The directors are pleased to present the sixteenth Annual Report of
 your Bank together with the audited accounts for FY 2011.
 
 India faced many challenges during FY 2011. Tackling the problem of
 high infation has been a agenda for the Government and the Reserve Bank
 of India (RBI). The global economy is recovering but still weak and a
 few countries in Europe continue to be in a precarious financial
 condition. In India, the year started well with adequate liquidity and
 low interest rates, however, by the second half the situation was very
 different. The IIP data was not encouraging and liquidity became tight
 pushing up interest rates. RBI took special steps to improve the
 liquidity in the system and banks started offering customers high term
 deposit interest rates. As cost of funds increased, banks increased the
 Base Rate for lending. Due to uncertain conditions, the stock markets
 remained volatile.
 
 Globally, towards the end of the year, there has been massive uprising
 of people in many of the Middle East countries demanding change. This
 has already pushed up the oil price to a great extent. The situation
 got worse in March 2011 when Japan was hit by a massive earthquake
 followed by a devastating tsunami.  Japan and the world is still
 dealing with the fall out of the unprecedented natural disaster. While
 the Indian economy continues to be resilient and buoyant and is
 expected to grow at 8.0 to 8.5% per annum, oil price increase and
 infation are likely to take some shine off the growth story.
 
 Against the above background, the shareholders will be pleased to know
 that in FY 2011, DCB has progressed further towards improving its
 business and financial performance. DCB returned to profits in the 2nd
 quarter of FY 2011 and thereafiter continued to improve step by step
 every quarter.
 
 In FY 2011, DCB has posted an Operating Profit of Rs. 86.06 Crore
 (Previous year: Rs. 48.27 Crore) and a Net Profit of Rs. 21.43 Crore
 (Previous year: Net Loss of Rs. 78.45 Crore).
 
 The Net Interest Margin (NIM) has improved from 2.79% in FY 2010 to
 3.13% in FY 2011 and the CASA ratio remains high at 35.2%.
 
 Cost to Income Ratio has decreased to 71.4% in FY 2011 from 80.6% in FY
 2010.
 
 Provisions other than tax has reduced to Rs. 56.81 Crore in FY 2011 from
 Rs. 121.01 Crore in FY 2010.
 
 Capital Adequacy Ratio (CAR) under Basel II as on 31st March 2011 stood
 at 13.25%.
 
 Total Assets have increased by Rs. 1,235.67 Crore and reached Rs. 7,372.34
 Crore as on 31st March 2011. (Rs. 6,136.67 Crore as on 31st March 2010).
 Customer Deposits have increased by Rs. 721.69 Crore and Advances have
 increased by Rs. 811.74 Crore.
 
 Gross and Net NPAs have decreased to Rs. 263.57 Crore and Rs. 41.23 Crore
 respectively as on 31st March 2011 from Rs. 319.18 Crore and Rs. 107.62
 Crore as on 31st March 2010. The overall NPA Provision Coverage Ratio
 was 87.64% and 100% for unsecured personal loans NPAs.
 
 FINANCIAL SUMMARY
 
                                                        (Rs. in Crore)
 
                          For the year     For the year     Increase/
                           ending               ending     (Decrease)
                          31 March, 2011   31 March, 2010
 
 Balance Sheet
 
 Deposits                    5,610.17        4,787.33       822.84
 
 Customer Deposits           5,350.02        4,628.33       721.69
 
 (including CASA)           (1,975.46)      (1,692.76)      282.70
 
 Inter Bank Deposits           260.15          159.00       101.15
 
 Advances                    4,271.45        3,459.71       811.74
 
 Non Performing
 Assets (Gross)                263.57          319.18       (55.61)
 
 Non Performing
 Assets (Net)                   41.23          107.62       (66.39)
 
 Provision for Standard
 Assets                         25.31           25.25         0.06
 
 Total Assets                7,372.34        6,136.67     1,235.67
 
 Profit & Loss
 
 Net Interest Income           189.14          141.55        47.59
 
 Non-Interest Income           112.10          107.52         4.58
 
 Total Operating Income        301.24          249.07        52.17
 
 Operating Cost                215.18          200.80        14.38
 
 Operating Profit                86.06           48.27        37.79
 
 Provisions                     56.81          121.01       (64.20)
 
 Net Profit/(Loss) Before Tax    29.25          (72.74)      101.99
 
 Tax                             7.82            5.71         2.11
 
 Net Profit/(Loss)               21.43          (78.45)       99.88
 
 Afiter Tax
 
 DIVIDEND
 
 In view of the provisions of Section 15 of the Banking Regulation Act,
 1949, your Directors are not able to recommend payment of any dividend
 for FY 2011 (Previous year NIL)
 
 VISION
 
 Our vision is to be the most innovative and responsive neighborhood
 community bank in India serving entrepreneurs, individuals and
 businesses. In line with our vision, we began implementing a new
 strategy, outlined below, in FY 2010. We have been operating under the
 new strategy for almost two years and we are clearly seeing an
 improvement in the business and financial performance of DCB.
 
 Business Strategy
 
 - Grow Retail Mortgages, MSME, SME and mid Corporate advances. The
 emphasis will be on creating a diversifed and secured portfolio.
 
 - Focus on CASA and Retail Term Deposits to manage/improve the cost of
 funds. Retail Banking using branch banking and outbound sales team will
 be the key channels for CASA and Retail Term Deposits. Bancassurance
 and Trade Finance products will be actively cross sold to improve Fee
 income and customer loyalty.
 
 - Treasury will be mainly responsible for liquidity and Balance Sheet
 management and will look for opportunities in fix and SLR trading gains
 within acceptable risk levels.
 
 - Productivity across all units to be actively managed with a strong
 Cost discipline.
 
 - Continue to strengthen Credit and Operational risks to support
 Balance Sheet growth.
 
 - Using sophisticated process improvement techniques, at least 3 key
 processes to be improved every year which in turn will improve Service
 Quality.
 
 - Focus on Training especially in Sales and Service to enhance
 frontline quality and effectiveness.
 
 - Improve Human Resource processes to attract and retain talent.
 
 Target Market
 
 DCBs core target market will be MSME and SME sector. The Bank has
 chosen this strategy in line with its capital position, infrastructure,
 branch distribution, people capabilities and product strength. This
 sector plays an important role in the economy of any country. They are
 small and usually labor intensive.  They cater to the needs of the
 market with limited and indigenous capital outlay. MSME and SME play a
 vital role in the growth of the Indian economy.  It is estimated that
 MSME and SME segment contributes around 45% of the industrial output
 and 40% of exports. In India, at the end of year 2009, it was estimated
 that MSME and SME make up for around 28.5 million business units
 employing over 66 million people.
 
 In FY 2011, DCB has grown Retail Mortgages, MSME and SME loans. A
 steady portfolio was maintained in Corporate Banking. DCB made special
 efforts to once again meet the Priority Sector Lending obligation.
 
 DCB received 2 branch licenses from RBI. These branches are likely to
 be operational by June 2011. In Branch Banking, focus of attention on
 CASA and Retail Term Deposits yielded good results. Throughout the
 year, the Bank managed its liquidity position very well and did not
 have to over rely on bulk deposits and borrowings.
 
 Costs increase was much slower than Income growth and were largely
 limited to salary increases for the existing workforce and hiring
 frontline sales staff for growing deposits and advances.
 
 Provisions in FY 2011 were substantially lower than the previous year
 and the Provision Coverage Ratio was well above the guidelines set by
 RBI.
 
 DCB has been able to return to profits in FY 2011. This has been
 possible due to systematic and disciplined execution of the new
 strategy while improving NPAs by concentrating on collections and
 recovery efforts.
 
 
 
 
 
 PARTICULARS OF EMPLOYEES
 
 The information required under Section 217(2A) of the Companies Act,
 1956 and the rules made there under, as amended, are given in the
 annexure appended hereto and forms part of this report. In terms of
 Section 219(1)(b)(iv) of the Act, the Report and Accounts are being
 sent to the shareholders excluding the aforesaid annexure. Any
 shareholder interested in obtaining a copy of the said annexure may
 write to the Company Secretary at the Registered Offce of the Bank. The
 Bank had 7 employees who were employed throughout the year and were in
 receipt of remuneration of more than Rs. 60.00 lacs per annum and 1
 employee who was employed for part of the year and was in receipt of
 remuneration of more than Rs. 5.00 lacs per month.
 
 EMPLOYEE STOCK OPTIONS
 
 The information pertaining to the Employee Stock Options is given in an
 annexure to this Report.
 
 PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
 
 The provisions of Section 217(1)(e) of the Companies Act, 1956 relating
 to conservation of energy and technology absorption do not apply to
 DCB.  However, as mentioned in the earlier part of the Report, DCB has
 been extensively using technology in its operations.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 In accordance with Section 217(2AA) of the Companies Act, 1956, your
 Board of Directors confrms that: a) in the preparation of the annual
 accounts, the applicable accounting standards have been followed along
 with proper explanation relating to material departures; 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 Bank at the end of the financial year and of the profit or loss of
 the Bank for that period; c) proper and suffcient care has been taken
 for maintenance of adequate accounting records as provided in the
 Companies Act, 1956, for safeguarding the assets of the Bank and for
 preventing and detecting frauds and other irregularities; and d) the
 annual accounts of the Bank have been prepared on a going concern
 basis.
 
 CORPORATE GOVERNANCE
 
 The Bank continues to believe in observing the best corporate
 governance practices and benchmarking itself against each such practice
 on an ongoing basis. A separate section on Corporate Governance and a
 Certifcate from M/s S. R. Batliboi & Co., Chartered Accountants
 regarding compliance of the conditions of Corporate Governance as
 stipulated under Clause 49 of the Listing Agreements with the Stock
 Exchanges form part of this Annual Report.
 
 DIRECTORS
 
 In accordance with the Companies Act, 1956 and the Articles of
 Association of DCB, Directors Mr. R. A. Momin, Mr. Narayan K. Seshadri
 and Mr. Suhail Nathani are retiring by rotation and, being eligible,
 offer themselves for reappointment.
 
 The Board recommends the re-appointments of Mr. R. A. Momin, Mr.
 Narayan K. Seshadri and Mr. Suhail Nathani as Directors at this Annual
 General Meeting.  A brief resume relating to the Directors who are to
 be re- appointed is furnished in the report on Corporate Governance.
 
 None of the above mentioned persons is disqualifed from being appointed
 as a Director as specified in terms of Section 274(1)(g) of the
 Companies Act, 1956.
 
 STATUTORY AUDITORS
 
 Messers S. R. Batliboi & Co., Chartered Accountants were appointed as
 Statutory Auditors at the last Annual General Meeting as per Banking
 Regulation Act, 1949. They are eligible for re-appointment for FY
 2011-12 and their appointment is subject to RBI approval. Your Board
 recommends their appointment as Statutory Auditors at the ensuing
 Annual General Meeting, subject to approval of RBI.
 
 ACKNOWLEDGEMENTS
 
 Your Board wishes to thank the principal shareholder, the promoters Aga
 Khan Fund for Economic Development (AKFED), and all the other
 shareholders for the confdence and trust they have reposed in DCB. Your
 Board also acknowledges with appreciation the RBI for its valuable
 guidance and support to DCB. Your Board similarly expresses gratitude
 for the assistance and co-operation extended by SEBI, BSE, NSE, NSDL,
 CDSL, Central Government and the Governments of various States where
 DCB has its branches.
 
 Your Board acknowledges with appreciation, the invaluable support
 provided by DCBs auditors, lawyers, business partners and investors.
 Your Board is also thankful for the continued co-operation of various
 financial institutions and correspondents in India and abroad.
 
 Your Board wishes to sincerely thank all its customers for their
 patronage. Your Board records with sincere appreciation the valuable
 contribution made by employees at all levels and looks forward to their
 continued commitment to achieve ambitious organizational goals that the
 Bank has set for the future.
 
                                On behalf of the Board of Directors
 
 Mumbai                                               Nasser Munjee
 
 April 13, 2011                                            Chairman