FRR 2016 ANNUAL REPORT38

Split between developed/emerging countries

The controversy divide goes against developed countries. 80 companies in this zone, or 3.98% of the companies analysed, are considered to be highly controversial.

Just five companies, or 1.07% of those analysed, in emerging countries are considered to be highly controversial. This is a quarter of the total in developed countries. The portfolio s lesser coverage of this zone largely explains the differ- ence. Corrected for this effect, the ratio none- theless remains 1:4.

Exclusions linked to prohibited weapons

Each year, the FRR publishes an exclusion list approved by the Supervisory Board s Responsi- ble Investment Committee. This list is updated during the first half of each year, and published on the FRR s website.

The FRR added two new companies to its exclu- sion list in 2016, and took two off. On 31 March 2016, the Responsible Investment Committee decided to add China Poly Group Corporation and S&T Dynamics to the FRR s exclusion list for their involvement in the manufacture of anti-personnel mines and cluster bombs. At the same time, the Committee decided to remove Singapore Technologies Engineering and Temasek Holdings from the list.

The FRR s exclusion list at 31 December 2016

Company Country

Aeroteh USA Alliant Techsystems USA Aryt Industries Israel China Aerospace Science and Technology Corporation China China North Industries Corporation China China Poly Group Corporation China General Dynamics USA Hanwha Corporation South Korea Hellenic Defense Systems Greece Israel Military Industries Israel L-3 Communications Holdings USA Larsen & Toubro India Lockheed Martin USA Motovilikhinskiye Zavody Russia Poongsan Holdings South Korea Raytheon USA Roketsan Turkey S&T Dynamics South Korea Tata Power India Textron USA

EXERCISE OF VOTING RIGHTS Overall data on votes cast by the FRR during the 2016 season

The FRR voted on 2,176 shares in 36 countries during 2016.

This represented 72,314 resolutions at 2,610 general meetings.

The FRR attended 99.4% of general meetings, being absent from just 16, which equates to 0.6% of the total.

The difficulties encountered by the FRR s man- agers, and any lack of vote, often resulted from the specific characteristics of local regula- tions, in particular the blocking of shares before a general meeting, or in the event of split