Annual Report 2007 in PDF - Cairn Energy PLC

More documents

Recommendations

Info

NOTES TO THE ACCOUNTS CONTINUED 7. Staff Costs (continued) The awards existing under the LTIP are detailed in the table below together with the WAGP at 31 December 2006. 96 CAIRN ENERGY PLC ANNUAL REPORT 2007 Number WAGP (£) Outstanding at the beginning of the year 2,697,500 6.61 Vested during the year (1,379,518) 3.08 Granted during the year 397,300 23.99 Lapsed during the year (231,082) 13.67 ––––––––––– ––––––––––– Outstanding at the end of the year 1,484,200 13.45 ––––––––––– ––––––––––– The weighted average fair value of options granted in the year was £5.97. The fair value of the awards under the 2002 LTIP is based on an independent valuation using the following assumptions: Tier 1 Tier 2 Vesting % 25.03% 19.03% Volatility 41.37% 41.37% Risk free rate 4.6% 4.6% The discount rate used has been set as the yield on a zero coupon Government bond with a term equal to the expected term on the option being valued (allowing for expected early redemption of the option). 2006 LTIP Under the 2006 LTIP, certain executive directors had been granted ‘phantom options’ (which are equity settled) over ‘units’ in the Group. Following the vesting of an award, participants will generally become entitled to such number of Cairn shares as have a market value equal to the aggregate price of the vested units. Only 50% of these shares will be transferred to the participant immediately. The remaining 50% will be held for a further year. The awards existing at the Balance Sheet date are detailed in the table below. Capricorn Units Cairn India Units Notional Notional exercise exercise Number price (£) Number price (£) Outstanding at the beginning of the year – – – – Granted during the year 7,090,655 1.07 2,044,374 1.86 Lapsed during the year (373,832) 1.07 – – Exercised during the year – – – – ––––––––––– ––––––––––– ––––––––––– ––––––––––– Outstanding at the end of the year 6,716,823 1.07 2,044,374 1.86 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Exercisable at the end of the year – – Weighted average fair value of options granted in year £0.39 £0.61 Weighted average remaining contractual life of outstanding options 2.25 years 2.25 years The fair value of the awards under the 2006 LTIP is based on an independent valuation using the following assumptions: Capricorn Units Cairn India Units Vesting % 36.83% 32.97% Volatility % 63% 42% Risk free rate 4.9% p.a. 4.9% p.a. Lapse due to withdrawals nil nil
NOTES TO THE ACCOUNTS CONTINUED Employee Share-Related Bonuses Cairn granted benefits to certain employees whereby they receive a cash sum that is calculated by reference to the improvement in share price from the date of grant of the award. At 31 December 2007, there were no outstanding balances in respect of such awards (2006: $92,000 disclosed in ‘Other creditors and accruals’ within trade and other payables). Cairn India Limited Cairn India Senior Management Plan The Cairn India Senior Management Plan (CISMP) was adopted by the company in November 2006. This is a discretionary arrangement that allowed the company to grant pre IPO options over its shares to a limited number of its key senior management team. Following the completion of the company’s flotation, no further options will be granted pursuant to this arrangement. The vesting conditions for options granted under the CISMP are the successful completion of Cairn India’s flotation, the continued employment of the relevant participant within the Cairn India Group over a specified period of time and the achievement of certain specified performance targets relating to the Rajasthan development. Option exercises will be settled by an allotment of shares in Cairn India to the relevant individual. The options granted under the CISMP are exercisable between 9 January 2007 and 1 April 2010, at Rs.33.70. At 31 December 2007, there were 7,506,473 options outstanding (2006: 8,298,713 options outstanding) with a weighted average remaining contractual life of 1.93 years (2006: 3.01 years). The following table details the number and WAEP of share options for the CISMP: 2007 2006 Number WAEP (Rs.) Number WAEP (Rs.) Outstanding at the beginning of the year 8,298,713 33.70 – – Granted during the year – – 8,298,713 33.70 Lapsed during the year (792,240) 33.70 – – Exercised during the year – – – – ––––––––––– ––––––––––– ––––––––––– ––––––––––– Outstanding at the end of the year 7,506,473 33.70 8,298,713 33.70 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Exercisable at the end of the year 3,030,318 – Weighted average fair value of options granted in year – Rs.131.19 No CISMP options were exercised during the year; consequently there is no weighted average share price. The CISMP options have been valued using the Black–Scholes model. The main inputs to the model include the number of options, share price, trigger points, discount rate, expected life of the options and volatility. Volatility was determined as the annualised standard deviation of the continuously compounded rates of return on the shares over a period of time. The fair value of the options is based on an independent valuation using the following assumptions: 9 January 9 July 31 December 1 April Vesting Date 2007 2008 2009 2010 Vesting % 33.33%-50% 25%-33.33% 25% 33.33% Volatility 45.99% 41.49% 39.67% 39.67% Risk free rate 6.82% 7.22% 7.44% 7.46% CAIRN ENERGY PLC ANNUAL REPORT 2007 97
Page 1 and 2:
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
Page 11 and 12:
ajasthan midstream the government o
Page 13 and 14:
Cambay Basin, India CAIRN ENERGY PL
Page 15 and 16:
Cairn india assets 30% 30% 49% 40%
Page 17 and 18:
Rajasthan, India the increased reso
Page 19 and 20:
Detail heading here relore min ullu
Page 21 and 22:
uk (West Of shetland) Block 214/19
Page 23 and 24:
nePal the security situation in nep
Page 25 and 26:
angladesh reserves sangu gross 2p r
Page 27 and 28:
activities in all operated blocks.
Page 29 and 30:
2007 marked the beginning of a new
Page 31 and 32:
key financial performance indicator
Page 33 and 34:
CAIRN INDIA CAPITAL EXPENDITURE FOR
Page 35 and 36:
3 9 12 4 8 1 Sir Bill Gammell, Chie
Page 37 and 38:
2007 ACCOUNTS Risk Factors 36 Corpo
Page 39 and 40:
RISk FACTORS CONTINUED The developm
Page 41 and 42:
RISk FACTORS CONTINUED Corporate Re
Page 43 and 44:
CORPORATE GOVERNANCE STATEMENT CONT
Page 45 and 46:
CORPORATE GOVERNANCE STATEMENT CONT
Page 47 and 48: CORPORATE GOVERNANCE STATEMENT CONT
Page 53 and 54: DIRECTORS’ REPORT CONTINUED At 31
Page 55 and 56: DIRECTORS’ REPORT CONTINUED Elect
Page 57 and 58: DIRECTORS’ REPORT CONTINUED Age o
Page 59 and 60: DIRECTORS’ REMUNERATION REPORT Re
Page 61 and 62: DIRECTORS’ REMUNERATION REPORT CO
Page 71 and 72: INDEPENDENT AUDITOR’S REPORT TO T
Page 73 and 74: PRINCIPAL LICENCE INTERESTS ASIA In
Page 75 and 76: GROUP INCOME STATEMENT For the year
Page 77 and 78: BALANCE SHEETS As at 31 December 20
Page 79 and 80: NOTES TO THE ACCOUNTS For the year
Page 81 and 82: NOTES TO THE ACCOUNTS CONTINUED Net
Page 83 and 84: NOTES TO THE ACCOUNTS CONTINUED Cas
Page 85 and 86: NOTES TO THE ACCOUNTS CONTINUED No
Page 87 and 88: NOTES TO THE ACCOUNTS CONTINUED 2.
Page 89 and 90: NOTES TO THE ACCOUNTS CONTINUED Cas
Page 91 and 92: NOTES TO THE ACCOUNTS CONTINUED The
Page 93 and 94: NOTES TO THE ACCOUNTS CONTINUED (b)
Page 95 and 96: NOTES TO THE ACCOUNTS CONTINUED Und
Page 97: NOTES TO THE ACCOUNTS CONTINUED 200
Page 103 and 104: NOTES TO THE ACCOUNTS CONTINUED (b)
Page 105 and 106: NOTES TO THE ACCOUNTS CONTINUED All
Page 107 and 108: NOTES TO THE ACCOUNTS CONTINUED Ten
Page 109 and 110: NOTES TO THE ACCOUNTS CONTINUED Sof
Page 113 and 114: NOTES TO THE ACCOUNTS CONTINUED Gro
Page 115 and 116: NOTES TO THE ACCOUNTS CONTINUED As
Page 117 and 118: NOTES TO THE ACCOUNTS CONTINUED At
Page 119 and 120: NOTES TO THE ACCOUNTS CONTINUED Num
Page 121 and 122: NOTES TO THE ACCOUNTS CONTINUED Oth
Page 123 and 124: NOTES TO THE ACCOUNTS CONTINUED Cai
Page 127 and 128: NOTES TO THE ACCOUNTS CONTINUED 34.
Page 131 and 132: RESERVES Direct Direct working enti
Page 133 and 134: NOTICE OF ANNUAL GENERAL MEETING No
Page 135 and 136: NOTICE OF ANNUAL GENERAL MEETING CO
Page 137 and 138: GLOSSARY OF TERMS CONTINUED TECHNIC
Page 139 and 140: The cover and text pages 1-36 of th
show all

Annual Report 2007 in PDF - Cairn Energy PLC

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?