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

Plaza, 3rd & 4th Floors, Suncity, Sector 54, Gurgaon - 122 002

CAIRN INDIA LIMITED

(Notice pursuant to Section 192A of the Companies Act, 1956) Dear Shareholder(s), NOTICE IS HEREBY GIVEN that the resolution as set out in this notice is proposed for consideration by shareholders for resolution by means of Postal Ballot under section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2011. Accordingly, the Resolution and the Explanatory Statement is being sent to you for your consideration, along with a Postal Ballot Form. The Company has appointed Mr. Nesar Ahmad, Practicing Company Secretary, as the Scrutinizer for conducting the Postal Ballot process in a fair and transparent manner. Please read carefully the instructions printed in the Postal Ballot Form and return the Form duly completed and signed in the enclosed self-addressed business reply envelope so as to reach the Scrutinizer on or before 5.30 p.m. on Saturday, September 10, 2011. After completion of scrutiny, the Scrutinizer will submit his report to the Chairman. The results of Postal Ballot shall be declared by the Chairman or any Director duly authorized by the Board on Wednesday, September 14, 2011, at 2.30 p.m. at the corporate office of the Company situated at Vipul Plaza, 3rd & 4th Floors, Suncity, Sector 54, Gurgaon - 122 002 and will also be displayed on the notice board of the Company at its registered office located at 101, West View, Veer Savarkar Marg, Prabhadevi, Mumbai 400 025 simultaneously. RESOLUTION PUT THROUGH POSTAL BALLOT To consider and, if thought fit, to give assent / dissent to the following resolution, as an Ordinary Resolution: RESOLVED THAT the consent of the Company be and is hereby accorded to accept the following conditions (the Conditions) imposed by the Government of India (GoI) in its approval letter dated July 26, 2011 in relation to the transfer of control of Cairn India Limited (the Company) by Cairn Energy PLC and Cairn UK Holdings Limited to Twin Star Energy Holdings Limited and Vedanta Resources plc and persons acting in concert with them: (i) The Company, Cairn Energy India Pty Limited, Cairn Energy Hydrocarbons Limited, other affiliates of the Company, to agree and give an undertaking that in respect of RJ-ON-90/1 block (the Rajasthan Block), the royalty paid by Oil and Natural Gas Corporation (ONGC) be treated as cost recoverable (Referred to in condition (g) in the section titled Consent applications made to GoI below); and

NOTICE OF POSTAL BALLOT

(ii) withdrawal of the claim made in the existing arbitration proceedings initiated by the Companys subsidiaries, Cairn Energy India Pty Limited and Cairn Energy Hydrocarbons Limited as participants in the Rajasthan Block against the GoI and ONGC relating to the dispute on payment of cess under the production sharing contract (PSC) (Referred to in condition (h) in the section titled Consent applications made to GoI below). RESOLVED FURTHER THAT the Board of Directors (hereinafter referred to as the Board which term shall include any Committee of the Board constituted to exercise its power, including the powers conferred by this resolution) is hereby authorized to accept the Conditions on behalf of the Company and its subsidiaries and to execute any documents that may be necessary or desirable in connection therewith. RESOLVED FURTHER THAT approval of the Company be and is hereby accorded to the Board to obtain no objection certificates in relation to the transfer of control of Cairn India Limited, referred to above, from their consortium partner(s) under the respective PSCs for the various blocks where the Company and its subsidiaries are a signatory (except for Ravva (PKMG-1) and CB-OS/2 blocks) and any other approvals, consents, permissions and sanctions, if any, from any other relevant authorities.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby authorized to exercise such powers, and to do all such acts, deeds, things and matters as may be required or considered necessary, or incidental thereto and to settle any question(s) or difficulty or doubt(s) that may arise in connection therewith in the manner it may deem fit and appropriate.
By Order of the Board of Directors For Cairn India Limited

Place : Edinburgh Date : July 26, 2011

Neerja Sharma Company Secretary

NOTES: 1. 2. 3. 4. Explanatory Statement and reasons for the proposed resolution, pursuant to Section 173(2) read with Section 192A (2) of the Companies Act, 1956 are annexed to the notice. The Company has appointed Mr. Nesar Ahmad, Practicing Company Secretary as Scrutinizer for the purpose of postal ballot exercise. This notice is being sent by post to all the shareholders of the Company. A member desiring to exercise vote by postal ballot may complete the enclosed Postal Ballot Form and send it to the Scrutinizer in the enclosed self-addressed Business Reply Envelope not later than 5.30 p.m. on Saturday, September 10, 2011. Postage will be borne and paid by the Company. Envelopes containing postal ballot forms, if sent by courier or by registered post at the expense of the member, will also be accepted. The result of the postal ballot shall be declared by the Chairman or any Director duly authorized by the Board, on Wednesday, September 14, 2011 at 2.30 p.m. at the corporate office of the Company situated at Vipul Plaza, 3rd & 4th Floors, Suncity, Sector 54, Gurgaon- 122 002 and will also be displayed on the notice board of the Company at its registered office located at 101, West View, Veer Savarkar Marg, Prabhadevi, Mumbai 400 025 simultaneously and the resolution will be taken as passed, effective from the date of announcement of the result, if the result of the Postal Ballot indicates that the requisite majority of the shareholders had assented to the resolution. Relevant documents referred to in this notice and accompanying Explanatory Statement are open for inspection at the Registered Office of the Company on all working days, except holidays, between 11.00 a.m. and 1.00 p.m. up to the date of declaration of results of Postal Ballot. Members are requested to carefully read the instructions printed on the back of the postal ballot form before exercising their vote. A Member entitled to vote is entitled to fill in the postal ballot form and send it to the Scrutinizer, and that any recipient of the Notice who has no voting rights should treat the Notice only as an intimation. Cairn UK Holdings Limited, the majority shareholder holding 52.11% shares has requisitioned in terms of Section 169 of the Companies Act, 1956 that an extraordinary general meeting of the Company be convened by the Board and that the conditions imposed by the GoI be placed before the shareholders of the Company for their consideration.

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10. The Board has decided that as against an extraordinary general meeting, seeking a vote by way of a postal ballot would be a more appropriate process for determination of a decision of such a significant nature. Explanatory Statement and reasons for the proposed resolution accompanying the notice dated July 26, 2011 pursuant to section 173 (2) and 192A (2) of the Companies Act, 1956 Background As the members of the Company are aware, Cairn UK Holdings Limited (hereinafter referred to as Cairn UK), along with its holding company, Cairn Energy PLC (hereinafter referred to as Cairn Energy), has agreed to sell a substantial part of its shareholding in the Company to Twin Star Energy Holdings Ltd and Vedanta Resources plc (collectively referred to as Acquirer) at a price of INR 355 per share by way of a share purchase deed dated August 15, 2010 entered into between Cairn UK, Cairn Energy and the Acquirer (hereinafter referred to as Acquisition Transaction), as amended (Share Purchase Deed). An open offer was made by Sesa Goa Limited and Sesa Resources Limited (Persons acting in concert (PACs)) to shareholders of the Company at INR 355 per share in accordance with the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as the Takeover Code).

Since then, the PACs have acquired 200,000,000 shares of the Company, representing approximately 10.51% of its share capital pursuant to a bulk trade conducted on the Indian stock exchanges and have also acquired 155,033,172 shares representing approximately 8.15% of the Companys share capital pursuant to the open offer made by them. Further, the Acquirer has acquired 191,920,207 shares from Cairn UK on July 11, 2011 representing approximately 10.09% of the Companys share capital. Consequently, at present the Acquirer and the PACs collectively hold 28.75% and are contracted to acquire additional 30% of the Companys fully diluted equity share capital from Cairn UK under the Share Purchase Deed. Consent applications made to GoI On August 31, 2010, the GoI requested Cairn Energy PLC to seek approval for its proposed sale of majority shareholding in the Company in respect of the various PSCs (New Exploration and Licensing Policy (NELP) blocks viz., PR-OSN-2004/1, MB-DWN-2009/1, KG-OSN-2009/3, KG-ONN-2003/1, KG-DWN-98/2, GS-OSN-2003/1 and KK-DWN-2004/1 and Pre-NELP blocks viz., RJ-ON-90/1, Ravva (PKMG-1) and CB-OS/2) to which Cairn India Limited and its subsidiaries (Cairn India Group or CIG) are a signatory. CIG acceded to the request and made formal applications to the GoI. Subsequently, GoI vide approval letter dated July 26, 2011 granted consent subject to the following conditions which are quoted below: (a) Parent financial and Performance Guarantees furnished by Cairn Energy PLC in pursuance to relevant applicable Article(s) of abovementioned 7 NELP PSCs and 3 Pre-NELP PSCs, shall be substituted by Parent Financial and Performance Guarantees to be furnished by Vedanta Resources plc, which needs to be acceptable to the Government and should be in the form and substance set out in the PSC; (b) Vedanta Resources plc to guarantee that the technical capability of Cairn India Limited is and shall be kept undisturbed and ensure continued production of oil and gas as per approved Field Development Plan (FDPs) from time to time. In case Vedanta Resources plc fails to perform as guaranteed then GoI shall be entitled to stipulate additional conditions, as deemed fit, including change in operatorship of blocks; (c) Vedanta Resources plc also shall give an undertaking that they shall ensure adherence to the approved field development plans and work programs; (d) Cairn India Limited and its affiliates shall provide the No Objection Certificate (NOC) obtained from their consortium partner(s) for each abovementioned blocks (except for Ravva (PKMG-1) and CB-OS/2 blocks) for the proposed transaction under the respective PSCs; (e) Necessary approvals from other Regulatory Bodies such as SEBI, on the proposed transaction to be obtained and submitted by Vedanta Resources plc; (f) Necessary security clearance from Ministry of Home Affairs in favour of the assignee, i.e. Vedanta Resources plc to acquire the shareholding shall be obtained and submitted by the said assignee;

(g) In respect of RJ-ON-90/1 block, the parties, i.e. Cairn India Limited, Cairn Energy India Pty Limited (CEIL), Cairn Energy Hydrocarbons Limited (CEHL) and any other affiliate company of CIL; and Vedanta Resources plc and any other affiliate company of Vedanta Resources plc, shall agree and give an undertaking that the royalty paid by ONGC is cost recoverable by ONGC as contract cost, as per the provisions of the PSC; and (h) In respect to RJ-ON-90/1 block, Cairn Energy India Pty Ltd. and Cairn Energy Hydrocarbons Limited shall withdraw the arbitration case relating to the dispute raised by them on payment of Cess under the PSC. Disputes on Cess and Royalty The Cairn India Group has a participating interest of 70 per cent in, and is the operator of Rajasthan Block, in which ONGC holds the remaining 30 per cent participating interest. Under the PSC executed for this block, in the view of CIG, royalty and cess are payable by ONGC. ONGC has, however, contended that the royalty payable under the Rajasthan Block should be considered as contract cost for cost recovery purposes. Royalty is currently payable at 20% of the post well-head value of crude oil produced (on an exroyalty basis), which translates to approximately 15% of the value received from the sale of crude oil. Based on the PSC provisions and legal advice received, CIG has been consistently of the view that royalty is payable by ONGC as a licensee and is not a contract cost and therefore, is not cost recoverable. The revenues are shared between CIG and ONGC in the proportion of their unrecovered contract costs. After recovery of all contract costs, the balance revenue i.e., Profit Petroleum is shared with GoI based on the return on investment made by CIG (the higher the return achieved, the higher the percentage taken by the GoI, subject to a maximum of 50%). The balance Profit Petroleum is shared between CIG and ONGC in the ratio of participating interest. In accepting ONGCs payment of royalty as being treated cost recoverable, the revenues for CIG would be reduced to the extent of 70% of the royalty paid by ONGC. However, impact on CIGs share of revenues shall reduce in future years to the extent of GoIs share of Profit Petroleum as the royalty thus paid shall also reduce the Profit Petroleum being shared with GoI. During the year ended March 31, 2011, total revenues from the Rajasthan Block were INR 125,518.5 million and the royalty paid by ONGC thereon in respect of 100% of the revenues was INR 18,320 million equivalent to USD 407.1 million.

In addition, the Cairn India Group has initiated arbitration proceedings against ONGC and the GoI pursuant to a notice of claim seeking declaration of non-liability to pay cess on oil produced from this block to the extent of Cairn India Group's participating interest in the block. Presently, CIG is paying cess at the rate of INR 2,575 per MT, under protest and the arbitration proceedings are ongoing. During the year ended March 31, 2011, the total cess paid by the Company on production of oil and oil equivalents of 4.97 MMT from the Rajasthan Block was INR 12,788.8 million equivalent to USD 284.2 million. If the Cairn India Group is not successful in the arbitration proceedings currently in progress in respect of cess, it would be required to continue to pay a 70 per cent share of the cess on oil produced from this block and it would then not be able to claim refund of what it has been paying since the commencement of production from this block. Payment of cess has an effect on Profit Petroleum in much the same way as in the case of royalty, described earlier. Requisition under Section 169 of the Companies Act, 1956 Cairn UK has made a requisition dated July 21, 2011 to the Board in terms of Section 169 of the Companies Act, 1956. Cairn UK has requisitioned that an extraordinary general meeting of the Company be convened by the Board and that the conditions imposed by the GoI be placed before the shareholders of the Company for their consideration. The Board has an obligation to convene a general meeting for consideration of the matters set out in the requisition. It has, however, decided that as against an extraordinary general meeting, seeking a vote by way of a postal ballot would be the more appropriate and democratic process for determination of a decision of such a significant nature. Acceding to the conditions of cost recovery of royalty and withdrawal of CIGs stance in relation to arbitration over cess would materially and adversely impact CIGs revenues, and consequently profits, from the Rajasthan Block under the PSC. However, whilst there is no assurance, agreeing to the abovementioned conditions may enhance CIGs ability to further develop the Rajasthan Block. The Board believes that the successful delivery of the large scale Rajasthan project, the continued focus on life cycle planning and low cost operations in Rajasthan, Ravva and CB/OS-2 along with the application of innovative technologies has created a strong foundation for future growth and the Cairn India Group remains committed to growing shareholder value. Whilst CIG is currently producing 125,000 bopd from the Rajasthan Block and has approved field development plans to produce up to 175,000 bopd, our current understanding of the resource base in the Rajasthan Block supports a vision to produce 240,000 bopd, equivalent to a contribution of ~35% of Indias current crude production, subject to further investments, partner and regulatory approvals including exploration rights in the development areas. While CIG continues to be of the view that ONGCs and GoIs positions on royalty and cess are without merit, we believe these issues have slowed the momentum in some of CIGs development efforts in the Rajasthan Block. Without the active support of the GoI and ONGC, it will not be possible for CIG to exploit the full potential of the resource base in the said block. Any forward-looking statements, including in particular the discussion regarding the resource base, further development of the Rajasthan Block and the extent to which agreement to the GoI conditions might help in the optimal development of the Rajasthan Block, is subject to numerous and significant risks and uncertainties and therefore, no attempt has been made to quantify any such benefits. While this Explanatory Note provides information considered material for these considerations, it is not intended to be exhaustive. Sir Bill Gammell and Ms. Jann Brown, being nominees of Cairn UK and Mr. Naresh Chandra and Mr. Aman Mehta, both independent Directors on the Board of Directors of Vedanta Resources plc may be deemed to be interested in the resolution.

By Order of the Board of Directors For Cairn India Limited

Place : Edinburgh Date : July 26, 2011

Neerja Sharma Company Secretary