Our Principles for Exercising Voting Rights(for Foreign Stocks)
as a Responsible Institutional Investor

Sumitomo Mitsui Trust Asset Management Co., Ltd.
Effective as of January 2024

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I. Purpose of Exercising Voting Rights

Sumitomo Mitsui Trust Asset Management Co., Ltd. (hereinafter, “SMTAM,” “we,” “us,” or “our”), asa responsible institutional investor, considers our exercise of voting rights in connection with entrustedassets (hereinafter, “exercise of voting rights”) to be one of the most important elements of ourstewardship activities, and we will strive to ensure that our exercise of voting rights enhances thecorporate value and encourages sustainable growth of investee companies, in order to maximize themedium to long term investment returns for our clients (beneficiaries).

II. Basic Policy on the Exercise of Voting Rights

1.

Our exercise of voting rights must aim to contribute to the sustainable growth of investee
companies thereby maximizing the medium to long term investment returns for our clients(beneficiaries). Based on investee companies’ conditions and details of engagements with thosecompanies, we will exercise voting rights not only pursuant to the formal criteria for decision
making, but after comprehensively considering the extent to which our exercise of voting rights
would contribute to the sustainable growth of investee companies (and to the maximization of
medium to long term investment returns for our clients (beneficiaries)).

Furthermore, if a

proposal has several interchangeable options, we will make our decision by prioritizing the optionthat would contribute most to sustainable growth.

2. In exercising voting rights, we will encourage investee companies to efficiently utilize theshareholder’s equity regarding sustainable growth and to actively develop appropriate corporate
governance systems, such as ensuring separation of management supervisory functions andindependence of outside officers (directors or corporate auditors), among others. In addition, wewill encourage the investee companies to conduct corporate activities appropriately by fully
considering the environment and society under soundly developed corporate governance systems.

3. If any act that disregards the interests of shareholders, controversies or anti-social behavior by aninvestee company or its management occurs, or its corporate value is damaged due to problems

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such as poor medium to long term performance, we will consider such act as a serious issue in theinvestee company’s corporate governance, and we will exercise voting rights in a way that would
improve the investee company’s corporate governance. We require investee companies that havebeen involved in misconducts to provide a full explanation of recurrence prevention measures,progress of improvement measures, and efforts towards improvement of their corporate
governance, and we will arrive at a decision on the exercise of voting rights based on theexplanations.

III. Management of Conflicts of Interest in the Exercise of Voting Rights

1.

With the view of prioritizing the interests of clients (beneficiaries), we strictly manage conflictsof interest that could arise in connection with our exercise of voting rights in accordance with theConflict of Interest Management Rules, the Investment Operation Rules, and other relevantinternal rules. Since conflict-of-interest management systems must be independent in particularwhen exercising voting rights, we have established the “Stewardship Activity AdvisoryCommittee” (the “Advisory Committee”) which consisting of the majority of outside experts, andwe will strive to exercise voting rights with high transparency by respecting the Advisory
Committee’s recommendations to the maximum extent.

2.

In order to enhance the visibility of appropriateness of our exercise of voting rights, we will
improve the disclosure of information regarding our exercise of voting rights by publishing ourguideline for the exercise of voting rights that contains clearly defined criteria to guide decision
making.

3IV. Structure for the Exercise of Voting Rights

1.

At SMTAM, the Executive Officer in charge of the Stewardship Development Department(hereinafter, “the Officer”) exclusively holds all authority relating to our exercise of voting rights,independent from the authority to execute other business activities. In addition, in order for theOfficer to appropriately exercise voting rights, we have established the Sustainability Committeethat deliberates on our exercise of voting rights, and we have established the Advisory Committee
as an advisory body for the Officer.

2. The Sustainability Committee is a committee to deliberate on our exercise of voting rights,
engagements, ESG-related activities and various other activities under Japan’s Stewardship Code.
In relation to our exercise of voting rights, the committee formulates original plans for theestablishment, revision, or abolition of the guidelines for exercise of voting rights and originalplans to individually exercise voting rights for a proposal not stipulated in the guidelines. The
committee consists of the Chairperson(eligible for making decisions) who is Officer in charge ofStewardship Development Department, and General Manager of Stewardship Development
Department, Officer in charge of Business Planning Department, General Manager of Business
Planning Department, Officers in charge of Market Front Departments, General Managers ofMarket Front Departments, Officer in charge of Investment Risk Management Department,
General Manager of Investment Risk Management Department, Officer in charge of ComplianceDepartment, (and General Manager of Product Development and Promotion Department also joins
when deliberating ESG product agenda).

3. The Advisory Committee is a body established to make recommendations for various activities
under Japan’s Stewardship Code to the Officer. Regarding our exercise of voting rights, thecommittee will make recommendations for the establishment, revision, or abolition of theguidelines for the exercise of voting rights, decisions concerning whether to support a proposal
not stipulated in these guidelines, appropriateness of interpretation of these guidelines for anindividual proposal, and verification and improvement of the decision-making process on theexercise of voting rights on a proposal in connection with which a conflict of interest may occur.
The committee consists of outside advisory members (outside experts) and officers appointed
by the board of directors, General Manager of the Compliance Department, and its secretariat

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is the Stewardship Development Department.

4. The Officer will make decisions on various matters taking full account of the recommendations ofthe Advisory Committee. If the officer receives recommendations from the Advisory Committee
regarding improvement of its exercise of voting rights, the Officer will promptly take measuresnecessary for the correction or improvement, giving due respect to the recommendation.

5. Our exercise of voting rights will be performed as follows:(1)

the guidelines for exercise of voting rights shall be established, revised, or abolished withthe approval of the Officer after deliberating at the Sustainability Committee andconsultation to the Advisory Committee.

(2)

a decision to exercise the voting regarding a proposal that is stipulated in our guideline shallbe made with the approval of the General Manager of the Stewardship Development
Department.

(3)

a decision to exercise the voting rights regarding a proposal that is not stipulated in ourguideline or that requires individual interpretation shall be made with the approval of theOfficer after individual deliberation at the Sustainability Committee and after consultation
to the Advisory Committee.

(4)

the result of exercising the voting rights shall be reported to the Sustainability Committee
and the Officer.

5Sustainability Committee(Former: Stewardship Meeting)

Chairperson：
Exective officer in charge of Stewardship
スチュワードシップ
Development Department（Approval※1）

Stewardship DevelopmentDepartment(4)
Results of exercise of voting rights

Proposal for individual exercise of voting rights

Exercise voting for casenot stipulated in guideline

Establishment or revison of guideline

Draft of guideline（3）

Recommendation

Stewardship Activity
Advisory Committee※2

ReportDeliberation（1）

Consultation※1 Making decisions based on recommendationfrom Stewardship Activity Advisory Committee※2 Committee members
・External experts（the majority of members）
・Officer appointed by the board of directors※3 Making a proposal for individual exerciseof voting rights with reference to research,
analysis or advice from a proxy advisory
firm（2） Exercise of voting rights based on guideline
Proposal for
individual exercise
of voting rights※36

General Manager ofStewardship Development
Department （Approval）

V. Guidelines for the Exercise of Voting Rights
Exercise of Voting Rights for Foreign Equities Our basic evaluation criteria are laid out below.
However, we will make judgments, in terms of exercising voting rights, based on thecircumstances for each country, specifically, its economic, political, social and historicalfoundation and how it has shaped the law, commercial practice and corporate governance.

1. Board of Directors and the Appointment of Directors【Approach to Proposals】
We believe that the Board of Directors as an executive body that governs corporate management,
should be comprised of members with sufficient competence to make prompt and appropriate
management decisions, and should dedicate itself to adequately performing management supervisory
functions by separating its management functions and supervisory functions.
It is our belief that the Board of Directors should be structured in such a way that appropriate
knowledge, experience, and abilities are provided as a whole and that diversity is considered with theaim of achieving sustainable growth and improving corporate value over the medium to long term. We
believe that outside directors with appropriate qualities should be appointed as a minimum proportionof total. Regarding board diversity including gender and so on, we believe that it is necessary toimplement measures to make pipelines for internal human resource promotion. Further, in order foroutside directors to execute their roles appropriately, we do not believe that the number of companies
in which they serve concurrently should be increased excessively. We will also demand Directors toattend and speak at Board meetings, and to make prompt and appropriate management decisions aspart of the Board of Directors’ management and supervisory function.

【General Rules of Exercise】(１) In any of the following cases, we will dissent in principle from the proposals:①

Appointment of a candidate as a Director who concurrently executes business functions,or an outside Director who assumes a supervisory role, both of whom are expected toserve as representatives of shareholders, if found inappropriate for the position②

Appointment of a candidate whose performance is considered a cause for concern basedon his/her past Board of Directors meeting attendance record

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③

Appointment of a Director deemed responsible for damaging enterprise value through asharp decline in business performance and/or a fall in share price during his/her tenure④

Appointment of a Director deemed responsible for damaging enterprise value throughanti-social behaviors, etc. associated with him/her⑤

Appointment of a candidate who is judged to be responsible, in the case of insufficientboard composition for gender diversity and so on concerning the law, rule, andcommercial practice of each country.

(２) We will make the following decisions on the exercise of voting rights in response to ESG
issues:・We will consider objecting to companies with other significant issues such as ESG themes when
they do not engage or have not made improvement of the situation despite continued engagement.

2. Audit Committee【Approach to Proposals】
Control bodies, including the Audit Committee, must appropriately audit the company’s financial
statements, its construction and disclosure process, and internal control, whilst observing the fairness,accuracy and legality of the accounting process in accordance with each country’s laws, regulations,commercial practices.

【General Rules of Exercise】
Appointed members of control bodies, including the Audit Committee, as well as statutory internal
auditors, must perform their audit functions objectively from an independent standpoint. In any of thefollowing cases, we will dissent in principle from the proposals:(１) Appointment of a committee member with direct interest in the company(２) Appointment of a committee member who is an executive director or employee at the parentcompany or a related company whose independence is under question8

3. Compensation for Officers【Approach to Proposals】
We believe that compensation for officers should be set at a level or have contents that are in line withthe company’s business performance and the goal of maximum enhancement of shareholder value, andshould be appropriate in terms of effectiveness as an incentive, among others. We also believe that it isdesirable to be appropriate and reasonable in comparison with compensation level of a same country
or peer companies, and the information on decision-making process and level of compensation should
be disclosed sufficiently.

【General Rules of Exercise】
In any of the following cases, we will dissent in principle from the proposals:(１) These incidents do not take into account where the company’s enterprise value is damaged
through his/her anti-social behaviors, etc. and violation of fiduciary duty or through a sharp
decline in business performance and/or a fall in share price during his/her tenure(２) Although in principle, a performance-linked compensation scheme based on stock options,etc. is acceptable, the introduction of a performance-linked compensation scheme based on
stock options, etc. where there is a great concern in terms of maximizing medium-to-longterm shareholder profits(３) Stock options and/or performance-linked retirement compensation schemes for Outside
Directors assuming a supervisory role (Non-Executive Directors) who share common
interests with Executive Officers are not desirable. Introduction of stock options and/orperformance-linked retirement compensation schemes for Outside Directors (Non-ExecutiveDirectors) where there is a great concern in terms of maximizing medium-to-long-term
shareholder profits.

94. Shareholder Returns【Approach to Proposals】
Regarding stock dividends, we believe that an appropriate distribution of profits should be made inaccordance with the stage of growth of the relevant company, taking into account the balance between
returning profits to shareholders, retaining internal reserves and investment in growth based on thecompany’s financial condition and business plan. We believe that share buyback is one of the effective
measures to enhance enterprise value and shareholder value.

【General Rules of Exercise】
In any of the following cases, we will dissent in principle from the proposals:(１) Where shareholder returns are constantly excessively high or low, or where there are noshareholder returns without valid or rational reason(２) Where there is a proposal to prohibit cash dividends

5. Appointment of Accounting Auditors【Approach to Proposals】
Accounting auditors must conduct appropriate audits to verify that the preparation of financial
statements was based on fairness, conforming to accounting standards in accordance with eachcountry’s laws, regulations, and commercial practices. Moreover, it must ensure that full disclosure ismade so that a company’s assets and profit and losses can be ascertained.

【General Rules of Exercise】
In any of the following cases, we will dissent in principle from the proposals:(１) The appointment of accounting auditors who are independent from the company and canconduct audits objectively. An independent auditor with no interests in the company. Theappointment of accounting auditors where there is some doubt as to their independence.
(２) The compensation of corporate auditors shall be clearly divided into audit functions, which
include traditional financial statement audits, and other non-audit functions. Compensation
for non-audit functions shall be limited within the appropriate scope. Compensation for

10accounting auditors for non-audit functions which exceed the appropriate norm.

6. Takeover Defense Measures【Approach to Proposals】
We believe that takeover defense measures must not be intended to protect the Board of Directors but
should contribute to the improvement over the medium to long term shareholder value.

【General Rules of Exercise】
Takeover defense measures must be based on maximizing medium-to-long-term shareholder value. The
exercise and steps of takeover defense measures and its release must be fully disclosed. Moreover,unless there is a proper system of governance that reflects the will of the shareholders, and prevents
arbitrary acts by the Directors, we will dissent from the proposal in principle.

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7. Acquisitions, Mergers and Capital Raising【Approach to Proposals】
In raising new capital, affecting other changes to corporate financial structure, or readjusting scale andlines of business through a merger, transfer of business, acceptance of transfer of business, company
split, etc., We believe that they must not damage the interests of shareholders or the future businessdevelopment of the company.

【General Rules of Exercise】(１) Proposals on financing the relevant company by issuing shares
・The issuance of new shares (both preferred and subordinated) and rights offerings and theauthorized capital stock must be based on the maximization of medium-to-long-term
shareholder value and rational reasons. We will support the proposal in principle if thecontent and scope of the action does not damage the rights of existing shareholders or theshare of their voting rights.
(２) Proposals on a merger, transfer of business, acceptance of transfer of business, company split,etc.
・Regarding a proposal for merger, transfer of business, company split, share exchange,
share transfer, etc., if we consider that the proposal is based on a justifiable reason in
respect of the necessity and adequacy of consideration by containing measures to secure
fairness through an external neutral appraisal organization or measures to avoid conflictsof interest (if any), we will support the proposal in principle.
・ If we consider that the proposed merger, transfer of business, company split, shareexchange, share transfer, etc., would have an adverse effect on the relevant company’s
earnings or would obviously be detrimental to the shareholders, we will dissent from the
proposal in principle.
・Regarding a proposal for expansion of new business, if we consider that synergy with therelevant company shareholders,usiness and the possibility of using the company’sstrength for the new business have been fully taken into account, we will support theproposal in principle.

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8. Amendments to the Articles of Incorporation, Other Proposals【Approach to Proposals】
We believe that proposals for amendments to articles of incorporation or other policies must contributeto improving the medium to long term shareholder value and profits for clients (beneficiaries), and thatthe relevant company must fully perform its accountability obligation.

【General Rules of Exercise】(１) Regarding a proposal for amendment to the articles of incorporation, we will exercise voting
rights in accordance with the following criteria:・If the change in Articles over the fiscal year or quorum raises a clear concern over themaximization of medium-to-long-term shareholder value, we will dissent from theproposal in principle.
・If the change in Articles over the company year or quorum ses clear concern over themaximization of medium-to-long-term shareholder value, we will dissent from the
proposal in principle.
・If the change in Articles over the structure or size of the Board of Directors or staggered
terms, raises clear concern over the maximization of medium-to-long-term shareholder
value, we will dissent from the proposal in principle.
(２) Financial statements and audit reports must be prepared under proper internal controls andmust provide full disclosure. Otherwise, we will dissent from the proposal in principle.
(３) We will make a decision on a shareholder’s proposal in the same manner as the relevant
company’s proposal, from the perspective of maximizing the medium-to-long-term
shareholder value. However, if the shareholder’s proposal is not in line with the company’s
management policy or measures, we will dissent from the proposal in principle.
(４) Regarding the liability exemption of Directors, Corporate Auditors, members of theCompensation and Nominating Committees and Accounting Auditors, we will take into
account the person subject to the liability exemption and the level of exemption. If we findthat the exemption deviates from what should be a natural burden, we will dissent from theproposal in principle.
(５) On proposals relating to society, politics and the environment, they must contribute to thecreation of shareholder value. Otherwise, we will dissent from the proposal in principle.

13(６) If proposals are unaccompanied by full and sufficient information, we will dissent from theproposal in principle.
(７) Regarding anti-social behaviors, the below is how we will exercise our voting rights:
・ For medium-to-long-term enterprise value creation, companies must bear a socialresponsibility. Anti-social behaviors may damage enterprise value. Companies that haveperformed anti-social behaviors, or have been punished for such behaviors will be judged
as having a poor governance structure. However, we will judge companies that havetaken remedial action or improved their governance structure with a proper explanation
on a case-by-case basis.
In principle, the following acts are deemed misconducts whereby the relevant company has
been judged to have been involved as an organization:
・Violation of antitrust laws and/or laws and regulations prohibiting bribery, corruption, etc.
・Inappropriate accounting practices and delay in the release of financial accounts
・Cases where fraudulent inspections and falsification of data, among others, have materially
impacted the relevant company’s management and operations
・Cases where socially unacceptable actions have resulted in the loss of social credibility of
the relevant company
・Cases where significant governance failure is identified.
・Other acts which may have a profound impact on society and the environment

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