Deepak Fertilizers and Petrochemicals Coprn

Business is to make profits......the answer is not only false, it is
 irrelevant. - PeterDrucker
 
 The year 2008-09 witnessed financial volatility comparable to a
 tsunami, marked by sharp price swings in commodities, real-estate and
 stock- markets. During the course of the year, oil, DAP, Sulphur and
 Ammonia touched their highest-ever levels, bolstering revenues to
 unprecedented levels.
 
 Just about as suddenly thereafter came the decline with a speed,
 magnitude and ferocity that spared no one - banks, companies and
 countries.
 
 What could possibly be our take-home learning from this turbulent
 period? At the root of it all, what went wrong? My answer: the singular
 pursuit of short-term profits.
 
 Profitability is not the purpose of, but a limiting factor on
 business. Profit is not the explanation, cause or rationale of business
 behaviour and business decisions but rather the test of their
 validity. - PeferDrucker
 
 If organisational actions are focused on short-term profits as opposed
 to the creation of true, comprehensible and sustainable value, there
 could be the risk of creating the basis for another speculative
 euphoria leading to value depreciation and finally profit erosion.
 
 At DFPCL, the one overriding question that we constantly ask ourselves
 is: how do we add value to our 29 years of fertiliser and chemical
 experience and our insight into the Indian and global scenario? How do
 we focus on sustainable value- creation as opposed to a fleeting
 increase in profits?  How do we reconcile short-term aspirations with
 long-term considerations?
 
 The answer points to a considerable potential before us in our specific
 businesses for the following reasons:
 
 - India represents a large local market
 
 - The country possesses untapped and vast mineral resources
 
 - The regions sun-soil-labour advantage powers its agriculture
 
 Each of these provide a growing scope for profits today as well as
 opportunities in synergic value creation in the years to come.
 
 The highest use of capital is not to make more money, but to make
 money do more for betterment of life. - Henry Ford
 
 At DFPCL, after another record breaking year of topline and bottomline
 despite the global meltdown, going forward we see ourselves poised to
 capitalise on the vast potential in four high-growth sectors of:
 
 - Agriculture
 
 - Mining
 
 - Chemicals and
 
 - Value-added real estate
 
 During 2008-09, we undertook a number of strategically guided and
 decisive steps, which will help us leverage Indias macro-economic
 momentum through the following businesses:
 
 - Our Speciality Fertiliser Business grew 139 percent, creating a firm
 footprint in the non-subsidised fertiliser segment and making in-roads
 into the high potential fruit and vegetable sectors. At the front-end,
 small but potentially attractive steps were taken to enter the
 agri-produce, purchase and export businesses. A state-of-the-art
 Sulphur Bentonite manufacturing facility was commissioned and a
 world-class speciality fertiliser product was placed in a market
 deficient of Sulphur nutrients in the soils.
 
 - A detailed analysis of the needs of the mining industry (including
 contract mining) was undertaken following the opening up of the coal
 sector, indicating new opportunities. The new project for tripling
 capacities of Technical Ammonium Nitrate to service the mining sector
 was well underway for commissioning during FY2011 leading to further
 avenues for growth.
 
 - In the Chemical Segment, a cosmetic grade IPA was developed, a
 strategic step towards conversion of some of our commodity chemicals
 into speciality niches. A 450 TPD Nitric Acid project was undertaken
 and the plant is under commissioning, slated to give a fillip to
 downstream fertilisers and chemicals.
 
 - In the Value-added real estate space, with over a million footfalls
 and over 35 percent conversions achieved at Ishanya, a sharper
 positioning with value-added services for the B-2-B and B-2-C segments
 was underway.
 
 The pages that follow are a peep into an exciting future that we see...
 value creation that will synergise Indias macro-drivers with DFPCLs
 proven past to chisel a future of promising potential... where profits
 will be a test of our validity and sustainability but not the
 overriding rationale of our existence.
 
 Sincerely,
 S. C. Mehta