UpperCrust Wealth Private Limited (hereinafter referred to as the “Company”) is committed to conducting its business in accordance with applicable laws, rules and regulations and the highest standards of business ethics and ethical conduct. Corporate Governance is about maximizing shareholders’ value on a sustainable basis and ensuring fairness to all other stakeholder of the Company.

The Company shall continue to ensure good governance through the implementation of effective policies and procedures, which is mandated and regularly reviewed by the Board or the committees of the members of the Board.

The Company shall continue to function under the able direction of the Board of Directors and through the procedures and policies mandated by the Board.

Responsibilities of the Board

  1. The Board’s key purpose is to ensure the Company’s prosperity by collectively directing the company’s affairs, whilst meeting the appropriate interests of its shareholders and stakeholders.
  2. The Board is primarily responsible for:
    • Establishing vision, mission & values and determining, reviewing the goals, policy of the Company from time to time.
    • Setting strategy and structure and deciding the means to implement and support them.
    • Delegating to management, determining monitoring criteria to be used and ensuring effectiveness of internal controls.
    • Exercising accountability to shareholders and be responsible to relevant stakeholders.
    • Management & Control.
  3. For better monitoring and control, the Board shall endeavor to constitute Board level Committees as under:
    • Board Supervisory ALCO.
    • Risk Management Committee.
    • Audit Committee.
    • Nomination and Remuneration Committee.
    • Finance Committee and Debenture Allotment Committee.
    • Corporate Social Responsibility Committee.

Asset Liability Management Committee (ALCO) – Board Supervisory

The ALCO shall primarily be responsible for monitoring the asset liability gap and strategize action to mitigate the risk associated with the business of the Company from time to time.

The broad functions of the ALCO shall include:

  1. Ensuring adherence to limits regarding management of risks as set out by the Board;
  2. Deciding on business strategy in line with the budget and risk management objectives;
  3. Funding requirements: Based on the quantum of business expected for the following quarter, half year and annual, determine the level of funding required, in order to ensure that adequate funding is at all times available to meet the needs of the Company’s business;
  4. Identifying suitable funding sources, including committed stand by lines, desired maturity profile, mix of incremental liabilities;
  5. Articulate current interest rate view, develop a view on the future direction of interest rates and accordingly decide on funding mixes, resources etc.

Credit Committee

The Credit Committee may consist of Directors, Key Managerial Personnel and Senior Executives of the Company. The Credit committee critically analyses the credit proposals placed before it.

Fair Practices Code

Pursuant to the guidelines on Fair Practices Code issued by the Reserve Bank of India, the Company has adopted a policy on Fair Practices Code, which is placed on the website of the Company and also a regular review on the implementation of the same is conducted by committee members.

Risk Management

At the Company, Risk Management is integrated seamlessly into business strategy. The objective of our risk management process is to insulate the Company from risks associated with the business while simultaneously creating an environment conducive for its growth. It entails a comprehensive estimation, control and review of risks to protect organizational value.

Risk Management also forms a critical part of our training module across all levels so that all employees are trained on risk management and implications thereof. The Company’s well- defined organizational structure, documented policies and Standard Operating Procedures (SOPs), authority matrix and internal controls ensure efficiency of operations, compliance with internal policies and regulatory requirements. At the Company, a governance process has been institutionalized, which ensures that risk management concepts and policies are applied to all business and risk types. Decision making levels are based on the Company’s objectives and risk tolerance limits. Many of the critical decision levels for investments, major lending, and policy initiatives are institutionalized through appropriate committees consisting of senior officials and experts. Strategies, policies and limits are designed to ensure that risks are prudently diversified. Risk mitigating activities are reviewed periodically by senior management and further at the Board.

Our experienced compliance, audit and risk management team plays a vital role in ensuring that the rules and regulations are strictly followed in all its process, not just in letter but also in spirit. The risk management discipline is centrally initiated but prudently decentralized; percolating to the line managers and helping them mitigate risks at the transactional level, the most effective form of risk management.

Market Risk

The financial services sector is aligned to a variety of factors linked to the domestic economic development and also global developments. Any economic event happening across the globe can have a direct or indirect impact on the Company. To mitigate this, the Company diversified product mix comprising of loan against securities, loan against property including capital market/ IPO financing.

Reputation risk

Over the years, the Company has built in systems, processes, checks and balances, which ensures that operating managers say ‘No’ to poor quality in pursuit of instant results, short cuts, stop-gap alternatives, and unfair / ad hoc policies and cutting corners, among others. Also, it has in place stringent employee code of conduct and trading guidelines, which are to be followed by every employee. The Company’s policy ensures monitoring and strict disciplinary actions against those deviating from the same.

The Company has institutionalized a number of measures to secure customer interests. Our lending business system provides for day-to-day customer security vaults, loan balances and interest dues whereby customers can get to know their up-to-date dues instantly through the respective branch. We have established a strong system of proper custody/safe keeping of securities documents at a centralized vault system at the respective branch in safe vaults and controls through webcam, access control, alarms, etc. The Company makes a constant and concerted effort to educate customers of the Do’s and Don’ts.

Credit risk

For credit and finance business, the Company shall endeavor to have a multi-level credit and finance committee consisting of directors of the Board / HODs to consider all credit proposals. Proposal formats for each type of loans shall have standardized and comprehensive information on each credit proposal. The credit proposals shall be formally presented in the standard format, for evaluation and approval of the respective committee.

The Company shall endeavor to constitute a Risk Management Committee and Asset Liability Management Committee (ALCO) consisting of directors and senior officials, which shall regularly meet and review the policies, systems, controls and positions of credit and finance business. The Risk Management Committee shall review the risk management processes covering credit and underwriting controls, operations, and technology and compliance risks. The ALCO shall review the strategic management of interest rate and liquidity risk, review of product pricing for various loans and advances, desired maturity profile and mix of the incremental asset and liabilities. It shall also review the funding policies of the Company in the light of interest rate movements and desired fund mixes particularly fixed / floating rate funds, wholesale / retail funds, money market funding etc. In order to enable frequent reviews and actions, an internal ALCO shall be put in place consisting of the credit and treasury functions, which shall endeavor to meet on a monthly basis, to analyse and initiate appropriate actions keeping in view the emerging conditions.

The supervisory ALCO of the Board shall ensure that the business and risk management strategy operates within the limits/parameters set by the Board and reviews the functioning of the internal ALCO. It shall also review the Company’s funding strategy and implementation of ALCO decisions.

Technology Risk

The Management understands the importance of technology in the business segments it operates and lays utmost emphasis on the system development and use of best technology available in the industry. The management keeps itself abreast of technological advancements in the industry and ensures continued and sustained efforts towards absorption of technology, adaptation as well as development of the same to meet the business needs and objectives.

The Company’s in-house technology team developed and deployed several software applications for the loan and finance business as well as our support functions.

Compliance risk

The businesses are carried on under separate division/ companies and are regulated by a respective regulator and as such compliance forms a critical part of operations of the group. The Company shall have a full-fledged compliance department manned by knowledgeable and experienced professionals in compliance, secretarial, legal and audit fields, which guides the businesses/support functions on all regulatory compliances and monitors implementation of new or changes in regulations/circulars, ensuring all the regulatory compliances and reporting of the group.

The compliance and audit discipline extends across the entire transaction cycle: KYC process, term sheet/agreements, vetting transaction execution, transaction settlement involving securities, loan documentations, pre and post disbursement, fund transfer, customer reporting, regulatory information/returns/reports to various regulatory authorities, etc. Being in the finance and financial services, the Company has put in place adequate systems and controls to ensure compliance with anti-money laundering standards. We have instituted special purpose audits for credit audit, systems audit, portfolio management audit, fund management etc. The compliance requirements across the various service points have been communicated comprehensively to all through compliance manuals and circulars. To ensure complete involvement in the compliance process, heads of every business/zones/area offices and departments shall submit quarterly compliance reports, the compilations of which shall be reviewed by the Board/ Finance Committee/ Audit Committee and also submitted to regulatory bodies periodically.

Internal control

The Company shall ensure that its internal audit and control systems are adequate and commensurate with the nature of business and the size of its operations. The internal control system may be supplemented by concurrent and internal audits regular reviews by management. The Company shall retain a reputed global firm as its Internal Auditors to conduct internal audits. The Company shall also retain a Chartered Accountant Firm to carry out post disbursement/ concurrent audit of functions such as KYC process, credit audit and loan documentation audits. The auditors’ reports and rectifications / implementations of audit observations, action taken report shall be reviewed by the top management/ Board. Audit Committee at regular intervals. The Board/ Audit Committee, on a quarterly-basis shall review instances of fraud and action taken on the same as well as implementation of the necessary systems and controls to strengthen the system and prevent such recurrence. The internal processes shall be designed to ensure adequate checks and balances at every stage. The processes shall be reviewed periodically by Internal Auditors/ Board/ Audit Committee and strengthened from time to time.

Fit and Proper Criteria

  • The policy on the fit and proper criteria, on the lines of the Guidelines issued by RBI (as amended by RBI from time to time), contained in Annex 1 would be applicable to ascertain the fit and proper criteria of the directors at the time of appointment, and on a continuing basis,
  • The Company shall obtain a declaration and undertaking from the directors giving additional information on the directors. The declaration and undertaking shall be on the lines of the format given in Annex 2 (as amended by RBI from time to time);
  • The Company shall obtain a Deed of Covenant signed by the directors, which shall be in the format as given in Annex 3 (as amended by RBI from time to time); and
  • Furnish to the Reserve Bank a quarterly statement on change of directors, and a certificate from the Managing Director of the NBFC that fit and proper criteria in selection of the directors has been followed. The statement must reach the Regional Office of the Reserve Bank within 15 days of the close of the respective quarter. The statement submitted for the quarter ending March 31, should be certified by the auditors. Provided that RBI, if it deems fit and in public interest, reserves the right to examine the fit and proper criteria of directors of the Company irrespective of the asset size of the Company.

Disclosure and transparency

  1. The Company shall put up to the Board of Directors, at regular intervals or atleast on an annual basis, the following:
    • the progress made in putting in place a progressive risk management system and risk management policy and strategy followed by the NBFC; and
    • Conformity with corporate governance standards, viz., in composition of various committees, their role and functions, periodicity of the meetings and compliance with coverage and review functions, etc.
  2. The Company shall disclose the following in their Annual Financial Statements, with effect from March 31, 2021 and onwards, such information as prescribed under circular no. DNBR (PD) CC. NO. 002/03.10.001/2014-15 dated November 10, 2014 read with DNBR (PD) CC.No. 024/ 03.10.001/ 2014-15 dated March 27, 2015 and such other guidelines and RBI directions as applicable from time to time.

Rotation of partners of the Statutory Auditors Audit Firm

The Company may endeavour to rotate the partner/s of the Chartered Accountant firm conducting the audit, every three years so that same partner does not conduct audit of the company continuously for more than a period of three years. However, the partner so rotated will be eligible for conducting the audit of the Company after an interval of three years, if the Company so decides. The Company shall incorporate appropriate terms in the letter of appointment of the firm of auditors and ensure its compliance.