The Directors have pleasure in presenting the 36th Annual Report and
 the Audited Financial Statements for the Financial Year ended December
 31, 2010.
 
 FINANCIAL RESULTS
 
 A) STANDALONE:
 
 The Standalone performance for the Financial Year ended December 31,
 2010 is as under:
 
 (Rs. in thousands)
 
 PARTICULARS               December 31, 2010*    December 31, 2009
 
 Net sales                    3,324,826            8,415,983
 
 Profit before interest, 
 depreciation, amortization 
 and taxation                   455,986            2,086,852
 
 Less: interest & finance 
 charges                        181,573              292,020
 
 Profit before depreciation
 and taxation                   274,413            1,794,832
 
 Less: Depreciation              83,243              310,344
 
 Profit before exceptional 
 item and taxation              191,170            1,484,488
 
 (Less)/Add: Exceptional item (1,994,989)            507,954
 
 (Loss)/Profit before taxation(1,803,819)          1,992,442
 
 Less: Provision for taxation     56,536             445,789
 
 (Loss)/Profit after taxation (1,860,355)          1,546,653
 
 Profit brought forward        3,436,745           2,377,847
 
 Profit available for 
 appropriation                 1,576,390           3,924,500
 
 Appropriations:
 
 Transfer (from) debenture 
 redemption reserve                --                (80,975)
 
 Transfer to general reserve       --                262,100
 
 Proposed dividend               325,839             262,088
 
 Tax on dividend - current year   54,118              44,542
 
 Tax on dividend - earlier year (33,184)               --
 
 Surplus carried to balance 
 sheet                        1,229,617            3,436,745
 
 * Consequent to the approval of the Honble High Court of Andhra
 Pradesh to the Scheme of Arrangement, the Cement business of the
 Company is transferred to Rain Cements Limited (formerly Rain CII
 Carbon (India) Limited), a wholly owned subsidiary Company with effect
 from April 1, 2010. Hence, the figures for the current Financial Year
 ended December 31, 2010 are not comparable with the figures of the
 previous Financial Year ended December 31, 2009.
 
 B) CONSOLIDATED :
 
 The Consolidated performance for the Financial Year ended December 31,
 2010 is as under:
 
                                                   (Rs. in thousands) 
 
 PARTICULARS                  December 31, 2010     December 31, 2009
 
 Net sales                         37,455,280         36,338,164
 
 Profit before interest, 
 depreciation, amortization 
 and taxation                       7,680,099          9,120,353
 
 Less: Interest & finance charges   1,896,229          2,259,658
 
 Profit before depreciation, 
 exceptional item and Taxation      5,783,870          6,860,695
 
 Less: Depreciation and 
 amortisation                       1,156,847          1,226,483
 
 Profit before exceptional item 
 and taxation                       4,627,023          5,634,212
 
 (Less)/Add: Exceptional items     (1,249,392)           513,354
 
 Profit before taxation             3,377,631          6,147,566
 
 Less: Provision for taxation         950,920          1,714,356
 
 Profit after Taxation before 
 minority interests                 2,426,711          4,433,210
 
 (Less)/Add: Minority interests       (19,543)             5,211
 
 Profit after taxation              2,407,168          4,438,421
 
 Profit brought forward             8,715,575          5,217,495 
 
 Less: Adjustment on account
 of
 
 - Change in holding in subsidiary       -               (25,928)
 
 - Receipt of dividend (including 
 tax thereon) from subsidiaries       227,632               -
 
 Profit available for appropriation 11,350,375         9,629,988
 
 Appropriations:
 
 Transfer (from) debenture 
 redemption reserve                       -              (80,975)
 
 Transfer to general reserve              -              462,100
 
 Proposed dividend                     351,860           455,821
 
 Tax on dividend                        54,118            77,467
 
 Surplus carried to balance sheet   10,944,397         8,715,575
 
 OPERATIONS
 
 During the period under review, the Company has achieved Net sales of
 Rs.3,324,826 (in thousands) and incurred a loss of Rs.1,860,355 (in
 thousands) on standalone basis. The Company has achieved a Net sales of
 Rs.37,455,280 (in thousands) and net profit of Rs.2,407,168 (in
 thousands) on a consolidated basis.
 
 OUTLOOK FOR CEMENT INDUSTRY
 
 The Indian Cement industry has witnessed massive capacity additions of
 over 100 Million tons during the past three to four years which has
 resulted in significant pressure on price realization and also capacity
 utilization during 2010, with average national gross Cement prices
 correcting by about 14% between April and August 2010. The decline in
 price was even higher in the Southern Region that witnessed majority of
 the added capacity, mostly due to the large lime-stone reserves and the
 strong demand growth over the past few years. Driven by renewed demand
 and seasonal factors, prices have recovered from October 2010 from
 these exaggerated lows. However, with the rising surplus capacity over
 the next few quarters due to new expansions commencing operations,
 there is a concern on the capacity utilizations and the sustainability
 of the sales realizations.
 
 The increased thrust on infrastructure development by Government of
 India and the projected growth in the housing sector combined with the
 increasing per capita income and the favorable monsoon in 2010 is
 expected to provide support to the cement prices and hedge against the
 transitory oversupply situation. With the initiatives taken by the
 Government of India for infrastructure development, Cement demand is
 expected to rise further in 2011. The irrigation and housing projects,
 initiated taken by the Government of Andhra Pradesh, although
 temporarily going on a slower pace, are expected to increase the demand
 in the State of Andhra Pradesh, where the Company sells a major portion
 of its production. The management expects that the supply demand gap
 would narrow down in next couple of years, as there are no major
 capacity expansions post FY 2011-12.
 
 In these market conditions, the management is continuing to concentrate
 on controlling costs, including (i) reduction in the cost of fuel with
 increased use of domestic coal, (ii) optimizing the freight cost by
 setting up Fly Ash Handling and Cement Packing facility at Bellary in
 the state of Karnataka and (iii) reduction in the interest cost by
 accelerating the pre-payments of debt and by optimizing the working
 capital.
 
 With the commencement of operations at Fly Ash Handling and Cement
 Packing facility in Bellary; there will be improvement in the
 Cement-Clinker Blend Ratio resulting in reduction in the per tonne cost
 of cement and improvement in operating margins.
 
 OVERVIEW OF CALCINED PETROLEUM COKE (CPC) BUSINESS
 
 Rain Commodities Limited, through its wholly owned subsidiaries Rain
 CII Carbon LLC, USA (RCC), Rain CII Carbon (Vizag) Limited (RCCVL)
 and Zhenjiang Xin Tian Tansu Company Limited, China (ZXTTCL); is
 engaged in the production and sale of Calcined Petroleum Coke (CPC)
 and generation of Energy through Waste-heat recovery.
 
 Rain CII Carbon LLC is operating seven CPC plants in the United States,
 with a total capacity of 1,895,000 tonnes
 
 per annum. Further, RCC co-generates steam and electricity from the
 waste heat recovered in the calcining process at three of its plants.
 RCC owns three deepwater shipping terminals and operates two
 full-service petroleum coke laboratories.
 
 RCCVL is operating a calcining plant at Visakhapatnam, Andhra Pradesh,
 India with an installed capacity of 480,000 tonnes per annum of CPC
 that also co-generates 49MW of electricity through waste heat recovery.
 Further, the waste heat recovery facility, set up during 2005, in
 Visakhapatnam is certified as a project under Clean Development
 Mechanism by United Nations Framework Convention on Climate Change and
 is eligible to receive 164,677 Carbon Emission Reductions (CERs) per
 annum up to July 2017.
 
 During the year 2009, the Group through its wholly owned subsidiary,
 RCC acquired ZXTTCL, a Chinese calcining plant with a capacity of
 20,000 tonnes per annum and gained access to Chinese CPC industry,
 which is a key market for CPC in the world.
 
 The Group has recorded a gross revenues of Rs. 28,702 million from the
 CPC Business during the financial year ended December 31, 2010 as
 compared to gross revenues of Rs. 26,759 million during the year ended
 December 31, 2009.
 
 OUTLOOK FOR CALCINED PETROLEUM COKE (CPC) INDUSTRY
 
 Calcined Petroleum Coke is produced from Green Petroleum Coke (GPC),
 a byproduct of Crude Oil Refining. CPC is an essential component of
 carbon anode for the Aluminum industry and is also used as a source of
 carbon for the Titanium Dioxide and Steel industries.  Aluminium
 Industry which contributes about 90% of total world demand for CPC was
 growing at about 5% per annum globally in the past ten years, with an
 exception to 2009. In 2009, Aluminum industry has witnessed substantial
 reduction in global aluminum production due to global economic downturn
 coupled with unprecedented decline in the Aluminum metal prices.
 However, the recovery in the aluminum industry started in the last
 quarter of 2009 has shown improvement throughout 2010 both in the form
 of increase in Aluminum metal price and Global Aluminum production and
 consumption. During 2010, the primary Aluminum metal price at London
 Metal Exchange (LME) has averaged about US$ 2,200 and the world
 primary Aluminum production has increased by over 11%.
 
 The world demand for Aluminum, particularly in automotive, construction
 and commercial transportation is likely to grow at about 9% in 2011 and
 is expected to grow at an average Compounded Annual Growth Rate
 (CAGR) of 7% between 2011 and 2015. With the expected robust growth
 in the Aluminum industry, the predominant end user of CPC, the outlook
 for CPC industry is expected to be strong from 2011 onwards.
 
 The performance of the Rain Group, being one of the leading producers
 of CPC with operating facilities in United States, India and China is
 expected to be reasonably strong in the medium term with improved
 demand from the growing Aluminum industry and the long term
 relationship with both the Aluminum Smelters and the Crude Petroleum
 Refineries.
 
 DIVIDEND
 
 The Board of Directors of the Company has recommended a Dividend @ 46%
 on the Paid up Equity Share Capital of the Company, i.e., Rs.4.60 per
 Equity Share for the financial year ended December 31, 2010.
 
 BUYBACK OF EQUITY SHARES
 
 The Board of Directors of the Company at their meeting held on March
 28, 2009 approved the Buy-back of 4,056,801 Equity Shares at a price
 not exceeding Rs.127 per equity share for an amount not exceeding
 Rs.515,213,727 from the Open Market through Stock Exchange.
 
 The shareholders of the Company have approved the Buyback of equity
 shares through Postal Ballot on June 17, 2009.
 
 As the price quoted on the stock exchange was higher than the maximum
 offer price for buy back of equity shares approved by the shareholders,
 the Company could not buy back shares from the shareholders.
 
 LISTING OF EQUITY SHARES
 
 The Companys Equity shares are listed at the following Stock
 Exchanges:
 
 (i) Bombay Stock Exchange Limited, Phiroze JeeJeebhoy Towers, Dalal
 Street, Mumbai-400 001;
 
 (ii) National Stock Exchange of India Limited, Exchange Plaza, Floor 5,
 Plot # C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai -
 400051; and
 
 (iii) The Delhi Stock Exchange Limited, DSE House, 3/1 Asaf Ali Road,
 New Delhi - 110002.
 
 The Company has paid the Annual Listing Fees to the said Stock
 Exchanges for the financial year 2010-11.
 
 SUBSIDIARY COMPANIES
 
 The Ministry of Corporate Affairs (MCA), Government of India vide their
 letter No.47/717/2010-CL-III, dated January 7, 2011, granted exemption
 from attaching the Balance sheet, Profit & Loss Account, Directors
 Report and Auditors Report of Subsidiary Companies to the Balance sheet
 of the Company. Your Company will provide with the copy of the Annual
 Accounts of the subsidiary companies and other related information upon
 request by any member of your Company or its Subsidiary Companies. The
 Annual Accounts of the Subsidiary Companies are kept for inspection by
 any investor at the registered office of the Company and the subsidiary
 companies.
 
 A statement of Rain Commodities Limited (Holding Company) interest in
 Rain Cements Limited (formerly Rain CII Carbon (India) Limited), Rain
 CII Carbon (Vizag) Limited, Rain Commodities (USA) Inc, Rain CII Carbon
 LLC, Moonglow Company Business Inc, Rain Global Services LLC, RGS Egypt
 Limited, Rain CII Carbon Mauritius Limited, CII Carbon Corporation,
 Zhenjiang Xin Tian Tansu Company Limited, Rain Carbon (USA) LLC, CPC
 Holdings (USA) LLC, Carbon Holdings (USA) LLC (Subsidiary
 Companies/step subsidiary Companies) is enclosed as required under
 Section 212 of the Companies Act, 1956.
 
 The information of Subsidiary Companies as required to be disclosed as
 per the directions given by MCA while granting exemption under section
 212(8) of the Companies Act, 1956 is enclosed and forms part of the
 Annual Report.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 As prescribed by Accounting Standard 21 issued by the Institute of
 Chartered Accountants of India, the Audited Consolidated Financial
 Statements are annexed. The Company has consolidated the Accounts of
 Rain Cements Limited (formerly Rain CII Carbon (India) Limited), Rain
 CII Carbon (Vizag) Limited, Rain Commodities (USA) Inc, Rain CII Carbon
 LLC, Moonglow Company Business Inc, Rain Global Services LLC, RGS Egypt
 Limited, Rain CII Carbon Mauritius Limited, CII Carbon Corporation,
 
 Zhenjiang Xin Tian Tansu Company Limited, Rain Carbon (USA) LLC, CPC
 Holdings (USA) LLC and Carbon Holdings (USA) LLC.
 
 FIXED DEPOSITS
 
 The Company has not accepted any deposits from the public in terms of
 Section 58A of the Companies Act, 1956.
 
 DIRECTORS
 
 Mr. N. Radhakrishna Reddy and Mr. P. Venugopal Reddy, Directors of the
 Company who retires by rotation and being eligible offer themselves for
 reappointment.
 
 Mr. N. Sujith Kumar Reddy has resigned from the position of Executive
 Director with effect from February 10, 2011, but continues to be the
 Director of the Company.
 
 Mr. Yogesh Rastogi has been appointed as Nominee Director of ICICI Bank
 Limited in place of Mr. V. Prakash with effect from January 20, 2011.
 
 AUDITORS
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the
 Company retires at the ensuing Annual General Meeting. They have
 expressed their willingness to accept appointment.
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants (ICAI Registration
 No. 008072S) have confirmed that their appointment, if made, shall be
 in accordance with the provisions of Section 224(1B) of the Companies
 Act, 1956.
 
 DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA)
 OF THE COMPANIES ACT, 1956
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, with respect to the Directors Responsibility Statement, the
 Board of Directors of the Company hereby confirms:
 
 (i) That in the preparation of the Annual Accounts for the Financial
 year ended December 31, 2010, the applicable accounting standards have
 been followed;
 
 (ii) That the Directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company as at December 31, 2010 and of Profit and
 Loss Account of the Company for the period ended on December 31, 2010;
 
 (iii) That the Directors have taken proper and sufficient care 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) That the Directors have prepared the Annual Accounts for the
 Financial Year ended December 31, 2010 on a going concern basis.
 
 AUDITORS REPORT
 
 There are no qualifications in Auditors Report.
 
 AUDIT COMMITTEE
 
 Audit Committee consists of the following Directors namely Mr.
 P.Venugopal Reddy, Chairman, Mr. R.S. Vidyasagar, Member, Mr. Yogesh
 Rastogi, Member and Mr. G. Krishna Prasad, Member.
 
 All the members of the Audit Committee are independent Directors.
 
 CORPORATE GOVERNANCE
 
 A separate report on Corporate Governance and Management Discussion and
 Analysis is annexed as part of the Annual Report along with the
 Auditors Certificate on its compliance.
 
 SCHEME OF ARRANGEMENT BETWEEN THE COMPANY, RAIN CEMENTS LIMITED
 (FORMERLY RAIN CII CARBON (INDIA) LIMITED), RAIN CII CARBON (VIZAG)
 LIMITED AND THEIR RESPECTIVE SHAREHOLDERS AND CREDITORS
 
 The Honble High Court of Andhra Pradesh vide its order dated December
 29, 2010 had approved the Scheme of Arrangement under Section 391 to
 394 of the Companies Act, 1956 consisting of the following:
 
 (a) Transfer of Cement Business from Rain Commodities Limited (Holding
 Company) to Rain Cements Limited (Formerly Rain CII Carbon (India)
 Limited) (Wholly owned Subsidiary Company) with effect from April 1,
 2010 (First appointed date); and
 
 (b) Transfer of Calcined Petroleum Coke (CPC) and Power Business from
 Rain Cements Limited (Formerly Rain CII Carbon (India) Limited) to Rain
 CII Carbon (Vizag) Limited with effect from April 1, 2010 (Second
 appointed date).
 
 The Board of Directors of the Company at their meeting held on January
 24, 2011 have taken on record the aforesaid order of the Honble High
 Court of Andhra Pradesh. The Company has filed the Honble High Court
 of Andhra Pradesh order dated December 29, 2010 with the Registrar of
 Companies, A.P., Hyderabad on February 10, 2011. Accordingly, the
 Scheme of Arrangement has became effective from February 10, 2011
 taking effect from April 1, 2010 (appointed date).
 
 Consequent to the approval of the Honble High Court of Andhra Pradesh
 to the aforesaid Scheme of Arrangement, the Cement business is
 transferred from Rain Commodities Limited to Rain Cements Limited
 (Formerly Rain CII Carbon (India) Limited) and the Calcined Petroleum
 Coke and Power business is transferred from Rain Cements Limited
 (Formerly Rain CII Carbon (India) Limited) to Rain CII Carbon (Vizag)
 Limited with effect from April 1, 2010.
 
 ACQUISITION OF BIRLA CEMENT AND INDUSTRIES LIMITED
 
 Your Company has acquired Birla Cement and Industries Limited from Yash
 Birla Group on January 14, 2011 by acquiring the equity shares. Birla
 Cement and Industries Limited holds certain Limestone Mining Leases in
 the State of Andhra Pradesh.
 
 Consequent to the said acquisition, Birla Cement and Industries Limited
 has become a Wholly owned subsidiary of the Company.
 
 INFORMATION RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
 FOREIGN EXCHANGE EARNINGS AND OUTGO AND PARTICULARS OF EMPLOYEES.
 
 Information with respect to conservation of energy, technology
 absorption, foreign exchange earnings and outgo pursuant to Section
 217(1)(e) of the Act read with Rule 2 of the Companies (Disclosures of
 Particulars in the Report of the Board of Directors) Rules, 1988 and
 information on particulars of employees under Section 217(2A) of the
 Act read with the Companies (Particulars of Employees) Rules, 1975 (as
 amended) form part of this Report.
 
 CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 Corporate Social Responsibility is commitment of the Company to improve
 the quality of life of the workforce and their families and also the
 community and society at large. The Company believes in undertaking
 business in such a way that it leads to overall development of all
 stake holders and Society.
 
 EDUCATION
 
 In order to provide better educational facilities, the Company is
 maintaining schools at plant location and imparting education in
 english medium. The school provides education from LKG to 10th Standard
 to the children of the employees and also the students of surrounding
 villages near the plant.
 
 HEALTH
 
 In order to provide good health facilities, the Company is maintaining
 hospital at Plant locations. The hospitals provide medical treatment to
 the workers and their families and also people living in surrounding
 villages near the plant location.
 
 The Company has ambulance service facilities at one of its plant
 location and also conducts medical camps regularly.
 
 ENVIRONMENT
 
 The Company has taken significant initiatives to reduce the pollution.
 Anti-pollution measures taken by the Company help minimize the impact
 of industrial process on the environment.
 
 ACKNOWLEDGEMENTS
 
 The Directors take this opportunity to place on record their sincere
 thanks to the Banks and Financial Institutions, Insurance Companies,
 Central and State Government Departments and the shareholders for their
 support and co-operation extended to the Company from time to time.
 Directors are pleased to record their appreciation of the sincere and
 dedicated services of the employees and workmen at all levels.
 
                                On behalf of the Board of Directors 
                                       for RAIN COMMODITIES LIMITED
 
                                Sd/-                         Sd/-
                  N. Radhakrishna Reddy      N. Jagan Mohan Reddy
                             Chairman           Managing Director
 
 Place: Hyderabad
 
 Date : February 25, 2011