Stewardship Code

Implementation of the Code

1.1 Principle 1: Stewardship Responsibilities

1.1.1 Role of Key Persons

The key persons of Samarth Wealth Management Funds are responsible to safeguard the interests of investors. Hence, the key persons shall be responsible for the overall implementation and execution of this Code. The stewardship responsibilities of Samarth Wealth Management Funds shall be:

• The investment management team, while making investment decisions, shall take into consideration various aspects of a Portfolio Company, such as its policies, strategies, financials, business and operational processes, environmental, social and governance (ESG) risks, corporate governance practices (including board structure, remuneration, etc.), industry-level monitoring and possible impacts, and other relevant information for making informed investment decisions.
• To ensure active engagements with the Portfolio Companies, including meetings with management, board or relevant personnel, to identify, deliberate on and find possible solutions to issues and continue discussions to formalize better processes.
• To exercise voting rights in the Portfolio Companies in a manner consistent with the best interests of investors.
• To have a clear policy on conflict of interest to ensure that the interest of investors of the respective Samarth Fund is placed before the interest of any other person or entity.

1.1.2 Outsourcing

In case any Samarth Fund utilizes the services of external service providers to support the investment management team in discharging its stewardship responsibilities, the respective Samarth Fund shall ensure that such engagements comply with the fund’s Vendor Management Policy.

1.1.3 Training and Review

A training program shall be formulated for key persons, the investment management team, and employees involved in ensuring compliance with this Code. The sessions shall explain responsibilities under this Code, including any amendments, and may be conducted by external agencies or internal teams.

1.1.4 Disclosure on Website

This Code, as amended from time to time, will be disclosed on the website of Samarth Wealth Management. Any change or modification will also be updated on the website.

1.2 Principle 2: Management of Conflict of Interest

Each Samarth Fund has adopted a separate policy for managing conflicts of interest to ensure that the interests of contributors are protected.

1.2.1 Approach for Resolution of Conflict of Interest

In addition to the provisions set out in the conflict management policy, the Samarth Funds shall establish procedures for managing and mitigating conflicts of interest, including but not limited to:

• Confidential Information: Each Samarth Fund shall enter into confidentiality agreements with necessary persons to restrict the flow of sensitive information and prevent improper access.
• Arm’s Length Transactions: Samarth Funds will ensure that transactions are conducted at arm’s length and no party unfairly profits.

If any Samarth Fund, its supervised persons, or the investment management team cannot implement sufficient controls to prevent damage to the fund’s interests, such conflict shall be disclosed to the Compliance Committee constituted by the Investment Manager, comprising of designated members and the Compliance Officer.

The Compliance Committee is responsible for establishing, periodically reviewing, and monitoring the compliance of each Samarth Fund. Such disclosures will be in writing, with sufficient detail to enable the committee to take an informed decision. Any member involved in a conflict shall abstain from participating in related decisions. Records of minutes and resolutions will be maintained.

For further details, please refer to the Conflict Management Policy.

1.3 Principle 3: Monitoring of Portfolio Companies

1.3.1 Areas of Monitoring

The investment management team shall periodically monitor Portfolio Companies in the following areas:

• Business strategy
• Financial performance and capital structure
• Quality of company management, board, and leadership
• Corporate governance practices, especially board composition, size, independence, diversity, and director remuneration
• Risks, including environmental, social, and governance (ESG) factors
• Shareholder rights and grievance redressal mechanisms

1.3.2 Level of Monitoring

The level of monitoring may vary depending on investment materiality. For larger investments, a higher degree of monitoring will be conducted.

1.3.3 Process of Monitoring

Monitoring may involve public disclosures such as quarterly results, annual reports, and announcements, as well as engagement with management. The team may also review research reports and industry insights and attend management calls or meetings where feasible. In cases where insider information is involved, the investment team shall comply with the SEBI (Prohibition of Insider Trading) Regulations, 2015, and the Prevention of Insider Trading Policy of Samarth Wealth Management.

1.4 Principle 4: Intervention in Portfolio Companies

Each Samarth Fund will intervene in Portfolio Companies when necessary, based on materiality of investment and significance of the issue.

1.4.1 Circumstances for Active Intervention

• Continuous lack of financial performance
• Poor corporate governance practices
• Inequitable treatment of shareholders
• Legal or regulatory non-compliance
• Significant lawsuits or litigation
• Any other major concerns

1.4.2 Mechanism of Intervention

• Step 1 – Engagement: Conduct one-on-one meetings with management to resolve concerns.
• Step 2 – Re-Engagement: If no action is taken, reinitiate discussions and agree upon a time-bound corrective plan.
• Step 3 – Escalation: Escalate to the company’s board or raise the matter in shareholder meetings.
• Step 4 – Collaboration: Collaborate with other institutional investors or associations if collective action is more effective.
• Step 5 – Voting: Consider voting against management proposals if governance concerns persist.

1.4.3 Investments Post Intervention

Unsuccessful intervention will not automatically result in an exit. Any buy/sell decision will depend on the best interests of investors, valuations, and market factors.

1.5 Principle 5: Voting Related Matters

6.5.1 Exercise of Voting Rights

Each Samarth Fund shall exercise its voting rights in Portfolio Companies in the best interest of investors. A comprehensive Voting Policy shall define when and how voting is conducted, including cases of abstention or dissent.

1.5.2 General Guidelines

Decisions on voting or abstaining will be made considering potential implications on investor interests.

1.5.3 Use of Proxy Advisors

Samarth Funds may engage proxy advisors for voting decisions but are not bound by their recommendations and may exercise independent judgment.

1.6 Principle 6: Report on Stewardship Activities

Each Samarth Fund shall provide periodic reports on stewardship activities in a simple format to investors. Reports may be placed on the website covering implementation of each principle, with voting disclosures quarterly and policy updates annually. Any modifications to this Code shall also be disclosed promptly.