NOMURA ASSET MANAGEMENT

NOMURA

The Principles for Responsible Institutional Investors (Japan's Stewardship Code)

We have accepted the "Principles for Responsible Institutional Investors (Japan's Stewardship Code; "this Code" hereafter)" on 23rd May 2014.
As a "responsible institutional investor" we accept this Code, and we will continue our efforts to foster the sustainable growth of investee companies in order to enhance the medium to long term returns for our clients.
We understand and disclose each of the seven principles, including our policy on how we fulfill the stewardship responsibilities, as in the following:

"Principles for Responsible Institutional Investors (Japan's Stewardship Code)"

i) Institutional investors should have a clear policy on how they fulfill their stewardship responsibilities, and publicly disclose it.

As an investment manager, we have the fiduciary duty to enhance the returns of funds that we manage on behalf of our clients.
We have our own proxy voting policy and disclose it in order to fulfill our fiduciary responsibility. In addition, we shall endeavor to understand the management of investee companies and engage in constructive dialogue with the management of such companies. We shall seek to support investee companies to increase their corporate value and achieve sustainable growth.

ii) Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.

In order to appropriately manage the conflicts of interest that can occur in stewardship activities, we have established "Conflict-of-Interest Management Policy". We have also created a Responsible Investment Committee composed of highly independent individuals engaged in investment management and research. Among its activities, the committee formulates policy for stewardship activities. As a rule, committee members are limited to individuals related to the decision-making involved in investment management and research, while individuals in a position of having a conflict of interest or who represent such individuals are excluded from membership.
We have established a Responsible Investment Council under the board of directors, composed of the Chief Conflict Officer and of independent outside directors. Particularly for stewardship activities such as exercising voting rights where there might be a conflict of interest, we refer to the opinions of multiple proxy advisory firms and, in the Responsible Investment Committee, make judgments about the exercising of voting rights from the standpoint of the shareholder.
We also employ the structure that conducts monitoring to ensure that decision-making is carried out appropriately. The Responsible Investment Council suggests possible improvements to the Management Council or the Responsible Investment Committee and reports the related details to the board of directors when necessary.
Members of the Responsible Investment Council attend Responsible Investment Committee meetings so that they are able to appropriately monitor the conflicts of interest related to stewardship activities and prevent problems from occurring. We manage areas with potential areas of conflicts of interest by prioritizing the interests of clients.

iii) Institutional investors should monitor investee companies so that they can appropriately fulfill their stewardship responsibilities with an orientation towards the sustainable growth of the companies.

Nomura Asset Management's research analysts and portfolio managers who are involved in investment decision making, shall endeavor to understand the conditions of companies they invest in by carefully analyzing their financial statements and having interviews with company representatives. Also, we shall make proper proxy voting judgments based on our understanding of financial conditions and the management of investee companies.

iv) Institutional investors should seek to arrive a common understanding with investee companies and work to solve problems through constructive engagement with investee companies.

Research analysts and portfolio managers at Nomura Asset Management involved in investment decision making shall encourage investee companies to enhance their corporate value and sustainable growth through constructive dialogue with investee companies by informing them of our views as a responsible investor.
We believe that it is highly important to engage in constructive dialogue for investee companies in order to increase their corporate value and to maintain sustainable growth. We have established our "Basic Policy for Engagement" to enhance this idea, and disclosed the policy on this website.

v) Institutional investors should have a clear voting policy and disclose their voting activities. The policy on voting should not be comprised only of a mechanical checklist; it should be designed to contribute to the sustainable growth of investee companies.

We shall exercise proxy voting rights based on our own guidelines. Our proxy voting policy, as well as proxy voting results can be found on this website.

vi) In principle, institutional investors should periodically report how they fulfill their stewardship responsibilities, including their voting responsibilities to their clients and beneficiaries.

We firmly believe that it is highly important to exercise proxy voting rights and to engage with investee companies in order to fulfill our stewardship responsibilities. Proxy voting results are disclosed on our website together with the main points of our engagement activities.

vii) In order to contribute to the sustainable growth of investee companies, institutional investors should have in-depth knowledge of the investee companies; including their business environment, as well as necessary skills and resources to appropriately engage with the companies and make proper judgments in fulfilling their stewardship activities.

Research analysts and portfolio managers involved in the investment activities shall endeavor to acquire and maintain in-depth knowledge of investee companies and their business environment. We have a team of corporate governance specialists who provide guidance for investment professionals to make appropriate judgments based on their professional opinions and expertise.