CH I Y OD A COR P O R A T I O N
Co n s o l i d a t e d F i n a n c i a l R e s u l t s
for the Y ear Ended March 31, 2006

This document has been prepared as a guide to non-Japanese investors and contains forwardthe time of publication. A number of factors could cause actual results to differ materially fromexpectations. This document is a translation of excerpts taken from the Japanese language
original. All numbers are rounded down to the nearest unit in accordance with standard Japanesepractice. Please be advised that the Company cannot accept responsibility for investment
decisions made based on the information contained in this report.

1

Su m m a r y o f F i n a n c i a l S t a t e m e n t s ( C o n s o l i d a t e d )for the Y ear Ended March 31, 2006
Listed Ex changes
Head Off ice
Stock Cod e
P resident & CEO
I nquiries
Telephone
U.S. GA A P A ccounting P rinciples

Tokyo
Kanagawa, Japan
6366
Nobuo Seki
Shinji Kusunoki, General Manager, Accounting Department+81-45-506-9410
Not adopted

Consolidated Business Results
for the Y ear Ended March 31, 2006

1) Consolidated Business Results
M illion s of Y en
Apr. 1, 2005
Mar. 31, 2006

Apr. 1, 2004
Mar. 31, 2005

Chang e( % )Revenue .............................................
Operating I ncome ...............................
Ord inary I n come ................................
Net I nco me .........................................
Net I nco me p er Share...................
Fully Diluted Net Income per Share
Return on Equity (R OE)
Ratio of Ordinary I ncom e to Total
A ssets
Ratio of Ordinary I ncom e to Revenue

390,875
20,72923,161
19,400101.27100.8042.0%

Chang e( % )

46.0
87.1
99.9
50.8

267,655
11,077
11,587
12,863
68.62
67.30
43.1%

10.0%

7.1%

5.9%

4.3%

29.4
88.4
82.5
93.5

(Notes) (1) Gain from investments in subsidiaries and affiliates accounted for by the equity method:Year ended March 31, 2006:
0
193 million yen
Year ended March 31, 2005:
152 million yen(2) Average number of outstanding shares (consolidated) during the period:
Year ended March 31, 2006:
191,558,345 sharesYear ended March 31, 2005:
187,450,203 shares(3) Changes to accounting principles:No(4) Percentages for revenue, operating income, ordinary income and net income represent year-on-year changes.

2) Changes in Consolidated Financial P osition
M illion s of Y en
Apr. 1, 2005
Mar. 31, 2006
Total A ssets
Equity Ratio
Shareho)(Notes) Outstanding shares (consolidated) at the end of the period:
Year ended March 31, 2006:
Year ended March 31, 2005:

279,72155,50819.8%
288.88Apr. 1, 2004
Mar. 31, 2005
182,893
36,87320.2%
193.22

192,152,053 shares
190,837,167 shares23) Consolidated Cash Flow s
Millions of Y en
Apr. 1, 2005
Apr. 1, 2004
Mar. 31, 2006
Mar. 31, 2005
Net cash p rovided b y operating activities ...............

5,237

484

Net cash used in investing activities ... ...................

1,051(1,006)

Net cash p rovided b y (used in) f inancing
activities .........................

(1,338)

1,169

Cash and cash equivalents at end of period ............

46,87841,594

4) Consolidated Subsidiaries and Affiliates Accounted forby the Equity Method
Number of consolidated subsidiaries:
Number of non-consolidated subsidiaries accounted forby the equity method:
Number of affiliates accounted for by the equity method:

18055) Changes in the Scope of Consolidation and Affiliates Accounted for by
the Equity M ethod
Consolidated subsidiaries:
Newly included
ExcludedAffiliates accounted for by the equity method:
Newly included
Excluded

00
00

Consolidated Operations Forecast
for the Y ear Ending M arch 31, 2007
Millions of Y en
Apr. 1, 2006 Mar. 31, 2007
I nterim
Full term
perio dRevenue ........................................................................................

190,000

420,000

Ord inary I n come ...........................................................................

12,00028,000Net I nco me ...................................................................................

7,000

16,500(Note) Projected net income per share for the year ending March 31, 2007

85. 87 yen

3(1) State of the GroupThe Chiyoda Group of Companies consists of the parent company, 18 subsidiaries, and 5 equity method affiliates.
As a comprehensive engineering services organization, the Group s central business is its expertise in providing themost efficient solutions based on an accurate understanding of customer needs. By using highly advanced
technologies and achieving the optimal combination of the project execution skills of group companies, all groupmembers work in unison to conduct business operations. Through this approach, the Group responds flexibly to theneeds of today s markets, society and regions. The Gro

Business Flow chart
Clients

Chiyoda Corporation
Comprehensive engineering business,
including consulting, pl anning,
designing , p rocurem ent, construction ,trial o peration , maintenance and o therservices, for plants o f all types

Engineering, Construction & Maintenance*1 Chiyoda Kosho Co., Ltd.
Plant engineering, construction, and maintenanceof energy and chemical plants*1 Chiyoda Techno Ace Co., Ltd.
Civil engineering of pharmaceutical and petroleum
plants*1 Chiyoda Keiso Co., Ltd.
Construction related to facilities for industries of all
types
Consulting*1 U-Tech Consulting Co., Ltd.
Consulting for industrial and social, regional
development / temporary help service

A dvanced Engineering*1 Chiyoda Advanced Solutions Corporation
Computer aided engineering analysis, plant life
cycle engineering and risk management, utilizationof space environment, etc.

Global Engineering Satellites (GESs)*1 C&E Corporation (Philippines)*2 L&T Chiyoda Ltd. (India)
Overseas construction bases*1 Chiyoda Singapore (Pte) Limited*1 PT. Chiyoda International Indonesia*1 Chiyoda (Thailand) Limited*1 Chiyoda Malaysia Sdn. Bhd.
*1 Chiyoda & Public Works Co., Ltd. (Myanmar)*2 Chiyoda Petrostar Ltd. (Saudi Arabia)
Overseas design bases

Other businesses

Finance, A ccounting, Tax*1 Arrow Business Consulting Corporation
Consulting services for finance and accounting

A irfreight and Spare P arts Supply*1 Arrowhead International Corporation
Travel and air cargo agent, spare parts supply

I nformation System Development*2 IT Engineering Limited
IT solutions and software development

Human Resources Staffing and Training*2 Arrow Mates Co., Ltd.
Staffing of human resources

Overseas A ccounting and Finance*1 Chiyoda Asia Pacific (Pte) Limited (Singapore)Consulting on accounting and finance*1： Consolidated subsidiary*2： Affiliated company accounted for by
the equity method
Direct Client Orders
Contracted Business, Entrusted
Businesses

Overseas sales bases*1 Chiyoda International Corporation (USA)*1 Chiyoda Nigeria Limited4

(2) Management P olicies
1. Basic M anagement P o licies
The Chiyoda Group has formulated, and on February 17, 2005 announced, a medium-term management plan called
Double Step-Up Plan 2008 (DSP2008). The goal of the plan, which starts in fiscal 2005 (ends in March 2006) andends in fiscal 2008 (ends in March 2009) is to enable the Group to consistently increase earnings.
The fundamental management policy is to achieve the targets of DSP2008 in order to achieve further gains incorporate value.
Management philosophy
The Chiyoda Group aims to conduct group management so as to earn the trust and understanding of shareholders,customers, suppliers, employees, communities and all other stakeholders.

Corporate P hilosophy
As a comprehensive engineering services organization, the Group s most important
objectives are to promote its business and to contribute to the sustainable development of asociety by sound application of its know-how and state-of-the-art technology.

M anagement P olicies
Steadfast implementation of
Double Step-Up Plan (DSP) 2008

Quality management policy

Occupational health andsafety policy

Environmental policy

Information security policy

Code of business conduct

Privacy policy

2. Management Vision and M edium-Term Manag ement Strateg ies

MediumMedium-Term Management Plan
Double StepStep-Up Plan (DSP) 2008
M anagement Vision
M anagement Vision
Step up to become the R eliability N o.1 P roject
Company .
Step up to become an Excellent Company able tosustainearnings grow th .
edium-Termanagement
MMedium-Term Strategies
MManagement
Strategies
S1

S2
S3

S4

Co n d u c t b u s in es s o p era tio n s b a s ed o n s u p erio r
tec h n o lo g ies , es ta b lis h in g rela tio n s h ip s a s ah ig h ly tru s ted p a rtn er fo r o u r c lien ts .
F u rth er u p g ra d e p ro jec t ex ec u tio n s k ills th ro u g h Sm a rt
EP C th a t u tiliz es th e Gro u p s c o llec tive s tren g th s .
Es ta b lis h a c o n s is ten tly s o u n d fin a n c ia l p o s itio n a b le tos u p p o rt th e c rea tio n o f n ex t -g en era tio n b u s in es s es th a t
c a n s u s ta in ea rn in g s g ro w th .
Crea te a n en erg etic o rg a n iz a tio n a n d refin e em p lo yee
s k ills to p ro vid e a p lea s a n t a n d rew a rd in g w o rk p la c e.

P la c e p rio rity o n Co rp o ra te So c ia l R es p o n s ib ility ( CSR ) p ro g ra m s

5There are two fundamental elements of DSP 2008. The first is to resolutely retain the innovative thinking needed tocapitalize on change, and take on challenges posed by change with the aim of becoming the Reliability No.1
Project Company. The second is to aim to become an Excellent Company that can increase earnings throughconstant internal efforts.
In accordance with the above fundamental approaches, the Group has established medium- and long-term
strategies. All Group employees from senior management on down are working as one to achieve management
goals. To reach these goals, balance scorecards are used to facilitate comprehensive management of key targets foreach strategy, action plans and the status of progress toward goals.
3. Targeted P erform ance I ndicato rs
The management goal of DSP 2008 is to raise the return on equity to at least 30% by fiscal 2008 (ends in March2009). The Group aims to further strengthen profitability through its own efforts and establish a permanently soundfinancial structure that can support the creation of next-generation businesses.
4. Fundam ental P olicy fo r Earnings Distributions
The Group is committed to being an organization able to perpetually grow and develop as well as to increase sales
and earnings. Accordingly, the fundamental earnings distribution policy is to further increase retained earnings inorder to maintain the consistently sound financial base needed to create next-generation businesses, to improve
remuneration for employees based on operating results, and to pay a consistent and stable dividend. Based on thisstandpoint, Chiyoda plans to pay an annual dividend of 10 yen per share in June 2006. In addition, Chiyoda aims tocontinue to pay a dividend of at least 10 yen per share. Chiyoda does not plan to alter the dividend decision-making

5. P olicy and Thinking Regard ing Reduction in I n vestment Unit
The Group regards a change in the stock investment unit as an effective means of adding vitality to capital markets,and thus as an important management issue. Such actions will be taken based on a comprehensive evaluation ofstock market trends, changes in Chiyoda s investment unit and other items.
6. I mportant Management I ssues
One central issue is to build a solid base for the DSP2008 medium-term management plan by executing as planned
LNG projects now under way. Of particular importance is contracts received in the past and prior fiscal years forconstruction of the worl
complex plant projects.
In addition, the Group must accommodate a variety of risks involving business activities and other items as well as
respond appropriately to revisions in laws and regulations. Through this stance, the Group is determined to be a
responsible corporate citizen.
7. I tems concerning p arent com pany
Chiyoda has no parent company.

6(3) Results of Operations and Financial Condition
1. Consolidated Operating Results for the Y ear Ended March 31, 2006
During the past fiscal year, there was a gradual economic recovery in Japan backed by rising capital expenditures
as corporate earnings improved. Overseas, the U.S. economy remained healthy and economies in China and other
Asian nations continued to post strong growth. The result was steady growth in the global economy.
In the global plant market, there was a big increase in demand for the gas value chain services of the Chiyoda
Group. As natural gas demand increased in energy-consuming nations such as the U.S., U.K., China and India,
there was a high level of gas development investments by gas-producing nations and major energy companies.
The price of crude oil remained high due to a combination of rising demand and political instability in oil-producing
nations such as Iran, Iraq and Nigeria. In Japan, oil companies made large investments to upgrade their refineries
in order to become more competitive. Investments included petrochemical production facilities targeting Asianmarkets, projects targeting the increasing price gap between heavy and light grades of oil, and large-scale energyconservation projects.
In this environment, consolidated new contracts increased 95.5% to 804,231 million yen, far above the initial
forecast for the volume of new contracts. New contracts in Japan increased 25.9% to 112,720 million yen andoverseas new contracts increased 114.9% to 691,510 million yen.

Consolidated Results of New Contracts
Billions of Yen
Fiscal year ended
March 31
2002
2003
2004
2005

128.0
180.4
218.6
321.7

New Contracts
Domestic
89.9
68.6
71.9
89.4

2006

691.5

112.7

Overseas

Backlog of contracts

Total
217.9
249.0
290.6
411.2

246.1
316.1
375.8
522.4

804.2

960.5

Majo r new contracts<Overseas>
LNG plant Trains 6 & 7 of Ras Laffan Liquefied Natural Gas (3) in Qatar
LNG plant Trains 4 & 5 of Qatar Liquefied Gas Company Limited (II) in Qatar
LNG plant Trains 6 & 7 of Qatar Liquefied Gas Company Limited (3 and 4) in Qatar[Licensing of CT-121 technology for coal fired power station flue gas desulfurization)]
Licensing to Southern Company Services (U.S.A.) for Southern Company (U.S.A.)
Licensing to Black & Veatch Corporation (U.S.A.) for American Electric Power (U.S.A.) and Alabama Electric
Cooperative, Inc. (U.S.A.)<Domestic>
Aromatics complex for Japan Energy Corporation
BTX facility for Taiyo Oil Company, Limited
Topper energy-saving operation for Kashima Oil Co., Ltd.
Re-operation of LNR plant for Idemitsu Kosan Co., Ltd. Chiba refinery (Chiyoda Kosho Co., Ltd.)
Reguratory maintenance of Toa Oil Co., Ltd. Mizue Plant (Chiyoda Kosho Co., Ltd.)
Integration of drug formulation plant of Asahi Kasei Pharma Corporation (Chiyoda Techno Ace Co., Ltd.)

Revenue increased 46.0% to 390,875 million yen due to steady progress in the construction of ongoing projects
and strong performances by group companies in Japan. This was higher than the forecast for the fiscal year. In
Japan, Revenue were up 17.5% to 105,329 million yen and overseas Revenue rose 60.4% to 285,545 million yen.

7

Majo r comp letions (*) completed portion<Overseas>
LNG plant in Oman
SMPO/MPG plant in China
LNG plant Train 3 & 4 for Ras Laffan Liquefid Natural Gas (2) in Qatar
LNG plant Train 4 & 5 of Qatar Liquefieds Gas Company Limited (II) in Qatar (*)
Sakhalin II LNG project in Russia (*)<Domestic>
Mizushima LNG terminal
Synthesizing plant for clinical trial for Eisai
Ethylene cracker for Mitsubishi Chemical Engineering and Mitsubishi Chemical
LPG storage terminals in Kamisu, Fukushima and Namikata
Low grade heat generation system for Fuji Oil Co., Ltd.
Mixed xylene plant for Seibu Oil
Lube oil/grease mixing and filling plant for Nippon Petroleum Refining (*)

Earnings benefited from the growth in Revenue and a 0.4 point improvement in the gross margin on these contracts.
As a result, gross profit on completed Revenue increased 54.7% to 30,552 million yen. Furthermore, operating
income was up 87.1% to 20,729 million yen as selling, general and administrative expenses declined by 0.8 point
as a percentage of sales. Ordinary income rose 99.9% to 23,161 million yen due in part to growth in interest
income in conjunction with an increase in th
resulting from a change in the retirement benefit system, a gain on the reversal of the doubtful account reserve dueto the collection of long-term delinquent receivables, and other items, net income was 19,400 million yen, an
increase of 50.8%. Both ordinary income and net income were higher than the figures projected for the fiscal year.

Consolidated Results of Operations
Billions of Yen

2002
2003
2004
2005

141.5
166.3
206.8
267.6

Gross profit on
projects
completed
4.6
10.4
14.1
19.7

2006

390.8

30.5

Fiscal year ended
March 31

Revenue

OperatingincomeOrdinary income

Net income

(5.1)
1.5
5.8
11.0

(3.3)
2.3
6.3
11.5

0.1
1.9
6.6
12.8

20.7

23.1

19.4

Non-consolidated new contracts were much higher than in the prior fiscal year, rising 103.1% to 747,971 million
yen. New contracts in Japan increased 15.7% to 66,660 million yen and overseas new contracts increased 119.3%
to 681,310 million yen.
Non-consolidated revenue increased 52.6% to 341,599 million yen. This is the total of domestic contracts of 70,307
million yen, up 20.2%, and overseas contracts of 271,291 million yen, up 64.1%.
Due to the growth in revenue and an 0.8 percentage point improvement in the gross margin, the gross profit onrevenue increased 69.7% to 25,680 million yen. Selling, general and administrative expenses fell by 0.7 point as apercentage of sales, resulting in a 112.1% increase in operating income to 18,545 million yen. Ordinary income
increased 130.7% to 21,211 million yen, due in part to higher interest income resulting from growth in thesystem and a gain on the reversal of the doubtful account reserve due to the collection of long-term delinquent
receivables. After these and other items, there was a 47.5% increase in net income to 17,517 million yen. Bothnon-consolidated ordinary income and net income were higher than initial projections for the fiscal year.
Results by Business Segment
The following is a summary of operating results by business segments.
Natural Gas & Electric P o w er
Overseas, gas-producing nations and the major energy companies made substantial gas value chain investments
due to growing global demand for natural gas. Investments extended from gas fields to LNG plants, LNG
increasingly on LNG im
growing demand for natural gas. The U.K. has become a net importer of natural gas because of declining output in
the North Sea. In Asia, India has joined the ranks of LNG importers and China is expected to begin importing LNG
sooner than had been expected. Due to the growth in LNG demand, there are a large number of LNG plants underwestern Africa.

8

companies are also adding facilities to benefit from the removal of boundaries that separated the electricity and gas
utility industries. In addition, utilities have a growing interest in making investments in new projects.
Natural gas & electric power consolidated new contracts increased 126.5% to 692,056 million yen and revenue
increased 75.1% to 284,505 million yen.
P etroleum , Petrochemicals and Gas Chemicals
In the petroleum sector, Japanese oil companies made many large investments to upgrade refineries in order tobecome more competitive. Activities included the expansion of petrochemical facilities to target opportunities in Asia,
investments targeting the growing price gap between heavy and light grades of oil, and large-scale energy
conservation projects.
In the petrochemical sector, Japanese petrochemical companies expanded activities in China and other Asian
countries and made joint investments with petroleum companies involving the petrochemicals business.
Consolidated new contracts increased 11.7% to 73,843 million yen and revenue decreased 14.0% to 61,686 million
yen.
General Chemicals & I ndustrial M achinery
In the general chemicals sector, the realignment of the Japanese pharmaceuticals industry due to mergers as wellas the rapid increase in activities in Japan of foreign pharmaceuticals companies continued to fuel capital
expenditures.
In the industrial machinery sector, there were substantial capital expenditures in Japan for facilities involving
electronic materials and functional films. Chiyoda received orders for upgrades and improvements at existing plants
and for development projects.
Consolidated new contracts decreased 8.8% to 26,474 million yen and revenue increased 46.4% to 31,900 million yen.
Environment & Others
In the environmental sector, Chiyoda continued to conduct sales activities for the CT-121 flue gas desulfurization
technology that was developed by the Company as a means to meet increasingly strict global environmental
restrictions involving air pollution. This technology was licensed to Southern Company Services for use at three fluegas desulfurization units at coal-fired power plants. In addition, this technology was licensed to Black and Veatch for
use at 10 flue gas desulfurization units at American Electric Power and at one unit at Alabama Electric Cooperative.
Revenue from these licenses made a contribution to sales in the past fiscal year.
Consolidated new contracts increased 10.8% to 7,134 million yen and revenue increased 6.9% to 8,061 million yen.

9

2. Financial Condition
A ssets
Current assets increased 94,611 million yen due mainly to growth in jointly controlled assets of joint ventures as
the number of large-scale projects conducted as joint ventures. In addition, there was a 2,216 million yen increasein fixed assets, mainly due to investments in IT-related software and equipment and to the acquisition of
investment securities. The result was a 96,827 million yen increase in total assets.
Liab ilities
There was a 78,215 million yen increase in liabilities. The major components were a 57,594 million yen increase inadvance receipts on revenues and a 11,487 million yen increase in trade payables on revenues.

income. However, the equity ratio declined 0.4 point to 19.8% because of the 96,827 million yen increase in assets
resulting from the growth in jointly controlled assets of joint ventures.
Billions of Yen
FY ended
March 31
Current A ssets
Cash and time
deposits
Trade receivableand costs ofrevenues inprocess
Jointly controlled
assets of joint
ventureOther current
assetsFixed A ssets

2006

2005

Change

47.0

42.3

4.6

64.8

62.6

2.2

131.3

49.9

81.3

13.3

7.0

6.3

Property, plantand equipment
Intangible fixed
assetsInvestments andother assets
Total A ssets

7.0

6.7

0.3

3.1

2.8

0.3

12.8

11.2

1.5

279.7

182.8

96.8

2006

2005

Change0.0

10.1(10.0)

Trade payable andadvance receipts
on revenues

187.8

118.7

69.0

Other current
liabilities
Non-current
Liab ilities
Long-term debt

17.2

10.8

6.3

10.1

0.2

9.9

Other long-term
liabilities (*)
Shareholders
EquityLiab ilities andShareholders
Equity

8.8

6.0

2.8

55.5

36.8

18.6

279.7

182.8

96.8

Current liabilities
Short-term loans* Includes minority interests

2) Cash Flow s
Operating activities
Net cash provided by operating activities was 5,237 million yen. Although there was an 81,382 million yen increasein joint venture assets due to an increase in large-scale projects conducted as joint ventures, cash was provided byincome before income taxes of 21,906 million yen and depreciation and amortization of 1,468 million yen.
Furthermore, changes in working capital (net changes in trade receivable, costs of revenues in process, trade
payable and advance receipts onrevenues) provided cash totaling 66,596 million yen.
I nvesting activities
Net cash provided by investing activities was 1,051 million yen. Purchases of plant and equipment, including ITrelated software, totaled 1,854 million yen. This was offset by proceeds of 3,340 million yen from the collection of
long-term loans.
Financing activities
Net cash used in financing activities was 1,338 million yen due to the payment of dividends and other items.
The net result of the above items was a net increase of 5,284 million yen in cash and cash equivalents to 46,878
million yen as of March 31, 2006.

10

Change in Financial (Consolidated)
Billions of Yen
Fiscal year ended March 31

2002

2003

2004

2005

2006

Total Assets

129.3

120.2

142.8

182.8

279.7

Total Liabilities (*)

114.2

103.6

120.0

146.0

224.2

Shareholders Equity

15.1

16.6

22.7

36.8

55.5

Net CashOperating

10.4

6.9

15.5

0.4

5.2

provided by

Activities(used in):Investing

(0.2)

(0.8)

(1.2)

(1.0)

1.0

(5.8)

(9.5)

(8.2)

1.1

(1.3)

38.6

34.9

40.9

41.5

46.8

Activities
Financing
Activities
Balance of Cash and Cash
Equivalents* Includes minority interests.

Cash Flow I ndicesFiscal year ended March 31

2002

2003

2004

2005

Shareholders Equity ratio

11.7%

13.9%

15.9%

20.2%

19.8%

Years for Debt Redemption

2.7 year

2.7 year

0.7 year

21.3 year

2.0 year17.5 times

11.7 times

42.4 times

1.6 times

17.3 times

Interest Coverage Ratio

2006

3. Outlook for the Y ear Ending March 31, 2006
In the overseas industrial plant market, growth is continuing on a global scale in gas-related investments by gasproducing nations and the energy majors due to rising worldwide demand for natural gas. These investments
include gas development and other upstream projects. Chiyoda will continue to target new contracts in market
sectors where growth is expected to continue, such as the markets for LNG, gas chemical and petrochemical plants.
In Japan, Chiyoda will aggressively target opportunities for orders associated with projected capital expenditures byoil companies aimed at increasing production of petrochemicals and at making refineries more competitive. In thepharmaceutical sector, Chiyoda is focusing on developing projects and capturing orders associated with facilities forthe production of many types of new drugs and intermediates in small lots. In the industrial machinery sector,
Chiyoda foresees continuing strength in capital expenditures associated with electronic materials used in cell phones
and liquid crystal displays. Chiyoda will be increasing efforts to capture orders in this sector.
In the U.S. and Europe, there is growing demand for flue gas desulfurization facilities at coal-fired power plants.
Chiyoda plans to offer partners in these two regions licenses to utilize its CT-121 desulfurization technology.
Chiyoda is continuing to conduct sales activities for this technology.
Based on this outlook, and assuming an exchange rate of 110 yen to the U.S. dollar in the fiscal year ending on March
31, 2007, Chiyoda is forecasting consolidated new contracts of 320,000 million yen, revenue of 420,000 million yen,ordinary income of 28,000 million yen and net income of 16,500 million yen. On a non-consolidated basis, Chiyoda isforecasting new contracts of 280,000 million yen, revenue of 370,000 million yen, ordinary income of 25,000 million
yen and net income of 15,000 million yen. The projected year-end dividend is 14 yen per share.

Outlook for FY 2006 Business Results
Billions of yen
Consolidated
FY to March 31
New contracts
Completed projects
Ordinary income
Net income

2007
320.0
420.0
28.0
16.5

2006
804.2
390.8
23.1
19.4

Non-consolidated
Change(%)(60.2)
7.5
20.9(14.9)

2006
280.0
370.0
25.0
15.0

2006
747.9
341.5
21.2
17.5

Change(%)(62.6)
8.3
17.9(14.4)

11

4. Risk Factors
Presented below is a list of major items, including significant items concerning the Group s financial condition,
operating results and cash flows, that may have a material effect on investment decisions
responses to these items. The Group is aware of these risks and is taking the greatest possible precautions toprevent their occurrence. The Group is also working on quickly responding in the event that a problem occurs tominimize its impact.
Risk factors listed below that involve future events represent items that the Company currently regards asimportant with regard to risk management.
1) Foreign exchange rate volatility
At overseas construction projects, although most payments received are denominated in yen, foreign currencies areused for most purchases of equipment and materials and for payments to subcontractors. As a result, an
unexpected change in foreign exchange rates can have an effect on earnings. The Company takes all actions
possible to hedge foreign exchange volatility risk by receiving payments in several foreign currencies to matchprojected expenses, using foreign exchange forward agreements and taking other steps.
2) Higher cost of equipment and m aterials and lim ited supplies of bas ic materials and construction
w ork ers
At plant construction projects, there is a gap between the time estimates are prepared and the time materials,
equipment and subcontracting work are ordered. As a result, there are cases when, following the submission of abid for a project, there is an increase in the cost of labor, equipment or materials that exceeds the outlook at thetime the estimates were prepared. Moreover, tight supplies of metals such as copper, nickel and aluminum maycause delays in the delivery of equipment and materials and in the installation of equipment. There may also bedelays in progress at construction projects due to a shortage of construction workers. Any of these events may
have an impact on earnings.
Chiyoda is doing everything possible to avoid and minimize exposure to these risks. The Company is studying thediversification of suppliers, such as by making purchases in all areas of the world, and the placement of large orders.
Other measures include ordering equipment, materials and subcontracting work as soon as possible andestablishing collaborate agreements with important construction companies.
3) Terro rism, hostilities in neighbo ring countries, strik es, anarchism and natural disasters
There may be an impact on earnings in the event that global terrorism or similar events directly damage
construction sites or Group offices in Japan and overseas, endanger construction site workers, force the suspensionof construction work or cause other problems resulting in expenses that cannot be passed on to customers. The
Group has a crisis management system that permits a quick initial response, including collaboration with customers
and other external parties, if a crisis occurs.
4) A ccidents at p lants
There is a possibility of a serious accident, such as an explosion or fire, due to some cause at a plant that is underconstruction or that has been constructed by the Group. In the event that the Group is judged to be responsible forthe cause of the accident, there could be an impact on earnings.
To prevent the occurrence of these accidents, the Group has established the best possible quality management,
construction safety management and other risk management systems. In addition, the Group purchases suitable
insurance coverage, includes in contractual provisions that appropriately divides responsibility for such damages
with customers, and takes other actions to avoid and minimize exposure to these risks.
P recautions regarding forw ard-looking statements
Forecasts for operating results contained in these materials are based on various assumptions concerning future
events. Actual results may differ significantly from these forecasts due to a wide range of factors. Investors are
therefore urged to refrain from reaching decisions based solely on these forecasts.

12

F in a n cia l Sta te m e n ts
1. Consolidated Balance Sheets
As of Mar. 31, 2006%
A ssets
Current A ssets
Cash and time deposits ..........................
47,033
Notes and accounts receivable-trade........
46,976
Costs of revenues in process ................... ...................
17,923
Deferred tax assets................................
1,750
Jointly controlled asset of joint venture ....
131,336
Other ...................................................
11,769Allowance for doubtful accounts ..............
(167)
Total Current A ssets ...........................
256,623
Fixed A ssets
Property, plant and equipment
Buildings and structures ...................
Accumulated depreciation.................
Book value of build ings andstructures
Machinery and equipment ................
Accumulated depreciation................ .
Book value of m achinery andequipment
Tools, furniture and fixtures..............
Accumulated depreciation.................
Book value of tools, furniture andfixtures
Land ..............................................
Construction in progress ..................
Total p roperty, p lant an d equipment ..
I ntangib le fixed assets .......................

91.7

Millions of Y en
As of Mar. 31, 2005%

42,38437,64924,977
3,803
49,953
3,749(506)
162,011

88.6

Difference

4,649
9,327
(7,054)(2,052)
81,382
8,020
338
94,611

6,453
3,440

6,302
3,247

3,013

3,054

817
279

685
313

537

371

5,248
3,567

5,352
3,954

1,681

1,398

282

1,852
―
7,085

2.6

1,955
3
6,783

3.7

(103)
(3)
301

3,168

1.1

2,844

1.6

324

(40)

166

Investments and other assets
Investment securities ......................
Long-term loans..............................
Long-term accounts receivable..........
Long-term receivables .....................
Deferred tax assets .........................
Other investments ...........................
Allowance for doubtful accounts ........
Allowance for capital loss on
investments ....................................
Total in vestments an d other assets ....

12,844

4.6

11,254

6.1

1,590

Total Fixed A ssets ..............................

23,097

8.3

20,881

11.4

2,216

Total A ssets ........................................

279,721100.0

182,893

100.0

96,827

5,701
533
662
―
4,157
3,522
(1,469)

4,322
643
3,711
3,003
112
2,208
(2,485)

(263)

1,378
(110)
(3,049)(3,003)
4,045
1,314
1,015

(263)

13

As of Mar. 31, 2006%
Liab ilities
Current Liabilities
Notes and accounts payable-trade ...................... 85,901
Short-term loans .............................................
46
Income taxes payable........................................
3,989
Deferred tax liabilities................................
1
Advance receipts on revenues ............................ 101,979
Indemnity allowance for completed
1,870
construction ..........................................
Allowance for contingent loss
146
Accrued bonuses..............................................
3,856
Other ............................................................
7,400
Total Current Liabilities ................................ 205,192

Millions of Y en
As of Mar. 31, 2005%

Difference

74,414
10,101
664―
44,384

11,487(10,055)
3,325
1
57,594

73.4

759
―
2,814
6,642
139,781

76.4

1,111
146
1,041
757
65,411

Non-Current Liab ilities
Long-term debt ............................................... 10,168
Deferred tax liabilities.......................................
0Liability for retirement benefits ..........................
7,962
Liability for retirement benefit to directors ..........
430
Other liabilities ................................................
136
Total Non-Current L iab ilities ......................... 18,698

6.7

214
1
5,167
425
85
5,894

3.2

9,953
(0)
2,795
5
50
12,803

Total L iabilities ............................................. 223,890

80.1

145,675

79.6

78,215

0.1

345

0.2

(22)

4.6
2.4
13.2

12,721
6,506
18,622

6.9
3.6
10.2

179
177
18,254

0.0
(0.1)
(0.3)
19.8

31
(759)
(250)
36,873

0.0
(0.4)
(0.1)
20.2

13
435
(425)
18,635100.0

182,893

100.0

96,827

Minority I nterests .........................................

322

Shareholders Equity
Common stock................................................. 12,901
Additional paid-in capital................................
6,684
Retained earnings ............................................ 36,877
Net unrealized loss on available-for-sale
44
securities ........................................................
Foreign currency translation adjustments............
(323)
Treasury stock .................................................
(676)
Total Shareholders Equity ............................ 55,508
Liab ilities, Minority I nterests an d................................

279,721

14

2. Consolidated Statements of I ncome
Apr. 1, 2005
Mar. 31, 2006%
Revenues ...................................................... 390,875
100.0
Cost of Revenues .......................................... 360,322
92.2
Gross profit ..................................................... 30,552
7.8
Selling, General and
9,823
2.5
A dministrative Expenses ...............................
Operating income............................................. 20,729
5.3

Millions of Y en
Apr. 1, 2004
March 31, 2005%
267,655
100.0
247,905
92.6
19,7497.4
8,671
11,077

Difference
123,220
112,416
10,803

3.3
4.1

1,151
9,651

Other I ncome
Interest ....................................................
Dividend income ........................................
Equity in earnings of associatedcompanies ................................................
Rent income............................................
Other ......................................................
Total Other I n come .......................................

2,638
29

723
19

193
269
151
3,280

0.8

152
247
141
1,284

0.5

1,996

Other Ex penses
Interest expense ........................................
Cost of rent income................................
Foreign exchange loss ................................
Other ........................................................
Total Other Ex penses ................................

302
148
174
223
848

0.2

304
149
102
218
775

0.3

73

Ordinary income ..............................................

23,161

5.9

11,587

4.3

11,5740.5

282

Extrao rdinary Gain
Reversal of allowance for doubtful
accounts...................................................
Reversal of allowance for contingency
loss..........................................................
Other .......................................................
Total Extraordinary Gain ...............................
Extrao rdinary Loss
Loss on termination of certain
retirement benefit plans ...................
Settlement of construction contract....
Impairment loss ..............................
Loss on sale of fixed assets ...............
Loss on removal of property, plant andequipment ...................................
Other .............................................
Total Extraordinary Loss .....................

1,367

1,073

―
223
1,590

200
34
1,308

0.4

1,995
469
127
20

―
233
390

―

98

233
2,845

0.7

124
846

0.3

1,999

Profit before income
taxes and minority interests ....................

21,906

5.6

12,0494.5

9,856

Income taxes current ............................
Income taxes deferred............................
Total Tax
Minority interests in net income ...............
Net in come ..........................................

4,478(2,011)
2,467
39
19,400

0.6
(0.0)
5.0

931
(1,754)(823)
912,863

(0.3)
(0.0)
4.8

3,290
29
6,536

15

3. Consolidated Statements of Retained Earnings
Apr. 1, 2005
Mar. 31, 2006
A dditional P aid-in Capital
A dditional P aid-in Capital at Beginning of P eriod ... ......................
6,506
I ncrease in cap ital surp lus
Proceeds from new shares issued for the exercise ofstock options ............................... ................... ...................... 177
A dditional P aid-in Capital at End of P eriod ............. ......................
6,684

Millions of Y en
Apr. 1, 2004
Mar. 31, 2005

Difference

5,818

688

688
6,506

(510)
177

Retained Earnings
Retained Earnings at Beg inning of P eriod ............... ......................
18,622
I ncrease in Retained Earn ings
From net income .............................. ................... ......................
19,400Total I ncrease in Retained Earnin gs ... ................... ......................
19,4005,800

12,821

12,863
12,863

6,536
6,536

Decrease in Retained Earnings
Dividend ......................................... ...................
1,145
From consolidated subsidiaries........... ................... ...................... ―Total Decrease in Retained Earnings .. ................... ......................
1,145
Retained Earnings at End of P erio d ..... ................... ......................
36,877―41
41
18,622

1,145
(41)
1,103
18,25416

4. Consolidated Statements of Cash Flow

Cash Flo w f rom Operating A ctivities
Profit (loss) before income
taxes and minority interests .............................................
Depreciation and amortization ..........................................
Amortization of goodwill ...................................................
Impairment loss ..............................................................
Increase (decrease) in allowance for doubtful accounts ........
Interest and dividend income ...........................................
Interest expense .............................................................
Foreign exchange losses (gains)........................................
Equity in earnings of associated companies ........................
Loss on sales and disposal of property,
plant and equipment........................................................
Loss on termination of certain retirement benefit plans.........
Settlement of construction contract..
Decrease (increase) in trade notes and accounts receivable..
Decrease (incrase) in costs of revenues in process ..............
Increase (decrease) in trade notes and accounts payable .....
Increase (decrease) in advance receipts on revenues...........
Increase (decrease) in accrued bonuses .............................
Increase (decrease) in retirement benefits .........................
Indemnity allowance for completed contracts......................
Increase (decrease) in allowance for contingency loss..........
Increase (decrease) in allowance for investment loss ...........
Decrease (increase) in jonitly controlled assets of joint
ventures ........................................................................
Increase (decrease) in consumption taxes payable ..............
Increase (decrease) in deposits received ............................
Other.............................................................................
Subtotal ...............................................
Interest and dividend income............................................
Interest paid...................................................................
Income taxes paid ...........................................................
Net Cash P ro vid ed byOperating A ctivities ............................................................

Apr. 1, 2005
Mar. 31, 2006

Millions of Y en
Apr. 1, 2004
Mar. 31, 2005

21,906
1,468
68
127(1,354)(2,667)
302
(236)
(193)

12,049
1,284
―
233
(993)
(742)
304
(66)
(152)

9,856
184
68
(105)
(360)
(1,924)
(2)
(170)
(40)

20
1,995
469
(9,100)
7,095
11,12257,479
1,039
798
1,103

488
―
―
(13,064)(6,059)21,568
7,322
1,265
1,038
(319)
(200)

(468)
1,995
469
3,963
13,154(10,446)
50,157
(225)
(239)
1,423
200
146

(81,382)
1,031(1,752)(3,322)
6,163
321
(303)
(944)

(21,540)183(2,626)
469
442
754
(304)
(408)

(59,842)847
874(3,791)(5,721)
(433)
1
(535)

5,237

484

4,753

146

Difference174. Consolidated Statements of Cash Flow (Continued)
Apr. 1, 2005
Mar. 31, 2006

Millions of Y en
Apr. 1, 2004
Mar. 31, 2005

―

(622)

622

703
(618)
139
(1,236)(1,272)
148
(121)
1
(33)
3,340
0
1,051

542
(854)
65
(1,037)
(33)
222
―
39
(20)
689
1
(1,006)

161
235
73
(198)
(1,239)
(74)
(121)
(38)
(13)
2,651
(1)
2,058

Cash Flo w f rom Financing A ctivities
Proceeds from long-term debt
Repayments of long-term debt .........................................
Proceeds from issuance of new stock .................................
Cash dividends paid.........................................................
Cash dividents paid to minority shareholders ......................
Other ............................................................................

10,000(10,101)357(1,139)
(36)

―
(101)
1,382
―
―

10,000(10,000)(1,024)(1,139)
(36)

(417)

(110)

(306)

Net Cash Used in Finan cing A ctivities .

(1,338)1,169(2,507)

333

100

232

5,284
41,594

747
40,902

4,536
691

―
46,878(56)
41,59456
5,284

Cash Flo w f rom I nvesting A ctivities
Payment for time deposits ................................................
Proceeds from refundsof time deposits with maturities ........................................
Purchase of property, plant and equipment.........................
Proceeds from sale of property, plant and equipment...........
Purchase of intangible fixed assets ....................................
Payments for purchase of investment securities ..................
Proceeds from sales of investment securities ......................
Payment for purchase of consolidated subsidiary stock
Net decrease in short-term loans.......................................
Long-term loans..............................................................
Proceeds from collections of long-term loans ......................
Other.............................................................................
Net Cash Used in I nvestin g A ctivities .

Foreign Curren cy Translation A d justments on Cashand Cash Equivalents ......................................................
Net I ncrease (Decrease) in Cash and Cash Equ ivalents ..
Cash and Cash Equivalents at Beginning of P eriod .........
Decrease in Cash and Cash Equivalents Elimination From
Consolidation .................................................................
Cash and Cash Equivalents at End of P eriod ...................

Difference18

<Appendix to Consolidated Financial Statements>

Changes in Accounting P rinciples
Current Fis cal Y ear ( From A pril 1, 2005 to
March 31, 2006)
Balance sheets
As reported in Item 5 of the Notes to Consolidated
Financial Statements (Notes to Balance Sheets),previous periods, has been reclassified and included

P revious Fiscal Y ear ( From A p ril 1, 2004 to
March 31, 2005)

on the total
assets as of the end of the current consolidated
fiscal year has become insignificant following the-termcurrent consolidated fiscal year were \931 million.

19

Notes to consolidated financial statements
SECURI TI ES
Previous fiscal year
1. Information regarding marketable securities classified as Other Securities
31, 2005)
Security
Securities whose carrying value
exceeds their acquisition cost
Securities whose acquisition costexceeds their carrying value
Total

Acquisition cost

Carrying value

57

111

Millions of yen
Unrealized
gain/loss
53

―

―

―

57

111

53

Equitysecurities
Equitysecurities

2. Sales of securities classified as Other Securities (April 1, 2004
Sales amountMarch 31, 2005)
Millions of yen
Aggregate loss
0

Aggregate gain
70

3.

(As of March

20

Other Securities without market value mainly consisted of the following. Their carrying
values are summarized below. (As of March 31, 2005)

Other Securities
Millions of yen
1,482
15

Equity securities unlisted (excluding OTC stock)
Subscription certificates

Current fiscal year
1. Information regarding marketable securities classified as Other Securities (As of March
31, 2006)
Security
Securities whose carrying value
exceeds their acquisition cost
Securities whose acquisition costexceeds their carrying value
Total

Acquisition cost

Carrying value

558

672

Millions of yen
Unrealized
gain/loss
114

649

622

(26)

1,207

1,295

87

Equitysecurities
Equitysecurities

2. Sales of securities classified as Other Securities (April 1, 2005
Sales amount

Aggregate gain
20

3.

13

March 31, 2006)
Millions of yen
Aggregate loss―

Other Securities without market value mainly consisted of the following. Their carrying
values are summarized below. (As of March 31, 2006)

Other Securities
Equity securities unlisted (excluding OTC stock)
Subscription certificatesMillions of yen
1,500
2

20

Allow ance for R etirement Benefits
1. Accounting for retirement benefits

Current fiscal year (April 1, 2005 March 31, 2006)
Employees of the Company and certain of its consolidated domestic subsidiaries had defined-benefit pension plans;that is, tax-qualified pension plans and lump-sum payment plans. Effective April 1, 2006, the Company plans toreform its retirement benefit system, adopting a defined-benefit pension plan (cash balance type pension plan) anda defined-contribution pension plan. In certain cases, the Company offers a special severance package at the timeof retirement.
Certain overseas consolidated subsidiaries have defined-benefit pension plans.
Previous fiscal year (April 1, 2004 March 31, 2005)
The Company and its consolidated domestic subsidiaries provide qualified pension plans and lump sum severance
payment plans for their defined benefit pension plans. In addition, the Company sometimes provides extra severance
pay. Part of overseas subsidiaries also provides defined benefit plans. The company has been providing lump sum
severance payment plans and qualified pension plans from 1980.

2. Retirement benefit obligations
Millions of Y en
As of Mar. 31, 2006
As of Mar. 31, 2005
Projected benefit obligations
Fair value of plan assets
Obligation for unreserved retirement
benefitUnrecognized transitional obligation
Unrecognized actuarial loss
Unrecognized prior-service cost
(Reduction of liability)
Retirement benefit obligation (net)carried on the balance sheet
Prepaid pension expenses
Loss on transition to defined-contribution
pension plan
Reserve for retirement benefits (*1)

(31,865)
17,718(33,587)
15,785(14,147)(17,802)

7,275
2,644

8,082
4,552

(1,733)―(5,961)(5,176)

6―(1,995)―(7,962)(5,167)

Note: The Group uses heuristic method for consolidating retirement obligations of its subsidiaries.

3. Retirement benefit costs
Millions of Y en
Apr. 1, 2005
Mar. 31, 2006
Service cost
Interest cost
Expected return on plan assets
Amortization of transitional obligation
Recognized actuarial loss
Prepaid pension expenses
Net perio dic benef it cost
Loss on transition to d efinedcontribution pension plan
Total

Apr. 1, 2004
Mar. 31, 2005
813
464
(217)
808
645
(29)
2,485

930
472
(214)
808
664
―
2,661

1,995

―

4,480

2,661

Note: According to heuristic method of consolidation of subsidiaries, subsidiary retirement benefit costs are recorded under
the service cost.

21

4. Actuarial assumptions used to determine costs and benefit obligations
for principal pension plans
Allocation of projected benefit obligation
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss

Amortization period of transitional
obligation

Apr. 1, 2005
Mar. 31, 2006
Equal amount over eachperiodApr. 1, 2004
Mar. 31, 2005
Equal amount over eachperiod1.5%
1.5%

10 years(The retirement benefit
obligation has been allocatedto each period by the straightline method over a period of
10 years, which falls within
the estimated remaining yearsof service of the eligible
employees. The retirement
benefit obligation is charged
to income as accrued.)
15 years

1.5%
1.5%
―

15 years

22

Tax Effect Accounting
1. P rinciple cause of deferred tax assets and liabilities
Millions of Y en
As of Mar. 31, 2006
As of Mar. 31, 2005
Deferred tax assets
Tax loss carry forward ........................................... ..
Cost of revenues .....................................................
Retirement benefits .................................................
Accrued bonuses .....................................................
Loss on valuation of fixed assets ...............................
Allowance for doubtful accounts ................................
Loss on valuation of costs of revenues in process ........
Loss on revenues due to application of progresspercentage method..................................................
Other .....................................................................
Sub-total deferred tax assets ...................................... ..
Valuation allowance ......................................................
Total deferred tax assets ...............................................

―
3,973
3,225
1,552
707
510
―

3,483
3,625
2,010
―
778
825
587

―
2,443
12,413(828)
11,58555
2,339
13,706(8,608)
5,098

Deferred tax liabilities
Equity in profit/loss of joint ventures ... ................... .....................
Unrealized gains on other securities ...........................
Other .....................................................................
Total deferred tax liabilities ............................................

(5,629)(42)(5)(5,678)(1,161)(21)(0)(1,183)Net deferred tax assets .................................................

5,906

3,914

Note: Net deferred tax assets for the current and the previous fiscal year are included in the consolidated balance sheets asfollows:

Current assets Deferred tax assets ...............................
Fixed assets Deferred tax assets ...................................
Current assets―Deferred tax assets................................
Non-current liabilities Deferred tax liabilities..................

Millions of Y en
As of Mar. 31, 2006
As of Mar. 31, 2005
1,750
3,803
4,157
112
―
(1)
(0)
(1)

2. P rinciple items w hich caused differences betw een statutory effective tax
rate and income tax rate charged after adoption of deferred tax
accounting

Normal effective statutory tax rate..................................
Adjustments
Non-deductible entertainment and other expenses ......
Non-taxable dividend and other income......................
Parity adjustment for inhabitance taxes......................
Tax credit ...............................................................
Foreign taxes .........................................................
Valuation allowance .................................................
Equity in earnings of affiliated companies ...................
Net loss of consolidated subsidiaries ..........................
Unrealized income ...................................................
Other .....................................................................
Income tax rate charged after adoption of deferred
tax accounting .....................................................

P ercent %As of Mar. 31, 2006
As of Mar. 31, 2005
%
%
40.6
40.6
0.8
(0.0)
0.2
(1.1)
―
(30.4)
(0.4)
(0.8)
(0.1)
2.5

2.5
(0.0)
1.2
―
2.0
(53.4)
(0.5)
(0.4)
(0.0)
1.2

11.3

(6.8)

23

Se g m e n t I n f o r m a t i o n
1. I ndustry Segments
current fiscal year was from April 1, 2005 to March 31, 2006. The previous fiscal year was from April 1,
2004 to March 31, 2005. The main business of the Chiyoda Group is engineering that focuses on the planning, design,
construction, and operations assistance of public- and private-sector facilities, as well as facilities for pollution
prevention and environmental preservation and enhancement. In non-engineering businesses, there are no segmentsthat account for 10% or more in terms of sales, operating income or assets, and as such these segments have been
omitted.

2. Geographic Segments Elimination Eliminations s
Current fiscal year (From A pril 1, 2005 to March 31, 2006)
Millions of Y en
Japan

Asia

Revenues
378,694
12,180Outside customers ................................
992
918
Inter-segment ................................
13,099Total................................379,686
357,825
14,149Operating expenses................................
Operating Income
21,860( 1,050)(Loss)................................................................
272,423
7,662
AssetsNorth
America

Others

−

−

Total

Eliminations(Corporate)

Consolidated
390,875

390,875

−

35

1,946

(1,946)―35

392,821(1,946)

390,875(1,882)

370,14536

16372,028

( 0)

( 16)

20,792(63)

20,729280,887(1,165)

279,721654

146(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries included in regions other than Japan:
Asia: Indonesia, Singapore, Philippines, Myanmar, Malaysia and Thailand.
North America: U.S.A.
Other regions: Nigeria.
Effective the current fiscal year, Chiyoda Deustchland GMBH (Germany), a consolidated subsidiary in prior periods,
is excluded from the consolidation due to liquidation in July 2003. Effective, the current fiscal year, Chiyoda
International Limited (Britain), a consolidated subsidiary in prior periods, is excluded from the consolidation becauseof reduced materiality of impact in the context of the consolidated financial statements. Effective the current fiscal
year, geographical segment information excludes Europe since there were no sales in that geographical segment..
(3)
Within asset Elimination (Corporate) account, corporate assets accounted for 3,339 million yen, consisting mainly of
long-term investments (investment securities).
(4)
Changes in Accounting Principles:
1) As stated in Section 4 (d), Recognition of Revenues In Process (Changes in accounting policy), the Company andits three domestic consolidated subsidiaries have changed the policy for the recognition of revenues in process.
Effective the current fiscal year, the Company and its three domestic consolidated subsidiaries recognize revenues
on new contracts greater than 0.1 billion yen and having construction duration of more than 12 months by thepercentage-of-completion method.
The effect of the adoption of the new accounting standard and the accounting standard was to increase revenue in
the Japan segment from external customers by 4,318 million yen and operating income by 300 million yen.
The adoption of the new accounting policy has no effect on other segments.
2) As stated in the section on Changes in the(Accounting
for Impairment of Property, Plant and Equipment), effective the current consolidated fiscal year, the Company
adopted the new standards for accounting for impairment of property, plant and equipment (Opinion on
Impairment of Fixed Assets.
The effect of the adoption of the new accounting standard and the accounting standard was to decrease assets in
the Japan segment by 233 million yen.
The adoption of the new accounting policy has no effect on other segments.
3) With the implementation of enterprise taxes, which are based on the size of the enterprise, the Company has
adopted the new accounting standard. Accordingly, effective from the current consolidated fiscal year, the amountpresented as a component of selling, general and administrative expenses.
The effect of this change was to increase selling, general and administrative expenses in the Japan segment by
163 million yen and decrease operating income, ordinary income and income before income taxes by 163 million
yen each.
The adoption of the new accounting policy has no effect on other segments.

24

P revious fiscal year (From A pril 1, 2004 to M arch 31, 2005)
Millions of Y en
Japan

Asia

Revenues
257,380
10,274
Outside customers ................................
3
1,539Inter-segment ................................
11,814
Total................................257,384
246,107
11,995
Operating expenses................................
Operating Income
11,276( 181)(Loss)
174,447
7,607
AssetsNorth
America

OthersTotal
267,655
1,574

31
31

269,229

Eliminations(Corporate)

Consolidated
267,655(1,574)31

3258,138(1,574)(1,561)

267,655
256,577

( 0)

( 3)

11,091(13)

11,077565

122

182,742150

182,893(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries included in regions other than Japan:
Asia: Indonesia, Singapore, Philippines, Myanmar, Malaysia and Thailand.
Europe: U.K. and Germany
North America: U.S.A.
Other regions: Nigeria.
(3)Within asset Elimination (Corporate) account, corporate assets accounted for 3,015 million yen, consisting mainly of
long-term investments (investment securities).
(4)
Changes in Accounting Principles:
Starting from the current fiscal year, the Company has changed the fixed number of years for the processing ofoperating expenses for actuarial loss to 10 years, from the previous 12 years. This change will have only a slighteffect on each segment.

3. Overseas Sales
Current fiscal year (A pril 1, 2005 to M arch 31, 2006)
Asia
Overseas sales .............................................
28,083
Consolidated sales ........................................
Ratio of overseas to consolidated sales (%) ..................
10.5

Millions of Y en
Russia/MiddleOther
CentralEast
RegionsAsia
96,13249,817
4,010
35.9

18.6

1.5

Total
178,043
267,655
66.5(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries and areas included in each region:
Asia: China, Indonesia and Thailand.
Middle East: Qatar, Oman, Saudi Arabia, Iran and United Arab Emirates
Russia/Central Asia: Russia
Other regions: Venezuela(3)Overseas sales are those sales of the Company and its consolidated subsidiaries that take place in countries orregions other than Japan(4)
Reclassification of Geographical Segments
As stated in Section 4 (d), Recognition of Revenues In Process (Changes in accounting policy), the Company and its
three domestic consolidated subsidiaries have changed the policy for the recognition of revenues in process.
Effective the current fiscal year, the Company and its three domestic consolidated subsidiaries recognize revenues
on new contracts greater than 0.1 billion yen and having construction duration of more than 12 months by thepercentage-of-completion method.
The effect of this change was to increase revenue in the Asia segment by 190 million yen, in the Middle Eastsegment by 678 million yen and in other regions segment by 53 million yen, respectively, compared to amounts thatwould have been reported if the previous method had been used consistently.

25

P revious fiscal year (A pril 1, 2004 to M arch 31, 2005)
Asia
Overseas sales .............................................
28,083
Consolidated sales ........................................
Ratio of overseas to consolidated sales (%) ..................
10.5

Millions of Y en
Russia/MiddleOther
CentralEast
RegionsAsia
96,13249,817
4,010
35.9

18.6

1.5

Total
178,043
267,655
66.5(Notes)(1)
Geographic segmentation is according to geographic proximity(2)
Countries and areas included in each region:
Asia: China, Thailand and Indonesia
Middle East: Qatar, Saudi Arabia, Oman and Iran
Russia/Central Asia: Russia
Other regions: Venezuela(3)Overseas sales are those sales of the Company and its consolidated subsidiaries that take place in countries orregions other than Japan(4)
Reclassification of Geographical Segments
Effective the current fiscal year, the Russia and Central Asia region, included as a component of Other Regions inprior years, is reclassified and presented as a separate line item ( Russia and Central Asia since total sales in thisregion exceeded 10% of consolidated revenue.
Sales in the Russia and Central Asia region included in Other Regions totaled 685 million, which accounted for
0.4% of the overseas sales, in the previous consolidated fiscal year.

26

P r o d u c t i o n , O r d e r s a n d Sa l e s Si t u a t i o n
1. OrdersMillions of Y en
Apr. 1, 2005
Apr. 1, 2004
Mar. 31, 2006
Mar. 31, 2005
New contracts
Backlog
New contracts
Backlog
A mt
%
A mt
%
A mt
%
A mt
%
Business Segm ent
Engineering
LNG plant................................ 675,208+136.9%16,848Gas and power utilities ...........................
-18.0%
Gas chemicals................................ 515-96.3%
73,328Petroleum and+40.4%

petrochemicals ................................
19,990General chemicals ................................

+12.6%
6,483
Industrial machinery...............................
-42.5%
7,134
Environment and other ...........................
+10.8%
799,509
Total Engineering+96.4%

83.9
2.1
0.1
9.1
2.5
0.8
0.9
99.4

4,721
Other....................................................

0.6+14.6%
804,231100.0
Total....................................................
+95.5%

846,922[23,671]
32,070[1,066]2,606[82]
55,624[939]

88.2

19,477[-510]
1,738
[-1]
2,098
[-509]
960,538[ 24,737]

2.0

−
[−]
960,538[ 24,737]

3.3
0.3
5.8

0.2
0.2
100.0

−
100.0

285,055+76.1%
20,539-59.7%
13,884+206.7%52,227+16.0%

69.3

17,756+13.3%
11,270+350.2%6,439-1.8%
407,173+41.8%

4.3

4,119+15.6%
411,292+41.5%

5.0
3.4
12.7

2.7
1.6
99.0

1.0
100.0

378,270[3,455]68,433
[413]
9,961
[166]
35,090[-762]

72.4

24,295[-258]
2,858
[-9]
3,534
[-51]
522,444[ 2,953]

4.7

−
[−]
522,444[ 2,953]

13.1
1.9
6.7

0.5
0.7
100.0

−
100.0

Breakdow n of Domestic and Overseas Orders
Millions of Y en
Apr. 1, 2005
Apr. 1, 2004
Mar. 31, 2006
Mar. 31, 2005
New contracts
Backlog
New contracts
Backlog
A mt
%
A mt
%
A mt
%
A mt
%
Domestic................................112,720

14.0+25.9%
86.0
Overseas................................ 691,510+114.9%804,231100.0
Total....................................................
+95.5%

97,484[-998]
863,054[25,736]
960,538[24,737]

10.1
89.9
100.0

89,496+24.3%
321,796+47.2%
411,292+41.5%

21.8
78.2
100.0

91,092[-204]
431,352[3,157]522,444[2,953]

17.4
82.6
100.0

(Note)
Numbers in brackets [ ] under Backlog of orders indicate the total of increases or decreases accompanying foreign
currency translation adjustments related to foreign currency business, increases resulting from adjustments for new
contracts, and decreases resulting from contractual changes in orders received before the previous fiscal year.

27

2. Sales
Millions of Y en
Apr. 1, 2005
Apr. 1, 2004
Mar. 31, 2006
Mar. 31, 2005
A mt
%
A mt
%

Business Segm ent
Engineering
LNG plant................................................................ 230,227+107.7%
Gas and power utilities ....................................................
54,278+5.1%
Gas chemicals ................................................................
7,952-45.8%Petroleum and petrochemicals ................................
53,733-5.8%
General chemicals ...........................................................
24,298+129.9%Industrial machinery .......................................................
7,602-32.3%
Environment and other ....................................................
8,061
+6.9%
Total Engineering
386,153+46.5%
Other ................................................................
4,721+14.6%
Total................................................................
390,875+46.0%

58.9

110,844

41.4

13.9

51,66219.3

2.0

14,6785.5

13.8

57,018

21.3

6.2

10,5704.0

1.9

11,221

4.2

2.1

7,540

2.8

98.8

263,536

98.5

1.2

4,119

1.5

100.0

267,655

100.0

Breakdow n of Domestic and Overseas Sales
Millions of Y en
Apr. 1, 2005
Apr. 1, 2004
Mar. 31, 2006
Mar. 31, 2005
A mt
%
A mt
%
Domestic................................................................ 105,329
26.9
89,61233.5+17.5%
Overseas................................................................ 285,545
73.1
178,043
66.5+60.4%
Total ................................................................
390,875
100.0
267,655100.0+46.0%(Notes)(1)
Status of production is not listed, because it is difficult to define production results for the Chiyoda Group.
(2)
Sales results and percentages of total sales for main customers are shown below.

Millions of Y en
Apr. 1, 2005
Mar. 31, 2006
Customer
Qatar Liquefied Gas Company
Limited (II)Sakhalin Energy Investment Co.,Ltd.
Ras Laffan LNG Co., Ltd.
(3)

55,531

Apr. 1, 2004
Mar. 31, 2005%
Customer
18.6 Sakhalin Energy Investment Co.,Ltd.
14.2 Ras Laffan LNG Co., Ltd.

44,64611.4

A mt
72,562A mt
49,777%
18.6

28,092

10.5

Amounts contained in these tables do not include consumption tax.

28

(2)-1 Net Sales by Facility

LNG plant ..........................
Gas and power utilities ........
Gas chemicals ....................
Petroleum andpetrochemicals ...................
General chemicals ...............
Industrial machinery ...........
Environment and other........
Total ................................

Apr. 1, 2005
Mar. 31, 2006
A mt%

Millions of Y en
A pr. 1, 2004
Mar. 31, 2005
A mt%

229,654
48,023
7,342

67.2
14.1
2.1

110,844
42,96913,014

49.5
19.2
5.8

118,809
5,053(5,672)

27,92917,4646,644
4,540
341,599

8.2
5.1
2.0
1.3
100.0

36,098
7,055
9,064
4,762
223,809

16.1
3.2
4.1
2.1
100.0

(8,169)10,409(2,419)(221)
117,789

Changes
A mt

Breakdow n of Domestic and Overseas Net Sales

Domestic ...........................
Overseas ...........................
Total ................................

Apr. 1, 2005
Mar. 31, 2006
A mt%

Millions of Y en
A pr. 1, 2004
Mar. 31, 2005
A mt%

70,307271,291
341,599

58,507
165,302
223,809

20.6
79.4
100.0

26.1
73.9
100.0

Changes
A mt
11,800105,988
117,78929

(2)-2 Backlog of Contracts by Facility
Millions of Y en
Apr. 1, 2005
Apr. 1, 2004
Mar. 31, 2006
Mar. 31, 2005
New contracts
Backlog
New contracts
Backlog
A mt
%
A mt
%
A mt
%
A mt
%
Engineering
LNG plant................................ 673,282

90.0

11,129Gas and power utilities ...........................

1.5

Gas chemicals................................ 134

0.040,834
Petroleum andpetrochemicals ................................
12,916
General chemicals ................................

5.5

5,654
Industrial machinery...............................

0.8

4,021
Environment and other ...........................

0.5

1.7

747,971
100.0
Total....................................................

845,356[23,458]
27,024[1,030]2,571[63]
38,141[129]

90.9

285,055

77.4

2.9

15,8734.3

0.3

13,042

3.6

4.1

29,1107.9

14,005
[26]
1,655
[-]
1,487
[-426]
930,243[ 24,281]

1.5

11,5673.1

0.2

10,004

2.7

0.1

3,636

1.0

100.0

368,290100.0

378,270[3,455]62,888
[654]
9,716
[194]
25,107[-656]

75.7

18,528[-247]
2,645
[-]
2,433
[-]
499,589[ 3,401]

3.7

12.6
2.0
5.0

0.5
0.5
100.0

Breakdow n of Domestic and Overseas Orders
Millions of Y en
Apr. 1, 2005
Apr. 1, 2004
Mar. 31, 2006
Mar. 31, 2005
New contracts
Backlog
New contracts
Backlog
A mt
%
A mt
%
A mt
%
A mt
%
Domestic................................ 66,660

8.9

Overseas................................ 681,310

91.1

747,971
100.0
Total....................................................

74,068[-420]
856,174[24,702]930,243[24,281]8.0

57,602

15.6

92.0

310,688

84.4

100.0

368,290

100.0

78,136[-172]
421,453[3,573]
499,589[3,401]

15.6
84.4
100.0

(Note)
Numbers in brackets [ ] under Backlog of orders indicate the total of increases or decreases accompanying foreign
currency translation adjustments related to foreign currency business, increases resulting from adjustments for new
contracts, and decreases resulting from contractual changes in orders received before the previous fiscal year.

30