DCB Bank Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018

1. The above unaudited financial results for the quarter and nine months ended December 31, 2018 have been reviewed by the Audit Committee and recommended for approval to and approved by the Board of Directors. These results were subjected to "Limited Review" by the Statutory Auditors of the Bank. An unqualified review report has been issued by them thereon.

2. The financial results for the quarter and nine months ended December 31, 2018 have been arrived at after considering the provision for standard assets including requirements for exposures to entities with Unhedged Foreign Currency Exposure, Non Performing Assets, Depreciation on Investments, Income tax and Other necessary provisions.

3. "Other Income" includes income from non-fund based activities such as brokerage and commission, fees, earnings in foreign exchange transactions, profit / loss on sale of investments (net) and income from sale of Priority Sector Lending Certificates.

4. During the quarter and nine months ended December 31, 2018, the Bank allotted 51,090 and 1,215,825 equity shares respectively (129,150 and 767,140 equity shares in the quarter and nine months ended December 31, 2017, respectively) pursuant to the exercise of stock options by employees.

5. In line with requirements of Accounting Standard 10 - Property, Plant and Equipment, the Bank had reviewed the useful life of its fixed assets due to which depreciation charge for the quarter and the nine months ended December 31, 2018 is lower by Rs. 4.57 crore and Rs. 9.15 crore respectively.

6. During the quarter, the Bank has reported fraud amounting to Rs. 12.44 crore in its loan portfolio in respect of certain borrowers. As per the RBI circular DCBR.CO.BPD.MC.No.1/12.05.001/2015-16 dated July 1, 2015, the Bank has opted to amortise entire amount due, net of recovery, over a period not exceeding four quarters commencing from the quarter in which the fraud has been detected. Unamortised balance as at December 31, 2018 stands at Rs. 2.87 crore.

7. In terms of RBI circulars DBR.No.BP.BC.1/21.06.201/2015-16 dated July 01, 2015 on Basel III Capital Regulations and DBR.No.BP.BC.80 /21.06.201/2014-15 dated March 31, 2015 on Prudential Guidelines on Capital Adequacy and Liquidity Standards - Amendments, banks are required to make certain Pillar 3, Leverage Ratio, and Liquidity Coverage Ratio disclosures along with the publication of financial results. Accordingly, such disclosures have been placed on the Bank’s website at the following link These disclosures have not been reviewed by the statutory auditors.

8. Figures for the previous period / year have been regrouped / reclassified wherever necessary to conform to the classification of the current period.

Murali M. Natrajan