FusionAR18 PDF

No
Fusion Microfinance Private Limited

matter
what
Annual Report 2017-18
Forward looking statement
In this Annual Report, we have disclosed forward-looking information to enable investors to fully appreciate our prospects and take informed investment
decisions. This report and other statements – written and oral – that we periodically make, contain forward-looking statements that set our anticipated
results based on management plans and assumptions. We have tried, where possible, to identify such statements by using words such as ‘anticipate’,
‘expect’, ‘project’, ‘intend’, ‘plan’, ‘believe’, and words of similar substance in connection with any discussion of future performance.
We cannot, of course, guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions.
Achievement of results is subject to risks, uncertainties, and potentially inaccurate assumptions. Should known or unknown risks or uncertainties
materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers
should bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future
events, or otherwise.
Fusion Microfinance features among the top

Between the covers 10 pure play microfinance companies in India
operating in 14 contiguous states.
The business entity Disbursement (C crore)
• No matter what 2
• An overview 8
• Statement from the management 12 2016-17 830.84 Growth
• The business excellence journey 15 (%)
• Board of Directors 30 2017-18 1,670.58 101.07
The business space

• Women and work 16
• The microfinance sector 19 Revenue (C crore)
The business 2016-17 201.04 Growth

performance (%)
2017-18 267.31 32.96
• State wise performance 22
• Business operations 24
• Business risk & mitigation 28
• Beyond business 32
Net profit (C crore)
The business
2016-17 4.10
documents
• Board’s Report 36
• Management discussion and 2017-18 (39.41)
analysis 54
• Corporate Governance Report 56
The business numbers Assets under management (H crore)

• Auditor’s report 76
• Financial statements 82 2016-17 827.16 Growth
(%)
2017-18 1,555.60 88.07
Gross Loan Portfolio (H crore)
2016-17 770.84
Growth
(%)
2017-18 1,492.76 93.65%
Resilience
breeds
success.
Fusion Microfinance Private Limited 1
You don’t have a choice regarding the arrival
of tough times. But you do have a choice in
not backing down, when they do arrive.
When push comes to shove, resilience
makes the real difference – the willingness
to keep your eyes on the prize and your feet
moving towards it, no matter what.
2 Annual Report 2017-18

And that is what we did.
Through the darkest hours, toughest times and
bleakest results – we pushed ourselves ahead, did
our part and never for once did we lose sight of our
goal.
Because we knew, our fight isn’t just for ourselves,
but for a greater good. That is what has kept us
moving, no matter what!

No matter what…
We resolved to serve more than we
had done before
They said rural household earnings were down.
They said outstanding amounts were creeping up.
They said delinquencies would abound.
For the demonetisation drive dealt a body blow to the rural economy; a speedy
recovery appeared to be a distant dream.
At Fusion, we challenged this mindset.

• For we knew our customer category well. They were not willful defaulters.
It was only the prevailing circumstances that were testing their resolve.
• For we realised that in such times, it was the rural masses who were
critically in need of funds to overcome the misery consequent to shrinking
capital.
At Fusion we decided to serve more than we

had done before.
• We added 104 branches in our existing states.
• We expanded our footprints across two new states – we set up 11
branches.
In doing so, we enrolled 147,352 new customers

(from the additional branches) disbursing a
cumulative D301.20 crore with a collection efficiency
of more than 99% (on new disbursements).

Branch network
As March 31, 2017 248
Added in Q1/2017-18 27
Added in Q2/2017-18 41
Added in Q3/2017-18 26 As on March
31, 2018
Added in Q4/2017-18 21 359
Customer base
As March 31, 2017 682,369
Added in Q1/2017-18 122,181

Added in Q2/2017-18 166,124
Added in Q3/2017-18 195,825 As on March
31, 2018
Added in Q4/2017-18 222,858 973,300

No matter what…
We resolved to go cash-less in
a cash-based business
They said it was hard work.
They said it would take ages.
They said it may not work at all.
For we were dealing with masses who were not considered
bankable. For we were engaging which a societal section that
firmly believed that hard currency was power to perform.
At Fusion, we decided to make a We made it happen.

difference.
• For it was the need of the hour as it was a safer method of The project was awarded the
handling cash
BW Digital India Award by
• For this global trend would cascade to the Indian landmass
anyway Union Minister for Information
• For this was the right thing to do – uplift those who were at and Technology of India, Sri
the bottom for decades
Ravi Shankar Prasad, for ‘Best
Usage of Information and
Communication Technologies in
Rural Development’ in 2017.
At Fusion, we worked relentlessly
It also featured in the 15th Asian
to transform tradition.
• We worked painstakingly on getting their acceptance on
Network of Quality Congress in
this digital medium; altering a multi-decade tradition took Kathmandu, Nepal which was
enormous patience
• We worked tirelessly on opening their bank accounts;
chaired by world renowned Prof.
getting banks to enroll the hitherto unbankable (for decades) Dr. Noriaki Kano of Japan.
took some doing
• We worked patiently on entering account details of
customers accurately into our system; funds if transferred
55% of our disbursements have
to a wrong account, is a dual loss – of the funds and the been through cash-less route in
customer
2017-18. We are now working on
leveraging the digital wave for
cash-less collection too.

Cashless Disbursements (C in crore)
110
100
Cashless Disbursements
90 93.8 90.8
83.7
80 78.7
70
60.9 72.3
60 52.9
43.6 56.3
50 34.4
40 26.2
30
15.1
20
Apr-17 Mar-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18

Fusion Microfinance is a registered
NBFC–MFI, which operates in a Joint
Liability Group lending model. The
Company’s responsibilities extend beyond
financial support, to educating clients on
financial literacy. Established in 2010, the Company focuses on
reaching out to the unbanked and providing
financial services to women entrepreneurs – 100%
of its clients comprise women living in rural and
semi-urban areas. Headquartered in New Delhi,
the Company’s operations are spread across 14
Indian states and are managed by an experienced
and enthusiastic team of 3,202 members with an
average age of 27 years.
Himachal
Pradesh
Punjab
Delhi
Haryana Uttarakhand
Rajasthan Uttar Pradesh

Bihar
Jharkhand
West
Madhya Pradesh Bengal
Chattisgarh
Orissa
Maharashtra
Footprint across India

14 States
194 Districts

The
365-day
report
card
Business Global Awards and

performance endorsement recognition
• Featured amongst ‘The 10 most
Raised
valuable Non-Banking Financial
Disbursement grew by
D80 crore Companies’ by Insight Success
101.07%
over the previous year
from our existing investors • Selected in the 15th Asian
Network of Quality (ANQ)
Congress held at Nepal for key
contributions in the category of
Change and Risk Management
through Cashless Disbursement
Revenue grew by Project
32.96%
over the previous year
Honoured to have the presence
of Her Majesty the Queen of the
Belgians – we were the only
• Awarded the BW Digital India
Award by Union Minister for
Information and Technology of
corporate visited by Her Majesty in
India, Sri Ravi Shankar Prasad,
India
for ‘Best usage of ICT in Rural
Development’ in 2017

Our progress thus far…
B U S I N E S S P E R F O R M A N C E
1670.58
120,205
266,836
308,789
491,534
167.51
308.33
601.54
830.84
110.34
201.04
267.31
82,083
24.96
54.94
101
115
18
22
89
2013-14
2014-15
2015-16
2016-17
2017-18
2013-14
2014-15
2015-16
2016-17
2017-18
2013-14
2014-15
2015-16
2016-17
2017-18
2013-14
2014-15
2015-16
2016-17
2017-18
Customer addition Branch addition Disbursement (C crore) Revenue (C crore)
Our operating canvas
… and our
current
position! 14 States
194
Districts
973,300Customers
46,621 Villages
359 3,202
Branches Employees

B U S I N E S S P R O F I T
(39.41)
103.86
14.62
36.51
71.48
85.04
13.42
10.78
18.94
21.41
18.44
12.14
3.01
5.31
4.10
9.73
9.53
9.96
8.22
6.58
2013-14
2014-15
2015-16
2016-17
2017-18
2013-14
2014-15
2015-16
2016-17
2017-18
2013-14
2014-15
2015-16
2016-17
2017-18
2013-14
2014-15
2015-16
2016-17
2017-18
EBIDTA (C crore) Net Profit (C crore) Net Interest Margin (%) ROE (%)
Our business operations Our operational efficiency
3,714.31 1,492.76 13.47 99.13

Disbursements as on Gross Loan Portfolio as on Effective cost of Collection efficiency
March 31, 2018 (C crore) March 31, 2018 (C crore) borrowing (%) (%)
1,555.60
Assets under management as on
21.87
Capital adequacy ratio (%)
73.44
Cost-to-income ratio
March 31, 2018 (C crore) (%)

Dear friends, It gives me great pleasure
to mention that we ended
What gives me immense satisfaction
is that we were able to ramp up our
operations and improve our performance
the year sucessfully. despite the continuing overhang of
demonetisation well into the first half of
For even as the external 2017-18. I firmly believe that we were
environment turned able to overcome economic and sectoral
increasingly volatile and headwinds owing to the determined
efforts of our experienced and energetic
challenging, we were able team. Their untiring efforts enabled us
to up the ante. Even as to isolate the sectoral disorder into a
manageable issue. This achievement
we continued to entrench vindicates my belief that dedicated
our presence in existing people always rise to any occasion when
states, we expanded their expertise and abilities are respected
and trusted.
into new territories. Our
Review of fiscal 2017-18
customer base increased Business registered a brisk growth as
by 42.64% over the disbursements and revenue grew by
previous year even as our 101% and 33% respectively over the
previous year despite policy driven
branch network increased structural changes in the economic and
by 44.76%. As a result, our sectoral landscape.
revenue increased by 33% But fiscal 2017-18 was an an important

milestone in Fusion’s journey beyond
over the previous year. just business growth.
One, we initiated Fusion’s digital journey.
We realised that going digital is no
more an option, it is the new default
because increasing competition made it
necessary to improve our service quality
even as volumes surged. This could
only be possible if we transitioned from
traditional processes into technology-
driven solutions.
This was not as simple as it sounds. It
meant wiring more than 350 branches
in 194 districts across 14 states. It
necessitated altering the mindset of
the team, which is an agglomeration of
Message from the Managing Director diverse cultures and temperaments. But
no matter what... we were determined to
“We ramped our change ... and change we did!

Cash-less operations: We initiated this
operations strategy in July 2016. It was a telling yet

a memorable experience. We needed
and improved our

to create bank accounts for customers
who were considered non-bankable
for years. We needed to educate our
performance despite the customers not just on the benefits of

cash-less disbursements and using bank
prevailing economic and

accounts. We needed to check and verify
our systems and our customer’s data to
ensure that the funds reached the right
sectoral headwinds.” account – each time, every time. And we

made it happen!

Our dogged determination yielded Two, in a difficult year for the financial on strengthening the learning culture
heartening returns. Currently, about 55% sector owing to increasing NPAs, within the organisation for sharpening
of all our disbursements are cashless. our team successfully increased their expertise and honing leadership
What gives me satisfaction is that we organisational liquidity to support our capabilities.
facilitated 973,300 Indians to become growth aspiration. The team raised
In keeping with this goal, we made
contributors to the formal economy. C1,090.82 crore from diverse lenders
an important structural change in the
Going forward, we intend to take this even as it widened its lender pool to
organisation. We moved our back- end
number to 75% (even we expect to grow include private banks, mutual funds and
operations (credit check and loan
our disbursement by more than 100% other financial institutions.
processing) from the head office to our
y-o-y). Extending this success to its next
The team opened a new funding channel regional offices. This move, I believe,
logical step, we are making inroads with
namely market-linked debentures which will help the organisation from two
our cash-less collection module.
capped the interest outgo, an important standpoints:
Mobile app: We launched a mobile de-risking for the Company. Further, the
• We created decision-makers in the
app on a trial basis, which allowed our team securitised C230 crore of its assets
middle management, which, over the
relationship officers to check the credit emerging as the first microfinance player
years will build our leadership pipeline.
worthiness of every applicant on a real in India to securitise an Uttar Pradesh-
time basis. This allows our officers originated portfolio with a reputed NBFC. • We remained better connected with our
to instantly segregate prospective We also sourced C80 crore equity from customers. We resolve queries faster and
customers from those who do not meet our existing investors. we processed loan applications quicker
our credit filters. As a result, we could and more accurately. Our customers get
Three, we focused on uplifting the
fund the aspirations of deserving clients their money faster.
career potential of our team. For I firmly
with speed and efficiency.
believe that team members who are well
These, we believe, will deliver peace of looked after pass on the same care and
mind to our customers and enhance respect to the customers. And this is
recall of the Fusion brand. the key differentiator in our business. In
keeping with this conviction, we focused
The team raised C1,090.82 crore from

diverse lenders even as it widened its
lender pool to include private banks, mutual
funds and other financial institutions. The
team opened a new channel - through
market-linked debentures which capped
the interest outgo.

Making responsibility our culture Going forward
At Fusion, providing a ray of hope We remain focused on expanding our
to the underprivileged is everything. frontiers in developing and deploying
Because they are fellow Indians who are technology-based solutions, which
impoverished. Because they have been enable us to create a knowledgeable and
overlooked for decades. Because their empowered India.
innocence has been misused. Because
Hence, even as we continue to expand
their faith has been broken time and time
our presence to new states within India,
again.
we would endeavour to strengthen our
I consider, the entire Fusion team, has network of digital branches. And, even as
done a great job in improving the quality we continue to fund their dreams, we will
of life of our customers who, at one point strive to empower them with service at
in time, had lost hope of better days. their fingertips.
But the question remains, how are we Warm regards,
taking our commitment to this section of
Devesh Sachdev
the community to a higher orbit. We have
removed Social Responsibility initiatives
from our ‘To-do-List’ and are embedding
it into the organisational culture. In doing
so, the priority of social responsibility
gets uplifted from a department agenda
to an organisation-wide thought.
Hall of Fame
Fusion Microfinance was honoured
to have the presence of Her Majesty
the Queen of Belgians. She was
delighted to hear about our clients
remarkable entrepreneurial journey
and self-sustainability achieved with
the support of Fusion. The Queen
was also presented with handmade
products made by the clients
themselves.

The business
excellence journey
Six Sigma methodology. The Project enhanced
At Fusion, we believe that productivity both at Branch and Head Office by
there is always room for reducing the reconciliation time.
improvement. Customer contact tracking: The team undertook a
In our endeavor of being better, we initiated a project to obtain accurate contact details (primarily
cultural change by implementing Lean Six Sigma mobile numbers) of customers. This would help in
Methodology across the organisation by creating providing information on disbursements, collections
a Business Excellence Vertical to identify areas to and other updates relating to their loan account.
implement Six Sigma and Lean Value Projects for The team made healthy progress – customer data
enhancing productivity and optimising operational collection progressed from 40% in September 2017 to
cross. 84% in March 2018
Headed by a Lean Six Sigma Master Black Belt Lean Value Stories
professional, cross-functional teams work together Embarking Kaizen (Continuous Improvement) in the
on business critical processes with the aim of work culture, Lean Value Stories are a platform to
transforming conventional systems into technology- implement quick-fix ideas wherein the prospective
driven solutions that will enable the Company to solutions are implemented with the help of Lean
provide superior service with greater accuracy. Tools. As such, Value Stories are generally completed
This culture of participation has become the new within 2-4 weeks. Some of the noteworthy lean value
organisational DNA where incremental yet meaningful stories are narrated below.
improvements promise to lift the organisation into a
Digital cheques: The team Introduced digital cheque
new efficiency orbit over the coming years.
printing solution and a dual signatory mechanism.
Lean Six Sigma projects The new solution saved immense time in cheque
These are strategic projects which herald a process issuance. Besides, the dual signatory mechanism
overhaul and hence are worked upon by cross completely nullified the risk of forgery.
functional teams. Since these are transformational
Change in operating system: The need for Operating
in nature they take about 6-8 months from
Systems and MS-Office increased significantly as the
conceptualisation to its implementation. Key projects
Company added new branches across geographies.
implemented are highlighted below.
As a result, the license fee and operating cost became
Accounting module decentralization: The team prohibitive. The team zeroed in on introducing Linux
successfully developed a solution for real time (UBUNTU/MINT) Open Source Operating System. By
reconciliation of daily transactions using the Lean the close of the year, about 90% of the existing Branch
users have transitioned to the new operating system.

Work, women & woes
If the number of women who quit jobs So, why are women quitting jobs?
in India between 2004-05 and 2011-12
The power of choice, the shame of a
(the last year for which census data is
working wife: complex reasons.
available), was the population of a city, it
would, at 19.6 million, be the third-most Ongoing research and IndiaSpend’s
populated in the world, after Shanghai own on-the-ground reporting suggests
and Beijing. Of this number, rural women a complex web of constraints that keep
accounted for about 53%. women away from the workplace.
Only 27% Indian women are currently in Chief among these are issues of
the labour force. Among G-20 countries, women’s agency.
only Saudi Arabia is worse, as reported
A man is expected to have a paid job.
by IndiaSpend on April 9, 2016. Within
When he seeks one, he needs nobody’s
South Asia in 2013, India had the
permission. Girls and women, on the
lowest rate of female employment after
other hand, almost without exception
Pakistan.
must have the permission of their
In over two decades preceding 2013, fathers, brothers, husbands and in some
female labour force participation in India cases even village panchayats in order
fell from 34.8% to 27%, according to an to work or even learn skills that will make
April 2017 World Bank report. them employable. This is because family
and responsibility for household work
are serious constraints.

Information nugget
In the first four months of 2017, a nugget of
information went by unnoticed: while jobs for
men increased by 0.9 million, 2.4 million women
fell off the employment map, according to the
Centre for Monitoring Indian Economy (CMIE).
India has the second-lowest female Jobs near home attract women: 93%
labour force participation rate in South of unemployed female youth said they
Asia. Studies reveal that, in rural as well would take a job if they could work from
as urban areas, while the proportion of home or in the village, according to a
regular wage-earners in households pilot survey conducted among rural,
increased between 2004-05 to 2011-12, below-poverty-line youth in areas around
proportion of self-employed persons and Bhopal in 2015, IndiaSpend reported on
casual labour decreased, indicating the March 8, 2016.
Patriarchy, cultural and social attitudes rising stability in family incomes.
In addition, policies should focus on
exist all over India. But in many states in Rising income levels and stability in promoting the acceptability of female
the north, there’s a feeling of ‘shame’ if a families is also dis-incentivising women employment and investing in economic
man’s wife works. from joining the labour force, according sectors in rural areas that are attractive
Unsurprisingly, Bihar, Haryana, Jammu to Reassessing Patterns of Female in terms of female employment.
and Kashmir and Punjab report the Labour Force Participation in India, a
What could be?
lowest rates of female labour force March 2017 report by the World Bank,
participation, whereas hill states such which analysed government data from If women participated in the economy
as Sikkim and Himachal Pradesh where 2004-05 to 2011-12.The proportion of at par with men, India could increase
men have historically migrated out regular wage earners in urban areas was GDP by up to 60%, or US$2.9 trillion, by
for work, leaving women in charge of 20 percentage points more than rural 2025, according to a 2015 study by the
village economies, female labour force areas, which explains its low FLFP rates. McKinsey Global Institute, a think tank.
participation or FLFP to use a brief At present, women contribute a mere
How can this change?
acronym for a distressing trend, is high. 17% to the country’s GDP, well below the
According to the World Bank study, global average of 37%.
The female labour force participation merely increasing women’s access to
rate (FLFP) refers to the section of education and skills will not necessarily
working women population, above lead to a rise in FLFP. Gains will not be
the age of 15 in the economy, that realised unless social norms around
are currently employed or seeking women’s (and men’s) work also change,
employment. It is measured as the and/or the rural labour markets offer
ratio of female to male proportion of forms of employment that are acceptable
a country’s working-age population, and attractive for women and their
employed in the labour market. families.

Working women –
a new perspective
Women’s participation in work is an However, this definition of employment 89% in rural areas, and only declines to
indicator of their status in a society. excludes some important activities that 85% in 2011-12 (a decline that can be
are definitely work (sometimes very hard completely explained by more enrolment
Where women’s work participation rates
work) and contribute critically to the in education among the 15-24 age
are relatively low, it is safe to say that
economy, but are not recognised as such group). In urban areas, the participation
the surrounding society isn’t giving
by the surveys – or by policymakers and rate increases to 81% in 1999-2000
women the capacities, opportunities and
society. and remains around the same at 80% in
freedom to engage in productive work,
2011-12.
nor recognising the vast amount of work In India’s NSSO one category excluded
performed by women as unpaid labour. from employment (and therefore even So what has actually happened is not a
from being counted in the labour force) decline in women’s work participation as
In India, where the economy has been
is code 92: those who “attended to such, but a shift from paid or recognised
growing rapidly over the past 30 years,
domestic duties only”. That includes all work to unpaid work. This is a dispiriting
recent statistics appear to show that
the activities that constitute the care shift, because it is also typically
women’s workforce participation rates
economy, that is looking after the young, associated with women’s and girls’ loss
(already low by international standards)
the sick and the elderly as well as other of agency and bargaining power within
have declined. Is there something
healthy household members, cooking, the family.
about Indian society and the nature of
cleaning and provisioning for the family,
economic growth that has led to this The invisibility of such women workers is
and so on. Another category excluded
historically unprecedented combination appalling because such work is essential
is code 93: those who “attended to
of trends? to the survival of society and provides
domestic duties and were also engaged
a huge and unnoticed subsidy to the
Estimates of employment in India are in free collection of goods (vegetables,
“formal” economy.
based on surveys conducted periodically roots, firewood, cattle feed), sewing,
(not every year) by the National Sample tailoring, weaving, etc for household It is also inefficient and unjust, adding
Survey Office (NSSO). It said that in use”. significantly to the relational inequalities
1999-2000, 35% of rural women and that are so entrenched in Indian
What has happened is not a decline in
17% of women over 15 years old were society. It disempowers even paid
women’s work participation, but a shift
“working”, as regular or casual wage women workers, since what women
from recognised work to unpaid work.
workers, self-employed or unpaid helpers do is undervalued, and contributes
If such women are actually counted
in family enterprises (like farms or small to large gender gaps in wages. And it
among workers, as indeed they should
shops). By 2011-12 (the most recent allows policymakers to forget about the
be with the new definition adopted by
survey published), after a period of rapid conditions of hundreds of millions of
the ILO in 2014, then the picture changes
economic growth, this has declined to workers on whom the entire economy
completely.
25% in rural areas and remained at the depends.
same pitifully low rate in urban areas. Women’s workforce participation rate
in 1999-2000 increased to a whopping

Microfinance sector
Financial inclusion today is not just a Why is microfinance essential for India? Microfinance industry of India: Core
concern limited to the developing or strengths
India is an agriculture-based rural
underdeveloped countries alone but also
economy where more than 60% of total • Regulated by the Reserve Bank of India
that of developed economies. As an
population still resides in villages. with MFIN as the SRO for the industry
enabler, greater financial inclusion
Villages are at the heart of India. The • Stringent industry code of conduct in
contributes to development goals of
main occupation of rural people is place
poverty reduction, economic growth
agriculture and usually they pursue it as • A street delivery model, which ensures
and jobs, greater food security and
a way of life. India’s rapid development doorstep delivery to clients
agricultural production, women’s
depends on the progression of its rural • Bouquet of products such as micro-
economic empowerment, and health
sector. However, according to NSSO, the credit, micro-insurance and micro-
protection.
monthly income of an average Indian pension among others
Microfinance, a medium that provides farmer having a family of five members • Presence in under-banked and
financial resources at the bottom of the and possessing two animals, is much untapped zones
societal pyramid, has emerged as the lower compared to that in the other • Financial literacy and awareness
most viable model for financial inclusion developing nations. Hence, microfinance integrated to product delivery
of masses hitherto considered non- becomes essential for rural India. • Conducive environment for clients
bankable. promoting local culture, local employees
and high customer connectedness

Microfinance in recent times
Microfinance has reached an important
inflection point in India. Some large and
established MFIs have transformed into
Small Finance Banks,which provides
them access to deposits and greater
operational leverage. New age players
are disrupting traditional systems and
processes by leveraging digital data,
embracing technology, establishing
enduring partnerships, diversifying
product portfolio and moving beyond
the traditional group-lending model.
These changes are altering the sectoral
ecosystem and will redefine how
microfinance is delivered in the future.
Industry performance
• As of March 31, 2018, 2.53 crore clients
have loan outstanding from NBFC-MFIs, Outreach trend
which is an increase of 25% over 2016-17. 2.53
2.33
2.02 2.06 2.16
• The aggregate gross loan portfolio 1.94 1.95
1.73
(GLP) of MFIs stood at H48,094 crore
as on March 31, 2018. This represents
48,094
42,300
38,288
a YoY growth of 50% as compared to
34,402
32,039
30,758
29,412
27,484
March 31, 2017.

• Loan amount of H59,629 crore was
disbursed in 2017-18, representing an 30 June 30 Sep 31 Dec 31 Mar 30 June 30 Sep 31 Dec 31 Mar
increase of 49% as compared to 2016-17. 2016 2016 2016 2017 2017 2017 2017 2018
• NBFC-MFIs disbursed 268 lakh loans
during 2017-18, an increase of 25% over GLP (C Crore) No. of clients (Crore)
2016-17.
• Average loan amount disbursed per
account during 2017-18 was H22,273, an Disbursement trend
18,891
increase of 19% from 2016-17. 100 20,000
13,853 14,875
• During 2017-18, NBFC-MFIs received 80 11,711 11,743 11,737 15,000
60 9,755 12,000
a total of H20,695 crore in debt funding, 7,468
growth of 20% compared to 2016-17. 40 8,000
• During 2017-18, NBFC-MFIs raised a 20 4,000
55
60
41
57
55
63
67
81
total of H9,631 crore as equity, up by 40% 0 0
from 2016-17. 30 June 30 Sep 31 Dec 31 Mar 30 June 30 Sep 31 Dec 31 Mar
• Portfolio at Risk (PAR) > 30 as on 2016 2016 2016 2017 2017 2017 2017 2018
March 31, 2018 is 4.44%. This does not
No. of loans Disbursed (in lakhs) Loan Amount Disbursed (C Crore)
include BFIL data. This is a significant
improvement from 11.05% as on March
31, 2017.
PAR trend
• MFIs now cover 30 states/union
territories. 12%
• In terms of regional distribution of
portfolio (GLP), East and North East 8%
accounts for 44% of the total NBFC MFI
portfolio, South 20%, North 14%, West 4%
11% and Central contributes 11%.
0%
30 June 30 Sep 31 Dec 31 Mar 30 June 30 Sep 31 Dec 31 Mar
2016 2016 2016 2017 2017 2017 2017 2018
PAR > 30 PAR > 90 PAR > 180

The customer’s expression
Making a difference…
“Education of my children was always a “When my husband passed away, my “My husband was working as a factory
point of concern for me and my husband world stopped. One, was the vacuum in labourer whose meager earning of
as his earnings were never enough to place of my life companion. Two, and the H6,000 per month was not enough for us
pay for their school fees. Finally, the most important, was the responsibility to make our ends meet. We wanted to
inevitable happened. And we were of bringing up our two sons. Three, the give a good future to our only daughter,
compelled to withdraw their names from social stigma of being a lone woman in a which seemed impossible owing to our
the school. It was one of the darkest village. Who would give me work? financial incapability.
days for us.
My daily wages just about got us some I wanted to help my husband and our
As we started to come to terms with food and provided shelter under a family financially. But being in a village, I
this set back, I came to know of Fusion dilapidated roof. Despite this hardship, was not allowed to step out of our house
Microfinance, who were giving loans to I continued to nurture the dream of to work. They say when things are going
people in our village. I was skeptical of providing a good future for my children. to happen, they just do. I got to know
taking a loan as I have heard of a number about Fusion. They were God sent. They
And even as I was on the verge of a
of people who had taken loans in the not only provided me the funds to start
near break-down, my brother-in-law
past and they were completely finished. my quilt making business,but also hand-
continued to encourage me to start a
held me in managing and growing the
After considerable deliberation and grocery shop. And introduced me to
business.
strife, I took the loan. With the money, I Fusion.
bought a buffalo. We made some money The business gained prominence over
Extremely hesitant, I took a loan from
by selling the milk. But more importantly time and our financial status stabilised.
them and started the venture at my
all members of the household got With my next cycle loan from Fusion, I
home. And within a short time, the
something to do. I repaid the loan. And started a grocery store for my husband.
business started generating good returns
took a second loan. Our earnings grew.
-I earned about H7,000 per month. We are happy that our household income
We bought four more buffaloes.
has increased to I10,000, which will help
Fusion’s critical support in my darkest
And since then we have not looked back. us in ensuring a good education for our
hour, provided the ray of hope that
Our children re-joined school. We bought daughter who is 4 years old and has just
brightened mine and my family’s future.
a bicycle for my husband. Today I feel started going to school”.
For this, I will forever remain grateful.
content that I am equally supporting
Savita Mandal
my husband and contributing towards a Anita
Gadarpur, Uttarakhand
better future of my children”. Dhampur, Uttar Pradesh
Sumitra
Dhampur, Uttar Pradesh

Business performance
Back on track
Uttar Pradesh
4.84%
Branches
10.74%
Loan outstanding (C)
69.97%
Disbursement (C crore)
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
62 65 177,034 196,045 194 329
Delhi
-
Branches
24.87%
31.66%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
2 2 1,536 1918 4 5
Madhya Pradesh
17.50%
Branches
4.93%
98.56%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
40 47 110,084 115,516 97 192
Uttarakhand
-
Branches
(20.93)%
45.52%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
13 13 49,678 39,280 48 70
Punjab
54.55%
Branches
170.07%
135.94%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
11 17 23,004 62,126 53 126
Haryana
-
Branches
9.86%
58.49%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
20 20 80,597 88,543 103 163
Bihar
52.17%
Branches
60.16%
112.26%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
46 70 145,254 232,635 175 371

Jharkhand
35.71%
Branches
24.07%
60.66%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
14 19 37,307 46,285 44 70
Chattisgarh
233.33%
Branches
248.79%
289.03%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
3 10 5,231 18245 8 33
Odisha
96.43%
Branches
189.43%
134.20%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
28 55 50,210 145,323 101 235
Maharashtra
-
Branches
190.55%
160.57%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
8 8 2,422 7,037 5 13
Rajasthan
2100%
Branches
176391%
144910%
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
1 22 12 21,179 0.03 43.50
Himachal Pradesh (new entry)
-
Branches
-
-
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
– 2 – 1372 – 3
West Bengal (new entry)
-
Branches
-
-
2016-17 2017-18 2016-17 2017-18 2016-17 2017-18
– 9 – 8,336 – 17

Business operations
Customer acquisition New branches
Fusion continued to strengthen its coverage of the Indian landmass to explore and 2016-17 101
capitalise on microfinance opportunities with cautious aggression. Hence, even 2017-18 115
13.86%
as it continued to strengthen its presence in existing states (104 branches added),
the Company established its footprint in two new states – Himachal Pradesh and New customers added
West Bengal (rolling out 11 branches). In doing so, the Company added 491,534 2016-17 308,789
new customers, disbursing C1,027.05 crore. Further, the Company launched the 2017-18 491,534
59.18%
top-up products (to meet customer emergency or allow a customer to capitalise on
a one-time opportunity) for select customers with a high credit profile – the team Additional disbursement (D crore)
enlisted 8,000+ customers in this vertical. Going forward, the Company is focused
2016-17 706.70
on entering three new states in 2018-19 for sustaining its growth prospects over
the coming years. 2017-18 1,027.05
35.73%
Credit management Applications received
As the name suggests, this is a critical business function that transforms sectoral 2016-17 425,742
opportunities into quality business assets. As competition intensified, customer 2017-18 1,021,734
139.99%
knowledge about nuances to secure loans from multiple agencies increased. This
resulted in over-indebtedness and defaults. Portfolio at risk > 30 (%)
While customer acquisition is critical for growth, the Company focused on securing 2016-17 23.11
quality assets for making its profitable growth sustainable. Towards this end, the 2017-18 3.80
(83.55)%
Company put in place strong credit filters that are periodically reviewed and aligned
with sectoral and on-field realities. Gross NPAs (%)
In 2017-18, the Company did a trial run of a mobile app which allows its field officers 2016-17* 11.63
to do a first-round check of every applicant’s creditworthiness instantly – improving 2017-18 3.98
(65.82)%
their productivity and the overall asset quality for the Company.
* Without RBI dispensation
Further, the Company decentralised the credit approval process from the Head Office
to regional offices to improve the turnaround time for credit approval and reduce the
cost of credit appraisal.
Going forward, the Company plans to check applicant data with multiple credit
agencies for a more detailed check on their indebtedness. It also plans to launch its
mobile app across all locations.
In addition, the team plans to leverage data analytics for reviewing every pincode
of its presence and existing asset portfolio to identify early warning signals for
delinquencies and take proactive remedial action.
The senior
management
team

Back-end operations Applications processed
This is the heart of the business operations, which focuses on disbursing funds 2016-17 422,761
with speed while optimising cost of operations even as the Company widens its 2017-18 722,290
70.85%
operational canvas across Indian states.
Turnaround time for loan (application
To achieve these goals, the microfinance sector, in recent times, has invested in to disbursement (days)
technology-based solutions to convert manual processes into digital systems.
Fusion has been a frontrunner in this transformation. It launched a document 2016-17 11.47
management system, cash-less disbursements and the concept of digital 2017-18 11.70
(1.97)%
branches.
Cash-less disbursement as %age of
In 2017-18, the Company took an important strategic decision to shift its overall disbursements
application processing to its regional offices, which was earlier concentrated at the
2016-17 7.50
Head Office – even as it maintained a disciplined control on the operations of all
regional offices. This initiative reduced the turnaround time for loan processing and 2017-18 55.00
48.50%
optimised operational costs.
In addition, the team focused on cash-less disbursements, which optimised cost
and time of disbursement and brought 325,822 villagers into the formal banking
system. The Company also took its digital branch concept ahead, setting up five
new digital branches during the year under review.
Going forward, the team will continue to introduce unique technology-based
solutions, which would enable it to move closer to its envisioned goals. Besides,
it would focus on strengthening cash-less disbursement and introducing digital
branches.
Further, the Company is working on a blue-print to launch a ‘Branch-based
Risk Scoring Card’ which will monitor the performance of every branch (across
multiple parameters) periodically. This initiative will provide early warning signals
of operational challenges and asset delinquencies in addition to unearthing
opportunities of business growth.

Collection management Collection efficiency (%)
Cash collection is as critical as it is risky. Critical, as timely cash inflow into 2016-17 90.70
the business enables the organisation to repay debt and grow business. Risky, 2017-18 99.13
8.43%
because cash often leads to crime - especially considering the rural areas in which
microfinance companies operate. Fusion is also impacted by these realities, which Collections (D crore)
make efficiency in cash collection extremely necessary for business sustenance. 2016-17 818.93
After the demonetisation drive that significantly impacted cash collection in the 2017-18 1,117.38
36.44%
latter part of 2016-17, fiscal 2017-18 opened on a brighter note with customers
returning to their paying days. The going was better for Fusion because they
stood by their customers – visited villages, interacted with customers, understood
ground realities and challenges, helped customers come out of the demonetisation
overhang. This painstaking exercise facilitated in superior collection efficiency
even in tough days – achieved 137.03% of the collection of pre-demonetisation
disbursements.
In 2017-18, the Company rolled out a cash-less collection module on a trial basis.
This facilitated in faster collection and eliminated the risk of handling cash. The
team plans to roll out this module across its operating sites in the current year.
Treasury management Funds secured (D crore)
This function is the lifeline for any financial institution as it provides the critical 2016-17 730.05
input for every business operation – Money. As such, treasury management 2017-18 1,090.82
49.42%
involves sourcing and repayment of funds, managing cost of funds and ensuring
that assets are matched with liabilities. This avoids the possibility of overleveraging Average interest cost (%)
by the Company. 2016-17 14.13
The challenge of treasury management becomes more intense when you have 2017-18 13.47
(4.67)%
multiple lenders, with diverse interest rates, tenures and terms and repayment
schedules. To effectively manage this, the Company institutionalised a
comprehensive loan management system which ensures that all repayments
are made timely – its MIS dashboard allows the team to perform accurate cash
management to ensure organisational liquidity at all times.
Fiscal 2017-18 was momentous for the Company due to multiple factors.
• The team raised C1,090.82 crore from diverse lenders even as it widened its lender
pool to include private banks, mutual funds and other financial institutions
• The team sourced C25 crore through a new financial instrument – market-linked
debentures which capped the interest outgo
• The team securitised C226 crore of its assets, emerging as the first microfinance
player in India to securitise a Uttar Pradesh originated portfolio with a reputed NBFC
• The team also sourced C80 crore equity from its existing investors namely
Creative Investments, Oikocredit, Ecumenical Development Cooperative Society and
Global Financial Inclusion Fund.
From an operational perspective, the Company introduced a cash pull back system
which transferred idle-funds (beyond the stipulated limit) from the branches (bank
account) to the Head Office (bank account). This pooling helped in better cash
management.
Going forward, the team is working on sourcing more than C2500 crore from its
funding partners through a prudent mix of debt and equity. In addition, the team is
strategising on increasing the proportion of long-term loans in its overall fund pool
to strengthen its asset-liability matrix.

Team bonding
Pleasure in the job puts perfection in

the work. Aristotle
As an organization we believe in
celebrating milestone moments
of our employee’s journey with us.
We have 3 years, 5 years & 7 years’
Service Awards. This helps to instil in
employees the feeling of oneness with
the organization and its leadership.
Fusion has its own Cricket League. This
is a source of both pride and inspiration
and their performances are closely
followed, critiqued and achievements
are celebrated. This healthy spirit of
competition is fostered as a positive
inspiration for their workplace
contributions.

If you don’t invest in risk management,
it doesn’t matter what business you’re
in, it’s a risky business. Gary Cohn
Fusion’s risk management framework goes far beyond traditional boundaries categorised as per impact on probability,
encompasses strategy and operations and seeks to involve all key managers mapped to key responsibilities of select
and seeks to proactively identify, address of the Company. There is a formal managers and managed with appropriate
and mitigate existing and emerging monitoring process at unit and company mitigation plan.
risks. The risk management framework level, wherein new risks are identified,
Growth risk
Will the Company be able to sustain its growth momentum going forward?
301.21
Mitigation: In a country, where more than 20% of its population is below the poverty
line, growth opportunities for microfinance abound across the Indian landmass.
Hence, growth is a natural consequence of geographic expansion. Disbursements (C crore)
Fusion has extended its footprint in four states in the last two years and added 96 made from the new branches
new branches in the states of its presence. This increasing coverage is expected to added in 2017-18
generate important growth opportunities for the Company over the coming years.
Funding risk
How will the Company manage the growing financial requirement to satiate
increasing opportunities?
Mitigation: Fusion is one of top 10 pure play microfinance players in India and
is widely respected for its ethical standards and governance practices. This is
reflected in its high rating by credit rating agencies - Fusion’s rating and grading 1,090.82
was reaffirmed as MFI 2+ and BBB+ (Stable) by CARE Ratings – one of the highest
Funds sourced (C crore) in 2017-18
ratings received by a microfinance player in North India post the demonetisation
against C730.05 crore in 2016-17
drive. This credibility fabric enables the Company to source funds from multiple
lenders. The Company added new lenders, namely private sector banks, to its lender
portfolio. Further, the Company raised H80 crore in equity from existing investors,
which provided the cushion to enhance its debt borrowing.
Funding partner risk

The funding from PSU banks could dry up in the near future. What then?
Mitigation: Public Sector Banks are mandated by law, to earmark a proportion of
their lending to the rural sector (priority lending). Hence, despite the NPA issues
which is looming large on PSU banks, the lending to the priority sector will continue 385
– PSU banks would prefer to lend to microfinance companies with a high credit
Funds (H crore) sourced from
rating and good track record. Fusion features high on this preference list.
private banks and mutual funds
As a prudent de-risking measure, the Company has further diversified its lender base from the total funds
to include private sector banks and mutual funds. Going forward, the Company plans sourced in 2017-18
to maintain a prudent mix between its lenders to avoid an over-leverage on any
single category.
People risk
Does the Company have the people resources to manage business expansion?
Mitigation: In this people-centric business, having the right people resources is
critical to survival, success and sustenance. Hence, the Company lays utmost 3,202
stress in recruiting the right knowledge capital. In addition, the Company makes People resources on the rolls
significant effort in enhancing their intellectual capability and work attitude to as on March 31, 2018
tide over operational issues. Further, the Company proactively recruits its people for branch roll out in 2018-19
resources before branch roll-out to ensure that the teams are well-versed with the
operational systems and processes.

Service risk
How will the Company effectively service its customers even as it widens its
geographic coverage?
Mitigation: Service in the microfinance business space means doing things
with speed and simplicity. For it is about dealing with simple people who do not
understand complex nuances of the financial world.
In recent times, the microfinance industry is witnessing a process transformation 491,534
which allows the microfinance player to service its customer faster and better even
as it widens its operational canvas by leveraging technology. Customer added in 2017-18
Fusion features among the proactive microfinance players catalysing this

transformation through its cash-less disbursement, digital branches, mobile
app. This results in faster appraisals and disbursements and accurate account
management - thereby enhancing customer experience and delight.
Asset quality risk

Aggressive volume growth could impact asset quality!
Mitigation: Even as business volumes increased significantly, Fusion leveraged
technology to process applications faster and tightened its credit filters to improve
asset quality. The newly launched mobile app enabled field offices to verify
and assess the credit worthiness of applicants’ real time, leading to faster and 3.98%
better customer selection. Moreover, the decentralised processing of customer
Gross NPAs
applications at the regional offices helped in superior credit appraisal and faster
as on March 31, 2018
processing of customer applications.
– a showcase of asset quality.
In addition, the Company has recently started working with multiple credit agencies
to verify data accuracy of every application and checking for over-indebtedness of
the applicant. This will help in improving asset quality going forward.
Defalcation risk
How does the Company manage incidences of cash defalcation by its employees?
Mitigation: Being a purely cash operated business, the microfinance sector
as a whole faces the risk of cash theft (by strangers) and cash defalcation (by
employees). And Fusion is no different.
For theft, the Company takes all steps which any other microfinance player would
do and which are required by regulation and law. 37.67%
To address the issue of defalcation by employees, the Company periodically Proportion of the funds
educates its on-field team of the consequences of the act in terms of his respect, recovered from
his employability and his career and the impact on the family. This proactive the defalcation cases
approach has ensured that the number of incidents for Fusion, are lower than most
others in this business space.
For incidents that do occur, the Company circulates data of the person to all other
microfinance players operating in that geography and leverages the legal route to
retrieve the loss. This has worked well for the Company.

Board of Directors
01 02
03 04
05 06 07
08 09
01 02 03
Devesh Sachdev Laetitia Counye Njord Andrewes

CEO & Director Nominee Director Nominee Director
The Company’s Founder & CEO, Devesh She is a Senior Investment Officer – Private Njord Andrewes is Investment Director in
Sachdev, an XLRI Post Graduate with 16 Equity at the Belgian Investment Company NMI AS. Prior to joining NMI, Mr. Andrewes
years of experience in the service industry for Developing Countries (BIO). Laetitia was a Senior Equity Research Analyst at
prior to starting Fusion in 2009-10. He has a 16+ years track record in private Lazard Capital Markets. Mr. Andrewes
started his career with Citigroup in equity investments both in emerging received an MBA in Finance from Kelley
1996. Amongst the diverse experiences, and developed markets after having School of Business at Indiana University,
his expertise lies in building business, started her career in asset management and a B.A. in Economics from Hope
managing large teams in a cost efficient (ING). Ms Counye has a Master of College. Mr. Andrewes holds several Board
manner, strategy, key relationship Science in Business Economics from Vrije or Director positions as well as a member
management and handling all dimensions Universiteit Brussel, Belgium. She has also of several advisory committees of financial
of the business. Under his leadership, served as Board Member at Annapurna inclusion funds.
Fusion has grown into one of the leading Microfinance from BIO’s initial investment
microfinance institutions and continues in 2014 to June 2017.
to expand its operations. He also sits
on the Board of MFIN, a Self-Regulatory
Organization for NBFC-MFIs.

04 Financial Inclusion Advisory Committee University, Aligarh. He also did his
and Chairperson of the South Asian Masters in Business Administration in
Albert Hofsink
Microfinance Network. She is currently Marketing from AMU. He joined SIDBI
Nominee Director
the CEO of the Sustainable India Finance in 1995 and held important positions
Albert holds a Bachelors in Accounting, Facility which is an entity set up under the in various departments like Business
and Honours degree in Accounting United Nations Environment Programme Development, HR and Administration. His
& Controlling as well as a Certificate and is partnering with BNP Paribas to prior prestigious postings include heading
in Theory of Accountancy from the bring in private sector investment into the Okhla, Ludhiana and now New Delhi
University of South Africa. He has spent sustainable agriculture, green energy, branch of the bank.
a large part of his career at Oikocredit, a water conservation and other sustainable
global social investor investing capital enterprise at scale. 08
in the microfinance sector as well as Nitin Gupta
agricultural cooperatives and social 06 Independent Director
enterprises managing wide ranging
Ken Vander Weele Nitin received an MBA from IIM,
responsibilities ranging from Accounting,
Nominee Director Ahmedabad, a law degree from Bombay
Treasury, Finance, Tax, Risk Management
and IT. He has also served on the Boards Mr Vander Weele has a PhD in University, and an Economics Honours
of: HKL (a Cambodian MFI); Maanaveeya international economics from Oxford degree from St. Stephen’s College, Delhi.
Development Finance India and other University, and a BBA in Accounting Nitin is the Founder of Argus Partners,
operating subsidiaries of Oikocredit. He is from the University of Wisconsin. Ken India’s only professional firm which
currently serving on the Boards of Fusion is also a CPA. He is a co-founder and focuses exclusively on helping companies
Microfinance (India), Musoni Microfinance partner in Creation Investments Capital find great Independent Non-Executive
(Kenya), Yalelo Limited (Zambia) and is Management, LLC, a fund management Board Directors. He is a non-executive
on the advisory Board of the 4F Fund company that manages several specialized co-founder of Faircent, India’s first and
(Netherlands). private equity vehicles that invest in best known P2P lending company. He is
emerging market financial services a Board Director at Loylty Rewardz, India’s
05 companies serving poor clients. From #1 cards loyalty management company,
2000 until 2009 Mr Vander Weele served as which was funded by Canaan Partners
Ratna Vishwanathan
the President of the Investment Services and Venture East and then acquired by Bill
Independent Director
Division at Opportunity International, Desk.
She has been the CEO of MFIN for the a major microfinance network. Mr.
last three years and was Dy. CEO prior to 09
Vander Weele was responsible for
that. She has built a strong Self Regulating the development and oversight of all Pradip Kumar Saha
Organisation in line with the sector commercial MFIs within the Opportunity Independent Director
supervision mandate of the RBI and built Network, garnering over $1 billion in Mr. Saha was a Chief General Manager,
strong credibility for the sector in the eyes assets during his tenure. During this Small Industries Development Bank of
of the external world. She has put in place period, Mr Vander Weele was involved India (SIDBI) and senior development
the international microfinance conclave in forming three microfinance banks in banker with more than 36 years of
which is now an annual feature and has Eastern Europe. Mr Vander Weele was experience in development banking.
enhanced the visibility of the sector. also a founder and the board chair of the During his long career in IDBI & SIDBI, he
Belonging to the 1987 batch of the Microfinance Centre for Eastern Europe has handled various departments, some as
Indian Audit and Accounts Service, Ms. from 1998 until 2006 and the Balkan Head of Department.
Vishwanathan comes with extensive Financial Sector Equity Fund from 2005 to
experience across a range of Government 2011.
departments including Audit, Defence and
07
Prasar Bharti. She has also served at very
senior levels in well-known international Javed Ahmad Siddiqui
NGOs such as Oxfam and VSO. Nominee Director
Ratna Vishwanathan is a Director on the Javed holds Bachelor of Engineering

Board of Mudra, Member of the RBI’s (Mechanical) from Aligarh Muslim

In business
Beyond business
Fusion business extends beyond the details digitally, digital payments and literate, introduce cashless payments to
scope of its offices to include the well- using debit/credit cards for transaction. them, enhance their economic growth
being of societies resident in the vicinity. and individual empowerment, thereby
Financial Literacy Programs were
This is because the Company nurtures supporting the Digital India initiative of
organised to enhance clients’ awareness
the belief that an island of prosperity the Government of India.  
on important aspects of financial
cannot sustain in a matrix of misery.
management. Various topics like Promoting child Education: As part of
As a good corporate citizen, Fusion has household budgeting, investment, the Children’s Day celebration, Fusion
been making enduring impact through preventing over-indebtedness, distributed school bags and stationery
its Social Responsibility programs that developing positive attitude towards items to around 100 school going
promote social and economic inclusion. savings and financial security from children of clients at Garhakhota in
The Company’s social upliftment the current income source etc. are Madhya Pradesh.
initiatives focus around financial and deliberated in order to enhance
digital literacy, healthcare, education, consumers' financial acumen. Healthcare, hygiene and
skill development and environmental sanitation
This initiative received an overwhelming Healthcare: Health check-up &
conservation, which facilitates bettering
response from clients and other people medicine distribution camps were
lives and improving livelihood, amongst
from the community who participated organised for the clients and their
others.
with full enthusiasm. families across Fusion’s operational
Digital and financial literacy The team used multiple easy-to- areas. The diagnosis was done by
Fusion conducted Digital Literacy highly experienced Gynecologists,
comprehend media to impart awareness
Program for its clients and other people Pediatricians, Ophthalmologists and
namely PPTs, videos, role play etc.
from the community General Physicians and medicines were
Women themselves are made a part
Digital literacy programs were conducted of these role plays. Some share their distributed free of cost. Awareness on
to impart knowledge on various modes success and failure stories as well.   maintaining good hygiene and sanitation
of cashless transaction, linking of Aadhar were also generated among rural women
The effort was made to make rural and children.
card to the branch, accessing account
households digitally and financially
International Women’s Day: Health their livelihood. They were trained on the women of Jamalpur Pathani, a small
awareness programs were organised paper bag making, cutting and sewing, village in Bijnor district of Uttar Pradesh.
for clients and their daughters in dona making program, pickle and In addition, the Company organised
different states to celebrate International papad making. Along with the product programs where plantation of medicinal
Women’s day. Awareness on maintaining making, clients were trained on product and fruit plants were done at Panchayat
good personal health and hygiene was packaging. Market linkage was also Area and government schools. It involved
created through street plays, videos and facilitated for sales in the right market. children, school authorities, Sarpanch
counselling by Gynaecologists. This Certificates were distributed to each and women of the village.
was followed by free sanitary napkin client who successfully completed the
Other sponsorships
distribution. The focus was to encourage program.
• Sponsored 1000 Dengue Protection
women to use sanitary napkins to Relief and welfare activities Kits to support ‘Behtar India’ initiative
maintain good menstrual health. Fusion organised a massive relief of NDTV. The kits were distributed to
Sanitation: Fusion constructed toilets campaign ‘Rahat – Ek Prayas’, wherein students at government schools
in the rural areas of Jharkhand, Uttar it provided food packets and other
• Sponsorship for supporting one year
Pradesh and Madhya Pradesh to necessary items like toiletries, medicines
of education for underprivileged girl
promote use of toilets at the community and utensils to clients residing in flood
children studying in Udbhav school,
level. Some of them were constructed in affected areas of North Bihar and Uttar
Hyderabad.
the government schools for girls which Pradesh. The team also organised health
facilitated their increased attendance check-up and distributed medicine to the • Sponsorship to Go Sports Foundation
in the school. The program supports clients and their families. to support emerging athletes and their
‘Swachh Bharat Abhiyan’ of the Govt. of representation at major international
Food items, clothes and other relief
India. events such as Commonwealth Games,
material were provided to a client from
Asian Games and the Olympics
Education and skill Daudnagar, Bihar who lost her house and
development belongings on account of a natural fire • Sponsorship was given to “Sandeepon
Skill development: Jivika, a skill caused by the heat wave. Music and Educational Society (SMES)”
development initiative taken by Fusion which runs Samriddhi, an open school
Green cover dedicated to promote education, art and
in Bihar, Haryana & Madhya Pradesh to Fusion distributed saplings of medicinal
train and empower its clients to improve culture among underprivileged children.
plants like Neem, Tulsi, Jamun, etc to
Fusion received 92%

Score and C1 Grade
in Code of Conduct
Assessment (COCA).
The company was
regarded as an
excellent performer
with respect to
adherence to Code of
Conduct.

STATUTORY
REPORTS
Board’s Report 36
Management Discussion and Analysis 54
Corporate Governance Report 56
(All amounts in Indian rupees, except share data and where otherwise stated)
BOARD’S REPORT
Dear Members,
Your directors have pleasure in presenting to you the 24th Annual Report together with the audited accounts of the company
for the year ended March 31, 2018.
1.FINANCIAL & OPERATIONAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY

Particulars FY March 31, 2018 FY March 31, 2017
Income
Revenue from Operation 25,451.95 18,490.05
Other income 1,279.32 1,614.28
Total income 26,731.27 20,104.33
Expenditure
Employee Benefit Expense 6,610.08 4,831.85
Depreciation Expense 204.07 160.26
Finance Costs 13,660.24 9,743.86
Provision for Standard and Non- performing Assets 2,195.39 2,562.22
Other Expense 9,421.98 2,324.61
Total Expense 32,091.75 19,622.79
Profit before Prior Period Expenses (5,360.48) 481.53
Less: Prior Period Expenses (Net of Income) - -
Profit/(Loss)before tax (5,360.48) 481.53
Current Tax/Deferred Tax (1,419.14) 71.81
Loss/Profit After tax (3,941.35) 409.72
Operational performance for the fiscal year 2017-18 is summarized in the following table:
Year ended March 31 FY March 31 FY March 31 Increase over %

2018 2017 FY 2017
Number of Branches 359 249 44.18%
Number of Members 973,300 682,400 42.63%
Number of employees 3,202 2,191 46.14%
Number of States 14 12 16.67%
Amount Disbursed (INR In Crore) 1,670.58 830.84 101.07%
Portfolio Outstanding (INR In Crore) 1,495.53 771.16 93.93%

STATUTORY REPORTS BOARD’S REPORT
2. DIVIDEND of INR 903 Crore by way of short- which was 2,191 as on March 31,
Dividend on Equity Share Capital: term, long-term loans. 2017, through 359 Branches, across 14
The Directors have not recommended states and 194 districts in India. During
any dividend for the year under review. b) Secured / Unsecured / Market the year under review, the Company
Linked Debentures opened 110 new branches.
Dividend on Preference Share Capital: The company raised an amount of
Due to insufficient profits, the company INR 133 Crores by way of issuance The Company already has borrowing
is not recommending any dividend for of Secured Debentures, INR 30 arrangement with a large number of
the financial year 2017-18. Crores by issuing Unsecured lenders and have started association
Debentures and INR 25 Crores by with a few more institutions to diversify
3. TRANSFER TO RESERVES way of Market Linked Debentures its sources of borrowing.
Due to insufficient profit, in accordance during the Financial Year ended
with the provision of Section 45-IC of March 31, 2018. 8.CHANGE IN THE NATURE OF
the Reserve Bank of India Act 1934, BUSINESS, IF ANY
the Company has not transferred any c) Asset Securitization / Assignment There was no change in the nature of
amount to statutory reserve during the of receivables business during the year.
year. During the year, your Company
raised resources to the extent of INR 9. DIRECTORS
4. GRADING AND CREDIT RATING 225.46 Crore through securitization Changes in the composition of the
CARE has assigned Grading of MFI 2+ and assignment of receivables. Board of Directors
(second highest grading on the eight-
point scale) vide letter dated September 7. BRIEF DESCRIPTION OF THE • During the year Mr. Aditya Bhandari
01, 2017 and Rating of ‘BBB+ Stable’ COMPANY’S WORKING DURING has resigned from the post of
on the Long-Term Bank Facilities to THE YEAR/STATE OF COMPANY’S Nominee Director on December
the tune of INR 500 Cr and on Long AFFAIR 28, 2017 due to RIF North 2’s (RIF)
Term Instruments- NCD to the tune of The Company is registered with shareholding fallen below 10%
INR 85 crore. Company has also been Reserve Bank of India as Non- Deposit (minimum shareholding limit for
assigned rating of ‘BBB (stable)’ by accepting NBFC-MFI vide Registration directorship). In accordance with
ICRA on NCDs of outstanding amount No. B-14.02857 granted on January 28, this RIF had withdrawn its board
to INR 466 Crore. 2014. nomination.
• Ms. Anita Alcira Serrate Cortez has
5. CAPITAL ADEQUACY The Company attained business resigned from the post of Nominee
The Capital Adequacy Ratio (CRAR) of performance by reaching out to Director on January 09, 2018 due to
the company was 21.87% as on March 973,300 active loan clients as on March personal reasons.
31, 2018 as against the minimum 31, 2018. The active loan clients grew
capital adequacy requirements of 15% from 682,400 as on March 31, 2017 • Ms. Laetitia Counye was appointed
by RBI. to 973,300 as on March 31, 2018. The as an Additional Director (Nominee
growth in active loan clients during the Director on behalf of Belgian
6. RESOURCE MOBILIZATION year was more than 42.63%. Investment Company for Developing
a) Term Loan / Sub debt / Refinance Countries SA) in the Board Meeting
During the year under review, The above was possible with excellent held on February 08, 2018.
the Company has diversified its efforts of more than 3,202 employees
sources of funds and raised a sum of the Company as on March 31, 2018,
A brief detail on change in the directors is given below -

S.No. Name Designation Date of Appointment Date of cessation
1. Ms. Laetitia Counye Additional Director Feb 08, 2018 Not applicable
2. Ms. Anita Alcira Serrate Cortez Nominee Director Sep 29, 2015 Jan 09, 2018
3. Mr. Aditya Bhandari Nominee Director Aug 11, 2010 Dec 28, 2017
10. DECLARATION BY INDEPEND- of Independent Director envisaged in the board met 8 (Eight) times i.e.
ENT DIRECTOR(S) section 149 (6) of the Companies Act, on May 30, 2017, August 29, 2017,
The Company has received necessary 2013. November 15, 2017, December 21,
declarations of independence from 2017, December 30, 2017, January 22,
each of its Independent Directors under 11. NUMBER OF MEETINGS OF 2018, February 08, 2018 and March
section 149(7) of the Companies Act, THE BOARD 29, 2018. Further details related to the
2013, that he/she meets the criteria During the Financial Year 2017-18, Board Meetings are mentioned in the

Corporate Governance Report, which change in the nature of business of 13. EXTRACT OF ANNUAL RETURN
forms part of this report. the Company which have occurred In accordance with Section 134(3)(a)
subsequent to the close of the financial of the Companies Act, 2013, an extract
12. MATERIAL CHANGES AFTER year of the Company to which the of the annual return in the prescribed
THE BALANCE SHEET DATE balance sheet relates and the date of format is appended as “ANNEXURE 1”
(MARCH 31, 2018) the report. to the Board’s report.
During the year, there is no material
14. SHARE CAPITAL

RAISING OF FUNDS/ INFUSION OF EQUITY CAPITAL
A. ISSUE OF EQUITY SHARES
S.No. Date of Allotment Name of the allottee Category Number of equity shares
1 December 30, 2017 Devesh Sachdev, Director & CEO Indian *10,99,295
2 December 30, 2017 Creation Investments Fusion, LLC Foreign Investor 50,41,716
Oikocredit, Ecumenical Development
3 February 08, 2018 Foreign Investor 15,45,455
Cooperative Society
4 February 08, 2018 Global Financial Inclusion Fund Foreign Investor 2,09,091
*The Company has issued partly paid shares at which Re. 1 per share paid up on issuance.
B. NON CONVERTIBLE DEBENTURES

In the last FY, company has issued Non-convertible Debentures on private placement basis aggregating to INR 188.00
crore. Details of the Non-Convertible Debentures issued to the allottees in respective meetings are mentioned below:
S. No Date of allotment Name of Allottees No. of NCD Price per NCD (INR) Status
1 July 07, 2017 Incofin CPP 310 1,000,000 Listed
2 September 04, 2017 Hinduja Leyland Finance 200 1,000,000 Listed
3 March 06, 2018 IFMR Fimpact Income Builder Fund 250 1,000,000 Listed
4 March 15, 2018 AAV SARL 190 1,000,000 Unlisted
5 March 16, 2018 Troidos Microfinance Fund 315 1,000,000 Unlisted
6 March 16, 2018 Triodos Fair Share Fund 315 1,000,000 Unlisted
7 March 31, 2018 Northern Arc Capital Limited 300 1,000,000 Listed
15.REDEMPTION OF NON-CONVERTIBLE DEBENTURES (NCDs) DURING THE FY 2017-18
Date on which
Date of No. of Amount Redemption Detail of
S.No Particulars Debentures are
allotment NCD (in million) Amount redemption
Redeemed
Hinduja Leyland Finance
1 June 24, 2015 80 80 80,000,000 June 23, 2017 Fully
Limited (CBO-VIII)
Hinduja Leyland Finance September 04,
2 200 200 3,33,33,200 February 28, 2018 Partially
Limited 2017
16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, the Company did not enter into any transactions that cover under related party as specified
in sub-section (1) of section 188 of the Companies Act, 2013.The details in the Form AOC-2 is attached as “ANNEXURE 2”.

17. ISSUE OF SHARES UNDER EMPLOYEE STOCK OPTION SCHEME

The Company has a stock option plan under ESOP Scheme 2014 and 2016 for its employees. As on March 31, 2018, the
following stock option grants were in operation:
PARTICULARS Details
Number of options granted during the year 330,540
Number of options vested during the year 206,117
Number of options exercised during the year 19,928
Total number of shares arising out as a result of exercise of option during the year 19,928
Options lapsed during the year -
Exercise price 20.55/27.08/37.99/64.08
Variation in terms of options -
Money realized by exercise of options 409,521
Total number of options in force 891,618

The options shall vest on graded basis as follows.
On completion of 1 year 25%
On completion of 2 years 25%

EMPLOYEE WISE DETAIL OF THE OPTIONS GRANTED TO:–
• TO KEY MANAGERIAL PERSONNEL DURING THE YEAR

Name of Key Managerial Personnel Designation Options granted Exercise Price
Mr. Deepak Madaan (FY 2017-18) Company Secretary 15,010 64.08
• ANY EMPLOYEE WHO RECEIVES A GRANT OF OPTION IN ANY ONE YEAR OF OPTION AMOUNTING TO 5% OR MORE OF
OPTIONS GRANTED DURING THAT YEAR
IN THE FINANCIAL YEAR 2015-16

Name of the Employee No. of Options granted
Mr. Gourav Sirohi 43,000
Mr. Md. Hossain 38,000
Mr. Himanshu Dutt 28,000
Mr. Sandeep Kumar Sharma 28,000
Mr. Deepak Madaan 41,000
Mr. Ankush Ahluwalia 72,970
Mr. Satish Mani 67,570
Mr. Praveen Kumar 36,530
Mr. Gaurav Maheshwari 70,270
Mr. Tarun Mehndiratta 100,000
Mr. Rohit Dhiman 29,100
Mr. Himanshu Jain 28,800
• EMPLOYEES WHO WERE GRANTED OPTIONS DURING ANY ONE YEAR, EQUAL TO OR EXCEEDING 1% OF THE ISSUED
CAPITAL (EXCLUDING OUTSTANDING WARRANTS AND CONVERSIONS) OF THE COMPANY AT THE TIME OF GRANT: NIL

18. DIRECTORS’ RESPONSIBILITY held on September 29, 2015 as Since the Company does not own any
STATEMENT Statutory Auditors of the Company manufacturing facility, the particulars
Pursuant to Section 134(3)(c) of the to hold office for a term of five years relating to conservation of energy
Companies Act 2013, the Directors of until the conclusion of the Annual and technology absorption are not
the Company hereby state and confirm General Meeting to be held in 2020, applicable.
that: subject to the ratification of such
appointment by the shareholders of The Foreign Exchange earnings and
a. In the preparation of the annual the Company at every consecutive outgo
financial statements for the Annual General Meeting. The
year ended March 31, 2018, the Auditors have confirmed their The Company neither had any foreign
applicable accounting standards eligibility for appointment in the exchange earnings nor any such outgo
have been followed along with financial year 2018-19, if their during the year under review.
proper explanations relating to appointment is ratified in the
material departures, if any; ensuing Annual General Meeting. 22. DETAILS OF SIGNIFICANT AND
MATERIAL ORDERS PASSED BY
b. The directors had selected such Your Directors recommend the THE REGULATORS OR COURTS
accounting policies and applied ratification of the appointment
OR TRIBUNALS IMPACTING THE
them consistently and made of M/s B S R & Associates LLP,
Chartered Accountants as the
GOING CONCERN STATUS AND
judgments and estimates that
Statutory Auditors of the Company COMPANY’S OPERATIONS IN
are reasonable and prudent so as
to give a true and fair view of the for the financial year 2018-19. FUTURE
state of affairs of the company at During the year under review, no
the end of the financial year and of II. Secretarial Auditor: significant and material orders were
the profits of the company for that Mr. Alok Chandra, Practicing passed by the regulators, courts
period; Company Secretary (FCS No. 7970 or tribunals against the Company,
and Certificate of Practice No. 8976) impacting its going concern status or
c. The Directors had taken proper and was appointed as the Secretarial its future operations.
sufficient care for the maintenance Auditor of the Company to conduct
of adequate accounting records in Secretarial Audit of the Company 23. COMMITTEES DETAILS
accordance with the provisions of for the Financial Year 2017-18 as The Company has 8 committees which
this Act for safeguarding the assets required under Section 204 of the govern and oversee different areas of
of the company and for preventing Companies Act, 2013 and the Rules the Company’s operations ensuring
and detecting fraud and other made there under. Secretarial Audit regular guidance and monitoring.
irregularities; Report for FY 2017-18 is attached
as “Annexure 3”. For further details please refer to
d. The Directors had prepared the Corporate Governance Report, which
annual accounts on a going 20. EXPLANATIONS OR COM- form the part of Directors’ Report.
concern basis; MENTS BY THE BOARD ON EVERY
QUALIFICATION, RESERVATION OR 24. INTERNAL FINANCIAL CON-
e. The directors had laid down internal ADVERSE REMARK OR DISCLAIM- TROLS
financial controls to be followed by In pursuant to the Section 134(5)
ER MADE -
the company, and that such internal (e) of the Companies Act, 2013, The
I. Statutory Auditor’s report /
financial controls are adequate and Company has adequate internal
Secretarial Report
were operating effectively. controls and processes in place with
The report from both the auditors
respect to its operations, which provide
contains no qualification/
f. The Directors had devised proper reasonable assurance regarding the
reservations in the said report, on
systems to ensure compliance reliability of the preparation of financial
the annual financial statements for
with the provisions of all applicable statements and financial reporting as
the financial year 2017-18.
laws and that such systems were also functioning of other operations.
adequate and operating effectively. The Company is following an effective
21. CONSERVATION OF ENERGY & internal control system commensurate
TECHNOLOGY ABSORPTION AND with its size and operations. These
19.AUDITORS
I. Statutory Auditors: FOREIGN EXCHANGE EARNINGS AND controls and processes are driven
The Statutory Auditors of the OUTGO IN THE MANNER AS PRE- through various policies and
Company, M/s. B S R & Associates SCRIBED IN RULE 8(3) OF THE COM- procedures. In addition to this the work
LLP, Chartered Accounts, Hyderabad PANIES (ACCOUNTS) RULES, 2014 process is designed in such a way that
(vide Registration No.: 116231W), Conservation of energy and technology process of internal check is ensured at
were appointed in the Annual absorption all levels.
General Meeting of the Company

It also ensures the adoption of all 29. ANNUAL PERFORMANCE to various risk parameters. The
policies & procedures for orderly and EVALUATION BY THE BOARD Company’s Risk Management strategy
efficient conduct of its business, A formal evaluation of the performance is based on clear understanding
including adherence to the Company’s of the Board, the Chairman and the of various risks, disciplined risk
Policy, the safeguarding of its assets, individual Directors was carried out assessment and continuous
prevention and detection of fraud & for the financial year 2017-18 led monitoring. The Risk Management
error, the accuracy & completeness by the Nomination & Remuneration Committee reviews various risks with
of the accounting records and the Committee. The evaluation was done which the organization is exposed
timely preparation of reliable financial using individual questionnaires. As including Credit Risk, Interest Rate Risk,
information. part of the evaluation process, the Liquidity Risk and Operational Risk.
performance evaluation of Board as The development and implementation
25.RELATED PARTY TRANSAC- a whole was done by the Directors of of risk management policy has been
TIONS the Board. The performance evaluation covered in the Management Discussion
All transactions entered into with of the Promoter Director, Nominee and Analysis in “ANNEXURE 4”, which
related parties as defined in the Directors and Non-Independent is a part of this report.
Companies Act 2013 during the year directors was done by the every other
under review were in the ordinary Director. The performance evaluation of 33. CORPORATE GOVERNANCE
course of business and at an arm’s the Independent Directors was done by Corporate Governance is about
length pricing basis and do not attract the Board excluding the Director being commitment to values and about
the provisions of Section 188 of the evaluated. The Directors expressed ethical business conduct. It stems
Companies Act 2013. satisfaction with the evaluation from the culture and mindset of a
process. management. Measures of Corporate
Details of the related party transactions, Governance emanate not only
which are exempted according to a 30. DETAILS OF ESTABLISHMENT from Regulation, but also because
proviso to Section 188 of the under OF VIGIL MECHANISM FOR managements now clearly understand
the Companies Act 2013, during the DIRECTORS AND EMPLOYEES that good and transparent governance
Financial Year 2017-18 are disclosed Your Company has an effective Vigil is the cornerstone on which lasting
in the financial statements. Mechanism system which is embedded values can be created. Your company
in its Code of Conduct. The Code of strives for excellence with the objective
The policy on Related Party Conduct of your Company serves as a of enhancing shareholders’ value and
Transactions, as approved by the guide for daily business interactions, protecting the interest of stakeholders.
Board, is displayed on the website of the reflecting your Company’s standard At Fusion, we ensure the practice
Company i.e. www.fusionmicrofinance. for appropriate behavior and living of the Principles of Good Corporate
com Corporate Values. The Code of Conduct Governance on which management
applies to all Fusion’s People, including decisions are based on a set of
26. DEPOSITS Directors, Officers, and all employees principles influenced by the values.
The company had not accepted any of the Company.
public deposits during the year within All functions of the Company are
the meaning of Non-Banking Financial discharged in a professionally sound,
31. SEXUAL HARASSMENT
Companies Acceptance of Public competent and transparent manner.
The Company is in compliance with
Deposits (Reserve Bank) Directions the Sexual Harassment of Women at
1998. A detailed report on the Company’s
Workplace (Prevention, Prohibition
commitment at adopting good
and Redressal) Act, 2013 and has
27. DETAILS OF SUBSIDIARY/ Corporate Governance Practices is
a Prevention of Sexual Harassment
enclosed as “ANNEXURE 5”.
JOINT VENTURES/ASSOCIATE Policy in place. All the employees of the
COMPANIES company are covered under this policy.
The Company does not have any No complaints were received during 34. CORPORATE SOCIAL RESPON-
subsidiary or associate, nor has the financial year 2017-18. SIBILITY
entered into any joint venture with any Your Company has always responded
organization. 32. RISK MANAGEMENT in a responsible manner to the growing
The Board of Directors of the Company needs of the communities in which
it operates. Your Company believes
28. PARTICULARS OF LOANS, has formed a board risk management
committee to frame, implement, and in making lasting impact towards
GUARANTEES OR INVESTMENTS creating a just, equitable, humane and
During the year under review the monitor the risk management plan
for the Company. The committee sustainable society.
company has not given any loan
or guarantee to any person or any is responsible for reviewing the
risk management plan, ensuring its During the year, your Company has,
other body corporate u/s 186 of the
effectiveness and verifying adherence in consonance with the CSR policy of
Companies Act, 2013.
the Company, undertaken a number of

initiatives that contribute to society at 35. MANAGERIAL REMUNERATION to express their deep and sincere
large, in the areas of health, education, Details of the remuneration as required gratitude to the Borrowers, Banks,
environment and also focused on to be provided pursuant to Section Financial Institutions, Investors,
the Government of India “Swachh 197(12) of Companies Act, 2013 and Employees for their continued
Bharat Abhiyan”. Major activities in read with Rule 5 of the Companies assistance, support, confidence and
which contribution were made by the (Appointment and Remuneration of patronage, as well as to the Reserve
company in the FY 2017-18 are as Managerial personnel) Rules, 2014 is Bank of India, the Government of India
follows: annexed as “ANNEXURE 7”. and Regulatory Authorities for their
cooperation, support and guidance.
• Digital Literacy Programs 36. RBI GUIDELINES
• Health Camps The Company is registered with the
Reserve Bank of India as a NBFC within For and on behalf of the Board of
• Construction of Toilet
the provisions of the NBFC (Reserve Directors
• Sapling distribution and Planta- Bank of India) Directions, 1998.
tion Program The Company continues to comply
• Skill Development programs with all the requirements prescribed by Sd/- Sd/-
• Support for Flood & Fire Victims the Reserve Bank of India as applicable Devesh Sachdev Pradip Kumar Saha
to it. (Director & CEO) (Director)
DIN: 02547111 DIN: 02947368
The initiatives undertaken by the
Company on CSR activities are 37. LISTING
During the year, the company has issued Place: New Delhi
mentioned in “ANNEXURE 6” of the
Non-Convertible Debentures, out of Dated: May 24, 2018
Board’s Report in the format prescribed
in the Companies (Corporate Social which some debentures were listed on
Responsibility Policy) Rules, 2014. Bombay Stock Exchange. The listing fees
to the Stock Exchange for the financial
A brief outline of the company’s CSR year 2018-19 has been duly paid.
policy is disclosed on our website at
http://www.fusionmicrofinance.com/ ACKNOWLEDGEMENTS
pdf/Fusion_CSR_Policy.pdf Your Directors take this opportunity

Annexure 1
FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN
as on financial year ended on 31.03.2018
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company
(Management & Administration )Rules, 2014.
I REGISTRATION & OTHER DETAILS:

i CIN U65100DL1994PTC061287
ii Registration Date Monday, September 05, 1994
iii Name of the Company Fusion Micro Finance Private Limited
iv Category/Sub-category of the Company Private Company NBFC-MFI
“Address of the Registered office H-1, C-Block, Community Centre, Naraina Vihar, New
v
& contact details” Delhi-110028
Yes,the Non Convertible Debentures of the company
vi Whether listed company are listed.However Equity shares of the company were
not listed as on March 31, 2018
Link Intime India Private Limited
C-13, Pannalal Silk Mills Compound, LBS Marg,
Bhandup (West), Mumbai - 400 078.
Name , Address & contact details of the Registrar &
vii Tel. No.: +91 22 2594 6970;
Transfer Agent, if any.
Fax No.: +91 22 2594 6969
E-mail:[email protected]
Website: www.linkintime.co.in
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated
NIC Code of the % to total turnover of

SL No Name & Description of main products/services
Product /service the company
1 Microfinance and related activities 64990 100.00%
III PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES

Name & Address of the HOLDING/ % OF APPLICABLE
Sl No CIN/GLN
Company SUBSIDIARY/ ASSOCIATE SHARES HELD SECTION
1 NA NA NA NA NA

IV . SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity)

(i)
No. of Shares held at the beginning of the No. of Shares held at the end of the
% change
Category of year [As on 31-March-2017] year[As on 31-March-2018]
during
Shareholders % of Total % of Total
Demat Physical Total Demat Physical Total the year
Shares Shares
A. Promoters
(1) Indian
a) Individual/HUF - 2,104,742 2,104,742 5.98% 3,004,037 3,004,037 6.97% 0.99%
b) Central Govt.or
- - - - - - - - -
State Govt."
c) Bodies
- - - - - - - - -
Corporates
d) Bank/FI - - - - - - - - -
e) Any other - - - - - - - - -
SUB TOTAL:(A) (1) - 2,104,742 2,104,742 5.98% 3,004,037 - 3,004,037 6.97% 0.99%
(2) Foreign
a) NRI- Individuals - - - - - - - - -
b) Other Individuals - - - - - - - - -
c) Bodies Corp. - - - - - - - - -
d) Banks/FI - - - - - - - - -
e) Any other… - - - - - - - - -
SUB TOTAL (A) (2) - - - 0.00% - - - 0.00% 0.00%
Total Shareholding
of Promoter 0 2,104,742 2,104,742 5.98% 3,004,037 3,004,037 6.97% 0.99%
(A)= (A)(1)+(A)(2)"
B. PUBLIC SHAREHOLDING
(1) Institutions
a) Mutual Funds - - - - - - - - -
b) Banks/FI - - - - - - - - -
C) Cenntral govt - - - - - - - - -
d) State Govt. - - - - - - - - -
e) Venture Capital
- - - - - - - - -
Fund
f) Insurance
- - - - - - - - -
Companies
g) FIIS - - - - - - - - -
h) Foreign Venture
- - - - - - - - -
Capital Funds"
i) Others (specify) - - - - - - - - -
SUB TOTAL (B)(1): 0 0 0 0.00% 0 0 0 0.00% 0.00%
(2) Non Institutions
a) Bodies
- - - - - - - - -
corporates
i) Indian - - - - - - - - -

No. of Shares held at the beginning of the No. of Shares held at the end of the
year [As on 31-March-2017] year[As on 31-March-2018] % change
Category of
during
Shareholders % of Total % of Total the year
Demat Physical Total Demat Physical Total
Shares Shares
ii) Overseas 13,546,635 18,374,598 31,921,233 90.75% 19,001,181 20,129,144 39,130,325 90.85% 0.10%
b) Individuals - - - - - - - - -
i) Individual
shareholders
holding nominal - - - - - - - - -
share capital upto
D1 lakhs
ii) Individuals
shareholders
holding nominal 212,830 - 212,830 0.61% - - - - -
share capital in
excess of D1lakhs
c) Others
- 935,912 935,912 2.66% - 935,912 935,912 2.18% -0.48%
(Employees/ Trust)
SUB TOTAL (B)(2): 13,759,465 19,310,510 33,069,975 94.02% 19,001,181 21,065,056 40,066,237 93.03% -0.99%
Total Public
Shareholding 13,759,465 19,310,510 33,069,975 94.02% 19,001,181 21,065,056 40,066,237 93.03% -0.99%
(B)= (B)(1)+(B)(2)
C. Shares held by
Custodian for - - - - - - - - -
GDRs & ADRs
Grand Total (A+B+C) 1,37,59,465 21,415,252 3,51,74,717 100.00% 22,005,218 21,065,056 43,070,274 100.00% -
(ii) SHAREHOLDING OF PROMOTERS

SL Shareholders Shareholding at the Shareholding at the % change
No Name begginning of the year April 01, 2017 end of the year March 31, 2018 in share
% of shares % of total % of shares holding
No of % of total shares pledged No of shares pledged during the
shares of the company encumbered shares of the encumbered to year
to total shares company total shares
1 Devesh Sachdev 1,804,742 5.13% - 2,704,037 6.28% - 1.15%
2 Mini Sachdev 300,000 0.85% - 300,000 0.70% - -0.15%
Total 2,104,742 5.98% - 3,004,037 6.98% - 1.00%
(iii) CHANGE IN PROMOTERS’ SHAREHOLDING ( SPECIFY IF THERE IS NO CHANGE)

CHANGE IN
SL
PROMOTERS’ Share holding at the beginning of the Year Cumulative Share holding during the year
No
SHAREHOLDING
% of total shares of % of total shares of
No. of Shares No of shares
the company the company
DEVESH SACHDEV
At the beginning of the
1,804,742 5.13% 1,804,742 5.13%
year
Transfer on 30/12/2017 -200,000 -1.40% 1,604,742 3.73%
Allotment on 30/12/2017 1,099,295 2.55% 2,704,037 6.28%
At the end of the year 2,704,037 6.28% 2,704,037 6.28%

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of GDRs & ADRs)
Date wise increase/

decrease in Share
No. of Shares held
holding during the year
at the beginning Shareholding at the end of Cumulative Shareholding during
specifying the reasons
of the year [As on the year the year
for increase/decrease
31-March-2017]
(e.g. allotment/transfer/
Sl. bonus/sweat equity etc)
No. No.of shares
at the
% of total
For Each of the Top 10 beginning % of total Increase/
No. of shares
Shareholders of the year shares of the Date Decrease in Reason
Shares of the
(01/04/2016)/ company Shareholding
company
end of the year
31/03/2017
CREATION
1 INVESTMENTS 9,866,497 28.05% 01.04.2017 -
FUSION LLC
shares
30.12.2017 200,000 10,066,497 23.37%
purchased
shares
30.12.2017 212,830 10,279,327 23.87%
purchased
30.12.2017 5,041,716 Allotment 15,321,043 35.57%
15,321,043 35.57% 31.03.2018
OIKOCREDIT
ECUMENICAL
2 DEVELOPMENT 5,060,920 14.38% 01.04.2017 -
COOPERATIVE
SOCIETY U.A
08.02.2018 1,545,455 Allotment 6,606,375 15.34%
6,606,375 15.34% 31.03.2018
BELGIAN
INVESTMENT
3 COMPANY FOR 5,134,920 14.60% 01.04.2017
DEVELOPING
COUNTRIES SA
5,134,920 11.92% 31.03.2018 5,134,920 11.92%
4 NMI FRONTIER FUND 4,848,758 25.34% 01.04.2017
4,848,758 11.26% 31.03.2018 4,848,758 11.26%
RIF NORTH 2
5 3,680,138 10.46% 01.04.2017
(INCOFIN)
3,680,138 8.54% 31.03.2018 8.54%
GLOBAL FINANCIAL
6 3,330,000 9.47% 01.04.2017
INCLUSION FUND
08.02.2018 209,091 Allotment 3,539,091 8.22%
3,539,091 8.22% 31.03.2018 8.22%
FUSION EMPLOYEE
7 918,162 2.61% 01.04.2017
BENEFIT TRUST
transfer to
30.05.2017 -19,928 898,234 2.09%
Employee
898,234 2.09% 31.03.2018 2.09%
8 RAHUL JAIN 0 0.00% 01.04.2017
shares
exercised
30.05.2017 19,928 19,928 0.05%
by
Employee
19,928 0.05% 31.03.2018 0.05%
9 GOURAV SIROHI 10,750 0.03% 01.04.2017
10,750 0.03% 31.03.2018 0.03%
SANDEEP KUMAR
10 7,000 0.02% 01.04.2017
SHARMA
7,000 0.02% 31.03.2018 0.02%

(v) Shareholding of Directors & KMP

Shareholding at the Shareholding at the
% change
begginning of the year end of the year
in share
For Each of the Directors % of shares % of shares
Sl. % of total holding
& KMP pledged pledged
No. No of % of total shares No of shares during the
encumbered encumbered
shares of the company shares of the year
to total to total
company
shares" shares"
1 Devesh Sachdev 1,804,742 5.13% - 2,704,037 6.28% - 1.15%
2 *Aditya Bhandari - - - - - - -
3 Nitin Gupta - - - - - - -
4 Njord Andrewes - - - - - -
5 Pradip Kumar Saha - - - - - - -
*Anita Alcira Serrate
6 - - - - - - -
Cortez
7 Albert Hofsink - - - - - - -
8 Javed Ahmad Siddiqui - - - - - - -
Kenneth Dan Vander
9 - - - - - - -
Weele
Laetita Counye - - - - - - -
10 Deepak Madaan - - - - - - -
11 Gaurav Maheshwari - - - - - - -
* Mr. Aditya Bhandari & Ms. Anita Alcira Serrate Cortez resigned w.e.f December 28, 2017 and January 09, 2018 respectively.
** Ms. Laetitia Counye was appointed w.e.f February 08, 2018.
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
Secured Loans Unsecured Total
Deposits
excluding deposits Loans Indebtedness
Indebtness at the beginning of the
financial year
i) Principal Amount 8,707,580,861 673,450,000 - 9,381,030,861
ii) Interest due but not paid - - -
iii) Interest accrued but not due 131,294,764 3,932,010 - 131,294,764
Total (i+ii+iii) 8,838,875,625 677,382,010 9,516,257,635
Change in Indebtedness during the

financial year
Additions 8,840,000,000 1,760,000,000 - 10,600,000,000
Reduction 3,150,920,497 763,450,333 - 3,914,370,830
Net Change 11,990,920,497 2,373,450,000 - 14,364,370,497
Indebtedness at the end of the financial
year
i) Principal Amount 14,377,975,834 1,670,000,000 - 16,047,975,834
ii) Interest due but not paid - 0
iii) Interest accrued but not due 152,236,680 4,446,812 - 156,683,492
Total (i+ii+iii) 14,377,975,834 1,670,000,000 16,047,975,834

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole time director and/or Manager:
Mr. Devesh Sachdev DIN- 02547111
Sl.No Particulars of Remuneration Total Amount
(Director & CEO)
1 Gross salary
(a) Salary as per provisions contained in section 17(1)
6,912,853 6,912,853
of the Income Tax. 1961.
(b) Value of perquisites u/s 17(2) of the Income tax Act,
- -
1961
(c ) Profits in lieu of salary under section 17(3) of the
- -
Income Tax Act, 1961
2 Stock option -
3 Sweat Equity - -
4 Commission - -
as % of profit - -
others (Bonus) -
5 Others, please specify - -
Total (A)
Ceiling as per the Act
B. Remuneration to other directors:

Mr. Njord Andrewes
**Ms. Laetitia Counye

Mr. Pradip Kumar Saha
*Mr. Aditya Bhandari
Mr. Albert Hofsink
Mr. Javed Ahmad

*Ms. Anita Alcira
Mr. Kenneth Dan

DIN- 02422809
DIN- 02947368
DIN- 06520457
DIN- 03062463
Mr. Nitin Gupta

DIN-03316274
DIN-07216795
DIN-02545813
Serrate Cortez
DIN-06990144
Remuneration
Siddiqui DIN-
Vander Weele
Particulars of
07288484
TOTAL
Sl.No
1 Independent Directors
(a) Fee for attending
board committee 420,000 - - 390,000 - - - - - 810,000
meetings
(b) Commission - - - - - - - - -
(c ) Others, please
- - - - - - - - -
specify
Total (1) 420,000 - - 390,000 - - - - - 810,000
2 Other Non Executive Directors
(a) Fee for attending
board committee - - - - - - - - -
meetings
(b) Commission - - - - - - - - -
(c ) Others, please
- - - - - - - - -
specify.
Total (2) - - - - - - - - -
Total (B)=(1+2) - - - - - - - - -
Total Managerial
420,000 - - 390,000 - - - - - 810,000
Remuneration
Overall Cieling as per
- - - - - - - - -
the Act
* Mr. Aditya Bhandari & Ms. Anita Alcira Serrate Cortez resigned w.e.f December 28, 2017 and January 09, 2018 respectively.
** Ms. Laetitia Counye was appointed w.e.f February 08, 2018.

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
Sl.No Particulars of Remuneration Key Managerial Personnel
*Mr. Deepak Madaan Total

Mr. Gaurav
1 Gross Salary Company
Maheshwari CFO
Secretary
(a) Salary as per provisions contained in
997,672 2,636,688 3,634,360
section 17(1) of the Income Tax Act, 1961.
(b) Value of perquisites u/s 17(2) of the
Income Tax Act, 1961
(c ) Profits in lieu of salary under section 17(3)
of the Income Tax Act, 1961
2 *Stock Option
3 Sweat Equity
4 Commission
as % of profit
others, specify
5 Others, please specify
Total 997,672 2,636,688 3,634,360
*During the Year 2017-18, 15,010 stock options were granted under ESOP Scheme 2016 to Company Secretary
VII PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES

Section Details of Penalty/
of the Punishment/ Authority (RD/ Appeal made if
Type Brief Description
Companies Compounding fees NCLT/Court) any (give details)
Act imposed
A. COMPANY
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. DIRECTORS
Penalty - - - - -
C. OTHER OFFICERS IN DEFAULT

Penalty - - - - -
For and on behalf of the Board of Directors

Devesh Sachdev Pradip Kumar Saha
(Director & CEO) (Director)
DIN: 02547111 DIN: 02947368
Place: New Delhi

Dated: May 24, 2018

Annexure 2
FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to
in sub section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transaction under third proviso
thereto during the FY 2017-18.
1. Details of contracts or arrangements or transactions not at Arm’s length basis during the FY 2017-18.

SL. No. Particulars Details
a) Name (s) of the related party & nature of relationship 0
b) Nature of contracts/arrangements/transaction 0
c) Duration of the contracts/arrangements/transaction 0
Salient terms of the contracts or arrangements or transaction including the
d) 0
value, if any
e) Justification for entering into such contracts or arrangements or transactions’ 0
f) Date of approval by the Board 0
g) Amount paid as advances, if any 0
Date on which the special resolution was passed in General meeting as
h) 0
required under first proviso to section 188
2. Details of contracts or arrangements or transactions at Arm’s length basis during the FY 2017-18

SL. No. Particulars Details
a) Name (s) of the related party & nature of relationship 0
b) Nature of contracts/arrangements/transaction 0
c) Duration of the contracts/arrangements/transaction 0
Salient terms of the contracts or arrangements or transaction including the
d) 0
value, if any
e) Justification for entering into such contracts or arrangements or transactions’ 0
f) Date of approval by the Board 0
g) Amount paid as advances, if any 0
Date on which the special resolution was passed in General meeting as
h) 0
required under first proviso to section 188

DIN: 02547111 DIN: 02947368
Place: New Delhi

Dated: May 24, 2018

Annexure 3
SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2018
To,
The Members,
Fusion Micro Finance Private Limited
H-1, C Block, Community Centre, Naraina Vihar
New Delhi-110028
(a) The Securities and Exchange Board of India

I have conducted the secretarial audit of the compliance
(Substantial Acquisition of Shares and Takeovers)
of applicable statutory provisions and adherence to good
Regulations, 2011; Not Applicable
corporate practices by Fusion Micro Finance Private Limited
(hereinafter called the ‘Company’). Secretarial Audit was (b) The Securities and Exchange Board of India
conducted in a manner that provided me a reasonable basis (Prohibition of Insider Trading) Regulations, 1992;
for evaluating the corporate conducts/statutory compliances Not Applicable
and expressing my opinion thereon.
(c) The Securities and Exchange Board of India
Based on my verification of the Company’s books, papers, (Issue of Capital and Disclosure Requirements)
minute books, forms and returns filed and other records Regulations, 2009; Not Applicable
maintained by the Company and also the information
d) The Securities and Exchange Board of India
provided by the Company, its officers SECRETARIAL,
(Employee Stock Option Scheme and Employee
agents and authorized representatives during the conduct
Stock Purchase Scheme) Guidelines, 1999; Not
of secretarial audit, I hereby report that in my opinion, the
Applicable
Company has, during the audit period covering the financial
year ended on March 31 , 2018 (‘Audit Period’) complied (e) The Securities and Exchange Board of India (Issue
with the statutory provisions listed hereunder and also that and Listing of Debt Securities) Regulations, 2008;
the Company has proper Board-processes and compliance-
mechanism in place to the extent, in the manner and subject (f) The Securities and Exchange Board of India
to the reporting made hereinafter: (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 regarding the Companies Act and
I have examined the books, papers, minute books, forms and dealing with client;
returns filed and other records maintained by the Company
for the financial year ended on March 31, 2018 according to (g) The Securities and Exchange Board of India (Delisting
the provisions of: of Equity Shares) Regulations, 2009; Not Applicable
and
(i) The Companies Act, 2013 (the Act) and the rules made
thereunder; (h) The Securities and Exchange Board of India (Buyback
of Securities) Regulations, 1998;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’)
and the rules made thereunder; (vi) Other laws applicable specifically to the Company
namely:
(iii) The Depositories Act, 1996 and the Regulations and Bye-
laws framed thereunder; The provisions relating to non-banking companies under the
Reserve Bank of India Act, 1934 and policies and directions
(iv) Foreign Exchange Management Act, 1999 and the rules issued by the Reserve Bank of India.
and regulations made thereunder to the extent of Foreign
Direct Investment, Overseas Direct Investment and I have also examined compliance with the applicable clauses
External Commercial Borrowings; of the following:
(v) The following Regulations and Guidelines prescribed (i) Secretarial Standards issued by The Institute of Company
under the Securities and Exchange Board of India Act, Secretaries of India
1992 (‘SEBI Act’):-

(ii) The Listing Agreements entered into by the Company (ii) Issue and allotment of 310 (Three Hundred Ten) rated
with Stock Exchange(s) listed Secured Redeemable Non-Convertible Debentures
of D1,000,000.00 each
During the period under review the Company has complied
with the provisions of the Act, Rules, Regulations, Guidelines (iii) Issue and allotment of 200 (Two Hundred) rated
etc. mentioned above. The Company has broadly complied Secured Redeemable Non-Convertible Debentures of
with the Secretarial Standards. D1,000,000.00 each
I further report, that the compliance by the Company of (iv) Issue and allotment of (a) 5,041,716 (Fifty Lakh Forty One
applicable financial laws, like direct and indirect tax laws, Thousand One Hundred and Thirty) fully paid up equity
has not been reviewed in this Audit since the same have shares having a face value of D10.00 (Rupees Ten only)
been subject to review by statutory financial audit and other at a premium of D100 (Rupees One Hundred only) and
designated professionals. (b) 1,099,295 (Ten Lakh Ninety Nine Lakh Twenty Five)
partly paid up equity shares having a face value of D10.00
I further report that the Board of Directors of the Company is
(Rupees Ten only) at a premium of D100 (Rupees One
duly constituted with proper balance of Executive Directors,
Hundred only) on preferential basis.
Non-Executive Directors and Independent Directors, however,
the Nomination and Remuneration Committee should (v) Issue and allotment of 1,754,546 (Seventeen Lakh Fifty
include one more independent director. The changes in the Four Thousand Five Hundred Forty Six) fully paid up
composition of the Board of Directors that took place during equity shares having a face value of D10.00 (Rupees Ten
the period under review were carried out in compliance with only) at a premium of D100 (Rupees One Hundred only)
the provisions of the Act. on preferential basis.
Adequate notice is given to all directors to schedule the (vi) Partial redemption of 200 Non-Convertible Debentures of
Board Meetings, agenda and detailed notes on agenda were D1,000,000.00 each for D3,33,33,200
sent at least seven days in advance except in case of urgent
(vii) Issue and allotment of 250 (Two hundred and Fifty only)
business, and a system exists for seeking and obtaining
Senior, Unsecured, Rated, Redeemable, Non-Convertible,
further information and clarifications on the agenda items
Principal Protected Market Linked Debentures of face
before the meeting and for meaningful participation at the
value of D10,00,000 each
meeting.
(viii) Issue and allotment of 190 Senior, Secured, Unlisted,
As per the minutes duly recorded and signed, the decisions
Rated, Redeemable, Taxable, Transferable Non-
of the Board were unanimous and no dissenting view was
Convertible Debentures of Face value of D10,00,000 each
found therein.
(ix) Issue and allotment of 630 (Six Hundred and Thirty) Rated,
I further report that there are adequate systems and
Unlisted, Senior, Taxable, Redeemable, Non-Convertible
processes in the company commensurate with the size and
Debentures with face value of D10,00,000 each
operations of the company to monitor and ensure compliance
with applicable laws, rules, regulations and guidelines. (x) Issue and allotment of 300 (Three Hundred) Rated Listed
Secured Redeemable Non-Convertible Debentures of
I further report that during the Audit Period the Company has
D1,000,000.00 each
following specific events / actions having a major bearing
on the Company’s affairs in pursuance of the above referred
laws, rules, regulations, guidelines, standards, etc. referred
to above: Place: Ghaziabad (ALOK CHANDRA SINGH)
Date: May 24, 2018 FCS No.7970, C.P.No.:8976
(i) Redemption of 80 Non-Convertible Debentures of
D1,000,000.00 each for D80,000,000.00.
Note: This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

To,
The Members,
Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express
an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct
facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable
basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and
regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility
of management. Our examination was limited to the verification of procedures on test basis.
6. The secretarial audit report is neither an assurance as to the future viability of the company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
Place: Ghaziabad (ALOK CHANDRA SINGH)

Date: May 24, 2018 FCS No.7970, C.P.No.:8976

Annexure 4
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDUSTRY STRUCTURE AND DEVELOPMENTS RISK AND CONCERNS

Company overview: The Board of Directors stands at the apex of the governance,
In a changing and often challenging operating environment, supporting the risk management framework. The Board
during the financial year 2017-18, the Company made good oversees the implementation of the Risk Management Plan
progress against its key strategic objectives during the principally through the Board Risk Management Committee
year. The Company continued to grow and diversify in new (BRMC).
geographies, invest on capacity building, building a strong
team and promoted to deal in cash less transactions. The The company being involved in business of lending is subject
company now has a strong team with more than 3000 to multiple risks i.e. Credit risk, Operational risk, Liquidity
members serving more than 1 million clients across 14 risk, and Regulatory risk. The Risk Management framework
states of India. of the company tends to reduce the risks which might result
in compromising the organizational strength.
FY 2017-18 for Fusion:
The portfolio of the company crossed INR 1500 crore during The Board of the company comprises of professional directors
the financial year 2017-18, also the Tier II Capital rated BBB+ with relevant experience who are well versed to understand
(Outlook: Stable), equivalent to Bank Loan Rating. the risks specific to the company. The company has put in
adequate checks by complying with the regulations framed
There was a good financial performance of the company by RBI which are applicable on the company. It also has an
during FY 2017-18 despite considerable challenges posed effective risk management department which is bound to
by demonetization and transition. work in an effective manner in order to mitigate risks.
Company outreach: Whereas each department focuses on its specific area

The company, as on March 31, 2018 was operating in 14 of activity, the risk management department operates
States covering 194 districts with 359 branches across the in cooperation with all other departments, utilizing all
country. significant information sourced by the other departments in
order to manage risks.
Funding & Capital Raising:
The company is also regulated by Reserve Bank of India
The company has raised funds through various sources
which has stipulated certain regulations to be followed by
during the financial year 2017-18. Out of the total fund raise
each and every NBFC.
of INR 1091 Crore during the year, INR 188 Crore was raised
through issue of Non-Convertible Debentures. INR 225.46
Crore was raised through securitization. The Net worth of INTERNAL CONTROL SYSTEMS AND THEIR
the company as on March 31, 2018 stood at 257.70 Crore, ADEQUACY
the revenue being INR 267.31 Crore. The internal control systems of the company are designed to
ensure that all assets of the company are safeguarded and
OPPORTUNITIES AND THREATS protected against any loss and be in line with the nature of
The growth of the Company is subject to opportunities and its business and the size of operations.
threats as are applicable to the industry from time to time.
DISCUSSION ON FINANCIAL PERFORMANCE WITH
SEGMENT WISE OR PRODUCT WISE PERFORMANCE OPERATIONAL PERFORMANCE
The details of financial performance of the Company are There has been a significant rise in the operations of the
appearing in the Balance Sheet and Statement of Profit and company during the year. The company has diversified
Loss for the year ended March 31, 2018. its operations as on March 31, 2018 in 14 states with 359
branches in 194 districts.
OUTLOOK
The number of customers has also increased to 973,300
Roadmap for FY 2018-19
as compared to 682,400 in the previous year. This has
The focus of the company during the financial year 2018-
resulted in increase in the revenue of the company to INR
19 would be in finding new ways to connect with its clients,
267.31crore during the year 2017-18. Further details related
increasing focus on automation, Data analytics and learning
to the operational performance can be seen in the Director’s
& development.
Report of the company.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / their importance in the growth of the Company. There has
INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER been a significant increase in the number of branches of the
OF PEOPLE EMPLOYED company during the year which has resulted in increase in
the number of employees as on March 31, 2018 at 3,202 as
compared to 2,191 in the previous year.
Human Resource
The company is cognizant of the importance of human
The company also has a strong culture of celebrations. All
capital in a fast evolving and high growth industry like
occasions are celebrated with great zeal and excitement at
the one it operates in. It also strives hard to retain its
the branches.
experienced team rich in domain expertise as it recognizes

DIN: 02547111 DIN: 02947368
Place: New Delhi

Dated: May 24, 2018

Annexure 5
CORPORATE GOVERNANCE REPORT
COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE the Company’s constant endeavour to adopt the best
At Fusion, Corporate Governance is all about maintaining a Corporate Governance practices keeping in view the best
valuable relationship and trust with all stakeholders. codes of Corporate Governance and practices of well-known
companies.
Effective corporate governance practices constitute the
strong foundation on which successful organizations are A detailed report on the Company’s commitment at adopting
built to last. good Corporate Governance Practices is shared below - .
The Company, practices a trustworthy, transparent, moral BOARD OF DIRECTORS (“BOARD”):

and ethical conduct, both internally and externally, and is The Board’s actions and decisions are aligned with the
committed towards maintaining the highest standards Company’s best interests. It is committed to the goal
of Corporate Governance practices in the best interest of of sustainably elevating the Company’s value creation.
all its stakeholders. The company believes that the sound The Company has defined guidelines and an established
corporate governance is critical to enhance and retain the framework for the meetings of the Board and committees.
trust of investors. It also seek to ensure that its performance These guidelines seek to systematize the decision-making
is driven by integrity. process at the meetings of the Board and committees in an
informed and efficient manner.
Good governance practices stem from the dynamic
culture and positive mindset of the organization. We are COMPOSITION OF THE BOARD
committed to meet the aspirations of all our stakeholders. We believe that the Board needs to have an appropriate
This is demonstrated in governance processes and an composition of directors in order to maintain independence
entrepreneurial performance focused work environment. and separate its functions of governance and management.
As on March 31, 2018, the company has an optimum
We believe, Corporate Governance is not just a destination, composition of Executive, Non-Executive (Nominee
but a journey to constantly improve sustainable value Directors) and Independent Directors. Our Board comprised
creation. It is an upward-moving target that we collectively 8 members, headed by an Executive Director and designated
strive towards achieving. We strive to conduct our business as the CEO, and comprised seven other Directors, out of
and strengthen our relationships in a manner that is which five are Non-Executive Directors including one Woman
dignified, distinctive and responsible. We adhere to ethical Director and two Independent Directors. Four of our board
standards to ensure integrity, transparency, independence members are Indians, while other four are foreign nationals.
and accountability in dealing with all stakeholders. It is
The composition of the Board and category of each Director in the Company as at March 31, 2018, is as follows:
No of other Companies in
Name DIN Category Designation
which he/she is Director
Mr. Devesh Sachdev 02547111 Promoter & Executive Director & CEO 1
Independent
Mr. Nitin Gupta 03316274 Non-Executive 6
Director
Mr. Njord Andrewes 06520457 Non-Executive Nominee Director 2
*Ms. Laetitia Counye 06990144 Non-Executive Nominee Director -
Mr. Albert Hofsink 02422809 Non-Executive Nominee Director -
Independent
Mr. Pradip Kumar Saha 02947368 Non-Executive 1
Director
Mr. Javed Ahmad Siddiqui 07288484 Non-Executive Nominee Director 2
Mr. Kenneth Dan Vander
02545813 Non-Executive Nominee Director 3
Weele
*Ms. Laetitia Counye was appointed as an Additional Director (Nominee Director on behalf of Belgian Investment Company
for Developing Countries SA) with effect from February 08, 2018.

None of the Non-Executive Directors held any equity shares needs, as and when required. In case of urgency or business
or convertible instruments of the Company during the exigencies, matters are also approved by way of resolution by
financial year ended March 31, 2018. circulation as per the provisions of Companies Act, 2013, and
subsequently noted in the next Board meeting. The Company
Resignation during the FY 2017-18 circulates the agenda and related notes/ documents well in
1. Mr. Aditya Bhandari has resigned from the post of advance through its e-mail to the Board and its Committee
Nominee Director on December 28, 2017 due to RIF Members on their registered mail ids.
North 2 (RIF) shareholding fallen below 10% (minimum
shareholding limit for directorship). In accordance with The functional/business heads of the Company periodically
this RIF had withdrawn its board nomination. give presentations to the Board covering their respective
operations, performance, plans and strategies and
discuss upon the areas of improvement and prospective
opportunities.
2. Ms. Anita Alcira Serrate Cortez resigned from the post of
Nominee Director on January 09, 2018 due to personal
As a practice, the Company Secretary communicates
reasons.
all important decisions taken by the Board Members/
Committee Members to the functional head of the concerned
BOARD MEETINGS & ATTENDANCE departments. An Action Taken Report (ATR) on the decisions
The primary role of the Board is that of trusteeship to protect taken and matters discussed in the previous meeting is
and enhance shareholder value through strategic direction outlined and placed in the succeeding meeting of the Board/
to the Company. The Board has fiduciary responsibility Board Committee for their consideration/information and
to ensure that the Company has clear goals aligned to noting.
shareholder value and its growth. It sets strategic goals
and seeks accountability for their fulfillment. It also directs There are no inter-se relationships between the Board of
and exercises appropriate control to ensure that the Directors of the Company.
Company is managed in a manner that fulfills stakeholder’s
aspiration and societal expectations. In order to meet out During the Financial Year 2017-18, 8 Board Meeting were
the responsibilities, the Company holds four pre-scheduled held i.e. on May 30, 2017, August 29, 2017, November 15
Board meetings in every calendar year complying with the 2017, December 21, 2017, December 30, 2017, January 22,
provisions of Companies Act, 2013 and applicable Secretarial 2018, February 08, 2018 and March 29, 2018. The details
Standard for conduct of Board Meetings. Additional Board of the Board Meetings along with the attendance of each
Meetings are held by the Company to address specific Director at the respective Board Meeting is tabled below:
Attendance of Directors for the year ended March 31, 2018

Name Attendance at the Board Meetings
May 30, August November December December January February March 29,
2017 29, 2017 15, 2017 21, 2017 30, 2017 22, 2018 08, 2018 2018
Mr. Devesh Sachdev Present Present Present Present Present Present Present Present
*Mr. Aditya Bhandari Present Present Present Present ^^NA NA NA NA
Mr. Albert Hofsink Present Present Present Present Present LOA Present Present
**Ms. Anita Serrate Present Present LOA LOA LOA NA NA NA
Mr. Javed Ahmad
Present Present LOA Present Absent Present Present Present
Siddiqui
Mr. Nitin Gupta Present Present Present Present LOA Present Present Present
Mr. Njord Andrewes Present Present Present Present LOA Present Present Present
Mr. Pradip Kumar Saha Present Present Present Present Present LOA Present Present
Mr. Kenneth Dan Vander
AB Present Present Present Present Present Present Present
Weele
***Ms. Laetitia Counye NA NA NA NA NA NA NA LOA
NA=not applicable; LOA=leave of absence granted; P=present

* Mr. Aditya Bhandari resigned w.e.f. December 28, 2017.
** Ms. Anita Serrate resigned w.e.f January 09, 2018.
***Ms. Laetitia Counye appointed as Nominee Director w.e.f February 08, 2018.

COMMITTEES OF THE BOARD 1. AUDIT COMMITTEE
Under the aegis of the Board of Directors, several committees As a measure of good Corporate Governance and also to
have been constituted which have been delegated powers meet the statutory provisions of the NBFC Regulations and
for different functional areas. The Board has Eight(8) Companies Act, 2013, the audit committee is made with
Committees namely - Audit Committee, Asset & Liability the primary objective to monitor and provide an effective
Management Committee, CSR Committee, Remuneration supervision of the management’s financial reporting
& Nomination Committee, Working Committee, Board Risk process, to ensure accurate and timely disclosures, with
Management Committee & Debenture Allotment Committee, the highest levels of transparency, integrity and quality of
Information Technology Strategy Committee which assists financial reporting.
the Board to deal with specific areas / activities that need
a closer review and to have an appropriate structure in Majority of the members of the Committee are Independent
discharging its duties and responsibilities. Directors and every member has experience in the financial
sector. The Company Secretary acts as Secretary to this
The Committees of the Board meet at regular intervals and Committee.
have the requisite subject expertise to handle and resolve
matters expediently. The Board oversees the functioning of All the Members of the Audit Committee have the required
the Committees. The Chairman of the respective Committees qualification and expertise for appointment on the Committee
briefs the Board on significant discussions and decision and possess requisite knowledge of accounting and financial
taken at their respective meetings. Minutes of the Committee management.
Meetings are placed in the subsequent Board Meeting for
their noting. Composition
During the financial year ended March 31, 2018, the
The Company Secretary acts as a Secretary to all the committee met 4 times on 29 May 2017, 29 August 2017, 15
Committees of the Board. Detailed terms of reference, November 2017 and 08 February, 2018.
composition, meetings and other information of each of the
Committees of the Board are detailed herein below:
The followings are the members and their attendance at the Committee Meetings held during the financial year ended 31st
March, 2018.
Name of the Director Status Number of meetings

Held during tenure Attended
Mr. Pradip Kumar Saha Chairman 4 4
Mr. Nitin Gupta Member 4 4
Mr. Albert Hofsink Member 4 4
Terms of Reference of the Audit Committee is as follows: statements, such as the business review / operating and
financial review; and
A) Financial Reporting • All related party transactions.
The Committee shall review the following:
• The consistency of, and any changes to accounting B) Internal Audit
policies. The Committee shall review the following:
• The methods used to account for significant or unusual
• Monitor & review the effectiveness of the Company’s
transactions where different approaches are possible.
internal audit function in the context of the overall Risk
• Whether the company has followed appropriate Management System.
accounting standards and made appropriate estimates
• Approve the appointment & removal of internal auditor
and judgement, taking into account the views of the
external auditor. • Review and assess the annual internal audit plan.
• The clarity of disclosures in the company’s financial • Review reports from the internal auditor.
reports and the context in which statements are made.
• Review and monitor the findings & recommendations of
• All material information presented with the financial the internal auditor.

C) External Audit • Review the findings of the audit with external auditor.
The Committee shall review the following: This shall include:-
1. Discussion of any major issues which arose during
• Consider and makes recommendations to the Board in the audit.
relation to appointment & removal of company’s external
auditors. The Committee shall oversee the selection 2. Any accounting & audit judgements.
process of a new auditor and, if an auditor resigns, the 3. Level of errors identified during the audit.
Committee shall investigate the issues leading to his
resignation and decide whether any action is required. 4. The effectiveness of the audit.
• Review and monitor the external auditor’s independence,

objectivity and the effectiveness of the audit process, Besides, the audit committee shall oversee the vigil
which shall include a report from the external auditor on mechanism. The vigil mechanism shall provide for adequate
their own internal quality procedures. safeguard against victimization of employees and directors
who availing the vigil mechanism
• Oversee the relationship with the external auditor
including (but not limited to) The Committee also review the quarterly Financial Statement
a. Recommendations on their remuneration, whether (unaudited) and place before the Board for their approval of
fees for audit & non audit services, and that the level the same.
of fees is appropriate to enable an adequate audit to
be conducted. In addition to the above the Audit Committee also put various
suggestions to the Board on review of policy and how to
b. Approval of their terms of engagement, including any further strengthen the process in future.
engagement letter issued at the start of each audit
and the scope of audit. 2. ASSET & LIABILITY MANAGEMENT COMMITTEE
c. Satisfying itself that there are no relationship (such
Composition
as family, employment, investment, financial or
The company has an effective Asset & Liability Committee
business) between the auditor and the company
formed in accordance with the directions framed by RBI.
(other than in the ordinary course of business).
The committee was last re-constituted by the board of
d. Monitor the auditor’s compliance with relevant Directors on February 08, 2018 to change the composition of
ethical & professional guidance on the rotation of its members on resignation of Mr. Aditya Bhandari from the
audit partner. board of the Company.
• The Committee shall meet the external auditor at least
once a year, without the executive being present, to
committee met 4 times on 29 May 2017, 29 August 2017, 15
discuss the auditor’s report and any issue arising from
November 2017 and 08 February, 2018.
the audit.
• Review and approve the annual audit plan and ensure that
it is consistent with the scope of the audit engagement.
March, 2018.

Mr. Devesh Sachdev Chairman 4 4
Mr. Gaurav Maheshwari Member 4 4
*Mr. Javed Ahmad
Member 1 1
Siddiqui
**Mr. Aditya Bhandari Member 3 3
**Mr. Aditya Bhandari resigned on December 30, 2017.

*Mr. Javed Ahmad Siddiqui was appointed as a member of the committee on February 08, 2018.

Terms of Reference The Committee reviews the Asset Liability Management
The terms of reference of the Asset & Liability Committee reports to be submitted periodically to RBI.
include:
• Liquidity Risk Management 3. CORPORATE SOCIAL RESPONSIBILITY (CSR)
• Management of market (interest rate) risk COMMITTEE
The CSR Committee consists of Three (3) Members including
• Funding and capital planning one (1) Independent Director. The committee was last
reconstituted on February 08, 2018 due to resignation of Ms.
• Pricing, profit planning and growth projections
Anita Serrate from the Board and all the sub-committees of
• To approve and revise the actual interest rates to be the Company.
charged from customers for different products from time
to time applying the interest rate model and also in line During the financial year ended March 31, 2018, the
with such regulations as may be in force from time to committee met 4 times on 29 May 2017, 29 August 2017, 15
time. November 2017 and 08 February, 2018.
• Review of operational risk.
March, 2018.

Mr. Pradip Kumar Saha Member 4 4
*Ms. Laetitia Counye Member 1 1
**Ms. Anita Serrate Member 3 2
**Ms. Anita Serrate resigned on February 09, 2018.

* Ms. Laetitia Counye was appointed as a member of the committee on February 08, 2018.
Terms of Reference the Company being a Non Deposit taking Non-Banking

The terms of reference of the Corporate Social Responsibility Finance Company has a Remuneration & Nomination
Committee include: Committee for the appointment of Directors of the
Company. The committee shall also carry out evaluation
• Formulate and recommend to the Board, a Corporate of every director’s performance and support the Board and
Social Responsibility Policy which shall indicate the Independent Directors in evaluation of the performance of
activities to be undertaken by the Company as specified the Board and its directors.
in Schedule VII to Companies Act, 2013
Composition and Attendance at Meetings:
• Recommend the amount of expenditure to be incurred on
the activities referred to in clause (a) above; and
The Remuneration & Nomination committee comprises
• Monitor the Corporate Social Responsibility Policy of the one Independent Director and two Nominee Directors.
Company from time to time. The Committee was re-constituted on February 08, 2018
consequent upon the subsequent resignations of Mr. Aditya
Bhandari and Ms. Anita Serrate from the Board of Directors
The CSR policy is duly adhere to and in compliance with the
of the Company.
Act in force.
4. REMUNERATION & NOMINATION COMMITTEE
committee met 3 times on 30 May 2017, 15 November 2017
Pursuant to the regulations framed by Reserve Bank of India,
and 08 February, 2018.

March, 2018.

Mr. Nitin Gupta Chairman 3 3
*Mr. Kenneth Dan
Member 1 1
Vander Weele
*Ms. Laetitia Counye Member 1 1
**Ms. Anita Serrate Member 2 1
**Mr. Aditya Bhandari and Ms. Anita Serrate resigned on December 28, 2017 and February 09, 2018 respectively.
*Mr. Kenneth Dan Vander Weele and Ms. Laetitia Counye were appointed as the members of the committee on February 08,
2018.
Terms of Reference Independent directors have three key roles – governance,

The Company has in place the Nomination and Remuneration control and guidance. Some of the performance indicators,
Committee in compliance with RBI guidelines on Corporate based on which the independent directors, are evaluated
Governance and it broadly includes the following: include:
• Formulation of the criteria for determining qualifications, • Willingness to spend time and making efforts to learn
positive attributes and independence of Directors about the Company and its business.
and recommend to the Board the remuneration of the
• Knowledgeable about latest development in corporate
Directors.
governance framework, financial reporting, micro-finance
• To ensure ‘fit and proper’ status of proposed/ existing industry and current markets conditions.
Directors
• Relationship with the other Directors and executive
• Formulation of criteria for evaluation of Independent management to enable the Board to function “As a team”
Directors and the Board; and current markets conditions.
• To review the structure, size and composition (including • Contributing precise and value added inputs in Board
the skills, knowledge and experience) of the Board at least Meetings to help decision making.
annually and make recommendations on any proposed
changes to the Board to complement the Company’s
To improve the effectiveness of the Board and each individual
corporate strategy;
director, a formal and rigorous Board review is internally
• To assess the independence of Independent Non- undertaken on an annual basis.
Executive Directors;
• To review the results of the Board performance evaluation
The board review process was externally facilitated and
process that relate to the composition of the Board;
conducted by JP Chawla & Co. LLP through the form of
• Annual appraisal of the performance of the CEO questionnaires approved by the Board of Directors of the
Company.
• To also act as the ESOP committee for the purposes,
administer and manage the ESOP Schemes
5. WORKING COMMITTEE
Performance Evaluation Composition
One of the key functions of the Board is to monitor and review The Working Committee, earlier named as the Executive
the Board evaluation framework. The Board works with the Committee was reconstituted on December 30, 2017
nomination and remuneration committee to lay down the consequent upon the resignation of Mr. Aditya Bhandari
evaluation criteria for the performance of the Chairman, the from the Board of Directors of the Company. The Executive
Board, executive / non-executive /nominee / independent Committee was renamed as Working Committee subsequent
directors through a peer evaluation, excluding the director to the approval of the board of directors in their meeting held
being evaluated. on February 08, 2018.

During the financial year ended March 31, 2018, the 7 December 2017, 11 December 2017, 19 December 2017,
committee met 44 times on 4 April 2017, 17 April 2017, 6 21 December 2017, 22 December 2017, 23 December 2017,
May 2017, 9 May 2017, 30 May 2017, 6 June 2017, 22 June 27 December 2017, 16 January 2018, 22 January 2018, 24
2017, 12 July 2017, 5 August 2017, 5 September 2017, 6 January 2018, 25 January 2018, 31 January 2018, 9 February
September 2017, 18 September 2017, 26 September 2017, 2018, 16 February 2018, 19 February 2018, 20 February 2018,
5 October 2017, 23 October 2017, 3 November 2017, 6 27 February 2018, 9 March 2018, 19 March 2018, 21 March
November 2017, 8 November 2017, 16 November 2017, 22 2018, 22 March 2018, 27 March 2018.
November 2017, 23 November 2017, 28 November 2017,
March, 2018.

*Mr. Javed Ahmad
Member 15 15
Siddiqui

*Mr. Javed Ahmad Siddiqui was appointed as the member of the committee on December 30, 2017.
Terms of reference ZM to meet business requirements not exceeding INR 25

Working Committee shall have the following powers to Lacs a day.
take such decisions as may be required for the smooth
• Opening/closing/transfer of bank (disbursement
functioning of the operations of the Company. Any decision
and collection) accounts and change of authorised
beyond the scope of the Working Committee would be put up
Signatories. It also covers new Bank Account required
to the Board for its approval.
to be opened as part of debt proposal in a new Banking
relationship (To Meet Business Requirements) Shifting
• Obtaining of loans not exceeding INR 750,000,000 (Indian
/ Relocation of an existing branch or Taking new Branch
Rupees Seven Hundred Fifty Million only) or issuing debt
premises on Rent for opening of a new branch / Renewal
securities of a value not exceeding INR 1500,000,000
of Rent Agreement
(Indian Rupees One Thousand Five Hundred Million only)
under a single loan/debt transaction. • Approval of new loan schemes / Changes in existing loan
schemes.
• Change in Terms and Conditions of Existing / New Loan
taken from a Financial Institution / Bank up to INR 75 Cr.
6. BOARD RISK MANAGEMENT COMMITTEE (BRMC)
• Securitization of portfolio not exceeding INR 75 Cr under
With a view to comply with the regulations framed by RBI
single transaction.
under the Code of Corporate Governance, the Board has and
• Make any investments in money market Liquid funds effective Board Risk Management Committee (BRMC) for
(AAA rated), fixed deposits with AAA rated MNC, monitoring the risk and to strategize action to mitigate risks
Private and Public Sector Banks and reputed Financial associated with the functioning of the Company.
Institutions having a minimum rating of AA, government
certificates and Securities (certificates). During the financial year ended March 31, 2018, the
committee met 4 times on 29 May 2017, 29 August 2017, 15
• Enhanced withdrawal authorities to BMs / AMs / RM / November 2017 and 08 February, 2018.

March, 2018.

Mr. Pradip Kumar Saha Member 4 4
Mr. Njord Andrewes Member 4 3
Terms of Reference • Liquidity, Funding and Interest Rate Risk and

The committee has with the following roles and
• Other Market Risks that may arise in the future
responsibilities:
(including FX related risks)
1. The BRMC is the authority that can approve, revise, or 5. The BRMC requires reports for all sources of risks
cancel policies related to risk management. The policy produced by various risk owners (department heads).
which needs full Board approval is the General Risk The BRMC should review the content as well as the
Management Policy structure of these reports.
2. Tasks of the BRMC include reviewing and approving 6. The BRMC will meet regularly, at least on a quarterly
policies and methodologies, and reviewing risk reports. basis.
3. The BRMC defines the list of policies that are appropriate
for Fusion. Such policies are modified over time and 7. DEBENTURE ALLOTMENT COMMITTEE (DAC)
additional policies are introduced to cover Fusion’s The Debenture Allotment Committee was reconstituted
operations as and when it expand. on December 30, 2017 consequent upon the subsequent
resignation of Mr. Aditya Bhandari from the Board of
4. For each risk category the BRMC will establish a separate
Directors of the Company.
policy. The broad risk categories are
• Credit Risk, During the financial year ended March 31, 2018, the
committee met 6 times on 7 July 2017, 4 September 2017, 6
• Operational Risk,
March 2018, 15 March 2018, 16 March 2018, 31 March 2018.
March, 2018.

*Mr. Javed Ahmad
Member 4 4
Siddiqui
*Mr. Javed Ahmad Siddiqui was appointed as the member of the committee on December 30, 2017.
Terms of reference constituted by the Board of Directors in the Board Meeting

The committee is constituted for allotment of Non- held on November 15, 2017.
Convertible Debentures for raising of debt funds and other
compliance matters related to Non-convertible debentures. During the financial year ended March 31, 2018, the
committee met 1 time i.e. on 12 January 2018.
8. INFORMATION TECHNOLOGY STRATEGY
COMMITTEE
The Information Technology Strategy Committee was

March, 2018.

Mr. Nitin Gupta Chairman 1 1
Mr. Devesh Sachdev Member 1 1
Mr. Modaswer Hossain Member 1 1
Terms of reference
The committee is constituted to carry out review and amend IT strategies in line with the corporate strategies, board policy
reviews, cyber security arrangements and other matters related to IT Governance.
REMUNERATION OF DIRECTORS
The remuneration of Directors is fixed keeping in view the overall limit laid down as per the qualification and experience 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.
a. Executive Directors
(i) Details of the remuneration paid/payable to Executive Directors for the Financial Year 2017-18
Managerial Remuneration
Name Of Director Designation
(as on March 31, 2018
Mr. Devesh Sachdev Director & CEO INR 69,12,853
TOTAL INR 69,12,853
b. Non-Executive Directors
The Independent Directors are not paid any remuneration other than the sitting fee for attending meetings of the Board and
the committees thereof as approved by the Board. The sitting fees as determined by the Board for attending meetings of the
Board, Audit Committee, Nomination and Remuneration Committee, Board Risk Management Committee and CSR committee
are within the limits prescribed under the Companies Act, 2013.
The details of Sitting Fees paid to Non - Executive Independent Directors for attending the meeting the Board during the
Financial Year 2017-18 are as under:
a) Remuneration & Nomination Committee,
b) Audit Committee,
c) Board Risk Management Committee
d) CSR Committee
Setting Fees
Name Of Director Designation
Board Meeting & Committee
Mr. Nitin Gupta Independent Director INR 390,000
Mr. Pradip Kumar Saha Independent Director INR 420,000
Total INR 810,000

GENERAL BODY MEETINGS

ANNUAL GENERAL MEETING (AGM)
The details of the Annual General Meetings (AGM) of the shareholders held during the last 3 years are given below:
Financial Year No. of Special

Date Time Venue
Financial Year Resolutions passed
H-1, C-Block, Community Centre, Naraina
2016-17 30.06.2017 11:00 A.M. 4
Vihar, New Delhi - 110028
C-3, Community Centre, Naraina Vihar, New
2015-16 29.09.2016 04:00 P.M. -
Delhi-110028
C-3, Community Centre, Naraina Vihar, New
2014-15 29.09.2015 04:00 P.M. -
Delhi-110028
Extra Ordinary General Meetings

The details of Extra Ordinary General Meetings (EGM) of the shareholders held during the last 3 financial years are given
below:
No. of Special
Year Date Time Location
Resolutions
H-1, C Block, Community Centre, Naraina Vihar, New
27.12.2017 04:00 P.M. 1
Delhi-110028
2017-18 22.01.2018 04:00 P.M. 1
Delhi-110028
27.01.2018 04:00 P.M. 1
Delhi-110028
11.05.016 05:00 P.M. C-3, Community Centre, Naraina Vihar, New Delhi-110028 2
05.07.2016 05:00 P.M. C-3, Community Centre, Naraina Vihar, New Delhi-110028 5
2016-17 12.08.2016 04:30 P.M. C-3, Community Centre, Naraina Vihar, New Delhi-110028 3
16.01.2017 04:00 P.M. -
Delhi-110028
2015-16 28.05.2015 01:00 P.M. C-3, Community Centre, Naraina Vihar, New Delhi-110028 3
All the proposed resolutions were passed by the shareholders as set out in their respective Notices.
DEBENTURE HOLDER DETAILS

The details regarding the Debenture Holders as on 31 March, 2018 are given as under:-
NUMBER OF NON CONVERTIBLE

NAME OF DEBENTURE HOLDER ADDRESS
DEBENTURES (NCDs)
2-8 avenue Charles de Gaulle, L-1653,
AAV SARL-1 426
Luxembourg
10th Floor-Phase 1, IIT-Madras Research Park ,
IFMR Fimpact Investment Fund 100
Kanagam Village, Taramani, Chennai 600113
Microfinance Initiative for Asia (MIFA) Debt
Microfinance Initiative for Asia Fund SA, SICAV-SIF, 31, Z.a. Bourmicht, 220
Bertrange L- 8070, Luxembourg.
Microfinance Enhancemenst Facility SA, SICAV
Microfinance Enhancement Facility 240
-SIF, 5, rue, Jean Monnet, L-2180, Luxembourg

NUMBER OF NON CONVERTIBLE
NAME OF DEBENTURE HOLDER ADDRESS
DEBENTURES (NCDs)
Pettelaar Effectenbewaarbedrijif Nachtwachtlaan 20 – 6th Floor, 1058 EA,
526
N.V. Amsterdam The Netherlands
2-8, Avenue Charles de Gaulle, L-1653,
AAV SARL-2 601
Luxembourg,
11-13, Boulevard, de la foire, L-1528,
Blue Orchard Microfinance Fund 470
Luxembourg
4th Floor, 19 Bank Street, Cybercity, Ebene
UTI International Wealth Creator 550
72201, Mauritius
IFMR Fimpact Long Term Credit 10th Floor, IIT M Research Park, 1, Kanagam
500
Fund Village, Taramani, Chennai, India-600 113
Incofin CPP Sneeuwbeslaan 20, 2610 Antwerpen, Belgium 310
M/s Hinduja Leyland Finance Hinduja Leyland Finance, No.27 A Developed
200
Limited Industrial,Estate, Guindy, Chennai - 600032
10th Floor, Phase 1, IIT Madras Research Park,
IFMR Fimpact Income Builder Fund 250
Kanagam Village, Taramani, Chennai - 600113
2-8 avenue Charles de Gaulle, L-1653
AAV-SARL 190
Luxembourg
11-13 boulevard de la foire, L-1528 Luxemburg,
Triodos Microfinance Fund 315
Grand Duchy of Luxembourg
Nieuweroordweg 1, 3704 EC, Zeist, the
Triodos Fair Share Fund 315
Netherlands
10th Floor, Phase 1, IIT Madras Research Park,
Northern Arc Capital Limited 300
Kanagam Village, Taramani, Chennai - 600113
REDEMPTION OF NON CONVERTIBLE DEBENTURES (NCDS) DURING THE FY 2017-18
During the financial year 2017-18 following Non-convertible Debentures were fully /partially redeemed:-
Date on which
Date of No. of Amount (in Redemption Detail of
S.No Particulars Debentures are
allotment NCD million) Amount redemption
Redeemed
Hinduja Leyland
June 24,
1 Finance Limited 80 80 80,000,000 June 23, 2017 Fully
2015
(CBO-VIII)
Hinduja Leyland September February 28,
2 200 200 3,33,33,200 Partially
Finance Limited 04, 2017 2018
DEBENTURE TRUSTEES DETAILS
The Debenture Trustees are as follows:-
DEBENTURE TRUSTEE REGISTERED OFFICE ADDRESS

CATALYST TRUSTEESHIP LIMITED Office No. 83 – 87, 8th floor, ‘Mittal Tower’, ‘B’ Wing, Nariman Point, Mumbai
(Formerly known as GDA) – 400021
Axis House, 2nd Floor, Wadia International Centre, Pandurang Budhkar Marg,
AXIS TRUSTEE SERVICES LIMITED
Worli, Mumbai-400 025.
IL & FS Financial Centre, Plot No C22, G Block, Bandra Kurla Complex, Bandra
VISTRA ITCL (INDIA) LIMITED
East, Mumbai, Maharashtra-400051

REGISTRAR AND SHARE TRANSFER AGENT DETAILS strategy followed by the Company;
In pursuance of Regulation 7(3) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, Statement of conformity with corporate governance
2015, all activities in relation to electronic with respect to standards viz., in composition of various committees,
Non-convertible debentures (NCDs) facility are maintained their role and functions, periodicity of the meetings and
by our Registrar & Transfer Agent (RTA) i.e. Link Intime India compliance with coverage and review functions, etc.
Private limited having SEBI Registration No. INR000004058
The Annual Financial Statements, also include the following
In case, NCDs held in electronic form, the transfers are details:
processed by National Securities Depository Limited (NSDL)  registration/ license/ authorization, by whatever name
and Central Depository Services (India) Limited (CDSL) called, obtained from other financial sector regulators;
through their respective Depository Participants. Details of
RTA are as under:-  ratings assigned by credit rating agencies and migration
of ratings during the year;
Link Intime India Private Limited  penalties, if any, levied by any regulator;
C-13, Pannalal Silk Mills Compound, LBS Marg,
Bhandup (West), Mumbai - 400 078.  Asset-Liability profile, NPAs and movement of NPAs,
Tel. No.: +91 22 2594 6970; Fax No.: +91 22 2594 6969 details of all off-balance sheet exposures, structured
E-mail: [email protected] products issued by them as also securitization/
Website: www.linkintime.co.in assignment transactions and other disclosures as
required.
MATERIALLY SIGNIFICANT RELATED PARTY  The particulars of transactions between the Company
TRANSACTIONS and its related parties, as defined under Section 2(76) of
There have been no materially significant related party the Companies Act, 2013 and in Accounting Standard 18,
transactions, monetary transactions or relationships are set out in the financial statements.
between the Company and its directors, the management,  The Company has a record of unqualified financial
subsidiaries or relatives. The related party policy of the statements since inception.
company is disclosed on the website of the company i.e.
www.fusionmicrofinance.com.
MEANS OF COMMUNICATION
DISCLOSURE AND TRANSPARENCY a. The half yearly results during the year were published in
At regular intervals, the Company placed the following the national English Newspapers and also on the website
information/reports to the Board of Directors: of the company i.e. www.fusionmicrofinance.com.
Report on progress made in putting in place a progressive b. During the financial year 2017-18, the Company published
risk management system and risk Management policy and its financial results in the following newspapers:
Financial Results Newspapers Date of publication

Audited Financial Results for the year
The Financial Express (English) May 25, 2018
ended March 31, 2018
Unaudited Results for the Half Year
ended September 30, 2017 with The Financial Express (English) November 16, 2017
Limited Review Report
REGULAR UPDATES
The Company sends Quarterly newsletter to the Board Members, stakeholders and keeps them updated on the happenings in
the Company. All other events and happenings of importance to the sector are reported to the Board on a continuous basis.

GENERAL SHAREHOLDER INFORMATION
Annual General Meeting: Date: June 26, 2018
Time: 11:00 A.M.
Venue: H-1, C Block, Community Centre, Naraina Vihar, New Delhi-110028
Financial year: April 1, 2017 to March 31, 2018
Listing Fees: The Debentures of the Company are listed on Bombay Stock Exchange (BSE) and the listing fees payable to the
stock exchange for the financial year 2017-18 has been paid in full.
Stock Code: BSE: 954315
Dividend payment date: During the financial year ended March 31, 2018, the company paid dividend at the rate of 9%, per
annum (excluding Dividend Distribution Tax) on the preference shares held by SIDBI in its Annual General Meeting held on
June 30, 2017.
DEMATERIALISATION OF SHARES AND LIQUIDITY

It has also been noted that the shareholding in dematerialized mode as on March 31, 2018 was 51.09%
Shareholding pattern as on 31st March 2018

Shareholder Group Shares Amount Stake %
Promoters 3,004,037 20,146,715 6.98%
Investor 39,130,325 391,303,250 90.84%
Employees 37,678 376,780 0.09%
ESOP Trust 898,234 8,982,340 2.09%
Total 43,070,274 420,809,085 100.00%
ESOP Trust
2.09%
Employees Promoters
0.09% 6.98% Promoters
Investors
Employees
ESOP Trust
Investors
90.84%
Address for Correspondence

Mr. Deepak Madaan
Company Secretary
H-1, C Block, Community Centre,
Naraina Vihar, New Delhi-110028
Tel: +91 46646600
Website: www.fusionmicrofinance.com

Place: New Delhi Devesh Sachdev

Date: May 24, 2018 Director & CEO

CEO CERTIFICATE
The Board of Directors

This is to certify that:
1. We have reviewed Financial Statements and the Cash Flow Statement for the Financial Year ended 31st March 2018 and
that to the best of our knowledge and belief:
a. these statements do not contain any materially untrue statement or omit any material fact or contain statements that
might be misleading;
b. these statements together present a true and fair view of the Company’s affairs and are in compliance with existing
Accounting Standards, applicable laws and regulations.
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.
3. We accept responsibility for establishing and maintaining internal controls for Financial Reporting and we have evaluated
the effectiveness of internal control systems of the Company pertaining to financial reporting.
4. We have indicated to the Auditors and the Audit Committee:
a. Significant changes in internal control over financial reporting during the year;
b. Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the
financial statements; and
c. Instances of significant fraud of which they have become aware and the involvement therein, if any, of the Management
or an employee having a significant role in the Company’s internal control system over financial reporting.


Declaration regarding compliance by Board Members and Senior Management personnel with the Company’s
Code of Conduct
This is to confirm that the Company has adopted a Code of Conduct for the Members of its Board and its Senior Management
Personnel. I confirm that the Company has, in respect of the financial year ended 31st March, 2018 received from the
Members of the Board and Senior Management team of the Company, a declaration of compliance with the Code of Conduct
as applicable to them.



Annexure 6
ANNUAL REPORT ON CSR ACTIVITIES TO BE INCLUDED IN THE BOARD’S REPORT
1. A brief outline of the company’s CSR policy, including Schedule VII of the Companies Act, 2013.
overview of projects or programs proposed to be
undertaken and a reference to the web-link to the CSR 2. The Composition of the CSR Committee.
policy and projects or programs.
The CSR Committee comprised Three (3) Members
Policy Statement including one (1) independent Director. The committee
was reconstituted on February 08, 2018 with the following
In alignment with the vision of the company, FMPL, as its composition:
CSR initiatives, will continue to enhance value creation
in the society and in the community in which it operates,
through its services, conduct and initiatives, so as to S.NO. NAME DESIGNATION
promote sustained growth for the society and community 1. Mr. Devesh Sachdev Chairman
in fulfilment of its role as a Socially Responsible Corporate 2. Ms. Laetitia Counye Member
with environmental concern. 3. Mr. Pradip Kumar Saha Member
Organization Setup
3. Average net profit of the company for last three financial
The CSR projects in FMPL are implemented under the years
guidance of the Board’s Sub-Committee on CSR which
presently comprises three directors out of which one D116,906,961
is Independent director. The terms of reference of the
Committee is given below: 4. Prescribed CSR Expenditure (two per cent of the amount
as in item 3 above)
a) Formulate and recommend to the Board, a Corporate
Social Responsibility Policy which shall indicate D2,338,139
the activities to be undertaken by the Company as
specified in Schedule VII to Companies Act, 2013; 5. Details of CSR spent during the financial year.
b) Recommend the amount of expenditure to be incurred a) Total amount to be spent for the financial year 2017-
on the activities referred to in clause (a) above; and 18; - D4,321,491*
c) Monitor the Corporate Social Responsibility Policy of b) Amount Spent: D43,83,084

the Company from time to time. c) Amount overused, if any; - D61,593
Scope of activities d) Manner in which the amount spent during the

financial year is detailed below.
The CSR activities of FMPL are as per the provisions of

(1) (2) (3) (4) (5) (6) (7) (8) (9)
(1) Direct expenditure on projects

Amount outlay(budget) project or
Cumulative expenditure upto the

(2) Specify the State and district
CSR project or activity identified
Amount spent on the projects or

where projects or programs was
Amount spent Direct or through

Sector in which the project is
implementing agency (INR)

(1) Local area or other
reporting period (INR)

programs sub-heads:
Projects or programs
(2) Overheads (INR)
Overused amount
programs wise
or programs
undertaken
covered
(in INR)
S.No
Financial Uttarakhand, Punjab, Uttar Pradesh,

Promoting
1 Literacy Chhattisgarh, Madhya Pradesh, 830635 830635 830635 Direct
Education
Program Haryana, Bihar
Promoting Uttar Pradesh, Madhya Pradesh,
Health Check
2 preventive Uttarakhand, Maharashtra, Jharkhand, 788402 788402 788402 Agency
up camp
healthcare Haryana, Odisha, Bihar, Delhi
Health Promoting
3 Awareness preventive Madhya Pradesh, Uttarakhand, Bihar 151777 151777 151777 Agency
Program healthcare
Donation to
Preventive
4 Indian Cancer Delhi 222000 222000 222000 Agency
healthcare
Society
Promoting
education:
Skill
Employment
5 Development Bihar, Madhya Pradesh, Haryana 218161 218161 218161 Agency
enhancing
Program
vocational
skills
Stationary
Promoting
6 Distribution Madhya Pradesh 55590 55590 55590 Direct
Education
Program
Sponsorship Promoting
7 Hyderabad (Telangana) 105000 105000 105000 Agency
to school Education
Promotion and
61,593
Sponsorship
development
8 to Music
of traditional
Delhi 50000 50000 50000 Agency
society
arts
Promoting
Sponsorship
9
to NDTV
preventive Haryana 300000 300000 300000 Agency
healthcare
Sponsorship Training to
10 to Go sports promote Bengaluru(Karnataka) 500000 500000 500000 Agency
foundation sports
Rural
Toilet Uttar Pradesh, Madhya Pradesh,
11 development 145959 145959 145959 Direct
Construction Jharkhand
project
Ensuring
Plantation
12 environmental Uttar Pradesh 17100 17100 17100 Direct
program
sustainability
Relief and
welfare work Relief and
13 Bihar 141181 141181 141181 Direct
for flood welfare work
victims
Relief and
Relief and
14 welfare work Bihar 2000 2000 2000 Direct
welfare work
for fire victims
Digital Uttarakhand, Uttar Pradesh, Madhya
Promoting
15 Literacy Pradesh, Maharashtra, Jharkhand, 881401 881401 881401 Direct
Education
Program Haryana

Amount Spent in FY 2017-18 INR 44,09,206
GST Deduction INR 26,122
Total Amount Spent in FY 2017-18 INR 43,83,084
*Total amount to be spent for the financial year 2016-17 is inclusive of balance amount of D1,983,352 for the FY 2015-16.
6. In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any
part thereof, the company shall provide the reasons for not spending the amount in its Board report.
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance
with CSR objectives and Policy of the company.
The implementation and monitoring of FMPL’s CSR Policy is in compliance with CSR objectives and Policy of the Company
By order of the Board of Directors

For Fusion Microfinance Private Limited For Fusion Microfinance Private Limited

Chief Executive Officer Member of CSR Committee

Place: New Delhi

Dated: May 24, 2018

Annexure 7
DETAILS OF MANAGERIAL REMUNERATION AS PER COMPANIES ACT, 2013 FOR THE FY 2017-18
S.No. PARTICULARS DISCLOSURES

the ratio of the remuneration of each director to the median remuneration of the
(i) Director & CEO: 32:1
employees of the company for the financial year;
Increase in Remuneration:
the percentage increase in remuneration of each director, Chief Financial Officer,
Chief Executive Officer : 14.3%
(ii) Chief Executive Officer, Company Secretary or Manager, if any, in the financial
Chief Financial Officer : 28.08%
year;
Company Secretary : 25.0%
the percentage increase in the median remuneration of employees in the
(iii) 12.71%
financial year;
(iv) the number of permanent employees on the rolls of company as on March 2018; 3202
average percentile increase already made in the salaries of employees other The average increase in the
than the managerial personnel in the last financial year and its comparison with salaries of employees was
(v) the percentile increase in the managerial remuneration and justification thereof 12.71% and the average
and point out if there are any exceptional circumstances for increase in the increase in the managerial
managerial remuneration; remuneration was 14.3%.
Affirmation that the remuneration is as per the remuneration policy of the
(vi) Yes
company.
The detail of top ten employees in terms of remuneration drawn is as follows:

Date of Commencement of
Last Employment Details

Remuneration Received
Whether relative of any

Nature of employment
Experience (In Years)
director/manager
Employee Name
Qualification
Employment
Designation
Age
Chief
Devesh Full time
Executive MBA 6,882,084 01-Jan-2010 45 21 BSA Logistics No
Sachdev employment
Officer
Chief
Tarun Full time 16-June- GE Capital
Operating MBA 4,797,798 48 26 No
Mehndiratta employment 2017 Ltd.
Officer
Chief
Gaurav Full time Avantha
Financial CA, MBF 2,636,688 03-Feb-2016 39 14 No
Maheshwari employment Group
Officer
Ankush Vice Full time Magma
MBE 2,223,132 03-Aug-2015 39 15 No
Ahluwalia President employment Fincorp Ltd.
GE
Vice Full time
Satish Mani B. Com 2,125,176 08-Apr-2015 46 24 Commercial No
President employment
Finance
Asst. Vice Full time Development
Rahul Jain BA 1,090,764 01-Dec-2009 33 13 No
President employment Credit Bank
B. Com,
Rohit Asst. Vice Full time Metlife
PG Mass 19-Sep-2016 36 15 No
Dhiman President 1,614,888 employment Insurance
Comm.

Date of Commencement of
Last Employment Details

Remuneration Received
Whether relative of any

Nature of employment
Experience (In Years)
director/manager
Employee Name
Qualification
Employment
Designation
Age
Full time Phillips India
Amal Govil Vice President BSc. 1,510,488 27-Jan-2015 45 20 No
employment Ltd
Arohan
Praveen Dy. Vice Full time Financial
MBA 29-Aug-2014 43 14 No
Kumar President 1,241,064 employment Service Pvt.
Ltd.
Gourav Dy. Vice Full time Grant Thorton
CA 08-Sep-2011 34 13 No
Sirohi President 1,218,300 employment LLP
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; NIL
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 the
aggregate, was not less than eight lakh and fifty thousand rupees per month; NIL
c. if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate,
or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time
director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of
the equity shares of the company; NIL
By order of the Board of Directors

For Fusion Microfinance Private Limited

Director and CEO Director
DIN: 02547111 DIN: 02947368

Place: New Delhi

Dated: May 24, 2018

STANDALONE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 March 2018
FINANCIAL
STATEMENTS
Auditors’ Report 76
Balance Sheet 82
Statement of Profit and Loss 83
Statement of Cash Flows 84
Notes to Financial Statements 85

INDEPENDENT AUDITOR’S REPORT
To the Members of Auditor’s Responsibility

Fusion Micro Finance Private Limited Our responsibility is to express an opinion on these financial
statements based on our audit.
Report on the Financial Statements
We have taken into account the provisions of the Act, the
We have audited the accompanying financial statements
accounting and auditing standards and matters which
of Fusion Micro Finance Private Limited (“the Company”),
are required to be included in the Audit Report under the
which comprise the Balance Sheet as at 31 March 2018,
provisions of the Act and the Rules made thereunder.
the Statement of Profit and Loss, the Cash Flow Statement
for the year then ended, and a summary of the significant We conducted our audit in accordance with the Standards on
accounting policies and other explanatory information Auditing specified under Section 143(10) of the Act. Those
(collectively referred to as the ‘financial statements’). Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable
Management’s Responsibility for the Financial assurance about whether the financial statements are free
Statements from material misstatement.
The Company’s Board of Directors is responsible for the
An audit involves performing procedures to obtain audit
matters stated in Section 134(5) of the Companies Act,
evidence about the amounts and the disclosures in the
2013 (“the Act”) with respect to the preparation of these
financial statements. The procedures selected depend on the
financial statements that give a true and fair view of the
auditor’s judgment, including the assessment of the risks of
financial position, financial performance and cash flows of
material misstatement of the financial statements, whether
the Company in accordance with the accounting principles
due to fraud or error. In making those risk assessments, the
generally accepted in India, including the Accounting
auditor considers internal financial control relevant to the
Standards specified under Section 133 of the Act, read
Company’s preparation of the financial statements that give
with Rule 7 of the Companies (Accounts) Rules, 2014.
a true and fair view in order to design audit procedures that
This responsibility also includes maintenance of adequate
are appropriate in the circumstances. An audit also includes
accounting records in accordance with the provisions of
evaluating the appropriateness of the accounting policies
the Act for safeguarding the assets of the Company and
used and the reasonableness of the accounting estimates
for preventing and detecting frauds and other irregularities;
made by the Company’s Directors, as well as evaluating the
selection and application of appropriate accounting policies;
overall presentation of the financial statements.
making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of We are also responsible to conclude on the appropriateness of
adequate internal financial controls, that were operating management’s use of the going concern basis of accounting
effectively for ensuring the accuracy and completeness and, based on the audit evidence obtained, whether a material
of the accounting records, relevant to the preparation and uncertainty exists related to events or conditions that may
presentation of the financial statements that give a true and cast significant doubt on the entity’s ability to continue as
fair view and are free from material misstatement, whether a going concern. If we conclude that a material uncertainty
due to fraud or error. exists, we are required to draw attention in the auditor’s
report to the related disclosures in the financial statements
In preparing the financial statements, management is
or, if such disclosures are inadequate, to modify the opinion.
responsible for assessing the Company’s ability to continue
Our conclusions are based on the audit evidence obtained
as a going concern, disclosing, as applicable, matters related
up to the date of the auditor’s report. However, future events
to going concern and using the going concern basis of
or conditions may cause an entity to cease to continue as a
accounting unless management either intends to liquidate
going concern.
the Company or to cease operations, or has no realistic
alternative but to do so.

We believe that the audit evidence we have obtained is directors is disqualified as on 31 March 2018 from
sufficient and appropriate to provide a basis for our audit being appointed as a director in terms of Section
opinion on the financial statements. 164 (2) of the Act;
(f) W
ith respect to the adequacy of the internal financial
Opinion
controls with reference to financial statements of the
In our opinion and to the best of our information and
Company and the operating effectiveness of such
according to the explanations given to us, the aforesaid
controls, refer to our separate report in “Annexure
financial statements give the information required by the Act
B”; and
in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted (g) With respect to the other matters to be included in
in India, of the state of affairs of the Company as at 31 March the Auditor’s Report in accordance with Rule 11 of
2018, its loss and its cash flows for the year ended on that the Companies (Audit and Auditors) Rules, 2014, in
date. our opinion and to the best of our information and
according to the explanations given to us:
Report on Other Legal and Regulatory
i. The Company has disclosed the impact of
Requirements
pending litigations as at 31 March 2018 on its
1. As required by the Companies (Auditor’s Report) Order,
financial position in its financial statements –
2016 (“the Order”) issued by the Central Government of
Refer Note 2.25.
India in terms of sub-section (11) of Section 143 of the
Act, and on the basis of such checks of the books and ii. The Company did not have any long-term
records of the Company as we consider appropriate and contracts including derivative contracts for which
according to the information and explanation given to us, there were any material foreseeable losses.
we give in the “Annexure A” a statement on the matters
iii. There were no amounts which were required to
specified in paragraphs 3 and 4 of the said Order to the
be transferred to the Investor Education and
extent applicable.
Protection Fund by the Company.
2. As required by Section 143 (3) of the Act, we report that:
iv. The disclosures in the financial statements
(a) W
e have sought and obtained all the information and regarding holdings as well as dealings in specified
explanations which to the best of our knowledge and bank notes during the period from 8 November
belief were necessary for the purposes of our audit; 2016 to 30 December 2016 have not been made
since they do not pertain to the financial year
(b) I n our opinion, proper books of account as required
ended 31 March 2018. However amounts as
by law have been kept by the Company so far as it
appearing in the audited financial statements
appears from our examination of those books;
for the period ended 31 March 2017 have been
(c) T
he Balance Sheet, the Statement of Profit and Loss, disclosed.
and the Cash Flow Statement dealt with by this
Report are in agreement with the books of account;
(d) I n our opinion, the aforesaid financial statements for B S R & Associates LLP
comply with the Accounting Standards specified Chartered Accountants
under Section 133 of the Act, read with Rule 7 of the ICAI Firm Registration Number: 116231W/W-100024
Companies (Accounts) Rules, 2014;
Arpan Jain
(e) O
n the basis of the written representations received Place: New Delhi Partner
from the directors as on 31 March 2018 taken Date: 24 May 2018 Membership Number: 125710
on record by the Board of Directors, none of the

The Annexure A referred to in our Independent Auditor’s Report of even date
to the Members of Fusion Micro Finance Private Limited (“the Company”)
on the financial statements for the year ended 31 March 2018, we report that:
i. (a) The Company has maintained proper records state insurance, Income-tax, Service tax, Goods
showing full particulars, including quantitative and services tax, Cess and other material statutory
details and situation of fixed assets. dues have generally been regularly deposited by
the Company with the appropriate authorities. The
(b) The Company has a regular programme of physical
Company did not have any dues on account of Sales
verification of its fixed assets by which all the fixed
tax, duty of Customs, duty of Excise and Value added
assets are verified every year. In our opinion, the
tax.
periodicity of physical verification is reasonable
having regard to the size of the Company and the According to the information and explanations given
nature of its assets. No material discrepancies were to us, no undisputed amounts payable in respect
noticed on such verification. of Provident Fund, Employees’ state insurance,
Income-tax, Service tax, Goods and services tax,
(c) The Company does not own any immovable
Cess and other material statutory dues were in
properties. Hence, the provisions of Clause 3(i)(c) of
arrears as at 31 March 2018 for a period of more
the said Order are not applicable to the Company.
than six months from the date they became payable.
ii. The Company was engaged in the business of providing
(b) According to the information and explanations given
Micro credit. Accordingly, it does not hold any physical
to us, there are no dues of Income tax, Service tax,
inventories. Hence, the provisions of Clause 3(ii) of the
Goods and services tax, duty of Customs, duty of
said Order are not applicable to the Company.
Excise and Value added tax, which have not been
iii. The Company has not granted any loans, secured deposited with appropriate authorities on account
or unsecured, to companies, firms, Limited Liability of any dispute.
Partnerships or other parties covered in the Register
viii. According to the records of the Company examined by
maintained under Section 189 of the Act. Hence, the
us and the information and explanation given to us, the
provisions of Clause 3(iii)(a), (iii)(b) and (iii)(c) of the said
Company has not defaulted in repayment of loans or
Order are not applicable to the Company.
borrowings to any financial institution or bank or dues
iv. The Company has not given loans, investments, to debenture holders as at the balance sheet date. The
guarantees and security covered under Section 185 and Company did not have any dues to Government.
186 of the Act. Therefore, paragraph 3(iv) of the Order is
ix. The Company has not raised any monies by way of
not applicable to the Company.
initial public offer or further public offer (including
v. The Company has not accepted any deposits from the debt instruments). In our opinion, and according to the
public. information and explanations given to us, monies raised
vi. The Central Government of India has not prescribed the by way of term loans have been applied, on an overall
maintenance of cost records under sub-section (1) of basis, for the purposes for which they were obtained.
Section 148 of the Act for any of the services rendered x. According to the information and explanations given
by the Company. to us, we report that no material fraud by the Company
vii. (a) According to the information and explanations given or by its employees or officers has been noticed or
to us and on the basis of our examination of the reported during the year except for instances of cash
records of the Company, amounts deducted/accrued embezzlements by certain employees of the Company
in the books of account in respect of undisputed aggregating to an amount of `3,151,955 and out of
statutory dues including Provident Fund, Employees’ which an amount of `1,187,298 has been recovered.

The services of the concerned employees have been xiv. The Company has made preferential allotment of equity
terminated. shares during the current year, in compliance with the
requirements of Section 42 of the Act. The amounts
xi. The provisions of Section 197 read with Schedule V to
raised have been used for the purpose for which funds
the Act are applicable only to the public companies.
were raised.
Accordingly, the provision of Clause 3 (xi) of the Order
are not applicable to the Company. xv. The Company has not entered into any non-cash
transactions with its directors or persons connected
xii. The Company is not a Nidhi Company and the Nidhi
with him. Accordingly, the provisions of Clause 3(xv) of
Rules, 2014 are not applicable to it. Accordingly, the
the Order are not applicable to the Company.
provisions of Clause 3(xii) of the Order are not applicable
to the Company. xvi. The Company has been registered under Section 45 IA
of the Reserve Bank of India Act, 1934 as a Non-Banking
xiii. According to the information and explanations given
Finance Company – Micro Finance Institution.
to us, the transactions with related parties are in
compliance with the provisions of Sections 177 and
188 of the Act where applicable and the details of such
for B S R & Associates LLP
related party transactions have been disclosed in the
Chartered Accountants
financial statements as required under Accounting
ICAI Firm Registration Number: 116231W/W-100024
Standard (AS) 18, Related Party Disclosures specified
under Section 133 of the Act, read with Rule 7 of the Arpan Jain
Companies (Accounts) Rules, 2014. Place: New Delhi Partner
Date: 24 May 2018 Membership Number: 125710

The Annexure B referred to in our Independent Auditor’s Report of even
date to the Members of Fusion Micro Finance Private Limited the financial
statements for the year ended 31 March 2018.
Report on the Internal Financial Controls under financial controls with reference to financial statements was
Clause (i) of Sub-section 3 of the Section 143 of established and maintained and if such controls operated
the Companies Act, 2013 (“the Act”) effectively in all material respects.
We have audited the internal financial controls with reference
to financial statements of Fusion Micro Finance Private
Limited (“the Company”) as of 31 March 2018 in conjunction Our audit involves performing procedures to obtain audit
with our audit of the financial statements of the Company for evidence about the adequacy of the internal financial
the year ended on that date. controls system with reference to financial statements and
their operating effectiveness. Our audit of internal financial
Management’s Responsibility for Internal controls with reference to financial statements included
Financial Controls obtaining an understanding of internal financial controls
The Company’s management is responsible for establishing with reference to financial statements, assessing the risk
and maintaining internal financial controls based on the that a material weakness exists, and testing and evaluating
internal control with reference to financial statements criteria the design and operating effectiveness of internal control
established by the Company considering the essential based on the assessed risk. The procedures selected depend
components of internal control stated in the Guidance on the auditor’s judgment, including the assessment of the
Note on Audit of Internal Financial Controls over Financial risks of material misstatement of the financial statements,
Reporting issued by the Institute of Chartered Accountants whether due to fraud or error.
of India (ICAI). These responsibilities include the design, We believe that the audit evidence we have obtained is
implementation and maintenance of adequate internal sufficient and appropriate to provide a basis for our audit
financial controls that were operating effectively for ensuring opinion on the Company’s internal financial controls system
the orderly and efficient conduct of its business, including with reference to financial statements.
adherence to Company’s policies, the safeguarding of its
assets, the prevention and detection of frauds and errors, Meaning of Internal Financial Controls with
the accuracy and completeness of the accounting records, reference to Financial Statements
and the timely preparation of reliable financial information, A company’s internal financial control with reference to
as required under the Companies Act, 2013. financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial
Auditor’s Responsibility reporting and the preparation of financial statements for
Our responsibility is to express an opinion on the Company’s external purposes in accordance with the generally accepted
internal financial controls with reference to financial accounting principles. A company’s internal financial control
statements based on our audit. We conducted our audit with reference to financial statements includes those
in accordance with the Guidance Note on Audit of Internal policies and procedures that (1) pertain to the maintenance
Financial Controls Over Financial Reporting (the “Guidance of records that, in reasonable detail, accurately and fairly
Note”) and the Standards on Auditing, issued by ICAI and reflect the transactions and dispositions of the assets of the
deemed to be prescribed under Section 143(10) of the company; (2) provide reasonable assurance that transactions
Companies Act, 2013, to the extent applicable to an audit are recorded as necessary to permit preparation of
of internal financial controls, both issued by the Institute financial statements in accordance with generally accepted
of Chartered Accountants of India. Those Standards and accounting principles, and that receipts and expenditures
the Guidance Note require that we comply with ethical of the company are being made only in accordance
requirements and plan and perform the audit to obtain with authorizations of management and directors of the
reasonable assurance about whether adequate internal

company; and (3) provide reasonable assurance regarding Opinion

prevention or timely detection of unauthorized acquisition, In our opinion, the Company has, in all material respects, an
use, or disposition of the company’s assets that could have adequate internal financial controls system with reference to
a material effect on the financial statements. financial statements and such internal financial controls with
reference to financial statements were operating effectively
Inherent Limitations of Internal Financial Controls as at 31 March 2018, based on the internal control with
with reference to Financial Statements reference to financial statements criteria established by the
Because of the inherent limitations of internal financial Company considering the essential components of internal
controls with reference to financial statements, including the control stated in the Guidance Note on Audit of Internal
possibility of collusion or improper management override Financial Controls Over Financial Reporting issued by the
of controls, material misstatements due to error or fraud Institute of Chartered Accountants of India.
may occur and not be detected. Also, projections of any
evaluation of the internal financial controls with reference to for B S R & Associates LLP
financial statements to future periods are subject to the risk Chartered Accountants
that the internal financial control with reference to financial ICAI Firm Registration Number: 116231W/W-100024
statements may become inadequate because of changes in
conditions, or that the degree of compliance with the policies Arpan Jain
or procedures may deteriorate. Place: New Delhi Partner
Date: 24 May 2018 Membership Number: 125710

BALANCE SHEET as at 31 March 2018

Note As at 31 March 2018 As at 31 March 2017
EQUITY AND LIABILITIES
Shareholder's funds
Share capital 2.1 441,826,745 372,565,550
Reserve and surplus 2.2 2,135,126,158 1,852,789,916
2,576,952,903 2,225,355,466
Non-current liabilities
Long-term borrowings 2.3 10,024,861,095 6,177,549,696
Long-term provisions 2.4 16,969,203 22,197,528
10,041,830,298 6,199,747,224
Current liabilities
Short term borrowings 2.5 1,208,175,525 180,000,000
Other current liabilities 2.6 5,330,561,568 3,279,933,832
Short-term provisions 2.7 527,093,587 299,229,523
7,065,830,680 3,759,163,355
Total 19,684,613,881 12,184,266,045
ASSETS
Non-current assets
Property, plant and equipment 2.8
(i) Tangible assets 47,249,139 43,589,883
(ii) Intangible assets 2,392,087 2,550,188
Deferred tax assets, net 2.35 250,931,961 109,018,191
Loan portfolio 2.9 4,391,934,739 1,353,889,032
Long-term loans and advances 2.10 30,029,916 10,416,667
Other non-current assets 2.11 749,995,256 503,986,337
5,472,533,098 2,023,450,298
Current assets
Current investments 2.12 5,000,000 2,105,113,760
Trade receivables 2.13 4,797,197 -
Cash and bank balances 2.14 5,058,328,187 1,665,133,415
Loan portfolio 2.9 8,834,957,752 6,156,307,737
Short-term loans and advances 2.15 120,599,597 45,995,351
Other current assets 2.16 188,398,050 188,265,484
14,212,080,783 10,160,815,747
Total 19,684,613,881 12,184,266,045
Significant accounting policies 1
Notes to the financial statements 2
The notes referred to above form an integral part of the financial statements.
As per our Report of even date attached for and on behalf of the Board of Directors of
for B S R & Associates LLP Fusion Micro Finance Private Limited
Chartered Accountants CIN: U65100DL1994PTC061287
ICAI Firm Registration
Number.:116231W/W-100024

Arpan Jain Devesh Sachdev Pradip Kumar Saha Deepak Madaan Gaurav Maheshwari
Partner Director & CEO Director Company Secretary Chief Financial Officer
Membership Number.: 125710 DIN: 02547111 DIN: 02947368

Place: New Delhi Place: New Delhi
Date: 24 May 2018 Date: 24 May 2018

STATEMENT OF PROFIT AND LOSS for the year ended 31 March 2018
for the year ended for the year ended
Note
31 March 2018 31 March 2017
INCOME
Revenue from operations 2.17 2,545,195,313 1,849,004,847
Other income 2.18 127,931,766 161,427,692
TOTAL REVENUE 2,673,127,079 2,010,432,539
EXPENSES
Operating expenses 2.19 944,959,645 349,497,394

Employee benefits expense 2.20 661,008,113 483,184,885
Finance costs 2.21 1,366,023,585 974,385,935
Depreciation and amortisation 2.8 20,406,853 16,026,431
Other expenses 2.22 216,777,285 139,184,778
TOTAL EXPENSES 3,209,175,481 1,962,279,423
(Loss)/ profit before tax (536,048,402) 48,153,116
TAX EXPENSES:
- Current tax - 104,200,000
- Deferred tax (141,913,770) (97,018,911)
(Loss)/ profit after tax (394,134,632) 40,972,027
Earning per equity share 2.30

[Nominal value per share D10 (previous year:
`10)]
- Basic (11.09) 1.27
- Diluted (11.09) 1.18
Significant accounting policies 1

Notes to the financial statements 2
The notes referred to above form an integral part of the financial statements.
Number.:116231W/W-100024



CASH FLOW STATEMENT for the year ended 31 March 2018

for the year ended for the year ended
31 March 2018 31 March 2017
PARTICULARS
I. CASH FLOWS FROM OPERATING ACTIVITIES:
(Loss)/ profit before tax (536,048,402) 48,153,116
Adjustments:
Depreciation and amortisation 20,406,853 16,026,431
Loan portfolio written off 663,678,587 46,657,341
Provision on loan portfolio 219,539,136 256,221,582
Provision for employee benefits 5,631,153 4,856,784
Profit on sale of mutual fund units (117,282,465) (160,744,260)
Loss on sale of fixed assets 15,997 26,476
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 255,940,859 211,197,470
Increase in loan portfolio (net of securitised loan portfolio) (6,380,374,309) (2,543,533,143)

INCREASE IN ADVANCES AND OTHER ASSETS (69,374,026) (111,910,869)
(Increase) / decrease in trade receivables (4,797,197) 9,316,951
Increase / (decrease) in liabilities and provisions 256,635,784 (18,063,046)
CASH GENERATED FROM OPERATIONS (5,941,968,889) (2,452,992,637)
Income taxes paid, net (27,105,876) (125,985,418)
NET CASH FLOW USED BY OPERATING ACTIVITIES (A) (5,969,074,765) (2,578,978,055)
II. CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of fixed assets (23,931,655) (41,232,730)
Proceed from sale of fixed assets 7,000 234,587
(Purchase)/sale of investments, net 2,217,396,225 (1,944,369,500)
Investment in long-term Fixed Deposits in banks/FIs with maturity of more than (351,712,192) (79,510,457)
three months
Net cash from/ (used by) investing activities (B) 1,841,759,378 (2,064,878,100)
III. Cash flows from financing activities:

Proceeds from issuance of share capital (including share premium) 748,688,116 1,013,823,770
Proceeds from Fusion Employee Benefit Trust towards repayment of loan 293,613 18,613,918
Payment of preference dividend (2,700,000) (1,346,301)
Payment of tax on preference dividend (549,660) (274,075)
Proceeds from borrowings, net 6,666,944,975 4,749,116,530
NET CASH PROVIDED BY FINANCING ACTIVITIES (C) 7,412,677,044 5,779,933,842
NET INCREASE IN CASH AND CASH EQUIVALENTS (A + B + C) 3,285,361,657 1,136,077,687

Cash and cash equivalents at the beginning of the year 1,660,508,415 524,430,728
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (REFER NOTE 2.13) 4,945,870,073 1,660,508,415
Note: 31 March 2018 31 March 2017

Cash and cash equivalents comprises:
Cash in hand
Balances in 5,161,301 16,983,590
Current accounts 3,090,708,772 1,643,524,825
Deposit accounts 1,850,000,000 -
4,945,870,073 1,660,508,415
Number.:116231W/W-100024




Company overview
Fusion Micro Finance Private Limited (‘the Company’) was incorporated on 5 September 1994 under the Companies Act,
1956. The Company was registered as a Non-Banking Financial (Non – Deposit Accepting or Holding) Company (‘NBFC- ND’)
under section 45-IA of the Reserve Bank of India Act, 1934 with effect from 19 May 2010. The Company got converted to Non-
Banking Financial Company-Micro Finance Institution (‘NBFC-MFI’) with effect from 28 January 2014. The Company listed its
Non-Convertible Debentures (‘NCDs’) in Bombay Stock Exchange, India.
It is engaged in micro finance lending activities, providing financial services to poor women in India who are organized as Joint
Liability Groups (‘JLGs’). The Company provides small value collateral free loans up to `50,000. All financial transactions are
conducted in the group meetings organized near the habitats of the borrowers.
1. Significant accounting policies

a) Basis of preparation of financial statements
The financial statements have been prepared and presented under the historical cost convention on the accrual
basis of accounting and comply with the Accounting Standards specified under Section 133 of the Companies Act,
2013 (‘the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, other accounting principles generally
accepted in India and the Reserve Bank of India (‘RBI’) guidelines to the extent applicable to a Systemically Important
Non-Deposit taking Non-Banking Finance Company (‘NBFC-ND-SI’) and Non-Banking Financial Company - Micro
Finance Institution (‘NBFC-MFI’). The financial statements are presented in Indian Rupees rounded off to the
nearest rupee.
b) Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and reported amounts of assets,
liabilities, income and expenses and the disclosure of contingent liabilities on the date of the financial statements.
Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Any revision to accounting estimates is recognized prospectively in current and future periods.
c) Current – non-current classification

All assets and liabilities are classified into current and non-current.
Assets
An asset is classified as current when it satisfies any of the following criteria:
i. it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle;
ii. it is held primarily for the purpose of being traded;
iii. it is expected to be realised within 12 months after the reporting date; or
iv. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for atleast
12 months after the reporting date.
Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
i. it is expected to be settled in the Company’s normal operating cycle;
ii. it is held primarily for the purpose of being traded;
iii. it is due to be settled within 12 months after the reporting date; or
iv. the Company does not have an unconditional right to defer settlement of the liability for atleast 12 months
after the reporting date.


Current liabilities include the current portion of non-current financial liabilities. All other liabilities are classified as
non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash
equivalents. Based on the nature of operations and their realisation in cash and cash equivalents, the Company has
ascertained its operating cycle as twelve months.
d) Revenue recognition
i. Interest income on loan portfolio is recognised on accrual basis taking into account the amount outstanding
and rate applicable except in the case of non-performing assets (NPA’s) where it is recognized, upon realization,
as per the prudential norms of RBI.
ii. Premium on securitisation of assets is recognised on the difference between the book value of the securitised
assets and consideration received on the assets derecognised from books. The premium is amortised over
the life of the securitised loan portfolio and losses, if any, are recognised immediately in accordance with the
guidelines laid down by RBI on securitisation.
iii. Income from business correspondent activity is recognised on accrual basis as per the terms of arrangement
entered into with the client bank. Revenue from Business Correspondent activities to the extent of services
rendered but yet to be billed are treated as ‘Unbilled revenue’ and are disclosed under other current assets.
iv. Loan processing fee received upfront are considered to be accrued at the time of entering into a binding
agreement upon its receipt and are recognised as revenue immediately.
v. Interest on term deposits has been accrued on the time proportion basis, using the underlying interest rate.
vi. Dividend income is accounted when the right to receive the dividend is established.
e) Classification of loan portfolio and provisioning policy

Loan Portfolio is classified and provision is made in accordance with the Non-Banking Financial Company – Micro
Finance Institutions (NBFC-MFIs) Directions issued by Reserve Bank of India as mentioned below:
Asset classification norms:

i. Standard asset means the asset in respect of which, no default in repayment of principal or payment of interest
is perceived and which does not disclose any problem nor carry more than normal risk attached to the business.
ii. Non-performing asset means an asset for which, interest/principal payment has remained overdue for a period
of 90 days or more.
Provisioning norms:
The aggregate loan provision shall not be less than the higher of:
i. 1% of the outstanding loan portfolio, or
ii. 50% of the aggregate loan installments which are overdue for more than 90 days and less than 180 days and
100% of the aggregate loan installments which are overdue for 180 days or more.
The company accrue higher provision wherever required based on its assessment.
Written Off Policy

The Loan portfolio is written off based on the assessment by the management wherever required considering days
of arrears and overdue bucket.
f) Fixed assets and depreciation/amortisation

Tangible fixed assets
Tangible fixed assets are carried at cost of acquisition less accumulated depreciation. The cost of tangible fixed


assets comprises the purchase price, taxes, duties, freight (net of rebates and discounts) and any other directly
attributable costs of bringing the assets to their working condition for their intended use.
Subsequent expenditures related to an item of tangible fixed asset are added to its book value only if they increase
the future benefits from the existing asset beyond its previously assessed standard of performance. Tangible fixed
assets under construction and tangible fixed assets acquired but not ready for their intended use are disclosed as
capital work-in-progress.
The Management has assessed the estimated useful life of the tangible fixed assets other than leasehold
improvements as specified in Schedule II to the Companies Act, 2013 as in the opinion of the management the
same reflects the estimated useful life. The depreciation is provided under written down value method. Depreciation
is calculated on pro rata basis from the date on which the asset is ready for use or till the date the asset is sold or
disposed.
Leasehold improvements are amortised on straight line method over the primary period of the lease or the estimated
useful life of the assets, whichever is lower.
Losses arising from retirement or gains or losses arising from disposal of fixed assets are recognized in the
Statement of Profit and Loss.
Intangible assets
Intangible assets are carried at cost of acquisition less amortization. Intangible assets that are acquired by the
Company are measured initially at cost. Subsequent expenditure is capitalised only when it increases the future
economic benefits from the specific asset to which it relates.
Intangible assets are amortized in the Statement of Profit and Loss over their estimated useful lives from the
date they are available for use based on the expected pattern of consumption of economic benefits of the asset.
Intangible asset are being amortised over a period of 3 to 6 years using written down value method.
g) Borrowing costs
Borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an
entity incurs in connection with the borrowing of funds.
Borrowing costs directly attributable to acquisition of those fixed assets which necessarily take a substantial period
of time to get ready for their intended use are capitalised. Other Borrowing cost are recognised as an expense in the
year in which they are incurred.
h) Impairment of assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired.
If any such indication exists, the Company estimates the recoverable amount of the asset. The recoverable amount
of an asset is the greater of its value in use and its net selling price. If such recoverable amount of the assets is
less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated
as an impairment loss and is recognised in the Statement of Profit and Loss. If at the balance sheet date there is
an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed
and the asset is reflected at the recoverable amount subject to a maximum of amortized historical cost.
i) Grants
Grants and subsidies from the Government are recognised when there is reasonable assurance that
(i) the Company will comply with the conditions attached to them; and
(ii) the grant/ subsidy will be received.
Grants of the nature of promoter’s contribution are credited to capital reserve and treated as a part of the
shareholder’s funds.


Where the grants are received as compensation for expenses or losses incurred, the grants are taken to the
statement of profit and loss in the period to which it relates.
j) Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current
investments. All other investments are classified as long term investments.
Long term investments are carried at cost less any other–than-temporary diminution in value. Current investments
are valued at lower of cost and fair value determined on individual investment basis.
k) Employee benefits
Defined contribution plans
The Company makes specified monthly contribution towards employee provident fund to Government administered
provident fund scheme, which is a defined contribution scheme. The Company’s contribution is recognised as an
expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined benefit plan

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. In the current
year, gratuity is covered under a scheme administered by the Kotak Life Insurance Company (Kotak Group Gratuity
plan) and the contributions made by the Company to the scheme are recognised in Statement of Profit and Loss.
The liability recognised in the Balance Sheet in respect of defined benefit plans is the present value of the defined
benefit obligation as at the Balance Sheet date less the fair value of plan assets. The calculation of the Company’s
obligation under the plan is performed annually by a qualified independent actuary using the projected unit credit
method. Actuarial gains and losses arising during the year are immediately recognised in the Statement of Profit
and Loss in the year which they arise.
Compensated absences
Compensated absences, is a long-term employee benefit, and accrued based on an actuarial valuation done as per
projected unit credit method as at the Balance Sheet date, carried out by an independent actuary.
Actuarial gains and losses arising during the year are immediately recognised in the Statement of Profit and Loss.
Employee Stock Option Scheme (‘ESOP’)

The Company has formulated an Employees Stock Option Schemes to be administered through a Trust. The scheme
provides that subject to continued employment with the Company, employees of the Company are granted an option
to acquire equity shares of the Company that may be exercised within a specified period. The Company follows
the intrinsic value method for computing the compensation cost for all options granted which will be amortized
over the vesting period. Measurement and disclosure of the employee share-based payment Schemes are done in
accordance with the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of
Chartered Accountants of India.
l) Earnings per share (“EPS”)

Basic earnings per share is computed by dividing the net profit after tax for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of
calculating diluted earnings per share, net profit after tax for the year and the weighted average number of shares
outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Dilutive potential
equity shares are deemed to have been converted as of the beginning of the year, unless they have been issued at
a later date.
m) Income tax
Income tax expense comprises current tax and deferred tax.


Current tax
The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the
Company.
Deferred tax
Deferred tax charge or benefit reflects the tax effects of timing differences between accounting income and taxable
income for the period. The deferred tax charge or benefit and the corresponding deferred tax liabilities or assets are
recognized using the tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable certainity that the assets can be realised in future;
however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only
if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet
date and written-down or written-up to reflect the amount that is reasonably/virtually certain to be realised.
n) Provisions and contingent liabilities

A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are recognised at the best estimate of the expenditure required to settle the present obligation at the balance sheet
date. The provisions are measured on an undiscounted basis.
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may,
but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated
reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of
resources is remote.
A contract is considered as onerous when the expected economic benefits to be derived by the Company from the
contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an
onerous contract is measured at the lower of the expected cost of terminating the contract and the expected net
cost of continuing with the contract. Before a provision is established, the Company recognises any impairment
loss on the assets associated with that contract.
o) Leases
Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases.
Payments made under operating leases are recognised in the statement of profit and loss on a straight line basis
over the lease period unless another systematic basis is more representative of the time pattern of the benefit.
p) Cash flow statement

Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted for the effects
of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The
cash flow from regular revenue generating, investing and financing activities of the Company are segregated.


2.1 Share capital
As at As at
31 March 2018 31 March 2017
AUTHORISED:
Equity shares
50,000,000 (previous year: 40,000,000) equity shares of `10 each 500,000,000 400,000,000
Preference shares
5,000,000 (previous year: 5,000,000) preference shares of `10 each 50,000,000 50,000,000
550,000,000 450,000,000
ISSUED AND SUBSCRIBED

Equity shares
Fully paid up
41,970,979 (previous year: 35,174,717 ) Equity Shares of `10 each 419,709,790 351,747,170
Less: Amount recoverable from Fusion Employee Benefit Trust 8,982,340 9,181,620
Partly paid up
1,099,295 (previous year: NIL ) equity shares of `10 each partly paid up @1 1,099,295 -
411,826,745 342,565,550
PREFERENCE SHARES
3,000,000 (previous year: 3,000,000) 9% Optionally convertible preference
30,000,000 30,000,000
shares of `10 each, fully paid-up
441,826,745 372,565,550
2.1.1The reconciliation of the number of equity shares outstanding as at the beginning and the end of the
reporting period is set out below:
As at 31 March 2018 As at 31 March 2017
Particulars Number of shares Amount Number of shares Amount
Equity shares
At the commencement of the year 35,174,717 351,747,170 19,138,046 191,380,460
Conversion of Compulsorily - - 5,300,000 53,000,000
Convertible Debentures (CCDs)
(refer note below)
Allotted to Fusion Employee Benefit - - 85,141 851,410
Trust
Issued during the year (Fully Paid 6,796,262 67,962,620 10,651,530 106,515,300
Up)
Issued during the year (Partly Paid 1,099,295 1,099,295 - -
up@ `1)
At the end of the year 43,070,274 420,809,085 35,174,717 351,747,170
Note: Pursuant to Shareholders agreement dated 05 June 2015, 16,960,000 CCDs having face value of `25 each have
been converted into 5,300,000 fully paid-up equity shares of `10 each on 11 May 2016 at a conversion price of `80 per
equity share.



2.1.2
The reconciliation of the number of Optionally Convertible Preference Shares (OCPS) outstanding as at
the beginning and end of the reporting period is set out below:

Particulars Number of shares Amount Number of shares Amount
9% Optionally Convertible Preference
Shares
At the commencement of the year 3,000,000 30,000,000 3,000,000 30,000,000
Issued during the year - - - -
At the end of the year 3,000,000 30,000,000 3,000,000 30,000,000
2.1.3 Rights, preferences and restrictions attached to equity shares and preference shares:
(i) Equity shares
The Company has single class of equity shares having a par value of `10 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
receive dividend as declared from time to time subject to payment of dividend to preference shareholders. In the 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.

(ii) 9% Optionally Convertible Preference Shares (OCPS)
OCPS were issued at par on 16 October 2014 to Small Industries Development Bank of India (SIDBI). OCPS carry a
cumulative dividend rate of 9% p.a. OCPS have a preferential right of dividend over equity shareholders. SIDBI have the
option and right, in its sole discretion, to convert the OCPS into equity shares at a price linked to breakup value. 50% of
OCPS not converted into equity shall be redeemed at the end of 4 years and the remaining portion of OCPS at the end of
5 years.
2.1.4 Particulars of equity shareholder holding more than 5% equity shares:

Name of the shareholder Number of shares % of Holding Number of shares % of Holding
RIF-NORTH 2 , Mauritius 3,680,138 8.54% 3,680,138 10.46%
NMI FRONTIER FUND, LLP , Norway 4,848,758 11.26% 4,848,758 13.78%
Devesh Sachdev - Director & CEO 2,704,037 6.28% 1,804,742 5.13%
Belgian Investment Company for 5,134,920 11.92% 5,134,920 14.60%
Developing Countries SA, Belgium
Oikocredit, Ecumenical Development 6,606,375 15.34% 5,060,920 14.39%
Co-Operative Society U.A., Netherlands
Creation Investment Fusion,LLC, 15,321,043 35.57% 9,866,497 28.05%
Chicago, U.S.A.
Global Financial Inclusion Fund 3,539,091 8.22% 3,330,000 9.47%
41,834,362 97.13% 33,725,975 95.88%

2.1.5 Particulars of preference shareholder holding more than 5% of preference shares:

Name of the shareholder Number of shares % of Holding Number of shares % of Holding
Small Industries Development Bank of 3,000,000 100 3,000,000 100
India.


2.1.6 Particulars of shares reserved for issue under employee stock options
As at 31 March 2018
Name of the shareholder Number of shares Number of shares
Under Employee Stock Option Plan [ESOP Plan C] (refer note 1 below) 1099294 -
1,099,294 -
Note 1: These shares are reserved for employees as at balance sheet date.
2.1.7 Aggregate number and class of shares allotted as fully paid up pursuant to Share Subscription Agreement dated
24 May 2010 without payment being received in cash during the five-year period ended 31 March 2018:

As at As at As at As at As at
31 March 2018 31 March 2017 31 March 2016 31 March 2015 31 March 2014
Number of Number of Number of Number of Number of
Particulars
shares shares shares shares shares
Shares allotted to Directors - - - 303,425 -
- - - 303,425 -
2.1.8 Pursuant to Shareholder’s Agreement dated December 27, 2017, the Chief Executive Officer has right to subscribe
upto i.e., 647,659 equity shares.
2.2 Reserves and surplus

Securities premium account
At the commencement of the year 1,614,143,888 336,686,828

Add: Addition on equity share issued during the year 679,626,201 1,277,457,060
Sub total 2,293,770,089 1,614,143,888
Less: Amount recoverable from Fusion Employee Benefit Trust (10,032,339) (10,126,672)
At the end of the year (A) 2,283,737,750 1,604,017,216
Statutory reserve (created under Section 45-1C of RBI Act, 1934)
At the commencement of the year 52,517,902 44,323,497

Add: Amount transferred - 8,194,405
Less: Amount utilised - -
At the end of the year (B) 52,517,902 52,517,902
(Deficit)/ Surplus Balance
At the commencement of the year 196,254,798 163,477,176

Add: (Loss)/Profit for the year (394,134,632) 40,972,027
Less : Amount transferred to statutory reserve - (8,194,405)
Less: Dividend on 9% Optionally convertible preference shares (2,700,000) -
Less: Tax on preference dividend (549,660) -
At the end of the year (C) (201,129,494) 196,254,798
Total reserves and surplus (A+B+C) 2,135,126,158 1,852,789,916


2.3 Long-term borrowings *

As at As at
31 March 2018 31 March 2017
Debentures
Secured
4,176 (Previous year: 3,133) Redeemable transferable non-convertible 4,142,999,867 3,133,000,000
debentures of `1,000,000 each. fully paid-up
Unsecured
1,050 (Previous year: 500) Redeemable transferable non-convertible 1,050,000,000 500,000,000
debentures of `1,000,000 each. fully paid-up
Term loans
Secured
- from banks 1,790,726,140 720,309,797
- from others 2,416,589,632 1,678,955,781
Unsecured
- from banks 70,000,000 -
- from others 554,545,456 145,000,000
Vehicle loans
Secured
- from banks - 284,118
10,024,861,095 6,177,549,696
* Refer note 2.34 for terms of borrowings
2.4 Long-term provisions

As at As at
31 March 2018 31 March 2017
Contingent provision against standard loan portfolio (refer note 2.23) - 10,325,950
Provision for employee benefits
- Gratuity (refer note 2.27) 312,746 65,085
- Compensated absences 16,656,457 11,806,493
16,969,203 22,197,528
2.5 Short Term Borrowings

As at As at
31 March 2018 31 March 2017
Cash Credit from banks 58,175,525 -
from Banks 1,150,000,000 180,000,000
1,208,175,525 180,000,000


2.6 Other current liabilities

As at As at
31 March 2018 31 March 2017
Current maturities of long-term debt: *
Debentures
Secured
287 (Previous year: 10) Redeemable transferable non convertible 286,666,800 10,000,000
debentures of `1,000,000 each.
Term loans
Secured
- From bank 2,169,290,194 1,330,310,356
- From others 2,213,243,558 1,654,269,716
Unsecured
- From others 145,454,544 28,450,000
Vehicle Loans
- From bank 284,120 451,093
4,814,939,216 3,023,481,165
Payable towards securitised portfolio 214,256,408 31,927,542
Interest accrued but not due on borrowings 156,683,492 135,226,774
Statutory liabilities 27,212,306 21,470,776
Salaries and bonus payable 50,674,148 35,850,035
Expenses payable 22,217,848 9,890,502
Other payable 44,578,150 13,086,654
Unamortised income on securitised portfolio - 9,000,384
5,330,561,568 3,279,933,832
2.7 Short-term provisions

As at As at
31 March 2018 31 March 2017
Contingent provisions against standard loan portfolio (refer note 2.23) - 46,736,096
Provision on non performing loan portfolio (refer note 2.23) 505,705,307 18,039,922
Provisions on standard loan portfolio due to demonetisation - 231,252,823
Provision on Business Correspondence Portfolio 20,188,620
Provision for tax (Net of advance tax) - -
Provision for employee benefits
- Gratuity (refer note 2.27) 225,171 -
- Compensated absences 974,489 666,132
Others - 2,534,550
527,093,587 299,229,523

2.8 Property, plant and equipment
Gross block Depreciation and amortisation Net block
As at As at As at As at As at
As at For the
Description Additions Deletions 31 Mar 1 April Deletions 31 Mar 31 Mar 31 March
1 April 2017 year
2018 2017 2018 2018 2017
Tangible assets
Owned
Furniture and fixtures 8,454,965 5,644,481 - 14,099,446 3,615,225 1,977,747 - 5,592,972 8,506,474 4,839,740
Electrical fittings 7,868,376 3,905,833 - 11,774,209 3,017,326 2,022,620 - 5,039,946 6,734,263 4,851,050
Office equipment 3,332,791 574,391 34,525 3,872,657 1,844,409 898,414 27,801 2,715,022 1,157,635 1,488,382
Vehicles 6,787,177 19,989 - 6,807,166 5,429,725 627,336 - 6,057,061 750,105 1,357,452
Computers 21,892,606 9,516,429 49,300 31,359,735 14,748,021 8,431,857 32,382 23,147,496 8,212,239 7,144,585
L e a s e h o l d 31,516,519 1,846,902 - 33,363,421 7,607,850 3,867,148 - 11,474,998 21,888,423 23,908,669

improvements
Sub-total (A) 79,852,434 21,508,025 83,825 101,276,634 36,262,556 17,825,122 60,183 54,027,495 47,249,139 43,589,878
Previous year 40,266,613 39,685,265 99,444 79,852,434 22,941,609 13,393,910 72,968 36,262,556 43,589,878
Intangible assets
Owned
Computer software 8,021,802 2,423,630 - 10,445,432 5,471,614 2,581,731 - 8,053,345 2,392,087 2,550,188
Sub-total (B) 8,021,802 2,423,630 - 10,445,432 5,471,614 2,581,731 - 8,053,345 2,392,087 2,550,188
Previous year 6,816,337 1,547,465 342,000 8,021,802 2,946,506 2,632,521 107,413 5,471,614 2,550,188
Grand total (A+B) 87,874,236 23,931,655 83,825 111,722,066 41,734,170 20,406,853 60,183 62,080,840 49,641,226 46,140,066
Previous year 47,082,950 41,232,730 441,444 87,874,236 25,888,115 16,026,431 180,381 41,734,170 46,140,066

95

2.9 Loan portfolio

Unsecured
Microfinance loan portfolio [net of securitised loan portfolio of 13,226,892,491 7,507,032,947
`1,700,705,311 (previous year: `201,394,495)]
Secured
Vehicle loans - 3,163,822
13,226,892,491 7,510,196,769
Of the above loan portfolio
Non current portion of loan portfolio 4,391,934,739 1,353,889,032
Current portion of loan portfolio 8,834,957,752 6,156,307,737
13,226,892,491 7,510,196,769
Out of the above loan portfolio
Loan portfolio (considered good)* 12,700,999,464 7,481,702,137
Loan portfolio (considered doubtful) 525,893,027 28,494,632
13,226,892,491 7,510,196,769
*Includes an amount of `219,544,479 (Previous year: 2,338,678) given as on-balance sheet exposure towards securitised
portfolio placed as over collateralization.
2.10 Long-term loans and advances

(Unsecured, considered good)
Security deposits 30,029,916 10,416,667
30,029,916 10,416,667
2.11 Other non-current assets

Long term deposits with maturity of more than 12 months
- with banks* 529,732,361 358,664,079
- with financial institutions as security deposit* 32,452,268 42,093,446
- with financial institution as security deposit towards securitised 147,260,615 64,808,641
portfolio*
Interest accrued but not due
- term deposits 7,149,754 10,157,116
Unamortised processing fees 33,400,258 28,263,055
749,995,256 503,986,337
*Includes deposits of `562,184,629 (previous year : `403,757,525 ) maintained as cash collateral against term loans availed
and `147,260,615 (previous year : `64,808,641) maintained as cash collateral against managed portfolio.



2.12 Current investments

Other than trade and quoted
(Valued at lower of cost and fair value)
Investments in mutual funds
Nil units (previous year: 108,336 units) of Axis Treasury Advantage Fund - 200,000,000
Nil units (previous year: 1,153,307) of Birla Sun Life Floating Rate Fund - 250,000,000
Nil units (previous year: 11,270,242) of DHFL Pramerica Low Duration Fund - 250,000,000
Nil units (previous year: 7,326,136) of Reliance Medium Term Fund - 250,000,000
Nil units (previous year: 8,638,264) of IDFC Ultra Short Term Fund - 200,000,000
Nil units (previous year: 94,236) of UTI Floating Rate Fund - 250,000,000
Nil units (previous year: 12,538,551) of UTI Short Term Income Fund - 250,000,000
Nil units (previous year: 831,099) of ICICI Prudential Liquid Fund - 200,000,000
units (previous year: 115,801) of Invesco India Short Term Fund - 250,000,000
500,000 units (previous year: 500,000) of HDFC Debt Fund for Cancer Cure 5,000,000 5,000,000
Nil units (previous year: 49) of DSP Blackrock Liquidity Fund - 113,760
5,000,000 2,105,113,760
Aggregate amount of quoted investments, Cost 5,000,000
Aggregate amount of quoted investments, Market Value 5,000,000
2.13 Trade receivables

Receivables outstanding for a period exceeding six months from the - -
date they became due for payment.
Others debts 4,797,197 -
4,797,197 -
2.14 Cash and bank balances

Cash and cash equivalents
Cash in hand 5,161,301 16,983,590
Balances with banks
- in current accounts 3,090,708,772 1,643,524,825
- in deposit accounts with less than 3 months maturity 1,850,000,000 -
4,945,870,073 1,660,508,415
Other bank balances
- Deposits with banks with maturity more than 3 months but less than 112,458,114 4,625,000
12 months*
112,458,114 4,625,000
Total 5,058,328,187 1,665,133,415
*Includes deposits of `99,125,000 (previous year : `4,625,000) maintained as cash collateral against term loans availed and
`13,333,114 (previous year : NIL) maintained as cash collateral against managed portfolio.



Details of bank balances and deposits
Bank balances available on demand/deposits with maturity of 3 months 4,940,708,772 1,643,524,825
or less included under ‘Cash and cash equivalents’
Bank deposits due to mature within 12 months of the reporting date 112,458,114 4,625,000
included under ‘Other bank balances’
Bank deposits due to mature after 12 months of the reporting date 709,445,244 465,566,166
included under ‘Other non-current assets’ (refer note 2.11)
5,762,612,130 2,113,715,991
2.15 Short-term loans and advances

Balance with ESOP trust 137,892 5,170,738
Advances recoverable in cash or kind or for value to be received 56,061,096 1,704,968
Rent deposits 6,940,070 5,289,808
Advance tax (net of provisions for tax) 53,180,348 26,074,472
Prepaid expenses 4,280,191 5,285,907
Service tax receivable - 2,469,458
120,599,597 45,995,351
2.16 Other current assets

Security deposits towards borrowings* - 3,000,000
Interest accrued but not due
- on loan portfolio 106,315,125 65,647,027
- on fixed deposits with banks 28,064,717 25,938,764
- on security deposits - 432,000
Interest accrued and due but not collected 2,971,872 51,577,705
Unamortised processing fees 51,046,336 31,073,166
Unbilled revenue - 10,596,822
188,398,050 188,265,484
*Represents deposits maintained as cash collateral against term loans availed from financial institution


2.17 Revenue from operations

Interest income on loan portfolio 2,193,354,634 1,594,507,377
Income from business correspondence services 57,768,440 62,803,596
Income from asset securitisation 91,784,990 72,288,049
Processing fee on loan portfolio 167,068,924 83,104,480
2,509,976,988 1,812,703,502
Other operating income
Interest on term deposits with banks 35,218,325 36,301,345

35,218,325 36,301,345
2,545,195,313 1,849,004,847
2.18 Other income

Profit on sale of Investments 117,282,465 160,744,260
Miscellaneous income 10,649,301 683,432
127,931,766 161,427,692
2.19 Operating expenses

Postage and communication 20,156,111 16,626,948
Contingent provision against standard portfolio* - 21,008,792
Provision on non performing loan portfolio 199,350,516 -
Provisio on Business Correspondence Portfolio 20,188,620 -
Provision on non-standard portfolio* - 3,959,967
Provision on standard portfolio due to demonetisation* - 231,252,823
Loan portfolio written off* 663,678,587 46,657,341
Repairs and maintenance 23,677,585 14,860,670
Printing and stationery 17,902,454 9,390,003
Provision towards cash loss 5,772 5,740,850
944,959,645 349,497,394
* refer note 2.23
2.20 Employee benefits expense

Salaries, wages and bonus* 598,396,132 442,459,131
Contribution to provident fund and other fund (refer note 2.27 (b)) 47,869,967 32,579,258
Staff welfare expenses 14,742,014 8,146,496
661,008,113 483,184,885
* Shown net of grant received from Small Industries Development Bank of India (SIDBI) amounting to `40,76,969 (previous
year ` NIL)


2.21 Finance costs

Interest on borrowings 1,324,468,682 936,342,629
Other borrowing costs 41,554,903 38,043,306
1,366,023,585 974,385,935
2.22 Other expenses

For the year ended
31 March 2018 March 2017
Rent (refer note 2.29) 60,541,017 38,850,471
Travelling and conveyance 40,475,985 24,737,335
Legal and professional fees (refer note 2.36)* 42,146,743 32,442,797
Rates and taxes 16,461,387 5,505,190
Office maintenance 15,291,547 9,659,936
Water and electricity 7,962,582 4,789,359
Staff recruitment and training 2,360,961 3,223,716
Insurance 3,510,989 2,954,373
Corporate social responsibility/Donation (refer note 2.39) 4,383,084 973,259
Business promotion 15,519,528 10,724,074
Miscellaneous expenses 8,123,463 5,324,268
216,777,285 139,184,778
* Shown net of grant received from Small Industries Development Bank of India (SIDBI) amounting to ` NIL (previous year
`537,492).


2.23 Provision for outstanding loan portfolio

a) The reconciliation of the number of Optionally Convertible Preference Shares (OCPS) outstanding as at the beginning
and end of the reporting period is set out below:
Asset classification Loan portfolio Provision Loan portfolio Provision
Standard portfolio 12,501,643,605 - 7,479,363,459 57,062,046
Sub-standard and loss portfolio 525,893,027 505,705,307 28,494,632 18,039,922
Total 13,007,348,012 505,705,307 7,507,858,091 75,101,968
b) During the year, based on qualitative assessment and considering days in arrears certain loan portfolio amounting
to `663,678,587 (previous year: `46,657,341) has been written off.
c) As on 31 March 2018 provision towards managed portfolio is `20,188,620 (previous year: `Nil)
d) The movement in provision during the year are explained below (owned and business correspondence portfolio).
For the year ended 31 March 2018 For the year ended 31 March 2017
Sub- Sub-
Standard standard Standard standard
Particulars Total Total
portfolio and loss portfolio and loss
portfolio portfolio
Opening 57,062,046 18,039,922 75,101,968 36,053,254 14,079,955 50,133,209
Additions / (write (57,062,046) 507,853,105 450,791,059 21,008,792 3,959,967 24,968,759
back), net
Closing - 525,893,027 525,893,027 57,062,046 18,039,922 75,101,968
e) Based on the management assessment and considering various factor the Company has accrued 100% provision
on identified non-performing portfolio, which is in higher than provision required as per RBI norms.
2.24 Contingent Liability:

a) Guarantees/security deposits given on securitized portfolio as collateral.
31 March 2018 31 March 2017
Principal assigned/ Principal assigned/
Sl.
Bank/Financial Institution Purchase Guarantee* Purchase Guarantee*
No
consideration consideration
1 IFMR Capital Olenna XXXIII 277,702,067 43,043,821 - -
2 Vivriti Capital Windu XXXIV 459,688,668 87,340,847 - -
3 Rosetta IFMR Capital XXXV 222,218,561 35,554,970 - -
4 Kenobi Vivriti Capital XXXVI 296,384,105 44,457,615 - -
5 Begonia IFMR Capital XXXVII 552,317,858 71,801,322 - -
6 Blizzard Vivrit Capital XXXVII 171,920,145 28,796,624 - -
7 Davos Northern ARC Cap XXXVIII 493,878,631 69,143,009 - -
8 IFMR Capital Finance Private - - 106,985,550 5,616,741*
Limited – XXVI
Limited – XXVII
Limited – XXVIII
Limited – XXIX


31 March 2018 31 March 2017

Principal assigned/ Principal assigned/
Sl.
Bank/Financial Institution Purchase Guarantee* Purchase Guarantee*
No
consideration consideration
Limited – XXX
Limited – XXXI
Limited – XXXII
Total 2,474,110,035 380,138,208^ 1,138,897,001 61,756,546
* Guarantees given as a % of assigned portfolio.

^ As on balance sheet date principal outstanding amounting to `219,544,479 (previous year: `2,338,678) given as first
loss credit enhancement by way of over collateralization.
b) The Company has entered into business correspondence arrangements with the banks. Accordingly, the Company
has given a performance security of `138,311,880 (Previous year: `118,164,555) towards the loans disbursed by
the banks on the Company’s reference. The total outstanding of such loans as on 31 March 2018 is `628,421,743
(previous year: `560,006,362). The performance security is given in the nature of fixed deposits and Corporate
Guarantee.
c) Contingent liability in respect of preference shares
Particulars As at 31 March 2018 As at 31 March 2017

Dividend on preference share capital 2,700,000 2,700,000
Dividend distribution tax 549,656 549,656
The same will be recorded as liability in the period in which shareholders approves the dividend.
2.25 Details of pending litigations

Particulars As at 31 March 2018 As at 31 March 2017
Proceedings by Company against employee fraud* 3,151,955 3,616,054
* The Company has recovered an amount of `1,187,298 (previous year `1,250,778) from the employees and out of the
balance of ` Nil (Previous year ` 1,722,920) has been written off.
2.26 Employee stock options

The Company has granted stock options to certain employees of the Company under the ‘Employee Stock Option Scheme
2014’ (Scheme 2014) and ‘Employee Stock Option Scheme 2016’ (Scheme 2016). The key terms and conditions related
to the grant of the stock options are as follows:
a) The Scheme 2014 and 2016 are effective from 31 July 2014 and 16 January 2017 respectively and are administered
through a Trust (Fusion Employees Benefit Trust).
b) The Scheme provides that, subject to continued employment with the Company, the employees are granted an
option to acquire equity shares of the Company that may be exercised within a specified period.
c) The Company has formed Fusion Employee Benefit Trust (ESOP Trust) on 24 June 2014 to issue ESOPs to employees
of the Company as per the respective scheme. The Company has given interest and collateral free loan to the ESOP
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.


d) As on 31 March 2018, the ESOP trust have 898,234 equity shares, as on 31 March 2017 trust had 918,162 shares,
out of which 19,928 shares were transferred from trust to employee on 30 May 2017 under the Scheme 2014.The
ESOP Trust does not have any transaction other than those mentioned above, hence it is treated as a part of the
Company and accordingly gets consolidated with the books of the Company. Accordingly, as at 31 March 2018, the
Company has reduced the shares allotted to ESOP Trust amounting `8,982,340 (previous year: `9,181,620 from the
share capital and `10,032,339 (previous year: `10,126,672) from the share premium.
e) The eligible employees shall exercise their option to acquire the shares of the Company within a period of three
years/ four years from the end of vesting period. The plan shall be administered, supervised and implemented by
the board.
The options shall vest on graded basis as follows.

On completion of 1 year 25%
Stock option activity under ESOP Scheme 2014 and 2016 is as below:
For the year ended For the year ended
Particulars
31 March 2018 31 March 2017
Number of equity shares:
Outstanding at the beginning of the year 581,006 256,856
Granted during the year 330,540 341,900
Forfeited during the year - -
Exercised during the year 19,928 17,750
Outstanding at the end of year 891,618 581,006
Exercisable at the end of year 186,189 56,428
The Company calculates the compensation cost based on the intrinsic value method, wherein the excess of Fair value of
underlying equity shares as on the date of the grant over the exercise price of the options given to employees under the
ESOP schemes of the Company, is recognized as compensation cost and amortized over the vesting period.
The Company granted the options to employees at Fair Value and accordingly there is no cost to the Company on
exercise of options by them. Hence, the disclosure relating to Proforma, Net results, Earnings per Share, etc. required
under Guidance note on Employee Share Based Payments issued by ICAI is not applicable.
2.27 Employee benefits expense

a) Defined benefit plan – Gratuity (Funded)
Every employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service in
line with the payment of Gratuity Act, 1972 with no limit on maximum amount payable. The same is payable at the
time of separation from the Company or retirement, whichever is earlier.


The following tables set out the status of the gratuity plan as required under AS 15 (Revised)
Movement in present values of defined benefit obligations

Particulars
31 March 2018 31 March 2017
Opening defined benefit obligation 12,394,279 6,395,006
Current service cost 9,089,136 6,556,553
Interest cost 960,557 479,625
Benefits paid (if any) (59,619) (484,250)
Actuarial (gain)/loss recognized during the year (2,447,847) (552,655)
Closing defined benefit obligation 19,936,506 12,394,279
Movement in fair value of planned assets:

Particulars
31 March 2018 31 March 2017
Opening fair value of planned assets 62,71,790 6,756,040
Contribution paid 125,00,000 -
Benefits paid - (4,84,250)
Expected return on planned assets 4,86,064 -
Actuarial gain/(loss) on plan assets 1,40,735 -
Closing fair value of planned assets 1,93,98,589 62,71,790
Expense recognized in Statement of Profit and Loss

Particulars
31 March 2018 31 March 2017
Current service cost 9,089,136 6,556,553
Interest cost 960,557 479,625
Expected return on plan assets (4,86,064) -
Past Service Cost -
Net actuarial (gain)/ loss recognized in the year (25,88,582) (552,654)
Amount, included in employee benefits expense. 69,75,047 6,483,524
Amount to be recognized in the balance sheet:

As at As at
Particulars
31 March 2018 31 March 2017
Defined benefit obligation 19,936,506 12,394,279
Fair value of plan assets (1,93,98,589) (12,329,194)
Liability recognized in the balance sheet 537,917 65,085
Experience adjustment for the year ended 31 March 2018

Particulars Amount
Experience adjustment (Gain) /loss for Plan liabilities (21,11,020)
Experience adjustment Gain/ (loss) for Plan assets. 1,40,735


Break up of liability:
As at As at
Particulars
31 March 2018 31 March 2018
Current 225,171 -
Non-current 312,746 65,085
Total liability 5,37,917 65,085
Amounts recognized in current year and previous four years:
As at 31 March 2018
Particulars
2018 2017 2016 2015 2014
Projected benefit obligation at the end of the 19,936,506 12,394,279 6,395,006 3,264,381 14,21,972
year
Fair value of plan assets at end of the year (19,398,589) (12,329,194) (5,529,194) - -
Net liability/(asset) 537,917 65,085 865,812 3,264,381 14,21,972
Principal actuarial assumptions 31 March 2018 31 March 2017

i) Discount rate (p.a) 7.75% 7.50%
ii) Salary escalation rate (p.a) 8.00% 8.00%
iii) Expected return on plan assets 7.75% 8.00%
iscount rate: - The discount rate is based on the prevailing market yield of Indian Government securities as at the
D
balance sheet date for the estimated term of obligations.

Salary escalation rate: - The estimate for the future salary increments considered taking into account the inflation,
seniority, promotional and other relevant factors.
a) Defined benefit plan – Gratuity (Funded)

Particulars
31 March 2018 31 March 20187
i) Provident fund* 33,303,947 22,893,549
ii) Employee state insurance 18,180,187 96,17,797
iii) Labor welfare fund 120,069 67,912
Total 51,604,203 32,579,258

* Contribution to provident fund is netted off with amount of `3,734,236 received under the scheme “Pradhan Mantri Rojgar Protsahan
Yojana” for the year ended 31 March 2018 (31 March 2017: ` Nil). (Refer note 1(i))
2.28 Segment reporting

Business segment
The Company operates in a single reportable segment i.e. micro financing activities, which have similar risk and return. Accordingly,
there is no reportable segment to be disclosed as required by Accounting Standard (AS) – 17 “Segment Reporting”.
Geographical Segment
The Company is engaged in the business within India. The conditions prevailing in India being uniform, no separate geographical
disclosure is considered necessary.
2.29 Operating leases

Lease payments made under cancellable operating lease amounting to ` 60,541,017 (previous year: ` 38,850,471) disclosed as rent
and the same have been recognized as an expense in the Consolidated Statement of Profit and Loss. There are no subleases. Also,
requirement of minimum lease payments does not arise as the Company do not have any non-cancellable operating leases.


2.30 Earnings per share (EPS)

Particulars
31 March 2018 31 March 2017
Earnings
Net (Loss) profit for the year (394,134,632) 40,972,027
Less: Dividend on 9% optionally convertible preference shares and 3,249,656 3,249,657
tax there on
Adjusted net profit attributable to equity share holders (390,884,976) 37,722,370
Shares
Number of shares at the beginning of the year (excluding shares 34,256,555 17,292,683
allotted to Fusion Employee Benefit Trust)
Add: Equity shares issued during the year (including shares allotted 7,915,485 16,963,872
to Fusion Employee Benefit Trust)
Total number of equity shares at the end of the year 42,172,040 34,256,555
Weighted average number of equity shares outstanding at the end 35,821,721 29,594,596
of the year - Basic
Add: Weighted average number of potential equity shares on - 580,822
account of Compulsorily Convertible Debentures (CCDs)
Add: Weighted average number of potential equity shares on 901,455 1,553,093
account of employee stock options
Add: Weighted average number of potential equity shares on 3,000,000 3,000,000
account of Optionally convertible preference shares
Weighted average number of equity shares outstanding during the 39,723,177 34,728,511
year – Diluted
Earnings Per Share
- Basic - Per value of `10 each (11.09) 1.27
- Diluted - Per value of `10 each (11.09) 1.18
Note: The options which are not exercised have anti-dilutive effect on loss per share and accordingly basic loss per share is considered
as dilutive loss per share
2.31 Pursuant to RBI Guidelines on Securitization of asset vide circular no DBOD.NO.BP.BC. 60/21.04.048/2005-06 dated 01
February 2006.
(Amount in crores)
Particulars
31 March 2018 31 March 2017
Total number of loans securitized 186,790 -
Aggregate book value of loans securitized 225.46 -
Micro Finance loans subordinated as cash credit enhancements 21.95 -
for assets de- recognized
Aggregate value of sale consideration 225.46 -
Aggregate gain on securitisation- to be amortised over the life of - -
the receivable
Quantum of credit enhancement provided during the year in the 16.06 -
form of deposits


2.32 As required in terms of circular RBI//2012-13/170 DNBS. PD. No. 301/3.10.01/2012-13 dated 21 August 2012 for the
securitization transactions entered on or after 21 August 2012:
(Amount in crores)
As at As at
Particulars
31 March 2018 31 March 2017
1. Number of Special Purpose Vehicles (SPVs) sponsored by the 7 7
Company for securitisation transactions
2. Total amount of securitised assets as per books of the SPVs 211.96 20.34
sponsored by the Company#
3. Total amount of exposures retained by the Company to comply - -
with Minimum Retention Rate (MRR) as on the date of balance
sheet
a) Off-balance sheet exposures
* First loss - -
* Others - -
b) On-balance sheet exposures
* First loss (Cash collateral) 16.06 6.18
* First loss (Micro finance loans) 21.95 0.23
* Others - -
4. Amount of exposures to securitisation transactions other than
MRR
a) Off-balance sheet exposures
i) Exposure to own securitizations
* First loss - -
* loss - -
ii) Exposure to third party securitizations
* First loss - -
* Others - -
b) On-balance sheet exposures
i) Exposure to own securitizations
* First loss - -
* Others - -
ii) Exposure to third party securitizations
* First loss - -
* Others - -
the above information has been prepared based on the confirmations received from certain SPVs and other information available with
the Company.
2.33 Related party transactions

A) Related Parties
Relationship Name of the party
Entities exercising significant influence over the Company Creation Investment Fusion, LLC, Chicago, U.S.A.
(effective from 12 August 2016)
Director / Key Managerial Personnel (KMP) Devesh Sachdev - Director and Chief Executive Officer


B) Summary of related party transactions:

Name of the related party Nature of transaction
31 March 2018 31 March 2017
Managerial remuneration 9,912,853 19,997,200**
Mr. Devesh Sachdev Equity shares allotted under 1,099,295 19,918,152
preferential allotment
Creation Investment Fusion, Allotment of equity shares 554,588,760 370,000,000
LLC, Chicago, U.S.A. (including share premium)
Refer note 2.1 for details of shares issued/ transferred
** This is inclusive of one-time payment of ` Nil (Previous year: `10,140,950) and not part of annual salary.
Note: As the provisions for gratuity, leave benefits and stock option expenditure are made for the Company as a whole,
the amounts pertaining to the Key Management Personnel are not specifically identified and included above.
C) The amount receivable/ (payable) from/ (to) related parties:

Name of the related party Nature of transaction As at 31 March 2018 As at 31 March 2017
Mr. Devesh Sachdev Bonus payable 30,00,000 1,576,344
2.34 Terms of borrowings

Nature of Facility Amount OS as at 31 March 2018 Amount OS as at 31 March 2017 Interest First date of Terms of
Current Non-Current Current Non-Current Rate repayment repayment
A. Redeemable transferable non-convertible debentures (NCD)*
Bullet
NCD 1 - 100,000,000 - 100,000,000 15.00% 21-Dec-20
Repayment
Bullet
NCD 2 220,000,000 - - 220,000,000 13.00% 16-Dec-18
Repayment
NCD 3 - - 10,000,000 - 13.50% 24-Jul-15 Monthly/24
Bullet
NCD 4 - 240,000,000 - 240,000,000 14.85% 29-Apr-19
Repayment
Bullet
NCD 5 - 426,000,000 - 426,000,000 14.50% 13-Aug-20
Repayment
Bullet
NCD 6 - 526,000,000 - 526,000,000 14.15% 16-May-22
Repayment
Bullet
NCD 7 - 601,000,000 - 601,000,000 13.22% 13-Jul-19
Repayment
Bullet
NCD 8 - 470,000,000 - 470,000,000 13.60% 31-Aug-21
Repayment
Bullet
NCD 9 - 550,000,000 - 550,000,000 13.25% 15-Sep-25
Repayment
Bullet
NCD 10 - 310,000,000 - - 13.15% 07-Jul-20
Repayment
Bullet
NCD 11 - 190,000,000 - - 12.30% 15-Mar-21
Repayment
Bullet
NCD 12 - 315,000,000 - - 12.75% 16-Mar-24
Repayment
Bullet
NCD 13 - 315,000,000 - - 12.75% 16-Mar-24
Repayment
NCD 14 66,666,800 99,999,867 - - 12.10% 28-Feb-18 Half Yearly/6
Total (A) 286,666,800 4,142,999,867 10,000,000 3,133,000,000


Nature of Facility
Amount OS as at 31 March 2018 Amount OS as at 31 March 2017 Interest First date of Terms of
B. Un-Secured non-convertible debentures (SD) from Financial Institutions*
Bullet
UNCD 1 - 300,000,000 - - 13.90% 29-Sep-23
Repayment
13.25% - Bullet
UNCD 2@ - 250,000,000 - - 02-Sep-21
13.75% Repayment
Bullet
UNCD 3 - 150,000,000 - - 13.85% 30-Mar-23
Repayment
Bullet
UNCD 4 - 350,000,000 - 500,000,000 13.85% 30-Mar-23
Repayment
Total (B) - 1,050,000,000 - 500,000,000
C. Secured term loan (‘TL’) from Banks*
TL 1 - - 9,000,000 - BR+ 3.25% 19-May-15 Quarterly/10
TL 2 - - 4,550,000 - BR+2.60% 31-Dec-14 Quarterly/11
TL 3 - - 33,315,713 - BR+2.75% 31-Aug-15 Monthly/30
TL 4 - - 15,000,000 - BR+3.25% 17-Jun-15 Quarterly/10
TL 5 - - 15,108,032 - BR+3.00% 30-Apr-15 Monthly/33
TL 6 - - 25,000,000 - BR+ 1.90% 31-Dec-15 Quarterly/8
TL 7 - - 28,125,000 - 11.80% 29-Feb-16 Quarterly/8
TL 8 - - 27,272,722 - BR+ 2.65% 31-Dec-15 Monthly/22
TL 9 - - 66,666,667 - 13.00% 9-Jun-16 Monthly/15
TL 10 - - 9,992,000 - BR+3.00% 8-Apr-16 Monthly/24
TL 11 - - 14,583,337 - BR+3.00% 27-Nov-15 Monthly/24
TL 12 - - 41,666,667 - 13.00% 12-Feb-16 Monthly/24
TL 13 - - 38,181,818 - BR+1.80% 30-Jun-16 Monthly/21
TL 14 21,000,000 - 28,000,000 21,000,000 BR+ 3.00% 28-Sep-16 Quarterly/10
TL 15 31,249,300 - 125,000,400 31,249,597 BR+3.50% 29-Jul-16 Monthly/24
TL 16 - - 85,200,000 - BR+3.00% 31-Jul-16 Monthly/21
TL 17 54,485,301 - 102,000,000 54,500,000 BR+2.75% 31-May-15 Monthly/30
TL 18 20,000,000 - 40,000,000 20,000,000 BR+3.00% 30-Jun-16 Quarterly/10
TL 19 - - 20,000,000 10,000,000 BR+4.00% 30-Jun-16 Quarterly/10
TL 20 25,000,000 - 20,000,000 25,000,000 BR+3.25% 7-Jan-17 Quarterly/10
TL 21 50,000,000 - 60,000,000 50,000,000 BR+3.00% 30-Sep-16 Monthly/30
TL 22 18,750,000 - 75,000,000 18,750,000 BR+3.00% 25-Jul-16 Quarterly/8
TL 23 15,625,000 - 62,500,000 15,625,000 11.40% 1-Sep-16 Quarterly/8
MCLR 1Y
TL 24 33,332,800 - 50,000,000 33,333,200 31-Dec-16 Monthly/24
1.52%
TL 25 18,750,000 - 37,500,000 18,750,000 BR+3.00% 31-Oct-16 Monthly/24
MCLR 1Y
TL 26 68,750,000 - 100,000,000 68,750,000 31-Dec-16 Quarterly/8
2.35%
MCLR 1Y
TL 27 40,000,000 30,000,000 30,000,000 70,000,000 17-Jul-17 Quarterly/10
2.65%
MCLR 1Y
TL 28 130,952,000 - 119,048,000 130,952,000 22-Jun-17 Monthly/21
2.85%
MCLR 1Y Bullet
TL 29 - - 180,000,000 - 20-Mar-18
2.09% Repayment
MCLR 1Y
TL 30 102,000,000 88,438,562 47,600,000 152,400,000 1-Sep-17 Monthly/30
3.00%
MCLR 1Y
TL 31 100,000,000 50,000,000 - - 25-Jun-18 Quarterly/6
3.35%


TL 32 200,000,000 50,000,000 - - 11.50% 30-Apr-18 Monthly/15
TL 33 125,000,004 124,999,996 - - 12.20% 5-Apr-18 Monthly/24
MCLR
TL 34 114,288,000 76,188,000 - - 1-Apr-18 Monthly/21
4.45%
MCLR
TL 35 100,000,000 75,000,000 - - 21-Mar-18 Quarterly/8
1.25%
MCLR 1Y
TL 36 26,404,219 19,803,164 - - 30-Apr-18 Quarterly/8
3.00%
TL 37 400,000,000 - - - 10.50% 27-Feb-18 Quarterly/4
MCLR
TL 38 114,288,000 85,712,000 - - 1-May-18 Monthly/21
4.45%
MCLR
TL 39 50,000,000 50,000,000 - - 30-Apr-18 Quarterly/8
1.25%
TL 40 200,000,000 50,000,000 - - 11.50% 30-Apr-18 Monthly/15
MCLR
TL 41 227,272,727 272,727,273 - - 27-Jun-18 Monthly/22
3.05%
TL 42 300,000,000 - - - 10.50% 30-Sep-18 Quarterly/4
MCLR
TL 43 107,142,855 142,857,145 - - 30-Sep-18 Quarterly/7
3.80%
TL 44 50,000,000 150,000,000 - - 12.75% 15-Sep-18 Quarterly/12
MCLR
TL 45 250,000,000 - - - 28-Apr-18 Monthly/12
2.20%
MCLR
TL 46 250,000,000 250,000,000 - - 30-Apr-18 Monthly/24
2.25%
MCLR
TL 47 25,000,000 75,000,000 - - 27-Oct-18 Monthly/24
2.10%
MCLR Bullet
TL 48 - 200,000,000 - - 30-Apr-19
1.98% Repayment
TL 49 - - 14,285,802 - 15.75% 5-Oct-15 Monthly/21
TL 50 49,999,988 - 100,000,000 49,999,996 14.00% 5-Oct-16 Monthly/24
Total (C) 3,319,290,194 1,790,726,140 1,624,596,158 770,309,793
D. Secured term loan ('TL') from Other*
TL 51 - - 8,337,000 - 15.00% 29-Jul-14 Quarterly/12
TL 52 30,000,000 - 60,000,000 30,000,000 15.00% 13-Nov-15 Quarterly/12
TL 53 4,735,228 - 52,807,555 4,735,229 13.75% 1-May-16 Monthly/24
TL 54 - - 49,999,996 - BR-0.50% 9-Apr-15 Monthly/24
TL 55 - - 60,062,799 - 14.00% 19-Jul-16 Monthly/21
TL 56 - - 16,666,665 8,333,336 15.50% 31-Mar-16 Half Yearly/6
TL 57 - - 66,666,663 - 13.25% 28-Nov-15 Monthly/24
TL 58 - - 49,296,708 - 14.00% 8-Mar-16 Monthly/24
TL 59 - - 45,832,900 - 13.25% 1-Mar-16 Monthly/24
TL 60 80,000,000 100,000,000 20,000,000 180,000,000 13.50% 17-Jan-18 Quarterly/10
TL 61 111,115,783 26,772,316 97,173,802 137,888,097 13.50% 29-Jul-16 Monthly/36
TL 62 107,916,661 - 185,000,003 107,916,661 13.00% 30-Nov-16 Monthly/24
TL 63 78,712,623 71,936,492 75,981,379 150,649,115 13.00% 28-Dec-16 Monthly/36
TL 64 124,999,996 - 125,000,004 124,999,996 12.85% 20-Apr-17 Monthly/24
TL 65 57,923,326 5,173,555 46,903,121 63,096,879 13.00% 1-May-17 Monthly/24
TL 66 73,720,596 6,584,524 59,694,881 80,305,119 13.00% 1-May-17 Monthly/24
TL 67 - - 21,220,000 - 13.00% 10-Feb-15 Monthly/33
TL 68 16,000,000 - 48,000,000 16,000,000 10.10% 30-Jul-16 Monthly/25


TL 69 41,100,000 - 41,100,000 41,100,000 11.50% 31-Jul-16 Half Yearly/6
TL 70 54,545,448 27,279,552 54,545,448 81,819,552 12.75% 10-Feb-17 Monthly/33
TL 71 300,000,000 287,500,000 300,000,000 587,500,000 11.50% 31-Jan-17 Half Yearly/11
TL 72 83,349,161 14,969,684 - - 13.00% 1-Jun-17 Monthly/24
TL 73 120,000,000 220,000,000 - - 10.85% 31-Jan-18 Half Yearly/11
MAS PLR
TL 74 75,000,000 50,000,000 - - 25-Dec-17 Monthly/24
-2.15%
MAS PLR
TL 75 50,000,004 37,499,995 - - 10-Jan-18 Monthly/24
-2.15%
TL 76 169,496,920 141,226,320 - - 12.25% 27-Mar-18 Quarterly/8
TL 77 54,522,569 81,818,098 - - 12.25% 31-Jan-18 Quarterly/11
MAS PLR
TL 78 99,999,996 83,333,338 - - 10-Feb-18 Monthly/24
-2.30%
TL 79 75,000,000 75,000,000 - - 13.20% 15-Apr-18 Monthly/24
TL 80 47,834,057 44,766,948 - - 12.75% 25-Feb-18 Monthly/24
TL 81 - 500,000,000 - - 12.75% 6-May-19 Quarterly/8
TL 82 58,465,117 141,534,883 - - 12.40% 5-Mar-18 Monthly/36
MAS PLR 25-Apr-18 Monthly/24
TL 83 125,000,000 125,000,000 - -
-2.50%
PFL PLR
TL 84 106,788,929 193,211,071 - - 5-Aug-18 Monthly/21
3.65%
TL 85 67,017,145 182,982,855 - - 12.15% 31-May-18 Monthly/36
Total (D) 2,213,243,558 2,416,589,632 1,539,983,914 1,628,955,785
E. Secured Vehicle loan (‘VL’) from Bank*
VL 1 284,120 - 451,093 284,118 10.25% 31-Oct-13 Monthly/60
Total (E) 284,120 - 451,093 284,118
F. Unsecured term loan (‘USL’) from financial institution
UTL 1 - - 3,450,000 - 2.00% 10-Sep-17 Quarterly/3
UTL 2 - - 25,000,000 75,000,000 15.00% 15-Sep-17 Quarterly/12
UTL 3 - - - - 13.60% 31-Aug-18 Quarterly/12
SD 2 - 300,000,000 - - 14.25% 04-Dec-23 Bullet Payment
UTL 4 145,454,544 254,545,456 - - 12.40% 24-Apr-18 Quarterly/11
Total (F) 145,454,544 554,545,456 28,450,000 75,000,000
G. Unsecured term loan (‘USL’) from Banks
Bullet
SD 1 - 70,000,000 - 70,000,000 15.50% 28-Feb-21
Repayment
Total (F) 70,000,000 - 70,000,000
H. Cash Credit from Bank
MCLR
CC1 58,175,525 - - - - Annual
+3.00%
Total (H) 58,175,525 - - -
Total (A+B+
6,023,114,741 10,024,861,095 3,203,481,165 6,177,549,696 - - -
C+D+E+F+G+H)
*Term loans and Non-convertible debentures are secured against exclusive charge on the standard assets portfolio receivables pertaining to
micro credit loans in addition to the cash collaterals referred in note 2.10, 2.13 and 2.15 with the respective lenders. Term loans of `241.58
crores are secured by personal guarantees of the promoter directors.
#Vehicle loan is secured by the vehicles procured from the respective loans.
@ Interest is charged based on Reference Index Performance, corresponding Effective Annualized Coupon rate Function.


2.35 Deferred tax assets

As at As at
Particulars
31 March 2018 31 March 2018
Deferred tax assets on:
- Provisions on loan portfolio 153,140,312 100,335,707
- Provision for employee benefits 5,290,772 4,339,051
- Depreciation on fixed assets 4,983,131 3,466,276
- Provision for employee contingency - 278,927
- Other provisions - 598,230
- Provision for bonus 5,243,043 -
- Tax loss as per Income Tax 82,274,703 -
Total 250,931,961 109,018,191
2.36 Auditors remuneration (Included in legal and professional fee, excluding service tax/Goods & Service Tax)
Particulars
31 March 2018 31 March 2017
Statutory audit fees 1,250,000 1,300,000
Limited review fees 400,000 350,000
Certification fees 350,000 350,000
Out of pocket expenses 45,024 95,046
Total 2,045,024 2,095,046
2.37 Information on instances of fraud: (Amount in crores)

For the year ended 31 March 2018 For the year ended 31 March 2017
Amount of Amount Amount of Amount
Nature of fraud Recovery Recovery
fraud outstanding fraud outstanding
Misappropriation of cash by 0.32 0.12 0.20 0.36 0.13 0.24*
employees
* The Company has written off/ provided the amount.
2.38 Amounts payable to Micro, Small and Medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which
recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the
Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect
of the amounts payable to such enterprises as at 31 March 2018 has been made in the financial statements based on
information received and available with the Company. Further, in the view of the management, the impact of interest, if
any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development
Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under
the said Act.
Particulars
31 March 2018 31 March 2017
The principal amount and the interest due thereon remaining Nil Nil
unpaid to any supplier as at the end of each accounting year.
The amount of interest paid by the company along with the amounts Nil Nil
of the payment made to the supplier beyond the appointed day
during the year.
The amount of interest due and payable for the period of delay in Nil Nil
making payment (which have been paid but beyond the appointed
day during the year) but without adding the interest specified under
this act.



Particulars
31 March 2018 31 March 2017
The amount of interest accrued and remaining unpaid at the end Nil Nil
of the year; and
The amount of further interest remaining due and payable even Nil Nil
in the succeeding years, until such date when the interest due as
above are actually paid to the small enterprise.
2.39 Section 135 of the Companies Act 2013 is applicable to the Company during the year and accordingly the Company has
formed a CSR Committee. The Board of Directors has approved a CSR Policy where certain focus areas out of list of
activities covered in Schedule VII of the Companies Act 2013, has been identified for carrying out CSR activities. Details
of amount to be spent and CSR expenditure incurred are given below:
Particulars
31 March 2018 31 March 2017
Average net profit of the company for last three financial years 119,405,529 115,622,054
Prescribed CSR expenditure to be spent (2% of the average net 2,338,111 2,312,441
profit)
Amount spent 4,383,084 973,259
Amount unspent - 1,339,182
2.40 Disclosures as required under RBI Notification No. DNBR. 019/CGM (CDS) -2015 dated April 10, 2015:
Capital to Risk Asset ratio (CRAR)
Sl. As at As at
Particulars
No. 31 March 2018 31 March 2017
I CRAR % 21.87% 25.97%
II CRAR – Tier I Capital (%) 15.14% 19.94%
III CRAR – Tier II Capital (%) 6.73% 6.03%
IV Amount of sub ordinated debt raised as Tier-II capital 600,000,000 542,000,000
V Amount raised by issue of Perpetual Debt Instruments - -
2.41 The Company does not have any direct or indirect exposure to real estate sector.
2.42 Asset Liability Management

Maturity pattern of certain items of assets and liabilities as on 31 March 2018 (Amount in crores)
Over 2 Over 3
1 day to 1 month Over 6 Over 1 Over 3
months months Over 5
Particulars 30/31 to 2 months year upto upto Total
upto 3 to 6 years
days months to 1 year 3 years 5 years
months months
Borrowings from 18.87 11.71 13.60 47.23 91.29 212.81 0.82 30.00 426.34
Banks
Borrowings from 30.28 27.30 28.46 115.70 189.21 230.18 9.37 - 630.49
others
Borrowings from NCD - - - 3.33 25.33 196.70 174.60 148.00 547.97
Foreign Currency - - - - - - - - -
Liabilities
Advances 71.97 80.18 74.71 236.75 442.90 431.24 - - 1,337.75
Investments 0.50 - - - - - - - 0.50
Foreign Currency - - - - - - - - -
Assets


2.43 Provision and contingencies (shown under the head expenditure in Statement of Profit and Loss)
(Amount in crores)
Particulars
31 March 2018 31 March 2017
Provision for non-performing loan portfolio 19.94 0.40
Provision for Business Correspondence Portfolio 2.02 -
Contingent provisions against standard loan portfolio - 2.10
Provisions for standard loan portfolio due to demonetization - 23.13
Provision for Income Tax - 10.42
Provision for Cash loss - 0.57
Provision for Gratuity 0.70 0.65
Provision for leave benefits 0.82 0.90
2.44 Sector wise Non-Performing Assets (NPA) (Amount in crores)

FY 2017-18 FY 2016-17
Sl. Percentage of NPAs Percentage of NPAs
Sector
No. to total advances in to total advances in
that sector that sector
1. Agriculture & allied activities 3.97% 0.29%
2. MSME 4.10% 7.47%
3. Corporate borrowers NA NA
4. Services NA NA
5. Unsecured personal loans NA NA
6. Auto loans NA 100%*
7. Other personal loans NA NA
* Small ticket vehicle loans are being considered in auto loans
2.45 Movement in Non-Performing Asset (NPA) (Amount in crores)

Particulars 2017-18 2016-17
i) Net NPA to net advances percentage 0.16% 0.14%
ii) Movement of NPAs (Gross)
a) Opening balance 2.85 1.54
b) Additions during the year 107.27 1.31
c) Reduction during the year (write off) 57.53 -
d) Closing balance 52.59 2.85
iii) Movement of net NPAs
b) Additions during the year -1.05 0.91
c) Reduction during the year - -
d) Closing balance - 1.05
iv) Movement of provisions for NPAs (excluding provisions on
standard assets)
b) Provision made during the year 108.31 0.40
c) Write off/ write back of excess provisions 57.53 -
d) Closing balance 52.59 1.80


2.46 Disclosure with respect to investments

(Amount in crores)
Sl. As at As at
Particulars
No. 31 March 2018 31 March 20187
1) Value of Investments
(i) Gross value of investments
(a) In India 0.50 210.51
(b) Outside India - -
(ii) Provision for depreciation
(a) In India - -
(iii) Net value of investments
(a) In India 0.50 210.51
2) Movement of provisions held towards depreciation on
investments
(i) Opening balance - -
(ii) Add: Provisions made during the year - -
(iii) Less: Write-off/ write-back of excess provisions during - -
the year
(iv) Closing balance - -
2.47 Disclosure with respect to customer complaints

Sl.
Sector Number of complaints
No.
(i) No. of complaints pending at the beginning of the year 4
(ii) No. of complaints received during the year 494
(iii) No. of complaints redressed during the year 463
(iv) No. of complaints pending at the end of the year 35
2.48 Ratings assigned by credit rating agencies and migration of ratings

Facility Current rating Previous rating
MFI Grading MFI 2+ MFI 2+
Long term bank facility CARE BBB+ CARE BBB+
Non-convertible debentures (other than below) ICRA BBB ICRA BBB
Other Non-convertible debenture CARE BBB+ CARE BBB+
2.49 Disclosure on specified bank notes

As required by the Ministry of Corporate Affairs notification G.S.R. 308 dated 30 March 2017, the details of Specified
Bank Notes (SBN) held and transacted during the period from 08 November 2016 to 30 December 2016 are provided in
the table below:
Particulars SBN Other demonization notes Total
Closing cash in has as on 08 November 2016 9,804,000 3,611 9,807,611
(+) Withdrawal from bank accounts 3,378,018 3378,018
(+) Collection from borrowers 31,643,000 1,124,719,681 1,156,362,681
(+) Collection on behalf of banks (BC borrower) 337,787,500 63,251,554 97,039,054
(-) Amount disbursed to borrowers - 282,558,000 282,558,000


Particulars SBN Other demonization notes Total

(-) Amount deposited in Banks 75,234,500 877,726,802 952,961,302
Closing cash in hand as on 30 December 2016 - 31,068,061 31,068,061
There are no transactions in Specified Bank Notes (SBNs) during the year ended 31 March 2018.
The disclosure on holding and dealing in SBN pertain to financial year ended 31 March 2017.
2.50 Details of penalties imposed by RBI and other regulators

No penalties has been imposed by RBI and other regulators on the Company during the financial year ended 31 March
2018 and 31 March 2017.
2.51 Unsecured advances

The Company has not given any unsecured advances against intangible securities such as charge over the rights,
licenses, authority, etc. during the financial year ended 31 March 2018 and 31 March 2017.
2.52 Details of non-performing financial assets purchased / sold:

The Company has not purchased/sold any non-performing financial assets during the financial year ended 31 March
2018 and 31 March 2017.
2.53 Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC:
The Company has not exceeded the prudential exposure limits during the financial year ended 31 March 2018 and 31
March 2017.
2.54 Draw down from Reserves

There has been no draw down from reserves during the year ended 31 March 2018 and 31 March 2017.
2.55 The Company does not have any foreign currency exposure and/or derivatives during the year and as at balance sheet date.
2.56 Details of registration with financial and other regulators:

Regulator Registration number Date of registration
Ministry of Corporate Affairs U65100DL1994PTC061287 5 September 1994
Reserve Bank of India B-14.02857 19 May 2010
2.57 Previous year’s figures have been regrouped / reclassified, where necessary, to conform to current year’s classification.
Number.:116231W/W-100024


CORPORATE INFORMATION
BOARD OF DIRECTORS
Mr. Devesh Sachdev Director & CEO
Mr. Pradip Kumar Saha Independent Director
Mr. Nitin Gupta Independent Director
Ms.Ratna Vishwanathan Independent Director
Mr. Njord Andrewes Nominee Director
Ms. Laetitia Counye Nominee Director
Mr. Albert Hofsink Nominee Director
Mr. Javed Ahmad Siddiqui Nominee Director
Mr. Kenneth Dan Vander Weele Nominee Director
KEY MANAGERIAL PERSONS

Mr. Devesh Sachdev Chief Executive Officer
Mr. Gaurav Maheshwari Chief Financial Officer
Mr. Deepak Madaan Company Secretary
REGISTERED OFFICE STATUTORY AUDITORS

FUSION MICRO FINANCE PRIVATE LIMITED BSR & ASSOCIATES LLP
H-1, C Block, Community Centre, Naraina Vihar, Chartered Accountants
New Delhi-110028 Salarpuria Knowledge City
Tel: +91 46646600 Orwell, 6th Floor, Unit - 3
Web Site: www.fusionmicrofinance.com Sy. No. 83/1, Plot no. 2, Raidurg
Hyderabad - 500081
BANKERS REGISTRAR & SHARE TRANSFER AGENT

HDFC Bank Limited LINK INTIME INDIA PRIVATE LIMITED
E-51, Naraina Vihar, C-13, Pannalal Silk Mills Compound, LBS Marg,
New Delhi - 110028 Bhandup (West), Mumbai - 400 078.
Tel. No.: +91 22 2594 6970; Fax No.: +91 22 2594 6969
E-mail: [email protected]
Website: www.linkintime.co.in
DEBENTURE TRUSTEE DETAILS

CATALYST TRUSTEESHIP LIMITED Office No. 83 – 87, 8th floor, ‘Mittal Tower’, ‘B’ Wing,
(Formerly known as GDA) Nariman Point, Mumbai – 400021
AXIS TRUSTEE SERVICES LIMITED Axis House, 2nd Floor, Wadia International Centre,
Pandurang Budhkar Marg, Worli, Mumbai-400 025.
VISTRA ITCL (INDIA) LIMITED IL & FS Financial Centre, Plot No C22, G Block, Bandra Kurla
Complex, Bandra East, Mumbai, Maharashtra-400051
H-1, C Block, Community Centre, Naraina Vihar, New Delhi-110028

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Fusion Microfinance Private Limited

Fusion Microfinance features among the top

The business space

The business 2016-17 201.04 Growth

The business numbers Assets under management (H crore)

Gross Loan Portfolio (H crore)

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Fusion Microfinance Private Limited 3

At Fusion, we challenged this mindset.

At Fusion we decided to serve more than we

In doing so, we enrolled 147,352 new customers

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As March 31, 2017 248

As March 31, 2017 682,369

Added in Q1/2017-18 122,181

Fusion Microfinance Private Limited 5

At Fusion, we decided to make a We made it happen.

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Fusion Microfinance Private Limited 7

Rajasthan Uttar Pradesh

Footprint across India

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Business Global Awards and

Fusion Microfinance Private Limited 9

Our operating canvas

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Our business operations Our operational efficiency

3,714.31 1,492.76 13.47 99.13

Fusion Microfinance Private Limited 11

revenue increased by 33% But fiscal 2017-18 was an an important

“We ramped our change ... and change we did!

operations strategy in July 2016. It was a telling yet

and improved our

performance despite the customers not just on the benefits of

prevailing economic and

sectoral headwinds.” account – each time, every time. And we

12 Annual Report 2017-18

The team raised C1,090.82 crore from

Fusion Microfinance Private Limited 13

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Fusion Microfinance Private Limited 15

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Fusion Microfinance Private Limited 17

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Fusion Microfinance Private Limited 19

March 31, 2017.

PAR > 30 PAR > 90 PAR > 180

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Fusion Microfinance Private Limited 21

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Himachal Pradesh (new entry)

West Bengal (new entry)

Fusion Microfinance Private Limited 23

Credit management Applications received

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Fusion Microfinance Private Limited 25

Treasury management Funds secured (D crore)

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