This document has been translated and summarized from the Japanese original for reference purposes only.
In the event of any discrepancy between the translated version and the Japanese original, the original
version shall prevail. The Company assumes no responsibility for this translation or for any direct, indirect
or any other form of damage arising from the translation.
(Securities Code: 6269)
March 4, 2019
To Our Shareholders with Voting Rights:
Toshiro Miyazaki
President and Chief Executive Officer
MODEC, INC.
3-10, Nihonbashi 2-chome Chuo-ku, TokyoNOTICE OF CONVOCATION OF
THE 33RD ANNUAL GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 33rd Annual General Meeting of Shareholders of MODEC, INC. (the“Company”) to be held as described below.
If you are unable to attend the meeting in person, you may exercise your voting rights in writing (by mail)or via the Internet, etc. Please review the attached Reference Documents for the General Meeting of
Shareholders and exercise your voting rights by 5:40 p.m. on Tuesday, March 19, 2019.

1. Date and Time:

Wednesday, March 20, 2019, at 10:00 a.m.
(The reception desk opens at 9:00 a.m.)

2. Place:

CongresSquare Nihonbashi 2F Convention Hall AB
Tokyo Tatemono Nihonbashi Building, 3-13, Nihonbashi 1-chome Chuo-ku,
Tokyo

3. Meeting Agenda:
Matters to be reported: 1. Operations Report, Consolidated Financial Statements, and Audit Reportconcerning Consolidated Financial Statements by the Accounting Auditor andthe Board of Corporate Auditors for the 33rd Term (from January 1, 2018 to
December 31, 2018)
2. Non-consolidated Financial Statements for the 33rd Term (from January 1,
2018 to December 31, 2018)
Matters to be resolved:
Appropriation of Surplus
Proposal 1:
Partial Amendments to the Articles of Incorporation
Proposal 2:
Election of Eleven Directors
Proposal 3:
Revision to the Amount of Remuneration for Directors
Proposal 4:
Payment of Bonuses to Directors
Proposal 5:-1---------------------------------------------------------------------------------------------------------------------------------

1. When attending the meeting, please submit the enclosed Voting Rights Exercise Form at thereception desk.
2. In case of voting by proxy, you can exercise your voting rights by appointing one shareholder who
has voting rights as your proxy.
* Please note that from this year, no commemorative gift will be provided to shareholders attending themeeting. We would appreciate your kind understanding.

-2-

Other Matters Concerning Procedures of Convocation of the Annual General Meeting of Shareholders
1. Disclosures on the Website
Consolidated Statement of Changes in Net Assets and Notes to Consolidated Financial Statements
as well as Non-Consolidated Statement of Changes in Net Assets and Notes to Non-consolidated
Financial Statements are posted on the Company’s website (https://www.modec.com/jp/) (Japaneseonly) pursuant to applicable laws and regulations as well as Article 15 of the Company’s Articles ofIncorporation, and they are not included in the Appendix to this notice. Accordingly, the Appendix
to this notice is a portion of the Consolidated Financial Statements or Non-consolidated Financial
Statements which Corporate Auditors audited in preparing an audit report and the Accounting
Auditor audited in preparing the Accounting Audit Report.
2. Revisions on the Website
In case of circumstances requiring revisions to the Reference Documents for the General Meetingof Shareholders, Operations Report, Consolidated Financial Statements or Non-consolidated
Financial Statements, the revised items will be posted on the Company’s website(https://www.modec.com/).
Information Concerning the Exercise of Voting Rights for Those Unable to Attend the Meeting
You may exercise your voting rights through either of the following methods:[Exercise of Voting Rights in Writing]
Please indicate your approval or disapproval of each of the proposals on the enclosed Voting Rights
Exercise Form and return it by mail so that it is received by 5:40 p.m. on Tuesday, March 19, 2019. Please
note that if there is no indication of your approval or disapproval of any of the proposals on the returned
Voting Rights Exercise Form, you will be deemed to have approved each of the proposals.
[Exercise of Voting Rights via the Internet]
Upon reading “Exercise of Voting Rights via the Internet” (Japanese only), please access the website
designated by the Company for the purpose of exercising your voting rights (https://www.web54.net). Please
enter the “vote exercising code” and “password” written on the enclosed Voting Rights Exercise Form andfollow the instructions on the screen to enter your approval or disapproval of each of the proposals by 5:40
p.m. on Tuesday, March 19, 2019.
If any voting right is exercised both in writing and via the Internet, the vote that reached the Company at alater timing will be recognized as valid. In the event that both votes arrive on the same day, the vote via theInternet will be recognized as valid.
If you exercise your voting rights more than once via the Internet, the most recent vote will be recognized
as valid.
[Guide to a Platform to Exercise Electronic Voting Rights for Institutional Investors]
Institutional investors, who have applied in advance to use the electronic voting platform operated by ICJ,
Inc., may use such platform as a method to electronically exercise voting rights at the General Meeting of
Shareholders of the Company, in addition to the exercise of voting rights via the Internet described above.

-3-

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1: Appropriation of Surplus
The distribution of stable and consecutive dividends to shareholders while retaining an appropriate
amount of internal reserve required for future business development and reinforcement of management baseis the Company’s basic policy on distribution of profits.
Based on this policy, as well as in light of the Company’s performance, management base reinforcement
for this fiscal year and future business development, it is proposed that a year-end dividend for this fiscal
year be ¥31.25 per share as stated below, consisting of an ordinary dividend of ¥21.25 per share andadditional ¥10 per share as a commemorative dividend for the Company’s 50th anniversary of the foundation
marked on December 26, 2018.
(1) Type of dividend property
Cash(2) Allocation of dividend property and total amount thereof¥31.25 per share of common stock of the Company (consisting of an ordinary dividend of ¥21.25 anda commemorative dividend of ¥10)
Total amount of dividends: ¥1,762,722,750
As the Company has already paid an interim dividend of ¥21.25 per share, the annual dividend will be¥52.50 per share.
(3) Effective date of dividends from surplus
March 22, 2019-4-

Proposal 2: Partial Amendments to the Articles of Incorporation
1. Reason for the amendment(1) In view of the current status of the Group’s businesses, it is proposed that a business purpose be
added in Article 2 (Purpose) of the current Articles of Incorporation with a view to clarifying theCompany’s business purposes and in response to future business development and businessdiversification.
(2) With a view to strengthening and enhancing management system, it is proposed that the number of
Directors set forth in Article 19 (Number of Directors) of the Articles of Incorporation be changed
from a maximum of 10 persons to a maximum of 15 persons.
(3) Amendments concerning liability limitation contract with Directors and Corporate Auditors
Following the enforcement of the “Act Partially Amending the Companies Act” (Act No. 90 of
2014) on May 1, 2015, the Company now may enter into a liability limitation contract with
Directors who do not execute business and Corporate Auditors who are not External Corporate
Auditors. Accordingly, in order to facilitate the invitation of competent personnel and ensure thatthey can fully demonstrate their capabilities as expected in their roles, it is proposed that theprovisions in Article 29 (Exemption of Liability of Directors) and Article 39 (Exemption of Liabilityof Corporate Auditors) of the Articles of Incorporation be amended.
The proposed amendment to Article 29 has been approved by all Corporate Auditors.
(4) Substitute Corporate Auditor
To prepare for a contingency in which the number of Corporate Auditors falls short of such number
stipulated by laws and regulations, we propose establishing new provisions concerning SubstituteCorporate Auditors, defining the effective period of the resolution for the election of a SubstituteCorporate Auditor, and setting forth the term of office of a Corporate Auditor assumed by a
Substitute Corporate Auditor.
(5) We propose renumbering certain Articles in line with the amendments mentioned above and makeother necessary amendments.
2. Details of the amendments
The details of the amendments are as follows.
(The underlined parts are those that will be amended.)
Current Articles of Incorporation
CHAPTER I.
GENERAL PROVISIONSCHAPTER I.

Article 2. (Purpose)
The purpose of the Company shall be to engage in thefollowing businesses:(1) – (6) (Article text omitted)(Newly established)

Proposed Amendments
GENERAL PROVISIONS

Article 2. (Purpose)(Same as current)(1) – (6) (Same as current)(7) Businesses related to desalination of seawater, etc.
and water supply; and(8) Any matters incidental or relating to the businesses
listed in the preceding items.

(7) Any matters incidental or relating to the businessactivities listed in the preceding items.
CHAPTER IV. DIRECTORS AND BOARD OF
DIRECTORS
Article 19. (Number of Directors)
The Company shall have no more than ten (10) Directors.

CHAPTER IV. DIRECTORS AND BOARD OF
DIRECTORS
Article 19. (Number of Directors)
The Company shall have no more than fifteen (15)Directors.

Article 29. (Exemption of Liability of Directors)(Article text omitted)

Article 29. (Exemption of Liability of Directors)(Same as current)-5-Current Articles of Incorporation
2. Pursuant to the provisions of Article 427, Paragraph 1of the Companies Act, the Company may enter into acontract with each of the External Directors to the effectthat any liability for damages of such External Director
arising from negligence in the performance of his/herduties shall be limited to the amount set by laws andregulations.

Proposed Amendments
2. Pursuant to the provisions of Article 427, Paragraph 1of the Companies Act, the Company may enter into acontract with each of the Directors (excluding thoseserving as Executive Directors, etc.) to the effect that any
liability for damages of such Director arising fromnegligence in the performance of his/her duties shall belimited to the amount set by laws and regulations.

CHAPTER V.
CORPORATE AUDITORS AND
BOARD OF CORPORATE AUDITORS
Article 31. (Election of Corporate Auditors)(Article text omitted)
2.
(Article text omitted)(Newly established)

CHAPTER V.
CORPORATE AUDITORS AND
BOARD OF CORPORATE AUDITORS
Article 31. (Election of Corporate Auditors)(Same as current)
2.
(Same as current)
3. Pursuant to the provisions of Article 329, Paragraph 3of the Companies Act, the Company may elect SubstituteCorporate Auditors at a General Meeting of Shareholders
to prepare for a contingency in which the number ofCorporate Auditors falls short of such number stipulated
by laws and regulations.
4. The effective term of the resolution for election of a
Substitute Corporate Auditor under the preceding
paragraph shall expire at the beginning of the Annual
General Meeting of Shareholders relating to the last fiscal
year ending within four (4) years from such resolution.

(Newly established)

Article 32. (Term of Office of Substitute Corporate
Auditors)(Article text omitted)
2. The term of office of a Corporate Auditor elected to filla vacancy left by a Corporate Auditor retiring prior to the
expiration of his/her term shall be the remaining term ofoffice of the retired Corporate Auditor.

Article 32. (Term of Office of Substitute Corporate
Auditors)(Same as current)
2. The term of office of a Corporate Auditor elected to filla vacancy left by a Corporate Auditor retiring prior to the
expiration of his/her term shall be the remaining term ofoffice of the retired Corporate Auditor.
However, in case that a Substitute Corporate Auditor
elected under Paragraph 3 of the preceding Article
assumes the office of Corporate Auditor, his/her term ofoffice shall not exceed the conclusion of an Annual
General Meeting of Shareholders relating to the last fiscal
year ending within four (4) years from such election as a
Substitute Corporate Auditor.

Article 39. (Exemption of Liability of Corporate
Auditors)(Article text omitted)
2. Pursuant to the provisions of Article 427, Paragraph 1of the Companies Act, the Company may enter into acontract with each of the External Corporate Auditors to
the effect that any liability for damages of such anExternal Corporate Auditor arising from negligence in theperformance of his/her duties shall be limited to theamount set by laws and regulations.

Article 39. (Exemption of Liability of Corporate
Auditors)(Same as current)
2. Pursuant to the provisions of Article 427, Paragraph 1of the Companies Act, the Company may enter into acontract with each of the Corporate Auditors to the effectthat any liability for damages of such a Corporate Auditor
arising from negligence in the performance of his/herduties shall be limited to the amount set by laws andregulations.

-6-

Proposal 3: Election of Eleven Directors
The terms of office of all the nine current Directors will expire at the conclusion of this General Meetingof Shareholders.
Accordingly, the election of eleven Directors is proposed, including six External Directors as well as anincrease of two additional Directors, conditional upon approval of Proposal 2 “Partial Amendments to the
Articles of Incorporation” in its original form, with a view to strengthening the Board of Directors’
effectiveness and function of supervision over business execution for the further enhancement of corporate
governance.
The candidates for Directors are as stated below.
No.

Name

Current positions at the Company

Attendance of theBoard of Directors
meetings in FY2018

1

Toshiro Miyazaki

Reappointment

President and Chief Executive
Officer

18 / 18 (100%)

2

Yuji Kozai

Reappointment

Director

14 / 14 (100%)

3

Takeshi Kanamori

Reappointment

Director
Executive Vice President

14 / 14 (100%)

Reappointment

Director
Executive Officer, General
Manager of Corporate Planning& Strategies Dept.

18 / 18 (100%)

Director

14 / 14 (100%)

45Minoru Sawada

Taketsune Matsumura Reappointment

6

Kazumasa Nakai

New appointment External Director

7

Katsuya Natori

Reappointment

External Director
Independent Director

External Director

18 / 18 (100%)

8

Shigenobu Aikyo

Reappointment

External Director
Independent Director

External Director

18 / 18 (100%)

9

Hiroshi Kanno

Reappointment

External Director
Independent Director

External Director

17 / 18 (94%)

10

Hiroko Noda

New appointment

External Director
Independent Director

–

–

11

Kazuko Shiraishi

New appointment

External Director
Independent Director

–

–

-7-

–

–

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1972
October 2002

1

Toshiro Miyazaki(August 21, 1949)
Reappointment

2

Yuji Kozai(February 10, 1960)
Reappointment

Number ofshares of theCompany held

Joined Mitsui Engineering & Shipbuilding Co., Ltd.
General Manager of Corporate Planning Dept., Mitsui
Engineering & Shipbuilding Co., Ltd.
March 2005
Corporate Auditor (part-time) of the Company
June 2005
Deputy Director, General Manager of Corporate Planning Dept.
and General Manager of Asset Utilization Sect., Mitsui27,200Engineering & Shipbuilding Co., Ltd.
Director, in charge of Finance Dept., Accounting Dept. and IR
June 2007& Public Relations, Mitsui Engineering & Shipbuilding Co.,Ltd.
March 2008
Director of the Company
March 2011
President and Chief Executive Officer of the Company (current
position)
Reasons for selection as a Director candidate
Mr. Toshiro Miyazaki has been successively selected as a candidate for Director, as he possesses
great management ability obtained through his diverse business career including corporate planning,finance and accounting, also he has been successfully demonstrating his leadership as President andChief Executive Officer of the Company in the overall management of the MODEC Group.
April 1982
Joined Mitsui Engineering & Shipbuilding Co., Ltd.
June 2005
General Manager of Diesel Design Dept., Machinery Factory,
Machinery & Systems Hq., Mitsui Engineering & Shipbuilding
Co., Ltd.
July 2007
General Manager of Production Planning Dept., Machinery
Factory, Machinery & Systems Hq., Mitsui Engineering &Shipbuilding Co., Ltd.
January 2011
General Manager of Quality Assurance Dept., Machinery
Factory, Machinery & Systems Hq., Mitsui Engineering &Shipbuilding Co., Ltd.
June 2013
General Manager of Corporate Planning Dept., Mitsui
Engineering & Shipbuilding Co., Ltd.
0
April 2015
Executive Officer, General Manager of Corporate Planning
Dept., Mitsui Engineering & Shipbuilding Co., Ltd.
October 2016
Executive Officer, Deputy General Manager of Corporate
Planning Hq., General Manager of Corporate Planning Dept.,
Corporate Planning Hq., Mitsui Engineering & Shipbuilding Co.,Ltd.
March 2018
Director of the Company (current position)
April 2018
General Manager of Corporate Planning Dept., Mitsui E&S
Holdings Co., Ltd. (current position)
June 2018
Director, Mitsui E&S Holdings Co., Ltd. (current position)
March 2019
Expected to retire from Mitsui E&S Holdings Co., Ltd.
Reasons for selection as a Director candidate
Mr. Yuji Kozai has been successively selected as a candidate for Director, as he has acquired
knowledge and experience related to the Company’s business as well as a wide range of experienceand deep insight in corporate management, which are expected to be leveraged in the overallmanagement of the Company. Mr. Yuji Kozai concurrently serves as Director of the Company’s
parent, Mitsui E&S Holdings Co., Ltd.

-8-

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1980
October 2005

3

Takeshi Kanamori(September 7, 1956)
Reappointment

4

Minoru Sawada(August 12, 1960)
Reappointment

Number ofshares of theCompany held

Joined Mitsui & Co., Ltd.
General Manager of First Plant Projects Division, Infrastructure
Projects Business Unit, Mitsui & Co., Ltd.
August 2007
General Manager of Second Projects Development Division,
Infrastructure Projects Business Unit, Mitsui & Co., Ltd.
October 2009
Operating Officer of Infrastructure Projects Business Unit,
Mitsui & Co., Ltd.
March 2010
Chairman & Managing Director, Mitsui & Co. (Shanghai) Ltd.
April 2011
Managing Officer, Mitsui & Co., Ltd.
Deputy Chief Representative, Mitsui & Co., Ltd. in China andChairman & Managing Director, Mitsui & Co. (Shanghai) Ltd.
600
April 2012
Executive Officer, Chief Operating Officer of Infrastructure
Projects Business Unit, Mitsui & Co., Ltd.
March 2013
External Director of the Company
April 2013
Executive Managing Officer, Chief Operating Officer ofInfrastructure Projects Business Unit, Mitsui & Co., Ltd.
April 2016
Senior Executive Managing Officer, Mitsui & Co., Ltd.
Chief Representative, Mitsui & Co., Ltd. in China and Chairman& Managing Director, Mitsui & Co., Ltd. In China
March 2018
Director, Executive Vice President of the Company (current
position)
Reasons for selection as a Director candidate
Mr. Takeshi Kanamori has been successively selected as a candidate for Director, as he has acquired
abundant experience as a member of the management of the general trading company, supervised
the overall business execution of the Company, and has been in charge of Human Resources,
Compliance, Health, Safety, Environment, and Quality Management Departments, etc.
April 1983
Joined Mitsui Engineering & Shipbuilding Co., Ltd.
April 2011
General Manager of Planning & Administration Dept.,
Environment & Plant Hq., Mitsui Engineering & Shipbuilding
Co., Ltd.
June 2012
General Manager of Planning & Administration Dept.,
Engineering Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
April 2013
General Manager of Procurement Dept., Engineering Hq., Mitsui
4,100
Engineering & Shipbuilding Co., Ltd.
October 2014
General Manager of Project Management Dept., Engineering
Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
April 2015
Deputy Director, Mitsui Engineering & Shipbuilding Co., Ltd.
October 2015
Deputy Director of the Company
March 2016
Director, Executive Officer, General Manager of Corporate
Planning & Strategies Dept. of the Company (current position)
Reasons for selection as a Director candidate
Mr. Minoru Sawada has been successively selected as a candidate for Director, as he has acquired awide range of knowledge and practical experience related to corporate planning and coordination
through his duties in the operating divisions of the Company’s parent company, as well as having
been in charge of the Company’s Corporate Planning and Strategies, General Affairs, Best Practice
Promotion, IT management divisions and supervising affiliated companies.

-9-

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1991
April 1999
April 2010
April 2015

Number ofshares of theCompany held

Joined Mitsui Engineering & Shipbuilding Co., Ltd.
Part-time Lecturer, Tokai University (current position)
Part-time Lecturer, Yokohama National University
General Manager of Basic Design Dept., Ship & Ocean Project
Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
April 2017
Thesis Screening Committee Member, The Japan Society ofNaval Architects and Ocean Engineers (current position)
0
General Manager of Strategic Planning Sect., Corporate Planning
Taketsune Matsumura February 2018
Dept., Corporate Planning Hq. and Manager of IR Dept., Mitsui(May 25, 1967)
5
Engineering & Shipbuilding Co., Ltd.
March 2018
Director of the Company (current position)
Reappointment
April 2018
General Manager of Strategic Planning Sect., Corporate Planning
Dept., Mitsui E&S Holdings Co., Ltd. (current position)
Reasons for selection as a Director candidate
Mr. Taketsune Matsumura has been successively selected as a candidate for Director, as he is judged
to be able to continue to provide advice on the overall management of the Company, based on his
knowledge and experience related to the Company’s business as well as a wide range of experienceand deep insight in corporate management.
April 1987
Joined Mitsui & Co., Ltd.
December 2005 General Manager of Project Sect., New York Office, MITSUI &CO. (U.S.A.), INC.
July 2009
Deputy Manager of Third Projects Development Division,
Infrastructure Projects Business Unit, Mitsui & Co., Ltd.
April 2012
General Manager of Third Projects Development Division,
0
Kazumasa Nakai
Infrastructure Projects Business Unit, Mitsui & Co., Ltd.
(August 29, 1963)
April 2015
General Manager of First Projects Development Division,
6
Infrastructure Projects Business Unit, Mitsui & Co., Ltd.
New appointment
October 2017
Operating Officer of Nutrition & Agriculture Business Unit,
External Director
Mitsui & Co., Ltd. (current position)
Reasons for selection as an External Director candidate
Mr. Kazumasa Nakai has been newly selected as a candidate for External Director, as he is judged tobe capable of advising the overall management of the Company, based on his wide range of businessexperience at the general trading company as well as practical knowledge related to the Company’sbusiness.

- 10 -

No.

Name(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1986

7

Number ofshares of theCompany held

Registered as an attorney, joined Masuda and Ejiri Law Office(currently Nishimura & Asahi)June 1990
Joined Davis Wright Tremaine LLP (Seattle, U.S.)
July 1992
Joined Wilmer, Cutler & Pickering (Washington D.C., U.S.)
July 1993
Joined Esso Sekiyu K.K.
January 1995
Joined Apple Japan, Inc.
January 1998
Director, Sun Microsystems K.K.
March 2002
Executive Officer, FAST RETAILING CO., LTD.
900
January 2004
Director, VP, IBM Japan, Ltd.
Katsuya Natori
April 2010
VP, IBM Japan, Ltd.
(May 15, 1959)
February 2012
Founded Natori Law Office
Chief, Natori Law Office (current position)
Reappointment
April 2012
Outside Audit & Supervisory Board Member, OLYMPUS
External Director
CORPORATION (current position)
Independent Director March 2015
External Director of the Company (current position)
April 2016
Supervisory Director, Global One Real Estate Investment
Corporation (current position)
Reasons for selection as an External Director candidate
Mr. Katsuya Natori has been successively selected as a candidate for External Director, as he isjudged to be able to continue to provide advice on the overall management of the Company, basedon a wealth of experience and broad insight as a corporate manager and as an attorney gained
through his domestic and overseas business experience over the years. If election of Mr. Katsuya
Natori is approved, the Company intends to appoint him as Independent Director as prescribed by
the Tokyo Stock Exchange.

- 11 -

No.

Name(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1972

8

Number ofshares of theCompany held

Joined Sumitomo Bank (currently Sumitomo Mitsui Banking
Corporation)
June 1999
Executive Officer, Head of Human Resources Dept., Sumitomo
Bank
April 2001
Executive Officer, Head of Corporate Management Dept.,
Sumitomo Mitsui Banking Corporation
June 2003
Managing Executive Officer, Head of Tokyo Corporate Banking
Division I, Sumitomo Mitsui Banking Corporation
June 2005
Managing Director and Managing Executive Officer, Sumitomo
Mitsui Banking Corporation
April 2006
Senior Managing Director, Sumitomo Mitsui Banking
Corporation
Senior Managing Director (Executive Officer), Sumitomo Mitsui
Financial Group, Inc.
April 2007
Deputy President, Head of Corporate Banking Unit, Sumitomo
1,000
Shigenobu Aikyo
Mitsui Banking Corporation(October 1, 1949)
April 2010
Chairman and Representative Director, Nikko Cordial Securities
Inc.
Reappointment
April 2011
Chairman and Representative Director, SMBC Nikko Securities
External Director
Inc.
Advisor, SMBC Nikko Securities Inc.
Independent Director April 2015
June 2015
External Director, HASHIMOTO SOGYO HOLDINGS Ltd.
(current position)
March 2016
External Director of the Company (current position)
June 2016
External Director, Sanyo Chemical Industries, Ltd. (current
position)
June 2016
External Director, DAIHEN Corporation (current position)
June 2016
Outside Director, SCSK Corporation
June 2016
External Director, NICHICON CORPORATION (current
position)
Reasons for selection as an External Director candidate
Mr. Shigenobu Aikyo has been successively selected as a candidate for External Director, as he isjudged to be capable of advising the overall management of the Company from a broad perspective,
based on his extensive knowledge regarding finance and management gained through his longtime
involvement in the management of financial institutions. If election of Mr. Shigenobu Aikyo isapproved, the Company intends to appoint him as Independent Director as prescribed by the Tokyo
Stock Exchange.

- 12 -

No.

Name(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1983
August 1991

910

Number ofshares of theCompany held

Joined Nikken Sekkei Ltd
Joined The Boston Consulting Group
Partner and Managing Director, the last position at The Boston
Consulting Group
July 2008
Professor, Hitotsubashi University Graduate School ofInternational Corporate Strategy
June 2011
External Director, Omron Healthcare, Co., Ltd. (current position)
April 2012
Dean, Hitotsubashi University Graduate School of International
Corporate Strategy
0
Hiroshi Kanno
October 2012
Outside Director, Japan Display Inc.
(November 14, 1958) June 2014
External Director, WOWOW INC. (current position)
June 2015
Outside Audit and Supervisory Board Member, STANLEY
Reappointment
ELECTRIC CO., LTD. (current position)
External Director
March 2016
External Director of the Company (current position)
Independent Director September 2016 Professor, Waseda Business School (Graduate School ofBusiness and Finance) (current position)
August 2017
Outside Director of ERI HOLDINGS CO., LTD. (current
position)
Reasons for selection as an External Director candidate
Mr. Hiroshi Kanno has been successively selected as a candidate for External Director, as he isjudged to be able to continue to provide advice on the overall management of the Company, basedon abundant experience as a business management consultant and professional insights as a
researcher on business strategy planning. If election of Mr. Hiroshi Kanno is approved, theCompany intends to appoint him as Independent Director as prescribed by the Tokyo Stock
Exchange.
April 1987
Joined Minato Audit Corporation (currently KPMG AZSA LLC)
August 1987
Joined Prudential Securities Incorporated
March 1990
Founded Noda Certified Public Accountant Office
Representative, Noda Certified Public Accountant Office(current position)
August 1992
Joined Banque Indosuez S.A. (currently Crédit Agricole
Corporate and Investment Bank and Crédit Agricole Securities
Asia BV)
June 2000
Joined Canadian Bank of Commerce0
Hiroko Noda
Accounting Manager of Tokyo Branch, Canadian Bank of(July 3, 1960)
Commerce and Tokyo Branch, CIBC Securities Inc.
July 2006
Joined Busicom Co., Ltd.
New appointment
September 2007 Representative Director, Prominent Consulting Co., Ltd.
External Director
May 2010
Founded Probity Consulting Co., Ltd.
Representative Director, Probity Consulting Co., Ltd. (current
Independent Director
position)
April 2014
Part-time Lecturer, Graduate School of Asian and International
Business Strategy, Asia University (current position)
Reasons for selection as an External Director candidate
Ms. Hiroko Noda has been newly selected as a candidate for External Director, as she is judged tobe capable of supervising and advising the overall management of the Company from an objective
standpoint, based on her years of experience in the field of international finance as well as broad
insights as a business management consultant. If election of Ms. Hiroko Noda is approved, theCompany intends to appoint her as Independent Director as prescribed by the Tokyo Stock
Exchange.

- 13 -

No.

Name(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions

Number ofshares of theCompany held

April 1974
February 2001
June 2003

11

Joined Ministry of Foreign Affairs of Japan
Consul General, Consulate-General of Japan in Atlanta
General Manager, International Economic Treaty Office, Treaty
Bureau, Ministry of Foreign Affairs
September 2004 Policy Coordinator, Foreign Policy Bureau, Ministry of Foreign
Affairs
General Manager, WTO Dispute Settlement Division, Economic
October 2005
Affairs Bureau, Ministry of Foreign Affairs
Councilor, Embassy of Japan in Poland
April 2007
Ambassador Extraordinary and Plenipotentiary to Lithuania
January 20120
Ambassador (for Women, Human Rights and Humanitarian
June 2015
Kazuko Shiraishi
Affairs and in charge of Arctic Affairs)(August 18, 1951)
Ambassador (in charge of Arctic Affairs), Ministry of Foreign
June 2016
Affairs
New appointment
Conciliation Commissioner, Tokyo Family Court (current
October 2016
External Director
position)Independent Director June 2017
Term of office of Ambassador, Ministry of Foreign Affairs
expiredDecember 2017 Special Envoy for EXPO 2025 OSAKA, KANSAI, JAPAN
June 2018
Director (Audit and Supervisory Committee Member), SCSKCorporation (current position)
Reasons for selection as an External Director candidate
Ms. Kazuko Shiraishi has been newly selected as a candidate for External Director, as she is judged
to be capable of supervising and advising the overall management of the Company from an
objective standpoint, based on her wealth of experience related to international affairs and broad
insight she gained through her career to date. If election of Ms. Kazuko Shiraishi is approved, theCompany intends to appoint her as Independent Director as prescribed by the Tokyo Stock
Exchange.

(Notes) 1. Mitsui E&S Holdings Co., Ltd. is the Company’s parent company. The positions and responsibilities at the parent
company of the candidates who currently serve or had served during the past five years as executives at Mitsui E&S
Holdings Co., Ltd. are stated in the above “Career summary, positions and responsibilities at the Company, andsignificant concurrent positions.”
Other candidates for Directors have no special interest in the Company.
2. The terms of office of the current External Directors as the Company’s External Director will be four years for Mr.
Katsuya Natori and three years for Messrs. Shigenobu Aikyo and Hiroshi Kanno as of the conclusion of this General
Meeting of Shareholders.
3. Liability limitation contract with the Directors (excluding those serving as Executive Directors, etc.)
The Company has entered into contracts with Messrs. Katsuya Natori, Shigenobu Aikyo and Hiroshi Kanno to limit their
liabilities for compensation of damages prescribed in Article 423, Paragraph 1 of the Companies Act. The maximum
amount of liability under the contracts shall be the minimum amount prescribed in Article 425, Paragraph 1 of the said
Act. If this Proposal is approved, the Company intends to renew the liability limitation contracts with them and newly
enter into contracts of the same content with Mr. Kazumasa Nakai and Mses. Hiroko Noda and Kazuko Shiraishi. In
addition, if Proposal 2 Partial Amendments to the Articles of Incorporation is approved, the Company intends to newly
enter into a contract with the same content with Mr. Taketsune Matsumura.

- 14 -

Proposal 4: Revision to the Amount of Remuneration for Directors
The Company, at the 27th Annual General Meeting of Shareholders held on March 28, 2013, has obtained
approval for the amount of remuneration for Directors as “¥300 million or less per annum,” however, inview of changes in economic conditions thereafter and in order to reinforce the management structure, theCompany proposed that the maximum number of Directors be changed from 10 to 15 in Proposal 2, and thatthe number of Directors be increased by two in Proposal 3. Accordingly, it is proposed that the amount of
remuneration for Directors be revised to “¥400 million or less per annum (including remuneration of ¥65
million or less per annum for External Directors).”
In addition, as in the past, the amount of remuneration for Directors shall not include salaries for theirservices in the capacity of employees, as well as the amount of stock-based remuneration, etc. for Directors(¥135 million in approximately five years), which was approved at the 32nd Annual General Meeting of
Shareholders held on March 23, 2018.
Currently, the number of Directors is nine (including four External Directors). If Proposal 3 is approved
as originally proposed, the number of Directors will be eleven (including six External Directors).

Proposal 5: Payment of Bonuses to Directors
In view of the Company’s performance for this fiscal year, it is proposed that bonuses of up to ¥35
million in total be paid to three Directors (excluding External Directors) who were in office as of December
31, 2018.

- 15 -

[Appendix]
Operations Report (from January 1, 2018 to December 31, 2018)
Overview and Results of Operations
During for the consolidated fiscal year ended December 31, 2018, the Japanese economy was on a
gradual recovery trend, reflecting the upward trend in capital investment due to the improvement in corporate
earnings, as well as improvement in conditions for employment and income. The global economy remained
firm in general with sustained recoveries mainly in Europe and the United States, despite concerns about
economic slowdown due to the escalation of trade friction between the United States and China.
WTI oil prices that had temporarily soared to the level of 70 dollars per barrel due to concerns overundersupply stemming from the U.S. sanctions against Iran calmed down to the level of around 50 dollars per
barrel at the end of the year as supply and demand forecast softened. In these circumstances, many offshore oil
exploration and development projects are being planned. Accordingly, business environment related tofloating production systems, the Group’s mainstay business, is favorable and future growth is expected.
Under these circumstances, for the consolidated fiscal year ended December 31, 2018, orders resulted in¥253,651 million (down 63.8% year on year) mainly due to new orders for large charter projects as well as achange to the specification for existing projects and O&M services. Revenue was ¥221,909 million (up16.1%) due to steady progress in construction of FPSOs.
In terms of profit, operating profit stood at ¥14,928 million (up 30.4%) due to steady progress inconstruction of FPSOs and realization of unrealized profit. Ordinary profit came to ¥28,779 million (up18.3%) including interest income and equity in earnings of affiliates and unconsolidated subsidiaries.
As a result, profit attributable to owners of parent was ¥21,891 million (up 12.5%).

- 16 -

Financial Statements

Consolidated Balance Sheet(December 31, 2018)(Millions of Japanese yen)

Description

AmountDescription(Assets)
Current assets

Amount(Liabilities)
211,734

Current liabilities

144,060

Cash and time deposits

51,215

Accounts payable - trade

97,680Accounts receivable - trade

95,065Current portion of long-term loans payable

6,142

Inventories

5,405

Lease obligations

12

Short-term loans receivable

43,021

Accrued expenses

15,507

Deferred tax assets

149

Income taxes payable

7,219

Other current assets

17,614

Advances received

9,981

Less - allowance for bad debts
Non-current assets

(738)

45

Accrued directors’ bonuses

19

Provision for product warranty

131,611

5,937

Provision for repairs

570

Other provisions

46

998

Other current liabilities

Property and equipment

2,543

Buildings and structures
Machinery and equipment
Other property and equipment

Accrued employees’ bonuses

1,462

1,475
Non-current liabilities

34,4709,260Long-term loans payable

Goodwill

1,024

Lease obligations

36

Other

8,235

Net defined benefit liabilities

347

Deferred tax liabilities

320

Intangible assets

119,806

Liabilities from application of equity method

Investment securities
Long-term loans receivable fromunconsolidated subsidiaries andaffiliated companies
Deferred tax assets

71,458Other provisions

36,947

Other non-current liabilities

3,196

Total liabilities

Other investments

8,203

Investments and other assets

2,096
397
6,383
178,531(Net assets)
Shareholders’ equity

154,446

Common stock

30,122

Capital surplus

30,851Retained earnings

93,571Less - treasury stock at cost
Accumulated gains (losses) from valuation
Unrealized gains (losses) on hedging derivative,
net of tax
Foreign currency translation adjustments
Retirement liability adjustments for foreign
consolidated subsidiaries, net of tax
Non-controlling interests
Total assets

24,889343,345(Note) The figures are rounded down to the nearest million yen.

- 17 -(99)(1,781)(6,864)
5,740(656)
12,148

Total net assets

164,814

Total liabilities and net assets

343,345

Consolidated Statement of Income(For year ended December 31, 2018)(Millions of Japanese yen)
Description

AmountRevenue

221,909

Cost of sales

195,351

Gross profit

26,557

Selling, general and administrative expenses

11,628Operating profit

14,928Non-operating income
Interest and dividend income
Equity in earnings of affiliates and unconsolidated
subsidiaries
Other

6,107
9,841
342

16,291Non-operating expenses
Interest expense

926

Foreign exchange gains (losses), net

1,038

Other

475

2,440

Ordinary profit

28,779

Income before income taxes

28,779

Income taxes - current

5,032

Income taxes - prior

33

Income taxes - deferred

1,164

Net income

22,549Profit attributable to non-controlling interests

658

Profit attributable to owners of parent

21,891- 18 -

Non-Consolidated Balance Sheet(December 31, 2018)(Millions of Japanese yen)
Description

AmountDescription(Assets)
Current assets

Amount(Liabilities)
133,939

Current liabilities

116,941

Cash and time deposits

20,664

Accounts payable - trade66,336

Accounts receivable - trade53,448Current portion of long-term loans payable

5,432Work in process
Advance payments - trade

16

Lease obligations

24

Accounts payable - other

12
1,544

Prepaid expenses

1,301

Accrued expenses

343

Short-term loans receivable

55,789Advances received653

Accrued income

461

Deposits received

903

Other current assets

2,509

CMS deposits received

Less - allowance for bad debts(276)

Accrued employees’ bonuses

7

Accrued directors’ bonuses

19

Other provisions

5

Non-current assets
Property and equipment

98,017

Buildings, net

70

Tools, furniture and fixtures, net

15

Leased assets, net

44

Intangible assets
Software

Other current liabilities

131

Non-current liabilities
Long-term loans payable

Investment securities
Investment in subsidiaries and affiliates
Long-term loans receivable fromunconsolidated subsidiaries andaffiliated companies
Other investments

24,337
23,60936

18

Provision for retirement benefits

347

18

Other provisions

14

Deferred tax liabilities

6

97,8680Total liabilities

323
141,278(Net assets)

86,564

Shareholders’ equity

91,276

8,364

Common stock

30,122

2,939

Capital surplus

30,852

Legal capital surplus
Retained earnings
Other retained earnings

30,332

Valuation and translation adjustments
Unrealized gains (losses) on hedging derivative,
net of tax- 19 -

30,40068

Less-treasury stock at cost

231,957

30,852

Legal retained earnings
Retained earnings brought forward

Total assets

281

Lease obligations

Other non-current liabilities
Investments and other assets

41,40030,332
(99)
(598)
(598)

Total net assets

90,678

Total liabilities and net assets

231,957

Non-Consolidated Statement of Income(For year ended December 31, 2018)(Millions of Japanese yen)
Description

AmountRevenue

106,386

Cost of sales

93,715Gross profit

12,671

Selling, general and administrative expenses

6,606

Operating profit

6,064

Non-operating income
Interest and dividend income

7,889

Other

282

8,171

Non-operating expenses
Interest expense

1,642

Foreign exchange loss

322

Loss on valuation of derivatives

236

Other

128

2,331

Ordinary profit

11,905

Income before income taxes

11,905

Income taxes - current(25)

Net income

11,931- 20 -