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Colonial First State Global Asset Management (including First State Investments)

PRI reporting framework 2017

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(Proxy) voting and shareholder resolutions

Overview

LEA 17. Voting policy & approach

New selection options have been added to this indicator. Please review your prefilled responses carefully.

17.1. Indicate whether your organisation has a formal voting policy.

17.2. Indicate what your voting policy covers:

17.3. Attach or provide a URL to your voting policy. [Optional]

17.4. Provide a brief overview of your organization’s approach to (proxy) voting.

Proxy voting rights are an important part of shareholder responsibility and we seek to vote on all possible resolutions at company meetings. Prior to voting, the relevant investment manager and analyst carefully consider each resolution, with guidance provided by our ‘Guidelines and principles for corporate engagement on governance, environment and social issues’.

Recommendations from a selection of independent corporate governance research providers are also sought. Our investment teams retain full control over their proxy voting decisions, however, and do not necessarily follow the guidance provided by third party governance research providers.

All teams have an approval and escalation process for proxy votes and maintain records when they vote against management or against the recommendations of the proxy voting adviser.

We see proxy voting as an extension of our engagement activities and will take the company's individual circumstances and willingness to engage into account when making decisions. We do not require different teams to vote the same way on specific resolutions.

We have not filled or co-filled a shareholder resolution but would consider such measures should we believe it was the most effective way to bring about change in an investee company.

17.5. Provide an overview of how you ensure your voting policy is adhered to, giving details of your approach when exceptions to the policy are made (if applicable).

Any material breaches of the policy would be reported to the Global Responsible Investment Steering Group. 


Process

LEA 18. Typical approach to (proxy) voting decisions

18.1. Indicate how you typically make your (proxy) voting decisions.

Approach

Based on

          We provide proxy guidelines and use proxy advisers however decisions are made by the teams. See additional information.
        

18.2. Additional information.[Optional]

As described above we provide proxy voting guidelines at a firm level however will take the company’s individual circumstances and willingness to engage into account when making decisions. We do not require different teams to vote the same way on specific resolutions. With oversight from the head of each investment team we believe this is the best way to conduct long-term and ongoing engagement with companies.


LEA 19. Percentage of voting recommendations reviewed (Not Applicable)


LEA 20. Confirmation of votes

New selection options have been added to this indicator. Please review your prefilled responses carefully.

20.1. Describe your involvement in any projects to improve the voting trail and/or to obtain vote confirmation .

          
        

20.2. Additional information. [OPTIONAL]

          
        

LEA 21. Securities lending programme

New selection options have been added to this indicator. Please review your prefilled responses carefully.

21.1. Indicate if your organisation has a securities lending programme.

21.3. Additional information.

          We do not believe it is in the best interests of our clients to loan shares to other investors who wish to bet against their positions. We also are concerned that issues may prevent shares being properly recalled for voting purposes.
        

LEA 22. Informing companies of the rationale of abstaining/voting against management

New selection options have been added to this indicator. Please review your prefilled responses carefully.

22.1. Indicate whether you or the service providers acting on your behalf raise any concerns with companies ahead of voting

22.2. Indicate whether you and/or the service provider(s) acting on your behalf, communicate the rationale to companies, when , you abstain or vote against management recommendations.

22.3. Additional information. [Optional]

Three investment teams reported that they inform companies in all cases of reasons for against or abstain votes while four teams reported that they inform companies in some cases, in particular on certain issues. Importantly as we view proxy voting as an extension of each investment team’s engagement activities issues which result in negative votes are generally addressed in regular interactions with companies rather than as a separate formal process.


Outputs and outcomes

LEA 23. Percentage of (proxy) votes cast

23.1. For listed equities where you and/or your service provider have the mandate to issue (proxy) voting instructions, indicate the percentage of votes cast during the reporting year.

Votes cast (to the nearest 1%)

95 %

Specify the basis on which this percentage is calculated

23.2. Explain your reason(s) for not voting certain holdings

23.3. Additional information. [Optional]


LEA 24. Proportion of ballot items that were for/against/abstentions

24.1. Indicate if you track the voting instructions that you and/or your service provider on your behalf have issued.

24.2. Of the voting instructions that you and/or third parties on your behalf issued, indicate the proportion of ballot items that were:

Voting instructions
Breakdown as percentage of votes cast
For (supporting) management recommendations
94.9 %
Against (opposing) management recommendations
4.5 %
Abstentions
0.6 %
100%

24.3. Describe the actions you take after voting against management recommendations.

          Generally we will inform companies of the reasons we have voted against directly after the vote or at our next scheduled meeting.
        

24.4. Additional information. [Optional]

We have included votes against company management recommendations (regardless of whether it is for or against the resolutions) for example shareholder resolutions where we have voted for the resolution even where the company have recommended voting against. 

We have excluded our Realindex and multiasset teams as they vote inline with our proxy voting advisor CGS Glass Lewis. 


LEA 25. Shareholder resolutions

New selection options have been added to this indicator. Please review your prefilled responses carefully.

25.1. Indicate if your organisation directly or via a service provider filed or co-filed any ESG shareholder resolutions during the reporting year.

25.6. Additional information. [Optional]


LEA 26. Examples of (proxy) voting activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

26.1. Provide examples of the (proxy) voting activities that your organisation and/or service provider carried out during the reporting year.

Topic or ESG issue
          Remuneration
        
Decision made by
Objectives

Proxy vote. 

Scope and Process

The options grant had no hurdles besides the strike price (which is below the current share price, as at May 4 2016). The options vest in one year, which is an insufficient performance period relative to conventional ASX 300 LTI plans, which have performance periods of at least three years. The reasoning from the board is this grant is to align the interests of the CEO with the growth and success of the company. This alignment already appears to be in place, with the CEO already holding ~$67.8mn in Syrah equity.

Outcomes

Voted against

Topic or ESG issue
          Governance
        
Decision made by
Objectives

Proxy vote

Scope and Process

Zhengzhou Yutong Bus Co. Ltd.

Items 12 for authority to invest up to RMB20 billion in wealth management products looks a bad practice from risk management and governance perspectives.

Outcomes

Voted against.

Topic or ESG issue
          Governance - disclosure
        
Decision made by
Objectives

Want Want China Holdings Ltd

Authority to Issue Repurchased Shares

Scope and Process

Issue price discount not disclosed

Outcomes

Voted against

Topic or ESG issue
          Governance - Tenure
        
Decision made by
Objectives

Pacific Gas & Electric Co

Relection of four of the board's directors.

Scope and Process

We believed tenure was an issue, including board representation during controversial safety issues.

Outcomes

Voted against reelection of four directors. 

Topic or ESG issue
          Governance - preemptive rights
        
Decision made by
Objectives

TAT Hong Holdings

Authority to Issue Shares w/ or w/o Preemptive Rights

Scope and Process

We don't support issuing up to 20% of the company without pre-emptive rights.

Outcomes

Voted against

26.2. Additional information. [Optional]

We have included examples where we voted against BOTH the management's and the proxy advisor's recommendations to demonstrate the independent decision making by our investment teams.  


Communication

LEA 27. Disclosing voting activities

27.1. Indicate if your organisation proactively discloses information on your voting activities.

27.2. Indicate if the information disclosed to the public is the same as that disclosed to clients/beneficiaries.

27.3. Indicate the voting information your organisation proactively discloses to the public.

Indicate how much of your voting record you disclose

Indicate what level of explanation you provide

27.4. Indicate how frequently you typically report voting information to the public.

27.5. Indicate the voting information your organisation proactively discloses to clients/beneficiaries.

Indicate how much of your voting record you disclose

Indicate what level of explanation you provide

27.6. Indicate how frequently you report voting information to clients/beneficiaries.

27.7. Describe any other differences in the information being disclosed. [Optional]

Proxy voting reports provided to clients occur in line with the relevant investment management agreements which can range from monthly to not at all (in which case clients are advised of public disclosures as they occur)

Some clients receive notifications of votes as they are submitted and prior to the deadline so they can override them should they choose to. Other clients request information on specific votes including the rationale for our voting decision.

Most clients require information on proxy voting for their regular assessment process/questionnaires.

27.8. Additional information. [Optional]


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