Page 1 CIG MAURITIUS PRIVATE LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010 PAGES CONTENTS MANAGEMENT AND ADMINISTRATION

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1 Page 1 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010 CONTENTS PAGES MANAGEMENT AND ADMINISTRATION 2 DIRECTORS' REPORT 3 SECRETARY'S REPORT 4 AUDITORS' REPORT 5-6 STATEMENT OF COMPREHENSIVE INCOME 7 STATEMENT OF FINANCIAL POSITION 8 STATEMENT OF CHANGES IN EQUITY 9 STATEMENT OF CASH FLOWS 10 NOTES TO THE FINANCIAL STATEMENTS 11-21

2 Page 2 MANAGEMENT AND ADMINISTRATION Date of appointment Date of resignation DIRECTORS Veronique Magny-Antoine Amit Gupta Kenny Devananda Naraidoo (Altemate toami!gupta) Indrajit Bane~ee Rahul Dhir Pandarinathan Elango 01 July October March July July July 2008 ADMINISTRATOR AND SECRETARY : Abax Corporate Services Ltd Slhfloor, Tower A 1 CyberCiy Ebene MAURITIUS REGISTERED OFFICE C/o Abax Corporate Services Ltd Sthfloor, Tower A 1 CyberCiy Ebene MAURITIUS AUDITORS Emst& Young 9 th Floor, Tower 1, NeXTeracom Cybercity Ebene MAURITIUS

3 Page 3 DIRECTORS' REPORT The directors present their report and the separate financial statements of CIG MAURITIUS PRIVATE LIMITED (the Company ) for the year ended 31 December PRINCIPAL ACTIVITY The principal activity of the Company is to act as an investment holding company. RESULTS AND DIVIDENDS The Company's loss for the year ending 31 December 2010 is 36,840 (2009: 33,654). The directors do not recommend the payment of a dividend. STATEMENT OF DIRECTORS' RESPONSIBIUTIES IN RESPECT OF THE FINANCIAL STATEMENTS Company law requires the directors to prepare financial statements for each financial year which present fairly the financial position, financial performance and cash flows of the Company. In preparing those financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether International Financial Reporting Standards, including International Accounting Standards and Interpretations issued by the International Accounting Standards Board have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concem basis unless it is inappropriate to presume that the Company will continue in business. The directors confirm that they have complied with the above requirements in preparing the financial statements. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Mauritian Companies Act They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. AUDITORS The auditor, Ernst & Young, have indicated their willingness to continue in office and will be automatically reappointed at the Annual Meeting. ISABELLE A~''lFr FO ABAX CORPORATE SECRETARY

4 ABAX corporate services Page 4 SECRETARY'S REPORT to be included in the Financial Statements of CIG Mauritius Private Limited ("the Company") AS PER SECTION 166 (d) OF THE COMPANIES ACT 2001 We confirm that, based on records and information made available to us by the directors and shareholder of the Company, we have filed with the Registrar of Companies, for the year ended 31 December 2010, all such returns as are required of the Company under the Mauritian Companies Act ]SA DRIEN FOR ABAX CORPORATE SERVICES L TO ,- ABAX CORPORATE SERVICES L TO Corporate Secretary Date: 29 April 2011 Abax Corporate Services Ltd 6th Floor, Tower A, 1 CyberCity, Ebene, Mauritius Tel Fax abax@abaxservices.com BRN C a member ofthe ABAX group

5 '''' ~ ERNST& YOUNG 5. INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF Report on the Financial Statements We have audited the financial statements of CIG Mauritius Private Limited (the "Company") on pages 7 to 21 which comprise the statement of financial position as at 31 December 2010 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of Significant accounting policies and other explanatory notes. Directors' Responsibility for the Financial statements The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritian Companies Act and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement. whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgement. including the assessment of the risks of material misstatement of the financial statements. whether due to fraud or error. In making those risk assessments. the auditors consider internal control relevant to the company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors. as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

6 II'"!I ERNST & YOUNG 6. INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONTINUED) Report on the Financial statements (Continued) Opinion In our opinion, the financial statements on pages 7 to 21 give a true and fair view of the financial position of the Company as at 31 December 2010 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act Report on Other Legal and Regulatory Requirements Companies Act 2001 We have no relationship with or interests in the Company other than in our capacities as auditors, tax advisors, and dealings in the ordinary course of business. We have obtained all the information and explanations we have required. In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records.

7 Page 7 STA"rEMENT OF 'COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2010 Notes EXPENSES Administrative expenses 35,996 32,877 Finance cost Loss before taxation --" (36,840) (33,654) Income tax expense Loss for the year 5 (36,840) (33,654) Other comprehensive income Total comprehensive income for the year (36,840) (33,654) The notes on pages 11 and 21 form an integral part of these financial statements.

8 Page 8 STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2010 Notes ASSETS Non current assets Investment in subsidiaries Current assets Other receivables Cash and cash equivalents Total assets 6 18,355, ,257 41,272 -_... _ , ,399,530 ========= 3,350, ,096 24, , ,377,780 ========= EQUITY AND LIABILITIES EQUITY Stated capital Application monies Accumulated losses Total equity LIABILITIES Current liabilities Payables and accruals 9 18,469,455 (87,704) ,381, , ,100 1,355 (50,864) ,353, ,189 Total equity and liabilities 18,399,530 3,377,780 Approved by the Board of Directors on.~.~-~~~- ~ ~ \~4,r &~4Q.c.. } DIRECTORS } V""'N\IAL.~~.. A.J,.M.ct The notes on pages 11 and 21 form an integral part of these financial statements.

9 Page 8 STATEMENT OF FINANCIAL POSITION - 31 DECEMBER 2010 Notes ASSETS Non current assets Investment in subsidiaries Current assets Other receivables Cash and cash equivalents Total assets 6 18,355, ,257 41, , ,530 ========= 3,350, ,096 24, , ,377,780 ========= EQUITY AND LIABILITIES EQUITY Stated capital Application monies Accumulated losses Total equity LIABILITIES Current liabilities Payables and accruals 9 18,469,455 (87,704) ,381, ,779 3,403,100 1,355 (50,864) ,353, ,189 Total equity and liabilities 18,399,530 3,377,780 Approved by the Board of Directors on and signed on Its behalf by: } } } DIRECTORS } The notes on pages 11 and 21 form an integral part of these financial statements.

10 Page 9 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2010 Stated Application Accumulated capital monies losses Total At 01 January ,500,900 17,210) 2,483,790 Allotment of share application monies 2,500,900 (2,500,900) Issue of shares 902, ,100 Share application monies 1,355 1,355 Loss for the yearl total comprehensive income ( 33,654) ( 33,654) At 31 December ,403,100 1,355 ( 50,864) 3,353,591 Issue of shares 15,065,000 15,065,000 Allotment of share application monies 1,355 (1,355) Loss for the yearl total comprehensive income ( 36,840) ( 36,840) At31 December ,469, ( 87,704) 18,381, The notes on pages 11 and 21 fann an integral part of these financial statements.

11 Page 10 CIG MAURITIUS PRIVATE UMITED STATEMENT OF CASH FLOWS, FOR THE YEAR ENDED 31 DECEMBER 2010 Notes Cash Dow'lfJI11 open1iingsctivilies Net loss before taxation 36,840) 33,654) Adjustment for: Unrealised exchange difference (Increase)/ decrease in prepayments (Decrease)/increase in other payables and accruals ( 36,624) ( 161) ( 6,626) ( 453) ,107) 425 4, Net cash used In operating activities ( 43,411) ,637 ) Cash Dow'lfJI11lnvesUnllllCUvltles Acquisition of shares in subsidiary 6 (15,005,000) (850,000) Net cash used In Investing activities (15,005,000) (850,000) Cash Dow'romDnllnclnllllCUvilies Advance from holding company Proceeds from issue of share capital 9 15,065,000 1, ,100 Net cash flows from financing activities 15,065, ,455 Net Increase in cash and cash equivalents 16,589 23,818 Cash and cash equivalents at beginning of year 24, Cash and cash equivalents at end of year ,683 The notes on pages 11 and 21 form an integral part of these financial statements.

12 Page 11 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER GENERAL INFORMATION CIG Mauritius Private Limited ( "the Company') is a limited company incorporated on 01 July 2008, holds a Category 1 Business Licence and is regulated by the Financial Services Commission. The Company's registered office address is C/O Abax Corporate Services Ltd, 6th Floor Tower A, 1 CyberCity Ebflme, Republic of Mauritius. The Company is engaged in investment holding activities 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These financial statements are the separate financial statements of the Company. The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. Basis of preparation The financial statements have been prepared in accordance with and in compliance with International Financial Reporting Standards ("IFRS ) and IFRIC interpretations. The financial statements have been prepared under the historical cost convention. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are described in Note 3. New and amended standards adopted by the Company The following new standards and amendments to standards are mandatory for the first time for the financial year beginning on or after 01 January 2010 and have been applied by the Company where relevant to its operations. The adoption of these new and revised standards has no material effect on the Company's accounting policies and disclosures: las 27ConsolidatedandSepamte Financial Statements (eltective loraccotlnbng penods.beginning on oraller 1.Iu~2()()!J) las 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. las 27 (revised) has had no impact on the current period, as none of the non-controlling interests have a deficit balance; there have been no transactions whereby an interest in an entity is retained after the loss of control of that entity, and there have been no transactions with non-controlling interests. las 7 - Statement 0/ Cash Flows (e/fecb've For 8CCotInbi7g periods.beginning on or aller 1.Ianua/y 2010) las 7 is amended to state explicitly that only expenditures that result in the recognition of an asset can be classified as a cash flow from investing activities. The amendment did not have any impact on the financial position or performance of the Company.

13 Page 12 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Sblndslfls, IImendments lindinle'pnjlallons 10 exisllngslilndllnis thlllll", nolyel elfflc/iye lind hllvenolbeen INIdylldoptedbythe Company The directors have considered new standards, amendments and interpretations to existing standards that have been published and that are mandatory for accounting periods beginning on or after 01 January 2011 or later periods which the Company has not early adopted and have concluded that these amendments will not have a material impact on the financial statements for the year ended 31 December The Company's assessment of the impact of these new standards and interpretations is set out on below: IFRS IJ - Financlsllnstmments (effective!'oraccountingpetiodsbeginning on oraller 1 Janua/y 2013) IFRS 9, 'Financial instruments', issued in November This standard is the first step in the process to replace las 39, 'Financial Instruments: recognition and measurement', IFRS 9 introduces new requirements for classifying and measuring financial assets and is likely to affect the group's accounting for its financial assets. The standard is not applicable until 1 January 2013 but is available for early adoption. The Company is yet to assess IFRS 9's full impact. las 24 (Revised) - RelatedPattyOisclosums (effective!'oreccollnbng penoris beginntng on oraller 1 Janua/y201t) Revised las 24 (revised), 'Related party disclosures', issued in November It supersedes las 24, 'Related party disclosures', issued in las 24 (revised) is mandatory for periods beginning on or after 1 January Earlier application, in whole or in part, is permitted. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities, The Company will apply the revised standard from 1 January Foreign currency translation Functionalandpl8sentetion cuttency Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which it operates ("the functional currency"). The financial statements are presented in United States Dollars (), which is the functional and presentation currency of the Company. Tmnsections andbalances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income. Current and deferred Income tax The tax expense for the year comprises current and deferred tax. The current income tax charge is calculated on the basis of the laws enacted or substantively enacted at the reporting date in the country where the Company operates and generate income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amount expected to be paid to the tax authorities.

14 Page 13 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Current and deferred income tax (Continued) Deferred income tax is recognised in full, using the liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax on accumulated tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax assets and liabilities are offset when there is legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. Investment in subsidiary Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies generally accompanying shareholding of more than one half of the voting rights or otherwise has power to exercise control over the operations. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Investment in the subsidiary undertaking is initially shown at cost in the Company's accounts. Where an indication of impairment exists, the recoverable amount of the investment is assessed. Where the recoverable amount of the investment is less than its carrying amount, the investment is written down immediately to its recoverable amount and the impairment loss is recognized as an expense in the statement of comprehensive income. On disposal of the investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statement of comprehensive income. Consolidated financial statements The Company owns 100% of the issued share capital of Caim Lanka (Pty) Limited, a company incorporated in Sri Lanka and 100% of the issued share capital of Cairn Energy Developments (Pte) Ltd. The Company itself is ultimately owned by Caim Energy Pic, a company incorporated in Scotland. The Company has taken advantage of paragraph 10 of las 27 (Consolidated and Separate financial statements), which dispenses it from the need to present consolidated financial statements since Caim Energy Pic, the ultimate parent presents consolidated IFRS financial statements. The registered office of Caim Energy Pic, the ultimate parent which presents consolidated IFRS financial statements, is 50 Lothian Road, Edinburgh EH3, 9BY Scotland. Financial Instruments Financial assets and liabilities are recognised on the Company's statement of financial position when the Company becomes party to the contractual provisions of the instrument. Financial instruments are initially recognised at fair value plus transaction costs. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

15 Page 14 NOTES TO THE FINANCIAL STA-rEMENTS - 31 DECEMBER _ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Financial instruments (Continued) Financial instruments carried on the statement of financial position include cash and cash equivalents and other payables. The particular recognition methods adopted are disclosed below: Cash andcash equivalents Cash comprises cash at bank. For the purpose of cash flows, cash and cash equivalents consist of cash at bank net of any bank overdraft if applicable. Payables andaccmals Accounts payable are stated at their nominal value. Derecognltion of financial assets and liabilities The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability. The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. Impairment of assets At each reporting date, the Company reviews the carrying amount of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exits, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). An impairment is recognised when the carrying amount of an asset exceeds its recoverable amount which is the higher of an asset's net selling price and its value in use. Impairment losses (if any) are recognised as an expense in the statement of comprehensive income. Provision Provision are recognised when the Company has a present obligation (legal or constructive) as a result of a past event. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some of all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. (I) Intel9stincome Interest income is recognised as it accrues, unless collectability is in doubt.

16 Page 15 NOTES TO THE FINANCIAL STArEMENTS - 31 DECEMBER SUMMARY OF SIGNIFICANT ACCOUNrlNG POLICIES (CONTINUED) Revenue recognition (Continued) (/7) Oivlaend Income Dividend income is recognised when the shareholder's right to receive payment is established. 3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION The preparation of the Company's financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumtances In the process of applying the Company's accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements: Oetennlna/lon 0/IiInctional cult8ncy The primary objective of the Company is to generate returns in, its capital-raising currency. The liquidity of the Company is managed on a day-to-day basis in. The Company's performance is evaluated in. Therefore, the management considers the as the currency that most faithfully represents the economic effects of the underlying transaction, events and conditions. Impalimen/ o/investment Insubsidiaty The directors have assessed the carrying value of the investments in the subsidiaries at 31 December 2010 as detailed in Note 6. The impairment assessment relies on forecasts and assumptions that are subject to a significant level of uncertainty. 4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES AnanclsinskmctolS The Company's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. This note presents information about the Company's exposure to each of the said risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital. Further quantitative disclosures are included throughout these financial statements. The board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company to set appropriate measures and controls and to monitor risks and adherence to limits. Risks management policies and systems are reviewed regularly to reflect changes in market conditions and in the Company's activities. The Company's exposure to the various types of risks associated to its activity and financial instruments is detailed on next page.

17 Page 16 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (a) Madretnsk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the retum. (I) Currencynsk Foreign exchange risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company has financial liabilities denominated in EURO and INR. Consequently, the Company is exposed to the risk that the exchange rate of the EURO relative to may change in a manner, which has a material effect on the reported value of the Company's financial instruments which are denominated in EURO and INR. Currency risk semii'mo;' ana~sis The following demonstrates the sensitivity to a reasonably possible change of 5% in the EURO exchange rate, with all other variables held constant, of the Company's profit before tax and the Company's equity. Increase/decrease Effect on Effect on in foreign exchange profit profit before rate before tax tax Depreciation of +5% (602) (844) Appreciation of -5% Currency proli/e The currency profile of the Company's financial assets and liabilities is summarised as follows: Financial assets 2010 Financial liab iiiti es 2010 Financial assets 2009 Financial liabilities 2009 INR Euro United States dollars () ,124 5,750 24,683 5,689 14,500 4, ,779 24,683 24,189 (!~ Interest /Bte nsk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The Company has no significant exposure to interest-rate risk as it has no interest-bearing financial assets and liabilities.

18 Page 17 - NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Financial risk management (COntinued) (a) (Iii) Marketnsk(ContInued) Pnce nsk Equity price risk is the risk of unfavorable changes in fair values of equities as a result of changes in the value of individual shares. The Company has no exposure to price risk at year end. (b) Cl9dIl risk The Company takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. With respect to credit risk arising from financial assets which comprise of cash and cash equivalents, the Company's exposure arises from the default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets at the reporting date. Cash transactions are limited to high credit quality financial institutions. There was no concentration of credit risk as at the reporting date. (c) uquidllyrisk Liquidity risk is the risk that an entity will encounter financial difficulty in meeting obligations assossiated with financial liabilities. The Company pays out its obligations from equity finance and funds received from the sole shareholder, Caim India Limited. The Company is therefore not exposed to liquidity risk. All financial liabilities of the Company outstanding at year end are payable on demand due to their short term nature,. FaIr values The carrying amounts of cash and cash equivalents and payables and accruals approximate their fair values. CapIlal management The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the retum to stakeholders through the optimisation of the debt and equity balance. The Company's overall strategy remains unchanged during the year under review. The capital structure of the. Company consists of equity attributable to equity holders of the parent, comprising issued capital and accumulated losses. 5. LOSS BEFORE TAXATION The loss before taxation is stated after charging: Secretarial fees 15,691 16,626 Audit fees 5,750 4,742 Accounting fees 4,465 3,000 Directors" fees 3,294 2,

19 Page 18 NOTES TO THE FINANCIAL STA'rEMENTS - 31 DECEMBER 2010 (CONTINUED) 6. INVESTMENT IN SLiBSIDIARIES At cost: At 01 January 3,350,001 2 Share subscription monies converted into shares 2,499,999 Additions 15,005, ,000 At 31 December 18,355,001 3,350,001 Details of the investment in subsidiaries are as follows: Name of company % holding Country of incorporation Cairn Lanka Private Limited Sri lanka 18,355,000 3,350,000 Cairn Energy Developments (Pte) Ltd Singapore 1 1 The directors are of the opinion that no provision for impairment is required in respect of the investment in Cairn Lanka Private Limited due to the fact the Company is still in the exploration phase and are not expected to generate profits. The directors have resolved that since there are no future plans for Cairn Energy Development (Pte) Ltd, that the company be struck off from the registrar. The carrying value of the investment, of 1 have not been impaired during the year under review. 7. INCOMETAX The Company is a tax incentive in Mauritius and under current laws and regulations liable to pay income tax on its profit at a rate of 15%. The Company is, however, entitled to a tax credit equivalent to the higher of actual foreign tax suffered or 80% of the Mauritian tax payable in respect of its foreign source income, thus reducing its maximum effective tax rate to 3%. There is no capital gain tax in Mauritius. The foregoing is based on current interpretation and practice and is subject to any future changes in the Mauritian tax laws. At 31 December 2010, the Company had accumulated tax losses of 70,231 (2009: 33,607) and is therefore not liable to income tax. The tax losses are available for offset against future taxable profit of the Company as follows: Up toyearending.' 31 December 2014 (33,607) 31 December 2015 (36,624) (70,231)

20 Page 19 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2010 (CONTINUED) 7. INCOME TAX (CONTINUED) Tax /9ConclHatiOl7. A numerical reconciliation between the accounting loss as adjusted for tax purposes and the actual income tax expense is shown as follows Net loss for the year before taxation (36,840) (33,654) ========= ========= Tax@ 15% (5,526) (5,048) Non allowable expenses Non taxable income (68) Deemed tax credit 4,395 4,033 Deferred tax asset not recognised 1,099 1,008 Income tax charge Deferred income tax ========= ========= A deferred income tax asset of 2,107 (2009: 1,008) has not been recognised in respect of tax losses carried forward as the directors consider that it is not probable that future taxable profits will be available against which the unused tax losses can be utilised. 8. OTHER RECEIVABLES Prepayments 3,257 3, STATED CAPITAL IssuedandIi//Iypaid- Oni/natyslJa/8.S 0/t.JSD t eaclj At 01 January 3,403, Share application monies converted into shares 1,355 2,500,900 Issued during the year 15,065, ,100 At 31 December 18,469,455 3,403,100 A reconciliation of the number of shares at the beginning and at the end of the financial year is as follows: No 0/slJa/8.S In i.s.su8. Number Number At 01 January 3,403,100 Issued during the year 15,066,355 3,403, At 31 December 18,469,455 3,403,100 ======== ==========

21 Page 20 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2010 (CONTINUED) 10. PAY ABLES AND ACCRUALS Payables to related party (Note 11) 5,905 5,689 Accruals 11,874 18,500 17,779 24, RELATED PARTY TRANSACTIONS During the year under review, the Company transacted with a related parties. The nature, volume of transactions and the balances are as follows: Amountdue to ultimateparentcompany- Cairn India Limited At 01 January 5, Adjustment to amount due to holding company (1,355) Exchange difference 216 (453) At 31 December 5, Amount due to pa/'snt company - i.!in/led CIG MaunltiJs HoIdliJg Ptivate At 01 January 1,355 2,500,900 Advance during the year 1,355 Issue of shares (1,355) (2.500,900) ,- At 31 December 1,355 ========= Keymanagement per.sonnel Directors' fees 3,294 3,314 ========= ========== The amount due to ultimate holding company and holding company is insecured. interest free and are repayable on demand. 12. PARENT AND ULTIMATE PARENT At the reporting date, the directors of the Company considered CIG Mauritius Holding. a company incorporated in Mauritius as its parent and Cairn Energy Pic as its ultimate parent. The registered office of Caim Energy Pic is is 50 Lothian Road, Edinburgh EH3, 9BY Scotland.

22 Page 21 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2010 (CON-rlNUED) 13_ EVENTS AFTER REPORTING DATE The Company issued 3,200,000 ordinary shares of 1 each to CIG Mauritius Private Holding Limited and acquired additional shares for a consideration of 3,200,000 in Cairn Lanka Private Limited.