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Stewardship Code - WESTBRIDGE AIF I


Stewardship is the responsibility attributed to an institutional investor to monitor, oversee and manage the capital invested in companies in order to create long-term value for its clients. The stewardship code is a set of principles or guidelines aimed primarily at institutional investors, who hold shares, and thus, voting rights in investee companies to fulfill their fiduciary obligations towards their clients. At the investee company level, the stewardship codes promote high standards of corporate governance by requiring investors to monitor and, where necessary, engage with investee companies on material matters, including environmental, social, governance, strategy, performance and risk issues and to vote on their shares at the shareholder meetings of the investee companies.

Recognizing that companies and investors have a symbiotic existence: i.e. companies need investors, just as much as investors need companies, effective stewardship and effective governance go together. For a company to be able to act in the investors’ best interest, it also needs to understand the investors’ perspective. The intent of a stewardship code is to set forth a broad framework that encourages the investors to engage with companies they have invested in and their respective management teams and boards of directors, thereby benefitting both the investee companies and the investors.

Stewardship aims to promote the long-term success of investee companies in a manner that the ultimate providers of capital also prosper. Effective stewardship benefits investee companies, asset managers, investors and enhances the quality of capital markets.


WestBridge AIF I (“WestBridge” or the “Fund”), is established as a trust under the Indian Trusts Act, 1882, and is registered with the Securities and Exchange Board of India (“SEBI”) as a Category II Alternate Investment Fund (“AIF”). Mountain Managers Private Limited, a private limited company incorporated under the laws of India, acts as the sponsor and investment manager of WestBridge AIF I (the “Investment Manager”). Milestone Trusteeship Services Private Limited serves as the trustee of WestBridge AIF I and has delegated its rights and powers to manage the AIF to the Investment Manager.

WestBridge AIF I makes investments across multiple sectors in India, including in listed companies (hereafter referred to as “Investee Company/ Companies”), in accordance with applicable laws under the directions of the board of directors of the Investment Manager (“Board”).

WestBridge AIF I is aware that SEBI has, pursuant to Circular CIR/CFD/CMD1/168/2019 dated December 24, 2019 (the “Stewardship Circular”), introduced a stewardship code that mutual funds and all categories of AIFs must follow in relation to their investment in listed equities.

Set out below is the Stewardship Code of WestBridge AIF I (the “Stewardship Code” or “Code”), which has been framed in accordance with the guidance provided by SEBI through the Stewardship Circular. Oversight of the Fund’s stewardship activities will be undertaken by the Board, which shall also review and make necessary changes to the Stewardship Code, from time to time.


WestBridge AIF I has adopted this Stewardship Code with effect from July 01, 2020.




WestBridge AIF I typically seeks to partner for the long term, with mid-size businesses that have capable and honest entrepreneurs and management teams, with growing market leadership and those with returns on capital and healthy free cash flows. Prior to making any investment, the team at the Investment Manager, including but not limited to employees and directors (the “Team”) undertakes extensive due diligence on the target of the proposed investment by WestBridge AIF I. The Team consists of experienced and skilled investment professionals with a strong track record, diverse and complementary skill-sets and industry network.

WestBridge AIF I, as relevant and appropriate, oversees the activities of its Investee Companies, through a commensurate policy as required by SEBI. WestBridge AIF I is generally of the view that the functioning of the Investee Companies should not be interfered with as long as the decisions made by the Investee Companies and their functioning do not adversely affect the interests of WestBridge AIF I. As noted above, WestBridge AIF I, has evolved strict standards and checks in place prior to selecting Investee Companies and typically only such companies which meet all relevant yardsticks, including from a compliance perspective, are considered by the Board for investments by WestBridge AIF I.

Notwithstanding the above, as part of its stewardship responsibilities, WestBridge AIF I shall endeavour to:

a) as part of its investment process, in addition to financial and operational performance metrics, take into consideration the Investee Companies’ policies and practices on environmental, social and corporate governance matters;

b) enhance shareholder/investor value through productive engagement with Investee Companies on various matters, including performance (operational, financial, etc.), corporate governance (board structure, executive remuneration), material environmental, social and governance (“ESG”) risks or opportunities, capital requirements and deployment, strategy, entering a new sector or jurisdiction, etc.

c) vote and engage with its Investee Companies in a manner consistent with the best interests of its investors;

d) influence the development of corporate governance standards and corporate responsibility at its Investee Companies;

e) maintain transparency in reporting its voting decisions and other forms of engagement with Investee Companies, as may be required; and

f) disclose its stewardship code (as amended from time to time) and activities to its investors on a periodic basis.

Further, WestBridge AIF I shall endeavour to discharge its stewardship responsibilities through:

a) nominee representation on the board of Investee Companies, where such an option is available and feasible for the Fund. WestBridge AIF I believes that this would also enable sharing with the Investee Companies, its experience to enrich the Investee Companies, and thereby contribute towards value enhancement of such Investee Companies;

b) attending investor calls and participating in general meetings of Investee Companies;

c) conducting detailed discussions with the management and interactions with the Investee Company managements and board of directors in compliance with all applicable laws, including applicable SEBI regulations;

d) exercising its vote on board or shareholders’ resolutions, as applicable, with a view to enhancing value creation for its investors and the Investee Companies;

e) advocating for responsible corporate governance practices, as a driver of value creation; and

f) intervening on material ESG opportunities/ risks in the Investee Companies, where such an option is available and feasible for the Fund.

The Board has designated Ms. Shobitha A Mani, General Counsel, as the “Compliance Officer” who shall be responsible for compliance with the Stewardship Code. The Compliance Officer, under the overall supervision of the Board, shall be responsible for monitoring implementation of the Stewardship Code and reviewing and updating the Code on a periodic basis.

The Compliance Officer shall conduct necessary training, as required, for implementation of the Stewardship Code and to ensure that all key personnel are aware of their responsibilities and duties under the Code. The trainings may be by way of internal/external training sessions, attending sessions/workshops on stewardship principles, reviewing of global / national best practices or any other form as may be found to be relevant and useful.

WestBridge AIF I may, engage the services of external service providers in the course of discharging its stewardship responsibilities, as the Board or Compliance Officer may deem necessary and appropriate.



The term "conflict of interest" typically refers to instances where personal or financial considerations may compromise or have the potential to compromise ones judgment in the course of discharging ones professional obligations. A conflict of interest exists where the interests of WestBridge AIF I and its affiliates conflict with the interests of its investors or of the Investee Company.

Instances may arise where the interests of, the investors of the Fund, the Board, employees of the Investment Manager, persons who act as nominee directors of WestBridge AIF on the board of directors of its Investee Companies, or the Investee Companies (collectively, the “Interested Parties”) may potentially or actually conflict with the interests of WestBridge AIF I.

WestBridge AIF I has evolved appropriate governance guidelines to achieve and maintain discipline and transparency in all business processes to avoid any potential or actual conflicts of interest. As a rule, the Board will use its good faith judgment in the best interests of WestBridge AIF I in addressing any potential conflicts of interest which may arise. These guidelines are applicable to any transaction entered into by WestBridge AIF I. In the event of any doubt as to whether a particular transaction would create (or have the potential to create) a conflict of interest, such relevant persons shall consult with the Board.

Some illustrations of potential conflicts of interest and how they might be managed are outlined below. However, the examples listed below are only indicative and illustrative and not intended to be exhaustive or to bind the Fund to a particular course of action in every circumstance. Also, other types of conflicts of interest may arise during the term of WestBridge AIF I, all of which will be reviewed, and the appropriate course of action determined by the the Board, as necessary.

  • Investments in Investee Companies in which Interested Parties have interests

    WestBridge AIF I may invest in Investee Companies in which Interested Parties may have an investment or other interests, which may be on terms similar to that of WestBridge AIF I’s investment or on different terms. In order to address such a conflict of interest, except where such an interest is arising from an investment that may be made through a formal co-investment programme, such Interested Party shall be required to fully disclose all details of its interest to the Board, and if the Board considers appropriate, shall not be involved in any decision-making process relating to the concerned investment by the Fund.

  • Purchase from, and sale of Investments to Interested Parties

    WestBridge AIF I may, in certain instances, engage in the purchase or sale of securities from or to the Interested Parties. In order to address any such conflicts, WestBridge AIF I, shall prior to engaging in any such purchase or sale of securities, ensure that there are appropriate disclosures of any such interests made to the Board. Further, any Interested Parties or their affiliates shall, to the extent necessary, abstain from participating in any decision-making process relating to the transaction.

  • Investee Company Boards

    There may be instances when WestBridge AIF I appoints a nominee on the board of directors of an Investee Company. While serving in such capacity, such persons have fiduciary and other duties to the Investee Company, under applicable law, which could in certain exceptional circumstances conflict with the interests of WestBridge AIF I. The nominee director should at all times be encouraged to act in accordance with their obligations under applicable law and report any such conflicts of interest to the Board, which will endeavour to resolve such conflicts of interest through good judgement and attention to the best interests of WestBridge AIF I and its investors and the concerned Investee Company.



As discussed under Principle 1, while WestBridge AIF I generally believes in a policy of non-interference with the functioning of its Investee Companies, it shall endeavour to monitor the performance of its Investee Companies through various analytical tools and on the basis of information which is available in the public domain and also through data generated by the Investee Companies and provided to its shareholders. The level of monitoring will of course depend upon various factors like the size of the Fund’s investment in the Investee Company and the period for which it intends to hold the investment – i.e. Investee Companies with higher investment amounts may receive relatively higher levels of monitoring vis-à-vis the Investee Companies with a lower investment amount. WestBridge AIF I will not actively monitor Investee Companies where the Fund’s total investment in the Investee Company is either less than 1% of the capital commitments to the Fund or where the Fund holds less than 1% of the equity share capital of the Investee Company (“Small Inv Cos”).

  • As part of the monitoring process, WestBridge AIF I aims to focus on discharging its responsibilities of stewardship in respect of its Investee Companies (other than the Small Inv Cos) by:

  • Satisfying itself that the Investee Company’s management and governance structures are effective and adequate for the size and nature of the concerned company and commensurate with relative industry standards, and that independent directors provide adequate oversight;

  • Assessing, as appropriate, the Investee Company’s strategy, performance, governance or management remuneration and the quality of such company’s reporting; and

  • Attending the general meetings of Investee Companies, where such an option is available and feasible for the Fund.

Further, WestBridge AIF I endeavours to periodically monitor, amongst other things, the following with regard to each Investee Company –

  • The Investee Company’s performance, both operational and financial, as compared to peers in the applicable sector;

  • The capital structure of the Investee Company and changes thereto - capital requirements and capital allocation to new investors;

  • Leadership and key management personnel and changes if any;

  • Deviations from material environmental, governance and corporate governance policies;

  • Compliance with legal and regulatory requirements, strength of the internal reporting mechanism; and

  • Investor grievances and their timely resolution.

In addition to the matters above, WestBridge AIF I may also consider the Investee Company’s approach to risk management, including in respect of environmental, social and governance matters, which will be taken into consideration when making an overall judgement on a company’s suitability for investment. Such information will be obtained from the Investee Company, its annual reports and accounts and research sources. WestBridge AIF I uses both in-house and third-party research to assist it in its assessment of a company, and as a source of different perspectives, as well as staying close to industry developments.

WestBridge AIF I shall, where applicable, notify its listed Investee Companies not to share any unpublished price sensitive information with it or the Team, in the absence of a specific prior agreement, which could deem it an ‘insider’. WestBridge AIF I shall ensure that all discussions and exchange of information with its listed Investee Companies are in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015. On receipt of any potentially unpublished price sensitive information by WestBridge AIF I or the Team, the same will be immediately reported to the Compliance Officer, who will, in consultation with external counsel (as necessary), determine any corrective action necessary to ensure the SEBI (Prohibition of Insider Trading) Regulations, 2015 are adhered to.



WestBridge AIF I shall endeavour to intervene in the acts/omissions of an Investee Company, in which it holds at least 25% of the share capital of the Investee Company.

WestBridge AIF I shall intervene if, in the opinion of the Board and in consultation with legal counsel (if necessary), any act/omission of the Investee Company is considered materially adverse (on a case to case basis), including but not limited to poor financial or operational performance, insufficient disclosures, inequitable treatment of shareholders, non-compliance with regulations, poor corporate governance related practices, failure to meet performance parameters, ESG risks, leadership concerns, related party transactions or any other similar matters, in such manner as the Board may deem fit and appropriate.

However, it may consider intervening in matters below the stated thresholds, if in the reasonable opinion of the Board or the Compliance Officer, the issue involved may materially and adversely impact the overall corporate governance of the Investee Company or WestBridge AIF I’s investment in such Investee Company.

Such intervention could be in the following manner –

  • Engagement: WestBridge AIF I shall take all reasonable steps to address its concerns, including but not limited to requesting for an opportunity to meet with the senior management of the Investee Company to fully comprehend the issue and resolve any concerns and participate in investors calls and general meetings.

  • Re-engagement: In the event the management of the Investee Company fails to undertake steps to resolve the concerns raised by WestBridge AIF I within a reasonable timeframe, WestBridge AIF I shall, as determined by the Board, consider collaborating with other (institutional) investors of the Investee Company and collectively, re-engage with the management of the Investee Company to resolve outstanding concerns.

  • Escalation: In case there is no progress despite the first two steps, WestBridge AIF I shall escalate the matter to the board of the Investee Company.

In circumstances where WestBridge AIF I’s approach to engaging with the management of Investee Company is not achieving the desired result, WestBridge AIF I may consider other intervention mechanisms, as deemed appropriate.

a) If there is no response or action taken by the Investee Company despite the above, WestBridge AIF I may approach the relevant authorities/ regulators.



WestBridge AIF I recognises the importance of exercising its voting rights in the protection of shareholders’ interests. WestBridge AIF I is conscious of its role as an investor and shall, to extent reasonably possible, make informed and independent voting decisions, applying due care and diligence.

WestBridge AIF I shall exercise its voting rights in its Investee Companies, on a case to case basis and after careful scrutiny of the resolutions. Generally, the resolutions on which WestBridge AIF I will have to vote can be bifurcated into two categories –

  • Routine resolutions in the ordinary course of the Investee Company’s business and which have a higher frequency of occurrence; and

  • Non-routine resolutions which are material and significant, which would be deliberated on by the Board or the Team, prior to determining the manner in which to exercise the Fund’s vote.

All Investee Company resolutions to be voted on by the Fund will typically be evaluated, amongst others, on the following parameters –

  • Impact on the Investee Company;

  • Implications for WestBridge AIF I;

  • Impact to promoters or their related parties; and

  • Whether the resolutions are, in the opinion of the Fund, in line with the vision, mission and strategy of the Investee Company.

Routine resolutions might include adoption of accounts, re-appointment of auditors, declaration of dividend, re-appointment of directors, fixing remuneration of directors, issuance of non-convertible securities, related party transactions, sale of assets, increase in borrowing limit etc.

Non-routine resolutions might include changes to the Investee Company’s business, material changes to the Investee Company’s capital structure, acquisition / divestments, business reorganisation, inter-group royalty arrangements etc.

As on date, WestBridge AIF I does not make use of proxy advisory voting or voting advisory services.

WestBridge AIF I shall adhere to the conflicts of interest policy as outlined in Principal 2 while exercising its voting rights in Investee Companies.



WestBridge AIF I is committed to providing transparency on its stewardship activities. WestBridge AIF I shall periodically monitor the Investee Companies and the Compliance Officer shall prepare a report with regard to the Fund’s stewardship activities, which will be made available to its investors on an annual basis.