1.  NATURE OF OPERATIONS
 
 Cairn India Limited (''the Company'') was incorporated in India on
 August 21, 2006. The equity shares of the Company are listed in India
 on the Bombay stock exchange and the National stock exchange.
 
 The Company is primarily engaged in the business of surveying,
 prospecting, drilling, exploring, acquiring, developing, producing,
 maintaining, refining, storing, trading, supplying, transporting,
 marketing, distributing, importing, exporting and generally dealing in
 minerals, oils, petroleum, gas and related by-products and other
 activities incidental to the above. As part of its business activities,
 the Company also holds interests in its subsidiary companies which have
 been granted rights to explore and develop oil exploration blocks in
 the Indian sub-continent.
 
 The Company is participant in various Oil and Gas blocks/fields, which
 are in the nature of jointly controlled assets, granted by the
 Government of India through Production Sharing Contracts (''PSC'')
 entered into between the Company and Government of India and other
 venture partners.  The Company has interest in the following Oil & Gas
 blocks / fields, which are presently under exploration phase-
 
 2.  BASIS OF PREPARATION
 
 The financial statements have been prepared to comply in all material
 respects with the accounting principles generally accepted in India,
 including mandatory Accounting Standards notified under the Companies
 (Accounting Standard) Rules, 2006 (as amended) under the historical
 cost convention and on an accrual basis. The accounting policies, in
 all material respects, have been consistently applied by the Company
 and are consistent with those used in the previous year except for
 changes in the presentation and disclosures of the financial statements
 as described in note no. 41 below.
 
 (a) Terms/ rights attached to equity shares
 
 The Company has only one class of equity shares having par value of INR
 10 per share. Each holder of equity shares is entitled to one vote per
 share. The dividend, if any, proposed by the Board of Directors will be
 subject to the approval of the shareholders in the ensuing Annual
 General Meeting.
 
 In the event of liquidation of the Company, the holders of equity
 shares will be entitled to receive assets of the Company remaining
 after settlement of all liabilities. The distribution will be in
 proportion to the number of equity shares held by the shareholders.
 
 a.  Series A debentures are redeemable at par after 21 months from date
 of allotment viz. 12 October 2010. Series B debentures are redeemable
 at par after 24 months from date of allotment viz. 12 October 2010.
 Series C debentures were redeemable at par after 27 months from date of
 allotment viz. 12 October 2010 on which a coupon rate of 8.50 % was
 applicable for the first 12 months and thereafter a market determined
 floating rate subject to a minimum of 8.50 %. The Company during the
 current year bought back the debentures issued under Series C, after
 their offer of buy back was accepted by the debenture holders.
 
 b.  The debenture holders have a negative lien on the assets of the
 Company. The Company had the option to prepay the debentures issued
 under series A and B at the end of 12 months from the date of issue.
 
 a.  The Company has made equity investments in CIG Mauritius Holding
 Private Limited fCMHPL'') mainly for funding the expenditure pertaining
 to block SL 2007-0-001 held by Cairn Lanka Private Limited (a wholly
 owned subsidiary of CMHPL). As the block is presently under exploration
 phase, no diminution in value of the said investments exists at the
 balance sheet date.
 
 b.  Cairn India Holdings Limited, U.K. has redeemed its preference
 shares during the year at par.
 
 The Company has a defined benefit gratuity plan for its employees.
 Under the gratuity plan, every employee who has completed atleast five
 years of service gets a gratuity on departure @ 15 days of last drawn
 salary for each completed year of service. The gratuity plan of the
 Company is an unfunded scheme.
 
 The following tables summarize the components of net benefit expense
 recognised in the statement of profit and loss and the amounts
 recognised in the balance sheet for the gratuity plans.
 
 CISMP plan
 
 (A) 6,714,233 options are to be vested in the following manner-
 
 - 1/3rd of the options will vest on the day following the date on which
 the equity shares have been admitted to listing on the Stock Exchanges
 (''admission date''). Listing date was 9 Jan 2007.
 
 - 1/3rd of the options will vest 18 months after the admission date.
 
 - 1/3rd of the options will vest on achieving 30 days'' consecutive
 production of over 150,000 bopd from the Rajasthan Block.
 
 (B) 1,584,480 options are to be vested in the following manner-
 
 - 1/2 of the options will vest on the day following the date on which
 the equity shares have been admitted to listing on the Stock Exchanges.
 
 - 1/4th of the options will vest on the date on which all major
 equipment for the start-up of the Mangala field is delivered to site.
 
 - 1/4th of the options will vest on achieving 100,000 bopd from the
 Mangala Field.
 
 CIPOP plan (including phantom options)
 
 Options will vest (i.e., become exercisable) at the end of a
 performance period which has been set by the remuneration
 committee at the time of grant (although such period will not be less
 than three years). However, the percentage of an option which vests on
 this date will be determined by the extent to which pre-determined
 performance conditions have been satisfied. Phantom options are
 exercisable proportionate to the period of service rendered by the
 employee subject to completion of one year.
 
 CIESOP plan
 
 There are no specific vesting conditions under Cl ESOP plan other than
 completion of the minimum service period.
 
 Subsequent to change in control of the Company as stated in note no 37,
 the remuneration committee approved immediate vesting of all the
 outstanding options under CISMP plan and prorata vesting upto 8
 December 2011 of outstanding options under CIPOP plan as per the
 provisions of the scheme. This does not have any material impact on
 these financial statements.
 
 Volatility is the measure of the amount by which the price has
 fluctuated or is expected to fluctuate during the period. The measure
 of volatility used in Black-Scholes option-pricing model is the
 annualized standard deviation of the continuously compounded rates of
 return on the stock over a period of time. Time to maturity /expected
 life of options is the period for which the Cairn India Group expects
 the options to be live. Time to maturity has been calculated as an
 average of the minimum and maximum life of the options.
 
 Operating Lease:
 
 The Joint Ventures, in which the Company has participating interest,
 have entered into operating lease for equipments and buildings. All
 such leases are cancellable in nature. There are neither escalation
 clauses nor any restrictions in the lease agreements. There are no
 subleases.
 
 Capital commitments (net of advances)
 
 Company''s share of Joint Ventures'' Exploration activities - INR 105,912
 thousand (31 March 2011: - I NR 67,462 thousand).
 
 Other commitments
 
 Company''s share of Joint Ventures'' minimum exploration commitments as
 per the production sharing contracts - INR 132,066 thousand (31 March
 2011: - INR 5,945,379 thousand).
 
 The shareholders of the Company have approved a Scheme of Arrangement
 between the Company and some of its wholly owned subsidiaries, to be
 effective from 1 January 2010. The Scheme of Arrangement has been
 approved by the Hon''ble High Court of Madras and the Hon''ble High Court
 of Bombay. However, it is pending for approval from other regulatory
 authorities. Pending receipt of such approvals, no accounting impact of
 the scheme has been given in these financial statements. After the
 implementation of the scheme, the Company will directly own the Indian
 businesses, which are currently owned by some of its wholly owned
 subsidiaries and as contemplated in the scheme, any goodwill arising in
 the Company pursuant to the scheme, shall be adjusted against the
 securities premium account.
 
 Business segments
 
 The primary reporting of the Company has been prepared on the basis of
 business segments. The Company has only one business segment, which is
 the exploration, development and production of oil and gas and operates
 in a single business segment based on the nature of the products, the
 risks and returns, the organisation structure and the internal
 financial reporting systems. Accordingly, the figures appearing in
 these financial statements relate to the Company''s single business
 segment.
 
 Geographical segments
 
 Secondary segmental reporting is prepared on the basis of the
 geographical location of customers. The operating interests of the
 Company are confined to India in terms of oil and gas blocks and
 customers. Accordingly, the figures appearing in these financial
 statements relate to the Company''s single geographical segment, being
 operations in India.
 
 The sale of shares of the Company by Cairn UK Holdings Limited and its
 holding company, Cairn Energy Pic. to Vedanta Resources Pic. and its
 subsidiaries (collectively the ''Vedanta group'') was completed on 8
 December 2011 and resulted in change of control in the management of
 the Company from that date.
 
 3. The Board of Directors, subject to the approval of the
 shareholders, have reappointed the Managing Director of the Company for
 a period of five years w.e.f. 22 August 2011 .
 
 In accordance with the provisions of Accounting Standard 22
 ''Accounting for taxes on income'', the Company would have had deferred
 tax assets of INR 1,001,000 thousand (31 March 2011: INR 918,000
 thousand) in respect of accumulated tax losses, INR 528,000 thousand
 (31 March 2011: Nil) in respect of accumulated long term capital losses
 and INR 669,000 thousand (31 March 2011 : INR 586,000 thousand) in
 respect of differences in block of fixed assets/exploration assets as
 per tax books and financial books. However, as the management is not
 virtually certain of subsequent realization of the asset, the same has
 not been recognized in these financial statements.
 
 Details of amounts recoverable from subsidiary companies in which
 directors are interested are the same as disclosed under note no 27.
 The balance outstanding as at the year end is also the maximum amount
 outstanding during the year in all cases except for in the case of
 Cairn Energy Hydrocarbons Limited where the maximum amount outstanding
 during the year was INR 31,432 thousand (31 Mar 2011: INR 31,432
 thousand). No loans have been given to the subsidiaries, associates,
 firms and companies, in which directors are interested.
 
 During the year ended 31 March 2012, the revised Schedule VI notified
 under the Companies Act 1956, became applicable to the Company, for
 preparation and presentation of its financial statements. The adoption
 of revised Schedule VI does not impact recognition and measurement
 principles followed for preparation of financial statements. However,
 it has significant impact on presentation and disclosures made in the
 financial statements. The Company has also reclassified the previous
 year figures in accordance with the requirements applicable in the
 current year.