Dear members,

The Board of Directors are pleased to present the 32 nd Annual Report of your Company ( " the Company " or " Fusion " ) along with the Standalone Audited Financial Statements, for the Financial Year ended March 31, 2026 ( " year under review " ).

1. FINANCIAL SUMMARY/STATE OF AFFAIRS

The financial statements of the Company for the year ended March 31, 2026 have been prepared in accordance with Indian Accounting Standards ( " Ind AS " ) prescribed under section 133 of the Companies Act, 2013 (the " Act " ), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Schedule III to the Act, as amended from time to time and applicable guidelines issued by Securities and Exchange Board of India (SEBI).

The financial results of the Company for the current Financial Year ended March 31, 2026, as compared to the previous Financial Year ended March 31, 2025, are as under:

(' in crores unless otherwise stated)

During the Financial Year 2025-26, the Company achieved a net profit of INR 13.85 crores for the year, in comparison to loss reported in previous financial year 2024-25 of INR 1,224.54 crores.

2. OPERATIONAL PERFORMANCE

Operational performance of the Company for the Financial Year ended March 31, 2026 as compared to the previous Financial Year ended on March 31, 2025 is summarized below:

In MFI, the Company has a total of 21,50,131 active loan Borrowers as on March 31, 2026, which has decreased from 31,91,002 as on March 31, 2025. The reduction in active loan borrowers during the year was 32.62%.

In MSME, the Company has a total of 19,091 active loan Borrowers as on March 31, 2026, which has increased from 19,081 as on March 31, 2025.

3. CASH FLOW STATEMENT

The Cash Flow Statement for the financial year ended on March 31, 2026 prepared under the applicable provisions of the Companies Act, 2013 read with applicable Ind-AS is forming part of the Audited Financial Statements of the Company.

4. ANNUAL RETURN

Pursuant to sub-section (3)(a) of Section 134 and subsection (3) of Section 92 of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the draft Annual Return as on March 31, 2026 is available on the website of the company at

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 RBI (NBFC - Acceptance of Public Deposits) Directions, 2025 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. Therefore, the disclosures required under Rule 8(5)(v) of Companies (Accounts) Rules, 2014 and Rule 2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014 are not applicable.

6. TRANSFER TO RESERVES

During the Financial Year 2025-26, the Company has transferred Rs. 2.77 crores to the statutory reserve pursuant to Section 45-IC of the Reserve Bank of India Act, 1934.

7. DIVIDEND DISTRIBUTION POLICY

Pursuant to the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the 'SEBI LODR Regulations'), the Company had formulated a dividend distribution policy, which sets out the parameters and circumstances to be considered by the Board of Directors ('Board') in determining the distribution of dividend to its shareholders and/or retaining profit earned. The said policy is available on the website of the Company at Fusion-Finance-Dividend-Distribution-Policy.pdf

8. DIVIDEND

The Board of Directors of your Company is focused on driving sustainable business growth and enhancing long-term shareholder values. In line with this objective and considering the substantial resources required to

support the Company's long-term strategic initiatives, the Board has not recommended any dividend for the FY 2025-26.

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

In terms of Section 125 of the Act, unclaimed dividends along with shares in respect of which dividend are not claimed for a period of 7 consecutive years are required to be transferred to the Investors Education and Protection Fund. There has been no dividend declared and unpaid in the last Seven (7) years and year under review and hence, the same is not applicable.

10. COMPLIANCE AND REGULATORY

Fusion Finance Limited (Formerly known as Fusion Micro Finance Limited) ('the Company'), was originally incorporated as 'Ambience Fincap Private Limited' on September 5, 1994 under the Companies Act, 1956. On January 9, 2003, the Reserve Bank of India (RBI) granted a certificate of registration as a non-deposit accepting, non-banking financial company under Section 45-IA of the Reserve Bank of India Act, 1934.

Subsequently, the name of Company was changed to 'Fusion Micro Finance Private Limited' and a fresh certificate of incorporation, dated April 19, 2010, was issued, post which the RBI granted a certificate of registration dated May 19, 2010 reflecting the change of name. Thereafter, the Company was issued a fresh certificate dated January 28, 2014 from RBI for carrying on the business of Non-Banking Financial Company-Micro Finance Institution ('NBFC-MFI'). The name of the Company was further changed to Fusion Micro Finance Limited upon conversion to a public limited company pursuant to the special resolution passed by the Shareholders of the Company and a fresh certificate of incorporation was issued dated July 20, 2021. Thereafter, the name of the Company was further changed to Fusion Finance Limited with effect from July 09, 2024. A fresh certificate consequent to change in the name of Fusion Finance Limited was issued by Registrar of Companies, Central Processing Centre, Haryana on July 09, 2024. The registered office of the Company is situated at H-1, C-Block, Community Centre, Naraina Vihar, New Delhi-110028.

The Company has listed its equity shares on both BSE Limited ( " BSE " ) and National Stock Exchange of India Limited ( " NSE " ) w.e.f November 15, 2022 and traded on BSE (Scrip Code: 543652) and NSE (Symbol: FUSION) under the ISIN: INE139R01012. Further, during the year under review, the Company has listed its NonConvertible Debt Instruments on BSE Limited. The

listing fees to BSE & NSE for the Financial Year 2025-26 has been duly paid within applicable timelines.

Pursuant to the Reserve Bank of India (Non-Banking Financial Companies - Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 issued by the RBI vide circular dated November 28, 2025 ( " SBR Framework " ), the Company has been categorised as an NBFC - Middle Layer ( " NBFC-ML " ).

During the year under review, the Company has received a corporate agency license on October 17, 2025 from the Insurance Regulatory and Development Authority of India (IRDAI).

The Company has complied with and continues to comply with all applicable laws, rules, regulations, circulars, notifications and directions issued by the Reserve Bank of India ( " RBI " ), including those applicable to NBFC-MFIs, the applicable provisions of Companies Act, 2013 and rules and regulations made thereunder, the applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, SEBI (Prohibition of Insider Trading) Regulations, 2015, SEBI (Issue and Listing of Non - Convertible Securities), Regulations 2021, SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018, SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ( " SBEB Regulations " ) or such other applicable regulations/notifications/circulars/ master circulars issued by SEBI, Stock Exchanges and Depositories in this regard, Secretarial Standards issued by ICSI and notified by MCA or any amendments thereof, and the IRDAI (Registration of Corporate Agents) Regulations, 2015, along with other applicable directions and guidelines issued by the Insurance Regulatory and Development Authority of India ( " IRDAI " ). The Company does not undertake any activity other than those specifically permitted for NBFC-MFIs under the applicable RBI regulatory framework and objects defined under the Memorandum ofAssociation and for Corporate Agents under the applicable IRDAI regulatory framework.

11. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2025-26, the Board met 14 (Fourteen) 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 LODR Regulations.

12. CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year under review, there was no change in

the nature of business of the Company.

13. DIRECTORS AND KEY MANAGERIAL PERSONNELS

(KMP)

a. Changes in Directors during the FY 2025 -26

(i) The Shareholders in the 31 st Annual General Meeting of the Company held on July 22, 2025 approved the re-appointment of Mr. Devesh Sachdev (DIN: 02547111), retiring by rotation, as the Director of the Company.

Further, Mr. Sachdev resigned from the position of Managing Director of the Company on September 30, 2025 and resigned from the directorship of the Company w.e.f. November 4, 2025.

(ii) Mr. Sanjay Garyali (DIN: 11046442) was appointed as an Additional Director designated as Whole-Time Director w.e.f. August 18, 2025. The appointment of Mr. Garyali as Director and Whole-Time Director was approved by shareholders via Postal ballot on October 19, 2025. Subsequently Mr. Garyali was appointed as Managing Director of the Company with effect from September 30, 2025. The appointment of Mr. Sanjay Garyali, as Managing Director was approved by the Shareholders of the Company by passing a Special Resolution via postal ballot on January 7, 2026, on the terms and conditions as approved by the shareholders via postal ballot on October 19, 2025, for the period of 5 (five) consecutive years commencing from August 18, 2025 to August 17, 2030.

(iii) Mr. Narendra Ostawal (DIN: 06530414), representing Honey Rose Investment Limited (Warburg Pincus), has resigned from the directorship of the Company w.e.f. September 04, 2025.

(iv) Mr. Hemant Omprakash Mundra (DIN: 08192978) was appointed as an Additional Non-Executive Director of the Company w.e.f. September 04, 2025, representative of Honey Rose Investment Limited (Warburg Pincus). Subsequently, the appointment of Mr. Mundra was approved by the Shareholders of the Company via postal ballot on October 19, 2025, liable to retire by rotation. The requisite approval from Reserve Bank of India has been obtained by the Company.

(v) Mr. Rajeev Sardana (DIN: 06648276), was appointed as an Additional Non-Executive Independent Director of the Company w.e.f. August 18, 2025 and subsequently the appointment of Mr. Sardana was

approved by the Shareholders of the Company by way of postal ballot on October 19, 2025, for a period of five (5) consecutive years with effect from August 18, 2025 to August 17, 2030, not liable to retire by rotation.

(vi) Mr. Brahmanand Hegde (DIN: 02984527), was appointed as an Additional Non-Executive Independent Director of the Company w.e.f. February 6, 2026 and subsequently the appointment of Mr. Hegde was approved by the shareholders via postal ballot on May 2, 2026, for a period of five (5) consecutive years with effect from February 06, 2026 up to February 05, 2031, not liable to retire by rotation.

(vii) Mr. Kenneth Dan Vander Weele (DIN: 02545813), representing Creation Investments Fusion, LLC and Creation Investments Fusion II, LLC, has resigned from the directorship of the Company w.e.f. March 31, 2026.

(viii) Ms. Remika Agarwal (DIN: 09438221) representing Creation Investments Fusion, LLC and Creation Investments Fusion II, LLC, was appointed as an Additional Non-Executive Director w.e.f. March 31, 2026 and subsequently, the appointment of Ms. Remika Agarwal was approved by the shareholders via postal ballot on May 02, 2026, for a period of five consecutive years commencing from March 31, 2026 to March 30, 2031, liable to retire by rotation. The requisite approval from Reserve Bank of India has been obtained by the Company.

(ix) Post closure of FY 2025-26, the second and final term of Ms. Ratna Dharashree Vishwanathan (DIN: 07278291) would be completed on May 23, 2026.

b. Changes in Key Managerial Personnels during the FY

2025-26:

(i) Mr. Gaurav Maheshwari, resigned from the position of Chief Financial Officer of the Company w.e.f. June 25, 2025.

(ii) Mr. Amandeep Singh, was appointed as Interim Chief Financial Officer of the Company w.e.f. June 26, 2025, who resigned from the position of Interim Chief Financial Officer w.e.f. January 17, 2026.

(iii) Mr. Deepak Madaan, resigned from the position of Company Secretary & Chief Compliance Officer of the Company w.e.f. August 17, 2025.

(iv) Mr. Vikrant Sadana, was appointed as Company Secretary & Compliance Officer of the Company w.e.f. August 18, 2025.

(v) Mr. Krishan Gopal, was appointed as Chief Financial Officer of the Company w.e.f. January 17, 2026.

The above changes in Directors and KMPs represent a significant step in strengthening Fusion's leadership team and reinforcing its corporate governance framework. The Board believes that these changes are in alignment with the principles of transparency, accountability, independence and ethical conduct, which underpin the Company's governance philosophy. These initiatives are aligned with the Company's long-term strategic objectives and are expected to enhance organizational effectiveness, enable sustainable growth, and support the creation of long-term value for all stakeholders.

c. Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013, and Regulation 17(1 )(a) of the SEBI LODR Regulations, the Company shall have at least one Woman Director on the Board. As on March 31, 2026, the Board comprised Ms. Namrata Kaul and Ms. Ratna Dharashree Vishwanathan as Independent Women Directors, and Ms. Remika Agarwal as NonExecutive, Non Independent Woman Director. Further, Ms. Ratna Dharashree Vishwanathan would complete her tenure (second and final term) on May 23, 2026.

d. Director liable to retire by rotation

Mr. Sanjay Garyali (DIN: 11046442) is liable to retire by rotation at the ensuing 32 nd Annual General Meeting and, being eligible, has offered himself for re-appointment. The Board, based on its evaluation, recommends his re-appointment as a Director of the Company. The requisite disclosures pursuant to Regulation 36(3) of the SEBI LODR Regulations, along with his brief profile, form part of the Notice of the 32 nd Annual General Meeting of the Company.

e. Key Managerial Personnel (KMP)

As per the provisions of the Act, as on March 31, 2026, Mr. Sanjay Garyali, Managing Director & Chief Executive Officer, Mr. Krishan Gopal, Chief Financial Officer and Mr. Vikrant Sadana, Company Secretary & Compliance Officer are the KMPs of the Company.

14. DECLARATION OF INDEPENDENCE

The Company has received necessary declarations from each Independent Director as per the provisions of Section 149(7) of the Act read with Regulation 16 & 25(8) of SEBI LODR 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 LODR Regulations.

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

15. CREDIT RATING

16. CAPITAL ADEQUACY

The Capital Adequacy Ratio of the company was stood at 36.46% as on March 31, 2026, as against the minimum capital adequacy requirements of 15% by Reserve Bank of India ( " RBI " ).

17. FAIR PRACTICE CODE

The Company has in place a Fair Practice Code (FPC) approved by the Board in compliance with the guidelines issued by RBI, to ensure better service and provide necessary information to customers to take informed decisions. The FPC is available on the website of the Company at .

18. CUSTOMER GRIEVANCES

The Company has a dedicated team on Customer Service 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.

During the year under review, the Board has constituted Customer Service Committee to oversee the governance customer related services provided. The detailed terms of reference and constitution details are provided under Corporate Governance Report annexed as " ANNEXURE-1 " .

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

19. RESOURCE MOBILIZATION Term Loan / Sub debt /Refinance

During the year under review, the Company diversified its sources of funds and raised a sum of Rs. 4,045.80 Crore (Inclusive of Term Loan of Rs. 3,872.70 Crore, and ECB of Rs. 173.10 Crore).

Secured / Unsecured Non-convertible debentures

During the year under review, the Company has raised INR 310.00 Crores from issuance of listed, secured NonConvertible Debentures.

Direct Assignment/Pass Through Certificate

During the year under review, the Company raised resources to the extent of Rs. 1,623.55 Crore through Direct Assignment (1,166.00 Crore) and Pass-Through Certificate (457.55 Crore).

20. SHARE CAPITAL

The Authorised Share Capital of the Company as on March 31, 2026 is stood at Rs. 2,00,00,00,000 (Rupees Two Hundred Crore only) consisting of 20,00,00,000 (Twenty Crore) Equity Shares of INR 10/- each.

The Issued and Paid-up Equity Share Capital of the Company as on March 31, 2026, stood at INR 1,61,88,62,330 (Rupees One Hundred Sixty One Crore Eighty Eight Lakh Sixty Two Thousand Three Hundred Thirty only) consisting of 16,13,75,774 (Sixteen Crore Thirteen Lakh Seventy Five Thousand Seven Hundred and Seventy Four) Fully paid-up Equity Shares of INR

10/- each and 7,06,503 (Seven Lakh Six Thousand Five Hundred Three) partly paid-up Equity Shares of INR 5/- each.

During the year, the Company has successfully completed the Rights Issue. The Rights Issue Committee on May 02, 2025 has approved allotment of 6,10,58,392 partly paid up equity shares at INR 131/- per share (including face value of INR 10/- each and a premium of INR 121/- per equity share) aggregating to ~INR 800 Crore; out of which an amount of INR 65.50/- per share (including face value of INR 5 each and a premium of INR 60.50 per share), aggregating to an amount of INR 399.93 crore has been paid by the eligible equity shareholders as application money for subscription of right issue.

Further, as approved by the Board of Directors in their meeting dated November 04, 2025, Company issued notice to pay the first and final call money of INR 65.50/- per share (including face value of INR 5 each and a premium of INR 60.50 per share) on November 13, 2025 to the eligible shareholder holding shares as on record date i.e. November 11, 2025. Company received call money of INR 3,95,30,48,729.50/- (Rupees Three Hundred and Ninety Five Crore Thirty Lakh Forty Eight Thousand Seven Hundred Twenty Nine and Fifty Paisa only) on 6,03,51,889 (Six Crore Three Lakh Fifty One Thousand Eight Hundred Eighty Nine) partly paid-up equity shares. Accordingly, the Right Issue Committee

approved the conversion of 6,03,51,889 partly paid up equity shares to fully paid equity shares.

Further, on February 11, 2026, the Company issued first reminder notice to shareholders for payment of call money on the remaining 7,06,503 (Seven Lakh Six Thousand Five Hundred Three) partly paid equity shares, amounting to INR 4,62,75,946.50 (Rupees Four Crore Sixty Two Lakh Seventy Five Thousand Nine Hundred Forty Six and Paise Fifty only). Out of which, the Company received call money of INR 2,05,94,182.50 (Rupees Two Crore Five Lakh Ninety-Four Thousand One Hundred Eighty-Two and Paise Fifty only) on 3,14,415 (Three Lakh Fourteen Thousand Four Hundred Fifteen) partly paid-up shares. As on date of the report, the call money on 3,92,088 partly paid-up equity shares remain outstanding which amounts to INR 2,56,81,764 (Rupees Two Crores Fifty Six Lakh Eighty One Thousand Seven Hundred Sixty Four only).

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

21. NON CONVERTIBLE DEBENTURES

During the year under review, the Board of Directors of the Company approved the issuance of nonconvertible debentures of Rs. 1,000 Crores, out of which the Company has raised funds by issuance of Listed, Secured Non-Convertible Debenture of an amount Rs. 310 crores. The necessary details of the same are as follows:

The outstanding NCDs including subordinated liabilities in form of NCDs as on March 31, 2026, was Rs. 360.16 Crores (at amortised cost).

22. COMMITTEES DETAILS

As on March 31, 2026, the Company had 8 (eight) Board Level Committees namely Audit Committee, Nomination and Remuneration Committee, Board Risk Management Committee, Information Technology Strategy Committee, Stakeholders Relationship Committee, CSR & ESG Committee, Customer Service Committee and Rights Issue Committee. Further, the Company has constituted several management-level committees in accordance with applicable NBFC guidelines and to support its operational requirements. These include, among others, the Information Security Committee, IT Steering Committee, Asset Liability Management Committee, Special Committee on Fraud Monitoring, Pricing Committee, Working Committee, and Debenture Committee.

The necessary details regarding committee meetings, including composition & terms of reference are covered under Corporate Governance Report, which forms part of this Annual Report and annexed as "ANNEXURE - 1 " .

23. RELATED PARTY TRANSACTIONS

The Company has in place a Policy on Related Party Transactions ("RPT Policy " ), as amended from time to time.

The RPT Policy provides for identification of RPT, necessary approvals from the Audit Committee/Board/ Members, reporting and disclosure requirements in compliance with the provisions of the Act and SEBI LODR Regulations and Industry Standards on Related Party Transactions. The said RPT Policy can be accessed on the website of the Company at All contracts or arrangements executed by the Company during the year under review with related parties were on arm's length basis and in the ordinary course of business.

During the year under review, the Company has not entered into any contract(s)/arrangement(s)/ transaction(s) with related parties which could be considered material in accordance with Regulation 23 of the SEBI LODR Regulations, as amended and the RPT Policy of the Company. Hence, the disclosure of RPTs as required under Section 134(3)(h) of the Act, in Form AOC-2 is not applicable to the Company.

The required details, as applicable, in relation to the related party transactions were placed before the Audit Committee and Board of Directors as per prescribed timelines.

Further, details of related party transactions as required to be disclosed as per Indian Accounting Standard - 24 "Related Party Disclosures " specified under Section 133 of the Act are given in Note 45 forming part of Standalone Financial Statements of the Company.

24. AUDITOR'S AND AUDITORS' REPORT

STATUTORY AUDITOR

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with rules made thereunder and RBI notification no. DoS.CO.ARG/ SEC.01/08.91.001/2021-22 dated April 27, 2021, read with the Company's policy on Appointment of Statutory Auditors, based on the recommendation of Audit Committee and approval of the Board of Directors, the Members of the Company at its 31 st AGM held on July 22, 2025 had appointed M/s. B.K. Khare & Co., Chartered Accountants (Firm Registration No. 105102W), as the Statutory Auditors of the Company for a period of 3 (three) consecutive years from the conclusion of the 31 st AGM till the conclusion of the 34 th AGM of the Company.

Further, the Auditors' Report for the financial year 2025-26, forming part of this Annual Report, does not contain any qualification, reservation, adverse remark or disclaimer. Further, there were no instances of any fraud reported by the Statutory Auditor's to the Board pursuant to Section 143(12) of the Act.

SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 of the Act and Regulation 24A of SEBI LODR Regulations, based on recommendation of Audit Committee, the Board of Directors, had appointed M/s. Navneet K Arora & Co LLP, Company Secretaries (Firm Registration No. P2009DE061500), as Secretarial Auditors of the Company for a first term of 5 (five) consecutive years beginning from Financial Year 2025-26 i.e. from the 31 st AGM till the conclusion of the 36 th AGM. Further, the same was approved by the shareholders of the Company at 31 st AGM held on July 22, 2025.

The Secretarial Audit Report for Financial Year ended on March 31, 2026 does not contain any qualification, reservation, adverse remark or disclaimer, and forms part of Annual Report as "ANNEXURE - 2 " .

Annual Secretarial Compliance Report

A Secretarial Compliance Report for the Financial Year ended March 31, 2026 on compliance of all applicable Acts and SEBI Regulations and circulars/ guidelines issued thereunder, was obtained from M/s. Navneet K Arora & Co LLP, Company Secretaries, Secretarial

Auditor of the Company and submitted with Stock Exchanges within stipulated timelines.

25. 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.

As the Company is a Non-Banking Financial Company, the disclosure requirements pertaining to particulars of loans or guarantees given and securities provided are exempt under the provisions of Section 186(11) of the Act, read with the relevant rules made thereunder, as amended. Further, details of the investments made by the Company are disclosed in the Notes to the Financial Statements.

26. COMPENSATION AND REMUNERATION POLICY

Pursuant to the provisions of Section 178 of the Act read with applicable rules thereunder, and Regulation 19 of SEBI LODR Regulations and in accordance with the RBI Guidelines, the Company have in place a Compensation and Remuneration policy approved by the Board of Directors.

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

This Policy is available on our website at

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

There are no material changes and commitments, affecting the financial position of your Company which have occurred in FY 2025-26 and up to the date of this report, except elsewhere stated in this report.

28. APPLICATION OF RE-CLASSIFCATION OF MR. DEVESH SACHDEV & HIS FAMILY FROM THE " PROMOTERS/PROMOTERS GROUP " CATEGORY TO " PUBLIC " CATEGORY

During the year under review, the Company received applications from Mr. Devesh Sachdev and his family members, along with their relatives (the " Outgoing Promoter and Promoter Group " ), for seeking

reclassification from the " Promoter and Promoter Group " category to the " Public " category.

After evaluating the rationale submitted in support of the applications, the Board of Directors approved the proposed reclassification, subject to obtaining the necessary approvals/no-objections from BSE Limited and the National Stock Exchange of India Limited (collectively, the " Stock Exchanges " ), followed by the approval of the shareholders of the Company. Accordingly, the Company has submitted the requisite applications to the Stock Exchanges seeking their approval/no-objection for the proposed reclassification.

29. RIGHTS ISSUE

During the year under review, the Company has successfully completed the Rights Issue. The Rights Issue Committee on May 02, 2025 has approved allotment of 6,10,58,392 partly paid up equity shares at INR 131/- per share (including face value of INR 10/- each and a premium of INR 121/- per share) aggregating to ~INR 800 Crore; out of which an amount of INR 65.50/- per share (including face value of INR 5 each and a premium of INR 60.50 per share), aggregating to an amount of INR 399.93 crore has been paid by the eligible equity shareholders as application money for subscription of right issue.

Further, as approved by the Board of Directors in their meeting dated November 04, 2025, Company issued notice to pay the first and final call money of INR 65.50/- per share (including face value of INR 5 each and a premium of INR 60.50 per share) on November 13, 2025 to the eligible shareholder holding shares as on record date i.e. November 11, 2025. The Company received call money of INR 3,95,30,48,729.50/- (Rupees Three Hundred and Ninety Five Crore Thirty Lakh Forty Eight Thousand Seven Hundred Twenty Nine and Fifty Paisa only) on 6,03,51,889 (Six Crore Three Lakh Fifty One Thousand Eight Hundred Eighty Nine) partly paid- up equity shares. Accordingly Right Issue Committee approved the conversion of 6,03,51,889 partly paid up equity shares to fully paid equity shares.

Further, on February 11, 2026, the company issued first reminder notice to shareholders for payment of call money on the remaining 7,06,503 (Seven Lakh Six Thousand Five Hundred Three) partly paid equity shares, amounting to INR 4,62,75,946.50 (Rupees Four Crore Sixty Two Lakh Seventy Five Thousand Nine Hundred Forty Six and Paise Fifty only). Out of which, the Company received call money of INR 2,05,94,182.50

(Rupees Two Crore Five Lakh Ninety-Four Thousand One Hundred Eighty-Two and Paise Fifty only) on 3,14,415 (Three Lakh Fourteen Thousand Four Hundred Fifteen) partly paid-up shares. As on date of the report, the call money on 3,92,088 partly paid-up equity shares remain outstanding which amounts to INR 2,56,81,764 (Rupees Two Crores Fifty Six Lakh Eighty One Thousand Seven Hundred Sixty Four only).

30. EMPLOYEE STOCK OPTIONS PLAN

The Board vide its meetings dated March 14, 2025 approved the increase of ESOP pool from 10,00,000 stock options to 60,00,000 stock options in ESOP 2023 scheme, which was further approved by the shareholders on April 23, 2025 vide postal ballot. The company has also received in-principle approval for the additional pool of 50,00,000 options from BSE vide letter No. DCS/IPO/AK/ESOP-IP/3649/2025-26 and NSE vide letter no. NSE/LIST/48565, both dated June 04, 2025. During the year under review, the Company has obtained shareholders approval to grant employee stock options equal to or exceeding 1% of the issued share capital of the Company to identified employees of the Company under Fusion Employee Stock Option Plan 2023.

Further, a certificate as required under Regulation 13 of SBEB Regulations, as amended, confirming that the ESOP 2016 and ESOP 2023 has been implemented in accordance with SBEB Regulations, issued by M/s Navneet K Arora, Secretarial Auditors of the Company will be available for inspection by the Members of the Company at the ensuing AGM.

Disclosures pertaining to ESOP 2016 and ESOP 2023 pursuant to SBEB Regulations are placed on the Company's website Grant wise details of options vested, exercised and cancelled are provided in the notes to the standalone financial statement of the Company.

31. AMENDMENT IN THE ARTICLES OF ASSOCIATION (AOA)

During the year under review, the approval of the shareholders was obtained in 31 st AGM of the Company held on July 22, 2025 to alter Articles of Association ( " AOA " ) of the Company by way of deletion of the existing article 35 of the AOA and substitution with the following article 35:

" 35. Board to have Right to Make Calls on Shares

The Board may subject to the provisions of the Act and any other applicable law, from time to time,

make such call as it thinks fit upon the Members in respect of all moneys unpaid on the shares (whether on account of the nominal value of the shares or by premium) and not by the conditions of allotment thereof made payable at fixed times. Provided that no call shall exceed one half or 50% of the nominal value and premium amount of the equity share or be payable at less than one month from the date fixed for the payment of the last preceding call. A call may be revoked or postponed at the discretion of the Board. The power to call on shares shall not be delegated to any other person except with the approval of the shareholders' in a General Meeting. "

Further, the approval of the shareholders was obtained via postal ballot on January 7, 2026 to alter the articles of association as under:

A. In Article 4 (Definitions and Interpretation) of Part A of the AOA, the definition of " Founder Promoter " stands omitted; and

B. Article 103.2 of the AOA be substituted with the following clause 103.2 of the AOA:

The composition of the Board of the Company shall be as follows: (i) for so long as and until Creation and Creation II collectively hold such number of Securities which is equal to or greater than the Minimum Threshold for Directorship, they shall collectively be entitled to nominate 1 (One) Director (the " Creation Director " ) on the Board of the Company; (ii) for so long as and until Honey Rose holds such number of Securities which is equal to or greater than the Minimum Threshold for Directorship, it shall be entitled to nominate 2 (Two) Directors (each a " Honey Rose Director " ) on the Board of the Company; and (iii) such number of Independent Directors as prescribed under Applicable Law ( " Independent Directors " ). The Creation Director and Honey Rose Directors shall hereinafter be referred to individually as " Investor Director " and collectively as " Investor Directors " .

32. 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

During the year under review, the Company has foreign exchange inflow of INR 173.10 Crores towards External Commercial Borrowings ("ECB " ) and outgo is INR 26.98 crores towards repayment of installments on ECB, professional fees and other operating expenses.

33. RISK MANAGEMENT

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

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

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

34. CORPORATE SOCIAL RESPONSIBILITY (CSR) AND ENVIRONMENTAL, SOCIAL AND GOVERNANCE ( " ESG " ).

The Company is committed to fulfilling its responsibilities towards the community by actively deploying its resources and efforts for sustainable social development. In furtherance of this objective, the CSR & ESG Committee has formulated a comprehensive CSR Policy, which provides a clear framework guiding the Company's CSR initiatives. The policy outlines key focus areas around which the Company's CSR activities are structured, including education and skill development to enhance employability, promotion of social and economic welfare for underprivileged sections of society, and

initiatives aimed at environmental sustainability and ecological balance.

Additionally, the policy encompasses such other activities as specified under Schedule VII of the Companies Act, 2013, as may be identified and approved by the CSR Committee from time to time, based on emerging societal needs and priorities. Through a structured and consistent approach, the Company endeavours to create long-term value for the community and contribute meaningfully towards inclusive and sustainable growth.

The Company remains committed to creating sustainable social impact through its Corporate Social Responsibility (CSR) initiatives in alignment with the provisions of Section 135 of the Companies Act, 2013 and the CSR Policy of the Company. During the financial year, the Company undertook various interventions across key thematic areas including Education & Skill Development, Health & Hygiene, Community Empowerment & Livelihood, Environmental Sustainability & Sanitation, and Relief & Rehabilitation. The Company also encouraged employee volunteering initiatives to strengthen community engagement and social participation. The Annual Report on CSR activities, containing details of the composition of the CSR Committee, brief outlines of CSR Policy, amount spent during the year, and other prescribed disclosures, forms part of this Report as ANNEXURE - 4.

The CSR Policy is available on the website of the company at

The Company continues to strengthen its commitment towards Environmental, Social and Governance (ESG) principles by integrating responsible and sustainable business practices into its operations and decision-making processes. The Company remains focused on promoting environmental stewardship through efficient utilization of paper consumption, e- waste management, energy conservation, and responsible business conduct. On the social front, the Company emphasizes employee well-being, diversity & inclusion, customer centricity, community engagement, and ethical workplace practices. Strong governance frameworks, transparency, compliance, risk management, and ethical business standards continue to guide the Company's operations. The Company recognizes ESG as a key driver for sustainable growth and stakeholder value creation and shall continue to enhance its ESG initiatives in line with evolving regulatory and business expectations.

The ESG Policy is available on the website of the company at

During the year under review, the name of the Corporate Social Responsibility Committee was changed to " CSR & ESG Committee " for broadening its responsibilities to include identifying and monitoring material ESG risks and opportunities and developing strategic ESG action plans and key performance indicators.

Further, the composition of the CSR &ESG 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 " .

35. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

A comprehensive Business Responsibility and Sustainability Report (BRSR), outlining the Company's performance and initiatives in the areas of environmental, social, and governance (ESG) practices, has been duly prepared in accordance with the applicable regulatory requirements. The Report provides a detailed insight into the Company's approach towards responsible business conduct, sustainability initiatives, stakeholder engagement, and long-term value creation.

The BRSR highlights the Company's commitment to integrating sustainable practices into its core business strategy, covering aspects such as ethical governance, environmental stewardship, employee well-being, customer focus, and community development. It also includes key disclosures, metrics, and qualitative information to enable stakeholders to assess the Company's sustainability performance and its alignment with the principles of responsible business.

For ease of access and greater transparency, the complete BRSR is hosted on the Company's website and can be viewed at Stakeholders are encouraged to review the Report to gain a deeper understanding of the Company's sustainability framework and ongoing initiatives.

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

In compliance with the Companies Act, 2013, and SEBI LODR Regulations, the Company has a structured assessment process for evaluation of performance of the Board, its committees and individual performance of each Director including the Chairperson. The evaluations are carried out in a confidential manner and the Directors provide their

feedback by categorising them in Good, Average, and Below Average categories, and after evaluation, the same is compiled by Nomination & Remuneration Committee (NRC) Chairperson. Further, the Company has also appointed an independent third party for carrying out the evaluation process in fair manner.

The Independent Directors at their separate meeting held on March 20, 2026, reviewed the performance of Non-Independent Directors and the Board as a whole, after taking into account 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 by the Chairperson of NRC to the Board of Directors of the Company.

37. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Vigil Mechanism system has been established with a view to provide a tool for directors and employees of the Company to report genuine concerns including unethical behavior, actual or suspected fraud, to the management. The Policy ensures adequate safeguards to protect directors and employees from any form of retaliation or victimization for raising such concerns.

The Company has formulated a 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 LODR Regulations, in order to encourage Directors and Employees of the Company to escalate any issue or concerns impacting and compromising with the interest of the Company and its stakeholders in any way to the level of the Audit Committee. 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 blower in good faith. The Company has not received any complaints under the said policy during the year.

The said Policy is available on the Company's website at

38. 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. 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

39. 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

40. RBI OMBUDSMAN

The Company has established a dedicated grievance redressal mechanism for addressing concerns and complaints raised by customers. Further, in accordance with the Reserve Bank of India (Non-Banking Financial Companies - Internal Ombudsman) Directions, 2026, the Company has appointed an Internal Ombudsman ("IO " ), who functions as an independent review authority within the internal grievance redress mechanism of the Company. The Company has also implemented a Complaint Management System for escalation, review and monitoring of complaints, in line with the aforesaid Directions.

In this regard, the company has appointed a senior official as the Principal Nodal Officer who is responsible for representing the company and furnishes information on behalf of the company in respect of complaints filed against the Company.

Further, the Company has put in place a system of periodic reporting and submission of information to the Reserve Bank of India, including quarterly reporting relating to the functioning of the Internal Ombudsman mechanism, in accordance with the applicable RBI guidelines and directions.

The salient features of the Scheme along with the copy of the Scheme and the contact details of the Principal Nodal Officer is displayed and updated on the website of the Company.

41. 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. However, the Company has adopted a policy on determining material subsidiary, the same is available on the website of the Company at

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

During the Financial Year 2025-26, there are no such orders passed by the regulators/courts/tribunals impacting the going concern status and the Company's operations in future.

43. INTERNAL FINANCIAL CONTROLS

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

44. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE AND MATERNITY BENEFIT ACT, 1961

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 programs against sexual harassment are conducted across the organization.

Further, the Company has an Internal Complaint Committee in place as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 to address the sexual harassment cases. The Annual Report of ICC Committee for the period commencing from January 01, 2025, till December 31, 2025, was submitted to the office of District Collector, Gurugram on February 27, 2026. The details pertaining to complaints received on matters pertaining to sexual harassment during calendar year 2025, are as below:

(a) number of complaints of sexual harassment received in the year: 0

(b) number of complaints disposed off during the year: 0

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

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

45. CORPORATE GOVERNANCE

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

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

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

46. 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.

47. DIRECTORS' RESPONSIBILITY STATEMENT

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

a. In the preparation of the annual financial statements for the year ended March 31, 2026, 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, 2026 and of the profits of the Company for financial 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.

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

No such agreements as specified under clause 5A to para A of part A of schedule II, are required to be

disclosed in accordance with Regulation 30A of SEBI LODR Regulations, in the Financial Year 2025-26.

49. MAINTENANCE OF COST RECORDS

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

50. SECRETARIAL STANDARDS

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

51. INSOLVENCY PROCEEDINGS

There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016.

52. ONE-TIME SETTLEMENTS

The Company has not entered into a one-time settlement with any of the banks or financial institutions.

53. EQUITY SHARES IN THE DEMAT SUSPENSE ACCOUNT

In accordance with the requirement of Regulation 34(3) and Schedule V Part F of SEBI LODR Regulations, the Company reports that as on March 31, 2026, the Company have 1,758 partly-paid up equity shares lying in the demat suspense account which were issued in dematerialized form pursuant to the rights issue of the Company.

54. SUSPENSION OF TRADING

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

55. CAUTIONARY STATEMENT

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

56. ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors Of Fusion Finance Limited (Formerly known as Fusion Micro Finance Limited)