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76 I CAIRN INDIA ANNUAL REPORT 2011-12 MANAGEMENT DISCUSSION AND ANALYSIS
CAIRN INDIA ANNUAL REPORT 2011-12 I 77
MANAGEMENT DISCUSSION AND ANALYSIS
76 146
AUDITED FINANCIAL STATEMENTS
78 I CAIRN INDIA ANNUAL REPORT 2011-12 AUDITED FINANCIAL STATEMENTS
CAIRN INDIA ANNUAL REPORT 2011-12 I 79 AUDITED FINANCIAL STATEMENTS
Auditors Report
To The Members of Cairn India Limited
1. We have audited the attached balance sheet of Cairn India Limited (the Company) as at March 31, 2012 and also the statement of prot and loss and the cash ow statement for the year ended on that date annexed thereto. These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003 (as amended) (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specied in paragraphs 4 and 5 of the said Order. Our comments in the said Annexure are restricted to the operations of the Company and do not cover the unincorporated joint ventures where any third party is the operator. Further to our comments in the Annexure referred to above, we report that: i. ii. iii. iv. v. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; The balance sheet, statement of prot and loss and cash ow statement dealt with by this report are in agreement with the books of account; In our opinion, the balance sheet, statement of prot and loss and cash ow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; On the basis of the written representations received from the directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualied as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012; b) in the case of the statement of prot and loss, of the prot for the year ended on that date; and c) in the case of cash ow statement, of the cash ows for the year ended on that date.
Auditors Report
Annexure referred to in paragraph 3 of our report of even date
Re: Cairn India Limited (the Company)
(i)
(a) (b)
The Company has maintained proper records showing full particulars, including quantitative details and situation of xed assets. Fixed assets have been physically veried by the management during the year and no material discrepancies were identied on such verication. There was no disposal of a substantial part of xed assets during the year. The management has conducted physical verication of inventory at reasonable intervals during the year. The procedures of physical verication of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verication. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, rms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon. According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, rms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.
2.
(c) (ii) (a) (b)
3.
(c) (iii) (a)
4.
(b)
(iv)
In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and xed assets and for the sale of services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. Since none of the oil and gas blocks in which the Company has interests has started any commercial production, there has not been any sale of goods. In our opinion, there are no contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(v)(b) of the Order is not applicable to the Company and hence not commented upon. The Company has not accepted any deposits from the public. In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business. Since none of the oil and gas blocks in which the Company has interests has started any production, in our opinion, the provisions of clause 4(viii) of the Order are not applicable to the Company. (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it. The provisions relating to employees state insurance, sales tax and excise duty are not applicable to the Company. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, income-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to employees state insurance, sales tax and excise duty are not applicable to the Company.
vi.
(v)
(vi) (vii) (viii)
For S.R. BATLIBOI & CO. Firm registration number: 301003E Chartered Accountants per Raj Agrawal Partner Membership No.: 82028
Place: Gurgaon Date: April 20, 2012
(ix)
(b)
(c) According to the information and explanations given to us, there are no dues of income tax, wealth tax, service tax, customs duty, and cess which have not been deposited on account of any dispute. The provisions relating to sales tax and excise duty are not applicable to the Company.
Auditors Report
(x) The Companys accumulated losses at the end of the nancial year are less than fty per cent of its net worth and it has not incurred cash losses in the current nancial year. In the immediately preceding nancial year, the Company had incurred cash losses. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to debenture holders. The Company did not have any outstanding dues in respect of a nancial institution or bank during the year. According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion, the Company is not a chit fund or a nidhi / mutual benet fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or nancial institutions. Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.
Balance Sheet
AS AT 31 MARC H 2012
(All amounts are in thousand Indian Rupees, unless otherwise stated)
Notes EQUITY AND LIABILITIES

Shareholders funds Share capital Reserves and surplus Non-current liabilities Long-term borrowings Long-term provisions Current liabilities Trade payables Other current liabilities Short-term provisions
31 March 2012
31 March 2011
(xi)
3 4
19,073,961 300,122,235 319,196,196 12,365 12,365 132,125 13,309,914 5,990 13,448,029 332,656,590
19,019,171 299,126,449 318,145,620 13,500,000 7,994 13,507,994 118,102 14,19,891 1,043 1,539,036 333,192,650
(xii)
5 6
(xiii)
(xiv)
7 7 6
(xv)
TOTAL
ASSETS
Non-current assets Fixed assets Tangible assets Intangible assets Exploratory work in progress Non-current investments Long-term loans and advances Other non-current assets
(xvi)
(xvii)
(xviii)
The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. The Company has unsecured debentures outstanding during the year, on which no security or charge is required to be created. The Company has neither raised any money by way of public issue of shares/debentures during the current year nor did it have any amount of unutilized money raised by way of public issue of shares/debentures at the beginning of the current year. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the nancial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.
8 9 10 11 12 13.2
25,655 540,318 308,534,591 1,542 35,378 309,137,484
24,739 16 218,780 314,865,228 4,082 38,351 315,151,196
(xix) (xx)
Current assets Current investments Trade receivables Cash and bank balances Short-term loans and advances Other current assets TOTAL Summary of signicant accounting policies
14 13.1 16 12 13.2
(xxi)
18,213,411 4,721 4,600,004 588,620 112,350 23,519,106 332,656,590
10,817,291 1,681 6,529,282 470,017 223,183 18,041,454 333,192,650
2.1
The accompanying notes are an integral part of the nancial statements.
For S.R. BATLIBOI & CO. Chartered Accountants Firm Registration Number : 301003E per Raj Agrawal Partner Membership Number : 82028
As per our report of even date
For S. R. Batliboi & Co. Firm Registration No.:301003E Chartered Accountants
For and on behalf of the Board of Directors
per Raj Agrawal Partner Membership No. 82028
Navin Agarwal Chairman
Rahul Dhir Managing Director and Chief Executive Ofcer
Aman Mehta Director
Place: Gurgaon Date: 20 April 2012
Sunil Bohra Deputy Chief Financial Ofcer
Neerja Sharma Company Secretary
Statement of Prot and Loss

FOR TH E YEAR E N DE D 31 MARC H 2012
Cash Flow Statement

Notes
Income Revenue from operations Other income 17 18
31 March 2012
87,961 2,401,358
31 March 2011
23,943 927,078 Cash ow from operating activities Prot/(loss) before tax Adjustments for: Depreciation/amortization Unsuccessful exploration costs Employee stock compensation expense Unrealized foreign exchange loss/(gain) (net) Gain on sale of long term investments (net) Gain on sale of current investments (net) Other nance charges Other non-operating income Interest expense Loan facility and management fees Interest income Dividend income Operating loss before working capital changes Movements in working capital : Increase/(decrease) in trade payables, other liabilities and provisions Decrease /(increase) in trade receivables Decrease /(increase) in inventories Decrease /(increase) in loans and advances and other assets Cash generated used in operations Direct taxes paid (net of refunds) Net cash ow used in operating activities (A) Cash ows from investing activities
31 March 2012
475,008 388 178,778 16,547 83,191 (990,950) (626,474) (33,132) 1,095,487 17,813 (450,533) (300,122) (533,999) (689,790) 3,040 (6,677) 50,866 (1,176,560) (34,109) (1,210,669)
31 March 2011
(2,126,721) 304 682,704 71,453 (5,369) 38,363 1,328,256 497,219 (273,992) (647,690) (435,473) (99,054) 14,047 (18,871) 8,297 (531,054) (531,054)
Total revenue Expenses Data acquisition and analysis Employee benet expenses Other expenses Depreciation and amortization expense Finance costs Unsuccessful exploration costs Prot/(loss) before tax Tax expenses Current tax Total tax expense Prot/(loss) for the year
Earnings/ (loss) per equity share in INR computed on the basis of prot/ (loss) for the year [nominal value of share INR 10 (31 March 2011: INR 10)] Basic Diluted Summary of signicant accounting policies
2,489,319
46,767 153,757 520,129 388
951,021
19,965 217,021 290,837 304
19 20
21 22 10
1,114,492 178,778 475,008

35,391 35,391 439,617
1,866,911 682,704 (2,126,721)

(2,126,721)
23
0.23 0.23
(1.12) (1.12)
2.1
The accompanying notes are an integral part of the nancial statements. As per our report of even date
Aman Mehta Director
Purchase of xed assets (including CWIP and capital advances) Short term investments (net) Long term investments sold Long term investments made Investments in bank deposits (having original maturity of more than 3 months) Redemption/maturity of bank deposits (having original maturity of more than 3 months) Interest received Dividend received Net cash ow from investing activities (B) Cash ows from nancing activities Proceeds from issuance of equity share capital (including securities premium) Proceeds from long-term borrowings Repayment of long-term borrowings Interest paid Payment of borrowing costs (other than interest) Net cash ow used in nancing activities (C) Net increase in cash and cash equivalents (A + B + C)
(557,183) (6,769,645) 14,428,587 (7,107,000) (4,542,265) 6,784,299
(1,076,468) 5,999,584 (391,165) (8,806,500) 4,723,612
553,556 300,122 3,090,471
73,038 647,690 1,169,791
565,513 (1,000,000) (1,132,559) (1,567,046) 312,756
670,480 14,000,000 (13,950,000) (801,081) (39,604) (120,205) 518,532
Statement of Cash Flow Continued

Notes to Financial Statements

31 March 2012
Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents Cash on hand With banks - on current accounts - on deposit account Total cash and cash equivalents (note 16) 522,782 835,538 41 5,497 830,000 835,538
31 March 2011
4,250 522,782 35 5,085 517,662 522,782
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, rening, 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/elds, 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 / elds, which are presently under exploration phase-
Notes: 1) The above Cash Flow Statement has been prepared under the Indirect Method as set out in Accounting Standard-3 on Cash ow statements. 2) Amounts in bracket indicate a cash outow or reduction.
Oil & Gas blocks/elds

Operated blocks (through subsidiaries) PR-OSN-2004/1 KG-ONN-2003/1 KG-OSN-2009/3 MB-DWN-2009/1 Following blocks have been relinquished Non-operated blocks
Area
Palar Basin Offshore Krishna Godavari Onshore Krishna Godavari Offshore Mumbai
Participating Interest
25.00% 25.00% 90.00% 90.00%
Aman Mehta Director
KK-DWN-2004/1 in Mar 2012 GS-OSN-2003/1 in Nov 2010 The participating interests were same in the previous year.
Kerala Konkan Basin Offshore Gujarat Saurashtra Onshore
40.00% 49.00%
2.
BASIS OF PREPARATION The nancial statements have been prepared to comply in all material respects with the accounting principles generally accepted in India, including mandatory Accounting Standards notied 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 nancial statements as described in note no. 41 below.
2.1 Summary of signicant accounting policies a) Oil and gas assets The Company follows a successful efforts method for accounting for oil and gas assets as set out by the Guidance Note issued by the Institute of Chartered Accountants of India (ICAI) on Accounting for Oil and Gas Producing Activities. Expenditure incurred on the acquisition of a license interest is initially capitalised on a license by license basis. Costs are held, undepleted, within exploratory & development work in progress until the exploration phase relating to the license area is complete or commercial oil and gas reserves have been discovered. Exploration expenditure incurred in the process of determining exploration targets which cannot be directly related to individual exploration wells is expensed in the period in which it is incurred. Exploration/appraisal drilling costs are initially capitalised within exploratory and development work in progress on a well by well basis until the success or otherwise of the well has been established. The success or failure of each exploration/appraisal effort is judged on a well by well basis. Drilling costs are written off on completion of a well unless the results indicate that oil and gas reserves exist and there is a reasonable prospect that these reserves are commercial. Where results of exploration drilling indicate the presence of oil and gas reserves which are ultimately not considered commercially viable, all related costs are written off to the statement of prot and loss immediately. Following appraisal of successful exploration wells, when a well is ready for commencement of commercial production, the related exploratory and development work in progress are transferred into a single eld cost centre within producing properties, after testing for impairment.
Notes to Financial Statements Continued


Where costs are incurred after technical feasibility and commercial viability of producing oil and gas is demonstrated and it has been determined that the wells are ready for commencement of commercial production, they are capitalised within producing properties for each cost centre. Subsequent expenditure is capitalised when it enhances the economic benets of the producing properties or replaces part of the existing producing properties. Any costs remaining associated with such part replaced are expensed off in the nancial statements. Net proceeds from any disposal of an exploration asset within exploratory and development work in progress are initially credited against the previously capitalised costs and any surplus proceeds are credited to the statement of prot and loss. Net proceeds from any disposal of producing properties are credited against the previously capitalised cost and any gain or loss on disposal of producing properties is recognised in the statement of prot and loss, to the extent that the net proceeds exceed or are less than the appropriate portion of the net capitalised costs of the asset. b) Depletion The expenditure on producing properties is depleted within each cost centre. Depletion is charged on a unit of production basis, based on proved reserves for acquisition costs and proved and developed reserves for other costs. Reserves for this purpose are considered on working interest basis which are reassessed atleast annually. Impact of changes to reserves are accounted for prospectively. c) Site restoration costs At the end of the producing life of a eld, costs are incurred in restoring the site of production facilities. Cairn India Limited recognizes the full cost of site restoration as a liability when the obligation to rectify environmental damage arises. The site restoration expenses form part of the exploration & development work in progress or cost of producing properties, as the case may be, of the related asset. The amortization of the asset, calculated on a unit of production basis based on proved and developed reserves, is included in the depletion cost in the statement of prot and loss. d) Impairment The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized where the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash ows are discounted to their present value using a pre tax discount rate that reects current market assessment of the time value of money and risks specic to the asset. After impairment, depreciation/depletion is provided in subsequent periods on the revised carrying amount of the asset over its remaining useful life. e) Tangible xed assets, depreciation and amortization Tangible assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of xed assets which take a substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management stated below, or at the rates prescribed under Schedule XIV of the Companies Act 1956, whichever is higher. Vehicles 2 to 5 years Freehold buildings 10 years Computers 2 to 5 years Furniture and xtures 2 to 5 years Ofce equipments 2 to 5 years Plant and Equipment 2 to 10 years Leasehold lands are amortised over the lease period. Leasehold improvements are amortized over the remaining period of the primary lease (3 to 6 years) or expected useful economic lives, whichever is shorter.
f) Intangible xed assets and amortization Intangible assets, other than oil and gas assets, have nite useful lives and are measured at cost and amortized over their expected useful economic lives as follows: Computer software 2 to 4 years g) Leases As lessee Finance leases, which effectively transfer substantially all the risks and benets incidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the nance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as an expense in the statement of prot and loss. Lease management fees, legal charges and other initial direct costs are capitalised. If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term. Leases where the lessor effectively retains substantially all the risks and benets of ownership of the leased item, are classied as operating leases. Operating lease payments are recognised as an expense in the statement of prot and loss on a straight-line basis over the lease term. h) Investments Investments that are readily realisable and intended to be held for not more than a year from the date on which such investments are made, are classied as current investments. All other investments are classied as long-term investments. Current investments are measured at cost or market value, whichever is lower, determined on an individual investment basis. Long term investments are measured at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. i) Joint Ventures The Company participates in several Joint Ventures involving joint control of assets for carrying out oil and gas exploration, development and producing activities. The Company accounts for its share of the assets and liabilities of Joint Ventures along with attributable income and expenses in such Joint Ventures, in which it holds a participating interest. Joint venture cash and cash equivalent balances are considered by the Company to be the amounts contributed in excess of the Companys obligations to the joint ventures and are therefore, disclosed within loans and advances. j) Revenue recognition Revenue is recognized to the extent that it is probable that the economic benets will ow to the Company and the revenue can be reliably measured. Revenue from operating activities As operator from the joint venture The Company recognizes revenue from joint ventures for services rendered in the form of parent company overhead based on the provisions of respective PSCs. Interest income Interest income is recognised on a time proportion basis. Dividend income Revenue is recognized when the instrument/unit holders right to receive payment is established by the balance sheet date. k) Borrowing costs Borrowing costs include interest and commitment charges on borrowings, amortisation of costs incurred in connection with the arrangement of borrowings, exchange differences to the extent they are considered a substitute to the interest cost and nance charges under leases. Costs incurred on borrowings directly attributable to development projects, which take a substantial period of time to complete, are capitalised within the development/producing asset for each cost-centre. All other borrowing costs are recognised in the statement of prot and loss in the period in which they are incurred.


l) Foreign currency transactions and translations The Company translates foreign currency transactions into Indian Rupees at the rate of exchange prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Indian Rupees at the rate of exchange prevailing at the balance sheet date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on reporting the Companys monetary items at rates different from those at which they were initially recorded during the period, or reported in previous nancial statements, are recognised as income or as expenses in the period in which they arise. m) Income taxes Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income tax reects the impact of current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier period. Deferred tax assets and liabilities are measured, based on tax rates and laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufcient future taxable income will be available against which such deferred tax assets can be realised. If the Company has carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is virtual certainty, supported by convincing evidence, that such deferred tax assets can be realised against future taxable prots. Unrecognised deferred tax assets of earlier periods are re-assessed and recognised to the extent that it has become reasonably certain or virtually certain, as the case may be, that future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufcient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufcient future taxable income will be available. n) Earnings Per Share Basic earnings per share are calculated by dividing the net prot or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net prot or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares, if any. o) Provisions A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reect the current best estimates. p) Cash and Cash equivalents Cash and cash equivalents comprise cash at bank and in hand and short-term investments, with an original maturity of 90 days or less. q) Employee Benets Retirement and Gratuity benets Retirement benets in the form of provident fund and superannuation scheme are dened contribution schemes and the contributions are charged to the statement of prot and loss of the period when the contributions to the respective funds are due. There are no obligations other than the contribution payable to the respective funds. Gratuity liability is a dened benet obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each nancial year. Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation made at the end of each nancial year. The actuarial valuation is done on projected unit credit method.
Actuarial gains / losses are immediately taken to statement of prot and loss and are not deferred. Employee Stock Compensation Cost Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the ICAI. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis. r) Use of estimates The preparation of nancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the nancial statements and the results of operations during the reporting period end. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates. s) Segment Reporting Policies Identication of segments The Companys operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate. t) Inventory Inventories of stores and spares related to exploration, development and production activities are valued at cost or net realizable value whichever is lower. Cost is determined on rst in rst out (FIFO) basis. Net realisable value is estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.
3. SHARE CAPITAL
31 March 2012 Authorised shares (No. in thousand) 2,250,000 (31 March 2011: 2,250,000) equity shares of INR 10 each Issued, subscribed and fully paid up shares (No. in thousand) 1,907,396 (31 March 2011: 1,901,917) equity shares of INR 10 each Total issued, subscribed and fully paid-up share capital 19,073,961 19,073,961 19,019,171 19,019,171 22,500,000 22,500,000 31 March 2011
(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period 31 March 2012 No. thousand INR thousand At the beginning of the period Issued during the period ESOP Outstanding at the end of the period 1,901,917 5,479 1,907,396 19,019,171 54,790 19,073,961
31 March 2011 No. thousand INR thousand 1,896,974 4,943 1,901,917 18,969,741 49,430 19,019,171
(b) 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.
CAIRN INDIA ANNUAL REPORT 2011-12 I 9 1 AUDITED FINANCIAL STATEMENTS


(c) Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates 31 March 2012 Subsidiaries of Vedanta Resources Plc., the holding company* Twin Star Mauritius Holdings Limited 738,874 thousand (31 March 2011: Nil) equity shares of INR 10 each fully paid 7,388,736 31 March 2011
4. RESERVES AND SURPLUS CONTINUED Less: deferred employee stock compensation Less: transferred to securities premium on exercise of stock options Closing Balance Surplus/ (decit) in the statement of prot and loss Balance as per last nancial statements Prot/ (Loss) for the year Less: Transfer to debenture redemption reserve Net (decit) in the statement of prot and loss Total reserves and surplus
31 March 2012 (189,973) (490,382) 109,786 31 March 2011 (225,304) (143,710) 554,722
Sesa Goa Limited 351,140 thousand (31 March 2011: Nil) equity shares of INR 10 each fully paid Sesa Resources Limited 32,700 thousand (31 March 2011: Nil) equity shares of INR 10 each fully paid Cairn UK Holdings Limited, the erstwhile holding company* 415,563 thousand (31st March 2011: 1,183,244 thousand) equity shares of INR 10 each fully paid * Also refer note 37 below.
3,511,404
327,000
(3,354,255) 439,617 (439,617) (3,354,255) 300,122,235
(1,227,534) (2,126,721) (3,354,255) 299,126,449
31 March 2012 4,155,630
31 March 2011 11,832,438
*Debenture redemption reserve of INR 1,851,765 thousand (31 March 2011: INR 831,913 thousand) has not been created due to inadequacy of prots.
5. LONG-TERM BORROWINGS
Non-current portion 31 March 2012 31 March 2011 Debentures (Unsecured) Series C - Nil (31 March 2011: 10 thousand) 8.50% non convertible debentures of INR 1,000 thousand each (INR 100 thousand called-up) Series B - 6.25 thousand (31 March 2011: 6.25 thousand) 8.40% non convertible debentures of INR 1,000 thousand each (fully paid up) 1,000,000 6,250,000 6,250,000 Current maturities 31 March 2012 31 March 2011
(d) Aggregate no. of shares issued for consideration other than cash during the period of ve years immediately preceding the reporting date: 31 March 2012 No. thousand 31 March 2011 No. thousand
Equity shares allotted as fully paid-up pursuant to contracts for consideration other than cash 861,765 In addition, the Company has issued total 15,997 thousand equity shares (31 March 2011: 10,518 thousand equity shares) during the period of ve years immediately preceding the reporting date on exercise of options granted under the employee stock option plan (ESOP scheme) wherein part consideration was received in form of employee services. (e) Details of shareholders holding more than 5% shares in the Company 31 March 2012 No. thousand Equity shares of INR 10 each fully paid Twin Star Mauritius Holdings Limited % holding in the class
Series A - 6.25 thousand (31 March 2011: 6.25 thousand) 8.35% non convertible debentures of INR 1,000 thousand each (fully paid up) Amount disclosed under the head other current liabilities (note 7) Net amount
6,250,000 13,500,000 13,500,000
6,250,000 12,500,000 (12,500,000) -
31 March 2011 No. thousand % holding in the class
a.
738,874 38.74% Cairn UK Holdings Ltd 415,563 21.79% 1,183,244 62.21% Sesa Goa Ltd 351,140 18.41% Petronas International Corporation Limited 283,431 14.90% As per records of the Company, including its register of shareholders/ members, the above shareholding represents legal ownerships of shares.
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 rst 12 months and thereafter a market determined oating 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. 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.
b.
(f) Shares reserved for issue under options For details of shares reserved for issue under the ESOP scheme of the Company refer note 25. 4. RESERVES AND SURPLUS
31 March 2012 Securities premium account Balance as per the last nancial statements Add: additions on employee stock options exercised Add: transferred from stock options outstanding Closing Balance Debenture redemption reserve* 301,925,982 510,723 490,382 302,927,087 301,161,222 621,050 143,710 301,925,982 31 March 2011
6. PROVISIONS
Long-term 31 March 2012 31 March 2011 Provision for employee benets Provision for employee stock options (cash settled)* Provision for gratuity (note 24) Provision for compensated absences Other provisions Provision for taxation (net of advance tax) 2,044 10,321 7,994 Short-term 31 March 2012 31 March 2011 3,028 2,962 1,043
12,365
7,994
5,990
31 March 2012 8,596 (3,524) 5,072
1,043
31 March 2011 -
Balance as per the last nancial statements Add: amount transferred from surplus balance in the statement of prot and loss Closing Balance Employee stock options outstanding Gross employee stock compensation for options granted in earlier years Add: gross compensation for options granted during the year
439,617 439,617 544,385 245,756
770,973 152,763
* Provision for employee stock options (cash settled) (refer note 2.1 (q) above) Opening Balance Additions for the year Reversed during the year Closing Balance


7. OTHER CURRENT LIABILITIES

31 March 2012 31 March 2011
10. EXPLORATORY WORK IN PROGRESS

31 March 2012 31 March 2011
Trade payables (refer note 31 for details of dues to micro and small enterprises) Other liabilities Current maturities of long-term borrowings (note 5) Amounts payable to subsidiary companies Interest accrued but not due on borrowings Others Statutory dues payable Liabilities for exploration activities
132,125
1,18,102
12,500,000 490,454 11,379 308,081 13,309,914 13,442,039

Leasehold land Ofce equipments 32 1,430 1,462 1,462 Furniture & xtures 25 25 25
638,819 527,175 3,200 250,697 1,419,891 1,537,993
Opening balance Add: Additions Less: Unsuccessful exploration costs Closing balance 11. NON-CURRENT INVESTMENTS
218,780 500,316 (178,778) 540,318
242,074 659,410 (682,704) 218,780
31 March 2012
31 March 2011
8. TANGIBLE ASSETS
Total 32 24,873 24,905 1,288 26,193
Cost or valuation At 1 April 2010 Additions At 31 March 2011 Additions At 31 March 2012 23,418 23,418 1,288 24,706
Trade investments (valued at cost unless stated otherwise) Unquoted instruments Investment in subsidiaries 420,810 thousand (31 March 2011: 420,810 thousand) Equity shares of GBP 1 each fully paid-up in Cairn India Holdings Limited, U.K. Nil (31 March 2011: 176 thousand) redeemable preference shares of GBP 1,000 each fully paid-up in Cairn India Holdings Limited, U.K. 167,000 thousand (31 March 2011: 21,785 thousand) Equity shares of USD 1 each fully paid-up in CIG Mauritius Holding Private Limited Aggregate amount of quoted investments Aggregate amount of unquoted investments
300,424,799 8,109,792 308,534,591 308,534,591
300,424,799 13,437,637 1,002,792 314,865,228 314,865,228
Depreciation At 1 April 2010 Charge for the year At 31 March 2011 Charge for the year At 31 March 2012 Net Block At 31 March 2011 At 31 March 2012 9. INTANGIBLE ASSETS
9 155 164 366 530
2 2 6 8
9 157 166 372 538
a. The Company has made equity investments in CIG Mauritius Holding Private Limited (CMHPL) 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. 12. LOANS AND ADVANCES
Non-current 31 March 2012 31 March 2011 Current 31 March 2012 31 March 2011 594 68
23,418 24,706
1,298 932
23 17
24,739 25,655
Unsecured and considered good Capital advances Security deposit 372 1,170 2,912 1,170
Computer Software Gross block At 1 April 2010 At 31 March 2011 At 31st March 2012 1,023 1,023 1,023
Total 1,023 1,023 1,023
Loan and advances to related parties (note 27) Advances recoverable in cash or kind
Other loans and advances
1,542 1,542
4,082 4,082
385,309 192,303 578,206 3,668 4,233 2,513 10,414 588,620
395,662 65,080 460,810 4,950 4,233 24 9,207 470,017
Advance income-tax (net of provision) Fringe benet tax paid (net of provision) Prepaid expenses
Amortization At 1 April 2010 Charge for the year At 31 March 2011 Charge for the year At 31 March 2012 Net block At 31 March 2011 At 31 March 2012
860
860
147 1,007 16 1,023
147 1,007 16 1,023
16 -
16 -


13. TRADE RECEIVABLES AND OTHER ASSETS 13.1. TRADE RECEIVABLES

Non-current 31 March 2012 31 March 2011 Unsecured, considered good Outstanding for a period exceeding six months from the date they are due for payment Other receivables 4,721 4,721 1,681 1,681 Current 31 March 2012 31 March 2011
QUOTED MUTUAL FUNDS CONTINUED

11 12 13 14 15 16 17 18 19 20,000 thousand units of INR 10 each of DWS Fixed Term Fund - Series 92 under DWS Mutual Fund - Growth plan 25,000 thousand units of INR 10 each of Fidelity Fixed Maturity Plan Series 6 - Plan C under Fidelity Mutual Fund - Growth plan 36,000 thousand units of INR 10 each of HDFC FMP 13M September 2011 (1) Growth-Series XVIII under HDFC Mutual Fund - Growth plan 40,000 thousand units of INR 10 each of HDFC FMP 370D October 2011 (1) Growth-Series XIX under HDFC Mutual Fund - Growth plan 20,850 thousand units of HDFC FMP 92D March 2012 (1) under HDFC Mutual Fund - Daily Dividend Reinvestment plan 40,000 thousand units of INR 10 each of ICICI Prudential Series 61 - 1 Year Plan A under ICICI Prudential Mutual Fund - Growth plan 45,079 thousand units of INR 10 each of ICICI Prudential FMP Series 63 - 1 Year Plan C under ICICI Prudential Mutual Fund - Growth plan 25,000 thousand units of INR 10 each of IDFC FMP Yearly Series 53 under IDFC Mutual Fund - Growth plan 24,000 thousand units of INR 10 each of IDFC FMP Yearly Series 54 under IDFC Mutual Fund - Growth plan 29,000 thousand units of INR 10 each of JP Morgan India Fixed Maturity Plan Series 7 under JP Morgan Mutual Fund - Daily Dividend Reinvestment plan
31 March 2012
200,000 250,000 360,000 400,000 208,500 400,000 450,785 250,000 240,000 290,000
13.2. OTHER ASSETS

Non-current 31 March 2012 31 March 2011 Current 31 March 2012 31 March 2011
Unsecured, considered good Non-current inventory of stores and spares (note 15) Ancillary cost of arranging the borrowings Interest accrued on deposits and investments
35,378 35,378
28,702 9,649 38,351
10,002 102,348 112,350
17,813 205,370 223,183
14. CURRENT INVESTMENTS (Valued at lower of cost and fair value)

31 March 2012 Quoted mutual funds Unquoted mutual funds Unquoted certicate of deposits 9,878,425 7,650,144 684,842 18,213,411 31 March 2011 5,438,714 5,378,577 10,817,291 20
21 22 23
20,000 thousand units of INR 10 each of Kotak FMP Series 69 under Kotak Mahindra Mutual Fund - Growth plan 30,000 thousand units of INR 10 each of Kotak FMP Series 72 under Kotak Mahindra Mutual Fund - Growth plan 46,078 thousand units of INR 10 each of Kotak FMP Series 83 under Kotak Mahindra Mutual Fund - Growth plan 24,000 thousand units of INR 10 each of Reliance Fixed Horizon Fund - XXI - Series 14 under Reliance Mutual Fund - Growth plan 25,000 thousand units of INR 10 each of Reliance Fixed Horizon Fund XXI Series 13 under Reliance Mutual Fund - Growth plan 50,000 thousand units of INR 10 each of Reliance Fixed Horizon Fund XXI Series 6 under Reliance Mutual Fund - Growth plan 24,925 thousand units of INR 10 each of Reliance Quarterly Interval Fund Series II under Reliance Mutual Fund - Daily Dividend Reinvestment plan 35,000 thousand units of INR 10 each of SBI Debt Fund Series - 367 Days - 6 under SBI Mutual Fund - Growth plan 43,345 thousand units of INR 10 each of SBI SDFS 367 days-11 under SBI Mutual Fund - Growth plan 25,581 thousand units of INR 10 each of SBI SDFS 90 Days - 57 under SBI Mutual Fund - Daily Dividend Reinvestment plan 20,000 thousand units of INR 10 each of SBI SDFS 90 Days-59 under SBI Mutual Fund - Daily Dividend Reinvestment plan 20,000 thousand units of INR 10 each of Tata Fixed Maturity Plan-Series 37 Scheme C under Tata Mutual Fund - Growth plan 40,000 thousand units of INR 10 each of UTI Fixed Term Income Fund - Series X - VII (368 days) under UTI Mutual Fund - Growth plan Total
200,000 300,000 460,779 240,000 250,000 500,000 250,079 350,000 433,452 255,813 200,000 200,000 400,000 9,878,425
Aggregate amount of quoted investments [Market value represented by net asset value: INR 10,048,287 thousand (31 March 2011: INR 5,533,568 thousand)] Aggregate amount of unquoted investments The details of investments are as under : QUOTED MUTUAL FUNDS
1 2 3 4 5 6 7 8 9 10 20,000 thousand units of INR 10 each of Birla Sun Life Fixed Term Plan - Series DY under Birla Sun Life Mutual Fund - Growth plan
9,878,425 8,334,986 18,213,411
5,438,714 5,378,577 10,817,291 24 25 26 27 28 29 30 31 32 33
31 March 2012
200,000 400,000 275,400 202,100 200,000 257,000 400,000 400,000 200,000 254,517
40,000 thousand units of INR 10 each of Birla Sun Life Fixed Term Plan Series EI under Birla Sun Life Mutual Fund - Growth plan 27,540 thousand units of INR 10 each of Birla Sun Life Quarterly Interval Fund - Series 4 under Birla Sun Life Mutual Fund - Daily Dividend Reinvestment plan 20,210 thousand units of INR 10 each of Birla Sun Life Short Term FMP Series 22 under Birla Sun Life Mutual Fund - Daily Dividend Reinvestment plan 20,000 thousand units of INR 10 each of Birla Sun Life Short Term FMP Series 29 under Birla Sun Life Mutual Fund - Daily Dividend Reinvestment plan 25,700 thousand units of INR 10 each of Birla Sun Life Short Term FMP Series 30 under Birla Sun Life Mutual Fund - Daily Dividend Reinvestment plan 40,000 thousand units of INR 10 each of DSP Blackrock FMP Series 23 12M under DSP Blackrock Mutual Fund - Growth plan 40,000 thousand units of INR 10 each of DSP Blackrock FMP Series 32 - 12M under DSP Blackrock Mutual Fund - Growth plan 20,000 thousand units of INR 10 each of DSP Blackrock FMP Series 33 - 3M under DSP Blackrock Mutual Fund - Daily Dividend Reinvestment plan 25,452 thousand units of INR 10 each of DSP Blackrock FMP Series 42 - 3 M under DSP Blackrock Mutual Fund - Daily Dividend Reinvestment plan


UNQUOTED MUTUAL FUNDS

1 2 3 4 5 131,385 thousand units of JM High Liquidity Fund - SIP under JM Mutual Fund - Daily Dividend Reinvestment plan 10,138 thousand units of Reliance Liquid Fund - Treasury Plan-Institutional Option under Reliance Mutual Fund - Daily Dividend Reinvestment plan 18,160 thousand units of DWS Ultra Short Term Fund - Regular Plan Bonus under DWS Mutual Fund - Bonus plan 195,490 thousand units of Tata Floater Fund under Tata Mutual Fund - Growth plan 2,170 thousand units of UTI Treasury Advantage under UTI Mutual Fund - Growth plan Total
31 March 2012
1,316,021 154,991 177,632 2,997,700 3,003,800 7,650,144 1 2 3 4 5 6 7 8 9
UNQUOTED MUTUAL FUNDS

24,829 thousand units of BSL Interval Income Fund - INSTL - Quaterely - Series 1 under Birla Sun Life Mutual Fund - Daily Dividend Reinvestment plan 20,439 thousand units of ICICI Prudential Half Yearly Interval Plan-II under ICICI Prudential mutual fund - Daily Dividend Reinvestment plan 24,654 thousand units of ICICI Prudential Interval Fund - Half Yearly Interval Plan I under ICICI Prudential mutual fund - Daily Dividend Reinvestment plan 20,718 thousand units of ICICI Prudential Interval Fund II Quarterly Plan D under ICICI Prudential mutual fund - Daily Dividend Reinvestment plan 25,154 thousand units of ICICI Prudential Interval Fund-Quarterly Interval Plan II under ICICI Prudential mutual fund - Daily Dividend Reinvestment plan 25,174 thousand units of Kotak Quarterly Interval Plan Series 7 under Kotak Mahindra mutual fund - Daily Dividend Reinvestment plan 25,070 thousand units of Reliance Quarterly Interval Fund Series III under Reliance mutual fund - Daily Dividend Reinvestment plan 25,147 thousand units of UTI Fixed Income Interval Fund-Quarterly Interval Plan Series I-Institutional under UTI mutual fund - Daily Dividend Reinvtment plan 82 thousand units of Templeton India TMA SIP under Templeton mutual fund - Daily Dividend Reinvestment plan 7,197 thousand units of BSL Floating Rate Fund - Long Term under Birla Sun Life Mutual Fund - Daily Dividend Reinvestment plan
31 March 2011
248,298 204,412 246,568 207,182 251,539 251,752 250,787 251,469 82,184 71,970
CERTIFICATE OF DEPOSITS
1 2 5 thousand units of certicate of deposits of Punjab National Bank 2.5 thousand units of certicate of deposits of IDBI Bank Total
31 March 2012
457,811 227,031 684,842
QUOTED MUTUAL FUNDS

1 2 70,000 thousand units of INR 10 each of Birla Sun Life Fixed Term Plan - Series CI under Birla Sun Life Mutual Fund - Growth plan 50,000 thousand units of INR 10 each of Birla Sun Life Short term FMP Series 4 - Dividend Payout under Birla Sun Life Mutual Fund - Daily Dividend Reinvestment plan
31 March 2011
700,000 500,000
10
3 4 5 6 7 8 9 10 11 12 13 14 15 16
25,000 thousand units of INR 10 each of DSP Blackrock FMP 12M Series 10 under DSP Blackrock mutual fund - Growth plan 20,000 thousand units of INR 10 each of DSP Blackrock FMP 12M Series 9 under DSP Blackrock mutual fund - Growth plan 37,198 thousand units of INR 10 each of DSP Blackrock FMP 3M Series 28 - Dividend Payout under DSP Blackrock mutual fund - Daily Dividend Reinvestment plan 30,000 thousand units of INR 10 each of Fidelity Fixed Maturity Plan Series 4 - Plan E under Fidelity Mutual Fund - Growth plan 25,030 thousand units of INR 10 each of ICICI Prudential FMP Series 53 - 1 Year Plan-C under ICICI Prudential mutual fund - Growth plan 35,000 thousand units of INR 10 each of ICICI Prudential FMP Series 56 - 1 Year Plan B under ICICI Prudential mutual fund - Growth plan 18,300 thousand units of INR 10 each of IDFC FMP - 100 Days Series 3 under IDFC mutual fund - Daily Dividend Reinvestment plan 24,000 thousand units of INR 10 each of Kotak FMP Series 40 under Kotak Mahindra mutual fund - Growth plan 25,000 thousand units of INR 10 each of Reliance Fixed Horizon Fund - XIX - Series 9 under Reliance mutual fund - Growth plan 55,000 thousand units of INR 10 each of Reliance Fixed Horizon Fund - XVI - Series 2 under Reliance mutual fund - Growth plan 30,000 thousand units of INR 10 each of Reliance Fixed Horizon Fund - XVI - Series 3 under Reliance mutual fund - Growth plan 35,000 thousand units of INR 10 each of Reliance Fixed Horizon Fund - XVII - Series 1 under Reliance mutual fund - Growth plan 24,344 thousand units of INR 10 each of SBI Debt Fund Series- 90 Days-41 under SBI mutual fund - Daily Dividend Reinvestment plan 40,000 thousand units of INR 10 each of SBI SDFS 370 days-8 under SBI mutual fund - Growth plan Total
250,000 200,000 371,978 300,000 250,299 350,000 183,000 240,000 250,000
11 12 13 14 15
27,077 thousand units of Canara Robeco Treasury Advantage under Canara Robeco mutual fund - Daily Dividend Reinvestment plan 14,201 thousand units of IDFC Money Manager TP Super Institutional - Plan C under IDFC mutual fund - Daily Dividend Reinvestment plan 93,704 thousand units of SBI SHF-Ultra Short Term Fund under SBI mutual fund - Daily Dividend Reinvestment plan 148,769 thousand units of Tata Floater Fund under Tata mutual fund - Daily Dividend Reinvestment plan 404 thousand units of UTI Floating Rate Fund - Short Term Plan under UTI mutual fund - Daily Dividend Reinvestment plan Total
335,941 142,032 937,605 1,492,987 403,851 5,378,577
15. INVENTORIES (valued at lower of cost and net realizable value) Non-current 31 March 2012 31 March 2011 Stores and spares 35,378 28,702 (35,378) (28,702) Less: amount disclosed under other non-current assets 16. CASH AND BANK BALANCES
Current 31 March 2012 31 March 2011 -
550,000 300,000 350,000 243,437 400,000 5,438,714 Other bank balances Deposits with original maturity for more than 12 months Deposits with original maturity for more than 3 months but less than 12 months
Cash and cash equivalents Balances with banks: On current accounts Deposits with original maturity of less than 3 months Cash on hand
31 March 2012
31 March 2011
5,497 830,000 41 835,538
5,085 517,662 35 522,782
2,702 3,761,764 3,764,466 4,600,004
1,502,500 4,504,000 6,006,500 6,529,282
Deposits above include Nil (31 March 2011: INR 17,662 thousand) pledged with the banks.


17. REVENUE FROM OPERATIONS

31 March 2012 31 March 2011
20. OTHER EXPENSES CONTINUED

31 March 2012 31 March 2011
Other operating revenue (income received as operator from joint venture)
87,961 87,961
23,943 23,943
18. OTHER INCOME

31 March 2012 Interest income on Bank deposits Current investments Others 441,665 8,868 147 300,122 990,950 626,474 33,132 2,401,358 273,992 382 647,690 5,014 927,078 31 March 2011
Dividend income on current investments Gain on sale of long term investments (net) Gain on sale of current investments (net) Exchange difference (net) Other non-operating income
Exchange difference (net) Directors' sitting fees Advertisement and publicity Public relation expenses Sponsorship Printing & stationery Security expenses Communication expenses Rates and taxes Miscellaneous expenses
154,794 800 38,869 421 11,700 4,331 182 13,451 2,020 674 520,129
820 20,880 6,553 29,444 1,381 157 7,541 5,081 2,058 290,837
21. DEPRECIATION AND AMORTIZATION EXPENSE

31 March 2012 Depreciation of tangible assets Amortization of intangible assets 372 16 388 31 March 2011 157 147 304
19. EMPLOYEE BENEFIT EXPENSES

31 March 2012 Salaries, wages and bonus Contribution to provident fund Contribution to superannuation fund Employee stock option scheme 109,983 4,732 4,742 21,619 2,327 85 10,269 153,757 31 March 2011 127,495 4,649 4,290
22. FINANCE COSTS

31 March 2012 Interest Loan facility and management fees Bank charges 1,095,487 17,813 1,192 1,114,492 31 March 2011 1,367,171 497,219 2,521 1,866,911
Gratuity expense (Note 24) Compensated absences Staff welfare expenses
71,453 1,347 647 7,140 217,021
23. EARNINGS/(LOSS) PER SHARE (EPS)

31 March 2012 The following reects the prot/ (loss) and share data used in the basic and diluted EPS computations: Prot/ (loss) after tax as per Statement of Prot & Loss 31 March 2011
20. OTHER EXPENSES

31 March 2012 Contract employee charges Rent Insurance Repairs and maintenance (others) 5,435 1,981 7,487 639 40,211 220,898 31 March 2011 6,601 1,994 109
439,617 No. thousand 1,903,047 4,784 1,907,831
(2,126,721) No. thousand 1,898,666 9,040 1,907,706
(used for calculation of both basic and diluted EPS) Weighted average number of equity shares in calculating basic EPS Effect of dilution: Stock options granted under employee stock options* Weighted average number of equity shares in calculating diluted EPS Earnings/ (loss) per equity share in INR computed on the basis of prot/ (loss) for the year Basic Diluted * considered as anti-dilutive in previous year.
Travelling and conveyance Legal and professional fees Auditors' remuneration As auditor: Fees for audit of standalone and consolidated nancial statements Fees for limited review of standalone and consolidated quarterly nancial results Fees for certication Fees for audit of interim nancial statements Fees for time spent on audit of draft IND-AS nancial statements Fees for limited review of the standalone and consolidated interim reporting package Reimbursement of expenses
991 35,557 158,385
5,736 6,287 381 1,103 1,655 1,074
5,736 6,287 303 331 628
0.23 0.23
(1.12) (1.12)
CAIRN INDIA ANNUAL REPORT 2011-12 I 1 0 1 AUDITED FINANCIAL STATEMENTS


24. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a dened benet gratuity plan for its employees. Under the gratuity plan, every employee who has completed atleast ve 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 benet expense recognised in the statement of prot and loss and the amounts recognised in the balance sheet for the gratuity plans.
Statement of prot and loss Net employee benet expense recognized in the employee cost
31 March 2012 31 March 2011
25. EMPLOYEE STOCK OPTION PLANS Cairn India Group has provided various share based payment schemes to its employees. During the year ended 31 March 2012, the following schemes were in operation: Particulars CISMP CIPOP CIESOP CIPOP Phantom Date of Board Approval 17-Nov-06 17-Nov-06 17-Nov-06 Not applicable Date of Shareholders approval 17-Nov-06 17-Nov-06 17-Nov-06 Not applicable Number of options granted till March 2012 8,298,713 8,318,283 25,958,972 77,489 Method of Settlement Equity Equity Equity Cash Refer vesting 3 years from 3 years from 3 years from Vesting Period conditions below grant date grant date grant date Exercise Period 18 months from vesting date 3 months from vesting date 7 years from vesting date Immediately upon vesting
Current service cost Interest cost on benet obligation Net actuarial (gain) / loss recognized in the year Net benet expense Balance sheet Details of Provision for Gratuity
1,516 640 171 2,327
1,474 532 (659) 1,347
31 March 2012
31 March 2011
Present value of dened benet obligation Fair value of plan assets Plan asset / (liability) Changes in the present value of the dened benet obligation are as follows
10,321 (10,321)
7,994 (7,994)
31 March 2012
31 March 2011
Opening dened benet obligation Current service cost Interest cost Benets paid Actuarial (gains) / losses on obligation Closing dened benet obligation
7,994 1,516 640 171 10,321
6,647 1,474 532 (659) 7,994
Number of options granted till 31 March 2012 Particulars CISMP CIPOP Date of Grant 24-Nov-06 8,298,713 01-Jan-07 1,708,195 20-Sep-07 3,235,194 29-Jul-08 789,567 10-Dec-08 22-Jun-09 29-Jul-09 994,768 27-Jul-10 584,144 23-Dec-10 1,006,415 26-Jul-11 Total 8,298,713 8,318,283 * represents options converted from CIPOP to CIPOP Phantom during the current year. The vesting conditions of the above plans are as under-
CIESOP CIPOP Phantom* 3,467,702 5,515,053 3,773,856 36,040 5,405,144 3,027,463 4,733,714 25,958,972 34,466 43,023 77,489
The principal assumptions used in determining gratuity liability for the Companys plans are shown below:
31 March 2011 8.00% 8.00% 10.00% 10.00% 5.00% 5.00% LIC (1994-96) LIC (1994-96) Ultimate Table Ultimate Table The estimates of future salary increases, considered in actuarial valuation, take account of ination, seniority, promotion and other relevant factors, such as supply and demand in the employment market. 31 March 2012
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 eld 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 satised. 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 specic vesting conditions under CIESOP 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 nancial statements.
Discount rate Future salary increase Employee turnover Mortality rate
Amounts for the current and previous periods are as follows:

31 March 2012 Dened benet obligation Surplus / (decit) Experience adjustments on plan liabilities 10,321 (10,321) (171) 31 March 2011 7,994 (7,994) 512 31 March 2010 6,647 (6,647) (583) 31 March 2009 3,994 (3,994) (45)
The Company had adopted AS-15 Employee Benets for the rst time during the period ended 31 March 2009. Disclosures required by paragraph 120 (n) of AS-15 are required to be furnished prospectively from the date of transition and hence have been furnished for year/period ended 31 March 2009 onwards.


25. EMPLOYEE STOCK OPTION PLANS CONTINUED Details of activities under employees stock option plans
CISMP Plan 31 March 2012 Weighted Number of average exercise options Price in INR Outstanding at the beginning of the year Granted during the year Expired during the year 2,238,077 Nil Nil 2,238,077 Nil Nil 33.70 NA NA 31 March 2011 Weighted Number of average exercise options Price in INR 2,238,077 Nil Nil 33.70 NA NA
25. EMPLOYEE STOCK OPTION PLANS CONTINUED CIPOP Plan - Phantom options
31 March 2012 Weighted Number of average exercise options Price in INR
31 March 2011 Weighted Number of average exercise options Price in INR Nil Nil Nil NA NA NA
Outstanding at the beginning of the year Granted during the year Expired during the year
Nil 77,489 Nil Nil 28,448 49,041 Nil
NA 10.00 NA
Exercised during the year Forfeited / cancelled during the year Outstanding at the end of the year Exercisable at the end of the year
Nil
33.70 NA NA NA
Nil Nil 2,238,077 Nil
NA NA 33.70 NA
NA 10.00 10.00 NA
Nil Nil Nil Nil
NA NA NA NA
Weighted average fair value of options granted on the date of grant is INR 345.71 (31 March 2011: NA) The details of exercise price for stock options outstanding as at 31 March 2012 are:
Weighted average Weighted remaining average exercise contractual life price in INR of options (in years) 2.00 10.00 1.01 0.96 278.49 10.00
Weighted average fair value of options granted on the date of grant is INR 131.50 (31 March 2011: INR 131.50) Weighted average share price at the date of exercise of stock options is INR 344.15 (31 March 2011: NA)
CIPOP Plan 31 March 2012 Weighted Number of average exercise options Price in INR Outstanding at the beginning of the year Granted during the year Expired during the year 2,147,663 1,006,415 Nil 856,432 1,215,306 1,082,340 Nil 10.00 10.00 NA 31 March 2011 Weighted Number of average exercise options Price in INR 2,626,830 584,144 Nil 10.00 10.00 NA
SCHEME
Range of exercise price in INR 10.00 143-331.25 10.00
No. of options outstanding
CIPOP Plan CIESOP Plan CIPOP Plan Phantom options
1,082,340 13,963,416 49,041
10.00 10.00 10.00 NA
922,043 141,268 2,147,663 Nil
10.00 10.00 10.00 NA
Weighted average fair value of options granted on the date of grant is INR 202.15 (31 March 2011: INR 186.37) Weighted average share price at the date of exercise of stock options is INR 338.79 (31 March 2011: INR 323.30)
CIESOP Plan 31 March 2012 Weighted Number of average exercise options Price in INR Outstanding at the beginning of the year Granted during the year Expired during the year 12,730,726 4,733,714 Nil 2,384,498 1,116,526 13,963,416 2,640,232 246.00 327.75 NA 31 March 2011 Weighted Number of average exercise options Price in INR 14,646,209 3,027,463 Nil 206.43 331.25 NA
The details of exercise price for stock options outstanding as at 31 March 2011 are: 33.70 CISMP Plan 10.00 CIPOP Plan CIESOP Plan 143-331.25
2,238,077 2,147,663 12,730,726
0.08 1.25 1.10
33.70 10.00 246.00
201.94 280.31 278.49 205.23
4,020,926 9,22,020 12,730,726 1,864,110
164.45 253.08 246.00 164.94
Effect of Employees Stock Option Plans on Financial Position Effect of the employee share-based payment plans on the statement of prot and loss and on its nancial position: 31 March 2012 Particulars Total Employee Compensation Cost pertaining to share-based payment plans 21,619 Compensation Cost pertaining to equity-settled employee share-based payment plan included above 16,547 Compensation Cost pertaining to cash-settled employee share-based payment plan included above 5,072 Equity settled employee stock options outstanding as at year end 109,786 Liability for cash settled employee stock options outstanding as at year end 5,072 Deferred compensation cost of equity settled options 189,973 Deferred compensation cost of cash settled options 11,847
31 March 2011
71,453 71,453 554,722 225,304 -
Weighted average fair value of options granted on the date of grant is INR 126.64 (31 March 2011: INR 112.48) Weighted average share price at the date of exercise of stock options is INR 337.97 (31 March 2011: INR 328.61)


25. EMPLOYEE STOCK OPTION PLANS CONTINUED Inputs for Fair valuation of Employees Stock Option Plans The Share Options have also been fair valued using an Option Pricing Model (Black Scholes Model). The main inputs to the model and the Fair Value of the options, based on an independent valuation, are as under:
VARIABLES - CISMP Grant Date Stock Price/fair value of the equity shares on the date of grant (INR) Vesting date Vesting % Volatility (Weighted average) Risk free rate (Weighted average) Time to maturity in years (Weighted average) Exercise price INR Fair Value of the options (Weighted average) - INR VARIABLES - CIPOP Grant Date Stock Price/fair value of the equity shares on the date of grant (INR) Vesting date Vesting % Volatility Risk free rate Time to maturity (years) Exercise price (INR) Fair Value of the options (INR) VARIABLES - CIESOP Grant Date Stock Price/fair value of the equity shares on the date of grant (INR) Vesting date Vesting % Volatility Risk free rate Time to maturity (years) Exercise price (INR) Fair Value of the options (INR) VARIABLES - CIPOP Phantom Grant Date Stock Price of the equity shares on the reporting date Vesting date Vesting % Volatility Risk free rate Time to maturity (years) Exercise price (INR) Fair Value of the options (INR) A 24-Nov-06 160.00 Refer vesting conditions Refer vesting conditions 44.08% 7.05% 2.45 33.70 131.69 B 24-Nov-06 160.00 Refer vesting conditions Refer vesting conditions 46.59% 6.94% 2.00 33.70 130.69
25. EMPLOYEE STOCK OPTION PLANS CONTINUED Volatility is the measure of the amount by which the price has uctuated or is expected to uctuate 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. Impact of Fair Valuation Method on net prots and EPS In March 2005, the Institute of Chartered Accountants of India has issued a guidance note on Accounting for Employees Share Based Payments applicable to employee based share plan, the grant date in respect of which falls on or after April1, 2005. The said guidance note requires the Proforma disclosures of the impact of the fair value method of accounting of employee stock compensation accounting in the nancial statements. Applying the fair value based method dened in the said guidance note, the impact on the reported net prot/(loss) and earnings per share would be as follows:
31 March 2012 Prot / (loss) as reported Add: Employee stock compensation under intrinsic value method Less: Employee stock compensation under fair value method Proforma prot / (loss) Earnings Per Share (in INR) Basic - As reported - Proforma 439,617 21,619 (494,789) (33,553) 31 March 2011 (2,126,721) 71,453 (528,203) (2,583,471)
01-Jan-07 160.00 01-Jan-10
20-Sep-07 166.95 20-Sep-10
29-Jul-08 228.55 29-Jul-11
29-Jul-09 234.75 29-Jul-12
27-Jul-10
331.50 27-Jul-13 Refer vesting conditions 53.73% 6.99% 3.12 10.00 323.39
26-Jul-11
0.23 (0.02)
(1.12) (1.36)
Refer vesting Refer vesting Refer vesting Refer vesting conditions conditions conditions conditions 41.61% 36.40% 37.49% 43.72% 7.33% 7.23% 9.37% 5.78% 3.12 3.12 3.12 3.12 10.00 10.00 10.00 10.00 152.05 158.97 221.09 226.40 01-Jan-07 160.00 01-Jan-10 100.00% 41.04% 7.50% 6.50 160.00 87.30 20-Sep-07 166.95 20-Sep-10 100.00% 40.24% 7.65% 6.50 166.95 90.72 29-Jul-08 228.55 29-Jul-11 100.00% 39.43% 9.20% 6.50 227.00 130.42 10-Dec-08 150.10 10-Dec-11 100.00% 38.19% 6.94% 6.50 143.00 79.80 29-Jul-09 234.75 29-Jul-12 100.00% 39.97% 6.91% 6.50 240.05 122.24
Diluted - As reported - Proforma 26. LEASES
0.23 (0.02)
(1.12) (1.36)
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. 27. RELATED PARTY DISCLOSURES Names of related parties and related party relationship Related parties where control exists Holding / Ultimate holding company
27-Jul-10
331.50 27-Jul-13 100.00% 53.73% 6.99% 6.50 331.25 141.56
26-Jul-11
322.60 26-Jul-14 100.00% 46.39% 8.37% 6.50 327.75 190.16
1. 2.
Vedanta Resources Plc. (w.e.f. 8 Dec 2011) Vedanta Resources Holdings Limited (w.e.f. 8 Dec 2011)
Fellow Subsidiary Subsidiary companies
29-Jul-09
27-Jul-10
3. 4. 5. 1. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Volcan Investments Limited (w.e.f. 8 Dec 2011) Cairn UK Holdings Limited (upto 7 Dec 2011)* Cairn Energy Plc. (upto 7 Dec 2011)* Sterlite Industries (India) Limited (w.e.f. 8 Dec 2011) Cairn Energy Australia Pty Limited Cairn Energy India Pty Limited CEH Australia Pty Limited Cairn Energy Asia Pty Limited Sydney Oil Company Pty Limited Cairn Energy Investments Australia Pty Limited Wessington Investments Pty Limited CEH Australia Limited Cairn India Holdings Limited CIG Mauritius Holding Private Limited CIG Mauritius Private Limited Cairn Energy Holdings Limited


27. RELATED PARTY DISCLOSURES CONTINUED
Cairn Energy Discovery Limited Cairn Exploration (No. 2) Limited Cairn Exploration (No. 6) Limited Cairn Energy Hydrocarbons Limited Cairn Petroleum India Limited Cairn Energy Gujarat Block 1 Limited Cairn Exploration (No. 4) Limited Cairn Exploration (No. 7) Limited Cairn Energy Development Pte Limited (Liquidated during the previous year) 22. Cairn Lanka (Pvt) Limited 23. Cairn Energy Group Holdings BV 24. Cairn Energy India West BV 25. Cairn Energy India West Holding BV 26. Cairn Energy Gujarat Holding BV 27. Cairn Energy India Holdings BV 28. Cairn Energy Netherlands Holdings BV 29. Cairn Energy Gujarat BV 30. Cairn Energy Cambay BV 31. Cairn Energy Cambay Holding BV * w.e.f. 8 December 2011 Cairn Energy Plc. and Cairn UK Holdings Limited only have signicant inuence over the company. Refer note 37. Related parties with whom transactions have taken place during the year Rahul Dhir, Managing Director and Chief Executive Ofcer Winston Frederick Bott Jr., Executive Director and Chief Operating Ofcer (upto 15 Jun 2011) Indrajit Banerjee, Executive Director and Chief Financial Ofcer (upto 23 Aug 2011)
1 13. 14. 15. 16. 17. 18. 19. 20. 21.
Nature of the Transactions Equity contributions made during the year
Related Party CIG Mauritius Holding Private Limited
31 March 2012
31 March 2011
7,107,000 14,428,587 319,500 1,420,008 28,897
391,165 1,267,674 163,001
Redemption of Preference shares during the year Guarantee given Guarantee received back Recovery of share option charge Shares issued including premium and stock option charge
Cairn India Holdings Limited Cairn Lanka Private Limited Cairn Lanka Private Limited Cairn Energy India Pty Limited
Indrajit Banerjee Rahul Dhir Total
4,852 282,669 287,521 2,400 247 711 3,358
21,074 Nil 21,074 2,400 1,200 1,800 5,400
Remuneration
Rahul Dhir Winston Frederick Bott Jr. Indrajit Banerjee Total
The remuneration to the key management personnel does not include the provisions made for gratuity and leave benets, as they are determined on an actuarial basis for the Company as a whole. Balances outstanding as at the end of the year: Nature of the Balance Related Party Guarantee given Loans & Advances Cairn Lanka Private Limited Cairn Energy India Pty Limited CIG Mauritius Holdings Private Limited CIG Mauritius Private Limited Cairn Lanka Private Limited Cairn Energy Hydrocarbons Limited Total Cairn Energy Plc Cairn Energy Gujarat Block 1 Limited Cairn Exploration (No. 2) Limited Cairn Exploration (No. 4) Limited Cairn Exploration (No. 6) Limited Cairn Exploration (No. 7) Limited Sterlite Industries (India) Limited Total
31 March 2012
31 March 2011
319,500 383,117 491 264 828 609 385,309 1,011 1,011
1,420,008 362,648 491 264 827 31,432 395,662 5,965 88,554 302,518 76,568 7,733 163,446 6,44,784
Key management personnel
Related party transactions The following table provides the total amount of transactions that have been entered into with related parties for the relevant nancial year:
Nature of the Transactions Expenses incurred by related party on behalf of the Company Related Party Cairn Energy India Pty Limited Cairn Energy Plc. Cairn Lanka Private Limited 31 March 2012 15,087 1,300 117 31 March 2011 28,360 8,781 -
Other current liabilities including trade payables
Sterlite Industries (India) Limited Total Expenses incurred by the Company on behalf of related party Cairn Energy India Pty Limited Cairn Energy Gujarat Block 1 Limited Cairn Exploration (No. 2) Limited Cairn Exploration (No. 6) Limited Cairn Exploration (No. 7) Limited Cairn Lanka Private Limited Total
1,123 17,627 468 1 1 118 588
37,141 10,804 27,197 560 38,561 28. CAPITAL AND OTHER COMMITMENTS
Capital commitments (net of advances) Companys share of Joint Ventures Exploration activities INR 105,912 thousand (31 March 2011: INR 67,462 thousand). Other commitments Companys 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).


29. DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE The Company did not take any derivative instruments during the current year / previous year. Particulars of unhedged foreign currency exposures are as follows31 March 2012 31 March 2011 Trade receivables 4,721 1,681 Loans and advances 162,026 51,743 Other current liabilities including trade payables 198,782 693,467 30. SCHEME OF ARRANGEMENT 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 Honble High Court of Madras and the Honble 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 nancial 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. 31. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006 31 March 2012
The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year Principal amount due to micro and small enterprises Interest due on above -
35. IMPORTED AND INDIGENOUS SPARE AND PARTS CONSUMED IN OIL & GAS EXPLORATION ACTIVITIES Percentage of total consumption Amount 31 March 2012 31 March 2011 31 March 2012 31 March 2011 Imported 99.12% 97.23% 31,795 27,911 Indigenous 0.88% 2.77% 281 784 100.00% 100.00% 32,076 28,695 36. SEGMENTAL REPORTING 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 nancial reporting systems. Accordingly, the gures appearing in these nancial statements relate to the Companys 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 conned to India in terms of oil and gas blocks and customers. Accordingly, the gures appearing in these nancial statements relate to the Companys single geographical segment, being operations in India. 37. CHANGE OF CONTROL OF THE COMPANY The sale of shares of the Company by Cairn UK Holdings Limited and its holding company, Cairn Energy Plc. to Vedanta Resources Plc. 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. 38. The Board of Directors, subject to the approval of the shareholders, have reappointed the Managing Director of the Company for a period of ve years w.e.f. 22 August 2011. 39. DEFERRED TAX 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 xed assets/exploration assets as per tax books and nancial books. However, as the management is not virtually certain of subsequent realization of the asset, the same has not been recognized in these nancial statements. 40. LOANS AND ADVANCES IN THE NATURE OF LOANS GIVEN TO SUBSIDIARIES AND ASSOCIATES AND FIRMS/ COMPANIES IN WHICH DIRECTORS ARE INTERESTED
31 March 2011
The amount of interest paid by the buyer in terms of section 16 of the MSMED Act 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specied under the MSMED Act 2006. The amount of interest accrued and remaining unpaid at the end of each accounting year The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act 2006 32. VALUE OF IMPORTS CALCULATED ON CIF BASIS
31 March 2012 Stores and spares 50,597
31 March 2011 45,392
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, rms and companies, in which directors are interested.
33. EXPENDITURE IN FOREIGN CURRENCY (Accrual Basis)

31 March 2012 Professional fees 63,027 31 March 2011 45,740
Data acquisition and analysis Exploration cost Public relation expenses Sponsorship Travelling and conveyance Staff welfare expenses Miscellaneous expenses
46,767 286,686 10,229 2,639 9,280 1,696 420,324
286,352 381 4,803 6,738 258 1,489 345,761
34. EARNINGS IN FOREIGN CURRENCY (Accrual Basis)

31 March 2012 Parent company overhead 87,961 31 March 2011 23,943

Auditors Report
The Board of Directors Cairn India Limited
1. We have audited the attached consolidated balance sheet of Cairn India Group, as at March 31, 2012 comprising Cairn India Limited (the Company) and its subsidiaries (together, the Group), and also the consolidated statement of prot and loss and the consolidated cash ow statement for the year ended on that date annexed thereto. These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying nancial statements include Cairn India Groups share of net assets, expenses and cash outows aggregating to INR 848,397 thousand, INR 59,054 thousand, INR 210 thousand respectively in the unincorporated joint ventures the unaudited information with respect of which has been provided to us by the management of the Company and relied upon by us. We report that the consolidated nancial statements have been prepared by the Companys management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, notied pursuant to the Companies (Accounting Standards) Rules, 2006, (as amended). In our opinion and to the best of our information and according to the explanations given to us, the consolidated nancial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) (b) (c) in the case of the consolidated balance sheet, of the state of affairs of the Cairn India Group as at March 31, 2012; in the case of the consolidated statement of prot and loss, of the prot for the year ended on that date; and in the case of the consolidated cash ow statement, of the cash ows for the year ended on that date.
41. PREVIOUS YEAR FIGURES During the year ended 31 March 2012, the revised Schedule VI notied under the Companies Act 1956, became applicable to the Company, for preparation and presentation of its nancial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of nancial statements. However, it has signicant impact on presentation and disclosures made in the nancial statements. The Company has also reclassied the previous year gures in accordance with the requirements applicable in the current year.
2.
3.
Aman Mehta Director
4.
5.
For S.R. BATLIBOI & CO. Firm registration number: 301003E Chartered Accountants per Raj Agrawal Partner Membership No.: 82028

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76 I CAIRN INDIA ANNUAL REPORT 2011-12 MANAGEMENT DISCUSSION AND ANALYSIS

CAIRN INDIA ANNUAL REPORT 2011-12 I 77

MANAGEMENT DISCUSSION AND ANALYSIS

AUDITED FINANCIAL STATEMENTS

78 I CAIRN INDIA ANNUAL REPORT 2011-12 AUDITED FINANCIAL STATEMENTS

CAIRN INDIA ANNUAL REPORT 2011-12 I 79 AUDITED FINANCIAL STATEMENTS

(c) (ii) (a) (b)

(c) (iii) (a)

(vi) (vii) (viii)

80 I CAIRN INDIA ANNUAL REPORT 2011-12 AUDITED FINANCIAL STATEMENTS

CAIRN INDIA ANNUAL REPORT 2011-12 I 81 AUDITED FINANCIAL STATEMENTS

Notes EQUITY AND LIABILITIES

25,655 540,318 308,534,591 1,542 35,378 309,137,484

24,739 16 218,780 314,865,228 4,082 38,351 315,151,196

18,213,411 4,721 4,600,004 588,620 112,350 23,519,106 332,656,590

10,817,291 1,681 6,529,282 470,017 223,183 18,041,454 333,192,650

The accompanying notes are an integral part of the nancial statements.

As per our report of even date

For S. R. Batliboi & Co. Firm Registration No.:301003E Chartered Accountants

For and on behalf of the Board of Directors

per Raj Agrawal Partner Membership No. 82028

Navin Agarwal Chairman

Rahul Dhir Managing Director and Chief Executive Ofcer

Aman Mehta Director

Place: Gurgaon Date: 20 April 2012

Sunil Bohra Deputy Chief Financial Ofcer

Neerja Sharma Company Secretary

82 I CAIRN INDIA ANNUAL REPORT 2011-12 AUDITED FINANCIAL STATEMENTS

CAIRN INDIA ANNUAL REPORT 2011-12 I 83 AUDITED FINANCIAL STATEMENTS

Statement of Prot and Loss

Cash Flow Statement

1,114,492 178,778 475,008

1,866,911 682,704 (2,126,721)

For S. R. Batliboi & Co. Firm Registration No.:301003E Chartered Accountants

For and on behalf of the Board of Directors

per Raj Agrawal Partner Membership No. 82028

Navin Agarwal Chairman

Rahul Dhir Managing Director and Chief Executive Ofcer

Aman Mehta Director

(557,183) (6,769,645) 14,428,587 (7,107,000) (4,542,265) 6,784,299

(1,076,468) 5,999,584 (391,165) (8,806,500) 4,723,612

553,556 300,122 3,090,471

73,038 647,690 1,169,791

Place: Gurgaon Date: 20 April 2012

Sunil Bohra Deputy Chief Financial Ofcer

Neerja Sharma Company Secretary

565,513 (1,000,000) (1,132,559) (1,567,046) 312,756

670,480 14,000,000 (13,950,000) (801,081) (39,604) (120,205) 518,532

84 I CAIRN INDIA ANNUAL REPORT 2011-12 AUDITED FINANCIAL STATEMENTS

CAIRN INDIA ANNUAL REPORT 2011-12 I 85 AUDITED FINANCIAL STATEMENTS

Statement of Cash Flow Continued

Notes to Financial Statements

Oil & Gas blocks/elds

As per our report of even date

For S. R. Batliboi & Co. Firm Registration No.:301003E Chartered Accountants

For and on behalf of the Board of Directors

per Raj Agrawal Partner Membership No. 82028

Navin Agarwal Chairman

Rahul Dhir Managing Director and Chief Executive Ofcer