The Directors have pleasure in presenting the Sixth Annual Report on
 the business and operations of the Company and the Audited Financial
 accounts for the year ended 31 March, 2012.
 
 FINANCIAL HIGHLIGHTS                                  In INR million
 
                               Standalone             Consolidated
 
                              For the financial
                              year ended           For the financial 
                                                   year ended
                             31 March,
                             2012      31 March,
                                       2011      31 March,
                                                 2012        31 March,
                                                             2011
 
 Total Income                  2,489        951    127,987     104,067
 
 Total Expenditure             2,014      3,077     43,752      35,167
 
 Profit/(loss) before tax        475     (2,126)    84,235      68,900
 
 Taxes                            35          -      4,857       5,556
 
 Profit/(loss) after tax         440     (2,126)    79,378      63,344
 
 The consolidated statements provide the results of Cairn India Limited
 together with those of its subsidiaries for the financial year ended 31
 March, 2012.
 
 DIVIDEND
 
 In view of inadeguacy 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, 5,479,007 eguity shares of INR
 10/- each were allotted on exercise of Employee Stock Options by the
 employees of the Company and its subsidiaries.  Accordingly, the issued
 and paid up capital of the Company has increased to INR 19,073,961,080
 divided into 1,907,396,108 eguity shares of INR 10/- each.
 
 Subseguent to the close of the financial year, the Company allotted
 79,588 eguity 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 19,074,756,960 divided into 1,907,475,696
 Eguity shares of INR 10/- each.
 
 REDEMPTION OF DEBENTURES
 
 During the year under review, the Company has redeemed 10,000 Unsecured
 Redeemable Non-convertible Series C Debentures (NCDs) having face
 value aggregating to INR 100 crores. NCDs issued by your Company have a
 credit rating of CARE AAA.
 
 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 & PROJECTS
 
 A detailed review of operations and projects 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 acguire 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 financial year, stock options have been granted to the
 employees of the Company and its subsidiaries under CIPOP & CIESOP
 schemes. On exercise of the options so granted, the paid-up eguity
 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 set out in Annexure I to this Report in compliance with
 Clause 12 of the Securities and Exchange Board of India (Employee Stock
 Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
 
 During the year under review, 5,479,007 eguity shares of INR 10 each
 were alloted pursuant to the exercise of stock options.
 
 SUBSIDIARY COMPANIES
 
 As on 31 March, 2012, the Company had 30 subsidiaries including
 indirect subsidiaries. All these companies are 100% beneficially owned
 by Cairn India Limited. The Company has its representatives on the
 boards of subsidiary companies and monitors the performance of such
 companies regularly.
 
 The Ministry of Corporate Affairs, vide its circular no. 2/2011 dated 8
 February, 2011, had granted exemption to holding companies from
 attaching the financial statements of its subsidiaries to the company''s
 Annual Report. In accordance with the said circular, 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. Further, the annual
 acounts of the subsidiaries are also available on the website of the
 Company.  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 susidiaries, 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 contractual & regulatory approvals and the same are expected
 shortly. The Scheme when approved is proposed to be effective from 1
 January, 2010.
 
 COMPLETION OF CAIRN VEDANTA DEAL
 
 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 acquired 155,033,172 equity
 shares under an open offer made to the shareholders of the Company in
 April, 2011. It subsequently acquired 200,000,000 equity shares of the
 Company from Petronas International Corporation Ltd.
 
 Pursuant to the conditions imposed by the Government of India, the
 Company along with its subsidiary Companies viz., Cairn Energy India
 Pty. Ltd. and Cairn Energy Hydrocarbons Limited, entered into an
 agreement with Oil and Natural Gas Corporation (ONGC) for acceptance of
 royalty as cost recoverable and withdrawal of the arbitration
 pertaining to cess in respect of Block RJ-0N-90/1. Subsequently, the
 cess arbitration was withdrawn effective 30 November, 2011. Post
 fulfillment of conditions imposed by the Government of India, shares
 aggregating 30% of the issued share capital of the Company were
 transferred by Cairn UK Holdings Ltd. to Vedanta Group on 8 December,
 2011. The shareholding of Vedanta Group, i.e. Twin Star Mauritius
 Holdings Limited, Sesa Goa Ltd. and Sesa Resources Ltd.  now aggregates
 59% of the issued capital.  These Vedanta Group Companies now
 constitute the Promoter Group of the Company.
 
 DIRECTORS
 
 During the period under review, following changes were made in the
 composition of the Board:
 
 - Mr. Rahul Dhir has been re-appointed as Managing Director and Chief
 Executive Officer of the Company for a period of 5 years commencing
 from 22 August, 2011.
 
 - Mr. Malcolm Shaw Thoms resigned as non-executive Director with
 effect from 14 June, 2011.
 
 - Mr. Rick Bott resigned as Executive Director and Chief Operating
 Officer with effect from 15 June, 2011.
 
 - Mr. Indrajit Banerjee resigned as Executive Director and Chief
 Financial Officer with effect from 23 August, 2011.
 
 - Mr. Mike Watts was appointed as an alternate Director to Ms. Jann
 Brown with effect from 26 September, 2011 and later ceased to be an
 alternate Director from 20 October, 2011.
 
 - Sir Bill Gammell and Ms. Jann Brown resigned as non- executive
 Directors with effect from 8 December, 2011.
 
 - Mr. Navin Agarwal and Mr. Tarun Jain were appointed as additional
 Directors of the Company with effect from 16 December, 2011. Mr. Navin
 Agarwal was also appointed as the Chairman of the Company on the said
 date.
 
 - Ms. Priya Agarwal was appointed as additional Director of the
 Company effective 2 January, 2012.
 
 Pursuant to the provisions of Section 260 of the Companies Act, 1956,
 Mr.  Navin Agarwal, Mr. Tarun Jain and Ms.  Priya Agarwal, hold office
 up to this Annual General Meeting. The Company has received notices
 from members of the Company sponsoring their candidature as Directors
 of the Company.  They are proposed to be appointed as non-rotational
 Directors.
 
 In accordance with the Articles of Association of the Company, Dr.
 Omkar Goswami and Mr. Aman Mehta, shall retire by rotation as Directors
 at the ensuing Annual General Meeting and are eligible for
 re-appointment.
 
 A brief profile of the above-named Directors seeking appointment/re-
 appointment forms part of the Corporate Governance report.
 
 CORPORATE GOVERNANCE
 
 Your company strives to ensure that best Corporate Governance practices
 are identified, adopted and consistently followed. Your Company
 believes that good governance is the basis for sustainable growth of
 the business and for enhancement of stakeholder value. 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 & AUDITORS'' REPORT
 
 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 at its meeting held on 20 April, 2012 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.
 
 Notes to the accounts, as referred to in the Auditors'' Report, are self
 explanatory and therefore do not require further comments and
 explanation.
 
 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, 2012 and of the profit of the Company
 for the year ended 31 March, 2012;
 
 (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) encompasses 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 elsewhere in the
 Annual Report.
 
 SHARE TRANSFER SYSTEM AND LISTING OF SHARES
 
 Details pertaining to share transfers and listing of shares are given
 in the Corporate Governance Report which forms part of the Annual
 Report. The Company has paid the annual listing fee for the year
 2012-2013 to Bombay Stock Exchange Limited and National Stock Exchange
 of India Limited.
 
 APPRECIATION
 
 Your Directors wish to place on record their sincere appreciation of
 the efforts and dedicated service of all employees, which contributed
 to the continous growth and conseguent 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
 
 Navin Agarwal
 
 Chairman
 
 Place; Gurgaon
 
 Date; 20 April, 2012