Voting Policy(for Domestic stocks)

Established May 26, 2003
Revised on March 26, 2021
Daiwa Asset Management Co. Ltd.

Our corporate philosophy is to contribute toward social and economic development through financial and capital markets, and we believe that the exercise of voting rights can play a very important role in this purpose. We have made public the details of DAM’s Proxy Voting Policy, so that all stake-holders are familiar with the Policy. We feel that helping investee companies to understand the reasons behind decisions as to whether or not to vote in favor of particular proposals can make a positive contribution toward constructive engagement with them.

Ⅰ.Basic Policy for Proxy Voting

1.Basic Policy for Proxy Voting

We fulfill our fiduciary duty by exercising voting rights to enhance the medium- and long-term value and sustainability of investee companies in consideration of minority shareholder interests.

In principle, we exercise voting rights on the stocks of all investee companies without distinguishing between active and passive investments.

We have established the Stewardship Committee, composed of personnel from the Fund Management Division whose roles are related to stewardship activities, under the direction of the Chief Investment Officer (CIO). Pros and cons of voting rights are determined independently by us based on the criteria established by the Stewardship Committee (hereinafter referred to as the "Criteria").

In addition, a Stewardship Supervisory Committee, of which more than half the members and chairperson are Outside Directors, oversees the overall stewardship activities, submits reports to the Board of Directors and recommends improvements to stewardship activities where necessary. With regard to the exercise of voting rights, the Supervisory Committee is reported by the Stewardship Committee the amendment of Criteria and the results of individual proxy voting and so on. It supervises the status of their operations from an independent standpoint.

2.Basic Guidelines for Proxy Voting

In principle, we will vote for the company proposals. However, if we believe there is a problem, such as the risk of damage to corporate value, we will vote against them.

In order to contribute to constructive dialog with investee companies, the Criteria are prepared as clear as possible with the aim of enhancing objectiveness and careful explanation.

The Criteria will be continuously reviewed and revised as necessary to contribute to the investee companies’ corporate value and sustainable growth, reflecting the knowledge obtained through constructive dialog with investee companies, as well as changes in the social, economic and political situations surrounding the company and its business environment etc.

3.Decision-making Process for Proxy Voting

We will decide whether to approve or disapprove the proposals based on the Criteria and exercise voting rights.

However, the Stewardship Committee shall decide whether to approve or disapprove the proposals independently of Criteria, based on constructive dialog with the investee company and other factors, if, due to changes in economic and social conditions and the individual circumstances of the company concerned, the application of the Criteria is not expected to contribute to the fulfillment of the fiduciary responsibility or to the enhancement the medium- and long-term value and sustainability of investee company.

The Criteria will be continuously reviewed and revised as necessary to contribute to the investee companies’ corporate value and sustainable growth, reflecting the knowledge obtained through constructive dialog with investee companies, as well as changes in the social, economic and political situations surrounding the company and its business environment etc.

The Stewardship Committee will treat the voting rights as special cases when exercising the voting rights for securities issued by companies with a capital relationship (DAM’s affiliates including Daiwa Securities Group Inc., etc.) or business relationship (companies that are distributors of our Investment Trusts, and their parent companies), as it may lead to conflict of interest. For proposals by these companies which should be decided independently of the regular criteria, we will exercise the voting rights based on the advice given by the external proxy advisors, so as to avoid conflict of interest and ensure the neutrality of the decision. However, if the advice given by the external proxy advisors is inappropriate, for instance due to questions of reliability, the Stewardship Committee shall decide whether to approve or disapprove the proposals independently. In these cases, we will avoid conflict of interest and ensure our neutrality by reporting to the Stewardship Supervisory Committee the details and the reasons why the advice was deemed inappropriate, as well as the contents of individual deliberations and decisions by the Stewardship Committee. In addition, the Stewardship Committee may receive advice from the Stewardship Supervisory Committee before individual deliberations or decisions by the Stewardship Committee, as necessary.

Ⅱ.Criteria for Executing Voting Rights

1.Domestic stocks

We shall carefully examine all proposals and exercise voting rights of the domestic investee companies based on the following criteria. Provided, however, that depending on an investee company’s current circumstances and the content of constructive dialog (engagement) with the investee companies, based on the adoption of a perspective that emphasizes enhancing the medium- and long-term value and sustainability of investee companies, the decisions made by us may differ from those indicated by the following criteria.

(1) Appointment of Directors (excluding Outside Directors)

In principle, we will vote for the company proposals. Provided, however, that we will vote against the reappointment of directors (excluding outside directors) of companies in any of the following cases.

1) The reappointments of the candidates (including new candidates who used to serve as Executive Officers including Corporate Auditors etc. ; the same shall apply hereafter) for the company judged to have experienced significant events (illegal activities, antisocial actions, scandals, etc.) that impair corporate social trust, and the candidates at such companies judged not to have put in sufficient effort to improve the internal control system thereafter. We will review individually of the company concerned (we will judge comprehensively from the perspectives of impact on performance, corporate value and/or social responsibility, and we may take into account if the executive officers were already replaced).

2) The reappointments of candidates who served longer than the last three fiscal years, during which it has been deemed inappropriate in terms of the past earnings results or capital allocations (in case of companies with nominating committee etc., including the term of service as executive officers). Provided, however, that some business categories may be exempted.

(*) The criteria for determining inappropriate in terms of the past earnings results or capital allocations are any of the following conditions:

·Condition 1: Falling under any of the following criteria (i) – (iii) and also falling under the criteria (iv).
(i) Companies that are making losses for the past three consecutive fiscal years;  
(ii) Companies whose Return on Equities, ROEs for the last three fiscal years are all below the low 33% level of the same industry group ranking. Provided, however, that it may be exempted for companies whose ROE has been on the uptrend in the last two terms;
(iii) Among companies whose ROEs have been declining for the last two consecutive fiscal years and whose ROE for the most recent fiscal year is below the low 33% level of the same industry group ranking, those that are judged to have problems;
(iv) Companies whose the Price-to-Book ratio, PBR (based on the latest fiscal-year-end) has been falling below the low 33% level of the same industry group ranking.

·Condition 2: Falling under any of the criteria (i) - (iii) of the Condition 1 and the Investor Relations, IR activities are deemed to be extremely inadequate.

(*) The criteria for determining that IR activities are extremely inadequate are companies that have no voluntary IR activities other than statutory disclosure.

(Notes) The industry classification is based on the TOPIX-17 Series by the Tokyo Stock Exchange.

In addition, we will vote against the reappointment of the Representative Directors (or Representative Executive Officers) of companies in any of the following cases.

3) The reappointments of the candidates who are representative directors (or representative executive officers) of the company for which two or more outside directors has not been appointed (submitted) under the Companies Act.
The conditions of 2) and 3) in “(2) Appointment of Outside Directors” described later are not required for Outside Directors as mentioned above.

4) The reappointments of the candidates who are representative directors (or representative executive officers) of the company, which has a parent company or controlling shareholder, unless multiple number of outside directors have been appointed (submitted) under the Companies Act and at least one-third of the board is comprised of outside directors.
The conditions of 2) and 3) in “(2) Appointment of Outside Directors” described later are not required for Outside Directors as mentioned above.

5) The reappointments of the candidates who are representative directors (or representative executive officers) and appointed as directors for three consecutive fiscal years of the company, which has been deemed insufficient in terms of capital allocation while maintaining excess capital and cash, and has a low dividend payout ratio, and does not show the improvement in terms of its usage of capital.

Provided, however, that the following companies are excluded.
(i) Companies for which proposals for surplus disposals are being put on agenda at the same time;
(ii) Companies belonging to the financial sector. Even in other industries, there are cases where companies with a high ratio of finance-related business may also be excluded.

(*)The criteria for maintaining excess capital or cash, low dividend payout ratio and insufficient capital allocation are the following all three conditions. We will monitor companies that fall under these criteria and will decide whether they are improving or not.

·Condition 1: The capital adequacy ratio is 50% or more and falls under any of (i) to (ii);
(i) Cash and Cash Equivalents to Total Assets is 50% or more;
(ii) Cash and Cash Equivalents is more than 2/3 of total sales.

·Condition 2: The Dividend on Equity (DOE) is less than 2%;

·Condition 3: Companies whose ROE is below the top 33% level of the same industry group and it does not exceed 8% (excluding companies falling under “2)” above) for the past two out of the last three fiscal years.

6) The reappointments of the candidates who are representative directors (or representative executive officers) of the company which introduced and continued to adopt takeover defense measures by resolution of the Board of Directors.

7) The reappointments of the candidates who are representative directors (or representative executive officers) of the company whose disclosure is not adequate (such as business reports at an ordinary general meeting of shareholders and information necessary for the decision of proposals is not disclosed).

8) The reappointments of the candidates who are representative directors (or representative executive officers) of the company that constituents comprising the TOPIX 100, for which at least one female officer (directors and corporate auditors under the two-tier board) has not been appointed (submitted).

(2) Appointment of Outside Directors

In principle, we will vote for the proposals. Provided, however, that we will vote against the candidates who fall under any of the following criteria.

1) The reappointments of the candidates (including new candidates who used to serve as Executive Officers including Corporate Auditors etc.) for the company judged to have experienced significant events (illegal activities, antisocial actions, scandals, etc.) that impair corporate social trust, and the candidates at such companies judged not to sufficiently effort to improve the internal control system thereafter.

2) Candidates judged as having problems with regard to the independence.

(*) It would be on the issue only when the majority of the Board of Directors does not consist of independent outside directors, and the criteria with regard to the independence of candidates are falling under any of the following conditions.
·Condition 1: Not stated as "met the requirements of independent officers" of the Financial Instruments in the notice of general meeting of shareholders;
·Condition 2: Belonged to and have engaged in the business of the major shareholders (holding 10% or more stake) and their parent company, subsidiaries and affiliate companies (Provided, however, that if the candidates have retired more than 5 years ago, the Condition will not be applied);
·Condition 3: Candidates who have a long term tenure as Outside Directors (12 years or more tenure as of the general meeting of shareholders).

3) Candidates judged as having problems with regard to the attendance at the Board of Directors.
(*) The criteria for judging the issues with regard to the attendance at the Board of Directors are any of the following conditions.
·Condition 1: Reappointment candidates whose attendance rate at the Board of Directors is less than 75%;
·Condition 2: Reappointment candidates for which clear information on attendance rates is not disclosed.

(3) Appointments of Corporate Auditors (excluding Outside Corporate Auditors)

In principle, we will vote for the proposals. Provided, however, that we will vote against the reappointment of the candidates (including new candidates who used to serve as Executive Officers including Directors etc.) for the company judged to have experienced significant events (illegal activities, antisocial actions, scandals, etc.) that impair corporate social trust, and the candidates at such companies judged not to sufficiently effort to improve the internal control system thereafter.

(4) Appointments of Outside Corporate Auditors

In principle, we will vote for the proposals. Provided, however, that we will vote against the candidates who fall under any of the following criteria.

1) The reappointments of the candidates (including new candidates who used to serve as Executive Officers including Directors etc.) for the company judged to have experienced significant events (illegal activities, antisocial actions, scandals, etc.) that impair corporate social trust, and the candidates at such companies judged not to sufficiently effort to improve the internal control system thereafter.

2) Candidates judged as having problems with regard to the independence.
(*) It would be on the issue when the candidates are falling under any of the following conditions.
·Condition 1: Not stated as "met the requirements of independent officers" of the Financial Instruments in the notice of general meeting of shareholders;
·Condition 2: Belonged to and have engaged in the business of the major shareholders (holding 10% or more stake) and their parent company, subsidiaries and affiliate companies (Provided, however, that if the candidates have retired more than 5 years ago, the Condition will not be applied);
·Condition 3: Candidates who have a long term tenure as Outside Corporate Auditors (12 years or more tenure as of the general meeting of shareholders).

3) Candidates judged as having problems with regard to the attendance at the Board of Directors.
(*) The criteria for judging the issues with regard to the attendance at the Board of Directors are any of the following conditions.
·Condition 1: Reappointment candidates whose attendance rate at the Board of Directors or the Board of Auditors is less than 75%;
·Condition 2: Reappointment candidates for which clear information on attendance rates is not disclosed.

(5) Appointments of Directors who are Members of Audit and Supervisory Committee or Audit Committee

We will apply the criteria according to the policy of appointing Corporate Auditors.
Besides, on the criteria for judging the issues with regard to the independence of candidates for Outside Directors, see the conditions of 2) in the “(2) Appointment of Outside Directors” .
And in the following criteria, when stated as "Corporate Auditors", it includes Directors as members of Audit and Supervisory Committee or Audit Committee.

(6) Appointments of Candidates for Officers at Vacant Positions

We will respect the proposals from the company.

(7) Appointments of Accounting Auditors

In principle, we will vote for the proposals. Provided, however, that we will consider independently the proposals which fall under any of the following criteria.

1) Companies judged to have experienced significant events that impair corporate social trust in terms of accounting or financing among the company or the company's officers and employees;

2) Companies with notes related to Going Concern Assumptions.

(8) Executive Compensations

1) Establishments and Revisions of Executive Compensation

In principle, we will vote for the proposals. Provided, however, that we will vote against the proposals to increase the amount of executive compensation per person for companies which fall under any of the following criteria (except in the case of setting the amount of compensation for directors who are Audit and Supervisory Committee members through the transition to a company with an Audit and Supervisory Committee).

(i) Companies judged to have experienced significant events (illegal activities, antisocial actions, scandals, etc.) that impair corporate social trust, and not to have put in sufficient effort to improve the internal control system thereafter;

(ii) Companies determined inappropriate in terms of the past earnings results or capital allocations. Provided, however, that compensation for Corporate Auditor is excluded. Some business categories may be exempted.

(*) See the condition 1 of “(1) Appointment of Directors” 2) on the criteria for determining inappropriate in terms of the past earnings results or capital allocations.

2) Executive Bonuses

In principle, we will vote for the proposals. Provided, however, that we will vote against the proposals which fall under any of the following criteria.

(i) Companies judged to have experienced significant events (illegal activities, antisocial actions, scandals, etc.) that impair corporate social trust, and not to have put in sufficient effort to improve the internal control system thereafter;

(ii) Companies determined inappropriate in terms of the past earnings results or capital allocations. Provided however that , some business categories may be exempted;

(*) See the condition 1 of “(1) Appointment of Directors” 2) on the criteria for determining inappropriate in terms of the past earnings results or capital allocations.

(iii) Payments to Outside Directors or Outside Corporate Auditors.

3) Payments of Retirement Benefits for Executives

In principle, we will vote against the proposals unless the termination of the payments of retirement benefits is proposed at the same time.

4) Adoptions or Revisions of Performance-Linked Compensations (including monetary remuneration, stock remuneration, and stock options)

In principle, we will vote for the proposals. Provided, however, that we will vote against the proposals which fall under any of the following criteria.

(i) When significant dilution of share value is involved;

(*) Criteria judging significant dilution of share value are subject to any of the following conditions:

·Condition 1: When granting more than 10% of the total number of shares outstanding;

·Condition 2: Maximum number of shares issuance per year exceeds 1% of the total number of shares outstanding.

(ii) when the applicable persons are deemed inappropriate.

(*) Criteria for judging that persons to be granted are deemed inappropriate are subject to any of the following conditions:

·Condition 1: Payments to Outside Directors or Outside Corporate Auditors;

·Condition 2: Payments to Business Partners (except when the purpose of the grant is acquisition related or third-party allocations of shares).

5) Adoptions or Revisions of Non-Performance-Linked Compensations

We will decide the proposals which grant non-performance-linked compensations to Corporate Auditors or Outside Directors, considering the following items.

・Whether there is a clear selection of targets, such as inside or outside directors, executive or non-executive directors, and whether it is clear that there is no performance-linked portion of corporate auditors or outside directors;
・Whether the ratio of stock-based compensation is limited;
・Whether there is a system to hold shares until the time of retirement from the executives;
・Whether the shares to be delivered are anti-dilutive.

(9) Appropriation of Surplus

If the shareholder proposals are submitted at the same time, we will consider the proposal independently (considering the growth potentials from utilizing the retained earnings), and if there are no shareholder proposals, we will vote for the proposals in principle. Provided, however, that we will vote against the cash dividend proposals which fall under any of the following criteria.

1.For companies with financial concerns

(*) Criteria for judging the companies with financial concerns are those that are making losses for the past three consecutive fiscal years, or those that have a capital ratio of 10% or less and a dividend payout ratio of 100% or more (including companies which pay dividends while making losses, except for financial industries)

2. Companies which have been deemed insufficient in terms of capital allocation while maintaining excess capital and cash, and has a low dividend payout ratio, and does not show the improvement in terms of its usage of capital.

(*) See the condition of “(1) Appointment of Directors” 5) on the criteria for maintaining excess capital or cash, low dividend payout ratio and insufficient capital allocation are the following all three conditions.

(10) Reverse Stock Splits

In principle, we will vote for the proposals. Provided, however, that we will vote against the proposals if substantial dilution of the share value is involved (excluding proposals aimed at squeeze-out).

(*) Criteria judging significant dilution of share value are if it involves substantial increase in the total number of issuable shares and if it exceeds more than twice the current number of shares outstanding.

(11) Treasury Stock Acquisitions (Establishment of a Repurchase Limit)

In principle, we will vote for the proposals. Provided, however, that we will consider the proposal independently (considering the growth potentials from utilizing the retained earnings) if the shareholder proposals are submitted at the same time.

(12) Capital Increases through Third-party Allocation

We will consider it case by case (taking into consideration the significance and the effectiveness of the capital increases, the appropriateness of the issue price and the allocated third-parties, etc., comprehensively judging with reference to the reaction of the stock market after the announcements).
Provided, however, that our decision on the proposals for the disposal of treasury stock by allotment to a third-party foundation shall be determined after considering the following points and other factors.

・Whether the allotment to the foundation, including the grant of stock options, does not exceed 10% of the total number of shares outstanding;
・Whether the voting rights of the shares allocated to the foundation are entrusted to a third party independent from the company or the foundation and are exercised by such third party.

(13) Mergers, Corporate Splits, Share Swaps, Share Transfers

We will consider it case by case (taking into consideration the significance and effectiveness of the merger transactions, the appropriateness of the integration ratio, etc., comprehensively judging with reference to the reaction of the stock market after the announcements). Provided, however, that we will vote for the proposals in the following cases.

・In case of merger between parent company and its wholly owned subsidiary
・In case of making a consolidated subsidiary a wholly owned subsidiary by parent company
・In case of reorganization within the group such as business transfer to a wholly owned subsidiary
・In case of becoming a holding company independently

(14) Introduction and Continuation of Takeover Defense Measures

In principle, we will vote against the proposals.

(15) Increases or Decreases in the Amount of Capital or Capital Surplus

In the case of nominal capital increases or decreases, we will vote for the proposals in principle.

(16) Mergers, Corporate Divestitures, Share Exchanges, Share Transfers

In principle, we vote for the following proposals for amendment of the Articles of Incorporation.
1) Changes relating to company profiles (e.g., change of company name, fiscal year, headquarter location etc.);
2) Addition and/or elimination of business objectives;
3) Change in the method of public notice (e.g., adoption of electronic public notices);
4) Changes in the provisions of the Share Handling Regulations (Rules);
5) Reduction in the total number of shares authorized to be issued;
6) Change in the number of shares constituting one unit;
7) Provisions on odd-lot shares (including restrictions on rights);
8) Changes related to the General Meeting of Shareholders (e.g., change of the meeting place, introduction of an Internet Disclosure System, changes in reference dates, etc.);
9) Relaxation of the quorum for special resolutions;
10) Transition to a Company with Nominating Committee, etc.;
11) Transition to a Company with an Audit and Supervisory Committee;
12) Change in the number of officers;
13) Shortening the tenure of Directors;
14) Reduction of requirements for dismissal of directors (transition to ordinary resolution);
15) Establishment and abolishment of positions;
16) Setting the effect of resolutions for appointing Substitute Corporate Auditors and its tenure;
17) Limitation of liabilities for Directors, Corporate Auditors, and Financial Auditors;
18) Delegations to Directors with regard to decisions on important business executions by the resolutions of the Board of Directors;
19) Introduction of written resolutions by the Board of Directors;
20) Amendment or modification of the wording;
21) Other proposals that are clearly expected to contribute to enhancing corporate value of the company.

In principle, we vote against the following proposals for amendment of the Articles of Incorporation.
1) Extension of the tenure of Directors;
2) Aggravation of requirements for dismissal of Directors;
3) Introduction and continuation of Takeover Defense Measures.

Other than the above, we will apply the following criteria.
1)Expansion of total number of issuable shares
In principle, we will vote for the proposals. Provided, however, that we will vote against the proposals if substantial dilution of the share value are involved (when it involves substantial increase in the total number of issuable shares and it exceeds more than twice the current number of shares outstanding, excluding proposals aimed at squeeze-out).

2) Dividends from surplus and treasury stock acquisitions by resolutions of the Board of Directors
In principle, we vote for the proposals. Provided, however, that if the shareholder proposal rights are excluded, it will vote against the proposals.
3)Issuance of Classified Shares
We will consider independently and vote for the proposals if the corporate value will not be impaired. Also, we will vote for the proposals aimed for Squeeze-Outs.
4) When there is a risk of impairment of corporate value, we will consider the proposals individually.

(17) Other Company Proposals

In principle, we vote for the proposals. Provided, however, that when there is a risk of impairment of corporate value, we will consider the proposals individually.

· Condition 3: The evaluation period of the acquirer exceeds 90 days (+ extension of 30 days).

· Condition 4: The expiration date of takeover defense measures exceeds 3 years.

2. We will oppose to companies that have insufficient corporate governance structures (companies that do not have multiple Outside Directors that have the independence).

3. When an acquisition is already anticipated at the introduction, we will consider it independently.

(18) Shareholders Proposals

Our criteria for exercising voting rights for the shareholder proposals depend on whether the shareholder proposals will contribute to the increase of corporate value.

In principle, we vote for the following proposals in the shareholder proposals.
1) Dismissal (refusal to reappoint) of Directors who do not meet our Criteria;
(Refer to “(1) Appointment of Directors (excluding Outside Directors)” and “(2) Appointment of Outside Directors”. )
Provided, however, that candidates who will retire as of the general shareholders meeting are excluded.
2) Shortening the tenure of Directors;
3) Requiring the introduction of Outside Directors;
4) Limitation of liabilities for Directors, Corporate Auditors;
5) Requiring disclosure of the attendance rate of Outside Officers at meetings of the Board of Directors (and the Board of Corporate Auditors)
6) Withdrawal of Takeover Defense Measures;
7) Amended or eliminated Articles of Incorporation that exclude shareholder proposal decisions to appropriation of surplus;
8) Individual Disclosure of Directors' Compensation;
9) Introduction of clawback provisions;
10) Other proposals that are clearly expected to contribute to enhancing corporate value.

In principle, we vote against the following proposals in the shareholder proposals.
1) Election of Directors and Corporate Auditors;
2) Dismissal (refusal to reappoint) of Officers who meet our Criteria;
3) Limiting or changing the number of Directors and limiting or changing the number of Corporate Auditors;
4) Changing the handling of blank votes;
5) Demands for changes in institutional design;
6) Restrictions on the election of the Chairman of the Board of Directors;
7) Other proposals that are unclear to contribute to enhancing corporate value.

Other than the above, we will apply the following criteria.
1) Dismissal (rejection of reappointment) of Corporate Auditors who do not meet our Criteria will be considered on a case-by-case basis.
(Refer to “(3) Appointments of Corporate Auditors (excluding Outside Corporate Auditors)” and “(4) Appointments of Outside Corporate Auditors”. )
2) With regard to the proposals for increasing the number of words suggested by shareholders, we will vote for the proposals if the company has restricted the number of words.
3) When there is a possibility of contributing to the enhancement of corporate value (proposal for appropriation of surplus, acquisition of treasury stock, etc.), we will consider the proposals individually.

2.J-REIT (Real Estate Investment Trust)

We shall carefully examine all proposals and exercise voting rights of J-REIT based on the following criteria. Provided, however, that depending on an investee trust’s current circumstances and the content of constructive dialog (engagement) with the investee trusts, based on the adoption of a perspective that emphasizes enhancing the medium- and long-term value and sustainability of investee companies, the decisions made by us may differ from those indicated by the following criteria.

(1) Appointment of Executive Officers

In principle, we will vote for the proposals. Provided, however, that we will vote against the reappointments of the candidates if the Investment Trust or the Asset Management Company is judged to have experienced significant events (illegal activities, antisocial actions, scandals, etc.) that impair corporate social trust.

(2) Appointment of Supervisory Officers

In principle, we will vote for the proposals. Provided, however, that we will vote against the reappointments of the candidates if the Investment Trust or the Asset Management Company is judged to have experienced significant events (illegal activities, antisocial actions, scandals, etc.) that impair corporate social trust.

(3) Appointments of Candidates for Officers at Vacant Positions

We will respect the proposals from the Investment Trust.

(4) Appointments of Accounting Auditor

We will respect the proposals from the Investment Trust.

(5) Amendment of Regulations

In principle, we will vote for the proposals. Provided, however, that the following proposals shall be determined after considering the impact on the value of investment securities and other factors.

1)Changing management fees;
2)Changing the Maximum Amount of Remuneration Paid to Officers;
3)Changing the Targets and Policies of Asset Management;
4)Changing the policy for distribution of money;
5)Changing the matters concerning Investors Meeting;
6)Changing the asset valuation method

(6) Proposal on Asset Management Contracts

We will consider it case by case (taking into consideration the risk of impairing the value of investment securities). Provided, however, that we will vote for the proposals that can be judged not to affect the value of investment securities, such as minor changes to asset management contracts.

(7) Mergers

We will consider it case by case (taking into consideration the significance and effectiveness of the merger transactions, the appropriateness of the integration ratio, etc., comprehensively judging with reference to the reaction of the stock market after the announcements).

(8) Other Investment Trust Proposals

In principle, we vote for the proposals. Provided, however, that when there is a risk of impairment of investment securities, we will consider the proposals individually.

(9) Shareholders Proposals

In principle, we vote against the proposals. Provided, however, that we may vote for the proposals when there is a possibility of contributing to the enhancement of the value of investment securities after considering the proposals individually.