Cairn India announces FY2013 results

22 April 2013

Vedanta Resources plcCairn India announces Results for the year ended 31 March 2013

For Immediate Release 22 April, 2013

Cairn India Limited

Consolidated Financial Results for the twelve month period ended 31 March, 2013

The following commentary is provided in respect of the audited financial results and operational highlights of Cairn India Limited and its subsidiary companies (referred to as "Cairn India" or the "Company", NSE: CAIRN, BSE: 532792, Bloomberg: CAIR) for the twelve month period (from April 2012 - March 2013) i.e. FY 2012-13, in accordance with Indian GAAP.

Please note: INR denotes Indian Rupee and US$ denotes US Dollar.

Result Highlights

·; Record revenues of INR 175,241 million (US$ 3,223 million), a 48% increase over the previous year and profit after tax (excluding forex and impact of the reorganisation) of INR 116,063 million (US$ 2,135 million), a 56% increase over the previous year

·; Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) of INR 130,332 million (US$ 2,397 million), a 41% increase over the previous year

·; Generated cash flows of INR 110,556 million (US$ 2,034 million); consequently the balance sheet remains strong with cash balance of INR 167,131 million (US$ 3,073 million), and debt free

·; Cairn India Board has recommended a final dividend of INR 6.5 per share, resulting in a total dividend of INR 11.5 per share for the year, culminating in a total payout of 21.2% (including dividend distribution tax) of profit after tax for the year

·; Gross operated production of 205,323 barrels of oil equivalent per day (boepd), a 19% increase over the previous year; positioned to provide consistent growth

·; Aishwariya field commenced oil production; the fifth oil field in the Rajasthan block to come online

·; Re-commenced exploration drilling in the Rajasthan block; 26th discovery made in April 2013

·; Gas sales commenced from the Rajasthan block

·; Formal application for an extension of the licence term as provided in the PSC has been submitted to the MoPNG

·; Cairn India plans to drill in excess of 450 wells in the Rajasthan block over a three year period; includes 100 Exploration and Appraisal (E&A) wells and the balance as development wells to sustain and enhance production volumes

·; The 100 E&A wells target a gross recoverable risked prospective resource of 530 mmboe; drilling in the first year is expected to test around half of the prospective resource volumes

·; The infill drilling campaign in CB/OS-2 was completed successfully; resulting in doubling the production potential

·; Cairn India farmed-in to the PetroSA 'Block 1' in the Orange Basin, offshore South Africa, with 60% interest and operatorship

Elango P, Whole Time Director and Interim CEO, Cairn India said:

"In FY2012-13 we have achieved spectacular results delivering best in class production growth and operating costs.

The operating environment has also substantially improved with key approvals coming in at a faster pace that enabled us to ramp up Mangala production, bring Aishwariya field online, commence gas sales and most importantly re-commence exploration in Rajasthan.

We have initiated the largest ever exploration and appraisal programme in our history to unlock further potential in Rajasthan as well as focus on our next stage of growth beyond Rajasthan. Commensurate with the development and exploration activity across the existing portfolio, we plan for a net capital investment of US$ 3 billion through FY2015-16."

·; Cairn India re-commenced exploration activity in the Rajasthan block in February 2013

o Oil was discovered in the first exploration well, Raag S-1, drilled in the block in April 2013

o Drilling in the first year is expected to test around half of the prospective resource volumes

o Exploration Strategy is to extend proven plays and test new plays

·; Rajasthan block current production at ~175,000 bopd; FY2013-14 exit production rate expected at 200,000-215,000 bopd

o Mangala field producing at plateau rates; infill wells planned this year for sustaining and extending plateau

o Aishwariya field commenced production in March 2013; expected to ramp up to approved rate over the next few months

o Bhagyam field expected to ramp up to approved rate in H2 FY2013-14; additional wells planned this year

·; Mangala Enhanced Oil Recovery (EOR) polymer Field Development Plan (FDP) approval is in progress; technical alignment with Joint Venture partner achieved; full field implementation in FY 2014-15 will result in extension of the field's production plateau

·; Development Plans for the Barmer Hill formation, the NI field and NE field have been submitted to the Operating Committee; production from Barmer Hill is expected to commence this fiscal year, subject to approvals

·; The Central Processing Terminal (CPT) to Salaya section of the oil pipeline has been tested and de-bottlenecked; it is now ready to deliver higher volumes in line with the planned production ramp up

·; In KG-ONN-2003/1 block, appraisal drilling will commence shortly; this will help evaluate the size and commerciality of the second discovery i.e. Nagayalanka-SE-1

India

·; In Ravva, preparations are ongoing to drill a 'high value, high risk' deeper prospect; drilling planned in H2 FY 2013-14

·; Following discussions with MoPNG, the three force majeure blocks (KG-OSN-2009/3, MB-DWN-2009/1 and PR-OSN-2004/1) have seen significant progress toward resumption of exploration activity

o In the KG-OSN-2009/3 block, approval has been received to carry out petroleum operations in 60% of the block area with certain conditions

International

·; In the SL-2007-01-001 block, two gas discoveries were made out of the four exploration wells drilled; options to monetize the discovered gas resources are under evaluation

·; Cairn India farmed-in to the PetroSA 'Block 1' in the Orange Basin, offshore South Africa, with 60% interest and operatorship

o Regulatory approvals by the South African authorities in place

o Pursuant to this, a 3D seismic survey has been initiated; 80% survey completed

CHIEF EXECUTIVE'S REVIEW

I am pleased to report that we achieved best in class performance in terms of production growth and dollars spent developing and producing each barrel of oil while maintaining the highest standards of safety. We delivered significant value to all stakeholders and continue to contribute to the Nation and the communities in which we operate. During the year, our operations helped reduce our nation's dependence on oil imports by ~INR 385 billion (~US$ 7 billion) and contributed ~INR 200 billion (~US$ 3.6 billion) to the exchequer. These results are a reflection of the commitment and capabilities of our people and support from our joint venture partners and the government.

Together with our JV partner, ONGC, we achieved three significant milestones in our world-class Rajasthan asset:

·; Commenced production from Aishwariya - the third largest discovery in the block. This is the fifth producing oil field from the block and will contribute towards achieving production growth from the block

·; Commenced commercial sale of gas from the block- this is the first step towards unlocking the natural gas potential of the block

·; Re-commenced exploration

Our other producing fields in the Rajasthan block continue to perform efficiently and have enabled us to deliver best in class production growth at low development and operating costs. The block currently produces ~175,000 barrels of oil per day (~8.7 mn tonne per annum) which constitutes more than 20% of domestic oil production. Following a successful EOR polymer flood pilot, a Field Development Plan for a full field application of polymer flood in the Mangala field has been submitted to the JV and is currently under the approval process. We have reached a complete technical alignment with our JV partner and are working towards full field implementation in FY 2014-15. The Development Plans for the Barmer Hill formation, the NI field and NE field have also been submitted to the Operating Committee. Production from Barmer Hill is expected to commence this fiscal year, subject to approvals.

After a long hiatus, GoI provided policy clarity to allow exploration activity in development blocks and this enabled us to move quickly to ensure we unlock the full potential of the Rajasthan Block. We immediately embarked on an intensive exploration programme which met with its first success - our 26th discovery in the block, which further reaffirmed our belief that this world class block has significant untapped potential. Even as we focus on implementing an aggressive exploration and appraisal program, we initiated engagement with GoI to remove bottlenecks in the current approval process and reduce the lead time from discovery to production. This will enable us to rapidly develop the new discoveries and put them on production ensuring production ramp-up from the block. To this end we have submitted an Integrated Block Development Plan.

During the year, in addition to our renewed exploration efforts in Rajasthan, we also increased our focus on exploration activity across our asset portfolio to harness the remaining potential of our producing blocks viz Ravva and CB/OS-2 and other exploration acreages.

In Sri Lanka, data from both exploration phases is being evaluated and integrated to fully understand the block's future potential as we evaluate options for developing the existing discoveries in the block. In the Orange Basin in South Africa, following an assignment of 60% operating interest in 'Block 1', we have commenced exploration operations.

Our focus on operational excellence and industry leading safety standards was reflected in a number of awards that we won in the year. Cairn India was adjudged the fastest growing energy company in the world at the Platts Top 250 Energy Company Awards 2012. At the 26th Mines Safety week 2012, under the aegis of Directorate General of Mines Safety (DGMS), Cairn India won 16 awards. Ravva asset won the Platinum Award under the FICCI Safety Excellence Awards for Manufacturing 2012.

* Impact of reorganisation

**Cash flow from Operations (CFFO) - refers to PAT (excluding other income and exceptional item) prior to non-cash expenses and exploration costs

The company generated its highest ever revenues and net profit during the FY 2012-13 as production grew from the Rajasthan block and lower operating costs. The Revenue, reported net of profit sharing with the GoI and the Rajasthan block royalty expense, grew by 48% at INR175,241 million (US$ 3,223 million).

Gross production during the year was 205,323 boepd 19% higher than the corresponding period. The increase was primarily due to the 32% yoy increase in the Rajasthan block production. The average price realization for the year was US$ 97.6 per barrel of oil equivalent. The crude oil from Rajasthan block realised US$ 98.3/bbl, 10.7% discount to Brent.

The profit petroleum of the Rajasthan block (net to the company) was INR 28,168 million (US$ 518 million) during the year.

EBITDA stands at INR130,332 (US$ 2,397 million), an increase of 41% during the year. The Profit after Tax (excluding the forex and impact of reorganisation) increased by 56% at INR 116,063 million (US$ 2,135) resulting in EPS of INR 60.8 per share.

The Rajasthan field direct operating expenses including transportation was US$ 3.0/bbl for the year, much lower than our guidance of US$ 5/bbl.

The gross cumulative Rajasthan development capital expenditure as on 31 March, 2013 was US$ 3.8 billion, of which US$ 99 million was spent during the year including US$ 8.5 million in DA 2.

The gross cash and equivalent at the end of the year was US$ 3,073 million, an increase of 99% over the previous year-end.

The average US$-INRexchange rate for the year was INR54.36 vs. INR47.83 for the corresponding previous year. The closing exchange rate as on 31 March, 2013 was INR54.39

The Cairn India Board recommended a final dividend of INR 6.5 per Equity share, entailing an outflow of approximately INR14,431 million including dividend distribution tax. This is subject to approval of shareholders at the ensuing Annual General Meeting (AGM) of the Company scheduled to be held on 24 July, 2013. The Book closure dates for the purpose of ensuing AGM and dividend payment are from 12 July, 2013 to 24 July, 2013. This along with the interim dividend paid in November 2012 cumulatively amounts to around 20% of our annual consolidated net profit which is in line with our stated dividend policy.

We are also building organizational capability to deliver long-term sustainable growth via internal and external technical resources. We have recently strengthened the Executive Committee by inducting Rich Paces as Director Development. Rich has over 32 years of experience and has substantial expertise and experience in petroleum and reservoir engineering as well as extensive operations and management experience.

Operational Review

1. Rajasthan (Block RJ-ON-90/1)

Operations & Projects

Cairn India has consistently demonstrated top quartile HSE performance amongst peers and has been an operator with industry leading safety standards. As a commitment towards maintaining the highest Health, Safety, Environment and Assurance standards, the company continues to report Lost Time Injury (LTI) performance on a regular basis. The Rajasthan Operation and Projects including pipeline had 28.2 million LTI free hours during the financial year.

The Rajasthan block is currently producing oil from five of its oil fields which fall under DA1 and DA2 i.e. Mangala, Aishwariya, Saraswati, Raageshwari and Bhagyam respectively. Current production is at ~175,000 bopd. Additionally the block commenced commercial sale of gas from the Raageshwari Deep Gas field. The facilities and well uptime stood at 97.7% during the financial year 2012-13 and figured in the top decile amongst global peers.

In line with standard industry practice, we envisage staggered shutdowns to tie-in new fields, routine maintenance periods to sustain safe operations, etc. Accordingly, we expect routine downtime of 3%-5% for the facilities and processing infrastructure. However, our endeavour remains to minimise downtime.

The company continues to focus on cost controls and hence cost improvements and commercial value additions are targeted and monitored regularly. This helps the company to remain a low cost operator and figure in the lowest decile amongst global peers. Our current field direct operating cost is US$ 2.4/bbl.

The Mangala field is a world class field. This has been demonstrated by the drilling and production performance seen so far. The field continues to sustain producing at its designated peak rates for more than two and a half years. The operator plans to drill 48 infill wells that will help sustain the plateau rate over a longer period and increase ultimate oil recovery from the field. The JV partners are aligned on this infill well programme. All the infill wells will be later utilised during the EOR polymer full field implementation which will further maintain plateau rates.

The Bhagyam field is expected to ramp up to its approved FDP rate in H2 FY 2013-14. Whilst the oil in place volumes in the field have given us a positive surprise, the individual well deliverability has not been as per expectations and hence there is a need to drill more than the FDP approved number of wells to ramp up production. The FDP well count consists of 81 wells, of which 66 have been drilled. The JV currently has approvals to drill over 30 wells, including the remaining FDP wells during FY2013-14 to help increase field production levels. Approvals for additional infill drilling later this year is currently being sought to enable the FDP approved rate. These additional wells will be utilised as part of the planned Bhagyam EOR project.

The Aishwariya field commenced production in March 2013 and reservoir performance has been in line with expectations. The field is expected to ramp up to the FDP approved rate of 10,000 bopd in coming months as additional wells are drilled and completed. A total of seven development wells have been drilled in the field so far.

The Raageshwari and Saraswati fields continue to cumulatively contribute over 500 bopd towards the total production from the block. The availability of the integrated processing and evacuation facility has reduced operating costs and has accordingly made these marginal fields economically viable.

Currently, drilling operations in the block are progressing with two drilling and two completion rigs. The JV has already contracted two more drilling rigs which are expected to arrive and commence operations during this quarter. The JV plans to contract five additional drilling rigs later this year to support the targeted work programmes.

Exit rate production guidance for FY 2013-14 stands in a range of 200,000-215,000 bopd from the Rajasthan Block. This guidance is based on a reasonable certainty of field wise production profiles, anticipation of requisite approvals and necessary rig count ramp up for the various interventions.

The MPT to Salaya (~590 km) section of the oil pipeline continues to safely deliver crude oil to Indian refiners. The Rajasthan crude continues to witness higher demand from this section of the pipeline. The pipeline is operating in line with the current production profile. In preparation of the expected production ramp up, the export pipeline was tested and de-bottlenecked and has been proven capable of handling higher volumes.

Construction work on the remaining ~80 km Salaya to Bhogat section is progressing well. This section, including the Bhogat Terminal, is expected to be mechanically completed in H1 FY 2013-14.

Sales

Crude oil sales arrangements have been finalized for volumes in excess of 200,000 bopd with PSU and private refiners for FY 2013-14. The crude is currently being supplied to four refineries.

In accordance with the RJ-ON-90/1 PSC, the crude is benchmarked to Bonny Light, West African low sulphur crude that is frequently traded in the region, with appropriate adjustments for crude quality. The implied crude price realisation for the financial year (average of twelve months up to March 2013) lies within the stated guidance of 10%-15% discount to Brent.

The JV received GoI approval on natural gas sales in March 2013. The gas sales have now commenced with initial targeted volumes of about 5 mmscfd. This leverages the existing gas processing infrastructure in the block that currently supports oil production. The 8" gas pipeline running along the oil pipeline is being used to supply gas to the buyer. This is a step towards the diligent usage of resources in the Rajasthan block in an environmental friendly way to add long term value for all stakeholders.

Resource Base

Following GoI clarification on conducting exploration activities in development areas, Cairn India spud its first exploration well Raageshwari-South-1 in the southern part of the Rajasthan block. This resulted in an oil discovery which is the 26th discovery made in the block so far. Technical evaluations indicate ~10 metres of gross oil column within Dharvi Dungar Formation. This was the first time a well had been drilled through the deeper Dharvi Dungar sands in the Raageshwari - Tukaram area, where previous discoveries were in the shallower Thumbli sands. The volumes of oil in place and the potential resource base associated with this discovery are under evaluation.

The company plans to undertake an aggressive E&A drilling program in the block with 100 wells planned in a three year period. Additional 3D seismic data acquisition and processing is also planned during the period, which will cover more than 50% of the block area. The tendering process is in final stages.

The strategy behind the aggressive exploration activity in the block is twofold; (a) to extend proven plays and (b) to test new plays. Under the proven plays category, our plan is to drill prospects with the largest risked volumes first. Under the new plays category, the plan is to drill the best play openers and the least risky prospects first. The 100 E&A exploration wells target gross recoverable risked prospective resources of 530 mmboe. The drilling in the first year is expected to test around half of the prospective resource volumes.

Efforts to monetise 20 other discoveries (including Barmer Hill) in the block are ongoing. The evaluation of the other discoveries with a view to optimise the development has made progress. As a step towards this, the development plan for the Barmer Hill formation has been prepared and submitted to the JV. Production from the Barmer Hill is expected to commence in this financial year. In the Barmer Hill formation, the operator will utilise state-of-the-art fracture stimulation and horizontal well completion technology to monetize this significant low permeability resource. Development Plans have also been submitted for two other satellite discoveries in the block i.e. NI field and NE field.

Post the Mangala EOR polymer pilot, an FDP for a full field application has been submitted to the JV. The JV is technically aligned on the application of EOR in the field. The full field implementation is expected to start in FY 2014-15. Preparation for the commencement of the Alkali Surfactant Polymer (ASP) phase is currently underway.

2. Eastern India (Block PKGM-I - Ravva Field) - Krishna Godavari Basin

The Ravva field has produced more than 253 million barrels of crude and sold 317 billion cubic feet of gas; about thrice the initial estimates. During the financial year, the plant uptime was 99.7% demonstrating superb operational efficiency.

The asset recorded 1.61 million LTI free hours during the year.

In order to optimally harness the potential of our mature assets we continue to utilise various technology driven approaches to identify new opportunities to increase the ultimate recovery of oil and gas from the block. In Ravva our monetisation strategy consists of drilling a 'high value, high risk' deep exploration prospect, evaluation of deeper prospects, development of contingent resources, an infill drilling campaign based on 4D seismic data and the evaluation of an EOR option amongst others. All of these efforts are aimed at arresting the production decline and enhancing the remaining value of the asset.  

In our attempt to realize value from the 'high value high risk' deep exploration prospect, a suitable 15k drilling rig will be mobilized later this year to drill a well targeting hydrocarbons in the late Oligocene sands. A separate mat supported jack up drilling rig will also be mobilized for an infill drilling campaign comprising three wells to tap by-passed oil in H2 FY 2013-14. The majority of the necessary drilling related contracts have already been awarded.

3. Western India (Block CB/OS-2) - Cambay Basin

The CB/OS-2 Block has completed 10 years of production and crossed a cumulative production of over 50 mmboe hydrocarbons.

Safety and operational integrity have been a strong area of focus for the CB/OS-2 asset operations team. The asset team recorded 0.93 million LTI free hours and delivered facilities uptime of 99.9% during FY 2012-13.

An infill drilling campaign comprising two new wells and one workover well has been completed successfully and resulted in doubling the production potential.

This block provides an example of optimal asset utilisation, whereby, there is a utilization of its existing infrastructure by tolling and processing ONGC's gas from its North Tapti field (adjacent to the Lakshmi field). The tolling of gas commenced in June, 2012. It has further utilized its existing production facilities to optimally produce gas from ONGC's Olpad field. This commenced in March 2013. The block recorded more than 10 million safe work hours over the last eight years, which demonstrates Cairn India's continued commitment to operate safely.

Cairn India has a portfolio of nine blocks, that it operates, which are located in four strategically focused areas: one in Rajasthan; two on the west coast of India; five on the east coast of India (including one in offshore Sri Lanka) and one in offshore South Africa. Two of blocks are located onshore in the Barmer and Krishna-Godavari Basins, and the remaining seven blocks are all located offshore in the Krishna-Godavari Basin, the Palar-Pennar Basin, the Cambay Basin, and the Mumbai Offshore Basin in India, and the frontier Mannar Basin in Sri Lanka and the Orange Basin in South Africa.

India Block Updates

In KG-ONN-2003/1 block, following the discovery of oil and gas in the well Nagayalanka-SE-1, a two well appraisal programme has been planned and approved by the JV. The tendering for rig and services is completed and drilling is expected to commence later this month with the mobilisation of the drilling rig to the site already underway. The appraisal drilling programme will help the JV to evaluate the size and commerciality of the second discovery.

In the KG-DWN-98/2 block, Cairn India divested its remaining 10% working interest to its JV partner, ONGC, during the year and thus no longer holds any interest in the block. This divestment of non-material equity is a part of its continuous portfolio optimisation.

In the KG-OSN-2009/3 block, approvals have been received to carry out petroleum operations in 60% of the block area with certain conditions. Commencement of work is pending discussions with GoI. 

In the MB-DWN-2009/1 block and the PR-OSN-2004/1 block discussions have been held with MoPNG seeking unrestricted access; which is under consideration by GoI.

Sri Lanka Block Update

The drilling of the phase-II exploration well has been completed in February, 2013. The well encountered high quality reservoir sands; however these sands were water bearing. The well was plugged and abandoned and the rig was demobilized. The results of the well are being integrated with reprocessed 3D seismic data to finalize the forward programme which includes the options for appraisal of the existing two discoveries and entering exploration phase-III. Options to appraise develop and monetise the two gas discoveries are under evaluation.

South Africa Block Update

Government approval received for transfer and assignment of PetroSA's Participating Interest (PI) to Cairn in Block 1. The assignment agreement was executed in February, 2013. The 3D survey acquisition commenced in March, 2013 and is likely to be completed within this quarter. As on date more than 80% of the survey has been completed.

An application for a Technical Cooperation Permit (TCP) for another block was approved by Petroleum Agency of South Africa (PASA). The agreement was signed in February, 2013 for a one year study programme. The company will have an option to convert this to an exploration permit with government approval after the one year study period.

Cairn India Limited

Registered Office: 101, West View, Veer Savarkar Marg, Prabhadevi, Mumbai - 400025

Corporate Office: 3rd & 4th Floors, Vipul Plaza, Sun City, Sector-54, Gurgaon - 122002

 (All amounts are in INR lakhs, unless otherwise stated)

* includes unsuccessful well cost of INR 26,585 lakhs in Sri Lanka block and general exploration cost of INR 7,267 lakhs in South Africa block, during the quarter and year ended 31 March 2013.

 * includes cash and cash equivalents of INR 4,634 lakhs (previous year : INR 444,639 lakhs)

Notes:-

1. The above audited financial results for the year ended 31 March 2013 have been reviewed and recommended by the Audit Committee and approved by the Board of Directors at their meeting held on 22 April 2013.

2. The figures for the quarter ended 31 March 2013 and 31 March 2012 are the balancing figures between audited figures in respect of the full financial year ended 31 March 2013 and 31 March 2012 respectively and the unaudited published year to date figures upto 31 December 2012 and 31 December 2011 respectively, being the end of the third quarter of the respective financial years, which were subjected to a limited review.

3. The individual items in the above financial results are net of amounts cross charged to oil and gas blocks where the Group is the operator. The Group's share of such net expenses in oil and gas blocks is treated as exploration, development or production costs, as the case may be.

4. Employee benefit expenses for the current quarter and year include stock option charge of INR 378 lakhs and INR 2,415 lakhs respectively, computed under the Intrinsic Value Method. The said charge for the current quarter and year would have been INR 1,359 lakhs and INR 7,246 lakhs respectively, if computed under the Fair Value (Black Scholes) Method.

5. 320,481 additional equity shares were issued during the current quarter on exercise of stock options by the employees of the Cairn India Group.

6. The Board of directors have proposed a final dividend of INR 6.50 per equity share. Additionally, during the year an interim dividend of INR 5 per equity share had been declared and distributed to the shareholders of the Company. The total proposed payout of dividend for the year of INR 255,287 lakhs (including dividend distribution tax), amounts to 21.2 % of the consolidated profit for the year.

7. The shareholders of the Company had approved a Scheme of Arrangement ('Scheme') between the Company and some of its overseas subsidiaries with an appointed date of 1 January 1 2010 whereby, the Indian businesses of the said subsidiaries were to be transferred to the Company from the appointed date. The said Scheme had received the approvals of the Hon'ble High Court of Madras and the Hon'ble High Court of Bombay in 2010 and was subsequently approved by other relevant regulatory authorities in October 2012. Post receipt of the requisite approvals, the Company has considered the operations of the said subsidiaries from 1 January 2010 as its own operations and accounted for the same in its books of accounts after making necessary adjustments. The adjustments of INR 18,878 lakhs relating to the period prior to 30 September 2012, and INR 13,665 lakhs relating to the period prior to 31 March 2012, on account of differences in tax rates etc., has been accounted for in the previous quarter ended 31 December 2012 and current year respectively.

Further, as per the provisions of the Scheme which had also been approved by the shareholders of the Company, the Company in its standalone financial statements had adjusted goodwill of INR 1,016,703 lakhs against the securities premium account which has consequentially been recorded in the consolidated financial statements as well and as a result both goodwill and securities premium account are stated lower by INR 1,016,703 lakhs each. This accounting, although different from that prescribed under the Accounting Standards, is in conformity with the accounting principles generally accepted in India, as the same has been approved by the Courts. The auditors have expressed an emphasis of matter on the same.

8. Vedanta Resources Plc. along with its subsidiaries (Vedanta group) became the promoter of the Company w.e.f. 8 December 2011. Consequently, royalty paid by Oil and Natural Gas Corporation Limited with respect to the RJ-ON-90/1 block was treated as cost recoverable, as it was one of the pre-conditions imposed by the Government of India for approving the transaction of sale of shares by Cairn Plc. group to Vedanta group resulting in reduction in revenues and profit after tax of the Cairn India Group. The reduction on this account for the period upto 31 March 2011 was disclosed as an exceptional item in the previous year ended 31 March 2012.

9. The Group operates in only one segment i.e. "Oil and Gas".

10. Previous quarters / year's figures have been regrouped / rearranged wherever necessary to confirm to the current year's presentation.

Cairn India Limited

Registered Office: 101, West View, Veer Savarkar Marg, Prabhadevi, Mumbai - 400 025

Corporate Office: 3rd & 4th Floors, Vipul Plaza, Sun City, Sector-54, Gurgaon - 122 002

 (All amounts are in INR lakhs, unless otherwise stated)

\* The Complaint has been resolved on 4 April 2013.

 * includes cash and cash equivalents of INR 104 lakhs (previous year : INR 8,355 lakhs)

Notes:-

1. The above audited financial results for the year ended 31 March 2013 have been reviewed and recommended by the Audit Committee and approved by the Board of Directors at their meeting held on 22 April 2013.

2. The figures for the quarter ended 31 March 2013 and 31 March 2012 are the balancing figures between audited figures in respect of the full financial year ended 31 March 2013 and 31 March 2012 respectively and the unaudited published year to date figures upto 31 December 2012 and 31 December 2011 respectively, being the end of the third quarter of the respective financial years, which were subjected to a limited review.

3. The individual items in the above financial results are net of amounts cross charged to oil and gas blocks where the Group is the operator. The Group's share of such net expenses in oil and gas blocks is treated as exploration, development or production costs, as the case may be.

4. Employee benefit expenses for the current quarter and year include stock option charge of INR 378 lakhs and INR 2,415 lakhs respectively, computed under the Intrinsic Value Method. The said charge for the current quarter and year would have been INR 1,359 lakhs and INR 7,246 lakhs respectively, if computed under the Fair Value (Black Scholes) Method.

5. 320,481 additional equity shares were issued during the current quarter on exercise of stock options by the employees of the Cairn India Group.

6. The shareholders of the Company had approved a Scheme of Arrangement ('Scheme') between the Company and some of its overseas subsidiaries with an appointed date of 1 January 2010 whereby, the Indian businesses of the said subsidiaries were to be transferred to the Company from the appointed date. The said Scheme had received the approvals of the Hon'ble High Court of Madras and the Hon'ble High Court of Bombay in 2010 and was subsequently approved by other relevant regulatory authorities in October 2012. Post receipt of the requisite approvals, the Company has considered the operations of the said subsidiaries from 1 January 2010 as its own operations and accounted for the same in its books of accounts after making necessary adjustments. Accordingly, profit after tax aggregating to INR 1,159,933 lakhs (net of tax of INR 77,168 lakhs), relating to operations of the said subsidiaries prior to 30 September 2012, and INR 826,612 lakhs (net of tax of INR 61,146 lakhs), relating to operations of the said subsidiaries prior to 31 March 2012, have been accounted for in the quarter ended 31 December 2012 and current year respectively.

Further, as per the provisions of the Scheme which had also been approved by the shareholders of the Company, the Company has adjusted goodwill of INR 1,016,703 lakhs arising pursuant to the implementation of the Scheme against the securities premium account and as a result both goodwill and securities premium account are stated lower by INR 1,016,703 lakhs each. This accounting, although different from that prescribed under the Accounting Standards, is in conformity with the accounting principles generally accepted in India, as the same has been approved by the Courts. The auditors have expressed an emphasis of matter on the same.

7. The Board of directors have proposed a final dividend of INR 6.50 per equity share. Additionally, during the year an interim dividend of INR 5 per equity share had been declared and distributed to the shareholders of the Company. The total proposed payout of dividend for the year of INR 255,287 lakhs (including dividend distribution tax), amounts to 21.2 % of the consolidated profit for the year.

8. The Group operates in only one segment i.e. "Oil and Gas".

9. Previous quarters / year's figures have been regrouped / rearranged wherever necessary to confirm to the current year's presentation. Since the current quarter and year include the operations of the subsidiaries, as described in note 6 above, the same are not comparable with the corresponding quarter ended 31 March 2012 and previous year results respectively.

Contact Details

On 9 January, 2007, Cairn India Limited was listed on the Bombay Stock Exchange and the National Stock Exchange of India. Cairn India is now part of the Vedanta Group, a globally diversified natural resources group with wide ranging interests in aluminium, copper, zinc, lead, silver, iron ore, etc.

Cairn India is headquartered in Gurgaon in the National Capital Region, with operational offices in India - Andhra Pradesh, Gujarat, Rajasthan, Tamil Nadu and International - Colombo and London.

Cairn India is primarily engaged in the business of oil and gas exploration, production and transportation. Average daily gross operated production was 205,323 boe in FY2012-13. The Company sells its oil to major refineries in India and its gas to both PSU and private buyers.

The Company has a world-class resource base, with interest in seven blocks in India, one in Sri Lanka and one in South Africa. Cairn India's resource base is located in four strategically focused areas namely one block in Rajasthan, two on the west coast of India, five on the east coast of India (including one in Sri Lanka) and one in South Africa.

The blocks are located in the Barmer Basin, Krishna-Godavari Basin, the Palar-Pennar Basin, the Cambay Basin, the Mumbai Offshore Basin, Mannar Basin and Orange Basin.

Cairn India's focus on India has resulted in a significant number of oil and gas discoveries. Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. To date, twenty six discoveries have been made in the Rajasthan block RJ-ON-90/1.

In Rajasthan, Cairn India operates Block RJ-ON-90/1 under a PSC signed on 15 May, 1995. The main Development Area (1,859 km2), which includes Mangala, Aishwariya, Raageshwari and Saraswati is shared between Cairn India and ONGC, with Cairn India holding 70% and ONGC having exercised their back in right for 30%. The Operating Committee for Block RJ-ON-90/1 consists of Cairn India and ONGC.

Further Development Areas (430 km2), including the Bhagyam and Shakti fields and (822 km2) comprising of the Kaameshwari West Development Area, is also shared between Cairn India and ONGC in the same proportion. The Mangala, Bhagyam and Aishwariya (MBA) fields have gross recoverable oil reserves and resources of approximately 1 billion barrels, which includes proved plus probable (2P) gross reserves and resources of 636 mmboe with a further 300 mmboe or more of EOR resource potential. The Rajasthan block is contributing more than one fifth of current domestic crude production. The total resource base supports a vision to produce 300,000 bopd, (equivalent to a contribution of more than 35% of India's current domestic crude production), subject to further investments and regulatory approvals.

In Andhra Pradesh and Gujarat, Cairn India on behalf of its JV partners operates two processing plants, 11 platforms and more than 200 km of sub-sea pipelines with a production of over 35,000 boepd.

Block SL-2007-01-001 was awarded to Cairn Lanka in the bid round held in 2008. This offshore block is located in the Gulf of Mannar. The water depths range from 400 to 1,900 meter. Cairn Lanka (Private) Limited is a wholly owned subsidiary of CIG Mauritius Private Limited under Cairn India and holds a 100% participating interest in the block. The signing of the Petroleum Resources Agreement (PRA) to explore oil and natural gas in the Mannar Basin was held in July 2008 in Colombo.

The farm-in agreement has been signed with PetroSA on 16 August, 2012 in the 'Block-I' located in Orange basin, South Africa. The block covers an area of 19,922 sq km. The assignment of 60% interest and operatorship has been granted by the South African regulatory authorities.

India currently imports 3.4* million bopd of crude oil. The current domestic crude oil production is approximately 0.76** million bopd of which Cairn India operated assets (Ravva, CB/OS-2 and the RJ-ON-90/1) contribute around one-fourth.

For further information on Cairn India Limited & Cairn Lanka (Pvt) Limited see www.cairnindia.com & www.cairnlanka.com

*BP Statistical Review for CY 2011

**MoPNG November 2012 data

·; The Company was adjudged the fastest growing energy company in the world at the Platts Top 250 Energy Company Awards 2012

·; The Company won 16 awards in the 26th Mines Safety week 2012 under the aegis of Directorate General of Mines Safety (DGMS), Ajmer

·; Raageshwari Oil Mine won the runners up award at the National Safety Awards (Mines), 2010 held by GoI last year for Lowest Injury Frequency Rate per lakh Man Shifts in Oil Mines Category

·; Ravva asset won the Platinum Award under the FICCI Safety Excellence Awards for Manufacturing 2012

·; Cairn India won the Golden Peacock Award for Excellence in Corporate Governance for 2012

·; Ravva asset won the OISD award for offshore Platform Category for 2011

Disclaimer

This material contains forward-looking statements regarding Cairn India and its affiliates, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward- looking statements are based on our management's assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are by their nature subject to significant risks and uncertainties; and actual results, performance and achievements may be materially different from those expressed in such statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry product supply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use of technology, acts of competitors and other changes to business conditions. Cairn India undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn India's expectations with regard thereto or any change in circumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within this document represent the views of Cairn India and do not represent the views of any other party, including the Government of India, the Directorate General of Hydrocarbons or any of Cairn India's joint venture partner.

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About Vedanta Resources plc

Vedanta Resources plc ("Vedanta") is a London listed FTSE-100 diversified global resources major. The group produces Aluminium, Copper, Zinc, Lead, Silver, Iron ore, Power, and Oil and Gas. Vedanta has world-class assets in India, Zambia, South Africa, Namibia, Ireland Liberia, Australia and Sri Lanka and a strong organic growth pipeline of projects. With an empowered talent pool globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. For more information, please visit:

www.vedantaresources.com.

Disclaimer

This press release contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.