Correspondence to Corporate Governance Code｜Corporate Governance｜IR

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

[Principle 2.2 Ensuring Diversity within the Company]

The MarketEnterprise Group believes that enabling a diverse workforce to realize their full potential leads to sustainable growth and medium- to long-term improvements in corporate value.

When promoting people to core human resource and management positions, our basic policy is to provide fair opportunities for growth and promotion that place emphasis on each employee's motivation, ability and aptitude, rather than categorizing people by attributes such as nationality, gender, age or background (including whether they were hired as new graduates or mid-career).

Because the Group's policy is to ensure diversity by providing such opportunities and enabling each individual to demonstrate their abilities, we do not establish numerical targets for the composition ratio or number of people by attribute in promotions to core human resource and management positions. Accordingly, we neither set voluntary and measurable targets for ensuring diversity in the promotion of core human resources nor disclose the status of achievement against such targets.

On the other hand, we hire and promote people with diverse backgrounds and of diverse ages, regardless of whether they joined as new graduates or mid-career hires, and we regularly review the status of promotions to management positions and related matters.

For human resource development, we have implemented a role-based grading system, various training programs, onboarding for new employees, corporate philosophy training for mid-career hires, career development interviews, and the development of next-generation management personnel. To improve the internal environment, we identify organizational issues through engagement surveys, assign and develop personnel using a talent management system, and work to invigorate internal communication.

We will continue our policy of not establishing numerical targets by attribute, while developing motivated and capable employees and promoting people with the proper aptitude.

[Principle 4.1 Roles and Responsibilities of the Board (1): Setting the Broad Direction of Corporate Strategy]

MarketEnterprise recognizes improving earning power and capital efficiency as important management issues for achieving sustainable growth and medium- to long-term improvements in corporate value.

With regard to the cost of capital, in "Action to Implement Management that is Conscious of Cost of Capital and Stock Price" dated November 13, 2025, MarketEnterprise estimated its cost of shareholders' equity at approximately 7% based on the CAPM (Capital Asset Pricing Model) and disclosed this estimate.

In the same document, MarketEnterprise identified the volatility of ROE, the stabilization of net income and the enhancement of equity capital as issues, and disclosed its policy for initiatives to improve its earning power and financial structure.

However, a process for comprehensively analyzing and evaluating the cost of capital, capital profitability and market valuation, and reflecting the results in the basic policies for management strategy, earnings plans and capital policy, has not yet been sufficiently established.

Going forward, toward further implementing management that is conscious of cost of capital and stock price, MarketEnterprise will continue to examine analysis and evaluation by the Board of Directors and the actions to be taken based on the results.

The current management targets and initiatives to improve earning power and capital efficiency are described in "Action to Implement Management that is Conscious of Cost of Capital and Stock Price" in this report.

[Principle 4.3 Roles and Responsibilities of the Board (3): Effective Oversight of the Management and Directors (1)]

(CEO succession plan)

The Board of Directors of MarketEnterprise has yet to concretely discuss a succession plan for the Chief Executive Officer (CEO) as an urgent issue, given the history of MarketEnterprise and the age of the current CEO and other members of the management. Going forward, MarketEnterprise will examine what the succession plan should concretely be.

On the other hand, the MarketEnterprise Group recognizes the development of next-generation management personnel who will support sustainable growth as an important management issue. We select candidates for future business leaders and senior executives and, in addition to in-house development programs, provide them with opportunities to participate in programs with external instructors and in executive development training offered by external organizations. We also develop next-generation management personnel by giving them opportunities to take part in the Management Committee and important projects.

These initiatives concern the development of management personnel in general and have not been systematized as a plan for selecting and developing CEO succession candidates.

(Evaluation criteria and procedures for dismissal of the CEO)

The Rules on Officers of MarketEnterprise prescribe that if an Officer commits any wrongdoing or breach of trust, or lacks the eligibility to be an Officer, the Board of Directors may urge the Officer to resign. Dismissal of Officers is made based on legitimate reasons for dismissal pursuant to a resolution of the General Meeting of Shareholders, following approval by the Board of Directors.

On the other hand, MarketEnterprise has not separately defined evaluation criteria or specific procedures for dismissal of the CEO.

MarketEnterprise holds meetings of External Officers, consisting of Independent External Directors and External Audit & Supervisory Board Members, approximately once every half year. At these meetings, they exchange information and opinions and develop a shared awareness from an independent and objective standpoint. Through oversight by External Directors and audits by External Audit & Supervisory Board Members, MarketEnterprise strives to ensure highly effective monitoring of the management.

(Related party transactions)

In principle, MarketEnterprise has a policy of not engaging in transactions with related parties. However, a transaction that contributes to an increase in the corporate value of MarketEnterprise and is highly non-substitutable and economically reasonable is executed after sufficient deliberation and resolution by the Board of Directors. In the deliberation, particular attention is paid to matters such as whether the transaction may damage the soundness of management of the MarketEnterprise Group, whether it is valid in light of rational judgment, and whether its terms are appropriate compared with other external transactions.

In addition, in accordance with the Standards of Audit by Audit & Supervisory Board Members, the Audit & Supervisory Board Members monitor and verify competing transactions, conflict-of-interest transactions and other transactions to ensure that there is no breach of Directors' duties.

[Principle 4.7 Use of Optional Mechanisms]

MarketEnterprise is a company with an Audit & Supervisory Board, and two of its five Directors are Independent External Directors.

For the nomination of Director candidates, the Representative Director and Directors select candidates. Before submitting them to the Board of Directors, they explain the candidates and the reasons for their selection to the Independent External Directors and obtain their opinions. The Director candidates to be proposed to the General Meeting of Shareholders are then determined following deliberation and resolution by the Board of Directors.

The remuneration of individual Directors is determined by the Representative Director, as delegated by the Board of Directors, within the scope of the total amount of remuneration approved by resolution of the General Meeting of Shareholders. Before making the decision, the Representative Director explains the basis for each individual remuneration decision to the Independent External Directors and obtains their advice.

In addition to these prior explanations and consultations on nomination and remuneration, MarketEnterprise obtains appropriate involvement and advice from the Independent External Directors at Board of Directors meetings. However, at present, MarketEnterprise has not established a nomination committee or a remuneration committee as an optional advisory body.

Going forward, MarketEnterprise will consider establishing such committees as necessary to strengthen its governance structure.

[Principle 4.15 Training of Directors and Audit & Supervisory Board Members]

MarketEnterprise provides newly elected Directors and Audit & Supervisory Board Members with explanations about important matters concerning MarketEnterprise that they should know in performing their duties and, as necessary, with opportunities such as visits to its business sites.

In addition, MarketEnterprise has a policy of covering the costs of external seminars that Directors and Audit & Supervisory Board Members attend to acquire the knowledge necessary to fulfill their roles and responsibilities. Each Director and Audit & Supervisory Board Member strives for self-improvement in basic fields such as law and finance, as well as in management in general and in their respective areas of expertise.

On the other hand, MarketEnterprise has no practice of the Board of Directors confirming the implementation status of such training support.

Disclosure Based on the Principles of the Corporate Governance Code

[Principle 1.1 Constructive Dialogue with Shareholders]

MarketEnterprise recognizes the importance of holding active dialogue with shareholders at all times, reflecting their opinions and requests in management, and growing together with shareholders, in order to achieve sustainable growth and medium- to long-term improvements in corporate value.

The Board of Directors of MarketEnterprise has approved policies on developing structures and initiatives to promote constructive dialogue with shareholders.

For dialogue with shareholders, MarketEnterprise has established an IR structure centered on the Managing Director, General Manager of Administration Division and the Head of the IR Unit, Corporate Planning Office. In addition to individual meetings, MarketEnterprise holds financial results briefings and presentations for individual investors, participates in IR events hosted by securities companies and others, and engages in dialogue with institutional investors.

To support such dialogue internally, the heads of the general affairs, finance, accounting, legal affairs, public relations and other departments share company information once a week in principle, led by the Managing Director, General Manager of Administration Division, who serves as the person in charge of information handling, to ensure close cooperation.

The content of dialogue with shareholders is reported to the Board of Directors as appropriate. MarketEnterprise takes seriously the opinions and concerns of shareholders identified through dialogue and strives to reflect them in management.

In dialogue, MarketEnterprise strives to manage information appropriately to prevent insider trading and leakage of material information, for example by making explicit decisions on whether information may be disclosed before it is released.

[Principle 1.4 Cross-Shareholdings]

At present, MarketEnterprise does not hold any listed shares as cross-shareholdings.

If a business partner holding MarketEnterprise shares as cross-shareholdings indicates its intention to sell or otherwise dispose of those shares, MarketEnterprise will not hinder the sale, for example by implying a reduction in business transactions. The continuation and terms of transactions with such a business partner are determined after thoroughly verifying their economic rationality, and MarketEnterprise has a policy of not engaging in transactions that would harm the common interests of MarketEnterprise and its shareholders.

[Principle 2.2 Ensuring Diversity within the Company]

Our views on ensuring diversity, the reasons for not setting targets, the status of ensuring diversity, and our human resource development policy and internal environment improvement policy and their implementation status are described in [Principle 2.2 Ensuring Diversity within the Company] under "Reasons for Non-compliance with the Principles of the Corporate Governance Code" above.

[Principle 2.4 Roles of Corporate Pension Funds as Asset Owners]

To support employees' medium- to long-term asset building, MarketEnterprise has introduced an optional defined contribution pension plan. Under this plan, participants select their own investment products and benefits are determined by the investment results; MarketEnterprise does not manage corporate pension reserves.

In addition, MarketEnterprise provides training on the plan to employees when they join, to promote their understanding of the plan and of asset management.

[Principle 3.1 Full Disclosure]

(i) Management philosophy, business strategies and business plans

Under its corporate philosophy of "conducting business that builds Win-Win relationships, and continuing to be a group of proactive people who truly enjoy business," the MarketEnterprise Group aims to be "an optimized trading company that realizes a sustainable society."

MarketEnterprise's management philosophy and long-term vision are disclosed on its website. Business strategies and business plans are disclosed in "Management Policy, Business Environment and Issues to be Addressed" in the Annual Securities Report, in financial results presentation materials and in other documents.

(ii) Basic views and basic policy on corporate governance

MarketEnterprise's basic views and basic policy on corporate governance are disclosed at the beginning of "I-1. Basic Views" in this report and in the descriptions of each principle in this section.

(iii) Policies and procedures for determining the remuneration of the senior management and Directors

When determining officers' remuneration, MarketEnterprise gives priority to matters such as the balance between returning profits to shareholders and the retained earnings necessary for medium- to long-term growth. Taking into account common practices, business performance, the economic environment, employee compensation and other factors, evaluation results are reflected in the remuneration according to the scope of duties of each Director, their contribution to medium- to long-term business performance, group-wide performance, and the degree to which group-wide targets were achieved.

Directors' remuneration for the current fiscal year consists of fixed remuneration only. Separately, MarketEnterprise has introduced a stock option plan as an incentive for long-term improvement of corporate value. Apart from the existing stock option plan, MarketEnterprise continues to examine the introduction of a new medium- to long-term performance-linked remuneration and stock-based remuneration system.

Details of the policy and procedures for determining remuneration are described in [Director Remuneration] under "II-1. Matters Concerning Organizational Composition and Operation" in this report.

(iv) Policies and procedures for appointment/dismissal of the senior management and nomination of Director and Audit & Supervisory Board Member candidates

MarketEnterprise's policy for nominating Director and Audit & Supervisory Board Member candidates is to nominate suitable people who can fulfill their duties and responsibilities, after thoroughly considering each person's character and insight.

Although MarketEnterprise has no specific rules on standards or policies regarding the independence of External Director and External Audit & Supervisory Board Member candidates, the Board of Directors confirms whether each candidate can maintain substantial independence, with reference to the standards set by Tokyo Stock Exchange, Inc.

For Director candidates, the Representative Director and Directors select candidates. Before submitting them to the Board of Directors, they explain the candidates and the reasons for their selection to the Independent External Directors and obtain their opinions, and the candidates are then determined following deliberation and resolution by the Board of Directors.

For Audit & Supervisory Board Member candidates, the Representative Director and the Managing Director, General Manager of Administration Division select candidates, and the candidates are determined following deliberation and resolution by the Board of Directors with the consent of the Audit & Supervisory Board.

Appointment/dismissal of Executive Officers is determined by the Board of Directors, and appointment/dismissal of senior managers is determined at the evaluation meeting held among the full-time Directors.

Regarding dismissal of Officers, the Rules on Officers prescribe that if an Officer commits any wrongdoing or breach of trust, or lacks the eligibility to be an Officer, the Board of Directors may urge the Officer to resign. Dismissal of Officers is made based on legitimate reasons for dismissal pursuant to a resolution of the General Meeting of Shareholders, following approval by the Board of Directors.

(v) Explanations of individual appointments/dismissals and nominations

The reasons for nominating each Director and Audit & Supervisory Board Member candidate, their brief personal histories, their significant concurrent positions, and the roles expected of External Officers are disclosed in the convocation notice of the General Meeting of Shareholders.

[Principle 4.3 Roles and Responsibilities of the Board (3): Effective Oversight of the Management and Directors (1)]

MarketEnterprise's approach to the CEO succession plan, the evaluation criteria and procedures for dismissal of the CEO, and related party transactions is described in [Principle 4.3 Roles and Responsibilities of the Board (3): Effective Oversight of the Management and Directors (1)] under "Reasons for Non-compliance with the Principles of the Corporate Governance Code" above.

[Principle 4.13 Preconditions for Ensuring the Effectiveness of the Board of Directors and the Audit & Supervisory Board]

(i) Composition of the Board of Directors and the expertise and experience of Directors

To achieve both prompt and efficient decision-making and highly effective management oversight, MarketEnterprise places importance on the balance and diversity of knowledge, experience and capabilities of the Board of Directors as a whole. The Board of Directors currently consists of five Directors, including two Independent External Directors.

In light of the Group's management strategy, the Board of Directors has identified seven areas of expertise that the Board as a whole should possess: "Corporate Management," "Industry Knowledge," "Marketing," "Technology," "Finance & Accounting," "Risk Management" and "Human Resource Development."

By combining internal Directors who are well versed in the Group's businesses and management administration with Independent External Directors who have management experience at other companies, knowledge in the IT field, overseas work experience and other backgrounds, MarketEnterprise has a structure that brings different experience and knowledge to the Board's discussions.

The expertise and experience of each Director and the combination of areas expected by MarketEnterprise are disclosed in "Expertise and Experience of Director Candidates (Skills Matrix)" in the Notice of Convocation of the 20th Annual General Meeting of Shareholders.

(ii) Expertise of Audit & Supervisory Board Members and management experience of Independent External Directors

MarketEnterprise appoints as Audit & Supervisory Board Members persons who have knowledge and experience in corporate governance, corporate legal affairs, finance and accounting and other fields, including a certified public accountant with considerable knowledge of finance and accounting.

In addition, MarketEnterprise appoints as Independent External Directors persons who have management experience as representative directors or in similar positions at other companies, and makes use of their respective experience and knowledge in overseeing and advising on the management of the Group.

(iii) Evaluation of the effectiveness of the Board of Directors

To improve the functions of the Board of Directors and enhance corporate governance, MarketEnterprise continuously analyzes and evaluates the effectiveness of the Board of Directors as a whole.

From February 20 to March 6, 2026, with the support of an external organization, MarketEnterprise conducted a self-evaluation using a questionnaire with five-point ratings and free-form comments. The respondents were all nine members who attended Board of Directors meetings during the evaluation period: five Directors and four Audit & Supervisory Board Members.

The evaluation covered five areas: "Composition and Operation of the Board of Directors," "Management Strategy and Business Plans," "Risk Management," "Nomination and Remuneration Systems" and "Dialogue with Shareholders and Others."

As a result, the effectiveness of the Board of Directors was assessed as being generally ensured. Meanwhile, "enhancing deliberations on management strategy (including sustainability) and business plans" and "reviewing the evaluation and remuneration systems for officers" were identified as items expected to be improved to further increase effectiveness.

Based on the evaluation results, MarketEnterprise is working on improvements to further increase the effectiveness of the Board of Directors. MarketEnterprise will continue to examine and implement necessary measures and strive to build a more effective corporate governance structure.

An overview of the evaluation results was announced in "Notice Regarding Overview of Results of the Evaluation of the Effectiveness of the Board of Directors" dated May 18, 2026.

[Principle 4.15 Training of Directors and Audit & Supervisory Board Members]

MarketEnterprise's policy on providing training opportunities and covering training costs for Directors and Audit & Supervisory Board Members, and the status of confirmation by the Board of Directors, are described in [Principle 4.15 Training of Directors and Audit & Supervisory Board Members] under "Reasons for Non-compliance with the Principles of the Corporate Governance Code" above.

【Action to implement management that is conscious of cost of capital and stock price】