)
(711)

3,575
(57)
(7,462)20,001
2,573
513(9,061)(4,328)(1,197)1,026(9,508)

179,528
58,547
4,075(217,622)(175,736)
79,471(170,538)(155,887)

1,953
1,421

164,075
6,925(10,387)
12,26422,557
195,434

24,1972,380
29,951(30,414)
10,000(2,212)
11,264
1,126(10,236)(143,387)
22,991(43,594)(802)(164,792)(9,123)
9,679

10,207
37,149¥ 47,356(8,047)(132,736)
446,755$314,019

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Chiyoda Corporation and Consolidated Subsidiaries
Years ended March 31, 2000 and 1999

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in theJapanese Securities and Exchange Law and its related accounting regulations, and in conformity with accounting principles andpractices generally accepted in Japan, which are different in certain respects as to application and disclosure requirements ofInternational Accounting Standards. The consolidated financial statements are not intended to present the financial position,
results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries andjurisdictions other than Japan.
Effective April 1, 1999, consolidated statements of cash flows are required to be prepared under Japanese accounting standards, and those for the years ended March 31, 2000 and 1999, are presented herein.
A restructuring plan was introduced in 1998. The Company plans to seek support from shareholders, such as Mitsubishi
Corporation, The Bank of Tokyo-Mitsubishi, Ltd. and Kellog Brown & Root. Most of this plan has been successfully achieved asscheduled, however, due to the continuing lack of capital spending, combined with severe competition, new orders remain far
below the plan. This has required additional restructuring including recognizing to effectively employ the resources and continuous
support of the shareholders mentioned above. The financial statements do not include any adjustments that might result from theoutcome of these uncertainties.
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. Also, certain reclassifications have been made to the 1999 financial statements in order for them to conform to the classifications used in 2000. In addition, the accompanying notes include certain information which is not required under accounting
principles and practices generally accepted in Japan but is presented herein as additional information.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company is incorporated and principally operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for theconvenience of readers outside Japan and have been made at the rate of ¥106 to $1, the approximate rate of exchange at March
31, 2000. Such translations should not be construed as representations that the Japanese yen amounts could be converted into
U.S. dollars at that or any other rate.

2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements for the year ended March 31, 2000, include the accounts of the Company and its 33 (29 in1999) significant subsidiaries (together, the “Group”). Effective April 1, 1999, the Group changed its consolidation scope of subsidiaries and associated companies from the application of the ownership concept to the control or influence concept in accordance with the new accounting standard for consolidation. Under the control or influence concept, those companies in which the
Parent, directly and indirectly, has a control over operations are fully consolidated.
The consolidated financial statements for the year ended March 31, 1999, have not been retroactively restated to conform with
the new consolidation accounting standard. The effect of accumulated deficit at April 1, 1999 arising from the change in the consolidation scope has been recognized as “Adjustment to accumulated deficit for newly consolidated subsidiaries” in the consolidated statements of shareholders’ equity for the year ended March 31, 2000.
Investments in four (two in 1999) associated companies are accounted for by the equity method. Investments in the remaining
unconsolidated subsidiaries and associated companies are stated at cost. If the equity method of accounting had been applied tothe investments in these companies, the effect on the accompanying consolidated financial statements would not be material.
The excess of the cost of the Company’s investments in consolidated subsidiaries and associated companies accounted for by
the equity method over its equity in the net assets at the respective dates of acquisition, has been charged to income at the timeof acquisition as the amount involved was not material.
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. Construction Contracts
Revenues on construction contracts greater than ¥5 billion and having a construction duration of more than 18 months is recognized on the percentage-of-completion method in the ratio of costs incurred to total estimated costs. Under this method, related
costs and estimated earnings in excess of progress billings are presented as a current asset.
Unbilled costs on the other contracts, which are accounted for by the completed-contract method, are stated as costs ofconstruction contracts in process.
Payments received in excess of costs and estimated earnings on the contracts, which are accounted for by the percentageof-completion method, and costs incurred on the other contracts are presented as a current liability.
Costs of preparation work for unsuccessful proposals and other projects which are not realized are charged to income and areincluded in costs of construction contracts.
CHIYODA CORPORATION17

c. Cash and Cash Equivalents
Cash equivalents include time deposits and short-term investments, all of which mature or become due within three months ofthe date of acquisition. The amount of cash and cash equivalents at March 31, 1999 was restated to conform with the presentation in 2000 from ¥49,130 million to ¥47,356 million.
d. Marketable and Investment Securities
Marketable securities and other investment securities are, in principle, stated at cost as determined by the moving-averagemethod. However, where its market value declines to less than half of the carrying value and such decline is deemed to be otherthan temporary, the value of the securities is written down to market.
e. Allowance for Doubtful Accounts
Investments in and advances to unconsolidated subsidiaries and associated companies, long-term loans, long-term receivables
and other investments are presented net of specific reserves for doubtful accounts provided for individual customers in theamounts of ¥2,188 million ($20,642 thousand) and ¥5,743 million for the years ended March 31, 2000 and 1999, respectively.
An additional allowance for doubtful accounts is provided as a general reserve for possible losses arising from doubtful notes,
accounts and loans receivable and plus the amount deductible for tax purposes.
f. Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed using the declining-balance method, except for thebuildings owned by the Company and leased property owned by a certain leasing subsidiary which are computed using thestraight-line method, based on the estimated useful lives of the assets.
g. Retirement Benefits
The Company’s provision for employees’ retirement benefits is calculated to state the liability at the actuarially computed present
value of severance payment costs for employees eligible for severance payments at each balance sheet date, less the amountfunded in the pension plan.
The amounts contributed to the fund, including prior service costs, are charged to income when paid.
Retirement benefits to directors and corporate auditors are provided at the amount which would be required based on the
Company’s regulations, if all directors and corporate auditors terminated their offices at the end of each period.
h. Research and Development Costs
Research and development costs are charged to income when incurred.
i. Leases
All leases are accounted for as operating leases. Under Japanese accounting standards for leases, finance leases that deemto transfer ownership of the leased property to the lessee are to be capitalized, while other finance leases are permitted to beaccounted for as operating lease transactions if certain “as if capitalized” information is disclosed in the notes to the lessee’s
consolidated financial statements.
j. Income Taxes
Effective April 1, 1999, the Group adopted the new accounting standard for interperiod allocation of income taxes based on theasset and liability method. Under the new accounting standards, deferred income taxes are recorded to reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax
purposes. These deferred taxes are measured by applying currently enacted tax laws to the temporary differences. The cumulative effect of the application of interperiod tax allocation in prior years in the amount of ¥348 million ($3,292 thousand) is included
as an adjustment to accumulated deficit as of April 1, 1999. Such cumulative effect is calculated by applying the income tax rate
stipulated by enacted tax laws as of April 1, 1999.
k. Foreign Currency Translations
Short-term receivables and payables (including the current portion of long-term debt) denominated in foreign currencies aretranslated into Japanese yen at rates prevailing at the respective balance sheet dates except for those which are translated using
the exchange rates set forth in the applicable forward exchange contracts.
Long-term receivables and payables denominated in foreign currencies are translated into Japanese yen at rates prevailingat the transaction dates except for those which are translated using the exchange rates set forth in the applicable forward
exchange contract.
Foreign exchange gains and losses are recognized in the fiscal periods in which they occur.
The financial statements of foreign subsidiaries and associated companies are translated into Japanese yen at the exchange
rates in effect at their respective balance sheet dates in compliance with Japanese accounting practices. “Foreign currency translation adjustments” in the consolidated financial statements result from such translation.

18 CHIYODA CORPORATION

l. Per Share Information
The computation of net income (loss) per share is based on the weighted average number of shares of common stock outstanding during each year. The average number of common shares used in the computation was 248,357 thousand shares for 2000
and 199,652 thousand shares for 1999, respectively.
Fully diluted net income per share is not disclosed because it is anti-dilutive.

3. Transactions with Non-Consolidated Subsidiaries and Associated Companies
Significant transactions with and balances due from/(to) non-consolidated subsidiaries and associated companies at March 31,
2000 and 1999, are summarized as follows:
Millions of Yen

2000

Transactions:
Construction contract revenues ...................................................................................... ¥6,425
Interest and dividend income ..........................................................................................
454
Due from/(to):Notes and accounts receivable—trade ...........................................................................
685
Short-term loans included in “Prepaid expenses and other”............................................
130
Notes and accounts payable—trade ..............................................................................
(15)

Thousands of
U.S. Dollars

1999

2000

¥63,180
195$60,613
4,283

6,043
1,183
(911)

6,462
1,226
(142)

The Company has guaranteed the indebtedness of certain non-consolidated subsidiaries and associated companies in theamount of ¥6,130 million ($57,830 thousand) at March 31, 2000.

4. Construction Contracts
Costs and estimated earnings recognized with respect to construction contracts which are accounted for by the percentage-ofcompletion method at March 31, 2000 and 1999, are as follows:
Millions of Yen

2000

Costs and estimated earnings ............................................................................................ ¥76,245
Amounts billed ................................................................................................................... (71,358)
Net ............................................................................................................................. ¥ 4,887

Thousands of
U.S. Dollars

1999

2000

¥161,532(151,864)$719,292(673,188)¥$ 46,104

9,668

Costs of construction contracts in process which are accounted for by the completed-contract method at March 31, 2000 and
1999, are as follows:
Millions of Yen

2000

Thousands of
U.S. Dollars

1999

2000

Costs incurred.................................................................................................................... ¥29,740
Amounts billed ................................................................................................................... (17,735)¥28,882(10,671)$280,566(167,311)

Net ............................................................................................................................. ¥12,005¥18,211$113,255

CHIYODA CORPORATION

19

5. Marketable and Investment Securities
The carrying amounts of marketable and debt securities and the related aggregate market values at March 31, 2000 and 1999,
excluding those for certain securities for which market information was not available, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2000

Current:
Carrying amount............................................................................................................. ¥24,097
Aggregate market value.................................................................................................. 20,553
Net unrealized loss ..................................................................................................... ¥(3,544)

1999

2000

¥38,950
38,541$227,330
193,896¥(409)$ (33,434)

Non-current:
Carrying amount............................................................................................................. ¥Aggregate market value..................................................................................................

13
14

¥

9
7

$

123
132

Net unrealized gain (loss) ............................................................................................ ¥

1

¥

(2)

$

9

The difference between the above carrying value and the amounts shown in the accompanying consolidated balance sheets
principally consists of money management funds and non-marketable securities for which there is no readily-available market fromwhich to obtain or calculate the market value thereof.

6. Investments in and Advances to Non-consolidated Subsidiaries and Associated Companies
Investments in and advances to non-consolidated subsidiaries and associated companies at March 31, 2000 and 1999, wereas follows:
Millions of Yen

Thousands of
U.S. Dollars

2000

1999

2000

Investments........................................................................................................................
Advances ...........................................................................................................................

¥3,139535¥2,6301,950$29,613
5,047

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

¥3,674¥4,580$34,660

7. Long-Term Loans and Long-Term Receivables
Long-term receivables at March 31, 2000 and 1999, include ¥15,440 million ($145,660 thousand) from Nigerian National Petroleum
Company (“NNPC”) relating to services performed by the Company in 1998. The Company has negotiated payment terms with
NNPC but the collectibility of the receivable is uncertain due to the economical and political circumstances in Nigeria. A portion of
the outstanding balance, ¥1,698 million ($16,019 thousand), was collected on June 19, 2000.
The Company also has receivables and other assets at March 31, 2000 and 1999, totaling ¥6,261 million ($59,066 thousand)from KAFCO, a Bangladesh company, and its related parties as follows. KAFCO has been under financial reconstruction withassistance by International Finance Organization and the other related countries.

Account receivable........................................................................................................................
Prepaid expenses and other .........................................................................................................
Investment securities.....................................................................................................................
Long-term loan .............................................................................................................................

Millions of Yen

Thousands of
U.S. Dollars¥0,316
537
1,347
4,061

$02,981
5,066
12,70838,311

Management expects to fully collect on these receivables and the financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
20 CHIYODA CORPORATION

8. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans bear interest ranging from 1.500% to 2.625% at March 31, 2000 and principally 1.4% at March 31, 1999
per annum. Short-term debt at March 31, 2000, consisted of the following:
Millions of Yen

Thousands of
U.S. Dollars

Collateralized ................................................................................................................................
Uncollateralized ............................................................................................................................

¥23,332
45,595$220,113
430,142

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

¥68,927$650,255

Long-term debt at March 31, 2000 and 1999, consisted of the following:
Millions of Yen

2000

Thousands of
U.S. Dollars

1999

2000

Long-term loans from banks and insurance companies, maturing seriallythrough 2010, with interest rates ranging from 0.71% to 7.70% (2000)
and from 1.87% to 7.70% (1999):
Collateralized.................................................................................................................. ¥ 1,476
Uncollateralized .............................................................................................................. 13,541¥ 2,220
14,981$ 13,925
127,745

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

15,017(2,472)

17,201(3,683)

141,670(23,321)

Total........................................................................................................................... ¥12,545¥13,518$118,349

Subordinated loan in the amount of ¥10,000 million ($94,340 thousand) from The Bank of Tokyo-Mitsubishi, Ltd. was included in‘Uncollateralized’ at March 31, 2000.
Annual maturities of long-term debt at March 31, 2000, were as follows:
Millions of Yen

Thousands of
U.S. Dollars

2001 ............................................................................................................................................
2002 ............................................................................................................................................
2003 ............................................................................................................................................
2004 ............................................................................................................................................
2005 and thereafter ......................................................................................................................

¥ 2,472
1,079
10,914230322$ 23,321
10,179102,962
2,170
3,038

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

¥15,017$141,670

Millions of Yen

Thousands of
U.S. Dollars

Marketable securities....................................................................................................................
Land.............................................................................................................................................
Buildings—net of accumulated depreciation .................................................................................

¥21,959746
288$207,160
7,038
2,717

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

¥22,993$216,915

Millions of Yen

Thousands of
U.S. Dollars

Notes and accounts receivable—trade..........................................................................................
Land .............................................................................................................................................
Buildings—net of accumulated depreciation..................................................................................

¥ 960
695
1,323

$ 9,057
6,557
12,481

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

¥2,978$28,095

Years Ending March 31,

The following assets were pledged as collateral for short-term bank loans at March 31, 2000:

The following assets were pledged as collateral for long-term debt at March 31, 2000:

CHIYODA CORPORATION

21

9. Retirement and Pension Plan
Employees who terminate their services with the Company are, under most circumstances, entitled to receive lump-sum retirement
benefits based upon their rates of pay at the time of termination, years of service and certain other factors.
However, an employee who terminates at the age of over 50 years old with service of at least 20 years is entitled to receive
an annuity from the trustee under the pension plan which covers such employees. If the annuity does not reach the level of total
retirement benefits due, the remainder would be paid by the Company.
Certain consolidated subsidiaries also have severance payment and pension plans similar to those of the Company.
Retirement benefits at March 31, 2000, include retirement benefits to directors and corporate auditors in the amount of¥437 million ($4,123 thousand). The retirement benefits to directors and corporate auditors are paid subject to the approvalof the shareholders.
The assets of the fund as of March 31, 2000 and 1999, totaled ¥6,675 million ($62,972 thousand) and ¥7,587 million, respectively.
Severance and pension expenses aggregated ¥1,719 million ($16,217 thousand) and ¥2,711 million for the years ended March
31, 2000 and 1999, respectively.

10. Shareholders’ Equity
At March 31, 2000 and 1999, the authorized number of shares was 700,000 thousand shares of common stock with a par valueof ¥50 per share and 80,000 thousand shares of non-voting, non-cumulative preferred stock without par value.
Under the Commercial Code of Japan (the “Code”), at least 50% of the issue price of new shares, with a minimum of the parvalue thereof, is required to be designated as stated capital. The portion which is to be designated as stated capital is determinedby resolution of the Board of Directors. Proceeds in excess of the amounts designated as stated capital are to be credited toadditional paid-in capital.
Under the Code, amounts equal to at least 10% of the aggregate amount of cash dividends and certain other appropriationsof retained earnings associated with cash outlays applicable to each fiscal period must be set aside as a legal reserve until suchreserve equals 25% of stated capital. This reserve amount, which is included in accumulated deficit, totals ¥2,970 million ($28,019
thousand) and ¥2,927 million as of March 31, 2000 and 1999, respectively, and is not available for dividends but may be used toreduce a deficit or may be transferred to stated capital.
The Company may also transfer, upon approval of the shareholders, a portion of unappropriated retained earnings available
for dividends to the capital stock account.

11. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate,
resulted in normal effective statutory tax rates of approximately 42% and 47% for the years ended March 31, 2000 and 1999,
respectively.
The tax effects of significant temporary differences and loss carryforwards which resulted in deferred tax assets and liabilities
at March 31, 2000, are as follows:
Millions of Yen

Thousands of
U.S. Dollars

Deferred tax assets:
Tax loss carryforwards ..............................................................................................................
Cost of construction contracts ..................................................................................................
Retirement benefits ...................................................................................................................
Loss on long-term construction contracts .................................................................................
Write-off of accounts receivable ................................................................................................
Allowance for doubtful accounts ...............................................................................................
Allowance for loss on investment ..............................................................................................
Loss on devaluation of costs of construction contracts in process ............................................
Allowance for financial support to subsidiaries...........................................................................
Other ........................................................................................................................................
Less valuation allowance...........................................................................................................

¥44,388
2,321
2,147
734
701
671
581
425
420
2,245
(54,379)$418,755
21,896
20,255
6,925
6,613
6,330
5,481
4,009
3,962
21,179(513,009)

Total .....................................................................................................................................
Deferred tax liabilities ................................................................................................................

254
57

2,396
538

Year Ending March 31, 2000

Net deferred tax assets .........................................................................................................
22 CHIYODA CORPORATION

¥

197

$

1,858

A reconciliation between the normal effective statutory tax rate for the year ended March 31, 2000, and the actual effective tax
rates reflected in the accompanying consolidated statement of operations, is as follows:Year Ended
March 31, 2000

Normal effective statutory tax rate................................................................................................................................
Expenses not deductible for income tax purposes .......................................................................................................
Effect of taxation on dividends .....................................................................................................................................
Inhabitant taxes per capita levy ....................................................................................................................................
Foreign income taxes...................................................................................................................................................
Tax loss carryforwards.................................................................................................................................................
Equity in earnings of associated companies.................................................................................................................
Operating losses of subsidiaries...................................................................................................................................
Lower income tax rates applicable to income in certain foreign countries.....................................................................

42%
12
(8)
4
13
(28)
(22)
45
(4)

Actual effective tax rate................................................................................................................................................

54%

The normal effective tax rate reflected in the accompanying consolidated statement of operations for the year ended March 31,
1999, differs from the actual effective tax rate, primarily due to the effect of permanently non-deductible expenses and temporary
differences in the recognition of asset and liability items for tax and financial reporting purposes.
Under the current Japanese tax regulations, a net operating loss can be carried forward for five years and deducted from any
future taxable income. The Company and consolidated subsidiaries have a net operating loss carryforward of approximately¥105,830 million ($998,396 thousand) at March 31, 2000.

12. Research and Development Costs
Research and development costs charged to income were ¥1,041 million ($9,821 thousand) and ¥410 million for the years ended
March 31, 2000 and 1999, respectively.

13. Leases
Income from equipment and a subsidiary lease for the years ended March 31, 2000 and 1999, was ¥340 million ($3,208 thousand) and ¥323 million, respectively.
The Company and a subsidiary lease certain machinery, computer equipment, office space and other assets. Total rental
expenses under the above leases were ¥93 million ($877 thousand) and ¥41 million for the years ended March 31, 2000 and
1999, respectively.

CHIYODA CORPORATION

23

Pro forma information of leased property under finance leases that do not transfer ownership of the leased property to thelessee on an “as if capitalized” basis for the years ended March 31, 2000 and 1999, was as follows:Year Ended March 31, 2000

For Lessor
Millions of Yen
MachineryandEquipment

Other

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

¥1,473
1,229

¥134
93

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

¥ 244

¥ 41

Thousands of U.S. Dollars

Total

MachineryandEquipment

Other

Total

¥1,607
1,322$13,896
11,594$1,264877$15,160
12,471¥ 285$ 2,302$ 387$ 2,689

Year Ended March 31, 1999

For Lessee
Millions of Yen
MachineryandEquipment

Other

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

¥ 302
138

¥ 31
12

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

¥ 164

¥ 19

Year Ended March 31, 2000

Thousands of U.S. Dollars

Total

MachineryandEquipment

Other

Total

¥ 333
150

$ 2,849
1,302

$ 292
113

$ 3,141
1,415

¥ 183

$ 1,547$ 179$ 1,726

Millions of Yen

Thousands of U.S. Dollars

Unearned
Lease Income(As Lessor)

Obligations
under
Finance Lease(As Lessee)

Unearned
Lease Income(As Lessor)

Obligations
under
Finance Lease(As Lessee)

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

¥248
300

¥ 92
91

$2,340
2,830

$ 868
858

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

¥548

¥183

$5,170$1,726

Year Ended March 31, 1999

Millions of Yen
Unearned
Lease Income(As Lessor)

Obligations
under
Finance Lease(As Lessee)

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

¥279
563

¥24
29

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

¥842

¥53

Depreciation expense for lessor, which is reflected in the accompanying consolidated statements of operations, computed by
the straight-line method was ¥238 million ($2,245 thousand) for the year ended March 31, 2000.
Depreciation expense for lessee, which is not reflected in the accompanying consolidated statements of operations, computedby the straight-line method was ¥93 million ($877 thousand) for the year ended March 31, 2000.
The amounts of unearned lease income and obligations, acquisition cost and depreciation under finance leases include theimputed interest income portion and interest expense portion, respectively.

24 CHIYODA CORPORATION

14. Derivatives
The Company enters into foreign exchange forward contracts and currency option contracts to hedge foreign exchange risk
associated with 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.
The basic policies for the use of derivatives are approved by the management and the execution and control of derivatives
are controlled by the Company’s Financing Department. Each derivative transaction is periodically reported to the Company’s
Accounting Department and executive directors.
Forward exchange contracted amounts which are assigned to associated assets or liabilities and are reflected on the balance
sheet at year end are not subject to the disclosure of market value information.
The total of forward exchange contracted amounts which were not reflected on the consolidated balance sheets and currency
option contracts as of March 31, 2000 and 1999, were as follows:Year Ended March 31, 2000

Millions of Yen

Amount ofForeign
Currency

Foreign exchange forward contracts:
Buying forward:
U.S. dollars.................................................................................... 48,658 thousand
German marks .............................................................................. 9,569 thousand
Singapore dollars........................................................................... 5,872 thousand
Other.............................................................................................
Total ..................................................................................................
Selling forward:
U.S. dollars....................................................................................
Other.............................................................................................
Total ..................................................................................................

8,186 thousand

Equivalent
Yen Valued at
ForwardExchange Rate

Equivalent
Yen Valued at
ForwardExchange Rateas ofMarch 31, 2000

¥5,182629
354
169¥5,025485
355
162¥6,334¥6,027

¥ 866
20

¥ 853
20

¥ 886

¥ 873

Millions of Yen

Contract
AmountCurrency options contracts:
Call:
U.S. dollars ................................................................................................................................ ¥3,804(Option premiums on balance sheet) ..........................................................................................
(166)
Put:
U.S. dollars ................................................................................................................................ ¥3,312(Option premiums on balance sheet) ..........................................................................................
(166)

Fair Value

¥18

¥49

CHIYODA CORPORATION

25

Year Ended March 31, 2000

Millions of Yen

Equivalent
Yen Valued at
ForwardExchange Rate

Equivalent
Yen Valued at
ForwardExchange Rateas ofMarch 31, 1999

¥12,281
2,430
1,881
994

¥12,321
2,215
1,845
971

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

¥17,586¥17,352

Selling forward:
U.S. dollars.................................................................................... 26,294 thousand
Other.............................................................................................

¥ 3,24195¥ 2,871
80

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

¥ 3,336¥ 2,951

Amount ofForeign
Currency

Foreign exchange forward contracts:
Buying forward:
U.S. dollars.................................................................................... 106,022 thousand
German marks .............................................................................. 33,802 thousand
Singapore dollars........................................................................... 26,944 thousand
Other.............................................................................................

15. Subsequent Event
The following proposed disposition of accumulated deficit of the Company at March 31, 2000, was approved at the shareholders
meeting held on June 29, 2000:
Millions of Yen

Thousands of
U.S. Dollars¥41,961$395,858

Balance of accumulated deficit at March 31, 2000 to be carried forward ......................................

16. Segment Information
Information about foreign operations and sales to foreign customers of the Company and consolidated subsidiaries for the years
ended March 31, 2000 and 1999, was as follows:(1) Foreign Operations
Millions of yen
Asia

EuropeNorth
America

Construction contract
revenue:
Outside customers ............... ¥161,075
Intersegment ........................
19,406¥5,367
547

¥520
390

¥2,001
76

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

5,914
5,908

910
923

2,077
1,918

¥

¥ (13)¥ 159

Year Ended March 31, 2000

Japan

180,481
181,553

Operating income (loss)............ ¥ (1,072)

6

Subtotal

Eliminations(Corporate)¥168,963
20,419¥(20,419)¥ 30

189,382
190,332(20,419)(21,216)¥ (30)

¥

¥

Other

(950)

Consolidated¥168,963
168,963
169,116

797

(153)

Other income andexpenses—net .......................

1,706

Income before income taxes
and minority interests .............
Assets ...................................... ¥153,614

26 CHIYODA CORPORATION¥¥6,005¥427¥1,081¥418¥161,545¥ (8,446)

1,553¥153,099

Thousands of U.S. Dollars
Asia

EuropeNorth
America

Construction contract
revenue:
Outside customers ............. $1,519,576
Intersegment ......................
183,075$50,632
5,161$4,906
3,679$18,877
717

Total ............................... 1,702,651
Operating expenses................ 1,712,764

55,79355,736

8,585
8,708

19,59418,094$ 283

Operating income (loss) .......... $$$ (123)$ 1,500$ (283)

Year Ended March 31, 2000

Japan

(10,113)

57

Subtotal

Eliminations(Corporate)$1,593,991
192,632$(192,632)

1,786,623
1,795,585(192,632)(200,151)

Other

$

(8,962)

Consolidated$1,593,991$

1,593,991
1,595,434

7,519(1,443)

Other income andexpenses—net .....................

16,094

Loss before income taxes
and minority interests............

$

Assets .................................... $1,449,189$56,651$4,028$10,198

Asia

EuropeNorth
America

Construction contract
revenue:
Outside customers .............. ¥296,288
Intersegment .......................
19,465¥10,562
995

¥ 145
6,750

Total................................ 315,753
Operating expenses ................ 326,781

11,557
13,782

Operating income (loss)........... ¥ (11,028)¥ (2,225)$3,943

14,651$1,524,009$ (79,679)$1,444,330

Other

Subtotal

Eliminations(Corporate)

Consolidated¥5,202412¥ 37
7¥312,234
27,629¥(27,629)

6,895
6,890

5,614
5,213

44
60

339,863352,726(27,629)(27,543)

312,234
325,183

¥

¥ 401

¥(16)

¥ (12,863)¥(12,949)

Millions of yen

Year Ended March 31, 1999

Japan

5

¥312,234(86)

Other income andexpenses—net ......................

2,415

Loss before income taxes
and minority interests ............

¥ (10,534)

Assets ..................................... ¥215,470¥ 4,013¥ 471¥1,707¥ 25¥221,686¥ (7,766)¥213,920

Notes: 1. The Company and consolidated subsidiaries are summarized in five segments by geographic area based on the countries where theCompanies are located.
Notes: 1. The segments consisted of the following countries in 2000 and 1999, respectively:
Year Ended March 31, 2000
Year Ended March 31, 1999
Asia: Indonesia, Singapore, Philippines, Myanmar, Malaysia
Asia: Indonesia, Singapore, Philippines, Myanmar
Europe: United Kingdom, Germany, Poland
Europe: United Kingdom, Germany
North America: United States of America
North America: United States of America
Other: Nigeria
Other: Australia
Notes: 2. Corporate assets mainly consist of long-term loans and investment securities of the Company. Corporate assets as of March 31, 2000
and 1999, were ¥1,834 million ($17,302 thousand) and ¥5,691 million, respectively.

CHIYODA CORPORATION

27

(2) Sales to Foreign Customers
Millions of Yen

Year Ended March 31, 2000

Asia

Overseas sales (A) ......................................................................................... ¥44,038
Consolidated sales (B) ...................................................................................
(A)/(B)............................................................................................................. 26.06%

The Near andMiddle East

Other

Total

¥35,722¥20,083

21.14%

11.89%¥099,843
168,963
59.09%

Thousands of U.S. Dollars

Year Ended March 31, 2000

Asia

Overseas sales (A)........................................................................................ $415,453
Consolidated sales (B)..................................................................................

The Near andMiddle East

Other

Total

$337,000$189,462$ 941,915
1,593,991

Millions of Yen

Year Ended March 31, 1999

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

Asia

The Near andMiddle East

Other

Total

¥86,742¥112,127¥27,950

27.78%

35.91%

8.95%¥226,819
312,234
72.64%

Note: The Company and consolidated subsidiaries are summarized in three segments by geographic area based on the countries where theCompanies are located.
Note The segments consist of the following countries:
Year Ended March 31, 2000
Year Ended March 31, 1999
Asia: China, Singapore, Thailand and others
Asia: Indonesia, Singapore, Malaysia, Myanmar and others
The Near and Middle East: Qatar, Oman,
The Near and Middle East: Qatar, Oman, Saudi Arabia and others
Saudi Arabia and others
Other: Poland, Turkmenistan, Azerbaijan,
Other: Poland, Turkmenistan, Slovakia,
United States of America and others
Other: United States of America, Canada 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.

28 CHIYODA CORPORATION

OPINION OF INDEPENDENT PUBLIC ACCOUNTANTS

Tohmatsu & Co.
MS Shibaura Building
13-23, Shibaura 4-chome,
Minato-ku, Tokyo 108-8530, Japan
Tel: +81-3-3457-7321
Fax: +81-3-3769-8508
www.tohmatsu.co.jp

Independent Auditors’ Report
To the Board of Directors and Shareholders of Chiyoda Corporation:
We have examined the consolidated balance sheets of Chiyoda Corporation and consolidated subsidiaries asof March 31, 2000 and 1999, and the related consolidated statements of operations, shareholders’ equity, andcash flows for the years then ended, all expressed in Japanese yen. Our examinations were made in accordancewith auditing standards, procedures and practices generally accepted and applied in Japan and, accordingly,
included such tests of the accounting records and such other auditing procedures as we considered necessary
in the circumstances.
As described in Note 7, the balance sheet at March 31, 2000 includes receivables and other accounts from Nigerian
National Petroleum Company and KAFCO totaling ¥15,440 million ($145,660 thousand) and ¥6,261 million ($59,066
thousand), respectively. The collectability of these receivables is uncertain due principally to the economical andpolitical circumstances in the respective countries. Management expects to fully collect on these receivables. In
addition, as discussed in Note 1, the Company is in a restructuring plan and constant support from certain shareholders has been and will be required. The financial statements do not include any adjustments that might result
from the ultimate outcome of these uncertainties.
In our opinion, the consolidated financial statements referred to above present fairly the financial position of Chiyoda
Corporation and consolidated subsidiaries as of March 31, 2000 and 1999, and the results of their operations andtheir cash flows for the years then ended in conformity with accounting principles and practices generally acceptedin Japan applied on a consistent basis.
Our examinations also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our
opinion, such translation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts arepresented solely for the convenience of readers outside Japan.

June 29, 2000

The accompanying financial statements are not intended to present the financial position and results of operations
and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan. The standards, procedures and practices to audit and opinion on such financial statements
are those which are generally accepted and applied in Japan.
CHIYODA CORPORATION

29

CORPORATE DIRECTORY

OFFICESOVERSEAS SUBSIDIARIES

Yokohama Head OfficeBldgs. No. 1, 2, and 3,
12-1, Tsurumichuo 2-chome,
Tsurumi-ku, Yokohama 230-8601, Japan
Tel: 81-45-521-1231 Fax: 81-45-503-0200

Chiyoda International Corporation
1177 West Loop South, Suite 1302,
Houston, TX 77027, U.S.A.
Tel: 1-713-965-9005 Fax: 1-713-965-0075

Chiyoda Research Park
13, Moriya-cho 3-chome,
Kanagawa-ku, Yokohama 221-0022, Japan
Tel: 81-45-441-1268 Fax: 81-45-441-1299

REPRESENTATIVE OFFICES
Chiyoda Abu Dhabi Representative Office
P.O. Box 43928 Old ADGAS Building,
4th Floor—Suite No. 22 Corniche Road,
Abu Dhabi, United Arab Emirates
Tel: 971-2-6271-733 Fax: 971-2-6271-744
Chiyoda Beijing Representative Office
Room No. 616, China World Trade CenterNo. 1, Jianguomenwai Avenue,
Beijing 100004, China
Tel: 86-10-6505-2678 Fax: 86-10-6505-1118
Chiyoda Jakarta Representative Office
9th Floor, Mid-Plaza Bldg.,
Jalan Jenderal Sudirman Kav. 10-11,
Jakarta 10220, Indonesia
Tel: 62-21-570-7579 Fax: 62-21-570-6276
Chiyoda Singapore Representative Office
14 International Business Park, Jurong East,
Singapore 609922, The Republic of Singapore
Tel: 65-560-1274 Fax: 65-560-2563
Chiyoda Tehran Branch Office
2nd Floor, No. 16,
Mahtab St., Aftab St.,
Vanak Avenue,
Tehran 19949 Iran
Tel: 98-21-8036391 Fax: 98-21-8058967
Singapore Human Resources Office
10 Anson Road, #28-06A International Plaza,
Singapore 079903, The Republic of Singapore
Tel: 65-324-0080 Fax: 65-324-0090

Chiyoda International Limited
4th Floor, Dorland House, 20 Regent Street,
London SW1Y 4PH, U.K.
Tel: 44-20-7867-1221 Fax: 44-20-7867-1414
Chiyoda Deutschland GmbHTechnologie Park, Bergisch Gladbach,Friedrich-Ebert-Strasse, 51429 Bergisch
Gladbach, Germany
Tel: 49-2204-843080 Fax: 49-2204-843090
Chiyoda Singapore (Pte) Limited
14 International Business Park, Jurong East,
Singapore 609922, The Republic of Singapore
Tel: 65-563-3488 Fax: 65-567-5231
Chiyoda Asia Pacific (Pte) Limited
14 International Business Park, Jurong East,
Singapore 609922, The Republic of Singapore
Tel: 65-425-0368 Fax: 65-569-6102
Chiyoda Malaysia Sdn. Bhd.
15th Floor, Menara Maxisegar,
Jalan Pandan Indah, 4/2, Pandan
Indah 55100, Kuala Lumpur, Malaysia
Tel: 60-3-4297-0988 Fax: 60-3-4297-0800
Chiyoda (Thailand) Limited
Bangkok Head Office
5th Floor, Dusit Thani Office Bldg.,
No. 946, Rama IV Road,
Bangkok 10500, Thailand
Tel: 66-2-236-8037 Fax: 66-2-236-6841
Sriracha Office
P.O. Box 7, Ao-Udom,
Sriracha, Chonburi 20230, Thailand
Tel: 66-38-352-315/8 Fax: 66-38-352-321
PT. Chiyoda International Indonesia
7th Floor, Aspac Kuningan Building,
JL H.R. Rasunasaid KAV. X-2 No. 4,
Jakarta 12950, Indonesia
Tel: 62-21-252-1066 Fax: 62-21-252-1101
L&T–Chiyoda Limited
B.P. Estate, National Highway No. 8,
Chhani, Baroda–391740,
Gujarat State, India
Tel: 91-265-771003 Fax: 91-265-774985
C&E Corporation
C&E Corporation Bldg.,
Meralco Avenue Corner,
General Araneta Street,
Pasig City, Metro Manila, Philippines
Tel: 63-2-636-1001/8 Fax: 63-2-636-1013

30 CHIYODA CORPORATION

Chiyoda Petrostar Ltd.
Al-Khobar Office
P.O. Box 31707, Al Khobar 31952,
The Kingdom of Saudi Arabia
Tel: 966-3-864-0839/966-3-898-0034
Fax: 966-3-864-0986
Jeddah Head Office
P.O. Box 6188, Jeddah 21442,
The Kingdom of Saudi Arabia
Tel: 966-2-647-0558 Fax: 966-2-647-1908
Chiyoda Nigeria Limited
Lagos Head Office
Plot PC-12, 1st Floor, (All CO Plaza),
Afribank Street, Victoria Island,
Lagos, Nigeria
Tel: 234-1-2613291 Fax: 234-1-2612565
Tlx: 21218 THRU C.I. TOKYO
Kaduna Branch Office
Kachia Road, 17KM, P.O. Box 1144,
Kaduna, Nigeria
Chiyoda Star Company
1177 West Loop South, Suite 1302,
Houston, TX 77027, U.S.A.
Tel: 1-713-965-9005
Fax: 1-713-965-0075/0602
Chiyoda & Public Works Co., Ltd.
No. 1 A, Thanthumar Road, 29 Ward,
Thuwunna, Thingangyun Township,
Yangon, The Union of Myanmar
Tel: 95-1-565615/579330
Fax: 95-1-579870
Chiyoda Polska Sp. ZO.O
UI.P. Skargi 8, #230, 40-091 Katowice, Poland
Tel/Fax: 48-32-587-000
Kellogg-Chiyoda Service Ltd.
c/o W.S. Walker & Company,
1st Floor, Caledonian House, Mary Street,
P.O. Box 265G George Town,
Grand Cayman, Cayman Island(As of September 1, 2000)

BOARD OF DIRECTORSCORPORATE DATA

Chairman
Naoyoshi Uehara*

Established
January 20, 1948

President
Kiyomitsu Nishio*

Number of Employees
3,956[Parent Company: 2,003]

Executive Vice President
Nicholas C. Gallinaro*
Senior Managing Directors
Toshikuni Hirai*
Nobuo Seki*
Managing Directors
Hiroshi Ohtsuka
Naotake Naritomi
Directors
Albert J. Stanley
Shoei Kaneko
Yoshihiro Shirasaki
Takashi Kubota
Yoshio Ishiwata
Akira Kadoyama
Yosuke Norimitsu
Hiroshi Kobayashi
Masato Miyamori
Hideo Nakatani
Corporate Auditors
Michihiko Kawana
Kazuo Takayanagi
Hisatomi Uga
Tsuneyoshi Kajiwara*Representative Director

Main Business Activities
Planning, design, procurement, construction, commissioning,and operation assistance of public- and private-sector facilities insuch areas as petroleum, gas, petrochemicals, general chemicals,coal, electric power, nonferrous metal processing, waterworks,
biochemistry, pharmaceutical manufacturing, medical treatment,
food processing, factory automation and computer-integrated
manufacturing, automotive industry, theme park development,
space development, and distribution as well as related facilities
for pollution prevention, environmental preservation and enhancement, and disaster prevention
Paid-in Capital¥20,385,420,890
Capital Stock Issued
248,357,059 shares
Number of Shareholders
19,324
Stock Exchange Listings
Tokyo, Osaka, Nagoya, Sapporo
Transfer Agent of Common Stock
The Mitsubishi Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku,
Tokyo 100-0005, Japan(As of March 31, 2000)(As of August 1, 2000)

CHIYODA CORPORATION

31

Printed in Japan