Risk Management/Hedging Policy Disclosure Statement

RISK MANAGEMENT OF FOREIGN EXCHANGE AND DERIVATIVE TRANSACTIONS

1. The company confirms that it enters into derivative transaction after it has
considered:
 The purpose it seeks to achieve by entering into the derivative transaction
 The risks involved in the derivative transaction.
 The suitability of the derivative transaction for the Company.
 Any regulatory approvals that may be needed
 Any internal governance approvals that may be needed

The Company confirms that it understands that the risks associated with
derivative transactions which are not limited only to those shown here.

2. THE PURPOSE OF THE DERIVATIVE TRANSACTION/FORWARD CONTRACTS:

The Company represents and warrants that all derivative transactions/forward

contracts will be entered into in connection with an underlying liability or asset for
the purpose of reducing risks or costs inherent in such liability or asset.

3. RISKS OF DERIVATIVE TRANSACTIONS/FORWARD CONTRACTS:

Company recognizes that the specific risks of a derivative transaction/forward

contract will depend upon the precise terms of that derivative transaction/forward
contract and the individual circumstances of the Company. Company will enter into
a derivative transaction/forward contract only after assessing its appropriateness
and compliance with the Company’s internal risk management policy. The Company
has shared /not shared its risk management policy with IndusInd Bank Ltd. due to
its internal guidelines.

4. Company has appropriate authority to enter into derivative transactions/forward

contract and details of limitations on the use of specific types of derivatives, level at
which derivative transactions are approved, the involvement of senior management
in decision-making and monitoring derivatives activity undertaken by it.

5. Company has a framework of internal risk management systems and controls to

monitor risks on an on-going basis throughout the lifetime of a derivative
transaction/forward contract. It also has prudent accounting and disclosure norms
and are capable of ascertaining the mark to market position of these products on an
on-going basis.

6. The company shall enter into derivative transactions/forward contracts which are in
consonance with the risk management policy of the company.
7. The Company also represent that as per the Board approved risk management
policy, Company has laid down clear procedures and company is permitted to
undertake third currency hedging of our Forex risks arising out of trade and non
trade exposures through Forward Contracts/Derivative transactions.

8. The Company also represent that as per the Board approved risk management
policy, the Company is allowed to undertake various cost reduction structures for
hedging our Forex and interest rate risks( i.e Forex Options – Zero Cost /Premium
paying cost reduction options/Interest Rate Options like Caps/Floor/Collar). The
Company further represent that company has adopted standard Accounting Norms
and Systems and shall comply fully and shall follow the accounting treatment and
disclosure standards on derivative contracts as envisaged in Accounting Standards
30 and 32.

9. The Company acknowledges that the derivative transactions/Forward Contracts

involve the following general categories of risk:

 Market risk - adverse and unanticipated market, economic and political

developments may significantly change the risk profile and market value of
derivative transactions. Due to the volatile nature of the markets, the
Company recognizes and accepts that derivative transaction may also lead to
significant losses, which cannot be predetermined at the time a derivative
transaction is entered into.

 Basis risk - the risk that the derivative transaction does not match properly
with the underlying liability or asset;

 Liquidity/Unwind Risk - It may not be possible for the Company to

liquidate/unwind the transaction easily due to limitations of counter party or
the market conditions. The benefits of customization in achieving particular
financial and risk management objectives may be offset by significant
liquidate/unwind risks.

 Operational risk - the ability of the Company's internal risk management

systems and controls to monitor risks on an on-going basis throughout the
lifetime of a derivative transaction.

 Legal, regulatory & tax risks - the enforceability of contractual obligations,

compliance with regulatory requirements and taxation treatment of derivative
transactions is complex. By undertaking the derivative transactions the
Company undertakes and warrants that it has complied with all regulatory
and legal requirements as laid down by the RBI or relevant laws. By agreeing
to undertake the transaction INDUSIND BANK Ltd. does not guarantee or
warrant either express or implied the permissibility of such transactions in so
far as they apply to the Company.

10. SUITABILITY OF DERIVATIVE TRANSACTIONS

The Company has considered the appropriateness of derivative transactions in the

light of its own experience, its objectives and Risk Management Policy. The
Company has ensured that it has the financial capacity and legal capacity to enter
into derivative transactions by regulations and laws applicable to its country of
incorporation and that it has conferred necessary authority and power of the Board
(typically by resolution of the Board of Directors) to any named persons to enter
into derivative transactions on its behalf and shall be binding upon the Company.
The Company will independently assess the suitability of the derivative transaction
that it propose to enter and by entering into the transaction confirms that it has
assessed independently the financial and legal risks of the transaction and is
prepared to assume the economic consequences of the same.