his 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 2, 2020
To Our Shareholders with Voting Rights:
Toshiro Miyazaki
Director, Chairman of the Board
MODEC, INC.
3-10, Nihonbashi 2-chome Chuo-ku, TokyoNOTICE OF CONVOCATION OF
THE 34TH ANNUAL GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 34th 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 Wednesday, March 18, 2020.

1. Date and Time:Thursday, March 19, 2020, at 10:00 a.m.
(The reception desk opens at 9:00 a.m.)

2. Place:

Congres Square 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 34th Term (from January 1, 2019 to
December 31, 2019)
2. Non-consolidated Financial Statements for the 34th Term (from January 1,
2019 to December 31, 2019)
Matters to be resolved:
Appropriation of Surplus
Proposal 1:
Election of Ten Directors
Proposal 2:
Payment of Bonuses to Directors
Proposal 3:-------------------------------------------------------------------------------------------------------------------------------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 no commemorative gift will be provided to shareholders attending the meeting. We
would appreciate your kind understanding.

-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 (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 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 Wednesday, March 18, 2020. 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 Wednesday, March 18, 2020.
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, themost 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.

-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¥22.50 per share of common stock of the Company
Total amount of dividends: ¥1,269,159,548
As the Company has already paid an interim dividend of ¥22.50 per share, the annual dividend will be¥45 per share.
(3) Effective date of dividends from surplus
March 23, 2020-3-

Proposal 2:

Election of Ten Directors

The terms of office of all the eleven current Directors will expire at the conclusion of this General
Meeting of Shareholders.
Accordingly, the election of ten Directors is proposed, including six 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 FY2019

1

Yuji Kozai

Reappointment

President and Chief Executive
Officer

18 / 18 (100%)

2

Takeshi Kanamori

Reappointment

Director
Executive Vice President

18 / 18 (100%)

3Minoru Sawada

Reappointment

Director
Executive Managing Officer

18 / 18 (100%)

4

Shoichi Taguchi

New appointment

5

Kazumasa Nakai

Reappointment External Director

6

Katsuya Natori

Reappointment

7

Shigenobu Aikyo

8

–

–

External Director

14 / 14 (100%)External Director
Independent Director

External Director

16 / 18 (88.8%)

Reappointment

External Director
Independent Director

External Director

18 / 18 (100%)

Hiroko Noda

Reappointment

External Director
Independent Director

External Director

14 / 14 (100%)

9

Kazuko Shiraishi

Reappointment

External Director
Independent Director

External Director

14 / 14 (100%)10Kazuhisa Nishigai

New appointment

External Director
Independent Director

–

-4-

–

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company, andsignificant concurrent positions
April 1982
June 2005

1

Yuji Kozai(February 10, 1960)
Reappointment

Number ofshares of theCompany held

Joined Mitsui Engineering & Shipbuilding Co., Ltd.
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.
April 2015
Executive Officer, General Manager of Corporate Planning
2,900
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
April 2018
General Manager of Corporate Planning Dept., Mitsui E&S
Holdings Co., Ltd.
June 2018
Director, Mitsui E&S Holdings Co., Ltd.
March 2019
Retired from Mitsui E&S Holdings Co., Ltd.
March 2019
Representative Director, President and Chief Executive Officerof the Company (current position)
June 2019
Director, Mitsui E&S Holdings Co., Ltd. (current position)
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.

-5-

No.

Name
(Date of birth)

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

2

Takeshi Kanamori(September 7, 1956)
Reappointment

3

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.
2,700
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 Compliance 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
Engineering & Shipbuilding Co., Ltd.
5,000
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
March 2019
Director, Executive Managing Officer 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, Legal, Best Practice Promotion,
IT management divisions and supervising affiliated companies.

-6-

No.

Name
(Date of birth)

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

Number ofshares of theCompany held

April 1985
May 2012

4

Shoichi Taguchi(April 9, 1958)
New appointment

Kazumasa Nakai(August 29, 1963)
5

Reappointment
External Director

Joined Mitsui Engineering & Shipbuilding Co., Ltd.
General Manager of Planning & Administration Dept.,
Machinery & Systems Hq., and Manager of IR Dept., Mitsui
Engineering & Shipbuilding Co., Ltd.
June 2013
General Manager of Machinery Factory, Machinery & Systems
Hq., Mitsui Engineering & Shipbuilding Co., Ltd.
0
April 2014
Deputy Director, Mitsui Engineering & Shipbuilding Co., Ltd.
April 2015
Executive Officer, Mitsui Engineering & Shipbuilding Co., Ltd.
April 2016
Executive Managing Officer, General Manager of Tamano
Office, Mitsui Engineering & Shipbuilding Co., Ltd.
March 2018
President, Mitsui E&S Business Service Co., Ltd.
June 2019
Director, Mitsui E&S Holdings Co., Ltd. (current position)
Reasons for selection as a Director candidate
Mr. Shoichi Taguchi 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 wide range ofknowledge, experience and managerial capability acquired through his duties in the operating
divisions and major offices of the Company’s parent company, as well as his insight on the
Company’s business as an officer in charge of Corporate Planning Dept. of the parent company.
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,
Infrastructure Projects Business Unit, Mitsui & Co., Ltd.
0
April 2015
General Manager of First Projects Development Division,
Infrastructure Projects Business Unit, Mitsui & Co., Ltd.
October 2017
Operating Officer of Nutrition & Agriculture Business Unit,
Mitsui & Co., Ltd.
March 2019
External Director of the Company (current position)
April 2019
Managing Officer, Mitsui & Co., Ltd. (current position)
Reasons for selection as an External Director candidate
Mr. Kazumasa Nakai has been successively selected as a candidate for External Director, as he isjudged to be capable of advising the overall management of the Company, based on his wide rangeof business experience at the general trading company as well as practical knowledge related to theCompany’s business.

-7-

No.

Name
(Date of birth)

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

6

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.
1,200
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 Director, OLYMPUS CORPORATION (current
External Director
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.

-8-

No.

Name
(Date of birth)

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

7

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
Mitsui Banking Corporation
1,400
Shigenobu Aikyo
April 2010
Chairman and Representative Director, Nikko Cordial Securities(October 1, 1949)
Inc.
April 2011
Chairman and Representative Director, SMBC Nikko Securities
Reappointment
Inc.
External Director
April 2015
Advisor, SMBC Nikko Securities Inc.
External Director, HASHIMOTO SOGYO HOLDINGS Ltd.
Independent Director June 2015
(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
June 2016
Outside Director, SCSK Corporation
June 2016
External Director, NICHICON CORPORATION (current
position)
June 2019
External Statutory Auditor, Starts Corporation Inc. (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
April 1987
August 1987
March 1990

89Number ofshares of theCompany held

Joined Minato Audit Corporation (currently KPMG AZSA LLC)
Joined Prudential Securities Incorporated
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 Commerce
Accounting Manager of Tokyo Branch, Canadian Bank of0
Commerce and Tokyo Branch, CIBC Securities Inc.
Hiroko Noda
July
2006
JoinedBUSICOM
Co.,
Ltd.
(July 3, 1960)
September 2007 Representative Director, Prominent Consulting Co., Ltd.
May 2010
Founded Probity Consulting Co., Ltd.
Reappointment
Representative Director, Probity Consulting Co., Ltd. (current
External Director
position)Independent Director April 2014
Part-time Lecturer, Graduate School of Asian and International
Business Strategy, Asia University (current position)
March 2019
External Director (Audit & Supervisory Committee Member),
Okabe Co., Ltd. (current position)
March 2019
External Director of the Company (current position)
Reasons for selection as an External Director candidate
Ms. Hiroko Noda has been successively selected as a candidate for External Director, as she isjudged to be able to continue to supervise and provide advice on the overall management of theCompany 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, the Company intends to appoint her as Independent Director as prescribed by the
Tokyo Stock Exchange.
April 1974
Joined Ministry of Foreign Affairs of Japan
February 2001
Consul General, Consulate-General of Japan in Atlanta
June 2003
General Manager, International Economic Treaty Office, Treaty
Bureau, Ministry of Foreign Affairs
September 2004 Policy Coordinator, Foreign Policy Bureau, Ministry of Foreign
Affairs
October 2005
General Manager, WTO Dispute Settlement Division, Economic
Affairs Bureau, Ministry of Foreign Affairs
April 2007
Councilor, Embassy of Japan in Poland
January 2012
Ambassador Extraordinary and Plenipotentiary to Lithuania
June 2015
Ambassador (for Women, Human Rights and Humanitarian0
Kazuko Shiraishi
Affairs and in charge of Arctic Affairs)(August 18, 1951)
June 2016
Ambassador (in charge of Arctic Affairs), Ministry of Foreign
Affairs
Reappointment
October 2016
Conciliation Commissioner, Tokyo Family Court (current
External Director
position)
Term of office of Ambassador, Ministry of Foreign Affairs
Independent Director June 2017
expiredDecember 2017 Special Envoy for EXPO 2025 OSAKA, KANSAI, JAPAN
June 2018
External Director (Audit and Supervisory Committee Member),
SCSK Corporation (current position)
March 2019
External Director of the Company (current position)
Reasons for selection as an External Director candidate
Ms. Kazuko Shiraishi has been successively selected as a candidate for External Director, as she isjudged to be able to continue to supervise and provide advice on the overall management of theCompany from an objective standpoint, based on her wealth of experience related to diplomacy andbroad insight she gained through her career to date. If election of Ms. Kazuko Shiraishi is approved,
the Company intends to appoint her as Independent Director as prescribed by the Tokyo Stock
Exchange.

- 10 -

No.

Name(Date of birth)

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

Number ofshares of theCompany held

April 1975

10

Joined Bridgestone Tire Co., Ltd. (currently Bridgestone
Corporation)
Director, Process Engineering Development Division,
April 2004
Bridgestone Corporation
Vice President and Officer, Bridgestone Corporation
January 2005
Vice President and Senior Officer, Bridgestone Corporation
October 2007
Member of the Board, Vice President and Senior Officer,
March 2008
Bridgestone Corporation0
Kazuhisa Nishigai
Representative Board Member, Senior Vice President,
March 2010
(July 29, 1950)
Bridgestone Corporation
Representative Board Member and COO, Bridgestone
March 2012
New appointment
Corporation
Member of the Board, COO and Representative Executive
March 2016
External Director
Officer, Bridgestone Corporation
Independent Director
Member of the Board, Bridgestone Corporation
January 2019
External Advisor, Bridgestone Corporation (current position)
March 2019
Reasons for selection as an External Director candidate
Mr. Kazuhisa Nishigai has been newly selected as a candidate for External Director, as he is judged
to be capable of advising the overall management of the Company, based on his extensive
knowledge and management ability gained through his longtime involvement in the management ofa listed company, as well as wide range of business experience related to production engineering,
plant management and sales, etc. If election of Mr. Kazuhisa Nishigai is approved, the Company
intends to appoint him 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 five years for Mr.
Katsuya Natori, four years for Mr. Shigenobu Aikyo and one year for Mr. Kazumasa Nakai and Mses. Hiroko Noda andKazuko Shiraishi 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. Kazumasa Nakai, Katsuya Natori and Shigenobu Aikyo and Mses.
Hiroko Noda and Kazuko Shiraishi 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 amountprescribed in Article 425, Paragraph 1 of the said Act. If this Proposal is approved, the Company intends to renew theliability limitation contracts with them and newly enter into contracts of the same content with Messrs. Shoichi Taguchi
and Kazuhisa Nishigai.

- 11 -

Proposal 3: Payment of Bonuses to Directors
It is proposed that bonuses of up to ¥23 million in total be paid to four Directors (excluding External
Directors) who were in office as of December 31, 2019. The amount of bonuses to Directors is calculated byconsidering the degree of achievement with respect to profit and the amount of new orders received, and thedetail of achievement of annual targets.

- 12 -

[Appendix]
Operations Report (from January 1, 2019 to December 31, 2019)
Overview and Results of Operations
During the consolidated fiscal year ended December 31, 2019, the Japanese economy recovered
gradually as conditions for employment and income continued to improve on account of growth in corporate
earnings, despite weak export and production activities. As to the global economy, the outlook grewincreasingly uncertain owing to concerns about politics and economy stemming from trade issues between the
United States and China as well as the Brexit issue.
WTI oil prices soared towards the end of the year and closed at the level of 60 dollars per barrel, as fears
about supply disruptions due to increased geopolitical risks in the Middle East and concerns for the friction
between the United States and China had eased, while decline in demand due to economic slowdown became
more likely. From the aspect of sustainable supply of energy resources, petroleum companies are forecast tocontinue development mainly in deep-sea areas. Accordingly, the business related to floating production
systems, the Group’s mainstay business, is expected grow steadily.
Under these circumstances, for the consolidated fiscal year ended December 31, 2019, orders resulted in¥635,832 million (up 150.7% 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 ¥332,644 million (up49.9%) due to steady progress in construction of FPSOs.
In terms of profit, operating loss of ¥4,841 million was posted (operating profit of ¥14,928 million was
posted in the previous consolidated fiscal year) due to the recording of provision for expenses that surpassed
the initial estimate of an EPCI project for Mexico. Ordinary profit came to ¥294 million (down 99.0%)
including interest income and equity in earnings of affiliates and unconsolidated subsidiaries. In addition,
under extraordinary losses, estimated expenses required for the repair of FPSOs which were offering charter
service off the coast of Brazil were recorded. Due to these and other factors, loss attributable to owners ofparent was ¥18,227 million (profit attributable to owners of parent of ¥21,891 million was posted in theprevious consolidated fiscal year).

- 13 -

Financial Statements

Consolidated Balance Sheet(December 31, 2019)(Millions of Japanese yen)

Description

AmountDescription(Assets)
Current assets

Amount(Liabilities)
247,512Current liabilities

231,860

Cash and time deposits

52,381

Accounts payable - trade150,847

Accounts receivable - trade163,364

Current portion of long-term loans payable

13,931

Lease obligations

1,544

Inventories

4,630

Short-term loans receivable

8,387

Accrued expenses

18,110

Other current assets

19,198

Income taxes payable

5,129

Less - allowance for bad debts(450)

Advances received

13,411

Non-current assets

135,677

Accrued directors’ bonuses

25
7,146

71

Provision for product warranty

6,930

5

Provision for repairs

10,573

Other current liabilities

4,124

5,048

Buildings and structures
Machinery and equipment
Construction in progress

85

Provision for loss on construction contracts

Property and equipment

Other property and equipment

Accrued employees’ bonuses

4,960
10

Non-current liabilities
Intangible assets
Goodwill
Other

9,652
850
8,801

Long-term loans payable

10,827

Lease obligations

2,238

Net defined benefit liabilities

366

Deferred tax liabilities

196

120,976

Liabilities from application of equity method

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

72,202Other provisions

37,886

Other non-current liabilities

3,922

Total liabilities

Other investments

6,965

Investments and other assets

5,451
285
6,596
257,823(Net assets)
Shareholders’ equity

131,185

Common stock

30,122

Capital surplus

29,301Retained earnings

71,950Less - 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

25,962

383,189(Note) The figures are rounded down to the nearest million yen.

- 14 -(188)(9,394)(11,282)
2,983(1,095)
3,575

Total net assets

125,366

Total liabilities and net assets

383,189

Consolidated Statement of Income(For year ended December 31, 2019)(Millions of Japanese yen)
Description

AmountRevenue

332,644

Cost of sales

325,148

Gross profit

7,495

Selling, general and administrative expenses

12,336

Operating loss

(4,841)Non-operating income
Interest income
Equity in earnings of affiliates and unconsolidated
subsidiaries
Other

5,943
2,382
67

8,393

Non-operating expenses
Interest expense

964

Foreign exchange losses

1,375

Loss on valuation of derivatives

590

Other

327

Ordinary profit

3,257
294

Extraordinary profit
Gain on sales of non-current assets

327

Gain on liquidation of subsidiaries and affiliates

509

837

16,69016,690Extraordinary losses
Special repair expenses
Loss before income taxes(15,558)

Income taxes - current

2,780

Income taxes - prior

0

Income taxes - deferred

(660)

Loss

(17,680)

Profit attributable to non-controlling interests

547

Loss attributable to owners of parent(18,227)- 15 -

Non-Consolidated Balance Sheet(December 31, 2019)(Millions of Japanese yen)
Description

AmountDescription(Assets)
Current assets

Amount(Liabilities)
143,304

Current liabilities

141,007

Cash and time deposits

11,916

Accounts payable - trade122,180

Accounts receivable - trade121,546

Current portion of long-term loans payable

13,396Work in process
Advance payments - trade
Prepaid expenses

73

Lease obligations

47

Accounts payable - other

1,566

16
1,973

Accrued expenses

247

Short-term loans receivable

564

Income taxes payable132

Accrued income

56

Advances received

2,693

Other current assets

7,802

Deposits received

173

Less - allowance for bad debts(268)

Accrued employees’ bonuses

13

Accrued directors’ bonuses

25

Other current liabilities

152

Non-current assets
Property and equipment

100,590134

Buildings, net

71

Tools, furniture and fixtures, net

12Leased assets, net

50

Non-current liabilities
Long-term loans payable

10,651
10,095

Lease obligations

38

635

Provision for retirement benefits

365

Software19

Other provisions

51

Other

616

Other non-current liabilities

100

Intangible assets

Investments and other assets
Investment securities

99,8190Total liabilities

151,659(Net assets)

Investment in subsidiaries and affiliates
Long-term loans receivable fromunconsolidated subsidiaries andaffiliated companies
Deferred tax assets

89,948

Shareholders’ equity

92,482

7,397

Common stock

30,122427

Capital surplus

30,852Other investments

2,045

Legal capital surplus
Retained earnings

243,895

68

Other retained earnings

31,628Less-treasury stock at cost

(188)

Total liabilities and net assets- 16 -

31,696

Legal retained earnings

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

30,852(247)(247)
92,235
243,895

Non-Consolidated Statement of Income(For year ended December 31, 2019)(Millions of Japanese yen)
Description

AmountRevenue

222,396

Cost of sales

211,398

Gross profit

10,998Selling, general and administrative expenses

7,729

Operating profit

3,268

Non-operating income
Interest and dividend income

3,261

Foreign exchange gains

8

Other

78

3,348

Non-operating expenses
Interest expense

1,679

Loss on valuation of derivatives

627

Other

138

Ordinary profit

2,446
4,170

Extraordinary losses
Loss on liquidation of subsidiaries and affiliates

273

Income before income taxes

273
3,897

Income taxes - current

3

Income taxes - deferred(434)

Net income

4,327- 17 -