Rain Commodities

The Directors have pleasure in presenting the 33rd Annual Report and
 the Audited Statement of Accounts for the period ended on 31st
 December, 2007.
 
 FINANCIAL RESULTS (STANDALONE) :
 
 The performance during the period ended on 31st December, 2007 has been
 as under:
 
                                                        (Rs. in Million)
                                   31st December, 2007  31st March, 2007
                                            (9 months)  (12 Months)
 
 
 Sales                                        4620.64       -
 Profit/(Loss) before Interest& Depreciation  1384.05     11.24
 Less: Interest & Financial Charges            272.19     16.71
 Profit/(Loss) after Interest but
 before Depreciation                          1111.86     (5.47)
 Less: Depreciation                            101.17      0.09
 Profit/(Loss) before Tax                     1010.69     (5.56)
 Less: Provision for Taxation                  155.33      0.02
 Profit/(Loss) after Tax (before
 Extra Ordinary Items)                         855.36     (5.58)
 Extra Ordinary Items                          602.10        -
 Profit After Tax (after Extraordinary Items)  253.26     (5.58)
 Balance brought Forward from Previous Year   1884.37    258.70
 Profit available for appropriation           2137.63    253.12
 Appropriations                                             
 Transferred to Debenture Redemption Reserve     6.95      -
 Transferred to General Reserve                 25.70      -
 Provision for proposed dividend               197.32    112.39
 Provision for tax on proposed dividend         33.52     19.10
 Surplus Carried to Balance Sheet             1874.14    121.63
 
 FINANCIAL RESULTS (CONSOLIDATED) :
 
 The performance during the period ended on 31st December, 2007 has been
 as under:
 
                                                        (Rs. in Million)
                                    31st December, 2007  31st March, 2007
                                             (9 months)  (12 Months)
 
 Sales                                        15,928.01     4,954.76
 Profit(Loss) before Interest & Depreciation   3,007.14     1,872.51
 Less: Interest & Financial Charges            1,577.56       679.83
 Profit(Loss) after Interest but
 before depreciation                           1,429.58     1,192.68
 Less: Depreciation                              573.83       148.19
 Profit(Loss) before tax                         855.75     1,044.49
 Less: Provision for Taxation                     80.09       141.22
 Profit(Loss) after Tax 
 (before Extra Ordinary Items)                   775.66       903.27
 Extra Ordinary Items                           (316.38)      328.66
 Profit After Tax (after Extraordinary Items)    459.28     1,231.93
 Share of profit/ (loss) in Associate             (5.25)      (12.83)
 Balance brought Forward from Previous Year       22.93      (933.15)
 Transferred from Rain Calcining Limited pursuant
 to the Scheme of Arrangement
 (Refer Note III on Schedule V)                 1312.97        -
 Profit available for appropriation             1789.93       285.95
 Appropriations
 Transferred to Debenture Redemption Reserve       6.95        -
 Transferred to General Reserve                   25.70        -
 Provision for proposed dividend                 197.32       112.39
 Provision for tax on proposed dividend           33.52        19.10
 Surplus Carried to Balance Sheet               1526.44        22.93
 
 OPERATIONS
 
 During the period under review, the Company has achieved a turnover of
 Rs. 4620.64 Million, earned a Net Profit of Rs.253.25 Million and
 production was recorded at 1.15 Million Metric tonnes.
 
 FUTURE OUTLOOK
 
 Outlook for Cement Industry continues to be moderate in the year 2008.
 Although growth may be moderate in short term but macroeconomic
 fundamentals continue to be strong. Given the current rate of growth of
 the economy, the number of infrastructure projects under
 implementation, and the construction boom, any slowdown in demand is
 unlikely in the near future which is likely to provide support to the
 prices. With the initiatives taken by the Government of India for
 development of infrastructure, the demand for Cement is expected to
 grow further in the year 2008. The irrigation and Housing Projects
 being under taken by the Government of Andhra Pradesh will further
 increase the demand for Cement in Andhra Pradesh, where the Company
 sells major portion of its production. The overall Cement consumption
 has increased substantially with the growth in the Housing Sector and
 concentration of Government on the development of infrastructure. The
 Company continues to concentrate on the reduction of Cost like Freight,
 Power and other inputs, so as to improve its profitability.
 
 However, government tough stand on inflation control new expansion
 plants commencing operations and further change in policies in order to
 keep a check on prices may affect the performance of the industry.
 
 EXPANSION OF CAPACITY
 
 The Company has undertaken expansion of its plant capacity by 1.66
 Million Metric tonnes per annum at Unit-ll situated at Sreepuram,
 Peapully- Mandal, Kurnool District, Andhra Pradesh with a project cost
 of Rs.334 Crores. The Project cost has been met out of internal
 accruals and term loans from Banks and Financial Institutions. Total
 Production capacity of the Company after expansion will be 3.16 Million
 Metric Tonnes per annum. The New capacity will come into operation with
 effect from May, 2008.
 
 OVERVIEW OF CALCINED PETROLEUM COKE (CPC) BUSINESS
 
 Rain CM Carbon (India) Limited (Formerly Rain Industries Limited) or
 RCCIL and Rain CM Carbon, LLC (Formerly Cll Carbon, L.L.C.) or RCC, are
 two wholly owned subsidiaries of Rain Commodities Limited.
 
 RCCIL is operating a 100% Export Oriented Unit in Visakhapatnam, Andhra
 Pradesh, India with an installed capacity of 480,000 Tons per annum of
 Calcined Petroleum Coke. RCCIL also generates. 49MW of electricity from
 its co- generation plant.  RCCIL has acquired 100% of equity interests
 of RCC on July 19, 2007 for an aggregate cash purchase consideration of
 US$ 595 million. RCC operates seven facilities to manufacture CPC in
 U.S., with an aggregate capacity of 1,895,000 Tons per annum. As a
 result of the RCC acquisition, the Group became the largest producer of
 CPC in the world.  The Group sells CPC for two principal end uses, the
 production of aluminum and the production of titanium dioxide. Rain Cll
 also produces energy through co-generation as a by-product of the
 calcining process, which it sells in the form of steam or electricity.
 
 Demand for CPC:
 
 Aluminum industry, which is the largest end user of CPC, is growing
 world wide at about 5.0% per annum and is expected to continue to grow
 at a rate of 5.0% to 5.5% in the next ten years. Majority of the growth
 in the Aluminum industry is taking place in Asia and Middle East. China
 alone is contributing for significant growth of the Aluminum industry.
 With increase in production of aluminum, the demand for CPC continues
 to grow in the medium term, as there is no known substitute for CPC in
 aluminum smelting. Accordingly, all the eight CPC plants of the Group
 are expected to operate at their full rated capacity during the
 foreseeable future.
 
 Availability of Green Petroleum Coke (GPC):
 
 The raw material (Anode Grade Green Petroleum Coke) required for
 manufacturing CPC, is a refinery by-product and is in short supply. The
 supply of Anode Grade GPC is not increasing at the same pace at which
 the demand for Anode Grade GPC is growing. Due to long history of
 continued relationship by RCC with the refineries across the world, the
 Group is able to procure the Anode Grade GPC for its plants in India
 and US.
 
 Integration of US and Indian CPC Operations:
 
 The Group has been able to integrate its CPC businesses of RCCIL, India
 and RCC, U.S.  seamlessly and initiated the process for implementing
 the best manufacturing practices followed by RCC in the CPC plant of
 RCCIL, India. Further, RCC, US has taken additional responsibilities of
 procuring GPC for RCCILs Indian operations and also in the marketing
 of CPC manufactured by RCCILs plant in India, post termination of the
 arrangement with Oxbow Carbon & Minerals LLC, by RCCIL, India.
 
 Greenfield Expansions:
 
 The Group is carrying out the feasibility and location studies for
 setting-up two Green Field CPC plants in Visakhapatnam, India and in
 China. These Greenfield CPC plants with aggregate capacity of 6,00,000
 tonnes are expected to commence commercial operations partly in second
 half of Calender Year 2009 and the remaining in Calender year 2010.
 
 Carbon Emission Reductions:
 
 The CPC Plant of RCCIL is approved as a Project under Clean Development
 Mechanism of United Nations Framework Convention on Climate Change on
 July 12, 2007 and is eligible for 164,777 Carbon Emission Reductions
 per annum for a period of ten years from July 12, 2007.
 
 CHANGE OF FINANCIAL YEAR
 
 The Company has changed its financial Year from April - March to
 January- December. Accordingly, the current financial year shall be
 from 1st April, 2007 to 31st December, 2007(9 Months) and subsequent
 financial years shall be from 1st January to 31st December (12 Months).
 
 DIVIDEND
 
 The Board of Directors of the Company have recommended a Dividend @ 28%
 on the Paid up Equity Share Capital of the Company, i.e., Rs.2.80 Per
 Equity Share for the financial year ended 31st December, 2007.
 
 SCHEME OF ARRANGEMENT AMONG THE COMPANY, RAIN CALCINING LIMITED, RAIN
 INDUSTRIES LIMITED AND THEIR RESPECTIVE SHAREHOLDERS
 
 The Scheme of arrangement among the Company, Rain Calcining Limited,
 Rain Industries Limited and their respective shareholders consisting of
 the following is approved by the Honble High Court of Andhra Pradesh
 on 25th October, 2007:
 
 (a) Transfer of Cement Business from Rain Industries Limited (Wholly
 Owned Subsidiary) to the Company with effect from 1st July,
 2006(Appointed date);
 
 (b) Amalgamation of Rain Calcining Limited with the Company with effect
 from 1st April, 2007(appointed date); and
 
 (c) Transfer of Calcined Petroleum Coke (CPC) and Power Business from
 the Company to Rain Industries Limited with effect from 1st April,
 2007(appointed date); The Company has filed the Form No. 21 with the
 Registrar of Companies, Andhra Pradesh, Hyderabad on 23rd November,
 2007.  Accordingly, the scheme of Arrangement has become effective from
 23rd November, 2007 taking effect from the appointed dates specified in
 the Scheme of Arrangement.
 
 ALLOTMENT OF EQUITY SHARES
 
 Consequent to the Amalgamation of Rain Calcining Limited with the
 Company as per the approval of Honble High Court of Andhra Pradesh to
 the Scheme of arrangement on 25th October, 2007, the Board of Directors
 of the Company fixed 2nd January, 2008 as the Record date for
 determining the shareholders of Rain Calcining Limited entitled for
 allotment of equity shares of the Company in the ratio of 2:7. The
 Board of Directors of the Company at their meeting held on 4th January,
 2008 allotted 3,48,61,286 Equity Shares to the shareholders of Rain
 Calcining Limited in the ratio of 2:7 i.e., two Equity Shares of the
 Company were allotted for every seven equity Shares held in Rain
 Calcining Limited as on record date i.e., 2nd January, 2008.
 
 LISTING OF EQUITY SHARES
 
 The Companys Equity shares are listed at (i) Bombay Stock Exchange
 Limited, Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai-400 001 and
 (ii) National Stock Exchange of India Limited, Exchange Plaza, Floor5,
 Plot # C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai -
 400051 and the company has paid the Annual Listing Fees to the said
 Stock Exchanges for the financial year 2008-2009.
 
 JOINT VENTURE
 
 Upon completion of merger of Rain Calcining Limited with the Company,
 Petroleum Coke Industries Company, Kuwait (PCIC) became a Joint Venture
 of the Company. PCIC is in the process of setting up a Calcination
 plant with a capacity to manufacture 350,000 MTPA of CPC and your
 Company, as a promoter has subscribed to 11.5% of the equity of PCIC
 amounting to Rs.258 million (equivalent to US$.5,817,897). The
 construction of the plant is in progress and major contracts have been
 awarded. The Companys wholly owned subsidiary Company namely Rain CM
 Carbon (India) Limited (RCCIL) has an Operation & Maintenance Contract
 with PCIC and once the plant commences production, RCCIL will receive a
 fee linked to production for a period of five years from the date of
 commencement of commercial operations.
 
 SUBSIDIARY COMPANIES
 
 The Ministry of Corporate Affairs (MCA), Government of India vide their
 letter No.47 144/2008-CL-lll, dated 2nd May, 2008 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 make available 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 your Company and the
 subsidiary companies.
 
 A statement of Rain Commodities Limited (Holding Company) interest in
 Rain CM Carbon (India) Limited, Rain Commodities (USA) Inc, Moonglow
 Company Business Inc and Rain Cll Carbon 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 Standards-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 Cll Carbon (India) Limited, Rain Commodities (USA) Inc, Moonglow
 Company Business Inc and Rain Cll Carbon LLC, wholly owned
 subsidiaries.
 
 FIXED DEPOSITS
 
 The Company has not accepted any deposits from the public in terms of
 Section 58A of the Companies Act, 1956.
 
 DIRECTORS
 
 Mr. P. Venugopal Reddy and Mr. G. Krishna Prasad, Directors of the
 Company who retires by rotation and being eligible offer themselves for
 reappointment.  Mr. R.S. Vidyasagar is appointed as the Nominee
 Director of Industrial Development Bank of India Limited with effect
 from 14th March, 2008.  Mr. P. Prasen Kumar has resigned from the
 Directorship of the Company with effect from 14th March, 2008.
 
 With effect from 24th November, 2007, Mr. N. Radhakrishna Reddy has
 resigned as Managing Director of the Company but continue to be a
 Director and Chairman of the Company, Mr. N. Jagan Mohan Reddy is
 appointed as Managing Director and Mr. N. Sujith Kumar Reddy is
 appointed as the Executive Director.
 
 AUDITORS
 
 M/s. Price Waterhouse, Chartered Accountants, Auditors of the Company
 retires at the ensuing Annual General Meeting. They have expressed
 their willingness to accept re-appointment.  M/s. Price Waterhouse,
 Chartered Accountants have confirmed that their appointment, if made,
 shall be in accordance with the provisions of Section 224(1 B) of the
 companies Act, 1956.
 
 COST AUDIT
 
 As per the Governments directive, the Companys cost records in
 respect of Cement for the financial year ended 31st December, 2007 are
 being audited by Cost Auditor Mr. Dantu Mitra who is appointed by the
 Board with the approval of the Central Government.
 
 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 31st December, 2007, 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 31st December, 2007 and of Profit and
 Loss Account of the Company for the period ended 31st December, 2007;
 
 (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;
 
 (iv) That the Directors have prepared the Annual Accounts for the
 Financial Year ended 31st December, 2007 on a going concern basis.
 
 AUDIT COMMITTEE
 
 Audit Committee consists of the following Directors namely Mr. P.
 Venugopal Reddy, Chairman, Mr. G Krishna Prasad, Member and Mr. R.S.
 Vidya Sagar, 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 a part of the Annual Report along with the
 Auditors Certificate on its compliance.
 
 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.
 
 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
 
                                                  N. Radhakrishna Reddy
                                                        Chairman
 
 Place : Hyderabad                                 N. Jagan Mohan Reddy
 Date  : May 21, 2008                                 Managing Director