Company Announcements

                                                                                                                                30 March 2021

CAIRN ENERGY PLC ("Cairn" or "the Company")

Report and Accounts and Notice of Annual General Meeting

The Company's annual report and accounts for the year ended 31 December 2020 (the "Report and Accounts") and a notice of annual general meeting (the "Notice") were posted to shareholders today. The Notice convenes the 2021 Annual General Meeting (the "AGM"). The AGM will be held at the Cairn Energy PLC Head Office at 50 Lothian Road, Edinburgh EH3 9BY at 12.00 noon on Tuesday 11 May 2021.

A copy of the Report and Accounts and Notice have also been submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The Report and Accounts and Notice are also available on the Company's website at www.cairnenergy.com.

Defined terms used in this announcement shall, unless otherwise specifically defined herein, have the same meanings as in the Report and Accounts.

COVID-19

In light of the ongoing COVID-19 pandemic and the UK and Scottish legislation and government guidance currently in force as a consequence, there are significant restrictions on public gatherings and non-essential travel that are expected to affect the arrangements for, and attendance at, the AGM. In light of these restrictions, together with the uncertainty as to any additional and/or alternative restrictions or measures that may be introduced by the UK or Scottish governments, and in order to protect the health and wellbeing of our Shareholders, employees, advisers and of the general public, we are proposing to hold the AGM with the minimum attendance required to form a quorum. Shareholders will not be permitted to attend the AGM in person, but can be represented by the chair of the meeting acting as their proxy.

Two Shareholders in attendance shall constitute a quorum for the AGM, as set out in the Company's Articles of Association. The Company shall ensure that a quorum is present and that the two Shareholders will be the only persons in attendance, therefore abiding with the laws in place and allowing the business contained in the 2021 Notice of AGM to be conducted. As was the case last year, the AGM will be held purely to conduct the required formal business, however a presentation will be made available on the Company's website at www.cairnenergy.com/investors/shareholder-information/agm/ following the closure of the meeting. The voting results on the resolutions put to the AGM shall be announced to the market and uploaded onto the Company's website following the closure of the AGM.

The Company will continue to monitor the situation and, in particular, any changes to the applicable law or guidance in force as a consequence of the COVID-19 pandemic. In the unlikely event of a material change in circumstances that results in the lifting or relaxation of measures or restrictions relating to travel and public gatherings before the date of the AGM, the Company will consider if it is appropriate, safe and legally permissible to open up the AGM for attendance by Shareholders. If this is the case, an update will be given on the Company's website AGM page at www.cairnenergy.com/investors/shareholder-information/agm/ and by separate announcement through the regulatory news service of the London Stock Exchange.

Given the expectation that Shareholders will not be able to attend the meeting in person, Shareholders are strongly encouraged to ensure that their votes are counted at the AGM by appointing the chair of the AGM as their proxy and submitting their completed Form of Proxy as soon as possible and, in any event, so as to arrive at the offices of the Company's registrars, Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, not later than 12.00 noon (BST) on Friday, 7 May 2021.

Shareholders may register their proxy appointment or voting directions electronically via the www.sharevote.co.uk website not later than 12.00 noon (BST) on Friday, 7 May 2021 (further information regarding the use of this facility is set out in the notes to the Notice). For Shareholders who hold their Ordinary Shares in CREST, they may appoint a proxy by completing and transmitting a CREST Proxy Instruction so as to be received by the Company's registrars, Equiniti, not later than 12.00 noon (BST) on Friday, 7 May 2021. We encourage Shareholders to submit their vote electronically were possible. If you do require a copy of the Form of Proxy, this can be downloaded on the Company website at www.cairnenergy.com/investors/shareholder-information/agm/, where you will also find instructions for completion of that Form. Further instructions on voting by proxy are set out in the Notice.

The Board remains committed to allowing Shareholders the opportunity to engage with the Board. If Shareholders have any questions for the Board in advance of the AGM, these can be sent by e-mail to IR.Mailbox@cairnenergy.com. The Board will endeavour to answer key themes of these questions on the Company's website as soon as practical.

Report and Accounts - Information required by Disclosure and Transparency Rule 6.3.5

The information set out below, which is extracted from the Report and Accounts, is included in this announcement for the sole purpose of complying with Disclosure and Transparency Rule 6.3.5 and the requirements it imposes on issuers as to how to make annual financial reports public.  It should be read in conjunction with the Company's preliminary results announcement, released on 9 March 2021 (the "Preliminary Results Announcement").  This material is not a substitute for reading the full 2020 annual report and accounts. Page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the Report and Accounts

Directors' responsibility statement

The following statement is extracted from page 124 of the Report and Accounts. This statement is repeated here solely for the purposes of complying with Disclosure and Transparency Rule 6.3.5. This statement relates to and is extracted from the Annual Report and Accounts. It is not connected to the extracted information presented in this announcement or in the Preliminary Results Announcement.

'Directors' Responsibility Statement

The Directors are responsible for preparing the Annual Report and Accounts, the Directors' Remuneration Report and the Financial Statements in accordance with applicable laws and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group and parent Company Financial Statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. Additionally, the Financial Conduct Authority's Disclosure Guidance and Transparency Rules require the Directors to prepare its Group Financial Statements in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union. Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and Company for that period. In preparing these Financial Statements, the Directors are required to:

·      select suitable accounting policies and then apply them consistently;

·      make judgements and accounting estimates that are reasonable and prudent;

·      state whether for the Group and Company, international accounting standards in conformity with the requirements of the Companies Act 2006 and, for the Group, international financial reporting standards adopted pursuant to Regulation (EC) No.1606/2002 as it applies in the European Union have been followed, subject to any material departures disclosed and explained in the Financial Statements; and

·      prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the Financial Statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group Financial Statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website (www.cairnenergy.com). Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Following careful review and consideration of the Cairn Energy PLC Annual Report and Accounts 2020 (the 'Accounts'), the Directors consider that the Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's performance, business model and strategy.

Directors' Statement Pursuant to the Disclosure and Transparency Rules

Each of the directors, whose names and functions are listed in the Board of Directors section on pages 72 and 73, confirm that, to the best of their knowledge:

·      the Group Financial Statements, which have been prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position, and loss of the Group and loss of the Company; and

·      the Strategic Report section on pages 2 to 69 of this document includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.'

The names of the directors who have given this responsibility statement are:

Nicoletta Giadrossi (Non-Executive Chair)

Keith Lough (Non-Executive Director)

Peter Kallos (Non-Executive Director)

Alison Wood (Non-Executive Director)

Catherine Krajicek (Non-Executive Director)

Erik B. Daugbjerg (Non-Executive Director)                                           

Simon Thomson (Chief Executive)

James Smith (Chief Financial Officer)

Principal risks and uncertainties

The following description of the principal risks and uncertainties is extracted from pages 46-51 of the Report and Accounts.

"Principal risks & uncertainties

The following pages provide a summary overview of the principal risks to the Group at the end of 2020, the potential impacts, the mitigation measures, the risk appetite and the KPIs or strategic objectives the risks may impact.

EMERGING RISKS

Within the Group's risk assessment framework, emerging risks are considered as part of the identification phase. These are risks that cannot yet be fully assessed, risks that are known but are not likely to have an impact for several years, or risks which are unknown but could have implications for the business going forward.

COVID-19 is an example of an emerging risk which was identified in Q4 2019 as a known potential risk which was challenging to fully assess. The scale of the global response to COVID-19 and the implications this has had on the industry was difficult to predict. In response to the pandemic, the Group has taken many steps throughout 2020 to ensure the safety of our staff and the continued delivery of our business-critical activities.

As the Group has moved to remote working in response to the pandemic, new and evolving cyber threats was identified as an emerging risk to the Group. The Group's IT team continue to monitor the cyber security environment and implement mitigations as threats are identified.

Related party transactions

The following description of related party transactions is extracted from page 187 of the Report and Accounts:

"8.8 Related Party Transactions

The Company's subsidiaries are listed in note 8.2. The following table provides the Company's balances which are outstanding with subsidiary companies at the balance sheet date:

The amounts outstanding are unsecured, repayable on demand and will be settled in cash.

The following table provides the Company's transactions with subsidiary undertakings recorded in the loss for the year:

Directors' remuneration

The remuneration of the Directors of the Company is set out below. Further information about individual Directors' remuneration is provided in the audited section of the Directors' Remuneration Report on pages 94 to 121.

Pension contributions of US$0.2m (2019: US$0.2m) were made on behalf of Directors in 2020.

290,683 LTIP share awards to Directors vested during 2020 (2019: none). Share-based payments disclosed above represent the market value at the vesting date of these awards in that year.

Other transactions       

During the year the Company did not make any purchases in the ordinary course of business from an entity under common control (2019: US$nil).

In December 2020 the Company received a dividend from its subsidiary, Capricorn Oil Limited, of US$484.6m, of which US$183.3m was settled in cash and US$301.3m by offset against previous borrowings.

The Company waived a loan of US$138.7m due from Capricorn Senegal (Holding) Limited in December 2020."

Directors' emoluments and remuneration of key management personnel

The following description of directors' emoluments and remuneration of key management personnel is extracted from page 166 of the Report and Accounts:

"(c) Directors' emoluments and remuneration of key management personnel

Details of each Director's remuneration, pension entitlements, share options and awards pursuant to the LTIP are set out in the Directors' Remuneration Report on pages 94 to 121. Directors' remuneration, their pension entitlements and any share awards vested during the year are provided in aggregate in note 8.8.

Remuneration of key management personnel

The remuneration of the Directors of the Company and of the members of the management and corporate teams who are the key management personnel of the Group is set out below in aggregate.

In addition, employer's national insurance contributions for key management personnel in respect of short-term employee benefits were US$0.9m (2019: US$0.9m).

Share-based payments shown above represent the cost to the Group of key management personnel's participation in the Company's share schemes, measured under IFRS 2.

During 2020, 613,791 shares awarded to key management personnel vested under the LTIP (2019: none)."

Forward looking statements

This announcement contains or may contain forward-looking statements regarding Cairn, 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 undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn's expectations with regard thereto or any change in circumstances or events after the date hereof.