The Members,
 
 The Directors have pleasure in presenting the Fifth Annual Report on
 the business and operations of the Company and the Audited Financial
 accounts for the year ended 31 March, 2011.
 
 FINANCIAL HIGHLIGHTS
 
                                                  In INR million
 
                              Standalone             Consolidated
 
                            For the financial 
                                year ended        For the financial
                                                     year ended
 
                            31 March, 
                                2011   31 March, 
                                           2010   31 March, 
                                                      2011   31 March,
                                                                 2010
 
 Total Income                    951      1,634    104,067     20,307
 
 Total Expenditure             3,077      2,367     35,167     10,143
 
 profit/(loss) before tax    (2,126)      (734)    68,900     10,163
 
 Taxes                             -        (44)     5,556       (348)
 
 profit/(loss) after tax     (2,126)      (689)    63,344     10,511
 
 The consolidated statements provide the results of Cairn India Limited
 together with those of its subsidiaries for the financial year ended
 31 March, 2011.
 
 DIVIDEND
 
 In view of inadequacy of profits in Cairn India Limited, your
 Directors regret their inability to recommend any dividend.
 
 CHANGES IN CAPITAL STRUCTURE
 
 During the financial year under review, 4,942,969 equity shares of INR
 10/- each were allotted on exercise of Employee Stock Options by the
 employees of the Company or of its subsidiaries.  Accordingly, the
 issued and paid up capital of the Company has increased to INR
 19,019,171,010 divided into 1,901,917,101 equity shares of INR 10/-
 each.
 
 Subsequent to the close of the financial year, the Company allotted
 213,131 equity shares of INR 10/- each on exercise of Stock Options by
 the employees.  Accordingly, the issued and paid up capital of the
 Company has increased to INR 19,021,302,320 divided into 1,902,130,232
 Equity shares of INR 10/- each.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 Your Company is also presenting the audited consolidated financial
 statements prepared in accordance with the Accounting Standard 21
 issued by the Institute of Chartered Accountants of India. Information
 in aggregate for each subsidiary in respect of capital reserves, total
 assets, liabilities, investments, turnover, etc. is disclosed
 separately and forms part of the annual report.
 
 OPERATIONS
 
 A detailed review of operations has been included in the Management
 Discussion and Analysis Report, which forms a part of this Annual
 Report.
 
 EMPLOYEE STOCK OPTION SCHEMES
 
 Your Company has established share incentive schemes viz., Cairn India
 Senior Management Plan (CISMP), Cairn India Performance Option Plan
 (CIPOP) and Cairn India Employee Stock Option Plan (CIESOP) pursuant to
 which options to acquire shares have been granted to select employees
 and Directors of the Company and its subsidiaries. The Company also has
 cash awards option plan (phantom stock options) for expatriate
 employees of the Company and its subsidiaries.
 
 During the year, stock/cash options have been granted to the executive
 Directors and employees of the Company or of its subsidiaries. On
 exercise of the options so granted, the paid-up equity share capital of
 the Company will increase in terms of the Stock Option Plans mentioned
 above.  The details of stock options granted by the Company are
 disclosed in compliance with Clause 12 of the Securities and Exchange
 Board of India (Employee Stock Option Scheme and Employee Stock
 Purchase Scheme) Guidelines, 1999 and set out in Annexure I to this
 Report.
 
 During the period under review, 4,942,969 equity shares of INR 10/-
 each were allotted pursuant to the exercise of stock options.
 
 SUBSIDIARY COMPANIES
 
 As on 31 March, 2011, the Company had 30 subsidiaries including
 indirect subsidiaries. All these companies are beneficially owned 100%
 by Cairn India Limited. During the year under review, Cairn Energy
 Developments Pte. Ltd., subsidiary Company in Singapore was voluntarily
 dissolved w.e.f. 8 March, 2011.
 
 The subsidiaries have their own Boards of Directors having the rights
 and obligations to manage such companies in the best interest of such
 Companies. The Company has its representatives on the board of
 subsidiary Companies and monitors the performance of such Companies
 regularly.
 
 The Ministry of Corporate Affairs, vide its circular nos. 2/2011 &
 3/2011 dated 8 February, 2011 & 21 February, 2011 respectively had
 granted general exemption to holding companies from attaching the fi
 nancial statements of its subsidiaries to the company''s Annual Report.
 In accordance with the said circulars, the Balance Sheet, profit &
 Loss Account and other documents of the subsidiary companies are not
 being attached with the Balance Sheet of the Company. The Company will
 make available the Annual Accounts of the subsidiary companies to any
 member of the Company who may be interested in obtaining the same. The
 annual accounts of the subsidiary companies will also be kept open for
 inspection at the Registered office of the Company and respective
 subsidiary Companies. The consolidated financial statements presented
 by the Company include the financial results of its subsidiary
 companies.
 
 SCHEME OF ARRANGEMENT
 
 In order to simplify and consolidate the multi layered structure
 comprising foreign subsidiaries, your Company had proposed a scheme of
 arrangement between Cairn India Limited, Cairn Energy India Pty
 Limited, Cairn Energy India West B.V., Cairn Energy Cambay B.V., Cairn
 Energy Gujarat B.V. and their Respective shareholders and creditors
 (the ''Scheme'').  The members of the Company had approved the scheme
 with overwhelming majority in the Court Convened meeting held on 18
 February, 2010.
 
 The Hon''ble High Courts of Madras and Bombay sanctioned the Scheme in
 April, 2010 and June, 2010 respectively.  The Scheme is now subject to
 receipt of certain contractual and regulatory approvals. The Scheme
 when approved is proposed to be effective from 1 January, 2010.
 
 OPEN OFFER TO SHAREHOLDERS BY VEDANTA RESOUCES PLC
 
 During the year under review, Cairn Energy PLC and Cairn UK Holdings
 Limited, promoters of the Company, agreed to sell a substantial part of
 their equity stake in the Company to Vedanta Resources PLC and persons
 acting in concert (''Vedanta'') by way of a share purchase deed dated 15
 August, 2010. In terms of the provisions of SEBI (Substantial
 Acquisition of Shares and Takeovers) Regulations, 1997, Vedanta issued
 a Public Announcement on 17 August, 2010 to make an open offer to the
 equity shareholders of the Company.  Vedanta also filed the draft
 Letter of Offer with SEBI, which was received by them on 31 August,
 2010. After the receipt of SEBI''s nod, the offer opened on 11 April,
 2011 and closed on 30 April 2011. Vedanta acquired 155,033,172 number
 of equity shares under the open offer. Vedanta also acquired
 200,000,000 equity shares of the Company from Petronas International
 Corporation Ltd. Subsequent to these acquisitions, Vedanta now holds
 18.66% of the equity capital of the Company.
 
 The deal for sale of shares by Cairn Energy PLC and Cairn UK Holdings
 Limited, promoters, to Vedanta is pending for regulatory approvals.
 
 DIRECTORS
 
 Mr. Philip Tracy ceased to be an alternate director with effect from 17
 August, 2010. He was again appointed as an alternate Director to Ms.
 Jann Brown on 10 February, 2011 and ceased to be so on 23 May 2011.
 
 In accordance with the Articles of Association of the Company, Mr.
 Naresh Chandra and Mr. Edward T Story, shall retire by rotation as
 Directors at the ensuing Annual General Meeting and being eligible,
 offer themselves for re- appointment.
 
 A brief profile of the above-named directors forms part of the
 Corporate Governance report.
 
 CORPORATE GOVERNANCE
 
 The Corporate Governance and Management Discussion and Analysis reports
 form an integral part of this report and are set out as separate
 sections to this annual report. The Certificate of S.  R. Batliboi &
 Co., chartered accountants, the statutory auditors of the Company
 certifying compliance with the conditions of corporate governance as
 stipulated in clause 49 of the listing agreement with stock exchanges
 is annexed with the report on corporate governance.
 
 AUDITORS
 
 M/s. S. R. Batliboi & Co., chartered accountants, auditors of the
 Company, retire at the conclusion of the ensuing annual general meeting
 and being eligible, offer themselves for re-appointment. The audit
 committee in its meeting held on 25 May, 2011 has also recommended the
 re-appointment of M/s. S. R. Batliboi & Co., as Statutory Auditors of
 the Company. Your directors also recommend their appointment.
 
 FIXED DEPOSITS
 
 The Company has not invited any deposits from the public under Section
 58A of the Companies Act, 1956.
 
 HUMAN RESOURCES
 
 Company''s industrial relations continued to be harmonious during the
 period under review.
 
 PARTICULARS OF EMPLOYEES
 
 Particulars of employees required to be furnished under Section 217(2A)
 of the Companies Act, 1956 (''the Act'') form part of this report.
 However, as per the provisions of Section 219(1)(b)(iv) of the Act, the
 report and accounts are being sent to the shareholders of the Company
 excluding the particulars of employees under Section 217(2A) of the
 Act. Any shareholder interested in obtaining a copy of the said
 statement may write to the Company Secretary for the same.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Information on Conservation of Energy Technology Absorption and Foreign
 Exchange Earnings and Outgo is given in Annexure II to this report.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
 confirm that:
 
 (i) In the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures
 
 (ii) Appropriate accounting policies have been selected and applied
 consistently and have made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at 31 March 2011 and of the profit of the Company
 for the year ended 31 March 2011
 
 (iii) Proper and sufficient care has been taken for maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities
 
 (iv) The annual accounts have been prepared on a going concern basis
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 At Cairn, Corporate Social Responsibility (CSR) emcompasses much more
 than social outreach programs and is an integral part of the way the
 Company conducts its business. Detailed information on the initiatives
 of the Company towards CSR activities is provided in the Corporate
 Social Responsibility section of the Annual Report.
 
 LISTING
 
 The Company has paid the annual listing fee for the year 2011-12 to
 Bombay Stock Exchange Limited and National Stock Exchange Limited of
 India.
 
 APPRECIATION
 
 Your Directors wish to place on record their sincere appreciation of
 the concerned efforts and dedicated service of all employees, which
 contributed to the continuous growth and consequent performance of the
 Company. Your Directors wish to place on record their gratitude for the
 valuable assistance and co-operation extended to the Company by the
 Central Government, State Governments, Joint Venture Partners, Banks,
 Institutions, Investors and Customers.
 
 For and on behalf of the Board of Directors
 
 Sir William B.B. Gammell
 
 Chairman
 
 Place Gurgaon
 
 Date 25 May, 2011