Tenacity &

Progression
Fusion Micro Finance Limited | Annual report 2021-22
002 CORPORATE OVERVIEW
002 Tenacity & Progression
012 From the MD & CEO’s desk
016 About Fusion Micro Finance
020 Progress in FY22
022 Key Progression Indicators
024 The Microfinance Sector
026 Risk Management
031 Our Sustainable Impact
056 Social Performance Management

058 MANAGEMENT REPORTS

058 Directors’ Report
066 Corporate Governance Report
091 Management Discussion & Analysis
207 List of Lenders

104 FINANCIAL REPORTS

104 Financial statements - Standalone
“Success has always been achieved only by those who dared to believe that something within them was
superior to circumstances.”
 These 2 words truly embody our journey through 2021 as a year and our growth as a
more stronger, resilient and confident franchise.

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 8,000 ‘Fusionites’ stand tall
today as those who were smart
enough to adjust their sails when
the wind changed its direction,
as those who had ‘baptism by
fire’ as they surmounted many
a challenge thrown up by
unforeseen events
during the last 5-6 years.

Tenacity
has had been the bedrock of
our foundation. A solid attribute
which over the years has created

It’s in our
a ‘crisis-hardened resilient’ and
a ‘sustainable growth oriented’
enterprise that steadfastly
continues on its mission to serve
the unserved in more
parts of Rural India...
year after year...

Conviction in our core strategy

of being a diverse, pan India,
responsible lender delivering
financial services in a transparent
trustworthy manner at the
doorstep of our large underserved
Rural populace - has been our
guiding North Star...

Progression
for us in not just a word... at
Fusion it symbolizes a culture that
has been interwoven in our DNA,
in our mindset.

...“to dream one needs effortless sleep, but to make it a reality...

one needs sleepless efforts”

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C Tenacity and
LOSER to the end of the year 2020 Challenges that we faced for treatment once struck with from them are then combined with
- as a nation, as a company, as l In our business, where regular the virus. It was particularly hard data analysis to build contours of
individuals - we were all hoping
that the unforeseen misery unleashed Progression being human interface / customer
engagement is the core of the
for people at the bottom of the
pyramid, our customers in rural
our calibrated strategy - segregated
region, state and district wise.
by nature on its people, on the global
economy... would cease with the rising the hallmark of our model- the tough lock-downs
threatened to halt all our activities.
parts of the country. The direct
impact of this was on their ability
The need of the hour was to avoid
taking any knee jerk action given that
sun of a new year.
But 2021 belied all those hopes and
response to the Social distancing guidelines had to
be mandated for people’s safety. All
to service their existing debt
repayment hence impacting their
the sector and Fusion in particular had
been through such unforeseen crisis in
showed no respite in terms of impact
or intensity. Wave 2 took with it
challenge... this was directionally opposite to
how a high touch business process
credit score and avenues to secure
future funding for their livelihood
the past as well and the fact that as a
senior management team of seasoned
ran. The direct impact of this was activity
many precious lives, destroyed many professionals we had successfully
on our ability to collect installments
more families and bludgeoned many How did we navigate these managed many such cycles in our
and disburse afresh to meet our
established enterprises across the challenges? careers.
customers’ requirements while
world - almost irreparably. The global We derive our strength from our
ensuring our people’s health safety
economy was staring down the barrel, people, our customers - both of whom
as well
just wanting to keep its head above demonstrated exceptional tenacity
the water somehow, just wanting to l Covid wave 2 and the related lock- and unwavering resilience to not allow
stay alive long enough to be able to downs in early parts of 2021were circumstances to get better of them.
see the light at the end of the tunnel. compounding the damage that
Our assessments of situations have
So was India. 2020 had caused. And it was
always been bottoms up. We give
especially tough for people with
And Fusion was as much in the utmost importance to feedback from
limited means as sequential
center of this maelstrom as any other our field team comprising of highly
phases of ‘no work’ meant more
company in the country. But we had skilled and experienced executives
severe impact on their income
a proud history of not only managing who are deeply rooted to their specific
and hence their ability to run their
various crisis over the last few years geographies, customers and on-
household, meet basic needs of
but emerging smarter, sharper and ground dynamics. Inputs received
food and health leave alone pay
stronger after each one.
On hindsight, how we managed and
braved through 2021, will go down
in Fusion’s corporate legacy as an
inspirational inflection point -

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ONE TWO

For our people For our Customers

l We ensured that every single l A comprehensive Covid Policy for ‘Resilient’ is one word that best l Our tenacity and our progressive l We also automated our field
employee was mapped for health employees was launched covering: describes our customers in their face- orientation amidst challenges processes to ensure seamless wing
status and engaged with regularly. m Medical treatment including off with this unforeseen challenge that helped us reach out to many more to wing processing and customer
On a daily basis across levels hospitalisation wherever required they too endured in 2021. And it is underserved/unserved customers servicing. The goal was to eliminate
m Vaccination Cost Reimbursement this virtue of theirs that strengthened resulting in addition of 209 new frictions in customer facing
l Hygiene kits were made available at
for both dozes our resolve in not deviating from branches and more than 6 lakh new processes and build robust checks
all Branches
our mission of being a responsible borrowers to the Fusion family last and balances to create capacity
l Not a single position was
l Covid infection heat maps issued by trustworthy partner for them and year helping us register a solid 46% for managing larger volumes and
rationalised, not a single rupee
government - at the center and in staying the course on our core growth in our AUM (assets under reducing turnaround time
reduction done in Fixed or Variable
states - were monitored regularly strategy of delivering financial services management) and a 67% increase
payout This also helped us develop a
to plan employee movement to them in adequate, seamless and in disbursements... year on year
‘green channel’ sort of processing
and branch operations given the l Regular communication on status affordable measure - at all times... We
l 2021 also gave us the opportunity mechanism for our existing customers,
phased lock-downs updates,social distancing norms, always believed that every challenge
to create the phase 2 of our helping us create a differentiator
hygiene standards was carried on also brings with it a few opportunities
Cashless Collections, a pure play worthy of their loyalty and vintage
and that is where we directed our
UPI enabled mobile phone- with us.
focus:
based payments platform for our
All these innovations helped us
l Kudos to the government for customers. Every customer got her
in improving on our average turn
continuing to run all its infra own unique QR code that captured
around time to just 5 days sourcing to
projects and employment all relevant details about the loan
disbursement.
generation schemes in rural parts and made it easy for them to pay
of the country even when cities cashless specially while maintaining We are now richer with the experience
were facing lock-downs. Given social distancing guidelines. This of having successfully managed
that 93% of our portfolio is also development complemented another challenge and demonstrate
rural - the forces aligned... our Cashless Collections infrastructure capability to grow organically in a
strategy of operational readiness that had started in 2018 wherein sustainable manner. A ‘future ready
in those branches combined well we had partnered with the team’ that today proudly wears the
with sustained economic activity merchant networks of payment tag of being Tenacious & Progressive
and hence it became a catalyst banks / other service providers having proved themselves by
for revival of their livelihood delivering consistently across cycles.
generation activities and funding
support from us for the same

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Our progression over the
last seven years

FY14 FY15 FY18 FY22

4 States of presence 5 States of presence 14 States of presence 18 States of presence

41 Branches 75 Branches 375 Branches 934 Branches

295 Team size 591 Team size 3,202 Team size 8,716 Team size

1,27,721 Customers 2,20,913 Customers 1,022,999 Customers 2,72,3449 Customers

168.3 Disbursements (FY) 326.37 Disbursements (FY) 1727.59 Disbursements (FY) 6,179.78 Disbursements (FY)

0 Cashless Disbursements (%) 0 Cashless Disbursements (%) 41.36 Cashless Disbursements (%) 94.12 Cashless Disbursements (%)

0 Cashless Collection (%) 0 Cashless Collection (%) 0 Cashless Collection (%) 30.41 Cashless Collection (%)

24.96 Revenue (H crore) 54.94 Revenue (H crore) 267.31 Revenue (H crore) 1201.35 Revenue (H crore)

3.01 Net Profit (H crore) 5.31 Net Profit (H crore) (39.41) Net Profit (H crore) 21.76 Net Profit (H crore)

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FROM THE DESK OF OUR MD & CEO MR. DEVESH SACHDEV

Dear Shareholders,

OUR focus on key strategic initiatives along with investments in

F
Y22 started with a much deadlier very unfortunate. My heart goes out that the Company embodied and
Covid wave which was fast to all those families who have lost demonstrated were Tenacity and
technology, building newer capabilities, network and people spreading and increasingly fatal. their loved ones during this health Progression. And as has been the case
The overall impact on human lives crisis. always, our Company has come out
will help us deepen our customer relationships and expand our was far more than we had ever
However, amongst these
stronger after every such unforeseen
addressable market experienced in our lives. At Fusion,
we lost some of our team members
unprecedented challenges over the
event be it demonetisation or the
global pandemic.
last two years, two very strong virtues
too during this trying time, which was

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FROM THE CEO’S DESK

c) The other important aspect is Going forward, our focus on key their patience and perseverance in
removing the margin caps and strategic initiatives being pursued, drawing up the Company’s business
deregulating pricing. As per along with investments in technology, plan and monitoring its execution to
the new guidelines, the pricing building newer capabilities, network the last detail. I thank the entire Fusion
framework is to be decided by and people will help us deepen our team for the discipline, dedication,
a company’s Board leading to customer relationships, expand our and determination in elevating the
implementation of risk-based addressable market, and power position of the Company in our
pricing, providing the necessary growth in the years ahead. business space with each passing year.
fillip to innovation and wider
In closing, I would like to thank my I also take the opportunity to thank
coverage of hitherto unserved parts
colleagues on the Board for their our debt providers, vendors and all
of the populace. It is a change in
invaluable guidance in contouring other stakeholders for believing in
basic assumptions and will usher in
the long-term blueprint of the us and supporting us in our journey
a new era for the sector.
In FY22, we added 209 new branches So why did we pilot the MSME Microfinance sector is the strongest Company, the leadership team for thus far.
and more than 6 lakh new customers, vertical? testament to that. The sector has
our disbursement and portfolio grew Our MSME initiative is part of our undergone significant changes over
by 67% and 46% respectively, while future-readiness road map, born out the last decade. Regulated framework
our revenue increased by 38%. These of our understanding of the landscape laid down in 2011 post Malegam We continue to solicit your support going forward.
numbers underscore our conviction in which we operate our in-house Committee Report was only for the
in our mission and our strategy to capabilities, our growth aspirations NBFC-MFIs. However, many changes Warm regards
bring many more underserved/ and our target customer group. This transpired since then with the Banks, Devesh Sachdev
unserved customers in Rural India into initiative gives us the opportunity to SFBs and NBFCs increasing their focus MD & CEO
the organised financing ecosystem. serve markets adjacent to our existing on this sector. The NBFC - MFI share,
These results again demonstrate the business space and sustain our growth as a result, came down to only 35% in
fact that Tenacity and Progress have momentum. this space.
been our hallmark while navigating
On our part, we wanted to expand Recently, the RBI announced new
challenges.
our addressable market beyond harmonised guidelines applicable to
Moreover, in the last five years, even as the MFI space. From our customer’s all regulated entities which were made
our business environment remained perspective, we understood that a applicable from April 1, 2022. Some
uncertain owing to factors such as large number of our microfinance of the key aspects addressed by these
demonetisation, liquidity crunch and clients aspired to move up the ladder. new guidelines are as follows:
the recent health crisis - our Company For this journey, they would require
a) It directs a major policy shift to
has grown at a healthy pace - our larger loans.
asset class-based regulations over
portfolio grew by 45% over the same
An integral requirement of this ‘legal form’, effectively plugging
period.
customer segment was to assess the the gap which was responsible for
The challenges over the last five years, risk and disburse high-ticket loans regulatory arbitrage.
have taught us to be future ready. We for which we needed more analytical
b) The new guidelines focus on
have focused on strengthening our and comprehensive credit assessment
better client credit assessment
core by investing in people, processes, capabilities of their venture and
through the concept of FOIR (Fixed
technology and building capabilities cashflows.
Obligation to Income Ratio). This
as we envision future opportunities.
Our MSME vertical helped us achieve endeavors to ensure that clients are
One key initiative in this direction
just that as a first step. not over indebted and are served
was starting our MSME vertical three
adequately.
years ago. We are happy to share that Our Regulator, the Reserve Bank of
our pilot project in this space has India (RBI) deserves a lot of credit
been successful. We have created 34 for creating a conducive policy
branches, enrolled 5,016 customers environment for deepening financial
and built a portfolio of Rs 139.12 crore inclusion.
as on March 31, 2022.

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FUSION MICRO FINANCE

Giving wings to her dreams Financial Inclusion | Atmanirbhar India | Digital India

F
usion as an organization was set-up in 2010 & is a registered NBFC - MFI which operates in a Joint Liability Group
lending model of Grameen.
Our clients comprise mainly of women living in rural and semi-urban areas. Our focus is reaching out to unbanked Our products
and providing financial services to women entrepreneurs belonging to the economically and socially deprived
section of the society. Our responsibilities are not restricted merely to financial support but also to acquaint
the clients to manage their financials by disseminating Financial Literacy to them. Fusion believes in robust business
practices, transparent policies expressed in our Customer Centric efforts towards our Clientele. Fusion aspires to create
value and balanced growth for all its stakeholders while keeping clients at the centre.

Microfinance MSME
Microfinance, is the provision of small Serving serve the “Missing Middle”
Our Vision credit to low-income individuals or
groups who otherwise would have no
segment of MSME, which is aspiring
to increase their contribution in the
other access to financial services. economic growth of the country.

Fusion micro finance has a

social vision and business
orientation aims to
provide underprivileged
women with economic
opportunities to
transform the quality of
their lives Our coverage

Our Mission

A self-sustainable
financial institution
which leverages the
distribution network
to channel other
products and services
l States of presence

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FUSION MICRO FINANCE

Giving wings to her dreams

934 2.79
Branch network Customers
mn
6,179.78
Disbursements (FY22)
6,785.97
Assets under
8,716
Team size
(March 31, 2022) (March 31, 2022) (H crore) Management (FY22) (March 31, 2022)
(H crore)

l North: 36.4% l Rural: 93.2% l North: 38.2% l North: 38.1% l Non-Field force: 32.9%
l South: 9.2% l Urban/Semi-urban: l South: 8.0% l South: 7.9% l Field force: 67.1%
l East: 31.9% 6.8% l East: 36.4% l East: 36.7%
l Central: 22.5% l Central: 17.5% l Central: 17.2%

Business size

1,337.95
Networth
7,652
Total assets
4.32
Debt-equity
(H crore) (H crore) (x)
March 31, 2022 March 31, 2022 March 31, 2022

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PROGRESS IN FY22

Our business progress

through the months
H1 H2

18.7 176.98 28.35 33.43

% % % %
Customer addition (net) Growth in Disbursements Customer Addition (net) Growth in Disbursements
Customers as on Disbursements Customers as on Disbursements
September 30, 2020 September 30, 2021 H1/2020-21 (H crore) H1/2021-22 (H crore) March 31, 2021 March 31, 2022 H2/2020-21 (H crore) H2/2021-22 (H crore)
1,896,356 2,250,115 856.34 2,371.86 2,121,873 2,723,449 2,853.96 3,807.92

36.98 (72.1) 38.10 (13.4)

% % % %
Growth in Revenue (net) Growth in Net Profit Growth in Revenue (net) Growth in Net Profit
Revenue Net profit Revenue Net profit
H1/2020-21 (H crore) H1/2021-22 (H crore) H1/2020-21 (H crore) H1/2021-22 (H crore) H2/2020-21 (H crore) H2/2021-22 (H crore) H2/2020-21 (H crore) H2/2021-22 (H crore)
390.54 534.97 27.42 7.66 482.55 666.38 16.53 14.32

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 F
FY17 878.01

022
FY18 1,727.59

(H crore)
FY19 2,820.45
FY20 3,574.04

Disbursement
FY21 3,710.30
6,179.78
FY22 its growth over the years.
USION’s tenacity of being better

FY17 201.043
every day, has enabled it to sustain

FY18 267.31

(H crore)
FY19 511.65
Total Income
FY20 730.31
FY21 873.09
1,201.35
FY22

FY17 4.097
(39.41) FY18
(H crore)

65.35
Net Profit

FY19
70.12
FY20
Key progression indicators

FY21 43.95
FY22 21.98

65.56
FY17
(%)

73.44
FY18
FY19 56.23
FY20 50.92
FY21 44.26
Cost-Income Ratio

FY22 44.27

ANNUAL REPORT 2021-22

FUSION MICRO FINANCE LIMITED
FY17 1218.43
FY18 1,968.46

TENACITY &
(H crore)

PROGRESSION
FY19 3,408.97
Total Assets

FY20 4,339.56
FY21 6,124.17
7,651.97
FY22

FY17 827.16
FY18 1,555.60
(H crore)

OVERVIEW

FY19 2,641.39
002 CORPORATE
Asset under
management

FY20 3,606.52
FY21 4,637.84
FY22 6,785.97
REPORTS

FY17 25.97
058 MANAGEMENT
(%)

FY18 21.87
FY19 27.33
35.82
FY20
REPORTS
Capital Adequacy

FY21 27.26
104 FINANCIAL

FY22 21.94
023
Microfinance - a tenacious sector that continued to districts in 28 states and eight Union
Territories. The industry has a portfolio
borrowers’ cash flows, - this resulted in
a dip in the collection efficiency of MFI
after February 2017 represents 99.1%
of the total industry portfolio, 98.1%

progress... size of H2.32 trillion, some MFIs

reported a collection efficiency more
players.
From the second half of FY22 however,
of the loan accounts and 99.5% of
unique borrowers of “Ever MFI data”

T
than 90% by the close of FY21. economic activity returned to near- (loans originated after January 2014).
HE programme of linking Self Help Groups (SHGs) to banks was started on a pilot basis by the National Bank for
Agriculture and Rural Development (NABARD) in the year 1991-92. What began as a humble approach of improving FY 22 in retrospect: Fiscal 2021-22 too normal resulting in healthy rise credit NBFC-MFI segment: As on March 1,
the outreach of the banking system and deepening rural credit, has, over decades, transcended into a holistic started on an uncertain note owing to demand. 2022, the on-balance sheet portfolio
programme for building financial, social, economic, and of late, technological capital in rural India. second wave of the pandemic which MFI Universe: Based on data as of 84 NBFC-MFIs was H1, 00,407 crore,
The model found its acceptance with the poor. has spread considerably faster in rural on 31 March 2022 (Q4 FY 21-22) spread across 611 districts of 35 states
areas and resulted in significantly for loans originated after February and union territories. The data shows
Hitherto, their fund providers in Microfinance industry in India is in uniformity and standards in the higher infections, and resultant local 2017, microfinance industry has an increase in portfolio of around
times of an emergency were local diverse with several types of players operating structure and retail service lock-downs. It impacted business total loan portfolio (i.e., loan amount 24.7% over the last year. Overall health
moneylenders and pawnbrokers delivering financial services - credit, processes for enhancing transparency volumes of microfinanciers during outstanding) of H2,85,441 crore, of the portfolio has improved on a YoY
who charged usurious interest rates insurance and pension- to the low- and customer protection. the first half owing to poor collections including DPD 180+ portfolio of basis as reflected by PAR>30 of 10.1%
including some physical collateral. If income households. Their legal and and curtailed fresh lending. Asset H23,624 crore. The total number of as on March 31 2022, in comparison
In recent years, the focus on quality metrics weakened owing to to 12.1% as on March 31, 2021. There
repayments were delayed, naming operating environment differs and technology and digitization of active loans accounts was 11.3 crore
and shaming was a usual practice hence, over the years, regulation the localised lock-downs impacting with 5.8 crore unique borrowers as on has been a marked improvement in
processes by MFIs has helped to PAR>30 in comparison to the previous
amongst the moneylenders, which has become a vital topic for the streamline operations, reduce costs 31 March 2022. The loans originated
then became a social issue as well. microfinance industry. quarter as well.
and turnaround time for customer
Microfinance did away with all this, it With the banks, NBFC-MFIs and servicing.
emerged as cost-effective and more now SFBs engaged in micro finance MFI Loans - a priority by the top bank
respectable way to improve one’s delivery, RBI has stepped in with The RBI’s strategy to categorise small MFI loans from small finance banks as a priority sector is
livelihoods and lives. several policy directives to bring expected to boost the lending to the former segment. While the scheduled commercial banks
have historically funded large microfinance institutions, they have been reluctant to sanction
the loans to smaller players in the microfinance space. It is expected that RBI’s measure will
“We got rid of colonialism, we got rid of slavery, and we got rid of apartheid - everyone result in incremental funding to the sub-H500 crore microfinance institution segment to an
extent of H2000-3000 crore over the current financial year.
thought each one of them was impossible. Let’s take the next impossible, do it with joy and
(Source: [Link]
get it finished with and create a world free from poverty. Let us create the world of our choice.” crore-debt-funding-likely-in-2021-22-repot-2439757)
Mohammad Yunus
1200

1000 Key performance indicators

A tenacious and progressive sector The Covid-19 challenge: 2020 was situation of their clients, enabling Loans accounts & amount outstanding
History has it that when India’s the real test for the microfinance them to get through the peak of the 800 4.21
3.86
financial sector or the economy sector. Covid-19 and the lock-downs pandemic-led disruption. Moreover, 3.69
600
at larger has been hit by a crisis, instituted to curb its spread brought digital disbursements and collections
majority of the brunt arising out of every business, small and large, to a enabled MFIs to continue to connect 400
the challenge is usually borne by the sudden and complete halt. It took a with their clients, even during the
microfinance sector. This is so because very heavy toll on small and micro lock-down. 200

1,00,407
87,444
80,549
it caters to the most economically enterprises - because they had little or The MFIs’ ability to adopt a cost- 00
vulnerable segments of the country. no cash reserves to fall back upon. In

2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
effective transition to phygital way of
Despite the hardships, the sector turn microfinance organisation who work has been key to their resilience
31-Mar-21 31-Dec-21 31-Mar-22

finance these ventures were adversely --------Outreach unique clients (00000) --------Amount Outstanding H bn Loan O/s [HCr] Active loan AC [Cr]
has survived and become better and - it has also positioned them as
more resilient after each crisis. The impacted. important contributors to the broader 13.0%
Average disbursement &
progressive nature of this business While the Government moved in with recovery. Loan outstanding [H] 12.1% 10.1%
space has neatly woven the lessons speed to rescue MFIs through policy As the economy progressed in 31-Mar-22 38, 647 9.1%
8.3%
23, 876
learnt into business processes to and financial support, the MFIs almost 2020 and entered 2021, the MFI 8.4%
report a healthy rebound after the immediately adopted the “phygital” 7.1% Portfolio quality
sector’s tenacity and progress 31-Dec-21 22, 643
36, 193
6.6% of NBFC-MFIs
roadblock. (physical + digital) connection with gained the spotlight. By early 2021,
These learnings helped the MFI sector their clients. Indian microfinance providers were 35, 262
5.3%
31-Mar-21 21, 835
during the Covid-19 pandemic that Using technology, they crafted addressing the financial needs of 60 31-Mar-21 31-Dec-21 31-Mar-22
ravaged economies across the globe. solutions tailored to the unique million unique customers, across 620 n Av. Disb. size during Qtr. [H]
n Av. Loan O/s [H] PAR>30 PAR>90 PAR>180

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RISK MANAGEMENT

Safeguarding our business

F
USION’s business of micro lending Fusion has achieved sustainable The team’s efforts in striking a prudent
is concentrated largely in rural growth across the years under such balance between business risks and
parts of the country with the a challenging environment owing to sectoral opportunities have been
unserved/underserved women in its disciplinedfocus on operational a key contributor to our progress
those areas as its target segment. excellence and risk management. year-on-year even amidst strong
Assessment of risk is a critical headwinds.
A network of 900 plus branches various instruments. Further a strong Our initiatives of continuous year of participating and the next year
component of decision making.
spanning 18 states, 360+ districts, ~ Mentioned below are some of the Balance Sheet and a low debt-equity engagement across levels, as well is a validation of our people
The company has a dedicated Risk
100000 villages and addressing ~2.8 risks that could probably impede ratio allow the Company to secure empowering people with decision centric approach across the years.
Management team that constantly
million customers with retail financial the Company’sprogress towards its additional funds, when required, to making, investing in their competency Additionally - since inception, Fusion
maps the sectoral ecosystem for
unsecured product comes with its envisioned goals and their mitigation fund its strategic growth initiatives. enhancement / overall growth and has believed in building a family
identifying possible risks and drawing
own set of challenges in terms of set measures: providing leadership opportunities that grows together and hence has
the contours of a relevant mitigation Q. In a people-led business, retaining
up and day to day monitoring and to those who deserve have in place an ESOP scheme that not
strategy. key people at leadership positions
management. Managing operational demonstrated our belief sufficiently only covers the top leadership team
is critical for sustained growth. How
risk in the business of Micro Finance is and today when 16 of our 18 states but also ensures coverage of the mid
is the Company able to manage
critical for success. our headed by people who grew management level creating a sense
leadership retention?
within the ranks - it sends out a very of ownership and loyalty amongst its
A. Micro Finance is a “touch” centric
strong message of the meritorious people.
model and our people are our bridge
growth oriented culture that we have
with the end customer. Given this
Risks that may impact our
01
strived to build over the years at
criticality, we have always focused on
Fusion. The fact that we were certified
ability to sustain growth building career paths for individuals
as a ‘Great Place to Work’ in our debut
within the organisation, ensuring
commonality of goals that converge
Q. The MFI sector has registered high for growth. However, since this too is such opportunities optimally and will towards mutual progression.
double digit growth over the last based on 2011 census data - we need continue to grow sustainably as a
decade. It has covered every corner to bake in organic increase in the leading responsible micro financier in
of the nation and is serving almost addressable population i.e. growth in the years to come.
every district in every state. Does this organic demand and on top of that Risks that may impact the
suggest that the growth momentum
could decelerate?
requirement demand as customers’
financial requirements would need to
Q. Growing the businesses would
require significant amounts of
funding. Does the Company have the
02 quality of our business
A. India has a large rural population be in tandem with their aspirational
financial muscle to fund its growth
that has been the growth engine for growth year on year.
aspirations? Q. In a rapidly expanding and One, two separate teams - the Audit Three, geotagging of branches and
its economy over the last 5-6 years Therefore, we are very optimistic A. Fusion is one of India’s leading growing business, there are chances team and the Risk management team group meeting locations allows the
especially with the launch of the JAM that the sector has the potential to microfinance players in India that that certain malpractices could with clear KRAs and functionalities to audit team to undertake surprise
trinity (JanDhan accounts, Aadhar and register significant growth in the enjoys a very strong reputation creep in, leading to revenue loss. protect the Company from all kinds audits with ease - the number of such
Mobile). Microfinance has played a next 5-8 years as well considering the with the financing community This needs to be plugged before it of frauds and malpractices through audits have increased substantially in
pivotal role in ensuring furtherance fact that not only our population has as a very reliable customer. It has snowballs into large losses - revenue rigorous review mechanism. recent months. This has mandated the
of financial inclusion in the country. increased considerably since then but an impeccable record of timely and reputation. Does the Company Two, as part of the Audit digitisation, field staff to remain on their toes at all
Data suggests that with an expansive a large part of our populace would repayments and the same has been have the bandwidth and tools to the Audit team uses data analytics times.
coverage by all MF practitioners, still remain unaddressed in addition to reflecting in the Credit Rating of the arrest leakages and loopholes? for more incisive audit which enables Four, the Company is working on
penetration of microfinance in eligible the demographic dividend that would Company. The Company enjoys credit A. Mindful of this reality, Fusion has it to identify and zero-in on areas of creating a specialised Fraud control
rural households has only now been accrue from earlier stated numbers. lines from all the major Public Sector taken important steps to ensure that concern by exception which in earlier unit with the key responsibility of
able to reach levels of 35%-40% on
Fusion has over the years, set up its Undertaking (Banks & Institutions), all possible slippages are identified years remained undetected at the early detection of fraud and plugging
an aggregate basis based on last
business and network to leverage Private and Multi National Banks. The early and plugged to ensure that they initial stages. gaps in a manner that such incidents
recorded 2011 census… clearly
Company is also building capabilities do not recur. For this, the Company do not recur.
stating there is significant potential
to tap debt capital markets through has:

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Q. Diversification is the name of the Our conviction in diversifying our Liabilities: The Company enjoys
game. Especially when sustainable presence across the country has not healthy business relations with
business operations are the goal. only helped us identify and leverage multiple banks and financial
Does the Company make a conscious growth opportunities but has also institutions. Moreover, the treasury
effort in diversifying its assets and helped mitigate concentration team continues to expand its funding
liabilities? risks and provided us with a solid partner’s year on year - thereby
A. Diversification was our core platform to insulate us relatively eliminating the possibility of an
strategy from day one. And our better during unforeseen events like over-dependence on any single
footprints across the country today Demonetisation, Floods / Draughts, funding partner category. As far
stand testimony to the fact that we Pandemics like Covid etc… as diversification is concerned, we
have ‘walked the talk’. We operate in Our growth has been organic and had a diversified mix of 57 lenders,
18 states and 368 districts. None of the granular, calibrated strategically to comprising a range of private banks
Risks that may impact
states that we are in contribute more
than 20% to our overall asset book
ensure we stand true to our mission of
being a pan -India inclusive financier.
(40.2%), public banks (13.4%), foreign
banks (15.1%), development financial 03 business profitability
and 5 of our TOP states together make institutions (13.4%), NBFC (9.1%) and
up for 65% of our portfolio. foreign portfolio investors (“FPIs”)
(8.8%) (excluding direct assignment).
Q. Cost of operations increases The emphasis on digital to pivot for growth in the coming
with the expansion of business transformation such as app-based years by harnessing the economies
geographically. Does the Company customer on boarding, paperless of scale, organic growth avenues,
have the tools to optimise operations processing, cashless disbursements, & and productivity levers and cross
costs? UPI payment collections has reduced selling opportunities. These
A. Fusion has formulated an IT the operating expenses to large initiatives along with our sustained
Strategic Roadmap for the next 3 extent. The tech enabled features like focus on optimising costs will drive
years that closely aligns with business geo tagging helps in optimising the organisational profitability.
growth plans. It is focussed on revenue & collection by enhancing Moreover, the new RBI guidelines have
technology investments to be ahead employee productivity and better de-regulated pricing of loans, which
of the curve and seamlessly manage monitoring on real time basis. provides an interesting opportunity to
growing business volumes without improve business margins.
Q. How else is Fusion working
increasing costs proportionately.
on strengthening organisational
The multi cloud strategy adopted profitability?
for enterprise applications enabled A. At Fusion, we have over the last 3-4
the agility in responding to dynamic years made significant investments
business requirements across in our Branch Network, Technology
geographies with highly scalable Platform, Operational Capacity,
solutions in most cost-efficient and Learning & Development...
manner. and we are now well positioned
Repetitive tasks such as data entry and
quality check are being automated
using Robotic Process Automation
to handle growing business volumes
without increasing human capital.

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 OUR
SUSTAINABLE IMPACT
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OUR SUSTAINABLE IMPACT

ENVIRONMENTAL INITIATIVES, SOCIAL RESPONSIBILITY, PURPOSEFUL The Exclusion Criteria is listed below:

GOVERNANCE AND SUSTAINABLE DEVELOPMENT GOALS AT ITS 1

Production or trade in any product or activity deemed illegal under host country laws or regulations or
international conventions and agreements
ROOTS 2 Production or trade in weapons and ammunitions

A
3 Production or trade in alcoholic beverages (excluding beer and wine)
T Fusion, ‘Environmental’, ‘Social’ as cross-sell product promoting a well-being, capacity building while 4 Production or trade in tobacco
and ‘Governance’ (ESG) principles pollution-free mode of transport enacting non-discrimination,
have been embedded in the and educated people about digital diversity, and inclusion. Sustainable 5 Gambling, casinos and equivalent enterprises
business. The entire processes payments through digital literacy growth is practiced in and around
6 Trade in wildlife or wildlife products regulated under CITES
and systems are strengthened to programs all together. its operational areas by creating job
execute responsible E&S actions. The Environmental sustainability is deep- opportunities for youth, supporting 7 Production or trade in radioactive materials
company has a strong commitment rooted into ethos of Fusion. The local workforce and employment
towards environmental sustainability, generation through the businesses 8 Production or trade in or use of unbounded asbestos fibers
company has focused intervention
effective governance, human well- to safeguard the environment financed by us. 9 Purchase of logging equipment for use in primary tropical moist forest
being and social equity. From serving and reducing negative effects While keeping ESG performance
the disadvantaged and marginalized 10 Production or trade in pharmaceuticals subject to international phase outs or bans
through its CSR initiatives such at the centre, strategic efforts are
stakeholders in aspirational district to as sustainable farming, greening undertaken to practice sustainable 11 Production or trade in pesticides/herbicides subject to international phase outs or bans
social & environmental stewardship the forest area, protecting water finance by conforming to International
programs for the communities. The sources in villages, and curbing the Finance Corporation’s (IFC) Exclusion 12 Drift net fishing in the marine environment using nets in excess of 2.5 km. in length
company is upholding integrity, menstrual waste. Meanwhile, the List which is part of the World Bank 13 Production or activities involving harmful or exploitative forms of forced labour/harmful child labour
ethics, and responsibilities towards its economic empowerment of women Group to assess loan applications from
stakeholders. entrepreneurs had a direct impact on E&S perspective. Fusion under no 14 Commercial logging operations for use in primary tropical moist forest
We are conscious about our ‘Green migration to urban/semi-urban areas circumstances funds those businesses 15 Production or trade in products containing PCBs
Footprint’ and have taken several reducing the burden on infrastructure which could have negative impact
steps to achieve that. We have and environment. on certain aspects of society and 16 Production or trade in ozone depleting substances subject to international phase out
adopted paperless operations through Fusion believes in protecting the environment.
17 Production or trade in wood or other forestry products from unmanaged forests
deployment of cashless disbursement interest of its stakeholders (e.g.
of loans into customers’ bank customers, employees, shareholders, Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale
accounts achieving 95% success rate 18
government, regulators, & associated usage of hazardous chemicals
and exercising digital on-boarding organizations) and strives to create
of clients. We have offered bi-cycle Production or activities that impinge on the lands owned, or claimed under adjudication, by Indigenous
long-term value for [Link] 19
Peoples, without full documented consent of such peoples
company ensures fair treatment of its
employees, safe working environment, 20 Production of or trade in pornography, or the provision of products or services of substantially similar nature
21 Pornography
22 Prostitution
23 Not engaged in production or mining of coal
Additionally, no discrimination is practiced towards the people on basis of ethnicity, disability, political
24
affiliation, sexual orientation, caste and religion

In continuing to play a positive role towards communities, Development Goals (SDGs). The company has been
environment, and governance; Fusion’s social initiatives positively contributing to 7 Global Goals out of 17 SDGs set
are aimed at helping the nation in successfully achieving by the United Nations General Assembly.
its commitment to the United Nations Sustainable

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 Sustaining our development efforts

No. of programs No. of districts Beneficiaries

covered

1,402

333

244,450

171,797
248

211,917
916
End poverty in its all forms End hunger, achieve food Ensure healthy lives and Ensure equitable and
everywhere security and improved promote well-being at quality education
nutrition, and promote all ages and promote lifelong
sustainable agriculture learning opportunities

116
91

19,912
181
140
FY19

FY20

FY21

FY22

FY19

FY20

FY21

FY22

FY19

FY20

FY21

FY22
Ensure gender equality and Ensure availability and Take urgent action to
empowerment sustainable management of combat climate change
water and sanitation for all and its impacts

ESG has been the core of our operations and business activities
and has been helping us in shaping a sustainable future for the
communities we serve, environment we operate in and creating
lasting value for all our stakeholders.

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FY22 - A SNAPSHOT
1) Our intervention

06
Relief & Welfare Healthcare WASH (Water, Education
Sanitation & 03 01
Hygiene) 04
02

07 05
19
18

08
Livelihood Sports Environment 10 17
16

2) Our Reach & Impact 11

15
01 Delhi [125]
09
02 Haryana [12,952]
03 Punjab [6,943]
04 Uttarakhand [15,151]
05 Uttar Pradesh [26,300]
06 Himachal Pradesh [200]
12 07 Rajasthan [9,170]
08 Gujarat [2,430]
09 Maharashtra [350]
14 10 Madhya Pradesh [19,241]
13 11 Chhattisgarh [9,700]

171,797 1,402 18 62
Aspirational
4,611 1.56
12 Karnataka [2]
13 Tamil Nadu [10,661]
States + UTs Employee Investment
Beneficiaries Programs covered districts covered 14 Puduchhery [644]
participation (H crore)
15 Odisha [24,422]
16 West Bengal [2,320]
17 Jharkhand [6,997]
18 Bihar [21,385]
19 Assam [2,804]

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 Battling Covid on the front-line During this challenging time, the Fusion leveraged this challenge as an
Covid continued to plague India Fusion team prepared and provided opportunity to provide employment

Relief & Welfare

and Indians. At the start of FY22, the much-needed hygiene kits to to people with minimal and zero
the second wave of the pandemic communities in rural and far-flung earning. It engaged underprivileged
struck India. The more contagious areas to protect them against women, indigenous communities,
and extremely virulent Delta variant Covid-19 infection and reduce ASHA, anganwadi workers, widows,
wreaked havoc across the Indian their risk of severe illness. The kits and persons with disabilities (PWDs)
landmass. Daily new infections consisted of masks, soap, sanitizer to produce masks, sanitizers and
cross the 4-lakh mark. Fatalities and sanitary napkin distributed sanitary napkin which helped them
were at an all-time high as hospital among communities which included earn extra money at a time when lives
infrastructure and services collapsed front-line warriors like District and livelihoods were at stake.
under pressure. Fear loomed large in Administration and Police Officers
everyone’s mind. across 18 states & UTs of India.

135,680 1,349 62
Aspirational
4,267
Employee
Beneficiaries Programs districts participation
1.22
Lakh
Beneficiaries

Distribution to Distribution to Employment Geographical

Communities Frontiline Warriors Generation Coverage
Masks: 1.22 lakh Masks and Hygiene Kits 205 People employed 9,209 Villages
Sanitary Napkins: 18,470 were provided to 11,305 including 150 Women 328 Districts
Sanitizers: 3,054 liters District Administration Income Earned: H6.1
Hygiene Kits: 29,447 62 Aspirational
and Police Officers Lakh Districts

Sajida Begum is 26 years, Tezpur, Assam

At the time of the pandemic, it was very challenging to meet the basic needs of the family.
Being the caretaker of my elder sister who is suffering from schizophrenia for more than
15 years our financial situation got worst. Fusion Micro Finance came in our life as a ‘Ray
of hope’. The orders that I got from the company for making the mask not only helped me
personally, it also helped other women in similar situations at our rehabilitation tailoring
unit to earn some amount of money. Our unit never got such a huge order, and I got the
opportunity to handle the entire group. It gave me the confidence to take similar mask-
making orders and the community started recognizing us. I am deeply thankful to Fusion
for giving me and my team this opportunity.

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Flood relief work During the monsoon in 2021, belongings had to be left behind to
Nature is all powerful. And when heavy rain lashed down upon and perish in the swirling waters.

Healthcare
Mother Nature wreaks havoc, there is battered multiple districts of Assam, Fusion took prompt action to provide
very little that we humans can do to Bihar, Madhya Pradesh, Gujarat, relief packages including food items,
protect ourselves. We can only endure Puduchhery and Tamil Nadu. Districts toiletries and household items to
the brunt of her payback for all the were completely flooded and cut off flood affected households in the face
years that we misused the bounties of from their supply lines. People were of torrential rain and the challenge of
our all-powerful Mother has bestowed forced to abandon their homes and reaching out to the marooned villages.
upon us. move to shelters to save themselves
– their lifelong savings and precious

10,581 3,527 3,282 2,777 2,027 1,314 3,527

13,316 22 3
Aspirational
152
Employee
Kg Rice Kg Salt Kg Potato Kg Pulses Kg Sugar Lt. Oil Soaps Beneficiaries Programs districts participation

14,108
Beneficiaries

3,527
Households

140
Villages

l Puduchhery: 544

14 l Uttar Pradesh: 2444

l Madhya Pradesh: 1884
Districts of 6 States l Gujarat: 980
l Bihar: 2800
l Tamil Nadu: 5456

140
Employees participation

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Menstrual Hygiene Management Fusion identified Odisha for The program is generating awareness, Health camps Fusion brought medical facilities Those who needed constant medical
(MHM) Program implementing this program for an and bringing Social and Behavioral Health is wealth. This old adage has and services to the villages and intervention were referred to local
A woman’s menstrual health is crucial important reason. Use of sanitary Change Communication (SBCC) become increasingly relevant in the villagers. It organised health camps government hospitals. Tests such
to her well-being and also to the napkins in Odisha stood at just about towards usage of sanitary napkin post-Covid era where individuals are with the objective of providing as blood pressure, hemoglobin and
welfare of her family and community. 33.5% as against the national average and hygienic absorbent among 6,000 taking utmost care of the slightest primary healthcare to marginalised diabetes were facilitated under one
But too often mindsets, customs of 57.6%, the latest National Family women and adolescent girls. disorder in their health. Unfortunately, communities. Gynecologist, roof.
and institutional biases prevent Health Survey (NFHS) data. The collaborative approach of India’s rural masses are not endowed pediatrician, and general physician The health camps organised in
women from getting the menstrual Kalahandi is one of the aspirational initiative that leverages the skills of with this luxury. Rural India hardly examined and diagnosed people. Saharsa and Gopalganj, Bihar in
health care they need. Menstrual districts of Odisha with low awareness ASHA/Anganwadi workers on the has any medical infrastructure and association with Microfinance
hygiene continues to be amongst level and practice related to menstrual ground which helps increase the facilities. These regions are largely Institutions network (MFIN) catered to
the most challenging development hygiene – further worsened by myths accessibility of menstrual hygiene bereft of standard healthcare facilities the medical needs of flood victims.
issues among rural India today – it & taboos around it. scheme of the Government of Odisha – forcing rural Indians, especially
is considered a taboo. Even today, to beneficiaries. villagers to travel miles to get some
Fusion is changing the legacy issues
the cultural and social influences medical attention and care.
through ‘Garima’, menstrual hygiene
on people create a major hurdle in
management (MHM) program for
ensuring that the adolescent girls are
women and adolescent girls in 19
given proper knowledge on menstrual
villages and tribal areas of Kalahandi
hygiene. Rebati Jena Malus, Orissa, 28
district, Odisha.
We don’t have a dispensary or a clinic in my village. The nearest hospital is 50 km away
which made it very difficult for us to get any treatment when we fall ill. It was a first
health camp organized in my village by Fusion Micro Finance. They had three doctors
who screened my family including my children. I had never visited a lady doctor (gynae)
Dr. Aanchal Gupta, Senior Eye Surgeon, Founder, Netram Eye Foundation in my life. It was very helpful for me and all women in the village.
We at Netram Eye Foundation highly appreciate the community transforming efforts
by Fusion Micro Finance, reaching transparently to the underprivileged section of the
society. Very recently we had a wonderful experience with Fusion in partnering them for
a CSR activity, working on the smallest nuances, and being focused on the upliftment
of society in the most innovative ways. Executing the Project Garima with them in the Project Ojas: Eye-care initiative Under this program, qualified and
most backward areas of Orissa, working on menstrual hygiene has been an enthralling Giving vision to people with a weak experienced medical practitioners
and equally challenging experience for us, and we look forward to having many more eyesight is akin to infusing life in the undertook doorstep screening of
such experiences with the team of Fusion Micro Finance. lifeless. It makes life worth living all cataract, reflective error, and other
over again. For you can once again see eye ailments of the entire family.
the miracles of the creator unfold. They made people aware of healthy
eye care practices to avoid loss of
With this objective, Fusion ideated
eyesight. Lasik cataract surgeries
and implemented Project Ojas an eye
were facilitated, and spectacles were
care initiative that provides eye check-
provided to patients with refractive
ups and treatment to underprivileged
Wheelchair distribution error and presbyopia.
population who receive minimal or
The world is not a walk in the park.
no access to eye check-up or cannot
Especially for those with walking
afford treatment of eyes.
disabilities. They would be dying
many times over every day in their
mind when they have to depend on
others for the smallest thing which the
privileged mobile population so easily Kumari Sahu, 77 year old, Kamsara Village, Odisha
take for granted. And their plight is My name is Kumari Sahu. I live in Kamsara village of Odisha. I manage my household
because they are immobile. along with financially supporting the family. My eyesight started deteriorating and that
hampered my livelihood. I live in a remote village that has no health facility nearby and
Fusion provided wheelchairs to
I didn’t have money to get the treatment. During the eye screening program of Fusion
specially abled women, men and
my cataract was detected, and they also got my surgery done free of cost. I will never
children belonging to weaker section
forget the generous act of Fusion and I am forever thankful to them.
of the society to help them experience
independent mobility, improve self-
confidence and livelihood possibilities.

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 WASH (Water, Sanitation & Hygiene) Education

1,380 9 1
Aspirational
72 8,976 17 2
Aspirational
106
Employee Employee
Beneficiaries Programs district participation Beneficiaries Programs districts participation

When the urbanite wakes up, he has To eliminate this burden for rural Health risks such as pain in neck, Financial literacy Fusion undertook this daunting ‘Fusion Sahayata Kendra’ (a kiosk set-
to walk a few steps and feels water girls and women, Fusion distributed back & spine and fatigue have been Earning funds is just the start of task of explaining the need and up), assisted people in applying for
flow onto his hands and splash on waterwheels to 345 families from 69 minimised. Girls are able to devote the game. Managing funds well science of financial management and Government schemes, ATM cards and
his face. But in Indian villages, the villages of Haryana, Punjab, Gujarat, more time in studies and attend critical to sustainable development. digital payments – more particularly opening bank accounts with support
women have to walk a few kilometers Tamil Nadu, Jharkhand, Odisha and schools regularly. They can carry It ensures that you have enough to about things like earning, spending, from Common Services Centers (CSC).
to get water back (on their heads) West Bengal collectively benefiting 45 liters easily with the help of last you through a rainy day. This is investing, borrowing, and saving The program motivated beneficiaries
to their homes for the daily chores. 1,380 people of the communities. The waterwheels hence reduced long especially true for those with a debt through classroom trainings using to maintain financial diaries, utilisation
Backbreaking and painstaking indeed. innovative product has eased out the multiple trips for women and girls to burden. Because one wrong move interactive module like role play, of ATM card, savings in banks and
burden of women and girl who used the water source. can wipe out years of perseverance. case study, and games etc. The team benefited 3,227 people through
to travel a long distance of 2-5 km to This is particularly relevant for the members also created awareness Government schemes.
fetch water for the households. underprivileged - because they get about the various Government
only half a chance to improve their lot. schemes in prevalence, their benefits
and how people could be benefited
from them.

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Project Shiksha underprivileged girls to continue Counselling and mentoring sessions
When you dream big, you are never and complete three-year graduation by experts were organised to help

Livelihood
alone. You always have someone, program. 60 meritorious girl students students choose an appropriate
largely unknown, who supports you in qualified from Odisha and Haryana career. Active participation of parents
your journey to become big. received a scholarship amount was also ensured in the future
Fusion, with the intent of supporting of H12,000 each for first year of building of their daughters.
the big dreams of young students, graduation and the financial support
initiated Project Shiksha. It aims to will be continued till the end of
provide merit-based scholarship to graduation.

Neha,19 years, Haryana

My father is a daily wage labourer, and we are 2 siblings - me and my brother.
We both are pursuing graduation. Because my college is far from my house, I
stay in hostel. My father works really hard to give me a better future, but our
financial situation got worst due to high hostel and college fee. Fusion Micro
Finance Shiksha scholarship program came to us as a savior. The scholarship 443 3 10
Employee
amount of H12,000 helps me meet all the educational expenses. I hope that Beneficiaries Programs participation
Fusion will continue to lend a helping hand to me in the future as well. Thank
you!
Project Beej their earning potential over the
It’s one thing to give food to the medium-term. The kits included 5,000
Grants hungry. It’s quite the other to teach kg of high-quality seeds, and 10,500
Fusion provided grants to Aarohan to support pre-school education of 25 children through ‘Early Child Day Care’ center. him to earn his own food. In the kg of fertilizers, urea, sulphur & zinc.
The children were aged between 2.5 to 4 years. The Company also gave grants to Ramakrishna Mission Aashram, Kanpur former you feed him once and make The team organised workshops
to construct a classroom to conduct classes for disadvantaged students between the age group of 6 and 11 years. him dependent. Doing the latter, a to educate farmers on sustainable
more painstaking endeavour, you farming technique and methods. Soil
make him self-dependent - he feeds tests were facilitated to help farmers
himself for life. understand quantity of fertilizers/
With this objective, Fusion ideated urea to be used in the field, save
its Project Beej. Beej in Hindi means cost on fertilizers, and enhance
seed - in effect Fusion sowed the production quality of wheat. The
seeds of independence among the initiative collectively augmented
communities it touched. wheat production by 25% across 224
The Company provided farming kits acres of land resulting in an increase in
to 100 small-scale wheat farmers with income.
the goal of introducing sustainability
in farming which would help improve

Miti Rani, Bijnor, Uttar Pradesh

I am Miti Rani from Bijnor, Uttar Pradesh. Farming is the primary source of income for our
family from ages. From past few years due to financial constraints, we could not purchase
good quality seeds. Surveys were conducted by Fusion to identify farmers who were in
need. We are glad they gave us an opportunity to join. We received high quality seeds,
fertilizers, and urea etc. For the first time, the soil of our farmland was tested. We attended
workshops on farming practices facilitated by Fusion. We have recently harvested and
could see that the production is more. This will help us sell the produce and generate
income that used to be just sufficient for family consumption earlier without any surplus,
so we never earned money.

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Skill development program This reality prompted Fusion to
It is largely accepted across the globe undertake skill development

Environment
that working women make a more programs for rural women in order to
lasting contribution to the family, make their livelihood sustainable. The
nation, and its economy. For a large project was organized in Akoi Sahib
part of their earning is invested in the village of Sangrur, Punjab. Under the
family. project, the team trained 32 women
in the basic understanding of cutting
and sewing.

12,000 6,000 4 1
Aspirational
Trees Employee
Beneficiaries planted participation district

Humans, in their unrelenting greed Fusion is one of them - giving back to district of Uttarakhand. The plantation
for more, have destroyed Earth in an the underprivileged communities and will help prevent the effect of the
irreparable way. But there are some the Earth. The Company organised the flood in around 1,000 acres of farming
organisations who are trying to make plantation of 6,000 medicinal, and fruit land of Fatwa, Raigati, Kabulpuri and
some amends to the damage done plants at Fatwa village in Haridwar Bhikkampur benefiting around 12,000
by humanity over previous decades. rural population.

Karamjit Kaur, Punjab

I attended a tailoring program in Akhoisahab (Singroor)
organized by Fusion. Under the program, we were given lessons
on cutting & stitching techniques and product finishing that
is helping me get orders from neighbourhood. I also received
certificate after the completion of the program. I am thankful
Deepak Singh, Divisional Forest Officer, Forest Department, Haridwar
to Fusion for providing training to me and other women of the
Fusion Micro Finance’s plantation drive is an initiative that will be creating
community.
environmental advantages not only in the present times but also in the
coming future. The 6,000 tree plantation done alongside the Ganga in
Fatwa’s Forest Reserve is a step towards environmental conservation,
which will prevent landslide in the area & also a progress towards
providing wildlife habitat to different species of animals in the area. I
appreciate them for their effort in the right direction.

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 Sports
Namita Chandel, Chhapara, Madhya Pradesh
My name is Namita Chandel, Indian International Canoeist, supported
Fusion continued its support to Bhavani Devi (Fencer) and under GoSports Foundation’s Rahul Dravid Athlete Mentorship
Namita Chandel (Canoeist) through GoSports Foundation for Programme since 2018. Fusion Micro Finance has played a crucial role
in my journey, supporting me for important requirements like my high-
the 4th consecutive year. Bhavani Devi has created history by performance training stint in Hungary, sports nutrition, and various
equipment and gear. The programme also provided me with mental well-
becoming the first Indian fencer to qualify for the Olympics being support when I was going through a tough time, which helped me
2021. Namita Chandel brought laurels to India when she won a lot.
Fusion has supported me over the years, helping me achieve some great
the bronze medal in the C-4 200m Asian Championship in feats across National and International competitions. I would like to
extend my heartfelt gratitude towards Fusion and GoSports Foundation,
Thailand. for being constant pillars of support in my journey, and contributing to
the development of the Indian sporting ecosystem.

Bhavani Devi, Chennai, Tamil Nadu

My name is Bhavani Devi, Indian International Sabre Fencer and India’s
first ever Fencer to qualify for the Olympics. I was selected to be a part of
GoSports Foundation’s Rahul Dravid Athlete Mentorship Programme in
2015, when I was on the verge of quitting the sport due to lack of support,
but I stood firm with the support of Fusion and the Foundation.
Last year, I achieved a huge dream of mine, and qualified for the Tokyo
Olympics, becoming India’s first Fencer to qualify for and win a match at
the Olympics. This would not have been possible without the support of
Fusion in my journey. On International Women’s Day, I got to interact with
Fusion team who have been supporting me throughout and shared my story
as well. I am grateful to Fusion Micro Finance for supporting me through
GoSports Foundation. Thank you so much for helping me strive for sporting
excellence!

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 TESTIMONIALS

What People Say...

Covid-19 Ratan Lal Dangi, IG, Chhattisgarh

Welfare Fusion Micro Finance initiative of distributing hygiene kits among the district
Program police stations in this Covid-19 pandemic crisis is thankworthy. We the frontline
worker are the most vulnerable to health risks, as we must deal with all sections
of people on a day-to-day basis, be it asylum seekers or refugees. I would like to
appreciate on behalf of my team for the commendable work done by Fusion’s
team & also wish them luck for the coming future.

Financial Vijay Lakshmi, Kushinagar, Uttar Pradesh

and I am a farmer from Bhatni Dadan village. I am also associated with animal
Digital husbandry that has been my primary source of income. Fusion has provided
Literacy the women of our village with training on financial & digital literacy, that played
Program a major role in showcasing the importance of and developing our interest
in savings and on digital monetary. I have also received an amount of 1500
rupees as financial assistance from government on E-shram card made with the
support of ‘Fusion Sahayata Kendra’.

Project Subhasmita,18 years, Odisha

Shiksha I am Subhasmita. I come from a very small village in Odisha. I have 4 siblings
and all of them are studying. During Pandemic my father hardly use to get
any work as he is a daily wage labourer. We have seen the hardest time of our
life. I was on the verge of quitting my studies but then Fusion initiated Project
Shiksha, it changed my life. My heart filled with joy when I received H12,000
scholarship amount. Now I don’t have to quit my studies and I can continue to
fulfill my dreams. I hope in future Fusion will continue supporting me and other
such students who are in need.

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 TESTIMONIALS TESTIMONIALS

Waterwheel Urmila Ben, Vasad, Gujarat Health Shweta Bharti, Chouparan, Jharkhand
Distribution The nearest well in Haripura is about 3 km away. We used to go by a rickshaw Camp There are no gynaecologists available in my village neither the young girls are
Program to fetch water on a rocky and uneven path, which is extremely tiring and aware about their problems. The health camp organized by Fusion had two
time-consuming. My 14-year-old daughter used to help me. I was concerned lady doctors who came all the way from Gaya and checked us up. They also
about her health and education. She used to miss out on her education due to advised us about how we can maintain hygiene during menstruation. Diabetes
this responsibility. Since I got the waterwheel from Fusion, I am relieved that and haemoglobin tests were also facilitated for us in the camp.
my daughter’s education will not suffer. This has helped me save my time and
rickshaw fare. I am thankful to Fusion for making life easier for us.

Flood Shobanaben, Gujarat

Relief I thank Fusion for helping us in our difficult times. I remember worrying about Project Ojas: Dr. Troy Cunningham, Country Director, India, Operation Eyesight Universal
how I would feed my children during the flood and then I received food Eye-care Operation Eyesight Universal is proud to be a part of Fusion Micro Finance
supplies with which not only my children, but the entire family survived for initiative initiative towards managing its second phase of Project Ojas to support 230
days. Thank you for supporting us in need. We look forward to your further marginalised patients in need to bring sight-restoring cataract surgery. We
support. also provided 140 pairs of prescription spectacles in parts of Odisha and
Rajasthan. Thanks to your support, patients experiencing vision loss and
blindness received treatment. In many cases, this treatment is life changing –
giving patients the opportunity to return to work and provide for their families.
Therefore, the impact of your gift extends far beyond individual patients,
and the impact is in fact felt by their entire community. The project has had
Wheelchair Sohan, 33 years, Karnal, Haryana a significant impact, amplified with Fusion’s strong vision to give back the
Distribution After having met with an accident my leg got fractured and a steel rod was community. We are looking forward to future opportunities to partner with
Program inserted. I felt hopeless. I barely used to walk with the help of crutches but after you.
getting a wheelchair I am able to resume previous work which was standstill for
five and a half months. The wheelchair gave me a new life for which I’m grateful
to Fusion. Menstrual Sarita Hial, Kikia, Odisha
Hygiene Earlier I had no knowledge of the use of sanitary pads. I was using clothes as
Management pad from years. Fusion has been organizing awareness programs in our village;
the counsellors invited me to attend such program where we were informed
about pads and maintaining hygiene. We were also given packets of pads free
of cost which was very useful. I used the napkin for the first time in my life. I
Wheelchair Om Prakash Narwal, DIG, Haryana thank Fusion for organizing this program.
Distribution I highly appreciate Fusion’s initiative of distributing wheelchairs to needy
Program women, men and children who are specially abled. This program has given
people the self-confidence to lead their lives with full independence. It gives
me immense pleasure to be able to support such social initiative which directly
benefits the communities.

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Social Performance
Management (SPM)

96% Received score in the Code of Conduct

Assessment done by M-CRIL

Comprehensive MFI Grading (Code l The Company made a score of l The Assessment on Code
of Conduct Assessment & Company 96% and received C1 grade in of Conduct was done on
Grading) the Code of Conduct Assessment the indicators pertaining to
l Fusion is an M2C1-grade company (CoCA). It was recognised as an transparency, client protection,
that has high capacity in running its excellent performer with respect to governance, recruitment, client
operation in a sustainable manner. adherence to the Code of Conduct. education, feedback, grievance
The MFI Capacity Assessment redressal and data sharing. The
Grading is done on the dimensions grading was done by M-CRIL - a

Statutory & Financial

of capital adequacy, governance, global leader in the financial rating
management quality and risk of microfinance institutions.
management systems.

COCA dimension scores ADDO scores

reports
l Max l Obtained
91%
Approval
SEN
93%
DSR IEB Documentation
100% 92%
100%
Dissemination
85%
FGR TRP
93% 100% 95%
Observance

97%
CLE CLP
92% 93%
94%

REC GOV

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Directors’ R e p o r t
Dear members,
The Board of Directors are pleased to present the 28th Annual Report of your Company (“the Company” or “Fusion”) along
with the audited annual financial statements, for the financial year ended March 31, 2022 (“financial statements”).

1. FINANCIAL RESULTS
2. OPERATIONAL PERFORMANCE
The financial results of the Company for the financial year ended March 31, 2022 is summarized below:
Operational performance of the Company for the financial year ended March 31, 2022 is summarized below:
(All amounts are in Rupees millions)
For the year ended For the year ended Increase over%
Particulars Particulars FY March 31, 2022 FY March 31, 2021
March 31, 2022 March 31, 2021 FY 2021 – 22
Revenue from operations Number of Branches 934 725 28.83%
Interest Income 10643.19 8275.64 Number of Members 27,23,449 2,121,873 28.35%
Fees and commission Income 13.86 7.19 Number of employees 8,716 6,406 36.06%
Net gain on fair value changes 247.65 167.45 Number of States 18 18 0.00%
Net gain on derecognition of financial instruments under amortized cost Amount Disbursed (H In Crore) 6,180 3,710 66.57%
607.95 107.84
category Gross Loan Portfolio (H In Crore) 6,786 4,638 46.31%
Total Revenue from operations 11512.65 8558.12
Other Income 500.84 172.76 The Company attained business performance by reaching 4. CASH FLOW STATEMENT
Total Income 12013.49 8730.88 out to 2,7,23,449 active loan clients as on March 31,2022 The Cash Flow Statement for the year ended on March 31,
which has grown from 2,121,873 as on March 31, 2021. The 2022 prepared under the provisions of the Companies Act,
Expenses
growth in active loan clients during the year was 28.35%. 2013 (“the Act”) is attached as a part of the Annual Financial
Finance Costs 4959.64 3751.04
Statements of the Company.
Impairment on financial instruments 3686.93 2207.80 The above was possible with excellent efforts of 8716
Employee benefits expenses 2330.66 1686.40 employees of the Company as on March 31, 2022 which
was of 6,406 as on March 31, 2021, through 934 Branches, 5. ANNUAL RETURN
Depreciation and amortization 53.71 38.94
across 18 states and 368 districts in India. During the year In accordance with Section 92 and 134(3)(a) of the Act, a
Other expenses 738.29 478.79 under review, the Company opened 209 new branches. copy of the annual return in the prescribed format, for the
Total Expenses 11769.23 8162.97 financial year ended on March 31, 2022 is uploaded on the
Profit before tax 244.26 567.91 The Company already has borrowing arrangement with website of the Company and the same may be accessed at
large number of lenders and has started association with a [Link].
Tax Expense:
few more institutions to diversify its sources of borrowing.
Current Tax 129.77 588.71
Deferred Tax (103.06) (460.24) 6. DEPOSITS
3. CONVERSION OF THE COMPANY INTO PUBLIC
Profit for the year 217.55 439.44 The Company has not accepted/received any public
COMPANY
deposits during the year under the report falling within the
Other Comprehensive Income During the FY’22, the status of the Company changed to ambit of Non-Banking Financial Companies Acceptance of
Items that will not be reclassified subsequently to profit or Loss Public Limited w.e.f. July 20, 2021. Ministry of Corporate Public Deposits (Reserve Bank) Directions, 1998 or Section
Re-measurement gains/(loss) on defined benefit plans 2.96 0.04 Affairs has issued fresh Certificate of Incorporation and 73 of the Act read with Companies (Acceptance of Deposits)
Income tax effect (0.74) (0.01) Reserve Bank of India has issued Certificate of Registration Rules, 2014.
to giving effect of the same.
2.22 0.03
Total Comprehensive Income for the year 219.77 439.47

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7. TRANSFER TO RESERVES Company is retiring by rotation at the ensuing Annual b) Secured / Unsecured Non-convertible debentures and 5,000,000 (Fifty lakh) preference shares of H10/- (Rupees
During the FY’ 22, your Company has transferred H43.51 General Meeting (“AGM”) and is eligible for re-appointment. During FY’ 22, the Company raised an amount of H45 Ten only) each to H1,050,000,000 (Rupees One Hundred and
million to the statutory reserve pursuant to Section 45-IC of Crore by way of issuance of unsecured Non-Convertible Five Crores only) divided into 105,000,000 (Ten Crore Fifty
Your Board recommends the re-appointment of Mr. Devesh lakh) equity shares of H10/- (Rupees Ten only) each.
the Reserve Bank of India Act, 1934. Debentures..
Sachdev, Managing Director & CEO of the Company. The
particulars in respect of Mr. Devesh Sachdev, Managing Further, the paid-up equity share capital of the Company
8. DIVIDEND Director & CEO as required under SS-2, are mentioned in c) Asset Securitization has increased from H807,779,832 (Rupees Eight Crores
Your Board of Directors of the Company believes that it is the Notice of AGM. During FY’ 22, your Company raised resources to the extent Seventy Seven Lakh Seventy Nine Thousand Eight Hundred
prudent to plough back the profits for future growth of the of H693.45 Crore through Direct Assignment. and Thirty Two only) to H843,263,880/- (Rupees Eighty Four
Company. Hence do not recommend any dividend for the KEY MANAGERIAL PERSONNEL Crores Thirty Two Lakh Sixty Three Thousand Eight Hundred
financial year ended March 31, 2022. d) External Commercial Borrowings (ECB) and Eighty only) on account of conversion of partly paid-up
As per the provisions of the Act, Mr. Devesh Sachdev,
The Company has raised funds by way of External equity shares to fully paid up.
Managing Director & Chief Executive Officer, Mr. Gaurav
9. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES Maheshwari, Chief Financial Officer and Mr. Deepak Commercial Borrowings to the extent to EUR 10,000,000
TO INVESTOR EDUCATION AND PROTECTION FUND Madaan, Company Secretary & Compliance Officer are the (Euros Ten Million) in the FY’ 22. 18. NON CONVERTIBLE DEBENTURES
Pursuant to the provisions of the Investors Education and Key Managerial Personnel of the Company. During FY’ 22, the Company raised an amount of H45
Protection Fund Authority (Accounting, Audit, Transfer and 17. SHARE CAPITAL Crore by way of issuance of unsecured Non-Convertible
Refund) Rules, 2016 notified by the Ministry of Corporate 13. DECLARATION OF INDEPENDENCE During FY’ 22, the Authorized Share Capital of the Company Debenture and H55 Crore inform of Sub Debt. The total fully
Affairs (“MCA”) as amended from time to time, there was has been reclassified and increased from H950,000,000 redeemed amount of NCDs H197 Crores. The outstanding
The Company has received declarations from all the
no dividend, shares or other amounts were liable to be (Rupees Ninety-Five Crores only) divided into 90,000,000 NCDs including subordinated liabilities in form of NCDs as
Independent Directors of the Company confirming that
transferred to the Investors Education and Protection Fund (Nine crore) equity shares of H10/- (Rupees Ten only) each on March 31, 2022 was H916.34 Crores.
they meet the criteria of independence as prescribed under
established by the Central Government.
Section 149(6) of the Act and provisions of Securities and
Exchange Board of India (Listing Obligations and disclosure 19. EMPLOYEE STOCK OPTION SCHEME
10. NUMBER OF MEETINGS OF THE BOARD requirements) Regulations, 2015 (“Listing Regulations”)and To reward the employees for their association and performance as well as to motivate them to contribute to the growth
During the FY’ 22, the Board met 10 (Ten) times and based on the declarations received from the Independent and profitability of the Company, the Company has a stock option plan namely ESOP Scheme 2014 and ESOP Scheme
details related to the board meetings of the Company are directors, the Board of directors are of the opinion that 2016.
mentioned in the Corporate Governance Report annexed the directors have the requisite integrity, expertise and
as “ANNEXURE -1”, which forms part of this report. experience including the proficiency to be the independent As on March 31, 2022, the following stock option grants were in operation:
directors of the Company.
11. CHANGE IN THE NATURE OF BUSINESS, IF ANY PARTICULARS Details
During the FY’ 22, there was no change in the nature of 14. CREDIT RATING Number of options granted during the year 5,18,500
business. CARE Advisory Research and Training Ltd. has assigned Number of options vested during the year 4,85,183
Grading of “MFI 1”; CARE Rating Limited has assigned Number of options exercised during the year 1,74,641
12. DIRECTORS AND KEY MANAGERIAL PERSONNEL Rating of ‘A-’ Outlook Stable on the Long- Term Bank
Total number of shares arising out as a result of exercise of option during the year 1,74,641
Facilities (amounting to D1,500 Cr) and on Non-Convertible
DIRECTORS Debentures. The Company has also been assigned rating Options lapsed during the year 56,900
During the FY’ 22, Mr. Shobinder Duggal, Independent as ‘A-’ Outlook Stable by CRISIL on the Long- Term Bank Exercise price 27.08/37.99/64.08/110/154.04/290.48
Director of the Company resigned from the Board w.e.f. Facilities (amounting to H2000 Cr) and rating of ‘A-’ Outlook Variation in terms of options -
September 22, 2021. Stable by ICRA on Non-Convertible Debentures.
Money realized by exercise of options 1,55,92,404.47
Further, on the recommendation of Nomination and 15. CAPITAL ADEQUACY Total number of options in force 23,49,107
Remuneration Committee, Mr. Pankaj Vaish (DIN: 00367424)
was appointed as an Additional Director of the Company in The Capital Adequacy Ratio of the company was 21.94% The options shall vest on graded basis as follows.
the category of independent director of the Company w.e.f. as on March 31, 2022 as against the minimum capital
adequacy requirements of 15% by Reserve Bank of India On completion of 1 year 25%
September 22, 2021 by the Board. He was subsequently
appointed as Non-executive Director in the category of (“RBI”). On completion of 2 years 25%
Independent Director of the Company in the Extra Ordinary On completion of 3 years 25%
General Meeting of the Company held on December 18, 16. RESOURCE MOBILIZATION On completion of 4 years 25%
2021 for a period of 3 years.
a) Term Loan / Sub debt /Refinance
In accordance with the provisions of Section 152 of the Act During FY’ 22, the Company has diversified its sources
and in terms of the Articles of Association of the Company, of funds and raised a sum of H4070.25 Crore (Inclusive
Mr. Devesh Sachdev, Managing Director & CEO of the of Term Loan of H3745.25 Crore, Refinancing of H270
Crore and Sub Debt of H55 Crore).

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20. COMMITTEES DETAILS There are no instances of any fraud reported by M/s. S. R. 27. RISK MANAGEMENT of Board as a whole was done by the Directors of the Board.
As on March 31, 2022, the Company has 10 committees Batliboi & Associates LLP, Chartered Accountants, to the Our Enterprise Risk Management (ERM) framework The performance evaluation of the Promoter Director,
which govern and oversee different areas of the Company’s Audit Committee or the Board pursuant to the provisions encompasses practices relating to the identification, Nominee Directors and Non-Independent directors was
operations ensuring regular guidance and monitoring. of Section 143(12) of the Act. analysis, evaluation, treatment, mitigation, and monitoring done by every other Director. The performance evaluation
of the Credit, Market, liquidity, Operational, compliance of the Independent Directors was done by the Board
For further details please refer to Corporate Governance SECRETARIAL AUDITOR risks to achieving our key business objectives. ERM at Fusion excluding the Director being evaluated. The Directors
Report, which form the part of Directors’ Report. seeks to minimize the adverse impact of these risks, thus expressed satisfaction with the evaluation process.
As required under Section 204 of the Act and the Rules
made thereunder, M/s. Navneet K Arora & Co., LLP was enabling the Company to leverage market opportunities
21. RELATED PARTY TRANSACTIONS appointed as the Secretarial Auditor of the Company to effectively and enhance its long-term competitive 30. VIGIL MECHANISM/WHISTLE BLOWER POLICY
During the FY’ 22, there were no material related party conduct Secretarial Audit of the Company for the Financial advantage. The Vigil Mechanism system/Whistle Blower Policy has been
transactions entered by the Company that were required Year ended March 31, 2022. established with a view to provide a tool to directors and
The Board of Directors of the Company has formed a
to disclosed in form AOC-2. The details of the related party employees of the Company to report to the management
The Secretarial Audit Report for Financial Year ended Board Risk Management Committee (“BRMC”) to frame,
transactions is provided in the notes to the Annual Financial genuine concerns including unethical behavior, actual or
on March 31, 2022 does not contain any qualification, implement, and monitor the enterprise risk management
Statements. suspected fraud. The Policy provides adequate safeguards
reservation, adverse remark or disclaimer and forming the plan for the Company.
against victimization of director(s)/employee(s) who avail
The policy on Related Party Transactions, as approved by part of Board Report as “Annexure – 2”. of the mechanism. The Company has not received any
The BRMC is responsible for reviewing the enterprise risk
the Board, is displayed on the website of the Company reference under the said policy during the year.
management plan, ensuring its effectiveness, and verifying
[Link]. 23. PARTICULARS OF LOANS, GUARANTEES OR adherence to various risk parameters. The Company’s
INVESTMENTS Enterprise Risk Management strategy is based on clear 31. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE
22. AUDITOR’S AND AUDITORS’ REPORT During FY’22, the Company has not given any loan or understanding of various risks, disciplined Enterprise risk COMPANIES
provide guarantee or security or made any investment assessment and continuous monitoring. The BRMC reviews The Company does not have any subsidiary, associate or
STATUTORY AUDITOR
falling within the purview of Section 186 of the Act. various risks with which the organization is exposed joint venture Companies.
Pursuant to the provisions of Section 139 of the Act read
including Credit Risk, Interest Rate Risk, Liquidity Risk and
with rules made thereunder, M/s. S. R. Batliboi & Associates
24. NOMINATION AND REMUNERATION POLICY Operational Risk. The development and implementation 32. SIGNIFICANT AND MATERIAL ORDERS PASSED
LLP, Chartered Accountants were appointed as Statutory
Pursuant to the provisions of Section 178 of the Act read of risk management policy has been covered in the BY THE REGULATORS OR COURTS OR TRIBUNALS
Auditors of the Company to hold the office for a period
with the rules made thereunder, the Company has framed a Management Discussion and Analysis Report attached as IMPACTING THE GOING CONCERN STATUS AND
of five (5) years from the conclusion of the Twenty–Fifth
Nomination and Remuneration Policy (“NRC Policy”) which “ANNEXURE 3”. COMPANY’S OPERATIONS IN FUTURE
Annual General Meeting (“AGM”) till the conclusion of the
Thirtieth AGM of the Company. is duly approved by the Board of Directors. The NRC Policy During FY’ 22, no significant and material orders were
is directed towards a structure that provides adequate 28. CORPORATE SOCIAL RESPONSIBILITY passed by any regulator or court or tribunal impacting the
However, the Reserve Bank of India vide its recent Notification rewards and compensation to the employees at all level. The Company is at the forefront of Corporate Social going concern status and Company’s operations in future.
[Link]/SEC.01/08.91.001/2021-22 dated April 27, Responsibility (“CSR”) and sustainability initiatives and
2021, require every NBFC to appoint the Statutory Auditors The NRC Policy of the Company is available on our website practices. It believes in making lasting impact towards
at [Link]. 33. INTERNAL FINANCIAL CONTROLS
for a continuous period of three (3) years. Accordingly, the creating a just, equitable, humane and sustainable society.
tenure of M/s. S. R. Batliboi & Associates LLP, Chartered The Company has been involved with social initiatives Pursuant to the Section 134(5) (e) of the Act, the Company
Accountants will come to an end on the conclusion of the 25. MATERIAL CHANGES AND COMMITMENTS in various activities in the field of education, primary has adequate internal controls and processes in place
Twenty–Eighth AGM (“the ensuing AGM”) of the Company. AFFECTING FINANCIAL POSITION BETWEEN THE END healthcare and communities, environment, etc. with respect to its operations, which provide reasonable
OF THE FINANCIAL YEAR AND DATE OF THE REPORT assurance regarding the reliability of the preparation
Therefore, the Board of Directors, on the recommendations The Annual Report on the CSR activities for the financial of financial statements and financial reporting as also
There was no material changes and commitments affecting
of the Audit Committee and subject to the approval of the year 2021-22 is attached herewith as “ANNEXURE 4” to this functioning of other operations. The Company is following
financial position between the end of the financial year and
shareholders of the Company, approved the appointment Report. an effective internal control system commensurate with
date of the report.
of Deloitte Haskins & Sells, Firm Registration no. 015125N, its size and operations. These controls and processes are
as the statutory auditors of the Company for a period Further, the Contents of the CSR policy are also available on driven through various policies and procedures. In addition
of three (3) consecutive years from the conclusion of the 26. CONSERVATION OF ENERGY & TECHNOLOGY the Company’s website at [Link] to this the work process is designed in such a way that
ensuing AGM till the conclusion of the Thirty – First AGM of ABSORPTION AND FOREIGN EXCHANGE EARNINGS process of internal check is ensured at all levels.
the Company to be held in FY 2025-26. AND OUTGO 29. PERFORMANCE EVALUATION OF THE BOARD, ITS
Since the Company does not own any manufacturing COMMITTEES AND INDIVIDUAL DIRECTORS It also ensures the adoption of all policies & procedures
The Auditors’ Reports for the financial year ended on March facility, there is no information to be provided with respect for orderly and efficient conduct of its business, including
A formal evaluation of the performance of the Board, the
31, 2022 submitted by M/s. S. R. Batliboi & Associates LLP, to conservation of energy and technology absorption. There adherence to the Company’s Policy, the safeguarding of
Chairman and the individual Directors as well as various
Chartered Accountants do not contain any qualification or have not been any foreign exchange earnings other than its assets, prevention and detection of fraud & error, the
Committees of the Board was carried out for the FY’22. The
reservation or adverse remark or disclaimer. inflow of External Commercial Borrowing (ECB) of H890.41 accuracy & completeness of the accounting records and
evaluation was done using individual questionnaires. As
Million (Euro 10 Million) while outgo during the year under the timely preparation of reliable financial information.
The Notes on Financial Statement referred to in the Auditors’ part of the evaluation process, the performance evaluation
review is D72.23 million towards interest payments on ECB
Report are self-explanatory and do not call for any further
and Initial Public Offering related expenses.
comments.

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34. PREVENTION OF SEXUAL HARASSMENT AT Act read with Rule 5(1) of the Companies (Appointment 40. MAINTENANCE OF COST RECORDS the Company’s operations include global and domestic
WORKPLACE and Remuneration of Managerial Personnel) Rules, 2014 is The Company is not required to maintain cost records in demand and supply conditions, changes in Government
As per requirements of Sexual Harassment of Women at attached as “ANNEXURE 5” which forms part of this report. terms of the provisions of Section 148 (1) of the Act read Regulations, Tax Laws, Economic Developments within the
Workplace (Prevention, Prohibition & Redressal) Act, 2013, with Companies (Cost Records and Audit) Rules, 2014. country and other factors such as litigation and industrial
your Company has a policy and framework for employees 37. DIRECTORS’ RESPONSIBILITY STATEMENT relations.
to report sexual harassment cases at workplace and our Pursuant to Section 134(3)(c) of the Act, the Directors of the 41. SECRETARIAL STANDARDS
process ensures complete anonymity and confidentiality Company hereby state and confirm that: 45. ACKNOWLEDGEMENTS
The Company has duly complied with the applicable
of information. Adequate workshops and awareness provisions of Secretarial Standard – 1 on meetings of Your Directors takes this opportunity to express its deep and
programmes against sexual harassment are conducted a. In the preparation of the annual financial statements sincere gratitude for the support and co–operation from
Board of Directors and Secretarial Standard–2 on General
across the organization. for the year ended March 31, 2022, the applicable the Borrowers, Banks, Financial Institutions, Investors, and
Meetings issued by the Institute of Company Secretaries of
accounting standards have been followed along with Employees of the Company, for their consistent support and
Further, the Company has the Internal Complaint Committee India.
proper explanations relating to material departures, encouragement to the Company. Your Directors also places
in place as per the requirement of Sexual Harassment of if any; on record its sincere appreciation of the commitment and
Women at Workplace (Prevention, Prohibition & Redressal) 42. INSOLVENCY PROCEEDINGS
hard work put in by the Management and the employees
Act, 2013 to address the sexual harassment cases. However, b. The directors had selected such accounting policies There was no application made or any proceeding pending of the Company and thanks them for yet another excellent
no complaints were received during the period under and applied them consistently and made judgments under the Insolvency and Bankruptcy Code, 2016. year. Their dedication and competence have ensured that
review. and estimates that are reasonable and prudent so as
43. The Company has not entered into one time settlement the Company continues to be a significant player in the
to give a true and fair view of the state of affairs of the
with any of the banks or financial institutions. Micro finance industry.
35. CORPORATE GOVERNANCE Company as at March 31, 2022 and of the profits of the
Company for year ended on that date; For and on behalf of the Board of Directors
Your Company governance framework is driven by the
objective of enhancing long term stakeholder value without 44. CAUTIONARY STATEMENT
c. The Directors had taken proper and sufficient care
compromising on ethical standards and corporate social for the maintenance of adequate accounting records Statements in the Board’s Report and the Management Sd/- Sd/-
responsibilities. Efficient corporate governance requires a in accordance with the provisions of this Act for Discussion & Analysis describing the Company’s objectives, Devesh Sachdev Ratna Dharashree Vishwanathan
clear understanding of the respective roles of the Board of safeguarding the assets of the company and for expectations or forecasts may be forward looking within (MD & CEO) (Director)
Directors and of senior management and their relationships preventing and detecting fraud and other irregularities; the meaning of applicable Laws and Regulations. Actual DIN: 02547111 DIN: 07278291
with others in the corporate structure. Sincerity, fairness, results may differ materially from those expressed in
good citizenship and commitment to compliance are key d. The Directors had prepared the annual accounts on a the statement. Important factors that could influence Place: Gurugram
characteristics that drive relationships of the Board and going concern basis; Dated: May 6, 2022
senior management with other stakeholders.
e. The directors had laid down internal financial controls
Your Company believes in adopting best & transparent to be followed by the company, and that such internal
practices of corporate governance. Corporate governance financial controls are adequate and were operating
principles are enshrined in the Spirit of Fusion, which form effectively.
the core values of the Company. These guiding principles
are also articulated through the Company’s code of f. The Directors had devised proper systems to ensure
business conduct, Corporate Governance guidelines & compliance with the provisions of all applicable laws
charter of various sub-committees. and that such systems were adequate and operating
effectively.
A detailed report on the Company’s commitment at
adopting good Corporate Governance Practices is enclosed 38. RBI GUIDELINES
as “ANNEXURE 1”. The Company is registered with the Reserve Bank of India as
a NBFC within the provisions of the NBFC (Reserve Bank of
36. MANAGERIAL REMUNERATION India) Directions, 1998. The Company continues to comply
In terms of the provisions of Section 197(12) of the Act read with all the requirements prescribed by the Reserve Bank of
with Rules 5(2) and 5(3) of the Companies (Appointment India as applicable to it, from time to time.
and Remuneration of Managerial Personnel) Rules, 2014,
as amended, a statement showing the names and other 39. LISTING
particulars of the employees drawing remuneration Some series of NCD’s issued by the Company are listed
in excess of the limits set out in the said rules and the on BSE Limited. The listing fees to the BSE Limited for the
disclosures relating to remuneration and other details financial year 2022-23 has been duly paid.
required under the provisions of Section 197(12) of the

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 ANNEXURE 1

CORPORATE GOVERNANCE R e p o r t
The Board composition as on March 31, 2022 is as follow:

No of other *No. of committees in

Name of Director
Whether Companies which director is -
and Director Category of Particulars of Equity Listed
Designation last AGM in which
identification Directors Chairman/ Entity Directorship
COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE stakeholders. The Company follows highest standards of attended he/she is Member
number Chairperson
This report is prepared in accordance with the provisions Corporate Governance Practices which are driven by timely Director
of the Securities and Exchange Board of India (Listing disclosures, transparent corporate policies and high levels Mr. Devesh Promoter
Managing
Obligations and Disclosure Requirements) Regulations, of integrity in decision making. Over the years, we have Sachdev DIN: and Yes 1 1 - Nil
Director & CEO
2015 (“Listing Regulations”) and the report contains the strengthened governance practices. 02547111 Executive
details of Corporate Governance systems and processes at Ms. Ratna
1. Moneyboxx Finance
Fusion Micro Finance Limited (Fusion or the Company). BOARD OF DIRECTORS : Limited– Independent
Dharashree Non- Independent
Yes 5 4 3 Director
The Corporate Governance framework of the Company is Vishwanathan Executive Director
Corporate Governance encompasses a set of systems and DIN: 07278291
2. Dilip Buildcon Limited–
based on an effective Board with Independent Directors, Independent Director
practices to ensure that the Company’s affairs are being
separation of the Board’s supervisory role from the
managed in a manner which ensures accountability, 1. Havells India Limited –
executive management team and constitution of the
transparency and fairness in all transactions in the widest Independent Director
Board Committees for various functions including those 2. Schneider Electric
sense. The objective is to meet stakeholders’ aspirations Ms. Namrata Kaul Non- Independent
as required under the law. We believe that an active and No 12 7 1 Infrastructure Limited –
and societal expectations. Good governance practices DIN: 00994532 Executive Director
well-informed Board is necessary to ensure the highest Independent Director
stem from the dynamic culture and positive mindset of
standards of Corporate Governance. 3. Prime Securities Limited –
the organisation. We believe, Corporate Governance is
Independent Director
not just a destination, but a journey to constantly improve The composition of the Board of Directors of the Company
sustainable value creation. 1. IIFL Wealth Management
is in conformity with the provisions of Companies Act, Limited – Independent
2013 (“the Act”) and Regulations 17 of Listing Regulations Director
Accordingly, the Company has always strived to maintain **Mr. Pankaj Vaish Non- Independent
maintaining the specified combination of executive and NA 3 4 -
the highest standards of corporate governance and DIN: 00367424 Executive Director 2. Krishna Institute of
non-executive independent directors with at least one
business conduct so as to create and maintain sustainable Medical Sciences Limited –
woman Independent Director.
shareholders’ value, safeguard stakeholders’ interest Independent Director
and maintain investors’ trust and confidence. Ethical In terms of the provisions of Schedule V of the Listing Nominee
business practices go hand in hand with strong corporate Regulations, M/s. Harish Popli & Associates, Company Mr. Kenneth Dan Director
governance, and we believe that running our businesses Non-
Secretaries has issued a certificate confirming that none Vander Weele
Executive
on behalf No 4 1 - Nil
in an ethical manner creates trust with the public and of the directors on the Board of the Company have DIN: 02545813 of Creation
ultimately create shareholders’ value for the Company. The been debarred or disqualified from being appointed or Investments
Company, at the same time, expects acts of honesty and continuing as directors of companies by the Board/ Ministry 1. 
Computer Age Manage-
integrity from its Board of Directors and employees. of Corporate Affairs or any such statutory authority. The Nominee ment Service Limited –
said certificate is enclosed with this section. Mr. Narendra Director on Nominee Director
The Company believes that Corporate Governance is a tool Non-
Ostawal behalf of Honey No 4 3 -
Executive 2. Home First Finance Compa-
to generate long term wealth and create values for all its DIN: 06530414 Rose Investment
Ltd ny India Limited - Nominee
Director
*The membership/chairmanship of Audit Committee & Stakeholders Relationship Committee in listed entity including company is
being considered.
**On September 22, 2021, subsequent to resignation of Mr. Shobinder Duggal, Independent Director of the Company,
Mr. Pankaj Vaish was appointed as an Independent Director.

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INTER-SE RELATIONSHIP AMONG DIRECTORS The Composition and attendance is as follows:
There are no inter-se relationships between the Board of Directors of the Company and none of the Non-Executive
Directors holds any equity shares or convertible instruments of the Company during the financial year ended Number of meetings during the financial
March 31, 2022. Name of the Director Category year ended March 31, 2022
Held during tenure Attended
KEY QUALIFICATION, EXPERTISE AND ATTRIBUTES OF BOARD Mr. Devesh Sachdev Managing Director & CEO 10 10
The Executive, Non-Executive and Independent Directors are eminent professionals, drawn from amongst persons Ms. Ratna Dharashree Vishwanathan Independent Director 10 9
with expertise in business, finance, law, marketing and other key functional areas and play a critical role in enhancing Ms. Namrata Kaul Independent Director 10 10
balance to the Board processes besides providing the Board with valuable inputs. The Board represents an optimal mix
of professionalism, knowledge and experience. The skills/ expertise / competence of Board of directors identified by the *Mr. Pankaj Vaish Independent Director 5 5
Board as required in the context of business of the Company are given below: Mr. Kenneth Dan Vander Weele Nominee Director 10 10
Mr. Narendra Ostawal Nominee Director 10 10
Mr. Kenneth Ms. Ratna
Mr. Devesh Mr. Narendra Ms. Namrata Mr. Panjak **Mr. Shobinder Duggal Independent Director 4 4
Skill and Expertise Dan Vander Dharashree
Sachdev Ostawal Kaul Vaish *Appointed w.e.f. September 22, 2021
Weele Vishwanathan
**Resigned w.e.f. September 22, 2021.
Banking Operations √ √ √ √
Audit & Financial DETAILED REASONS FOR RESIGNATION OF Committee. All decisions and recommendations of the
√ √ √ √ √ √
Statements INDEPENDENT DIRECTORS Committees are placed before the Board for information or
Financing √ √ √ √ √ Mr. Shobinder Duggal, Independent Director of the approval. During the financial year, the Board has accepted
Company was also an Independent Director in SBI Life the recommendations of Committees on matters where
Investment √ √ √ √
Insurance Company, due to which the Company was facing such a recommendation is mandatorily required. There
Risk Management √ √ √ have been no instances where such recommendations
the complexities in sourcing credit lines from SBI and other
Entrepreneurship √ √ √ lenders. Therefore, considering the aforesaid circumstance have not been considered.
Micro-Finance √ √ √ √ during the FY’ 22, Mr. Duggal, has resigned from the Board
The Company Secretary acts as a Secretary to all the
Management √ √ √ √ √ √ w.e.f. September 22, 2021 and apart from the stated reason
Committees of the Board. Detailed terms of reference,
there is no other material reason for his resignation.
Information composition, meetings and other information of each of
√ √ √ √ the Committees of the Board are detailed herein below:
Technology
FAMILIARIZATION PROGRAMME
Human Resource
√ √ √ With a view to familiarize the Independent Directors as 1. AUDIT COMMITTEE
Development
required under the Listing Regulations, the Company
The Audit Committee oversees the financial reporting
has held familiarization programme for the Independent
DECLARATION BY INDEPENDENT DIRETORS functioning. The Board provides and evaluates the process and reviews, with the Management, the financial
Directors.
Company’s strategic direction, management policies and statements to ensure that the same are correct, credible
During the year under review, all Independent Directors
their effectiveness, and ensures that shareholders’ long- The details of familiarization program are available on and also to meet the statutory provisions of the NBFC
have confirmed and submitted declaration to the effect
term interests are being served. The Company’s internal the Company’s website and can be accessed at www. Regulations and the Act. The Audit Committee also reviews
that they meet the criteria of independence as laid down
guidelines for Board / Committee meetings facilitate [Link] reports of the Statutory Auditors, the Internal Auditors and
under the Act and Listing Regulations and the same was
decision-making process at its meetings in an informed adequacy of the internal control system.
taken on records after undertaking due assessment of the
veracity. and efficient manner. COMMITTEES OF BOARD The Composition of the Audit Committee is in terms of
The Company, as on March 31, 2022 had Ten committees; Listing Regulations, the majority of the members of the
In the opinion of the Board, the Independent Directors During the Financial Year 2021-22, the board met 10 (Ten)
Audit Committee, Nomination and Remuneration Committee are Independent Directors and all the members
fulfill the conditions specified in the Regulations and are times i.e. on April 15, 2021, May 26, 2021, July 25, 2021,
Committee, Corporate Social Responsibility Committee, of the Audit Committee have the required qualification
Independent of the Management. August 1, 2021, August 6, 2021, September 22, 2021,
Asset Liability Management Committee, Board Risk & expertise for appointment on the Committee and
October 5, 2021, October 27, 2021, February 14, 2022 and
Management Committee, Working Committee, Debenture possess requisite knowledge of accounting and financial
BOARD & ITS COMMITTEE MEETINGS March 30, 2022. The intervening gap between the two
Committee, Information Technology Strategy Committee, management.
board meetings was in compliance of the provisions of
The Board of Directors is the apex body constituted Stakeholders Relationship Committee & IPO Committee.
the Act.
by shareholders for overseeing the Company’s overall Composition and Attendance:
Our Board has constituted sub-committees to focus
on specific areas and make informed decisions within During the financial year ended March 31, 2022, the
the authority delegated to each of the Committees. Committee met 6 times, i.e. on May 26, 2021, August 1,
Each Committee of the Board is guided by its Charter, 2021, October 5, 2021, October 27, 2021, February 14, 2022
which defines the scope, powers and composition of the and March 30, 2022.

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The composition & attendance are as follows - 15. reviewing the findings of any internal investigations 2. 
statement of significant related party transactions
by the internal auditors into matters where there is (as defined by the audit committee), submitted by
Number of meetings during the financial suspected fraud or irregularity or a failure of internal management;
Name of the Member and Designation Category year ended March 31, 2022 control systems of a material nature and reporting the
matter to the board; 3. 
management letters / letters of internal control
Held during tenure Attended
weaknesses issued by the statutory auditors;
*Ms. Namrata Kaul (Chairperson) Independent Director 6 6 16. 
discussion with statutory auditors before the audit
Mr. Narendra Ostawal Nominee Director 6 6 commences, about the nature and scope of audit as 4. 
internal audit reports relating to internal control
well as post-audit discussion to ascertain any area of weaknesses; and
**Mr. Pankaj Vaish Independent Director 4 4
concern; 5. the appointment, removal and terms of remuneration
***Mr. Shobinder Duggal (Chairman) Independent Director 1 1
* appointed as Chairperson of the Committee w.e.f. September 22, 2021 17. to look into the reasons for substantial defaults in of the chief internal auditor shall be subject to review
**appointed as member of the Committee w.e.f. September 22, 2021. the payment to the depositors, debenture holders, by the audit committee.
***ceased to be the member and Chairman of the Committee upon resignation from the Board w.e.f. September 22, 2021. shareholders (in case of non-payment of declared 6. statement of deviations:
dividends) and creditors;
Terms of Reference of the Audit Committee: 5. 
reviewing, with the management, the quarterly
financial statements before submission to the board (a) quarterly statement of deviation(s) including report
The term of reference of the Audit Committee is given 18. 
to review the functioning of the whistle blower
for approval; of monitoring agency, if applicable, submitted to
hereunder: mechanism; stock exchange(s) in terms of Regulation 32(1); and
The role of the Audit Committee includes the following: 6. 
reviewing, the statement of uses / application of 19. 
approval of appointment of chief financial officer
funds raised through an issue (public issue, rights (b) annual statement of funds utilized for purposes
after assessing the qualifications, experience and other than those stated in the offer document/
1. oversight of the Company’s financial reporting process issue, preferential issue, etc.), the statement of funds background, etc. of the candidate;
and the disclosure of its financial information to ensure utilized for purposes other than those stated in the prospectus/notice in terms of Regulation 32(7).
that the financial statement is correct, sufficient and offer document / prospectus / notice and the report 20. carrying out any other function as is mentioned in the The powers of the Audit Committee include the following:
credible; submitted by the monitoring agency monitoring the terms of reference of the audit committee in term of
utilisation of proceeds of a public or rights issue, and the applicable laws; and 1. to investigate any activity within its terms of reference;
2. recommendation for appointment, remuneration and making appropriate recommendations to the board to
terms of appointment of auditors of the Company; take up steps in this matter; 21. reviewing the utilization of loans and/ or advances 2. 
to seek information from any employee of the
from/investment by the holding company in the Company;
3. approval of payment to statutory auditors for any other 7. reviewing and monitoring the auditor’s independence subsidiary (if applicable) exceeding rupees 100 crore
services rendered by the statutory auditors; and performance, and effectiveness of audit process; or 10% of the asset size of the subsidiary, whichever is 3. to obtain outside legal or other professional advice;
lower including existing loans / advances / investments and
4. reviewing, with the management, the annual financial 8. 
approval or any subsequent modification of
statements and auditor’s report thereon before existing as on the date of coming into force of this
transactions of the Company with related parties; 4. 
to secure attendance of outsiders with relevant
submission to the board for approval, with particular provision.
expertise, if it considers necessary.
reference to: 9. scrutiny of inter-corporate loans and investments; 22. 
Consider and comment on rationale, cost-benefits
Besides, the Audit Committee shall oversee the vigil
(a) matters required to be included in the director’s and impact of schemes involving merger, demerger,
10. valuation of undertakings or assets of the Company, mechanism. The vigil mechanism shall provide for adequate
responsibility statement to be included in the amalgamation etc., on the listed entity and its
wherever it is necessary; safeguard against victimization of employees and directors
board’s report in terms of clause (c) of sub-section shareholder.
who avail the vigil mechanism.
(3) of Section 134 of the Companies Act, 2013; 11. 
evaluation of internal financial controls and risk
23. carrying out any other function as is mentioned in the
management systems; In addition to the above the Audit Committee also put
(b) changes, if any, in accounting policies and practices terms of reference of the Audit Committee in term of
various suggestions to the Board on review of policy and
and reasons for the same; 12. 
reviewing, with the management, performance of the applicable laws.
how to further strengthen the process in future.
statutory and internal auditors, adequacy of the
(c) major accounting entries involving estimates based Further, the Audit Committee shall mandatorily review the
internal control systems;
on the exercise of judgment by management; following information: 2. CORPORATE SOCIAL RESPONSIBILITY (CSR)
13. 
reviewing the adequacy of internal audit function, COMMITTEE
(d) 
significant adjustments made in the financial 1. 
management discussion and analysis of financial
if any, including the structure of the internal audit
statements arising out of audit findings; condition and results of operations; Composition and Attendance:
department, staffing and seniority of the official
(e) 
compliance with listing and other legal heading the department, reporting structure coverage During the financial year ended March 31, 2022, the
requirements relating to financial statements; and frequency of internal audit; Committee met 4 times, i.e. on May 26 2021, October 5,
2021, October 27, 2021 and February 14, 2022.
(f ) disclosure of any related party transactions; and 14. 
discussion with internal auditors of any significant
findings and follow up there on;
(g) modified opinion(s) in the draft audit report;

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The composition & attendance are as follows – motivate directors of the quality required to run 7. 
Recommending to the board, all remuneration, in
our Company successfully; whatever form, payable to senior management;
Number of meetings during the financial
Name of the Member and Designation Category year ended March 31, 2022 b) 
relationship of remuneration to performance 8. Administering, monitoring and formulating detailed
is clear and meets appropriate performance terms and conditions of the Employees Stock Option
Held during tenure Attended
benchmarks; and Scheme of the Company;
Ms. Ratna Dharashree Vishwanathan
Independent Director 4 3 c) 
remuneration to directors, key managerial 9. Framing suitable policies and systems to ensure that
(Chairperson)
Mr. Devesh Sachdev Managing Director & CEO 4 4 personnel and senior management involves a there is no violation, as amended from time to time, of
balance between fixed and incentive pay reflecting any securities laws or any other applicable laws in India
*Mr. Pankaj Vaish Independent Director 3 3 short and long term performance objectives or overseas, including:
**Mr. Shobinder Duggal Independent Director NA NA appropriate to the working of the Company and its
*appointed as member of the Committee w.e.f. September 22, 2021. goals; a) 
The Securities and Exchange Board of India
** ceased to be the member of the Committee upon resignation from the Board w.e.f. September 22, 2021. (Prohibition of Insider Trading) Regulations, 2015,
2. For every appointment of an independent director, as amended; and
Terms of Reference (c) To monitor the Corporate Social Responsibility Policy the Nomination and Remuneration Committee
shall evaluate the balance of skills, knowledge and b) 
The Securities and Exchange Board of India
The revised term of reference of the Corporate Social of the company and its implementation from time to
experience on the Board and on the basis of such (Prohibition of Fraudulent and Unfair Trade
Responsibility Committee is given hereunder: time;
evaluation, prepare a description of the role and Practices relating to the Securities Market)
(a) To formulate and recommend to the board, a Corporate (d) To do such other acts, deeds and things as may be capabilities required of an independent director. The Regulations, 2003, as amended;
Social Responsibility Policy which shall indicate required to comply with the applicable laws; and; person recommended to the Board for appointment 10. 
Perform such functions as are required to be
the activities to be undertaken by the company as as an independent director shall have the capabilities performed by the Nomination and Remuneration
(e) To perform such other activities as may be delegated identified in such description.
specified in Schedule VII of the Companies Act, 2013 Committee under the SEBI (Share Based Employee
by the Board or specified/ provided under the
and make any revisions therein as and when decided Benefits) Regulations, 2014, as amended, including the
Companies Act, 2013 or by the SEBI Listing Regulations For the purpose of identifying suitable candidates, the
by the Board; following:
or statutorily prescribed under any other law or by any Nomination and Remuneration Committee may:
(b) To review and recommend the amount of expenditure other regulatory authority.
a. use the services of an external agency, if required; y Formulating detailed terms and conditions of
to be incurred on the activities referred to in (a); the plan in accordance with SEBI (Share Based
b. 
consider candidates from a wide range of Employee Benefits) Regulations, 2014 in term of
3. NOMINATION & REMUNERATION COMMITTEE
backgrounds, having due regard to diversity; and which includes the provision as specified by the
Composition and Attendance: Board in this regard; and
c. consider the time commitments of the candidates.
During the financial year ended March 31, 2022, the Committee met 6 times, i.e. on April 15, 2021, May 26, 2021, August y Administration and superintendence of the
1, 2021, September 22, 2021, October 5, 2021 and February 14, 2022. 3. Formulating criteria for evaluation of performance of aforesaid plan.
independent directors and the Board of Directors;
The composition & attendance are as follows – 11. Carrying out any other function as is mandated by the
4. Devising a policy on diversity of Board of Directors; Board from time to time and / or enforced/mandated by
Number of meetings during the financial
Name of the Member and Designation Category year ended March 31, 2022 any statutory notification, amendment or modification,
5. 
Identifying persons who are qualified to become
as may be applicable;
Held during tenure Attended directors and who may be appointed in senior
Ms. Ratna Dharashree Vishwanathan management in accordance with the criteria laid 12. carrying out any other function as is mentioned in the
Independent Director 6 5 down, and recommend to the Board of directors
(Chairperson) terms of reference of the Nomination and Remuneration
their appointment and removal and shall specify the Committee in term of the applicable laws;
Ms. Namrata Kaul Independent Director 6 6 manner for effective evaluation of performance of
Mr. Narendra Ostawal Nominee Director 6 6 the Board, its committees and individual directors to 13. Performing such other functions as may be necessary
Mr. Kenneth Dan Vande Weele Nominee Director 3 3 be carried out either by the Board, by the Nomination or appropriate for the performance of its duties; and
*Ceased to be the member of the Committee w.e.f. August 6, 2021. and Remuneration Committee or by an independent
external agency and review its implementation 14. To ensure ‘fit and proper’ status of proposed/ existing
and compliance. The Company shall disclose the Directors.
Terms of Reference to the remuneration of the directors, key managerial remuneration policy and the evaluation criteria in its
The term of reference of the Nomination and Remuneration personnel and other employees. The Nomination annual report; Performance Evaluation by the Board:
Committee is given hereunder: and Remuneration Committee, while formulating the The performance evaluation criteria for the Board, its
above policy, should ensure that: 6. Extending or continuing the term of appointment of Committees & the Directors of the Company is determined
1. Formulating the criteria for determining qualifications, the independent director, on the basis of the report of by the Nomination and Remuneration Committee. An
positive attributes and independence of a director and a) 
the level and composition of remuneration be performance evaluation of independent directors; indicative list of factors on which evaluation of Independent
recommend to the Board of directors a policy, relating reasonable and sufficient to attract, retain and

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Directors is carried out includes participation by a director Director. The performance evaluation of the Independent Terms of Reference 4. To periodically review the risk management policy, at
in the board meetings, effective deployment of knowledge Directors was done by the Board excluding the Director 1. To formulate a detailed risk management policy which least once in two years, including by considering the
and experience in implementation of company’s strategy, being evaluated. The performance evaluation of the Board shall include: changing industry dynamics and evolving complexity
contribution with precise and value added inputs in Committees was done by respective Committee members.
Board Meetings to help decision making, integrity and a) 
A framework for identification of internal and 5. To keep the board of directors informed about the
maintenance of confidentiality and independence of external risks specifically faced by the listed entity, nature and content of its discussions, recommendations
4. ASSET LIABILITY MANAGEMENT COMMITTEE
judgement. in particular including financial, operational, and actions to be taken
Composition and Attendance: sectoral, sustainability (particularly, ESG related
As part of the evaluation process, the performance risks), information, cyber security risks or any other 6. To appointment, removal and terms of remuneration of
The Company has an effective Asset Liability Management the Chief Risk Officer shall be subject to review by the
evaluation of Board as a whole for the FY 2021-22 was risk as may be determined by the Committee;
Committee formed in accordance with the directions Risk Management Committee
done by the Directors of the Board. The performance framed by RBI. During the financial year ended March 31, b) 
Measures for risk mitigation including systems
evaluation of the Promoter Director, Nominee Directors 2022, the Committee met 4 times, i.e. on May 26, 2021, and processes for internal control of identified 7. To coordinate its activities with other committees, in
and Non-Independent directors was done by every other October 5, 2021, October 27, 2021 and February 14, 2022. risks; and instances where there is any overlap with activities of
such committees, as per the framework laid down
The composition & attendance are as follows – c) Business continuity plan.
8. The Committee shall have powers to seek information
Number of meetings during the financial 2. To ensure that appropriate methodology, processes
from any employee, obtain outside legal or other
Name of the Member and Designation Category year ended March 31, 2022 and systems are in place to monitor and evaluate risks
professional advice and secure attendance of outsiders
Held during tenure Attended associated with the business of the Company;
with relevant expertise, if it considers necessary.
Mr. Devesh Sachdev (Chairman) Managing Director & CEO 4 4 3. 
To monitor and oversee implementation of the
9. carrying out any other function as is mentioned in
Mr. Gaurav Maheshwari Chief Financial Officer 4 4 risk management policy, including evaluating the
the terms of reference of the Board Risk Management
adequacy of risk management systems
Committee in term of the applicable laws.
Terms of Reference y T o approve and revise the actual interest rates to be
The terms of reference of the Asset Liability Management charged from customers for different products from
time to time applying the interest rate model and also 6. INFORMATION TECHNOLOGY STRATEGY COMMITTEE
Committee include:
in line with such regulations as may be in force from During the financial year ended March 31, 2022, the Committee met 2 times, i.e. on October 5, 2021 and February 14,
y Liquidity Risk Management time to time. 2022. In compliance with RBI Master Direction - Information Technology Framework for the NBFC Sector dated June 08,
y Management of market (interest rate) risk 2017, Mr. Naveen Mangle is the Chief Technology Officer of the Company.
y Review of operational risk.
y Funding and capital planning The composition & attendance are as follows –
The Committee reviews the Asset Liability Management
y Pricing, profit planning and growth projections reports to be submitted periodically to RBI.
Number of meetings during the financial
5. BOARD RISK MANAGEMENT COMMITTEE (BRMC) Name of the Member and Designation Category year ended March 31, 2022
The company has an effective Board Risk Management Committee (BRMC) formed in accordance with Listing Regulations Held during tenure Attended
and in terms of the directions framed by RBI for monitoring the risk and to strategize action to mitigate risks associated *Ms. Pankaj Vaish (Chairman) Independent Director 2 2
with the functioning of the Company.
**Ms. Namrata Kaul Independent Director 2 2
Composition and Attendance: Mr. Devesh Sachdev Managing Director & CEO 2 2
During the financial year ended March 31, 2022, the Committee met 4 times, i.e. on May 26, 2021, October 5, 2021, October Mr. Naveen Mangle Chief Technology Officer 2 2
27, 2021 and February 14, 2022. ***Mr. Shobinder Duggal Independent Director - -
The composition & attendance are as follows – *appointed as member and Chairman of the Committee w.e.f. September 22, 2021.
**ceased to be the Chairperson of the Committee w.e.f. September 22, 2021.
Number of meetings during the financial *** ceased to be the member of the Committee upon resignation from the Board w.e.f. September 22, 2021.
Name of the Member and Designation Category year ended March 31, 2022
Terms of reference
Held during tenure Attended
The Committee is constituted to carry out review and amend IT strategies in line with the corporate strategies, board
Ms. Namrata Kaul (Chairperson) Independent Director 3 3
policy reviews, cyber security arrangements and other matters related to IT Governance.
Mr. Devesh Sachdev Managing Director & CEO 4 4
Mr. Narendra Ostawal Nominee Director 4 4
Mr. Sanjay Choudhary Chief Risk Officer 3 3
*Mr. Satish Mani VP – Risk & Audit 1 1
*ceased to be the member of the Committee w.e.f. May 26, 2021.

074 FUSION MICRO FINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 075
7. STAKEHOLDER RELATIONSHIP COMMITTEE 2. Resolving the grievances of the security holders of the The details of Sitting Fees payable to Non - Executive Independent Directors for attending the meeting of the Board &
In terms of the Listing Regulations, the Company has Company including complaints related to transfer/ relevant Committees during the Financial Year 2021-22 are as under:
constituted the “Stakeholder Relationship Committee” with transmission of shares, non-receipt of annual report,
the following members: non-receipt of declared dividends, issue of new/ Sitting Fees
duplicate certificates, general meetings, etc; Name of Director Designation
Board Meeting & Committee
1. 
Ms. Ratna Dharashree Vishwanathan, Independent
Director - Chairperson 3. 
Review of measures taken for effective exercise of Ms. Namrata Kaul Independent Director H 14,75,000
voting rights by shareholders; Ms. Ratna Dharashree Vishwanathan Independent Director H 12,75,000
2. 
Mr. Devesh Sachdev, Managing Director & CEO -
Member 4. Review of adherence to the service standards adopted *Mr. Pankaj Vaish Independent Director H 7,50,000
3. Ms. Namrata Kaul, Independent Director – Member by the Company in respect of various services being **Mr. Shobinder Duggal Independent Director H 4,25,000
rendered by the Registrar & Share Transfer Agent; and
During the FY’22, the Committee met once on February 14, Total H 39,25,000
2022 and all the members attended the meeting. 5. Review of the various measures and initiatives taken by *appointed w.e.f. September 22, 2021.
the Company for reducing the quantum of unclaimed **resigned w.e.f. September 22, 2021
Mr. Deepak Madaan, Company Secretary was designated dividends and ensuring timely receipt of dividend
as Compliance Officer of the Company. During the period warrants/annual reports/statutory notices by the There were no other pecuniary relationships or transactions of the Non-Executive Directors and Independent Directors
under review, the Company received no shareholders’ shareholders of the Company. vis-à-vis the Company. As on March 31, 2022 none of the director was entitled for Employees Stock Option (ESOPs) of the
complaint and as on the March 31, 2022 no shareholder Company and during the financial year under the review no ESOPs were granted to any director of the Company.
complaint is remained unresolved/pending. 6. carrying out any other function as is mentioned in the
terms of reference of the Stakeholders Relationship GENERAL BODY MEETINGS
The term of reference of the Committee is hereunder :
Committee in term of the applicable laws.
1. Considering and looking into various aspects of interest ANNUAL GENERAL MEETING
of shareholders, debenture holders and other security The details of the Annual General Meetings (AGM) of the shareholders held during the previous 3 financial years are given
holders; below:
REMUNERATION OF DIRECTORS
AGM for No. of Special
The remuneration of Directors is fixed keeping in view the overall limit laid down as per the qualification and experience Date Time Venue
Financial Year Resolutions passed
of the appointee and overall financial performance of the Company. The remuneration of Executive Directors of the
Company is being paid as approved by the Board of Directors of the Company. H-1, C-Block, Community Centre, Naraina
2020-21 16.06.2021 11:00 A.M 2
Vihar, New Delhi – 110028
a. Executive Directors H-1, C-Block, Community Centre, Naraina
2019-20 28.07.2020 11:00 A.M 3
Details of the remuneration paid to Executive Directors in the Financial Year 2021-22 ad other disclosures (amount in H) Vihar, New Delhi – 110028
Name of Director Designation Gross Salary Bonus* Perquisites Others Total H-1, C-Block, Community Centre, Naraina
2018-19 29.06.2019 11:00 A.M 3
Vihar, New Delhi – 110028
Mr. Devesh Sachdev MD & CEO 2,01,94,237 1,70,00,000 3,02,807 26,400 3,75,23,444
*Bonus is pertaining to the FY 20-21, paid in FY 21-22 Extra Ordinary General Meetings
Mr. Devesh Sachdev, Managing Director and CEO was is provided on the basis of various parameters linked to The details of Extra Ordinary General Meetings (EGM) of the shareholders held during the last 3 financial years are given
appointed for a period of 5 years commencing from performance set by the Board in advances. below:
December 3, 2018. The Company may terminate his services
after serving 2 months notice or salary in lieu thereof. In any b. Non-Executive Directors No. of Special
Year Date Time Location
other circumstances, he is not entitled for any severance fees. Resolutions Passed
The Independent Directors are not paid any remuneration
other than the sitting fee for attending meetings of the Plot No. 86, Institutional Sector 32,
The Company’s remuneration strategy is market driven and 26.04.2021 11:00 A.M 2
Board and the committees thereof as approved by the Gurugram - 122001
aims at attracting and retaining high caliber talent. The
strategy is in consonance with existing industry practice Board. The sitting fees as determined by the Board for Plot No. 86, Institutional Sector 32,
2021 – 22 27.07.2021 11:00 A.M 4
and is directed towards rewarding performance, based on attending meetings of the Board, Audit Committee, Gurugram - 122001
review of achievements on periodical basis Nomination and Remuneration Committee, Board Risk Plot No. 86, Institutional Sector 32,
Management Committee and CSR committee are within 18.12.2021 11:00 A.M 1
Gurugram - 122001
Apart from the bonus, all the components of remuneration the limits prescribed under the Act. No sitting fee were paid
of Mr. Devesh Sachdev, MD & CEO are fixed. The bonus to the Nominees Directors. All the proposed resolutions were passed by the shareholders as set out in their respective notices.
During the Financial year, no resolution was passed through Postal Ballot.

076 FUSION MICRO FINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 077
DEBENTURE HOLDER DETAILS: Name of the NCD Address No. of NCD
The details regarding the Debenture Holders as on March 31, 2022 are given as under: Union Bank of India 3 Floor, Treasury office, 239, Union Bank Central Office, Vidhan
rd
200
Bhavan Marg, Nariman Point, Mumbai, Maharashtra 400021
Name of the NCD Address No. of NCD
Tata Capital Financial Services 12th Floor Tower A Peninsula Business Park, Senapati Bapat 30
AU Small Finance Bank Limited Corporate Office 5 Floor, E Wing Kanakia Zillion Junction of Cst
th
300 Limited Marg,Lower Parel, Mumbai- 400013
And Lbs Road Kurla West, Mumbai
Vivriti Capital Private Limited 2nd floor, Prestige Polygon 471, Anna Salai, Mount Road, 250
Blue Orchard (Microfinance Fund) 11-13, Boulevard, de la foire, L-1528, Luxembourg 500 Nandanam, Chennai, Tamil Nadu 600035
PETTELAAR liNachtwachtlaan 20 – 6th Floor, 1058 EA, Amsterdam The 526 Northern Arc Money Market Alpha 10th Floor, IIT Madras Research Park, Kanagam Rd, Kanagam, 450
EFFECTENBEWAARBEDRIJF N.V. Netherlands Trust Tharamani, Chennai, Tamil Nadu 600113
(ASN Microcredit Fund TJ)
CDC Group PLC CDC Group PLC, 123 Victoria Street, London – SW1E6DE 600
Blue Orchard (JAPAN ASEAN 11-13, Boulevard, de la foire, L-1528, Luxembourg 500
WOMEN EMPOWERMENT FUND)
FULL REDEMPTION OF NON-CONVERTIBLE DEBENTURES (NCDS) DURING THE FY 2021-22
UTI International Wealth Creator 4 4th Floor, 19 Bank Street, Cybercity, Ebene 72201, Mauritius 350
During the financial year 2021-22 following Non-convertible Debentures were redeemed:
(responsAbility)
UTI International Wealth Creator 4 4th Floor, 19 Bank Street, Cybercity, Ebene 72201, Mauritius 700 S. Date of Amount Date of Detail of
(responsAbility) Particulars No. of NCD
No. Allotment (in million) redemption redemption
UTI International Wealth Creator 4 4th Floor, 19 Bank Street, Cybercity, Ebene 72201, Mauritius 750 1 Northern Arc Capital Limited 05-Aug-20 150 150 6-Aug-21 Fully redeemed
(responsAblity) Money Market Alpha Fund(UN)
UTI International Wealth Creator 4 4th Floor, 19 Bank Street, Cybercity, Ebene 72201, Mauritius 550 2 Punjab National Bank 12-Aug-20 250 250 12-Feb-22 Fully redeemed
(responsAbility)
3 Union Bank of India 12-Aug-20 250 250 12-Feb-22 Fully redeemed
Triodos Microfinance Fund 11-13 boulevard de la foire, L-1528 Luxemburg, Grand Duchy of 315
4 Blue Orchard (Microfinane 31-Aug-16 470 470 31-Aug-21 Fully redeemed
Luxembourg
Fund)
Triodos Fair Share Fund 11-13 boulevard de la foire, L-1528 Luxemburg, Grand Duchy of 315
5 CVSO Incofin 27-Sep-18 250 250 27-Sep-21 Fully redeemed
Luxembourg
6 AAV Saral-Symboitic IV 22-Oct-18 350 350 22-Oct-21 Fully redeemed
IFMR Fimpact Long term Credit 10th Floor, IIT M Research Park, 1, Kanagam Village, Taramani, 350
Fund Chennai, India-600 113 7 IFMR Fimpact Income Builder 06-Mar-18 250 250 2-Sep-21 Fully redeemed
Fund MLD
IFMR Fimpact Medium Term 10th Floor, IIT M Research Park, 1, Kanagam Village, Taramani, 150
Opportunity Fund Chennai, India-600 113 Total 1970 1970
Northern Arc Capital Limited 10th Floor, Phase 1, IIT Madras Research Park, Kanagam Village, 300
Taramani, Chennai – 600113 DEBENTURE TRUSTEES DETAILS:
Bank of Baroda SITB, 4&5 Floor, C-34, G Block, BKC, Bandra East,
th
500 The Debenture Trustees are as follows:
Mumbai-400051
DEBENTURE TRUSTEE REGISTERED OFFICE ADDRESS
Bank of India Bank of India, Treasury Branch, Star House 1, C-5, G- Block, 350
Bandra (East), Pin- 400051 CATALYST TRUSTEESHIP LIMITED GDA House, First Floor, Plot No. 85 S. No. 94 & 95, Bhusari Colony
(Formerly known as GDA) (Right), Kothrud Pune Maharashtra 411038 IN
DCB Bank limited Peninsula Business Park, Tower A, 6th Floor, Senapati Bapat Marg, 100
Lower Parel, Mumbai – 400013 IL & FS Financial Centre, Plot No C22, G Block, Bandra Kurla
VISTRA ITCL (INDIA) LIMITED
Complex, Bandra East, Mumbai, Maharashtra-400051
Indian Bank Indian Bank treasury branch, 2nd floor Allahabad Bank building, 200
Fort, Mumbai, 400001 4C & D, Siddhivinayak Chambers, Gandhi Nagar, Opp. MIG Cricket
BEACON TRUSTEESHIP LIMITED
Club, Bandra (East), Mumbai 400 051
Indian Overseas Bank Indian Overseas Bank, 4th Floor, Annex Building, Treasury 250
Department, 763 Anna Salai, Chennai 600002, Tamil Nadu
MEANS OF COMMUNICATION:
Punjab National Bank Bank, Treasury Division, Pragati tower, C-9, G Block, Bandra Kurla 250
Complex, Mumbai 400051 a. The financial results during the year were published in the national English Newspapers having circulation substantially
in whole of India and are also available on the website of the company i.e. [Link].
State Bank of India State bank of India, Securities Services Branch, 2nd floor SBI Main 250
Branch Building, Samachar Marg, Fort, Mumbai 400001 b. During the financial year 2021-22, the Company published its financial results in the following newspapers:
State Bank of India State bank of India, Securities Services Branch, 2 floor SBI Main
nd
500
Branch Building, Samachar Marg, Fort, Mumbai 400001

078 FUSION MICRO FINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 079
Financial Results Newspapers Date of publication CREDIT RATING of Conduct of your Company serves as a guide for
The details with respect to Credit Ratings obtained by the daily business interactions, reflecting your Company’s
Audited Results for the Financial Year ended March 31, 2021 Mint (English) May 28, 2021
Company are given in the Directors’ Report. standard for appropriate behavior and living Corporate
Audited Results for the Quarter and Half Year ended September Values. The Code of Conduct applies to all Fusion’s
Mint (English) October 28, 2021
30, 2021 People, including Directors, Officers, and all employees
OTHER DISCLOSURES
Un -Audited Results for the Quarter and Nine months ended of the Company.
Mint (English) February 15, 2022 a. 
The Company has not entered any transaction of
December 31, 2021.
material nature with the Directors or the management, d. The Company has fully complied with all applicable
relatives of Directors during the year under review that mandatory requirements of Listing Regulations.
REGULAR UPDATES: have potential conflict with the interest of the Company.
The Company sends Quarterly newsletter to the Board Members, stakeholders and keeps them updated about the Statements in summary form of the transactions e. 
During the year, the Company does not have any
Company. All other events and happenings of importance to the sector are reported to the Board on a continuous basis. with related parties both under Companies Act, 2013 exposure to Commodity Price risk and commodity
and under Indian Accounting Standards – 24, if any, hedging activities.
GENERAL SHAREHOLDER INFORMATION: are placed periodically before the Audit Committee.
f. During the FY’22, the total fee of H17,843,200 is being
Further, the details of the related party transactions of
Annual General Meeting: Date: August 5, 2022 paid to the Statutory Auditors of the Company for
the Company during the year ended March 31, 2022
Statutory Audit, Tax Audit and other professional
Time: 11:00 A.M. are given in Notes on Accounts forming part of Annual
services.
Venue: H-1, C Block, Community Centre, Naraina Vihar, New Delhi-110028 Report.
g. As per requirements of Sexual Harassment of Women
Financial year: April to March All related party transactions entered are on arms’
at Workplace (Prevention, Prohibition & Redressal)
length basis and in the ordinary course of business and
Act, 2013, your Company has a policy and framework
Listed Debenture: BSE Limited are intended to further the interest of the Company.
for employees to report sexual harassment cases
Address: Phiroze Jeejeebhoy Towers Dalal Street Mumbai- 400001 The related party policy of the company is
at workplace and our process ensures complete
disclosed on the website of the company i.e.
Listing Fees: The listing fees payable to the BSE Limited in relation to listed debentures of the Company for the financial anonymity and confidentiality of information.
[Link].
year 2022-23 has been paid in full. Adequate workshops and awareness programmes
b. There was no such non-compliance by the Company against sexual harassment are conducted across the
Dividend payment date: No dividend was declared for the Financial year 2021 – 22. on any matter related to capital markets, during the last organization.
three years.

Further, the Company have properly constituted
REGISTRAR AND SHARE TRANSFER AGENT DETAILS: SHARE TRANSFER SYSTEM, DEMATERIALIZATION OF Internal Complaint Committee to address the sexual
c. 
The Company has a Whistle Blower Policy duly
In pursuance to Regulation 7(3) of the SEBI (Listing SHARES AND LIQUIDITY: harassment cases. However, no complaints were
approved by the Board, which has been circulated to all
Obligations and Disclosure Requirements) Regulations, All the equity shares of the Company are held in demat the employees of the Company and also placed on the received during the period under review.
2015 (“Listing Regulations”), all activities in relation form. website of the Company i.e. [Link].
to electronic facility with respect to Non-convertible h. The Company being high value debt listed entity, is in
com. Further, it is affirmed that no personnel have
debentures (NCDs) are maintained by our Registrar & compliance with corporate governance requirement
OUTSTANDING GDRS/ ADRS/ WARRANTS OR been denied access to the Audit Committee. The
Transfer Agent (RTA) i.e. Link Intime India Private limited specified in Regulation 17 to 27 of the Listing
CONVERTIBLE INSTRUMENTS: Company has an effective Vigil Mechanism system
having SEBI Registration No. INR000004058. Further, the Regulations.
There are no outstanding GDRs/ ADRs/ Warrants or any which is embedded in its Code of Conduct. The Code
Company has also availed electronic facility from the RTA
Convertible Instruments as on 31st March, 2022, which are
with respect to dematerialization of its equity shares.
likely to have an impact on the equity of the Company.
DISTRIBUTION OF SHAREHOLDING
For the NCDs held in electronic form, the transfers are
processed by National Securities Depository Limited COMMODITY PRICE RISK OR FOREIGN EXCHANGE RISK The Shareholding pattern of the Company as on March 31, 2022 –
(NSDL) and Central Depository Services (India) Limited AND HEDGING ACTIVITIES:
(CDSL) through their respective Depository Participants. Shareholder Group Shares Amount Stake %
The Company follows prudent risk management policies.
Details of RTA are as under: There is no direct hedge able commodity risk that the Promoters and Promoter Group 72,161,216 721,612,160 85.57%
Company has on any of its products & services. Investors 10,145,466 101,454,660 12.03%
Link Intime India Private Limited Other Individuals 39,468 394,680 0.05%
C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup PLANT LOCATION: ESOP Trust & Employees 1,980,238 19,802,380 2.35%
(West), Mumbai - 400 078.
Being a financial services company, the Company has no Total 84,326,388 843,263,880 100.00%
Tel. No.: +91 22 2594 6970; Fax No.: +91 22 2594 6969
plant locations.
E-mail: [Link]@[Link]
Website: [Link]

080 FUSION MICRO FINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 081
 c e r t i f i c a t e o f NON-DISQUALIFICATION OF DIRECTORS
ESOP Trust &
Employees
Other 2.35%
Promoters and Promoter Group
Individuals
85.57%
0.05%

To,
Investors
The Members of
Investors Fusion Micro Finance Limited
12.03% Promoters and Promoter Group
Regd. Office: H-1, C Block, Community Centre,
ESOP Trust & Employees Naraina Vihar, New Delhi New Delhi DL 110028 IN
Other Individuals
We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of FUSION
MICRO FINANCE LIMITED (CIN U65100DL1994PLC061287) having registered office at H-1, C Block, Community Centre,
Naraina Vihar, New Delhi New Delhi DL 110028 IN, (hereinafter referred to as ‘the Company’), produced before us by the
Company for the purpose of issuing this Certificate.

In our opinion and to the best of our information and according to the verifications (including Directors Identification
Address for Correspondence Registered Office: Corporate Office: Number (DIN) status at the portal [Link]) as considered necessary and explanations furnished to us by the
Mr. Deepak Madaan H-1, C Block, Community Centre, Naraina Plot No. 86, Institutional Sector – 32, Company & its directors / officers, we hereby certify that none of the Directors on the Board of the Company as stated
Company Secretary & Compliance officer Vihar, New Delhi-110028 Gurugram, Haryana – 122001 below for the Financial Year ending on 31st March 2022 have been debarred or disqualified from being appointed or
Fusion Micro Finance Limited Tel: 011-46646600 Tel: 0124-6910500/6910600 continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs and any
Plot No. 86, Institutional Sector – 32, such other statutory authority.
Gurugram, Haryana – 122001
Tel: 0124-6910500/6910600 Sr. No. Name of Director DIN Date of Appointment in Company
Website: [Link] 1. Mr. Devesh Sachdev 02547111 05/11/2009
2. Mr. Pankaj Vaish 00367424 22/09/2021
CEO Certification on Code of Conduct:
3. Mr. Kenneth Dan Vander Weele 02545813 12/08/2016
I, Devesh Sachdev, Managing Director and CEO of Fusion Micro Finance Limited, hereby certify that all the Board Members
and Senior Managerial Personnel have affirmed compliance with the Code of Conduct of the Company laid down by the 4. Mr. Narendra Ostawal 06530414 05/12/2018
Board of Directors, for the year ended March 31, 2022. 5. [Link] Dharashree Vishwanathan 07278291 24/05/2018
6. Ms. Namrata Kaul 00994532 18/02/2020
For and on behalf of the Board of Directors
Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the
management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate
Sd/- is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the
Place: Gurugram Devesh Sachdev management has conducted the affairs of the Company.
Date: May 6, 2022 MD & CEO
For Harish Popli & Associates
Company Secretaries

Harish Kumar
Proprietor
ACS: 24843, COP: 22475

Place: New Delhi

Date: May 6, 2022

UDIN: A024843D000295047

082 FUSION MICRO FINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 083
 c e r t i f i c a t e o N CORPORATE GOVERNANCE ceo & cfo c e r t i f i c a t e
[As per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015]
The Board of Directors
Fusion Micro Finance Limited
To,
The Members of This is to certify that:
Fusion Micro Finance Limited
Regd. Office: H-1, C Block, Community Centre, 1. We have reviewed Financial Statements and the Cash Flow Statement for the Financial Year ended 31st March 2022
Naraina Vihar, New Delhi New Delhi DL 110028 IN and that to the best of our knowledge and belief:

We have examined the compliance of conditions of Corporate Governance by Fusion Micro Finance Limited for the a. these statements do not contain any materially untrue statement or omit any material fact or contain statements
year ended 31st March, 2022 as per regulations 17 to 27 of Schedule V of Securities and Exchange Board of India (Listing that might be misleading.
Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”).
b. these statements together present a true and fair view of the Company’s affairs and are in compliance with
The compliance of conditions of corporate governance is the responsibility of the management. Our examination was existing Accounting Standards, applicable laws and regulations.
limited to procedure and implementation thereof, adopted by the Company for ensuring the compliance of the conditions
of corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. 2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year
which are fraudulent or illegal or violate Company’s Code of Conduct.
In our opinion and to the best of our information, based on the records, documents, books, and other information
furnished and according to the explanations given to us, we certify that the company has complied with the conditions of 3. We accept responsibility for establishing and maintaining internal controls for Financial Reporting and we have
Corporate Governance as per regulations 17 to 27 of Listing Regulations as applicable. evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and there
was no deficiencies in the design or operation of such internal controls, of which we are aware and the steps were
We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency required to be taken to rectify these deficiencies.
or effectiveness with which the management has conducted the affairs of the Company.
4. We have indicated to the Auditors and the Audit Committee:

a. Significant changes in internal control over financial reporting during the year;
For Harish Popli & Associates
Company Secretaries b. Significant changes in accounting policies during the year and that the same have been disclosed in the notes to
the financial statements; and

Harish Kumar c. Instances of significant fraud of which they have become aware and the involvement therein, if any, of the
Proprietor Management or an employee having a significant role in the Company’s internal control system over financial
ACS: 24843, COP: 22475 reporting.

Place: New Delhi

Date: May 6, 2022
Sd/- Sd/-
UDIN: A024843D000295003
Place: Gurugram Gaurav Maheshwari Devesh Sachdev
Date: May 6, 2022 CFO MD & CEO

084 FUSION MICRO FINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 085
 ANNEXURE 2 an Issue and was also not acting as Share Transfer f) The Payment of Wages Act, 1936;
Agent, Hence the aforesaid Regulations were
Form No. MR-3 not applicable to the Company during the Audit g) The Equal Remuneration Act, 1976;
period.
Secretarial Audit Report h) The Shops and Commercial Establishments Act,
d) 
The Securities and Exchange Board of India 1958;
[For the Financial Year ended on 31 March, 2022]
st (Prohibition of Insider Trading) Regulations, 2015; i) The Payment of Bonus Act, 1965;
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies e) The Securities and Exchange Board of India (Issue of j) The Child Labour (Prohibition & Regulation) Act,
(Appointment and Remuneration of Managerial Personnel) Rules, 2014] Capital and Disclosure Requirements) Regulations, 1986;
2009;
k) The Payment of Gratuity Act, 1972;
f ) 
The Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee l) Employment Exchanges (Compulsory Notification
To, Stock Purchase Scheme) Guidelines, 1999 and Of Vacancies) Act, 1959 and Rules made thereunder;
The Members, the Securities and Exchange Board of India (Share
Fusion Micro Finance Limited Based Employee Benefits) Regulations, 2014; m) Labour Welfare Fund Act;
Formerly: Fusion Micro Finance Private Limited
Corp Office: Plot No 86, Institutional Sector -32. g) 
The Securities and Exchange Board of India n) Indian Stamp Act, 1899;
Gurugram –HR-122001 (Delisting of Equity Shares) Regulations, 2009;
o) The Sexual Harassment of Women at Workplace
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and adherence to good h) 
The Securities and Exchange Board of India (Prevention, Prohibition and Redressal) Act 2013
corporate practices by the Fusion Micro Finance Limited (CIN No-U65100DL1994PLC061287) having its Registered office (Buyback of Securities) Regulations, 1998. read with The Sexual Harassment of Women at
at H-1, C Block Community Centre, Naraina Vihar, New Delhi-110048 and Corporate Office at Plot No 86, Institutional Workplace (Prevention, Prohibition and Redressal)
Sector -32, Gurugram (Haryana) 122001 (hereinafter called the Company). Secretarial Audit was conducted in a manner Since, the Equity Shares of the Company were not listed, Rules 2013;
that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our therefore, regulations stated above at sub-clauses (d)
to (h) of clause (v) of this Report, were not applicable We have also examined compliance with the applicable
opinion thereon.
on the Company during the audit period. clauses of the following:
Based on our verification of the books, papers, minute books, forms and returns filed and other records or registers
(vi) Other labour, environment and specific applicable Acts (i) 
Secretarial Standards issued by the Institute of
maintained by the Company and also the information provided by the Company, its officers, agents and authorized
/ Laws to the Company for which Secretarial Audit was Company Secretaries of India;
representatives during the conduct of Secretarial Audit, the explanations and clarifications given to us and the
representations made by the Management and considering the relaxations granted by the Ministry of Corporate Affairs conducted as an overview audit and was generally
(ii) 
Securities & Exchange Board of India (Listing
and Securities and Exchange Board of India warranted due to the spread of the COVID-19 pandemic, we hereby report based / relied upon the documents provided to us and
Obligations and Disclosure Requirements)
that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2022, Management Confirmation Certificate provided by the
Regulations 2015, in respect of listing of non-
complied with the statutory provisions listed hereunder and also that the Company has proper Board-Processes and Management of the Company & other audit report and
convertible debentures with BSE Ltd.
Compliance-Mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: certificates given by other professionals, the company
has complied with the following Acts / Laws applicable We have not examined the applicable financial laws,
We have examined the books, papers, minute books, forms and returns filed and other records or registers maintained by to the Company during the audit period: like direct and indirect tax laws, since the same have
the Company for the period ended on 31st March 2022, according to the provisions of: been subject to review by statutory financial audit and
a) Reserve Bank of India Act read with Non-Banking
(i) The Companies Act, 2013 (the Act) and the Rules made a) 
The Securities and Exchange Board of India other designated professionals.
Financial Company -Micro Finance Institutions
thereunder; (Substantial Acquisition of Shares and Takeovers) (Reserve Bank) Directions, 2011 and other related We report that during the period under review the
Regulations, 2011; Only Debt Securities were policies and guidelines issued by Reserve Bank of
(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) Company has complied with the provisions of the
listed on the Stock Exchanges; hence, no such India as amended till date;
and the rules made thereunder; Act, Rules, Regulations, Guidelines, Standards, etc. as
transaction was held during the financial year and
mentioned above.
accordingly the Regulations were not applicable to b) The Employees Provident Fund & Miscellaneous
(iii) The Depositories Act, 1996 and the Regulations and
the Company during the audit period. Provisions Act, 1952 & The Employees Deposit- We further report that:
Bye-laws framed there under;
Linked Insurance Scheme, 1976 and Employees
b) The Securities and Exchange Board of India (Issue Provident Fund Scheme, 1952; 1) 
The Company has complied with Companies
(iv) 
Foreign Exchange Management Act, 1999 and the
and Listing of Debt Securities) Regulations, 2008; Act 2013 in respect of constitution of the board
rules and regulations made thereunder to the extent of
c) The Contract Labour (Regulations and Abolition) with proper balance of Executive, Non-Executive
Foreign Direct Investment, Overseas Direct Investment c) 
The Securities and Exchange Board of India Act, 1970; Directors & Independent Directors. The Changes
and External Commercial Borrowings; (Registrars to an Issue and Shares Transfer Agents)
in the Composition of the Board of Directors that
Regulations, 1993, regarding the Companies Act d) Maternity Benefit Act, 1961;
(v) The following Regulations and Guidelines prescribed took place during the period under review out in
and dealing with client; The Company was not
under the Securities and Exchange Board of India Act, e) Minimum Wages Act, 1948; compliance with the provisions of the Act;
engaged in the activities relating to Registrar to
1992 (‘SEBI Act’), viz.;

086 FUSION MICRO FINANCE LIMITED

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REPORTS 087
 2) 
Adequate notice is given to all Directors to d) Board approval on 25th July 2021 for Call money four Hundred Thirty) Non-convertible and records maintained there are adequate systems and
schedule the Board Meetings atleast seven days in of – debentures of H10,00,000 (Rupees Ten processes in the Company commensurate with the size
advance and agenda and detailed notes on agenda Lakh) each during the financial year, and operations of the Company to monitor and ensure
were also sent in advance to all the Directors a. 
C109 per Equity Share on 10,99,295 partly compliance with other applicable laws, rules, regulations
subsequently, and a system exists for seeking and paid Equity Shares issued at face value of i) Partial Redemption of 1,850 (One Thousand and guidelines.
obtaining further information and clarifications H10/- each and premium of H100 each. Eight Hundred Fifty) Non-convertible
on the agenda items before the meeting and for debentures of H10,00,000 (Rupees Ten We further report that during the audit period, there were
b. 
D109 per Equity Share on 6,47,659 partly Lakh) each during the financial year to the no instances of:
meaningful participation at the meeting. In case paid Equity Shares issued at face value of extent of H56.10 Crore (Fifty-six Crore Ten
of shorter notice, the Company has complied with H10/- each and premium of H100 each. Lacs). a) Public / Preferential Issue of Shares / Sweat Equity
the applicable provisions of Section 173 of the except as stated above in point No. 4;
Companies Act, 2013 read with clause 1.3.7 of the c. 
D153.04 per Equity Share on 13,52,454 All the applicable provisions of the Companies
Secretarial Standard -1 of ICSI; partly paid Equity Shares issued at face Act, 2013 relating to above matters have b) Buy-back of Securities;
value of H10/- each and premium of been duly complied with by the Company.
3) 
Majority decision is carried through while the c) Merger / Amalgamation / Reconstruction etc. and
H144.04 each. Further Company has also paid stamp duty on
dissenting members’ views, if any, are captured and
recorded as part of the minutes; issuance of Non-convertible Debentures as per d) Foreign Technical Collaborations.
d. 
D289.48 per Equity Share on 8,43,264 partly
applicable stamp duty provisions;
paid Equity Shares issued at face value of
4) 
The Company has obtained requisite approval, H10/- each and premium of H280.48 each. 5) There was no prosecution initiated and no fines
permission, confirmation from Registrar of
Companies, NCT of Delhi & Haryana, Securities & or penalties were imposed during the year under
Considering the same, all the partly paid-
Exchange Board of India, BSE Limited, Debenture review under the Companies Act 2013, Depositories For Navneet K Arora & Co LLP
up equity shares of the Company as on
Trustee and other regulated bodies in respect of: Act and Rules, Regulations and Guidelines framed Company Secretaries
March 31, 2022 are fully paid up.
under these Acts against / on the Company, its
a) Conversion of its status from Private Limited e) Shareholders in the Extraordinary General Directors and Officers.
Company to Public Limited Company by way of CS Navneet Arora
Meeting held on 27th Day of July, 2021 has
Passing Special Resolution in its Extra-Ordinary 6) The Directors have complied with the disclosure Managing Partner
passed the resolutions relating to approval
General Meeting held on 26th April 2021 and requirements in respect of their eligibility of CS: 3214, COP: 3005
of Initial Public Offering of Equity Shares of
obtained fresh certificate of incorporation on appointment, their being independent and [ICSI Firm Unique Identification Code: P2009DE061500]
the Company, approved the Adoption of
20th July 2021consequent upon conversion compliance with the Code of Business Conduct & Place: New Delhi UDIN: F003214D000242827
Restated of Articles of Association of the
of status from Registrar of Companies NCT of Ethics for Directors and Management Personnel; Date: 29th April 2022
Company and Approval for Amendment in
Delhi & Haryana, New Delhi, Fusion Micro Finance Limited Employees We further report that based on the information received
Stock Option Plan (“ESOP 2014”/ “PLAN”)
b) Shareholders has approved in the Extraordinary
as well as Amendment in Fusion Employee
General Meeting held on 26th Day of April, 2021
Stock Option Plan 2016 (“ESOP 2016”/ [Note: This report is to be read with our letter of even date which is annexed as “Annexure-A” and forms an integral
for adoption of New Articles of Association of
“PLAN”). part of this report].
the Company & Reclassification and Increase in
the Authorized Share Capital of the Company, f ) Issue & Allotment of 450 (Four Hundred
Fifty) Rated, Listed, unsecured,
c) Shareholders in the Annual General Meeting
unsubordinated, Redeemable,
held on 16th day of June 2021 besides other
transferable, Non-Convertible Debenture
regular resolutions has also approved
of face value of H10,00,000 (Rupees Ten
resolutions relating to Increase in the
Lakh) each on 21st December 2021,
Borrowing Limit of the Company (apart from
temporary loans obtained or to be obtained g) Issue & Allotment of 250 (Two Hundred
from time to time from the Company’s Bankers Fifty) Rated, Unlisted, subordinated,
in the ordinary course of business) and Unsecured, Tier II, Redeemable,
creation of charges on the movable properties Transferrable, Non-Convertible Debenture
of the Company, both present and future in of H10,00,000 (Rupees Ten Lakh) and 30
respect of Borrowings under section 180(1) (Thirty) Unsecured, Subordinated, Tier-
(c) And 180(1) (a) of the Companies act, 2013 II, Rated, Unlisted, Taxable, Redeemable
upto H8000 Crores and also approved the Limit Non-Convertible Subordinate Debentures
of Raising of Funds through Non–Convertible of H10,00,000 (Rupees Ten Lakh) each on
Debentures upto H2000 Crores. 31st March 2022,

h) 
Redemption of 1,430 (One Thousand

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 Annexure - “A” ANNEXURE 3

To,
The Members, MANAGEMENT DISCUSSION AND ANALYSIS R e p o r t
Fusion Micro Finance Limited
Formerly: Fusion Micro Finance Private Limited
Corp Office: Plot No 86, Institutional Sector -32. ECONOMIC OVERVIEW sector, meanwhile, remained muted while the GNPA ratio
Gurugram –HR-122001 Strong economic fundamentals will likely help India avoid remained higher than pre-pandemic levels. Banks and
the long-term impacts of the ongoing conflict in Ukraine. nonbanking financial companies (NBFCs) have healthier
Our report of even date is to be read along with this letter as under: balance sheets and provisions compared to the levels seen
Right when the global economy seemed to be at the cusp of in 2018.
1) Maintenance of secretarial record is the responsibility of the Management of the Company. Our responsibility is to witnessing green shoots of recovery after leaving the worst
express an opinion on these secretarial records on our audit. of the COVID-19 pandemic behind (despite uncertainties Inflation will likely be the wild card over the next year, the
associated with subsequent waves of infection and rising rapid reopening of the economy that is currently underway
2) We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the will drive growth in contact-intensive services sectors,
global inflationary pressures), the Russia-Ukraine crisis
correctness of the contents of the Secretarial Records. The verification was done on test basis to ensure that correct which have been laggards so far. This will push prices for
escalated. Consequently, prices of crude oil and gas, food
facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable services up as well, adding to the inflation woes.
grains and several major commodities have shot up. The
basis for our opinion.
conflict has also brought in severe financial sanctions and
However, the RBI will be watchful of how the inflation
3) We have not verified the correctness and appropriateness of financial records and books of accounts of the Company. political pressure on Russia from the rest of the world It
dynamics play out—it may accordingly decide to use
is obvious that these will likely have unpredictable and
other policy instruments to keep inflation and currency
4) Wherever required, we have obtained the Management Representation about the compliance of laws, rules and undesired implications on the global financial system and
depreciation in check. The frequency and the number
regulations and happening of events etc. economy.
of hikes will also depend on how gradual the demand
5) The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the However, India’s underlying economic fundamentals recovery is and whether credit tightening is successful in
responsibility of Management. Our examination was limited to the verification of procedures on test basis. are strong and despite the short-term turbulence, the deescalating inflation.
impact on the long-term outlook will be marginal. The
6) The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or The next few months will be critical for India’s economy as
results of growth-enhancing policies and schemes (such
effectiveness with which the Management has conducted the affairs of the company. the government and the RBI work at balancing the stress
as production-linked incentives and government’s push
on inflation, currency, external accounts, and fiscal deficit.
toward self-reliance) and increased infrastructure spending
The good news is, India has endured the pandemic for over
will start kicking in from 2023, leading to a stronger
two years and has come out of it more resilient. The hope is
For Navneet K Arora & Co LLP multiplier effect on jobs and income, higher productivity,
that the current pressures on the economy too shall pass.
Company Secretaries and more efficiency—all leading to accelerated economic
growth.
Microfinance Industry – Key Takeaways (source
CS Navneet Arora Furthermore, the emphasis on manufacturing in India, Micrometer report as of March 2022)
Managing Partner various government incentives such as lower taxes, and - Portfolio outstanding of Microfinance sector at H2.85
CS: 3214, COP: 3005 rising services exports on the back of stronger digitization Lacs Cr. as of Mar 22 vs 2.59 Lacs Cr. as of Mar 21
Place: New Delhi [ICSI Firm Unique Identification Code: P2009DE061500] and technology transformation drive across the world will registering a Y-o-Y growth of 10%
Date: 29th April 2022 UDIN: F003214D000242827 aid in growth. Also, several spill over effects of geopolitical
conflicts could enhance India’s status as a preferred - Nearly 11.3% Q-o-Q growth in the Microfinance book
alternate investment destination. Global in-house centres in Q4 FY22, up from 5.3% Q-o-Q growth in the previous
and multinationals, for instance, may prefer India over quarter
Eastern European markets (especially those that border - 
As of Mar’22, while Banks lead the pack with a
Ukraine) to shift their current operations or open new portfolio share of 40%, NBFC MFIs have ended the year
facilities. On the health front, a large, vaccinated population with a share of 35% up from 31% as of Mar 21 ……
will likely help contain the impact of subsequent infections registering a 400 bps increase whereas the Banks’ share
waves, if any. has come down from 43.6% in Mar 21 to current 40%.
SFBs account for 17% share vs 15.8% as of Mar’21
On a positive note, there was a visible growth in credit
uptake in FY 2021–22, with agricultural and industrial - The sector had 11.3 Cr active loans as of Mar 22 vs 10.8
sectors and personal loans driving the uptick. Falling Cr active loans as of Mar 21 registering a 4.6% increase
gross nonperforming asset (GNPA) ratios in the industry in a covid impacted year. Total disbursements for the
sector (by 7.6% in three years) contributed to a significant sector in Mar 22 were at 2.39 Lac Cr vs 1.88 Lac Cr
rise in lending to this sector. Credit growth in the services registering a 27% increase YoY

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- Average ticket size for FY 20-21 was H38105 vs H36738 for OPPORTUNITIES AND THREATS OPERATIONAL PERFORMANCE Further, the Company has continued to focus on digital
FY 21-22 registering a marginal increase of 3.7% The Company registered a strong performance in 2021-22. transformation initiatives in enabling business process
A. Opportunities automation. The various digital solutions have helped not
From an operational perspective, the Company has taken
- PAR 30+ DPD as of Mar’22 vs Mar’21 has declined for - New Guidelines issued by RBI which expand the only in improving internal productivity but also enhanced
important strides which promise to make its profitable
NBFC MFIs & NBFCs while it has gone up for Banks and qualification criteria for a Customer to be tapped by the customer experience. While cashless disbursements have
growth sustainable.
SFBs MF sector provides potentially a wider strike zone for increased significantly, the company also implemented
all practitioners eventually facilitating sector growth. The Company has extended its branch network further digital collections using Unified Payments Interface (UPI).
Top 10 states by GLP contribute to ~ 83% of national GLP,
in the 18 states that it operates in with total number of And, the emphasis has been on continuous improvement
Tamil Nadu is now the largest state in terms of GLP followed - Integration of Comprehensive Credit Report with MF branches as of Mar 22 being 934 as against 725 as of Mar leveraging next gen technologies like Artificial Intelligence
by Bihar and West Bengal loans will greatly help in improving the overall portfolio 21. Significantly, the company also increased its customer and Robotic Process Automation to achieve digitization
quality by optimizing exposure levels and inculcating base to 27.23 Lakhs as of Mar 22 as compared to 21.5 Lakhs across varied business processes.
INDUSTRY STRUCTURE AND DEVELOPMENT greater credit discipline. as of Mar 21.
A very important development for the sector was the roll
- Better growth prospects coupled with improvement in FINANCIAL PERFORMANCE
out of New Eligibility Guidelines by the Reserve Bank as on
portfolio quality post covid will encourage investments (All amounts are in Rupees millions unless otherwise stated)
March 14th 2022.
and better liquidity support for all lenders across the
sector For the year ended For the year ended
The new set of guidelines have provided the Lenders (any Particulars
March 31, 2022 March 31, 2021
category be it a Public Sector Bank, private Bank, NBFC,
- 
Greater responsibility resting with the respective Revenue from operations
NBFC MFI, any other) engaged in the business of Micro
Boards of lenders will help strengthen corporate
Finance, a framework which clearly defines operational Interest Income 10643.19 8275.64
governance
criteria to be followed universally across. The KEY changes Fees and commission Income 13.86 7.19
are as follows:
B. Threats Net gain on fair value changes 247.65 167.45
- House Hold income based customer eligibility criteria:
- Un-predictability of a 4th or 5th Covid wave is a major Net gain on derecognition of financial instruments under amortized cost
now everyone with a total HH income of ≤ 3 Lacs p.a. 607.95 107.84
threat given the impact seen by the sector in the 3 category
can potentially qualify as a MF customer. This was earlier
waves since its onset in March 2020. Total Revenue from operations 11512.65 8558.12
< 1.25 Lacs for Rural and < 2Lacs for Urban customers.
- 
Current global unrest with the prolonged Russia – Other Income 500.84 172.76
- Overall debt servicing level / expense assessment: as
per new guidelines, only 50% of the HH income will be Ukraine crisis setting back growth oriented initiatives Total Income 12013.49 8730.88
available for calculating Debt Service capacity. FOIR – taken by many countries, impacting capital markets, Expenses
which is the Fixed Income to Obligation Ratio (Fixed trade balance, supply chains, budgetary allocations,
banking system/credit offtake etc. Finance Costs 4959.64 3751.04
Income to Instalment Servicing Obligation including
the proposed loan) cannot be > 0.5. Impairment on financial instruments 3686.93 2207.80
- Natural events like lower than expected Monsoons,
Employee benefits expenses 2330.66 1686.40
- Flexible, transparent Pricing mechanism now doing Floods, Cyclones etc.
away with 10%/12% margin caps on COF (cost of funds) Depreciation and amortization 53.71 38.94
as was the case earlier. COMPANY OVERVIEW Other expenses 738.29 478.79
- No restriction on Total Exposure, Loan Amount Size per Fusion Micro Finance is a registered NBFC -MFI which Total Expenses 11769.23 8162.97
product, Number of Lenders. operates on a Joint Liability Group lending model of Profit before tax 244.26 567.91
Grameen. Established in 2010, the Company focuses on Tax Expense:
- 
Qualifying portfolio as a proportion of total assets reaching out to the underserved and unbanked populace
requirement for a lender reduced from current 85% of the country providing financial services to rural women Current Tax 129.77 588.71
to 75%. -100% of its client comprise women living in rural and peri- Deferred Tax (103.06) (460.24)
These guidelines have provided a much needed ‘level rural areas. While the Company’s core business model is to Profit for the year 217.55 439.44
playing field’ for all practitioners by practically nullifying provide financial support to this segment, disseminating
Other Comprehensive Income
whatever arbitrage(s) were there for certain categories of financial literacy & awareness to its customers is an integral
part of its core strategy. Adjacent to this initiative is the Items that will not be reclassified subsequently to profit or Loss
lenders and have also now removed all erstwhile caps on
aspects like gross exposure / no. of lenders / pricing margin company’s CSR policy which focuses on key activities Re-measurement gains/(loss) on defined benefit plans 2.96 0.04
etc in order to provide greater operational flexibility while like Health, Hygiene, Sanitation, Primary Education in Income tax effect (0.74) (0.01)
at the same time facilitating introduction of risk premium catchment areas of its operations.
2.22 0.03
based pricing benefiting customers who demonstrate Headquartered in Gurgaon, the Company’s operations are Total Comprehensive Income for the year 219.77 439.47
relatively better credit discipline. spread across 18 Indian states including 2 Union Territories
and managed by an experienced and enthusiastic
workforce.

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Net Profit Margin percentage of the Company reduced the organization. It assists the Company in accomplishing constantly strives to strengthen our people in alignment The Company’s progressive HR policies along with offering
from 5.03% in FY’21 to 1.81% in FY’22 and the return on its objectives by bringing in a systematic and disciplined with the business needs and continue to engage them conducive work culture to our employees has made us a
net worth reduced from 3.59% in FY’21 to 1.68% in FY’22 approach to evaluate and improve the effectiveness through various initiatives in the field of learning & Great place to work certified for 3 years in running.
due Fall in net profit in FY 2021-22 to H217.55 Millions from of Company’s internal control, risk management and development opportunities, reward & recognition,
H439.44 Millions in FY 2020-21. governance processes. employee engagement activities & career growth. CAUTIONARY STATEMENT
The internal auditors carry out extensive audits throughout The company has provided all kind of support to its Certain statements made in the Management Discussion
OUTLOOK FOR 2022-23 and Analysis Report relating to the Company’s objectives,
the year across all locations penetrating all functional areas people during the covid crisis, comprehensive covid
Given the strong uptick in fresh disbursements in Q3 & Q4 and submit their reports to the Audit Committee. policy was framed covering monetary support for tests, projections, outlook, expectations, estimates and others
FY 21-22, the outlook for FY 22-23 is very positive. Rural hospitalization, and mental well-being. may constitute ‘forward looking statements’ within the
India has once again demonstrated its resilience against meaning of applicable laws and regulations. Actual results
RISK AND CONCERNS
adversity and is leading from the front in ensuring higher During the last two years of Covid, the company has may differ from such expectations whether expressed or
credit off take especially in the retail lending portfolio Risk management is embedded in the Company’s operating been able to pivot and digitize end-to-end process from implied. Several factors could make significant difference
segment across the country. Beginning Sep 2021, driven framework. The Company believes that managing risks sourcing, recruiting, onboarding, and engaging with the to the Company’s Operations. These include climatic
by strong latent demand, a large number of practitioners helps in maximizing returns. people, thus removing many frictions in the process. and economic conditions affecting demand and supply,
in the Micro Financing sector saw relative new highs in government regulations, taxation, and natural calamities
The Company has integrated risk management practices We are striving for gender balance as a business imperative.
their respective disbursement levels and a sustained over which the Company does not have any direct control.
into governance and operations. Appropriate systems and We know gender balance and more women in leadership
improvement in collection efficiency levels. tools are in place for identification, measurement, reporting roles will help us deliver sustainable growth.
Adding to this conviction has been the roll out of new and managing risks. The company follows 3 lines of defense
guidelines for the Micro Financing sector by RBI in March approach for managing risks. At the first line of defense are By order of the Board of Directors
2022 which has been welcomed by all the practitioners the various Business and Support functions, second line is For Fusion Micro Finance Limited
involved in Micro Financing business be it NBFC MFI, NBFCs, made of Risk Management and Compliance function and (Formerly Fusion Micro Finance Private Limited)
Banks, SFBs etc as the new guidelines have directionally third line of defense is the Audit function.
provided a level playing field and removed limits imposed Risk Management policies and processes have been
selectively on Pricing, Overall exposure, No. of lenders, designed for periodic review and mitigation of all the risks SD/- SD/-
Ticket size etc. faced by organization including credit risk, market risk, Devesh Sachdev Ratna Dharashree Vishwanathan
Also, having already taken the financial provisioning/ operational risk, reputation risk, liquidity risk, technology Place: Gurugram MD and CEO Director
impact of NPA/Written off cases in FY 21-22, all leading risk, business and strategic risk, legal and compliance risk. Dated: May 6, 2022 DIN: 02547111 DIN: 07278291
practitioners are targeting the untapped potential in the Risk Management at Fusion is an enterprise-wide
Micro Financing sector with renewed enthusiasm and this function backed by a qualified team of specialists with
augurs well for FY 22-23. deep industry experience who develop frameworks and
methodologies for assessing and mitigating risks. The Risk
INTERNAL CONTROL AND ITS ADEQUACY Management Plan forms the basis for implementation of
The Company believes in maintaining a strong internal risk management strategies and practices in detail.
control framework and sees such a framework as an
essential prerequisite for the growth of business. The HUMAN RESOURCE
Company has well-documented policies, procedures and Our people are our most important assets. We are
authorization guidelines in place. Additionally, an efficient committed to hiring and retaining the best talent and
independent internal audit system is in place to conduct being among the industry’s leading employers. For this,
audit of all branches, regional offices, Corporate Office and we focus on promoting a collaborative, transparent and
the Head Office. participative and inclusive organization culture, and
Fusion has built the management reporting and internal rewarding merit and sustained high performance. Our
control systems in place, that enable it to monitor human resource management focuses on allowing our
performance, strategy, operations, business environment, employees to develop their skills and grow in their career.
procedures, funding, risk and internal control. The Company has setup structured induction process for
Internal Audit in the Company is an independent unit new joiners across the nation also providing management
focused on improving and enhancing the operations of programs to upskill the employees. The Company

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 ANNEXURE 4 8. (a) CSR amount spent or unspent for the financial year:
Amount Unspent (in D)
Annual Report on CSR ACTIVITIES Total Amount transferred to Amount transferred to any fund specified under
FOR FINANCIAL YEAR ENDED ON MARCH 31, 2022 Total Amount Spent for the Unspent CSR Account as per Schedule VII as per second proviso to section
Financial Year (in D) section 135(6) 135(5)
Date of Name of the
Amount Amount Date of transfer
1. Brief outline on CSR Policy of the Company: transfer Fund
1,55,98,089 Nil Not Applicable
In alignment with the vision of the Fusion Micro Finance Limited (“Company/FML) as its CSR initiatives, will continue
to enhance value creation in the society and in the community in which it operates, through its services, conduct (b) Details of CSR amount spent against ongoing projects for the financial year:
and initiatives, so as to promote sustained growth for the society and community in fulfilment of its role as a Socially (1) (2) (3) (4) (5) (6) (7)
(8) (9) (10) (11)
Responsible Corporate with environmental concern. Amount Amount
Item from
Amount spent transferred to Mode of
the list of Local
2. Composition of CSR Committee as on March 31, 2022: Sl.
Name
activities area
Location
Project
allocated in the Unspent CSR Mode of Imple- Implementa-
of the of the for the current Account for the mentation-Di- tion – Through
Number of meetings Number of meetings of No in Schedule (Yes/ duration
Sl. Designation/Nature Project project. project financial project as per rect (Yes/No) Implementing
Name of Director of CSR Committee held CSR Committee attended VII to the No)
No. of Directorship (in D) Year Section 135(6) Agency
Act.
during the year during the year (in D) (in D)
Ms. Ratna Dharashree CSR
i. Chairperson 4 3 State District Name Registration
Vishwanathan
number
ii. Mr. Devesh Sachdev Member 4 4 NA
iii. Mr. Pankaj Vaish* Member 3 3
(c) Details of CSR amount spent against other than ongoing projects for the financial year:
iv. Mr. Shobinder Duggal* Member - -
(1) (2) (3) (4) (5) (6) (7) (8)
*Mr. Shobinder Duggal appointed as member of the Committee w.e.f. May 26, 2021 and ceased to be the member w.e.f. September
Item from Mode of Implementation –
22,2021. Subsequently, Mr. Pankaj Vaish appointed as member of Committee w.e.f September 22, 2021. Mode of
the list of Local Location of the project. Amount Through Implementing
Name implemen-
3. Provide the web-link where Composition of CSR committee, CSR : [Link] Sl. activities area spent for Agency
of the tation-
Policy and CSR projects approved by the board are disclosed on No in Schedule (Yes/ the project
Project Direct CSR Registra-
the website of the Company. VII to the No) State District (in D) Name
(Yes/No) tion number
Act.
4. Provide the details of Impact assessment of CSR projects carried : Not Applicable 1. Covid 19 Relief and Yes Assam, Uttar Pradesh, Multiple districts 36,94,305 No Pragya Social CSR00001462
out in pursuance of sub-rule (3) of rule 8 of the Companies Welfare Welfare Bihar, Odisha, Organization
(Corporate Social responsibility Policy) Rules, 2014, if applicable Work Work Rajasthan, Madhya Bahudday CSR00012447
(attach the report). Pradesh, Punjab, Lok Sewa
Haryana, Tamil Nadu, Sansthan
5. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social Himachal Pradesh, Doctors For CSR00000608
responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any.: Gujarat, Chhattisgarh, You
Jharkhand, RAWA CSR00002778
Sl. Amount available for set-off from Amount required to be set- off for Uttarakhand,
Financial Year Academy
No. preceding financial years (in D) the financial year, if any (in D) Delhi, Maharashtra, Parivartan CSR00002607
Nil Puducherry and West
Safe Society CSR00003132
Bengal
6. Average net profit of the company as per section 135(5): H779,904,397. 2. Flood Relief and Yes Bihar, Uttar Pradesh, Varanasi, Ghazi- 13,94,361 Yes
Relief Welfare Madhya Pradesh, pur, Shivpuri,
7. (a) Two percent of average net profit of the company as per section 135(5): H1,55,98,088
Work Work Gujarat, Puducherry, Sheopur,
(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years. : Nil and Tamil Nadu Begusarai, East
champaran,
(c) Amount required to be set off for the financial year, if any : Nil Muzaffarpur,
Samastipur, Jam-
(d) Total CSR obligation for the financial year (7a+7b- 7c) : H1,55,98,088 nagar, Viluppur-
am, Thiruvallur,
Cuddalore,
Puducherry,
Tiruvannamalai

096 FUSION MICRO FINANCE LIMITED

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OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 097
(1) (2) (3) (4) (5) (6) (7) (8) (1) (2) (3) (4) (5) (6) (7) (8)
Item from Mode of Implementation – Item from Mode of Implementation –
Mode of Mode of
the list of Local Location of the project. Amount Through Implementing the list of Local Location of the project. Amount Through Implementing
Name implemen- Name implemen-
Sl. activities area spent for Agency Sl. activities area spent for Agency
of the tation- of the tation-
No in Schedule (Yes/ the project No in Schedule (Yes/ the project
Project Direct CSR Registra- Project Direct CSR Registra-
VII to the No) State District (in D) Name VII to the No) State District (in D) Name
(Yes/No) tion number (Yes/No) tion number
Act. Act.
3. Financial Promoting Yes Uttar Pradesh, Bihar, Khusinagar, 17,94,780 No Safe Society CSR00003132 10. Project Ensuring Yes Uttar Pradesh and Bijnor and Sagar 8,18,000 No Bahudday
and Education Madhya Pradesh, Satna, Beej: An Environ- Madhya Pradesh Lok Sewa
Digital Haryana, Punjab, Shahdol, Agricul- mental Sus- Sansthan CSR00012447
Literacy Rajasthan, Tamil Nadu West ture Initia- tainability
Champaran, tive
Sonbhadra,
Pragya Social CSR00001462 11. Wheel- Promoting Yes Haryana Karnal and 1,63,842 Yes
Cuddalore,
Nagaur, Bareilly, Organization chair Dis- Healthcare Rohtak
Saharanpur, tribution
Moga, Bijnor, Program
Yamunanagar, 12. Water- Promoting Yes Punjab, Haryana, Muktsar, Boudh, 9,36,001 Yes
Dungarpur wheel Sanitation Odisha, Gujarat, Tamil Jajpur, Sirsa,
4. Project Promoting Yes Haryana, Odisha Karnal, Rewari, 11,04,777 No Buddy4S- CSR00000121 Distri- (WASH) Nadu, West Bengal and Giridih, Bankura,
Shiksha- Education Jhajjar, tudy Foun- bution Jharkhand Tiruchirappalli,
Schol- Pehowa, Sirsa, dation Program Anand and
arship Vadodara
Kendrapara,
Program 13. Training Promoting No Karnataka 10,00,000 No GoSports CSR00002235
Jajpur,
of Sports Foundation
Jagatsinghpur,
National
Cuttack, Puri Athletes
5. Grant to Promoting Yes Delhi South Delhi 1,00,000 No Aarohan CSR00004308 14. Plantation Ensuring Yes Uttarakhand Haridwar 3,30,225 No Bahudday CSR00012447
Aarohan Education Drive Environ- Lok Sewa
6. Grant Promoting Yes Uttar Pradesh Kanpur 2,00,000 No Ramakrishna mental Sus- Sansthan
to RK Education Mission tainability
Mission Ashrama 15. Skill Promoting Yes Punjab Sangrur 77,512 No B-Able CSR00000740
Ashram Enhance- Livelihood Foundation
7. Men- Promoting Yes Odisha Kalahandi 14,29,017 No Bharat Gyan CSR00020042 ment for
struation Healthcare Vigyan Sustain-
Hygiene Samiti able Live-
Manage- lihood
Netram Eye
ment CSR00000560 TOTAL 1,52,67,008
Foundation
Program
8. Health Promoting Yes Uttar Pradesh, Bihar, Bathinda, 10,11,452 No Pragya Social CSR00001462 (d) Amount spent in Administrative Overheads: H3,31,081
Check Up Healthcare Rajasthan, Madhya Fatehabad, Organization
(e) Amount spent on Impact Assessment, if applicable: Not Applicable
Camps Pradesh, Punjab, Sheopur, Bahudday CSR00012447
Haryana, Odisha, Saharsa, Lok Sewa (f ) Total amount spent for the Financial Year (8b+8c+8d+8e) : H1,55,98,089
Chhattisgarh, Gopalganj, Sansthan (g) Excess amount for set off, if any:
Uttarakhand and Shivpuri, Doctors For CSR00000608
Jharkhand Hazaribagh, You Sr. Amount
Puri, Amritsar, Netram Eye CSR00000560 Particulars
No. (in D)
Kurukshetra, Foundation
Udham (i) Two percent of average net profit of the company as per section 135(5) 1,55,98,088
Singh Nagar, (ii) Total amount spent for the Financial Year 1,55,98,089
Saharanpur,
Barabanki, Katni, (iii) Excess amount spent for the financial year [(ii)-(i)] 1
Sagar, Udaipur, Surplus arising out of the CSR projects or programmes or activities of the previous financial
and Jabalpur (iv) Nil
years, if any
9. Project Promoting Yes Rajasthan and Odisha Chhitorgarh, and 12,12,736 No Operation
Ojas Healthcare Subarnapur Eyesight CSR00003071
(v) Amount available for set off in succeeding financial years [(iii)-(iv)] Nil
India

098 FUSION MICRO FINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 099
9. (a) Details of Unspent CSR amount for the preceding three financial years: Nil ANNEXURE 5
Amount Amount transferred to any fund
STATEMENT OF INFORMATION TO BE FURNISHED PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013
transferred to Amount spent specified under Schedule VII as per Amount remaining
(“THE ACT”) READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL
Preceding Unspent CSR in the reporting section 135(6), if any to be spent in
Sl. PERSONNEL) RULES, 2014
Financial Account under Financial Year succeeding
No Name
Year section 135 (6) (in D) Amount Date of financial years [Link]. PARTICULARS DISCLOSURES
(in D) of the (in D)
(in D) transfer (i) the ratio of the remuneration of each director to Managing Director & CEO: 71:1
Fund
the median remuneration of the employees of the
NA company for the financial year;
(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): Nil (ii) the percentage increase in remuneration of each Increase in Remuneration:
director, Chief Financial Officer, Chief Executive Chief Executive Officer: 50%
(1) (2) (3) (4) (5) (6) (7) (8) (9) Officer, Company Secretary or Manager, if any, in Chief Financial Officer: 27%
Total Cumulative the financial year; Company Secretary: 30%
Financial Amount spent
amount amount spent Status of (iii) the percentage increase in the median 10.03%
Year in on the project
Sl. Project Name of Project allocated at the end the project remuneration of employees in the financial year;
which the in the reporting
No ID the Project duration for the of reporting -Completed
project was Financial Year (iv) the number of permanent employees on the rolls 8716
project Financial Year /Ongoing
commenced (in D) of company as on March 2022;
(in D) (in D)
(v) average percentile increase already made The average increase in the salaries of employees was 10.03%
NA
in the salaries of employees other than the and the average increase in the managerial remuneration (CEO,
10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through managerial personnel in the last financial year CFO & CS) was 35.67%. In the last financial year, the Company
CSR spent in the financial year (asset-wise details): and its comparison with the percentile increase decided to benchmark the remuneration of employees with
in the managerial remuneration and justification the peer group.
a) Date of creation or acquisition of the capital asset(s). NIL
thereof and point out if there are any exceptional Considering the one-time benchmarking with the peer
b) Amount of CSR spent for creation or acquisition of capital asset. NIL circumstances for increase in the managerial group and other relevant parameters, the Board of Directors
c) Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their remuneration; approved the increment given to the employees including the
address etc. Not Applicable senior managerial & managerial personnel.
d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital (vi) Affirmation that the remuneration is as per the Yes
asset). Not Applicable remuneration policy of the company.
11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5).
Not Applicable STATEMENT OF INFORMATION TO BE FURNISHED PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT,
2013 (“THE ACT”) READ WITH RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF
RESPONSIBILITY STATEMENT MANAGERIAL PERSONNEL) RULES, 2014
The implementation and monitoring of CSR Policy, is in compliance with CSR objectives and policy of the Company. A. The detail of top ten employees in terms of remuneration drawn is as follows:

Date of
Whether
By order of the Board of Directors Com-
Remu- Nature of Last Em- relative
For Fusion Micro Finance Limited Employee Qualifi- mence- Experience
Designation neration employ- Age ployment of any
(Formerly Fusion Micro Finance Private Limited) Name cation ment of (In Years)
Received* ment Details director/
Employ-
manager
ment
SD/- SD/- Chief Full time
Devesh BSA
Devesh Sachdev Ratna Dharashree Vishwanathan Executive MBA 3,75,23,444 employ- 01-Jan-10 49 25 No
Sachdev Logistics
Place: Gurugram MD and CEO Chairperson of CSR Committee Officer ment
Dated: May 6, 2022 Chief Full time
Tarun
Operating MBA 1,13,43,820 employ- 19-Jun-17 52 30 SBI Cards No
Mehndiratta
Officer ment
Religare
Kamal Chief Full time
Housing De-
Kumar Operating CA 93,14,312 employ- 22-Jul-19 49 22 No
velopment
Kaushik Officer ment
Finance

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OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 101
 Date of b. if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in
Whether the aggregate, was not less than eight lakh and fifty thousand rupees per month: Nil
Com-
Remu- Nature of Last Em- relative
Employee Qualifi- mence- Experience
Designation neration employ- Age ployment of any c. if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the
Name cation ment of (In Years)
Received* ment Details director/ aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director
Employ-
manager or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less
ment
than two percent of the equity shares of the company: Nil
Chief Full time
Gaurav Avantha
Financial CA, MBF 83,85,279 employ- 03-Feb-16 43 18 No By order of the Board of Directors
Maheshwari Group
Officer ment For Fusion Micro Finance Limited
Full time (Formerly Fusion Micro Finance Private Limited)
Ankush Senior Vice Magma
MBE 76,83,374 employ- 03-Aug-15 43 19 No
Ahluwalia President Fincorp Ltd.
ment
Full time GE SD/- SD/-
Senior Vice
Satish Mani B. Com 46,91,601 employ- 08-Apr-15 50 28 Commercial No Devesh Sachdev Ratna Dharashree Vishwanathan
President
ment Finance Place: Gurugram MD and CEO Director
Almondz Dated: May 6, 2022 DIN: 02547111 DIN: 07278291
Full time Capital
Deepak Vice
CS 44,95,668 employ- 01-Jun-13 35 14 and Man- No
Madaan President
ment agement
Services Ltd
Sanjay Full time
Chief Risk Satin Credit
Vishwanath CA 42,77,074 employ- 02-Sep-20 46 23 No
Officer Care
Choudhary ment
Naveen Chief Full time
Aviva Life
Kumar Technology MBA 41,82,299 employ- 17-Sep-19 44 19 No
Insurance
Mangle Officer ment
Full time
Manish Senior Vice IDFC First
PGDBA 40,30,130 employ- 04-Jan-20 46 24 No
Verma President Bank Ltd.
ment
*includes performance linked incentives for the FY 2020-21 paid in FY 2021-22.

B. Name of every employee of the company who –

a. if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was
not less than one crore and two lakh rupees:
Date of
Whether
Com- Experi-
Remu- Nature of Last Em- relative
Employee Qualifi- mence- ence
Designation neration employ- Age ployment of any
Name cation ment of (in
Received* ment Details director/
Employ- Years)
manager
ment
Chief Full time
Devesh BSA
Executive MBA 3,75,23,444 employ- 01-Jan-10 49 25 No
Sachdev Logistics
Officer ment
Chief Full time
Tarun
Operating MBA 1,13,43,820 employ- 19-Jun-17 52 30 SBI Cards No
Mehndiratta
Officer ment
* includes performance linked incentives for the FY 2020-21 paid in FY 2021-22.

102 FUSION MICRO FINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
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OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 103
INDEPENDENT AUDITOR’S R E P O R T
To the Members of Fusion Micro Finance Limited (formerly, provisions of the Act and the Rules thereunder, and we have Key audit matters How our audit addressed the key audit matter
Fusion Micro Finance Private Limited”) fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics. We believe (Impairment of financial instruments (including provision Our audit procedures included, among others,
for expected credit loss) Considering the Company’s accounting policies for
Report on the Audit of the Financial Statements that the audit evidence we have obtained is sufficient and
(as described in note 2.7 of the financial statements) impairment of loan receivables, assessing compliance with
appropriate to provide a basis for our audit opinion on the
Opinion financial statements. Ind AS 109 requires the Company to provide for impairment the policies in terms of Ind AS 109 and the governance
We have audited the accompanying financial statements of its loan receivables (financial instruments) using the framework approved by the Board of Directors pursuant to
of Fusion Micro Finance Company Limited (“the Company”) expected credit loss (ECL) approach. ECL involves an Reserve Bank of India guidelines issued on March 13, 2020.
Emphasis of Matter
(formerly, Fusion Micro Finance Private Limited”), which estimation of probability-weighted loss on financial Tested the assumptions used by the Company for staging
We draw attention to Note 53 of the financial statements instruments over their life, considering reasonable and
comprise the Balance sheet as at March 31 2022, the which describes the impact of economic and social of loan portfolio into various categories and default buckets
supportable information about past events, current for determining the Probability of Default (“PD”) and Loss
Statement of Profit and Loss, including the statement of consequences of the CoVID-19 pandemic on the Company’s conditions, and forecasts of future economic conditions Given Default (“LGD”) rates.
Other Comprehensive Income, the Cash Flow Statement business and financial metrics, which continues to be which could impact the credit quality of the Company’s
and the Statement of Changes in Equity for the year then dependent on uncertain future developments. Our opinion loans and advances. Tested the operating effectiveness of the controls for
ended, and notes to the financial statements, including is not modified in respect of this matter. staging of loans based on their past-due status. Tested
In the process, a significant degree of judgement has been
a summary of significant accounting policies and other samples of performing (stage 1) loans to assess whether any
applied by the management for:
explanatory information. loss indicators were present requiring them to be classified
Key Audit Matters a. Defining qualitative/ quantitative thresholds for under stage 2 or 3.
In our opinion and to the best of our information and Key audit matters are those matters that, in our professional ‘significant increase in credit risk’ (“SICR”) and ‘default’.
Tested the input data used for determining the PD and LGD
according to the explanations given to us, the aforesaid judgment, were of most significance in our audit of the b. Grouping of loan portfolio under homogenous pools to rates and compared the data with the underlying books of
financial statements give the information required by the financial statements for the financial year ended March determine probability of default on a collective basis. accounts and records.
Companies Act, 2013, as amended (“the Act”) in the manner 31, 2022. These matters were addressed in the context c. Estimating recoveries to determine loss given default on
so required and give a true and fair view in conformity with of our audit of the financial statements as a whole, and Reviewed the Company’s policy with respect to moratorium
a collective basis for loans that have defaulted.
the accounting principles generally accepted in India, of in forming our opinion thereon, and we do not provide a pursuant to the RBI circular and tested the implementation
d. Determining effect of less frequent past events on future of such policy on a sample basis.
the state of affairs of the Company as at March 31, 2022, its separate opinion on these matters. For each matter below,
probability of default.
profit including other comprehensive income its cash flows our description of how our audit addressed the matter is Assessed the additional considerations applied by the
and the changes in equity for the year ended on that date. provided in that context. Additional considerations on account of CoVID-19 management for staging of loans as SICR/ default in view of
Pursuant to the Reserve Bank of India circular dated May Company’s policy on moratorium.
We have determined the matters described below to be 5, 2022(“RBI circular”) allowing lending institutions to
Basis for Opinion Tested assumptions used by the management in
the key audit matters to be communicated in our report. restructure the loans, the Company has restructured the
We conducted our audit of the financial statements determining the overlay for macro-economic factors
We have fulfilled the responsibilities described in the loans given to its borrowers in accordance with its Board
in accordance with the Standards on Auditing (SAs), (including CoVID-19 pandemic) in accordance with the
Auditor’s responsibilities for the audit of the financial approved policy.
as specified under section 143(10) of the Act. Our governance framework approved by the Board of Directors
statements section of our report, including in relation The Company has considered internal and external sources pursuant to Reserve Bank of India guidelines issued on
responsibilities under those Standards are further to these matters. Accordingly, our audit included the
described in the ‘Auditor’s Responsibilities for the Audit of information available including indicators of deterioration March 13, 2020.
performance of procedures designed to respond to our in the macro-economic factors and impact of CoVID-19
of the Financial Statements’ section of our report. We are assessment of the risks of material misstatement of the Tested the arithmetical accuracy of computation of ECL
on the borrower’s ability to service their obligations on provision performed by the Company in spreadsheets.
independent of the Company in accordance with the ‘Code financial statements. The results of our audit procedures, a timely basis. Accordingly, the management’s estimate
of Ethics’ issued by the Institute of Chartered Accountants including the procedures performed to address the matters Compared the disclosures included in the financial
of impairment losses based on various variables and
of India together with the ethical requirements that are below, provide the basis for our audit opinion on the statements in respect of expected credit losses with the
assumptions could result in actual credit loss being different
relevant to our audit of the financial statements under the accompanying financial statements. than that being estimated. requirements of Ind AS 107 and 109. Reviewed specific
disclosures made in the financial statements with regards
Given the high degree of management’s judgement involved
to the impact of CoVID-19 and its impact on ECL estimation
in estimation of ECL, accentuated by the considerations for
and other disclosures as prescribed by RBI relating to
CoVID-19 related developments, it is a key audit matter.
moratorium granted.

104 FUSION MICROFINANCE LIMITED

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TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 105
Other Information financial statements that give a true and fair view and are Evaluate the appropriateness of accounting policies of India in terms of sub-section (11) of section 143 of
The Company’s Board of Directors is responsible for the free from material misstatement, whether due to fraud or used and the reasonableness of accounting estimates the Act, we give in the “Annexure 1” a statement on the
other information. The other information comprises the error. and related disclosures made by management. matters specified in paragraphs 3 and 4 of the Order.
Management Discussion and Analysis and Board’s Report
In preparing the financial statements, management is Conclude on the appropriateness of management’s use 2. As required by Section 143(3) of the Act, we report that:
including Annexures to Board Report, but does not include
responsible for assessing the Company’s ability to continue of the going concern basis of accounting and, based
the financial statements and our auditor’s report thereon. a. We have sought and obtained all the information
as a going concern, disclosing, as applicable, matters on the audit evidence obtained, whether a material
The other information is expected to be made available to and explanations which to the best of our knowledge
related to going concern and using the going concern uncertainty exists related to events or conditions
us after the date of this auditor’s report. and belief were necessary for the purposes of our
basis of accounting unless management either intends to that may cast significant doubt on the Company’s
liquidate the Company or to cease operations, or has no ability to continue as a going concern. If we conclude audit;
Our opinion on the financial statements does not cover
the other information and we do not express any form of realistic alternative but to do so. that a material uncertainty exists, we are required to b. In our opinion, proper books of account as required
assurance conclusion thereon. draw attention in our auditor’s report to the related by law have been kept by the Company so far as it
Those Board of Directors are also responsible for overseeing disclosures in the financial statements or, if such
the Company’s financial reporting process. appears from our examination of those books;
In connection with our audit of the financial statements, disclosures are inadequate, to modify our opinion. Our
our responsibility is to read the other information identified conclusions are based on the audit evidence obtained c. The Balance Sheet, the Statement of Profit and Loss
above when it becomes available and, in doing so, consider Auditor’s Responsibilities for the Audit of the Financial up to the date of our auditor’s report. However, future including the Statement of Other Comprehensive
whether such other information is materially inconsistent Statements events or conditions may cause the Company to cease Income, the Cash Flow Statement and Statement of
with the financial statements or our knowledge obtained Our objectives are to obtain reasonable assurance about to continue as a going concern. Changes in Equity dealt with by this Report are in
in the audit or otherwise appears to be materially misstated whether the financial statements as a whole are free from agreement with the books of account;
Evaluate the overall presentation, structure and content
material misstatement, whether due to fraud or error,
When we read the other information, if we conclude that of the financial statements, including the disclosures, and d. In our opinion, the aforesaid financial statements
and to issue an auditor’s report that includes our opinion.
there is a material misstatement therein, we are required to whether the financial statements represent the underlying comply with the Accounting Standards specified
Reasonable assurance is a high level of assurance, but is
communicate the matter to those charged with governance transactions and events in a manner that achieves fair under Section 133 of the Act, read with Companies
not a guarantee that an audit conducted in accordance
and to comply with the relevant applicable requirements of presentation. (Indian Accounting Standards) Rules, 2015, as
with SAs will always detect a material misstatement when
the standard for auditor’s responsibility in relation to other amended;
it exists. Misstatements can arise from fraud or error and are We communicate with those charged with governance
information in documents containing audited financial
considered material if, individually or in the aggregate, they regarding, among other matters, the planned scope and e. On the basis of the written representations received
statements.
could reasonably be expected to influence the economic timing of the audit and significant audit findings, including from the directors as on March 31, 2022 taken
decisions of users taken on the basis of these financial any significant deficiencies in internal control that we on record by the Board of Directors, none of the
Responsibilities of Management for the Financial statements. identify during our audit. directors is disqualified as on March 31, 2022 from
Statements
As part of an audit in accordance with SAs, we exercise being appointed as a director in terms of Section
The Company’s Board of Directors is responsible for the We also provide those charged with governance with
professional judgment and maintain professional 164 (2) of the Act;
matters stated in section 134(5) of the Act with respect a statement that we have complied with relevant
to the preparation of these financial statements that give skepticism throughout the audit. We also: ethical requirements regarding independence, and to f. With respect to the adequacy of the internal financial
a true and fair view of the financial position, financial communicate with them all relationships and other controls with reference to financial statements and
Identify and assess the risks of material misstatement of
performance including other comprehensive income, cash matters that may reasonably be thought to bear on our the operating effectiveness of such controls, refer to
the financial statements, whether due to fraud or error,
flows and changes in equity of the Company in accordance independence, and where applicable, related safeguards. our separate Report in “Annexure 2” to this report;
design and perform audit procedures responsive to
with the accounting principles generally accepted in
those risks, and obtain audit evidence that is sufficient From the matters communicated with those charged with g. In our opinion, the managerial remuneration for the
India, including the Indian Accounting Standards (Ind
and appropriate to provide a basis for our opinion. The governance, we determine those matters that were of most year ended March 31, 2022 has been paid / provided
AS) specified under section 133 of the Act read with the
risk of not detecting a material misstatement resulting significance in the audit of the financial statements for the by the Company to its directors in accordance with
Companies (Indian Accounting Standards) Rules, 2015, as
from fraud is higher than for one resulting from error, financial year ended March 31, 2022 and are therefore the the provisions of section 197 read with Schedule V
amended. This responsibility also includes maintenance
as fraud may involve collusion, forgery, intentional key audit matters. We describe these matters in our auditor’s to the Act;
of adequate accounting records in accordance with the
omissions, misrepresentations, or the override of report unless law or regulation precludes public disclosure
provisions of the Act for safeguarding of the assets of
internal control. about the matter or when, in extremely rare circumstances, h. With respect to the other matters to be included
the Company and for preventing and detecting frauds
and other irregularities; selection and application of we determine that a matter should not be communicated in the Auditor’s Report in accordance with Rule 11
Obtain an understanding of internal control relevant to of the Companies (Audit and Auditors) Rules, 2014,
appropriate accounting policies; making judgments and in our report because the adverse consequences of doing
the audit in order to design audit procedures that are as amended in our opinion and to the best of our
estimates that are reasonable and prudent; and the design, so would reasonably be expected to outweigh the public
appropriate in the circumstances. Under section 143(3) information and according to the explanations
implementation and maintenance of adequate internal interest benefits of such communication.
(i) of the Act, we are also responsible for expressing given to us:
financial controls, that were operating effectively for our opinion on whether the Company has adequate
ensuring the accuracy and completeness of the accounting internal financial controls with reference to financial Report on Other Legal and Regulatory Requirements i. The Company does not have any pending
records, relevant to the preparation and presentation of the statements in place and the operating effectiveness of 1. As required by the Companies (Auditor’s Report) Order, litigations which would impact its financial
such controls. 2020 (“the Order”), issued by the Central Government position;

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 ii. The Company has made provision, as required b) The management has represented that, to Annexure referred to in paragraph 1 of “Report on Other Legal and Regulatory
under the applicable law or accounting standards, the best of its knowledge and belief, other
for material foreseeable losses, if any, on long- than as disclosed in the note 58 to the financial Requirements” of our report of even date
term contracts including derivative contracts – statements, no funds have been received by
Re: Fusion Micro Finance Limited (‘the Company’) (iii) (a) Since the principal business of the Company
Refer Note 14 to the financial statements; the company from any person(s) or entity(ies),
is to give loans, the requirement to report on
including foreign entities (“Funding Parties”), In terms of the information and explanations sought by us
iii. There were no amounts which were required clause 3(iii)(a) of the Order is not applicable to
with the understanding, whether recorded in and given by the company and the books of account and
to be transferred to the Investor Education and the Corporation.
writing or otherwise, that the company shall, records examined by us in the normal course of audit and
Protection Fund by the Company. whether, directly or indirectly, lend or invest in to the best of our knowledge and belief, we state that: (b) During the year the investments made,
other persons or entities identified in any manner guarantees provided, security given and
iv. a) The management has represented that, to
whatsoever by or on behalf of the Funding (i) (a) (A) The Company has maintained proper records the terms and conditions of the grant of all
the best of its knowledge and belief, other
Party (“Ultimate Beneficiaries”) or provide any showing full particulars, including quantitative details loans and advances in the nature of loans
than as disclosed in the note 58 to the financial
guarantee, security or the like on behalf of the and situation of Property, Plant and Equipment. and guarantees to companies, firms, Limited
statements, no funds have been advanced or
Ultimate Beneficiaries; and Liability Partnerships or any other parties are
loaned or invested (either from borrowed funds (B) The Company has maintained proper records
or share premium or any other sources or kind not prejudicial to the Company’s interest.
c) Based on such audit procedures that were showing full particulars of intangibles assets.
of funds) by the company to or in any other considered reasonable and appropriate in (c) In respect of loans and advances in the nature
person(s) or entity(ies), including foreign entities the circumstances, nothing has come to our (b) All Property, Plant and Equipment were
of loans, granted by the Company as part of
(“Intermediaries”), with the understanding, notice that has caused us to believe that the physically verified by the management in the
its business of providing microfinance loans,
whether recorded in writing or otherwise, representations under sub-clause (a) and (b) previous year in accordance with a planned
the schedule of repayment of principal and
that the Intermediary shall, whether, directly contain any material misstatement. programme of verifying them once in three
payment of interest has been stipulated by the
or indirectly lend or invest in other persons or years which is reasonable having regard to the
Company. Having regard to the voluminous
entities identified in any manner whatsoever v. No dividend has been declared or paid during size of the Company and the nature of its assets.
nature of loan transactions, it is not practicable
by or on behalf of the company (“Ultimate the year by the Company.
(c) There is no immovable property (other than to furnish entity-wise details of amount, due
Beneficiaries”) or provide any guarantee, security
properties where the Company is the lessee date for repayment or receipt and the extent
or the like on behalf of the Ultimate Beneficiaries;
and the lease agreements are duly executed of delay (as suggested in the Guidance Note on
in favour of the lessee), held by the Company CARO 2020, issued by the Institute of Chartered
and accordingly, the requirement to report on Accountants of India for reporting under this
For S.R. Batliboi & Associates LLP clause 3(i)(c) of the Order is not applicable to clause) in this Annexure 1, in respect of loans
the Company. and advances which were not repaid / paid
Chartered Accountants
when they were due or were repaid / paid
ICAI Firm Registration Number: (d) The Company has not revalued its Property, with a delay, in the normal course of lending
101049W/E300004 Plant and Equipment (including Right of use business.
assets) or intangible assets during the year
ended March 31, 2022. Further, except for those instances where
per Amit Kabra
there are delays or defaults in repayment of
Partner (e) There are no proceedings initiated or are principal and / or interest as at the balance
Palace : Gurugram Membership Number: 094533 pending against the Company for holding sheet date, in respect of which the Company
Date : May 6, 2022 UDIN: 22094533AIMTAY5437 any benami property under the Prohibition of has disclosed asset classification in note 6 to
Benami Property Transactions Act, 1988 and the financial statements in accordance with
rules made thereunder. Indian Accounting Standards (Ind AS) and the
guidelines issued by the Reserve Bank of India,
(ii) (a) The Company’s business does not require
the parties are repaying the principal amounts,
maintenance of inventories and, accordingly,
as stipulated, and are also regular in payment of
the requirement to report on clause 3(ii)(a) of
interest, as applicable
the Order is not applicable to the Company.
(d) In respect of loans and advances in the nature of
(b) The Company has not been sanctioned working
loans, the total amount overdue for more than
capital limits in excess of Rupees five crores in
ninety days as at March 31, 2022 and the details
aggregate from banks or financial institutions
of the number of such cases, are disclosed
during any point of time of the year on the basis
in note 6 to the financial statements. In such
of security of current assets. Accordingly, the
instances, in our opinion, reasonable steps have
requirement to report on clause 3(ii)(b) of the
been taken by the Company for recovery of the
Order is not applicable to the Company.
overdue amount of principal and interest.

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 (e) Since the principal business of the Company (viii) The Company has not surrendered or disclosed (xi) (c) As represented to us by the management, there (xvii) The Company has not incurred cash losses in
is to give loans, the requirement to report on any transaction, previously unrecorded in the are no whistle blower complaints received by the current financial year.
clause 3(iii)(e) of the Order is not applicable to books of account, in the tax assessments under the Company during the year. (xviii) There has been no resignation of the statutory
the Corporation. the Income Tax Act, 1961 as income during the (xii) The Company is not a nidhi Company as per auditors during the year and accordingly
(f ) The Company has not granted any loans or year. Accordingly, the requirement to report on the provisions of the Companies Act, 2013. requirement to report on Clause 3(xviii) of the
advances in the nature of loans, either repayable clause 3(viii) of the Order is not applicable to Therefore, the requirement to report on clause Order is not applicable to the Company.
on demand or without specifying any terms the Company. 3(xii)(a), (b) and (c) of the Order is not applicable (xix) On the basis of the financial ratios disclosed in
or period of repayment to companies, firms, (ix) (a) The Company has not defaulted in repayment to the Company. note 54(x) to the financial statements, ageing
Limited Liability Partnerships or any other of loans or other borrowings or in the payment (xiii) Transactions with the related parties are in and expected dates of realization of financial
parties. Accordingly, the requirement to report of interest thereon to any lender. compliance with sections 177 and 188 of assets and payment of financial liabilities,
on clause 3(iii)(f ) of the Order is not applicable (ix) (b) The Company has not been declared wilful Companies Act, 2013 where applicable and other information accompanying the financial
to the Company. defaulter by any bank or financial institution or the details have been disclosed in the notes statements, our knowledge of the Board of
(iv) There are no loans, investments, guarantees, government or any government authority. to the financial statements, as required by the Directors and management plans and based
and security in respect of which provisions (ix) (c) Monies raised during the year by the Company applicable accounting standards. on our examination of the evidence supporting
of sections 185 and 186 of the Companies by way of term loans, I 42,042.92 Mn was (xiv) (a) The Company has an internal audit system the assumptions, nothing has come to our
Act, 2013 are applicable and accordingly, the initially invested in liquid investments payable commensurate with the size and nature of its attention, which causes us to believe that any
requirement to report on clause 3(iv) of the on demand and were ultimately applied for the business. material uncertainty exists as on the date of
Order is not applicable to the Company. purpose for which they were raised. the audit report that Company is not capable
(xiv) (b) The internal audit reports of the Company of meeting its liabilities existing at the date of
(v) The Company has neither accepted any (ix) (d) On an overall examination of the financial issued till the date of the audit report, for the
deposits from the public nor accepted any balance sheet as and when they fall due within a
statements of the Company, no funds raised on period under audit have been considered by us. period of one year from the balance sheet date.
amounts which are deemed to be deposits short-term basis have been used for long-term
within the meaning of sections 73 to 76 of the (xv) The Company has not entered into any non- We, however, state that this is not an assurance
purposes by the Company. cash transactions with its directors or persons as to the future viability of the Company. We
Companies Act and the rules made thereunder,
to the extent applicable. Accordingly, the (ix) (e) The Company does not have any subsidiary, connected with its directors and hence further state that our reporting is based on the
requirement to report on clause 3(v) of the associate or joint venture. Accordingly, the requirement to report on clause 3(xv) of the facts up to the date of the audit report and we
Order is not applicable to the Company. requirement to report on clause 3(ix)(e) of the Order is not applicable to the Company. neither give any guarantee nor any assurance
Order is not applicable to the Company. that all liabilities falling due within a period of
(vi) The Company is not in the business of sale (xvi) (a) The Company has registered as required, under
one year from the balance sheet date, will get
of any goods or provision of such services (ix) (f ) The Company does not have any subsidiary, section 45-IA of the Reserve Bank of India Act,
discharged by the Company as and when they
as prescribed. Accordingly, the requirement associate or joint venture. Accordingly, the 1934 (2 of 1934).
fall due.
to report on clause 3(vi) of the Order is not requirement to report on Clause 3(ix)(f ) of the (xvi) (b) The Company has not conducted any Non-
applicable to the Company. Order is not applicable to the Company. (xx) (a) In respect of other than ongoing projects, there
Banking Financial or Housing Finance
are no unspent amounts that are required to be
(vii) (a) The Company is regular in depositing with (x) (a) The Company has not raised any money during activities without obtained a valid Certificate
transferred to a fund specified in Schedule VII
appropriate authorities undisputed statutory the year by way of initial public offer / further of Registration (CoR) from the Reserve Bank of
of the Companies Act (the Act), in compliance
dues including goods and services tax, provident public offer (including debt instruments) hence, India as per the Reserve Bank of India Act, 1934.
with second proviso to sub section 5 of section
fund, employees’ state insurance, income-tax, the requirement to report on clause 3(x)(a) of (xvi) (c) The Company is not a Core Investment 135 of the Act. This matter has been disclosed
sales-tax, service tax, duty of customs, duty the Order is not applicable to the Company. Company as defined in the regulations made in note 34 to the financial statements.
of excise, value added tax, cess and other (x) (b) The Company has not made any preferential by Reserve Bank of India. Accordingly, the
statutory dues applicable to it. According to the (xx) (b) There are no unspent amounts in respect
allotment or private placement of shares /fully requirement to report on clause 3(xvi) of the
information and explanations given to us and of ongoing projects, that are required to be
or partially or optionally convertible debentures Order is not applicable to the Company.
based on audit procedures performed by us, transferred to a special account in compliance
during the year under audit and hence, the (xvi) (d) There are no other Companies part of the
no undisputed amounts payable in respect of of provision of sub section (6) of section 135 of
requirement to report on clause 3(x)(b) of the Group, hence, the requirement to report on
these statutory dues were outstanding, at the Companies Act. This matter has been disclosed
Order is not applicable to the Company. clause 3(xvi) of the Order is not applicable to
year end, for a period of more than six months in note 34 to the financial statements.
(xi) (a) No fraud by the Company or no material fraud the Company.
from the date they became payable. on the Company has been noticed or reported For S.R. Batliboi & Associates LLP
(b) There are no dues of goods and services tax, during the year. Chartered Accountants
provident fund, employees’ state insurance, ICAI Firm Registration Number:
(xi) (b) During the year, no report under sub-section (12) 101049W/E300004
income tax, sales-tax, service tax, value added of section 143 of the Companies Act, 2013 has
tax, cess, goods and service tax and other been filed by [cost auditor/ secretarial auditor
statutory dues which have not been deposited per Amit Kabra
or by us] in Form ADT – 4 as prescribed under Partner
on account of any dispute. Rule 13 of Companies (Audit and Auditors) Palace : Gurugram Membership Number: 094533
Rules, 2014 with the Central Government. Date : May 6, 2022 UDIN: 22094533AIMTAY5437

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Annexure 2 referred to in paragraph 2(f) under the heading “Report on other
legal and regulatory requirements” of our report of even date

Report on the Internal Financial Controls under Clause their operating effectiveness. Our audit of internal financial reference to financial statements to future periods are financial statements and such internal financial controls
(i) of Sub-section 3 of Section 143 of the Companies controls with reference to financial statements included subject to the risk that the internal financial control with with reference to financial statements were operating
Act, 2013 (“the Act”) obtaining an understanding of internal financial controls reference to financial statements may become inadequate effectively as at March 31, 2022, based on the internal
We have audited the internal financial controls with with reference to these financial statements, assessing because of changes in conditions, or that the degree of control over financial reporting criteria established by the
reference to financial statements of Fusion Micro Finance the risk that a material weakness exists, and testing and compliance with the policies or procedures may deteriorate. Company considering the essential components of internal
Limited (formerly, Fusion Micro Finance Private Limited evaluating the design and operating effectiveness of control stated in the Guidance Note issued by the ICAI.
(“the Company”) as of March 31, 2022 in conjunction with internal control based on the assessed risk. The procedures
Opinion
our audit of the financial statements of the Company for selected depend on the auditor’s judgement, including
the assessment of the risks of material misstatement of the In our opinion, the Company has, in all material respects,
the year ended on that date.
financial statements, whether due to fraud or error. adequate internal financial controls with reference to
Management’s Responsibility for Internal Financial We believe that the audit evidence we have obtained is
Controls sufficient and appropriate to provide a basis for our audit For S.R. Batliboi & Associates LLP
The Company’s Management is responsible for establishing opinion on the Company’s internal financial controls with Chartered Accountants
and maintaining internal financial controls based on he reference to these financial statements.
ICAI Firm Registration Number:
internal control over financial reporting criteria established
101049W/E300004
by the Company considering the essential components of Meaning of Internal Financial Controls with reference
internal control stated in the Guidance Note on Audit of to these Financial Statements
Internal Financial Controls Over Financial Reporting issued per Amit Kabra
A company’s internal financial controls with reference
by the Institute of Chartered Accountants of India (“ICAI”). Partner
to financial statements is a process designed to provide
These responsibilities include the design, implementation
reasonable assurance regarding the reliability of financial Palace : Gurugram Membership Number: 094533
and maintenance of adequate internal financial controls
reporting and the preparation of financial statements for Date : May 6, 2022 UDIN: 22094533AIMTAY5437
that were operating effectively for ensuring the orderly
external purposes in accordance with generally accepted
and efficient conduct of its business, including adherence
accounting principles. A company’s internal financial
to the Company’s policies, the safeguarding of its assets,
controls with reference to financial statements includes
the prevention and detection of frauds and errors, the
those policies and procedures that (1) pertain to the
accuracy and completeness of the accounting records, and
maintenance of records that, in reasonable detail, accurately
the timely preparation of reliable financial information, as
and fairly reflect the transactions and dispositions of the
required under the Companies Act, 2013.
assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit
Auditor’s Responsibility preparation of financial statements in accordance with
Our responsibility is to express an opinion on the Company’s generally accepted accounting principles, and that receipts
internal financial controls with reference to these financial and expenditures of the company are being made only
statements based on our audit. We conducted our audit in in accordance with authorisations of management and
accordance with the Guidance Note on Audit of Internal directors of the company; and (3) provide reasonable
Financial Controls Over Financial Reporting (the “Guidance assurance regarding prevention or timely detection
Note”) and the Standards on Auditing, as specified under of unauthorised acquisition, use, or disposition of the
section 143(10) of the Act, to the extent applicable to an company’s assets that could have a material effect on the
audit of internal financial controls, both issued by ICAI. financial statements.
Those Standards and the Guidance Note require that we
comply with ethical requirements and plan and perform Inherent Limitations of Internal Financial Controls with
the audit to obtain reasonable assurance about whether reference to Financial Statements
adequate internal financial controls with reference to these
Because of the inherent limitations of internal financial
financial statements was established and maintained and if
controls with reference to financial statements, including
such controls operated effectively in all material respects.
the possibility of collusion or improper management
Our audit involves performing procedures to obtain audit override of controls, material misstatements due to error
evidence about the adequacy of the internal financial or fraud may occur and not be detected. Also, projections
controls with reference to these financial statements and of any evaluation of the internal financial controls with

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REPORTS 104 FINANCIAL
REPORTS 113
Balance Sheet AS AT MARCH 31, 2022 (H in millions unless otherwise stated) Statement of Profit & Loss FOR THE YEAR ENDED MARCH 31, 2022
(H in millions unless otherwise stated)
As at As at For the year ended For the year ended
Particulars Notes Particulars Notes
March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021
Assets Revenue from operations
Financial assets
Cash and cash equivalents 3 10,113.72 12,154.20 Interest income 26 10,643.19 8,275.64
Bank balance other than cash and cash equivalents 4 1,422.26 1,198.36 Fees and commission income 27 13.86 7.19
Trade receivables 5 43.42 27.93 Net gain on fair value changes 28 247.65 167.45
Loans 6 59,181.94 43,607.30
Net gain on derecognition of financial instruments under amortised cost
Other financial assets 7 668.65 300.76 29 607.95 107.84
category
Total financial assets 71,429.99 57,288.55
Non-financial Assets Total revenue from operations 11,512.65 8,558.12
Current tax assets (net) 8 353.61 119.58 Other income 30 500.84 172.76
Deferred tax assets (net) 9 867.56 765.28 Total income 12,013.49 8,730.88
Property, plant and equipment 10 122.04 102.74
Expenses
Right of use asset 11 69.17 78.19
Intangible assets 12 0.71 1.90 Finance costs 31 4,959.64 3,751.04
Other non-financial assets 13 61.74 23.09 Impairment on financial instruments 32 3,686.93 2,207.80
Total non-financial assets 1,474.83 1,090.78 Employee benefits expenses 33 2,330.66 1,686.40
Total assets 72,904.82 58,379.33
Depreciation and amortization 10-12 53.71 38.94
Liabilities
Financial liabilities Others expenses 34 738.29 478.79
Derivative financial instrument 14 77.11 - Total expenses 11,769.23 8,162.97
Trade payables Profit before tax 244.26 567.91
total outstanding dues of micro enterprises and small enterprises 15 - -
total outstanding dues of creditors other than micro enterprises and small Tax expense/(credit):
15 176.59 113.06 Current tax 35 129.77 588.71
enterprises
Debt securities 16 7,837.76 9,904.50 Deferred tax 35 (103.06) (460.24)
Borrowings (other than debt securities) 17 48,294.66 33,250.79
Profit for the year 217.55 439.44
Subordinated liabilities 18 1,625.67 1,167.21
Other financial liabilities 19 1,334.32 1,265.98 Other comprehensive income
Total financial liabilities 59,346.11 45,701.54 Items that will not be reclassified subsequently to profit or loss
Non-financial liabilities Remeasurement gains on defined benefit plans 2.96 0.04
Current tax liabilities (net) 20 1.04 53.98 Income tax effect on above (0.74) (0.01)
Provisions 21 71.68 80.76
Other non-financial liabilities 22 106.48 79.50 Total other comprehensive income for the year 2.22 0.03
Total non-financial liabilities 179.20 214.24 Total comprehensive income for the year 219.77 439.47
Total liabilities 59,525.31 45,915.78 Earnings per equity share ( equity share par value of D10 each)
Equity
Equity share capital 24 827.60 790.37 Basic (H) 36 2.67 5.56
Other equity 25 12,551.91 11,673.18 Diluted (H) 36 2.64 5.49
Total equity 13,379.51 12,463.55 Significant accounting policies 2
Total liabilities and equity 72,904.82 58,379.33
Significant accounting policies 2
The accompanying notes are an integral part of the financial statements
The accompanying notes are an integral part of the financial statements As per our report of even date
As per our report of even date for S.R. Batliboi & Associates LLP for and on behalf of the Board of Directors of
Chartered Accountants Fusion Micro Finance Limited
for S.R. Batliboi & Associates LLP for and on behalf of the Board of Directors of
ICAI Firm Registration Number: 101049W/E300004 CIN:U65100DL1994PLC061287
Chartered Accountants Fusion Micro Finance Limited
ICAI Firm Registration Number: 101049W/E300004 CIN:U65100DL1994PLC061287
Amit Kabra Devesh Sachdev Ratna Dharashree Vishwanathan
Partner Managing Director and Chief Executive Officer Director
Amit Kabra Devesh Sachdev Ratna Dharashree Vishwanathan
Membership Number : 094533 DIN : 02547111 DIN : 07278291
Partner Managing Director and Chief Executive Officer Director
Membership Number : 094533 DIN : 02547111 DIN : 07278291
Deepak Madaan Gaurav Maheshwari
Company Secretary and Compliance Officer Chief Financial Officer
Deepak Madaan Gaurav Maheshwari
Company Secretary and Compliance Officer Chief Financial Officer Place: Gurugram Place: Gurugram
Date: May 06, 2022 Date: May 06, 2022
Place: Gurugram Place: Gurugram
Date: May 06, 2022 Date: May 06, 2022

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Statement of Cash Flows FOR THE YEAR ENDED MARCH 31, 2022 Statement of Cash Flows FOR THE YEAR ENDED MARCH 31, 2022 (Contd.)
(H in millions unless otherwise stated) (H in millions unless otherwise stated)
As at As at As at As at
Particulars Particulars
March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021
I. Cash flow from operating activities II. Cash flow from investing activities
Profit before tax 244.26 567.91 Purchase of property, plant and equipments (62.77) (75.41)
Adjustments to reconcile profit before tax to net cash flows: Proceeds from sale of property, plant and equipment - 0.99
Depreciation and amortisation 53.71 38.94 Purchase of intangible assets (0.05) (2.45)
Impairment of financial instruments 3,686.93 2,207.80 Purchase of investments (67,650.00) (43,330.00)
Finance cost on lease liability 8.88 5.30 Proceeds from sale of investments 67,897.65 43,502.45
Provision for gratuity 26.07 17.90 Net cash flow from investing activities (B) 184.83 95.58
Provision for compensated absences 21.38 20.31 III. Cash flow from financing activities
Other provisions (27.51) 2.73 Proceeds from issue of equity shares 656.95 4.79
Net gain on sale of mutual fund investment (247.65) (167.45) Repayment of debt securities (2,531.01) (660.53)
Net gain on derecognition of financial instruments under amortised cost Proceeds from debt securities 450.00 6,577.19
(607.95) (128.15)
category Repayment of borrowings (other than debt securities) (25,905.28) (20,036.34)
Employee share based compensation 39.24 30.40 Proceeds from borrowings (other than debt securities) 41,043.00 28,711.21
Amortisation of processing fees (57.31) (5.88) Proceeds from Subordinated debt 550.00 -
Net foreign exchange differences (43.81) - Repayment of Subordinated debt (70.00) -
Fair value loss on derivative financial instruments 77.11 - Payment of lease liability (11.69) (4.12)
Profit on sale of assets - (1.00) Net cash (used)/flow from financing activities (C) 14,181.97 14,592.20
Operating cash flow before working capital changes 3,173.35 2,588.81 Net (decrease)/increase in cash and cash equivalents (A + B + C) (2,040.48) 6,757.53
Movement in working capital: Cash and cash equivalents at the beginning of the year 12,154.20 5,396.67
Increase in loans (19,259.56) (12,374.28) Cash and cash equivalents at the end of the year 10,113.72 12,154.20
(Increase)/decrease in trade receivables (15.49) 3.46
Note:
Decrease in other financial assets 213.99 47.95
a) For disclosures relating to change in liabilities arising from financing activities, refer note 41.
(Increase)/decrease in other non- financial assets (38.65) 10.22 b) The cash flow statement has been prepared under the indirect method as set out in Ind AS 7, “Statement of Cash
(Increase)/decrease in bank balance other than cash and cash equivalents (225.91) 1,571.37 flows”.
Increase in trade payables 63.60 72.36 c) For components of cash and cash equivalents as at March 31, 2022 and March 31, 2021 refer note 3.
Increase in other financial liability 71.15 668.07 Cash flow from operating activities includes interest received of H10,953.65 millions (previous year H6,755.39 millions) and
Increase in other non-financial liabilities 26.98 17.54 interest paid of H4,925.73 millions (previous year H3,646.87 millions).
Cash flow from operations (15,990.54) (7,394.50) Significant accounting policies 2
Income tax paid (416.74) (535.75)
Net cash (used)/flow from operating activities (A) (16,407.28) (7,930.25) The accompanying notes are an integral part of the financial statements
As per our report of even date
for S.R. Batliboi & Associates LLP for and on behalf of the Board of Directors of
Chartered Accountants Fusion Micro Finance Limited
ICAI Firm Registration Number: 101049W/E300004 CIN:U65100DL1994PLC061287

Amit Kabra Devesh Sachdev Ratna Dharashree Vishwanathan

Partner Managing Director and Chief Executive Officer Director
Membership Number : 094533 DIN : 02547111 DIN : 07278291

Deepak Madaan Gaurav Maheshwari

Company Secretary and Compliance Officer Chief Financial Officer
Place: Gurugram Place: Gurugram
Date: May 06, 2022 Date: May 06, 2022

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Statement of Changes in Equity FOR THE YEAR ENDED MARCH 31, 2022
A Equity share capital Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
(H in millions unless otherwise stated)
Changes in Changes in
Restated Changes Restated Changes
As at Equity Share As at Equity Share As at 1. Corporate information Accounting Standards (“Ind AS”) notified by under
balance as during the balance as during
Particulars April 1, Capital due to March 31, Capital due to March 31,
at April 1, year 2020- at March the year the Companies (Indian Accounting Standards) Rules,
2020 prior period
2020 21
2021 prior period
31, 2021 2021-22
2022 Fusion Micro Finance Limited (‘the Company’),
errors errors 2015 (as amended from time to time) as prescribed
(formerly known as Fusion Micro Finance Private
Equity share capital under Section 133 of the Companies Act, 2013 (‘Act’)
(fully paid up)
803.84 - 803.84 - 803.84 - 803.84 39.42 843.26 Limited) was originally incorporated as ‘Ambience
, other accounting principles generally accepted in
Less: Treasury Fincap Private Limited’ on September 5, 1994 under
(18.28) - (18.28) 0.87 (17.41) - (17.41) 1.75 (15.66) India and presentation requirements of Division III of
shares* the Companies Act, 1956. On January 9, 2003, the
Equity share capital Schedule III of the Act (Ind AS compliant Schedule III),
3.94 - 3.94 - 3.94 - 3.94 (3.94) - Reserve Bank of India (RBI) granted a certificate
(partly paid up) as applicable to the Company.
of registration as a non-deposit accepting non-
-
Total 789.50 - 789.50 0.87 790.37 - 790.37 37.23 827.60 banking financial company under Section 45IA of The financial statements have been prepared on
*Treasury shares represents shares held by ESOP Trust . The company treats ESOP Trust as its extension and shares held by ESOP Trust are treated as
the Reserve Bank of India Act, 1934. Subsequently, a historical cost basis, except for fair value through
treasury shares. the name of Company was changed to ‘Fusion Micro other comprehensive income (FVTOCI) instruments,
Finance Private Limited’ and a fresh certificate of plan assets, derivative financial instruments recorded
B. Other equity (H in millions unless otherwise stated)
incorporation, dated April 19, 2010, was issued, post at fair value through profit or loss (FVTPL) and
Other which the RBI granted a certificate of registration financial assets and liabilities designated at FVTPL,
Reserves and Surplus Comprehensive
Income
dated May 19, 2010 reflecting the change of name. all of which have been measured at fair value. The
Particulars Total Thereafter, the Company was issued a fresh certificate financial statements are presented in Indian Rupees
Employee Remeasurement
Statutory Treasury Securities Retained
reserve shares# premium
stock option
earnings
gains on defined dated January 28, 2014 from RBI for carrying on (H) and all values are rounded to the nearest million,
plan reserve benefit plans the business of Non-Banking Financial Company- except when otherwise indicated.
Balance as at April 1, 2020 322.44 (141.37) 10,087.57 43.83 880.38 6.54 11,199.39
Micro Finance Institution (‘NBFC-MFI’) .The name of
Profit for the year - - - - 439.44 - 439.44 Presentation of financial statements
Other comprehensive income for the Company was further changed to Fusion Micro
- - - - - 0.03 0.03
the year Finance Limited upon conversion to a public limited The Company presents its balance sheet in order of
Transfer from retained earnings 87.89 - - - (87.89) - - company pursuant to the special resolution passed liquidity.
Share based compensation - - - 30.40 - - 30.40
by the Shareholders of the Company and a fresh
Exercise of share options - 3.23 4.10 (3.41) - - 3.92 The Company generally reports financial assets and
Lapse of share options - - - (2.36) 2.36 - - certificate of incorporation was issued dated July
financial liabilities on a gross basis in the balance
Balance as at March 31, 2021 410.33 (138.14) 10,091.67 68.46 1,234.29 6.57 11,673.18 20, 2021. The registered office of the Company is at
sheet. They are only offset and reported net, when
Balance as at April 1, 2021 410.33 (138.14) 10,091.67 68.46 1,234.29 6.57 11,673.18 H-1, C-Block, Community Centre, Naraina Vihar, New
Profit for the year - - - - 217.55 - 217.55 in addition to having an unconditional legally
Delhi-110028.
Other comprehensive income for enforceable right to offset the recognized amounts
- - - - - 2.22 2.22
the year The Company is primarily engaged in micro finance without being contingent on a future event, the
Issue of shares - - 606.02 - - - 606.02 parties also intend to settle on a net basis in all the
lending activities, providing financial services to
Transfer to / from retained earnings 43.51 - - - (43.51) - -
Share based compensation - - - 39.24 - - 39.24 poor women in India who are organized as Joint following circumstances:
Exercise of share options - 11.44 11.08 (8.82) - - 13.70 Liability Group (‘JLGs’). The Company provides small
A. The normal course of business.
Lapse of share options - - - (3.73) 3.73 - - value collateral free loans. Apart from micro finance
Balance as at March 31, 2022 453.84 (126.70) 10,708.77 95.15 1,412.06 8.79 12,551.91 lending, the Company also have lending to MSME B. The event of default.
#Treasury shares excluding amount adjusted from equity share capital. enterprises. C. The event of insolvency or bankruptcy of the
Significant accounting policies 2 Company and/or its counterparties.
Company uses its distribution channel to provide
The accompanying notes are an integral part of the financial statements other financial products and services to the members Similarly, the Company offsets incomes and
primarily relate to providing of loans to the members expenses and reports the same on a net basis
As per our report of even date
for the purchase of certain productivity enhancing when permitted by Ind AS specifically.
for S.R. Batliboi & Associates LLP for and on behalf of the Board of Directors of products such as mobile handsets, bicycle.
Chartered Accountants Fusion Micro Finance Limited 2. Significant accounting policies
ICAI Firm Registration Number: 101049W/E300004 CIN:U65100DL1994PLC061287 The financial statements for the year ended March 2.1 Recognition of income and expense
31, 2022 were approved for issue in accordance with
Amit Kabra Devesh Sachdev Ratna Dharashree Vishwanathan
a resolution of the directors on May 06, 2022. The Company earns revenue primarily from giving
Partner Managing Director and Chief Executive Officer Director
Membership Number : 094533 DIN : 02547111 DIN : 07278291 loans. Revenue is recognized to the extent that it is
1A. Basis of Preparation of financial statements probable that the economic benefits will flow to the
Deepak Madaan Gaurav Maheshwari The financial statements of the Company as at Company and the revenue can be reliably measured.
Company Secretary and Compliance Officer Chief Financial Officer The following specific recognition criteria must also
and for the year ended March 31, 2022, have been
Place: Gurugram Place: Gurugram prepared in accordance with requirements of Indian be met before revenue is recognized:
Date: May 06, 2022 Date: May 06, 2022

118 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 119
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022

2.1.1 Interest income 2.1.2 Dividend income a) Facilitation fees income is earned by selling of 2.2.3 Measurement categories of financial assets and
services and products of other entities under liabilities
Interest revenue is recognized using the Effective Dividend income is recognized when the Company’s
distribution arrangements. The income so
Interest Rate method (EIR). The EIR method calculates right to receive the dividend is established, it is The Company classifies all of its financial assets based
earned is recognized on successful sales on
the amortized cost of a financial instrument and probable that the economic benefits associated on the business model for managing the assets and
behalf of other entities subject to there being
allocates the interest income or interest expense with the dividend will flow to the entity and the the asset’s contractual terms, measured at either:
no significant uncertainty of its recovery.
over the relevant period. amount of the dividend can be measured reliably.
a) Amortized cost, as explained in Note 2.3.1
This is generally when the shareholders approve the b) The company recognizes revenue from
The Company calculates interest income by applying
dividend. market support services upon satisfaction b) FVTPL as explained in Notes 2.3.4
the EIR to the gross carrying amount of financial
of performance obligation by rendering of
assets other than the credit impaired assets. 2.1.3 Net gain on derecognition of financial instruments c) FVTOCI
services underlying the contract with third
under amortized cost category The Company classifies and measures its trading
When a financial asset becomes credit impaired party customers.
and is, therefore, regarded as ‘Stage 3’, the Company Where derecognition criteria as per Ind AS 109, portfolio at FVTPL. The Company may designate
c) Revenue from business correspondence
calculates the interest income by applying the including transaction of substantially all the risks and financial instruments at FVTPL, if so doing eliminates
services is recognized point in time when
effective interest rate to the net amortized cost of rewards relating to assets being transferred to the or significantly reduces measurement or recognition
performance obligation is satisfied as per
the financial asset. If the financial assets cures and is buyer being met, the assets have been derecognized. inconsistencies.
agreed terms and conditions of the contract
no longer credit-impaired, the Company reverts to Income from assignment transactions i.e. present Financial liabilities, are measured at FVTPL when
calculating interest income a gross basis. value of excess interest spread is recognized. Refer 2.2 Financial Instruments– initial recognition
they are derivative instruments or the fair value
Note 2.5 for policy on derecognition of financial designation is applied, as explained in Note 2.3.4
[Link] The effective interest rate method A financial instrument is any contract that gives
assets and liability.
rise to a financial asset of one entity and a financial
Under Ind AS 109 interest income is recorded 2.3 Financial assets and liabilities
2.1.4 Net Gain/Loss on fair value changes liability or equity instrument of another entity.
using the effective interest rate (EIR) method for all 2.3.1 Cash and cash equivalents, Bank balances, Loans,
Financial assets and financial liabilities are recognized
financial instruments measured at amortized cost, The Company recognizes the fair value on investment Trade receivables, financial investments and
when the entity becomes a party to the contractual
debt instrument measured at FVTOCI and debt in mutual funds measured at FVTPL in the statement other financial assets at amortized cost
provisions of the instrument.
instruments designated at FVTPL. The EIR is the rate of profit and loss in accordance with Ind AS 109.
that exactly discounts estimated future cash receipts 2.2.1 Date of recognition The Company measures cash and cash equivalents
2.1.5 Interest Expense Bank balances, Loans, Trade receivables and other
through the expected life of the financial instrument
Financial assets and liabilities, with an exception of
or, when appropriate, a shorter period, to the net Interest expense includes issue costs that are initially financial investments and assets at amortized cost if
loans, debt securities, deposits and borrowings are
carrying amount of the financial assets. recognized as part of the carrying value of the both of the following conditions are met:
initially recognized on the trade date, i.e., the date
financial liability and amortized over the expected The financial asset is held within a business
The EIR (and therefore, the amortized cost of the that the Company becomes a party to the contractual
life using the effective interest method. These include model whose objective is to hold assets in
asset) is calculated by considering any discount or provisions of the instrument. Loans are recognized
fees and commissions payable to arrangers and other order to collect contractual cash flows.
premium on acquisition, fees and transaction costs when funds are disbursed to the customer’s accounts.
expenses such as external legal costs, provided these
that are an integral part of the EIR. The Company The Company recognises debt securities, deposits The contractual terms of the financial asset
are incremental costs that are directly related to the
recognises interest income using a rate of return and borrowings when funds reach the Company. give rise on specified dates to cash flows that
issue of a financial liability.
that represents the best estimate of a constant rate are solely payments of principal and interest
2.2.2 Initial measurement of financial instruments
of return over the expected life of the loan. Hence, 2.1.6 Revenue from Contracts with Customers (SPPI) on the principal amount outstanding.
it recognises the effect of potentially different The classification of financial instruments at initial
The Company recognizes revenue from contracts The details of these conditions are outlined below.
interest rates charged at various stages, and other recognition depends on their contractual terms and
with customers (other than financial assets to which
characteristics of the product life cycle (including the business model for managing the instruments. [Link] Business model assessment
Ind AS 109 ‘Financial Instruments’ is applicable) based
prepayments, penalty interest and charges). Financial instruments are initially measured at their
on a comprehensive assessment model as set out in The Company determines its business model at the
fair value, except in the case of financial assets and
If expectations regarding the cash flows on the Ind AS 115 ‘Revenue from Contracts with Customers’. level that best reflects how it manages groups of
financial liabilities recorded at Fair value through
financial asset are revised for reasons other than The Company identifies contract(s) with a customer financial assets to achieve its business objective. The
profit or loss (FVTPL), transaction costs are added to,
credit risk. The adjustment is booked as a positive and its performance obligations under the contract, information considered includes:
subtracted from, this amount. Trade receivables are
or negative adjustment to the carrying amount determines the transaction price and its allocation
measured at the transaction price. The Company's business model is not assessed on an
of the asset in the balance sheet with an increase to the performance obligations in the contract and
or reduction in interest income. The adjustment is recognizes revenue only on satisfactory completion instrument-by-instrument basis, but at a higher level
subsequently amortized through Interest income in of performance obligations. Revenue is measured at of aggregated portfolios and is based on observable
the statement of profit and loss. fair value of the consideration received or receivable. factors such as:

120 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 121
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022

How the performance of the business model [Link] The SPPI test 2.3.2 Derivative financial instruments at fair value The notional amount and fair value of such derivatives
and the financial assets held within that through profit or loss are disclosed separately in Note 14. The Company
As a second step of its classification process the
business model are evaluated and reported to does not apply hedge accounting.
Company assesses the contractual terms of financial A derivative is a financial instrument or other contract
the entity's key management personnel.
assets to identify whether they meet the solely with all three of the following characteristics: 2.3.3 Debt securities and other borrowed funds
The risks that affect the performance of the payments of principal and interest (the ‘SPPI test’).
Its value changes in response to the change in After initial measurement, debt issued and other
business model (and the financial assets held
For the purposes of this test, ‘principal’is defined as the a specified interest rate, financial instrument borrowed funds are subsequently measured at
within that business model) and, in particular,
fair value of the financial asset on initial recognition price, commodity price, foreign exchange rate, amortized cost. Amortized cost is calculated by
the way those risks are managed.
and may change over the life of the financial asset index of prices or rates, credit rating or credit taking into account any discount or premium on
How managers of the business are (for example, if there are repayments of principal or index, or other variable, provided that, in the funds issued, and costs that are an integral part of
compensated (for example, whether the amortisation of the premium/discount). case of a non-financial variable, it is not specific the EIR. A compound financial instrument which
compensation is based on the fair value of the to a party to the contract (i.e., the 'underlying'). contains both a liability and an equity component is
‘Interest’ within a lending arrangement are typically
assets managed or on the contractual cash separated at the issue date
the consideration for the time value of money and for It requires no initial net investment or an initial
flows collected).
the credit risk associated with the principal amount net investment that is smaller than would be For the accounting treatment of financial instruments
The expected frequency, value and timing outstanding during a particular period of time and required for other types of contracts expected with equity conversion rights and call options, the
of sales are also important aspects of the for other basic lending risks and costs (e.g. liquidity to have a similar response to changes in market Company first establishes whether the instrument
Company’s assessment. However, information risk and administrative costs), as well as profit margin. factors. is a compound instrument and classifies such
about sales activity is not considered in To make the SPPI assessment, the Company applies instrument’s components separately as financial
It is settled at a future date.
isolation, but as part of an overall assessment judgement and considers relevant factors such as the liabilities or equity instruments in accordance with
of how the Company’s stated objective for currency in which the financial asset is denominated, Initial recognition and subsequent measurement Ind AS 32. Classification of the liability and equity
managing the financial assets is achieved and and the period for which the interest rate is set. components of a convertible instrument is not
The Company uses derivative financial instruments,
how cash flows are realised. revised as a result of a change in the likelihood that
Where the business model is to hold assets to collect such as currency and interest rate swaps , to hedge
a conversion option will be exercised, even when
The stated policies and objectives for the contractual cash flows (i.e. measured at amortized its foreign currency risks and interest rate risks,
exercising the option may appear to have become
portfolio and the operation of those policies in cost) or to collect contractual cash flows and sell (i.e. respectively. Derivative financial instruments are
economically advantageous to some holders. When
practice. In particular, whether management’s measured at fair value through other comprehensive initially recognized at fair value on the date on
allocating the initial carrying amount of a compound
strategy focuses on earning contractual interest income), the Company assesses whether the financial which a derivative contract is entered into and are
financial instrument to the equity and liability
revenue, maintaining a particular interest rate instruments’ cash flows represent SPPI. In making subsequently re-measured at fair value. Derivatives
components, the equity component is assigned as
profile, matching the duration of the financial this assessment, the Company considers whether are carried as financial assets when the fair value is
the residual amount after deducting from the entire
assets to the duration of the liabilities that are the contractual cash flows are consistent with a positive and as financial liabilities when the fair value
fair value of the instrument, the amount separately
funding those assets or realising cash flows basic lending arrangement i.e. interest includes only is negative. Any gains or losses arising from changes
determined for the liability component. Once the
through the sale of the assets; consideration for the time value of money, credit risk, in the fair value of derivatives are taken directly to
Company has determined the split between equity
other basic lending risks and a profit margin that is profit or loss except for the effective portion of cash
The business model assessment is based on and liability, it further evaluates whether the liability
consistent with a basic lending arrangement. Where flow hedges, which is recognised in OCI and later
reasonably expected scenarios without taking 'worst component has embedded derivatives that must be
the contractual terms introduce exposure to risk or reclassified to profit or loss when the hedge item
case' or 'stress case’ scenarios into account. If cash accounted for separately.
volatility that are inconsistent with a basic lending affects profit or loss or treated as basis adjustment
flows after initial recognition are realised in a way that
arrangement, the related financial asset is classified if a hedged forecast transaction subsequently results 2.3.4 Financial assets and financial liabilities at fair
is different from the Company's original expectations,
and measured at fair value through profit or loss. The in the recognition of a non-financial asset or non- value through profit or loss
the Company does not change the classification of
amortized cost, as mentioned above, is computed financial liability.
the remaining financial assets held in that business Financial assets and financial liabilities in this
using the effective interest rate method.
model, but incorporates such information when Changes in the fair value of currency and interest category are those that are not held for trading
assessing newly originated or newly purchased After initial measurement, such financial assets are rate swaps entered to hedge foreign currency risks and have been either designated by management
financial assets going forward. subsequently measured at amortized cost using the and interest rate risks, respectively, on external upon initial recognition or are mandatorily required
EIR method. Amortized cost is calculated by taking commercial borrowing are included in Net loss / to be measured at fair value under Ind AS 109.
into account any discount or premium on acquisition (gain) on fair value of derivative contracts measured Management only designates an instrument at FVTPL
and fees or costs that are an integral part of the EIR. at fair value through profit or loss under finance upon initial recognition when one of the following
The EIR amortisation is included in interest income cost. Changes in the fair value of other derivatives criteria are met. Such designation is determined on
in the profit or loss. The losses arising from ECL are included in net gain/(loss) on fair value changes an instrument-by-instrument basis:
impairment are recognized in the profit or loss. unless hedge accounting is applied.

122 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 123
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022

The designation eliminates, or significantly of the asset but has transferred control of the instruments’. Equity instruments are not subject to Loans considered credit-impaired. The Company
reduces, the inconsistent treatment that would asset. impairment under Ind AS 109. records an allowance for the LTECLs. All exposures
otherwise arise from measuring the assets or having overdue balances for a period exceeding 90
When the Company has transferred its rights to The ECL allowance is based on the credit losses
liabilities or recognising gains or losses on days are considered to be defaults and are classified
receive cash flows from an asset or has entered into expected to arise over the life of the asset (the
them on a different basis under this stage.
a pass-through arrangement, it evaluates if and to lifetime expected credit loss or LTECL), unless there
Or what extent it has retained the risks and rewards has been no significant increase in credit risk since For financial assets for which the Company has no
of ownership. When it has neither transferred nor origination, in which case, the allowance is based reasonable expectations of recovering either the
The liabilities are part of a group of financial
retained substantially all of the risks and rewards of on the 12 months’ expected credit loss (12mECL). entire outstanding amount, or a proportion thereof,
liabilities, which are managed and their
the asset, nor transferred control of the asset, the The Company’s policies for determining if there has the gross carrying amount of the financial asset is
performance evaluated on a fair value basis,
Company continues to recognise the transferred been a significant increase in credit risk are set out in reduced. This is considered a (partial) derecognition
in accordance with a documented risk
asset to the extent of the Company’s continuing Note 46 (e). of the financial asset.
management or investment strategy
involvement. In that case, the Company also
The 12mECL is the portion of LTECLs that represent 2.7.2 Methodology for calculating ECL
Or recognises an associated liability. The transferred
the ECLs that result from default events on a financial
asset and the associated liability are measured on a The Company calculates ECL based on a probability
The liabilities containing one or more instrument that are possible within the 12 months
basis that reflects the rights and obligations that the weighted outcome of factors indicated below to
embedded derivatives, unless they do not after the reporting date.
Company has retained. measure the expected cash shortfalls. The Company
significantly modify the cash flows that would
Both LTECLs and 12mECLs are calculated on either does not discount such shortfalls considering
otherwise be required by the contract, or it is Continuing involvement that takes the form of a
an individual basis or a collective basis, depending relatively shorter tenure of loan contracts. A cash
clear with little or no analysis when a similar guarantee over the transferred asset is measured at
on the nature of the underlying portfolio of financial shortfall is the difference between the cash flows that
instrument is first considered that separation the lower of the original carrying amount of the asset
instruments. are due to an entity in accordance with the contract
of the embedded derivative(s) is prohibited and the maximum amount of consideration that the
and the cash flows that the entity expects to receive
Company could be required to repay. Based on the above process, the Company
2.4 Reclassification of financial asset and liabilities
categorizes its loans into Stage 1, Stage 2, Stage 3 as Key factors applied to determine ECL are outlined as
A financial liability is derecognized when the
Financial assets are not reclassified subsequent to described below: follows:
obligation under the liability is discharged or
their initial recognition, apart from the exceptional
cancelled or expires. When an existing financial Stage 1 Probability of default (PD) – The probability of
circumstances in which the Company acquires,
liability is replaced by another from the same default is an estimate of the likelihood of default over
disposes of, or terminates a business line. Financial When loans are first recognised, the Company
lender on substantially different terms, or the terms a given time horizon. A default may only happen at
liabilities are never reclassified. The Company did recognises an allowance based on 12mECLs. Stage
of an existing liability are substantially modified, a certain time over the assessed period, if the facility
not reclassify any of its financial assets or liabilities in 1 loans also include facilities where the credit risk
such an exchange or modification is treated as has not been previously derecognized and is still in
2021-22 and 2020-21. has improved, and the loan has been reclassified
the derecognition of the original liability and the the portfolio.
from Stage 2. The Company has assessed that all
2.5 Derecognition of financial assets and liabilities recognition of a new liability. The difference in the standard exposures (i.e. exposures with no overdues) Exposure at default (EAD) – Exposure at default
A financial asset (or, where applicable, a part of respective carrying amounts is recognized in the and exposure up to 30 days overdues fall under this (EAD) is the sum of outstanding principal and the
a financial asset or part of a Company of similar statement of profit and loss. category. interest amount accrued but not received on each
financial assets) is primarily derecognized when: 2.6 Offsetting of financial instruments loan as at reporting date.
Stage 2
The rights to receive cash flows from the asset Financial assets and financial liabilities are offset Loss given default (LGD) – It is an estimate of the loss
When loan that have had a significant increase in
have expired, or and the net amount is reported in the balance sheet arising when the event of default occurs. It is based
credit risk since initial recognition are classified under
The Company has transferred its rights to when there is a legally enforceable right to offset on the difference between the contractual cash
this stage. Based on empirical evidence, significant
receive cash flows from the asset or has the recognized amounts and there is an intention to flows due and those that the lender would expect to
increase in credit risk is witnessed after the overdues
assumed an obligation to pay the received cash settle on a net basis, or realise the asset and settle the receive. It is usually expressed as a percentage of the
on an exposure exceed for a period more than 30 days.
flows in full without material delay to a third liability simultaneously (‘the offset criteria’). EAD.
Accordingly, the Company classifies all exposures
party under a ‘pass-through’ arrangement; and 2.7 Impairment of Financial Assets with overdues exceeding 30 days at each reporting Impairment losses and releases are accounted for
either: date under this Stage. The Company records an and disclosed separately from modification losses or
2.7.1 Overview of principles for measuring expected
(a) the Company has transferred substantially all allowance for the LTECLs. Stage 2 loans also include gains that are accounted for as an adjustment of the
credit loss ('ECL') on financial assets.
the risks and rewards of the asset, or facilities, where the credit risk has improved, and the financial asset’s gross carrying value
The Company records allowance for expected credit loan has been reclassified from Stage 3.
(b) the Company has neither transferred nor The mechanics of the ECL method are summarised
retained substantially all the risks and rewards losses for all loans, other debt financial assets not held
Stage 3 below:
at FVTPL, in this section all referred to as ‘financial

124 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 125
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022

Stage 1: The 12mECL is calculated as the portion offs. If the amount to be written off is greater than The principal or the most advantageous market must such adjustments are based on unobservable inputs
of LTECLs that represent the ECLs that the accumulated loss allowance, the difference is be accessible by the Company. which are significant to the entire measurement, the
result from default events on a financial first treated as an addition to the allowance that is Company will classify the instruments as Level 3.
The fair value of an asset or a liability is measured
instrument that are possible within the then applied against the gross carrying amount. Any
using the assumptions that market participants Level 3 financial instruments − Includes one or
12 months after the reporting date. subsequent recoveries against such loan are credited
would use when pricing the asset or liability, more unobservable input where there is little market
The Company calculates the 12mECL to the statement of profit and loss.
assuming that market participants act in their activity for the asset/liability at the measurement
allowance based on the expectation of
2.7.5 Impairment of non-financial assets economic best interest. date that is significant to the measurement as a
a default occurring in the 12 months
whole.
following the reporting date. These The Company assesses, at each reporting date, A fair value measurement of a non-financial asset
expected 12-month default probabilities whether there is an indication that an asset may be takes into account a market participant’s ability to For assets and liabilities that are recognized in
are applied to a EAD and multiplied by the impaired. If any indication exists, or when annual generate economic benefits by using the asset in the Financial statements on a recurring basis, the
expected LGD. impairment testing for an asset is required, the its highest and best use or by selling it to another Company determines whether transfers have
Company estimates the asset’s recoverable amount. market participant that would use the asset in its occurred between levels in the hierarchy by re-
Stage 2: When a loan has shown a significant
An asset’s recoverable amount is the higher of an highest and best use. assessing categorisation (based on the lowest level
increase in credit risk since origination,
asset’s fair value less costs of disposal and its value input that is significant to the fair value measurement
the Company records an allowance for Accordingly, the Company uses valuation techniques
in use. Recoverable amount is determined for an as a whole) at the end of each reporting period.
the LTECLs. The mechanics are similar to that are appropriate in the circumstances and for
individual asset, unless the asset does not generate
those explained above, including the use which sufficient data is available to measure fair The Company evaluates the levelling at each
cash inflows that are largely independent of those
of multiple scenarios, but PDs and LGDs value, maximizing the use of relevant observable reporting period on an instrument-by-instrument
from other assets or groups of assets. When the
are estimated over the lifetime of the inputs and minimizing the use of unobservable basis and reclassifies instruments when necessary
carrying amount of an asset exceeds its recoverable
instrument. inputs. based on the facts at the end of the reporting period.
amount, the asset is considered impaired and is
Stage 3: For loans considered credit-impaired, written down to its recoverable amount. In order to show how fair values have been derived, 2.9 Foreign Currency transactions
the Company recognises the lifetime financial instruments are classified based on a
In assessing value in use, the estimated future cash 2.9.1 Functional and presentation currency
expected credit losses for these loans. hierarchy of valuation techniques, as summarised
flows are discounted to their present value using a The Financial statements are presented in Indian
The method is similar to that for Stage 2 below:
pre-tax discount rate that reflects current market Rupees (H), which are the functional currency of the
assets, with the PD set at 100%. Level 1 financial instruments - Those where the
assessments of the time value of money and the Company and the currency of the primary economic
2.7.3 Forward looking information risks specific to the asset. In determining fair value inputs used in the valuation are unadjusted quoted
environment in which the Company operates.
less costs of disposal, recent market transactions are prices from active markets for identical assets or
While estimating the expected credit loss, the 2.9.2 Transaction and balance
taken into account. If no such transactions can be liabilities that the Company has access to at the
Company reviews macro-economic developments
identified, an appropriate valuation model is used. measurement date. The Company considers markets
occurring in the economy and market it operates in. Transactions in foreign currencies are initially
as active only if there are sufficient trading activities
On a periodic basis, the Company analyses if there is 2.8 Fair value measurement recorded in the functional currency at the spot rate
with regards to the volume and liquidity of the
any relationship between key economic trends like of exchange ruling at the date of the transaction.
The Company measures financial instruments, such identical assets or liabilities and when there are
GDP, Inflation, Unemployment rates, Benchmark Monetary assets and liabilities denominated
as, derivatives at fair value at each balance sheet binding and exercisable price quotes available on
rates set by Reserve Bank of India, with the estimate in foreign currencies are retranslated into the
date. the balance sheet date.
of PD, LGD determined by the Company based in functional currency at the spot rate of exchange at
its internal data. While the internal estimates of Fair value is the price at the measurement date that Level 2 financial instruments - Those where the
the reporting date. All exchange differences arising
PD, LGD rates by the Company may not be always would be received to sell an asset or paid to transfer inputs that are used for valuation and are significant,
from foreign currency borrowings are regarded as a
reflective of such relationships, temporary overlays a liability, in an orderly transaction between market are derived from directly or indirectly observable
cost of borrowing irrespective of whether they are
are embedded in the methodology to reflect such participants at the measurement date. The fair value market data available over the entire period of the
capitalized or not as a part of the cost of the asset.
macro-economic trends reasonably. measurement is based on the presumption that the instrument’s life. Such Inputs include quoted prices
transaction to sell the asset or transfer the liability for similar assets or liabilities in active markets, quoted Non–monetary items that are measured at historical
2.7.4 Write-offs cost in a foreign currency are translated using the
takes place either: prices for identical instruments in inactive markets
Loans are written off in their entirety only when and observable inputs other than quoted prices such spot exchange rates as at the date of recognition.
In the principal market for the asset or liability, or
the Company has stopped perusing the recovery. as interest rates and yield curves, implied volatilities, 2.10 Leasing
This is generally the case when the Company In the absence of a principal market, in the and credit spreads. In addition, adjustments may be
determines that the borrower does not have assets most advantageous market for the asset required for the condition or location of the asset The Company assesses at contract inception whether
or sources of income that could generate sufficient or liability or the extent to which it relates to items that are a contract is, or contains, a lease. That is, if the
cash flows to repay the amounts subject to write- comparable to the valued instrument. However, if contract conveys the right to control the use of an

126 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 127
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022

identified asset for a period of time in exchange for In calculating the present value of lease payments, they are accounted for as a separate items (major The Company assesses at each Balance Sheet date
consideration. the Company uses its incremental borrowing rate at components) of property, plant and equipment. whether there is any indication that an asset may be
the lease commencement date because the interest impaired.
Where the Company is lessee Leasehold improvements are amortized on straight
rate implicit in the lease is not readily determinable.
line basis over the lease term or the estimated useful The useful lives of intangible assets are assessed to
The Company applies a single recognition and After the commencement date, the amount of lease
life of the assets, whichever is lower. be either finite or indefinite. Intangible assets with
measurement approach for all leases, except for liabilities is increased to reflect the accretion of
finite lives are amortized over the useful economic
short-term leases and leases of low-value assets. The interest and reduced for the lease payments made. The residual values, useful lives and methods of
life. The amortisation period and the amortisation
Company recognises lease liabilities to make lease In addition, the carrying amount of lease liabilities depreciation of property, plant and equipment are
method for an intangible asset with a finite useful
payments and right-of-use assets representing the is remeasured if there is a modification, a change in reviewed at each financial year end and adjusted
life are reviewed at least at the end of each reporting
right to use the underlying assets. the lease term, a change in the lease payments (e.g., prospectively, if appropriate
period.
changes to future payments resulting from a change
• Right-of-use assets Property plant and equipment is derecognized
in rate used to determine such lease payments) or a Amortisation is calculated using the straight–line
on disposal or when no future economic benefits
The Company recognises right-of-use assets at the change in the assessment of an option to purchase method to write down the cost of intangible assets to
are expected from its use. Any gain or loss arising
commencement date of the lease (i.e., the date the the underlying asset. their residual values over their estimated useful lives,
on derecognition of the asset (calculated as the
underlying asset is available for use). Right-of-use as follows:
Short term lease difference between the net disposal proceeds and
assets are measured at cost, less any accumulated
the carrying amount of the asset) is recognized in Computer software - 3-6 years
depreciation and accumulated impairment losses, The Company applies the short-term lease
other income / expense in the statement of profit
and adjusted for any remeasurement of lease recognition exemption to its short-term leases (i.e., Changes in the expected useful life or the expected
and loss in the year the asset is derecognised.
liabilities. The cost of right-of-use assets includes the those leases that have a lease term of 12 months pattern of consumption of future economic benefits
amount of lease liabilities recognised, initial direct or less from the commencement date and do not Depreciation on property, plant and equipment embodied in the asset are considered to modify the
costs incurred, and lease payments made at or before contain a purchase option). Lease payments on provided on written down value method at the rate amortisation period or method, as appropriate, and
the commencement date less any lease incentives short-term leases are recognized as and when due. arrived based on useful life of the assets, prescribed are treated as changes in accounting estimates. An
received. Right-of-use assets are depreciated on a under schedule II of the Act, which also represents intangible asset is derecognized upon disposal (i.e.,
2.11 Cash and Cash Equivalents
straight-line basis over the shorter of the lease term the estimate of the useful life of the assets by the at the date the recipient obtains control) or when no
and the estimated useful lives of the assets. Cash and cash equivalent in the balance sheet management. future economic benefits are expected from its use.
comprise cash at banks and on hand and short-term Any gain or loss arising upon derecognition of the
If ownership of the leased asset transfers to the Depreciation on assets sold during the year is
deposits with an original maturity of three months asset (calculated as the difference between the net
Company at the end of the lease term or the charged to the statement of Profit and Loss up to the
or less, which are subject to an insignificant risk of disposal proceeds and the carrying amount of the
cost reflects the exercise of a purchase option, date of sale.
changes in value. asset) is included in the statement of profit and loss.
depreciation is calculated using the estimated useful
The Company has used the following useful lives when the asset is derecognized.
life of the asset. For the purpose of the statement of cash flows, cash
to provide depreciation on its Property, plant and
and cash equivalents consist of cash and short-term 2.14 Retirement and other Employee benefits
The right-of-use assets are also subject to equipment.
deposits, as defined above, net of outstanding bank
impairment. Refer to the accounting policies in note 2.14.1 Short term employee benefits
overdrafts as they are considered an integral part of Asset category Useful life (in years)
2.7.5 Impairment of non-financial assets.
the Company’s cash management. Short-term employee benefits are expensed as the
• Lease Liabilities Furniture & Fixture 10 related service is provided. A liability is recognized
2.12 Property, Plant and Equipment (PPE) Electrical fittings 10 for the amount expected to be paid if the Company
At the commencement date of the lease, the Company
Property, plant and equipment is stated at cost Computers & Printers 3 has a present legal or constructive obligation to pay
recognises lease liabilities measured at the present
excluding the costs of day–to–day servicing, this amount as a result of past service provided by
value of lease payments to be made over the lease Office Equipment 5
less accumulated depreciation and accumulated the employee and the obligation can be estimated
term. The lease payments include fixed payments Vehicles 8
impairment in value if any. Cost comprises the reliably.
(including in substance fixed payments) less any
purchase price and any attributable cost of bringing 2.13 Intangible assets
lease incentives receivable, variable lease payments 2.14.2 Share-based payment arrangements
the asset to its working condition for its intended use.
that depend on an index or a rate, and amounts The Company’s intangible assets mainly include the
Changes in the expected useful life are accounted for The Company has formulated an Employees Stock
expected to be paid under residual value guarantees. Computer Software. An intangible asset is recognized
by changing the amortisation period or methodology, Option Schemes to be administered through
The lease payments also include the exercise price of only when its cost can be measured reliably and it is
as appropriate, and treated as changes in accounting a Trust. The scheme provides that subject to
a purchase option reasonably certain to be exercised probable that the expected future economic benefits
estimates. continued employment with the Company, the
by the Company and payments of penalties for that are attributable to it will flow to the Company. employees are granted an option to acquire equity
terminating the lease, if the lease term reflects the If significant parts of an item of property, plant Intangible assets acquired separately are measured shares of the Company that may be exercised
Company exercising the option to terminate. and equipment have different useful lives, then on initial recognition at cost. within the specified period.

128 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 129
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022


The cost of equity-settled transactions is then excess is recognized as an asset to the extent 2.14.5 Other long-term employee benefits evaluates positions taken in the tax returns with
determined by the fair value at the date when that the pre-payment will lead to, for example, a respect to situations in which applicable tax
Compensated absences are a long-term employee
the grant is made using an appropriate valuation reduction in future payment or a cash refund. regulations are subject to interpretation and
benefit and are accrued based on an actuarial
model. Further details are given in Note 42. establishes provisions where appropriate.
2.14.4 Defined benefit plans valuation done as per projected unit credit method
That cost is recognized in employee benefits as at the Balance Sheet date, carried out by an Current tax assets and liabilities are offset only if,
The Company has defined benefit gratuity plan.
expense over the period in which service conditions independent actuary. the Company:
The Company’s net obligation in respect of gratuity
are fulfilled, together with a corresponding
is calculated by estimating the amount of future Actuarial gains and losses arising during the year has a legally enforceable right to set off the
increase in employee stock option plan reserve in
benefit that employees have earned in the current are immediately recognized in the statement of recognized amounts; and
other equity. The cumulative expense is recognized
and prior periods, discounting that amount and profit and loss.
for equity-settled transactions at each reporting intends either to settle on a net basis, or
deducting the fair value of any plan assets.
date until the vesting date reflects the extent to 2.15 Provisions to realise the asset and settle the liability
which the vesting period has expired. The expense The calculation of defined benefit obligations is simultaneously.
Provisions are recognized when the Company
or credit in the statement of profit and loss for a performed annually by a qualified actuary using the
has a present obligation (legal or constructive) as 2.17.2 Deferred tax
period represents the movement in cumulative projected unit credit method. When the calculation
a result of past events, and it is probable that an
expense recognized as at the beginning and end of results in a potential asset for the Company, the Deferred tax is provided using the balance sheet
outflow of resources embodying economic benefits
that period and is recognized in employee benefits recognized asset is limited to the present value approach on temporary differences between the
will be required to settle the obligation, and a
expense. of economic benefits available in the form of any tax bases of assets and liabilities and their carrying
reliable estimate can be made of the amount of
future refunds from the plan or reductions in future amounts for financial reporting purposes at the
Service conditions are not taken into account the obligation. When the effect of the time value
contributions to the plan. To calculate the present reporting date.
when determining the grant date fair value of of money is material, the Company determines the
value of economic benefits, consideration is given Deferred tax liabilities are recognized for all taxable
awards, but the likelihood of the conditions being level of provision by discounting the expected cash
to any applicable minimum funding requirements. temporary differences, except:
met is assessed as part of the Company’s best flows at a pre-tax rate reflecting the current rates
estimate of the number of equity instruments that 
Remeasurement of the net defined benefit specific to the liability. When discounting is used, the
Where the deferred tax liability arises from
will ultimately vest. No expense is recognized for liability/asset, which comprise actuarial gains increase in the provision due to the passage of time is
the initial recognition of goodwill or of an
awards that do not ultimately vest because service and losses, the return on plan assets (excluding recognized as a finance cost. The expense relating to
asset or liability in a transaction that is not a
conditions have not been met. interest) and the effect of the asset ceiling (if any, any provision is presented in the statement of profit
business combination and, at the time of the
excluding interest), are recognized immediately in and loss net of any reimbursement.

The dilutive effect of outstanding options is transaction, affects neither the accounting
the balance sheet with a corresponding debit or profit nor taxable profit or loss.
reflected as additional share dilution in the 2.16 Share issue expenses
credit to OCI ( other Comprehensive Income) in the
computation of diluted earnings per share. Incremental costs that are directly attributable to the In respect of taxable temporary differences
period in which they occur. Net interest expense
2.14.3 Defined contribution plans (income) on the net defined liability (assets) is issue of an equity instrument (i.e. they would have associated with investments in subsidiaries,
computed by applying the discount rate, used to been avoided if the instrument had not been issued) where the timing of the reversal of the

Obligations for contributions to defined temporary differences can be controlled and
measure the net defined liability (asset), to the net are deducted from equity.
contribution plans are expensed as the related it is probable that the temporary differences
defined liability (asset) at the start of the financial 2.17 Taxes
service is provided. Post-employment benefits in will not reverse in the foreseeable future
year after taking into account any changes as a
the form of provident fund , and other funds are 2.17.1 Current tax
result of contribution and benefit payments during Deferred tax assets are recognized for all deductible
defined contribution scheme.
the year. Net interest expense and other expenses Current tax assets and liabilities for the current and temporary differences, the carry forward of unused

The Company has no obligation, other than related to defined benefit plans are recognized in prior years are measured at the amount expected tax credits and any unused tax losses. Deferred
the contribution payable to the provident fund profit or loss. Remeasurements are not reclassified to be recovered from, or paid to, the taxation tax assets are recognized to the extent that it is
and pension scheme. The Company recognises to profit or loss in subsequent periods. authorities. It is computed using tax rates and probable that taxable profit will be available against
contribution payable to scheme as an expense, tax laws enacted or substantively enacted at the which the deductible temporary differences, and
When the benefits of a plan are changed or when
when an employee renders the related service. If reporting date. the carry forward of unused tax credits and unused
a plan is curtailed, the resulting change in benefit
the contribution payable to the scheme for service tax losses can be utilised Deferred tax assets are
that relates to past service or the gain or loss on Current income tax relating to items recognized
received before the balance sheet date exceeds the reviewed at each reporting date and are reduced
curtailment is recognized immediately in profit or outside profit or loss is recognized outside profit
contribution already paid, the deficit payable to the to the extent that it is no longer probable that
loss. The Company recognises gains and losses on or loss (either in other comprehensive income
scheme is recognized as a liability after deducting sufficient taxable profit will be available to allow all
the settlement of a defined benefit plan when the or in equity). Current tax items are recognized in
the contribution already paid. If the contribution or part of the deferred tax asset to be utilized.
settlement occurs. correlation to the underlying transaction either in
already paid exceeds the contribution due for
services received before the balance sheet date, OCI or directly in equity. Management periodically

130 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 131
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022

Unrecognized deferred tax assets are reassessed at 2.18 Earning per share A contingent asset is a possible asset that arises from significant effect on the amounts recognized in the
each reporting date and recognized to the extent past events and whose existence will be confirmed financial statements is included in the following notes:
The Company reports basic and diluted earnings
that it has become probable that future taxable only by the occurrence or non-occurrence of one or
per share in accordance with Ind AS33 on Earnings Business model assessment
profits will allow the deferred tax asset to be more uncertain future events not wholly within the
per share. Basic earnings per share are calculated by
recovered. control of the entity. Contingent assets are disclosed, Classification and measurement of financial
dividing the net profit or loss for the year attributable
where an inflow of economic benefits are probable. assets depends on the results of the SPPI and the
Deferred tax assets and liabilities are measured at to equity shareholders by the weighted average
The Company shall not recognise a contingent asset business model test. The Company determines the
the tax rates that are expected to apply in the year number of equity shares outstanding during the
unless the recovery is virtually certain business model at a level that reflects how groups
when the asset is realised or the liability is settled, period. Partly paid equity shares are treated as a
of financial assets are managed together to achieve
using tax rates (and tax laws) that have enacted or fraction of an equity share to the extent that they are 2.21 Treasury Shares
a particular business objective. This assessment
substantively enacted at the reporting date. entitled to participate in dividends relative to a fully
The Company has created an Employee Benefit includes judgement reflecting all relevant evidence
paid equity share during the reporting year.
Deferred tax relating to items recognized outside Trust (EBT) for providing share-based payment to including how the performance of the assets is
profit or loss is recognized outside profit or loss For the purpose of calculating diluted earnings per its employees. The Company uses EBT as a vehicle evaluated and their performance measured, the
(either in other comprehensive income or in share, the net profit or loss for the year attributable for distributing shares to employees under the risks that affect the performance of the assets and
equity). Deferred tax items are recognized in to equity shareholders and the weighted average employee stock option schemes. how these are managed and how the managers of
correlation to the underlying transaction either in number of shares outstanding during the period are the assets are compensated. The Company monitors
Own equity instruments that are reacquired (treasury
OCI or directly in equity. adjusted for the effects of all dilutive potential equity financial assets measured at amortized cost or fair
shares) are recognized at cost and deducted from
shares. Dilutive potential equity shares are deemed value through other comprehensive income that are
Deferred tax assets and liabilities are offset only if: equity. No gain or loss is recognized in profit or loss
converted as of the beginning of the period, unless derecognized prior to their maturity to understand
on the purchase, sale, issue or cancellation of the
the entity has a legally enforceable right to they have been issued at a later date. In computing the reason for their disposal and whether the reasons
Company’s own equity instruments. Any difference
set off current tax assets against current tax the dilutive earnings per share, only potential equity are consistent with the objective of the business for
between the carrying amount and the consideration,
liabilities; and shares that are dilutive and that either reduces the which the asset was held. Monitoring is part of the
if reissued, is recognized in capital reserve. Share
earnings per share or increases loss per share are Company’s continuous assessment of whether the
the deferred tax assets and the deferred tax options exercised during the reporting period are
included. business model for which the remaining financial
liabilities relate to income taxes levied by satisfied with treasury shares.
assets are held continues to be appropriate and if it is
the same taxation authority on the same 2.19 Segment reporting
2.22 Significant accounting judgements, estimates not appropriate whether there has been a change in
taxable entity.
Operating segments are reported in a manner and assumptions business model and so a prospective change to the
2.17.3 
Goods and services tax /value added taxes consistent with the internal reporting provided to classification of those assets.
The preparation of financial statements requires
paid on acquisition of assets or on incurring the chief operating decision maker.
the management to make judgments, estimates Fair value of financial instrument
expenses
The MD and CEO of the Company has been identified and assumptions that affects the reported amounts
The fair value of financial instruments is the price that
Expenses and assets are recognized net of the as the chief operating decision maker for the of assets, liabilities, revenue and expenses and the
would be received to sell an asset or paid to transfer
goods and services tax/value added taxes paid, Company. accompanying disclosures, , as well as the disclosure
a liability in an orderly transaction in the principal
except: of contingent liabilities, at the end of the reporting
2.20 Contingent Liabilities and Contingent Assets (or most advantageous) market at the measurement
period. Although these estimates are based on the
When the tax incurred on a purchase of date under current market conditions (i.e., an exit
A Contingent Liability a possible obligation that management's best knowledge of current events
assets or services is not recoverable from price) regardless of whether that price is directly
arises from past events whose existence will be and actions, uncertainty about these assumptions
the taxation authority, in which case, the observable or estimated using another valuation
confirmed by the occurrence or non-occurrence of and estimates could result in the outcomes requiring
tax paid is recognized as part of the cost technique. When the fair values of financial assets
one or more uncertain future events beyond the a material adjustment to the carrying amounts of
of acquisition of the asset or as part of the and financial liabilities recorded in the balance sheet
control of the Company or a present obligation that assets or liabilities affected in future periods
expense item, as applicable cannot be derived from active markets, they are
is not recognized because it is not probable that
Estimates and underlying assumptions are reviewed determined using a variety of valuation techniques
When receivables and payables are stated an outflow of resources will be required to settle
on an ongoing basis. Revisions to estimates are that include the use of valuation models. The inputs
with the amount of tax included the obligation. A contingent liability also arises
recognized prospectively. to these models are taken from observable markets
The net amount of tax recoverable from, or in extremely rare cases where there is a liability
where possible, but where this is not feasible,
that cannot be recognized because it cannot be In particular, information about significant areas
payable to, the taxation authority is included estimation is required in establishing fair values.
measured reliably. The Company does not recognize of estimation, uncertainty and critical judgments
as part of receivables or payables in the Judgements and estimates include considerations
a contingent liability but discloses its existence in the in applying accounting policies that have the most
balance sheet. of liquidity and model inputs related to items such
Financial statements.

132 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 133
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022

as credit risk (both own and counterparty), funding highly sensitive to changes in these assumptions. All (ii) 
Reference to the Conceptual Framework – (iii) Property, Plant and Equipment: Proceeds before
value adjustments, correlation and volatility. assumptions are reviewed at each reporting date. Amendments to Ind AS 103 Intended Use – Amendments to Ind AS 16
Impairment of financial asset Other Estimates The amendments replaced the reference to The amendments modified paragraph 17(e)
the ICAI’s “Framework for the Preparation and of Ind AS 16 to clarify that excess of net sale
Judgment is required by management in the Useful lives of depreciable/amortizable assets
Presentation of Financial Statements under proceeds of items produced over the cost of
estimation of the amount and timing of future cash – Management reviews its estimate of the
Indian Accounting Standards” with the reference testing, if any, shall not be recognised in the
flows when determining an impairment allowance useful lives of depreciable/amortizable asset at
to the “Conceptual Framework for Financial profit or loss but deducted from the directly
for loans and advances. In estimating these cash each reporting date, based on expected utility
Reporting under Indian Accounting Standard” attributable costs considered as part of cost of
flows, the Company makes judgments about the of assets. Uncertainties in these estimates
without significantly changing its requirements. an item of property, plant, and equipment.
borrower’s financial situation. These estimates are relate to technical and economic obsolescence
based on assumptions about a number of factors that may change the utility of assets The amendments also added an exception to The amendments are effective for annual
such as credit quality, level of arrears etc. and actual the recognition principle of Ind AS 103 Business reporting periods beginning on or after 1 April
Recognition of deferred tax assets – The extent
results may differ, resulting in future changes to the Combinations to avoid the issue of potential 2022. The amendments are not expected to have
to which deferred tax assets can be recognized
impairment allowance. ‘day 2’ gains or losses arising for liabilities and a material impact on the Company.
is based on assessment of the probability of
contingent liabilities that would be within
Provisions other than impairment on loan portfolio the future taxable income against which the (iv) Ind AS 109 Financial Instruments – Fees in the
the scope of Ind AS 37 Provisions, Contingent
deferred tax assets can be utilized. ’10 per cent’ test for derecognition of financial
Provisions are held in respect of a range of future Liabilities and Contingent Assets or Appendix C,
liabilities
obligations such as employee benefit plans and cash 2.23 New standards, interpretations, and amendments: Levies, of Ind AS 37, if incurred separately.
loss contingencies. Some of the provisions involve The amendment clarifies the fees that an entity
The Ministry of Corporate Affairs has notified It has also been clarified that the existing
significant judgment about the likely outcome of includes when assessing whether the terms
Companies (Indian Accounting Standard) guidance in Ind AS 103 for contingent assets
various events and estimated future cash flows. of a new or modified financial liability are
Amendment Rules 2022 dated March 23, 2022 to would not be affected by replacing the reference
The measurement of these provisions involves the substantially different from the terms of the
amend the following Ind AS which are effective from to the Framework for the Preparation and
exercise of management judgments about the original financial liability. These fees include only
April 01, 2022. Presentation of Financial Statements under
ultimate outcomes of the transactions. Payments that those paid or received between the borrower
Indian Accounting Standards.
are expected to be incurred after more than one year (i) 
Onerous Contracts – Costs of Fulfilling a and the lender, including fees paid or received
are discounted at a rate which reflects both current Contract – Amendments to Ind AS 37 The amendments are effective for annual by either the borrower or lender on the other’s
interest rates and the risks specific to that provision. reporting periods beginning on or after 1 April behalf.
The amendments to Ind AS 37 specify which
2022. The amendments are not expected to have
Share Based Payment costs an entity needs to include when assessing The amendments are effective for annual
a material impact on the Company.
whether a contract is onerous or loss-making. reporting periods beginning on or after 1 April
Estimating fair value for share-based payment
The amendments apply a “directly related cost 2022. The amendments are not expected to have
transactions requires determining of the most
approach”. The costs that relate directly to a a material impact on the Company.
appropriate valuation model, which is dependent on
contract to provide goods or services include
the terms and conditions of the grant. This estimate
both incremental costs for example direct labour
also requires determination of the most appropriate
and materials and an allocation of other costs
inputs to the valuation model including the expected
directly related to contract activities for example
life of the share option, volatility and dividend yield
an allocation of the depreciation charge for an
and making assumptions about them.
item of property, plant and equipment used in
Defined employee benefit assets and liabilities fulfilling that contract. General and administrative
costs do not relate directly to a contract and are
The cost of the defined benefit gratuity plan and
excluded unless they are explicitly chargeable to
the present value of the gratuity obligation are
the counterparty under the contract.
determined using actuarial valuations. An actuarial
valuation involves making various assumptions that The amendments are effective for annual
may differ from actual developments in the future. reporting periods beginning on or after 1 April
These include the determination of the discount 2022. The Company is currently assessing
rate, future salary increases and mortality rates. Due the impact of the amendments to determine
to the complexities involved in the valuation and the impact they will have on the Company
its long-term nature, a defined benefit obligation is accounting policy disclosures.

134 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 135
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

3 Cash and cash equivalents Outstanding for following periods from due date of payment*
As at As at Particular Less than 6 6 months - 1 1-2 2-3 More than 3 Total
Particulars
March 31, 2022 March 31, 2021 months year years years years
Cash on hand 148.19 111.27 (iv) Disputed trade receivables
- - - - - -
Balance with banks considered good
- on current accounts 9,365.40 7,690.27 (v) Disputed trade receivables –
- deposits with original maturity of less than 3 months* 600.13 4,352.66 which have significant increase - - - - - -
in credit risk
Total 10,113.72 12,154.20
(vi) Disputed trade receivables –
- - - - - -
*Short-term deposits are made for varying periods of between one day and three months, depending on the immediate credit impaired
cash requirements of the Company and earn interest at the respective short-term deposit rates. The company has 43.42 - - - - 43.42
not taken bank overdraft, therefore the cash and cash equivalent for cash flow statement is same as cash and for cash
equivalent given above. Trade receivables ageing schedule as on March 31, 2021
4 Bank balance other than cash and cash equivalents Outstanding for following periods from due date of payment*
Particular Less than 6 6 months - 1 More than 3 Total
As at As at 1-2 years 2-3 years
Particulars months year years
March 31, 2022 March 31, 2021
(i) Undisputed trade receivables –
Deposits with remaining maturity of less than 12 months* 920.87 601.61 27.93 - - - - 27.93
considered good
Deposits with remaining maturity of more than 12 months ** 501.39 596.75
(ii) Undisputed trade receivables –
Total 1,422.26 1,198.36 which have significant increase - - - - - -
*Includes lien free fixed deposits as at March 31, 2022 H60.54 millions (March 31, 2021: H336.02 millions) in credit risk
**Includes lien free fixed deposits as at March 31, 2022 H3.79 millions (March 31, 2021: H36.27 millions) (iii) Undisputed trade receivables –
- - - - - -
credit impaired
Note: Fixed deposit and other balances with banks earns interest at contractual fixed rates.
(iv) Disputed trade receivables
- - - - - -
5 Trade receivables (at amortised cost) considered good
(v) Disputed trade receivables –
As at As at which have significant increase - - - - - -
Particulars
March 31, 2022 March 31, 2021 in credit risk
Unsecured considered good 43.42 27.93 (vi) Disputed trade receivables –
- - - - - -
Less : Impairment loss allowance - - credit impaired
Total 43.42 27.93 27.93 - - - - 27.93
*In case of no due date of payment disclosure has been given based on the date of the transaction.
Trade receivables ageing schedule as on March 31, 2022
Outstanding for following periods from due date of payment* Note: No trade or other receivable are due from directors and other officers of the Company either severally or jointly
Particular Total with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which
Less than 6 6 months - 1 1-2 2-3 More than 3
any director is a partner, a director or a member. Trade receivable are non-interest bearing and generally on terms of 30
months year years years years
to 90 days.
(i) Undisputed trade receivables –
43.42 - - - - 43.42 6 Loans (at amortised cost)
considered good
(ii) Undisputed trade receivables – As at As at
which have significant increase - - - - - - Particulars
March 31, 2022 March 31, 2021
in credit risk
Term Loans:
(iii) Undisputed trade receivables –
- - - - - - Joint liability loans 61,454.18 46,129.77
credit impaired
MSME Loans 1,331.26 330.55

136 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 137
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

As at As at Gross portfolio movement for the year ended March 31, 2021
Particulars
March 31, 2022 March 31, 2021 Particular *Stage I Stage II Stage III Total
Total - Gross 62,785.44 46,460.32 Gross carrying value of loans as at April 1, 2020 33,861.54 166.06 384.49 34,412.09
Less: Impairment loss allowance (3,603.50) (2,853.02)
New loans originated during the year, net off for
Total - Net 59,181.94 43,607.30 12,104.12 77.24 192.93 12,374.29
repayments and derecognised portfolio
(a) Secured 271.61 35.07 Loans written off during the year - - (326.06) (326.06)
(b) Unsecured 62,513.83 46,425.25
Movement between stages
Total - Gross 62,785.44 46,460.32
Transfer from stage I (5,202.84) 3,000.49 2,202.35 -
Less: Impairment loss allowance (3,603.50) (2,853.02)
Transfer from stage II 1.01 (106.21) 105.20 -
Total - Net 59,181.94 43,607.30
Transfer from stage III 0.01 - (0.01) -
(a) Public sector - -
(b) Others 62,785.44 46,460.32 Gross carrying value of loans as at March 31, 2021 40,763.84 3,137.58 2,558.90 46,460.32
Total - Gross 62,785.44 46,460.32 *Includes over due from 1 to 30 days amounting to H1,121.26 million and H1719.89 million as on March 31, 2022 and
Less: Impairment loss allowance (3,603.50) (2,853.02) March 31, 2021 respectively.
Total - Net 59,181.94 43,607.30 Reconciliation of loss allowance provision from beginning to end of reporting period:
Above amount include
Loans Other financial
(a) Loans provided in India 62,785.44 46,460.32 Particulars Total
Stage I Stage II Stage III assets (refer note 7-B)
(b) Loans provided outside India - -
ECL allowance on April 01, 2020 645.31 83.02 254.04 982.36 13.33
Total - Gross 62,785.44 46,460.32 New assets originated during the
Less: Impairment loss allowance (3,603.50) (2,853.02) period, netted off for repayments 230.67 38.62 127.48 396.77 11.09
Total - Net 59,181.94 43,607.30 and derecognised portfolio
Loans written off during the year - - (326.06) (326.06) (15.06)
Overview of the Loan Portfolio of the Company Movement between stages
The Company is primarily in the business of providing micro loans towards income generating activities with its operations Transfer from stage I (37.45) 16.52 20.93 - -
spread out in different parts of India. The table below discloses credit quality of the Company’s exposures as at reporting Transfer from stage II 0.50 (53.10) 52.59 - -
date. Transfer from stage III 0.01 - (0.01) - -
Gross portfolio movement for the period ended March 31, 2022 Impact on ECL on account of
movement between stages/ (389.48) 783.17 1,406.26 1,799.95 -
Particular *Stage I Stage II Stage III Total updates to ECL model
Gross carrying value of loans as at April 1, 2021 40,763.84 3,137.58 2,558.90 46,460.32 ECL allowance on March 31, 2021 449.56 868.23 1,535.23 2,853.02 -
New loans originated during the period, net off for ECL allowance on April 01, 2021 449.56 868.23 1,535.23 2,853.02 -
19,372.32 (1,491.18) 1,378.36 19,259.50 New assets originated during the
repayments and derecognised portfolio
period, netted off for repayments 213.65 (412.64) 826.96 627.97 2.01
Loans written off during the period - - (2,934.39) (2,934.39)
and derecognised portfolio
Movement between stages Loans written off during the period - - (2,934.39) (2,934.39) -
Transfer from stage I (2,640.41) 818.39 1,822.02 - Movement between stages
Transfer from stage II 352.08 (1,176.07) 823.99 - Transfer from stage I (29.12) 9.03 20.09 - -
Transfer from stage III 42.43 22.19 (64.62) - Transfer from stage II 97.43 (325.44) 228.01 - -
Transfer from stage III 25.46 13.31 (38.77) - -
Gross carrying value of loans as at March 31, 2022 57,890.26 1,310.91 3,584.26 62,785.43
Impact on ECL on account of
movement between stages/ (159.86) 299.90 2,916.86 3,056.90 -
updates to ECL model
ECL allowance on March 31, 2022 597.12 452.39 2,553.99 3,603.50 11.37

138 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 139
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

7 Other financial assets (at amortised cost) C Movement in Deferred tax assets (net)
As at As at (Charge)/credit Recognized
Particulars in Statement of in other
March 31, 2022 March 31, 2021 As at Recognized As at
profit and loss comprehensive
A. Security deposits Particulars April 01, in other March 31,
for the year income for the
2021 equity 2022
Unsecured, considered good 26.92 23.53 ended March year ended
31, 2022 March 31, 2022
(A) 26.92 23.53
Assets
B. Other assets Impairment allowance for financial assets 688.12 212.27 - - 900.39
Excess interest spread (EIS) receivable 435.08 128.15 Differences of written down value of Property,
11.87 3.42 - - 15.29
Advances recoverable in cash or for value to be received 162.05 158.44 plant and equipment and intangible assets
Provision for employee benefits 35.73 1.11 (0.74) - 36.10
Initial public offer expenses recoverable (refer note A in note 13) 55.97 -
Provisions allowable on payment basis 31.48 (31.48) - - -
Less : Impairment loss allowance (refer note 6 for movement) (11.37) (9.36) Financial liabilities measured at amortised cost 6.08 0.34 - - 6.42
(B) 641.73 277.23 Derivative financial instrument - 19.41 - - 19.41
Total (A+B) 668.65 300.76 EIR impact on term loans 68.98 42.39 - - 111.37
Other temporary difference 16.00 (7.59) - - 8.41
Liabilities
8 Current tax assets (net)
EIS receivable (29.15) (72.39) - - (101.54)
As at As at Stage 3 interest income (63.83) (64.46) - - (128.29)
Particulars
March 31, 2022 March 31, 2021 Total 765.28 103.02 (0.74) - 867.56
Advance income tax (net) 353.61 119.58
(Charge)/credit Recognized
Total 353.61 119.58
in Statement of in other
As at Recognized As at
profit and loss comprehensive
9 Deferred tax assets (net) Particulars April 01, in other March 31,
for the year income for the
2020 equity 2021
ended March year ended
As at As at 31, 2021 March 31, 2021
Particulars
March 31, 2022 March 31, 2021 Assets
A. Deferred tax assets: Impairment allowance for financial assets 237.62 450.51 - - 688.12
Impairment allowance for financial assets 900.39 688.12 Differences of written down value of Property,
7.86 4.01 - - 11.87
plant and equipment and intangible assets
Differences of written down value of Property, plant and equipment and
15.29 11.87 Provision for employee benefits 28.32 7.42 (0.01) - 35.73
intangible Assets
Provisions allowable on payment basis 20.53 10.95 - - 31.48
Provision for employee benefits 36.10 35.73 Financial liabilities measured at amortised cost 3.99 2.09 - - 6.08
Provisions allowable on payment basis - 31.48 EIR impact on term loans 38.72 30.26 - - 68.98
Financial liabilities measured at amortised cost 6.42 6.08 Other temporary difference 9.41 6.59 - - 16.00
Liabilities
Fair valuation of derivative financial instruments 19.41 -
EIS receivable (30.19) 1.03 - - (29.15)
EIR impact on loan portfolio 111.37 68.98 Stage 3 interest income (11.24) (52.59) - - (63.83)
Other temporary difference 8.41 16.00 Total 305.02 460.27 (0.01) - 765.28
Total deferred tax assets 1,097.39 858.26
B. Deferred tax liabilities
Excess interest spread (EIS) receivable (101.54) (29.15)
Stage 3 interest income (128.29) (63.83)
(229.83) (92.98)
Net deferred tax assets (A+B) 867.56 765.28

140 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 141
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

10 Property, plant and equipment 12 Intangible assets

Net Carrying Net Carrying
Gross carrying amount (at cost) Depreciation Gross carrying amount (at cost) Depreciation
Amount Amount
Particulars Particulars
As at As at As at As at As at As at As at For the As at As at
For the As at Additions Disposals Disposals
April 1, Additions Disposals March 31, April 1, Disposals March 31, April 1, 2021 March 31, 2022 April 1, 2021 year March 31, 2022 March 31, 2022
year March 31, 2022
2021 2022 2021 2022
Computer
Furniture and fixtures 26.83 9.44 - 36.27 12.00 4.73 - 16.73 19.54 8.12 0.05 - 8.17 6.22 1.24 - 7.46 0.71
software
Electrical fittings 9.11 1.04 - 10.15 4.74 1.20 - 5.94 4.21 Total 8.12 0.05 - 8.17 6.22 1.24 - 7.46 0.71
Office equipment 18.14 11.58 - 29.72 7.36 7.18 - 14.54 15.18
Vehicles 3.35 - - 3.35 0.40 0.92 - 1.32 2.03 Net Carrying
Gross carrying amount (at cost) Depreciation
Amount
Computers 48.35 40.71 0.06 89.00 33.05 21.42 0.04 54.43 34.57 Particulars
As at As at As at For the As at As at
Leasehold improvements 69.97 - - 69.97 15.46 8.00 - 23.46 46.51 Additions Disposals Disposals
April 1, 2020 March 31, 2021 April 1, 2020 year March 31, 2021 March 31, 2021
Total 175.75 62.77 0.06 238.46 73.01 43.45 0.04 116.42 122.04 Computer
5.67 2.45 - 8.12 4.20 2.02 - 6.22 1.90
software
Total 5.67 2.45 - 8.12 4.20 2.02 - 6.22 1.90
Net Carrying
Gross carrying amount (at cost) Depreciation
Amount
Particulars As at As at As at As at 13 Other non-financial assets (at amortised cost)
For the As at
April 1, Additions Disposals March 31, April 1, Disposals March 31,
year March 31, 2021 As at As at
2020 2021 2020 2021
Particulars
Furniture and fixtures 21.21 5.68 0.06 26.83 7.28 4.78 0.06 12.00 14.83 March 31, 2022 March 31, 2021
Electrical fittings 12.00 0.18 3.07 9.11 5.12 2.69 3.07 4.74 4.37 Unsecured, considered good
Office equipment 9.12 9.39 0.37 18.14 3.18 4.55 0.37 7.36 10.78
Pre-paid expenses 22.18 16.88
Share issue expenses (refer note A below) 27.99 -
Vehicles 0.75 2.96 0.36 3.35 0.62 0.16 0.37 0.40 2.95
Others 11.57 6.21
Computers 33.64 14.71 - 48.35 20.87 12.18 - 33.05 15.29
Total 61.74 23.09
Leasehold improvements 27.48 42.49 - 69.97 8.15 7.31 - 15.46 54.52
Total 104.20 75.41 3.86 175.75 45.22 31.65 3.87 73.01 102.74 Note A: During the year ended March 31, 2022, the Company has incurred share issue expenses of H83.96 millions in
connection with proposed public offer of equity shares for various services received for Initial Public Offering (IPO). As
per the Offer Agreement entered between the Company and the selling shareholders, the selling shareholders shall
11 Right of use asset
reimburse the share issue expenses in proportion to the respective shares offered for sale. The Company will partly
Net Carrying recover the expenses incurred in connection with the issue on completion of IPO and therefore, the amount of H55.97
Gross carrying amount (at cost) Depreciation
Amount
millions recoverable from the selling shareholders has been carried forward and disclosed under the head “IPO expenses
Particulars As at As at As at As at
April 1, Additions Disposals March 31, April 1,
For the
Disposals March 31,
As at recoverable” (to the extent of not written off or adjusted) under Note 7B.
year March 31, 2022
2021 2022 2021 2022
The Company’s share of expenses shall be adjusted against securities premium to the extent permissible under Section
Building (refer Note 52) 83.45 - - 83.45 5.26 9.02 - 14.28 69.17 52 of the Act on successful completion of IPO and therefore, the amount of H27.99 millions related to the Company’s share
Total 83.45 - - 83.45 5.26 9.02 - 14.28 69.17 has been carried forward and disclosed under this head (to the extent of not written off or adjusted) under Note 13.

Net Carrying
14 Derivative financial instrument
Gross carrying amount (at cost) Depreciation
Amount As at As at
Particulars As at As at As at As at Particulars
For the As at March 31, 2022 March 31, 2021
April 1, Additions Disposals March 31, April 1, Disposals March 31,
year March 31, 2021 Derivatives not designated as hedges
2020 2021 2020 2021
Building (refer Note 52) - 83.45 - 83.45 - 5.26 - 5.26 78.19 Currency and Interest rate swaps 77.11 -
Total - 83.45 - 83.45 - 5.26 - 5.26 78.19
Total 77.11 -
The Company enters into derivatives for risk management purposes. Derivatives (i.e., currency and interest rate swaps)
held for risk management purposes include hedges that are economic hedges, but the company has elected not to apply
hedge accounting requirements.

142 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 143
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

The company has entered into currency and interest rate swaps to hedge foreign currency risks and interest rate Outstanding for following year from due date of payment #
risks, respectively, on external commercial borrowing (ECB) denominated in EURO as follows:-: Particulars
Less than 1 year 1-2 years 2-3 years More than 3 years Total
Currency Swap: The Company has a currency swap agreement whereby it has hedged the risk of changes in foreign (i) MSME - - - - -
exchange rates relating to the cash outflow arising on settlement of its ECB. (ii) Others 112.75 0.10 0.12 0.09 113.06
(iii) Disputed dues – MSME - - - - -
Interest rate Swap: The company has an interest rate swap agreement whereby the company receives a variable rate of (iv) Disputed dues - Others - - - - -
interest of 6M EURIBOR + 4.30% and pays interest at a fixed rate. The swap is being used to hedge the exposure to changes 112.75 0.10 0.12 0.09 113.06
in the variable interest rate.
**There are no unbilled dues outstanding as on reporting date.
The table below shows the fair values of derivative financial instruments recorded as assets or liabilities together with #In case where due date of payment is not specified, disclosure has been given based on the date of the transaction.
their notional amounts.
16 Debt Securities (at amortised cost)
As at March 31, 2022 As at March 31, 2021
Particulars Notional Fair Value Fair Value Notional Fair Value Fair Value As at As at
Particulars
amounts - Assets -Liabilities amounts -Assets -Liabilities March 31, 2022 March 31, 2021
Currency and Interest rate derivatives: Non-convertible debentures (Secured by book debts)* 5,788.92 8,605.90
Currency and Interest rate swaps 890.42 - 77.11 - - - Non-convertible debentures (Unsecured ) 2,048.84 1,298.60
Total 890.42 - 77.11 - - - Total 7,837.76 9,904.50

The notional amounts indicate the value of transactions outstanding at the year end and are not indicative of either the
market risk or credit risk. As at As at
Particulars
March 31, 2022 March 31, 2021
15 Trade Payables (at amortised cost) Debt securities in India 7,837.76 9,904.50
Debt securities outside India - -
As at As at
Particulars Total 7,837.76 9,904.50
March 31, 2022 March 31, 2021
(i) Total outstanding dues to micro enterprises and small enterprises * - - *The secured borrowings are secured by hypothecation of book debts and margin money deposits and fixed deposits.
(ii) Total outstanding dues of creditors other than micro enterprises and small Information about the Company’s exposure to credit and market risks are included in Note no. 46 and 48 respectively.
176.59 113.06
enterprises
Total 176.59 113.06 Terms of Debt securities
* The Company does not have any outstanding dues and any interest payable for micro enterprises and small enterprises- Number of debentures Amount
refer Note 39 Particulars As at As at As at As at
Trade payables ageing schedule as on March 31 2022** March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021

Outstanding for following year from due date of payment#

Secured
Particulars 11.15% secured rated listed redeemable
Less than 1 year 1-2 years 2-3 years More than 3 years Total
transferable non convertible debentures of
(i) MSME - - - - - face value of H10,00,000 each redeemable
(ii) Others 176.36 0.12 0.07 0.04 176.59 at par at the end of 71 months and 27
700 700 699.71 699.67
Calendar Days (Subject to exercise of put/
(iii) Disputed dues – MSME - - - - - call option at the end of 35 months and 26
(iv) Disputed dues - Others - - - - - Calendar Days) from the date of allotment
i.e. 10 March, 2021
176.36 0.12 0.07 0.04 176.59
11.00% secured rated listed redeemable
Trade payables ageing schedule as on March 31 2021** non convertible debentures of Face Vale of
H10,00,000 each redeemable at par at the
end of 72 months (subject to exercise of 500 500 499.73 499.68
put/call Option at the end of 36 months)
from the date of allotment i.e. 18 March
2021

144 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 145
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Number of debentures Amount Number of debentures Amount

Particulars As at As at As at As at Particulars As at As at As at As at
March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021
10.70% secured rated unlisted redeemable 12.05% Secured rated listed redeemable
non convertible debentures of face value non convertible debentures of face value
of H10,00,000 each redeemable at par at of H10,00,000 each redeemable at par at
the end of 72 months (Subject to exercise the end of 72 months (Subject to exercise
315 315 315.00 315.00 526 526 525.76 524.70
of put /call option at the end of 36 months) of put/call option at the end of 36 months)
from the date of allotment i.e. 16 March from the date of allotment i.e. June 02,
2018 [ROI revised from 12.94% effective 2016 [ROI revised from 14.15% effective
from March 16, 2021] from June 3, 2019]
10.70% Secured rated unlisted redeemable 10.40% secured rated listed senior taxable
non convertible debentures of face value redeemable non convertible debentures of
of H10,00,000 each redeemable at par at Face Vale of H10,00,000 each redeemable at 500 500 124.92 498.02
the end of 72 months (Subject to exercise par at the end of 18 months from the date of
315 315 315.00 315.00
of put /call option at the end of 36 months) allotment i.e. November 13, 2020
from the date of allotment i.e. 16 March 10.25% secured rated listed senior taxable
2018 [ROI revised from 12.71% effective redeemable non convertible debentures of
from March 16, 2021] Face Vale of H10,00,000 each redeemable at 350 350 349.80 348.19
11.25% secured rated listed taxable par at the end of 18 months from the date of
redeemable non convertible debentures of allotment [Link] 13, 2020
Face Vale of H10,00,000 each redeemable at 500 500 499.73 499.60 9.75% secured rated listed senior taxable
par at the end of 36 months from the date of redeemable non convertible debentures of
allotment i.e. December 23, 2020 Face Vale of H10,00,000 each redeemable at 250 250 249.87 248.82
11.50% secured rated, listed, senior taxable, par at the end of 18 months from the date of
transferable redeemable non-convertible allotment i.e. Novermber 13, 2020
debentures of Face Vale of H10,00,000 each 200 200 198.42 197.39 10.50% secured rated listed senior taxable
redeemable at par at the end of 36 months redeemable non convertible debentures of
from the date of allotment [Link] 29, 2020 Face Vale of H10,00,000 each redeemable at 500 500 499.87 498.83
11.25% secured rated listed redeemable non par at the end of 18 months from the date of
convertible debentures of Face Vale of allotment i.e. November 13, 2020
H10,00,000 each redeemable at par at the 200 200 199.40 198.99 10.50% secured rated, listed, senior taxable,
end of 36 months from the date of allotment transferable redeemable non-convertible
i.e. June 30, 2020 debentures of Face Vale of H10,00,000 each
- 250 - 248.75
11.90% secured, rated, listed, redeemable at par at the end of 18 months
unsubordinated, transferable, redeemable, from the date of allotment i.e. August 12,
non covertible debentures of Face Vale of 2020
100 100 99.71 99.49
H10,00,000 each redeemable at par at the 10.50% secured rated, listed, senior taxable,
end of 36 months from the date of allotment transferable redeemable non-convertible
i.e. June 10, 2020 debentures of Face Vale of H10,00,000 each
- 250 - 249.52
11.25% secured rated, listed, redeemable redeemable at par at the end of 18 months
non-convertible debentures of Face Vale from the date of allotment i.e. August 12,
of H10,00,000 each redeemable at par at 250 250 249.50 249.09 2020
the end of 32 months from the date of 11.53% Secured rated unlisted redeemable
allotment i.e. July 31, 2020 non convertible debentures of face value
10.50% secured rated listed senior taxable of H1,00,00,000 each redeemable at par - 35 - 348.94
redeemable non convertible debentures of at the end of 36 months from the date of
Face Vale of H10,00,000 each redeemable at 250 250 249.91 249.18 allotment i.e. October 22, 2018
par at the end of 18 months from the date of
allotment i.e. November 19, 2020

146 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 147
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Number of debentures Amount Number of debentures Amount

Particulars As at As at As at As at Particulars As at As at As at As at
March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021
9.54% rated unlisted senior secured NIFTY 50 Index linked rated listed
redeemable taxable, transferable non redeemable non convertible of face value
convertible debentures of Face Vale of of H10,00,000 each redeemable at par at - 250 - 249.90
600 600 562.76 598.24
H10,00,000 each redeemable at par at the the end of 42 months from the date of
end of 48 months from the date of allotment allotment i.e. March 06, 2018
i.e. March 30, 2021 11.96% unsecured rated listed
11.81% Secured rated unlisted redeemable unsubordinated transferable redeemable
non convertible debentures of face value non convertible debentrues of H10,00,000
- 150 - 149.98
of H1,00,00,000 each redeemable at par - 25 - 249.86 each redeemable at par at the end of 12
at the end of 36 months from the date of months from the date of allotment i.e.
allotment i.e. September 27, 2018 August 05, 2020
11.86% Secured rated listed redeemable 10.50% Rated, Listed, Unsecured,
non convertible debentures of face value Unsubordinated, Redeemable, Transferable,
of H10,00,000 each redeemable at par at Non-Convertible Debentures of face value
the end of 60 months (Subject to exercise of H10,00,000/- each redeemable at par at 450 - 399.65 -
- 470 - 469.81
of put/call option at the end of 36 months) the end of 24 Months (Subject to exercise
from the date of allotment [Link] 31, of put option at the end of 12 months) from
2016 [ROI revised from 13.60% effective the date of allotment i.e. December 21, 2021
from August 31, 2019] Total 7,837.76 9,904.50
11.40% (rbi repo rate +credit spread)
secured rated listed taxable transferable
17 Borrowings - other than debt securities (at amortised cost)
redeemable non convertible debentures of
300 250 149.83 249.55
Face Vale of H10,00,000 each redeemable at As at As at
par at the end of 36 months from the date of Particulars
March 31, 2022 March 31, 2021
allotment [Link] 19, 2020
(a) Term loans
Unsecured
(i) from banks 40,337.54 26,856.90
11.53% secured rated unlisted redeemable
non convertible debentures of Face Vale of (ii) from other parties 5,769.54 2,619.30
H10,00,000 each redeemable at par at the (b) Short term loans from banks 1,343.92 3,499.64
end of 72 months (subject to exercise of put 750 750 749.60 749.54
option at the end of 12 months and Put/call (c) Short term loans from financial institutions - 274.95
Option at the end of 36 months) from the (d) External commercial borrowings 843.66 -
date of allotment i.e. 02 November, 2020
Total 48,294.66 33,250.79
11.91% Unsecured Rated Listed Redeemable
Borrowings in India 47,451.00 33,250.79
Non Convertible Debenture of Face Value
of H10,00,000 each redeemable at par at the Borrowings outside India 843.66 -
end of 72 Months (subject to exercise of Put/ Total 48,294.66 33,250.79
550 550 549.81 549.42
Call Option at the end of 36 months) from
the Date of Allotment i.e. 15 September Secured* 48,294.66 33,250.79
2016 [ROI revised from 13.25% effective Unsecured - -
from September, 15 2019]
Total 48,294.66 33,250.79
12.60% Unsecured rated listed redeemable
non convertible debenture of face value of *The secured borrowings are secured by hypothecation of book debts and margin money deposits and fixed deposits.
H10,00,000 each redeemable at par at the
end of 71 months and 29 Calendar Days 350 350 349.77 349.30
(subject to exercise of put/call Option at
the end of 36 months) from the date of
allotment i.e. Septembe 10, 2019

148 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 149
Notes to the Financial S t a t e m e n t s

(B in millions unless otherwise stated)

1,500.00
27.06
2,912.50
195.30
63.75
198.44
3,066.09
916.06
267.32
250.00
1,149.80
1,143.67
-
116.67
-
4,097.72
2,109.85
667.08
8,262.05
3,492.29

120.00
1,292.59
12,993.22
57.48
315.00

268.75
325.00
16.00
655.00
Total
For the year ended March 31, 2022 (B in millions unless otherwise stated)

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-

-
-
-
Amount

-
-
18 Subordinated liabilities (at amortised cost)

Due Between
5 to 6 Year
As at As at
Particulars

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-

-
-
-
No. of
Intallments

-
-
March 31, 2022 March 31, 2021

16A, 17A and 18A Terms of Principal repayment of Debt securities/Borrowings/Subordinated liabilities as on March 31, 2022
from banks 300.00 300.00
from other than banks 1,325.67 867.21

-
-
-
-
240.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-

-
-
-
Amount

-
-
Total 1,625.67 1,167.21

Due Between
4 to 5 Year
Subordinated liabilities in form of Non-convertible debentures* 1,325.67 797.21

-
-
-
-
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-

-
-
-
No. of
Intallments

-
Subordinated liabilities in form of term loan 300.00 370.00
Total 1,625.67 1,167.21
Subordinated liabilities in India 1,625.67 1,167.21

-
-
-
-
415.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

20.00
-
-
-

-
-
-
Amount

-
-
Subordinated liabilities outside India - -

Due Between
3 to 4 Year
Total 1,625.67 1,167.21

-
-
-
-
-
4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

1
-
-
-

-
-
No. of
Intallments

-
-
*includes H250 millions due to related party (refer note 42 for more details)

Number of debentures Amount

440.00

-
-
-
-
-
-
-
22.22
87.50
75.00
99.81
222.22
-
-
-
-
54.55
-
1,441.49
49.96
118.39

80.00
-
-

-
-
Amount

-
-
Particulars As at As at As at As at
March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021

Due Between
2 to 3 Year
13.85% unsecured, subordinated, rated,

-
-
-
-
4
-
-
-
1
3
3
4
8
-
-
-
-
3
-
1
11

2
-
-
11

-
-
No. of
Intallments

-
-
taxable, transferable, redeemable and
non-convertible debentures of face value
500 500 499.66 499.37
of H1,000,000 each redeemable at par at

Notes to the Financial S t a t e m e n t s

the end of 73 months from the date of

-
-
-
5.40
877.50
53.43
62.01
-
1,321.92
240.42
100.00
494.99
411.23
-
-
11.67
-
972.84
82.95
5,280.32
3,008.69
536.69

80.00
60.00
411.69

-
-
Amount

-
135.00
allotment i.e. March 15, 2017

Due Between
13.90% Unsecured, Subordinated Rated,

1 to 2 Year
Redeemable, Listed Non-convertible
Debentures of face value of H10,00,000 each

-
-
-
1
4
2
3
-
11
7
4
11
12
-
-
1
-
12
3
12
12

2
2
9
12

-
-
No. of
Intallments

-
9
300 300 298.61 297.84
redeemable at par at the end of 66 months
from the date of allotment [Link] 31,
2018

1,500.00
268.75
21.66
940.00
213.89
133.29
63.75
198.44
1,721.94
588.14
75.00
555.00
510.22
-
-
655.42
116.67
3,070.33
2,026.90
5,203.40
2,837.20

475.00
60.00
880.90
6,271.41

325.00
16.00
Amount

57.48
180.00
12.11% Unsecured, Rated, Unlisted
Subordinated Non-Convertible Debenture

Due Within
of face value of H1,00,00,000 each

1 Year
30 - 282.92 -
redeemable at par at the end of 66 months

2
2
4
4
4
8
4
3
12
12
3
12
12
-
-
12
12
12
7
12
12

2
12
12

1
2
2
No. of
Intallments

3
12
from the date of allotmnet i.e. March 31,

For the year ended March 31, 2022

2022
13.00% Unsecured, Rated, Redeemable,

07.01% - 07.50%
9.51% - 10.00%
11.51% - 12.00%
9.01% - 9.50%
9.51% - 10.00%
10.01% - 10.50%
10.51% - 11.00%
11.01% - 11.50%
Transferable, Unlisted Subordinated

9.01% - 9.50%
9.51% - 10.00%
08.01% - 08.50%
8.51% - 9.00%
10.01% - 10.50%
12.51% - 13.00%
12.01% - 12.50%
11.01% - 11.50%
11.51% - 12.00%
10.01% - 10.50%
10.51% - 11.00%
9.01% - 9.50%
9.51% - 10.00%

11.01% - 11.50%
11.51% - 12.00%
8.01% - 8.50%
8.51% - 9.00%

10.51% - 11.00%
10.51% - 11.00%
6.01% - 6.50%
7.51% - 8.00%
Interest rate
Non-Convertible Debenture of face value
250 - 244.47 -
of H10,00,000 each redeemable at par at
the end of 63 months from the date of
allotmnet i.e. March 31, 2022

than debt securities)

1,080 800 1,325.66 797.21

Original Maturity

Borrowings (other

Above 3 Years
Above 3 Years

Above 3 Years
Note :Company has not defaulted in repayment of borrowing / interest during the current period and previous period

Upto 3 Years
Upto 3 Years
Upto 3 Years

Half Yearly
Quarterly
with respect to Debt Securities (Note 16) borrowings (other than debt securities) (Note 17) and subordinated liabilities

Monthly
of loan
(Note 18)

150 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 151
152
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Due Within Due Between Due Between Due Between Due Between Due Between
Original Maturity 1 Year 1 to 2 Year 2 to 3 Year 3 to 4 Year 4 to 5 Year 5 to 6 Year
Interest rate Total
of loan No. of No. of No. of No. of No. of No. of
Amount Amount Amount Amount Amount Amount
Intallments Intallments Intallments Intallments Intallments Intallments
Bullet Repayment
Upto 3 Years 8.51% - 9.00% 2 1,075.00 - - - - - - - - - - 1,075.00
Debt securities - - - - - - - - - - - - - -
Bi-Monthly - - - - - - - - - - - - - -
Above 3 Years 10.01% - 10.50% - - - - 6 450.00 - - - - - - 450.00
Quarterly
Upto 3 Years 10.01% - 10.50% 4 525.00 - - - - - - - - - - 525.00
Half Yearly
Upto 3 Years 11.01% - 11.50% 2 100.00 1 50.00 - - - - - - - - 150.00
Above 3 Years 10.01% - 10.50% 2 36.00 2 78.00 - - - - - - - - 114.00
Bullet Repayment - - - -
9.51% - 10.00% 1 250.00 - - - -
10.01% - 10.50% 1 1,100.00 - - - - - - - - - - 250.00
10.51% - 11.00% - - - - - - - - - - - - 1,100.00
Upto 3 Years 11.01% - 11.50% - - 3 650.00 - - - - - - - - 650.00
11.51% - 12.00% - - 3 1,800.00 - - - - - - - - 1,800.00
12.01% - 12.50% - - 1 750.00 - - - - - - - - 750.00
12.51% - 13.00% 1 350.00 - - - - - - - - - - 350.00
11.01% - 11.50% - - 1 315.00 - - - - - - - - 315.00
Above 3 Years 11.51% - 12.00% - - 1 315.00 - - - - - - - - 315.00
12.51% - 13.00% 2 1,076.00 - - - - - - - - - - 1,076.00
Vehicle -
Upto 3 Years 7.51% - 8.00% 12 1.03 10 0.85 - - - - - - - - 1.88
ECB
Bullet Repayment 10.51% - 11.00% - - - - 1 846.60 - - - - - - 846.60
Sub-Debt
Bullet Repayment
12.01% - 12.50% - - - - - - - - - - 1.00 300.00 300.00
12.51% - 13.00% - - - - - - - - - - 1.00 250.00 250.00
Above 3 Years
13.51% - 14.00% 1 500.00 1 300.00 - - - - - - - - 800.00
14.01% - 14.50% - - 1 300.00 - - - - - - - - 300.00
EIR Impact (139.06)
TOTAL 223 33,978.80 153 18,705.61 58 3,987.75 5 435.00 3 240.00 550.00 57,758.09

ANNUAL REPORT 2021-22

FUSION MICROFINANCE LIMITED
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

TENACITY &
PROGRESSION
16A, 17A and 18A Terms of Principal repayment of Debt securities/Borrowings/Subordinated liabilities as on March 31, 2021
Due Within Due Between Due Between Due Between Due Between Due Between
Original Maturity of 1 Year 1 to 2 Year 2 to 3 Year 3 to 4 Year 4 to 5 Year 5 to 6 Year
Interest rate Total
loan No. of No. of No. of No. of No. of No. of
Amount Amount Amount Amount Amount Amount
Intallments Intallments Intallments Intallments Intallments Intallments
Monthly
6.01% - 6.50% 12 380.88 3 57.48 - - - - - - - - 438.36
6.51% - 7.00% 1 125.00 - - - - - - - - - - 125.00
7.51% - 8.00% 12 1.00 12 1.00 12 1.00 - - - - - - 3.00
8.51% - 9.00% 12 219.44 10 145.83 - - - - - - - - 365.28
9.01% - 9.50% 12 846.43 12 470.24 - - - - - - - - 1,316.67
OVERVIEW

Upto 3 Years 9.51% - 10.00% 12 3,045.43 12 2,542.45 3 93.75 - - - - - - 5,681.63

002 CORPORATE

10.01% - 10.50% 12 1,675.36 12 1,117.14 1 13.79 - - - - - - 2,806.29

10.51% - 11.00% 12 3,192.12 12 1,747.11 - - - - - - - - 4,939.24
11.01% - 11.50% 12 2,110.09 12 671.78 1 11.67 - - - - - - 2,793.53
11.51% - 12.00% 12 410.21 7 116.67 - - - - - - - - 526.88
12.01% - 12.50% 7 57.15 - - - - - - - - - - 57.15
10.51% - 11.00% 12 158.59 12 176.95 5 79.63 - - - - - - 415.17
REPORTS

Above 3 Years
12.51% - 13.00% 11 366.67 - - - - - - - - - - 366.67
Quarterly
058 MANAGEMENT

9.51% - 10.00% 8 500.00 8 425.00 - - - - - - - - 925.00

10.01% - 10.50% 8 932.64 8 276.39 2 53.47 - - - - - - 1,262.50
Upto 3 Years 10.51% - 11.00% 10 1,024.70 8 239.68 3 62.43 - - - - - - 1,326.82
11.01% - 11.50% 6 492.50 3 63.75 - - - - - - - - 556.25
11.51% - 12.00% 5 733.12 3 214.77 - - - - - - - - 947.89
9.51% - 10.00% 4 700.00 4 700.00 4 637.50 4 200.00 4 175.00 - - 2,412.50
REPORTS
104 FINANCIAL

Above 3 Years 10.01% - 10.50% 4 21.67 4 21.66 1 5.42 - - - - - - 48.75

12.01% - 12.50% 1 16.67 - - - - - - - - - - 16.67
Half Yearly
6.51% - 7.00% 2 650.00 1 325.00 - - - - - - - - 975.00
Upto 3 Years
9.51% - 10.00% 2 725.00 - - - - - - - - - - 725.00
10.51% - 11.00% 2 16.00 2 16.00 - - - - - - - - 32.00
Above 3 Years 11.01% - 11.50% 2 640.00 2 475.00 2 80.00 2 80.00 1 20.00 - - 1,295.00
11.51% - 12.00% 2 255.00 2 60.00 2 60.00 - - - - - - 375.00
Bullet Repayment
8.51% - 9.00% 3 1,875.00 - - - - - - - - - - 1,875.00
Upto 3 Years 9.51% - 10.00% 1 500.00 - - - - - - - - - - 500.00
10.01% - 10.50% 1 200.00 - - - - - - - - - - 200.00
153
 Notes to the Financial S t a t e m e n t s
(B in millions unless otherwise stated)

Total

450.00

500.00

250.00
150.00

250.00
1,600.00
650.00
750.00
600.00
315.00
1,515.00
750.00
1,896.00
250.00

800.00
300.00
70.00
(81.72)
44,322.50
Due Between For the year ended March 31, 2022 (B in millions unless otherwise stated)
5 to 6 Year

Amount

-
-

-
-
-
-
-
-
700.00
750.00
-
-

-
-
-

1,450.00
19 Other financial liabilities (at amortised cost)
As at As at
Particulars
No. of
Intallments

-
-

-
-
-
-
-
-
1
1
-
-

-
-
-

2
March 31, 2022 March 31, 2021
Payable towards assigned portfolio 603.58 177.46
Interest accrued but not due on borrowings 256.85 373.39
Due Between
4 to 5 Year

Amount

-
-

-
-
-
-
-
-
500.00
-
900.00
-

-
-
-

1,595.00
Salaries and bonus payable 197.80 159.68
Lease Liabilities (refer note 52) 81.82 84.63
Other payable 194.27 470.82
No. of
Intallments

-
-

-
-
-
-
-
-
1
-
1
-

-
-
-

7
Total 1,334.32 1,265.98

20 Current tax liabilities (net)

Due Between
3 to 4 Year

Amount

450.00

-
-
-
-
-
-
-
-
-
-

-
-
-

730.00
As at As at
Particulars
March 31, 2022 March 31, 2021
No. of
Intallments

-
-
-
-
-
-
-
-
-
-

-
-
-

12
Provision for tax (net) 1.04 53.98
Total 1.04 53.98
Due Between
2 to 3 Year

Amount

50.00
78.00

-
-
650.00
600.00
-

21 Provisions
315.00
315.00
-
-
-

300.00
300.00
-

3,706.67
As at As at
Particulars
March 31, 2022 March 31, 2021
No. of
Intallments

1
2

-
-
3
2
-
1
1
-
-
-

1
1
-

48
Provision for gratuity (refer note 38) 3.53 5.17
Provision for compensated absence (refer note 38) 46.52 37.34
Notes to the Financial S t a t e m e n t s

Provision for other contingencies* 20.26 37.48

Due Between
1 to 2 Year

Amount

125.00

100.00
36.00

250.00
1,100.00
-
-
-
-
-
-
526.00
-

500.00
-
-

12,500.90 Others 1.37 0.77

Total 71.68 80.76
No. of
Intallments

2
2

1
1
-
-
-
-
-
-
1
-

1
-
-

158

*Provisions are for cash loss and related contingencies.

22 Other non-financial liabilities

Due Within
1 Year

Amount

375.00

100.00
36.00

-
500.00
-
150.00
600.00
-
-
-
470.00
250.00

-
-
70.00

24,421.66

As at As at
Particulars
March 31, 2022 March 31, 2021
Statutory dues payable 104.48 77.18
No. of
Intallments

2
2

-
1
-
1
2
-
-
-
1
1

-
-
1

214

Others 2.00 2.32

Total 106.48 79.50
For the year ended March 31, 2022

Interest rate

10.01% - 10.50%

23 Share Capital
10.01% - 10.50%

11.01% - 11.50%
10.01% - 10.50%

9.51% - 10.00%
10.01% - 10.50%
11.01% - 11.50%
11.51% - 12.00%
12.01% - 12.50%
11.01% - 11.50%
11.51% - 12.00%
12.01% - 12.50%
12.51% - 13.00%
13.51% - 14.00%

13.51% - 14.00%
14.01% - 14.50%
15.01% - 15.50%

As at As at
Particulars
March 31, 2022 March 31, 2021
Authorised share capital
Equity shares
Original Maturity of

March 31, 2022: 10,50,00,000 (March 31, 2021 : 90,000,000) equity shares of H10 each 1,050.00 900.00
Bullet Repayment

Bullet Repayment
Debt securities

Above 3 Years

Above 3 Years

Above 3 Years

Above 3 Years

Preference shares
Upto 3 Years

Upto 3 Years

Upto 3 Years
Bi-Monthly

EIR Impact
Half Yearly

Sub-Debt
Quarterly

March 31, 2022: Nil (March 31, 2021 : 5,000,000) preference shares of H10 each - 50.00
Total
loan

Total 1,050.00 950.00

154 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 155
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

24 Equity Share capital c Particulars of equity shareholder holding more than 5% equity shares:
As at As at As at March 31, 2022 As at March 31, 2021
Particulars
March 31, 2022 March 31, 2021 Name of the shareholder Number of Number of
% of Holding % of Holding
Issued, subscribed and paid-up shares shares
Equity shares Devesh Sachdev - Managing Director &
55,53,414 6.59% 55,53,414 6.59%
Fully paid up Chief Executive Officer
Oikocredit, Ecumenical Development Co-
March 31, 2022: 8,43,26,388 (March 31, 2021 : 8,03,83,716) equity shares of H10 66,06,375 7.83% 66,06,375 7.83%
843.26 803.84 operative Society U.A., Netherlands
each fully paid up
Creation Investments Fusion II ,LLC,
Partly paid up 99,54,529 11.80% 99,54,529 11.80%
Chicago, U.S.A.
March 31, 2022:Nil (March 31, 2021 : 39,42,672) equity shares of H10 each partly
- 3.94 Creation Investments Fusion,LLC, Chicago,
paid up @ H1 1,53,21,043 18.17% 1,53,21,043 18.17%
U.S.A.
Less: treasury shares (15.66) (17.41)
Honey Rose Investment Ltd, Mauritius 4,10,22,730 48.65% 4,10,22,730 48.65%
Total 827.60 790.37
7,84,58,091 93.04% 7,84,58,091 93.04%
a The reconciliation of the number of equity shares outstanding as at the beginning and the end of the reporting year
is set out below: d Shares held by promoters at the end of the year
As at March 31, 2022 As at March 31, 2021 As at March 31, 2022 As at March 31, 2021
Particulars Number of Number of % %
Amount Amount Name of the Promoter
shares shares Number of % of Change Number of % of Change
Equity shares shares Holding during shares Holding during
the year the year
At the commencement of the year
Promoter
Fully paid up 8,03,83,716 803.84 8,03,83,716 803.84
Devesh Sachdev 55,53,414 6.59% 0.00% 55,53,414 6.59% 0.00%
Partly paid up 39,42,672 3.94 39,42,672 3.94
Creation Investments Fusion II, LLC* 99,54,529 11.80% 0.00% 99,54,529 11.80% 0.00%
Conversion of partly paid up into fully
39,42,672 39.42 - - Creation Investments Fusion, LLC* 1,53,21,043 18.17% 0.00% 1,53,21,043 18.17% 0.00%
paid up
Conversion of partly paid up into fully Honey Rose Investment Ltd* 4,10,22,730 48.65% 0.00% 4,10,22,730 48.65% 0.00%
(39,42,672) (3.94) - -
paid up *Promoter’s since July 25, 2021
At the end of the year (A) 8,43,26,388 843.26 8,43,26,388 807.78
Treasury shares e Particulars of shares reserved for issue under employee stock options
At the commencement of the year (17,40,626) (17.41) (18,27,536) (18.28) Number of shares
Issued for cash on exercise of share Particulars As at As at
1,74,641 1.75 86,910 0.87
options March 31, 2022 March 31, 2021
At the end of the year (B) (15,65,985) (15.66) (17,40,626) (17.41) Under Employee Stock Option Plans 1,352,454* 1,352,454*
At the end of the year (A+B) 8,27,60,403 827.60 8,25,85,762 790.37
*With reference to the amendment agreement dated December 17, 2019 to the Shareholder’s agreement dated
September 10, 2018, the Company will institute an employee stock option plan, pursuant to which it will grant and
b Rights, preferences and restrictions attached to equity shares : allot 1,352,454 equity shares of the Company to certain identified employees.
The Company has single class of equity shares having a par value of H10 per equity share. Accordingly, all equity shares
rank equally with regard to dividends and share in the Company’s residual assets. The equity shares are entitled to f No share was allotted without payment being received in cash during the year ended March 31, 2022 and
receive dividend as declared from time to time subject to payment of dividend to preference shareholders. In the year ended March 31, 2021.
event of liquidation of the Company, the holders of equity shares will be entitled to receive the residual assets of the
Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

156 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 157
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

25 Other equity Statutory reserve

The said reserve has been created under section 45-IC of Reserve Bank of India Act, 1934. As per the said section, every
As at As at Non-banking financial company shall create a reserve fund and transfer a sum of not less than 20% of net profit every
Particulars
March 31, 2022 March 31, 2021 period before declaration of dividend.
Statutory reserve
Balance as at the beginning of the year 410.33 322.44 Securities premium
Add: Amount transferred from retained earnings 43.51 87.89 Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the
provisions of the Companies Act, 2013.
Balance as at the end of the year 453.84 410.33
Securities premium
Treasury Shares
Balance as at the beginning of the year 10,091.67 10,087.57 Treasury shares represents shares held by ESOP trust. The Company treats ESOP trust as its extension and shares held by
Add: On issue of shares 606.02 - ESOP trust are treated as treasury shares. Treasury share amount excluding amount adjusted from equity share capital
Add: Exercise of share options 11.08 4.10 are recognized under this head. Exercise price received on equity share issued in excess of face value of share capital
against share option exercised are adjusted from treasury [Link] difference between the carrying amount and the
Balance as at the end of the year 10,708.77 10,091.67
consideration received on exercise of share options, is transferred to capital reserve.
Treasury Shares #
Balance as at the beginning of the year (138.14) (141.37) Retained Earnings
Add: Exercise of share options 11.44 3.23 Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to statutory
Less: Lapse of share options - - reserve, dividends or other distributions paid to shareholders. Retained earnings is a free reserve available to the Company
Balance as at the end of the year (126.70) (138.14) and eligible for distribution to shareholders, in case where it is having positive balance representing net earnings till date.
Retained earnings
Employee stock option plan reserve
Balance as at the beginning of the year 1,234.29 880.38
The said amount is used to recognise the grant date fair value of options issued to employees by the Company.
Add: Profit for the year 217.55 439.44
Add: Stock options lapsed 3.73 2.36 Remeasurement of defined benefit plans
Less : Amount transferred to statutory reserve (43.51) (87.89) Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits:
Balance as at the end of the year 1,412.06 1,234.29
(a) actuarial gains and losses on defined benefit oligations
Employee stock option plan reserve
Balance as at the beginning of the year 68.46 43.83 (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and
Add: Share based compensation 39.24 30.40 (c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit
Add: Exercise of stock options (8.82) (5.77) liability (asset)
Less: Lapse of stock options (3.73) -
26 Interest Income
Balance as at the end of the year 95.15 68.46
Other comprehensive income For the year ended For the year ended
Particulars
March 31, 2022 March 31, 2021
Remeasurement of defined benefit plans
Balance as at the beginning of the year 6.57 6.54 On financial asset measured at amortized cost

Other comprehensive income for the year 2.22 0.03 Interest income on loan portfolio 10,566.31 8,059.97

Balance as at the end of the year 8.79 6.57 Interest on deposits with banks 76.88 215.67

Total other equity 12,551.91 11,673.18 Total 10,643.19 8,275.64

Nature and purpose of other reserve :

# These treasury shares excludes amount adjusted from equity share capital.

158 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 159
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

27 Fees and commission income 31 Finance cost

For the year ended For the year ended For the year ended For the year ended
Particulars Particulars
March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021
Facilitation fees 13.86 5.08 On financial liabilities measured at amortized cost
Income from business correspondence services - 2.11 Interest on debt securities 1,049.55 762.80
Total 13.86 7.19 Interest on borrowings (other than debt securities) 3,712.85 2,817.54
Interest on subordinated liabilities 155.06 165.40
28 Net gain on fair value changes Interest on lease liability 8.88 5.30
For the year ended For the year ended Other interest expense
Particulars
March 31, 2022 March 31, 2021 Net loss on fair value of derivative contracts measured at fair value
77.11 -
- On trading portfolio through profit or loss
Net gain on sale of mutual fund investment 247.65 167.45 Net gain or loss on foreign currency transaction and translation on
(43.81) -
- Others - - external commercial borrowing
Total 247.65 167.45 Total 4,959.64 3,751.04

For the year ended For the year ended 32 Impairment on financial instruments
Particulars
March 31, 2022 March 31, 2021 For the year ended For the year ended
Particulars
Fair value changes : March 31, 2022 March 31, 2021
- Realised 247.65 167.45 On financial assets measured at amortised cost
- Unrealised - - Impairment on loan portfolio 3,684.92 2,196.71
Total 247.65 167.45 Other financial assets 2.01 11.09
Total 3,686.93 2,207.80
29 Net gain on derecognition of financial instruments under amortised cost category
For the year ended For the year ended 33 Employee benefit expenses
Particulars
March 31, 2022 March 31, 2021 For the year ended For the year ended
Particulars
Gain on derecognition of financial instruments (refer note 45) 607.95 107.84 March 31, 2022 March 31, 2021
Total 607.95 107.84 Salaries, wages and bonus 2,063.86 1,497.18
Contribution to provident and other funds* 169.61 122.37
30 Other income Share based compensation expense 39.24 30.40
For the year ended For the year ended Staff welfare expenses 57.95 36.45
Particulars
March 31, 2022 March 31, 2021 Total 2,330.66 1,686.40
Market support income 426.87 145.39
*Contribution to provident fund is net of H1.71 million (March 31, 2021 : H7.25 million) received under the scheme “Pradhan
Recovery of loans written off 69.74 18.04 Mantri Rojgar Protsahan Yojana”.
Miscellaneous income 4.23 9.33
Total 500.84 172.76

160 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 161
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

34 Other expenses For the year ended For the year ended
Particulars
For the year ended For the year ended March 31, 2022 March 31, 2021
Particulars
March 31, 2022 March 31, 2021 b) improvement in education which includes special education
Rent (refer note 52) 147.33 110.79 and employment strengthening vocation skills among
3.32 1.23
children, women, elderly and the differently-abled and
Travelling and conveyance 118.33 74.80
livelihood enhancement projects.
Legal and professional fees* 46.82 20.94
c) Safeguarding environmental sustainability, ecological balance,
Rates and taxes 52.97 40.65 protection of flora and fauna, animal welfare, agroforestry,
Office maintenance 184.20 128.09 conservation of natural resources and maintaining a quality 1.17 0.10
Water and electricity 29.82 19.63 of soil, air and water which also includes a contribution for
rejuvenation of river Ganga.
Staff recruitment and training 7.35 2.49
d) Training to stimulate rural sports, nationally recognized
Insurance 23.92 12.26 1.00 0.80
sports, Paralympic sports and Olympic sports.
Corporate social responsibility # 15.60 12.73
e) Disaster management, including relief, rehabilitation and
Business promotion 0.87 0.62 5.27 8.14
reconstruction activities.
Lodging and boarding 23.99 10.18 Total 15.60 12.73
Cash management services 48.85 13.60
Credit bureau expenses 11.85 7.18 35 Income tax
Membership fees 6.34 4.70 a. Income tax expense in the statement of profit and loss consist of:
Miscellaneous expenses 20.05 20.13
For the year ended For the year ended
738.29 478.79 Particulars
March 31, 2022 March 31, 2021
Includes payment to auditors* Current income tax:
Audit fees 7.20 2.70 Income tax 129.77 588.71
Certification and other services 0.50 0.30 Deferred tax:
Out of pocket expenses 0.06 0.05 Attributable to-
7.76 3.05 Origination and reversal of temporary differences (103.06) (460.24)
#Details of corporate social responsibility expenditure Income tax expense reported in the statement of profit or loss 26.71 128.47
a) Gross amount required to be spent by the Company for respective Income tax recognised in other comprehensive income
15.60 8.22
financial year
Deferred tax arising on remeasurement gains on defined benefit plan 0.74 0.01
b) Amount approved by the board to be spent during the year 15.60 12.73
Total income tax expense 27.45 128.48
c ) Amount spent during the year :
i) construction/acquisition of any asset - - Income tax recognised in other comprehensive income
ii) on purposes other than (i) above 15.60 12.73
For the year ended March 31, 2022 For the year ended March 31, 2021
iii) (Shortfall) / Excess at the end of the year - - Particulars Tax Net of Tax Net of
iv) Total of previous years shortfall - - Before tax Before tax
expense tax expense tax
(v) Details of related party transactions - - Remeasurement of the net defined
2.96 (0.74) 2.22 0.04 (0.01) 0.03
(vi) Nature of CSR activities: benefit (liability)/asset
a) abolishing poverty, malnourishment and hunger, improvising Total 2.96 (0.74) 2.22 0.04 (0.01) 0.03
health care which includes preventive health care and 4.84 2.46
sanitation and making available safe drinking water. 

162 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 163
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

b. Reconciliation of total tax charge 37 Segment reporting

The tax charge shown in the statement of profit and loss differs from the tax charge that would apply if all profits The Managing Director(MD) and Chief Executive Officer(CEO) of the Company takes decision in respect of allocation
had been charged at India corporate tax rate. A reconciliation between the tax expense and the accounting profit of resources and assesses the performance basis the report/ information provided by functional heads and are thus
multiplied by India’s domestic tax rate for the year ended March 31,2022 and March 31, 2021 is as follows: considered to be Chief Operating Decision Maker (CODM).

For the year ended March 31, 2022 For the year ended March 31, 2021 The Company operates under the principal business segment viz. “micro financing activities”. The CODM views and monitors
Particulars the operating results of its single business segment for the purpose of making decisions about resource allocation and
Enacted tax Enacted tax
Amount Amount performance assessment. Accordingly, there are no separate reportable segments in accordance with the requirements
rate rate
of Ind AS 108 ‘Operating segment’ and hence, there are no additional disclosures to be provided other than those already
Accounting profit before tax 25.17% 244.26 25.17% 567.91 provided in the Ind AS statements. Presently, the Company’s operations are predominantly confined in India. There are no
Computed tax expense 61.48 142.93 individual customer contributing more than 10% of Company’s total revenue. All non-current assets other than financial
Effect of: instruments, deferred tax assets, post-employment benefit assets of the Company are located in India.
Non-deductible expenses 5.65% 13.80 1.91% 10.86
38 Employee benefit plan
Deduction under chapter VI-A -19.99% (48.82) -0.04% (25.06)
The Company operates the following post-employment plans -
Others 0.10% 0.25 -0.05% (0.26)
Effective tax rate/income tax i. Defined contribution plan
expense reported in statement of 10.93% 26.71 22.62% 128.47 The Company makes contribution, determined as a specified percentage of employees salaries, in respect of qualified
profit and loss employees towards provident fund and other funds which are defined contribution plans. The Company has no
obligation other than this to make the specified contribution. The contribution is charged to the statement of profit
36 Earning per share * and loss as they accrue.
For the year ended For the year ended
Particulars For the year ended For the year ended
March 31, 2022 March 31, 2021 Particulars
March 31, 2022 March 31, 2021
a) Basic earning per share
Contribution to provident funds* 117.67 82.11
Profit for the year before Other comprehensive income as per
217.55 439.44 Contribution to employee state insurance 26.96 21.29
Statement of profit and loss
Profit after tax for calculation of basic EPS and diluted EPS 217.55 439.44 National pension scheme 1.31 0.75
Weighted average number of equity shares outstanding during Labour welfare fund 0.56 0.36
81.50 78.97
the year Total 146.50 104.51
b) Diluted earning per share *Contribution to provident fund are net of H1.71 million received under the scheme “Pradhan Mantri Rojgar Yojana” for
Profit for the year before Other comprehensive income as per the year ended March 31, 2022 (Previous year H7.25 million).
217.55 439.44
Statement of profit and loss
Weighted average number of equity shares outstanding during the ii. Defined benefit plan
81.50 78.97
year - basic
Gratuity
Add: Weighted average number of potential equity shares on account
0.92 1.01 The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service
of employee stock options
is eligible for gratuity on cessation of employment and it is computed at 15 days salary (last drawn salary) for each
Weighted average number of equity shares outstanding during the
82.42 79.98 completed year of service as per “The Payment of Gratuity Act, 1972 as amended from time to time. The scheme is
year - diluted
funded with an insurance Company in the form of a qualifying insurance policy.
Earning per share
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity
Basic - par value of H10 each 2.67 5.56
were carried out as at March 31, 2022. The present value of the defined benefit obligations and the related current
Diluted - par value of H10 each 2.64 5.49 service cost and past year service cost, were measured using the projected unit credit method.

The following tables summarized the components of net benefit expenses recognized in the statement of profit and
loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

164 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 165
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

As at As at As at March 31, 2022 As at March 31, 2021

Particulars
March 31, 2022 March 31, 2021 Defined Fair value Net defined Defined Fair value Net defined
Particulars
Present value of obligation 94.83 70.57 benefit of plan benefit benefit of plan benefit
obligation assets (asset)/ liability obligation assets (asset)/ liability
Fair value of plan assets 91.10 65.19
Included in Other
Net defined benefit liability/(asset) * 3.73 5.38 comprehensive income
*The amount disclosed in note 21 for year ended March 31, 2022 and March 31, 2021 include H0.2 million, advanced Remeasurements loss
- - - - - -
to gratuity trust for bank account opening. (gain)
– Actuarial loss (gain)
- - - - - -
arising from:
Amount recognized in the statement of profit and loss is as under:
- demographic
As at As at - - - (2.93) - (2.93)
Particulars assumptions
March 31, 2022 March 31, 2021
- financial assumptions (2.35) - (2.35) 7.71 - 7.71
Current service cost 25.77 18.45 - experience adjustment 0.37 - 0.37 1.96 - 1.96
Net interest cost/(income) on the net defined benefit liability/(asset) 0.30 (0.55) -Return on plan assets
- 0.98 (0.98) - 6.78 (6.78)
Expenses recognized in the statement of profit and loss 26.07 17.90 excluding interest income
Total (1.98) 0.98 (2.96) 6.74 6.78 (0.04)
Amount recognized in the other comprehensive income: Other
As at As at Contribution paid by the
Particulars - 21.35 (21.35) - 1.63 (1.63)
March 31, 2022 March 31, 2021 employer
Actuarial gain/(loss) recognized during the year 2.96 0.04 Benefits paid (3.51) (0.10) (3.41) (1.04) - (1.04)
2.96 0.04 Total (3.51) 21.25 (24.76) (1.04) 1.63 (2.67)
Balance at the end of
94.83 91.10 3.73 70.57 65.19 5.38
(a) Funding the year
The scheme is fully funded with Kotak Gratuity Group Plan. The funding requirements are based on the gratuity fund’s
actuarial measurement framework set out in the funding policies of the plan. Employees do not contribute to the (c) Major categories of plan assets (as percentage of total plan assets):
plan.
As at As at
Particulars
Expected contribution to gratuity plan for next year is as on March 31 2022 is H35.74 million and H18.20 million for March 31, 2022 March 31, 2021
March 2021. Investment with Kotak gratuity group plan 100% 100%

(b) Reconciliation of the net defined benefit (asset) / liability On an annual basis, an asset-liability matching study is done by the Company whereby the Company contributes the
net increase in the actuarial liability to the plan manager (insurer) in order to manage the liability risk.
The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit
(asset) liability and its components: (d) Actuarial assumptions
As at March 31, 2022 As at March 31, 2021 Principal actuarial assumptions at the reporting date (expressed as weighted averages):
Particulars Defined Fair value Net defined Defined Fair value Net defined As at As at
benefit of plan benefit benefit of plan benefit Particulars
March 31, 2022 March 31, 2021
obligation assets (asset)/ liability obligation assets (asset)/ liability
Discount rate 6.10% 5.65%
Balance at the beginning
70.57 65.19 5.38 43.98 53.80 (9.82) Future long term salary growth 10.00% 10.00%
of the year
Included in profit or loss
Withdrawal rate: 22.00% 22.00%
Retirement age (in years) 60.00 60.00
Current service cost 25.77 - 25.77 18.45 - 18.45
Expected rate of return on plan assets 6.10% 5.65%
Interest cost (income) 3.98 3.68 0.30 2.44 2.98 (0.54)
100% of IALM 100% of IALM
Total 29.75 3.68 26.07 20.89 2.98 17.91 Mortality
2012-14 2012-14

166 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 167
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

(e) Sensitivity analysis of significant assumptions iii Compensated absences

The following table present a sensitivity analysis to one of the relevant actuarial assumption, holding other assumptions The Company provides compensated absences benefits to the employees of the Company which can be carried
constant, showing how the defined benefit obligation would have been affected by changes in the relevant actuarial forward to future periods. Amount recognised in the Statement of profit and loss for compensated absences is as
assumptions that were reasonably possible at the reporting date. under-

As at March 31, 2022 As at March 31, 2021 For the year ended For the year ended
Impact on defined benefit Impact on defined benefit Particulars
Particulars March 31, 2022 March 31, 2021
obligation obligation
Amount recognised in Statement of profit and loss 21.38 20.31
Increase Decrease Increase Decrease
Discount rate (1.00% movement) 89.95 100.21 66.77 74.76 As at As at
Salary growth rate (1.00% movement) 99.96 90.07 74.55 66.88 Particulars
March 31, 2022 March 31, 2021
Attrition rate (1.00% movement) 93.33 96.43 69.25 71.97 Present value of obligation as at the end 46.52 37.34
Mortality rate (10.00% movement) 94.82 94.84 70.56 70.58
iv The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India.
(f) Expected maturity analysis of the defined benefit plans in future years
However, the date on which the Code will come into effect has not been notified and the final rules/interpretation
have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record
As at As at
Particulars any related impact in the period the Code becomes effective.
March 31, 2022 March 31, 2021
1 year 13.15 8.51 39 Amount payable to micro small and medium enterprises
Between 2-5 years 54.10 39.55
The Ministry of Micro Small and Medium Enterprises has issued an office memorandum dated August 26, 2008 which
Between 6-10 years 39.96 29.81 recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the
Over 10 years 31.66 23.89 'entrepreneurs memorandum number' as allotted after filling of the memorandum. Accordingly, the disclosure in
Total 138.87 101.76 respect of the amount payable to such enterprises as at March 31, 2022 has been made in the financial statements
As at March 31, 2022, the weighted-average duration of the defined benefit obligation was 5 years (March 31, 2021 -5 (refer note 15) based on information received and available with the Company.
years).

(g) Description of risk exposures

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such
Company is exposed to various risks as follows -
Salary increases: The present value of the defined benefit plan is calculated with the assumption of salary increase
rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate
of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

Investment risk: The present value of defined benefit plan liability is calculated using a discount rate which is
determined by reference to the prevailing market yields of Indian government securities as at the balance sheet date
for the estimated term of the obligation.

Discount rate: Reduction in discount rate in subsequent valuations can increase the plan’s liability.

Mortality & disability: Actual deaths & disability cases proving lower or higher than assumed in the valuation can

impact the liabilities.

Withdrawals: Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates
at subsequent valuations can impact plan’s liability.

Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return

expected on investments of the fund during the estimated term of the obligations.

168 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 169
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

40 Maturity analysis of assets and liabilities 41 Reconciliation of liabilities arising from financing activities

The table below shows an analysis of assets and liabilities analysed according to when they are expected to be The changes in the Company's liabilities arising from financing activities can be classified as follows :
recovered or settled. With regard to loans and advances to customers, the Company uses the same basis of expected
repayment behaviour as used for estimating the EIR. Issued debt reflect the contractual coupon amortisations. Borrowings (other Subordinated
Particulars Debt securities Total
than debt securities) liabilities

As at March 31, 2022 As at March 31, 2021 April 1, 2020 3,998.98 24,571.58 1,166.29 29,736.85
Particulars Within 12 After 12 Within 12 After 12 Cash flows:
Total Total
months months months months Repayment (660.53) (20,036.34) - (20,696.87)
Assets Proceeds 6,577.19 28,711.21 - 35,288.40
Cash and cash equivalents 10,113.72 - 10,113.72 12,154.20 - 12,154.20 Non Cash:
Bank balance other than cash and cash 920.87 501.39 1,422.26 601.61 596.75 1,198.36 Amortisation of upfront fees (11.14) 4.34 0.92 (5.88)
equivalents
March 31, 2021 9,904.50 33,250.79 1,167.21 44,322.50
Trade receivables 43.42 - 43.42 27.93 - 27.93
Cash flows:
Loans 36,339.32 22,842.62 59,181.94 27,218.83 16,388.47 43,607.30
April 1, 2021 9,904.50 33,250.79 1,167.21 44,322.50
Other financial assets 653.31 15.34 668.65 273.95 26.81 300.76
Non-financial assets Repayment (2,531.01) (25,905.28) (70.00) (28,506.29)
Current tax assets (net) - 353.61 353.61 - 119.58 119.58 Proceeds 450.00 41,043.00 550.00 42,043.00
Deferred tax assets (net) - 867.56 867.56 - 765.28 765.28 Non Cash:
Property, plant and equipment - 122.04 122.04 - 102.74 102.74 Amortisation of upfront fees 14.27 (50.04) (21.54) (57.31)
Right of use asset - 69.17 69.17 - 78.19 78.19 Exchange differences (net) - (43.81) - (43.81)
Intangible assets - 0.71 0.71 - 1.90 1.90 March 31, 2022 7,837.76 48,294.66 1,625.67 57,758.09
Other non financial assets 61.20 0.54 61.74 22.77 0.32 23.09
Total Assets 48,131.84 24,772.98 72,904.82 40,299.29 18,080.04 58,379.33 42 Share based compensation
Liabilities A. Description of share-based payment arrangements
Financial liabilities i. Share option programme (equity settled)
Derivative financial instruments at fair value 29.70 47.41 77.11 - - -
The Company has granted stock options to certain employees of the Company under the 'Employee Stock Option
through profit or loss
Scheme 2014' (Scheme 2014) and 'Employee Stock Option Scheme 2016' (Scheme 2016). The key terms and
Trade payables 176.59 - 176.59 113.06 - 113.06 conditions related to the grant of the stock options are as follows:
Debt securities 3,234.82 4,602.94 7,837.76 2,467.29 7,437.20 9,904.49
a) The Scheme 2014 and 2016 are effective from July 31, 2014 and January 16, 2017 respectively and are
Borrowings (other than debt securities) 29,867.97 18,426.69 48,294.66 21,725.21 11,525.58 33,250.79
administered through a ESOP Trust (Fusion Employees Benefit Trust).
Subordinated liabilities 499.66 1,126.01 1,625.67 70.00 1,097.21 1,167.21
Other financial liabilities 1,259.37 74.96 1,334.32 1,184.75 81.23 1,265.98 b) The scheme provides that, subject to continued employment with the Company, the employees are granted an
Non-financial liabilities option to acquire equity shares of the Company that may be exercised within a specified period.
Current tax liabilities (net) 1.04 - 1.04 53.98 - 53.98 c) The Company has formed Fusion ESOP Trust on September 24, 2014 to issue ESOPs to employees of the
Provisions 31.76 39.92 71.68 75.39 5.37 80.76 Company as per the respective scheme. The Company has given interest and collateral free loan to the ESOP
Other non-financial liabilities 106.48 - 106.48 79.50 - 79.50 trust, to provide financial assistance to purchase equity shares of the Company under such schemes. The Trust
in turn allots the shares to employees on exercise of their right against cash consideration.
Total Liabilities 35,207.39 24,317.92 59,525.31 25,769.18 20,146.59 45,915.77
Net Assets 12,924.45 455.05 13,379.51 14,530.11 (2,066.55) 12,463.56

170 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 171
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

d) As on March 31, 2022, the ESOP trust have 15,65,985 equity shares, (March 31, 2021 - 17,40,626). The ESOP Trust C Share options outstanding at the end of the year have the following contractual expiry date and exercise
does not have any transaction other than those mentioned above, hence it is treated as an integral part of the options
Company and accordingly gets consolidated with the books of the Company. Accordingly, as at March 31, 2022,
the Company has reduced the shares allotted to ESOP Trust amounting I 15.66 million (March 31, 2021 - I 17.41 Number of options outstanding
Number of Exercise
million) from the share capital and I 126.70 million (March 31, 2021 - I 138.15 million) from the share premium. Grant date Expiry date As at As at
options price
These are shown as treasury shares. March 31, 2022 March 31, 2021
March 31, 2016 2,17,000
e) The eligible employees shall exercise their option to acquire the shares of the Company within a period of eight
periods from the end of vesting period. The plan shall be administered, supervised and implemented by the Tranche 1 54,250 March 31, 2025 27.08 10,250 10,250
board. Tranche 2 54,250 March 31, 2026 27.08 10,250 10,250
Tranche 3 54,250 March 31, 2027 27.08 10,250 19,750
These options shall vest on graded basis as follows:
Tranche 4 54,250 March 30, 2028 27.08 20,000 29,500
Time period Percentage Vesting condition
March 31, 2017 3,41,900
On completion of 1 year 25% Service
Tranche 1 85,475 March 31, 2026 37.99 45,133 49,248
On completion of 2 years 25% Service
Tranche 2 85,475 March 31, 2027 37.99 58,560 62,675
On completion of 3 years 25% Service
Tranche 3 85,475 March 30, 2028 37.99 67,693 76,601
On completion of 4 years 25% Service
Tranche 4 85,475 March 30, 2029 37.99 73,700 85,475
B Reconciliation of outstanding share options March 31, 2018 3,30,540
Set out below is a summary of options granted under the plan : Tranche 1 82,635 March 31, 2027 64.08 42,658 52,318

March 31, 2022 March 31, 2021

Tranche 2 82,635 March 30, 2028 64.08 44,002 53,662
Number Average Number Average Tranche 3 82,635 March 30, 2029 64.08 46,323 57,818
Particulars
of share exercise price of share exercise price Tranche 4 82,635 March 30, 2030 64.08 50,198 59,045
options per share options per share
March 31, 2019 4,34,720
Outstanding options at the beginning of the year 20,70,558 156.57 16,20,998 100.84
Tranche 1 1,08,680 March 31, 2028 110.00 56,093 79,829
Add: Granted during the year 5,18,500 327.50 5,84,500 290.48
Tranche 2 1,08,680 March 31, 2029 110.00 56,092 84,530
Less: Lapsed/forfeited during the year 65,310 165.12 48,030 88.20
Tranche 3 1,08,680 March 31, 2030 110.00 72,055 94,665
Less: Exercised during the year 1,74,641 89.28 86,910 55.50
Tranche 4 1,08,680 March 31, 2031 110.00 85,063 94,665
Outstanding options at the end of the year 23,49,107 199.07 20,70,558 156.57
September 30, 2019 5,46,180
Options exercisable at the end of the year 9,96,477 7,42,836 Tranche 1 1,36,545 September 30, 2028 154.04 1,07,781 1,28,558
The weighted average share price at the date of exercise for share options exercised during the year ended March Tranche 2 1,36,545 September 30, 2029 154.04 1,12,010 1,31,160
31, 2022 was I 129.07 (March 31, 2021 - I 123.49). Tranche 3 1,36,545 September 30, 2030 154.04 1,29,910 1,31,160
Tranche 4 1,36,545 September 30, 2031 154.04 1,29,910 1,31,160
November 8, 2019 31,790
Tranche 1 7,948 November 8, 2028 154.04 3,611 6,898
Tranche 2 7,948 November 8, 2029 154.04 5,848 7,948
Tranche 3 7,948 November 8, 2030 154.04 6,898 7,948
Tranche 4 7,948 November 8, 2031 154.04 6,898 7,948

172 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 173
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Number of options outstanding B. Measurement of fair values

Number of Exercise
Grant date Expiry date As at As at i. Equity-settled share-based payment arrangements
options price
March 31, 2022 March 31, 2021
The fair value of employee share options has been measured using Black-Scholes model. The weighted average fair
February 18, 2020 13,000 value of each option granted during the financial year 2021-22 was ranged between 116.48-136.22.
Tranche 1 3,250 February 18, 2029 290.48 2,200 3,250
The fair value of options and the inputs used in the measurement of the grant date fair values of the equity-settled
Tranche 2 3,250 February 18, 2030 290.48 2,200 3,250 share based payment plans are as follows:
Tranche 3 3,250 February 18, 2031 290.48 2,200 3,250
Historical Exercise Share Risk free Fair value
Tranche 4 3,250 February 19, 2032 290.48 2,200 3,250 Grant date Expiry date
volatility price price rate of option
August 19, 2020 1,62,000 March 31, 2016
Tranche 1 40,500 August 19, 2029 290.48 39,125 40,500 Tranche 1 March 31, 2025 45.00% 27.08 51.90 7.18% 30.69
Tranche 2 40,500 August 19, 2030 290.48 39,500 40,500 Tranche 2 March 31, 2026 45.00% 27.08 51.90 7.32% 32.84
Tranche 3 40,500 August 19, 2031 290.48 39,500 40,500 Tranche 3 March 31, 2027 45.00% 27.08 51.90 7.43% 34.74
Tranche 4 40,500 August 19, 2032 290.48 39,500 40,500 Tranche 4 March 30, 2028 45.00% 27.08 51.90 7.51% 36.42
November 9, 2020 67,500 March 31, 2017
Tranche 1 16,875 November 9, 2029 290.48 16,875 16,875 Tranche 1 March 31, 2026 45.00% 37.99 80.40 6.45% 51.16
Tranche 2 16,875 November 9, 2030 290.48 16,875 16,875 Tranche 2 March 31, 2027 45.00% 37.99 80.40 6.62% 53.92
Tranche 3 16,875 November 9, 2031 290.48 16,875 16,875 Tranche 3 March 30, 2028 45.00% 37.99 80.40 6.77% 56.41
Tranche 4 16,875 November 9, 2032 290.48 16,875 16,875 Tranche 4 March 30, 2029 45.00% 37.99 80.40 6.88% 58.65
February 5, 2021 3,55,000 March 31, 2018
Tranche 1 88,750 February 5, 2030 290.48 86,375 88,750 Tranche 1 March 31, 2027 45.00% 64.08 82.30 6.94% 38.69
Tranche 2 88,750 February 5, 2031 290.48 86,375 88,750 Tranche 2 March 30, 2028 45.00% 64.08 82.30 7.13% 43.26
Tranche 3 88,750 February 5, 2032 290.48 86,375 88,750 Tranche 3 March 30, 2029 45.00% 64.08 82.30 7.28% 47.22
Tranche 4 88,750 February 5, 2033 290.48 86,375 88,750 Tranche 4 March 30, 2030 45.00% 64.08 82.30 7.40% 50.68
February 14, 2022 5,18,500 March 31, 2019
Tranche 1 1,29,625 February 14, 2031 327.50 1,29,625 - Tranche 1 March 31, 2028 46.30% 110.00 111.10 7.01% 56.07
Tranche 2 1,29,625 February 14, 2032 327.50 1,29,625 - Tranche 2 March 31, 2029 46.30% 110.00 111.10 7.12% 61.43
Tranche 3 1,29,625 February 14, 2033 327.50 1,29,625 - Tranche 3 March 31, 2030 46.30% 110.00 111.10 7.22% 66.18
Tranche 4 1,29,625 February 14, 2034 327.50 1,29,625 - Tranche 4 March 31, 2031 46.30% 110.00 111.10 7.30% 70.42
September 30, 2019
Outstanding options at the end of the year 23,49,107 20,70,558 Tranche 1 September 30, 2028 45.00% 154.04 111.10 6.31% 42.37
Weighted average remaining contractual life of options outstanding at 8.39 years 7.63 years Tranche 2 September 30, 2029 45.00% 154.04 111.10 6.46% 48.42
the end of the year
Tranche 3 September 30, 2030 45.00% 154.04 111.10 6.59% 53.90
Tranche 4 September 30, 2031 45.00% 154.04 111.10 6.70% 58.86
November 8, 2019
Tranche 1 November 8, 2028 45.00% 154.04 213.60 6.25% 124.09
Tranche 2 November 8, 2029 45.00% 154.04 213.60 6.43% 132.58
Tranche 3 November 8, 2030 45.00% 154.04 213.60 6.59% 140.16
Tranche 4 November 8, 2031 45.00% 154.04 213.60 6.71% 146.93

174 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 175
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Historical Exercise Share Risk free Fair value 43 Related party disclosure
Grant date Expiry date
volatility price price rate of option i. Names of the related party and nature of relationship:-
February 18, 2020
Description of
Tranche 1 February 18, 2029 45.00% 290.48 213.60 6.08% 82.04 Designation As at March 31, 2022 As at March 31, 2021
relationship
Tranche 2 February 18, 2030 45.00% 290.48 213.60 6.23% 93.50 Managing Director and
Devesh Sachdev Devesh Sachdev
Tranche 3 February 18, 2031 45.00% 290.48 213.60 6.35% 103.81 Chief Executive Officer
Tranche 4 February 18, 2032 45.00% 290.48 213.60 6.44% 113.13 Chief Financial Officer Gaurav Maheshwari Gaurav Maheshwari
August 19, 2020 Company Secretary and
Deepak Madaan Deepak Madaan
Tranche 1 August 19, 2029 49.60% 290.48 185.20 5.52% 68.68 Compliance Officer
Tranche 2 August 19, 2030 49.60% 290.48 185.20 5.77% 79.33 Key Management Ms. Namrata Kaul Ms. Namrata Kaul
Tranche 3 August 19, 2031 49.60% 290.48 185.20 5.97% 88.91 Personnel Mr. Pankaj Vaish -
Independent Director*
Tranche 4 August 19, 2032 49.60% 290.48 185.20 6.12% 97.52 Ms. Ratna Dharashree Ms. Ratna Dharashree
Vishwanathan Vishwanathan
November 9, 2020
Mr. Narendra Ostawal Mr. Narendra Ostawal
Tranche 1 November 9, 2029 52.70% 290.48 193.80 5.31% 78.61
Nominee Director Mr. Kenneth Dan Vander Mr. Kenneth Dan Vander
Tranche 2 November 9, 2030 52.70% 290.48 193.80 5.58% 89.76
Weele Weele
Tranche 3 November 9, 2031 52.70% 290.48 193.80 5.81% 99.74
Creation Investments Creation Investments
Tranche 4 November 9, 2032 52.70% 290.48 193.80 5.99% 108.67 Fusion, LLC, Fusion, LLC,
February 5, 2021 Entities exercising Chicago, U.S.A. Chicago, U.S.A.
Tranche 1 February 5, 2030 52.70% 290.48 193.80 5.63% 79.47 significant influence Shareholder Creation Investments Fusion Creation Investments Fusion
Tranche 2 February 5, 2031 52.70% 290.48 193.80 5.89% 90.68 over the Company II, LLC, II, LLC,
Chicago, U.S.A. Chicago, U.S.A.
Tranche 3 February 5, 2032 52.70% 290.48 193.80 6.10% 100.69
Honey Rose Investment Ltd Honey Rose Investment Ltd
Tranche 4 February 5, 2033 52.70% 290.48 193.80 6.27% 109.64
Entities with common
February 14, 2022 Vivriti Capital Private Limited
directors
Tranche 1 February 14, 2031 54.50% 327.50 250.10 5.98% 116.48 Fusion Micro Finance Fusion Micro Finance
Tranche 2 February 14, 2032 54.50% 327.50 250.10 6.29% 130.74 Post Employment
Gratuity Trust Private Limited Employees Private Limited Employees
benefits plan
Tranche 3 February 14, 2033 54.50% 327.50 250.10 6.54% 143.29 Group Gratuity Trust Fund Group Gratuity Trust Fund
Tranche 4 February 14, 2034 54.50% 327.50 250.10 6.72% 154.35
*Mr. Pankaj Vaish was appointed as an Additional Director on September 22, 2021 and was regularised as an Independent Director w.e.f
Expected volatility is a measure of the amount by which a price is expected to fluctuate during a period. The measure December 18, 2021
of volatility used in option pricing models is the annualised standard deviation of the continuously compounded rates Shobinder Duggal was appointed on May 26, 2021 and resigned on September 22, 2021
of return on the share over a period of time. Expected volatility approximates historical volatility.

176 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 177
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

ii. Summary of related party transactions during the year 44 Financial instruments - fair value and risk management
For the year ended For the year ended A. Financial instruments by category
Name of the related party Nature of transaction
March 31, 2022 March 31, 2021
The following table shows the carrying amounts and fair values of financial assets and financial liabilities.
Managerial remuneration 37.50 25.91
Mr. Devesh Sachdev As at March 31, 2022
Amount received against 641.51 - Particulars
partly paid up shares Carrying value Fair value

Mr. Gaurav Maheshwari Remuneration 8.39 6.51 At amortised cost

Mr. Deepak Madaan Remuneration 4.50 3.42 Financial assets:
Mr. Pradip Kumar Saha Sitting fees - 0.48 Cash and cash equivalents 10,113.72 10,113.72
Ms. Ratna Vishwanathan Sitting fees 1.26 0.60 Bank balance other than cash and cash equivalents 1,422.26 1,422.26
Mr. Shobinder Duggal Sitting fees 0.43 - Trade receivables 43.42 43.42
Ms. Namrata Kaul Sitting fees 1.45 0.47 Loans 59,181.94 60,225.94
Sitting fees 0.75 - Other financial assets 668.65 668.65
Mr. Pankaj Vaish Reimbursement of travelling 0.03 0.10 71,429.99 72,473.99
expenses Financial liabilities:
Fusion Micro Finance Private Limited Investment 21.35 1.81 Trade payables 176.59 176.59
Employees Group Gratuity Trust Fund Debt securities 7,837.76 8,076.25
Vivriti Capital Private Limited Proceeds from 250.00 - Borrowings (other than debt securities) 48,294.66 48,416.68
Subordinated debt
Subordinated liabilities 1,625.67 1,785.96
Vivriti Capital Private Limited Loan processing fees 3.75 -
Other financial liabilities 1,334.32 1,334.32
The amount receivable/(payable) from/ (to) related parties: 59,269.00 59,789.80
Name of the related party Nature of transaction At fair value through profit or loss
Vivriti Capital Private Limited Subordinated debt 250.00 - Derivative financial instrument 77.11 77.11
Terms and conditions 77.11 77.11
All transactions with these related parties are priced on an arm’s length basis and at normal commercial terms. 59,346.11 59,866.91

As the provision for gratuity, leave compensation and share based compensation is made for the Company as a whole,
the amount pertaining to the Key Management Personnel is not specifically identified and hence is not included above.
The above remuneration details are in the nature of short term benefits .

178 FUSION MICROFINANCE LIMITED

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TENACITY &
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OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 179
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

As at March 31, 2021 Assets and liabilities which are measured at amortised cost for which fair values are disclosed
Particulars
Carrying value Fair value As at March 31, 2021 Carrying value Level 1 Level 2 Level 3 Total
At amortised cost Financial assets:
Financial assets: Loans 43,607.30 - 45,195.17 - 45,195.17
Cash and cash equivalents 12,154.20 12,154.20 43,607.30 - 45,195.17 - 45,195.17
Bank balance other than cash and cash equivalents 1,198.36 1,198.36 Financial liabilities:
Trade receivables 27.93 27.93 Debt securities 9,904.50 - 10,328.61 - 10,328.61
Loans 43,607.30 45,195.17 Borrowings (other than debt 33,250.79 - 33,401.40 - 33,401.40
Other financial assets 300.76 300.76 securities)
57,288.55 58,876.42 Subordinated liabilities 1,167.21 - 1,270.76 - 1,270.76
Financial liabilities: 44,322.50 - 45,000.77 - 45,000.77
Trade payables 113.06 113.06
The management assessed that carrying value of financial Level 2 : The fair value of financial instruments that
Debt securities 9,904.50 10,328.61 assets (except loan and investments) and financial liabilities are not traded in active markets is determined using
Borrowings (other than debt securities) 33,250.79 33,401.40 (except debt securities, borrowings (other than debt valuation techniques which maximize the use of
Subordinated liabilities 1,167.21 1,270.76 securities) and subordinated liabilities) approximate their observable market data either directly or indirectly, such
fair value largely due to short term maturities of these as quoted prices for similar assets and liabilities in active
Other financial liabilities 1,265.98 1,265.98
instruments. markets, for substantially the full term of the financial
45,701.54 46,379.81 instrument but do not qualify as Level 1 inputs. If all
C. Valuation framework
significant inputs required to fair value an instrument
The Managing Director and Chief Executive Officer of
B. Fair value hierarchy of assets and liabilities are observable the instrument is included in level 2.
the Company takes decision in respect of allocation
B.1 Financial assets and liabilities measured at fair value - recurring fair value measurements of resources and assesses the performance basis the Level 3 : If one or more of the significant inputs is not
report/ information provided by functional heads and based in observable market data, the instruments is
As at March 31, 2022 Carrying value Level 1 Level 2 Level 3 Total are thus considered to be Chief Operating Decision included in level 3. That is, Level 3 inputs incorporate
Financial liabilities: Maker (CODM). market participants’ assumptions about risk and
the risk premium required by market participants in
Derivative financial instrument 77.11 - 77.11 - 77.11 The Company operates under the principal business
order to bear that risk. The Company develops Level 3
segment viz. “micro financing activities”. The CODM
77.11 - 77.11 - 77.11 inputs based on the best information available in the
views and monitors the operating results of its single
circumstances.
B.2 Financial assets and liabilities which are measured at amortised cost for which fair values are disclosed business segment for the purpose of making decisions
about resource allocation and performance assessment. Valuation techniques include net present value and
As at March 31, 2022 Carrying value Level 1 Level 2 Level 3 Total Accordingly, there are no separate reportable segments discounted cash flow models. Assumptions and
in accordance with the requirements of Ind AS 108 inputs used in valuation techniques include risk-free
Financial assets:
‘Operating segment’ and hence, there are no additional and benchmark interest rates, credit spreads and
Loans 59,181.94 - 60,225.94 - 60,225.94 disclosures to be provided other than those already other premium used in estimating discount rates and
59,181.94 - 60,225.94 - 60,225.94 provided in the Ind AS statements. Presently, the expected price volatilities and correlations.
Financial liabilities: Company’s operations are predominantly confined in The objective of valuation techniques is to arrive at a fair
India. There are no individual customer contributing value measurement that reflects the price that would be
Debt securities 7,837.76 - 8,076.25 - 8,076.25 more than 10% of Company’s total revenue. All non- received to sell the asset or paid to transfer the liability
Borrowings (other than debt 48,294.66 - 48,416.68 - 48,416.68 current assets other than financial instruments, in an orderly transaction between market participants
securities) deferred tax assets, post-employment benefit assets of at the measurement date.
the Company are located in India.”
Subordinated liabilities 1,625.67 - 1,785.96 - 1,785.96 The fair values of loans and receivables are estimated
57,758.09 - 58,278.89 - 58,278.89 Level 1: Inputs that are quoted market prices by discounted cash flow models that incorporate
(unadjusted) in active markets for identical assets or assumptions for credit risks, probability of default
liabilities. and loss given default estimates. The Company uses

180 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 181
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

historical experience and other information used in its rates, yield curves of the respective currencies, currency 46 Financial risk management The Company’s risk management policies are
collective impairment models. The credit risk is applied basis spreads between the respective currencies and established to identify and analyse the risks faced
Risk is an integral part of the Company's business and
as a top-side adjustment based on the collective interest rate curves. As at March 31, 2022, the mark-to- by the Company, to set appropriate risk limits and
sound risk management is critical to the success. As a
impairment model incorporating probability of defaults market value of derivative liability position is net of a controls and to monitor risks and adherence to limits.
financial intermediary, the Company is exposed to risks
and loss given defaults. credit valuation adjustment attributable to derivative Risk management policies and systems are reviewed
that are particular to its lending and the environment
counterparty default risk. regularly to reflect changes in market conditions and
The fair values of the Company’s fixed rate interest- within which it operates and primarily includes credit,
the Company’s activities. The Company, through its
bearing debt securities, borrowings and subordinated There have been no transfer between Level 1, 2 liquidity and market risks. The Company has a risk
training and management standards and procedures,
liabilities are determined by applying discount rate and 3 during the period ended March 31, 2022 and management policy which covers risks associated with
aims to maintain a disciplined and constructive control
that reflects the issuer’s borrowing rate as at the end of March 31, 2021. the financial assets and liabilities. The risk management
environment in which all employees understand their
the reporting period. For variable rate interest-bearing policy is approved by the board of directors.
roles and obligations.
debt securities, borrowings and subordinated liabilities,
45 Transfers of financial assets The Company has identified and implemented
carrying value represent best estimate of their fair value The Company’s audit committee oversees how
as these are subject to changes in underlying interest Assignment transactions: comprehensive policies and procedure to assess,
management monitors compliance with the Company’s
rate indices as and when the changes happen. monitor and manage risk through-out Company. The
Company generally enters into assignment deals, as a risk management policies and procedures, and reviews
risk management process is continuously reviewed,
The Company has entered into derivative financial source of finance. As per the terms of deal, since the the adequacy of the risk management framework in
improved and adopted in the context of changing risk
instruments with counterparty being a financial derecognition criteria as per Ind AS 109, including relation to the risks faced by the Company. The audit
scenario and the agility of the risk management process
institution with investment grade credit ratings. transaction of substantially all the risks and rewards committee is assisted in its oversight role by internal
is monitored and reviewed for its appropriateness in
Currencty and Interest rate swaps are valued using relating to assets being transferred to the buyer being audit that undertakes both regular and ad hoc reviews
the changing risk landscape. The process of continuous
valuation techniques, which employs the use of met, the assets have been derecognized. of risk management controls and procedures, the
evaluation of risks includes stock of the risk landscape
market observable inputs. The most frequently applied results of which are reported to the audit committee.
The management evaluates the impact of the on an event driven basis.
valuation techniques include forward pricing and swap assignment transactions done during the year for its A. Credit risk
models, using present value calculations. The models The Company has an elaborate process for risk
business model. Based on the future business plan, the
incorporate various inputs including the credit quality management. Major risks identified by the businesses All derivative activities for risk management purposes
Company’s business model remains to hold the assets
of counterparties, foreign exchange spot and forward and functions are systematically addressed through are carried out by specialist teams that have the
for collecting contractual cash flows.
mitigating actions on a continuing basis. appropriate skills, experience and supervision. It is
the Company’s policy that no trading in derivatives
Risk management framework
The table below summarises the carrying amount of the derecognized financial assets and the gain on derecognition, for speculative purposes may be undertaken. Credit
per type of asset during the year The Company’s board of directors has overall risk arising from derivative financial instruments is, at
responsibility for the establishment and oversight of any time, limited to those with positive fair values, as
Carrying amount of derecognized the Company’s risk management framework. The board recorded on the balance sheet. As per risk management
Gain from derecognition
financial assets of directors has established the risk management policy of the company, it only deals with counterparties,
Assignment committee, which is responsible for developing and which has good credit rating/ worthiness given by
monitoring the Company’s risk management policies. external rating agencies or based on company's
For the year ended March 31, 2022 6,934.54 607.95
The committee reports regularly to the board of internal assessment. The Board of Directors reviews and
For the year ended March 31, 2021 1,180.20 107.84 directors on its activities. agrees policies for managing each of these risks, which
are summarised below:
Since the Company transferred the above financial asset in a transfer that qualified for derecognition in its entirety, Efficient and timely management of risks involved in the
therefore the whole of the interest spread (over the expected life of the asset) is recognized at its present value on the Company's activities is critical for the financial soundness Credit risk is the risk of loss that may occur from
date of derecognition itself as interest strip receivable and correspondingly recognised as gain on derecognition of and profitability of the Company. Risk management defaults by our borrowers under our loan agreements.
financial asset. involves the identifying, measuring, monitoring and In order to address credit risk, we have stringent credit
managing of risks on a regular basis. The objective of assessment policies for client selection. Measures such
risk management is to increase shareholders' value as verifying client details and usage of credit bureau
and achieve a return on equity that is commensurate data to get information on past credit behaviour also
with the risks assumed. To achieve this objective, the supplement the efforts for containing credit risk. We
Company employs leading risk management practices also follow a systematic methodology in the opening of
and recruits skilled and experienced people. new branches, which takes into account factors such as
the demand for credit in the area; income and market

182 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 183
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

potential; and socio-economic and law and order risks (a) Probability of default (PD) e) Expected credit loss on Loans significantly since initial recognition, the Company
in the proposed area. Further, our client due diligence uses information that is relevant and available without
PD describes the probability of a loan to eventually The Company measures the amount of ECL on a
procedures encompass various layers of checks, undue cost or effort. This includes the Company’s
falling into stage 3. PD percentage is calculated for financial instrument in a way that reflects an unbiased
designed to assess the quality of the proposed group internal assessment and forward-looking information
entire loan portfolio and is determined by using and probability-weighted amount. The Company
and to confirm that they meet our criteria. to assess deterioration in credit quality of a financial
available historical observations. considers its historical loss experience and adjusts the
asset.
The Company is a rural focused NBFC-MFI with a same for current observable data. The key inputs into
PD for stage 1: is derived as percentage of all loans in the measurement of ECL are the probability of default, Expected credit loss on other financial assets
geographically diversified presence in India and offer
stage 1 moving into stage 3 in 12-months' time. loss given default and exposure at default. These
income generation loans under the joint liability group The Company assesses whether the credit risk on a
model, predominantly to women from low-income parameters are derived from the internal assessment financial asset has increased significantly on collective
PD for stage 2: is derived as percentage of all loans in
households in Rural Areas. Further, as we focus on of the historical data. In addition, the Company uses basis. For the purpose of collective evaluation of
stage 2 moving into stage 3 in the maximum lifetime of
providing micro-loans in rural areas, our results of reasonable and supportable information on future impairment, financial assets are grouped on the basis
the loans under observation.
operations are affected by the performance and the economic conditions including macroeconomic factors of shared credit risk characteristics, taking into account
future growth potential of microfinance in rural India. PD for stage 3: is derived as 100% considering that the such as interest rates, gross domestic product, inflation accounting instrument type, credit risk ratings, date of
Our clients typically have limited sources of income, default occurs as soon as the loan becomes overdue for and expected direction of the economic cycle. Since initial recognition, remaining term to maturity, industry,
savings and credit histories and our loans are typically 90 days which matches the definition of stage 3. incorporating these forward looking information geographical location of the borrower, collateral type,
provided free of collateral. Such clients generally do not increases the judgment as to how the changes in these and other relevant factors.
have a high level of financial resilience, and, as a result, Macroeconomic information (such as regulatory macroeconomic factor will affect ECL, the methodology
changes, market interest rate or inflation) is and assumptions are reviewed regularly. The Company monitors changes in credit risk by
they can be adversely affected by declining economic
incorporated as part of the internal assessment . In tracking published external credit ratings. In order
conditions and natural calamities. In addition, we rely
general, it is presumed that credit risk has significantly The Company has applied a three-stage approach to to determine whether published ratings remain
on non-traditional guarantee mechanisms rather than
increased since initial recognition if the payments are measure expected credit losses (ECL) on loans. Assets up to date and to assess whether there has been a
tangible assets as collateral, which may not be effective
more than 30 days past due. migrate through following three stages based on the significant increase in credit risk at the reporting date
in recovering the value of our loans.
changes in credit quality since initial recognition: that has not been reflected in published ratings, the
"The Company’s exposure to credit risk is influenced (b) Exposure at default (EAD) Company supplements this by reviewing changes in
i) Stage 1: 12- months ECL: For exposures where there government bond yields together with available press
mainly by the individual characteristics of each EAD is the sum of outstanding principal and the interest is no significant increase in credit risk since initial and regulatory information about issuers.
customer. However, management also considers the amount accrued but not received on each loan as at recognition and that are not credit-impaired upon
factors that may influence the credit risk of its customer reporting date. origination, the portion of the lifetime ECL associated 47 Liquidity risk
base, including the default risk associated with the
(c) Loss given default (LGD) with the probability of default events occurring within Liquidity risk is the risk that the Company will encounter
industry. A financial asset is ‘credit-impaired’ when
the next 12- months is recognized. difficulty in meeting the obligations associated with its
one or more events that have a detrimental impact on The Company determines its recovery rates by analysing
the estimated future cash flows of the financial asset financial liabilities that are settled by delivering cash
the recovery trends over different periods of time after ii) Stage 2: Lifetime ECL, not credit-impaired: For credit
have occurred. Evidence that a financial asset is credit- or another financial asset. The Company's approach
a loan is considered credit impaired. Recovery rate exposures where there has been a significant increase
impaired includes the following observable data: to managing liquidity is to ensure, that it will have
is the total of discounted value of all the recoveries in credit risk since initial recognition but are not credit-
sufficient liquidity to meet its liabilities when they
on the credit impaired loan account divided by the impaired, a lifetime ECL is recognized.
• significant financial difficulty of the borrower or issuer; are due, under both normal and stressed conditions,
outstanding of the loan account after its first default.
iii) Stage 3: Lifetime ECL, credit-impaired: Financial without incurring unacceptable losses or risking
•a breach of contract such as a default or past due LGD = 1 - (Recovery rate).
assets are assessed as credit impaired upon occurrence damage to the Company's reputation.
event;"
(d) Significant increase in credit risk of one or more events that have a detrimental impact
The maturity schedule for all financial liabilities and
The Company believes that the Micro finance on the estimated future cash flows of that asset. For
The Company continuously monitors all assets subject assets are regularly reviewed and monitored. Company
loans (MFI) have shared risk characteristics (i.e. financial assets that have become credit-impaired,
to ECL. In order to determine whether an instrument or has assets liability management (ALM) policy and
homogeneous) across various states in India. Similarly, a lifetime ECL is recognized and interest revenue is
a portfolio of instruments is subject to 12 months ECL ALM Committee to review and monitor liquidity
the MSME loans are considered to have shared risk calculated by applying the effective interest rate to the
or life time ECL, the Company assesses whether there risk and ensure the compliance with the prescribed
characteristics. Accordingly, the Company believes that amortised cost.
has been a significant increase in credit risk since initial regulatory requirement. Monitoring liquidity risk
these product categories are the best measure of credit recognition. Regardless of the change in credit grades, involves categorizing all assets and liabilities into
At each reporting date, the Company assesses whether
risk concentration. Refer note 6 for the product wise if contractual payments are more than 30 days past due, different maturity profiles and evaluating them for any
there has been a significant increase in credit risk of its
loan balances. the credit risk is deemed to have increased significantly mismatches in any particular maturities, particularly in
financial assets since initial recognition by comparing
since initial recognition. the risk of default occurring over the expected life of the the short-term. The ALM Policy prescribes the detailed
asset. In determining whether credit risk has increased guidelines for managing the liquidity risk.

184 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 185
 Notes to the Financial S t a t e m e n t s
(B in millions unless otherwise stated)

52,809.58
8,971.78
2,227.84
77.12
1,252.49
176.59

36,408.25
12,957.78
1,535.48
1,265.98
113.05
65,515.40

52,280.54
The following are the contractual maturities of financial liabilities at the reporting date. The amount are gross and undiscounted, and include contractual

Total

Total
For the year ended March 31, 2022 (B in millions unless otherwise stated)

48 Market risk (ii) Price Risk

-
-
576.27
-
-
-

-
1,614.31
-
51.78
-
576.27

1,666.09
Over 5

Over 5
years

years
Market risk is the risk that the fair value or future cash The Company's exposure to price risk is not material and
flows of financial instruments will fluctuate due to it is primarily on account of investment of temporary
changes in market variables such as interest rates, treasury surplus in the highly liquid debt funds for very
interest payments and exclude the impact of netting agreements.

736.27 short durations. The Company has a board approved

-
137.66
-
-
-

525.09
2,476.87
-
17.91
-
873.93

3,019.87
credit, liquidity etc. The Company is exposed to three
3 to 5

3 to 5
years

years
type's of market risks as follows: policy of investing its surplus funds in highly rated
debt mutual funds and other instruments having
(i) Interest rate risk insignificant price risk, not being equity funds/ risk
Interest rate risk is the risk that the future cash flows of bearing instruments. As of March 31, 2022 and March
18,901.56
4,874.21
790.67
47.41
-
-

11,719.77
5,359.69
1,310.97
11.54
-
24,613.85

18,401.98
a financial instrument will fluctuate because of changes 31, 2021, the company does not have any exposure to
1 to 3

1 to 3
years

years
in market interest rates. We are subject to interest rate mutual funds.
risk, principally because we lend to clients at fixed
Contractual cash flows

Contractual cash flows

(iii) Foreign currency risk
interest rates and for periods that may differ from our
13,953.08
627.89
610.93
1.39
-
-

10,970.44
1,640.46
76.81
1.59
-
15,193.29

12,689.30
funding sources, while our borrowings are at both fixed The Company is exposed to foreign exchange risk
6 months

6 months
to 1 year

to 1 year
and variable interest rates for different periods. arising from foreign currency transactions. Foreign
exchange risk arises from recognized assets and
We assess and manage our interest rate risk by
liabilities denominated in a currency that is not the
managing our assets and liabilities. Our Assets
functional currency of the Company. To mitigate
10,223.29
1,176.72
56.52
0.72
29.68
-

6,973.36
1,579.06
38.94
178.40
-
11,486.93

8,769.76
Liability Management Committee evaluates asset
months

months

the Company’s exposure to foreign currency risk,

3 to 6

3 to 6

liability management, and ensures that all significant

non-rupee cash flows are monitored and derivative
mismatches, if any, are being managed appropriately.
contracts are entered into in accordance with the
The Company has board approved Asset Liability
Company’s risk management policies. Currency risk
Management (ALM) policy for managing interest rate
3,152.18
146.05
30.18
0.24
16.48
-

2,213.75
97.65
24.41
16.78
-
3,345.13

2,352.59
is the risk that the value of a financial instrument will
months

months

risk and policy for determining the interest rate to be

2 to 3

2 to 3

fluctuate due to changes in foreign exchange rates.

charged on the loan given.
Notes to the Financial S t a t e m e n t s

Foreign currency risk arises majorly on account of

The Company manages its interest rate risk by having foreign currency borrowings. The Company manages
a balanced portfolio of fixed and variable rate loans
2,551.42
2,124.91
12.79
0.25
148.24
52.53

1,546.51
166.21
7.17
105.84
46.75

its foreign currency risk by entering into cross currency

4,890.14

1,872.48
months

months
1 to 2

1 to 2

and borrowings. For this, during period ended March swaps and forward contract. When a derivative is
31, 2022, the company has external commercial entered in to for the purpose of being as hedge, the
borrowings on which the company has entered an Company negotiates the terms of those derivatives
interest rate swap agreement whereby the company to match with the terms of the hedge exposure.
3291.78
22.00
12.82
27.11
1,058.09
124.06

2,459.34
23.54
77.17
882.14
66.30
4,535.86

3,508.49
Up to 1

Up to 1

receives a variable rate of interest of 6M EURIBOR +

month

month

For hedges of forecasted transactions, the derivatives

4.30% and pays interest at a fixed rate. cover the period of exposure from the point the cash
flows of the transactions are forecasted up to the point
The following table demonstrates the sensitivity to a
of settlement of the resulting receivable or payable that
reasonably possible change in the interest rates on the
Total undiscounted financial liabilities

Total undiscounted financial liabilities

Borrowings (other than debt securities)

Borrowings (other than debt securities)

is denominated in the foreign currency.

portion of borrowings affected. With all other variables
held constant, the profit before tax is affected through The Company hedges its exposure to fluctuations on the
For the year ended March 31, 2022

the impact on floating rate borrowings, as follows: translation into INR of its foreign currency transactions
Derivative financial instrument
As at March 31, 2022

As at March 31, 2021

by holding net borrowings in foreign currencies and by

March 31, March 31,
Finance Cost using foreign currency swaps and forwards. At March
Other financial liabilities

Other financial liabilities

2022 2021
Subordinated liabilities

Subordinated liabilities

31, 2022, the Company hedged 100% (March 31, 2021:

0.50 % Increase 105.54 68.87 Nil), for entire term of borrowing, of its expected interest
Financial liabilities

Financial liabilities

0.50 % Decrease (105.54) (68.87) and principle repayments on External commercial

Trade payables

Trade payables
Debt securities

Debt securities

borrowings. This foreign currency risk is hedged by

using foreign currency forward contracts.

186 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 187
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Details of borrowings denominated in foreign currency prescribes the sources of funds, threshold for mix from authorities in the ordinary course of business requiring any provision to be provided in books of accounts.
and derivatives (i.e., currency and interest rate swaps) various sources, tenure manner of raising the funds etc.
51 Revenue from contracts with customers
held for risk management purposes as economic hedges:
For the purpose of the Company’s capital management,
For the year ended For the year ended
The Company doesn’t have any exposure in foreign capital includes equity share capital and other equity. March 31, 2022 March 31, 2021
currency other than External Commercial Borrowings. Debt includes terms loans from banks, NBFC and
(a) Type of services
debentures net of cash and cash equivalents and bank
As at March As at March balances other than cash and cash equivalents. The Facilitation fees (refer note 27) 13.86 5.08
Particulars 31, 2022 31, 2021 Company monitors capital on the basis of the following Income from business correspondence services (refer note 27) - 2.11
Euro Euro gearing ratio.
Income from market support services (refer note 30) 426.87 145.39
Borrowings
Gearing Ratio: Total 440.73 152.58
External commercial 10.00 -
borrowings As at As at (b) Geographical markets
Particulars
March 31, 2022 March 31, 2021 India 440.73 152.58
Less: Currency and Interest 10.00 -
rate swaps Net Debt* 46,478.96 31,343.33 Outside India - -
Unhedged External - - Total equity 13,379.51 12,463.55 Total 440.73 152.58
commercial borrowings Net debt to 3.47 2.51 (c) Timing of revenue recognition
equity ratio
49 Capital Management Risk Service transferred at a point in time 440.73 152.58
* Net Debt includes debt securities + borrowings other than Services transferred over time - -
The Company’s objective for capital management is
debt securities + Subordinated liabilities + interest accrued
to maximize shareholder’s value, safeguard business Total 440.73 152.58
- cash and cash equivalents - bank balances other than cash
continuity, meet the regulatory requirement and
and cash equivalents.
support the growth of the Company. The Company As at As at As at
determines the capital requirement based on annual 50 Contingent Liabilities, commitments and contingent March 31, 2022 March 31, 2021 April 1, 2020
operating plans and long-term and other strategic assets (d) Trade receivables
investment plans. The funding requirements are met
A. Contingent liabilities Facilitation fees 6.42 3.56 1.01
through borrowings, retained earnings and operating
cash flow generated. There are no Contingent liabilities as at March 31, 2022 Income from market support services 34.92 23.84 29.18
and March 31, 2021. Total 41.34 27.40 30.19
As an NBFC-MFI, the RBI requires us to maintain a
minimum capital to risk weighted assets ratio (“CRAR”) B. Commitments
consisting of Tier I and Tier II capital of 15% of our There are no commitments as at March 31, 2022 and 52 Leases
aggregate risk weighted assets. Further, the total March 31, 2021. Company as a lessee
of our Tier II capital cannot exceed 100% of our Tier I
capital at any point of time. (refer note 54) The Capital C. Contingent assets Company has its office at Gurugram under lease [Link] head office lease has obtained on a non-cancellable
management process of the Company ensures to There are no contingent assets as at March 31, 2022 and lease term of 3 years which is extendable up to 9 years with an escalation clause at a 3 years interval. The company's
maintain to healthy CRAR at all the time. March 31, 2021. obligations under its leases are secured by the lessor’s title to the leased assets. The company is restricted from
assigning and subleasing the leased assets.
The Company has a board approved policy on resource D. The company has reviewed all litigations having an
planning which states that the resource planning of impact on the financial position, where applicable, has The Company has branch offices on lease for which 'short term lease' recognition exemption is applied. Accordingly,
the Company shall be based on the Asset Liability adequately provided for where provision are required . lease rentals of I 139.65 millions for year ended March 31, 2022 (I 110.79 millions for the year ended March 31, 2021)
Management (ALM) requirement. The policy of the As on March 31, 2022, the Company does not have any on such short term leases has been directly debited to Ind AS statement of profit and loss.
Company on resource planning will also cover the material litigation pending with Income tax authorities,
objectives of the regulatory requirement. The policy Goods and service authorities and other statutory

188 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 189
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Set out below are the carrying amounts of Right of use asset recognized and the movements during the year (Refer 54 Additional information required by Reserve Bank of India Master Direction DNBR. PD. 008/03.10.119/2016-17
note 11): a. Capital to risk assets ratio ('CRAR')
Particulars Right of use asset
As at As at
Particulars
As at April 1, 2020 - March 31, 2022 March 31, 2021
Addition 83.45 CRAR (%) 21.94% 27.26%
Depreciation 5.26 CRAR- Tier I (%) 19.93% 25.52%
As at March 31, 2021 78.19 CRAR- Tier II (%) 2.01% 1.74%
Addition - Amount of subordinated debt raised as Tier-II capital 1,625.67 1,167.21
Depreciation 9.02 Amount raised by issue of Perpetual Debt Instruments - -
As at March 31, 2022 69.17
b. Exposures
Set out below are the carrying amounts of lease liabilities and the movements during the year: (Refer note 19) i) The Company has no direct and indirect exposure to real estate sector.
As at April 1, 2020 - ii) The Company has no exposure to capital market.
Addition 83.45
c. Assets liability management:
Accretion of interest 5.30
Maturity pattern of certain items of assets and liabilities as on March 31, 2022
Payments (4.12)
As at March 31, 2021 84.63 1-7 8-14 15-30 1 to 2 2 to 3 3 to 6 6 months 1 to 3 3 to 5 Over 5
Particulars Total
days days days months months months to 1 year year year year
Addition -
Borrowings
Accretion of interest 8.88 159.23 994.02 1,639.17 3,685.30 3,435.82 10,379.30 13,309.61 21,004.20 2,624.04 527.39 57,758.09
(Note 1)
Payments (11.69) Advances
895.56 896.66 1,921.19 3,211.44 3,222.85 9,613.07 17,282.14 23,034.38 87.30 66.86 60,231.45
As at March 31, 2022 81.82 (Note 2)

The following are the amounts recognized in statement of profit or loss: Maturity pattern of certain items of assets and liabilities as on March 31, 2021
For the year ended For the year ended 1-7 8-14 15-30 1 to 2 2 to 3 3 to 6 6 months 1 to 3 3 to 5 Over 5
Particulars Particulars Total
March 31, 2022 March 31, 2021 days days days months months months to 1 year year year year
Depreciation expense of Right of use asset ( refer note 11) 9.02 5.26 Borrowings
538.60 623.92 1,112.29 1,305.16 2,175.92 7,207.37 11,299.23 17,185.89 1,424.24 1,449.88 44,322.50
Interest expense on lease liability (refer note 31) 8.88 5.30 (Note 1)
Total amount recognized in profit or loss 17.90 10.56 Advances
605.46 651.45 1,563.87 2,379.49 2,515.70 7,350.38 13,010.84 16,821.08 11.90 14.91 44,925.08
(Note 2)
Total cash outflow for leases for the year March 31, 2022 and March 31, 2021 were I 159.02 millions, I 114.24 millions. Note 1 - Borrowings exclude accrued interest
Note 2 - Net of provision towards non-performing loans and advances
The effective interest rate for lease liabilities is 10.72% with maturity between September 2020 - November 2029.
53 The uncertain economic environment as result impact of COVID-19 continues to prevail as infection rates continue d. Information on instances of fraud :
change on a regular basis. On account of resurgence of Covid-19 pandemic in India during year ended March 31, 2022, Instances of fraud reported during the year ended March 31, 2022
the Reserve Bank of India introduced Resolution Framework – 2.0: Resolution of Covid-19 related stress of Individuals No. of Amount of Amount
Nature of fraud Recovery*
and Small Businesses vide circular [Link].11/21.04.048/2021-22 dated May 05, 2021 with the objective of cases fraud provided
alleviating the potential stress to individual borrowers and small businesses. In accordance with the circular, the Cash Embezzlement 435 12.67 5.96 6.71
Company has identified the eligible borrowers and those who agreed with the resolution plan were extended the
*includes recoveries in respect of frauds reported in earlier years
support under the framework for relief from stress of Covid-19.
For the year ended March 31, 2022, the Company has incorporated estimates, assumptions, and judgements specific Instances of fraud reported during the year ended March 31, 2021
to the impact of CoVID-19 pandemic in its assessment of business model, going concern, measurement of impairment No. of Amount of Amount
loss allowance including relating to the restructuring discussed above. These estimates, including the impairment loss Nature of fraud Recovery*
cases fraud provided
allowance on loan portfolio which stood at I 3603.50 Mn as at March 31, 2022 is subject to uncertainty on account of
Cash Embezzlement 170 9.77 5.18 4.59
factors explained above and the actual results may differ.
*includes recoveries in respect of frauds reported in earlier years

190 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 191
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

e. Ratings assigned by credit rating agencies and migration of ratings during the year: h. Sector wise NPAs*
Date of Current % of NPA to total advances in that sector
Particulars Amount Credit Rating Agency Valid up to Previous Rating
Rating Rating Particulars As at As at
Credit Analysis & CARE A-; CARE A-; March 31, 2022 March 31, 2021
Bank Loan Rating 15,000.00 21-Jan-22 See Note 1
Research Ltd. Stable Stable
Agriculture & allied activities # 3.82% 2.29%
CRISIL A -/ CRISIL A -/
Bank Loan Rating 19,700.00 CRISIL Limited 4-Feb-22 See Note 1 MSME 8.03% 3.76%
(Stable) (Stable)
Credit Analysis & CARE A-; Corporate borrowers NA NA
Cash Credit - 3-Sep-21 See Note 1 -
Research Ltd. Stable
Services 10.64% 3.58%
Non - Convertible Credit Analysis &
300.00 3-Sep-21 See Note 1 - -
Debenture Research Ltd. Unsecured personal loans NA NA
Non - Convertible 250.00 Credit Analysis & 3-Sep-21 See Note 1 CARE PP-MLD A-; Auto loans NA NA
Debenture (MLD) Research Ltd. Stable
* interest accrued on loans have not been consisdered for above calculation NA NA
Non - Convertible [ICRA]
9125.00* ICRA Limited 21-Sep-21 See Note 1 [ICRA]A-(Stable) # including manufacturing & production, trade & retail, CS and others.
Debenture A-(Stable)
Non - Convertible Credit Analysis & CARE A Provisional CARE
600.00 5-May-21 See Note 1 i. Movement of NPA's
Debenture Research Ltd. (CE); Stable A (CE); Stable
Subordinate Debt Credit Analysis & CARE A-; Particulars March 31, 2022 March 31, 2021
300.00 21-Jan-22 See Note 1 CARE A- (Stable)
(NCD) Research Ltd. (Stable)
i) Net NPA to net advances percentage 1.74% 2.35%
Subordinate Debt [ICRA]
500.00 ICRA Limited 21-Sep-21 See Note 1 [ICRA]A-(Stable) ii) Movement of NPAs (Gross)
(NCD) A-(Stable)
Subordinate Debt CRISIL A -; a) Opening balance 2,558.90 384.49
300.00 CRISIL Limited 4-Feb-22 See Note 1 -
(Term Loan) (Stable)
b) Additions during the year 3,959.74 2,500.47
Organization N.A CARE Advisory Research 16-Mar-22 MFI 1 (MFI
06/03/23 MFI 1 (One) c) Reduction during the year (write off ) (2,934.39) (326.06)
Grading and Training Ltd. One)
Note 1: Rating is subject to annual surveillance till final repayment/redemption of rated facilities. d) Closing balance 3,584.25 2,558.90
*Bank of Baroda NCD of H 500.00 million has dual rating (1) ICRA A - Stable (2) CRISIL A - Stable iii) Movement of net NPAs
f. Disclosure of Complaints a) Opening balance 1,023.68 130.47
No. of Complaints b) Additions during the year 6.60 893.21
Particulars
March 31, 2022 March 31, 2021 c) Reduction during the year - -
No. of complaints pending at the beginning of the year 14 44 d) Closing balance 1,030.28 1,023.68
No. of complaints received during the year 1214 777 iv) Movement of provisions for NPAs (excluding provisions on standard assets)
No. of complaints redressed during the year 1207 807
a) Opening balance 1535.23 254.04
No. of complaints pending at the end of the year 21 14
b) Provision made during the year 3,953.15 1607.25
g. Concentration of Advances, Exposures and NPAs c) Write off/ write back of excess provisions (2,934.39) (326.06)
As at As at d) Closing balance 2553.99 1535.23
Particulars
March 31, 2022 March 31, 2021
Concentration of Advances j. Investments
Total advances to twenty largest borrowers* 19.97 15.34 As at As at
(%) of advances to twenty largest borrowers to total advances 0.03% 0.03% Particular
March 31, 2022 March 31, 2021
Concentration of Exposures 1. Value of Investments
Total exposure to twenty largest borrowers* 19.97 15.34 (i) Gross value of investments
(%) of exposures to twenty largest borrowers to total exposure 0.03% 0.03%
(a) In India - -
Concentration of NPAs
(b) Outside India - -
Total exposure to top four NPA accounts 1.85 0.72
(ii) Provision for depreciation - -
* Does not include interest accrued

192 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 193
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

As at As at (v). Stock Ratios

Particular
March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021
(a) In India - - Particulars As a % of As a % As a % of As a % of As a % As a % of
total public of total total assets total public of total total assets
(b) Outside India - -
funds* liabilities* funds* liabilities*
(iii) Net value of investments - -
Commercial papers - - - - - -
(a) In India - -
Non Convertible Debenture - - - - - -
(b) Outside India - - (Original Maturity of less than one year)
2. Movement of provisions held towards depreciation on investments
Other short-term liabilities 60.96% 59.15% 48.29% 12.31% 8.52% 44.14%
Opening balance - -
Add: Provisions made during the year - - (vi). Institutional set-up for liquidity risk management
Less: Write-off/write-back of excess provisions during the year - - The Board of Directors has the overall responsibility for establishing the risk management framework for the Company.
Closing balance - - The Board in turn has established an ALM Committee (ALCO) for evaluating, monitoring and reviewing liquidity and
interest rate risks arising in the Company on both sides of the Balance sheet. The Board based on recommendations
j(a). Public disclosure on liquidity risk management from the ALCO has prescribed policies and the risk limits for the management of liquidity risk.
(i). Funding concentration based on significant counterparty *(both deposits and borrowings)
ALCO Committee is responsible for managing the risks arising out of Asset Liability mismatches consistent with the
Number of significant counterparties Amount % of Total Deposits % of Total Liabilities
regulatory requirements and internal risk tolerances established by the Board. Amongst other responsibilities, ALCO
March 31, 2022 26 46,487.13 - 78.10% has been empowered to decide the funding mix for the company in light of the future business strategy and prevailing
March 31, 2021 30 38,237.82 - 86.28% market conditions. ALCO committee is conducted at least once in a quarter and the ALCO minutes are reviewed by the
Board from time to time.
(ii). Top 20 large deposits - Not applicable
The Company being a Systemically Important Non-Deposit taking Non-Banking Financial Company registered with *Notes
Reserve Bank of India does not accept public deposits. 1. A "significant counterparty" is defined as a single counterparty or group of connected or affiliated counterparties accounting in
aggregate for more than 1% of the NBFC-NDSI's, NBFC-Ds total liabilities and 10% for other non-deposit taking NBFC.
(iii). Top 10 borrowings (amount in millions and % of total borrowings)
2. A "significant instrument/product" is defined as a single instrument/ product of group of similar instruments/products which in
March 31, 2022 March 31, 2021 aggregate amount to more than 1% of the NBFC-NDSI's, NBFC-Ds total liabilities and 10% for other non-deposit taking NBFC's.
Amount % of Total Borrowings Amount % of Total Borrowings
3. Total Liabilities has been computed as sum of all liabilities (Balance sheet figure) less equities and reserve/surplus.
31,495.69 54.53% 23,354.16 52.70%
4. Public Funds" shall include funds raised either directly or indirectly through public deposits, commercial paper, debentures,
(iv). Funding concentration based on significant instrument/product* inter-corporate deposits and bank finance but exclude funds raised by issue of instruments compulsory convertible into equity
March 31, 2022 March 31, 2021 shares with in a period not exceeding 10 years from the date of issue as defined in Regulatory Framework For Core Investment
Amount % of Total Amount % of Total Companies issued vie Notification No. DNBS (PD) CC.No206/03.10.001/2010-11 dated January 5th, 2011.
Name of the instrument/product
Liabilities Liabilities
5. The amount stated in this disclosure is based on the audited financial statements for the year ended March 31, 2022.
Term loans from Banks 42,525.11 71.44% 30,351.15 68.49%
Subordinate Debts 1,625.67 2.73% 1,167.21 2.63% k. Details of assignment transactions:
Non Convertible Debentures 7,837.76 13.17% 9,904.49 22.35% Particulars March 31, 2022 March 31, 2021
Term Loans from Others Parties (NBFC and FIs) 5,769.55 9.69% 2,894.30 6.53% Total no. of loans assigned 3,05,690 99,375.00
Borrowings under Securitization arrangement - 0.00% - 0.00% Aggregate book value of loan assigned 6,934.54 1,180.20
Sale consideration received for loan assigned 6,934.54 1,180.20
Aggregate gain / (loss) over net book value - -

194 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 195
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Particulars March 31, 2022 March 31, 2021 m. Provisions and contingencies (shown under expenditure in statement of profit and loss)
l. Disclosure related to securitization Particulars March 31, 2022 March 31, 2021
Particulars March 31, 2022 March 31, 2021
Provision for non-performing loan portfolio 3,953.15 1,607.24
Total no. of loans securitized - -
Provision for standard portfolio (268.28) 589.47
Aggregate book value of loan securitized - -
Provision for insurance recoverable and BC collection - -
Aggregate book value of loan securitized (including MRR) - -
Sale consideration received for loan securitized - - Provision for Income Tax (net) 26.71 128.47
Credit enhancements provided and outstanding (Gross): Provision for cash loss (11.43) 9.21
Principal subordination - - Provision for gratuity 23.11 17.86
Cash collateral - - Provision for leave benefits 21.38 20.31
Outstanding value of loan securitized during the year - -
n. Information on Net Interest Margin
As at As at Particulars March 31, 2022 March 31, 2021
Particulars
March 31, 2022 March 31, 2021
Average interest charged (A) 18.82% 20.45%
[Link] of Special Purpose Vehicles (SPVs) sponsored by the Company for - -
securitisation transactions Average effective cost of borrowings (B) 10.43% 11.23%
[Link] amount of securitised assets as per books of the SPVs sponsored by the - - Net Interest Margin (A-B) 8.39% 9.22%
Company#
1. Interest income considered for computation of "average interest charged" excludes loan processing fee collected from
[Link] amount of exposures retained by the Company to comply with customers in accordance with para 54(vi) of the RBI Master Directions. As per Ind AS 109, such loan processing fee
Minimum Retention Rate (MRR) as on the date of balance sheet forms part of interest income in the Ind AS financial statements.
a) Off-balance sheet exposures
2. Average loan outstanding considered for computation of "average interest charged" is gross of the impairment
* First loss - -
allowance and unamortized portion of loan processing fee. As per Ind AS 109, such allowance is adjusted from the
* Others - - loan balance in the Ind AS financial statements.
b) On-balance sheet exposures
* First loss (Cash collateral) - - o. Prudential floor for impairment loss
* First loss (Micro finance loans) - - Gross Loss Provision Difference
Asset
Assets classification under carrying allowance Net carrying required as between Ind AS
* Others - - classification
RBI norms March 31, 2022 amount as as required amount per IRACP 109 provision
4. Amount of exposures to securitization transactions other than MRR under Ind AS
per Ind AS under Ind AS norms* and IRACP
a) Off-balance sheet exposures (I) (II) (III) (IV) (V) = (III) - (IV) (VI)# (VII) = (IV - VI)
i) Exposure to own securitizations Performing assets
* First loss - - Standard assets Stage I 57,890.26 597.12 57,293.14 590.64 6.48
* loss - - Stage II 1,310.91 452.39 858.53 27.50 424.89
ii) Exposure to third party securitizations Subtotal (A) 59,201.17 1,049.51 58,151.67 618.14 431.37
* First loss - -
* Others - -
b) On-balance sheet exposures
Mr. Pradip Kumar Saha
* First loss - -
* Others - -
ii) Exposure to third party securitizations
* First loss - -
* Others - -

196 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 197
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

Gross Loss Provision Difference The disclosures as required vide the above Notification dated March 13, 2020 are relevant for year ended March 31, 2020 and onwards,
Asset hence prior period reporting is not required.
Assets classification under carrying allowance Net carrying required as between Ind AS
classification
RBI norms March 31, 2022 amount as as required amount per IRACP 109 provision
under Ind AS p. Details of penalties imposed by RBI and other regulators
per Ind AS under Ind AS norms* and IRACP
Non-performing assets No penalty has been imposed by RBI and other regulators on the Company during the financial year ended March 31,
Sub-standard Stage III 3,584.26 2,553.99 1,030.27 585.47 1,968.52 2022 and March 31, 2021.
Doubtful Stage III - - - - -
q. Details of unsecured advances
Up to 1 year Stage III - - - - -
1 to 3 years Stage III - - - - - The Company has not given any unsecured advances against intangible securities such as charge over the rights,
More than 3 years Stage III - - - - - licenses, authority, etc. during the financial year ended March 31, 2022 and March 31, 2021.
Loss assets Stage III - - - - - r. Details of non-performing financial assets purchased / sold
Subtotal (B) 3,584.26 2,553.99 1,030.27 585.47 1,968.52
The Company has not purchased / sold any non-performing financial assets during the financial year ended March 31,
Total Stage I 57,890.26 597.12 57,293.14 590.64 6.48
2022 and March 31, 2021.
Stage II 1,310.91 452.39 858.53 27.50 424.89
Stage III 3,584.26 2,553.99 1,030.27 585.47 1,968.52 s. Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC:
Total 62,785.43 3,603.50 59,181.94 1,203.61 2,399.89 The Company has not exceeded the prudential exposures limits during the financial year ended March 31, 2022 and
# This also includes additional 10% provision on restructred loans as per the requirement of RBI circular RBI/2021-22/31 [Link]. March 31, 2021.
REC.11/21.04.048/2021-22 dated May 05, 2021
Gross Loss Provision Difference t. Draw down from reserves
Asset
Assets classification under carrying allowance Net carrying required as between Ind AS There has been no draw down from reserves during the year ended March 31, 2022 and March 31, 2021.
classification
RBI norms March 31 , 2021 amount as as required amount per IRACP 109 provision
under Ind AS u. Derivatives
per Ind AS under Ind AS norms* and IRACP
(I) (II) (IV) (V) = (III) - (IV) (VI) (VII) = (IV - VI) Currency and interest rate swap
Performing assets Particulars March 31, 2022 March 31, 2021
Standard assets Stage I 40,763.84 449.56 40,314.28 428.04 21.52
Notional Principal of swap agreements 890.42 -
Stage II 3,137.58 868.23 2,269.35 8.88 859.35
Loss/(profit) which would be incurred if counterparties failed to fulfil their 77.11 -
Subtotal (A) 43,901.42 1,317.79 42,583.63 436.92 880.87 obligations under the agreement
Non-performing assets -
Collateral required by the applicable NBFC upon entering into swaps - -
Sub-standard Stage III 2,558.90 1,535.23 1,023.67 12.29 1,522.94
Concentration of credit risk arising from swap - -
Doubtful Stage III - - - - -
Fair value of the swap book 77.11 -
Up to 1 year Stage III - - - - -
1 to 3 years Stage III - - - - - v. The Company has no loans outstanding as at March 31, 2022 and March 31, 2021 that are secured against gold.
More than 3 years Stage III - - - - -
w. Details of registration with financial and other regulators
Loss assets Stage III - - - - -
Regulator Registration number Date of registration
Subtotal (B) 2,558.90 1,535.23 1,023.67 12.29 1,522.94
Total Stage I 40,763.84 449.56 40,314.28 428.04 21.52 Ministry of Corporate Affairs U65100DL1994PLC061287 September 5, 1994
Stage II 3,137.58 868.23 2,269.35 8.88 859.35 Reserve Bank of India B-14.02857 May 19, 2010
Stage III 2,558.90 1,535.23 1,023.67 12.29 1,522.94 x Disclosure of Liquidity risk management as per RBI/2019-20/88 [Link] (PD) CC. No.102/03.10.001/2019-20
Total 46,460.32 2,853.02 43,607.30 449.21 2,403.81 The requirements of the above circular with respect to the Liquidity Coverage Ratio (""LCR"") have become applicable
to the Company with effect from the quarter ended March 31, 2021.
*The provision required as per IRACP norms has been calculated on the aggregate loan portfolio after derecognizing the securitised
assets (net of MRR) which meets the de-recognition criteria under the previous GAAP.

198 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 199
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

For the quarter ended March 31, 2022 For quarter ended December 31, 2021 For the quarter ended September 30, 2021 For quarter ended June 30, 2021
Total unweighted Total weighted Total unweighted Total weighted Total unweighted Total weighted Total unweighted Total weighted
value (average) value (average) value (average) value (average) value (average) value (average) value (average) value (average)
High Quality Liquid Assets Cash Outflows
1 Total High Quality Liquid Assets (HQLA) - 4,974.25 - 4,459.02 2 Deposits (for deposit taking - - - -
Cash Outflows companies)
2 Deposits (for deposit taking companies) - - - - 3 Unsecured wholesale funding - - - -
3 Unsecured wholesale funding - - - - 4 Secured wholesale funding - - - -
4 Secured wholesale funding - - - - 5 Additional requirements, of which - - - -
5 Additional requirements, of which - - - - (i) Outflows related to derivative - - - -
exposures and other collateral
(i) Outflows related to derivative exposures - - - -
requirements
and other collateral requirements
(ii) Outflows related to loss of funding on - - - -
(ii) Outflows related to loss of funding on - - - -
debt products
debt products
(iii) Credit and liquidity facilities - - - -
(iii) Credit and liquidity facilities - - - -
6 Other contractual funding obligations 2,905.07 3,340.83 2,973.63 3,419.67
6 Other contractual funding obligations 4,329.83 4,979.30 3,681.20 4,233.38
7 Other contingent funding obligations - - - -
7 Other contingent funding obligations - - - -
8 Total cash outflows 4,430.28 5,094.82 3,723.50 4,282.03
8 Total cash outflows 4,329.83 4,979.30 3,681.20 4,233.38
Cash Inflows
Cash Inflows
9 Secured lending - - - -
9 Secured lending - - - -
10 Inflows from fully performing - - - -
10 Inflows from fully performing exposures - - - -
exposures
11 Other cash inflows 5,139.42 3,854.56 4,956.34 3,717.25
11 Other cash inflows 3,559.74 2,669.80 6,968.98 5,226.74
12 Total cash inflows 5,139.42 3,854.56 4,956.34 3,717.25
12 Total cash inflows 5,195.58 3,896.69 4,956.34 3,717.25
Total Adjusted Value Total Adjusted Value
Total Adjusted Value Total Adjusted Value
13 Total HQLA - 4,974.25 - 4,459.02
13 Total HQLA - 3,632.50 - 3,979.39
14 Total net cash outflows - 1,244.83 - 1,058.35
14 Total net cash outflows - 835.21 - 854.92
15 Liquidity Coverage ratio (%) - 399.59% - 421.32%
15 Liquidity Coverage ratio (%) - 434.92% - 465.47%
Following assets formed part of HQLA
Following assets formed part of HQLA
Assets
Assets
Cash on hand - 129.41 - 119.97
Cash on hand - 126.41 - 110.95
Balances with banks – Current Accounts - 4,844.85 - 4,339.05
Balances with banks – Current - 3,506.09 - 3,868.44
Total - 4,974.25 - 4,459.02 Accounts
Total - 3,632.50 - 3,979.39
For the quarter ended September 30, 2021 For quarter ended June 30, 2021
Total unweighted Total weighted Total unweighted Total weighted
value (average) value (average) value (average) value (average)
High Quality Liquid Assets
1 Total High Quality Liquid Assets - 3,632.50 - 3,979.39
(HQLA)

200 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 201
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

y Schedule to the Balance Sheet of a Non-Banking Financial Company as required under Master Direction - Non-Banking As at As at
Financial Company- Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve March 31, 2022 March 31, 2021
Bank) Directions, 2016, as amended: Amount outstanding Amount outstanding
As at As at (iii) Units of Mutual Funds - -
S. March 31, 2022 March 31, 2021
Particulars (iv) Government Securities - -
No Amount Amount Amount Amount
(v) Others (Please specify) - Commercial Paper - -
outstanding overdue outstanding overdue
Long Term Investments -
1 Liabilities side
1 Quoted
Loans and advances availed by the company (i) Shares - -
inclusive of interest accrued thereon but not paid:
(A) Equity - -
a Debentures : Secured 5,870.52 - 9,550.41 - (B) Preference - -
Debentures : Unsecured 3,418.27 - 1,304.17 - (ii) Debentures and Bonds - -
(other than falling within the meaning of public (iii) Units of Mutual Funds - -
deposits*) (iv) Government Securities - -
b Deferred Credits (v) Others (Please specify) - -
c Term Loans* 48,726.16 - 33,841.32 - 2 Unqouted
d Inter corporate loans and borrowings (i) Shares - -
e Commercial Paper (A) Equity - -
(B) Preference - -
f Public Deposit
(ii) Debentures and Bonds - -
g Other loans (lease liability) 81.82 84.63
(iii) Units of Mutual Funds - -
As at As at (iv) Government Securities - -
March 31, 2022 March 31, 2021 (v) Others (Please specify) - Pass through certificate, Units of - -
Amount outstanding Amount outstanding debt fund and security receipts
Asset Side
2 Break-up of Loans and Advances including bills receivables : 4 Borrower group-wise classification of assets financed as in (2):& (3)
a Secured** 271.61 35.07 As at March 31, 2022 As at March 31, 2021
b Unsecured 62,513.83 46,425.25 Amount net of provision Amount net of provision
3 Current Investments Secured Unsecured Total Secured Unsecured Total
1 Quoted Category
(i) Shares - - a. Subsidieries - - - - - -
(A) Equity - - b. Companies in the same group - - - - - -
(B) Preference - -
c. other related parties - - - - - -
(ii) Debentures and Bonds - -
Other then related parties 271.61 58,910.33 59,181.94 35.07 43,607.30 43,642.37
(iii) Units of Mutual Funds - -
(iv) Government Securities - - Total 271.61 58,910.33 59,181.94 35.07 43,607.30 43,642.37
(v) Others (Please specify) - -
2 Unqouted
(i) Shares - -
(A) Equity - -
(B) Preference - -
(ii) Debentures and Bonds - -

202 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 203
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)

5 Investor group-wise classification of all investments (current and long term) in shares and securities (both 56 As per Regulation 54 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 ('Listing
quoted and unquoted) Regulations'), as on March 31, 2022, all Secured Non-convertible debenture of the Company are secured by exclusive
first charge by way of hypothecation against the principal amount outstanding and accrued coupon on debenture.
As at March 31, 2022 As at March 31, 2021
Further, the Company has maintained security cover being minimum of 100% of principal outstanding and accrued
Market Value Book value (net of Market Value Book value (net of coupon thereon or as stated in the Information Memorandum of non-convertible debentures at all times
provisions) provisions)
Category 57 Details of loans transferred/acquired during the quarter ended March 31, 2022, under RBI Master Direction on Transfer
a. Subsidieries - - - - of Loan Exposures dated September 24, 2021, are given below: erred/acquired through assignment:

b. Companies in the same group - - - - (i) Details of loans not in default transferred/acquired through assignment:
c. other related parties - - - -
March 31, 2022 March 31, 2021
Other then related parties - - - -
Transferred Acquired Transferred Acquired
Total - - - - Particulars
(MFI Loan) (MFI Loan)
Aggregate amount of loans transferred/acquired 4,683.33 - 6,934.54 -
6 Other information Weighted average in maturity 16.13 - 16.80 -
As at March 31, 2022 As at March 31, 2021 (in months)
Particulars Amount Amount Weighted average holding period 8.52 - 7.57 -
(in months)
Gross Non Performing Assets
Retention of beneficial economic interest by the 10.00% - 11.62% -
a. Related parties - -
originator
b. Other than related parties 3,584.26 2,558.90
Tangible security cover 111.11% - 112.42% -
Rated wise distribution of rated loans Not - Not -
Net Non Performing Assets applicable applicable
a. Related parties -
(ii) The Company has not transferred any non-performing assets (NPAs).
b. Other than related parties 1,030.27 1,023.67
(iii) The Company has not acquired any loans through assignment
55 (i) Details of resolution plan implemented under the Resolution Framework for COVID-19-related stress as per RBI (iv) The Company has not acquired any stressed loan.
circular dated August 6, 2020 (Resolution Framework 1.0) are not applicable as the Company has not restructured any
loan accounts under resolution framework 1.0. 58 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”)
(ii) Details of resolution plan implemented under the RBI Resolution Framework - 2.0: Resolution are given below: - with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party
identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any
S. March 31, 2022 party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in
Descrption
No JLG Loans MSME Loans other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee,
A Number of requests received for invoking resolution process 88,611 48 security or the like on behalf of the Ultimate Beneficiaries.
B Number of accounts where resolution plan has been implemented under this 85,454 25 59 Analytical Ratios
window.
As at As at
C Exposure to accounts mentioned at (B) before implementation of the plan. 1,336.74 5.23 % Reason for
Numerator Denominator March 31, March 31,
variance Variance
D Of (C), aggregate amount of debt that was converted into other securities. - - 2022 2021
E Additional funding sanctioned, if any, including between invocation of the plan - - a) Capital to risk-weighted Total Capital Risk wiegited assets 21.94% 27.26% (19.52)% NA
and implementation. assets ratio (CRAR)
F Increase in provisions on account of the implementation of the resolution plan* 133.67 0.52 (b) Tier I CRAR Tier -I capital Risk wiegited assets 19.93% 25.52% (21.89)% NA
(c) Tier II CRAR Tier -II capital Risk wiegited assets 2.01% 1.74% 15.14% NA
* Represents impairment loss allowance maintained as per regulatory requirement.
(d) Liquidity Coverage Ratio Total HQLA Total net cash outflows 399.59% 394.85% 1.20% NA

204 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 205
Notes to the Financial S t a t e m e n t s
For the year ended March 31, 2022 (B in millions unless otherwise stated)
List of Lenders
[Link]. Name of the Lenders
1 State Bank of India
60 With regard to the new amendments under “Division III of Schedule III” under “Part II - Statement of Profit and Loss 2 Punjab National Bank
3 Bank of Baroda
- General Instructions for preparation of Statement of Profit and Loss :- 4 Canara Bank
5 Indian Bank
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the
6 Union Bank of India
company for holding any Benami property. 7 Bank of Maharashtra
8 Bank of India
(ii) The Company do not have any transactions with companies struck off. 9 Indian Overseas Bank
10 IDBI Bank Limited
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory 11 National Bank for Agriculture and Rural Development
period. 12 Small Industries Development Bank of India
13 Micro Units Development and Refinance Agency
(iv) The Company have not traded or invested in Crypto currency or virtual currency during the financial year. 14 Citibank
15 Standard Chartered Bank
(v) The Company has not been declared willful defaulter by any bank or financial institution or other lender. 16 BNP Paribas
17 HSBC Bank
(vi) The Company have not any such transactions which is not recorded in the books of accounts that has been 18 DBS Bank Limited
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. 19 Federal Bank
20 CSB Bank Limited
61 The figures for the previous year have been regrouped/rearranged wherever necessary to conform to current year 21 SBM Bank (India) Ltd
presentation. 22 Woori Bank
23 BANK IM BISTUM ESSEN EG-BIB
24 Bank of Bahrain and Kuwait B.S.C
The accompanying notes are an integral part of the financial statements 25 Credit Agricole Corporate & Investment Bank
As per our report of even date 26 Axis Bank Limited
27 ICICI Bank Limited
for S.R. Batliboi & Associates LLP for and on behalf of the Board of Directors of 28 HDFC Bank Limited
Chartered Accountants Fusion Micro Finance Limited 29 RBL Bank
ICAI Firm Registration Number: 101049W/E300004 CIN:U65100DL1994PLC061287
30 Yes Bank Limited
Amit Kabra Devesh Sachdev Ratna Dharashree Vishwanathan 31 IndusInd Bank Limited
Partner Managing Director and Chief Executive Officer Director 32 Utkarsh Small Finance Bank Limited
Membership Number : 094533 DIN : 02547111 DIN : 07278291 33 Bandhan Bank Ltd
34 DCB Bank Limited
Deepak Madaan Gaurav Maheshwari 35 Karnataka Bank
Company Secretary and Compliance Officer Chief Financial Officer 36 Equitas Small Finance Bank
37 UJJIVAN Small Finance Bank Limited
Place: Gurugram Place: Gurugram
Date: May 06, 2022 Date: May 06, 2022
38 Kotak Mahindra Bank Limited
39 Nabsamruddhi Finance Limited
40 AU Small Finance Bank Limited
41 IDFC First Bank Limited
42 Bajaj Finserv Limited
43 Nabkisan Finance Limited
44 Aditya Birla Finance Limited
45 Sundaram Finance Ltd.
46 Hero Fincrop Ltd
47 Piramal Capital & Housing Finance
48 MAS Financial Services Limited
49 KISETSU SAISON FINANCE (INDIA) PRIVATE LIMITED
50 Northern Arc Capital Ltd
51 Tata Capital Financial Services Limited
52 Vivriti Capital Private Limited
53 UTI International Wealth Creator (responsAbility)
54 Blue Orchard (Microfinane Fund)-4
55 CDC GROUP
56 PETTELAAR EFFECTENBEWAARBEDRIJF N.V. (ASN Microcredit Fund TJ)
57 Triodos Fare Share Fund

206 FUSION MICROFINANCE LIMITED

ANNUAL REPORT 2021-22
TENACITY &
PROGRESSION 002 CORPORATE
OVERVIEW 058 MANAGEMENT
REPORTS 104 FINANCIAL
REPORTS 207
Notes
[Link]

Plot no 86, Institutional sector 32

Gurgaon
Haryana - 122001
 NOTICE

NOTICE is hereby given that the 28th Annual General Meeting of the members of Fusion Micro Finance Limited (the
Company) will be held on Friday, August 5, 2022 at 11:00 a.m. at H-1, C- Block, Community Centre, Naraina Vihar, New
Delhi-110028 to transact the following business:

This notice is a shorter notice and is given pursuant to Section 101(1) of the Companies Act, 2013 (including any
statutory modification (s) or re-enactment(s) thereof for the time being in force) and the rules made thereunder (the
“Companies Act, 2013”) in accordance with the Articles of Association of the Company

ORDINARY BUSINESS:

1. TO RECEIVE, CONSIDER AND ADOPT THE AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR
ENDED MARCH 31, 2022 AND THE REPORT OF THE BOARD OF DIRECTORS AND AUDITORS THEREON.

To consider and if thought fit, to pass the following resolution, with or without modification, as an Ordinary
Resolution

“RESOLVED THAT the audited financial statements of the Company for the financial year ended March 31,
2022, and the reports of the Board of Directors and Auditors thereon laid before this meeting, be and are
hereby considered and adopted.”

2. TO APPOINT A DIRECTOR IN PLACE OF MR. DEVESH SACHDEV (DIN: 02547111), WHO RETIRES BY ROTATION
AND BEING ELIGIBLE, OFFERS HIMSELF FOR REAPPOINTMENT.

"RESOLVED THAT Mr. Devesh Sachdev (DIN: 02547111), Director of the Company, who retires by rotation
and being eligible for re-appointment, be and is hereby appointed as a director of the Company liable to
retire by rotation.”

SPECIAL BUSINESS

3. TO APPOINT AUDITORS AND FIX THEIR REMUNERATION AND IN THIS REGARD, PASS THE FOLLOWING
RESOLUTION AS AN ORDINARY RESOLUTION:

“RESOLVED THAT pursuant to the provisions of Sections 139, 142 and other applicable provisions, if any, of
the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and RBI guidelines on
appointment of statutory auditors of NBFCs (including any statutory modification(s) or re-enactment(s)
thereof, for the time being in force), M/s. Deloitte Haskins & Sells, (Registration no. 015125N) be and is
hereby appointed as the Statutory Auditors of the Company for a term of 3 (three) consecutive years from
the conclusion of this Annual General Meeting till the conclusion of the 31st Annual General Meeting of the
company to be held in Financial Year 2025-26, at such remuneration as shall be fixed by the Board of
Directors of the company.

“RESOLVED FURTHER THAT the board of directors of the company is hereby authorized to do all acts and
take all such steps as necessary, proper and expedient to give effect to this resolution.”

4. TO CONSIDER AND APPROVE THE REMUNERATION OF MR. DEVESH SACHDEV, MANAGING DIRECTOR &
CEO OF THE COMPANY IN ACCORDANCE WITH THE STATUTORY REQUIREMENT APPLICABLE TO THE
COMPANY AS APPROVED BY THE BOARD ON THE RECOMMENDATION OF NOMINATION AND
REMUNERATION COMMITTEE.
 To consider and if thought fit, to pass the following resolution, with or without modification, as a Special
Resolution:

“RESOLVED THAT “RESOLVED THAT pursuant to the provisions of Sections 196, 197 and all other applicable
provisions of the Companies Act, 2013 (“the Act”) read with Schedule V of the Act, and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, or any statutory modification(s) or
re-enactment thereof and in terms SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
of subject to such consent(s), approval(s) and permission(s) as may be necessary in this regard and subject
to such condition(s) as may be imposed by any authority while granting such consent(s), approval(s) and
permission(s) and subject to the approval of the members of the Company, and on the recommendation
Nomination & Remuneration Committee and as approved by the Board of Directors, the consent of member
of the Company be and is hereby accorded for the payment of INR 2.50 Crores (including perquisite) per
annum plus Bonus upto INR 2.25 Crores for the period starting from April 1, 2021 to March 31, 2022) and
INR 2.75 Crores (including perquisites) and bonus upto INR 4 Crore to Mr. Devesh Sachdev, Managing
Director & CEO of the Company for his remaining tenure w.e.f. April 1, 2022.

RESOLVED FURTHER THAT the Board of the Company be and is hereby authorized to vary and/or revise the
remuneration of Mr. Devesh Sachdev, Managing Director & CEO and settle any question or difficulty in
connection therewith and incidental thereto.

RESOLVED FURTHER THAT in case the Company has no profits or its profits are inadequate in any financial
year, the Company will pay remuneration by way of salary, benefits, perquisites, allowances,
reimbursements and facilities as specified above or revised by the Board time to time as minimum
remuneration to Mr. Devesh Sachdev, Managing Director & CEO;

RESOLVED FURTHER THAT any Director or Company Secretary of the Company be and are hereby severally
authorised for obtaining necessary approvals-statutory, contractual or otherwise, file necessary forms and
applications, do all such acts, deeds, matters and things as are incidental thereto or as may be deemed
necessary or desirable to give effect to the above resolutions.”

5. TO INCREASE THE BORROWING LIMIT OF THE COMPANY AND CREATE CHARGES ETC ON THE MOVABLE
PROPERTIES OF THE COMPANY, BOTH PRESENT AND FUTURE IN RESPECT OF BORROWINGS UNDER
SECTION 180(1) (C) AND 180 (1) (A) OF THE COMPANIES ACT, 2013 UP TO RS. 12,000 CRORES

To consider, and if thought fit, to pass with or without modification(s), the following resolution as a Special
Resolution:

“RESOLVED THAT in supersession of all the earlier Resolutions passed in this regard, consent of the
Company be and is hereby accorded, pursuant to Sections 179, 180(1)(c) and all other applicable provisions,
if any, of the Companies Act, 2013 (the 'Act'), and the Companies (Meetings of Board and its Powers) Rules,
2014 and other Rules, Regulations, Notifications and Circulars issued including any statutory modification
or re-enactment thereof for the time being in force, to the Board of Directors of the Company (hereinafter
referred to as 'the Board) which term shall be deemed to include any Committee which the Board may have
constituted or may hereinafter constitute to exercise its powers including the powers conferred by this
Resolution) for borrowing from time to time, any sum or sums of money for the purposes of the Company,
upon such terms and conditions and with or without security, as the Board may in its discretion think fit,
notwithstanding that the money or monies to be so borrowed by the Company (apart from the temporary
loans obtained or to be obtained from time to time from the Company's Bankers in the ordinary course of
business) together with the sums already borrowed, may exceed the aggregate of the paid-up share capital
of the Company and its free reserves that is to say, reserves not set apart for any specific purposes, provided
however that the sums so borrowed and remaining outstanding on account of principal shall not, at any
time, exceed Rs. 12,000 Crores (Rupees Twelve Thousand Crores Only).

RESOLVED FURTHER THAT in pursuance to the limits stated above and the provisions of Section 180(1)(a)
of the Companies Act, 2013 along with the Statutory amendments thereof, consent of the Company be and
is hereby accorded to the Board of Directors of the Company, to create charges, mortgages and / or
hypothecations in addition to the existing charges, mortgages and hypothecations created by the Company,
in such form and manner and with such ranking, whether exclusive, pari-passu, subservient or otherwise
and at such time and on such terms as the Board may determine, on all or any of the moveable and / or
 immovable properties of the Company, both present and future and / or on the whole or any part of the
undertaking(s) of the Company, in favour of the banks, non-banking financial companies, financial
institutions and other lender(s), Agent(s) and Trustee(s), for securing the borrowings of the Company availed
/ to be availed by way of loans(s) (in Foreign currency and / or rupees) and / or debentures (convertible /
non-convertible/ secured / unsecured) and / or securities in the nature of debt instruments issued / to be
issued by the Company or external commercial borrowing (hereinafter termed 'loans'), from time to time,
provided that the total amount of loans shall not at any time exceed Rs. 12,000 Crores (Rupees Twelve
Thousand Crores Only) in excess of the aggregate of the paid-up capital of the Company and its free reserves
(apart from temporary loans obtained / to be obtained from the Company's bankers in the ordinary course
of business) in respect of such borrowings and containing such specific terms and conditions and covenants
in respect of enforcement of security as may be stipulated in that behalf and agreed to, between the Board
of Directors and the lender(s), Agent(s) and Trustee(s) of the Company.

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds, matters and
things as it may, in its absolute discretion, deem necessary and with power to settle questions, difficulties
or doubts that may arise in this regard without requiring the Board to secure any further approval of the
Members of the Company.”

6. TO APPROVE THE LIMIT FOR RAISING OF FUNDS THROUGH NON - CONVERTIBLE DEBENTURES.

To consider, and if thought fit, to pass with or without modification(s), the following resolution as aSpecial
Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 42, 71 and other applicable provisions, if any, of the
Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securities)Rules, 2014 and the
Companies (Share Capital and Debentures) Rules, 2014 (including any statutory modification(s) or re-
enactment(s) thereof, for the time being in force) and subject to the provisions of the Articles of Association
of the Company, consent of the members of the Company be and is hereby accorded to the Board of Directors
(hereinafter referred to as the “Board”, which term shall include any Committee constituted by the Board to
exercise the powers conferred on the Board by this Resolution) of the Company to offer/Issue Non-
Convertible Debentures(NCD), in one or more series /tranches, on private placement basis, issuable /
redeemable at par aggregating up to Rs. 3,500 Crores (Rupees Three Thousand Five Hundred Crores Only),
from such persons and on such terms and conditions as the Board of Directors/ Committee of the Company
may, from time to time, determine and consider proper and most beneficial to the Company including,
without limitation, as to when the said Debentures are to be issued, the consideration for the issue, mode of
payment, coupon rate, redemption period, utilization of the issue proceeds and all matters connected
therewith or incidental thereto;

RESOLVED FURTHER THAT the Board of Directors of the Company or any committee thereof be and is hereby
authorized to finalize with the Investors and the trustees the documents for creatingthe mortgages, charges,
pledges and/or hypothecations and to negotiate, modify, finalize and sign the documents, including without
limitation the offer letter, debenture trust deed, pledge agreement and any other security documents, in
connection with the NCD Issue by the Company of such Secured/unsecured, Rated, Listed/unlisted, Non-
Convertible, Redeemable, Taxable Debentures and to do all such acts, deeds, matters and things as may be
necessary or ancillary or incidental thereto and to execute all such documents as may be necessary for giving
effect to the above resolutions.”

By order of the Board of Directors

For Fusion Micro Finance Limited
(Formerly Fusion Micro Finance Private Limited)

Sd/-
Date: July 30, 2022 Deepak Madaan
Company Secretary & Compliance Officer
Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING (THE MEETING) ISENTITLED
TO APPOINT A PROXY TO ATTEND AND VOTE, INSTEAD OF HIMSELF AND SUCH PROXY NEED NOT BE A
MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING A PROXY SHOULD, HOWEVER, BE DEPOSITED AT
THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF
THEMEETING.

2. Corporate Members are requested to send a duly certified copy of the Board Resolution authorizing their
representative to attend and vote at the Meeting.

3. The Register of Directors Shareholding shall be available for inspection at the Meeting.

4. Explanatory statement pursuant to Section 102 of the Companies Act, 2013 is annexed hereto

5. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead
of himself and such a proxy need not be member of the company. Proxy forms, in orderto be effective, must be
deposited at the Registered Office of the company, not later than 48 hours before the time fixed for the
meeting.

6. Route Map for the Fusion Micro Finance Limited H-1, C-Block, Community Centre, Naraina Vihar, New Delhi –
110028 is annexed hereto.

7. The Member/Proxies should bring their attendance slip, sent herewith, duly filled in, for attending the
meeting.

8. The Annual Report for the year ended March 31, 2022 containing, inter-alia, the Directors’ Report,Auditors’
Report and the audited financial statement.
 EXPLANATORY STATEMENT PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT, 2013 (“The Act”)

The Following Statement sets out all material facts relating to the Special Business mentioned in the accompanying
Notice:

Item No.3

Pursuant to the provisions of Section 139 of the Act read with rules made thereunder, M/s. S. R. Batliboi & Associates
LLP, Chartered Accountants were appointed as Statutory Auditors of the Company to hold the office for a period of
five years from the conclusion of the Twenty–Fifth Annual General Meeting (“AGM”) till the conclusion of the
Thirtieth AGM of the Company.

However, the Reserve Bank of India vide its recent Notification [Link]/SEC.01/08.91.001/2021-22 dated April
27, 2021, require every NBFC to appoint the Statutory Auditors for a continuous period of three years. Accordingly,
the tenure of M/s. S. R. Batliboi & Associates LLP, Chartered Accountants will come to an end on the conclusion of
the Twenty–Eighth AGM (“the ensuing AGM”) of the Company.

Therefore, the Audit Committee of the Company has proposed & the Board has recommended the appointment of
M/s. Deloitte Haskins & Sells, (Registration no. 015125N) as the statutory auditors of the Company which will be
subject to the approval of shareholders’ of the Company in the ensuing AGM. M/s. Deloitte Haskins & Sells, will hold
office for a period of three consecutive years from the conclusion of the ensuing AGM till the conclusion of the Thirty
– First AGM of the Company to be held in FY 2025-26.

The Auditors’ Reports for the financial year ended on March 31, 2022 submitted by M/s. S. R. Batliboi & Associates
LLP, Chartered Accountants do not contain any qualification or reservation or adverse remark or disclaimer. The
Notes on Financial Statement referred to in the Auditors’ Report are self-explanatory and do not call for any further
comments.

The Board recommends the resolution set forth in the Item No. 3 of the Notice for approval by the shareholders by
way of Ordinary Resolution.

None of the Directors / Key Managerial Personnel of the Company / their relatives are, in any way, concerned or
interested, financially or otherwise, in the resolution set out at Item No. 3 of the Notice.

Item No. 4

Mr. Devesh Sachdev, Managing Director & CEO of the Company was appointed as the Managing Director of the
Company for the period of 5 years w.e.f .December 5, 2018. The Company subsequent to the conversion into Public
limited is required to approve the remuneration payable to the Managing Director in terms of provisions of Sections
196, 197 and 198 read with Schedule V of the Companies Act, 2013 for remaining tenure since the date of conversion
of the Company into public limited i.e. July 20, 2021.

The Board of Directors, on the recommendation of Nomination and Remuneration Committee (NRC), in its meeting
held on April 15, 2021 has approved revised remuneration payable to Mr. Devesh Sachdev, Managing Director & CEO
of the Company of INR 2.50 Crores (including perquisite of INR 25 lakhs) [Link]. April 1 2021. However, consequent to
conversion into “Public Limited”, considering the requirement prescribed under the Sections 196, 197 and 198 read
with Schedule V of the Companies Act, 2013, the Board of Directors of the Company, on the recommendation NRC
and subject to the approval of the shareholders has approved the remuneration of INR 2.50 Crores (including
perquisite of INR 25 lakhs) to Mr. Devesh Sachdev, Managing Director & CEO, for the period starting from July 20,
2021 to December 4, 2023.

Thereafter, the Board of Directors, on the recommendation NRC and subject to the approval of the shareholders, in
its meeting held on May 6, 2022 has approved payment of INR 2.50 Crores (including perquisite) per annum plus
Bonus upto INR 2.25 Crore for the period starting from April 1, 2021 to March 31, 2022) and INR 2.75 Crores
(including perquisites) and bonus upto INR 4 Crore to Mr. Devesh Sachdev, Managing Director & CEO of the Company
for his remaining tenure w.e.f. April 1, 2022.
In terms of the provisions of Sections 196, 197 and all other applicable provisions of the Companies Act, 2013 (“the
Act”) read with Schedule V of the Act, and the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, or any statutory modification(s) or re-enactment thereof and in terms of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the total managerial remuneration payable to Mr. Devesh Sachdev,
Managing Director & CEO of the Company is within limit of eleven per cent. of the net profits for financial
year computed in the manner laid down in section 198 . However, it exceeds the limit of 5% of such net profits.

Accordingly, the Board recommends the resolution set forth in the Item No. 4 of the Notice for approval by the
shareholders by way of Special Resolution.

The necessary disclosure/ information in terms of Schedule V is provided below:

I. General information:
1. Nature of industry Financing Industry - Micro Finance
2. Date or expected date of 05.09.1994
commencement of commercial
production
3. In case of new companies, expected Not Applicable
date of commencement of activities
as per project approved by financial
institutions appearing in the
prospectus
4. Financial performance based on In the financial year 2021-2022, the Company made a turnover of
given indicators INR 12013.49 Millions and Profit of 217.55 Millions after tax
5. Foreign investments or Detail of Equity investors of the Company along with their
collaborations, if any. shareholding in the Company are as follows:
Name of the Entity %
Honey Rose Investment Ltd – Promoter 48.65
Creation Investments Fusion, LLC – Promoter 18.17
Creation Investments Fusion II LLC – Promoter 11.80
Oikocredit, Ecumenical Development Co-Operative 7.83
Society U.A.
Global Financial Inclusion Fund 4.20
Total 90.65

II. Information about the appointee:

1. Background details Company’s Managing Director & CEO, Devesh Sachdev, An XLRI
Post Graduate with 14 years of experience in the Service Industry
prior to starting Fusion in 2009-10. He has also attended and
successfully completed Strategic leadership program in Harvard
Business School.

He is currently the Chairperson of the governing board of

Microfinance Institutions Network (MFIN), which is a Self-
Regulatory Organization for NBFC-MFIs in India. MFIN works
closely with regulators and other key stakeholders and plays an
active part in the larger financial inclusions dialogue through the
medium of microfinance.

2. Past remuneration FY 20 -21, INR 1.70 Crores (including perquisite) and Bonus of 1.70
Crores)
3. Recognition or awards Chairperson of the governing board of Microfinance Institutions
Network (MFIN), which is a Self-Regulatory Organization for NBFC-
MFIs in India
4. Job profile and his suitability He has been part of the Company since inception and under his
leadership, Fusion has grown into one of the leading microfinance
institutions and continues to expand its operations.
 Further, considering his knowledge of various aspects relating to
the Company’s affairs and long business experience, the Board of
Directors is of the opinion that for smooth and efficient running
of the business, the services of Mr. Devesh Sachdev should be
available to the Company.
5. Remuneration proposed As stated in resolution of Item No. 4 of the Notice
6. Comparative remuneration profile The remuneration of Mr. Devesh Sachdev is comparable to that
with respect to industry, size of the drawn by the peers in the similar capacity in the industry and is
company, profile of the position and commensurate with the size of the Company and nature of its
person business.
7. Pecuniary relationship directly or Mr. Devesh Sachdev is a Founder promoter of the Company and
indirectly with the company, or holds 55,53,414 equity shares of the Company and he also serve
relationship with the managerial to the Company as Managing Director & CEO on remuneration
personnel or other directors, if any basis.

Mr. Sachdev don’t have any Pecuniary relationship directly or

indirectly relationship with the managerial personnel or other
directors of the Company.
III. Other information:
1. Reasons of loss or inadequate profits The Company is a profitable Company. However, due to ongoing
Steps taken or proposed to be taken Covid-19 pandemic and other factors involved in the macro
for improvement and expected environment, resulted in inadequacy of profits for the purpose of
increase in productivity and profits in payment of remuneration due to provisions of Section 198 of the
measurable terms. Act . The management of the Company is already taking steps to
mitigate the effect of the Covid-19 pandemic in line with the
industry.

Other disclosure required under Schedule V, is forming the part of Annual Report “Corporate Governance” Section.

No Director (other than Mr. Devesh Sachdev, himself) and Key Managerial Personnel and their relatives, is in any way
concerned or interested in this resolution.

Item No. 5

The shareholder of the company in their meeting on June 16, 2021, had increased the borrowing limits of the
Company and authorized the Board of Directors to borrow funds, from time to time, for the business of the
company, up to an amount, the aggregate, outstanding of which should not exceed, at any given time Rs. 8000
crores and to create charge on properties of the Company to secure the repayments of the borrowings.

Keeping in view, the existing borrowing and the additional fund requirements for meeting the capital expenditure
for the ongoing / future projects, capacity expansion, acquisitions and enhanced long-term working capital needs
of the Company, the Board of Directors had considered and approved to increase the borrowing limits of the
company and creation of security on the properties of the Company from Rs. 8000 crore to Rs. 12,000 crore, subject
to the approval of the shareholders, and recommends Resolution no. 4 of the accompanying Notice to the
shareholder for their approval by way of special resolution.

Pursuant to Section 180(1)(c) and 180(1)(a) of the Companies Act 2013, approval of the Shareholder by way of
special resolution is required to authorize the Board of Director to borrow moneys up to the said limits and create
security in respect thereof.

None of the Directors and / or Key Managerial Personnel of the Company and their relatives is concerned or
interested, financial or otherwise, in the resolution set out at Item No.5.

Item No. 6

Section 42 of the Companies Act, 2013 read with rule 14(2) of the Companies (Prospectus and allotment of securities)
Rules, 2014 mandates companies issuing Non-Convertible Debentures (NCD) through Private placement to pass
special resolution once in a year for all the offers or invitation for such debentures during the year. NCDs issued on
private placement basis are a significant source of borrowings for the company.

In order to augment long term resources for financing, inter alia, for the strategic business expansion in future and
for general corporate purposes, the Company intends to approve the issuing limit of NCD to Rs. 3,500 Crores.

Accordingly, consent of the members is sought for passing the Special Resolution as set out at Item No.5 of the
Notice. This resolution is an enabling resolution and authorized the Board of Directors of the Company to offer or
invite subscription for non-convertible debentures, as may be required by the Company, from time to time for a year
from the date of passing this resolution.

None of the Directors / Key Managerial Personnel of the Company / their relatives are, in any way, concerned or
interested, financially or otherwise, in the resolution set out at Item No. 6 of the Notice.

The information as required under the Secretarial Standard on General Meetings, in relation to the Mr. Devesh
Sachdev seeking re-appointment in the forthcoming Annual General Meeting, is given hereunder:
Name of the Director Mr. Devesh Sachdev
Date of Birth 25-12-1972
Date of First Appointmenton the 05-11-2009
Board
No. of shares held as on31st 55,53,414 equity shares
March, 2022
Qualifications Mr. Devesh Sachdev is an XLRI Post Graduate. He has also attended and
successfully completed Strategic leadership program in Harvard Business
School.
Experience Mr. Sachdev have 14 years of experience in the Service Industry prior to
starting Fusion in 2009-10.

He is currently the Chairperson of the governing board of Microfinance

Institutions Network (MFIN), which is a Self-Regulatory Organization for
NBFC-MFIs in India. MFIN works closely with regulators and other key
stakeholders and plays an active part in the larger financial inclusions
dialogue through the medium of microfinance.
Terms and Conditions of his Mr. Devesh Sachdev (DIN: 025471111) was appointed as the Managing
appointment Director of the Company with effect from December 5, 2018 for a period
of 5 (five) years as per the terms and conditions of the employment
agreement dated December 03, 2018.
No. of Board Meetings Attended all the 10 Board meetings held during the period under review.
attended during the year

Detail of Remuneration sought to be Remuneration sought to be paid: As stated in resolution of Item No. 4 of
paid and theremuneration last drawn the Notice
Remuneration Last drawn: FY 20 -21, INR 1.70 Crores (including
perquisite) and Bonus of 1.70 Crores)
List of Directorship in Companies Fusion Saksham Development Foundation
(Other than Fusion Micro Finance
Limited)
Chairman / Member of the Nil
Committees of the Board of
Directors of Companies (Other than
Fusion Micro Finance Limited) in
which he is a Director
Disclosure of Inter se relationship of Directors:

None of the directors has any relationship with other directors and Key Managerial Personnel of the Company.

By order of the Board of Directors

For Fusion Micro Finance Limited
(Formerly Fusion Micro Finance Private Limited)

Sd/-
Date: July 30, 2022 Deepak Madaan
Company Secretary & Compliance Officer
 PROXY FORM –MGT 11
(Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and
Administration) Rules, 2014)
CIN: U65100DL1994PLC061287
Name of the Company: Fusion Micro Finance Limited
Registered Office: H-1, C-Block, Community Center, Naraina Vihar, Delhi-110028

Name of the Member (s) :[●]

Registered address : [●]

E-mail id : [●]

Folio No. : [●]

I / We, being the member(s) of Equity Shares of Fusion Micro Finance Limited, hereby appoint
1. Name :
Address:
E-mail Id:
Signature: , or failing him / her
2. Name :
Address:
E-mail Id:
Signature: , or failing him / her
3. Name :
Address:
E-mail Id:
Signature: , or failing him / her

as my / our proxy to attend and vote (on a poll) for me / us and on my / our behalf at the Annual General Meetingof the
Company, to be held on Friday, August 5, 2022 at 11:00 a.m at H-1, C-Block, Community Centre, Naraina Vihar, New Delhi-
110028 and at any adjournment thereof, in respect of such resolutions set out in the Notice convening the meeting, as are
indicated below:
Item No. Resolution Assent Dissent
1. ADOPTION THE AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED
MARCH 31, 2022 AND THE REPORT OF THE BOARD OF DIRECTORS AND AUDITORS
THEREON
2. TO APPOINT A DIRECTOR IN PLACE OF MR. DEVESH SACHDEV (DIN: 02547111), WHO
RETIRES BY ROTATION AND BEING ELIGIBLE, OFFERS HIMSELF FOR REAPPOINTMENT.
3.
TO APPOINT STATUTORY AUDITORS AND FIX THEIR REMUNERATION
4. TO CONSIDER AND APPROVE THE EXISTING REMUNERATION OF MR. DEVESH
SACHDEV, MANAGING DIRECTOR & CEO OF THE COMPANY IN ACCORDANCE WITH THE
STATUTORY REQUIREMENT APPLICABLE TO THE COMPANY AS APPROVED BY THE
BOARD ON THE RECOMMENDATION OF NOMINATION AND REMUNERATION
COMMITTEE.

5. TO INCREASE THE BORROWING LIMIT OF THE COMPANY AND CREATE CHARGES ETC
ON THE MOVABLE PROPERTIES OF THE COMPANY, BOTH PRESENT AND FUTURE IN
RESPECT OF BORROWINGS UNDER SECTION 180(1) (C) AND 180 (1) (A) OF THE
COMPANIES ACT, 2013 UP TO RS. 12,000 CRORES
6. TO APPROVE THE LIMIT FOR RAISING OF FUNDS THROUGH NON - CONVERTIBLE
DEBENTURES.

Signed this ……. day of .............................. 2022

Signature of Proxy Holder(s)
Revenue
Stamp
Note: The proxy must be returned so as to reach the Registered Office of the Company not later than 48 hoursbefore the
time for holding the aforesaid meeting. The Proxy need not be a member of the Company.
 ATTENDANCE SLIP

(To be handed over at the Registration Counter)

Fusion Micro Finance Limited

Folio No. [●]

No. of Shares: [●]

I/We hereby record my/our presence at the Annual General Meeting of the Company being held on Friday, August 5, 2022 at
11:00 a.m at H-1, C-Block, community Centre, Naraina Vihar, New Delhi-110028.

1. Name(s) of the Member :1. Mr./Ms. …...………...…………………………………………………………………...

and Joint Holder(s) :2. Mr./Ms. .…………....…………………………………………………………………….
(in block letters) :3. Mr./Ms. ……...………..…………………………………………………………………
2. Address :.……………………………………………………………………………………………….......
……………………………………………………………………………………………….........
3. Father’s/Husband’s
Name (of the Member) :Mr. …………………………………………..…………………………………………………..
4. Name of Proxy :Mr./Ms. …………………………………………………………………………………….....
1.

2.

Signature of the Proxy Signature(s) of Member and Joint Holder(s)

Note: Please complete the Attendance slip and hand it over at the Registration Counter at the venue.
Route Map for the Fusion Micro Finance Limited H-1, C-block, Community Centre, Naraina Vihar, New Delhi – 110028