The correct answer is: D. No error
The sentence is grammatically correct. The word “regretfully” is an adverb that modifies the verb “fell.” The phrase “profits earned by your company” is a noun phrase that is the subject of the sentence. The verb “fell” is in the past tense, which is consistent with the time reference in the sentence (“last year”). The phrase “by 20 per cent” is a prepositional phrase that modifies the verb “fell.” The phrase “despite higher sales”
is a prepositional phrase that modifies the verb “fell.”The sentence is clear and
easy to understand. It conveys the message that the company’s profits fell by 20 per cent last year, despite higher sales.