Deepak Fertilizers and Petrochemicals Coprn

The Directors have pleasure in presenting the Twenty-Eighth Annual
 Report together with Audited Accounts of the Company for Financial Year
 ended 31st March, 2008.
 
 FINANCIAL RESULTS
 
 The summarised financial results for the year are as under:
 
                                                       (Rupees in Lacs)
                                                2007-08          2006-07
 
 Sales (including other income)             1,08,131.07       86,943.46
 
 Profit before depreciation                   19,897.87       16,846 60
 
 Less : a) Depreciation                        4,470.51        3,908 32
 
 b) Prior years adjustments (net)                -              (58.65)
 
 Profit before Exceptional Items              15,427.36       12,996 93
 
 Less : Exceptional Items                        276.02          182.12
 
 Profit Before Tax (PBT)                      15,151.34       12,814 81
 
 Less: a) Provision for Income Tax             5,386.77        1,690.30
 
 b) Provision for deferred Income Tax           (375.98)       1,745.66
 
 c) Provision for Fringe Benefit Tax .            92.00           69 00
 
 d) Provision for Wealth Tax                      22.00           17 21
 
 Net Profit                                   10,026.55        9,292.64
 
 Add : Balance brought forward                36,729.79       31,653.15
 
                                              46,756.34       40,945.79
 
 Appropriations :
 
 a) Transferred to Debenture Redemption 
 Reserve                                         190.00          190 00
 
 b) Transferred to General Reserve             1,005.00          930 00
 
 c) Dividend on Equity Shares                  3,087.20        2,646 20
 
 d) Corporate Dividend Tax                       524.70          449 80
 
 Surplus carried to Balance Sheet             41,949.44       36,729.79
 
 Sales (including other income) increased to Rs. 1,081.31 crores
 (including trading operations of Rs. 357.93 crores) as against Rs.
 869.43 crores (including trading operations of Rs. 315.78 crores) for
 the previous year.  PBT for the year under review is Rs.151.51 crores
 as against Rs. 128.15 crores in the previous year. Net Profit for the
 current year is Rs. 100.27 crores as compared to Rs. 92.93 crores in
 the previous year.
 
 - DIVIDEND
 
 Considering the continued good performance of the Company during the
 year under review, your Directors recommend a dividend @ 35% (Previous
 Year 30%) on Equity Shares of the Company for year ended 31st March,
 2008. The proposed dividend (including Corporate Dividend Tax) will
 absorb Rs. 36.12 crores.
 
 * MANAGEMENT DISCUSSION AND ANALYSIS
 
 A report on Management Discussion and Analysis (MDA), which forms part
 of this Report, inter-alia, deals adequately with the operations as
 also current and future outlook of the Company.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of sub-section (2AA) of Section 217 of the
 Companies Act, 1956, your Directors confirm that:
 
 (i) in the preparation of the annual accounts, the applicable
 accounting standards had been followed alongwith proper explanation
 relating to material departures, if any;
 
 (ii) the accounting policies selected had been applied consistently and
 judgements and estimates made were reasonable and prudent so as to give
 a true and fair view of the state of affairs of the Company at the end
 of the financial year on 31st March, 2008 and of the profit of the
 Company for that period;
 
 (iii) proper and sufficient care had been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 (iv) the annual accounts had been prepared on a going concern basis.
 
 - CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, a separate section titled Corporate Governance is attached
 to this Annual Report.
 
 SUBSIDIARY COMPANIES
 
 As mentioned in the last years Directors Report, the Company has two
 subsidiaries viz. Smartchem Technologies Limited and Deepak Nitrochem
 Pty. Limited.
 
 A statement pursuant to Section 212 of the Companies Act, 1956 in
 respect of these subsidiaries is appended to the Balance Sheet. In
 terms of approval granted by the Gentral Government under Section
 212(8) of the Companies Act, 1956, the annual accounts and other
 reports specified in Section 212(1) in respect of the subsidiary
 companies have not been attached to the Balance Sheet. The Company will
 make available these documents /details to the investors of the Company
 and the subsidiary companies upon request made in this regard to the
 Company.
 
 In accordance with the requirements of Accounting Standard AS-21
 prescribed by the Institute of Chartered Accountants of India, the
 Consolidated Financial Statement of the Company and its subsidiaries is
 annexed to this Annual Report.
 
 * INDUSTRIAL RELATIONS
 
 Industrial Relations during the year under review continued to be
 cordial.
 
 - CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 As required by the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988 the relevant data pertaining to
 conservation of energy, technology absorption and foreign exchange
 earnings and outgo are given in Annexure forming part of this Report.
 
 - DIRECTORS
 
 Shri R. A. Shah, Shri D. Basu and Shri U. P. Jhaveri retire by rotation
 at the ensuing Annual General Meeting and being eligible, offer
 themselves for re-appointment. Dr. S. Rama Iyer was appointed as an
 Additional Director of the Company and holds office up to the date of
 ensuing Annual General Meeting and is eligible for appointment as
 Director of the Company.
 
 The term of Shri S. C. Mehta as Vice-Chairman & Managing Director of
 the Company shall be expiring on 31st July, 2008. Shri S. C. Mehta has
 been re-appointed by the Board of Directors for a further period of
 five years w.e.f. 1st August, 2008, subject to approval of Members.
 
 AUDITORS
 
 M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, the Auditors of
 the Company hold office until the conclusion of the ensuing Annual
 General Meeting. The Company has received a letter from them to the
 effect that their appointment, if made, by the Company for the year
 2008-09 will be within the limit prescribed under Section 224(1-B) of
 the Companies Act, 1956. The Board of Directors commends their
 re-appointment.
 
 - PERSONNEL
 
 As required by the provisions of Section 217 (2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the names and other particulars of employees are set out in
 the Annexure to the Directors Report. However, as per the provisions
 of Section 219(1)(b)(iv) of the said Act, the annual report and
 accounts are being sent to all members of the Company excluding the
 aforesaid information.  Any member interested in obtaining such
 particulars may write to the Company Secretary at the Registered Office
 of the Company.
 
 * ACKNOWLEDGEMENT
 
 Your Directors wish to place on record their sincere appreciation to
 the financial institutions, Companys bankers and customers, vendors
 and investors for their continued support during the year.
 
 Your Directors are also pleased to record their appreciation for the
 dedication and contribution made by employees at all levels who through
 their competence and hard work have enabled your Company achieve good
 performance year after year and look forward to their support in future
 as well.
 
                                      For and on behalf of the Board,
 Mumbai                               C. K. MEHTA
 
 Dated 30th May, 2008                 Chairman