Rain Commodities Ltd-08

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RAIN COMMODITIES LIMITED

BOARD OF DIRECTORS

Mr. N.Radhakrishna Reddy

Mr. N.Jagan Mohan Reddy

Mr. N. Sujith Kumar Reddy

Mr. R.S. Vidyasagar

•Mr. V. Prakash

Mr. P. Venugopal Reddy

Mr. G. Krishna Prasacl

Chairman

Managing Director

Executive Director

Nominee Director, IDBI Bank Limited

Nominee Director, ICICI Bank limited

Director

Director

CHIEF GENERAL MANAGER (F & A)

Mr. G N V S R R Kumar

COMPANY SECRETARY

Mr. S. Venkat Ramana Reddy

STATUTORY AUDITORS

M/s. Price Waterhouse,Chartered Accountants,8-2-293/82 A/1131 A,Road No.36,Jubilee HillsHyderabad-500 034.

REGISTERED OFFICE

"Rain Center"-,34, Srinagar Colony,Hyderabacl-500 073,Andhra Pradesh, India.Phone • No.040-40401234Fax No.040-40401214

INTERNAL AUDITORSM/s. Deloitte Haskins & SellsChartered Accountants5th Floor, Gowra GrandS.P. Road,Secunderabad - 500 003.

BANKS AND FINANCIALINSTITUTIONS

IDBI Bank LimitedLife Insurance Corporation of IndiaCitibankICICI Bank LimitedIndian BankState Bank of IndiaState Bank of FHyderabadState Bank of Indore

PLANTSUnit-l '

Ramapuram Village,Mellacheruvu Mandal,Nalgonda-Dist,Andhra Pradesh, India.

Unit- IIBoincheruvupalli Village,Peapully, Mandal,Kurnool Djst,Andhra Pradesh, India.

34th Annual Report 2008





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Contents

Notice

Directors' Report -—

Management Discussion and Analysis :

Corporate Governance Report r

Auditors' Report

Standalone Financial Statements

Statement u/s 212 of the Companies Act, 1956 .

Balance Sheet abstract

Auditors' Report on consolidated Financial Statements

Consolidated Financial Statements

ECS Form — .-

Proxy Form and Attendance Form

V

^v

Page No.

03

12

- — • 21

23

39

43

65

68

70

-". — ' 71

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NOTICE

Notice is hereby given that the 34th Annual GeneralMeeting of the Members of Rain Commodities Limitedwill be held on Wednesday, the 17th Day of June, 2009at 11:00 A M at KLN Prasad Auditorium, Federation ofAndhra Pradesh Chambers of Commerce &Industry(FAPCCI), Red.Hills, Hyderabad-500 004, AndhraPradesh to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the.Balance sheet asat December 31, 2008, Profit and Loss Account forthe Financial year ended on December 31, 2008 andreports of Directors and Auditors thereon.

2. To declare a dividend on equity shares for theFinancial year ended December 31, 2008.

3. • To appoint a Director in place of Mr. N. RadhakrishnaReddy, who retires by rotation and being eligibleoffers himself for re-appointment.

4. To appoint a Director in place of Mr. P. VenugopalReddy, who retires by rotation and being eligibleoffers himself for re-appointment.

5. To appoint M/s. Deloitte Haskins & Sells, Chartered' Accountants, as the Statutory Auditors of the

Company to hold office from the conclusion of this34th Annual General Meeting until the conclusionof the next Annual General Meeting of the Companyin place of M/s. Price Waterhouse, retiring Auditors,who have not offered themselves for re-appointment

• as Auditors of the Company and to authorise theBoard of Directors to fix the remuneration of Auditors.

SPECIAL BUSINESS :

6. To Consider and if thought fit to pass with or withoutmodification(s) the following resolution as anORDINARY RESOLUTION:

"RESOLVED THAT pursuant to Sections 198, 269,309, 310, 311 and other applicable provisions, if any,of the Companies Act, 1956 (the 'Act') read withSchedule XIII thereto consent of the members of theCompany be and is hereby accorded to there-appointment of Mr. N. Sujith Kumar Reddy as theExecutive Director of the Company for a period of 5years with effect from April 1, 2008 (i.e., from April1, 2008 to March 31, 2013) on the following termsand conditions :

A) Remuneration comprising of Salary,Commission and leave travel allowance shallbe as follows:

i) Salary: Rs.5,50;000 per month. This willinclude dearness allowance and all otherallowances not otherwise specified herein.

ii) Commission: Such amount of commission(in addition to salary and perquisiteshereinafter stated) calculated with referenceto the net profit of the Company for eachfinancial year as may be fixed by the Boardof Directors or a Committee of Directorswhich together with the salary andmonetary value of perquisites shall notexceed the ceiling laid down in Section 309of the Companies Act, 1956.

' . iii) Leave Travel Allowance: For self and familyequivalent to one month's salary in a year.

B) Perquisites/Benefits:

i) Residential Accommodation:

a) Rent free accommodation of which10% of the salary shall be recoveredor

b) In case no accommodation is providedby the Company, house rent allowanceat 20% of the salary, shall be paid. Inaddition, free use of the Company'sowned furniture and other consumerdurables, if required.

ii) Contribution to Provident Fund,Superannuation Fund and Gratuity:

a) Company's contribution to ProvidentFund and Superannuation fund shallnot exceed 25% of the Salary.

The excess of such contribution overthe maximum amount, either singly orput together, not taxable under theIncome-tax Act, shall be consideredand included for the purpose ofcalculating the ceiling on perquisitesgiven in B (iii) below.

b) As per the payment of Gratuity Act orCompany's Gratuity Scheme,

, whichever is higher.

iii) Other Perquisites:

a) Gas, electricity, water, housemaintenance and furnishings, themonetary value of which shall bevalued as per the Income Tax Rules,1962 and subject to a ceiling of tenpercent of the salary of the ExecutiveDirector.




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b) Personal Accident Insurance shall notexceed Rs.10,0007- per annum andMedical reimbursement for self andfamily equivalent to one month's salaryin a year or three months salary in ablock of three years.

c) Fees of club, subject to a maximum oftwo clubs excluding admission and lifemembership fees.

d) Provision of a car with driver for useon Company's business and telephone/fax facility at residence.

e) The perquisites shall be evaluated atcost to the Company and where suchevaluation is difficult, it shall beevaluated as per the Income Tax Rules.

C) Minimum Remuneration:

Where in any financial year, during the currencyof tenure of Mr. N. Sujith Kumar Reddy, theCompany has no profits or its profits areinadequate, the Company shall pay to Mr. N.Sujith Kumar Reddy, remuneration by way ofSalary and perquisites not exceeding the limitsspecified in Schedule-XIII of the Companies Act,1956 including any statutory modifications 3.thereof for the time being in force.

The Executive Director shall not be paid anysitting fees for attending the meetings of theBoard of Directors or Committee thereof

FURTHER RESOLVED THAT Mr. N RadhakrishnaReddy, Chairman, Mr. N. Jagan Mohan Reddy,Managing Director and Mr. S. Venkat RamanaReddy, Company Secretary be and are herebyseverally authorized to sign the necessarydocuments and forms and to do such other actsand deeds as may be necessary to give effect tothis resolution".

7. To Consider and if thought fit to pass with or withoutmodification(s) the following resolution as a SPECIALRESOLUTION:

"RESOLVED THAT pursuant to applicable provisionsof the Foreign Exchange Management Act (FEMA),1999, FEMAfTransfer or issue of security by personResident outside India) Regulations, 2000, theCompanies Act, 1956, all other applicable laws,rules, regulations, guidelines and subject to suchapprovals, consents and permissions of theGovernment of India, Reserve Bank of India(RBI) andany other appropriate authorities, institutions orregulatory bodies as may be necessary,and'subject

to such conditions as may be prescribed by any ofthe concerned authorities while granting suchapprovals, permissions, sanctions which may be

•agreed >to by the Board- of Directors of theCompany(hereinaffer referred to as the "Board" whichterm shall be deemed to include any Committee(s)constituted/to be constituted by the Board to exerciseits powers including the powers conferred by thisResolution), the consent of the Members of theCompany be and is hereby accorded for theinvestment by Non-Resident Indians (hereinafterreferred to as "the NRIs") in the share capital of theCompany, to be increased from 10% to 24% or suchother limit as may be prescribed from time to timeby the Central Government and/or Reserve Bank ofIndia or any other related authority.

FURTHER RESOLVED THAT the Board of Directorsof the Company be and are hereby authorized to takesuch steps and do other acts, deeds, matters andthings and accept any alteration(s) or amendment(s)or correction(s) as they may deem fit and appropriateand give such directions/instructions as may benecessary, proper or expedient for the purpose ofgiving effect to this resolution and for the mattersconnected therewith or incidental thereto."

To Consider and if thought fit to pass with or withoutmodificatibn(s) the following resolution as a SPECIALRESOLUTION:

"RESOLVED THAT subject to the provisions of theCompanies Act, 1956, Securities Contracts(Regulation) Act, 1956, and the rules framed thereunder, listing agreement, SEBI (Delisting of Securities)Guidelines, 2003, and such other applicable laws,rules, regulations and guidelines, and subject to suchapprovals, permission and sanctions, as may benecessary, the consent of the members of thecompany be and is hereby accorded to seekvoluntarily delisting of its securities from the DelhiStock Exchange Limited and the Hyderabad StockExchange Limited.

RESOLVED FURTHER THAT the securities of the.company shall continue to be listed on the StockExchanges having nation wide trading terminalsnamely Bombay-Stock Exchange-Limited andNational Stock Exchange of India Limited andtherefore as per the said guidelines issued by theSecurities and Exchange Board of India, no exitopportunity need to be given to the, shareholders ofthe Company.

RESOLVED FURTHER THAT the Bo'ard of Directorsof the Company be and are hereby authorised to do

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all such acts, deeds, matters and things as it may inits absolute discretion deem necessary or desirableand to execute all-such deeds and documents as maybe considered necessary .and expedient to give effectto the above said resolution.". .

9. *To Consider and if thought fit to pass with or withoutmodification(s) the following resolution as a SPECIALRESOLUTION:

"RESOLVED THAT in accordance'with the provisionscontained in Article 28a of the Articles of Association-of the Company and Sections 77A, 77AA, 77B andall other applicable provisions, if any, of theCompanies Act, 1956 ("the Act") and the provisionscontained in the SEBI (Buy.Back of Securities)Regulations, 1998 ("Buy Back Regulations")(including any -, statutory modification(s) orre-enactment of the Act or Buyback Regulations, forthe time being in force) and subject to such other .approvals; permissions and sanctions as may be

. necessary' and subject to such conditions andmodifications as may be prescribed or imposed whilegranting such approvals, permissions and sanctionswhich may be agreed to by the Board of Directors ofthe Company (herein after referred to as the "Board"which term shall be deemed to include anyCommittee thereof which the Board may constituteto exercise its powers, including the powers conferredby this resolution), the consent of the Shareholdersof the Company be and is hereby accorded to theBoard at its sole option at such time and from time to

. time as it .may consider appropriate to purchase theCompany's own fully paid up Equity Shares of Rs.10/- each to the extent not exceeding 40,56,801 EquityShares being 5.73% of.the total paidup Equity Capitalof the Company at a price not exceeding Rs. 127/-(Rupees One Hundred and Twenty Seven only),perEquity Share from the Open Market through BombayStock Exchange Limited and National Stock Exchangeof India.Limited ("Buy .Back") and the total aggregateamount to be expended by the Company for theBuyback not exceeding Rs. .51,52,13,7277- (RupeesFifty One Crores Fifty Two Lakhs Thirteen Thousandand Seven Hundred Twenty Seven only) i.e. not

: exceeding 11.58% of the total paid-up capital andfree reserves of the Company as per the auditedBalance Sheet as at December 31, 2008.

RESOLVED FURTHER THAT the Company mayimplement the'Buyback in one or more tranches, fromtime to time'as it may consider appropriate, from outof its free reserves and / or the share premium accountand / or internal accruals and / or such other sources

„ or by such mechanisms as may be permitted by law.

RESOLVED FURTHER THAT nothing containedherein above shall confer any right on the part ofany shareholder to offer, or any obligation on thepart of the Company or the Board to buy back anyshares, and / or impair any power of the Company orthe Board to terminate any process in relation to suchBuyback if so permissible by law.

. RESOLVED FURTHER THAT the Board of Directorsof the Company (including any Committee thereof)be and is hereby authorized to do all such acts, deeds,

> matters and things as it may in its absolute discretion,deem necessary, expedient, usual or proper, to be inthe best interest.of shareholders, including but notlimited to the appointment of Merchant Bankers,Brokers, Solicitors, Depository Participants,Registrars, Advertising Agencies, Compliance Officer,Investor Service Centre and other'consultants /representatives/intermediaries/agencies, incidentalto the implementation ofthebuybackasalsotomakealj applications to the appropriate authorities, partiesand the institutions for'their requisite-approvals as

- also to initiate all necessary actions for preparationand issue of public announcement and filing of publicannouncement with the SEBI and Stock Exchanges,filing of declaration of solvency certificate and filingof certificate of extinguishment and physicaldestruction of certificates/all other undertakings,agreements, papers and documents required to befiled in the above"connection and to settle all suchquestions, difficulties or doubts that may arise inrelation to the implementation of the Buybackwithout being required to seek any further consentor approval of the Shareholders .or otherwise to theend and intent that-the Shareholders shall be deemedto have given their approval thereto expressly by theauthority of the above resolution; •

' RESOLVED FURTHER THAT the Board of Directorsof.the Company (including any Committee thereof)be and is hereby authorized to delegate'all or any ofthe authorities conferred as above to any Director(s)/Company Secretary of the Company to give effectto the aforesaid resolution or to accept any change(s)or modification(s) as may be suggested by the

• appropriate authorities or Advisors."

*Note: Resolution'mentioned at Item No. 9 will bepassed through Postal ballot for which a separatenotice along with the postal ballot form is sent.

• t . By order of the Boardfor RAIN COMMODITIES LIMITED

Place: HyderabadDate : April 23, 2009

S. VENKAT RAMANA REDDY' COMPANY SECRETARY






NOTES:

1.

2.

3.

A member entitled to attend ahd^vote is entitled to appoint a proxy to attend and on a'poll to vote instead ofhimself and such proxy need not;be a member. The instrument appointing a proxy should, however, be depositedat the Registered Office of the Company not less than 48 hours before the meeting. '

The Register of Members and Share Transfer Books of the Company will remain closed from June 10, 2009 to June17, 2009 (both days inclusive). ,' : "

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividend,for the financial year endedMarch 31, 1999 has been transferred to the Investor Education and Protection Fund (IEPF) established by theCentral Government pursuant to Section 205C of the Companies Act, 1956 and the dividend for the financial yearended March 31, 2006 and thereafter, which remain unclaimed for a period of 7 years will be transferred by theCompany to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuantto Section 205C of the Companies Act, 1956.

Information in respect of such unclaimed.dividend when due for transfer to the Investor Education an'd ProtectionFund (IEPF) is given below:

SI. No

1

2

3

4

Name of the Company '

Rain Calcining Limited*

Rain Calcining Limited*'

Rain Commodities Limited

Rain Commodities Limited .

For the Financialyear

March 31 , 2006

March 31, 2007 -

March sf, 2007 . < •

December 31, 2007

Date ofDeclaration

September 29, 2006

August 1,2007

August 3, 2007

June 25, 2008

Due date for transfer tothe Investor Educationand Protection Fund

October 29, 2013 -

September 1, 2014

September 2, 2014

•July 25, 2015

'4.

Rain Calcining Limited is amalgamated with the Company.

The Shareholders who have not encashed thedividend warrant(s) so far for the Financial Year endedMarch 31, 2006 .and March 31, 2007 of RainCalcining Limited and in case of the Company forthe Financial Year ended March 31, 2007 andDecember 31, 2007, are requested to make theirclaim to the Secretarial Department, RainCommodities Limited, Rain Center, 34, Srinagarcolony, Hyderabad,- 500073,.Andhra Pradesh, India.

Dividend on equity shares '@ 37% on the paid upEquity share capital i.e., Rs.3.70 per Equity Share asrecommended by the Board o.f Directors, if declaredby the Shareholders at the meeting, will be paid tothose shareholders whose names appear on theRegister of Members of the Company as on June 10,2009 and also to the Beneficial Owners of equity 6.shares held in electronic form on the said date as perthe details furnished by the Depositories for thispurpose.

The Securities and Exchange Board of India (SEBI)and the Ministry of Corporate Affairs have made itmandatory for all the Listed Companies to offerElectronic Clearing .Service (ECS) facilities forpayment of dividend, wherever applicable. This

7.

facility offers various benefits like timely credit ofdividend to the shareholders account, eliminationof loss of instruments in transit or fraudulentencashment etc. In view of the above:

(i) Shareholders holding shares in Physical Formand desirous of availing the facility are requested tocomplete ECS form attached to this Annual Reportand forward the same to the Company's Registrarand Share Transfer Agent.

(ii) Shareholders holding shares in DematerializedForm are requested to provide the Bank details totheir Depository Participants for incorporation in theirrecords. The Depository in turn would forward therequired information to the Company.

The above information should be made available tothe Company's Registrars M/s. Karvy ComputersharePrivate Limited, (Unit: Rain Commodities Limited),Plot No.17 to 24, Vittal Rao Nagar, Madhapur,Hyderabad - 500 081, Andhra Pradesh, India, on orbefore June 1, 2009. i

The Company's equity shares are Listed at (i) BombayStock Exchange Limited, Phiroze Jeejeebhoy Towers,Dalai Street, Mumb'ai- 400 001 and,:(ii) National Stock

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\

8.

Exchange of India Limited, Exchange Plaza, Floor 5,Plot # C/1, Bandra (East), Mumbai - 400051 and theCompany has paid the Annual Listing Eees to thesaid Stock Exchanges for the year 2009-10.

Members are requested to send all communicationrelating to shares (Physical and Electronic) to theCompany's Share Transfer Agent at KarvyComputershare Private Limited (Unit: Rain

Commodities Limited), Plot No.17 to 24, Vittal RaoNagar, Madhapur, Hyderabad - 500 081, AndhraPradesh, India.

By order of the Boardfor RAIN COMMODITIES LIMITED


S. VENKAT RAMANA REDDYCOMPANY SECRETARY

EXPLANATORY STATEMENT(Pursuant to Section 173(2) of the Companies Act, 1956)

ITEM NO.6

Mr. N. Sujith Kumar Reddy was're-appointed as theExecutive Director for a period of 5.years with effect fromApril 1, 2008 (i.e., from April 1, 2008 to March 31, 2013)by the Board of Directors at their meeting held on July24, 2008; • '• . '•• . •

Profile of Mr. N. Sujith Kumar Reddy is given below:

Mr. N. Sujith Kumar Reddy, aged about 38 years, has adegree in Commerce. He has more than 16 years ofexperience in the,fields of manufacturing industry.Currently, he is also on the board of PCL Financial ServicesLimited, Nivee Property Developers Private Limited,Arunachala Holdings Limited, Apeetha Enterprises Limitedand Nivee Holdings Limited. He has been a director ofour Company since 1993.

Mr. N. Sujith Kumar Reddy holds 20,05,754 equity Sharesin the Company.

Mr. N. Sujith Kumar Reddy is son of Mr. N. RadhakrishnaReddy, Chairman and brother of Mr. N. Jagan MohanReddy, Managing Director. Other than the said Directors,Mr. N Sujith Kumar Reddy is not connected to any otherDirector of the Company.

None of the Directors except Mr.-N. Sujith Kumar Reddy,Mr. N. Radhakrishna Reddy and Mr. N. Jagan MohanReddy are interested in the above Resolution.

Your Directors recommend the above Resolution for yourapproval.

ITEM NO. 7

In accordance with the Foreign Exchange Management(Transfer or issue of security by a Person Resident outsideIndia) Regulations, 2000 issued under the ForeignExchange Management Act, 1999 investment in EquityShares by Non-Resident Indians (NRIs) is limited to 10%of a Company's paid-up Equity Share Capital. This limitcan be increased by the Company by passing a Special

'. • '

Resolution at the General Meeting of the Shareholders ofthe Company.

In order to improve the freefloat of the Company's sharefor purchase/trading by NRIs, it is proposed to raise thelimit for investment by NRIs in the paid-up Equity ShareCapital of the Company.

The Board of Directors of the Company recommend theresolution for increasing the limit of investment by NRIsupto 24% of the Paid up Share Capital in the Companyfor the approval of the members.

None of the Directors of the Company is directly orindirectly concerned or interested in this resolution.

ITEM NO. 8

The Securities & Exchange Board of India (SEBI) notifiedguidelines'for voluntary delisting of securities from theStock Exchanges. As per Clause 5.2 of SEBI (Delisting ofSecurities) Guidelines, 2003 an exit opportunity to theshareholders need not be given where securities of theCompany remain listed on the Stock Exchanges havingnation wide trading terminals namely Bombay StockExchange Limited and National Stock Exchange of IndiaLimited and any other stock exchange that may bespecified by SEBI in this regard.

At present the equity shares of the company are listed atBombay Stock Exchange Limited and National StockExchange of India Limited.

Considering the negligible volume of trading and as apart of its cost reduction measures, the consent of-membersis sought for getting its securities delisted from the DelhiStock Exchange Limited., New Delhi and the HyderabadStock .Exchange Limited (which is.de-recognised bySecurities and Exchange Board of India) as proposed inthe Special Resolution. The Securities of the Companyshall continue to be listed on Bombay Stock ExchangeLimited and National Stock Exchange of India Limited.






The Board recommends the resolution for approval of 4.members.

None of the directors is, in any way, concerned orinterested in the said resolution.

ITEM NO. 9

The Company intends to acquire Equity Shares each offace value of,Rs.10/- at a price not exceeding Rs.127 perEquity Share ("the maximum Buyback price") with the totalaggregate amount to be expended not to exceedRs.51,52,13,727 which is within 25% of the Company'stotal paid-up Capital and Free Reserves as per the auditedBalance Sheet as on December 31, 2008. As the proposedBuyback is more than 10% of the total paid-up Capitaland Free Reserves of the Company as on December 31,2008, the consent of the members is sought by way of aSpecial Resolution pursuant to the provisions of Section77A(2) of the .Companies Act, 1956 ("the Act").

As per the requirements of Section 173(2) read withSection 77A and other applicable provisions of theCompanies Act, 1956 and the Securities and Exchange 5.Board of India (Buy Back of Securities) Regulations, 1998(hereinafter referred to as Buyback Regulations) read withSchedule I of the Buyback Regulations, the ExplanatoryStatement contains relevant and material information toenable the shareholders to consider and approve theSpecial Resolution on Buyback of the Company's equitysnares:

1. The Board of Directors of the Company in its meetingheld on March 28, 2009 has approved the proposalfor Buyback of the Company's own Fully Paid-upequity shares of Rs. 10/- each (hereinafter referred toas the Buyback Offer) in accordance with theprovisions contained in the Articles of Association 6.and Sections 77A, 77AA, 77B and all other applicableprovisions of the Act and the provisions containedin the Buyback Regulations.

2. The Buyback offer is proposed to be implementedby the Company from the Open Market throughBombay Stock Exchange Limited ('BSE') and NationalStock Exchange of India Limited ('NSE') in the manner 7.as may be described in the Act and the BuybackRegulations and on such terms and conditions as maybe determined by the Board of Directors at theappropriate time.

3. There will be no Buyback from any persons throughnegotiated deals whether through the StockExchanges or through spot transactions or throughany private arrangement.

Your Board is of the view that necessity for Buybackis on account of the following reasons:

a) The share Buyback offer is being proposed inpursuance of the Company's desire to maximizereturns to investors, to reduce outstandingnumber of shares and enhance overallshareholder value by returning cash to theshareholders in an efficient and investor friendlymanner. This will be done without in any mannercompromising on the high growth opportunitiesavailable to the Company.

b) The Buyback will result in reduction in theoverall capital employed in the business, whichwill, in turn lead to higher earnings per shareand enhanced return on equity and return oncapital employed, return on net worth, returnon assets, etc.

c) The Buy Back will also provide a reasonable exitopportunity to those shareholders who so desire.

The aggregate Paid-up Equity Share Capital and FreeReserves of the Company as on December 31, 2008is Rs. 445,08,42,241 and under the provisions of theAct, , the fund deployed for Buyback offer shall notexceed 25% of the Paid-up Capital and Free Reservesof the Company. Accordingly the maximum amountthat can be utilised in the present Buyback is Rs.111,27,10,560. The Company proposes to utilize anamount not exceeding Rs. 51,52,13,7277- for Buy-back of Equity Shares of the Company. This amountfor Buyback will be financed out of the Company'sFree Reserves and cash balances and internalaccruals/operating cash inflows of the Company.

The Equity Shares of the Company are proposed tobe bought back at a price not exceeding Rs. 127/-per Equity Share. The said price has been arrived atafter considering various factors including but notlimited to the book value, market value of the shareon the stock exchanges and the possible impact ofBuy-back on the earnings per share.

As per the provisions of the Act, , the maximumnumber of equity shares permitted to be bought backin any financial year shall not exceed 25% of thetotal Paid-up Equity Share Capital of the Company.The Company proposes to Buy-back 40,56,801Equity Shares at a price not exceeding Rs. 127/- perequity share at an aggregate amount not exceedingRs. 51,52,13,727, the maximum number of EquityShares to be bought back under the Buy-back offerwill be less than the 25% of the paid up equity sharecapital of the Company.

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9.

11.


8. (a) The aggregate shareholding of the promoters and of the Directors of the Promoter Companies and of personswho are in control of the Company as on the date of the notice is 3,03,83,816 equity shares constituting42.89% of the paid up share capital of the Company as on the date of this notice. Pursuant to the Buyback ofEquity Shares as proposed and depending on the response to the Buyback offer, the percentage holding of thePromoters would increase beyond the aforesaid percentage. Such an increase in the percentage holding ofthe Promoters is consequential and indirect in nature. If all 40,56,801 equity shares on the Buyback Offer arebought back by the Company, post Buyback offer the percentage shareholding of the Promoter and PromoterCroup would increase from 42.89% to 45.50%.

(b) The details of equity shares of the Company purchased or sold by the promoters and of the Directors of thePromoter Companies and of persons who are in control of the Company during the period of last six monthspreceding the date of the Board Meeting at which the Buyback is approved i.e. 28th March, 2009 and alsofrom 28th March, 2009 to 23rd April, 2009 are mentioned below:-

Name of thePromoter or Personsin control.

Mrs. AnanthalaxmiA Reddy

Name of thePromoter or Personsin control.

M/s. North American •Investments andHoldings Inc.

No. of SharesPurchased

21,44,831

No. of SharesSold

21,44,831

Max Price(Rs. Per share)

Rs. 84.90 Perequity Share

Max Price(Rs. Per share)

Rs. 84.90 Perequity Share

Date ofMax Price

2nd April,2009

Date ofMax Price

2nd April, •2009

Min Price(Rs. Per Share)

Rs.61.55 perequity Share

, Min Price(Rs. Per Share)

Rs.61.55 perequity Share

Date ofMin Price

5th February,2009

Date ofMin Price

5th February,2009

(c) The Promoters and persons in control of the Company will riot participate-in the Buyback.

As required under the Act, , the ratio of debt owedby the Company would not be more than twice theEquity Share Capital and Free Reserves of theCompany after the,Buyback.offer.

10. As per the provisions of the Act, , the Buyback willbe completed within a maximum period of twelvemonths from the date of passing of the said SpecialResolution by the Shareholders. The time frame forthe Buyback will be determined by the Board /Committee within this validity period.

As per the provisions of the Act, the Company willnot be allowed to issue fresh Equity Shares, within aperiod of six months after the completion of theBuyback except by way of bonus shares or sharesissued in the discharge of subsisting obligations, ifany, such as conversion of warrants, stock optionschemes, sweat equity or conversion of preferenceshares or debentures into equity shares, if any.Currently the Company has no subsisting obligationsarising from convertible preference shares orconvertible debentures.

12. The Company hereby confirms that there are nodefaults subsisting in the repayment of deposits,

redemption of debentures or preference shares orrepayment of term loans to any financial institutionsor banks.

13. The Board of Directors of the Company confirm thatthey have made a full inquiry into the affairs andprospects of the Company and they have formed theopinion that:

(a) immediately following the date on which theproposed resolution is passed by theshareholders, there will be no grounds on whichthe Company could be found unable to pay itsdebts;

(b) as regards its prospects for the year immediatelyfollowing that date, having regard to theirintentions with respect to the management ofthe Company's business during that year and to

' the amount and character of the financialresources which will in their view be availableto the Company during, that year, the Companywill be able to meet its liabilities as and whenthey-fall due and will not be rendered.insolventwithin a period of one year from that date; and




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(c) in forming their opinion for the above purposes, the Directors have taken into account the liabilities as if theCompany were being wound up under the provisions of the Companies Act,. 1956 (including prospectiveand contingent liabilities). • . ' ' •

14. The text of the report dated 28th March, 2009 received from M/s.- Pricewaterhouse, Chartered Accountants, thestatutory auditors of the Company, addressed to the Board of the Directors is reproduced below:

To 'The Board of DirectorsRain Commodities Limited,Registered Office - "Rain Center"34, Srinagar Colony, . • .Hyderabad - 500 073,Andhra Pradesh, India

Dear Sirs, . .

Report under Schedule I Clause (xi) of the Securities and Exchange Board of India (Buyback of Securities) Regulations,1998

In connection with the proposed buy back of equity shares approved by the Board of Directors of Rain CommoditiesLimited ('the Company') at its meeting held on March 28, 2009, in pursuance of the provisions of the Companies Act,1956 and the Securities & Exchange Board of India (Buy back of Securities) Regulations, 1998 and based on theinformation and explanations given to us, we report as follows:

1 . We have inquired into the state of affairs of the Company in relation to its audited accounts for the year endedDecember 31, 2008, which were taken on record by the Board of Directors at the meeting held on March 10,2009.

2. The capital payment (including premium) of an amount not exceeding Rs.515,214 thousands towards the buyback of equity shares has been properly determined in accordance with Section 77A(2)(c) of the Companies Act,1956 which is within the permissible amount of 25% of the paid up equity capital and free reserves of thecompany as computed below : • ,

a) Maximum Permissible limit for buy back:

Particulars

Total paid up Capital as at December 31, 2008(7,08,34,579 equity shares of Rs.1 0/- each fully paid up)

Free reserves as at December 31, 2008

Total paid-up capital and free reserves

Maximum permissible limit for buy back of equity shares[with the approval of shareholders of the Company - 25% of paidup capital and free reserves pursuant to provisions stipulated underSection 77A (2)(c) of Companies Act, 1956]

Restricted to:

Amount (in 'OOOs)

708,346

3,742,497

4,450,843

1,112,711

515,214

b) Maximum limit of buy back of equity shares in a financial year.

No. of Shares

Total paid up capital as at December 31, 2008

25% thereof being maximum equity capital eligible for buy back

70,834,579

1 7,708,645

34th Annual Report 2008 10



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3. The Board of Directors in their meeting held on March 28, 2009 have formed their opinion as specified in Clause(x) in Schedule I of the Securities Exchange Board of India (Buy Back of Securities) Regulations, 1998 on reasonablegrounds and that the company will not, having regard to its state of affairs, be rendered insolvent within a periodof one year from the date.of the Board meeting i.e. March 28, 2009.

• For Price WaterhouseChartered Accountants

Partha MitraPlace: Hyderabad • PartnerDate : March 28, 2009 Membership No.50553

15. The Company shall transfer from its Free Reserves a sum equal to the nominal value of the Equity Shares purchasedthrough the Buy-back to the Capital Redemption Reserve account and the details of such transfer shall be disclosedin its subsequent audited balance Sheet.

16. In accordance with the regulatory provisions, the shares bought back by the Company will compulsorily becancelled and will not be held for re-issuance.

17. All the material documents referred to in the Explanatory Statement such as Memorandum and Articles of•Association, relevant Board Resolution and Auditors' Report will be made available for inspection at the RegisteredOffice of the Company on all working days except Holidays between 10.00 a.m. 'and 6.00 p.m.

18. The proposed resolution seeks to authorize the Board of Directors (including the Management •Committee) or anyother person authorized by the Board in this regard.

Your Directors recommend this Special Resolution for approval of the Shareholders.

All the Directors may be deemed to be concerned or interested in the resolution to the extent of shares held by themin the Company like any other Shareholder.

By order of the Boardfor RAIN COMMODITIES LIMITED

Place: Hyderabad . S. VENKAT RAMANA REDDYDate : April 23, 2009 COMPANY SECRETARY

11 34lh Annual Report'2008




LI RAIN COMMODITIES LIMITED

DIRECTORS' REPORT

Dear Members,

Your Directors have pleasure in presenting the 34th Annual Report and the Audited Financial Statements for theFinancial Year ended December 31, 2008.

FINANCIAL RESULTS

A) STANDALONE:

The Standalone performance for the Financial Year ended December 31, 2008 has been as under:

(Rs. in thousands)

PARTICULARS

Sales

Profit/(Loss) before Interest & Depreciation

Less: Interest & Financial Charges

Profit/(Loss) after Interest but before Depreciation and Taxation

Less: Depreciation and Amortisation

Profil/(Loss) before Taxation and Extra Ordinary Items

Less: Provision for Taxation

Profit/(Loss) after Tax (before Extra Ordinary Items)

Extra Ordinary Items

Profit After Tax

Surplus brought Forward from Previous Year

Profit available for appropriation

Appropriations

Transferred (from)/to Debenture Redemption Reserve

Transferred to Capital Redemption Reserve

Transferred to General Reserve

Provision for Dividend

Provision for Tax on Dividend

Surplus Carried to Balance Sheet

December 31, 2008(12 Months)

11,176,756

1,923,243

485,434

1,437,809

224,855

1,212,954

362,417

850,537

-

850,537

1,874,132

2,724,669

(62,029)

12,000

85,100

266,465

45,286

2,377,847

December 31, 2007(9 months)

4,718,282

1,385,083

273,228

1,111,855

101,179

1,010,676

155,335

855,341

602,097

253,244

1,884,376

2,137,620

6,948

-

25,700

197,320

33,520

1,874,132




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B) CONSOLIDATED :

The Consolidated performance for the Financial Year ended

PARTICULARS

Sales

Profit/(Loss) before interest & Depreciation

Less: Interest & Financial Charges

Profit/(Loss) after interest but before depreciation

Less: Depreciation and Amortisation

Profit/(Loss) before Exceptional Item and Taxation

Exceptional Items - Inventory Write Down

Profit before taxation and Extra Ordinary Items

Less: Provision for Taxation

Profit/(Loss) after Tax (before Extra Ordinary Items)

Extra Ordinary Items

Profit After Tax (after Extraordinary Items)

Share of profit/ (loss) in Associate

Profit After Taxation

Surplus brought Forward from Previous Year

Profit available for appropriation

Appropriations

Transferred (from)/to Debenture Redemption Reserve

Transferred to Capital Redemption Reserve

Transferred to General Reserve

Provision for Dividend .

Provision for Tax on Dividend.

Surplus Carried to Balance Sheet

December 31, 2008 has

December 31, 2008(12 Months)

46,934,513

12,194,272

4,234,255

7,960,017

1,060,226

6,899,791

686,236

6,213,555

2,175,684

4,037,871

• • . _

4,037,871

-

4,037,871

1,526,446

5,564,317

(62,029)

12,000

85,100

266,465

45,286

5,21 7,495

been as under:

(Rs. in thousands)

December 31, 2007(9 months)

16,160,900

2,887,979

1,458,400

1,429,579

573,830

855,749

.

855,749 .

80,090

775,659

(316,380)

459,279

(5,250)

454,029

1,335,905

1,789,934

6,948

-

' 25,700

197,320

33,520

1,526,446

OPERATIONS

During the period under review, the Company has achieved a turnover of Rs. 1,11,76,756 (in thousands), includingturnover of Rs. 29,64,291 (in thousands) from trading in Carbon Products, earned a Net Profit,of Rs.8,50,537 (inthousands) and production was recorded at 21,85,113 Metric tonnes. .

OUTLOOK FOR CEMENT INDUSTRY

Outlook for the Cement Industry will most likely be moderate during Current Year 2009 and beyond. Given the-current growth rate of the economy and the various infrastructure projects under implementation, there is unlikely tobe any major slowdown in demand for cement in the near future. The irrigation and Housing Projects being undertaken by the Government of Andhra Pradesh will further increase the Demand for Cement in Andhra Pradesh, the keymarket for the Company.

13 34lh. Annual Report 2008



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While strong demand for Cement is expected to continuein short term, the industry should achieve an overall 5--6% demand growth in Current Year 2009 and 2010.Currently cement prices are firm but the prices areexpected to soften from second half of Current Year 2009,as new supply of 46 million tonnes by March 201 Centersthe market. The Company continues to concentrate onthe reduction of cost such as Freight, Power and otherinputs, so as to improve its profitability.

EXPANSION OF CAPACITY

The Company has completed expansion of its plantcapacity by 1.50 Million Metric tonnes per annum at Unit-II situated at Sreepuram, Peapully Mandal, KurnoolDistrict, Andhra Pradesh on June 19, 2008, with a projectcost of Rs.334 Crores. The Project cost has been met outof internal accruals and term loans from Banks andFinancial Institutions. Total Production capacity of theCompany after expansion will be 3.16 Million Metrictonnes per annum. .

OVERVIEW OF CALCINED PETROLEUM COKE (CPC)BUSINESS

Rain CM Carbon (India) Limited (Formerly Rain IndustriesLimited) or RCCIL and Rain CM Carbon, LLC (FormerlyCll Carbon, L.L.C.) or RCC, are two wholly ownedsubsidiaries of Rain Commodities Limited.

RCCIL is operating a 100% Export Oriented Unit jnVisakhapatnam, Andhra Pradesh, India with an installedcapacity of 480,000 tonnes per annum of CalcinedPetroleum Coke (CPC). RCCIL also generates 49MW ofelectricity from its co-generation plant.

RCC is operating seven CPC plants in US, with anaggregate capacity of 1,895,000 tonnes per annum ofCPC. Further, RCC also generates Electricity in three of itsplants, through waste-heat recovery.

The Group sells CPC for the production of aluminum,titanium dioxide and high strength steel.

OUTLOOK FOR CPC INDUSTRY

Aluminum industry, the largest end user of CPC, wasgrowing at about 5% per annum globally in the past tenyears. However, global aluminum demand would fall by11% during Current Year 2009, resulting in reduceddemand for CPC during Current Year 2009.

The world demand for aluminum would again grow from2011 as the economic climate begins to brighten. Thedemand for aluminum is expected to grow at about 10%in 2011 and is expected to get doubled in next fifteenyears. Accordingly the outlook for CPC industry would

be moderate in the medium term and become strong fromthe year 2011 onwards. '

The performance of the Group in CPC Industry would bestable in the medium term with improved availability ofraw-materials and the long term relationship with boththe aluminum'smelters and the Petroleum Refineries.

GREENFIELD EXPANSIONS

The Company's wholly owned subsidiary, namely RainCalciner Limited, had acquired land at Visakhapatnamfor setting up a plant for producing Calcined PetroleumCoke and generation of power. The Company has kepton hold its Greenfield expansion plans in India and Chinaconsidering the reduction in demand for CPC. Theexpansion plans would be taken-up, once there is a revivalin the demand for CPC.

CARBON EMISSION REDUCTIONS

The CPC Plant of RCCIL is approved as a Project underClean Development Mechanism of United NationsFramework Convention on Climate Change on July 12,2007 and is eligible for 1 64,777 Carbon EmissionReductions per annum for a period of ten years from July12, 2007.

DIVIDEND

The Board of Directors of the Company has recommendeda Dividend @ 37% on the Paid up Equity Share Capital ofthe Company, i.e., Rs.3.70 per Equity Share for thefinancial year ended December 31, 2008.

ALLOTMENT OF EQUITY SHARES CONSEQUENT TOCONVERSION OF EQUITY WARRANTS

The Company had issued 68,00,000 equity warrants toM/s. Focus India Brands Private Limited at a price ofRs.200/- each (Rs.10/- face value + Rs.190/- Premium)on November 29, 2006 which may be converted intoequal number of Equity shares within 18 months fromthe date of issue.

Out of 68,00,000 equity warrants, M/s. Focus India BrandsPrivate Limited converted 50,63,293 equity shares andthe balance 17,36,707 equity warrants were forfeited onJuly 24, 2008 by the Board of Directors, as the investorhad-not converted the balance equity warrants into equityshares within 18 months from the date of allotment ofwarrants.

BUYBACK OF 12,00,000 EQUITY SHARES

The Board of Directors of the company at their meetingheld on September 1, 2008 had approved'the buyback ofequity shares not exceeding 12,00,000 'equity shares of




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Rs.TO/- each fully paid up for an amount not exceedingRs.26 Crores from open market through Stock Exchangesat a price not exceeding Rs.307/- per equity share.

The Company had commenced Buyback .offer onSeptember 25, 2008 and closed on December 5, .2008.During the said period thexompany had .bought back12,00,000 equity shares i.e., the maximum limit approvedby the Board of Directors to be bought back by theCompany.

PROPOSAL FOR BUYBACK OF 40,56,801 EQUITYSHARES:

The Board of Directors of the Company, at their meetingheld on March 28, 2009 approved for Buy-back of EquityShares from the Open Market through Stock Exchangemechanism, for an amount not exceeding Rs.51,52,13,727 subject to a maximum of 40,56,801 EquityShares and at a price not exceeding Rs. 127 per equityshare. • - . . . . •

The said Buy-back of shares is subject to the approval-ofShareholders for which a Special Resolution has beenproposed through postal ballot..

LISTING OF EQUITY SHARES

The Company's Equity shares are listed at the followingStock Exchanges: • ,

(i) Bombay Stock Exchange Limited, PhirozejeejeebhoyTowers, Dalai Street, Mumbai-400 001; and ;.

(ii) National Stock Exchange of India Limited, ExchangePlaza, Floor 5, Plot # C/1, G Block; Bandra-KurlaComplex, Bandra (East), Mumbai - 400051.

The company has paid the Annual Listing Fees to the saidStock Exchanges for the financial year 2009-10.

JOINT VENTURE

Petroleum Coke Industries Company, Kuwait (PCIC), aJoint Venture of the Company has set-up a CPC plant witha capacity to. manufacture 350,000 tonnes per annumand 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 theplant was completed and trial production had commencedin the year 2008. The Company's wholly owned subsidiaryCompany namely Rain CM Carbon (India) Limited (RCCIL)has an Operation & Maintenance Contract with PCIC arid

•once the plant commences production, RCCIL will receivea fee linked to production for a period of five-years fromthe date of commencement of commercial operations.

SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs (MCA), Government of' India vide their letter No.47/579/2009-CL,lll, Dated 19thDecember, 2008 granted exemption from attaching theBalance sheet, Profit & .Loss-Account, Directors Reportand Auditors Report of'Subsidiary Companies to.theBalance sheet of the Company. Your Company wj.llprovide with the copy of the Annual Accounts of thesubsidiary companies and other related information uponrequest by any member of your Company or its SubsidiaryCompanies: The Annual Accounts-of the'SubsidiaryCompanies are kept for inspection by any-investor at theregistered office of Company and the subsidiarycompanies. . .

A statement of Rain Commodities Limited (HoldingCompany) interest in Rain CM Carbon (India) Limited, RainCalciner Limited, Rain CM Carbon LLC, Rain CM Carbon,Mauritius Limited, Rain Global Services HK Limited, RainGlobal Services LLC, Rain Commodities (USA) Inc., andMoonglow Company Business Inc (Subsidiary Companies/step subsidiary Companies)-is enclosed as required underSection 212 of the Companies Act, 1956. '

The information of Subsidiary companies as required tobe disclosed as per the directions given by MCA whilegranting exemption under section 212(8) of the CompaniesAct, 1956 is enclosed and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

As prescribed by Accounting Standard 21 issued by theInstitute of Chartered-Accountants of India, .the AuditedConsolidated Financial. Statements are annexed. TheCompany has consolidated the Accounts of Rain CllCarbon (India) Limited, Rain Calciner Limited, RainCommodities (USA) Inc, Moonglow Company BusinessInc, Rain Cll Carbon LLC, Rain CM Carbon MauritiusLimited, Rain Global Services HK Limited and Rain Global,Services LLC. • ; .

FIXED DEPOSITS

The Company has not accepted any deposits from thepublic 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 andbeing eligible offer themselves for.reappoihtment.

The ICICI Bank has'withdrawn the nomination ofMr. R. Ramanujam and in his place Mr. V. Prakash hasbeen appointed as the Nominee Director with effect fromJuly 29, 2008 - .

15 34th Annual Report 2008



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AUDITORS

M/s. Price Waterhouse, Chartered Accountants, StatutoryAuditors of the Company who retires at the ensuingAnnual General Meeting have not offered themselves forre-appointment. Your Company proposes to appoint M/sDeloitte Haskins & Sells, Chartered Accountants as itsStatutory Auditors from the conclusion of the 34th AnnualGeneral Meeting till the conclusion of the next AnnualGeneral Meeting.

M/s Deloitte Haskins & Sells, Chartered Accountants haveconfirmed that their appointment, if made, shall be inaccordance with the provisions of Section 224(1 B) of theCompanies Act, 1956.

COST AUDIT

As per the Government's directive, the Company's costrecords in respect of Cement for the Financial Year endedDecember 31, 2008 are being audited by Cost AuditorM/s. Sagar & Associates, who are appointed by the Boardwith the approval of the Central Government.

DIRECTORS RESPONSIBILITY STATEMENT ASREQUIRED .UNDER SECTION 217(2AA) OF THECOMPANIES ACT, 1956:

Pursuant to the requirement under section 217(2AA) ofthe Companies Act, 1956, with respect to the Directors'Responsibility Statement, the Board of Directors of theCompany hereby confirms:

(i) That in the preparation of the Annual Accounts forthe Financial year ended 31st December, 2008, theapplicable accounting standards have been followed;

(ii) That the Directors have selected such accountingpolicies and applied them consistently'and madejudgements and estimates that were reasonable andprudent so as to give a true and fair view of the stateof affairs of the Company as at December 31, 2008and of Profit and Loss Account of the Company forthe period ended December 31, 2008;

(iii) That the Directors have taken proper and sufficientcare for the maintenance of adequate accountingrecords in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets ofthe Company and for preventing and detecting fraudand other irregularities;

(iv) That the Directors have prepared the AnnualAccounts for the Financial Year ended December 31,2008 on a going concern basis. .

AUDIT COMMITTEE

Audit Committee consists of the following Directorsnamely Mr. P.Venugopal Reddy, Chairman, Mr. G KrishnaPrasad, Member Mr. V. Prakash, Member and Mr. R.S.Vidya Sagar, Member.

All the members of the Audit Committee are independentDirectors.

CORPORATE GOVERNANCE

A separate report on Corporate Governance andManagement Discussion and Analysis is annexed as apart of the Annual Report -along with the Auditor'sCertificate on it's compliance.

INFORMATION RELATING TO CONSERVATION OFENERGY, TECHNOLOGY ABSORPTION, FOREIGNEXCHANGE EARNINGS AND OUTGO ANDPARTICULARS OF EMPLOYEES.

Information with respect to conservation of energy,technology absorption, foreign exchange earnings andoutgo'pursuant to. Section 217(1 )(e) of the Act read withRule 2 of the Companies (Disclosures of Particulars inthe Report of the Board of Directors) Rules, 1988 andinformation on particulars of employees under Section

, 21 7(2A) of the Act read with the Companies (Particularsof Employees) Rules, 1975 (as amended) form part of thisReport.

ACKNOWLEDGEMENTS

The Directors take this opportunity to place on recordtheir sincere thanks to the Banks and Financial Institutions,Insurance Companies, Central and State GovernmentDepartments and the shareholders for their support andco-operation extended to the Company from time to time.Directors are pleased to record their appreciation of thesincere and dedicated services of the employees andworkmen at all levels.

On behalf of the Board of Directorsfor RAIN COMMODITIES LIMITED

N Radhakrishna ReddyChairman


N.Jagan Mohan ReddyManaging Director'




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ANNEXURE TO DIRECTORS' REPORT

Information under section 217(1 )(e) of the Companies Act,1956 read with the Companies (Disclosure of'particularsin the Report of Board of Directors) Rules, 1988 formingpart of Directors Report for the financial year endedDecember 31, 2008.

A. CONSERVATION OF ENERGY.

(a) Energy conservation measures taken:

Unit - I (Ramapuram)

1. Installation of Belt Bucket Elevator.for CementSilo 1 & 2 .

2. Installation of new energy meters for monitoringthe energy consumption

3. Installation of new PLC system to minimizestoppages and improve operations. ' •

4. Installation of new grinding aid in cementproduction

5. Replacement of loading and transportationequipment in Mines

Unit - II (Sreepuram)

1. Installation of a 450 tonnes capacity Belt Bucket' . Elevation for loading Fly ash

2. Installation of higher-capacity .bag filter at-theTertiary Crusher area

3. Installation of high-capacity belt bucket elevator

4. Installation of high-pressure water pump forbreaking the kiln inlet coating

(b) Additional investments and proposals, if any, beingimplemented for reduction of consumption ofEnergy

Unit - I (Ramapuram)

1. Proposal to install high-capacity raw mill fan toimprove production

2. Change the Cement Mill from Open Circuit toClosed Circuit

3. Proposal for a spare bucket elevator to handleexcess capacity of mill discharge

4. Proposal for mechanical unloading of fly ashsystem

Unit - II (Sreepuram)

1. Proposal for installing a belt bucket elevator forLine I Kiln Pre heater

2. Proposal to install a Variable Frequency Drives(VFD) for Cooler Fans

3.- Proposal to install an MIS for energy meteringof the entire plant ' ' '

4. Upgradation of the Plant Automation Systemwith a new PLC.

(c) Impact of the measures at (a) and (b) above forreduction of energy consumption and consequentimpact on the cost of production of goods.'

. !

Power consumption has been reduced by 2.05kwhper tonne of Cement.





[ RAIN COMMODITIES LIMITED

(d) Total energy consumption and energy consumption per unit of production as per Form A is given below:

FORM-AForm for Disclosure of particulars with respect to conservation of Energy

January 1, 2008 toDecember 31, 2008

(12 Months)

April 1, 2007 toDecember 31, 2007

(9 Months)A. Power and Fuel Consumption

Power and Fuel Consumption

1. ELECTRICITY

a) Purchased

Unit (No.) (Kwh)

Total Amount (Rs.)

Rate/Unit(Rs.)

b) Own Generation

i) Through Generator

Unit (No.)

Unit per Litre of Diesel Oil (No)

Cost/Unit (Rs.)

ii) Through Steam turbine/Generator

Units (KWH)

Units per litre of fuel Oil & Gas

Cost/unit (Rs.) .

2 COAL

Quantity (Tonnes)

Total Cost (Rs.).

Average rate (Rs.)

3 FURNACE OIL

Quantity (K Ltrs)

Total Amount (Rs.) '

Average Rate (Rs.)

4 Other Fuels (HSD OIL & LUB OIL)

Quantity

Total Cost ' ' '

Rate/unit

5 Consumption per Metric tonne of Cement Production

Production (Cement)

Electricity (Kwh)

Furnace Oil (KL)

Coal (%) ' .

B. TECHNOLOGY ABSORPTION:

efforts made in technology absorption as per Form B:

187,841,740

622,060,021

3.31

48,695

3.49

21.21

Nil

Nil

Nil .

335,042

839,383,000

2,505

6,415

101,998

15.90 -

5,094,557

195,741,099

38.42

j

2,185,113

89.46

0.0052

16.90

100,582,153

332,722.690

3.31

1 60,490

3.64

5.76

Nil

Nil

Nil

•

193,115

450,926,673

2,335

33,478

532,300

15.90

10,664

392,010

36.76

.' ' ' I

• 1,151,481

83.75

0.0290

16.77

,.-,:

* Annual Report 2008 18



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•.••• - • • • • - . . " . - . : - -oir.. . -.<?, u FORM-B :> ' • '

Form for disclosure of particulars with respect to absorption—'

RESEARCH AND DEVELOPMENT (R&D):

1 Specific areas in which R & -Q-carried out by the Company :

2 Benefits derived as a result of the above R & D . :

3 Future plan of action :

4 Expenditure on R&D :

TECHNOLOGY ABSORPTION, ADOPTATION AND INNOVATION

Nil

Nil

Nil

Nil

1. Efforts, in brief, made towards technologyabsorption, adaptation and innovation

Benefits derived as a result of the above efforts, :eg. Product development, import substitution, etc.,

In case of imported technology (imported during :

the last 5 years reckoned from the beginning ofthe Financial year), following informationmay be furnished

a) Technology imported :

b) Year of Import :

c) Has Technology been fully absorbed :

d) If not fully absorbed, area where this has :not taken place reasons therefor andfuture plans of action

FOREIGN EXCHANGE EARNINGS AND OUTGO:

a) Activities relating to exports; initiatives :taken to increase exports; developmentof new export markets for productionand service and export plans

b) Total foreign exchange used and earned :

Foreign Exchange earned

Foreign Exchange Used


At Unit-l situated at Ramapuram Village, the Manufacturingprocess is based on know-how from ONODA EngineeringConsulting Company Limited, Japan.

At Unit-ll situated at Sreepuram Village the plant andequipment is supplied by Fuller India Limited., as per theFLS & Fuller Technology.

The usage of imported technology and upgradation accordingto the changes in the Technology has resulted into increasedproductivity and reduction in the energy consumption.

Technology.has been imported last year at Unit-ll.

FL Smidth Denmark, Through FLS India

2008

Yes

Not applicable

The Company is engaged in manufacturing of Cement andthe entire cement produced is sold with in India.

January 1, 2008 toDecember 31, 2008

(12 Months)> , - . / • ; -. - •• NIL

26,41,697

(Rs. In thousands)

April 1,2007 toDecember 31, 2007

(9 Months)NIL

50


N Radhakrishna ReddyChairman

N.Jagan Mohan ReddyManaging'Director




Annexure to the Directors Report

Statement of particulars of employees pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with the.Companies (Particulars of Employees) Rules, 1975 (as amended) and forming part of .the Directors' Report for the Financial year

ended December 31, 2008

SI. Name of the Employee & Designation/ Gross Qualification Experience ,.-, Date of Particulars ofNo (Age) • Nature of Duty Remuneration in years commencement last

t (Rupees) of employment employment

1. Mr. N. Sujith Kumar Reddy' Executive Director 1,22,45,121 B.Corn - 16Years .,22.03.1992 First Employment(38 years) . . - " ' . ' . ' ' . - ' ~ ' ' :

r>O

2O0'

a-O

2. Mr. P:B..Gqpala Krishna President(53 years) (Operations)

41,76,357 B.Tech (Mech) 32 Years 22.05.2006 Madras Cements Ltd.,as Vice President(Manufacturing)

Notes: ^

1. Gross Remuneration includes salary, taxable allowances, commission, value of perquisites as per the Income-tax Rules, 1962 and Company'scontribution to provident fund/superannuation fund. .

2. The nature of employment is contractual.

3. None of the above are related to each-other. . • '



N. Radhakrishna Reddy N. Jagan Mohan ReddyChairman . . Managing Director

jfl



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MANAGEMENT DBSCUSSION AND ANALYS5S

CEMENT INDUSTRY STRUCTURE AND DEVELOPMENT OUTLOOK OF CEMENT INDUSTRY

The Indian Cement industry. - comprising 1 30 largecement plants and more than 300 mini cement plants -Jsthe second largest producer of globally benchmarkedCement. The industry's capacity at the beginning of theyear 2008-09 was 198.30 million tonnes. The demandfor cement, being a.deriyed demand, depends primarilyon the industrial activity, real estate business, constructionactivity and investment in the infrastructure sector. Indiancement industry is globally competitive because theindustry has witnessed healthy trends such as cost controland continuous technology upgradation. An additionalcapacity of around .115 million tonnes is likely to be onstream by 2012, resulting in supply exceeding thedemand.

OPPORTUNITIES AND THREATS .

Opportunities

Despite apprehensions about the impact of inflation andslowdown in Industrial production and overall economicscenario, the outlook for the cement sector remainspositive with the growth in Infrastructure, Housing, Roads,ports, power, urban infrastructure and irrigation projects.

Cement demand is likely to remain robust in the nearterm, driven by the housing and infrastructure sectorswhich will correspondingly be aided by higher disposableincome, rising population, changing demographics andreduction in average size of household.

Threats

A sharp slowdown in real estate and the capital-starvedinfrastructure sector, coupled with a broad economicdownturn may see the industry face considerable pressureon profitability. Earlier, the cement sector had seen a risein prices driven by strong demand, but the slowdown in'the real estate sector and expansion of cement plants maysee an over supply of cement and consequently, a fall inprices.

RISKS AND CONCERNS

Though the overall industry looks moderate, politicaluncertainties , rising energy prices and high growth ofinflation among others, may affect the cement industry.

The shortage of coal is a major bottleneck for the industrywith a prospective effect on power generation, a majorinput for cement production. The other major concern isthe rising freight cost.

Outlook for the cement industry continues to-be moderatein 2009. Growth in the housing sector and infrastructureprojects.is likely to.provide support to the prices and hedgeagainst any demand'slowdown iri the near future. TheCompany has completed 'Capacity expansion at itsKurnool unit enabling it to tap new markets and also widen .its dealer network. With the initiatives taken by theGovernment of India-for infrastructure development,cement demand is expected to rise further in 2009. Theirrigation and house projects being under taken by theGpvernmenfof Andhra Pradesh will further increase thedemand in the state, where the Company sells a majorportion of its produce.

The Company continues to concentrate on cost reductionin freight, power and other inputs, so as to improve itsprofitability..

However, with the new cement Greenfield and Brownfieldexpansions commencing operations, cement supplywould be higher than demand resulting in reduced salesrealization. .

OUTLOOK OF CPC INDUSTRY

Outlook for CPC industry, continues to be moderate in2009, in view of major production cuts announced inthe Aluminum industry. However, the long term outlookof CPC is stable, with world-wide production of Aluminumgetting doubled in next fifteen years. The Company withlong term relationships with the Aluminum smelters andPetroleum Refiners and with globally dispersed operatingplants would maintain its leadership position in the CPCIndustry.

INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY

The Company has adequate internal control systems andprocedures with regards' to purchase of stores, rawmaterials including components, plant and machineryequipment, sale of goods and other assets.

The Company has clearly defined roles andresponsibilities for all managerial positions and alloperating parameters are monitored and controlled.

DISCUSSION ON FINANCIAL PERFORMANCE WITHRESPECT TO OPERATIONAL PERFORMANCE

During the year under review the Company, has achieveda turnover of Rs. .1,11,76,756 (in thousands) and a cementproduction of 21,85,113 Metric Tonnes.

•34th Annual 'Report 2008



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During the year the Company has earned a profit aftertax of Rs.8,50,537 (in thousands).

The Earnings per share of the Company as on December31, 2008 was Rs.12.08 (Basic) and Rs.12.08 (diluted).

> - . ' - ' 'The Paid up Share Capital of the Company as onDecember 31, 2008 is Rs. 70,83,45,790 comprising of7,08,34,579 equity shares of Rs.10/- each fully paid-up.

HUMAN RESOURCEINDUSTRIAL RELATIONS

DEVELOPMENT AND

The Company believes that the quality of its employeesis the key to its success in the long run and is committedto provide necessary human resource development andtraining opportunities to equip them with, skill, enablingthem to adapt to contemporary technologicaladvancements. Industrial relations during the yearcontinued to be cordial and the Company is committedto maintain good industrial relations through negotiationsand meetings. . . .

As on December 31, 2008, the Company had an 820strong employee base. , "

vGAUTIONARY:STATEMENT ft, > ^..

.Statements,in the Management Discussion and Analysisdescribing the Company's objectives, projections,estimates, expectations may be forward-lookingstatements. Actual results may differ materially from thoseexpressed or implied. Important factors that could makea,difference to the Company's operations includeeconomic.conditions affecting demand/supply and priceconditions in the domestic and overseas markets in whichthe Company operates, changes in the Governmentregulations, tax laws, statutes and other incidental factors.


N. Radhakrishna ReddyChairman

Place: Hyderabad.Date : April 23, 2009

N. Jagan Mohan ReddyManaging Director

•-•:,*,)•. .

34't' Annual Report 2008 22



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REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges in India, compliance with the requirementsof Corporate Governance'is set out below: ' * ' ' •

1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE :

Rain Commodities Limited ("RCOL"/the "Company") is committed to implement sound corporate governancepractices with a view to bring about transparency in its operations and maximizing shareholder value. TheCompany's core philosophy on the code of Corporate Governance is to ensure:

» Fair and transparent business practices;

« Accountability for performance;

o Compliance of applicable statute;

© Transparent and timely disclosure of financial and management information;

« Effective management control and monitoring of executive performance by the Board; and

• Adequate representation of promoter, executive and independent directors on the Board.

2. BOARD OF DIRECTORS :

The present Board of Directors ("Board") comprises seven Directors of whom two are Wholetime Directors, oneis a Non-Executive Promoter Director and four are Non-Executive Independent Directors. The composition andthe category of Directors are as under: .

S.No.

1

2

3

4

5

6

7

Name of the Director

Mr. N. Radhakrishna Reddy

Mr. N. Jagan Mohan Reddy


Mr. G. Krishna Prasad

Mr. P. Venugopah Reddy

Mr. R.S.Vidyasagar * •

Mr. V.Prakash**

Designation

Chairman

Managing Director

Executive Director

Director

Director

Nominee Director

Nominee Director

Category

Non - Executive Director(Promoter)

Executive Director(Promoter)

Executive Director(Promoter)

Independent Director

Independent Director

Independent Director -Nominee ofIDBI Bank Limited

Independent Director -Nominee ofICICI Bank Limited

* Mr. R.S.Vidyasagar has been appointed as Nominee Director of IDBI Bank Limited with effect from 14th March, 2008

** Mr V. Prakash has been appointed as Nominee Director of ICICI Bank Limited with effect from 29th July, 2008.

None of the Directors hold Directorships in more than 15 companies.

Other Directorships:

The number of directorships and memberships in the committees held by the Directors as on December 31, 2008are as under:



Mr. N Jagan Mohan Reddy

Mr.N Sujith Kumar Reddy

Mr. G Krishna Prasad


Mr. R.S.Vidyasagar

Mr. V.Prakash

No. of OtherDirectorships

7

9

5

4

2

2

-

CommitteeMembership

-

- . .

-

-

.

.

-

CommitteeChairmanship

. .

.

- -

-

-

.

-

23 •34'f1 Annual Report 2008





Board Meetings held from 1st January, 2008 to 31st December, 2008: , :

During the period from 1st January, 2008 to 31st December, 2008, Eleven board meetings were held as.againstthe minimum requirement of four meetings. The maximum time gap between any of the two meetings was notmore than four months.

The dates on which the Board meetings were held are:

4th January, 2008, 30th January, 2008, 3rd March, 2008, 11th March, 2008, 21st March,'2008, 22nd April, 2008,21st May, 2008, 24th July, 2008, 1st September, 2008, 12th September, 2008 and 24th October, 2008.

Attendance of Directors at the meetings:

The details of the attendance of the Directors at the Board meetings held during the period from 1st January, 2008to 31st December, 2008 and the last Annual General Meeting ("ACM") are given below:

-s,



Mr. N. Jagan Mohan Reddy




Mr. R. S. Vidya Sagar*'

Mr. R. Ramanujam @

Mr. V. Prakash @@

Mr. P. Prasen Kumar**

Board MeetingsAttended

. 11

11

11 •

10

10

3

' ' 1

1

3

Attendance at last AGMheld on 25th June, 2008

. Yes

Yes

Yes

Absent

Yes

Absent

Yes

N.A

N.A

* Mr. R.S.Vidyasagar has been appointed as nominee director of IDBI Bank Limited with effect from 14th March, 2008.

** Mr. P. Prasen Kumar was resigned from the Directorship of the Company with effect from 14th March, 2008.

@ Mr. R. Ramanujam has been appointed as Nominee Director of ICICI Bank Limited with effect from 14thMay, 2008 and withdrawn his nomination w.e.f. 29th July, 2008.

@@ Mr V. Prakash has been appointed in place of Mr. R. Ramanujam as Nominee Director of ICICI Bank Limitedwith effect from 29th July, 2008.

Re-appointment of Directors ,

Brief resume of the Directors being reappointed, nature of their expertise in specific functional areas and name ofCompanies in which they hold directorship and the membership of the committees of the Board are furnishedhereunder:

• Mr. N. Radhakrishna Reddy

Mr. N. Radhakrishna Reddy, aged about 67 years, is the Chairman of Rain Commodities Limited. Mr.Radhakrishna Reddy has more than 41 years of experience in the fields of construction and Cement Industry.Currently, he is also on the board of Pioneer Builders Private Limited, Rain Calciner Limited,'PCL FinancialServices Limited, Arunachala Holdings Limited, PR Investments Limited, Apeetha Enterprises Limited andLakshmi Sea Foods Limited.. He has been a director of our Company since 1984. , ,

Mr..N. Radhakrishna Reddy holds 20,76,746 equity shares in the Company.

Mr. N Radhakrishna Reddy, Chairman is the father of Mr. N. Jagan Mohan Reddy, Managing Director and Mr.N. Sujith Kumar Reddy, Executive Director. Other than the said Directors, Mr. N Radhakrishna Reddy is not

. related to any other Director . ' ' •'




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e Mr. N. Sujith Kumar Reddy . '

'Mr. N. Sujith Kumar Red'dy, (38 years), has a degree in Commerce. He has more than 16 years of experiencein the manufacturing industry. Presently, he is also on the board of PCL Financial Services Limited, NiveeProperty Developers Private Limited, Arunachala Holdings Limited, Apeetha Enterprises Limited and NiveeHoldings Limited. ,

Mr. N. Sujith Kumar Reddy holds 20,05,754 equity shares in the Company.

Mr. N. Sujith Kumar Reddy is son of Mr.N.Radhakris'hna Reddy, Chairman and brother of Mr. N.-JaganMohan Reddy, Managing Director. Other than the said Directors, Mr. N Sujith Kumar Reddy is not related toany other Director.

e Mr. P. Venugopal Reddy . .

Mr. P.Venugopal Reddy,' (43 years), has a Masters degree in Commerce, Bachelor's Degree in Law and he isa Chartered Accountant. Mr. P. Venugopal Reddy has over 11 years of experience in the areas of Audit,Finance and Accounts. At present, he is holding the directorship of Coolroc Energy Limited and KrishnaHydro Energy Limited. . .

Mr. P. Venugopal Reddy does not hold any equity Shares in the Company and is not related to any Directorof the Company. • . . . ,

3. Board Committees: .

The Company has the following standing committees of the Board: • . '

a) Audit Committee

Composition, name of the members and Chairman

' In Compliance with Clause-49 of the Listing Agreement and Section 292A of the Companies Act, 1956, theBoard of Directors of the Company has constituted an Audit Committee comprising of the following Non-Executive-Independent Directors: • : . . .

/ Mr. P. Venugopal Reddy - Chairman .

/ Mr. C. Krishna Prasad - Memberi • ' .

S Mr. R.S.VidyaSagar* - Member

/ • Mr. V. Prakash ** - Member

* Mr. R.S. Vidyasagar has been appointed as member of the Audit Committee with effect from 14th March,: '2008: • • • . - . • •

** Mr V. Prakash has been .appointed as member of the Audit Committee with effect from i si; September,2008.' • • '. • ' - . > • <" ' • • • • : • - .

The Statutory Auditors, Internal Auditors and Cost Auditors are invited to attend the Audit Committee meetingsand the Company Secretary acts as'the Secretary o f the Committee.' • ' • . . .

The minutes of the meetings of the Audit Committee'are circulated to all the members of the Board alongwith the Board Agenda. . ' : , . •

Terms of Reference:

In terms of Clause 49 of the Listing Agreement and Section 292A of the Act, the terms of reference of theAudit Committee a r e a s under: _ . " " . . .

To oversee the Company's financial reporting process and disclosure of its financial information,.recommendthe. appointment of Statutory, Internal and Cost Auditors and fixation of their fees, review and discuss withthe Auditors about internal control systems, determine the scope of Audit.including the observations.of theAuditors, adequacy of the internal audit system, major accounting policies, practices and transactions,

25 34"' Annual Report 2008





compliances with accounting standards and listing agreements entered into with the stock exchanges andother legal requirements concerning financ.ial statements and; related party transactions, if any, review theCompany's financial, and risk management policies and discuss with the Internal Auditors any significantfindings for follow-up thereon, review.the quarterly, half-yearly and annual financial statements before theyare submitted to the Board of Directors. . • •

Attendance of the members at the Audit Committee meetings: .

During the period from 1st January, 2008 to 31st December, 2008, Fpur Audit Committee Meetings wereheld on 21st March, 2008, 22nd April, 2008, 24th July, 2008 and 24th October, 2008.

Name of the Director No. of Meetings Attended


Mr. G Krishna Prasad

Mr. R.S. Vidya Sagar*

Mr. R. Ramanujam**

Mr. V. Prakash**

• 4

3

1

1

NIL

b)

* Mr. R.S. Vidyasagar has been appointed as member of the Audit Committee with effect from 14th March,2008. : . ' • .

** Mr V. Prakash has been appointed in place of Mr. R: Ramanujam as Nominee Director of ICICI BankLimited with effect from 29th July, 2008. , , .

Remuneration Committee:

The Remuneration Committee has been constituted to formulate and recommend to the Board of theremuneration package of the Managing Director and Executive Director, including performance/achievementbonus and perquisites payable to the'whole-time Directors.

Composition, name of the members and Chairman .

/ Mr. P. Venugopal Reddy - Chairman .

/ Mr. G Krishna Prasad . - Member . .

/ Mr. R.S.VidyaSagar* - Member

/ Mr. V. Prakash ** - Member ,

* Mr. R.S. Vidyasagar has been appointed as membe'r of the Remuneration Committee with effect from 14thMarch, 2008. . . . . . ; . , . . . '

** Mr V. Prakash has been appointed as member of the Remuneration Committee with effect from 1st'September/2008. . • . . - , ;

All the members of the Committee are Independent and Non-Executive Directors.

Attendance of the members at the Remuneration Committee meetings:

During the period from 1st January, 2008 to 31st December, 2008, Remuneration Committee Meetings wereheld on 21st March, 2008 and 24th July, 2008. ' ' '

Name of the Director '

Mr. P. Venugopal. Reddy • '"

Mr. G Krishna Prasad - . .

Mr. R.S. Vidya Sagar

Mr. R. Ramanujam

No. of Meetings Attended

• • 2

Absent

1.

. . . „. . ._ _ , - . . . ._. • — , . . . . . - . „






.Remuneration policy , > ; , . - - r ; . > i ; , :.

The compensation of'the executive'directors'comprises of fixed component and commission. Thecompensation is determined based oVr the'remuneration prevailing in the industry and the performance ofthe Company. The remuneration1 packag'e'bf the executive directors are periodically reviewed and suitablerevision is recommended to the Board.

The executive directors are not paid "sitting'fees for any Board/Committee meetings attended by them.

Details of remuneration to all the Directors

The Details of sitting fees paid to the Non-Executive Directors for attending Board Meetings and CommitteeMeetings held during the period from 1st January, 2008 to 3Tst December, 2008 are as follows:1

Name of Director




Mr. R.S. Vidya Sagar

Mr. V. Prakash

Mr. R. Ramanujam

Mr. P. Prasen Kumar -

(Rs.)

11,000

• 12,500

11,500

3,500

1,000

2,000.

3,000

The Remuneration paid to the Whole-time Directors during the period from 1 st January, 2008 to 31 st December,2008 a r e a s follows: . • • . , , . •

.. • • • • • . • . . . • • Rupees

Name of Director and Designation

Mr. N. Jagan Mohan Reddy, Managing Director'- ' 'i ' 't , ' • ' "' * ' '• "

Mr. N. Sujith Kumar Reddy, Executive Director

Total

Salary and Perquisites

NIL

1,22,45,121

1,22,45,121

Mr. N. Jagan Mohan Reddy has been appointed as Managing Director with out any remuneration.

The Company does not have any stock option plan or performance linked incentive for the Executive Directors.The appointments are made for a period of five years on the terms and conditions contained in the respectiveresolutions passed by, the Members jn the General Meetings. .

Shares held by Non-Executive Directors:

Name of the Non-Executive Director


Mr. G. Krishnaprasad


Mr. R.S.Vidyasagar

Mr. V. Prakash

No. of Equity Sharesheld in the Company

20,76,746

NIL

NIL

NIL

NIL

\

27 34'*. Annual Report 2008



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RAIN COMMODITIES LIMITED ^ ..

c) Shareholders/Investors'Grievance Committee: •

Composition and brief terms of reference. . .

The Committee consists of the following:

/ Mr. N Radhakrishna Reddy - Chairman

/ Mr. NSujith Kumar Reddy - Member

/ Mr. N Jagan Mohan Reddy - Member .

The Shareholders/Investors Grievance Committee oversees and reviews all matters connected with thesecurities transfers and also looks into redressing of shareholders complaints like transfer of shares, non-receipt of annual reports/dividends etc. The Committee oversees the performance of the Registrar and Transferagents and recommends measures for overall improvement in the quality of investor services.

Name and designation of Compliance Officer.

Mr. S. Venkat Ramana Reddy, Company Secretary

Email-id for Investor Grievances : [email protected]

Number of Shareholders complaints received so far.

During the period from 1st January, 2008 to 31st December, 2008, the Company has received and resolved460 complaints and there were no pending complaints. Number of complaints not resolved to the satisfactionof shareholders is Nil .

4. GENERAL BODY MEETINGS:

The details of date, location and time of the last three Annual General Meetings held are as under:

Financial year

2007

2006-2007

2005-2006

Date

25th June, 2008

3rd August, 2007

14th September, 2006

Venue

KLN Prasad Auditorium, FAPCCI,Red Hills, Hyderabad, Andhra Pradesh.



Time

11.00 am

11.00am

11.00 am

Special Resolutions passed during the previous three Annual General Meetings:

/ 33rd Annual General Meeting - 25.06.2008Special Resolutions were passed for the following:

i) Amending the Articles of Association for including Articles for Buy-back of equity shares^

ii) Amending the Memorandum of Association for including the new clauses-in Main Object Clause III(A),Objects Incidental or Ancillary to the attainment of the Main Objects Clause lll(B), Other Object ClauseIII(C) and Commencement of business

iii) Keeping the Statutory records with the Registrars and Share Transfer Agents instead of the Company'sRegistered Office.

/ 32nd Annual General Meeting - 03.08.2007No special resolutions were passed.

/ 31st Annual General Meeting - 14.09.2006No special resolutions were passed




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^ffrtiii P^^T* ' *SRILiLl[' RAIN COMMODITIES LIMITED

Special resolution passed last year through postal ballot-details of voting pattern

The Special Resolutions were passed on 25th June, 2008 by the Company's members through postal ballot, underSection 17 of the Companies Act, 1956, to amend/alter the following to enable the company to take up the newbusiness.

i) Alteration of Clause III(A) Main Objects of the Memorandum of Association of the Company ;-

ii) Alteration of Clause III(B) Objects Incidental or Ancillary to the attainment of the Main Objects of Memorandumof Association of the Company ;

iii) /Alteration of Clause III(C) Other Object Clause of Memorandum of Association of the Company ; and

iv) Commencement of business specified in Clause 6, 7 and 8 of main objects and Clause 20 of Other Objectsof Memorandum of Association of the Company.

The Person who conducted the Postal Ballot exercise:

The Board had appointed Mr. S Chidambaram, Practising Company Secretary as Scrutinizer to conduct the PostalBallot voting process in a fair and transparent manner ' . • • '

Procedure for postal ballot:

1. Postal ballot forms were dispatched to all shareholders separately with draft'resolution and explanatorystatement pursuant to Section 173(2) of the Companies Act, 1956, for obtaining the approval of the members.

2. Members were requested to carefully read the instructions-in the postal ballot form, record their assent ordissent therein and return the said form duly completed, in original, in the self-addressed pre-paid envelope,so as to reach the addressee not later than the close of business hours on 20th June, 2008.

After scrutinising all the ballot forms received, the scrutiniser submitted a report to the Chairman. The results ofthe voting conducted through postal ballot were as under: .

SI.No.

1.

2.

3

4

Particulars

Special Resolutionfor Alteration of MainObject Clause

Special Resolution forAlteration of ObjectsIncidental or Ancillaryto the attainment of theMain Objects Clause

Special Resolution forAlteration of the OtherObject Clause

Special Resolution .for Commencementof business

No. ofvalid postalballot forms

received

1125-

1125

1125

.1125

TotalVotesPolled

3,56,77,994

3,56,77,993

3,56,77,994

3,56,77,993

Votes castedin favor of the

resolution(%)

3,56,77,373(99.998%)

3,56,75,978, (99.994%)

3',56,76,832(99:996%)

3,56,76,493(99.996%)

e>

Votes castedagainst theresolution ,

- (%)

391(0.001%)

. • ,',1785. (0.005%)

• ' 9 2 7. (0.003%)

1115(0^003%)

Result

The Resolutionwas passedwith requisitemajority.







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The aforesaid results were declared by the Chairman to the members at the 33rd Annual General Meeting held on25th June, 2008. . » . , - . , : • . ; ,

The Company proposes of to pass Special Resolution through Postal Ballot for approval for Buy-back of EquityShares of the Company.

• . ,) • !', ' . • - .

5 . DISCLOSURES: . - . < . .

a) Disclosures on materially significant related 'party transactions, i.e., transactions of the Company of materialnature with the promoters, the Directors or the management, their subsidiaries or relatives etc. that mayhave potential conflict with the interest of the Company at large:

The disclosures with regard to transactions with related parties are given in the Notes to the Accounts of theaudited financial statements for the financial year ended December 31, 2008. These transactions are not inconflict with the interests of the Company.

b) Details of non-compliance by the Company, penalties and strictures imposed on the Company by the StockExchanges or Securities and Exchange Board of India (SEBI) or any other statutory authority on any matterrelated to the Capital Markets during the last three years:

There were no instances of non-compliance, penalty or strictures on any matter related to the capital markets,during the last three years.

c) Disclosure of Accounting Treatment:;

In the preparation of financial statements, the Company has followed the accounting standards issued by theInstitute of Chartered Accountants of India. The significant accounting policies, which are consistently applied,have been set out in the Notes to the Accounts of the audited financial statements for the financial yearended December 31/2008. .

- d) Whistle Blower policy . . . . i.

Though the Company does not have Whistle Blower policy, no person is denied access to the Audit Committee.

e) Board Disclosures

(i) Risk Management

Currently, the Company's risk management approach comprises of the following:

• Governance of Risk

• Identification of Risk .

• Assessment and control o f Risk . . . .

The risks have been prioritized through a-company wide exercise. Members of Senior Managementhave undertaken the ownership and are 'working, on mitigating the same through co-ordination amongthe various departments, insurance coverage, directors and officers' liability policy, security policy andpersonal accident coverage for lives of all employees. '

Your Company has put in place the risk managemefit'framework, which helps to identify various riskscutting across its business lines. The risks are identified and are discussed by the representatives fromvarious functions. .

A presentation on risk management is made to the Board of Directors and the Audit Committee. TheBoard and the Audit Committee provide oversight and review the risk management policy periodically.

(ii) Internal Control System

Your Company has in place adequate systems of internal control commensurate with its size and thenature of its operations. These have been designed to provide reasonable assurance with regard torecording and providing reliable financial and operational information, complying with applicable statutes,safeguarding assets from unauthorized use or losses, executing transactions with proper authorization

.34th Annual Report 2008 30



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and ensuring compliance'with internal policies. The Company has a well defined delegation of powerwith authority limits for approving revenue as well as capital expenditure. Processes for formulating andreviewing annual, and long.term business plans have been laid down to ensure adequacy of the controlsystem, adherence to the management instructions and legal compliances. The Company uses ERP(Enterprise Resource Planning) system to record data for accounting and connects to different locationsfor efficient exchange of information. This process ensures that all transaction controls are continuallyreviewed and risks of inaccurate financial reporting, if any, are dealt with immediately.

The Company's internal control system covers the following aspects:

e Financial propriety of-business transactions

e Safeguarding the assets of the Company

e Compliance with prevalent statutes, listing agreement, management authorizations, policies and° procedures

The Audit Committee of the Board periodically reviews audit plans, observations and recommendationsof the Internal and External Auditors, with reference to the significant risk areas and adequacy of internalcontrols and keeps the Board of Directors informed of its major observations from time to time.

f) Code of Conduct

'The Board has laid down a Code of Conduct covering the ethical requirements to be complied with coveringall- the Board members and Senior Management Personnel of the Company. An affirmation of compliancewith the code is received from them on an annual basis.

g) CEO / CFO Certification:

The CEO / CFO certification on the financial -statements and internal controls is separately annexed.

(h) Details of compliance with mandatory requirements and adoption of the npn mandatory requirements ofthis clause:

The company has complied with all the mandatory requirements of the Clause 49 of the Listing Agreement.Remuneration Committee requirements have been adopted from non mandatory requirement.

6. MEANS OF COMMUNICATION:

a) Quarterly results

The quarterly results of the Company are published in accordance with the requirements of the listing agreement,in widely circulated newspapers like Business Standard (English daily) and Andhra Prabha (Telugu daily).

b) News releases, presentations etc:

Official news releases, detailed presentations made to media, analysts, institutional investors, etc. if any, willbe displayed on the Company's website: www.priyacement.com

* . - • . . - • • . . . . • .- 'c) Management Discussion and Analysis (MDA) Report

The report on MDA forms part of the Annual Report and Accounts sent to the shareholders..

7. GENERAL SHAREHOLDER INFORMATION

a) Annual General Meeting : 34th Annual General Meeting

Date : . June 17, 2009

Time : 11:00 a.m.

Venue :. KLN Prasad Auditorium, Federation of AndhraPradesh Chambers of Commerce &

,' ' . ' ' ' '. . , Industry(FAPCCI), Red'Hills, Hyderabad-500. ' ' ' • ' ' . . . ' • 004, Andhra Pradesh

. i. '•< • . • • • • - : ' - ' , , , ,

31 34!'1 Annual Report 2008



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b) Financial Calendar ' :

Tentative Schedule for considering Financial Results

For the Quarter ending March 31, 2009 :

For the Quarter ending June 30, 2009 :

For the Quarter ending September 30, 2009 :

For the Quarter/Year ending December 31, 2009 :

c) Dates of Book Closures :

d) Dividend.Payment Date :

e) Listing oh Stock Exchanges:

January 1, 2009 to December 31, 2009

April 23, 2009 •

July 2009

October 2009

March 2010

June 10, 2009 to June 17, 2009

(both days inclusive)

On or after June 1 7, 2009

Name and Address of the Stock Exchange

Bombay Stock Exchange Limited, ' •Phiroze Jeejeebhoy Towers, Dalai street, Mumbai-400 001.

National Stock Exchange of India Limited, .Exchange Plaza, Floor 5, Plot # C/1, .Bandra-Kurla Complex,Bandra (East), Mumbai - 400051

Scrip Code

500339

RAINCOM

The listing fees for the year 2009-10 have been paid to the above stock exchanges,

f) Market Price Data: High, low during each month from January 1, 2008 to December 31, 2008

BOMBAY STOCK EXCHANGE LIMITED

Month

January, 2008

February, 2008

March, 2008

April, 2008

May, 2008

June, 2008

July, 2008 •

August, 2008

September, 2008

October, 2008

November, 2008

December, 2008

High (Rs.)

309.00

. 228-50

234.00

270.00

250.00 •

-223.00

225.7.0

238.00

228.40

197.80

139.00

97.50

Low (Rs.)

•205.00

178.30

125.30

191.00

203.00

175.00

157.05

206.00

165.10

92.30

'91.10

82.10

No. of Shares traded

22,02,294

21,86,507

38,23,580

28,40,870

1 1 ,06,609

15,03,524

10,28,512

15,05,965

8,75,272

10,67,519

3,40,593

7,63,987




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! RAIN COMMODITIES LIMITED

"uttt_V_o*ca.

Share Prices at .BSE3oc;n nn

ônn nn -

•pen nn -

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Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec-OS . 08 08 08 08 08 08 08 08 08 08 08

_«_, High -*- Low

NATIONAL STOCK EXCHANGE OF INDIA LIMITED

Month

January, 2008

February, 2008

March, 2008

April, 2008

• May,. 2008

June, 2008

July, 2008

August, 2008

September, 2008

October, 2008

November, 2008

December, 2008

High (Rs.) Low (Rs.) No. of Shares traded

Trading started from March 3, 2008.

238.50

' 270.25

247.95

221.95

225.00

236.70

228.00

198.00

139.80

97.95

125.00

192.00

200.00

173.95

158.00

207.55

165.00

94.05

90.05

82.25

3692849

2660177

1077198' •

1749124

1013159

1 421 835

837220

1811842

497215

478112

ocn nn

qnn nn

250 00 -to

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en nn

0-nn

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Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

— < — High — «.— Low '




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g) Performance in comparison to broad based indices such as BSE Sensex:

T 20000

Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec-08 08 08 08 08 08 08 08 08 08 08 08

Month

- Sensex -Price

Performance in comparison to broad based indices such as Nifty

0.00

Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

month

-Price • - Sensex

h) Registrar & Share Transfer Agents:(for Shares held in both Physical and Demat mode)

Karvy Computershare Private Limited(Unit: Rain Commodities Limited)Plot No.17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081.Phone # 91-40-23420815-28; Fax # 91-40-23420814 / 23420857Email id: [email protected]

i) Share transfer System:

The Physical share transfers are processed and the share certificates are returned to the shareholders withina maximum period of one month from the date of receipt, subject to the documents being valid and completein all respects.

Any transferee who wishes to demat the shares may approach a Depository participant along with a dulyfilled Demat Request Form, who shall, on the basis of the Share Certificate, generate a demat request andsend the same to the Registrar and Share transfer Agents(RTA). On receipt, the Depository Registrar confirmsthe request.

''34th Annual Report 2008 34



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All requests for Dematerialisation,of shares are processed and the confirmation is given to the respectiveDepositories, i.e.-, National Securities Depository Limited (NSDL) and Central Depository Services (India)Limited (CDSL], with in 21 days of receipt. •

Distribution of Share holding: .

(i) Share holding pattern as on December 31, 2008

SI.No.

1.

2.

3.

4.

5.

6.

7. '

8.

Category

Promoters/Directors/ Associates

Mutual Funds and UTI

Banks, Financial Institutions, Insurance .Companies (Central/State GovernmentInstitutions/ Non-Government Institutions)

Flls ( -

Private Corporate Bodies

Indian Public

NRIs/OCBs • • ' . . .

OthersfClearing Members)

Total

No. of Sharesheld

3,03,83,816

. 66,05°,031

2,48,315

53,87,484

• 1,21,16,011

1,04,37,597

' 53,52,893

3,03,432

7,08,34,579

Percentage ofshareholding

42.89

9.32

. 0.35

7.61

17.1

14.74

7.56

0.43

100.00%

(ii) Distribution of Share holding as on December 31, 2008:

Nominal Value(in Rs.)

1 - 5,000

5,001 - 10,000

10,001 - 20,000

20,001 - 30,000

30,001 - 40,000

40,001 - 50,000

50,001 - 1,00,000

1,00,001 and above

TOTAL

Holders

Number ofshareholders

51,428

1,986

900

303

85

118

162

227

55,226

% to TotalNo. of

Shareholders

' . 93.16

3.60

1.63

0.55

0.15

0.21

0.29

0.41

100.00

Amount

In Rupees

5,66,55,600

1 -,49,24,830-

1,30,47,890

77,85,410

29,97,080

53,83,170

1,17,40,280

59,58,11,530

70,83,45,790

% to Totalpaid up capital

8.00

2.11

1.84.

1.10

• '-" ' 0.42

0.76

1.66

84.11.

100.00

k) Dematerialisation of Shares & Liquidity .

The Company's shares are available for dematerialisation on both the Depositories viz., National Securities•Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

As on December 31, 2008, 5,10,84,118 equity shares were dematerialised representing 72.12% of the totalpaid up e.quity share capital of the Company. ,

ISIN: INE855B01017

\

.35 34th Annual Report 2008



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I) Outstanding GDRs/ADRs/Warrants or any Conyertibl.<e";instrurnents, conversion date and likely impact onequity.

The Company'has not issued any CDRs/ADRs and there are no; .outstanding warrants or any Convertibleinstruments. . . .

m) Plants Location:

• ' Unit-l : - • Ramapuram Village,Mellacheruvu Mandal,Nalgonda Dist,Andhra Pradesh.

o - - . -

Unit - II : Boincheruvupalli Village,Peapully Mandal, •Kurnool Dist,

• . Andhra Pradesh. ..• " ~ ]

n) Address for Correspondence: , , /

Company SecretaryRain Commodities LimitedRegd. Off: "Rain Center", 34, Srinagar Colony,Hyderabad - 500 073. Andhra Pradesh, India.Phone No.040-40401234, 040-40401259Fax No. 040-40401214. .E-mail:[email protected] :www.priyacement.com

o) Registrar and Share Transfer Agents (for shares held in both Physical and Demat Mode):

Karvy Computershare Private Limited , .(Unit: Rain Commodities Limited)Plot No.1 7 to 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 0 8 1 . _Phone # 91 -40-23420815-28; Fax # 91 -40-23420814 / 23420857Email id: [email protected]


Place: Hyderabad N. Radhakrishna Reddy N. Jagan Mohan ReddyDate: April 23, 2009 . Chairman Managing Director

'34th Annual Report 2008 36



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• . < . • • • • • ' » • •>- •••- DECLARATION - : - ;:' ' '

As provided under Clause-49 "of the Listing "Agreement with the Stock Exchanges, the Board of Directors and the

Senior Management Personnel have confirmed compliance with the Code of Conduct and Ethics for the financial year

ended December 31, 2008. '

for RAIN COMMODITIES LIMITED

Place: Hyderabad • • ' , . ' , N . Jagan Mohan ReddyDate: April 23, 2009 ' Managing Director

AUDITORS''CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF .CORPORATE GOVERNANCE UNDER CLAUSE-49 OF THE LISTING AGREEMENT

To the Members of . ' • • ' . ' • • • • ' . .Rain Commodities Limited ' . . . . ' • . .

We have examined the compliance of conditions of Corporate Governance by Rain Commodities Limited ('theCompany'), for the year ended December 31, 2008, as stipulated in Clause 49 of the Listing Agreements of the saidCompany with stock exchanges i n India. , . . . .

The compliance of conditions of Corporate Governance is the responsibility of the Company's management. Ourexamination was. carried out in accordance with the Guidance Note on Certification of Corporate Governance (asstipulated in Clause 49 of the Listing Agreement), issued .by the Institute of Chartered Accountants of India and waslimited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of theconditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements ofthe Company. •

In our opinion and to the best of our information and according to the explanations given to us and the representationmade by the Directors and Management, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in the clause 49 of above mentioned Listing Agreements. .

We further state that such compliance is neither an assurance as to the future viability of the Company nor theefficiency or effectiveness with which the management has conducted the affairs of the Company.

Partha MitraPartner

Membership Number 50553

For and on behalf ofPlace: Hyderabad Price WaterhouseDate: April 23, 2009 s ' . Chartered Accountants




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CEO AND CFO CERTIFICATE ]

We hereby certify that':

a) We have reviewed financial statements!and the cash flow statement for the Financial year ended December 31,2008 and that to the best of our knowledge and belief:

i) these statements do not contain any materially untrue statement or omit any materiaLfact or contain statementsthat might be.misleading; . • - • ' • • • . ' , : . • ' " • '

ii) these statements together present a true and fair view of the Company's affairs and are in compliance withexisting accounting standards, applicable laws and regulations. •

b) There are, to the best of our knowledge and belief no transactions entered into by the Company during the yearwhich are fraudulent, illegal or violative of the Company's code of conduct.

c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that wehave evaluated the effectiveness of internal control systems of the company pertaining to financial reporting andwe have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of suchinternal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify thesedeficiencies. .• ' .

d) We have indicated to the Auditors and the Audit Committee that there are no:

. i) significant changes in internal control over financial reporting during the year;

ii) significant.changes in accounting policies "during the year and that the same have been disclosed in the notesto the financial statements; and • .

iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the. management or an employee having significant role in.the company's internal control system over financialreporting. . - . . :

e) We further declare that all board members and senior managerial personnel have affirmed compliance with the" code of conduct for the current financial year.

For RAIN COMMODITIES LIMITED

Place: Hyderabad N. Jagan Mohan Reddy G N V S R R KumarDate : March 10, 2009 . . . Managing Director / - Chief General Manager (F&A)

34th Annual Report 2008 ;>38



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\

AUD5TORS' REPORT

TO THE MEMBERS OF .RAIN COMMODITIES LIMITED . •

1. We have audited the attached Balance Sheet of Rain. Commodities Limited, as at December 31, 2008, and

the related Profit and Loss Account and the Cash FlowStatement for the year ended on that date annexedthereto, which we have signed under reference tothis report. These financial statements are theresponsibility of the Company's management. Ourresponsibility is to express an opinion on thesefinancial statements based on our audit:

2. We conducted our audit in accordance with theauditing standards generally accepted;iri India. ThoseStandards require that we plan and perform the auditto obtain reasonable assurance about whether thefinancial statements are free of material misstatement.An audit includes examining, on a test basis,evidence supporting the amounts and disclosures inthe financial statements. An audit also includesassessing the accounting principles used andsignificant estimates made by management, as wellas evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor's Report)Order, 2003, as amended by the Companies(Auditor's Report) (Amendment) Order, 2004, issuedby the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act,1956' of India (the 'Act') and on the basis of suchchecks of the books and records of the Company aswe considered appropriate and according to theinformation and explanations given to us, we give inthe Annexure a statement on the matters specified inparagraphs 4 and 5 of the said Order. .

4. Further to our comments in the Annexure referred toin paragraph 3 above, we report that:

• (a) We have obtained a I.I the information andexplanations, which to the best of ourknowledge and belief were necessary for thepurposes of our audit; , '• • ' ,

(b) In our'opinion, proper books of account asrequired by law have been kept by the Company

. so far as appears from our examination of thosebooks;

(c) The Balance Sheet/ the Profit and Loss Accountand the Cash Flow Statement dealt with by thisreport are in agreement with the books ofaccount; ' .

(d) In our opinion, the Balance Sheet, the Profit andLoss Account and the Cash Flow Statement dealtwith by this report comply with the accountingstandards referred to in sub-section (3C) ofSection-211 of the Act; '

(e) On the basis of written representations receivedfrom the directors, as on December 31, 2008and taken on record by the Board of Directors,none of the directors is disqualified .as onDecember 31, 2008 from being appointed as adirector in'terms of clause (g) of sub-section (1)"of Section 274 of the Act;

(f) Attention is drawn to Note V.I 11 (a) on ScheduleV - Notes to Accounts, regarding the incrementalremuneration paid to the executive director ofRs. 2,520 thousands, pending the shareholders'approval.

(g) In our opinion and to the best of our informationand according to the explanations given to us,the said financial statements together with thenotes thereon and attached thereto and read withparagraph (f) above give in the prescribed mannerthe information required by the Act and give atrue and fair view in conformity with the

. accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the stateof affairs of the Company as at December

' 3.1, 2008; .

(ii) in the case of the Profit and Loss Account,of the profit for the year ended on that date;and

(iii) in the case of the'Cash Flow Statement, ofthe cash flows for the year ended on thatdate. ..

Partha Mitra. Partner

. , Membership No. F50553

Place: HyderabadDate: March 10, 2009

For and on behalf ofPrice Waterhouse

•Chartered Accountants




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ANNEXURE TO AUDITORS' REPORT

[Referred to in paragraph 3 of the Auditors' Report of evendate to the members of Rain Commodities Limited on thefinancial statements for the year ended December 31,2008]

1. (a) The Company is maintaining proper recordsshowing full particulars including quantitativedetails and situation of fixed assets.

(b) The fixed assets are physically verified by themanagement according to a phased programmedesigned to cover all the items over a period ofthree years, which in our opinion, is reasonablehaving regard to the size of the Company andthe nature of its assets. Pursuant to theprogramme, a portion of the fixed assets hasbeen physically verified by the managementduring the year and no material discrepanciesbetween the book records and the physicalverification has been noticed.

(c) In our opinion and according to the informationand explanations given to us, a substantial partof fixed assets has not been disposed off by theCompany during the year.

2. (a) The inventory has been physically verified bythe management during the year according to aphased programme normally so designed thateach material item is physically verified at leastonce in a year and more often in appropriatecases. In our opinion, the frequency ofverification is reasonable.

(b) In our opinion, the procedures .of. physicalverification of inventory followed by themanagement are reasonable and adequate inrelation to the size of the Company and thenature of its business.

Q(c) On the basis of our examination of the inventory

records, in our opinion, the Company ismaintaining proper records of inventory. Thediscrepancies noticed on physical verificationof inventory as compared to book records werenot material.

3. (a) The company has not granted any loans, securedor unsecured, to companies, firms or otherparties covered in the register maintained underSection 301 of the Act.

(b) The company has not taken any loans, secured 9.or unsecured, to companies, firms or otherparties covered in the register maintained underSection 301 of the Act.

•6.

In our opinion and according to the information andexplanations given, to us, having regard to theexplanation that certain items purchased are ofspecial nature for which suitable alternative sourcesdo not exist for obtaining comparative quotations,there is an adequate internal control systemcommensurate with the size of the Company andthe nature of its business for the purchase of inventory,fixed assets and forthe sale of goods and services.Further, on the basis of our examination of the booksand records of the Company, and according to theinformation and explanations given to us, we' have

' neither come across nor have been informed of anycontinuing failure to correct major weaknesses in theaforesaid internal control system.

(a) In our opinion and according to the informationand explanations given to us, the particulars of

.. contracts or arrangements referred to in section301 of the Act have been entered in the registerrequired to be maintained under that section.

(b) In our opinion and accord ing to the information,and explanations given to us> the transactionsmade in pursuance of such contracts orarrangements and exceeding the value of rupeesfive lakhs in respect of any party during the yearhave been made at prices which are reasonablehaving regard to the prevailing market prices atthe relevant time.

The Company has not accepted any deposits fromthe public within the meaning of Section 58A and

.Section 58AA of the Act and the rules framed thereunder.

In our opinion, the Company has an internal auditsystem commensurate with its size and nature of itsbusiness. .

We have broadly reviewed the books of accountmaintained by the Company in respect ofmanufacture of cement where, pursuant to the rulesmade by the Central Government of India, themaintenance of cost records has been prescribedunder clause (d) of. sub-section (1) of Section 209 ofthe Act and are of the opinion that prima facie, theprescribed accounts and records have been madeand maintained. We have not, however, made adetailed examination of the records with a view todetermine whether they are accurate or complete.

(a) According to. the information and explanations.given to us and the records of the Companyexamined by us, in our opinion, the Companyis generally regular in depositing the undisputed




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statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service• tax, customs duty, excise duty, cess and .other material statutory dues as applicable with the appropriate

authorities. • . '

(b) According to the information and explanations given to us and .the records of the company examined by us,the particulars of dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess asat December 31, 2008 which have not been deposited on account of a dispute, are as follows -

Name of the' 'Statute

Andhra PradeshGeneral Sales 'Tax Act, 1957

The CentralSales Tax Act,1956

The CentralSales Tax Act,1956

Central ExciseAct, 1944




Nature of dues

Tax levied on issue of diesel tothe transporters / tax onSecond sales / turnover notcovered by 'G' forms etc., •

Turnover not covered by forms,concessional rate not allowed,

• tax on transport charges, salestax on issue of diesel totransporters etc.

Tax levied on issue ofDiesel to the transporters

Mod vat credit availed on DCSets.

Cenvat credit utilized onservice tax paid on outwardfreight for ex-factory sales

Cenvat credit utilized onservice tax. paid on outwardfreight for ex-factory sales

Excise Duty paid under proteston sales made to Governmentand Institutional Consumers

Amount inRupees ('000)

56,670

5,604

10,972

1,689

1,145

2,747

1,696

Period to whichthe amount

relates

1992-93to

2002-03

1993-94 to1998-99 and

2001-02

1996-9 7 to1 999-00

• 1998-2001

2005-2006

2005-2006

2007-2008

Forum where the. dispute is pending

• Sales Tax AppellateTribunal, AndhraPradesh, .

Sales Tax AppellateTribunal, AndhraPradesh,Hyderabad

Sales Tax AppellateTribunal, AndhraPradesh, Hyderabad

AdditionalCommissioner (CentralExcise), Hyderabad

Commissioner(Appeals), Guntur

AdditionalCommissioner (CentralExcise), Tirupati

Commissioner(Appeals), Guntur.

10. The Company has no accumulated losses as atDecember 31, 2008, and it has not incurred any cashlosses in the financial year ended on that date or inthe immediately preceding financial year.

11. According to the records of the Company examinedby us and the information and explanations given tous, the Company has not defaulted in repayment ofdues to any financial institution or bank as at thebalance sheet date.

12. In our opinion and according to the information andexplanations given to us, the terms and conditionsof the guarantees given by the Company, for loanstaken by its subsidiaries from banks or financialinstitutions, are not prejudicial to the interest of theCompany.

13. The provisions of any special stature applicable tochit fund / nidhi / mutual benefit fund societies arenot applicable to the Company.

14. In our opinion, the Company is not a dealer or traderin shares, securit ies, debentures and other

.investments.\

15. In our opinion and according to the information andexplanations given to us, the Company has not givenany guarantee for loans taken by others from banksor financial institutions during the current year.

16. In our opinion, and according to the information andexplanations given to us, on an overall basis, theterm loans have been applied for the purposes forwhich they were obtained.

41 34lh Annual Report 2008



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17. On the basis of an overall examination of the balancesheet of the Company, in our opinion and accordingto the information and explanations given to us, thereare no funds raised on a short term basis which havebeen .used for long term purposes.

18. The Company has made preferential allotment ofshares against the share warrants to parties andcompanies covered in the register maintained underSection 301 of the Act during the year. In our opinion,and according to the information and explanationsgiven to us, the price at which such shares have beenissued is not prejudicial to the interest of thecompany.

19. The Company has not issued any debentures during,the year.

20. The Company has not raised any money by publicissues during the year.

21. During the course of our examination of the booksand .records of the Company, carried out inaccordance with the generally accepted auditingpractices in India, and according to the informationand explanations given to us, we have neither comeacross any instance of fraud on or by the Company,noticed or reported during the year, nor have we beeninformed of such case by the management.

Partha MitraPartner

Membership No. F50553



Chartered Accountants






BALANCE SHEET AS AT DECEMBERS, 2008All amounts are in Indian Rupees-Thousands, except share data and where otherwise stated • . . .

- -:

SOURCES OF FUNDS

Shareholders' Fundsa) Capitalb) Capital Suspensec) • Share Application money

pending allotmentd) Reserves and Surplus

Loan Fundsa) Secured Loansb) Unsecured Loans

Deferred Tax Liability

TOTAL

SCHEDULE December 31, 2008 December

• • ' • . ' < . • •• •• • ' . .„ •

A . . 708,346 321,100B . • . . . - . . 348,613 .

- ' 136,000C 4,254,146 . 2,885,"448

4,962,492

D 4,264,364 2,849,976E 784,995 716,940

5,049,359434,441

10,446,292

As at31, 2007

3,691,161

3,566,916243,700

7,501,777

APPLICATION OF FUNDSFixed Assetsa) Gross Blockb) Less: Depreciation

c) Net Blockd) Capital Work In Progress

InvestmentsCurrent Assets, Loans and Advancesa) Inventoriesb) Sundry Debtors .c) Cash and Bank balancesd) Other Current Assetse) Loans and Advances

Less : Liabilities and Provisionsa) ' Liabilitiesb) Provisions

Net Current AssetsTOTAL

Notes to the Accounts

G

HIJKL

MN

V

5,178,858300,528

4,878,330313,807

616,6991,470,138

115,1183,239

2,338,9414,544,135

1,350,427345,403

1,695,830

5,192,1372,405,850

2,848,30510,446,292

2,056,623101,068

1,955,5552,418,222

299,648432,193140,694

1,1881,265,3262,139,049

1,164,748252,673

1,417,421

4,373,7772,406',372

721,628

7,501,777

Schedules A to N and V form an integral part of the Balance Sheet.

This is the Balance Sheet referred to in For and on behalf of the Board of Directorsour report of even date..

Partha MitraMembership No.50553PartnerFor and on behalf ofPrice WaterhouseChartered AccountantsPlace: HyderabadDate : March 10, 2009 •

N. Radha Krishna ReddyChairman

S. Venkat Ramana ReddyCompany Secretary


G.N.V.S.R.R KumarCGM - Finance & Accounts




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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2008All amounts are in Indian Rupees Thousands, except share data and where otherwise stated

' Year ended Nine months period endedSCHEDULE December 31, 2008 December 31, 2007

INCOMESales (Gross) OLess: Excise duty

Other Income PIncrease/ (Decrease) in stock in trade Q

EXPENDITUREPayments and Benefits to Employees RManufacturing Expenses SAdministrative, Selling andDistribution Expenses T

GROSS OPERATING PROFITInterest and Finance Charges U

PROFIT BEFORE DEPRECIATION & TAXATIONDepreciation and Amortisation

PROFIT/ (LOSS) BEFORE TAXATION & EXTRAORDINARY ITEMSProvision for Taxation- Current tax- Deferred tax- Fringe Benefit tax

PROFIT AFTER TAXATION & BEFORE EXTRAORDINARY ITEMSExtra-ordinary Item- Loss on transfer of calcination and power business

PROFIT AFTER TAXATIONSurplus brought forward from previous year

PROFIT AVAILABLE FOR APPROPRIATIONAPPROPRIATIONS

Transfer (from) / to Debenture Redemption ReserveTransfer to Capital Redemption ReserveTransfer to General ReserveProvision for DividendProvision for Dividend Distribution tax

SURPLUS CARRIED TO BALANCE SHEETNotes to Accounts • V

Earnings/ (Loss) Per Share before Extraordinary item - Basic - Rs.Earnings/ (Loss) Per Share after Extraordinary item - Basic - Rs.Earnings/ (Loss) Per Share before Extraordinary item - Diluted - Rs.Earnings/ (Loss) Per Share after Extraordinary item - Diluted - Rs.

12,355,8481,245,713

11,110,13540,52026,101

11,176,756

242,6326,056,609

2,954,2729,253,5131,923,243

485,4341,437,809

224,8551,212,954

166,821190,824

4,772850,537

850,5371,874,1322,724,669

(62,029)12,00085,100

266,46545,286

2,377,847

12.0812.0812.0812.08

5,273,753653,110

4,620,64324,88172,758

4,718,282

113,2591,797,310

1 ,422,630•3,333,1991,385,083

273,2281,111,855

101,1791,010,676

1 60,000(6,500)

1,835855,341

602,097253,244

1,884,3762,137,620

6,948

25,700197,320

33,5201,874,132

12.773.78

11.593.43

Schedules O to V form an integral part of the Profit and Loss Account.

This is the Profit and Loss Account referred to inour report of even date.

Partha MitraMembership No.50553PartnerFor and on behalf ofPrice WaterhouseChartered Accountants

Place: HyderabadDate : March 10, 2009

For and on behalf of the Board of Directors









li RAIN COMMODITIES LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2008All amounts are in Indian Rupees Thousands, except share data and where otherwise stated

tj_ • . . . . .

"*•."' )'••'• •• Year ended Nine months period ended. . December 31, 2008 December 31, 2007

A. Cash Flow from Operating Activities

Net Profit before Taxation and Extra ordinary items

Adjustments for:

Depreciation

Discount On Issue of Debentures Amortised

Unrealized Loss/ (Gain) on Foreign Exchange Fluctuation

Interest on deposits with Banks and others

Provision for doubtful debts

Interest and finance charges

Liability No Longer Required Written Back

Loss on Sale of Fixed Asset/ Fixed Assets Written off

Dividend Received

Profit from sale of investments

Operating profit before Working Capital changes

Adjustments for :

Sundry Debtors

Inventories

Loans and Advances

Current Liabilities and Provisions

Income Tax paid ( net of refund)

Net cash flow from/fused in) operating activities

B. Cash Flow from Investing activities

Purchase of Fixed Assets '-

Proceeds from sale of Fixed Assets

Sale of Investments

Investment in Subsidiary Companies

Proceeds from maturity of long term deposits

Investment in long term deposits

Interest received

Dividend received

Net Cash flow used in Investing Activities

1,212,954

224,855

25,5601,572

(21,399)458

403,696

(2,592)

11,761

(150)

1,856,716

(1,037,487)

(317,051)

(1,016,042)

152,842

(361,022)

(201,705)

(562,727)

(1,065,073)

10,098

,1,272

(600)

5,511

19,348

(1,029,444)

1,0.10,676

101,180.

19,170

1,051

(13,358)

799

253,017

(29)

110

(7,473)

1,365,141

(372,722)

(92,894)

78,061

330,353

' 1,307,938

(174,317)

1,133,621

(1;755,395)

1,620

(803,588)

(6,026)

13,987

7,473

(2,541,929)




SA1NSCU


CASH FLOW (Cond.)All amounts are in Indian Rupees Thousands, except share data and where otherwise stated

Year ended Nine months period endedDecember31, 2008 December 31, 2007

C. Cash Flow from Financing activities

Proceeds from long term borrowings

Repayment of long term borrowings

Proceeds from / (Repayment) of Working capital borrowings (net)

Sales tax deferment

Interest paid

Proceeds from Security Deposits

Proceeds from / (Repayment) of Unsecured Loan

Payment of Dividend and Tax thereon

Proceeds from issue of additional equity shares

Buy back of equity shares

Net Cash Flow from Financing Activities

Net (Decrease)/lncrease in Cash and Cash equivalents

Cash and Cash equivalents - Opening Balance*

866,771

(446,650)

999,326

138,918

(411,978)

49,137

(120,000)

(235,961)

911,393

(1 78,848)

1,572,108

(20,063)

134,669

1,248,924

-

(18,707)

57,810

(248,742)

24,342

1 20,000

(131,485)

-

-

1,052,142

(356,166)

490,835

Cash and Cash equivalents - Closing Balance*

includes money held on margin money deposit accounts

Supplementary Information

Cash and Bank Balance

Less: Long term deposits with Scheduled Banks consideredas investment.

Notes

114,606

115,118

514

114,604

134,669

140,694

6,026

134,668

1 The above cash flow statement has been prepared under the 'Indirect Method' as set out in the AccountingStandard - 3 on Cash Flow Statements.

2 Comparative figures of the previous period, where necessary, have been regrouped to conform to those ofthe current period

This is the Cash Flow Statement referred toin our Report of even date.

Partha MitraMembership No.50553PartnerFor and on behalf of .Price WaterhouseChartered Accountants











j[ RAIN COMMODITIES LIMITED

SCHEDULES TO THE BALANCE SHEETAll amounts are in Indian Rupees Thousands, except share data and where otherwise stated

_ As at As at. December 31, 2008 December 31, 2007

Schedule-A. Capital

Authorised

118,000,000 Equity Shares of Rs. 10/-each N 1,180,000 1,180,000

4,900,000 Redeemable Preference Shares of Rs. 10O/- each 490,000 490,000

1,670,000 ' • 1,670,000

Issued, subscribed and paid up

72,034,579 (December 31, 2007: 32,110,000) ' '•Equity shares of Rs.10/- each . • 720,346 321,100

Less : Buy back of 1,200,000 Equity Shares of Rs. 10/- each 12,000[Refer Note III on Schedule V]70,834,579 (December 31, 2007 : 32,110,000)Equity shares of Rs.10/-each '

708,346 . '321,100

Of the above, 34,861,286 equity shares of Rs. 10/- eachhave been allotted to the share holders of erstwhileRain Calcining Limited pursuant to the scheme ofarrangement between the company and erstwhile.Rain Calcining Limited with out payment being received in cash.

Schedule-B. CAPITAL SUSPENSE

Capital Suspense - 348,613

Nil (December 31, 2007 : 34,861,286) Equity Shares ofRs.10/- each pending allotment pursuant to the Scheme ofArrangement between the Company, Rain Industries Limited 'and erstwhile Rain Calcining Limited ' - • 348,613




if3Di j*Imli mIKiilUllLl


'



As at As atDecember 31, 2008 December 31 , 2007

Schedule-C. RESERVES AND SURPLUSCapital Reserve

As at the commencement of the year 382,9.91 ' 2,734. Add: On forfeiture of equity share warrants 34,734 -

[Refer Note IV on Schedule V]

Less: Per Scheme of Arrangement - On transfer ofcement business from Rain Industries Limited - (4,060)

Add: Per Scheme of Arrangement - On merger oferstwhile Rain Calcining Limited with the Company , - 384,317

417,725. 382,991

Capital Redemption ReserveTransfered from Profit and Loss Account 12,000 -[Refer Note III on Schedule V]

Debenture Redemption ReserveAs at the commencement of the year 143,004 -

Add: Per Scheme of Arrangement - On transfer of - 136,056cement business from Rain Industries Limited

Add: Transferred from/(to) Profit and Loss Account (62,029) 6,948

80,975 143,004Securities Premium Account

As at the commencement of the year 302,194 300,000

Add: Per Scheme of Arrangement - On merger of erstwhileRain Calcining Limited with the Company - 2,194

Add: Premium received on issue of additional equity shares 962,026 -

• 1,264,220 302,194Less: Utilisation against buy back of equity

shares at market value (166,848) -[Refer note. Ill on Schedule V] __ .

1,097,372 302,194General Reserve


Add: Transferred from Profit and Loss Account 85,100 25,700

Less: Adjustment on account of initial adoption ofAccounting Standard 15 - - (2,573)(revised 2005) on 'Employee Benefits' (net of deferred tax)

268,227 183,127

Profit and Loss Account 2,377,847 1,874,132

4,254,146 2,885,448




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flC RAIN COMMODITIES LIMITED


As atDecember 31, 2008


Schedule-D. SECURED LOANS*

Debentures

11,278,000, 9.39% RedeemableNon - Convertible Debentures of Rs. 100 each(privately placed and partly paid)

Term Loans

- Banks

- Financial Institutions

- Interest accrued and due

Working Capital Loans*

- Banks

Hire Purchase Loan

- Banks

323,900

1,260,045

1,550,547

\

1,129,872

4,264,364

*Working capital loan include buyer's credit availed by the company 1,037,112

572,016

1,123,984

1,017,542

5,059

130,546

829

2,849,976

Schedule-E. UNSECURED LOANS

Other than short term

Sales Tax Deferment

Security Deposit from customers

Inter Corporate Deposit

654,120

130,875

784,995

515,202

81,738120,000

716,940

* Notes:

1. Debentures and Term Loans are : . .

a) Secured by pari passu first charge on all immovable properties of the Company

b) Secured by additional security of farm land at Nellore and land owned by certain Directors;

c) Secured by personal guarantee of certain promoter Directors;

2. Cash Credit is secured by first charge on the whole of the present and future current assets of the company.

3. The Non-Convertible Debentures of Rs.100 each are reedeemabie in ten half yearly installments commencingfrom September 30, 2005 and ending by March 31, 2010. The Company has paid upto December 31, 2008 -Rs. 803,900 (December 31, 2007 - Rs. 555,780).




-g SCHEDULES JO THE BALANCE SHEETAll amounts are in Indian Rupees Thousands, except share data and where otherwise stated

Schedule-F. FIXED ASSETS

Description

1. INTANGIBLE ASSETS

Software

II. TANGIBLE ASSETS

Land - Free Hold

Land -Mining

Buildings

Railway Siding

Plant and Machinery

Furniture and Fixtures

Office Equipments

Vehicles

TOTAL

Period endedDecember 31, 2007

GROSS BLOCK

As atJanuary 1,

2008

882

882

52,915

16,459

444,300

1,802

1,406,463

101,190

24,612

8,000

2,055,741

2,056,623

2,024,858

Additionsduring the

year

-

_

6,652

4,118

235,495

2,901,235

' 3,641

9,767

8,580

3,169,488

3,169,488

33,385

Deletionsduring the

year

-

_

-

.

-

-

47,193

6

54

-

47,253

47,253

1,620

As atDecember

31,2008

882

882

59,567

20,577

679,795

1,802

4,260,505

104,825

34,325

16,580

5,177,976

5,178,858

2,056,623

DEPRECIATION/AMORTISATION

UptoJanuary 1 ,

2008

664

664

-

84

11,450

80

80,980

5,070

2,220

520

100,404

101,068

-

For theyear

218

218

-

151

20,951

105

192,904

3,848

5,453

1,225

224,637

224,855

101,179

OnDeletions

-

_

-

-

-

-

25,395

-'

-

25,395

25,395

110

UptoDecember

31,2008

882

882

-

235

32,401

185

248,489

8,918

7,673

1,745

299,646

300,528

101,068

Capital work in Progess (including Capital Advances of Rs.9,541 (December 31 , 2007 Rs.1 22,41 9))

NET BLOCK

As atDecember

31, 2008

-

_

59,567

20,342

647,394

1,617

4,012,016

95,907

26,652

14,835

4,878,330

4,878,330

-

313,807

5,192,137

As atDecember'.31,2007

218

218

. :52,915

16,375

432,850

1,722'

1,325,483

96,120

22,392

7,480

1,955,337

1,955,555

-

2,418,222

4,373,776

•30>

oO'32OO

en

Kjo§








Schedule-G. INVESTMENTS

(Unquoted, Long Term - At Cost)

Other than Trade

Government Securities - National Savings Certificates

Trade Investments

a) Andhra Pradesh Gas Power Corporation Limited1,34,000 Equity Shares of Rs. 10 each fully paid up

b) Petroleum Coke Industries Company, Kuwait1 7,175,000 (December 31, 2007.- 1 7,250,000) Equity shares ofKD 0.10 each, fully paid up

- (75,000 Equity shares of KD 0.10 sold during the year)

Subsidiary Companies

a) Rain CM Carbon (India) Limited29,805,000 Equity Shares of Rs. 10 each fully paid up

b) Rain Commodities (USA) Inc20 Common Stock at face value of USD 0.01 per share

c) . Rain Calciner Limited60,000 ( December 31, 2007 - Nil) Equity shares ofRs. 10 each fully paid up

92

16,000

256,609

2,128,104

4,445

600

2,405,850

92

16,000

257,731

2,128,104

4,445

2,406,372

Schedule-H. INVENTORIES.

Stores and Spare Parts *

Raw Materials *

Stock In Trade

Work -in-Progress **

Finished Goods **

Raw Material includes goods'in transit of

* at cost or below

** at lower of cost and net realisable value

49,394

419,174

66,250

81,881

616,699

55,242

122,374

90,882

31,150

299,648

11,053






SCHEDULES TO THE BALANCE SHEETAll amounts.are in Indian Rupees Thousands, except share data and where otherwise stated



Schedule-l. SUNDRY DEBTORS(Considered good, unless otherwise stated)

SecuredConsidered Good

- Debts Outstanding for a period exceeding six months 9,180 7,099-Other debts 40,616 27,209

Unsecured .Considered Good

- Debts Outstanding for a period exceeding six monthsFrom Rain CM Carbon (India) Limited,-Subsidiary Company* 391,323

- Other debtsFrom Rain CM Carbon (India) Limited, Subsidiary Company* 956,260 331,880From Others 72,759 66,005

Considered Doubtful- Debts Outstanding for a period exceeding six months. 14,778 14,884-Other debts 637 73Less: Provision for doubtful debts ^ (15,415) (14,957)

* Maximum amount outstanding during the year - Rs.1,347,583(December 31, 2007: Rs. 331,880)

1,470,138 . . 432,193

Schedule-J. CASH AND BANK BALANCES

Cash and Cheques on Hand

With Scheduled Banks

- Current Accounts

- Fixed Deposit Accounts

- Margin Money Deposit Accounts

- Dividend Accounts •

235

9,179

514

97,033

8,157

37,534

38,556

6,026

53,295

5,283

115,118 140,694

Schedule-K. OTHER CURRENT ASSETS

Interest accrued on Deposits 3,239

3,239

1,188

1,188




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SCHEDULES TO THE BALANCE SHEETAll amounts are in Indian Rupees Thousands', except share data;and. where otherwise stated


46,586

2,338,941


29

637,570

Schedule-L. LOANS AND ADVANCES(Unsecured and Considered Good, unless otherwise stated)

Loans to Employees . 517

Advances recoverable in cash or kind or for value to be received:

Subsidiary Companies- Rain Commodities (USA) Inc., ' 1,292,410

[Maximum amount outstanding during the year - Rs.1,292,410;(December 31, 2007 : Rs 637,570)]

- Rain Calciner Limited 130,091[Maximum amount outstanding during the year - Rs.130,091(December 31, 2007 : Nil)]From others 682,992

Balance with Government and Public Bodies -163,116

Deposits with Others 23,229

Advance Tax [Net of Provision for tax Rs. 166,821(December 31, 2007 : Rs. 160,000)]

398,821

•187,889

24,393

16,624

1,265,326

Schedule-M. LIABILITIES.Sundry Creditors

- Dues to Micro and Small Enterprises- Dues to other than Micro and Small Enterprises

Dues to Subsidiary Companies- Rain CM Carbon (India) Limited,- Rain CM Carbon LLC- Rain Global Services LLC

Advance from CustomersOther LiabilitiesInterest accrued but not due on loans

Unclaimed Dividends*

829,352

240,00052,13019,05067,073

128,1036,562

8,157

1,350,427

537,582

240,000247,.878

40,81783,403-9,785

5,283

1,164,748

There are no amounts due and outstanding to be credited to the InvestorEducation and Protection Fund.

Schedule-N. PROVISIONSRetiral BenefitsFringe Benefit TaxProvision for DividendProvision for Dividend distribution tax

38,391

382

262,088

44,542

345,403

21,301532

197,32033,520

252,673




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li RAIN COMMODITIES LIMITED

SCHEDULES TO THE PROFIT AND LOSS ACCOUNTAll amounts are in Indian Rupees Thousands, except share data and where otherwise stated

Year ended Nine months period endedDecember 31, 2008 December 31, 2007

Schedule-O. SALES

Cement

Green Petroleum Coke

9,391,5572,964,291

12,355,848

4,779,170

494,5835,273,753

Schedule-P. OTHER INCOME

Interest on deposits with Banks and Others (Gross)*

Dividend Income (Gross)*

Profit from sale of Investments

Scrap sales

Liability no longer required written back .

Miscellaneous Income*[Tax deducted at Source - Rs.4,402 (December 31, 2007 : Rs 2,957)]

21,399

150

11,516

2,5924,863

40,520

13,358

7,473

3,49529

526

24,881

Schedule-Q. INCREASE/ (DECREASE) IN STOCK*

Opening Stock*

Finished Goods

Work in Progress

Closing Stock

Finished Goods

Work in Progress

*includes increase/decrease in Excise duty on Stock

31,150

90,882

122,032

81,881

66,250148,131

26,101

4,343

28,356

20,918.

49,274

31,150

90,882

122,032

72,758

1,002

Schedule-R. PAYMENTS AND BENEFITS TO EMPLOYEES

Salaries, Wages and Bonus

Contribution to Provident Fund and Other Funds

Workmen and Staff Welfare Expenses

194,544

28,478

19,610

242,632

88,819

11,570

12,870

113,259




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SCHEDULES TO THE PROFIT AND LOSS ACCOUNTAll amounts are in Indian Rupees Thousands, except share data and where otherwise stated ' '

Year endedDecember 31, 2008

Schedule-S. MANUFACTURING EXPENSESRaw Materials ConsumedPurchase of Goods for ResalePacking Material Consumed

• Stores and Spare Parts ConsumedPower and FuelRepairs

- Buildings- Machinery

Royalty and Cess

Less: Cement consumption for expansion project•

Schedule-T. ADMINISTRATIVE, SELLING AND DISTRIBUTION EXPENSESRent ,Rates and taxesRepairs to OthersInsuranceDirector's sitting feesCommission to DirectorsAuditor's Remuneration

Audit FeesCertification FeesOut of pocket expenses

Selling and Distribution ExpensesCommunication ExpensesTravelling and ConveyanceLegal and Professional ChargesProvision for Doubtful DebtsLoss on Sale of Fixed Asset/Written offMiscellaneous Expenses " • .

Schedule-U. INTEREST AND FINANCE CHARGESInterest- on Debentures . .- on Term Loans- on Cash Credit facility- on OthersAmortisation of Discount on issue of DebenturesBank and Finance chargesLoss/ (Cain) on Foreign Exchange Fluctuation

487,0902,941,084

284,781166,587

1,997,757

1,17369,887

115,884

6,064,2437,634

6,056,609

30,4851,091,386

17,7128,457

45

4,200

3,450231

12

1,678,74210,72418,34923,603

458

11,76154,657

2,954,272

40,922286,247

2,7245,351

25,56068,45256,178

485,434

Nine months period endedDecember 31, 2007

213,178486,142133,503108,743785,604

39928,47665,266

1,821,31124,001

1,797,310

10,397555,178

11,4136,774

1433,500

1,800285

10786,896

4,1358,655

14,440799110

18,095

1,422,630

45,749184,846

3,77713,08619,1705,5601,040

273,228




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SCHEDULES TO THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNTAll amounts are in Indian Rupees Thousands, except share data or otherwise stated ,

Schedule-V. NOTES TO ACCOUNTS

I. Organization:

Rain Commodities Limited ('the Company') isengaged in the manufacture and sale of cement. TheCompany through its wholly owned subsidiaries -Rain CM Carbon (India) Limited (formerly RainIndustries Limited) and Rain Cll Carbon LLC. is.engaged in the manufacturing and trading of CalcinedPetroleum Coke and generation of Power throughwaste heat recovery.

II. Significant Accounting Policies

a) Basis of Preparation of Financial Statements

The Company follows the accrual basis ofaccounting. The accounts are prepared onhistorical cost convention and as a goingconcern to comply in all material aspects withapplicable accounting principles in India andthe Accounting Standards covered by theAccounting Standard Rules and the relevantprovisions of the Companies Act, 1956.

b) Use of Estimates

The preparation of the financial statements inconformity with the generally acceptedaccounting principles requires that themanagement makes estimates and assumptionsthat affect the reported amounts of assets andliabilities, disclosure of contingent liabilities asat the date of the financial statements and thereported amounts of revenue and expensesduring the reported period. Actual results coulddiffer .from those estimates.

c) Revenue Recognition

Sales are recognised on despatch of goods tocustomers. Gross sales include excise duty andsales tax recovered and are net of tradediscounts.

d) Fixed Assets and Depreciation

Fixed assets are stated at actual cost lessaccumulated depreciation. The cost includesmaterial cost, freight, installation cost, duties andtaxes, and other incidental expenses.

Assets under construction as at the balance sheetdate are shown as Capital work in progress.Advances paid towards acquisition of fixed

assets are also included under Capital work inprogress.

Depreciation on buildings and plant andmachinery is computed on straight line methodat the rates specified in Schedule XIV of theCompanies Act, 1956 or based on the remainingestimated economic useful lives determined byan independent valuer, whichever is higher.Software is amortized evenly over a three-yearperiod.

Depreciation on other assets is computed onstraight line method at the rates specified inSchedule XIV of the Companies Act, 1956.

Individual assets acquired for less than Rs.5,000/- are entirely depreciated in the year ofacquisition and put to use.

All the fixed assets are assessed for anyindication of impairment, at the end of eachfinancial year. On such indication, theimpairment loss, being the excess of carryingvalue over the recoverable value of the assets,is charged to the Profit and Loss Account in therespective financial years. The impairment lossrecognized in the prior years is reversed in caseswhere the recoverable value exceeds thecarrying value, upon reassessment in thesubsequent years.

e) Inventories

Inventories are valued at cost or below. Rawmaterials cost is computed on the basis ofweighted average cost per unit of measurementafter providing for cost of obsolescence, if any.Finished goods and work in progress are valuedat lower of cost or net realisable value. Cost isdetermined on a weighted average basis andcomprises of material, labour and applicableoverhead expenses. Stores and spares are valuedat cost on weighted average basis, or below.

Goods in transit are valued at cost, whichrepresents the costs incurred upto the stage atwhich the goods are in transit.

f) Employee Benefits

i) Defined contribution Plans

Contributions paid/payable under definedcontribution plans are recognised in theProfit and Loss Account each year.




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Contribution plans comprises of ProvidentFund, administered and managed by theGovernment of India. The Company makesmonthly contributions and. has no furtherobligations under the plan beyond itscontributions. '

ii) Defined Benefit Plans

The Company has a defined benefit Gratuityplan covering all its employees.'Gratuity iscovered under a Scheme of Life InsuranceCorporation of India (LIC) and contributionsin respect of such scheme ar.e recognisedin the Profit and Loss Account. The liability

• • as at the Balance Sheet date is provided for. based on the actuarial valuation carried out

in accordance with revised AccountingStandard 15 (revised 2005) on 'EmployeeBenefits' (AS -15) as at the end of the year.

iii) Other long term employee benefits

Other long term employee benefitscomprise of leave encashment which isprovided for based on the actuarialvaluation carried out in accordance with'revised AS-15 as at the end of the year.

iv) Short term employee benefits

Short term employee benefits includingaccumulated compensated absences as atthe Balance Sheet date are recognised asan expense as per Company's schemesbased on expected obligation on anundiscounted basis.

g) Earnings Per Share (EPS)

The earnings considered in ascertaining theCompany's EPS comprises the net profit after tax.The number of shares used in computing basicEPS is the weighted average number of sharesoutstanding during the year.

Dilutiye potential equity shares are deemed tobe converted as of the beginning of the year,unless they have been issued at a later date. Thenumber of shares used for computing the dilutedEPS is the weighted average.number of sharesoutstanding during the year after considering thedilutive potential equity shares.

h) Taxes on Income :

Current tax is determined based on the amountof tax payable in respect of taxable income forthe period. Deferred tax is recognised on timingdifferences being the differences between thetaxable income and accounting income thatoriginate in one period and are capable ofreversal in one or more subsequent periodssubject to consideration of prudence. Deferredtax assets are not recognized unless there isreasonable certainty that there will be sufficientfuture taxable income available to realize suchasset. Deferred tax assets and liabilities havebeen computed on the timing differencesapplying the enacted tax rates.

i) Foreign Currency Transactions

Transactions in foreign currency are recordedat the exchange rates prevailing on the date ofthe transactions. Monetary assets and liabilitiesdenominated in foreign currency are restated atthe prevailing year end rates. The resultant gain/loss upon such restatement along with therealized gain/loss on account of foreign currencytransactions are accounted in the Profit and Lossaccount.

j) Investments

Long term investments are stated at cost lessprovision for permanent diminution in the valueof long term investments, if any. "

Pursuant to the Board of Directors approval for buyback of equity shares under section 77 A of theCompanies Act, 1956, the Company has bought back1,200,000 equity shares of Rs. 10 each through openmarket transactions for an aggregate amount ofRs.178,848 by utilizing the Securities PremiumAccount. The Capital Redemption Reserve has been

. created out of the current year profits for Rs.12,000being the nominal value of shares bought back interms of section 77AA of the Companies Act, 1956.

The Company has allotted 50,63,293 equity sharesof Rs.10 each at a premium of Rs.190 consequent to

.conversion of equity warrants issued on- November29, 2006. The amount received against the un-exercised 1,736,707 equity warrants amounting toRs. 34,734 has been forfeited and credited to capitalreserve during the year. •




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V. Contingent liabilities not provided for in respect of:

Matters under, dispute:

Sales Tax

Excise Duty

Claims against the Company not acknowledged as debts

Corporate Guarantee issued on behalf of whollyowned subsidiary

December 31, 2008Amount

73,246

10,690

•

4,360,500

. December 31, 2007Amount

52,385

8,101

22,968

2,957,250

VI. Estimated amount of contracts remaining to be executed on capital accounts not provided for as on December31, 2008 - Rs. 96,727 (December 31, 2007 - Rs.247,220).

VII. The Company has entered into various operating lease agreements for assets comprising of storage facilities andan amount of Rs. 30,485 (December 31, 2007 - Rs. 10,397) paid under such agreements have been charged torevenue. These agreements are cancellable in nature and there is no restriction in respect of such leases.

VIII.(a) Directors'Remuneration includes:

Salary

Other Benefits

Commission

Sitting Fees

Total


5,850

2,195

4,200

45

12,290


2,534

729

3,500

143

6,906

Note: The company has paid an incremental remuneration of Rs.2,520 to the executive director for whichnecessary approval of the shareholders will be taken at the ensuing annual general meeting.

(b) Computation of Net Profit for determination of Managerial Remuneration in accordance with section 349, read with Sec 198 of the Companies Act, 1956:

Profit before Tax and after Extraordinary Item as perProfit and Loss account

Add: Depreciation as per books of account

Remuneration to directors

Sitting Fees

Less: Depreciation as per Section 350 of the Companies Act, 1956

Net Profit in accordance with Section 349 of Companies Act, 1956

Maximum Managerial Remuneration permissible

Total Remuneration restricted to


1,212,954

224,856

12,245

45

224,856

1,225,244

61,262

-: 12,245




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IX.

X.

Earnings per Share (EPS) -. .

. ,••.(:•; : '. <••-. • . • ••. " ' • * '

a. . Profit/ (Loss) after Tax before Extraordinary item

.b. Extraordinary Item

c. Profit/ (Loss) after Tax .

Basic

d. Weighted average number of equity shares ofRs.10 each outstanding during the year

Dilution

e. Equity Shares to be allotted against Equity Share Warrants

f. Weighted average number of equity shares ofRs.1 0 each outstanding during the year

Earnings per Share

h. Basic before extraordinary item - [a]/[d] - (Rs.)

i. Basic after extraordinary item - [c]/[d] - (Rs.)

j. Diluted before extraordinary item - [a]/[f] - (Rs.)

k. Diluted after extraordinary item - [c)/[f] - (Rs.)


850,537

' -

850,537

70,411,284

,

70,411,284

' 12.08

12.08

12.08

12.08

Nine months period endedDecember 3 1,2007

1 855,341

602,097

' 253,244

•: 66,971,286

6,800,000

73,771,286

12.77

3.78

11.59

3.43

rhe Deferred Tax Liability (Net) is as under:' - • ' - •

Deferred Tax Liability- on account of depreciation

Deferred Tax Asset- on account of fiscal differences

Deferred T a x Liability (Net) ' ' • • : . • . ^ .

December 31, 2008•• • Amount

452,730

18,289

- 434,441


255,994

12,294

243,700

XI. Additional information pursuant to the provisions of paragraph 3, 4C and 4D of part II of Schedule VI to theCompanies Act, 1956: •-

(a) Installed capacity and production

The Company is not subject to industrial licensing. Installed capacity is as certified by the management.

Class of Goods

Cement

Unit

Mts.

Particulars

Installed Capacity

Actual Production


, 2,900,000-

2,185,113

Nine months period ended.December 3 1,2007

1,400,000

1,151,481.

(b) Particulars of Stocks

Cement and Clinker

Opening Stock

Closing Stock

December 31, 2008

Qty (Mt)

15,617

30,339

Amount

31,150

81,881

December 31,2007

Qty (Mt)

, , 15,580

,15,6] 7

Amount

28,356

. 31,150

Closing stock excludes excesses/ shortages including damaged stocks and captive consumption, etc.

59 . 34<h Annual Report 2008



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[RAIN COMMODITIES LIMITED

(c) Particulars of Sales (Gross)

Sales

Cement • •


Total

Year endedr December 31, 2008

Qty(Mt)

2,164,353

218,129

Amount

9,391,557

2,964,291

12,355,848


Qty (Mt)

' 1,138,362

63,998

Amount

4,779,170

494,583

. . 5,273,753

(d)

Sales does not include 4,593 Mt used for captive consumption.

Details of Raw Materials Consumption

a) Raw Materials

Consumed:

Limestone/ Shale/Dolomite

Gypsum/ Carbon Black

Iron ore/ Limesludge/ Slag

Laterite/ Bauxite/ LowGrade Laterite

Fly Ash

Total

b) Purchase ofGoods for resale


Qty.(Mt)

. •/

2,379,058

88,991

95,334

79,897

365,344

218,129

Amount

80,228

130,919

52,221

63,829

159,893

487,090

2,941,084

Nine months period ended.December 31-, 2007

Qty(Mt)

1,360,001

50,607

24,859

47,789

2-19,622

63,998

Amount

30,035

53,207

9,187

25,874

94,875

213,178

486,142

(e) Value of Raw material, Stores and spare parts consumed

Raw Materials

Imported

Indigenous

Total. '

Stores and Spares

/

Impo'rted

Indigenous

Total • . '


Amount

-

487,090

487,090

%

.

100.00

100.00


Amount"

166,587

166,587

%--

100.00

100.00


Amount

.

213,178

213,178

%

.

100.00

100.00

Nine months' period endedDecember 3'1, 2007

Amount

. 598

108,145

108,743

%0.55

99.45

100.00

Annual Report 2008 60



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(f) GIF Value of Imports

, ' ;- ' • - . • • • • ' '

Green Petroleum Coke • ' •

Coal and Fuel Grade Coke

Capital goods •. .


2,941,084

513,314

5,027

Nine months period ended• December 31, 2007

486,142

1,494

124,442

(g) Expenditure in foreign currency

Travel expenses

Books and Periodicals


13


54,625

(h) Dividends remitted in foreign currency to the non-resident shareholders

Number of shareholders

Number of shares held

Year to which dividend relates

Amount


422

4,413,060

2007

18,500


328

120,000

2006-07

420

XII. Related Party Transactions

Names of related parties and description of relationship:

(i) Subsidiaries

(ii) Enterprise where, key managerialpersonnel along with their relatives exercisesignificant influence

(iii) Key Management Personnel

a)'

b) '

c)

d)

e)

0

8)

a)

a)

b)

c)

Rain ClfCarbon (India) Limited ('Rain Cll')

Rain Commodities (USA) Inc (RCUSA)

Rain Calciner Limited (from April 23, 2008)

Moonglow Company Business Inc, BVI('Moonglow') (Subsidiary of Rain Cll)

Rain Global Services LLC. (RGS)(from March 27, 2008) (Subsidiary of RC USA)

Rain Cll Carbon LLC, USA (RCC)(Subsidiary of Rain Cll)

Rain Global Services HK Limited(from November 21, 2008) (Subsidiary of RGS)

Sujala Investments Private Limited ('Sujala')

Mr. N. Radha Krishna Reddy, Chairman.

Mr. N. Jagan Mohan Reddy,Managing Director.

Mr. N. Sujith Kumar Reddy, 'Executive Director.

a)




SAINSCJU SERVICES - Annual Keports Eifirary-Services


b) Transactions with related parties:

Year Ended December 31, 2008

Nature of Transactions

Sales-Rain CllCementGreen Petroleum Coke

Purchases- Rain Cll- RCC

Loan given - RC USA

Loans repaid - Sujala

Rent received - Rain Cll

Advance given (net) - Rain Cll- Rain Calciner

Amount payable (on account of merger)- Rain Cll

Interest expense '- Sujala

Managerial Remuneration

Freight Expenses - RGS

SubsidiaryCompany

3,6392,964,291

304,407 '2,941,084

654,840

-

567

350,000130,091

_

-

-

19,050

Enterprises whereKey Managerial

Personnel along withtheir relatives exercise

significant influence

-

-

-

1 20,000

—

_

2,458

-

'

KeyManagement

Personnel

-

-

-

-

—

_

. -

12,245

-

Balance

1,347,583

52,130

1292410

-

-

130,091

240,000

-

4,200

19,050

Period Ended December 31, 2007


Sales-Rain Cll

Cement


Purchases

- Rain Cll (Power)

- RCC (Coke)

Loan given - RC USA

Loans taken - Sujala

Rent received - Rain Cll

Advance given/taken (net) - Rain Cll

Amount payable (on account of merger)- Rain Cll

Interest expense - Sujala


SubsidiaryCompany

1,531

494,583

200,873

248,441

494,089

-

142

40,694

240,000

-

-

Enterprises whereKey Managerial

Personnel along withtheir relatives exercise

significant influence

- •

-

. -

120,000

-

-

_

6,217

• -

KeyManagement

Personnel

-

-

-

• -•

.

•

__

-

6,763

Balance

331,880

247,878

637,570

1 20,000

-

-

240,000

-

3,500




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XIII.Employee Benefits • • : •

a) Defined benefit plans

The following table sets forth the status of the G'ratuity Plan of the Group and the amounts recognized in theBalance Sheet and Profit and Loss Account.

Amounts recognized in the Balance Sheet are as follows:

Present value of funded obligation

Less: Fair Value of Plan Assets

Net Liability


35,301

10,659

24,642


20,339

9,869

10,470

Amounts recognized in "Contribution to Provident and other funds" under Schedule R are follows:

Current Service Cost

Interest cost

Expected Return on plan assets

Net actuarial lossAgain) recognized during the year

Total


2,292

1,907

(826)

12,346

15,719


995

1,150

(629)

4,664

6,180

Reconciliation of opening and closing balances of the present value of the obligations:

Opening defined benefit obligation

Current service cost

Interest Cost

Actuarial lossAgain)

Benefit Paid

Closing Defined Benefit Obligation


20,339

2,292

1,907

11,979

(1,216)

35,301


15,164

995

1150

4,597

(1,567)

.20,339

Reconciliation of opening and closing balances of the fair value of plan assets:

Opening fair value of plan Assets

Expected Return on Plan Assets

Actuarial (lossVgain

Contribution by employer

Benefits Paid

Closing. Fair value of Plan Assets

Actual Return on Plan Assets


9,869

826

(367)

1,547

(1,216)

10,659

459


10,872

630

(66)

•

(1,567)

9,869

. 563




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Major Category of plan assets as a percentage to fair value of plan assets:

• Insurer Managed Funds

Year endedsDe'eember 31, 2008

1 00%


1 00%

Principal Actuarial assumptions used:

Discount rates

Expected rate of return on plan assets

Expected salary increase rates


5.90%

7.50%

10%for first year &7% there after


9.10%

7.50%

10%for the first2 years and

7% thereafter

The estimates of future salary increase considered in the actuarial valuation takes into account factors likeinflation, seniority, promotion and other relevant factors such as supply and demand in the employmentmarket. The expected return on plan assets is based on actuarial expectation of the average long term rate ofreturn expected on investments of the Funds during the estimated term of the obligations. The principalactuarial assumptions used for the computation of defined plan are also used for the computation ofcompensated absence of long term benefit.

XIII.Comparative figures of the previous year where necessary, have been regrouped to conform to those of thecurrent year. The figures for the current year are for a period of twelve months and those of the previous period arefor nine months, hence are not comparable.




Statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary companies

1. Name of the subsidiary Rain Cll Carbon (India) Limited Rain Calciner Limited Rain Commodities (USA) Inc. Rain CM Carbon LLC

2 Financial year ending of theSubsidiary

31 st December, 2008 31st December, 2008 31st December, 2008 31st December, 2008

-3. Holding Companies interest Rain Commodities Limited isholding 2,98,05,000 Equity Shares

.of Rs.10/- each Aggregating toRs.29,80,50,000 representing1.00% of the total Paid up EquityShare Capital of Rain Cll Carbon(India) limited.

Rain Commodities Limitedis holding 60,000 EquityShares of Rs.10/- eachAggregating to Rs.6,00,000representing 100% of theTotal Paid up Equity ShareCapital, of Rain CalcinerLimited

Rain Commodities Limited isholding 20 Shares of USD 0.01each representing 100% of theTotal Paid up Share Capital ofRain Commodities (USA) Inc

The Company's wholly owned subsidiarynamely Rain Cll Carbon (India)Limited(RCCIL) is holding 50 Class-ACommon Stock of USD.0.01 each andRCCIL's subsidiary namely MoonglowCompany Business Inc also holds 898Class-A Common Stocks of USD 0.01,the aggregate of the same represents100% of the total paid up share capitalof Rain Cll Carbon LLC, USA. Further theCompany's Subsidiary RainCommodities (USA) Inc. hold 920 Class'B common'stock without voting rights

CTv ,U1

4. The net aggregate of profits or Josses•for the-current period o f - thesubsidiary so far as it concerns themembers;bf the holding company

a. dealt with or provided for in the NILaccounts of the holding Company

b. not dealt with or provided for inthe accounts of ' the holding

: Company •

NIL NIL NIL

Profit of Rs. 173,246 thousands Loss of Rs.185 thousands Profit of Rs.407,833 thousands Profit of Rs.2,872,751' thousands

44

5. The net aggregate of profits or lossesfor previous financial years of thesubsidiary so far as it concerns the

• members of the holding Company.

a. dealt with or provided for-in theaccounts of the holding Company

b not dealt with or provided forin the accounts of the holdingCompany

NIL

Loss of Rs. 190,249-thousands

N.A

N.A ' .' (Since it was incorporatedon 23rd April, 2008 duringthe current year only).

NIL NIL

Loss of Rs.628,363 thousands Loss of Rs.590, 352-Thousands

•yo>

oO

§CO

Place: HyderabadDate: April 23, 2009

3for and on behalf of the Board of Directors


N.jagan Mohan ReddyManaging Director

C.N.V.S.R.R. KumarCGM (F&A)






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V

Financial performance of Subsidiary Companies for the financial year ended 31st December, 2008

Rs. in thousands

Particulars

Capital .

Reserves . ,.

Total Assets

Total Liabilities

Investments

Total Income

Profit/doss) before Taxation

Provision for taxation

Profit/doss) after Taxation

Proposed Dividend

RainCIICarbon (India)

Limited

; 298,050

2,432,147

•13,495,635

13,495,635

3,856,687

11,936,297.

239,198

65,952

173,246

-, • • -

Rain CalcinerLimited

600

(185)

130,506

130,506

'

NIL

(185)

. • •

-(185)

-

RainCommodities

(USA) Inc.

3,869

(274,777)

4,677,964

4,677,964

• 4,458,913-

-.'•

407,833

•

407,833

,

Rain CDCarbon LLC

8,196,312

3,179,833

' 37,677,879

37,677,879

-

30,186,303

4,620,067

1,747,316

2,872,751''

Rain CllCarbon

MauritiusLimited

0.048

- NIL-

- NIL-,

-NIL-

- NIL-

-NIL-

-NIL-

:NIL-

.- NIL-

- -

Rain GlobalServices

LLC

242

(6,095)

.;. 115,995

115,995

48

4,299

(6,134)

-

(6,134)

-

Rain GlobalServices KH

Limited

48

(80)

"48

48

-

-

' ' (80)

-

(80)'

-

MoonglowCompany

BusinessInc

3,541,460

809,422'

4,350,883

4,350,883

4,350,8TO

-

(13.)

-

(13)

•

U)

for and on behalf of the Board of Directors

Iio

Place: HyderabadDate:.April. 23, 2009


N.Jagan Mohan Reddy C.N:v.S.R.R. KumarManaging Director CGM (F&A)


OO

I—I.

m





INFORMATION PURSUANT TO PART IV OF SCHEDULE VI TO THE COMPANIES ACT 1956

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

I Registration Details

Registration No.

Balance sheet Date

no.li l-IU6T9T3|

I 3 I 1 I - I 1 I 2 I - I O T 8 1 -Date Month Year

State Code

II Capital raised during the year (Rs. In Thousands)

Public Issue | | | | | |N| I |L |

Bonus Issue I I I I I |N| I |L|

Right Issue

Private Placement

TI rr

III Position of Mobilisation and Deployment of Funds (Rs. In Thousands)

Total Liabilities |TT2|1 |4|2|1 |2|2| Total Assets

SOURCES OF FUNDS

Paid-up Capital

11121114121112111

Share Capital Suspense

Share Application Moneypending allotment

APPLICATION OF FUNDS

Net Fixed Assets

Net Current Assets

Accumulated Losses

I I I I lN| l |L l

151119121111171

|2|8|4|8|3|0|5l

Reserves & Surplus

Unsecured Loans

Secured Loans


Investments

Misc. Expenditure

11121114121112171

I | 4 |2 |5 |4 |1 |4 |6 |

T l7T8|4 !9 |9 |5 |

|4|2|6|4|3|6|4l

I I4|3|4|4|4|l1

' |2 |4 |Q|5 |8 |5 |0 |

TlNTTTLl

TI I I INI I IL

1 1 5

IV Performance of Company (Rs in Thousands)

Turnover

Profit/(Loss) Before Tax

Earning per Share in Rs.

Mmi|2|9|5|4l

I I M I 2 I . 1 0 1 8 1

Total Expenduture

Profit/doss) After Tax

Dividend Rate % '

|9|9|3|7|7TOT1|

I |8|5|0|5|3|7l

M i l l 13171

V Generic Names of Three Principal Products/Services of Company (as per monetary term)

Item Code No. (ITC Code) |2 |5 |2 |3. |2 |9 | . |0|1

Product Description |C| E|M| E|NTT|



N. Radha Krishna ReddyChairman.


N. lagan Mohan ReddyManaging Director





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'<*/


CONSOLIDATED FINANCIAL STATEMENTS






CONSOLIDATED AUDITORS' REPORT

TO THE BOARD OF DIRECTORS OFRAIN COMMODITIES.LIMITED'

1. We, have audited the attached Consolidated BalanceSheet of Rain Commodities Limited ("the Company")arid its subsidiaries (collectively referred to as "theGroup") as at December 31, 2008, the relatedConsolidated Profit and Loss Account and theConsolidated Cash Flow Statement for the year endedon that date annexed thereto, which we have signedunder reference to this report. These ConsolidatedFinancial Statements are the responsibility of theCompany's management. Our responsibility is toexpress an opinion on these Consolidated FinancialStatements based on our audit.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. Thosestandards require that we plan and perform the auditto obtain reasonable assurance about whether thefinancial statements are prepared, in all materialrespects, in accordance with an identified financialreporting framework and are free of materialmisstatement. An audit includes examining, on a testbasis, evidence supporting the amounts anddisclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by management, as wellas evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. We did not audit the financial statements of certainconsolidated entities, whose financial statementsreflect total assets of Rs. 130,495 thousands, as atDecember 31, 2008, total revenues of Rs. Nil, andnet cash flows of Rs. 415 thousands, for the yearended on that date. These financial statements havebeen audited by other auditors whose reports havebeen furnished to us, and our opinion in so far as itrelates to the amounts included in respect of these

consolidated entities, is based solely on the report ofthe other auditors.

4. We report that the Consolidated Financial Statementshave been prepared by the Company's managementin accordance with the requirements of AccountingStandard 21, "Consolidated Financial Statements"notified by the Companies (Accounting Standards)Rules 2006.

5. Based on our audit and on consideration of separateaudit reports on individual audited financialstatements of the Company and its consolidatedsubsidiaries, subject to our comments in para 3above, in our opinion and to the best of ourinformation and according to the explanations givento us, the Consolidated Financial Statements give atrue and fair view in conformity with the accountingprinciples generally accepted in India:

(a) in the case of the Consolidated Balance Sheet,of the state of affairs of the Group as at December31, 2008;

(b) in the case of the Consolidated Profit and LossAccount, of the profit for the year ended on thatdate; and

(c) in the case of the Consolidated Cash FlowStatement, of the cash flows for the year endedon that date.

Partha MitraMembership No. 50553

Partner

Place: HyderabadDate; March 10, 2009


Chartered Accountants

34th Annual Report 2008 . 70



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CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2008All amounts are in Indian Rupees Thousands, except share data and where otherwise stated •

SCHEDULEAs at

December 31, 2008As at

December 31, 2007

SOURCES OF FUNDS

Shareholders' Fundsa) • Capital ' - . .b) Capital Suspensec) Share Application money

pending allotmentd) Reserves and Surplus

Loan Fundsa) Secured Loansb) Unsecured Loans


. 'TOTAL

AB

c

DE

708,346 321JOO348,613

136,0007,689,900 2,099,685

8,398,246

24,964,544- , 19,489,55412,858,251 10,492,880

37,822,7952,441,259

48,662,300

2,905,398

29,982,434'1,528,626

34,416,458

APPLICATION OF FUNDSFixed Assetsa) Gross Block . .b) -Less: Depreciation/Amortisation

• c) Net Blockd) Capital Work In Progress ".

Investments

Current Assets, Loans and Advancesa) Inventories " :

b) Sundry Debtorsc) Cash and Bank balancesd) Other Current Assetse) Loans and Advances

Less : Liabilities and Provisionsa) Liabilitiesb) Provisions

Net Current Assets _' '

TOTAL

Notes to the Accounts

F

C

H1

K• L

MN

V

37,976,7412,165,776 • .

35,810,965558,798

36,369,763268,572

8,431,3974,767,5762,359,223

5,633, 1,517;918

17,081,747

4,270,863786,919

5,057,782" 12,023,965

48,662,300

28,755,7721 ,023,625

27,732,1.472,744,933

' ' ; 4,1-45,578. 2,078,432

' 803,0305,600

1,080,916

8,113,556

3,838,851-• 603,899

4,442,750

30,477,080• 268,572

3,670,806

34,416,458

Schedules A to N and V form an integral part of the Consolidated Balance Sheet.'

This is the Consolidated Balance Sheet referred to in For and on behalf of the Board of Directors-our report of even date. ' • ' ' •' • ' ' '. • ' " "

Partha Mitra ' N. Radha Krishna ReddyMembership No.50553 . .ChairmanPartner 'For and on behalf ofPrice Waterhouse S. Venkat Ramana ReddyChartered Accountants ' ' . ' Company Secretary

Place: Hyderabad • -.'Date : March 10, 2009 ,

N. jagan Mohan ReddyManaging Director

T. Srinivasa RaoVice President - Finance

71 Annual Report 2008





CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2008 :

All amounts are in Indian Rupees Thousands, except share data and where otherwise stated • 'Year ended Nine months period ended

SCHEDULE ^ ,— „., onnb December 31, 2007

INCOMESales (Gross) OLess: Excise duty •

Other Income , PIncrease/ (Decrease) in stock in trade Q

EXPENDITUREPayments and Benefits to Employees RManufacturing Expenses SAdministrative,Selling and Distribution Expenses T

GROSS OPERATING PROFITInterest and Finance Charges U

PROFIT BEFORE DEPRECIATION, EXCEPTIONAL ITEM & TAXATIONDepreciation and Amortisation

PROFIT BEFORE EXCEPTIONAL ITEM & TAXATIONExceptional Items- Inventory Write Down-( Refer .note V on Schedule 'V )

PROFIT BEFORE TAXATION & EXTRAORDINAY ITEMSProvision for Taxation- Current Tax

. - Deferred Tax- Fringe Benefit Tax

PROFIT AFTER TAXATION & BEFORE EXTRAORDINARY ITEMExtraordinary Items (net of tax)

Share of profit/ (loss) in AssociatePROFIT AFTER TAXATION

Surplus brought forward from previous yearAVAILABLE FOR APPROPRIATIONAPPROPRIATIONS

Transfer (from) / to Debenture Redemption ReserveTransfer to Capital Redemption reserveTransfer to General ReserveProvision tor DividendProvision for Dividend Tax -

SURPLUS CARRIED TO BALANCE SHEETNotes to Accounts - • . V

Earnings/ (Loss) Per Share before Extraordinary item - BasicEarnings/ (Loss) Per Share after Extraordinary item - BasicEarnings/ (Loss) Per Share before Extraordinary item - DilutedEarnings/ (Loss) Per Share after Extraordinary item - Diluted

47,420,1661,811,912

45,608,254483,003843,256

46,934,513

1,426,90629,097,3164,216,019

34,740,24112,194,2724,234,2557,960,0171,060,2266,899,791

686,2366,213,555

1,597,319571,423

6,9424,037,871

4,037,871

4,037,8711,526,4465,564,317

(62,029)12,00085,100

266,46545,286

5,217,495

57.3557.3557.35

: 57.35

16,817,790889,780

15,928,010163,89069,000

16',1 60,900

572,40110,705,200

1,995,32013,272,9212,887,9791 ,458,4001,429,579

573,830855,749

855,749

141,720(65,380)

3,750775,659

(316,380)459,279

(5,250)454,029

1,335,905" 1,789,934

6,948

25,700197,32033,520

1,526,446

11.506.78

10.45'• , '' 6.15

Schedules O to V form an integral part of the Consolidated Profit and Loss Account.This is the Consolidated Profit and Loss Account referred to in For rf b h |f f he B ard f Directorsour report of even date. • • .

Partha Mitra N. Radha Krishna Reddy N. Jagan Mohan ReddyMembership No.50553 Chairman , Managing DirectorPartnerFor and on behalf of ^^Price Waterhouse S. Venkat Ramana Reddy T. Srinivasa RaoChartered Accountants ' - ' Company Secretary Vice President - FinancePlace: HyderabadDate : March 1 0, 2009 \

34th Annual Report, 2008 72



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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2008.All amounts are in Indian Rupees Thousands, except share data and where otherwise stated

: ; : ' . • . . - . " . Year ended Nine months peribcl.endedDecember 31, 2008 December 31, 2007

A. Cash Flow from Operating Activities

Net Profit before Taxation and Extra-ordinary items

Adjustments for :

Depreciation

Discount On Issue of Debentures Amortised

Unrealized Loss/ (Gain) on Foreign Exchange Fluctuation

Interest on deposits with Banks and others

Provision for doubtful debts

Interest and finance charges

Liability No Longer Required Written Back

Loss on Sale of Fixed Asset/ Fixed Assets Written off

Dividend received

Interest Income

Operating profit before Working Capital changes

Adjustments for:

Sundry Debtors

Inventories ' '"

Loans and Advances

Current Liabilities and Provisions

Income Tax paid ( net of refund)

Net cash flow from/(used in) operating activities

B Cash Flow from Investing activities

Purchase of Fixed Asset

Proceeds from sale of Fixed Assets

Purchase of Investments ..

Sale of Investments

Proceeds from maturity of long term deposits ,,,

Investment in long term deposits

Interest Received

Dividend, Received• * ' " ' " •

Net Cash flow used in Investing Activities

6,213,555

1,060,226

25,5603,044,341

(21,399)

458

2,423,727

• (2,592)

11,761

(13,636)

12,742,002

(2,448,672)(4,285,821)

(309,923)(102,809)5,594,777

(1,715,805)

3,878,972

(1,737,845) .

10,098

(600)

5,511

47,982

(1,674,854)

'855,749

573,830

19,170

(253,438)

(73,390)

800

'1,577,560

" (8,550)

110

(13,460)

2,678,381'

,.•217,509

963,920

(693,414)

1,713,835

4,880,231

(172,810)

4,707,421

(2,170,373)

1,600

(24,470,105)

5,458,476

. (6,026)

72,394

13,460

(21,100,574)

73 34th. Annual Report 2008





CONSOLIDATED CASH FLOW (Cond.)All amounts are in Indian Rupees Thousands, except share data and where otherwise" stated

Year ended Nine months period endedDecember 31, 2008 December 31, 2007

C. Cash Flow from Financing activities

Proceeds from Long term borrowings

Repayment of Long term borrowings

Proceeds from Working capital borrowings (net)

Sales tax deferment

Interest paid

Proceeds from Security Deposits •

Proceeds from / (Repayment) of Unsecured Loan

Payment of Dividend including Dividend distribution tax

Proceeds from issue of additional Equity Shares

Buy back of Equity Shares

Net Cash Flow from / (used in) Financing Activities

Net (Decrease)/lncrease in Cash and Cash equivalents

Cash and Cash equivalents - Opening Balance*

Cash and Cash equivalents on acquisition of Cll Carbon L.L.C.

Cash and Cash equivalents - Closing Balance*

*includes money held on margin money deposit accounts

866,771

(1,558,313)

1,742,388

138,918

(2,258,498)

49,137

(120,000)

(235,961)

911,993

(1 78,848)

(642,413)

1,561,705

797,004

-

2,358,709

I

38,432,989

(19,879,991)

214,443

57,810

(3,081,196)

24,342

1 20,000

(282,975)

,

•

15,605,422

(787,731)

1,535,395

49,340

797,004

Supplementary Information

'Cash and Bank Balance

Less : Long term deposits with Scheduled Banks consideredas investment.

2,359,223

514

2,358,709Notes

803,030

6,026

797,004

1. The above cash flow statement has been prepared under the 'Indirect Method' as set out in the AccountingStandard- 3 on Cash Flow Statements.

2. Gomparative figures of the previous period, where necessary, have been regrouped to conform to those ofthe current period.

This is the Consolidated Cash Flow Statement referred toin our Report of even date.

Partha MitraMembership No.50553PartnerFor and on behalf ofPrice WaterhouseChartered Accountants






T. Srinivas RaoVice President - Finance




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SCHEDULES TO THE CONSOLIDATED BALANCE SHEETAll amounts are in Indian Rupees Thousands, except share data and where otherwise stated

.: " . . • As at , As at. ' • -. December 31, 2008 December 31, 2007

Schedule-A. Share Capital

Authorised

118,000,000 Equity Shares of Rs. 10/- each 1,180,000 1,180,000

4,900,000 Redeemable Preference Shares of Rs. 10O/- each 490,000 • 490,000

1,670,000 1,670,000

Issued, subscribed and paid up

72,034,579 (December 31, 2007: 32,110,000)Equity shares of Rs. 10/- each 720,346 321,100

Less : Buy back of 1,200,000 Equity Shares of Rs. 10/- each . 12,000[Refer Note III on Schedule V]70,834,579 (December 31, 2007 : 32,110,000)Equity shares of Rs.10/-each

Of the above, 34,861,286 equity shares of Rs. 10/-each ,, . ,have been allotted to the share holders of erstwhileRain Calcining Limited pursuant to the scheme ofarrangement between the company and erstwhileRain Calcining Limited with out payment being received in cash.

• 708,346 321,100

Schedule-B. CAPITAL SUSPENSE

Capital Suspense . - 348,613

Nil (December 31,2007: 34,861,286) Equity Shares ofRs.10/-each pending allotment pursuant to the Scheme ofArrangement between the Company, Rain Industries Limitedand erstwhile Rain Calcining Limited • - • 348,613

75 '34th Annual Report 2008




RAIN COMMODITIES LIMITED '


As at As at• . December 31, 2008 December 31, 2007

Schedule-C RESERVES AND SURPLUS

Capital Reserve

As at the commencement of the year . 2,734 2,734

Add: On forfeiture of equity share warrants 34,734 . -[Refer Note IV on Schedule V]

37,468 . 2,734

Capital Redemption Reserve

Transfer from Profit and Loss Account 12,000 -

[Refer Note III on Schedule V]

Debenture Redemption Reserve


Add: Transferred from / (to) Profit and Loss Account (62,029) 6,948

80,975 . 143,004

Securities Premium Account

„ As at the commencement of the year .302,194 300,000

Add: Per Scheme of Arrangement - On merger of

erstwhile Rain Calcining - 2,194

Limited with the Company •

Add: Premium received on issue of additional equity shares 962,026 -•-

1,264,220 302,194

Less: Utilisation against buy back of equity shares at market value (166,848)

[Refer note III on Schedule V]

1,097,372 . 302,194

General Reserve

As at the commencement of the year . 183,127 ' 160,000

Add: Transferred from Profit and Loss Account 85,100 25,700

"Less: Adjustment on account of initial adoption of

Accounting Standard 15"(revised 2005) on

'Employee Benefits' (net of deferred tax)" - (2,573)

268,227 183,127

Foreign Currency Translation Reserve ( 976,363 (57,820)

Profit and Loss Account 5,217,495 1,526,446

7,689,900 2,099,685




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SCHEDULES TO THE CONSOLIDATED BALANCE SHEETAll amounts are in Indian Rupees Thousands, except share data and. where otherwise stated


• . As atDecember 3V, 2007

Schedule-D. SECURED LOANS*

Debentures11,278,000/9.39% Redeemable Non -ConvertibleDebentures'of Rs.-100 each (privately placed and partly paid)

Term Loans- Banks .

Foreign Currency Loans• Rupee Loans >

.-. Financial Institutions .- Interest accrued and due

Working Capital Loans*- Banks . • ' . ' • ' '

Hire Purchase Loan- Banks • . :

*Working Capital Loans include buyer'scredit availed by the Company

323,900

16,980,3931,260,0451,550,547

4,849,659

24,964,544

2,290,602

572,016

7,710,6608,222,270 '1,017,540.

5,059

1,961,180

82919,489,554

873,271

Schedule-E. UNSECURED LOANSOther than short term11.125% ( 2015) Senior Subordinated Notes10.000%. (2018) Junior Subordinated NotesSales Tax DefermentSecurity Deposit from CustomersInter Corporate Deposits ' . :

*Notes:

1

11,385,400687,856654,120130,875

12,858,251

9,266,940509,000515,202

81,738120,000

10,492,880

Term Loans from banks borrowed by the subsidiaries are secured/ to be secured by an irrevocable undertaking toprovide security over all immovable assets of the group and further secured by a first ranking fixed charge on theEscroW account of the company and first ranking floating charge on the moveable assets of the group, bothpresent and future. Further-secured by the pledge of shares held by the Company in its wholly owned.subsidiariesand by the tangible and intangible assets of the group. Secured .by way of Corporate guarantees given by thecompany of US$ 75.million and by its subsidiary upto a maximum of US$ 150 million.

2. Working Capital Loan is secured by first charge on the whole of the present and future current assets of thecompany. : ; • .' . ' - • ' • '

3. Debentures and certain Term Loans are : ". : . ,

a) Secured by pan passu'first charge on all immovable properties of the Company. :

b) Secured by additional security of farm land at Nellore and land owned by certain Directors;

c) Secured by personal! guarantee of certain promoter Directors;

4. The Non-Convertible Debentures of Rs.100 each are reedeemable in .ten half yearly installments commencingfrom September 30, 2005 and ending by March 31, 2010. The Company has paid upto December 31, 2008 -Rs. 803,900 and December 31,.2007- Rs. 555,780. . •

77 34"1 Annual Report 2008



I

3;N>


Schedule-F. FIXED ASSETS

Description

1. INTANGIBLE ASSETS

Goodwill(on consolidation)

Software

II. TANGIBLE ASSETS

Land - Free Hold

Land -Mining

Buildings

Railway Siding

Plant and Machinery

Furniture and Fixtures

Office Equipments

Vehicles

Total

Period ended -December 3 1,2007 .

GROSS BLOCK

As at•January 1

2008

16,861,190

882

16,862,072

' 521,640

16,840

1,522,110

2,220

9,662,020

112,540

41,500

14,830

11,893,700

28,755,772

2,646,890

Adjustmentfor currency

translation

3,965,620 "

-

3,965,620

107,152

. ' -

65,420

_

1,203,654

631

1,060

• • -

1,377,917

5,343,537

-

Additionsduring the

year

-

-

-

21,567

4,118

• 800,589

-

3,070,229

4,097

. 14,843

9,644

3,925,087

3,925,087

26,361,282

Deletionsduring the

year -

-

-

-

. -

-

-

47,595

6

54

_

. 47,655

47,655

252,400

As atDecember31, 2008

20,826,810

882

20,827,692

650,359

20,958

2,388,119

2,220

13,888,308

117,262

57,349

24,474

17,149,049

37,976,741

28,755,772

DEPRECIATION/AMORTISATION

UptoJanuary 1,

2008

-

664

664

3,270

460

. 112,790

501

885,980

8,480

10,290

1,190

1,022,961

1,023,625

579,480

adjustmentfor currency

translation

.

,

.

1,683

-

5,253

-

100,888

70

127

.

108,021

108,021

For theyear

-

218

218

. 8,231.

151

105,684

105

931,106

4,804

7,865

2,062

1,060,008

1,060,226

573,830

OnDeletions

-

-

.

-

•

-

•

26,096

-

-

-

26,096

26,096

129,685

UptoDecember31, 2008

-

882

882

13,184

611

223,727

606

1,891,878

13,354

18,282

3,252

2,164,894

2,165,776

1,023,625

Capital work in Progess (including Capital Advances of Rs.9,541 (December 31, 2007 Rs.1 22,419))

NET BLOCK

As atDecember

31, 2008

20,826,810

-

20,826,810

637,175

20,347

2,164,392

1,614

11,996,430

103,908

39,067

21,222

14,984,155

35,810,965

558,798

36,369,763

As atDecember

' 31,2007

16,861,190

': 21.8/

"16,861,408

518,370

16,375

1,409,320.

1,722

. 8,776,040:

. 104,060

3i,2iO-:13,642

10,870,739

27,732,147-f-'i

2,744,933

30,477,080"

OO

1

oo



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10 RAIN.COMMODITIES LIMITED


As at As at, ' December 31, 2008 December 31, 2007

Schedule-G. INVESTMENTS

(Unquoted, Long Term - At Cost)

Other than Trade : .

Government Securities - National Savings Certificates 92 .. • . 92

Trade Investments

a) Andhra Pradesh Gas Power Corporation Limited 16,000 • 16,0001,34,000 Equity Shares of Rs. 10 each fully paid up ' ;

b) Petroleum Coke Industries Company, Kuwait 252,480 '' ', 257,73017,250,000 equity shares of KD 0.10 each, fully paid u p . • •Less: Share of loss in Associate . ' - (5,250)

252,480 . 252,480

268,572 268,572

Schedule-H. INVENTORIES ~ .

Stores and Spare Parts * 221,390 259,493

Raw Materials * ' . : , 6,117,448 2,636,782

Stock In Trade - ;

Work-in-Progress** 67,492 ' . 91,463

Finished Goods * * - , . 2,025,067 1,157,840

• • . 8,431,397 4,145,578

Raw Material includes goods in transit of . 423,512 80,321

* at cost or below

** at lower of cost and net realisable value

Schedule-l. SUNDRY DEBTORS ' '. .(Considered good, unless otherwise stated)

Secured ;

Considered Good

:-Debts Outstanding for a period exceeding six months 9,180 .; 7,099-Other debts . 40,616 27,209

U n s e c u r e d ^ . ' . . . .Considered Good :

-.Debts Outstanding for a period exceeding six months 1,362 • - 468:- Other Debts • 4,716,418 .2,043,656

Considered Doubtful-.Debts Outstanding for a period exceeding six months 14,778 • . 14,884- Other debts . 637 \ 73less: Provision for doubtful debts . : (15,415) . " (14,957)

' '. ' . ; ' 4,767,576 . „• ..,..2,078,432

'Includes Unbilled revenue of . 18,311 ; ,, 19,896; • - •

79 34lh- Annual Report 2008



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SCHEDULES TO THE CONSOLIDATED BALANCEAll amounts are in Indian Rupees Thousands, except share data and where otherwise stated

SHEET


Schedule-J. CASH AND BANK BALANCESCash and Cheques on HandWith Scheduled Banks

- Current Accounts- Fixed Deposit Accounts- Margin Money Deposit Accounts- Dividend Account

With Non-Scheduled Banks- Current Accounts- Deposit Accounts

Schedule-K. OTHER CURRENT ASSETS

Interest accrued on Investments and Deposits

Schedule-L. LOANS AND ADVANCES(Unsecured and Considered Good, unless otherwise stated)Loans to EmployeesAdvances recoverable in cash or kind or for value to be receivedBalance with Government and Public BodiesDeposits with OthersAdvance Tax and Tax Deducted at Source (Net)

Schedule-M. LIABILITIESSundry Creditors

- Dues to Micro and Small Enterprises- Dues to other than Micro and Small Enterprises

Advance from CustomersOther LiabilitiesInterest accrued but not due on loansUnclaimed Dividends*

* There are no amounts due and outstandingto be credited to the Investor Education and Protection Fund.

Schedule-N. PROVISIONSRetirement BenefitsFringe Benefit TaxProvision for DividendProvision for Dividend distribution taxProvision for Taxation (Net of advance tax)

1,010

810,480101,444172,293

8,157

663,771602,068

2,359,223

5,633

5,633

5171,211,096

173,12823,229

109,948

1,517,918

-3,862,350

83,107133,485183,764

8,157

4,270,863

479,337952

262,08844,542

-

786,919


68,120

68,1096,026

142,3615,283

452,62160,510

803,030

5,600

r,.f,00

30809,854246,642

24,390-

: 1 ,080,91 6

-2,645,690

916,610255,210

16,0585,283

3,838,851

371,1791,060

197,32033,520

820

603,899




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SCHEDULES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNTAll amounts are in Indian Rupees Thousands, except share data and where otherwise stated • ' '

Schedule-O. SALES

Calcined Petroleum Coke

Cement


Energy

Schedule-P. OTHER INCOMEInterest on deposits with Banks and Others (Gross) *Dividend Income (Gross) *Interest from Investments (Gross).*

Income from Emission Rights CertificatesLiability no'longer required Written back

Scrap salesMiscellaneous Income

* [Tax deducted at Source - Rs. 6,1 65 and

' (December 31, 2007 -Rs. 3,834)]

Schedule-Q. INCREASE/(DECREASE) IN STOCK*

Opening Stock*

Finished Goods

Work in Progress

Closing Stock

Finished Goods

Work in Progress

încludes increase/decrease in Excise duty on Stock

Schedule-R. PAYMENTS AND BENEFITS TO EMPLOYEES

Salaries, Wages and. Bonus

Contribution to Provident Fund and Other Funds

Workmen and Staff. Welfare Expenses


35,897,588

9,387,918

613,681

1,520,979

47,420,166

<*>.

39,309--

-

400,78011,51631,398

483,003

•

1,157,840

91,463

1,249,303

2,025,067

67,492

2,092,559

843,256

14,458

1,123,429

281,319

22,158

1,426,906


11,107,083

" 4,777,639

17,272

915,796

16,817,790

30,688. . 13,453

42,70559,982

8,552-

8,510

163,890

1,158,840

21,463

1,180,303

1,157,840

91,463

1,249,303

69,000

36,152

446,270

111,157

14,974

' . 572,401






SCHEDULES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNTAll amounts are in Indian Rupees Thousands, except share data and where otherwise stated .

Year ended Nine months period endedDecember 31, 2008 December 31 , 2007

Schedule-S. MANUFACTURING EXPENSESRaw Materials Consumed v

Purchase of Goods for ResalePacking Material ConsumedStores and Spare Parts ConsumedFreight InwardWater ChargesPower and Fuel . ^Repairs

- Buildings- Machinery- Others • . .

Royalty and Cess .

Less: Cement consumption for expansion project

Schedule-T. ADMINISTRATIVE, SELLING AND DISTRIBUTIONRentRates and taxesRepairs - OthersInsuranceDirector's sitting feesCommission to DirectorsRebate on power salesSelling and Distribution ExpensesCommunication ExpensesTravelling and ConveyanceLegal and Professional ChargesProvision for Doubtful Debts .Loss on Sale of Fixed Asset/Written offMiscellaneous Expenses

Schedule-U. INTEREST AND FINANCE CHARGESInterest .- on Debentures- on Term Loans- on othersAmortisation of Discount on issue of DebenturesBank and Finance chargesLoss/ (Gain) on Foreign Exchange Fluctuation

21,830,6701,612,103

284,7811,441,232

187,39125,760

1,873,309

10,3671,551,169

172,284115,884

29,104,9507,634

29,097,316

EXPENSES90,748

1,188,28417,712

141,476545

11,02061,407

1,814,60928,488

102,921110,698

45811,761

635,892

4,216,019

40,9222,398,531

1 44,56325,560

281,7371,342,942

4,234,255

8,162,147518,486133,501635,246210,072

18,431658,968

6,515267,481• 53,084

65,270

10,729,20124,001

10,705,200

34,828618,52049,00668,809

60511,550

. 45,224916,117

13,99541,816

112,100798112

81,840

1,995,320

45,7411,085,919

290,15619,170

136,574(119,160)

1,458,400




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SCHEDULES TO THE CQNSOLIDyVTEp]BALAN£E $HEET ArvJD PROFIT AND LOSS ACCOUNTAll amounts are in Indian Rupees thousands, except share data arid .where otherwise,stated ' '

Schedule-V. CONSOLIDATED NOTES TO ACe6uNTS-

I. Organization: • " ' • ' -r-r;:m?r~-

Rain Commodities Limited ('the Company') is engaged in the manufacture and's'aJe of'cement: The Companythrough its wholly owned subsidiaries - Rain CM Carbon (India) Limited (formerly Rain Industries Limited) andRain Cll Carbon LLC. is engaged in the manufacturing and trading of Calcined Petroleum Coke and generation ofPower through, waste heat recovery. . • . , . •

II. Principles of Consolidation & Significant Accounting Policies

a) Basis of preparation of Consolidated Financial Statements

The consolidated financial statements have been prepared on the basis of going concern, under the.historicalcost convention on accrual basis, to-comply in all material aspects with the applicable accounting principlesin India, the Accounting Standards covered by the accounting standard rules and the relevant provisions ofthe Companies Act, 1956..

These financial statements have been prepared in accordance with the Accounting Standard'21 - "ConsolidatedFinancial Statements" .('AS -21') and Accounting Standard 23 - "Accounting for Investments in Associates inConsolidated Financial Statements" ('AS -23').'

Investments in associates are accounted for by using the equity method whereby the investments are initiallyrecorded at cost and adjusted thereafter for the post acquisition changes based on share of profit or lossessince the acquisition.

All inter company transactions/b'alances and'unrealized surpluses and deficits 'on transactions betweengroup companies are .eliminated. • • • . .

The Companies considered in the consolidated financial statements which along with the Rain CommoditiesLimited constitute the group ("the Group") are: •

Name of the Company .V.

1. Rain Cll Carbon (India)- . Limited. (RCCIL)

2. Rain Commodities (USA) Inc.•(RCUSA) ' . • - . ,

3. Rain Cll Carbon LLC. (RCC)

4. Moonglow Company Business Inc.(Moonglow) ' . . _ .

5. Rain Cll Carbon Mauritius Limited.(RCCML)

6. Rain Global Services LLC. (RGS) .

7. Rain Global Services HK Limited(RGSHKL) ' '•

8. Rain Calciner Limited. (RCL)

9. Petroleum Coke Industries,Kuwait. (PCIC) :

Relationship

Subsidiary

Subsidiary •

Subsidiary

Subsidiary of RCCIL

Subsidiary of RCC

.Subsidiary of RCUSA.

Subsidiary of RGS

. Subsidiary

Associate *

Country of •Incorporation

India

U.S. A •'••

U.S.A "

B.V.I.

Mauritius

• U.S.A

•Hong Kong

India

Kuwait

Percentage of Voting Power

December31, 2008

- 100.00

100.00

100.00

1 00.00

100.00

' 100.00

100.00. 10.0.00

December• 31, 2007

100.00

100.00

• 100.00

1 00.00

.

11.50

.* Consequent to the change.in the management control, PCIC is no longer considered as an Associate of theGroup in the current year." ' - • • , . . .

83 34fh Annual Report 2008



e)

f)

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The ownership interest as given above has been calculated based on the effective interest of Rain; CommoditiesLimited in the various companies after considering the investments made by its subsidiaries.

The exchange rates adopted for converting 1 USD into Indian Rupees of the foreign subsidiaries with respectt o : ' . • ' • • - ;

Balance sheet items

Revenue items

December 31, 2008

48.45

43.51

'December 31, 2007

39.44

40.44

b) Use of Estimates

The preparation of the financial statements in conformity with the generally accepted accounting principlesrequires that the management makes estimates and assumptions that affect the reported amounts of assetsand liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reportedamounts of revenue and expenses during the reported period. Actual results could differ from those estimates.

c) Revenue Recognition

i) Calcined Petroleum Coke - Sales are recognized on dispatch of goods to customers. Sales are inclusiveof excise duty, as applicable. . ;

ii) Energy (Power/Steam) - Sale of energy is exclusive of electricity duty payable to the State Governmentand recognized in accordance with contract terms.

iii) Cement - Sales are recognized on despatch of goods to customers. Gross sales include excise duty andsales tax recovered and are net of trade discounts.

d) Fixed Assets and Depreciation -

Fixed assets are stated at actual cost less depreciation. The actual cost capitalized includes material cost,,freight, installation cost, duties and taxes, and other incidental expenses.

Assets under construction as at the balance sheet date are shown as Capital work in progress. Advances paidtowards acquisition of fixed assets are also included under Capital work in progress.

Depreciation on buildings and plant and machinery is computed, on straight line method at the rates specifiedin Schedule XIV of the Companies Act, 1956 or based on the remaining estimated economic useful livesdetermined by an independent valuer, whichever is higher. Software is amortized evenly over a three-yearperiod.

Depreciation on other assets is computed on straight line method at the rates specified in Schedule XIV of theCompanies Act, 1956.

Individual assets acquired for less than Rs. 5,000 are entitled to be depreciated in the year of acquisition andput to use.

All the fixed assets are assessed for any indication of impairment, at the end of each financial year. On suchindication, the impairment loss, being the.excess of carrying value over the recoverable value of the assets,is charged to the Profit and Loss Account in the respective financial years. The impairment loss recognized inthe prior years is reversed in cases where the recoverable value exceeds the carrying value, upon reassessmentin the subsequent years.

Goodwill

Goodwill (on consolidation) represents the difference between the purchase price and the book value of theassets and liabilities acquired, net off reserves.

Inventories

Inventories are valued at cost or below. Raw materials cost is computed on the basis of weighted averagecost per unit of measurement after providing for cost of obsolescence, if any. Finished goods and work in




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I RAIN COMMODITIES LIMITED

progress are valued at lower of cost or net realizable value. Cost is determined on a weighted average basisand comprises of material, labour and applicable overhead expenses. Stores and spares are valued at cost onweighted average basis, or below.

Cost of inventories with respect to the Indian subsidiary engaged in the Calcined Petroleum Coke is computedon the basis of first in first out .(FIFO) cost.

g) Employee Benefits

i) Defined contribution Plans

Contributions paid/payable under defined contribution plans are recognized in the Profit and Loss Accounteach year. Contribution plans comprises of Superannuation covered under a scheme administered andmanaged by ICICI Prudential and Provident Fund administered and managed by the Government ofIndia. The Company makes monthly contributions and has no further obligations under the plan beyondits contributions.

The Group has established separate group savings plan for all hourly and salaried employees in theUnited States of America. Employer contributions are made at the discretion of the employer.

ii) Defined Benefit Plans

The Company has a defined benefit Gratuity plan covering all its employees working with in India.Gratuity is covered under a Scheme of Life Insurance Corporation of India (LIC) and contributions inrespect of such scheme are recognized in the Profit and Loss Account. The liability as at the balancesheet date is provided for based on the actuarial valuation carried out in accordance with revised

* Accounting Standard 15 (revised 2005) on 'Employee Benefits' (AS 15') as at the end of the-year.

The Group has a defined benefit retirement plan covering all its employees in United States of America(the 'Pension Plan'). The Pension Plan covers hourly employees under which these employees are paidbased on respective years of service and age. The Group contributes to the pension plan to at least meetthe minimum requirements as required by law in the United States of America. The Group contributesto post retirement plan based on pay-as-you-go policy. The Group sponsors two defined benefitpostretirement plans that cover certain employees in United States of America. One plan provides postretirement medical and dental benefits, the other plan provides life insurance benefits. Both plans arenon contributory and neither is funded. The liability as at the balance sheet date is provided based onthe actuarial valuation carried out in accordance with the applicable Accounting Standards in theUnited States of America.

iii) Other long term employee benefits

Other long term employee benefits comprise of leave encashment which is provided for based on theactuarial valuation carried out in accordance with revised AS -15 as at the end of the year.

iv) Short term employee benefits

Short term employee benefits including accumulated compensated absences as at the Balance Sheetdate are recognized as an expense as per Group's schemes based on expected obligation on anundiscounted basis.

h) Segment Reporting

The group has considered business segment as the primary'segment for reporting. The products consideredas business segment are: .

e Carbon Products (CPC/GPC and Power)

e Cement

The above business segments have been identified based on the nature of products, risks and return,organization structure and internal-financial reporting.




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The geographical segments considered for disclosures are:

• Sales within India - represents sales made to customers located within India

• Sales outside India - represents sales made to customers located outside India,

ij Earnings Per Share (EPS)

The earnings considered in ascertaining the Group's EPS comprises the net profit after tax. The number ofshares used in computing basic EPS is the weighted average number of shares outstanding during the period.

Dilutive potential equity shares are deemed to be converted as of the beginning of the period, unless theyhave been issued at a later date. The number of shares used for computing the diluted EPS is the weighted

. average number of shares outstanding during the period after considering the dilutive potential equity shares.

j) Taxes oh Income

Current tax is determined based on the amount of tax payable in respect of taxable income for the period.Deferred tax is recognized on timing differences being the differences between the taxable incomes andaccounting income that originate in one period and are capable of reversal in one or more subsequentperiods subject to consideration of prudence. Deferred tax assets are not recognized unless there is reasonablecertainty that there will be sufficient future taxable income available to realize such asset. Deferred tax assetsand liabilities have been computed on the timing differences applying the enacted tax rates.

k) Foreign Currency Transactions

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transactions.Monetary assets and.liabilities denominated in foreign currency are restated at the prevailing year end rates.The resultant gain/loss upon such restatement along with the realized gain/loss on account of foreign currencytransactions are accounted in the Profit and Loss account.

Foreign Subsidiaries

All subsidiaries of the Company are in the nature of non-integral operations in terms of Accounting Standard11, "The effects of change in foreign currency rates". All monetary and non-monetary assets and liabilities are

. translated at the rate prevailing on the balance sheet date. All revenue and expense transactions during,theyear are reported at average rate. The resultant translation adjustment is reflected is reflected as 'ForeignCurrency Translation Reserve' and included under Reserves and Surplus Schedule.

7

I) Investments

Long term investments are stated at cost less provision for permanent diminution in the value of long terminvestments, if any. . •

III. Pursuant to.the Board of Directors approval for buy back of equity shares under section 77 A of the CompaniesAct, 1956, the Company has bought back 1,200,000 equity shares of Rs. 10 each through open market transactionsfor an aggregate amount of Rs.178,848 by utilizing the Securities Premium Account. The Capital RedemptionReserve has been created out of the current year profits for Rs. 12,000 being the nominal value of shares boughtback in terms ofsection 77AA of the Companies Act, 1956.

IV. The Company has allotted 50,63,293 equity shares of Rs. 10 each at a premium of Rs.190 consequent to conversionof equity warrants issued on November 29, 2006. The amount received against the un-exercised 1,736,707equity warrants amounting to Rs. 34,734 has been forfeited and credited to capital reserve during the year.

V. During the year ended December 31, 2008, the group has recorded write-down of inventory by Rs.686,236which has been disclosed as an Exceptional Item in the Profit & Loss Account. In accordance with the provisionsof "Accounting Standard 2" - Valuation of Inventories, inventories are measured at the lower of cost and netrealizable value. Accordingly, the group tested the recoverability of its inventories of raw petroleum coke, bycomparing estimated total production cost with estimated net realizable value. Further, the inventories of calcinedpetroleum coke purchased for trading operations were similarly tested by comparing cost with estimated netrealizable value. The "write-downs" recorded reflect the expected losses upon sale of the finished products.




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VI. On July 12, 2007, the Co-Generation facility of the Group entity has been registered with United Nations.FrameworkConvention on Climate Change CUNFCC). During the current year, UNFCCChas issued 79,535 Carbon EmissionReductions ("CERs") generated during the period from July 12, 2007 to.December 31, 2007. Further the Group is.in the process of filing the required documents with UNFCCC for issuance of further 151,933 CERs generatedduring the year ended December 31, 2008. The Group has not recognized any revenue from CERs, pendingconclusion of CER Sale Contracts with ultimate Buyers. • .

VII. Contingent liabilities and commitments :

a) During 2002, the erstwhile Rain Calcining Limited merged with the group pursuant to the scheme ofarrangement, had disputed the order of Andhra Pradesh Electricity Regulatory Commission CAPERC) inrespect of wheeling charges before the Hon'ble High Court of Andhra Pradesh. The Hon'ble High Court ofAndhra Pradesh had set aside the order of APERC. Transmission Corporation of Andhra Pradesh ('AP Transco')filed a Special Leave Petition in the Supreme Court of India against the order of the High Court. The finalverdict of Supreme Court of India is awaited. This contingent liability computed on the basis of imputed costtill December 31, 2008 is Rs; 467,100 (December 31, 2007 - Rs. 504,213) as per the terms of the said APERCOrder.

b) Others

Matters under dispute:

. Sales Tax

Excise Duty - '

Income tax

Claims against the Company not acknowledged as debts

Bank guarantees outstanding*

Customers' bills discounted under Letters of Credit


73,246

10,690

22,527

-

226,401

-


'. 52,385

' 8,101

51,212

22,968

317,611

208,238

[*includes bank guarantees given to AP Transco - Rs. 146,958 (December 31, 2007- Rs.146,958)]

VIM.Estimated amount of contracts remaining to be executed on capital accounts not provided for as on -December31, 2008 - Rs. 121,725 (December 31, 2007 - Rs. 247,220).

•s

IX. The group has entered into various operating lease agreements for assets comprising of storage facilities and anamount of Rs. 90,748 (December 31, 2007 - Rs. 34,830) paid under such agreements have been charged torevenue. These agreements are cancellable in nature and there is no restriction in respect of such leases.

•X. The group purchases derivative contracts to hedge the foreign currency risks on forecasted cash flows where thecounter party is a Bank. The group purchases derivative contracts to mitigate the risk of changes in foreignexchange rates on export sales realization, import raw material payments and loan repayments. The marketliability of Rs. 264,125 as on December 31, 2008 (December 31, 2007 -. Rs. 193,883) has been recognized in the

• profit and loss account and is included in Current Liabilities. • :

Further the group has also entered into derivative contracts with respect to natural gas price risks covering 31,500MMBTU as on December 31, 2008 (December 31, 2007 - 2,115,000 MMBTU). The group has provided themarked to market liability against such contracts amounting to Rs. 1,163 as on December 31, 2008 (December31, 2007- Rs. 15,900).






XI. Earnings per Share (EPS)

a. Profit/ (Loss) after Tax before Extraordinary item

b. Extraordinary Item (net)

c. Profit after Taxation

Basic

d. Weighted average number of equity shares of Rs 10 eachoutstanding during the year (Nos.)

Dilution

e. Equity Shares to be allotted againstEquity Share Warrants (Nos.)

f. Weighted average number of equity shares of Rs 1 0 each(Outstanding during the year (Nos.)

Earnings per Share

g. Basic before extraordinary item - [a]/[d] - (Rs.)

h. Basic after extraordinary item - [c]/[d] - (Rs.)

i. Diluted before extraordinary item - [a]/[f] - (Rs.)

j. Diluted after extraordinary item - [c]/[f] - (Rs.)


Amount

4,037,871

•

4,037,871

70,411,284

.

70,411,284

57.35

57.35

57.35

57.35


Amount

770,409

(316,380)

454,029

66,971,286

6,800,000

,73,771,286

11.50

6.78

10.45

6.15

XII. Taxation

Deferred Tax:

Deferred Tax Liability- on account of depreciation

Deferred Tax Asset

-on account of unabsorbed losses

-on account of other fiscal differences

Total

Deferred Tax Liability (Net)


2,524,333

64,785

18,289

83,074

2,441,259


1,835,220

153,810

152,784

306,594

1,528,626

XIII.Related Party Transactions

(a) Names of related parties and description of relationship:

(i)

(ii)

Enterprise where key managerial personnel alongwith their relatives exercise significant influence

Key Management Personnel

'

a)

a)

b)

c).

Sujala Investments Private LimitedCSujala')

Mr. N. Radha Krishna ReddyChairman.

Mr. N. Jagan Mohan ReddyManaging Director

Mr. N. Sujith Kumar ReddyExecutive Director.




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b) Transactions with related parties

Year Ended December 31, 2008


Loan repaid - Sujala



Enterprises where Key ManagerialPersonnel along with their relatives

exercise significant influence

120,000

2,458

-

KeyManagement

Personnel

-

-

12,245

Balance

-

-

4,200

Nine Months period ended December 31, 2007


Loan taken - Sujala



Enterprises where Key ManagerialPersonnel along with their relatives

exercise significant influence

120,000

6,217

-

KeyManagement

Personnel

- .

-

6,763

Balance

120,000

- ' -

3,500

XIV. Employee Benefits

a) Defined benefit plans

The following table sets forth the status of the Gratuity Plan of the Indian entities and Pension Plan of the USentity of the Group and the amounts recognized in the Balance Sheet and Profit and Loss Account.

Amounts recognized in the Balance Sheet are as follows:

Present value of funded obligation

Less: Fair Value of Plan Assets

Total


261,387

152,974

108,413


204,299

162,789

41,510

Amounts recognized in "Contribution to Provident and other funds" under Schedule R are follows:

Current Service Cost

Interest cost '

Expected Return on plan assets

Net actuarial loss/(gain) recognized during the year

Total


8,609

13,872

(12,956)

50,788

60,313

Nine months period endedDecember 3 1,2007

17,507

40,864

(839)

4,629

62,161






Reconciliation of opening and closing balances of the present value of the obligations:

Opening defined benefit obligation

Current service cost

Interest Cost

Actuarial loss/(gain)

Benefit Paid

Exchange differences

Closing Defined Benefit Obligation


204,299

8,609

13,872

6,840

(10,562)

38,329

261,387


112,393

17,507

40,864

4,563

(29,207)

58,179

204,299

Reconciliation of opening and closing balances of the fair value of plan assets:

Opening fair value of plan Assets

Expected Return on Plan Assets

Actuarial (loss)/gain

Contribution by employer

Benefits Paid

Exchange Differences

Closing Fair value of Plan Assets

Actual Return on Plan Assets


162,789

12,956

. (43,948)

3,371

(10,562)

28,367

. 152,974

(30,991)


177,487

839

(66)

13,736

(29,207)

-

162,789

773

Major Category of plan assets as a percentage to fair value of plan assets:

'

Insurer Managed Funds

Equity Securities

Debt Securities


10.78%

53.53%

35.69%


8.49%

54.91%

36.60%

Principal Actuarial assumptions used:

Discount rates

Expected rate of return on plan assets

Expected salary increase rates


5.30% to 6.00%

7.50% to 8.00%

10% for first yearand 7 % thereafter


6.00% to 9. 15%

7.50% to 8.00%

10% for first 2 yearsand 7% thereafter

The estimates of future salary increase considered in the actuarial valuation takes into account factors likeinflation, seniority, promotion and other relevant factors such as supply and demand in the employmentmarket. The expected return on plan assets is based on actuarial expectation of the average long term rate ofreturn expected on investments of the Funds during the estimated term of the obligations. The principalactuarial assumptions used for the computation of defined plan are also used for the computation ofcompensated absence of long term benefit.




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XV. Balances with Non - Scheduled Banks

Name of the Bank

JP Morgan Chase Bank

ICICI Bank, London

ICICI Bank, USA '

Bank of America N.A, USA

Citibank, DOA, London

Citibank N.A, London

Citibank N.A, USA

Chase Bank, USA

December 31, 2008

Balance

' • • •

7,268

558,337

54,735

1,911

32

' '

643,556

MaximumOutstanding

during the year

7,268

750,111

203,860

359,163 , '

32

-77

1,093,996

513,059

December 31, 2007

Balance

-

'53,003

.-

8,944

25

. ' . 771

451,011

71

MaximumOutstanding

during the period

-

555,99::

15,330

110

1,164

1,067,410

181,510

XVf.Segmental Reporting

I. Business Segment

Revenue

External Sales(net of excise duty)

Inter- Segment Sales

Total SalesLess Eliminations

Total Revenue

Result

Segment Result

Operating Profit

Interest Expenses (net)Unallocated income

Exceptional item -inventory write off

Unallocated CorporateExpenses'

Share of Loss in Associate

Profit Before Taxation

Taxation

- Current

- Deferred

- Fringe 'Benefit Tax

Net Profit

Year ended December 31, 2008

CarbonProducts

37,462,411

304,841

37,767,252304,841

37,462,411

9,016,376

•

-

-

-

'

-

-

-

-

Cement

8,145,843

3,639

8,149,482

3,639

8,145,843

1,634,667

-

.-

-

-

-

-

.

. -

Total

45,608,254

308,48045,916,734

308,480

45,608,254

10,651,043

10,651,043

4,234,255

(483,003)

686,236

.-

6,213,555

1,597,319

571,423

6,942

4,037,871

Nine Months period endedDecember 31, 2007

CarbonProducts

11,803,480

200,87012,004,350

200,870

11,803,480

768,674

-

-

-

-

-

.

•

Cement

4,124,530

1,531

.4,126,061

, 1,531

' 4,124,530

1,245,011

' " -

-

-

'

-

-

•

'

_

Total

15,928,010'202,401

16,130,411

202,401

15,928,010

2,013,685

2,013,6851,458,400

(300,464)

-

316,380

5,250

534,119

141,720

(65,380)

3,750

454,029




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' ... - - " -'

' Segment Assets

Unallocated , •" Corporate Assets

Total Assets

Segment Liabilities

UnallocatedCorporate Liabilities

Total Liabilities

Capital Expenditure

Depreciation

Year ended December 31, 2008

CarbonProducts

46,674,439

_

46,674,439

37,463,112

_

37,463,112

672,772

835,370

Cement

6,935,695

_

6,935,695

5,108,956

_

. 5,108,956

1,065,072

224,856

Total

53,610,134

109,948

53,720,082

42,572,068

2,749,768

45,321,836

1,737,845

1,060,226

Nine Months period endedDecember 31 , 2007

CarbonProducts

32,610,292

_

32,610,292

29,440,851

_

29,440,851

414,983

472,646

Cement

6,030,010

__

6,030,010

4,984,337

_

49,84,337

1,755,39.0

101,184

Total

38,640,302

218,910

38,859,212

34,425,188

1,528,626

35,953,814

2,170,373

573,830

II. Geographic Segment

India

Outside India

Revenue fromexternal customers

SegmentAssets

December 31, 2008

12,103,420

33,504,834

45,608,254

16,313,135

37,406,947

53,720,082

Revenue fromexternal customers

SegmentAssets

December 31, 2007

5,376,470-

10,551,540

15,928,010

27,178,474

11,680,734

38,859,208

XVII. Comparative figures of the previous year where necessary, have been regrouped to conform to those of thecurrent period. The'figures for the current year are for a period of twelve months and those of the previousperiod are for nine months, hence are not comparable.




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ELECTRONIC CLEARING SERVICE'" MANDATE FORM FOR PAYMENT

CLEARING)DIVIDEND

To, • 'Karvy Computershare Private Limited • •(Unit: Rain Commodities Limited)Plot No.1 7 to 24, Vittal Rao Nagar,Madhapur, Hyderabad-500081.. '

Shareholder's authorisation to receive dividends through Electronic Credit Clearing Mechanism.

Registered Folio No. :

Name of the first/sole shareholder

Bank Name

Branch Address &Telephone'No. of Branch

Bank Account Number(As appearing on the Cheque Books)

9 digit code number of the Bank and Branchappearing on the MICR cheque issued by the Bank.(Please attach a1 blank cancelled cheque, or aphotocopy (xerox copy) of a cheque issued to youby your Bank, for verification of the above particulars)

Account Type

(Please tick the option)

Bank Account Ledger Folio No. (If any)

Effective date of this mandate

ECS Ref. No. :(for Office use only)

Q Savings

Q Current .

Q Cash Credit

I hereby, declare that the particulars given above are correct and complete. If the payment transaction is delayed ornot effected at all for any reasons, including but not limited to incomplete or incorrect information, I will not holdMessrs. Rain Commodities Limited responsible. I agree to discharge the responsibility expected of me as a participantunder the scheme.

I, further undertake to inform the Company of any subsequent change(s) in the above particulars.

Place : Name of First Holder :

Date: Signature of First Holder :_

Note:

1. Please fill in the information in CAPITAL LETTERS in ENGLISH ONLY. ,

2. In case of shareholders holding the equity shares in demat form, the shareholders are requested to providedetails to their respective Depository participants. Shareholders are also requested to note that changes, if any,intimated by the Demat Account holders directly to the Company will not be considered.

93



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fRlUIll RAIN COMMODITIES LIMITEDRegd.Office: Rain Center, 34, Srinagar Colony, Hyderabad-500 073, Andhra Pradesh

ERQXiLEQRMRegd. Folio No. .

No. of Shares held

* DP ID:

* Client ID:

I/We ! •. .: :

of ;......... being a, member/members of

RAIN COMMODITIES LIMITED hereby appoint •.' of

or failmg him

of..... '. as my/our proxy to attend and vote for me/us and onmy/our behalf at the 34th Annual General Meeting of the Members of the Company to be held on Wednesday,the 17th day-of June, 2009 at 11:00 A.M. at KLN Prasad Auditorium, Federation of Andhra Pradesh Chambersof Commerce & Industry (FAPCCI), Red Hills, Hyderabad-500 004, Andhra Pradesh. .

Signed this day of. 2009.

I-

Note: (1) The Proxy need not be a member of the company.

(2) The Proxy in order to be effective should be duly stamped, completed and signed and must bedeposited at the Registered Office of the Company not less than 48 hours before the time for holdingthe aforesaid meeting.

Applicable for investors holding shares in Electronic Form.

RAIN COMMODITIES LIMITEDRegd.Office: Rain Center, 34, Srinagar Colony, Hyderabad-500 073, Andhra Pradesh

AIIENDANCLSL1P34th Annual General Meeting, 17th June, 2009 at 11:00 A.M.

Regd. Folio No.

No. of Shares held

* DP ID:

* Client ID:

Name of the Shareholder

Name of Proxy

I/We hereby record my / our presence at the 34th Annual General'Meeting of the members of the Company heldon Wednesday/the 17th day of June, 2009 at 11:00 A.'M. at KLN Prasad Auditorium, Federation of AndhraPradesh Chambers of Commerce & Industry' (FAPCCI), Red Hills, Hyderabad-500 004, Andhra Pradesh.

SIGNATURE OF THE MEMBER OR THE PROXY ATTENDING THE MEETING

If Member, Please sign here If Proxy, Please sign here

Note: This form should be signed and handed over at the Meeting Venue.

* Applicable for investors holding shares in electronic form.





BOOK - POSTPRINTED MATTER

Mailed by KarvyIf undelivered, please return to:

RAIN COMMODITIES LIMITEDRegd. Office: Rain Center, 34, Srinagar Colony,Hyderabad - 500 073, Andhra Pradesh, India.



Rain Commodities Ltd-08

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