I. Introduction
ICICI Prudential Asset Management Company Ltd. (“the AMC” or “the Investment Manager”)
acts as the Investment Manager to the schemes of ICICI Prudential Mutual Fund (“the Fund”).
Some of the schemes of the Fund have invested or will be investing in securities of
companies
or units of Infrastructure Investment Trusts (InvITs) (“investee companies”) carrying
voting
rights or debt instruments. These securities carry (or will carry) voting rights that can
be
exercised at meetings of shareholders or court convened meetings or through postal ballots.
The AMC, as the Investment Manager, is authorized to exercise, or to abstain from
exercising,
the rights on behalf of the unitholders of the investor schemes.
This note sets out the general policy to be followed by the AMC in deciding on whether and
how to exercise the voting rights vested in it as the Investment Manager. The policy takes
into
account the relevant regulatory guidelines issued by the Securities and Exchange Board of
India (SEBI)1
II. Guiding principle
The basic principle that should guide the policy on dealing with voting rights in
investee
companies is that the exercise of voting rights or abstention from such exercise should be
in the perceived best interests of the unitholders of the investor schemes. In the event of
any
conflicts of interest between those of the Investment Manager and the unitholders, the
latter
shall prevail.
III. Proposals coming up for voting
Matters that generally come up for voting by shareholders of investee companies and
holders
of debt instruments (either at shareholder meetings or at court convened meetings or
through
postal ballots) include but are not limited to the following:
IV. General guidelines for exercise of voting rights
The Investment Manager’s decision either to vote, or to abstain from voting, on
proposals before the shareholders of investee companies shall be made taking into account
the possible implications of the voting or abstention on the interests of the unitholders
represented by the Investment Manager. The Investment Manager should ensure that the voting
or abstention would help protect, preserve, or enhance the unitholders’ value in the
investee company, or would not prejudice their interests.
Further, the Investment Manager may decide to abstain from voting:
The reasons for the proposed change (especially of the objects clause) and its likely impact on the investee company’s character, business operations and financial condition shall be taken into consideration while determining the voting decision.
Proposals to increase the capital, whether through a rights issue or other
means, should be examined to see why it is needed, and if it would have a
significant impact on the existing shareholders’ rights and their existing or
potential value. It should also be examined how the additional capital infusion
would be leveraged
The board of directors of a company shoulders the primary responsibility for
managing it in such a manner as would protect or enhance shareholder value
while also ensuring that the company complies with statutory and regulatory
requirements and adopts good corporate governance practices. The board should,
therefore, comprise individuals who can be expected to help the board perform
its role satisfactorily.
While considering a proposal for appointment or reappointment of a director of
an investee company, the Investment Manager shall take into account such
factors as the person’s qualifications and relevant experience, any instances
of his misconduct as would reflect onhis ability to function effectively as a
director, any history of legal proceedings against him, and (in the case of an
independent director) the degree of independence that he could beexpected to
bring to his tasks. The Investment Manager shall normally not vote against
suchproposals unless there are strong factors in the knowledge of the
Investment Manager thatmilitate against the appointment or reappointment.
While considering proposals for remuneration (including any stock options) of
directors and
the chief executive and senior executives, the Investment Manager will consider
such factors
as the company’s business volume, income, and profits, statutory or regulatory
limits, and comparable industry practices. It is clearly in the interests of
shareholders that an investee
company should have the ability to attract and retain personnel of high
quality. Employee
remuneration levels should reflect market-based judgment taking into account
the nature, size
and complexity of the business of individual companies and industry practices.
The Investment Manager would normally support proposals for remuneration of the
chief or
senior executives linked to the company’s long-term performance, as reflected
in enhanced
shareholder value. Employee stock-option and stock incentive plans that result
in excessive
dilution of shareholder value, or are considered to be excessively generous,
shall not be
supported. Further, any record of unsatisfactory performance or misconduct by
personnel
who will significantly benefit from approval of such proposals shall be kept in
view.
While considering proposals for the appointment/reappointment of statutory
auditors, the
Investment Manager shall give due consideration to factors such as the auditor’
performance
vis-à-vis the company, its overall experience and track record, and any known
instances of
professional misconduct.
The Investment Manager shall normally support, or will not vote against,
proposals that would
enable the company to contribute to social development, community welfare, and
environmental protection, or those that are reasonably expected to bring in
significant socio-economic
benefits. For this
purpose, the Investment
Manager shall consider reasonableness
of
the amount
proposed
to be spent.
The Investment Manager shall analyze a proposal for merger, or other corporate
restructuring,
to assess its short- and long-term financial and strategic implications for the
company and its
shareholders, and support those that are considered to be in the interests of
the unitholders
and vote against those that are considered to be prejudicial to their
interests.
V. Conflicts of interest
Situations involving current or potential conflicts of interest may only arise when a
proposal
is from an investee company within the ICICI/Prudential group. In all such situations,
decisions
shall be taken in the interest of the unitholders of the investor scheme.
VI. Procedure for policy implementation
The general procedure to be adopted by the Investment Manager for considering, and
deciding on, proposals from investee companies is noted below:
a) The Investment Manager shall arrange for the Custodian or such other agency appointed for the purpose, to notify the Investment Manager, in advance, of forthcoming shareholder meetings and postal ballots or court convened meetings to be held by investee companies and the proposals coming up for voting at the meetings or for ballot.
b) On being so notified, the proposals will be reviewed by the Investment Manager in terms of the guidelines contained in this policy.
c) A decision to vote for or against, or to abstain from voting, shall be
taken on each proposal.
With respect to equity and equity related investments, including
Infrastructure Investment
Trusts (InvITs), the final decision on each proposal shall be taken by
either Head of
Research or Chief Investment Officer (CIO) or Deputy CIO (including Fund
Managers) or
Managing Director and/or any such person, as authorized by the Managing
Director/CIO.With respect to fixed income investments, the final decision
on each proposal shall be
taken by either Chief Investment Officer (CIO) – Fixed Income or any Fixed
Income Fund
Managers or Managing Director and/or any such person, as authorized by the
Managing
Director/CIO - Fixed Income.
The Investment Manager may also seek the analysis and recommendations of a
research
firm or other competent agency or individual to aid such decisions.
d) Where, however, a proposal with respect to equity and equity related
investments
involves conflicts of interest or where the Head of Research intends to
vote against a
proposal, the proposal shall be referred to, and a decision thereon shall
be taken by the
committee chaired by the Managing Director or along with other members
appointed by
him.
Further, where, a proposal with respect to fixed income investments
involves conflicts of
interest or where the CIO – Fixed Income intends to vote against a
proposal, the proposal
shall be referred to, and a decision thereon shall be taken by the
committee chaired by the
Managing Director or along with other members appointed by him.
This would ensure that the Investment Manager’s decision on the proposal
would be in
the best interests of the unitholders of the investor scheme concerned.
Further, there shall
be a written disclosure of the conflicts of interest in the process leading
to the final
decision.
e) Further, the decisions taken on each proposal along with the facts of the proposal and justification shall be recorded and documented.
f) Where so decided, the voting right shall be exercised, in accordance with the decision taken on the proposal, by a representative of the Investment Manager so authorized. The Investment Manager could avail of the services of an agency for representing the Fund/ the Schemes, in the meetings of the Investee companies.
g) The AMC shall obtain certification from “scrutinizer” in terms of Rule 20 (3) (ix) of Companies (Management and Administration) Rules, 2014 and any future amendment/s to the said Rules thereof on the voting reports disclosed. Such certification shall be submitted to the Board of Directors of the Trustee Company and also disclosed in the annual report and on the AMC’s website.
h) The Board of Directors of the AMC and the Trustee Company shall review and ensure that the AMC has voted on important decisions that may affect the interests of investors and the rationale recorded for vote decision is prudent and adequate. The confirmation on the above, along with any adverse comments made by the Scrutinizer, shall be reported to SEBI in half-yearly Trustee reports.
i) A periodical report containing a summary of the voting decisions exercised and abstained along with the rationale, as the case may be, will be submitted to the Board of Directors of the Trustee Company and the AMC.
VII. Disclosures
This policy shall be put on the Investment Manager’s website www.icicipruamc.com.
The following periodical disclosures shall be made available on the aforesaid website and/or in the abridged annual report for the year distributed to the unitholders:
VIII. Review/Amendments to the policy
This policy shall be reviewed once in two years, or as and when needed. This Policy may
only be amended with the prior approval of the Board of Directors of the Trustee Company.
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1
a) SEBI circular no. SEBI/IMD/CIR No 18/198647/2010 dated March 15, 2010;
b) Mail dated May 9, 2011 from SEBI; and
c) Mail dated June 23, 2011 from SEBI
d) SEBI circular no. CIR/IMD/DF/05/2014 dated March 24, 2014.
e) SEBI circular no. SEBI/HO/IMD/DF2/CIR/P/2016/68 dated August 10, 2016
Click to view Details of Auditor Certificate of Voting Disclosure year 2015-2016.
Click to View Details
of Proxy Voting exercised for the Financial Year 2010-11
Click to View Details of Proxy Voting exercised for the Financial Year 2011-12
Click to View Details of Proxy Voting exercised for the Financial Year 2012-13
Click to View Details of proxy Voting excercised for the Financial Year 2013-2014
Click to view Details of votes exercised during the Financial year 2014-2015.
Click to view Details of Auditor Certificate of Voting Disclosure year 2014-2015.
Click to view details of votes exercised during the Financial year 2015-2016.
Click to view details of votes exercised during the Financial year 2016-2017.
Click to view details of Scrutinizer's Certificate of voting disclosure year 2016-2017.
Click to view details of votes exercised during the Financial year 2017-2018.
Click to view details of Scrutinizer's Certificate of voting disclosure year 2017-2018.