On February 21, 2023, Ebara Jitsugyo Co., Ltd. stated in its press release that it had decided to oppose the proposals presented by Nippon Active Value Fund PLC. The proposals submitted were as follows: (i) Revision of Remuneration Amount concerning Restricted Stock Compensation Plan: To set the total remuneration amount at 280 million Yen with 112 thousand as the maximum number of shares granted for directors who are subject to restricted stock compensation plan and total annual amount set to 60 million yen or less with the maximum number of shares granted set at 24 thousand shares for external directors and audit committee members, (ii) Acquisition of Treasury Shares: Under article 156 paragraph 1 of the Companies Act, acquire a total of 1,233,960 shares at an acquisition price of 2,776,410,000 Yen, (iii) Amendment to Article of Incorporation regarding the number of external directors: External directors should make up a majority of the company's directors. The company has opposed these proposals for the following reasons: (i) Remuneration of company's directors is based on their position, responsibilities and performance however, the total amount of remuneration stated in the shareholder proposal lacks a balance between fixed basic remuneration and performance based remuneration, (ii) The acquisition of treasury shares as stated in the shareholder proposal exceeds the expected net income of 2.6 billion Yen for the fiscal year ending December 31, 2023.

The company believes that following through with the proposal could stagnate long term growth and improvement of corporate value, resulting in loss of profits for shareholders, (iii) All the director candidates are familiar with the company's business and the four independent external directors have specialized knowledge in their respective fields as well as a deep knowledge of corporate governance. However, the company believes that establishing the provision stated in shareholder proposal would limit the scope of selection of candidates.