Record Earnings at All Levels in Fiscal 2011
In fiscal 2011 (the fiscal year ended March 31, 2012), JGC achieved consolidated net sales of \556.9 billion. We achieved this with the support of our shareholders and clients, coupled with the earnest efforts of all those working for the JGC Group. In terms of earnings, we recorded a gross profit of \86.7 billion, operating income of \67.0 billion, and net income of \39.1 billion. All earnings figures were records for JGC. We paid a full-year dividend of \38.5 per share, as planned. Consolidated contracts received reached \793.2 billion as we received orders for large-scale LNG projects as well as other projects, despite the highly competitive market.
Our forecasts for fiscal 2012 are for consolidated net sales of \600.0 billion, gross profit of \88.0 billion, operating income of \67.5 billion, and net income of \44.0 billion. Furthermore, we plan to pay a dividend of \43.5 per share applicable to the fiscal year. We have set a target for consolidated orders of \600.0 billion, and will do our best to achieve this target.
Fiscal 2011 was a year filled with uncertainty, as the European sovereign debt crisis triggered by the situation in Greece weighed heavily on the global economy. It was also a period that saw the WTI price of crude oil rise from US $80 to US $100 per barrel through the year, driven higher by population growth in emerging markets, increasing demand for energy, and a growing trend toward urbanization. Against this backdrop, many capital investment plans were implemented in connection with oil and natural gas development, as well as for oil refineries and petrochemical
facilities, notably in the Middle East, North Africa and Oceania.
JGC prevailed in fiscal 2011 in the face of fierce EPC business competition. In addition to winning contracts for projects in Japan, we were also successful in gaining orders overseas for a crude oil processing facility in Algeria, an oil refinery expansion project in Venezuela, a project to renovate cooling water facilities at a power plant in Iraq, and Front End Engineering and Design (FEED) work for an LNG plant expansion project in Malaysia. In addition, we were awarded a contract for the Ichthys LNG project, a mega-project being promoted by INPEX Corporation and Total. These achievements helped our contracts received reach \793.2 billion on a consolidated basis, which significantly exceeded our \550.0 billion target.
Meanwhile, in our investment business, we made considerable progress in fiscal 2011 in the resource development field in particular. We decided to invest in shale oil production and development businesses in the U.S., and a shale gas development and production business in Canada. Production also commenced at a gas field in the U.S. in which we own a working interest. Furthermore, we made the decision to invest in a Japan-China fund to promote energy saving and environmental conservation. The fund will invest in Chinese venture firms operating in these sectors.
In another major move, since the beginning of fiscal 2012 full-scale trial operations have begun at a demonstration plant for the production of slurry-form fuel made from unused low-rank coal deposits in Indonesia. This coal fuel can be used as a substitute for heavy fuel oil.
As we look back, fiscal 2011, the first year of our new medium-term management plan "New Horizon 2015," saw us deliver the results we expected.

Client Investment Plans in Fiscal 2012 in a Wide Range of Fields,
Upstream to Downstream, Mainly in the Middle East and North Africa
For the engineering and construction market in fiscal 2012, we expect to see commitment of capital investments on a level above that of fiscal 2011, with further EPC opportunities emerging for us. These capital investments will mainly center on the Middle East and North Africa. Oil majors, national oil companies, and other companies will be investing in a wide range of areas, from upstream to downstream.
In the Middle East and North Africa, we will see the continued development of oil and natural gas. At the same time, capital investments are planned in the oil refinery and petrochemical fields with the aim of adding value to these resources. In East Africa, LNG project plans are taking shape. In Asia and Oceania, we expect to see plans implemented for the construction or expansion of LNG projects in response to growing LNG demand within Asia. In Japan, we anticipate continued capital investment in expanding and upgrading power supply facilities, and in the pharmaceutical industry.

Focus on Strengthening Cost Competitiveness, Developing New Markets,
and Enhancing Technological Capabilities
Given this market situation for the EPC business, in fiscal 2012 we will focus again on strengthening our cost competitiveness across the EPC spectrum. In tandem, we will work to maintain our solid position in the highly competitive LNG field.
Furthermore, in the Middle East and Africa, we will concentrate our efforts on developing new markets. We also plan to strengthen our technological capabilities, as an important element in order to be competitive in the EPC business. With an increasing number of projects expected to adopt a modular construction approach, we will endeavor to further enhance our project execution capabilities, and at the same time bolster our technological capabilities in new areas of endeavor including floating LNG plants.
Plants have become larger in recent years and clients today expect contractors to possess advanced capabilities not only with respect to technologies, but also the associated elements including health, safety and the environment (HSE). We are keenly aware that these demands on contractors will only grow and become more exacting in terms of quality and scope. Our firm intention is to respond positively to these demands by improving related technologies and developing new capabilities.
In the investment business in fiscal 2012, we plan to continue with our strict selection of prime investment projects. We will focus on infrastructure-related businesses such as power and water; resource development businesses, including conventional and unconventional resources; solar ower generation; and our new energy business for the effective utilization of low-rank coal. We will also target the urban development business, with a focus on Asia.
It is without doubt that the energy market is witnessing dynamic changes, due to shale gas developments in North America and other factors. These changes are spawning new markets that present us with major opportunities for growth as an engineering contractor. It can be expected that we will target changing fields, as we make the maximum possible efforts to achieve our consolidated targets for contracts awarded and our operating result forecasts, over the coming year.

We ask our shareholders for their continued support and guidance as we continue to implement "New Horizon 2015" to drive further growth.

July 2012