Corporate Governance Report

CORPORATE GOVERNANCE

Last Update: April 10, 2026

Hirohiko Miyata, Representative Director, President & CEO

Contact: +81 -3-5290-1200

Securities code: 6269

https://www.modec.com/

The corporate governance of MODEC, Inc. (the “Company” or “MODEC”) is described below.

1. Basic Views on Corporate Governance, Capital Structure, Corporate Attributes, and Other Key Information
   1. Basic Views

      Basic views on corporate governance

      The Company establishes its corporate governance system in accordance with the fundamental principles of strict compliance, a focus on shareholder returns and securing business transparency. In particular, with regard to securing transparency, the Company proactively strives to ensure prompt and accurate information disclosure.

      Reasons for Non-compliance with the Principles of the Corporate Governance Code

      The Company complies with all principles of the Corporate Governance Code.

      Updated

Disclosure Based on each Principle of the Corporate Governance Code

The Company has established the MODEC, Inc. Corporate Governance Guidelines (hereinafter, the “MODEC Guidelines”). https://www.modec.com/sustainability/pdf/governanceguideline_en.pdf

Please refer to the following items for the Company’s policies regarding matters that the Corporate Governance Code states should be disclosed.

MODEC Guidelines [Article 7. Basic Policy for Cross-Shareholdings and Exercising Voting Rights Associated with Cross-Shareholdings]

The Company does not currently cross-hold any shares.

MODEC Guidelines [Article 5. Procedures Concerning Transactions that may Harm the Common Interests of Shareholders]

Based on the concept that “human resources are a source of competitive strength,” we aim to realize a society where “the ocean and humanity co-exist in harmony,” as stated in our vision, by uniting the strength of all employees across the group. In our Mid-term Business Plan 2024-2026, we are committed to actively investing in human capital, which serves as the foundation for growth and transformation, alongside the decarbonization of FPSOs and the materialization of new business. This year, we are advancing the re-organization of our policies towards human capital management. Specific initiatives related to human capital include ensuring the necessary personnel to realize our business strategy and creating a foundation for group management and a diverse, comfortable working environment where employees can maximize their value.

We believe that new ideas generated from diverse perspectives lead to further strengthening our competitiveness. Based on this belief, we aim to attract a wide range of talented individuals regardless of gender, nationality, age, or other attributes, and foster a workplace culture where diverse talents can work with peace of mind.

1. Ratio of Women

   At our Tokyo head office, we are strengthening the recruitment of women. Additionally, to create an environment where female employees can thrive in the medium to long term, we are working on “support the balance between childcare and work,” in accordance with relevant laws.

   Target item Target FY2025 results

   Ratio of female employees* 40% by the end of FY2030 34%

   Ratio of female managers* 20% by the end of FY2030 15%

   * Applies to MODEC, Inc. only

2. Foreign nationals

   As a company operating globally, we train and promote employees at each location based on each individual employee’s abilities and achievements, regardless of their nationality.

   (Reference) Ratio of foreign national employees: 95.2% (including at overseas bases (FY2025))

3. Mid-career hires

   The Company trains and promotes employees based on each individual employee’s abilities and achievements, regardless of whether they joined the Company as a new graduate or as a mid-career hire.

   (Reference) Ratio of mid-career hires: 75.5%; Ratio of mid-career hires in managerial positions: 89.1% (Tokyo head office (2025))

   The Company does not have a corporate pension fund system.

   MODEC Guidelines [Article 2. Management Philosophy], [Article 3. Basic Policy for Establishment and Enhancement of Corporate Governance System], [Article 12. Roles and Responsibilities of the Board of Directors], [Article 13. Composition of the Board of Directors], [Article 14. Procedures for Nomination of Candidates and Election/Dismissal for Officers], and [Article

   15. The Company’s Approach to Executive Remuneration and Decision Procedures]

   The election/dismissal of Directors and Directors who are Audit and Supervisory Committee Members is determined in accordance with the policies outlined in the MODEC Guidelines [Article 13. Composition of the Board of Directors] and [Article

   14. Procedures for Nomination of Candidates and Election/Dismissal for Officers], based on each individual’s work experience and knowledge. Individual career summaries are disclosed in the Annual Securities Report.

   Please refer to the Company’s website for the Mid-term Business Plan.

   https://www.modec.com/ir/strategy/midterm.html

   Please refer to the Company’s website for information on its approach to sustainability and its sustainability policy and initiatives. In FY2023, we established the Sustainability Committee to strengthen our sustainability initiatives. https://www.modec.com/sustainability/

   The Company endorses the TCFD Recommendations. Please refer to the Company’s website for information on its climate change initiatives.

   https://www.modec.com/sustainability/tcfd.html

   MODEC Guidelines [Article 12. Roles and Responsibilities of the Board of Directors]

   MODEC Guidelines [Article 13. Composition of the Board of Directors]

   MODEC Guidelines [Article 13. Composition of the Board of Directors]

   MODEC Guidelines [Article 13. Composition of the Board of Directors]

   Please refer to the Notice of Convocation of the 40th Annual General Meeting of Shareholders “(Reference) Skill Matrix” for information on the skills that are required of the Board of Directors and the balance of knowledge, experience, and abilities. https://www.modec.com/ir/stock/pdf/2025_agm_notice_en.pdf

   MODEC Guidelines [Article 18. Limitation of Interlocking Directorates of Independent Officers]

   MODEC Guidelines [Article 16. Evaluation of the Board of Directors]

   Please refer to the Company’s website for a summary of the Board of Directors’ effectiveness assessment. Summary of the Board Effectiveness Assessment Results https://www.modec.com/sustainability/pdf/Board_Effectiveness_Assessment_Results_20260325_en.pdf

   MODEC Guidelines [Article 24. Support System for Officers]

   MODEC Guidelines [Article 25. Basic Policy] and [Article 26. System for Promoting Dialogue] The Company’s website includes content for investors and shareholders. https://www.modec.com/jp/ir/individuals/ (Japanese Only)

   In accordance with our basic views on corporate governance, we implement the following systems and measures.

   ・Establish the Budget and Planning Department under the CFO, a unit responsible for IR.

   ・Actively hold individual interviews with domestic and overseas institutional investors, small meetings with the President or CFO (meetings where the President or CFO exchanges opinions with investors and analysts), and financial results briefings

   ・Prepare and publish a wide range of IR information in Japanese and English, including financial results, financial statements, and timely disclosure, as well as materials for financial results briefings and mid-term business plans, and strive to enhance fair and timely disclosure for institutional investors both domestic and international, analysts, and individual investors by posting IR information on the Company’s website.

   ・Report opinions obtained through dialogue with shareholders and investors to the Board of Directors every six months

   ・Conduct surveys to identify genuine shareholders twice a year to ascertain shareholder composition

   ・Thoroughly comply with internal rules concerning the prevention of insider trading, including by giving due consideration to fair disclosure when engaging in IR activities

   Action to Implement Management that is Conscious of Cost of Capital and Stock Price

   Availability of English Disclosure

   Date of Disclosure Update

   Available

   April 10, 2026

Explanation

The Company has formulated the Mid-term Business Plan 2024-2026 and disclosed it in February 2024. In this plan, we outline the foundational projects and their prospects to strengthen our profitability, and we have set financial KPIs (such as Return on Equity (ROE) and Price-Book value Ratio (PBR)) as targets. Subsequently, on February 13, 2025, we revised the financial targets for the fiscal year ending December 2026.

Please refer to the Company’s website for the Mid-term Business Plan 2024-2026, “Explore a Sustainable Future with Innovation.”

https://www.modec.com/ir/strategy/midterm.html

1. Capital Structure

   Foreign Shareholding Ratio	Updated		20% or more and less than 30%

   	Updated
   Name or Company Name			Number of Shares Owned	Percentage (%)
   Mitsui O.S.K. Lines, Ltd.			10,251,800	15.00
   MITSUI & Co., LTD.			10,162,300	14.86
   The Master Trust Bank of Japan, Ltd. (Trust Account)			8,151,000	11.92
   Custody Bank of Japan, Ltd. (Trust Account)			4,495,006	6.57
   MITSUI E&S Co., Ltd.			2,502,400	3.66
   THE CHASE MANHATTAN BANK, N.A. LONDONSECS LENDING OMNIBUS ACCOUNT			1,406,617	2.05
   J.P. MORGAN BANK LUXEMBOURG S.A. 384513			1,291,673	1.88
   STATE STREET BANK AND TRUST COMPANY 505223			1,127,138	1.64
   JPMorgan Securities Japan Co., Ltd.			803,948	1.17
   BNYM AS AGT/CLTS 10 PERCENT			753,811	1.10

   Status of Major Shareholders

   Name of Controlling Shareholder, if applicable (excluding Parent Companies)	-
   Name of Parent Company, if applicable	N/A

   Supplementary Explanation

   Updated

1. The status of Major Shareholders is as of December 31, 2025.

2. In addition to the above, Sumitomo Mitsui Trust Bank, Limited. holds 3.6 thousand shares (0.00%) as trust property under the "Stock Compensation Plan for Directors and Officers". These shares are included in treasury shares in the consolidated statement of financial position.

3. As disclosed in the Large Shareholder Report made available for public inspection on May 9, 2025, Asset Management One Co., Ltd. and its one co-owner are stated to own the following shares as of April 30, 2025. However, as the Company is unable to confirm the actual number of shares held as of December 31, 2025, such shares are not included in the above list of major shareholders. The details of the aforementioned Large Shareholder Report are as follows:

   Name/Number of Share Certificates, etc./Holding Ratio of Share Certificates, etc. (%)

   Asset Management One Co., Ltd./3,454,600/5.05

   Asset Management One International Ltd./190,100/0.28

   Total 3,644,700/5.33%

4. As disclosed in the Large Shareholder Report (Amendment Report) made available for public inspection on August 7, 2025, Goldman Sachs Japan Co., Ltd. and its three co-owners are stated to own the following shares as of July 31, 2025. However, as the Company is unable to confirm the actual number of shares held as of December 31, 2025, such shares are not included in the above list of major shareholders. The details of the aforementioned Large Shareholder Report (Amendment Report) are as follows:

   Name/Number of Share Certificates, etc./Holding Ratio of Share Certificates, etc. (%) Goldman Sachs Japan Co., Ltd./362,018/0.53

   Goldman Sachs Asset Management Co., Ltd./140,100/0.20 Goldman Sachs Asset Management, L. P./1,922,600/2.81 Goldman Sachs Asset Management International/682,000/1.00 Total 3,106,718/4.55%

5. As disclosed in the Large Shareholder Report (Amendment Report) made available for public inspection on January 6, 2026, J.P. Morgan Asset Management (Japan) Limited. and its five co-owners are stated to own the following shares as of December 31, 2025. However, as the Company is unable to confirm the actual number of shares held as of December 31, 2025, such shares are not included in the above list of major shareholders. The details of the aforementioned Large Shareholder Report (Amendment Report) are as follows:

Name/Number of Share Certificates, etc./Holding Ratio of Share Certificates, etc. (%)

J.P. Morgan Asset Management (Japan) Limited./3,548,800/5.19

J.P. Morgan Investment Management Inc./138,100/0.20 JPMorgan Asset Management (Asia Pacific) Limited/261,700/0.38 JP Morgan Securities Japan Co., Ltd./884,200/1.29

J.P. Morgan Securities plc/440,211/0.64

J.P. Morgan Securities LLC/131,488/0.19

1. Corporate Attributes

   Listed Stock Exchange and Market Segment	Tokyo Stock Exchange (Prime)
   Fiscal Year-End	December
   Business Sector	Machinery
   Number of Employees (Consolidated) as of the End of the Previous Fiscal Year	1,000 or more
   Net Sales (Consolidated) for the Previous Fiscal Year	¥100 billion or more but less than ¥1 trillion
   Number of Consolidated Subsidiaries as of the End of the Previous Fiscal Year	10 or more but fewer than 50

2. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder

   N/A

3. Other Special Circumstances which may have a Material Impact on Corporate Governance

   N/A

1. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight

   Corporate Governance System	Company with Audit and Supervisory Committee
   rectors
   Number of Directors Stipulated in Articles of Incorporation	15
   Directors’ Term of Office Stipulated in Articles of Incorporation	1 year
   Chairperson of the Board	President & CEO
   Number of Directors	10
   Election of External Directors	Elected
   Number of External Directors	7
   Number of Independent Directors	5

   1. Organizational Composition and Operation

Di

External Directors’ Relationship with the Company (1)

*Categories for “Relationship with the Company”.

(Use “○” when the director presently falls or has recently fallen under the category; “△” when the director fell under the category in the past; “●” when a close relative of the director presently falls or has recently fallen under the category; and “▲” when a close relative of the director fell under the category in the past.)

1. Person who executes business for the Company or its subsidiary

2. Person who executes business for a non-executive director of the Company’s parent company

3. Person who executes business for a fellow subsidiary

4. Person/entity for which the Company is a major client or a person who executes business for said person/entity

5. Major client of the Company or a person who executes business for said client

6. Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets from the Company in addition to remuneration as a director/company auditor

7. Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business for the corporation)

8. Person who executes business for a client of the Company (excluding persons categorized as any of d, e, or f above) (applies to director him/herself only)

9. Person who executes business for another company that holds cross-directorships/cross-auditorships with the Company (applies to director him/herself only)

10. Person who executes business for an entity receiving donations from the Company (applies to director him/herself only)

11. Other