CAIRNS INDIA

PRIVATE LIMITED
ENERGY FOR INDIA
 An Introduction

 Cairn India is one of the largest oil and gas exploration and production company and has a
working interest in 10 blocks in India and 1 block in Sri Lanka. Three of these are currently
producing hydrocarbons. Cairn India is focused on creating shareholder value by developing
its world class resource base in Rajasthan and seeks to continue with its track record of
exploration success. Cairn India’s portfolio is fostered in both mature and frontier areas, as
well as in regions and basins where the current data set can be optimised or reinterpreted.
 Cairn India has a Scottish heritage. In 1979 Sir Bill Gammell, founded Castle Cairn Financial
Services. By 1986, the majority of its work was in the expanding gas and oil industry and a
new company was formed – Cairn Energy Management. Presently , the Cairn India Private
Limited is headed by Mr.Rahul Dhir.
  The company was acquired by Caledonian Offshore Limited in 1988 and was renamed
Cairn Energy PLC, just prior to its flotation on the London Stock Exchange. As the Indian oil
and gas market deregulated in the early 1990s, Cairn’s focus turned to South Asia. Cairn
acquired Command Petroleum Ltd in 1996, an Australian-quoted company with interests in
India.
 In January 2004, following the largest oil discovery by any company in India since 1985,
Cairn added the Mangala oilfield in Rajasthan to the assets and this, along with the other
discoveries in Rajasthan, will form the core of the future developments in India. Cairn India
was floated on the National Stock Exchange and Bombay Stock Exchange in January 2007.
• DIVIDEN
 DIVIDEND
In view of the inadequacy of profits in Cairn India Limited, the Directors regret their inability to
Recommend any dividend.
EQUITY SHARES
During the financial year under review, 306,316 equity shares of INR 10/- each were allotted on exercise of
Employee Stock Options by the employees of the Company or of its subsidiaries. Accordingly, the issued and
paid up capital of the Company has increased to INR 18,969,741,320 divided into 1,896,974,132 equity
shares of INR 10/- each. Subsequent to the close of the financial year, the Company allotted 239,288 equity
shares of INR. 10/- each on exercise of Stock Options by the employees. Accordingly, the issued and paid up
capital of the Company has increased to INR18,972,134,200 divided into 1,897,213,420 equity Shares of INR
10/- each
 EMPLOYEE STOCK OPTION SCHEMES
Your Company has established share incentive schemes viz., Cairn India Senior Management Plan (CISMP),
Cairn India Performance Option Plan (CIPOP) and Cairn India Employee Stock Option Plan (CIESOP) pursuant
to which options to acquire shares have been granted to select employees and Directors of the Company and
its subsidiaries. The Company also has cash awards option plan (phantom stock options) for expatriate
employees of the Company and its subsidiaries. During the year, stock/cash options have been granted to
the executive Directors and employees of the Company or of its subsidiaries. On exercise of the options so
granted, the paid-up equity share capital of the Company will increase in terms of the Stock Option Plans
mentioned above. The details of stock options granted by the Company are disclosed in compliance with
Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines,. During the period under review, 306,316 equity shares of INR 10/- each were
allotted pursuant to the exercise of the stock options.
contd..
SUBSIDIARY COMPANIES
As on 31 March, 2010, the Company had 31 subsidiaries including indirect subsidiaries.
All these companies are beneficially owned 100% by Cairn India Limited. These
subsidiaries have their own Boards of Directors having the rights and obligations to
manage such companies in the best interest of such Companies. The Company has its
representatives on the Board of subsidiary companies and monitors the performance of
such companies regularly. Pursuant to the provisions of Section 212(8) of the Companies
Act, 1956, the Company has obtained exemption from the Ministry of Corporate Affairs,
Government of India from attaching the accounts of its subsidiaries to the Company’s
Annual Accounts for the financial year ended 31 March, 2010.

 SCHEME OF ARRANGEMENT
In order to simplify and consolidate the multi layered structure comprising foreign
subsidiaries, the Company had proposed a scheme of arrangement between Cairn India
Limited, Cairn Energy India Pty Limited, Cairn Energy India West B.V., Cairn Energy
Cambay B.V., Cairn Energy Gujarat B.V. and their respective shareholders and creditors
(the 'Scheme'). The members of the Company had approved the Scheme with
overwhelming majority in the Court convened meeting held on 18 February, 2010.
STOCK OPTION SCHEMES
BALANCE SHEET AS PROVIDED IN THE ANNUAL REPORT
CAPITAL & LIABILITIES :(in ‘0000rss) Cairn India Ltd. ONGC Aban Offshore Ltd. Jindal Drilling GAIL (India) Ltd.
Owners' Fund Mar` 09   Mar` 09   Mar` 09   Mar` 09   Mar` 09  
Equity Share Capital 1896.67   2138.89   7.56   11.47   1268.48  
Share Application Money 38.9   0   0   0   0  
Peference Share Capital 0   0   326   0   0  
Reserves & Surplus 30055.23   76596.53   911.62   258.88   13501.15  

Loan Funds

Deposits 0   0   0   0   0  

Borrowings made by the bank 0   0   0   0   0  
Other Liabilities & Provisions 139.21   57512.08   342.14   310.19   9638.09  

Total 32130   136248   1588   580   24407  

ASSETS
Cash & Balances with RBI 2763.28   19096.21   234.28   17.04   3456.15  
Money at call and Short Notice 0   0   0   0   0  

Investments 29225.4   5090.32   1380.75   64.85   1737.27  

Advances 0   0   0   0   0  

Fixed Assets

Gross Block 0.06   61355.61   1206   127.48   17603.98  

Less: Revaluation Reserve 0   0   0   0   0  
Less: Accumulated Depreciation 0   50941.23   716.88   43.53   8553.66  

Net Block 0.06   10414.37   489.12   83.95   9050.32  

Capital Work-in-progress 54.03   52923.19   35.13   0.39   2426.33  

Other Assets 2850.52   83204.71   2755.45   470.85   12393.93  

Miscellaneous Expenses not written off

0   650.61   0   0   0  

Total 32130   136248   1588   580   24407  

Note
Contingent liabilities 351.74   36024.57   2457.78   5.64   11352.14  
Book Value of Unqouted Investment 29225.4   2333.84   1379.73   64.85   897.96  
Market Value of Qouted Investment 0   11143.95   1.33   0   4905.94  
 ANALYSIS OF FINANCIAL SOURCES IN YEARLY BASIS
Amount in ‘0000 rs. Dec '06(12 months) Dec '07(12 months) Mar '09(15 months) Mar '10(12 months)
Sources Of Funds
Total Share Capital 1,765.31 1,778.40 1,896.67 1,896.97
Equity Share Capital 1,765.31 1,778.40 1,896.67 1,896.97
Share Application Money 0.00 94.71 38.90 46.40
Reserves 27,507.07 27,500.37 30,055.23 29,993.37
Revaluation Reserves 0.00 0.00 0.00 0.00
Networth 29,272.38 29,373.48 31,990.80 31,936.74
Secured Loans 0.00 0.00 0.00 1,345.00
Unsecured Loans 20.47 0.00 0.00 0.00
Total Debt 20.47 0.00 0.00 1,345.00
Total Liabilities 29,292.85 29,373.48 31,990.80 33,281.74
Application Of Funds
Gross Block 0.00 0.00 0.06 0.11
Less: Accum. Depreciation 0.00 0.00 0.00 0.09
Net Block 0.00 0.00 0.06 0.02
Capital Work in Progress 0.00 0.00 54.03 24.21
Investments 26,681.87 29,413.73 29,225.40 33,129.09
Inventories 0.00 0.00 0.00 0.98
Sundry Debtors 0.00 1.27 1.79 1.57
Cash and Bank Balance 5,283.33 0.78 1.40 192.79
Total Current Assets 5,283.33 2.05 3.19 195.34
Loans and Advances 5.58 5.48 85.45 84.16
Fixed Deposits 654.11 0.00 2,761.88 0.00
Total CA, Loans & Advances 5,943.02 7.53 2,850.52 279.50
Deffered Credit 0.00 0.00 0.00 0.00
Current Liabilities 3,332.04 13.84 107.67 148.07
Provisions 0.00 33.93 31.54 3.01
Total CL & Provisions 3,332.04 47.77 139.21 151.08
Net Current Assets 2,610.98 -40.24 2,711.31 128.42
Miscellaneous Expenses 0.00 0.00 0.00 0.00
Total Assets 29,292.85 29,373.49 31,990.80 33,281.74
Contingent Liabilities 0.00 0.00 351.74 129.60
Book Value (Rs) 165.82 164.64 168.46 168.11
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 09-10
 COMPARATIVE ANALYSIS OF THE P/L ACCCOUNT WITH ITS COMPETITORS

ONGC    Aban Offshore Ltd.    Jindal Drilling    GAIL (India) Ltd.   

Amount in thousand Rupees
Operating Income 45980.18   862.62   950.02   18471.38  

Other income 1750.79   137.12   4.03   332.59  

Employee Expenses 840.63   55.04   28   512.73  

Other Expenses 16863.09   246.14   828.1   12843.18  

Total interest 12.57   247.68   1.57   49.99  

Operating profit 29811.55   450.88   90.06   3694.96  

Provisions Made 0   0   0   0  

Net depreciation 10210.76   79.24   9.1   422.94  

Total taxation 6610.18   131.21   27.81   1043  

Extra ordinary item 0   0   0   0  

Net profit / loss 12991.14   240.43   53.15   2229.02  

Prior year adjustment 0.53   0   0   0  

Reserve written back 0   0   0   0  

Equity capital 2138.87   8.7   11.47   1268.48  

Total reserve and surplus 0   0   0   0  

Equity Dividend Rate 0   0   0   0  

Agg. Non-Promotor Shares 55.31   2.05   0.57   52.51  

Agg. Non-Promotor Holding(%) 0   0   0   0  

GovernmentShare 0   0   0   0  

CapitalAdequacyRatio 0   0   0   0  

EPS 0   0   0   0  

 YEARLY ANALYSIS OF THE P/L ACCOUNT
Amount in CRORE OF rupees Mar` 09 Mar` 07 Mar` 06

Income :

Operating Income 3.73 1.27 0

Expenses:

Financial Expenses 0.34 0.02 0.17

Personnel Expenses 9.01 2.13 0.09

Selling Expenses 1.44 1.43 0

Adminstrative Expenses 50.8 76.25 34.87

Expenses Capitalised 0 0 0

Operating Expenditure 61 79 35

Operating Profit -142.95 -79.44 -34.96

Other Recurring Income 154.17 29.93 5.91

Adjusted PBDIT 11.22 -49.51 -29.05

Provisions Made 0 0 0

Depreciation 0 0 0

Other Write offs 20.88 0 0

Adjusted PBT -10.01 -49.53 -29.22

Tax Charges 57.83 32.05 0

Adjusted PAT -67.84 -81.58 -29.22

Non Recurring Items 122.08 2.76 0

Other Non Cash adjustments 0 0 0

Reported Net Profit 54 -79 -29

Earnigs Before Appropriation -53.8 -108.04 -29.22

Equity Dividend 0 0 0

Preference Dividend 0 0 0

Retained Earnings -53.8 -108.04 -29.22

 FINANCIAL RATIOS FOR THE PAST FOUR YEARS
  Dec '06 Dec '07 Mar '09 Mar '10
Investment Valuation Ratios
Face Value 10.00 10.00 10.00 10.00
Dividend Per Share -- -- -- --
Operating Profit Per Share (Rs) -0.20 -0.45 -0.75 -0.88
Net Operating Profit Per Share (Rs) -- 0.01 0.02 0.02
Free Reserves Per Share (Rs) 155.62 154.64 158.46 -0.65
Bonus in Equity Capital -- -- -- --
Profitability Ratios
Operating Profit Margin(%) -- -6,250.96 -3,829.26 -5,218.17
Profit Before Interest And Tax
-- -254.61 -90.53 -102.37
Margin(%)
Gross Profit Margin(%) -- -6,250.96 -3,829.26 -5,219.74
Cash Profit Margin(%) -- -261.48 -29.74 -47.57
Adjusted Cash Margin(%) -494.77 -261.48 -29.74 -47.57
Net Profit Margin(%) -494.77 -252.62 34.35 -42.20
Adjusted Net Profit Margin(%) -- -252.62 34.35 -42.20
Return On Capital Employed(%) -- -0.16 -0.03 -0.02
Return On Net Worth(%) -0.10 -0.26 0.16 -0.21
Adjusted Return on Net Worth(%) -0.09 -0.27 -0.21 -0.24
Return on Assets Excluding Revaluations -0.09 -0.27 0.17 168.11
Return on Assets Including Revaluations -0.09 -0.27 0.17 168.11

Return on Long Term Funds(%) -0.09 -0.16 -0.03 -0.02

Liquidity And Solvency Ratios

Current Ratio 1.77 0.16 20.48 1.85
Quick Ratio 1.78 0.16 20.48 1.84
Debt Equity Ratio -- -- -- 0.04
Long Term Debt Equity Ratio -- -- -- 0.04
Debt Coverage Ratios
Interest Cover -169.46 -2,371.18 -249.01 -0.11
Total Debt to Owners Fund 0.00 -- -- 0.04
Financial Charges Coverage Ratio -169.46 -2,371.18 32.55 -0.11
Financial Charges Coverage Ratio
-169.46 -3,773.76 218.99 -0.04
Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio -- -- -- 3.26
Debtors Turnover Ratio -- 1.00 2.44 1.90
Investments Turnover Ratio -- -- -- 3.26
Fixed Assets Turnover Ratio -- -- -- 30.37
Total Assets Turnover Ratio -- -- -- --
Asset Turnover Ratio -- -- -- 30.37
Average Raw Material Holding -- -- -- --
Average Finished Goods Held -- -- -- --
Number of Days In Working Capital 159,138.93 -11,402.08 326,829.58 14,429.30
Profit & Loss Account Ratios
Material Cost Composition -- -- -- --
Imported Composition of Raw
Materials Consumed -- -- -- --

Selling Distribution Cost Composition -- 112.68 38.53 --

Expenses as Composition of Total Sales -- 99.99 100.66 100.02
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit -- -- -- --
Dividend Payout Ratio Cash Profit -- -- -- --
Earning Retention Ratio -- -- 100.00 --
Cash Earning Retention Ratio -- -- -- --
AdjustedCash Flow Times -- -- -- --
Earnings Per Share -0.17 -0.44 0.29 -0.36
Book Value 165.82 164.64 168.46 168.11
 Share Holdings

Here , we can see that majority of shares of the company is help by the promoter company
namely cairns energy plc with around 22% being held by the public and financial bodies. During
the year, PETRONAS International Corporation Ltd (PICL), the overseas arm of Petroliam Nasional
Berhad (PETRONAS), acquired from Cairn Energy PLC 43.6 million shares in Cairn
India,representing a 2.3% stake and taking the total holding of PICL in the Company to 14.94%.
 STOCK MARKET

As on 31 March, 2010, over 99.99% shares of the Company were held in
dematerialised form . The shares of the Company are permitted to be traded
only in dematerialised form under ISIN INE910H01017.
There are no outstanding GDRs / ADRs / warrants or any convertible
instruments issued by the Company. However, the Company has outstanding
employee stock options
The Company’s Initial Public Offering (IPO) of 328,799,675 equity shares,
which closed on 15 December, 2006, was fully subscribed aggregating INR
52,608 million at the issue price of INR 160. The Company also placed INR
33,547 million through a pre-IPO placement and exercised its Green Shoe
Option for 13,085,041 shares. The total proceeds aggregated INR 88,249
million.
The Company made a preferential issue of 113,000,000 equity shares to
Petronas International Corporation Ltd and Orient Global Tamarind Fund Pte
Ltd. amounting to INR 25,345.9 million on 22 April, 2008. The shares were
issued at a premium of INR 214.30 per share . During the year under review,
the Company has received INR 20,363,110 as subscription amount, pursuant
to exercise of stock options granted to employees.
The equity shares of the Company are listed on Bombay Stock Exchange Limited (BSE)
and the National Stock Exchange of India limited (NSE).the initial public offering of the
company completed in December 2006 at issue price 160

As we can see that the shares of cairns India limited has always been in line the Nifty
and Sensex. There has not been a major fluctuation in its market price even in time of
global economic recession indicating it to be stable entity.
CASH FLOW STATEMENT
AN OVERVEIW OF THE FINANCIAL PERFORMANCE OF THE COMPANY
SUBSIDIARIES OF CIL AND THEIR SHAREHOLDING
Consolidated balance sheet
Consolidated P/L Account
CONSOLIDATED CASH FLOW STATEMENT
The consolidated balance sheet has taken into account the financial
statements of all its subsidiaries as well.