The Board of Directors are pleased to present the 31st Annual Report of your Company ("the Company" or “Fusion")
along with the Audited Financial Statements, for the Financial Year ended March 31, 2025 (“Financial Statements").

1. FINANCIAL SUMMARY/STATE OF AFFAIRS

The financial statements of the Company for the year ended March 31, 2025 have been prepared in accordance with
Indian Accounting Standards ("Ind AS") prescribed under section 133 of the Companies Act, 2013 (the “Act"), read
with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Schedule III to the Act, as amended
from time to time and applicable guidelines issued by Securities and Exchange Board of India (“SEBI").

The financial results of the Company for the current Financial Year ended March 31, 2025, as compared to the previous
Financial Year ended March 31, 2024, are as under:

(R in crores unless otherwise stated)

2. OPERATIONAL PERFORMANCE

Operational performance of the Company for the current Financial Year ended March 31, 2025 as compared to the
previous Financial Year ended March 31, 2024 is summarized below:

The Company reached out to 32,08,248 active loan
Borrowers as on March 31, 2025, which has decreased
from 38,61,892 as on March 31, 2024. The reduction in
active loan borrowers during the year was -16.93%.

The Company has 15,274 employees as on March 31,
2025, which was 13,807 as on March 31, 2024, through
1,571 Branches, across 22 states and 497 districts in
India. During the year under review, the Company
opened/split 274 new branches.

The Company already has borrowing arrangements
with a large number of lenders and has started
associations with a few more institutions to diversify
its sources of borrowing.

3. CASH FLOW STATEMENT

The Cash Flow Statement for the Financial Year ended
on March 31, 2025 prepared under the provisions of the
Act is attached as a part of the Financial Statements of
the Company.

4. ANNUAL RETURN

Pursuant to sub-section (3)(a) of Section 134 and
sub-section (3) of Section 92 of the Act, read with Rule 12
of the Companies (Management and Administration)
Rules, 2014, the copy of the Annual Return as at March
31, 2025 is available on the website of the company at
www.fusionfin.com

5. DEPOSITS

The Company is a non-deposit taking Non-Banking
Financial Company - Micro Finance Institution
(NBFC-MFI) and has not accepted any public
deposits within the ambit of Non-Banking Financial
Companies Acceptance of Public Deposits (Reserve
Bank) Directions, 1998 or Section 73 of the Act
read with Companies (Acceptance of Deposits)
Rules, 2014. Further the company continues to be a
non-deposit taking Non-Banking Financial Company
in conformity with the guidelines of the RBI.

6. TRANSFER TO RESERVES

During the Financial Year 2024-25, the Company has
not transferred any amount to the statutory reserve
pursuant to Section 45-IC of the Reserve Bank of India
Act, 1934, due to loss during the Year.

7. DIVIDEND DISTRIBUTION POLICY

Pursuant to the provisions of Regulation 43A of the
Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015 (the ‘SEBIListing Regulations'), the Company
had formulated a dividend distribution policy,
which sets out the parameters and circumstances
to be considered by the Board of Directors (‘Board')
in determining the distribution of dividend to its
shareholders and/or retaining profit earned. The said
policy is also available on the website of the Company at
https://fusionfin.com/wp-content/uploads/2024/11/11.-
Dividend-Distribution-Policy-W.pdf

8. DIVIDEND

The Board of Directors is focused on driving
sustainable business growth and enhancing long¬
term shareholder returns. In line with this objective,
and considering the substantial resources required to
support the Company's long-term strategic initiatives
and losses during the financial year ended on March 31,
2025, the Board has not considered or recommended
distribution of any dividend for the year under review.

9. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES
TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Act, unclaimed dividends
are required to be transferred to the Investors
Education and Protection Fund. There has been no
dividend declared in the last Seven (7) years and year
under review and hence, there is no requirement of
transferring the same to the Investors Education and
Protection Fund for the year under review.

10. SCALE BASED REGULATIONS

With reference to the RBI circular dated October 22,
2021 on "Scale Based Regulation (SBR): A Revised
Regulatory Framework for NBFCs" (‘SBR Framework'),
the NBFCs are categorised into four layers,
NBFC - Base Layer (NBFC-BL), NBFC - Middle Layer
(NBFC-ML), NBFC - Upper Layer (NBFC-UL) and
NBFC - Top Layer (NBFC-TL)based on their size,
activity, and perceived risk. Accordingly, the company
is categorised as an NBFC -Middle Layer (NBFC-ML)
and is in compliance with the applicable regulations.

11. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2024-25, the Board
met 9(Nine) times and details related to the
board meetings of the Company are mentioned
in the Corporate Governance Report annexed as
“ANNEXURE -1”, which forms part of this report. The
intervening gap between the Board Meetings was
within the period prescribed under the Act and SEBI
Listing Regulations.

12. CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of the
Company during the Financial Year ended March 31,
2025.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL
(KMP)

a. Changes in Directors and KMPs during the FY
2024-25

(i) The Shareholders in the Annual General Meeting
of the Company held on September 27, 2024
approved the re-appointment of Mr. Narendra
Ostawal (DIN: 06530414), retiring by rotation, as the
Nominee Director of the Company.

(ii) The tenure of Mr. Pankaj Vaish (DIN: 00367424),
Independent Director of the Company was
completed on September 21, 2024.

(iii) The Board, based on the recommendation of
the Nomination and Remuneration Committee
("NRC"), appointed Mr. Puneet Gupta (DIN:
02728604), as an Additional Director in the category
of an independent director w.e.f. October 5, 2024
to hold the office upto the date of AGM. Based on
the recommendations of the NRC and Board of
Directors, the shareholders in the Extra Ordinary
General meeting of the Company held on October
30, 2024, approved the appointment of Mr. Puneet
Gupta as an Independent Director, for a period of
three consecutive years, w.e.f. October 5, 2024.

The Board is of the opinion that Mr. Puneet
Gupta (DIN: 02728604) is a person of integrity,
expertise, and is having competent experience
and proficiency to serve the Company as an
independent director that can strengthen the
overall composition of the Board.

(iv) The Board has appointed Mr. Sanjay Garyali as the
Chief Executive Officer of the Company w.e.f. March
17, 2025.

(v) The designation of Mr. Devesh Sachdev (DIN:
02547111) has been changed from "Managing
Director & CEO" to "Managing Director" w.e.f. March
17, 2025.

b. Woman Director

In terms of the provisions of Section 149 of the
Companies Act, 2013, and Regulation 17(1)(a) of
the SEBI Listing Regulations read with secretarial
standard-2, the Company shall have at least one
Woman Director on the Board. Accordingly, the
Company has Ms. Namrata Kaul and Ms. Ratna
Dharashree Vishwanathan as Independent Woman
Directors on the Board.

c. Director retiring by rotation

Mr.Devesh Sachdev (DIN: 02547111) shall retire by
rotation as a director on the Board in terms of
provisions of the Companies Act, 2013 at the ensuing
Annual General Meeting of the Company and being
eligible offers himself for reappointment. The Board
recommends his reappointment as a director. As
stipulated under Reg 36 (3) of the SEBIListing
Regulations read with secretarial standard-2, a
brief resume of Mr. Devesh Sachdev proposed to be
reappointed is given in notice of the 31st AGM of the
Company.

d. Key Managerial Personnel (KMP)

As per the provisions of the Act, Mr. Devesh Sachdev,
Managing Director, Mr. Sanjay Garyali, Chief Executive
Officer,Mr. Gaurav Maheshwari, Chief Financial Officer
and Mr. Deepak Madaan, Company Secretary & Chief
Compliance Officer are the KMPs of the Company.

14. DECLARATION OF INDEPENDENCE

The Company has received necessary declarations
from each Independent Director as per the provisions
of Section 149(7) of the Act read with Regulation 25(8)
of SEBI Listing Regulations, that they meet the criteria
of Independence as laid down in Section 149(6) of
the Act and Regulation 16(1) (b) of the SEBI Listing
Regulations.

There has been no change in the circumstances
affecting their status as Independent Directors of the
Company or to qualify under the Act and the relevant
regulations.

In the opinion of the Board, all the Independent
Directors are person of integrity and possess requisite
qualification/ skill/ expertise required for their roles
and they are independent of the Management.

15. CREDIT RATING

Further, CARE Edge Analytics & Advisory has assigned
Grading of MFI 1(One).

16. CAPITAL ADEQUACY

The Capital Adequacy Ratio of the company was
22.42% as on March 31, 2025, as against the minimum
capital adequacy requirements of 15% by Reserve
Bank of India ("RBI").

17. FAIR PRACTICE CODE

The Company has in place a Fair Practice Code
(FPC) approved by the Board in compliance with the
guidelines issued by RBI, to ensure better service
and provide necessary information to customers to

take informed decisions. The FPC is available on the
website of the Company at www.fusionfin.com.

18. CUSTOMER GRIEVANCES

The Company has a dedicated Customer Grievance
team for receiving and handling customer
complaints/ grievances and ensuring that the
customers are treated fairly and without any bias at all
times. All issues raised by the customers are dealt with
courtesy and redressed expeditiously.

19. RESOURCE MOBILIZATION

a) Term Loan / Sub debt /Refinance

During the Financial Year ended March 31, 2025, the
Company diversified its sources of funds and raised a
sum of Rs. 4,030.13 Crore (Inclusive of Term Loan of Rs.
3,821.30 Crore, and ECB of Rs. 208.84 Crore).

b) Secured / Unsecured Non-convertible debentures

During the Financial Year ended March 31, 2025, the
Company has not raised funds from unsecured Non¬
Convertible Debentures and secured Non-Convertible
Debenture.

c) Direct Assignment

During the Financial Year ended March 31, 2025, the
Company raised resources to the extent of Rs. 1,010.00
Crore through Direct Assignment.

20.SHARE CAPITAL AND EMPLOYEE STOCK OPTION
SCHEME

A. SHARE CAPITAL

The Authorized Share capital of the company was
increased from INR 1,05,00,00,000 (Indian Rupees
One Hundred and Five Crores only) divided into
10,50,00,000 (Ten Crore Fifty Lakh) equity shares of
face value of INR 10/- (Indian Rupees Ten only) each
to INR 2,00,00,00,000/- (Indian Rupees Two Hundred
Crores Only) divided into 20,00,00,000 (Twenty Crores)
equity shares of face value of INR 10/- (Indian Rupees
Ten Only) each, as approved by the shareholders of the
Company in the Extraordinary General Meeting held
on October 30, 2024.

The Issued and Paid-up Equity Share Capital of
the Company as on March 31, 2025, stood at INR
1,010,238,850 (Rupees One Hundred and One Crore
Two Lakh Thirty Eight Thousand Eight Hundred Fifty
only) consisting of 101,023,885 (Ten Crore Ten Lakh
Twenty Three Thousand Eight Hundred and Eighty
Five only) Equity Shares of INR 10/- each.

During the year the Board of Directors of the Company
in its meeting held on December 04, 2024, has

considered and approved the raising of funds by way
of issue of partly paid equity shares of the Company
of face value INR 10 each through Rights Issue for
an amount aggregating up to INR 800 crores to the
eligible equity shareholders of the Company.

Pursuant to the above, the Company has successfully
completed the Rights Issue and the Rights Issue
Committee on May 02, 2025 has approved an issuance
and allotment of 6,10,58,392 partly paid up equity
shares at INR 131/- (Indian Rupees One Hundred and
Thirty one only) per equity share (including face value of
INR 10/-(Indian Rupees Ten only) each and a premium
of INR 121/- (Indian Rupees One Hundred and Twenty
one only) per equity share); out of which an amount
of INR 65.50/- (Indian Rupees Sixty Five and fifty paisa
only) per equity share (including face value of INR 5/-
(Indian Rupees Five only each and a premium of INR
60.50/- per equity share), aggregating to an amount of
INR 399.93 crore has been paid by the eligible equity
shareholders of the Company. The remaining amount
may be called in one or more subsequent call(s), with
terms and conditions such as the number of calls
and the timing and quantum of each call as may be
decided by our Board/ Rights Issue Committee from
time to time to be completed on or prior to March 31,
2027, or such other extended timeline.

Consequently, with effect from May 02, 2025, the Issued
and Paid-up Equity Share Capital of the Company
stood at INR 1,31,55,30,810 (Rupees One Hundred and
Thirty One Crore Fifty Five Lakh Thirty Thousand Eight
Hundred and Ten only) consisting of 10,10,23,885 (Ten
Crore Ten Lakh Twenty Three Thousand Eight Hundred
and Eighty Five only) fully paid up Equity Shares of INR
10/- each and 6,10,58,392(Six Crore Ten Lakh Fifty Eight
Thousand Three Hundred and Ninety Two only) partly
paid-up Equity Shares of INR 5/- each.

Further, the Company has not bought back any of its
securities during the year under review.

B. EMPLOYEE STOCK OPTION SCHEME

In order to motivate, incentivize and reward employees,
your Company instituted Fusion Employee Stock Plan,
2016 ("ESOP 2016) and Fusion Employee Stock Option
Plan, 2023 ("ESOP 2023")

The NRC monitors the implementation of ESOP 2016
and ESOP 2023, which are in compliance with the
Securities and Exchange Board of India (Share Based
Employee Benefits and Sweat Equity) Regulations,
2021 ("SEBI SBEB Regulations").

Relevant disclosures pursuant to SEBISBEB
Regulations, as on March 31, 2025, are available on
the website of the Company at https://fusionfin.com/
employee-benefit-scheme-docs/.

During the year under review, the Board of Directors,
based on the recommendation of NRC,in its meetings
held on March 14, 2025 approved the increase of
ESOP pool from 10,00,000 stock options to 60,00,000
stock options in ESOP 2023 scheme and some other
amendements, which was further approved by the
shareholders on April 23, 2025 vide postal ballot. The
company has also received in-principle approval for
the additional pool of 50,00,000 options from BSE
vide letter No. DCS/IPO/AK/ESOP-IP/3649/2025-26 and
NSE vide letter no. NSE/LIST/48565, both dated June
04, 2025.

21. NON CONVERTIBLE DEBENTURES

During the financial year ended March 31, 2025, the
Company has not raised any funds by issuance of
unsecured Non-Convertible Debenture and secured
Non-Convertible Debenture respectively. The total
fully redeemed NCDs in FY25 is INR 56.67 Crores. The
outstanding NCDs including subordinated liabilities
in form of NCDs as on March 31, 2025, was Rs. 198.78
Crores.

22. COMMITTEES DETAILS

As on March 31, 2025, the Company has 10 committees
which govern and oversee different areas of the Company's
operations ensuring regular guidance and monitoring.

For further details, please refer to Corporate Governance
Report, which forms part of Directors' Report as
“Annexure - 1”.

23. RELATED PARTY TRANSACTIONS

During the Financial Year 2024-25, there were no
material related party transactions entered by the
Company that were required to be disclosed in form
AOC-2. The details of the related party transactions are
provided in the notes to the Financial Statements.

The policy on Related Party Transactions, as approved
by the Board, is displayed on the website of the
Company i.e. www.fusionfin.com.

24. AUDITOR'S AND AUDITORS' REPORT
STATUTORY AUDITOR

Pursuant to the provisions of Section 139 of
the Companies Act, 2013 read with rules made
thereunder and RBI notification no. DoS.CO.ARG/
SEC.01/08.91.001/2021-22 dated April 27, 2021, M/s
Deloitte Haskins and Sells, Chartered Accountants

were appointed as Statutory Auditors of the Company
to hold office for a period of three years from the
conclusion of the 28th Annual General Meeting till
the conclusion of the 31st Annual General Meeting of
the Company to be held in the Financial Year 2025¬
26. The tenure of office of M/s. Deloitte Haskins and
Sells, Chartered Accountants (Firm Registration No.
015125N), as Statutory Auditors of the Company will
expire with the conclusion of 31st AGM of the Company.
The Board places on record its sincere appreciation
for the services rendered by M/s. Deloitte Haskins and
Sells, during their tenure as Statutory Auditors of the
Company.

In order to ensure smooth transition and handover
and In terms of Section 139 of the Act read with rules
made thereunder and guidelines issued by RBI on
April 27, 2021, the Audit Committee of the Board, after
assessing the qualifications and experience of M/s. B.K.
Khare & Co., Chartered Accountants (Firm Registration
No. 105102W), recommended their appointment as
the Statutory Auditors of the Company for a period of
3 (three) consecutive years from the conclusion of the
ensuing 31st AGM till the conclusion of the 34th AGM
of the Company. The Board of Directors at its meeting
held on June 10, 2025, based on the recommendations
of the Audit Committee and subject to approval of
the members at the ensuing 31st AGM, approved
the appointment of M/s. B.K. Khare & Co., Chartered
Accountants (Firm Registration No. 105102W), as
the Statutory Auditors of the Company for a period
of 3 (three) consecutive years from the conclusion
of the ensuing 31st AGM till the conclusion of the
34th AGM of the Company. Appropriate resolution
seeking approval of the members for appointment
and remuneration of M/s. B.K. Khare & Co, Chartered
Accountants, is appearing in the Notice convening the
31st AGM of the Company.

The Company has received written consent(s)
and certificate(s) of eligibility and other relevant
documents in accordance with Sections 139, 141 of
the Act read with Guidelines issued by RBI on April
27, 2021, and other applicable provisions Rules made
thereunder (including any statutory modification(s) or
re-enactment(s) for the time being in force), from M/s.
B.K. Khare & Co., Chartered Accountants.

Statutory Audit Report

M/s. Deloitte Haskins & Sells LLP, Statutory Auditors
of the Company have, in their report(s) on the
audited financial statements of the Company for

the financial year ended March 31, 2025 submitted
following observations:

Qualified Opinion on Financial Statements:

In our opinion and to the best of our information and
according to the explanations given to us, except
for the possible effects of the matter described in
the Basis for Qualified Opinion section below, the
aforesaid financial statements give the information
required by the Companies Act, 2013 (the "Act") in the
manner so required and give a true and fair view in
conformity with the Indian Accounting Standards
prescribed under section 133 of the Act, ("Ind AS")
and other accounting principles generally accepted
in India, of the state of affairs of the Company as at
31st March 2025, and its loss, total comprehensive loss,
its cash flows and the changes in equity for the year
ended on that date.

Basis for Qualified Opinion on Financial Statements:

As stated in Note 60 to the financial statements,
the Company has not evaluated whether any of
the expected credit allowances recognised in the
year ended March 31, 2025 should be retrospectively
adjusted to the previously reported amounts in the
prior year presented because of impracticability as
described in Ind AS 8, Accounting Policies, Changes
in Accounting Estimates and Errors. In the absence of
sufficient and appropriate evidence, we are unable to
comment on the Company's basis of impracticability
to evaluate and determine whether any retrospective
adjustment should have been made to previously
reported amounts in the prior year presented."

Qualified Opinion on Internal Financial Controls:

In our opinion, to the best of our information and
according to the explanations given to us, except for
the possible effects of the material weakness described
in the Basis for Qualified Opinion paragraph above on
the achievement of the objectives of the control criteria,
the Company has maintained, in all material respects,
an adequate internal financial controls with reference
to the financial statements and such internal financial
controls with reference to the financial statements were
operating effectively as at March 31, 2025, based on
the criteria for internal financial control with reference
to financial statements established by the Company
considering the essential components of internal
control stated in the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by
the Institute of Chartered Accountants of India.

Basis for Qualified Opinion on Internal Financial
Controls:

According to the information and explanations given
to us and based on our audit, the following material
weakness has been identified in the Company's
internal financial controls with reference to the
financial statements as at March 31, 2025.

The Company has concluded that it was impracticable
to evaluate and determine any amounts for
retrospective recognition and measurement in those
prior periods on account of expected credit loss
allowance as explained in note 60 of the financial
statements of the Company. As a result, we are unable
to determine whether any adjustments were required
for prior period(s) relating to the impairment charge
recorded for the year ended March 31, 2025.

Because of the deficiency in financial closing and
reporting process, in respect of information as
aforesaid, we are unable to assess whether or not the
current year's figures are comparable to those of the
previous year.

A ‘material weakness' is a deficiency, or a combination
of deficiencies, in internal financial control with
reference to the financial statements, such that
there is a reasonable possibility that a material
misstatement of the company's annual or interim
financial statements will not be prevented or detected
on a timely basis.

Directors' responseto QualifiedOpiniononFinancial
Statements and Internal Financial Controls: With
respect to Auditor's Qualified Opinion on Financial
Statements and Internal Financial Controls and in
reference to the explanation given in Note 60 to the
Financial Statements, the Board has taken note of
the statutory auditor's remarks and wishes to clarify
that the microfinance sector experienced significant
dislocation during FY25, which resulted in sharp
deterioration in borrower credit quality. The Company
has evaluated whether any of the expected credit loss
(ECL) allowances recognized during FY25 should have
been attributed to prior periods. However, consistent
with the principles set out in Ind AS 8 (Accounting
Policies, Changes in Accounting Estimates and
Errors), and given the limitations in objectively
determining information relating to assumptions
and circumstances as it existed in those prior periods,
the Company concluded that it was impracticable to
evaluate and determine any amounts for retrospective
recognition and measurement in those prior periods.
This is because significant judgments had been

applied in determining the staging of the loan assets
and related impairment allowance for events and
conditions existing as at the earlier reporting dates.
The Company believes it would not be appropriate to
apply those judgments retrospectively without the
benefit of hindsight.

With respect to the statutory auditor's observation
regarding controls over historical ECL provisioning,
it is important to highlight that targeted remedial
actions have since been undertaken, following the
commissioning of multiple independent external
reviews. These include: (a) investments in technology
upgrades, (b) revision of underwriting policies, and
(c) enhancements to the ECL methodology based on
recommendations from external review, among others.

Auditors' Remark on Material uncertainty related
to Going Concern:

"We draw attention to Note 61 to the financial statements
which describes the material uncertainty in relation to
the going concern assumption used in the preparation
of the financial statements. This condition and other
matters stated in the Note indicate the existence of
material uncertainty that may cast significant doubt on
the Company's ability to continue as a going concern.
However, the financial statements of the Company
have been prepared on a going concern basis for the
reasons stated in the said Note."

Our Opinion is not modified in respect of this matter."

Directors' response to Auditors' Remark on Material
uncertainty related to Going Concern:

With respect to remark on material uncertainty on
going concern and in reference to the explanation
given in Note 61 to the Financial Statements, the
Board confirms that the financial statements have
been appropriately prepared on a going concern
basis. As at March 31, 2025, the Company had breached
various financial covenants (in respect of borrowings
amounting to I NR 4,762.62 crore as at March 31, 2025),
resulting in these borrowings technically becoming
repayable on demand. However, the Company has
obtained extension, of less than 12 months and equal
to or more than 12 months from testing date for said
breaches from lenders whose borrowings as of March
31, 2025 aggregate INR 3,748.90 crore and INR 331.02
crore respectively. This aggregates to a total waived
amount of INR 4,079.92 crore (~86% of the breached
amount). The Company is in discussion with the
remaining lenders to obtain similar extensions. It
is further clarified that no demand for accelerated
repayment of borrowed funds has been received from

any lender as on date, and the lenders have continued to
extend their support to the Company. Additionally, the
Company holds Cash and Cash equivalents and liquid
assets aggregating to INR 798.36 crore as at March 31,
2025, and INR 877.73 crore as at May 31, 2025. To further
strengthen liquidity and balance sheet resilience, the
Company successfully completed a rights issue of partly
paid-up equity shares of INR 799.86 crores which was
subscribed 1.5x, with the Share Application Money of INR
399.93 Crores completed in May 2025, and the remaining
INR 399.93 Crores callable at the Company's discretion.

The Company has demonstrated continued support
from its lending partners through all quarters in FY25,
and the Board believes that with the corrective actions
taken and strengthening of the balance sheet, Fusion is
well positioned to continue to operate as a going concern.

Further, during the year, no incidence of fraud as
defined under Section 143(12) of the Companies Act,
2013, which is required to be disclosed under Section
134(3) (ca) of the Companies Act, 2013, has been
reported by the Auditors to the Board of directors of
the Company.

SECRETARIAL AUDITOR

The Board of Directors at its meeting held on June
10, 2025, based on the recommendations of the Audit
Committee and subject to approval of members at the
ensuing 31st AGM, approved the appointment of M/s.
Navneet K Arora & Co LLP, Company Secretary (Firm
Registration No. P2009DE061500), for a first term of 5
(five) consecutive years beginning from Financial Year
2025-26 i.e. from the 31st AGM till the conclusion of the
36th AGM.

Secretarial Audit Report

As required under Section 204 of the Act and the Rules
made thereunder, M/s. Harish Popli & Associates was
appointed as the Secretarial Auditor of the Company
to conduct Secretarial Audit in Form No. MR-3 of the
Company for the period under review.

The Secretarial Audit Report for Financial Year ended
on March 31, 2025 does not contain any qualification,
reservation, adverse remark or disclaimer, except as
contained therein, and forms part of Board Report as
"ANNEXURE - 2". The management response to the
same is given as follows:

Annual Secretarial Compliance Report

A Secretarial Compliance Report for the Financial Year
ended March 31, 2025 on compliance of all applicable
Acts and SEBI Regulations and circulars/ guidelines
issued thereunder, was obtained from M/s. Harish
Popli & Associates, Company Secretaries, Secretarial
Auditor of the Company. The same was submitted to
the stock exchanges in due course.

25. PARTCULARS OF LOANS, GUARANTEES OR
INVESTMENTS

During the year under review, in terms of the provisions
of Section 186(1) of the Act, the Company did not make
any investment through more than two layers of
investment companies.

Since, the Company is Non-Banking Financial
Company, the disclosures regarding particulars of
the loan or guarantee given and security provided is
exempt under the provisions of Section 186(11) of the
Act read with rules made thereunder, as amended.
Further, the details of investments made by the
Company are given in the Notes to the Financial
Statements.

26. COMPENSATION AND REMUNERATION POLICY

Pursuant to the provisions of Section 178 of the Act
read with applicable rules thereunder, and Regulation

19 of SEBI(Listing Obligations and Disclosure
Requirements) Regulations, 2015 and in accordance
with the RBI Guidelines, the Board of directors has
approved the Compensation and Remuneration
Policy.

This Policy is directed towards a structure that
provides adequate rewards and compensation
to the employees, as specified therein. This policy
formulates the criteria for determining qualifications,
competencies, positive attributes, and independence
for the appointment of a director (executive/non-
executive) and also the criteria for determining
the remuneration of the directors, key managerial
personnel (KMPs) and other employees.

This Policy is available on our website at www.fusionfin.
com.

27. MATERIAL CHANGES AND COMMITMENTS
AFFECTING FINANCIAL POSITION BETWEEN THE
END OF THE FINANCIAL YEAR AND DATE OF THE
REPORT
Rights Issue

During the year the Board of Directors of the
Company in its meeting held on December 04,
2024, has considered and approved the raising of
funds by way of issue of partly paid equity shares

of the Company of face value INR 10 each through
Rights Issue for an amount aggregating up to
INR 800 crores to the eligible equity shareholders
of the Company.

Pursuant to the above, the Company has successfully
completed the Rights Issue and the Rights Issue
Committee on May 02, 2025 has approved an issuance
and allotment of 6,10,58,392 partly paid up equity
shares at INR 131/- per share (including face value of
INR 10/- each and a premium of INR 121/- per share);
out of which an amount of INR 65.50/- per share
(including face value of INR 5 each and a premiumof
INR 60.50 per share), aggregating to an amount of
INR 399.93 crore has been paid by the eligible equity
shareholders of the Company. The remaining amount
may be called in one or more subsequent call(s), with
terms and conditions such as the number of calls
and the timing and quantum of each call as may be
decided by our Board/ Rights Issue Committee from
time to time to be completed on or prior to March 31,
2027, or such other extended timeline.

Employee Stock Options Plan

During the year, the Board vide its meetings dated
March 14, 2025 approved the increase of ESOP pool
from 10,00,000 stock options to 60,00,000 stock
options in ESOP 2023 scheme, which was further
approved by the shareholders on April 23, 2025
vide postal ballot. The company has also received
in-principle approval for the additional pool of
50,00,000 options from BSE vide letter No. DCS/IPO/
AK/ESOP-IP/3649/2025-26 and NSE vide letter no.
NSE/LIST/48565, both dated June 04, 2025.

28. AMENDMENT IN THE MEMORANDUM OF

ASSOCIATION (“MOA”) AND ARTICLES OF

ASSOCIATION (AOA)

During the Financial Year ended March 31, 2025, the
Company's MOA and AOA were amended , pursuant
to the change in the name of the company from
"Fusion Micro Finance Limited" to "Fusion Finance
Limited".

Further, the Board of directors in its meeting held on
June 10, 2025 approved the amendment in Articles of
Associations of the Company, subject to the approval of
the members, in order to enable the Board of directors
to make call on partly paid up shares up to one half
or 50% of the nominal value and premium amount
of the share. The Company is seeking approval of the
members in the ensuing AGM of the Company.

29. CONSERVATION OF ENERGY & TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUTGO

a. Information Relating to Conservation of Energy,
Technology Absorption

The operations of our Company are not
energy-intensive. The Company has, however, used
information technology extensively in its operations
and continuously invests in energy-efficient office
equipment at all office locations.

b. Foreign Exchange Earnings and Outgo

There has an foreign exchange inflow of INR 208.84
crores on account of external commercial borrowings
while outgo during the year under review is INR 101.96
crores towards Interest Payment on ECB, professional
fees against ECB and Rights Issue & other operating
expenses.

30. RISK MANAGEMENT

Our Enterprise Risk Management (ERM) framework
encompasses practices relating to the identification,
analysis, evaluation, treatment, mitigation,
and monitoring of the Credit, Market, liquidity,
Operational, compliance risks to achieving our key
business objectives. ERM at Fusion seeks to minimize
the adverse impact of these risks, thus enabling the
Company to leverage market opportunities effectively
and enhance its long-term competitive advantage.

The Board of Directors of the Company has formed
a Board Risk Management Committee ("BRMC") to
frame, implement, and monitor the enterprise risk
management plan for the Company.

Pursuant to Section 134(3)(n) of the Companies
Act, 2013, the BRMC is responsible for reviewing
the enterprise risk management plan, ensuring its
effectiveness, and verifying adherence to various
risk parameters. The Company's Enterprise Risk
Management strategy is based on clear understanding
of various risks, disciplined Enterprise risk assessment
and continuous monitoring. The BRMC reviews
various risks with which the organization is exposed
including Credit Risk, Interest Rate Risk, Liquidity
Risk and Operational Risk. The development and
implementation of risk management policy has been
covered in the Management Discussion and Analysis
Report attached as “ANNEXURE 3”.

31. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company strives to meet its commitment towards
the community by committing its resources and
energies to social development. The CSR Committee
of the Company has formulated a CSR Policy
which describes the multiple lines around which
the CSR activities of the Company are positioned
being education and skills development, social and

economic welfare, environmental sustainability and
such other activities included in Schedule VII of the
Act as may be identified by the CSR Committee from
time to time.

The Policy is available on the website of the company
at www.fusionfin.com.

Further, the composition of the CSR Committee,
terms of reference of the committee and the details of
meetings attended by the Committee members are
provided in Corporate Governance Report attached as
“ANNEXURE 1”.

The Annual Report on the CSR activities for the
Financial Year 2024-25 containing salient features of
CSR Policy and other relevant details is attached as
“ANNEXURE 4” to this Report.

32. BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORT

A detailed Business Responsibility & Sustainability
Report (BRSR) has been prepared and is made
available on the website of the company at
https://fusionfin.com/brsr/

33. PERFORMANCE EVALUATION OF THE BOARD, ITS
COMMITTEES AND INDIVIDUAL DIRECTORS

In compliance with the Companies Act, 2013, and SEBI
Listing Regulations, the Company has a structured
assessment process for evaluation of performance of
the Board, its committees and individual performance
of each Director including the Chairperson. The
evaluations are carried out in a confidential
manner and the Directors provide their feedback
by categorising them in Good, Average, and Below
Average categories, and after evaluation, the same is
compiled by Nomination & Remuneration Committee
(NRC) Chairperson. Further,the Company has also
appointed an independent third party for carrying out
the evaluation process in fair manner.

The Independent Directors at their separate meeting
reviewed the performance of Non-Independent
Directors and the Board as a whole. The Chairman of
the Company after taking into account the views of
other Non-Executive Directors, the quality, quantity
and timeliness of flow of information between
the Company management and the Board that is
necessary for the Board to effectively and reasonably
perform their duties.

The overall performance evaluation exercise was
completed to the satisfaction of the Board. The
outcome of the evaluation was presented to the Board

of Directors of the Company.

34. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Vigil Mechanism system/Whistle Blower Policy
has been established with a view to provide a tool for
directors and employees of the Company to report
to the management genuine concerns including
unethical behavior, actual or suspected fraud. The
Policy ensures adequate safeguards to protect
directors and employees from any form of retaliation or
victimization for raising such concerns. The Company
has not received any complaints under the said policy
during the year.

The Company has formulated a codified Vigil
Mechanism System/Whistle-Blower Policy
incorporating the provisions relating to Vigil
Mechanism in terms of Section 177 of the Companies
Act, 2013 and Regulation 22 of SEBIListing
Regulations, in order to encourage Directors and
Employees of the Company to escalate to the level of
the Audit Committee any issue or concerns impacting
and compromising with the interest of the Company
and its stakeholders in any way. The Company is
committed to adhere to highest possible standards
of ethical, moral and legal business conduct and
to open communication and to provide necessary
safeguards for protection of employees from reprisals
or victimisation, for whistle blowing in good faith. The
Company has not received any complaints under the
said policy during the year.

The said Policy is available on the Company's website
at www.fusionfin.com.

35. AUDIT COMMITTEE

The Company has an Audit Committee constituted in
accordance with the provisions of Section 177 of the
Companies Act, 2013, RBI Guidelines and Regulation
18 of SEBI(Listing Obligations and Disclosure
Requirements) Regulations, 2015, as amended. The
composition of the Audit Committee and the details
of meetings attended by the Committee members are
provided in Corporate Governance Report attached as
“ANNEXURE 1”.

36. CODE OF CONDUCT FOR INSIDER TRADING

The Company has duly formulated and adopted the
Code of Conduct for Prohibition of Insider Trading in
accordance with SEBI (Prohibition of Insider Trading)
Regulations, 2015. The objective of this Code is to
prescribe the procedure for trading in securities of
the Company and the disclosures to be made by
the designated persons covered under the Insider

Trading Policy with respect to their shareholding
in the Company, both direct and indirect. The
Code of Conduct for Prohibition of Insider Trading
is available on the website of the Company at
www.fusionfin.com.

37. RBI OMBUDSMAN

The company has a dedicated team which deals
with the concerns or complaints raised by the
customers. Further, in accordance with the RBI
Circular dated November 15, 2021 on "Appointment
of Internal Ombudsman by Non-Banking Financial
Companies(NBFCs)" the Company has an Internal
Ombudsman (IO) being the apex of the grievance
redressal mechanism of the Company. The IO deals
with the complaints of its customers which are partly
or wholly rejected by the Company.

In addition, the Company has a system of periodic
reporting of the information to RBI as per the
prescribed guidelines.

38.SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE
COMPANIES

The Company has no subsidiary/joint venture/
associate company and hence consolidation and the
provisions relating to the same under the Companies
Act, 2013 and rules made thereunder are not applicable
to the Company.

39.SIGNIFICANT AND MATERIAL ORDERS PASSED
BY THE REGULATORS OR COURTS OR TRIBUNALS
IMPACTING THE GOING CONCERN STATUS AND
COMPANY'S OPERATIONS IN FUTURE

During the Financial Year 2024-25, there are no such
orders passed by the regulators/courts/tribunals
impacting the going concern status and the
Company's operations in future.

40. INTERNAL FINANCIAL CONTROLS

As per Section 134(5)(e) of the Companies Act, 2013, the
Directors have an overall responsibility for ensuring
that the Company has implemented a robust system
and framework of Internal Financial Controls. This
provides the Directors with reasonable assurance
regarding the adequacy and operating effectiveness
of controls with regards to reporting, operational
and compliance risks. The Company has devised
appropriate systems and framework including proper
delegation of authority, policies and procedures,
effective IT systems aligned to business requirements,
risk based internal audits as per RBI guidelines on Risk
Based Internal Audit, risk management framework
and whistle blower mechanism. The Company had

already developed and implemented a framework for
ensuring internal controls over financial reporting.

The Internal Audit team monitors and evaluates the
efficacy and adequacy of internal control systems in
the Company, its compliance with operating systems,
accounting procedures and policies at all locations
of the Company. Based on the report of internal
audit function, process owners undertake corrective
action(s) in their respective area(s) and thereby
strengthen the controls. Significant audit observations
and corrective action(s) thereon are presented to the
Audit Committee.

The Audit Committee reviews the reports submitted
by the Internal Auditors in each of its meeting. Also,
the Audit Committee at frequent intervals has
independent sessions with the management to
discuss the adequacy and effectiveness of internal
financial controls.

41. PREVENTION OF SEXUAL HARASSMENT AT
WORKPLACE

As per requirements of Sexual Harassment of Women
at Workplace (Prevention, Prohibition & Redressal)
Act, 2013, the Company has a policy and framework
for employees to report sexual harassment cases
at workplace and our process ensures complete
anonymity and confidentiality of information.
Adequate workshops and awareness programmes
against sexual harassment are conducted across the
organization.

Further, the Company has the Internal Complaint
Committee in place as per the requirement of Sexual
Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013 to address the
sexual harassment cases. The Annual Report of ICC
Committee for the period commencing from January
01, 2024, till December 31, 2024, was submitted to the
office of District Collector, Gurugram on February 21,
2025. The details pertaining to complaints received on
matters pertaining to sexual harassment during the
Financial Year 2024-25, are as below:

(a) number of complaints of sexual harassment
received in the year: None

(b) number of complaints disposed off during the
year: None

(b) number of complaints pending for more than
ninety days: NA

Further, the Company has complied with the
provisions relating to the Maternity Benefit Act, 1961.

42. CORPORATE GOVERNANCE

Corporate governance is the system of rules, practices
and processes by which a company is directed and
controlled. Corporate governance essentially involves
balancing the interests of a company's stakeholders
and the community at large. Sound governance
practices and responsible corporate behavior
contribute to superior long-term performance
of organisations. Corporate Governance requires
everyone to raise their level of competency and
capability to meet the expectations in managing the
enterprise and its resources optimally with prudent
ethical standards.

The Company's corporate governance framework
ensures that it is aligned to good corporate governance
philosophy and that timely disclosures are made and
accurate information regarding the financials and
performance is shared, as well as the leadership and
governance of the Company. The Company has an
adequate system of control in place to ensure that the
executive decisions taken should result in optimum
growth and development which benefits all the
stakeholders.

A detailed report on the Company's commitment at
adopting good Corporate Governance Practices is
enclosed as “ANNEXURE 1”.

43. PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES

In terms of the provisions of Section 197(12) of the Act
read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014,
including any statutory modification(s) thereof for the
time being in force, the details of remuneration etc.
of Directors, Key Managerial Personnel and employees
covered under the said Rules and other details is
attached as “ANNEXURE 5” which forms part of this
report.

44. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Act the Directors of
the Company hereby state and confirm that:

a. In the preparation of the annual financial
statements for the year ended March 31, 2025,
the applicable accounting standards have been
followed along with proper explanations relating
to material departures, if any;

b. The directors had selected such accounting
policies and applied them consistently and made
judgments and estimates that are reasonable and

prudent so as to give a true and fair view of the
state of affairs of the Company as at March 31, 2025
and of the profits of the Company for year ended
on that date;

c. The Directors had taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of this
Act for safeguarding the assets of the company
and for preventing and detecting fraud and
otherirregularities;

d. The Directors had prepared the annual accounts
on a going concern basis;

e. The directors had laid down internal financial
controls to be followed by the company, and that
such internal financial controls are adequate and
were operating effectively.

f. The Directors had devised proper systems to ensure
compliance with the provisions of all applicable
laws and that such systems were adequate and
operating effectively.

45. RBI GUIDELINES

The Company is registered with the Reserve Bank of
India as a NBFC within the provisions of the NBFC
(Reserve Bank of India) Directions, 1998. The Company
continues to comply with all the requirements
prescribed by the Reserve Bank of India as applicable
to it, from time to time.

46. DISCLOSURE IN ACCORDANCE WITH REGULATION
30A OF SEBI (LISTING OBLIGATIONS AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

No such agreements as specified under clause 5A
to para A of part A of schedule II, are required to be
disclosed in accordance with Regulation 30A of SEBI
Listing Regulations, in the Financial Year 2024-2025.

47. LISTING

The equity shares of the Company are listed on BSE
Limited ("BSE") and National Stock Exchange of India
Limited ("NSE"). The listing fees to BSE & NSE for the
Financial Year 2025-26 has been duly paid.

48. MAINTENANCE OF COST RECORDS

The provisions of Section 148 of the Companies Act,
2013, read with the Companies (Cost Records and Audit)
Rules, 2014 relating to Cost Audit and maintaining cost
audit records are not applicable to the Company.

49. EMPLOYEES STOCK OPTION SCHEME

The Company has two (2) stock option plans namely
Fusion Employee Stock Option Plan 2016 ("ESOP

2016") and Fusion Employee Stock Option Plan 2023
("ESOP 2023") and they are in compliance with SEBI
(Share Based Employee Benefits & Sweat Equity)
Regulations, 2021, as amended from time to time (the
‘SBEB Regulation').

The members vide postal ballot dated April 23, 2025,
approved the amendments in the ESOP 2023. The
amendments are aimed at enhancing employee
engagement, recognizing their contributions and
performance, and motivating them to actively support
the growth and profitability of the Company.

The disclosures required under Regulation 14, read with
Part F of the Securities and Exchange Board of India
(Share Based Employee Benefits and Sweat Equity)
Regulations, 2021, are available on the Company's
website at https://fusionfin.com/employee-benefit-
scheme-docs/

50. SECRETARIAL STANDARDS

The Company has duly complied with the applicable
provisions of "Secretarial Standard -1" on meetings of
Board of Directors and "Secretarial Standard - 2" on
General Meetings issued by the Institute of Company
Secretaries of India ("ICSI").

51. INSOLVENCY PROCEEDINGS

There was no application made by the Company
initiating insolvency proceedings against any another
entity nor are any proceedings pending against the
Company under the Insolvency and Bankruptcy Code,
2016 (31 of 2016) during the year under review.

52. ONE-TIME SETTLEMENTS

The Company has not entered into a one-time
settlement with any of the banks or financial
institutions. Accordingly, there are no details regarding
difference between amount of the valuation done at
the time of one time settlement and the valuation
done while taking loan from the Banks or Financial
Institutions.

53. EQUITY SHARES IN THE DEMAT SUSPENSE
ACCOUNT

In accordance with the requirement of Regulation 34(3)
and Schedule V Part F of SEBI Listing Regulations, the
Company reports that as on March 31, 2025, there are
no equity shares lying in the demat suspense account
which were issued in dematerialized form pursuant to
the public issue of the Company.

54. SUSPENSION OF TRADING

The securities of the Company have not been
suspended from trading during the period under
review.

55. CAUTIONARY STATEMENT

Statements in the Board's Report and the
Management Discussion & Analysis describing the
Company's objectives, expectations or forecasts may
be forward looking within the meaning of applicable
Laws and Regulations. Actual results may differ
materially from those expressed in the statement.
Important factors that could influence the Company's
operations include global and domestic demand
and supply conditions, changes in Government
Regulations, Tax Laws, Economic Developments
within the country and other factors such as litigation
and industrial relations.

56. ACKNOWLEDGEMENTS

The directors take this opportunity to express their
deep and sincere gratitude for the support and
co-operation from the Borrowers, Banks, Financial
Institutions, Investors, and Employees of the Company,
for their consistent support and encouragement
to the Company. The directors also place on record
theirsincere appreciation of the commitment and
hard work put in by the Management and the
employees of the Company and thank them for
yet another excellent year. Their dedication and
competence have ensured that the Company
continues to be a significant player in the Micro
finance industry.

For and on behalf of the Board of Directors

Of Fusion Finance Limited

(Formerly known as Fusion Micro Finance Limited)

Sd/- Sd/-

Devesh Sachdev Ratna Dharashree Vishwanathan

Place: Gurugram (Managing Director) (Director)

Dated:10.06.2025 DIN:02547111 DIN:07278291

88 | Fusion Finance Limited