Our policies and initiatives with respect to each principles of Japan's Stewardship Code that has direct application to our business are shown below (As of 30^th June, 2020).

Under the Principles for Responsible Institutional Investors «Japan's Stewardship Code», institutional investors are expected to fulfil their stewardship responsibilities.
As an asset management company that provides asset management services regarding Japanese and foreign securities mainly for Japanese investors, we aim to grow the assets of our clients over the medium to long term whilst maintaining appropriate risk control and, especially in the case of active asset management based on bottom-up research, we integrate non-financial information including ESG (Environmental, Social and Governance) factors into fundamental analysis of investee companies and judge the investment attractiveness of companies by engaging in dialogue with them. This stance is consistent with the aims of Japan's Stewardship Code, which we have announced we accept.
Our basic approach to properly fulfilling our stewardship responsibilities with an orientation towards the sustainable growth of investee companies is as shown below.

• In the case of active asset management based on bottom-up research of individual stocks, analysts and portfolio managers will play a central role in determining the investment universe and continuously conducting company research and analysis to gain an accurate understanding of the business conditions and future potential of investee companies.
• We will seize opportunities for dialogue with the senior management of investee companies, aiming to arrive at an understanding in common with investee companies. If we recognize any issues with their management, we will endeavor to engage in constructive dialogue that will help them improve the situation where necessary, recognizing that it is important to encourage the growth of investee companies.
• We will endeavor to strengthen our team of experienced analysts and portfolio managers, focusing on improving their ability to make appropriate investment decisions and their ability to conduct stewardship activities.
• We will publish our policy for fulfilling our stewardship responsibilities on our website. We will also report internally, every year, on how we have fulfilled our stewardship responsibility and will publish a summary of this report on our website and make this information widely available to our clients.
• In the case of passive asset management, we fulfill our stewardship responsibilities mainly through the exercise of voting rights and collaborative engagement.

We will continue to enhance our capabilities necessary to fulfill our stewardship responsibilities in other asset classes beyond Japanese listed equities which Japan's Stewardship Code primarily targets to.

In order to fulfil our fiduciary responsibilities, we will always act in the best interests of our clients.
We will establish internal rules clearly specifying types of conflicts of interest transactions (conflict between interest of a client and our own interests or the interests of Group companies or another client)and how to manage them and we will out appropriate compliance systems in place to manage them. We will manage the following types of possible conflicts of interest in accordance with internal regulations and will always act in the best interests of our clients.

1. 1.Conflicts of interest concerning investment decisions
   When making investment decisions, we might decide to invest in the securities of a company with which we or a group company has a capital relationship or a business relationship and this investment decision may not be in the best interests of the client. However, this is not allowed under our internal regulations, and we will also endeavor to discover and prevent any conflicts of interest through internal monitoring to check whether investment activities are being carried out in line with investment policies and investment guidelines.
   Our policy when managing client assets is not to invest in our own securities or those issued by a group company, in principle. However, if we were to make any such investment to the extent permitted by laws and regulations, we would disclose necessary information to the client and obtain the consent of the client before proceeding.
2. 2.Conflicts of interest concerning the exercise of voting rights
   A similar situation could also arise when we exercise our voting rights. However, we have established regulations and guidelines concerning the exercise of voting rights and developed a system for making decisions objectively on all proposals. If a conflict of interest is suspected based on our voting activity in relation to a company with which we have a business relationship, we will conduct a review to uncover or prevent any conflict of interest.
   We have enacted the "Regulations for Managing Conflicts of Interest" as comprehensive regulations for managing conflicts of interest based on the "Policies for Managing Conflicts of Interest" enacted by our parent company Meiji Yasuda Life Insurance Company for Group financial institutions, pursuant to the Insurance Business Act, and we have published an outline of these regulations. Our Compliance and Risk Management Department, which is independent from other business units, oversees the management of conflicts of interest, and through initiatives such as the identification of possible conflict of interest transactions and the development of management systems and management methods, we properly manage possible conflict of interest transactions to prevent unfair harm to client interests.
   As an advisory body for the Board of directors, the Stewardship Advisory Committee composed of a majority of outside directors conducts a review of our voting records and process and discusses matters necessary for the achievement of its purpose to contribute to the enhancement of the conflict of interest management in stewardship activities.
   Furthermore, under the leadership of senior management, we aim to enhance management independence and transparency and work to develop governance and conflict of interest management systems befitting a fiduciary.

In the case of active asset management based on bottom-up research of individual stocks, analysts and portfolio managers play a central role in determining the investment universe and continuously conducting company research and analysis to gain an accurate understanding of the business conditions and future potential of investee companies.
When researching and analyzing companies, "growth potential," "management quality" and "valuation" are key themes and, besides judging whether the senior management has the ability to achieve the growth scenario by visiting investee companies directly or inviting them in to interview the senior management, finance and IR staff, we also judge growth potential though participation in financial results briefings held by the companies. In addition to financial factors such as financial health and stock price valuation, non-financial factors such as environmental, social and governance considerations are also taken into account when making investment decisions, in so far as this is not at odds with our fiduciary duty.

We contribute to the formation of a sustainable society as one end of the investment chain by driving the sustainable growth of investee companies in the medium and long term through engagement in dialogue and the exercise of voting rights from a long to medium term perspective. We will seize opportunities for dialogue with the senior management of investee companies, aiming to arrive at an understanding in common with investee companies. If we recognize any issues with their management, we will endeavor to engage in constructive dialogue that will help them improve the situation where necessary, recognizing that it is important to encourage the growth of investee companies.
To prevent the receipt of non-public material facts through such dialogue, our internal regulations do not allow us to pressurize those who might know corporate information or information that might be classed as such to provide such information and requires us to warn them in advance not to mention any corporate information or any information which might be classed as such. Should such corporate information be received by any chance, it will be managed appropriately in accordance with internal regulations.
Whilst we engage in dialogue with investee companies independently, as a general rule, we will also be open to considering engaging in dialogue in collaboration with other institutional investors (collaborative engagement), if this is judged beneficial.
In case of dialogue with the investee companies held only in passive asset management, we endeavor to contribute to the enhancement of their corporate value and the vitalization of entire stock market mainly through exercising voting rights and collaborative engagement.

We have established regulations and guidelines on how to exercise of voting rights for the purpose of improving interests of our clients. Our analysts take the lead in carefully examining proposals on a case by case basis and deciding how to exercise voting rights in light of information obtained through dialogue with companies in their day-to-day research activities and also considering how best to drive the sustainable growth of the company.We may discuss and determine that an exception to the guideline would be appropriate; in such cases, our voting decisions may differ from the guideline. In the case of Japanese equity, we exercise voting rights on our own responsibility and at our own discretion based on objective judgment criteria (ROE, appointment of outside directors, information disclosure about compensation, etc.).
We also see the exercise of voting rights as an important opportunity for expressing our intention as an investor to fulfil our stewardship responsibilities and, by factoring assessment from a corporate governance perspective into our decision on how to vote, we aim to exercise voting rights in a way that will enhance the social value of investee companies and lead to their sustainable growth.
In addition, we will seek to ensure transparency in the exercise of voting rights by disclosing our "Basic Policy Concerning the Exercise of Voting Rights" and "Guidelines on the Exercise of Voting Rights" on our website and by also disclosing the results of the exercise of voting rights and the rationale for voting decisions based on aggregate results for each of the main types of proposal and our voting activities for individual investee companies and proposals. Regarding discretionary investment contracts with clients, we will also disclose our internal regulations concerning the exercise of voting rights in accordance with the requests of individual clients and our relevant voting activity.

• Proxy Voting

We will endeavor to improve our activities to fulfill our stewardship responsibilities by recording our status of the exercise of voting rights and dialogue activities and by establishing an internal committee to review our activities on a regular basis.
We will also make regular internal reports on how we have fulfilled our stewardship responsibility and will publish a summary of this report on our website and make this information widely available to our clients.