During the current financial year, the Total Income from operations grew by 33.00% to C2,316.73 crore which is mainly due to an increase in the Asset Under Management ('AUM') of the Company and the Profit before tax grew by 29.55% to C663.26 crore The improvement in the financial performance of the company is on account of business growth recorded during the year.
2. OPERATIONAL PERFORMANCE
Operational performance of the Company for the current financial year ended the March 31,2024 as compared to the previous financial year ended the March 31,2023 is summarized below:
The Board of Directors are pleased to present the 30th Annual Report of the Company ("Fusion Finance Limited" or "Fusion") along with the Audited Financial Statements, for the Financial Year ended March 31,2024.
1. FINANCIAL SUMMARY/STATE OF AFFAIRS
The financial statements of the Company for the year ended March 31, 2024 have been prepared in accordance with Indian Accounting Standards ("Ind AS") prescribed under section 133 of the Companies Act, 2013 (the "Act"), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Schedule III to the Act, as amended from time to time and applicable guidelines issued by SEBI.
The financial results of the Company for the current financial year ended the March 31,2024 as compared to the previous financial year ended the March 31,2023 are as under:
|
(? in crores unless otherwise stated)
|
|
Particulars
|
For the year ended March 31, 2024
|
For the year ended March 31, 2023
|
|
Revenue from operations
|
|
Interest Income
|
2,091.90
|
1,600.10
|
|
Fees and commission Income
|
41.67
|
19.58
|
|
Net gain on fair value changes
|
52.86
|
25.38
|
|
Net gain on derecognition of financial instruments under amortized cost category
|
130.30
|
96.86
|
|
Total Revenue from operations
|
2,316.73
|
1,741.92
|
|
Other Income
|
95.69
|
58.05
|
|
Total Income
|
2,412.42
|
1,799.97
|
|
Expenses
|
|
Finance Costs
|
790.83
|
642.78
|
|
Impairment on financial instruments
|
364.86
|
200.37
|
|
Employee benefits expenses
|
431.22
|
325.52
|
|
Depreciation and amortization
|
9.01
|
7.41
|
|
Other expenses
|
153.24
|
111.91
|
|
Total Expenses
|
1,749.16
|
1,287.99
|
|
Profit before tax
|
663.26
|
511.98
|
|
Tax Expense:
|
|
Current Tax
|
172.30
|
110.60
|
|
Deferred Tax
|
(14.33)
|
14.23
|
|
Profit for the year
|
505.29
|
387.15
|
|
Other Comprehensive Income
|
|
Items that will not be reclassified subsequently to profit or Loss
|
|
Re-measurement gains/(loss) on defined benefit plans
|
1.64
|
0.42
|
|
Income tax effect
|
(0.41)
|
(0.11)
|
|
Total Other Comprehensive Income for the year
|
1.23
|
0.31
|
|
Total Comprehensive Income for the year
|
506.52
|
387.46
|
|
Particulars
|
FY March 31, 2024
|
FY March 31, 2023
|
Increase %
|
|
Number of Branches
|
1,297
|
1,086
|
19.43%
|
|
Number of Members
|
38,61,892
|
35,28,107
|
9.46%
|
|
Number of Employees
|
13,807
|
10,363
|
33.23%
|
|
Number of States (including UTs)
|
22
|
20
|
10.00%
|
|
Amount Disbursed (C In Crore)
|
10,294
|
8,596
|
19.76%
|
|
Gross Loan Portfolio (C In Crore)
|
11,476
|
9,296
|
23.45%
|
The Company attained business performance by reaching out to 38,61,892 active loan Borrowers as on March 31,2024, which has grown from 35,28,107 as on March 31,2023. The growth in active loan borrowers during the year was 9.46%.
The above was possible with excellent efforts of 13,807 employees of the Company as on March 31, 2024, which was 10,363 as on March 31, 2023, through 1297 Branches, across 22 states and 453 districts in India. During the year under review, the Company opened 211 new branches.
The Company already has borrowing arrangements with a large number of lenders and has started associations with a few more institutions to diversify its sources of borrowing.
3. CASH FLOW STATEMENT
The Cash Flow Statement for the year ended on March 31, 2024 prepared under the provisions of the Companies Act, 2013 is attached as a part of the Financial Statements of the Company.
4. ANNUAL RETURN
Pursuant to sub-section (3)(a) of Section 134 and sub-section (3) of Section 92 of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of the Annual Return as at March 31, 2024 is available on the website of the company at www.fusionfin.com.
5. DEPOSITS
The Company is a non-deposit taking Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI) and has not accepted any public deposits within the ambit of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 or Section 73 of the
Act read with Companies (Acceptance of Deposits) Rules, 2014. Further, the company continues to be a non-deposit taking Non-Banking Financial Company in conformity with the guidelines of the RBI.
6. TRANSFER TO RESERVES
During the FY2023-24 the Company has transferred C 101.06 Crore to the statutory reserve pursuant to Section 45-IC of the Reserve Bank of India Act, 1934.
7. DIVIDEND
The Board of Directors aims to grow the business of the Company and enhance the rate of return on investments of the shareholders. With a view to financing the longterm growth plans of the Company that require substantial resources despite having sufficient distributable profits, the Board of Directors do not recommend any dividend for the year under review.
The Dividend Distribution Policy, in terms of Regulation 43A of the Listing Regulations is available on the website of the Company at https://fusionfin.com/wp-content/ uploads/2023/07/Dividend-distribution-policy1.pdf
8. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 125 of the Act, unclaimed dividends are required to be transferred to the Investors Education and Protection Fund. There has been no dividend declared in the last Seven (7) years and year under review and hence, there is no requirement of transferring the same to the Investors Education and Protection Fund for the year under the review.
9. SCALE BASED REGULATIONS
With reference to the RBI circular dated October 22, 2021 on "Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs" ('SBR Framework'), the NBFCs are categorised into four layers, NBFC - Base Layer (NBFC-BL), NBFC - Middle Layer (NBFC-ML), NBFC - Upper Layer (NBFC-UL) and NBFC - Top Layer (NBFC-TL) based on their size, activity, and perceived riskiness. Accordingly, the company is categorised as an NBFC - Middle Layer (NBFC-ML) and is in compliance with the applicable regulations.
10. NUMBER OF MEETINGS OF THE BOARD
During the FY 2023-24, the Board met 4 (Four) times and details related to the board meetings of the Company are mentioned in the Corporate Governance Report annexed as "ANNEXURE -1", which forms part of this report. The intervening gap between the Board Meetings was within the period prescribed under the Act and SEBI Listing Regulations.
11. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business during the financial year ended March 31,2024 .
12. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
a. Changes in Directors and KMPs during the FY 2023 -24
During the financial year, the shareholders via postal ballot dated July 08, 2023 has approved the change the terms of appointment of Mr. Kenneth Dan Vander Weele (DIN: 02545813) and Mr. Narendra Ostawal (DIN: 06530414), nominee directors of the company, thereby, making their office liable to retire by rotation.
Further, Ms. Ratna Dharashree Vishwanathan (DIN: 07278291) was re-appointment as an Independent Director w.e.f. May 24, 2023 for a second term, for three consecutive years, which was approved by the shareholders in the Extra Ordinary General meeting of the Company held on February 16, 2023.
In addition, the shareholders in the Annual General Meeting of the Company held on September 29, 2023 approved the re-appointment of Mr. Kenneth Dan Vander Weele, retiring by rotation, as the Director of the Company.
Further, Mr. Deepak Madaan, Company Secretary of the company was redesignated as Company Secretary and Chief Compliance Officer by the board of directors in
their mootinn helHrvnAiimictO’} 9 09 3
b. Reappointment of Managing Director
The shareholders via postal ballot dated July 08, 2023 had re-appointed Mr Devesh Sachdev as Managing Director of the Company for the period of 5 (five) consecutive years commencing from December 05, 2023 to December 04, 2028.
c. Woman Director
In terms of the provisions of Section 149 of the Companies Act, 2013, and Regulation 17(1 )(a) of the SEBI Listing Regulations, the Board of Directors of top 1000 listed entities shall have at least one independent women director. Accordingly, the Company has Ms. Namrata Kaul (DIN: 00994532) and Ms. Ratna Dharashree Vishwanathan (DIN: 07278291) as Independent Woman Directors on the Board.
d. Director retiring by rotation
Mr. Narendra Ostawal (DIN: 06530414) shall retire by rotation in terms of provisions of the Companies Act, 2013 at the ensuing Annual General Meeting of the Company and being eligible, offers himself for reappointment. The Board recommends his reappointment. As stipulated under Reg 36(3) of the SEBI (LODR) Regulations 2015, a brief resume of Mr. Narendra Ostawal proposed to be reappointed is given in notice of the 30th AGM of the Company.
e. Key Managerial Personnel (KMP)
As per the provisions of the Act, Mr. Devesh Sachdev, Managing Director & Chief Executive Officer, Mr. Gaurav Maheshwari, Chief Financial Officer and Mr. Deepak Madaan, Company Secretary & Chief Compliance Officer are the KMPs of the Company.
13. DECLARATION OF INDEPENDENCE
The Company has received necessary declarations from each Independent Director as per the provisions of Section 149(7) of the Act read with Regulation 25(8) of SEBI Listing Regulations, that they meet the criteria of Independence as laid down in Section 149(6) of the Act and Regulation 16(1) (b) of the SEBI Listing Regulations.
There has been no change in the circumstances affecting their status as Independent Directors of the Company or to qualify under the Act and the relevant regulations.
In the opinion of the Board all the Independent Directors are person of integrity and possess requisite qualification/ skill/ expertise required for their roles and they are independent of the Management.
14. CREDIT RATING
CRISIL has assigned rating A , outlook stable for Long Term Bank Facilities (amounting to C8000 crore). CARE Rating Limited has also assigned rating of A , outlook stable for Long Term Bank Facilities (amounting C1500 crore) and for Non-Convertible Debentures. ICRA assigned rating of A , outlook stable on Non-Convertible Debentures including subordinate debt.
CARE Advisory Research and Training Ltd has assigned grading of "MFI 1".
15. CAPITAL ADEQUACY
The Capital Adequacy Ratio of the company was 27.53% as on March 31,2024, as against the minimum capital adequacy requirements of 15% by Reserve Bank of India ("RBI").
16. FAIR PRACTICE CODE
The Company has in place a Fair Practice Code (FPC) approved by the Board in compliance with the guidelines issued by RBI, to ensure better service and provide necessary information to customers to take informed decisions. The FPC is available on the website of the Company at www. fusionfin.com.
17. CUSTOMER GRIEVANCES
The Company has a dedicated Customer Grievance team for receiving and handling customer complaints/ grievances and ensuring that the customers are treated fairly and without any bias at all times. All issues raised by the customers are dealt with courtesy and redressed expeditiously.
18. RESOURCE MOBILIZATION
a) Term Loan / Sub debt /Refinance
During FY2023-24 , the Company diversified its sources of funds and raised a sum of C7,173.19 Crore (Inclusive of Term Loan of C7,023.19 Crore, and Refinance term loan of C150.00 Crore).
b) Secured / Unsecured Non-convertible debentures
During FY2023-24, the Company has not raised funds from unsecured Non-Convertible Debentures and secured Non-Convertible Debentures.
c) Direct Assignment
During FY2023-24, the Company has raised C1640.53 Crore through Direct Assignment.
19. SHARE CAPITAL
The Authorized Share Capital of the Company as March 31, 2024, stood at ? 1,05,00,00,000 (Rupees One Hundred and Five
Crore only) consisting of 10,50,00,000 (Ten Crore and Fifty Lacs only) Equity Shares of C10 (Rupees Ten only) each.
The Issued and Paid-up Share Capital of the Company as on March 31, 2024, stood at C1,01,02,38,850 (Rupees One Hundred and One Crore Two Lakh Thirty-Eight Thousand Eight Hundred Fifty only) consisting of 10,10,23,885 (Ten Crore Ten Lakh Twenty-Three Thousand Eight Hundred and Eighty Five only) Equity Shares C10 (Rupees Ten only) each.
There was no public issue, rights issue, bonus issue or preferential issue, etc. during the year. Further, the Company has not bought back any of its securities during the year under review.
During the year, 3,93,150 equity shares were issued and allotted to Fusion Employee Benefit Trust towards ESOP, which is included in the above said Paid-Up Equity Share Capital.
20. NON CONVERTIBLE DEBENTURES
During FY2023-24, the Company has not raised any funds by the way of issuance of secured and unsecured NonConvertible Debentures. Further, all the listed NCDs of the Company have been redeemed as on March 31, 2024. The fully redeemed NCDs during the year amounts to C437.79 Crores. The outstanding NCDs including subordinated liabilities in form of NCDs as on March 31, 2024 stood at C254.98 Crores.
21. COMMITTEES DETAILS
As on March 31, 2024 , the Company has 10 committees which govern and oversee different areas of the Company's operations ensuring regular guidance and monitoring.
Further, the details pertaining to various Committees and the respective meetings are provided in Corporate Governance Report attached as "ANNEXURE 1".
22. RELATED PARTY TRANSACTIONS
During the FY2023-24, there were no material related party transactions entered by the Company that were required to disclosed in form AOC-2. The details of the related party transactions are provided in the notes to the Financial Statements.
The policy on Related Party Transactions, as approved by the Board, is displayed on the website of the Company i.e. www.fusionfin.com.
23. AUDITOR'S AND AUDITORS' REPORT
STATUTORY AUDITOR
Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with rules made thereunder and RBI
notification no. DoS.CO.ARG/SEC.01/08.91.001/2021-
22 dated April 27, 2021, M/s Deloitte Haskins and Sells, Chartered Accountants were appointed as Statutory Auditors of the Company to hold office for a period of three years from the conclusion of the Twenty - Eight Annual General Meeting till the conclusion of the Thirty First Annual General Meeting of the Company to be held in the financial year 2025-26.
The Auditors' Reports for the Financial Year 2023-2024 is self-explanatory and does not carry any observation/ qualification/ adverse remarks etc. or infirmity in the Company's affairs. The notes to Financial Statement referred to in the Auditors' report are self explanatory and do not call for any further comments.
During the year, no incidence of fraud as defined under Section 143(12) of the Companies Act, 2013, which is required to be disclosed under Section 134(3) (ca) of the Companies Act, 2013, has been reported by the Auditors to the Board of directors of the Company.
SECRETARIAL AUDITOR
As required under Section 204 of the Act and the Rules made thereunder, M/s. Harish Popli & Associates was appointed as the Secretarial Auditor of the Company to conduct Secretarial Audit of the Company for the Financial Year ended March 31, 2024.
The Secretarial Audit Report for Financial Year ended on March 31, 2024 does not contain any qualification, reservation, adverse remark or disclaimer, except as contained therein, and form the part of Board Report as "Annexure - 2”. The same is self-explanatory in nature.
24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year under review, in terms of the provisions of Section 186(1) of the Act, the Company did not make any investment through more than two layers of investment companies.
Since, the Company is Non-Banking Financial Company, the disclosures regarding particulars of the loan or guarantee given and security provided is exempt under the provisions of Section 186(11) of the Act read with rules made thereunder, as amended. Further, the details of investments made by the Company are given in the Notes to the Financial Statements.
25. NOMINATION AND REMUNERATION POLICY
Pursuant to the provisions of Section 178 of the Act read with applicable rules thereunder, and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in accordance with the RBI master circulars, the Company has in place Nomination and Remuneration Policy ("NRC Policy").
The NRC Policy formulates the criteria for determining qualifications, competencies, positive attributes, and independence for the appointment of a director (executive/ non-executive) and also the criteria for determining the remuneration of the directors, key managerial personnel (KMPs) and senior management personnel.
The NRC Policy of the Company is available on our website at www.fusionfin.com.
26. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT
Change of name of the Company from "FUSION MICRO FINANCE LIMITED" to "FUSION FINANCE LIMITED".
With the expanding needs of its customers, the company plans to provide a more diverse range of financial products to the existing and adjacent clientele. The inclusion of the word 'Microfinance' in the company's name presented a restrictive view of the proposed product offerings and inhibit the company from acquiring new customers in other segments. Therefore, it was believed that removing 'Micro' from the company's name will not impact the current customer segment or impact the core business. Therefore, the board of directors in their meeting held on November 06, 2023 approved the change in the name of the company from 'Fusion Micro Finance Limited' to 'Fusion Finance Limited' which was further approved by the shareholders via Postal Ballot resolution dated June 09, 2024. Notably, there was no change in the main objects of the company pursuant to the change in the name of the company.
Accordingly, the name of the Company has been changed from "FUSION MICRO FINANCE LIMITED” to "FUSION FINANCE LIMITED" w.e.f. July 09, 2024 and a fresh "Certificate of Incorporation" issued by Registrar of Companies (ROC - NCT of Delhi and Haryana), has been received by the Company.
No other material changes and commitments have occurred after the closure of the FY 2023-24 till the date of this Report, which would affect the financial position of the Company.
27. AMENDMENT IN THE ARTICLES OF ASSOCIATION (AOA)
During the Financial Year ended March 31, 2024, the Company's Articles of Association (AOA) was amended two times with the consent of the Board as well as the members of the company, by adopting the amended and restated Articles of Association pursuant to special resolution passed by the members via Postal ballot resolution dated July 08, 2023 and in the Annual General Meeting of the company held on September 29, 2023.
28. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
a. Information Relating to Conservation of Energy, Technology Absorption
The operations of our Company are not energyintensive. The Company has, however, used information technology extensively in its operations and continuously invests in energy-efficient office equipment at all office locations.
b. Foreign Exchange Earnings and Outgo
There have not been any foreign exchange inflow while outgo during the year under review is C6.54 crores towards Interest Payment on ECB & other operating expenses.
29. RISK MANAGEMENT
Our Enterprise Risk Management (ERM) framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation, and monitoring of the Credit, Market, liquidity, Operational, compliance risks to achieving our key business objectives. ERM at Fusion seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage.
The Company has in place a Board Risk Management Committee ("BRMC") to frame, implement, and monitor the enterprise risk management plan for the Company.
Pursuant to Section 134(3)(n) of the Companies Act, 2013, the BRMC is responsible for reviewing the enterprise risk management plan, ensuring its effectiveness, and verifying adherence to various risk parameters. The Company's Enterprise Risk Management strategy is based on clear understanding of various risks, disciplined Enterprise risk assessment and continuous monitoring. The BRMC reviews various risks with which the organization is exposed including Credit Risk, Interest Rate Risk, Liquidity Risk and Operational Risk. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis Report attached as "ANNEXURE 3”.
30. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company strives to meet its commitment towards the community by committing its resources and energies to social development. The CSR Committee of the Company has formulated a CSR Policy which describes the multiple lines around which the CSR activities of the Company are positioned being education and skills development, social
and economic welfare, environmental sustainability and such other activities included in Schedule VII of the Act as may be identified by the CSR Committee from time to time.
The Policy is available on the website of the company at www.fusionfin.com.
Further, the composition of the CSR Committee, terms of reference of the committee and the details of meetings attended by the Committee members are provided in Corporate Governance Report attached as "ANNEXURE 1”.
The Annual Report on the CSR activities for the FY 2023 -24 containing salient features of CSR Policy and other relevant details is attached as "ANNEXURE 4” to this Report.
31. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
A detailed Business Responsibility & Sustainability Report (BRSR) has been prepared and is made available on the website of the company at https://fusionfin.com/wp-content/uploads/2024/09/FFL-BRSR-2023-24.pdf.
32. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
In compliance with the Companies Act, 2013, and SEBI Listing Regulations, 2015, the Company has a structured assessment process for evaluation of performance of the Board, its Committees and individual performance of each Director including the Chairperson. The evaluations are carried out in a confidential manner and the Directors provide their feedback by categorising them in Good, Average, and Below Average categories.
The Independent Directors at their separate meeting reviewed the performance of Non-Independent Directors and the Board as a whole. The Chairman of the Company after taking into account the views of other Non Executive Directors, the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
The overall performance evaluation exercise was completed to the satisfaction of the Board. The outcome of the evaluation was presented to the Board of Directors of the Company.
33. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Vigil Mechanism system/Whistle Blower Policy has been implemented with a view to provide a tool to directors and employees of the Company to report to the management genuine concerns including unethical behavior, actual or
In addition, the Company has a system of periodic reporting of the information to RBI as per the prescribed guidelines.
37. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has no subsidiary/joint venture/ associate company and hence consolidation and the provisions relating to the same under the Companies Act, 2013 and rules made thereunder are not applicable to the Company.
38. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the FY2023-24, there are no such orders passed by the regulators/courts/ tribunals impacting the going concern status and the Company's operations in future.
39. INTERNAL FINANCIAL CONTROLS
As per Section 134(5)(e) of the Companies Act, 2013, the Directors have an overall responsibility for ensuring that the Company has implemented a robust system and framework of Internal Financial Controls. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. The Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audits, risk management framework and whistle blower mechanism. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. During the year, controls were tested and no reportable material weakness in design and effectiveness was observed.
The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the controls. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee.
The Audit Committee reviews the reports submitted by the Internal Auditors in each of its meeting. Also, the Audit Committee at frequent intervals has independent sessions with the management to discuss the adequacy and effectiveness of internal financial controls.
suspected fraud. The Policy provides adequate safeguards against victimization of director(s)/employee(s) who avail of the mechanism. The Company has not received any reference under the said policy during the year.
The Company has formulated a codified Vigil Mechanism System/Whistle-Blower Policy incorporating the provisions relating to Vigil Mechanism in terms of Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations, 2015, in order to encourage Directors and Employees of the Company to escalate to the level of the Audit Committee any issue or concerns impacting and compromising with the interest of the Company and its stakeholders in any way. The Company is committed to adhere to highest possible standards of ethical, moral and legal business conduct and to open communication and to provide necessary safeguards for protection of employees from reprisals or victimisation, for whistle blowing in good faith.
The Procedure for raising concern and the said Policy is available on the Company's website at www.fusionfin.com.
34. AUDIT COMMITTEE
The Company has an Audit Committee constituted in accordance with the provisions of Section 177 of the Companies Act, 2013, RBI Guidelines and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. The composition of the Audit Committee and the details of meetings attended by the Committee members are provided in Corporate Governance Report attached as "ANNEXURE 1".
35. CODE OF CONDUCT FOR INSIDER TRADING
The Company has duly formulated and adopted the Code of Conduct for Prohibition of Insider Trading in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015. The objective of this Code is to prescribe the procedure for trading in securities of the Company and the disclosures to be made by the designated persons covered under the Insider Trading Policy with respect to their shareholding in the Company, both direct and indirect. The Code of Conduct for Prohibition of Insider Trading is available on the website of the Company at www.fusionfin.com.
36. RBI OMBUDSMAN
The company has a dedicated team which deals with the concerns or complaints raised by the customers. Further, in accordance with the RBI Circular dated November 15, 2021 on "Appointment of Internal Ombudsman by NonBanking Financial Companies (NBFCs)" the Company has an Internal Ombudsman (IO) being the apex of the grievance redressal mechanism of the Company. The IO deals with the complaints of its customers which are partly or wholly rejected by the Company.
40. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has a policy and framework for employees to report sexual harassment cases at workplace and our process ensures complete anonymity and confidentiality of information. Adequate workshops and awareness programmes against sexual harassment are conducted across the organization.
Further, the Company has the Internal Complaint Committee in place as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 to address the sexual harassment cases. However, during the financial year ended 31st March 2024, the Company has received two complaints on sexual harassment, the said complaints were investigated and resolved as per the provisions of the POSH and as on 31st March 2024, no complaint was pending for investigation and resolution.
41. CORPORATE GOVERNANCE
Corporate governance is the system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of a company's stakeholders and the community at large. Sound governance practices and responsible corporate behavior contribute to superior long-term performance of organisations. Corporate Governance requires everyone to raise their level of competency and capability to meet the expectations in managing the enterprise and its resources optimally with prudent ethical standards.
The Company's corporate governance framework ensures that it is aligned to good corporate governance philosophy and that timely disclosures are made and accurate information regarding the financials and performance is shared, as well as the leadership and governance of the Company. The Company has an adequate system of control in place to ensure that the executive decisions taken should result in optimum growth and development which benefits all the stakeholders. The Certificate from M/s Harish Popli & Associates, Practicing Company Secretary, confirming the compliance of Corporate Governance norms is attached thereto.
A detailed report on the Company's commitment at adopting good Corporate Governance Practices is enclosed as "ANNEXURE 1".
42. MANAGERIAL REMUNERATION
In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, including any statutory modification(s) thereof for the time being in force, the details of remuneration etc. of Directors, Key Managerial Personnel and employees covered under the said Rules is attached as "ANNEXURE 5" which forms part of this report.
43. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Act the Directors of the Company hereby state and confirm that:
a. In the preparation of the annual financial statements for the Financial Year ended March 31,2024, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;
b. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2024 and of the profits of the Company for year ended on that date;
c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d. The Directors had prepared the annual accounts on a going concern basis;
e. The directors had laid down internal financial controls to be followed by the company, and that such internal financial controls are adequate and were operating effectively.
f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
44. EMPLOYEES STOCK OPTION SCHEME
The Company has two (2) stock option plans namely Fusion Employee Stock Option Plan 2016 ("ESOP 2016") and Fusion Employee Stock Option Plan 2023 ("ESOP 2023") and they are in compliance with SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021, as amended from time to time (the 'SBEB Regulation').
Further, there is no other material change in the ESOP schemes of the Company. The Company has not provided any financial assistance to its employees for purchase or subscription of shares in the Company or in its holding
company and the Company has not issued any sweat Equity Shares or Equity Shares with differential rights during the year.
45. RBI GUIDELINES
The Company is registered with the Reserve Bank of India as a NBFC within the provisions of the NBFC (Reserve Bank of India) Directions, 1998. The Company continues to comply with all the requirements prescribed by the Reserve Bank of India as applicable to it, from time to time.
46. DISCLOSURE IN ACCORDANCE WITH REGULATION 30A OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
No such agreements as specified under clause 5A to para A of part A of schedule II, are required to be disclosed in accordance with Regulation 30A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in the FY 2023-24.
47. LISTING
All the NCDs listed on the BSE Limited ("BSE") have been delisted during the Financial Year ended March 31, 2024, accordingly, there are no listed NCDs as on March 31,2024. Further, the equity shares of the Company are also listed on BSE & National Stock Exchange of India Limited ("NSE"). The listing fees to BSE & NSE for the financial year 2024-25 has been duly paid.
48. MAINTENANCE OF COST RECORDS
The provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 relating to Cost Audit and maintaining cost audit records is not applicable to the Company.
49. SECRETARIAL STANDARDS
The Company has duly complied with the applicable provisions of Secretarial Standard - 1 on meetings of Board of Directors and Secretarial Standard-2 on General Meetings issued by the Institute of Company Secretaries of India ("ICSI").
50. INSOLVENCY PROCEEDINGS
There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016.
51. ONE-TIME SETTLEMENTS
The Company has not entered into a one-time settlement with any of the banks or financial institutions.
52. EQUITY SHARES IN THE DEMAT SUSPENSE ACCOUNT
In accordance with the requirement of Regulation 34(3) and Schedule V Part F of SEBI Listing Regulations, the Company reports that as on March 31,2024, there are no equity shares lying in the demat suspense account which were issued in dematerialized form pursuant to the public issue of the Company.
53. CAUTIONARY STATEMENT
Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward looking within the meaning of applicable Laws and Regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions, changes in Government Regulations, Tax Laws, Economic Developments within the country and other factors such as litigation and industrial relations.
54. ACKNOWLEDGEMENTS
The Directors take this opportunity to express their deep and sincere gratitude for the support and co-operation from the Borrowers, Banks, Financial Institutions, Investors, and Employees of the Company, for their consistent support and encouragement to the Company. The Directors also place on record their sincere appreciation of the commitment and hard work put in by the Management and the employees of the Company and thank them for yet another excellent year. Their dedication and competence have ensured that the Company continues to be a significant player in the Micro finance industry.
For and on behalf of the Board of Directors
Sd/- Sd/-
Devesh Sachdev Ratna Dharashree Vishwanathan
(MD & CEO) (Director)
DIN:02547111 DIN: 07278291
Place: Gurugram Dated: August 06, 2024
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