Proxy Voting Policy and Disclosure of Results

SPARX Asset Management Co., Ltd made the following disclosure. It is English translation of the original Japanese version. If there is any inconsistency between the two versions, the Japanese version shall prevail.

I.Basic approach to the exercise of voting rights by instruction

SPARX Asset Management Co., Ltd. (hereafter the Company) mainly engages in investment management based on bottom-up approach that emphasize individual company research. We select targets for investment based on detailed surveys and an appropriate understanding of elements that include each target company's management policy and environmental, social, and governance approaches. Moreover, when indicating our intentions related to exercising voting rights and the like, we apply this approach to ensure that our funds contribute to the sustainable growth of the target company.

II.Decision-making process and framework related to the exercise of voting rights by instruction

The Investment Policy Committee makes final judgments on the exercise of voting rights by instruction. The Investment Policy Committee is comprised of a chairperson appointed by the Company's Board of Directors, as well as managers from the Investment & Research, Risk Management, and Legal & Compliance divisions. The Committee has been authorized by the Board of Directors to make judgments on the exercise of voting rights by instruction.

III.Basic guidelines regarding the exercise of voting rights

Specifically, the Investment Policy Committee formulates basic guidelines regarding the exercise of voting rights by instruction and grants authority for the exercise of each particular voting right by instruction to a fund manager deemed appropriate by the Investment Policy Committee for each particular target of investment.
The fund manager who is granted authority by the Investment Policy Committee refers to and follows the guidelines for voting rights on each individual proposal, while taking into consideration the circumstances of each investment target.

IV.Individual disclosure of the exercise of voting rights

In line with the Financial Services Agency's Stewardship Code and the Company's support for the trend strengthening corporate governance in the market, we decided, starting with companies whose fiscal years ended March 31, 2017, to disclose the results of exercised voting rights for each company individually. However, as a firm that solely engages in active management, we differ from other companies that engage in passive management. To disclose the results of our decisions on every proposal would also disclose all our investment names. In consideration of our prime commitment to performance for our clients and, given that we cannot eliminate the risk of harming our research and investment activities, we have decided to opt for limited disclosure. We only disclose opposing votes to corporate proposals and supporting votes to shareholder proposals.

Also note that, with regard to the following proposals, our Guidelines for the Exercise of Voting Rights stipulate specific policies and instructions.

Financial statements and proposals for the appropriation of profits
Capital policy
Restructuring, including mergers, transfers of business, and acquisitions
Board of Directors and appointment of directors
Board of Corporate Auditors and appointment of corporate auditors
Officer remuneration
Stock options
Changes to the Articles of Incorporation
Hostile takeover defense measures
Shareholder proposals

V.Results of Exercised Voting Rights

Results of exercised voting rights shall be disclosed every quarter, with January to March being the first quarter and the target date for disclosure being the first day of the month that is two months after the end of each quarter (e.g., the first day of May, August, November, and February).