Annual Report 2007 in PDF - Cairn Energy PLC

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DIRECTORS’ REPORT CONTINUED The directors may, in their absolute discretion and without assigning any reason therefor, refuse to register a transfer of any share which is not a fully paid share unless such share is listed on the Official List of the Uk Listing Authority and traded on the London Stock Exchange’s main market for listed securities. The directors may also refuse to register a transfer of a share in uncertificated form where the Company is entitled to refuse (or is excepted from the requirement) under the Uncertificated Securities Regulations 2001 to register the transfer and they may refuse any such transfer in favour of more than four transferees. The directors may also refuse to register any transfer of a share on which the Company has a lien. The directors may, in their absolute discretion and without assigning any reason therefor, refuse to register a transfer of any share in certificated form unless the relevant instrument of transfer is in respect of only one class of share, is duly stamped or adjudged or certified as not chargeable to stamp duty, is lodged at the transfer office or at such other place as the directors may determine, is accompanied by the relevant share certificate(s) and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer and is in favour of not more than four transferees jointly. If the directors refuse to register a transfer, they shall, within two months after the date on which the transfer was lodged with the Company (in the case of a share in certificated form) or the date on which the operator-instruction (as defined in the Uncertificated Securities Regulations 2001) was received by the Company (in the case of a share in uncertificated form) (or in either case such longer or shorter period (if any) as the Listing Rules may from time to time permit or require), send to the transferee notice of the refusal. Major Interests in Share Capital As at 31 March 2008, the Company had received notification that holdings exceeding the 3 per cent notification threshold were as follows: 52 CAIRN ENERGY PLC ANNUAL REPORT 2007 Number of Shares % of Share Capital BlackRock Investment Management 17,163,948 13.12 Baillie Gifford 13,876,535 10.61 HSBC Investments 12,607,491 9.64 Legal & General Investment Management 9,210,081 7.04 F&C Asset Management 8,344,077 6.38 HSBC James Capel as principal 7,079,940 5.41 TT International Investment Management 4,905,289 3.75 Charitable and Political Donations The Company has a Charities Committee which is responsible for distributing the Company’s charitable donations to selected charities within an overall annual budget. During the year the Company made various charitable contributions in the Uk totalling $3,146,764 (2006: $270,943). Contributions in the Uk are made to a variety of charitable organisations whose areas of operation and activities are aligned with Cairn’s. In addition, the Group provides funding to various charitable initiatives outwith the Uk. Further details of these can be found in our Corporate Responsibility Report. In July 2007, the Company formed a new longteam strategic alliance with Heriot Watt University. Heriot Watt is one of the Uk’s leading universities for business and industry at the forefront of innovative technology and rigorous research-based science. Its Institute of Petroleum Engineering operates one of the largest research programmes in its field. The partnership includes a £1.4 million donation from the Company which will help towards the funding of a new Postgraduate Centre and appointment of the first Programme Co-ordinator for Innovation and Enterprise. As part of the alliance a new Chair has also been created within the field of Petroleum Engineering. No political donations were made and no political expenditure was incurred during the year. Creditor Payment Policy and Practice It is Cairn’s payment policy to ensure settlement of suppliers’ services in accordance with the terms of the applicable contracts. In most circumstances, settlement terms are agreed prior to business taking place. Trade creditors of the Company at 31 December 2007 were equivalent to 27 days’ purchases, based on the average daily amount invoiced by suppliers to the Company during the year. Financial Instruments The financial risk management objectives and policies of the Company are detailed in Note 30 of the Notes to the Accounts.
DIRECTORS’ REPORT CONTINUED Election/Re-Election of Directors Norman Murray and Sir Bill Gammell retire by rotation at the AGM to be held on 23 May 2008 in accordance with the Company’s Articles of Association and, being eligible, offer themselves for re-election as directors. Hamish Grossart and Ed Story have each served on the Board for more than nine years and, in accordance with the Combined Code, will therefore seek re-election as directors on an annual basis. Andrew Shilston retires by rotation at the AGM to be held on 23 May 2008 and will not be offering himself for re-election. The Board has carried out a formal performance evaluation and confirms that, after rigorous review, it has determined that the performance of each of the directors who is subject to re-election continues to be effective and that each demonstrates commitment to the role. An explanation of the performance evaluation procedure carried out by the Company is contained in the Corporate Governance Statement on pages 40 to 49. The directors’ biographies are on pages 32 to 34. The Company’s Articles of Association provide that directors can be appointed by the Company by ordinary resolution or by the Board. The nomination committee makes recommendations to the Board on the appointment and replacement of directors. Further details of the rules governing the appointment and replacement of directors are set out in the Corporate Governance Statement on pages 40 to 49 and in the Company’s Articles of Association. Powers of the Directors Subject to the Company’s Memorandum and Articles of Association, Uk legislation and any directions given by special resolution, the business of the Company is managed by the Board. The directors currently have powers both in relation to the issuing and buying back of the Company’s shares and are seeking renewal of these powers at the forthcoming AGM (see below under ‘Share Capital Authorities’). Share Capital Authorities Resolution 8 in the Notice of AGM seeks to give the directors authority to allot up to 43,610,779 unissued ordinary shares, being up to an aggregate nominal amount of £2,683,740.25. This maximum amount represents 33.33% of the Company’s total issued ordinary share capital as at 31 March 2008. As at 31 March 2008 the Company holds no shares in treasury, representing 0% of the total ordinary share capital (calculated exclusive of treasury shares). The authority conferred by this resolution will expire on 22 May 2013, although the directors intend to seek the renewal of this authority on an annual basis. The directors consider that the authority proposed to be given pursuant to resolution 8 is desirable to allow the Company to retain flexibility, although they have no present intention of exercising this authority. Resolution 9 in the Notice of AGM seeks to give the directors power to allot unissued ordinary share capital and to sell ordinary shares held in treasury for cash up to an aggregate nominal amount of £2,683,740.25 in aggregate without first being required to offer such shares to existing shareholders but this authority is limited to: (i) the allotment of ordinary shares and sale of treasury shares avoiding legal or practical problems should there be an offer of shares or other securities to shareholders pro rata in the future; and (ii) the allotment and sale of up to 6,542,271 ordinary shares and treasury shares for cash (for any purpose), representing 5% of the issued ordinary share capital of the Company as at 31 March 2008. The authority conferred by this resolution will expire on 22 May 2013, although the directors intend to seek the renewal of this authority on an annual basis. Purchase of Own Shares Resolution 10 in the Notice of AGM will be proposed to authorise the Company to make market purchases of its own ordinary shares. Shares repurchased by the Company pursuant to such authority may be cancelled or held in treasury and then either sold (in whole or in part) for cash or cancelled (in whole or in part). The directors intend to take advantage of the flexibility afforded by this resolution as they deem appropriate. No dividends will be paid on treasury shares and no voting rights attach to them. The maximum aggregate number of ordinary shares that may be purchased pursuant to the authority shall be 14.99% of the issued ordinary share capital of the Company as at 31 March 2008, being 19,613,729 ordinary shares. The maximum price which may be paid for an ordinary share pursuant to this resolution (exclusive of expenses) shall be the higher of (i) an amount equal to 105% of the average of the middle market quotations for the Company’s ordinary shares for the five business days immediately preceding the date of purchase and (ii) the higher of the price of the last independent trade of an ordinary share and the highest current independent bid for an ordinary share as derived from the London Stock Exchange Trading System (SETS). The minimum price that may be paid for an ordinary share pursuant to this resolution (exclusive of expenses) shall be 6 2 /13 pence, being the nominal value of an ordinary share. CAIRN ENERGY PLC ANNUAL REPORT 2007 53
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ANNUAL REPORT & ACCOUNTS 2007 CAIRN
Page 3 and 4: CAIRN is an edinburgh based oil and
Page 5 and 6: CAIRN INDIA performance First comme
Page 7 and 8: 2000 lakshmi disCovery 2001 sarasWa
Page 9 and 10: THE RESTRUCTURING OF THE GROUP INTO
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Page 13 and 14: Cambay Basin, India CAIRN ENERGY PL
Page 15 and 16: Cairn india assets 30% 30% 49% 40%
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NOTES TO THE ACCOUNTS CONTINUED 34.
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RESERVES Direct Direct working enti
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NOTICE OF ANNUAL GENERAL MEETING No
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NOTICE OF ANNUAL GENERAL MEETING CO
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GLOSSARY OF TERMS CONTINUED TECHNIC
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