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 3, 2017
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 31ST ANNUAL GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 31st 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. Please review the attached Reference Documents for the General Meeting of Shareholders
and exercise your voting rights by 5:40 p.m. on Thursday, March 23, 2017.

1. Date and Time:

Friday, March 24, 2017, at 10:00 a.m. (The reception desk opens at 9:00 a.m.)

2. Place:

BELLESALLE Tokyo Nihonbashi B2 Event Hall
Tokyo Nihonbashi Tower, 7-1, Nihonbashi 2-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 31st Term (from January 1, 2016 to
December 31, 2016)
2. Non-consolidated Financial Statements for the 31st Term (from January 1,
2016 to December 31, 2016)

Matters to be resolved:
Appropriation of Surplus
Proposal 1:
Election of Nine Directors
Proposal 2:
Election of Four Corporate Auditors
Proposal 3:
Payment of Bonuses to Directors
Proposal 4:--------------------------------------------------------------------------------------------------------------------------------

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.

-1-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 (http://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 audited by the Accounting Auditor for the preparation of 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(http://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 Thursday, March 23, 2017. 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 (http://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 Thursday, March 23, 2017.
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.

-2-

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, a year-end dividend for this fiscal year is proposed asstated below.
(1) Type of dividend property
Cash(2) Allocation of dividend property and total amount thereof¥18.75 per share of common stock of the Company
Total amount of dividends: ¥1,057,637,569(3) Effective date of dividends from surplus
March 27, 2017-3-

Proposal 2: Election of Nine Directors
The terms of office of all the current Directors will expire at the conclusion of this General Meeting of
Shareholders.
Accordingly, the election of nine Directors is proposed, including four External Directors.
The candidates for Directors are as stated below.
No.

Name

Current positions andresponsibilities at the Company

Attendance of theBoard of Directors
meetings in FY2016

1

Toshiro Miyazaki Reappointment

President and Chief Executive
Officer

20 / 20 (100%)2

Teruhisa Konishi Reappointment

3

Minoru Sawada

4

Shinsuke Minoda New Appointment

5

Shinsuke Nippo

6

Yoshio Kometani Reappointment

7

Katsuya Natori

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

Reappointment–

Reappointment

20 / 20 (100%)

15 / 15 (100%)–

Director

19 / 20 (95%)

External Director

External Director

15 / 15 (100%)

Reappointment

External Director
Independent Director

External Director

20 / 20 (100%)

8

Shigenobu Aikyo Reappointment

External Director
Independent Director

External Director

14 / 15 (93%)

9

Hiroshi Kanno

External Director
Independent Director

External Director

13 / 15 (86%)

Reappointment

-4-

No.

Name
(Date of birth)

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

1

2

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., Mitsui
22,700Engineering & Shipbuilding Co., Ltd.
Toshiro Miyazaki
Director, in charge of Finance Dept., Accounting Dept. and IR
June 2007(August 21, 1949)& Public Relations, Mitsui Engineering & Shipbuilding Co.,Ltd.
Reappointment
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.
Joined Mitsui Bank (currently Sumitomo Mitsui Banking
April 1981
Corporation)
General Manager of Global Business Dept., Sumitomo Mitsui
June 2005
Banking Corporation
Head of Sydney Branch, Sumitomo Mitsui Banking Corporation
April 2008
September 2010 President, Banco Sumitomo Mitsui Brasileiro S.A.
5,600
April 2011
Deputy Director, Sumitomo Mitsui Banking Corporation,
Teruhisa Konishi
President, Banco Sumitomo Mitsui Brasileiro S.A.
(November 19, 1957) April 2013
Executive Officer, General Manager of Human Resources Dept.
of the Company
Director of the Company
Reappointment
March 2015
Director, Executive Officer, General Manager of General Affairs
May 2016
Dept. of the Company (current position)
Reasons for selection as a Director candidate
Mr. Teruhisa Konishi has been successively selected as a candidate for Director, as he has acquired
a wide range of knowledge and practical experience related to international finance and overseas
investment through his duties at financial institutions, as well as he has been in charge of theCompany’s Human Resources, General Affairs, Environmental Safety and Health Departments, etc.

-5-

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1983
April 2011

3

Minoru Sawada(August 12, 1960)
Reappointment

Shinsuke Minoda(January 15, 1954)
4
New Appointment

Number ofshares of theCompany held

Joined Mitsui Engineering & Shipbuilding Co., Ltd.
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
4,000
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, IT management divisions andsupervising affiliated companies.
April 1977
Joined Mitsui Engineering & Shipbuilding Co., Ltd.
February 2004
General Manager of Business Co-ordination Dept., Machinery
Factory, Machinery & Systems Hq., Mitsui Engineering &Shipbuilding Co., Ltd.
April 2008
Assistant to General Manger of Machinery Factory, Machinery& Systems Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
January 2009
General Manager of Business Co-ordination Dept., Machinery
Factory, Machinery & Systems Hq., Mitsui Engineering &Shipbuilding Co., Ltd.
June 2009
General Manager of Planning & Administration Dept.,0Machinery & Systems Hq., Mitsui Engineering & Shipbuilding
Co., Ltd.
June 2011
Director, General Manager of Machinery & Systems Hq., Mitsui
Engineering & Shipbuilding Co., Ltd.
April 2014
Managing Director, General Manager of Machinery & Systems
Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
April 2015
Director, Managing Executive Officer, General Manager ofMachinery & Systems Hq., Mitsui Engineering & Shipbuilding
Co., Ltd. (current position)
Reasons for selection as a Director candidate
Mr. Shinsuke Minoda has been newly selected as a candidate for Director, as he is judged to becapable of advising the overall management of the Company, based on his knowledge andexperience related to the Company’s business as well as a wide range of experience and deep insightin corporate management. Mr. Shinsuke Minoda concurrently serves as Director of the Company’s
parent, Mitsui Engineering & Shipbuilding Co., Ltd.

-6-

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1981
June 2007

Shinsuke Nippo(October 17, 1956)
5

Reappointment

Yoshio Kometani(April 11, 1962)
6

Reappointment
External Director

Number ofshares of theCompany held

Joined Mitsui Engineering & Shipbuilding Co., Ltd.
General Manager of Plant Sales Dept., Environment & Plant Hq.,
Mitsui Engineering & Shipbuilding Co., Ltd.
April 2013
General Manager of Energy Solutions & Infrastructure Sales
Dept. and General Manager of Plant Sales Dept., Engineering
Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
June 2013
Deputy Director, General Manager of Energy Solutions &Infrastructure Sales Dept. and General Manager of Plant Sales
Dept., Engineering Hq., Mitsui Engineering & Shipbuilding Co.,Ltd.
March 2014
Director of the Company (current position)0
April 2014
Deputy General Manager of Engineering Hq., Mitsui
Engineering & Shipbuilding Co., Ltd.
June 2014
Director, Deputy General Manager of Engineering Hq., Mitsui
Engineering & Shipbuilding Co., Ltd.
June 2015
Executive Officer, Deputy General Manager of Engineering Hq.,
Mitsui Engineering & Shipbuilding Co., Ltd.
April 2016
Managing Executive Officer, General Manager of Engineering
Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
June 2016
Director, Managing Executive Officer, General Manager ofEngineering Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
(current position)
Reasons for selection as a Director candidate
Mr. Shinsuke Nippo has been successively selected as a candidate for Director, as he is judged to becapable of advising the overall management of the Company, based on his wide range of knowledge
and experience related to the Company’s business as well as a wide range of experience and deep
insight in corporate management. Mr. Shinsuke Nippo concurrently serves as Director of theCompany’s parent, Mitsui Engineering & Shipbuilding Co., Ltd.
April 1985
Joined Mitsui & Co., Ltd.
March 2010
General Manager of Planning and Administrative Division,
Infrastructure Projects Business Unit, Mitsui & Co., Ltd.
April 2013
Operating Officer of Infrastructure Projects Business Unit,
Mitsui & Co., Ltd.
May 2014
Deputy Chief Operating Officer of Asia Pacific Business Unit,
0
Mitsui & Co., Ltd. and Senior Vice President, Mitsui & Co.
(Asia Pacific) Pte. Ltd. (located at Singapore)
April 2015
Managing Officer, Deputy Chief Operating Officer of Asia
Pacific Business Unit, Mitsui & Co., Ltd.
March 2016
External Director of the Company (current position)
April 2016
Managing Officer, Chief Operating Officer of Infrastructure
Projects Business Unit, Mitsui & Co., Ltd. (current position)
Reasons for selection as an External Director candidate
Mr. Yoshio Kometani 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 wide range of experience and knowledge related to the Company’s business as well as
abundant experience in corporate management as a member of the management of the general
trading company.

-7-

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.
500
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)
External Director of the Company (current position)
Independent Director March 2015
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,
based on 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 asprescribed by the Tokyo Stock Exchange.

-8-

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
100
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 (current position)
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.

-9-

No.

Name
(Date of birth)

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

Number ofshares of theCompany held

April 1983
August 1991

9

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
0
Hiroshi Kanno
Corporate Strategy(November 14, 1958) October 2012
Outside Director, Japan Display Inc. (current position)
June 2014
External Director, WOWOW INC. (current position)
Reappointment
June 2015
Outside Audit and Supervisory Board Member, STANLEY
External Director
ELECTRIC CO., LTD. (current position)
External Director of the Company (current position)
Independent Director March 2016
September 2016 Professor, Waseda Business School (Graduate School ofBusiness and Finance) (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.

(Notes) 1. Mitsui Engineering & Shipbuilding Co., Ltd. is the Company’s parent company. The positions and responsibilities at theparent company of the candidates who currently serve or had served during the past five years as executives at Mitsui
Engineering & Shipbuilding Co., Ltd. are stated in the above “Career summary, positions and responsibilities at theCompany, and significant 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 two years for Mr.
Katsuya Natori and one year for Messrs. Yoshio Kometani, Shigenobu Aikyo and Hiroshi Kanno as of the conclusion ofthis General Meeting of Shareholders.
3. Liability limitation contract with the External Directors
The Company stipulates in its current Articles of Incorporation that the Company may enter into contracts with External
Directors which limit their liabilities for compensation of damages to the Company within a certain range so that theCompany can invite competent personnel as External Directors. If the reelection of Messrs. Yoshio Kometani, Katsuya
Natori, Shigenobu Aikyo and Hiroshi Kanno, candidates for External Director, is approved, the Company intends torenew the liability limitation contracts with them with a content as stated below.
- In the event that External Directors cause damages to the Company by performing their duties, the maximum amountof liability shall be the minimum amount prescribed in Article 425, Paragraph 1 of the Japanese Companies Act, on thecondition that they perform their duties in good faith and without gross negligence.

- 10 -

Proposal 3: Election of Four Corporate Auditors
The term of office for all the current Corporate Auditors will expire at the conclusion of this General
Meeting of Shareholders.
Therefore, the election of four Corporate Auditors is proposed, including three External Corporate
Auditors.
The candidates for Corporate Auditors are as follows, and the Board of Corporate Auditors has given its
approval to this proposal.
No.

Name
(Date of birth)

Career summary, positions at the Company andsignificant concurrent positions
April 1978
March 2005

Katsunori Aikyo(October 1, 1955)
1
New Appointment

Kenji Seto
(July 4, 1953)
2

Reappointment
External Corporate
AuditorIndependent
Corporate Auditor

Number ofshares of theCompany held

Joined Mitsui & Co., Ltd.
General Manager of Non-Ferrous Metal Products Dept., Iron &Steel Raw Materials and Non-Ferrous Metals Business Unit,
Mitsui & Co., Ltd.
December 2006 General Manager of Non-Ferrous Metal Materials Dept., Mineral& Metal Resources Business Unit, Mitsui & Co., Ltd.
April 2008
Senior Vice President, Chief Operating Officer of Americas
Energy & Mineral Resources Division, Mitsui & Co. (U.S.A.),
0
Inc
April 2011
Managing Officer, Chief Operating Officer of Transportation
Logistics Business Unit, Mitsui & Co., Ltd.
April 2013
Managing Officer, Senior Deputy General Manager of Osaka
Office, Mitsui & Co., Ltd.
April 2014
Executive Managing Officer, General Manager of Nagoya
Office, Mitsui & Co., Ltd. (current position)
March 2017
Expected to retire from Mitsui & Co., Ltd.
Reasons for selection as a Corporate Auditor candidate
Mr. Katsunori Aikyo has been newly selected as a candidate for Corporate Auditor, as he is judged
to be able to audit from an objective perspective by utilizing his insight in business activities and theoverall management based on his experience as a member of the management of the general trading
company.
April 1976
Joined Mitsui Bank (currently Sumitomo Mitsui Banking
Corporation)
October 2000
Head of Financial Products Dept., Mitsui Bank
April 2001
Head of Business Dept. I, Europe, Middle East and Africa
Division, Sumitomo Mitsui Banking Corporation
October 2005
Joined JCB Co., Ltd.
0
June 2006
Board Member, Executive Officer, General Manager ofInternational Headquarters, JCB Co., Ltd. and President andDirector, JCB International Co., Ltd.
April 2013
Board Member, Senior Executive Officer, Head of Processing
Business Group, JCB Co., Ltd.
March 2016
External Corporate Auditor of the Company (current position)
Reasons for selection as an External Corporate Auditor candidate
Mr. Kenji Seto has been successively selected as a candidate for External Corporate Auditor, as
he is judged to be able to audit from an objective perspective by utilizing his abundant
experience as a corporate manager over the years and a wide range of knowledge related tofinance. If election of Mr. Kenji Seto is approved, the Company intends to appoint him as
Independent Corporate Auditor as prescribed by the Tokyo Stock Exchange.

- 11 -

No.

Name(Date of birth)

Career summary, positions at the Company andsignificant concurrent positions

Number ofshares of theCompany held

April 1977
April 1986
July 1997
April 2005

3

4

Joined Bridgestone Tire Co., Ltd.
Joined Pricewaterhouse Aoyama Audit Corporation
Director, PricewaterhouseCoopers Tax Corporation
Founded Yoshihiro Kato International Accounting Office
Head, Yoshihiro Kato International Accounting Office (current
position)
April
2005
Professor, Kanazawa Seiryo University and Graduate School of
Yoshihiro Kato
0
Kanazawa Seiryo University(November 20, 1954)
April 2012
Part-time Lecturer, Faculty of Law, Toin University of
Yokohama
Reappointment
Part-time Lecturer, Faculty of Human Life, Jumonji University
External Corporate April 2014
Professor, Faculty of Human Life, Jumonji University (current
Auditorposition)Independent
March 2016
External Corporate Auditor of the Company (current position)
Corporate Auditor
Reasons for selection as an External Corporate Auditor candidate
Mr. Yoshihiro Kato has a wealth of knowledge and experience as a tax accountant and researcher
on tax accounting. Although Mr. Yoshihiro Kato has never been directly engaged in corporate
management, he has been successively selected as a candidate for External Corporate Auditor, as heis judged to be capable of appropriately performing the duties of an External Corporate Auditor forthe reasons mentioned above. If election of Mr. Yoshihiro Kato is approved, the Company intends
to appoint him as Independent Corporate Auditor as prescribed by the Tokyo Stock Exchange.
April 1974
Joined Export-Import Bank of Japan
April 1980
Deputy Director, Office of Permanent Delegation of Japan,
International Bank for Reconstruction and Development (TheWorld Bank) (Washington, D.C., U.S.A.)
May 2000
Special Advisor (in charge of Act on Access to Information Heldby Administrative Organs), Japan Bank for International
Cooperation
April 2001
Director General, Legal Affairs Office, Japan Bank forInternational Cooperation
January 2002
Senior Advisor, Deposit Insurance Corporation of Japan
Kazumi Inoue0(secondment)(September 30, 1950)
March 2004
Advisor to Human Resources Management Office, Japan Bankfor International Cooperation (returned)
New Appointment
April 2004
Left Japan Bank for International Cooperation
External Corporate May 2004
Managing Director, JAL Capital Co., Ltd.
Auditor
April 2010
Advisor to Managing Director (Head of the Internal Control
Independent
Office) (in charge of internal control promotion), Mitsubishi
Corporate Auditor
Chemical Holdings Corporation
September 2015

Advisor to General Manager, Internal Control Promotion Dept.,
MITSUBISHI RAYON CO., LTD. (current position)
March 2017
Expected to retire from MITSUBISHI RAYON CO., LTD.
Reasons for selection as an External Corporate Auditor candidate
Mr. Kazumi Inoue has been newly selected as a candidate for External Corporate Auditor, as he isjudged to be able to audit from an objective perspective by utilizing his abundant experience andachievements as well as wide range of knowledge and insight related to corporate management. Ifelection of Mr. Kazumi Inoue is approved, the Company intends to appoint him as Independent
Corporate Auditor as prescribed by the Tokyo Stock Exchange.

- 12 -

(Notes) 1. The above candidates for Corporate Auditors have no special interest in the Company.
2. The terms of office of the current External Corporate Auditors as the Company’s Corporate Auditor will be one year for
Messrs. Kenji Seto and Yoshihiro Kato as of the conclusion of this General Meeting of Shareholders.
3. Liability limitation contract with the External Corporate Auditors
The Company stipulates in its current Articles of Incorporation that the Company may enter into contracts with External
Corporate Auditors which limit their liabilities for compensation of damages to the Company within a certain range sothat the Company can invite competent personnel as External Corporate Auditors. If the election of Messrs. Kenji Seto
and Yoshihiro Kato, candidates for External Corporate Auditors, is approved, the Company intends to renew the liability
limitation contract with them with a content as stated below. Furthermore, if the election of Mr. Kazumi Inoue isapproved, the Company intends to enter into a similar liability limitation contract with him.
- In the event that External Corporate Auditors cause damages to the Company by performing their duties, the maximum
amount of liability shall be the minimum amount prescribed in Article 425, Paragraph 1 of the Japanese Companies
Act, on the condition that they perform their duties in good faith and without gross negligence.

Proposal 4: Payment of Bonuses to Directors
In view of the Company’s performance for this fiscal year, it is proposed that bonuses of up to ¥20
million in total be paid to three Directors (excluding External Directors) who were in office as of December
31, 2016.

- 13 -

[Appendix]
Operations Report (from January 1, 2016 to December 31, 2016)

Overview and Results of Operations
During the fiscal year under review, the Japanese economy continued a gradual recovery trend in spite ofa slow improvement in corporate earnings, on the back of the economic and monetary policies introduced by
the government and the Bank of Japan. The global economy recovered gradually, mainly in Europe and theUnited States. However, the situation is still uncertain mainly due to the slowing economic growth of
emerging countries and the impact of U.S. policy trends.
Looking at crude oil prices, WTI oil prices recovered to the level of 50 dollars per barrel from the level atthe beginning of the year due to expectations to reduce oversupply on the back of oil reduction agreements
among oil producing countries. In the medium and long term, oil companies are likely to continue oil and gas
exploration and development activities mainly in deepwater, with a view to ensuring the sustainable supply ofenergy resources. Business related to floating production systems, the MODEC Group’s mainstay business, is
expected to experience long range stable growth.
Under these circumstances, for the consolidated fiscal year ended December 31, 2016, orders resulted in¥92,704 million (down 50.9% year on year) mainly due to a change to the specification for existing projects
and O&M services. Revenue was ¥229,987 million (down 22.2%) due to steady progress in construction of
FPSOs.
In terms of profit, operating profit stood at ¥18,018 million (up 255.0%), reflecting the improvement inearnings from FPSO construction work and the realization of deferred profits. Ordinary profit came to¥29,409 million (up 129.4%), owing to an increase in operating profit coupled with the posting of stable
equity in earnings of the affiliates accounted for by the equity method in the lease business. As a result, profit
attributable to owners of parent was ¥21,012 million (up 260.7%).

- 14 -

Financial Statements
Consolidated Balance Sheet(December 31, 2016)(Millions of Japanese yen)
Description

AmountDescription(Assets)
Current assets

Amount(Liabilities)
218,042

Current liabilities

142,536

Cash and time deposits

42,807

Accounts payable - trade

96,738

Accounts receivable - trade95,544Current portion of long-term loans payable

7,812

Inventories

2,360

Lease obligations

20

Short-term loans receivable

55,012

Accrued expenses

14,377

Deferred tax assets

3,263

Income taxes payable

9,713

Other current assets

21,026

Advances received

5,252

Less - allowance for bad debts(1,971)

Accrued employees’ bonuses

7

Accrued directors’ bonuses

13

115,206

Provision for product warranty

Property and equipment

14,161

Provision for repairs

43

Buildings and structures

88

Other provisions

5

Non-current assets

6,860

Machinery and equipment

12,101

Deferred tax liabilities

1

Other property and equipment

1,784

Other current liabilities

1,688

Construction in progress

186
Non-current liabilities
7,420

Long-term loans payable

Goodwill

1,414

Lease obligations

Other

6,005

Net defined benefit liabilities

Intangible assets

56,10242,4789265

Liabilities from application of equity method

7,350

93,624

Other non-current liabilities

5,998

Investment securities
Long-term loans receivable fromunconsolidated subsidiaries andaffiliated companies
Long-term time deposits

55,162

Total liabilities

Investments and other assets

198,639

28,165(Net assets)

3,781

Shareholders’ equity

118,200

Deferred tax assets

2,666

Common stock

30,122Other investments

3,848

Capital surplus

30,852Retained earnings

57,227Less - treasury stock at cost
Accumulated gains (losses) from valuation
Unrealized gains (losses) on available-for-salesecurities, net of tax
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

333,249(Note) The figures are rounded down to the nearest million yen.

- 15 -

(1)
4,849
(11)
(10,453)
15,490(176)
11,560Total net assets

134,609

Total liabilities and net assets

333,249

Consolidated Statement of Income(For year ended December 31, 2016)(Millions of Japanese yen)
Description

AmountRevenue

229,987

Cost of sales

198,443

Gross profit

31,544

Selling, general and administrative expenses

13,526

Operating profit

18,018Non-operating income
Interest and dividend income
Equity in earnings of affiliates and unconsolidated
subsidiaries
Gain on revaluation of derivatives

4,055
9,618
397

Other

665

14,736

Non-operating expenses
Interest expense

1,421

Foreign exchange gains (losses), net

1,807

Other

116

Ordinary profit

3,346
29,409Extraordinary losses
Loss on disposal of property and equipment

107

Impairment loss

1,524

1,632

Income before income taxes

27,776

Income taxes - current

6,284

Income taxes - prior

6

Income taxes - deferred

1,873

Net income

19,612

Loss attributable to non-controlling interests(1,400)

Profit attributable to owners of parent

21,012- 16 -

Non-Consolidated Balance Sheet(December 31, 2016)(Millions of Japanese yen)
Description

AmountDescription(Assets)
Current assets

Amount(Liabilities)
146,856

Current liabilities

104,366

Cash and time deposits

13,128

Accounts payable - trade

61,780Accounts receivable - trade52,753Current portion of long-term loans payable

6,087Work in process

1,478

Lease obligations

Advance payments - trade

Accounts payable - other542

Accrued expenses

380

72,789

Income taxes payable112

Accrued income

212

Advances received

1,938

Other current assets

7,867

Deposits received

54

Less - allowance for bad debts(2,105)

CMS deposits received

Prepaid expenses
Short-term loans receivable

6

20

726

33,019Accrued employees’ bonuses

7

Accrued directors’ bonuses

13

146

Other provisions

5

Buildings

88

Other current liabilities

Tools, furniture and fixtures

31

Leased assets

26

Non-current assets
Property and equipment

79,392

Non-current liabilities
Long-term loans payable
Lease obligations

32

Provision for retirement benefits

Software31

Deferred tax liabilities

Other

1

Other non-current liabilities

Intangible assets

Total liabilities
Investments and other assets
Investment securities

79,212403
42,15440,729
9
265
6
1,144
146,520(Net assets)

153

Shareholders’ equity

81,276

Investment in subsidiaries and affiliates
Long-term loans receivable fromunconsolidated subsidiaries andaffiliated companies
Insurance funds

63,071

Common stock

30,122

13,060Capital surplus

30,852Other investments

2,588

338

Legal capital surplus
Retained earnings

68

Other retained earnings

20,234Less-treasury stock at cost
Valuation and translation adjustments
Unrealized gains (losses) on available-for-salesecurities, net of tax
Unrealized gains (losses) on hedging derivative,
net of tax
226,248- 17 -

20,303

Legal retained earnings

Retained earnings brought forward

Total assets

30,852

20,234(1)(1,549)(11)(1,537)

Total net assets

79,727

Total liabilities and net assets

226,248

Non-Consolidated Statement of Income(For year ended December 31, 2016)(Millions of Japanese yen)
Description

AmountRevenue

113,847

Cost of sales

114,302

Gross loss

(455)

Selling, general and administrative expenses

5,973

Operating loss

(6,429)Non-operating income
Interest and dividend income

11,014

Other

957

11,971Non-operating expenses
Interest expense

1,359

Foreign exchange loss

2,996

Other

95

Ordinary profit

4,450
1,091

Extraordinary losses
Loss on disposal of property and equipment

35

Income before income taxes

35
1,056

Income taxes - current

25

Income taxes - deferred

1,003

Net income27- 18 -