total employees - bseindia.com · gri index 105 nvg to gri linkage ... (oisd) awarded our 670 km...

TOTAL EMPLOYEES: 1,643NET REVENUE: ~INR 187,617 MillionTOTAL CAPITALIZATION*: ~INR 635 BillionPRODUCTS: Crude Oil and Natural GasTOTAL ASSETS*: ~INR 656 Billion

* As on 31st March 2014

CAIRN INDIA SUSTAINABILITY REPORT 2013-14 1

Cairn India is one of the largest independent oil and gas exploration

and production companies in India with a market capitalisation of ~

US$ 11 billion. The company was rated as the fastest-growing energy

company in the world, as per the 2012 and 2013 Platts Top 250 Global

Energy Company Rankings.

Cairn India operates ~ 30 per cent of India’s domestic crude oil

production. Through its affiliates, the company has been operating for

close to 20 years, playing an active role in developing India’s oil and

gas resources. To date, Cairn India has opened 4 frontier basins with

over 40 discoveries, 31 of these in Rajasthan alone.

The Mangala field in Rajasthan, discovered in January 2004, is the

largest onshore oil discovery in India in over two decades. The

Mangala, Bhagyam and Aishwariya fields, each one a major discovery

in the Rajasthan block, with expected gross ultimate oil recovery

of over 1 billion barrels from primary, secondary and Enhanced Oil

Recovery (EOR) methods.

Cairn India has a portfolio of 9 blocks. 7 blocks are in India - 1 in

Rajasthan with multiple assets, 2 on the west coast and 4 on the

east coast. 1 block is in Sri Lanka and 1 in South Africa. Oil and gas is

currently being produced from Rajasthan, Ravva in Andhra Pradesh

and Cambay in Gujarat.

The company is headquartered in Gurgaon in the National Capital

Region with domestic offices operating across India in Andhra

Pradesh, Gujarat, Rajasthan, and Tamil Nadu and with international

offices in Colombo and Houston.

ABOUT CAIRN INDIA

CONTENTSABOUT CAIRN INDIA 1

Notes from the CEO's Office 4

Organizational Structure, Report Scope & Boundary 8

Awards 10

THE PEOPLE STORY

Sustainability @ Cairn 14

Listening to Our Stakeholders 17

A Comprehensive Stakeholder Engagement Structure 17

Aligning Business to Material Issues 20

Material Issues: Environment 21

Material Issues: Social 27

Material Issues: Economic 32

A COMPANY WITH ANINCLUSIVE GROWTH MODEL

HOW CAIRN INDIA ADDS VALUE TO LOCAL ECONOMIES 38

Engaging Local Vendors 38

CSR: Interventions to Uplift Communities 40

12

36

»

»

»

A COMPANY BUILT AROUND PEOPLE

THE EMPOWERED EMPLOYEE 49

The ‘Can-Do’ Spirit 49

Recognizing Talent 50

Training, Development, & Rewards 52

Helping Employees Do the Right Thing 54

Meaningful Engagement 56

Safety First 61

A COMPANY THAT CARESFOR THE ENVIRONMENT

CHARTING A COURSE FOR GREATER RESOURCE EFFICIENCY 68

Energy, Afforestation & Climate Change 68

Managing Our Water Footprint 76

Handling our Waste Stream 79

HIGHLIGHTS FROM NEXT YEAR’S SUSTAINABILITY REPORT 82

CONSOLIDATED LIST OF GRI INDICATORS 83

DISCLOSURE ON MANAGEMENT APPROACH 98

GRI INDEX 105

NVG TO GRI LINKAGE INDEX 121

ASSURANCE LETTER 122

48

66

»

»

CAIRN INDIA SUSTAINABILITY REPORT 2013-144

NOTES FROM THE CEO’S OFFICE

We produced our 200 millionth barrel of oil

from Rajasthan on 13th January 2014, a mere

9 years from the discovery of the Mangala

field and about 3.5 years from commencement of

production from the block. By the end of FY 2013-14, we

were able to recover 47% of the hydrocarbons available

in the Ravva fields. Our Cambay block saw a 71% year-

on-year increase in gross operated oil production. These

are remarkable achievements and would not have been

possible without the active support and encouragement

of all our stakeholders.

Today we are ranked the fastest growing energy

company in the world1. We have made over 40

hydrocarbon discoveries in India. Our oil discoveries

come at a time when global and national demand for

oil is on the rise. The World Energy Outlook 2013 study

predicts that the global energy demand will increase

by as much as 33% from 2011 to 20352. Much of that

demand will come from Asia – primarily India and China.

This means that oil production will need to grow by

nearly 1 million barrels of oil per day every year from the

current rate of 90 million barrels of oil per day. With over

three quarters of the country’s basins remaining under-

explored, there remains a vast opportunity to tap these

hydrocarbons.

Our annual production has touched approximately

76 million barrels of oil equivalent. We are aspiring to

achieve an annual production of over 100 million barrels

in the next 3 years. As we focus on this ambitious

number, we seek to further our exploration and

development activities to include marginal oil fields, tight

“CAIRN IS THE

FASTEST GROWING

ENERGY COMPANY

IN THE WORLD AND

IS COMMITTED TO

SUSTAINABILITY.”


reservoirs and deep-water systems. We are committed

to investing USD 3 billion in capital expenditure over

the next three years. As stated in this year's Annual

Report by our Chairman, Navin Agarwal, we also plan

to leverage the potential of the Rajasthan block for the

exploration and development of gas and are working

towards creating appropriate infrastructure to include

this as a significant part of our production mix.

Our success and growth has not only benefited the

company and its shareholders, but has made us a

significant economic engine for the Indian economy.

Some of our contribution is direct in nature:

n In FY 2013-14, we have contributed over INR 242,000 million to the government exchequer in the form of taxes

n We operate approximately 30% of the country’s crude oil production, helping the nation save over INR 481,000 million in foreign exchange that may, potentially, have been spent on oil imports in FY 2013-14

n Our annual profits have grown at a CAGR of 25.15% over the last 3 years, resulting in generous returns for our employees and shareholders

It is in this context that we embark on our sustainability

journey.

We have always known that our license to operate

comes from the communities impacted by our

business. This knowledge has translated into the

core belief that all our actions need to respect local

communities and foster their economic growth. Our

relationships with various local stakeholders have given

us a comprehensive understanding of their needs and

the developmental changes they seek. We welcome

their desire for change, for it means that the community

now expects easier access to quality education, better

roads, safe drinking water, and a share in the economic

progress of the region. This has led to our local content

policy for sourcing materials and services as well as our

robust CSR programs, which lay a strong emphasis on

local livelihood development, especially in remote areas

such as Barmer and Ravva.

However, not all of our impact is so direct. A large

part of our influence can be seen in the manner in

which we have stimulated the economy in these rural

environments. Communities that surround our areas of

operations have seen a steady rise in their economic

well-being. Cairn’s operations have created a new

generation of entrepreneurs who not only provide

services to fulfill our direct needs, but also provide

valuable support services to our entire workforce. From

vehicle providers to hotel entrepreneurs, we have seen

that the wealth created by oil discovery also finds its

way into the local households.

Our success has been driven by the “Can-Do” spirit of our employees and contractors. They have enabled us to successfully pursue our commitment to explore and produce hydrocarbons in a consistent, safe, and responsible manner. Whether it is meeting the 200,000 barrels of oil per day target in Rajasthan, achieving a 99.8% plant uptime rate at Ravva, or ensuring that our major sites are free of Lost Time due to Incidents (LTI), we are what we are due to the commitment shown by our employees and contractors. I take pride in the manner in which we conduct our business.

When it comes to environmental management, we are

focused on complying with national and state level

environmental standards. In addition, we have begun to

take a hard look at how to better manage our wastes.

Teams across the organization have been working on

solutions to handle our wastewater and drilling waste.

I am proud to say that we have now reached the

implementation stage for co-processing of our drilling

waste in the cement manufacturing industry. In the

coming years, I anticipate that many other initiatives will

come online and allow us to move beyond compliance

on the environmental front.

Climate change continues to be an issue that is closely

linked to the oil & gas industry. In the past year we have

significantly reduced our excess gas flaring intensity


"We have always believed that collaboration and team work are the means to find elegant and innovative solutions."

»


and made progress in making our operations more

energy efficient. We continue to explore options to

increase our dependency on alternate power sources

like solar and wind. We have also set ambitious targets

for our greenbelt initiatives – with the knowledge

that such initiatives will not only help improve the

biodiversity and ecosystems of the areas where

we operate, but also act as carbon sinks. I however

acknowledge that much more needs to be done on this

front and a comprehensive climate change mitigation

and adaptation policy for the company is needed.

Deliberations on this front continue and I hope to

announce a climate change policy that is relevant to the

context of our business and meaningful in its impact in

the near future.

I am both proud and humbled by the awards and

recognitions that we have received during the year. In

addition to being recognized as the fastest growing

energy company in the world by Platts 250, we have

been awarded many prestigious accolades for our

HSE & CSR performance. Our Mangala oil and gas

field was awarded the second prize in the large scale

manufacturing category in the 3rd FICCI Safety

Systems Excellence Awards for Manufacturing-2013.

The Oil Industry Safety Directorate (OISD) awarded our

670 km long continuously heated and insulated crude

oil pipeline, the safety award for the year 2011-12 and we

won the coveted FICCI Corporate Social Responsibility

Award – 2013 in the large private sector company

category for the year 2013.

We have always believed that collaboration and team

work are the means to find elegant and innovative

solutions. We engaged with the best in the world and in

India through the Global HSE & Sustainability workshop,

the first of its kind in India. The workshop was an

opportunity for us to learn and deliberate on the best

global practices. In pursuance to our commitment that

our suppliers and vendors be partners in our success

we continued our formal dialogue through the widely

attended third annual vendor and supplier conference.

We had deep and widespread engagements with local

communities through various formats, including public

hearings in Rajasthan and Ravva, to hear their voices

and views and respond both swiftly and positively. Our

employee opinion drives our quest for sustainability

and we continue to solicit their views in identifying our

materiality issues.

Sustainability is a critical journey for Cairn India. Each year we learn more about what it means to be a truly sustainable organization and each year we bring in measures that will allow us to meet our sustainable development aspirations, more holistically and in larger measure. I acknowledge that there is much to do and it is a long journey ahead, yet, as I look at what the company has achieved and the manner in which it has achieved it, I am reminded that Cairn has always been a sustainability-driven organization both in intent and at heart. This report seeks to celebrate those within the organization who have given us the strong fundamentals upon which to build a truly responsible and sustainable organization.

I encourage you to join me in celebrating this success,

and also discover areas for future shared collaboration.

It is through this continued learning and sharing of

ideas that we can make Cairn a truly sustainable

organization – one that we can be proud of as we build

assets and structures for the next three decades.

Sudhir MathurInterim CEO & CFO

1 Source: Platts Top 250 - 2013 Fastest Growing Top 250 Companies [Online] http://top250.platts.com/FastestGrowing

2 As per the International Energy Agency (2013) World Energy Outlook 2013 Factsheet [Online] http://www.worldenergyoutlook.org/media/weowebsite/factsheets/WEO2013_Factsheets.pdf


ORGANIZATIONAL STRUCTURE, REPORT SCOPE & BOUNDARY

ORGANIZATIONAL STRUCTURE FY 2013-14 was a year when we began the process of transitioning from an operating unit structure to a Strategic Business Unit model. This internal restructuring was part of an ongoing effort to fully realize ef�ciencies from our expanding operations. However, for the predominant part of the year, our business was still structured at a functional unit level consisting of exploration, seismic, drilling, projects and operations. The transition to a SBU based model is currently underway.

We will, continue to report our sustainability performance at a functional level this year. As with our last report, the boundary of this report continues to remain Cairn India Limited’s operations function. These consist of our upstream operations in Rajasthan (Mangala, Raageshwari, Bhagyam, Aishwariya, Saraswati), our midstream operations (Barmer-Salaya pipeline including Viramgam and Radhanpur), and our production operations at Ravva and Suvali.

This report does not include our exploration, drilling, seismic, or projects related functional areas. Information on these aspects of our business will be included in the future as we consolidate our reporting process. It also does not include information about our joint ventures and subsidiaries.

PRODUCTION SCENARIO During FY 2013-14, we produced approximately 11.2 million tonnes of hydrocarbons from our production facilities at Rajasthan, Ravva and Suvali. This does not include approximately 0.27 million tonnes of hydrocarbon processed as part of the tolling arrangement at the Suvali facility for ONGC. Our Rajasthan operations produce 84.5% of our hydrocarbons, Suvali produces 3.7% and Ravva produces 11.8%, on a barrel of oil equivalent basis.

CAIRN INDIA LIMITED

EXPLORATION DRILLING PROJECTS OPERATIONS

UPSTREAMOPERATIONS

MIDSTREAMOPERATIONS

RAVVA SUVALI

SUSTAINABILITY REPORT BOUNDARY


ABOUT THE REPORTThe report is prepared based on to Global Reporting Initiative (GRI) guidelines version 3.1 Oil & Gas Sector Supplement (OGSS). The report has been prepared keeping in mind the principles of sustainability reporting – namely materiality, stakeholder inclusiveness, sustainability context, completeness, balance, comparability, accuracy, timeliness, clarity, and reliability. The application level of the report is ‘B’ with 68 indicators reported fully and 6 indicators reported partially.

MEASUREMENT METHODOLOGY

All data presented in this report has been obtained from our data management systems that systematically track data on a regular basis. Primary environmental data is part of systems that are aligned to Environmental Management Systems ISO 14001 Standards. Safety and occupational health data is aligned with OHSAS 18001 (Occupational Health and Safety Advisory Services).

MEASURED QUANTITIESFuel consumption (except diesel consumption in contractor vehicles, which was estimated), Water withdrawal, Water recycled, Ozone depleting substance emissions, Waste water discharged, Produced water, Waste generated, Drilling waste, Spills, Hydrocarbon �ared, Ambient air emissions, Production data, Environmental expenditure.

Total workforce number, Employee hire and turnover, Safety incident data, Training hours, Workforce diversity breakup, Average salary information, Stakeholder grievances, Incidents of discrimination, and Fines paid. DERIVED QUANTITIES Renewable energy generated, Energy saved, Greenhouse gas emissions, GHG emissions reduced, overall SOx/NOx/VOC emissions, Hydrocarbon vented, Injury rates, and Ratio of salaries.

Greenhouse Gas emissions are calculated based on the API Compendium 2009. Injury rates are calculated based on the industry standard provided by the OGP. This year we have had to re-articulate some numbers reported last year. We have made a note of all data that has been changed within the body of the report.

All measurements and techniques are in line with prevalent industry practices.

ASSURANCE STRATEGY

At Cairn India, our management systems and processes undergo periodic, comprehensive due diligence checks through independent, structured audits. We have extended this practice to validate the data, processes and initiatives that constitute our sustainability performance. Sustainability audits were conducted across all our sites and the �ndings have informed our sustainability strategy and reporting. For continuity, we plan to engage the same audit/assurance agency for a period of three years. This report’s contents and performance indicators have been externally assured by DNV GL.

AWARDSOur efforts in embedding sustainability across our operations have received

recognition. Cairn India was the recipient of three prestigious awards in 2013-14.

Award Category Business Function Awarding Organization

1Safety Award for the Year

2011-12Cross Country - Crude

Oil PipelineMidstream operations

Oil Industry Safety Directorate (OISD)

2

Second prize in the 3rd FICCI Safety Systems Excellence Awards for Manufacturing-2013.

Large scale manufacturer category

Mangala Oil & Gas Field unit

FICCI

3FICCI Corporate

Social Responsibility Award – 2013

Private Sector Companies with a

turnover of INR 3001 Crores per annum and

above

Corporate Social Responsibility

FICCI

4Environment, Health, Safety

Excellence Awards - 2013

1st Place in Chemical/Pharma/Refinery

category

2nd Place in Large Scale category

'5-Star' Rating for Excellence in EHS

Practices and Policies

Cairn India CII (Southern Region)

THEPEOPLESTORY



Is sustainability linked to my job description and activities at the workplace?” In the last one year, this has been the most commonly asked question to the sustainability team. Each time our answer has

been an emphatic ‘Yes’! In fact most activities undertaken at Cairn have an underlying aspect of sustainability performance. The task for the company is recognizing and building upon those sustainability aspects. The challenge – as we understand it, is to fully comprehend that good business performance does not mean a trade-off between pro�ts, ethics, social responsibility, health, safety and environmental stewardship. Good business performance entails scoring high on the scale for each of these aspects.

But the devil is always in the details. The sustainability priorities and issues – how sustainability is linked to daily job descriptions and how good business performance is linked to a model that integrates environmental stewardship, social responsibility and high ethical standards – need to be constantly visible and exempli�ed through demonstrated leadership and visible actions.

This report describes the work that Team Cairn India has undertaken over the last year that knowingly or unknowingly, has impacted our sustainability and business performance. Through this report we acknowledge our employees contributions and report our sustainability performance to our external stakeholders.

A word to all Cairnians, as you read through these pages, we hope that you can draw a link between the work that you do, Cairn’s business philosophy, our sustainability performance and the contribution that you have made that makes the difference! Once you see the linkages and connections we encourage you to engage with us to see how we can collectively take Cairn forward on this journey and strengthen our sustainability agenda.

Jaishankar Krishnan GM – Sustainability [email protected]


SUSTAINABILITY @ CAIRN

WHAT DEFINES A SUSTAINABLE COMPANY?

This question was placed before the Sustainability Steering Committee members at the beginning of the year. The �rst meeting for the committee was

an opportunity for the leadership of the organization to come together and strategize on how Cairn will adopt the formal frameworks that form the foundations of sustainable companies. Right from the start it was clear that sustainability for Cairn India was about:

� Listening to and engaging with our stakeholders

� Embedding sustainability aspects into our core decision-making processes

� Being prepared to address key environmental and social concerns challenging the organization

� Ensuring that we live up to our role of a responsible corporate citizen

� Running our operations in a safe manner – both for our workforce and for the communities impacted by us

� Being ethical in all our transactions

The broad gamut of functional areas covered under sustainability meant that the topic needed to be governed across the organization. To meet this purpose, the Sustainability Steering Committee is Chaired by the Director of Strategy & Integration (Member: Executive Committee) and comprises of Directors/Heads of Department of all the key functions within the company.

This structure allows for the discussion and implementation of sustainability initiatives in a manner that is cognizant of business needs. Sustainability initiatives are owned by the respective heads of department and they form a part of their annual corporate KPIs. In addition, we have also created a sustainability team under our HSE department to drive and manage the daily interactions on the subject.

The structure given above pertains only

to the functioning and operation of the

sustainability steering committee and is not

indicative of the departmental hierarchy of

the organization.


QHSE: Quality, Health, Safety & Environment

GB: Green Belt

LA: Land Acquisition

HR: Human Resources

RA: Risk Assurance

CS: Company Secretary

CSR: Corporate Social Responsibility

PSCM: Procurement & Supply - Chain Management

IT: Information Technology


ADVANCING THE SUSTAINABILITY AGENDAAs we move forward with our sustainability agenda, it is clear to us that we need to take a long-term approach to institutionalizing sustainability within the organization. At Cairn, we are strong believers of implementing organization-wide changes in a phased manner. This allows us to monitor progress and tweak our approach to changing ground realities. Embedding sustainability involves the same methodology.

We have planned our sustainability journey in three-phases:

In Phase 1, we have tried to align the day-to-day job functions of our employees to the larger sustainability agenda. Last year, we undertook studies to assess how closely our functions are aligned with the larger sustainability themes of climate change, natural resource management, waste management, workforce safety, training, societal impact, human rights, corruption, in�uencing public policy, and product responsibility. Where we found linkages, we have sought to highlight them within the organization. Where we found gaps, we have begun the process of debate and discussion with our management team to see how these gaps are to be bridged. Materiality assessment exercises have helped us focus on the themes that are relevant to our organization.

This report – The People Story – highlights these linkages and celebrates our sustainability achievements.

In Phase 2, we will aim to extend our decision-making structures to incorporate sustainability metrics. The goal will be to begin embedding sustainability into our processes and strive for best-in-class performance benchmarks. Sustainability measures should start to become part of our operations and processes by the end of this phase.

This phase will form the basis of – The Process (Strategy) Story – our corresponding sustainability report.

In Phase 3, we will assess our sustainability performance as a result of embedding sustainability metrics in our decision-making and strategy-setting process. This will be a checkpoint to assess the impact of our sustainability initiatives on our business.

This phase will form the basis of – The Performance Story – our third sustainability report in this series.

For our employees, contract workers, investors, vendors and external stakeholders: The next few years present the opportunity to help shape the long-term journey of the organization. We invite your contributions and look forward to reassessing our performance at the end of Phase 3 to measure the extent to which sustainability has been able to drive an improvement in overall business performance.

SUSTAINABILITY @ CAIRN

“OUR SHORT TERM SUSTAINABILITY STORY WILL EVOLVE IN THREE PHASES.PEOPLE, PROCESS AND PERFORMANCE STORIES”


LISTENING TO OUR STAKEHOLDERS

A COMPREHENSIVE STAKEHOLDER ENGAGEMENT STRUCTURE

Consistent dialogue with stakeholders is a proven method for identifying and assessing emerging risks and recognizing opportunities. At Cairn we employ formal and informal channels to engage with our stakeholders. Each department is responsible for ensuring effective engagement with their primary internal and external

stakeholders during the course of their daily business functioning.

INTERNAL STAKEHOLDER ENGAGEMENTCairn has developed several formal communication channels to ensure that information about evolving ground realities reaches the organization’s decision-makers in a timely manner. Internal channels of communication such as town hall meetings, daily leadership update forums, HSE leadership and Sustainability Steering Committee meetings, site-level risk sub-committees, employee engagement surveys, our incidents reporting through the Cairn Incident Management System (CIMS), and the various engagement forums at site – both formal and informal, allow us to keep a pulse on the day-to-day functioning of the company. We keep all lines of communication open with our employees and contract workforce.

EXTERNAL STAKEHOLDER ENGAGEMENT DIRECT CHANNELS Risks and opportunities also arise in the external environment and we have several formal channels to engage with our external stakeholders. The company has well-de�ned, formalized structures for conducting dialogues with our key stakeholders as described ahead.

LOCAL COMMUNITIES

The CSR team has been given the primary responsibility of overseeing our engagement with local communities. Stakeholder Engagement Teams and


Grievance Cells have been formed so that members of the local community can bring their grievances and suggestions to the company.

The HSE and CSR teams are also mandated with conducting public hearings for the Environmental Impact Assessment process. In FY 2013-14, public hearing programs were held in the Rajasthan block as we sought to get permission to increase our production limits from 200,000 barrels of oil per day to 300,000 barrels of oil per day. We also held public hearings in Ravva when seeking approvals for our Contingent Resource Development program and for the expansion of our wells and sub-sea pipeline infrastructure.

INVESTORS

Our Investor Relations (IR) team interacts with our investors and when appropriate directs their queries to the relevant departments. In FY 2013-14, the IR team received several enquiries from our investors about our sustainable business practices and was able to identify this as a learning and experience-sharing opportunity.

JOINT VENTURE PARTNERS & REGULATORS

The Joint Venture Management team with the support of appropriate departments is responsible for managing our relationship with our Joint Venture (JV) partners, the Directorate General of Hydrocarbons (DGH) and the Ministry of Petroleum and Natural Gas (MoPNG) through Operational Committee (OC), Technical Committee (TC), and Management Committee (MC) meetings.

Our Legal, HSE, and on-site teams are responsible for engaging with regulators such as the District Administration, Ministry of Environment and Forests, State and Central Pollution Control Boards, and the Directorate General of Mines Safety (DGMS) among others.

In addition, the CEO’s Office along with identi�ed ExCo members are responsible for engaging with senior government functionaries in the DGH and line ministries. The of�ce also engages with ministries

through Industry associations on industry-speci�c policy matters.

VENDORS, CONTRACTORS & SUPPLIERS

Vendors, contractors, and suppliers form a large component of our external stakeholders and our Procurement and Supply Chain Management (PSCM) team is empowered to manage and communicate with them. In FY 2013-14, the team organized several capacity building sessions for our local vendors. They also organize an annual vendor and contractor conference to communicate our business plans and speci�c performance requirements, including those related to the sustainability agenda.

MEDIA & INDUSTRY ASSOCIATIONS

The Corporate Communication team is primarily responsible for any engagement with the media and with industry bodies such as Association of Oil and Gas Operators (AOGO), Confederation of Indian Industries (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), and the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

INDIRECT CHANNELS

Industry conferences, feedback received at the Cairn Enterprise Centre and employee experience form the basis of indirect external stakeholder views received by the company.

Collectively, our internal engagement forums and our direct and indirect channels of stakeholder engagement bring to focus the key issues that impact the organization and provide our senior management the information needed to make sound, timely decisions.

LISTENING TO OUR STAKEHOLDERS


HSE: Health, Safety & Environment

SSC: Sustainability Steering Committee

CIMS: Cairn Incident Management System

AGM: Annual General Meeting

OC: Operational Committee

TC: Technical Committee

MC: Management Committee

HR: Human Resources

CS: Company Secretary


ALIGNING BUSINESS TO MATERIAL ISSUES

Highly volatile global markets, challenges in accessing, developing and monetizing new �elds, availability of oil�eld service providers & skilled

manpower, and potential regulatory uncertainties are risks inherent to the oil & gas industry. In India, Cairn also encounters a delay or denial of approvals due to ambiguity in regulations, variations in the actual and estimated recoveries from oil reserves, and challenges to timely project completion such as acquiring land for expansion of our operations. In addition, risks inherent in the adoption and scaling up of cutting edge technologies may impact the overall implementation of our expansion plans.

Our understanding of these risks is further enhanced by our interactions with our stakeholders. Over the last two years, we have begun the exercise of re-evaluating our material issues.

Last year we undertook a survey of our employees to understand what sustainability issues they considered most material to the organization. The issues highlighted were compared with topics being addressed by other oil & gas companies. Our leadership and the Sustainability Steering Committee assessed the �ndings and identi�ed

a �nal list of material issues for the company.

This year we conducted a similar survey, seeking further input from our employees, given that they had undergone capacity building on sustainability topics. We have used the information provided in the survey to understand the prioritization that the employees would like to see within each of the important aspects of sustainability. We are happy to observe that there is clear alignment between the employee prioritization of issues and the sustainability agenda set by the company. It therefore gives us the building blocks for our future sustainability initiatives and helps us communicate with clarity the connect of the sustainability agenda with day-to-day activities of the employees. We have also expanded our stakeholder engagement to our suppliers and local community partners. The engagement with our suppliers was carried out by our procurement team, while the engagement with the local community members was carried out by our HSE and CSR teams.

While most material issues remained the same, there were a few additions to the list. The issues are detailed ahead.


T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY

MATERIAL ISSUES: ENVIRONMENTWater, energy & climate change, wastewater management, controlling air emissions and enhancing the biodiversity of the regions where we operate are the material environmental issues for the company

KEY STAKEHOLDERS: Local community (fresh water use), Regulators.

In addition, the Central Groundwater Authority (CGWA) has approved an enhancement of the saline deep-ground-water abstraction limit to 43,500 m3/day, which will allow us to meet our future water needs.

WATER

“A majority of our operations are located in water scarce regions. It is inevitable that

efficient use of water remains a key focus area for the company. While we source 99%

of our water from saline water sources, we need to keep a constant vigil on our water

use to ensure that we are not contaminating or impacting the fresh water on which

local communities and agriculture are dependent.”

Sai Subramanian, General Manager – Upstream Operations

Initiative Monitoring Team Outcome

Efficient water utilization using drip irrigation techniques Installation managers – RGT,

MPT, Bhagyam

Annual saving of 13,000 KL of freshwater

Reuse/Recycling of water Annual savings of 69,000 KL of freshwater

RO water purifying and dis-pensing systems installed un-der the ‘Jeevan Amrit’ program (Any Time Water Machines)

Barmer SteercoRO plants installed in 15 villages. Any Time Wa-ter (ATW) machines installed in 7 villages.

CAIRN’S RESPONSECairn has undertaken the following initiatives in FY 2013-14 to improve our water management systems:

LEADERSHIP SPEAK


MATERIAL ISSUES: ENVIRONMENT

KEY STAKEHOLDERS: Internal stakeholders, regulators, and institutional investors

ENERGY, AFFORESTATION & CLIMATE CHANGE

“In 2013, global atmospheric CO2 levels crossed 400 parts per million. The impacts

from climate change are being felt and will become more intense in the immediate

future. The oil & gas industry, as a result of its operations, as well as its final product, is

a significant contributor to greenhouse gases and thus to climate change. Energy use

determines the climate change impact of any company and our endeavour is to reduce

demand and switch to alternate (low and zero-carbon) sources of energy in a phased

manner. Efficient energy use is also a reflection of the efficiency of operations.

We have also set an ambitious goal of increasing the green cover in India by planting

trees across a land area equivalent to 50% of total land area occupied by our opera-

tions. This will allow us to offset some of our carbon emissions.”

Jaishankar Krishnan, General Manager – Sustainability

LEADERSHIP SPEAK



Installation of solar powered lighting

Installation managers – RGT, Bhagyam

51 solar lights installed.

Feasibility studies conducted on possible renewable energy deployment

Various - across the organization

Studies conducted: • RenewableEnergyStrategybyTERI.• ReplacingfluorescentlampswithLEDlamps.• 40KWsolarPVprojectatSaraswathi-1tosubstitutediesel

consumption.• RooftopsolarPVprojectsatMangala.• Solar-baseddripirrigationfeasibilitystudyongoing.• MoUsignedtoassesssolarthermalfeasibilityforhighandmid-

pressure steam generation requirements.

Budget approvals

Installation managers – MPT, RGT

Solar PV arrays for LQ at MPT, RGT.

Energy saving initiatives

Installation Managers

17,709 GJ of energy savings from process redesign and retrofitting of equipment.

Solar home systemproject

CSRProposal to install 2,000 solar roof-top installations to provide household electricity under the MNRE scheme has been submitted to the Government. Phase-I installation commenced for 500 households.

Contribute towards India’s green cover using captive greenbelt & social forestry

Land2,699,220 trees planted; Capacity to approximately sequester 80,000 tonnes of CO

2/year, upon maturity of the trees.

Developing a ‘Climate Change policy’ and strategy for the company

SustainabilityA draft policy is in circulation among the leadership team and the most effective way forward is being debated.

CAIRN’S RESPONSECairn has undertaken the following initiatives in FY 2013-14 to manage our energy use and carbon footprint:

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY



KEY STAKEHOLDERS: Local community, Regulators, and Internal Stakeholders.

WASTEWATERMANAGEMENT

“Production well field operations result in the generation of large quantities of

wastewater known as produced water. Produced water is a mix of water and

hydrocarbons. If not responsibly managed and disposed of, produce water can pollute

the neighbouring environment and leach into ground water. Untreated sewage water

from our administrative offices and living quarters can also have a similar impact.”

Sivakumar Pothapalli, Asset Manager – Producing Assets (RJ)


Recycling of produced water Installation managersMore than 95% of our produced water is recycled and reused.

Installation of Sewage Treat-ment Plants (STPs)

Installation managersAll our operating facilities have STPs. At MPT, STP capacity increased from 80m3/day to 330 m3/day.

CAIRN’S RESPONSEAt our on-shore facilities, Cairn is a zero surface discharge organization. Our efforts to treat wastewater include:

LEADERSHIP SPEAK


CAIRN’S RESPONSECairn complies with local air emission norms at all its locations. Our current emissions do not cause any impact on the local air quality since they are well within the assimilative capacity for the region.

KEY STAKEHOLDERS: Regulators, local community, employees

AIR EMISSIONS MANAGEMENT

“We burn fossil fuels in order to generate energy for our operations. We also

flare or emergency vent, excess extracted gas to ensure safety of our operations.

Apart from the greenhouse gas emissions, the burning of these fuels emits SOx,

NOx and Volatile Organic Compounds (VOCs) that can adversely impact the

ambient air quality of the regions.”

Hari Kumar, Director QHSES & Sustainability

LEADERSHIP SPEAK

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY



KEY STAKEHOLDERS: Regulators, and the Local community.

PROTECTING BIODIVERSITY

“A loss of biodiversity has a negative impact on the overall environmental

stability of a region. In recent years, forests have faced pressures due to the

increasing industrialization. A healthy forest cover provides various ecosystem

services such as air purification, prevents erosion of top soil, acts as a

watershed and enhances the aesthetics of a region.”

Jagdeep Chayya, Head – Land Acquisition & Greenbelt Development

CAIRN’S RESPONSEMangrove forests form a part of the regional ecosystem of our coastal operations in Ravva and Suvali. Cairn has embarked upon a program to enhance the mangrove cover of the region to conserve and protect the biodiversity and prevent coastal soil erosion. In 2013-14, we planted nearly 2.6 million mangrove trees in the region.

LEADERSHIP SPEAK


LEADERSHIP SPEAK

MATERIAL ISSUES: SOCIALWorkforce health & safety, talent management, CSR and local community engagement are the material social issues for the company.

KEY STAKEHOLDERS: Employees, Regulators, Local Community, and Investors.

WORKFORCE HEALTH & SAFETY

“Safe operations are key to a productive business. Low injury and

fatality rates reflect in positive employee morale and therefore enhance

performance. A safe work culture also results in lowering the risk of

significant accidents that can result in loss of life, property and cause

economic and environmental damage.”

Devendra Katiyar, General Manager - Safety

CAIRN’S RESPONSECairn has always been pro-active about enhancing the safety culture of the company. In FY 2013-14, it undertook the following initiatives to improve safety performance:

Initiative Monitoring Group Outcome

Instituting a culture of Process Safety within the organization

HSE, Installation managers

• Launchofmandatorymanagementsitetourstohighlightfocuson process safety; made part of corporate KPIs.

• Institutingleadingprocesssafetyindicatorstofacilitateperiodicreporting and monitoring.

• BaselineProcessSafetyManagementauditinitiated.

Maintain best in class HSE performance to ensure employee and community safety

HSE, Installation managers

• CairnIndia’sHSEperformanceiswithinthetoptenofOGPmembers.

• KnowYourHazardprogramlaunched.TwoprogramshavebeenconductedinGurgaonandatdrillingsitesinRajasthan.

Focus on road safety HSEIn addition to training our drivers on defensive driving, 14,000 local community participants including school children have been trained on proactive safety behaviours while on the road.

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


MATERIAL ISSUES: SOCIAL

KEY STAKEHOLDERS: Employees, college graduates, and industry professionals

TALENTMANAGEMENT

“With the era of easy oil over, and a large portion of the experienced

oil & gas professionals due for retirement in the near future, grooming

the next generation of leadership is crucial for the continued

sustainability of the companies in the E&P sector.”

SanjaySingh, Director – Human Resources

CAIRN’S RESPONSECairn values its employees and has put a lot of focus on evolving as an “Employer of Choice”. Our emphasis is on recruiting the right people who align with the Cairn value system, providing them the best-in-class benefits, training, recognition, and driving a behaviour of continuous improvement.


Making Cairn an “Employer of Choice”

Human Resources

Brand Building:• AnewCairnwebsitelaunchedtoattractqualitytalentand

position Cairn as an Employer of Choice• MappingandbrandingcampaignsundertakenbothwithinIndia

and abroad to attract global talent

Safe Workplace:• FormationofanInternalComplaintsCommittee(ICC)to

address issues pertaining to sexual harassment issues; ICC members nominated and trained.

• Workshopsandsensitizationprogramsonthepreventionofsexual harassment to educate all employees.

CONTINUED TO NEXT PAGE

LEADERSHIP SPEAK



Making Cairn “Employer of Choice”

Human Resources

Talent Engagement:• TheannualPerformanceManagementSystem(PMS)Process

launched with enhanced focus on conversations. • Capabilityenhancingexerciseconductedformanagers

and leaders on having meaningful structured development conversations.

• ConsolidationoftheManagementLeadershipDevelopmentProgram (MLDP) and the Graduate Engineering Trainee (GET) program.

• ProjectonEmployeeValuePropositionunderwaytoimproveemployee engagement scores.

• AmazingChampionsofEnergyII(ACEII)conductedwiththeparticipation of 20,000 participants across 25 campuses; a big difference in comparison to 12 campuses and 6,000 participants for ACE I.

Talent Development:• TalentManagementSystemandLearningManagementSystem

implemented.• Trainingandidentificationofhigh-potentialemployees.• InstitutionalizationoftheManagementLeadershipDevelopment

Program.

CONTINUED FROM PREVIOUS PAGE

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


MATERIAL ISSUES: SOCIAL

KEY STAKEHOLDERS: Local community, and Regulators

CSR & LOCAL COMMUNITYENGAGEMENT

“A company’s social license to operate comes from the relationship it

enjoys with the communities impacted by its operations. By understanding

the social and environmental impacts of the company’s operations on

local communities, recognizing their needs and aspirations, engaging and

deploying programs that have a positive and sustainable impact, a company

can retain and enhance its social license to operate.”

Nilesh Jain, Head – CSR

CAIRN’S RESPONSEIn FY 2013-14, Cairn conducted the following interactions with local communities:


Influence and improve knowledge and capacity of local vendors around sustainability issues.

PSCMTrainings on key sustainability topics delivered to 110+ local vendors

Deliver better heath for all in our operational areas.

CSR

Public-Private-Partnerships:• 19MobileHealthVans(8inPPPmode)providingbasic

healthcare at the doorstep to 350,000 rural people. • 3GramPanchayatscoveredundertheGovernment

Sanitation Scheme “Nirmal Bharat Abhiyan” serving 4,800 households.

• Improvementofqualityofeducation(academicperformance, enrolment & retention) in 40+ government schools by strengthening teacher capacity, improving infrastructure, providing teacher-aid and computer based learning.

CONTINUED TO NEXT PAGE

LEADERSHIP SPEAK



Strive to achieve primary education for all rural children in our operational area.

Implement farm based programmes that will improve the livelihoods of rural farmers and land contributors across our operational areas

Support initiatives that improve the quality of life through economic empowerment of communities, and development of community owned sustainable businesses by building local capacities and entrepreneurial talents

CSR

Water:• 15communitybasedROPlantssetuptoprovidesafedrinking

water to 2,000 households.

Needs Assessment:A baseline socio-economic measurement survey has been initiated

to measure improvement.

CapitalIntensiveProjects:• Appliedforlandforthepurposeofbuildingasecondarycare

hospitalandanEnglishmediumschoolinBarmer,Rajasthan.• CairnCentreofExcellenceforadvancedvocationaltraining

under construction.

Sustainable livelihood (farm & non-farm based):• 25newdemonstrationplotshavebeensetupwithnewvarieties

of vegetables and crops.• 9agri-kiosksset-upforbettermarketlinkageandqualityseed

distributioninGujarat.• 153wadisestablished.• Constructionof39waterharvestingstructureintheformof

traditional khadins (bunds/dykes) completed.• Dairycooperativecollecting5,000litresofmilk/daywith

market linkage providing increased income to 1,500 households.• TheCairnEnterpriseCentrehastrainedover950youthof

whom 750 have received employment. • RuralBPOprovidingemploymentto50youth.


T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


KEY STAKEHOLDERS: Investors, Regulators, Employees, and Local Communities

ENERGY SECURITY & RESERVEACCRETION

“As we develop our fields, it is inevitable that over time our oil reserves will

show a declining trend. Our ability to extract the maximum hydrocarbon

from our existing fields and successfully explore and develop new fields will

determine the continued economic growth of the organization.”

Sudhir Mathur, Interim CEO & Chief Financial O�cer

CAIRN’S RESPONSECairn has launched the 10-3-300 campaign, which will see us strive to achieve 10 billion barrels of oil equivalent in place, 3 billion barrels of oil equivalent realized, and 300,000 barrels per day of production. We are also focusing on Enhanced Oil Recovery (EOR) technologies that will allow us to maximize oil production from our existing fields.

MATERIAL ISSUES: ECONOMICEnergy security & reserve accretion, asset security, and a focus on ethics, transparency and governance are the material economic issues for the organization.

“Extracting hydrocarbons from depleting fields also has environmental

implications due to rise in energy usage and produced water generation.

Exploring for new fields has environmental and social implications as it

involves purchase or lease of new lands, thereby bringing greater focus on our

local community engagement programs.”

S V Nair, Director – Strategy & Integration (Member Executive Committee)

LEADERSHIP SPEAK

LEADERSHIP SPEAK


CAIRN’S RESPONSEIn FY 2013-14, Cairn has repositioned its security efforts and increased focus on process safety.

KEY STAKEHOLDERS: Investors, Employees, Contractors, Local Community, and Regulators

“Curtailing process hazards can help improve productivity, minimize

loss of human life, and prevent damage to our assets. Process Safety

Management helps identify, understand and control process hazards

thereby preventing process related accidents.”

Srikrishna S, General Manager – Asset Integrity & Maintenance


Enhancing Security Management Systems

Security

• Soughtactiveandrehearsedresponsefromstate/governmentactors in guarding/protecting Cairn’s assets.

• Establishedbaselinesecuritystandards.• EstablishedMISbasedsystemforincidentreporting,collation

and analysis.• Conductedthreatriskanalysisforallsites.• Leveragedtechnologytoimproveefficiencyofoursecurity

systems.• ImplementedIndividualdevelopmentplanstoenhance

professional excellence• InitiatedperformancetrackingforindicatorssuchasHuman

Rights training and ensuring good working/ living conditions for security personnel.

• Allsecuritycontractsmanagedcentrallytoensurestandardization & uniformity.

Formalizing Process Management Systems

HSEQ

• IntegratedProcessSafetyManagementdialoguesintothesafety leadership tours conducted by senior management.

• IntroducedprocesssafetyKPIsintomonthlymanagementdashboard reporting.

LEADERSHIP SPEAK

ASSET SECURITY

“Oil & gas installations help secure the country’s energy future and it is

essential that they are kept safe from instances of sabotage or process safety

related mishaps. Last year, Cairn’s assets had been declared ‘Installations of

Strategic Importance’, which allowed us to supplement our security efforts.”

Col. Avneet Bedi, Head (Security)

LEADERSHIP SPEAK

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


KEY STAKEHOLDERS: Investors, and Employees

ETHICS,TRANSPARENCY,& GOVERNANCE

MATERIAL ISSUES: ECONOMIC

CAIRN’S RESPONSEIn FY2013-14, Cairn undertook the following:


Programmes to increase awareness on ethics and good governance principles amongst employees and contractors

Company Secretary

• Guidelineson‘Consequencemanagement’havebeenfinalized.

• ‘TraintheTrainer’workshopconductedfor‘EthicsChampions’.• 3Leadershipworkshopsforseniormanagementheld.• Revampedwebsitelaunched–nowincludesenhanced

disclosures under the Investors’ section.• TheCodeofBusinessEthicshasbeenamendedto

bring it in line with current best industry practices and applicable laws.

• RelevantaspectofForeignCorruptPracticesAct(FCPA) included in the Code of Business Ethics.

• KnowledgesharingsessiononForeignCorruptPracticesAct (FCPA) was organized for senior management.

• WhistleBlowerpolicyupdated,enablingemployees,consultants and contractors to raise concerns at a significantly senior level, without fear of intimidation or retaliation.

Strengthen accountability and compliance to governance procedures through policy revisions / additions and improved internal controls

Company Secretary

• Exercisetoreview,updateandconsolidateallpoliciesacross CIL underway.

• IntegrityDueDiligence(IDD)institutedforvendorevaluation and segmentation. A process for blacklisting delinquent vendors has been finalized and rolled out.

“In order for a company to function effectively, it is essential to have systemic

checks and balances to prevent any instance of malpractice. Written policies help

remove ambiguity for employees and contractors. Socializing these policies allows

these systems to be effectively deployed when required, thereby serving their role

as enablers and deterrents.”

NeerjaSharma, Director – Risk Assurance & Company Secretary

LEADERSHIP SPEAK

T H E P E O

PL

E

ST

OR

Y

T H E P E O

PL

ES

TO

RY


Ravva Operations: Helping Secure the Country's Energy Future.

»


A COMPANY WITH AN INCLUSIVE GROWTH MODEL

In INR Million FY 2013-14 FY 2012-13

Direct Economic Value Generated (A): 202,644 185,604

Net Sales 187,617 175,242

Revenues from Financial Investments 15,025 9,183

Revenues from Sale of Assets 2 1,179

Economic Value Distributed (B): 73,907 67,377

Operating Costs 41,060 36,933

Total Payroll Expenses 2,332 698

Total Benefit Costs 410 335

Dividends to Shareholders 23,864 21,965

Interest Payments to Providers of Loans 0 0

Interest on Debts & Borrowings 150 687

Payment to Government 5,614 6,550

Community Investments 477 209

Economic Value Retained (A-B) 128,737 118,227

OUR ECONOMIC PERFORMANCE


A COMPANY WITH AN INCLUSIVE GROWTH MODEL

The Rajasthan Block is a project of national importance and has developed into one of the largest onshore reserves of hydrocarbons in the country. It is playing a signi�cant role in reducing the country’s dependence on imported crude. Since the start of operations, the Rajasthan block has

produced over 200 million barrels of oil. We have also contributed over INR 638,000 Million to the national exchequer over the last 4 years and the oil produced from our Rajasthan operations during FY 2013-14 reduced the nation’s crude oil import bill by INR 481,500 Million.

185,604

2012-13 2013-14

67,377

118,227

202,644

73,907

128,737

ECONOMIC VALUE GENERATED (A) ECONOMIC VALUE DISTRIBUTED (B) ECONOMIC VALUE RETAINED (A-B)


ENGAGING LOCAL VENDORSIn 2010, we approved our ‘Local Content Policy3’, which requires us to give �rst priority to those individuals who live in the same district as our operational sites, when it comes to employing directly or indirectly an unskilled or semi-skilled workforce. In fact, all major tenders require that a majority of our unskilled and semi-skilled job requirements will be ful�lled by individuals living in the same district as our operations, subject to availability and project requirements.

BUILDING CAPACITY

Cairn has invested considerable efforts in improving the capabilities of local vendor partners to bring them to a standard where they can comply with our HSE standards and ful�ll our needs. This has yielded results, with our total spend on local suppliers increasing year-on-year. Over the course of the last year we have implemented several initiatives to make it easier for local vendors and contractors to do business with Cairn. In order to ensure that our suppliers understand our policies on health and safety, road transportation, and non-use of drugs and alcohol during service hours, we had these policies

translated into Hindi. We continue to hold training programs on our health, safety, and environmental standards for the contract workers who enter our sites. In FY 2013-14, we began conducting workshops to initiate our local vendors on sustainability topics. Workshops were conducted on subjects such as (i) Delivery management, (ii) Quality control and assurance, (iii) Regulatory compliance, (iv) Ethical behaviour and integrity, and (v) Human Rights awareness. These workshops were attended by over 110 of our 652 active local vendors. We believe that these workshops will result in improving the overall vendor compliance on quality, ethics and human rights issues. We have begun the process of creating benchmarks against which to monitor improved vendor performance on these sustainability aspects. We expect to be able to report on the results of our efforts by FY 2015-16.

OUR LOCAL ECONOMIC IMPACT

Cairn’s presence has also resulted in the general economic condition of the Barmer region showing an upward trajectory. Our presence has had direct and indirect economic impacts on the local population. Land-owners, who used to be dependent on sporadic rainfall to sow and harvest the bajra crop, have seen their fortunes rise by selling their land to Cairn. Driven

HOW CAIRN INDIA ADDS VALUE TO LOCAL ECONOMIES

Cairn India, as an integral part of its business model has always endeavoured to plough back a portion of the wealth generated into the communities impacted by our work and business. We have relied on two approaches to facilitate a fair distribution of wealth – our local content policy and our CSR strategy.

3India content: Goods, services, and manpower originating from anywhere in India.Local state: Any Indian state where our chief facilities exist (Rajasthan, Gujarat, and Andhra Pradesh)Local district: Any Indian district where our chief facilities exist (Barmer, Ahemdabad, Surat, East Godavari)Local content: Supply of goods, services, and manpower that originates from local district


by the entrepreneurial spirit of the local community, the service economy has been booming. Barmer, which used to have two hotels in 2003, now boasts of 18 hotels. Local entrepreneurs also supply us with warehouses, bunks and containers, catering and travel services. The increase in personal incomes of those who sold land to Cairn as well as those who contract to the company has resulted in other businesses setting up shop in the area to market aspirational products and services.

MEET ONE OF OUR LOCAL VENDORSIf one visits Barmer, it is easy to see the

number of local businesses that have

mushroomed in the area. Many of these

businesses are small family-managed

initiatives, serving the needs of a growing

immigrant worker population. One would

think that the story of Barmer’s economic

growth is limited to these providers of daily

conveniences, but as one stays longer, one

begins to hear about the incredible success

stories of local entrepreneurs who have made

it big. Such is the story of NS Enterprises – a

diversified local business. The proprietor, Mr

Prakash Solanki, used to operate a dhaba in

Barmer with an annual turnover of INR 1 million

in 2002. When Cairn arrived, with hundreds

of employees and contractors, Solanki saw an

opportunity to expand his dhaba into a full-

fledged catering business.

Contracts with Cairn’s vendor partners

proved successful in helping him understand

the demands of a migrant/nomadic worker

population, who required to be fed at odd

hours and across multiple shifts. The stint also

introduced him to the high standards that he

would need to meet if he wanted to continue

to be on our vendors’ roster. Says Solanki,

“Cairn appeared on the scene just at the right

time. I was thinking about moving to a bigger

city like Jodhpur or Jaipur in search of a

steadier pay-check. The business that resulted

from Cairn’s presence, not only allowed me

to grow, but also taught me what it takes to

serve world-class companies. It is my learnings

from those early days that I have been able to

use to grow my business into what it is today.”

And grown he has. Today Solanki Caterers

has diversified under the umbrella of NS

Enterprises to include transportation and man-

power services. He employs more than 180

people, with an annual turnover of more than

INR 600 million per year. Perhaps a bigger

testament to his entrepreneurial abilities is his

client list, which includes the Indian Airforce

and several engineering companies that can

be found in the Barmer region. In fact, Cairn

accounts for just 1/60th of his overall income!

While we do not attribute the success of the

many entrepreneurs like Mr Solanki solely to

our presence in Barmer, we

are happy that associating

with us has resulted in

these local businessmen

being able to transform

their lives by seizing

the growth opportunity

catalysed by the presence

of Cairn India.

153 101 86

894

533 387

1091

430

307

FY 13-14 FY 12-13 FY 11-12

Local Spend Rest of India Spend International Spend

SPEND ONSUPPLIERS(USD Million)

»

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y


CSR: INTERVENTIONS TO UPLIFT COMMUNITIESIn FY 2013-14, Cairn India invested INR 477 million into CSR initiatives with our Rajasthan operations accounting for more than 80% of our CSR spend. Our focus has been to improve the quality of life for the thousands of people who live in the rural communities surrounding our operations. Baseline studies as well as consultations with local community members help us understand their social development needs. Our goal is to ensure that the projects that we undertake become self-sufficient over time. In many cases we try and supplement government programs – so that their implementation becomes more efficient as a result of our intervention. In certain programs such as the “Jeevan Amrit Dhara” Water ATM project, we have developed models where communities make a small payment to avail of the services offered. Our contribution is mainly towards the capital expenditure, and we look to the community to take on the responsibility of the operational expenses.

In our work with the local communities over the years, we have found that in order to maximise the impact of the monies �owing into community programs, local administrative institutions need to be strengthened. As a result several of our initiatives have focussed on building the capacities of local village panchayats, setting up and strengthening local Self-Help-Groups (SHGs), dairy cooperatives, and farmers clubs. The impact of these interventions is visible in the increased success rate of our programs and a larger number of members of the local communities being able to derive bene�t from these initiatives. Our health, water and sanitation initiatives seek to improve health indices of the local communities by lowering the incidences of water borne diseases and improving hygiene standards. Our education initiatives focus on improving the academic performance of local children as well as improving the rates of school attendance and retention. The Cairn Enterprise Centre (CEC) and the Cairn Centre of Excellence (CCoE)

are focused on training individuals on vocational skills, linking them to employment opportunities or helping them launch micro-enterprises. Since a large section of the population, which lives around our area of operations practices farming, Cairn has invested a signi�cant portion of our CSR budget in helping farmers increase their knowledge about good farming practices that help enhance and conserve natural resources like pasturage and water by developing bunds, khadins, and desert orchards. Our work has also helped to improve animal husbandry practices and milk production in the area.

A snapshot of our CSR expenditure is given below:


CSR SPEND, 2013-14

Activity Spend (INR Million)

Health, Water & Sanitation 128

Education 57

Sustainable Livelihood Programs (non-farm)

65

Sustainable Livelihood Programs (farm-based)

37

Construction: Cairn Centre of Excellence

190

TOTAL 477


Our CSR work has focused on ensuring the holistic development of individual households by including programs in education, health, sanitation, drinking water, sustainable livelihood, and electricity. We intend to scale-up all our programs to cover all households in our area of operation. We plan to measure the impact

through socio-economic impact assessment by measuring common indicators of quality of life, Infant Mortality Rates, Maternal Mortality Rates, and years of schooling. We have initiated a baseline survey of these indicators, to allow us to track our progress over a two-year cycle.

600

500

400

300

200

100

0

90

2012-13 2013-14

190

37

65

57

128

17

47

50

4

Construction: Cairn Centre of Excellence

Sustainable Livelihood Programs (farm based)

Sustainable Livelihood Programs (non-farm based)

Health, Water & Sanitation

Education

208

477

CSR SPEND(USD Million)

CSR SNAPSHOT; PEOPLE BENEFITED, 2013-14

CSR SNAPSHOT 2013-14

Total Core Villages 350

Total Peripheral Villages 375

Total Population in Core Villages 650,000

Total Population in Peripheral Villages 675,000

Districts where we work 13

Blocks where we work 29

CONTINUED ON NEXT PAGE

»

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y



CSR SNAPSHOT; PEOPLE BENEFITED, 2013-14

COMMUNITY ASSET DEVELOPMENT PROGRAMS

Population Benefited by Community Asset Development Programs 9,000

Children Benefited by School Repair Programs 2,500

Saplings Planted 125,000

HEALTHCARE INITIATIVES

Number of People Benefited by Mobile Health Van Programs 299,840

Number of Patients Benefited by Special/Mega Medical Camps 15,000

Number of People Benefited by Health Awareness Camps 12,000

Families Benefited by IHL & Community Toilet Complex Programs 1,325

Families Benefited by Clean Drinking Water Initiative 1,500

EDUCATION PROGRAMS

Children Covered by the Mid-day Meal Program 150

Children Covered under Scholarship Program & High Education Support 50

Children Enrolled in Company Supported (Partial) Schools 5,000

Students Benefiting under the Computer Aided Learning Project 20,000

Students Covered through Evening Centres 12,500

People Enrolled in Adult Education/Literacy Centres 200

LIVELIHOOD PROGRAMS (NON-FARM)

Youths Provided Vocational Training 950

Youths Linked to Jobs after Training 760

Youths Engaged under Micro Enterprise Development for Self-employment 25

LIVELIHOOD PROGRAMS (FARM-BASED)

Farmers Covered under Agriculture Initiatives 6,529

Farmers Covered under Wadi Project Horticulture, Vegetables, Floriculture 100

Members in Farmer’s Clubs/SHGs 690

Members in Farmers Cooperatives 1,450

Families Assisted with Livestock Projects such as Goat-keeping, Mini-dairy, and Poultry-farming

1,500

WOMEN EMPOWERMENT INITIATIVES

Women Members in New SHGs 30

Women Members in Existing SHGs 149

Members in Women’s Cooperatives 20



477

THE CAIRN CENTRE OF EXCELLENCEAs Rajasthan transforms into an advanced

industrial economy, we anticipate that in the

near-term there will be a demand for nearly

5.2 million qualified human resources4. The

Cairn Centre of Excellence (CCoE) is an

initiative by Cairn India to develop the skillset

of communities in and around Rajasthan

and provide a linkage to employment. The

vision is to develop a state-of-the-art, best-

in-class centre that is positioned well above

existing offerings in the realm of vocational

training. The goal is to provide training of

a calibre that allows students to find jobs

both nationally and internationally. Cairn has

already seen interest from several companies

towards recruitments of the trainees. As with

other community development programs

undertaken by the company, the CCoE is in

line with the vision of the Government of

Rajasthan to develop Jodhpur as an education

city.

The curriculum is being developed and will

be taught by the German company TUV

Rhineland, who has experience in operating

500 similar centres across the globe. In

the first year, courses in advanced welding,

renewable energy, automobile repair and

maintenance, and retail are planned. In

addition, training to enhance the soft skills of

a candidate; especially in topics pertaining to

communication skills and HSE awareness will

be provided. In the next phase of program

development courses on technical and safety

aspects specific to the oil & gas industry will

be provided.

Says Sidharth Balakrishna, Senior Manager

Business Transformation Group, “The goal is

to position the centre as ‘aspirational’ and an

institute of ‘national importance’ along the

lines of institutes developed by some of the

other leading business

houses in the country.

Eventually, the Cairn

Centre of Excellence

should attract students

from all over the country.”

4 From Mapping of Human Resources and Skills for Rajasthan – 2015. By ICRA Management Consulting Services Limited for the Government of Rajasthan. [Online] http://www.rajrojgar.nic.in/skillmap.pdf

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y



BOLSTERING THE AGRARIAN ECONOMYWhen one operates in rural India, the fact

that agriculture is the mainstay of the local

economy in continually reinforced. For

any CSR team working closely with the

community, it is also difficult to ignore the

challenging circumstances that our farmers

operate in – especially if they ply their trade in

some of the harshest climates in India. Cairn’s

CSR activities have always supported the

local farmer through our sustainable livelihood

programs, but since 2012 we have scaled

up our agricultural initiatives and work with

partner organizations who can help boost the

productivity and thereby the annual income of

the farming communities who live around our

operations.

Our farm-based sustainable livelihood programs centre around two objectives:

1. Help farmers increase their production

yields

2. Help farmers lower their production costs

and increase their sales price

GRAMIN SUVIDHA KENDRAS (GSK) – AKA, FARMING CONVENIENCE CENTRES (2010)

As one travels along the length of our pipeline,

one encounters over 270 farming communities.

When our CSR team first interacted with these

communities, a common

theme began to emerge.

Farmers were struggling

to get a fair price for their

produce at the local mandis

or traders markets. It was not

uncommon for farmers to

get exploited by agents who took advantage

of the fact that farmers did not have access

to food pricing information prevailing in the

commodity markets. As a result, once a farmer

got their produce to a local mandi they were

forced into selling it at rates far below market

prices. However, this was not the only stage

of the farming value chain where a lack of

information hurt the farmer. Poor information

about weather forecasts, innovations in

farming techniques, and pest control methods

also eluded farmers, negatively impacting the

overall economic benefit they could derive

from engaging in agricultural activities.

The Gramin Suvidha Kendra’s were started to

bridge these information gaps.

In this program, Cairn India built a partnership

model with the Indian Postal Service, the Multi

Commodity Exchange of India Ltd. (MCX), and

Krishi Vigyaan Kendras (KVK) to bring up-

to-date information about current and future

food pricing to the farmers at the village

level – before they make the decision to take

their produce to the local mandi. The program

relies on the extensive reach and acceptance

of the Indian Post Office in villages. 9 GSK

centres have been setup to provide daily price

information and act as hubs for all program

activity. At the centres, farmers who have

registered with the program for as little as INR

30 per annum, can get price information and

route questions about day-to-day agricultural

issues to experts at the KVK. In addition, the

program also provides registered farmers

access to training programs conducted

by experts from KVK, exposure visits to

agriculture exhibitions and other farming


477

initiatives. GSK has also established direct

linkages with agri-input companies to secure

quality inputs below market rates.

According to Avinash Rawal, Manager,

CSR, “The GSK program is seeing greater

acceptance among farmers today. But it was

not always so. In the early days, getting farmer

buy-in was a challenge as it was difficult to get

them to change their traditional crop selling

behaviour and relationships.”

All this is slowly changing. As the program

helps farmers make better economic and

agricultural decisions, more farmers are joining

the program. Tasrifa, a farmer registered with

the program says that the program’s capacity

building initiatives have taught her systematic

seed treatment and watering regimes resulting

in additional returns amounting to nearly INR

10,000. Other farmers have reported similar

increases in yield and profitability. In FY

2013-14, the program had over 2,100 farmer

registrations that have made cumulative crop

sales worth INR 2 million in one year. GSKs

also conducted 171 training programs and

organized 14 exposure visits.

At Cairn, we see the GSK program as a

scalable, low cost innovation that incorporates

a revenue generation mechanism at each step

– making it sustainable over a long term. It is

a program that most truly reflects the spirit

of CSR at Cairn and we have plans to scale it

further over the next few years.

THE WADI PROJECT (2012)

Farming in Rajasthan is severely restricted

due to the arid soil conditions, wide-ranging

temperature variation (too hot-too cold),

and the scarcity of water. These challenges

result in many farmers restricting themselves

to sustenance crops, which do not fetch

good prices in the local markets. As a result,

several farming communities also engage in

secondary professions to supplement their

income.

Started in 2012, the wadi project – modelled

on techniques developed by Bhartiya Agro

Industries Foundation (BAIF) – seeks to help

farmers plant fruit-bearing cash crops using

farming techniques that put focus on intensive

care of the planted crops. Planted on 160 X

160 feet plots of land, and fed by a water tank

that has been developed to harvest rainwater

and irrigate the field, this project aims to

increase farmer incomes by INR 200,000

- 300,000 after 6 years of adoption. The

model enables farmers to use limited acreage

effectively, diversify

production and open

new avenues to enhance

profitability.

Cairn plans to get this

project adopted by 1,550

GOVT. OF RAJASTHAN, ICRA STUDY; ‘MAPPING OF HUMAN RESOURCES AND SKILLS FOR RAJASTHAN – 2015’

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y



farmers over the next three years and fund

the development costs for about 50% of the

farmers. We hope that the success of this

project will encourage other farmers to plant

crops in a similar fashion, increasing the overall

economic well-being of the region.

THE AGRI-NRM PROJECT (2013)

Owing to infertile and highly saline soil

conditions, an estimated 75% of the

agricultural population in the Barmer region

comprises small, sustenance farmers. Limited

agricultural skills and market linkages

combined with unproductive farming practices

further reduce agricultural yields.

To help alleviate these agricultural challenges,

Cairn has initiated a 5-year program to

enhance agricultural productivity by

promoting best practices in seed cultivation,

production, harvesting, and water

management. The program will combine

harnessing individual and community-level

water resources such as khadins (bunds) and

nadis (ponds) alongside cultivating crops that

are suited to desert climates. It also aims to

develop a roster of agricultural experts who

will serve as extension service providers to

the farmers. To further supplement income

from agriculture, the project will also provide

support to livestock farming.

Through our project partner, TechnoServe,

we are developing demonstration plots to

showcase better farming techniques that

result in increased returns and lower costs.

This allows farmers to compare their current

techniques with those being

deployed in test plots and

check the difference in yield

and cost for themselves.

One such demonstration

plot was setup in a field

owned by Hanuman Ram, a vegetable farmer

from Kawas village. A marginal farmer with a

land holding of 1.5 acres, he found it difficult to

fetch better prices for his produce because he

would harvest his crop during a supply glut in

the market.

As part of the program he was trained on soil

testing, seed treatment, nursery management

and integrated pest management. The

TechnoServe team also advised him to

diversify his crops by sowing late varieties

of radish and fenugreek crops. This allowed

him to prolong his harvest season into the

off-season, when he could command better

market prices. A total of 5 new crops were

introduced to allow him to increase his

earnings.

This strategy resulted in prolonging his

harvest period by a month (from mid-March

to mid-April) and beat the price discounting

that occurs due to excess crop supply.

Hanuman Ram’s revenue increased from INR

30,000/square kilometre to INR 40,500/

square kilometre, an increase of nearly

30%. The success of the demonstration has

raised the interest levels of other farmers

in the community who wish to avail of this

intervention.

According to Hanuman Ram, “Every year I

wished to take advantage of higher market

price during the off season but failed to

do so due to lack of proper guidance and

technology. This demo plot has taught me how

to get the maximum price advantage”.


477

How does one integrate a rural populace into

the mainstream economy?

As Cairn’s presence in Rajasthan has become

more permanent, we have observed a high

unemployment rate among youth. While

Cairn has a strong local sourcing policy which

provides jobs to local youth, much of the

work is geared towards blue-collar workers.

Additionally, it is not feasible to provide

employment to everybody. The last 10 years

have also seen a rise in the number of people

with higher education degrees, who are

interested in white-collar jobs.

To address these issues, Cairn has partnered

with Rural Shores, which specializes in setting

up Business Process Outsourcing (BPO)

centres in rural communities. The initiative,

named “Samvriddhi” is aimed at providing IT

sector, white-collar jobs to rural populations.

The program provides customized courses

that train the local youth on skills required

to work as data processors and call-centre

workers. It is especially targeted at women,

thereby empowering them towards becoming

financially independent.

The project works in a public-private

partnership model. The building to house the

BPO has been provided by the Barmer Zila

Parishad, Cairn has provided the initial capital

expenditure and setup costs, and Rural Shores

is the implementation partner. Currently about

100 youths are employed with this program,

but a recent contract with a large telecom

provider, which will make this one of the regional

tele-customer-service hubs for the company, will

see the number of people rise to 350.

The Cairn Enterprise Centre (CEC) has played

a catalytic role in scaling up the operations.

CEC conducts programmes on different

vocational skills including training in basic

computer skills. Over the past year, Samvriddhi

has employed more than 50 youths from this

trained talent pool. Today the BPO handles

non-voice (data entry) and voice processes

for telecom, insurance and banking clients.

Employees are also equipped to handle

non-voice processes such as indexing, image

tagging (for online shopping), and data

tagging-publishing.

Vidya is an example of someone who has

gone through the CEC training program and

been hired by Samvriddhi. Like most girls

in Barmer, she wanted to work part-time

while completing her education from a local

college. However, she feared that the low

industrialization in Barmer would not give

her the opportunities to fulfil her dreams. She

enrolled for CEC training and made her way

into Samvriddhi. Vidya says that Samvriddhi’s

centre has given a new direction to her life.

“Earlier we did not get the opportunity to work

on a computer but here I get to learn so many

different things every day”. Currently Vidya is

completing her B.A. and she has decided to

work with Samvriddhi after her studies.

This rural BPO has opened

up new opportunities for

the youth of Barmer and we

hope that the initial success

is a harbinger for greater

positive change in the

community.

FROM AGRICULTURE TO BUSINESS PROCESS OUTSOURCING

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y

EC

ON

O M I C S U S TA

IN

AB

IL

IT

Y

A COMPANY BUILT AROUNDPEOPLE


A COMPANY BUILT AROUNDPEOPLE

THE EMPOWERED EMPLOYEE

THE ‘CAN-DO’ SPIRIT“Oil is �rst found in the minds of people, before it is found in the ground.”

How did Cairn India become the fastest growing energy company in the world? The credit for this tremendous achievement rests on the shoulders of our employees. As a company we have always prided ourselves on the manner in which our employees take on tough challenges…and deliver.



THE EMPOWERED EMPLOYEE: ‘THE CAN DO SPIRIT’

Team Cairn has always displayed a result-oriented bent towards any task undertaken. The company has endeavoured to continuously expand the capacity of employees to align with our business-strategy. We have termed this employee development model the ‘Can-Do’ Spirit and we believe that it will help all concerned to bene�t from consistent and scalable people processes.

We are aware of the fact that the era of easy oil is over. The next decade of growth for our company will see us deploy cutting edge oil exploration technologies. We will expand our exploration to geologically dif�cult oil basins, which will result in challenges in terms of oil recovery, environmental impact mitigation, and stakeholder engagement. We know that 21st century oil will no longer come from the best oilfields, but will have to be extracted from difficult and marginal fields using state-of-the-art technology operated by a highly-skilled workforce. Our goal is to equip our employees with the skills to navigate the changing/evolving business landscape. We want to help them develop professional skillsets that re�ect:

ENTREPRENEURIAL THINKING So employees recognize and realize unique opportunities for new business or to deliver existing work in new ways that models an entrepreneurial focus along with the willingness to take calculated risks that drive competitive success.

STAKEHOLDER FOCUS So employees can develop strong and differentiated partnerships with internal and external stakeholders in a manner that ful�lls their needs and complements our efforts to become a globally competitive oil & gas company.

PROCESS EXCELLENCE So employees can create consistent, repeatable and sustainable work�ows and delivery across the business to achieve operational excellence and good governance.

COLLABORATIVE MINDSET So employees can recognize synergies and work collaboratively across business groups to establish a �exible, responsive and ef�cient organization.

INFLUENCE AND ENGAGE So employees freely share their ideas, challenge and appreciate different perspectives, identify entrepreneurial opportunities and deliver in an ef�cient and effective manner.

BUILD TALENT So employees can engage with each other to develop internal capacities, institutional learning and make Cairn an “Employer of Choice”.

RECOGNIZING TALENTProviding constructive feedback to our employees is essential to allow them to contribute towards the company’s business in a productive manner. 100% of our eligible employees go through a formal performance appraisal at the end of the year. Our Performance Management System (PMS) allows us to systematically measure and track the performance of employees over the course of the year and ensure that the goals that employees set for themselves align with departmental and overall business goals. In addition, the system also allows us to identify our most talented employees who will take on the leadership role over the next few years.


Sustaining a talented work-pool is one of the

biggest challenges for oil & gas companies.

Across the globe there is a general greying of

the workforce creating a significant shortage

of talented human resources. In many

companies, it has been observed that as senior

employees retire, there is a vacuum in the

leadership, resulting in a temporary decline in

performance.

Demographically, Cairn is a relatively young

organization. More than 90% of our company

is under 50 years of age, with a majority of our

employees aged between 31-50 years. We are

fortunate that several of the individuals who

pioneered our explorations and oversaw their

development, still call Cairn their professional

home. In them, we have a strong leadership

platform. However, we also recognize that

unless we have an active program to groom

leadership within the organization, we will

be faced with the same shortage of expert

leaders faced by other oil and gas companies.

At Cairn, we have instituted a structured

program to identify high potential employees

across the organization. Structured

development inputs are provided to the

identified employees so that they can grow

as leaders for tomorrow and Cairn can have

a robust leadership pipeline. Besides this

Cairn also recruits from leading technical

and management schools and as part of

the Management Leadership Development

Program (MLDP) grooms individuals through

the early stages of their careers. These

individuals are given exposure to different

business verticals / functions/ corporate

offices/ sites to get an overall perspective on

business and contribute to the organization.

We also offer a plethora of skills development

programs as part of our Individual

Development Assessment Plan (IDAP) process.

The IDAP supplements our Performance

Management System (PMS) and helps our

employees enhance their professional skillsets

(technical and behavioural) in a structured

manner.

Collectively these programs reflect our

effort in maintaining and building the talent

and leadership pool of this company. These

programs may only be evaluated over the

long term, however their success and potential

impact is visible through low attrition rates

among high performers, a strengthening of the

Cairn culture, and the ability

of the organization to adapt

to the constantly evolving

geological, environmental

and regulatory challenges

present in our sector.

IDENTIFYING EMERGING LEADERS

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


JUNIOR LEVEL (B1) MIDDLE LEVEL (B2) SENIOR LEVEL (B3)

2012-13 2013-14

54

,814

14,9

76

20

,05

0

19,7

52

4,1

70

2,5

52

TOTAL TRAINING HOURS (EMPLOYEES)

TRAINING, DEVELOPMENT & REWARDS

TRAINING

We have invested over 79,034 person-hours in training programs this year. This is an increase of 112% from the number in FY 2012-13. These programs have helped our employees upgrade their technical skills, enhance their soft skills, and deepen their understanding of sustainability and HSE issues. While nearly 90% of our

employees took part in at least one training program, several of our trainings (especially HSE training) were also attended by our contractor and vendor partners, thus assuring that the transmission of knowledge happens across the organization.

THE EMPOWERED EMPLOYEE: TRAINING, DEVELOPMENT & REWARDS

TRAINING DATA

Employee Level GenderNumber of Unique Employees Trained

Total Employee Training Hours

2013-14 2012-13 2013-14 2012-13

Senior Level (B3) Male 67 out of 92 (73%) 79 4,070 2,512

Female 3 out of 3 (100%) 3 100 40

Middle Level (B2) Male 455 out of 459 (99%) 440 19,012 19,168

Female 29 out of 32 (90%) 29 1,038 584

Junior Level (B1) Male 813 out of 947 (86%) 867 48,890 13,256

Female 103 out of 110 (94%) 96 5,924 1,720

»


DEVELOPMENT

Learning and development is instrumental in enhancing employee capability through a structured approach and the implementation of different learning interventions with technological support. We believe that learning not only adds to quality, but clearly helps in achieving organizational goals. Some of the interventions that have contributed to achieve qualitative results include:-

EXECUTIVE EDUCATION PROGRAM This has been launched with the aim of honing the leadership capabilities required to take both qualitative and quantitative business decisions.

TECHNICAL CAREER ARCHITECTURE This program has been launched for developing the Petrotech talent pool. It will help enhance the organization’s technical capability - essential to meet current and future needs.

TECHNICAL CAPABILITY DEVELOPMENT These initiatives are aligned to the business requirements, which help improve the skills required to deliver the desired results.

LEARNING MANAGEMENT SYSTEM This is an integrated platform, which will help us improvise our operational ef�ciency of end-to-end L&D processes.

REWARDS

We recognize that in order to attract and retain world-class talent and be perceived as an “Employer of Choice”, we need to deploy incentives that benchmark to market expectations. These also need to align with our short-and long-term business needs.

We have structured our incentives so that they reward meritocracy at all levels and promote behaviours that are consistent with Cairn’s core values and culture. Our rewards strategy seeks to be transparent and easy to understand, promote fairness, internal equity and external parity.

The CAFÉ Awards have been designed to recognize

employees for their contribution towards making

Cairn a productive place to work. The awards are

designed so as to serve as a token of appreciation

for day-to-day work through a “Pat on the Back”

and “Thanks a Barrel” programs and also recognize

the high achievers and value champs within the

organization.

While recognition for employees is an important

aspect of these awards, they also serve to

incentivize positive behaviour that aligns with

Cairn’s values, including exceptional achievement,

great people management, an energetic and

positive work ethic, and going the extra mile.

The awards aim to recognize all achievement and

it is our endeavour to be inclusive in celebrating

good performance. This is reflected in the number

of individuals who have received this recognition. In

FY 2013-14;

• 120 individuals received the “Long Service Award” • 27 individuals received the “Impact Bonus Award” • 4 employees were recognized as “Value Champs” • 462 employees were “Pat on the Back” Awardees” • 41 employees were recognized as “Cairn Achievers” • 28 employees were recognized as “Energy &

Positivity Champs”

Awardees were recognized for exhibiting Cairn’s

values in work areas such as financial due diligence,

brand development, health &

safety, operational excellence,

resource conservation,

community engagement,

human resource development,

compliance & government

liaising, and technology

deployment.

CAFÉ AWARDS RECOGNIZING VALUE-BASED PERFORMANCE

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


THE EMPOWERED EMPLOYEE: DOING THE RIGHT THING

POLICIES THAT GUIDE AND EMPOWER

Our business spans multiple locations and engages several stakeholders. There are complexities on the operational, projects planning, and regulatory aspects. Under these circumstances it can become very easy to lose standardization, best practices, and be ambivalent about ethics, codes of conduct, and business practices. This becomes especially challenging when the company is growing at an accelerated rate. To mitigate such occurrences, Cairn has instituted several policies across its business functions to allow our employees, contractors and vendors to react in a consistent manner to varying situations. These policies have been formulated over time after taking into consideration several international standards, conventions and best practices, such as those set by

the International Association of Oil and Gas Producers, the IFC Performance Standards, Global Reporting Initiative Framework, ISO Quality and Environmental Management Systems, ILO Standards, Foreign Corrupt Practices Act, and the Sarbanes-Oxley Act, among others.

In FY 2013-14, we revised our Code of Business Ethics to incorporate the sharper clarity of anti-corruption practices that exist in the UK. The Code is applicable to all employees and service providers of Cairn India and the provisions are a mandatory condition for employment, contract, or any business relationship with the company. We also formalized our sexual harassment policy and formed an Internal Complaints Committee (ICC) to oversee any such cases in a transparent, fair and responsible manner.

HELPING EMPLOYEES DO THE RIGHT THING

In the 15 years that Cairn has been present

in India, we are proud of the professional

and ethical manner in which we have

conducted business. However, we are also

aware that despite having all the right

policies to enable our employees to do the

right thing, ground realities often entice

our employees, contractors, and vendor

partners to weaken the company mandate

in favour of expediency. To ensure that our

workforce abides by our Code of Business

Ethics and follows good business practices,

we undertake several policy and behaviour

socializing programs around the year and

across the company. In FY 2013-14, we

conducted:

� SOCIALIZING THE NEW CODE OF BUSINESS ETHICS AMONG OUR

SENIOR MANAGEMENT: Chaired by our

Ethics Committee and moderated by an

independent expert, these sessions were

conducted to help our Band 3 employees

(senior management) deliberate and

debate the dilemmas that they face when

conducting business. Discussions were held

on topics such as emulating best practices,

understanding the code of business

ethics and regulatory requirements. These

were also supported by case studies/

examples followed by

a framework outlining

consequences mapped

to business conduct

infractions. By the end

of March 2014, we had

conducted 3 sessions,

which had been

SOCIALIZING GOOD CONDUCT



attended by 68% of our Band 3 employees.

� SUSTAINABILITY AUDITS AND AWARENESS SESSIONS: What is

the relevance of sustainability for the

organization? That is the question that

we sought to answer for our employees

and workforce over the course of the past

year. The sustainability team held several

workshop and discussion sessions with

departments across the company as well

as across our sites. The primary objective

of these sessions was to link day-to-day

activities with the tenets of sustainability.

Over 1,000 employees took part in

these discussions and it can be credibly

said that the level of awareness on

sustainability topics has risen. The team

also undertook an extensive audit exercise

to ensure that all of the data points that

track our sustainability performance are

recorded in a consistent manner across

our locations. Findings from the audit

have been applied to our data collection

methodology and we are confident that

over the course of the next two years

we will be able to have a greater degree

of certainty over the accuracy and

completeness of the data.

� LOCAL VENDOR CAPACITY BUILDING: Cairn has always had a strong desire to

ensure that our local vendors benefit

from our presence in Rajasthan, Gujarat,

and Andhra Pradesh. Key to their

success is their ability to adhere to our

high standards of quality control, safety,

human rights and ethical behaviour. Over

the years, our local vendors have risen

to the challenge and adapted and built

capacity to become service providers to

the company. In our continual effort to

improve our performance on sustainability

parameters, we have called on our local

vendors to join us on this journey. To

facilitate this, our procurement team held

several sessions with our local vendors

on delivery management, human rights,

ethical business practices, quality control,

and regulatory compliance. In FY 2013-

14, capacity building sessions were

conducted for over 110 (out of 652) of our

local vendors. These exercises are part

of the continuum of our efforts to get

contracts to understand and adhere to our

high safety, delivery, and ethical standards.

Further, our local vendors have benefited

from the translation of some of our policies

(Drug & Alcohol, Road Transport, and HSE

Manual) into the local language. We intend

on continuing these interactions over the

course of the next year as

the discussion with our

vendors evolves, and we

incorporate sustainability

metrics in our vendor

selection criteria in a

phased manner.


T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


ENSURING ETHICAL BUSINESS PRACTICES

In recent years, discussions around bribery and corruption have taken center-stage among policy makers, businesses and civil society. There is a very strong sentiment in the country and indeed around the world for governments and businesses to reign-in acts of corruption. At Cairn, we have always kept sharp vigil on corrupt business-practices. Our Code of Business Ethics puts a very strong emphasis on doing business in an ethical manner and we have zero-tolerance for corruption. All our employees need to read, sign and abide by the Code on

an annual basis. While it is important for every employee to ensure that they comply with the standards laid out in the Code of Business Ethics, our procurement, commercial and investor relations departments have received special sensitization on this issue. In addition, these departments have developed standard practices in order to ensure that corrupt practices do not occur under their jurisdiction. We also have an Ethics Committee that investigates any cases of corruption that are brought to its notice. In FY 2013-14, 16 complaints related to unethical business practices were brought to the committee. Out of these, 11 complaints have been resolved, while 5 are still under investigation.

ENGAGING WITH LOCAL COMMUNITIES

Our employees operate on the front-lines of some of the toughest work conditions in the country. Their work puts them at odds with the elements and in some cases with some local people. Our operational locations are spread over a large cumulative area across the states of Rajasthan, Gujarat and Andhra Pradesh. This geographical spread of our operations brings us in contact with several local communities. Many of these communities are agrarian in nature, depending on farming or animal husbandry for their livelihood.

These areas have also traditionally ranked low on human development index parameters (education, healthcare and nutrition, gender justice and women’s empowerment, and economic development). At Cairn – led by our CSR and procurement teams - we continuously monitor and assess our impacts on local communities and their emerging needs. Our primary vehicles for doing so are Social Impact Assessments (SIAs) and Environmental Impact Assessments (EIAs).

In FY 2013-14, we began the work for expanding our operations. As part of the process of seeking approvals from the appropriate government authorities, we held

THE EMPOWERED EMPLOYEE: DOING THE RIGHT THING

MEANINGFUL ENGAGEMENT

“CAIRN PROVIDES EASY ACCESS TO SAFE DRINKING WATER, WHICH REDUCES DISEASES AND GIVES

WOMEN TIME TO PURSUE OTHER ECONOMIC ACTIVITIES ”


several public hearings with village communities, explaining to them the environmental and social impacts of our expanded operations. The EIA’s that were conducted at the commencement of our operations can be found publicly on the website of the Ministry of Environment and Forests.

TAKING DIRECT ACTION

Our employees are empowered to take corrective actions should they encounter actual or potential negative impacts to communities or operations. At a community level, our CSR team works alongside of the community,

and of our operations and our HSE teams, to understand and mitigate any actual or potential negative impacts we may be having on the community. The collective interventions by our employees have signi�cantly improved living conditions for the local communities around our area of operations.

ECONOMIC IMPACT & INTERVENTIONS5

Loss of agricultural land/ agricultural productivity and the farm-based sustainable livelihood program: As Cairn brings greater industrialization to the Barmer region in Rajasthan, it is quite likely that farming communities may be disadvantaged. Traditionally agrarian communities have seen a decline in productivity as the focus of local populations has shifted from

agriculture to providing services in an industrial economy.

To help mitigate this impact, our CSR team has launched programs that help improve the income being generated from farm-based livelihoods. In FY2013-14, over 6,500 farmers bene�ted from our Agri-kiosk and Wadi programs. Over 170 acres of land across 238 villages were covered under the wadi, watershed management or other agricultural initiative programs. We also trained 650 farmers on agricultural best practices. As of 31st March 2014, 100 farmers have adopted these best practices.

We understand that farming communities face

tremendous economic pressures and so we helped form 23 farmer Self-Help Groups (SHGs), 17 farmers’ cooperatives and 15 water user committees. Over 2,100 farmers are members of these groups.

We have also covered 1,500 heads of cattle under veterinary camp programs to ensure consistent yield of dairy farming.

Availability of jobs and vocation based sustainable livelihood programs: As new opportunities for non-farm-based employment open up near areas of our operations, the local populations have found themselves ill-equipped and under-quali�ed to participate in the industrial economy. In FY2013-14, we provided 950 local youth with vocational training through the Cairn Enterprise Centre (CEC). Out of these, 750 youth were

5 Interventions are beyond legal compliance requirements.

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


linked to jobs upon the completion of their training. The CEC also encourages individuals to start their own micro-enterprises and 25 individuals were provided micro-enterprise development training. The vocational and micro-enterprise training covered 7 trades and over 780,000 hours of training were conducted for rural youth and SHG members under this program.

Over the years, Cairn has persisted with sourcing a large portion of its requirements from local suppliers. As of 31st March 2014, we had 652 local suppliers and vendor partners in our roster, a rise from 591 local suppliers at the end of 31st March 2013.

ENVIRONMENTAL IMPACTS & INTERVENTIONS6

Scarcity of drinking water: Rajasthan lies in a rainfall de�cient region of the country and local communities are challenged to �nd safe drinking water.

In FY 2013-14, Cairn helped install 7 water ATWs and 15 RO systems in 15 villages to provide safe drinking water to villages. Over 1,500 families bene�t from this program.

Using saline water for operations: Before commencing our operations in Barmer, our projects team had conducted a detailed mapping of fresh ground and surface water body resources in the region. Care was taken that we do not source water to meet our operational requirements from any of the local fresh water sources. Instead we draw our water from a saline aquifer in the Barmer region and are careful to not contaminate the fresh water pockets in the process. Over 99% of all our water needs are met through this saline water. More details on how we conserve, recycle and reuse water can be obtained in the “Managing our Water Footprint” section of this report.

Recycling of STP water for horticulture purposes: In addition to sourcing water from saline water sources, we also ensure that all the domestic wastewater is recycled and reused for horticulture purposes. Our Rajasthan operations are zero-discharge operations.

Segregation and isolation of waste: To prevent our waste from contaminating local lands, we segregate and

THE EMPOWERED EMPLOYEE: MEANINGFUL ENGAGEMENT

Access to safe drinking water is a significant

challenge in Barmer. The water of Barmer district

has high levels of impurities and fluoride content

resulting in large incidents of water-borne diseases.

Levels of Total Dissolved Solids (TDS) in the drinking

water of the region exceed 2,020 mg/litre ppm,

which is four times more than the acceptable level

of TDS prescribed by the Bureau of Indian Standards

and five times above the specifications given by the

WHO. The fluoride content of the water is also as

high as 1.4 to 1.7mg/litre, making it the prime cause

of bone deformity and joint pains, especially among

the older population.

The “Jeevan Amrit Project” is a Cairn India initiative

in partnership with the Public Heath Engineering

Department (PHED) of the Government of Rajasthan

and Tata Projects to bring potable drinking water to

the doorstep of the community.

We have set up water kiosks with an attached

RO plant in villages for the local communities to

access clean drinking water. The customized RO

+ Water Dispensing plant (water kiosk) has been

especially developed by Tata Projects to meet

the water purification needs of the local area. The

infrastructure for these water kiosks are funded by

Cairn and are being run and managed by village

water committees under the respective Village

Panchayats. The village water committee decides the

cost of water to ensure the economic sustainability

of the project. Currently, most water committees

have priced the filtered water at INR 5 per 20 litres.

In some places, transportation of water is available

for a nominal fee to the surrounding dhanis, in order

INTRODUCING THE ANY TIME WATER MACHINES

6All interventions except the Jeevan Amrit program are to meet legal compliance requirements. The Jeevan Amrit program goes beyond compliance.


to extend the reach of the project. The revenue

earned by the village water committee is used to

meet the operational expenses of the plant, which

include the salary of the operator, electricity cost,

consumables, maintenance and other running

expenses. The surplus monies earned by the

committee are used to undertake developmental

work of the village. All the RO plants have been

set up in the PHED campus and the source water

connection is being provided by them. To help see

the village water committees through the initial

hurdles of managing the water kiosks, our local

NGO partner – Dhara – provides capacity building,

hand-holding and support.

So far we have helped set up 15 RO plants and we

plan to scale this up to many more locations in the

coming year.

CUTTING EDGE INNOVATION To ensure that villagers can get access to clean

drinking water, ATW (Any Time Water) machines

have been installed in 5 RO plants at Barmer and

2 RO plants at Sanchore. This technology enables

villagers to buy water by swiping their smart

card in the ATW machines installed at the

plant. Each time they swipe their card

20 litres of water is released from the

machine and Rs.5 is deducted from

the card.

OUTCOME AND IMPACT

REDUCTION IN DISEASES One of the most important

outcomes of the project

has been that it has helped

in bringing down the

number of water borne

diseases like diarrhea in

the villages especially

among the children. This is helping villagers to

save money that used to be spent on healthcare.

The clean drinking water is also helping the senior

citizens in reducing incidents of joint pains and

problems, which was a result of consumption of

high fluoride content through the water.

SELF-SUSTAINABLE In a short period of time all the plants have

become self-sustainable in terms of revenue

earned and expenses incurred. In fact many RO

plants are earning enough revenue to be able to be

used for developmental work in the village.

GOOD GOVERNANCE The Water committees formed in every village

are an example of good self-governance. The

committee has been able to create its own identity

in the village and is looked upon as an effective

social group. Along with effectively running the RO

plants the committees are also undertaking many

development works in the village focusing on

health and sanitation.

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY



isolate our waste streams. The hazardous waste is sent to government certi�ed third-party handlers. Non-hazardous waste is sent to a secure land�ll. More details on our waste handling can be found in the “Handling our waste stream” section of this report.

Impact on wildlife: The local communities around Barmer hold a special reverence for the wildlife found in the area. Blackbuck and peacocks are endemic to the area and much beloved to the locals. Our operations could have an impact on the local wildlife through road accidents or other accidental mishaps. We have taken measures to prevent such occurrences. Working with the local forest department we have deployed strict protocols for our drivers to prevent accidents, and in the unfortunate event of a collision with a wild animal, we are careful to respond in a manner that is respectful of local sensibilities. We have also launched a veterinary ambulance to handle such eventualities. Our transmission lines have also been insulated to minimize the risk of accidental electrocution of large birds such as peacocks.

Spills Management: Cairn India has a robust spills management programs. More details on this program can be found in the Spills table of the “Consolidated Performance Numbers” section of this report.

Disaster Preparedness Plan: In the eventuality of a serious disaster at our sites, the company has developed a disaster management plan in consultation with local authorities. The plan is aligned to the best practices in the oil & gas industry. We periodically review our disaster preparedness and also raise awareness within the local communities on how they need to act in the event of a major incident. The disaster preparedness training includes periodic mock drills and desk-top simulations of incidents involving other local emergency response agencies.

SOCIAL IMPACT & INTERVENTIONS7

Rise in the number of road accidents & the Road Safety Programs: The presence of Cairn operations has increased the number of vehicles plying on the roads of Rajasthan and Gujarat. This has resulted in an increased potential for road safety related incidents / accidents especially since not all of the drivers on the road are on Cairn India’s payroll and are out of the ambit of our

direct in�uence and control. Road safety has always been given the highest priority and attention and, our site teams have conducted road safety training programs not only for our work related drivers but also for members of the community who reside around our work sites. In FY 2013-14, over 14,000 people received basic road safety training. We anticipate that such interventions will make the roads around our areas of operations safer.

ENGAGING WITH REGULATORSAs an oil & gas company, we need to engage with several regulatory agencies such as the Ministry of Petroleum & Natural Gas, Directorate General of Hydrocarbons, Ministry of Finance, Planning Commission, Ministry of Law, Ministry of Environment & Forests, and state-level governmental agencies. Several of these interactions are in place to communicate our compliance with the laws of the land and our consent(s) to operate. However, Cairn also engages with regulatory bodies through industry associations like the Association of Oil and Gas Operators, Confederation of Indian Industry, Associated Chambers of Commerce and Industry of India, Federation of Indian Chambers of Commerce and Industry, and the Petroleum Federation of India. We use these forums to pursue issues pertaining speci�cally to the upstream segment of the Industry. We have engaged with regulators on: PSC extension, improving functioning of the Management Committee to ensure that India is able to ef�ciently and effectively monetize hydrocarbon resources, improving operational environment, submissions to the Dr Kelkar Committee, draft Uniform Licensing Policy, and numerous other public policy subjects.

Our former CEO Mr P. Elango represented AOGO as one of the committee members on setting international best practices for PSC operations constituted by MoPNG.

In order to keep a �nger on the pulse of the latest developments in health, safety and environmental management for the oil & gas sector, Cairn organized India’s �rst Global HSE Conference in 2013. The conference was an attempt to engage with industry experts, regulators, and peer-group companies on HSE topics and try and in�uence the raising of HSE standards in India.

7 Interventions are beyond legal compliance requirements.


SAFETY FIRST

SAFETY PERFORMANCE

Cairn believes in a safety culture that is imbibed as a personal value within its workforce. We constantly encourage both our employees and contractors to be mindful of this commitment. This culture is what has resulted in minimal Lost Time due to Incidents (LTI) for several of our sites and truly best in class global performance. In FY 2013-14, Aishwariya successfully completed its �rst year of operation and it was a LTI free year. Our pipeline operations have recorded nearly 24.8 million LTI free man-hours till 31st March 2014. Ravva received 3 awards of excellence from the Confederation of Indian Industry for its excellent safety performance. Overall the company reported a Lost Time Injury Frequency Rate (LTIFR) of 0.16 which is in the top decile globally for safety performance as compared to the Oil & Gas Producers (OGP) global safety performance data of 0.48.

‘Near Miss’ reporting is actively encouraged and serves as a valuable tool to learn from what could have gone wrong so that we can prevent it from happening. During the FY 2013-14, we had 108 Near Miss cases reported. Two of these had the potential to cause a single fatality and 7 had the potential to cause multiple fatalities. These were investigated with the same rigour as actual incidents and corrective and preventive actions were implemented.

The year also saw us re-commit ourselves to safety. We are acutely aware that as we pursue our growth plans, our operations will increase in extent and complexity. With the deployment of a larger contractor workforce – many of whom may be new to the Cairn system - the risk of safety-related incidents will increase. In FY 2013-14, we recorded 24.98 million man-hours and had 14 injury incidents with an injury rate of 0.56 per million man-hours and a loss day rate of 4.8 days per million man-hours. We had no incident resulting in fatality during the reporting period.

COMPLIANCE AND ASSURANCE

HSE compliance and assurance has played a key role

in the Cairn growth story. The system has continued to ensure that all projects have gone through the laid down gated process and been commissioned without any major incidents. The internal assurance process of verifying operational HSE compliances of various assets has created a high level of assurance not only within the management but to the regulatory authorities as well.

SOCIALIZING A SAFETY CULTURE

In FY 2013-14, our senior management, supported by the HSE (Safety) team introduced two new initiatives to our roster of initiatives to keep the spotlight on safety. The ‘Know Your Hazards’ program has been designed

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY


to communicate common safety risks to our on-site workforce. Illustrative posters, depicting situations that can lead to accidents, along with corrective actions to be taken, have been designed and circulated to our on-site locations. The posters seek to serve as a constant and ready reminder of the risks involved in day-to-day activities and will help familiarize our workers with common workplace scenarios that lead to safety incidents, thereby reducing their occurrence.

Annual HSE training and refresher courses, HSE audits and workshops ensure that safety, quality, environmental compliance and occupational health issues remain top-of-mind for our entire workforce. In light of our growth trajectory, our senior leadership has taken special interest in ensuring that the safety of our operations remains paramount. They have undertaken specially-organized manager tours to all our operating sites to shine a spotlight on safe business practices. Their focus has been to re-engage our on-ground workforce and assure them that the organization should continue to embrace our ‘safety �rst’ approach, despite the business demand for increasing production volumes. They are reminding our workforce that any one of them is empowered to stop production activities if they feel that safety might be compromised. The focus is to get employees to increase participation in the Cairn Observation Program (COP), which attempts to prevent safety incidents before they occur. COP card system offers every person, including visitors, an opportunity to offer speci�c suggestions for improvement, to acknowledge good practices and to report any unsafe act or condition that they may observe. These are analysed and corrective and preventive action taken as appropriate. During the reporting period 41,643 cards were received and about 85% of them were acknowledgement of safe acts / conditions observed and the balance 15% were suggestions for improvements.

Given our stated commitment on encouraging local employment, we are specially challenged to ensure that we do not compromise on our safety standards while encouraging local contracts. Our comprehensive ‘Gate to Gate’ approach ensures that every person who enters our premises is constantly aware of the safety requirements at all times.

Over the next year, we anticipate that our near miss cases will increase signi�cantly, however our Lost Time

due to Incidents (LTI) should decline.

ROAD SAFETY Road safety continues to be one of our key safety risks. During the reporting period we had 14 road safety related incidents, out of which 3 were LTI. We are keenly aware that we need to keep a constant vigil on this aspect to ensure that our employees, contractors and the community at large are safe on the road. Though all drivers contracted on a regular basis by Cairn are trained in ’Defensive Driving’, but to ensure safe roads we need to make sure that all road users are trained on road safety and are aware of the safety risks encountered on the road. We have organized workshops conducted by specialist agencies for any vehicle driver from the local community. Special programs have also been conducted amongst the rural school children on road safety and the importance of proactive safe behaviour. Our road safety programs have trained over 14,000 people on safe driving between November 2011 and March 2014.

CONTRACTOR SAFETY During FY 2013-14, contractors were responsible for approximately 90% of the total man-hours worked. As a result, Cairn India’s HSE performance is primarily dependent on our contractors HSE performance. We make a considerable effort to ensure that our contractors fully understand and comply with Cairn India’s HSE requirements. Over the years, all those who have wanted to be associated with us have understood that HSE compliance is mandatory and non-negotiable. It is mandatory for any person working within our premises to complete a half-day HSE training course. All contract workers are empowered to insist that proper safety precautions are taken, job hazards are informed, protective gear provided and used, and to stop work in case any unsafe condition is encountered or unsafe act is asked to be undertaken.

During FY 2013-14, we initiated a new program to rank the safety, competency and performance of our contractors through independent third party audits. The objective of the audits is to verify the contractor’s compliance to Cairn HSE requirements at work site and identify gap areas that need to be improved. We will work with the contractors to improve their competence through training, knowledge sharing and monitoring of safety performance indicators. During the reporting



period, apart from over 100 internal checks, 3 external audits on contractor safety performance were conducted.

PROCESS SAFETY The integrity of our processes is critical to the safe operation of our operations. An indication of our safety culture is the number of process safety events that occur. Decreasing the number of process safety events from occurring is an important element in the safe operation of our oil and gas assets.

While Cairn has always had robust processes, FY 2013-14 was a busy year as we focused on activities to embed process safety principles into our systems. Our leadership team played an active role in promoting process safety through the safety management tours organized across all our sites. Work was also carried out to institutionalize and report leading indicators of process safety. This enabled the company to nurture an organization-wide process safety culture that discovers process safety concepts alongside reporting on the indicators periodically. We have also begun implementing Risk Based Inspection practices and encouraging compliance to Management of Change procedures. By

introducing Process Safety KPIs and their monthly reporting we have integrated asset integrity, maintenance and operational performance as factors for monitoring our site performance. According to Srikrishna S, General Manager, Asset Integrity & Maintenance, “Process safety management helps us identify chemical and process hazards and measure, maintain and improve process safety performance. It gives a health check of the process operating envelope.”

In FY 2013-14, there were zero Tier 1 process safety events. There were 9 Tier 2 incidents that were reported. All incidents involved spills or leakages of oil and chemicals. All were resolved after following due process.

OCCUPATIONAL HEALTH

Our operations are located in harsh environments. In Rajasthan, day-time summer temperatures can frequently cross 45 degrees Celsius. Adding to the effect of low relative humidity, the effect of heat-exposure incidents can become serious very quickly. Our �rst line of defence against the elements is to educate our workers on safe/unsafe working hours. In summer

OUR SAFETY PERFORMANCE8

Incident* Unit 2013-14 2012-13**

Injury (Reportable Injuries+ Non-Fatal Accidents + Fatalities) (Employees + Contractors)

Number 14 12

Injury Rate (Employees + Contractors) Number/Million Man-hours 0.56 0.67

Occupational Disease Rate (Employees & Con-tractors)

Number/Million Man-hours 0 0

Lost Days (Employees + Contractors) Days 120 113

Lost Day Rate (Employees + Contractors) Days/Million Man-hours 4.80 6.39

Absentee days (Sick Leaves) Days 1,042 Not Reported

Absentee Rate

Fatalities Number 0 0

Total Manhours (Employees + Contractors) Hours 24,980,086 17,656,760

* No women were involved in any safety incident** 2012-13 numbers have been revised from last year’s report as they were company-wide numbers. The figures presented in this table correspond only to safety incidents in our operations.Each site also has a safety committee, which is responsible for ensuring that safe work conditions are met.

8Numbers correspond to operations only. Organization wide number for injury rate is 0.16 (LTIFR)

T H E P E O

PL

E

ST

OR

Y

Is and their

T H E P E O

PL

ES

TO

RY


months, when the temperatures soar, sites are issued different �ag signs, of which red-�ag hours warrants all outdoor work needs to stop. This is to prevent any incidents of heat stress related illness. Workers have also been trained to help them identify when they or their colleagues might be suffering from heat stress or any such medical emergency. All our worksites are well equipped with an on-site medical team, which is responsible for providing emergency care to those who may be exposed to any illness or be affected by a safety

incident. They function from well-equipped medical centres and Advance Life Support Ambulances. For serious cases that require tertiary medical care facilities, we have deployed an air ambulance – a dedicated helicopter converted exclusively for air medevac purpose. Work exposure monitoring through industrial hygiene surveillance and ergonomics evaluation is regularly undertaken to correlate the work environment parameters and human exposure.


Cairn India has always been pro-active

about promoting strong Environmental,

Safety, Health and Sustainability standards

for the oil and gas industry. While we are

continuously engaged in improving the HSE

performance of the company and influencing

the performance of our vendor partners, there

was a need for a larger forum to discuss HSE

best practices with industry peers, experts

and regulators.

Cairn India in association with the Oil

Industry Safety Directorate (OISD), Ministry

of Petroleum & Natural Gas (MoPNG) and

the Oil and Gas Industry organized the first

ever international conference on HSE held

in South Asia. The theme of the conference

was ‘Collaborate, Lead and Transform’ and

the key objective was to raise the leadership

awareness in transforming the HSE culture

across sectors in India.

Over 600 delegates and 50 speakers from

across 12 countries participated in this

conference with parallel sessions held on

process safety, human factors in safety

performance, emergency response and

sustainable development.

The event was a unique coming together

in India of thought leadership in the

functional arena of HSE and sustainability.

The conference not only served to improve

our understanding of HSE issues, but also

resulted in key recommendations emerging

for regulators and industry practitioners. The

key points that emerged from the two day

deliberations were:

n LEADERSHIP & COMMITMENT: Demonstration of senior management

commitment and involvement is critical to

successfully drive HSE and Sustainability

performance goals

n CONSULTATION & ENGAGEMENT:

Workforce consultation and engagement

is fundamental to improving safety

performance

n EMPOWERING THE NODAL REGULATORY AUTHORITY: Recommendation on

empowering the OISD

as the over-arching

regulator for the Indian

oil & gas industry

GLOBAL HSE CONFERENCE: COLLABORATE | LEAD | TRANSFORM


n BUILDING HSE CAPACITY: To build

HSE capacity within the industry, the

Government of India may look into the

possibility of creating world class training

institutes specialized in HSE. This would

help the nation in bridging the looming

“Talent Gap” and help fulfill the vision

of achieving self-sufficiency and Energy

Independence for India by 2030

n SELF-REGULATION & RISK BASED SAFETY APPROACH: Develop a regulatory

framework to encourage self-regulation

among the industries based on a

company’s HSE track record, with the

regulator adopting a risk-based approach

for regulatory inspection and detailed

diligence

n EFFECTIVE EMERGENCY PREPAREDNESS AND RESPONSE CAPABILITY: Effective

emergency preparedness is critical to

ensure proper handling of emergency

situations. Organizations should ensure

that appropriate training and emergency

drills are undertaken regularly at all the

sites. It is recommended that the purview

of the National Disaster Management

Authority (NDMA) be expanded beyond

natural disasters to cover industrial

disasters as well

n BEST PRACTICES AND KNOWLEDGE SHARING: That regional conferences be

conducted under the aegis of various

industry bodies/associations with specific

themes and clear objectives to share and

learn from industry incidents and best

practices

n ADOPTION OF ENERGY EFFICIENT AND ENVIRONMENTALLY FRIENDLY TECHNOLOGIES: A recommendation

to the Government of India to consider

an alternate fiscal incentive regime for

consumers to reduce their current level

of energy consumption and encourage

renewable sources of energy

n OCCUPATIONAL HEALTH: A

recommendation that occupational

health index be brought through dash

boards to the board rooms and actions

taken to improve the overall well-being of

employees

n INTEGRATION OF SOCIAL IMPACT ASSESSMENT: To build capacity in Social

Impact Assessment (SIA) and enable its

integration with the Environmental Impact

Assessment (EIA)

process to create a

meaningful tool-kit

for formulating and

monitoring effective

social development

programs

T H E P E O

PL

E

ST

OR

YT H E P E O

PL

ES

TO

RY

CARESFOR THE

A COMPANY THAT


CARESFOR THE

A COMPANY THAT

Cairn’s major operational areas are in relatively isolated parts of the country. In Rajasthan, our operating sites are located in a semi-desert environment, with minimal vegetation cover and widely-spread, isolated human habitats. In Andhra Pradesh and Gujarat our

production wells are located off-shore with the processing terminal located onshore. Our cross-country hydrocarbon pipeline commences in the deserts of Barmer in Rajasthan and terminates in the Arabian Sea off the coast of Bhogat, Jamnagar in Gujarat. We operate in diverse environments each with distinct characteristics.

A large portion of our operations are also located in areas that are “environmentally harsh”, implying that they belong to geographical zones that have scarce fresh water resources, are semi-arid, with an extreme climate, making it a challenging task for the rural communities who populate these lands to eke out a substantial living out of farming and animal husbandry. Conversely the land and sea off the coast of Suraisaniyanam, Andhra Pradesh, Bay of Bengal is rich and fertile both in terms of crop productivity and �shery. We are also aware that Bhoghat, Gujarat, where our pipeline terminates, is an area rich in marine �ora and fauna. We recognize and understand our responsibility to safeguard the environments and the scarce natural resources of the regions where we operate.

Given such circumstances, as one of the largest private stakeholders in the areas where we operate, Cairn India has the responsibility to minimize its environmental footprint so that the existing natural resources can be conserved, protected and shared with all stakeholders. It is also our responsibility to try and improve the environmental conditions wherever possible. It is in this context that we have developed our environmental management strategy.

ENVIRONMENT


84% 8%4%2%1%1%

GHG EMISSION SOURCES

ASSOCIATE GASCOMBUSTION

GAS FLARING

FREE GAS COMBUSTION

DIESEL COMBUSTION

COLD VENTING

GRID ELECTRICITY

Cairn India is in the business of securing the energy future of India. However, as an oil & gas company we are acutely aware of our impact on the earth’s climate. In FY 2013-14, under the auspices of the Sustainability Steering Committee, Cairn had committed to formulate a climate change strategy to give us direction on how to use our energy resources as we develop and operate our hydrocarbon discoveries. Though, (as until the time of this report going to print), the climate change policy is still under deliberation, operationally we have been pursuing initiatives conceived as part of our Climate Change Policy framework. In particular FY 2013-14 has been a year of looking at the feasibility of renewable energy as becoming a material part of our consumptive energy mix. We continue to report to international protocols and our focus remains on benchmarking our Greenhouse Gas (GHG) emissions intensity with our peers as per the OGP guidelines.

GHG emissions intensity is one of the corporate KPIs monitored by the HSE leadership committee as well as our operations team. In FY 2013-14, Cairn’s GHG intensity was 92.25 tonnes of CO2e/ ‘000 tonnes of hydrocarbon produced as compared with a GHG intensity of 92.69 tonnes of CO2e/ ‘000 tonnes9 of hydrocarbon produced in 2012-13. Our 2013-14 number compares very favourably with the OGP benchmark for 2012, which stands at 160 tonnes of CO2e/ ‘000 tonnes of hydrocarbon produced.

In order to account for fugitive emissions, leakages and other monitoring & reporting uncertainties, we have added a 13% correction to the Scope 1 GHG numbers in FY 2013-14 and a 10% correction for FY 2012-13. The additional 30% increase in uncertainty is to account for the Aishwariya �eld, which came online in FY 2013-14. Revised numbers are presented ahead:

CHARTING A COURSE FOR GREATER RESOURCE EFFICIENCYManaging our environmental footprint not only helps us meet our environmental compliance requirements, but also has a positive impact on business. By reducing the amount of waste produced and increasing ef�ciency of fuel, water, and land usage, we are able to decrease our operating costs and increase operational ef�ciency.

ENERGY, AFFORESTATION & CLIMATE CHANGE

9 OGP report 2013 (2012 data)


»

GREENHOUSEGASEMISSIONS 2012-13 2013-14

967.45

SCOPE 1

SCOPE 2

7.14

7.35

1,058.50

»* 2012-13 numbers have been revised from 983,302 tons of CO

2e for Scope 1

emissions.

Our GHG emissions intensity is lower than industry average primarily due to our cleaner energy mix brought about by maximizing the utilization of associate gas and thereby reducing gas �aring. In FY 2013-14, we have achieved a 38% reduction in gas �aring and a 71% decrease in cold venting as compared to our FY 2012-13 energy consumption numbers. Our gas �aring intensity has dropped to 2.18 tonnes/ ‘000 tonnes of hydrocarbon produced from 3.90 tonnes/ ‘000 tonnes of hydrocarbon produced in FY 2012-13. This compares favourably against the OGP 2012 global average of 13.9 tonnes of gas �ared / ‘000 tonnes of hydrocarbon produced.

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

GHG NUMBERS AFTER ACCOUNTING FOR CORRECTION

Unit 2013-14 2012-13 % Change

Total Direct GHG emissions (Scope 1) Tonnes CO2E 1,187,792 1,055,181 +12.6%

Total Indirect GHG emissions (Scope 2) Tonnes CO2E 7,355 7,145 +2.9%

TOTAL Tonnes CO2E 1,195,147 1,062,326 +12.5%

GHG Emission IntensityTonnes CO

2E / ‘000

T HC 104.16 101.78 +2.3%


‘000 Tonnes of CO2e*

92.69

158 160

92.25

2012-13 2013-14

GHG INTENSITY

CAIRN GHG INTENSITY OGP AVG.

(T CO2e/’000 T Hydrocarbon)

»

CHARTING A COURSE FOR GREATER RESOURCE EFFICIENCY

FUEL GAS

DIESEL

GRID ELECTRICITY

RENEWABLE

ENERGY MIX 2013-14

1.76%

98.06%

TOTAL FLARING AND VENTING

Unit 2013-14 2012-13 % Change

Volume of Flared Hydrocarbon Cubic Meters 38,469,321 62,560,986 -38.50%

Volume of Vented Hydrocarbon Cubic Meters 1,090,527 3,711,994 -70.62%

More than 73% of our associate gas produced is utilized to power our operations compared with 61% in FY 2012-13. Collectively, these measures have been able to decrease our GHG emissions by more than 93,484 T of CO2e.

Our energy mix consists of fuel gas, diesel, grid electricity and renewable energy. A breakup of our total energy consumption is provided in the table below.

TOTAL ENERGY CONSUMPTION

DIRECT ENERGY SOURCE Unit 2013-14 2012-13 % Change

Fuel Gas GJ 16,340,458 14,573,975 +12.12%

Diesel GJ 291,585 202,295 +44.13%

Renewable Sources (Solar + Wind) GJ 276 276 0%

Total Direct Energy Consumed GJ 16,632,319 14,776,546 +12.55%

Grid Electricity Purchased GJ 29,749 28,901 +2.93%

Total Energy Consumed GJ 16,662,068 14,805,447 +12.54%

»0.18%


EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

Our overall energy intensity for FY2013-14 is 1.452 GJ/tonne of hydrocarbon produced as compared to last year’s number of 1.419 GJ/tonne10 of hydrocarbon produced. This energy intensity has been calculated on the total energy usage (including the gas energy lost in �aring

and venting). The OGP de�nition for energy intensity reporting excludes energy lost in �aring and venting and our corresponding energy intensity �gures reduce to 1.344 GJ/tonne of hydrocarbon produced for FY 2013-14 (about 8% less) and to 1.223 GJ/tonne of hydrocarbon

ENERGY CONSERVATION & RENEWABLE ENERGY DEPLOYMENT

ENERGY CONSERVATION In FY2013-14, we were able to save 17,709 GJ of energy from process redesign and retro�tting of equipment.

A CASE OF NITROGEN BLANKETINGBefore being transported to the Ankleshwar

unloading terminal through road tankers the

crude oil produced from the offshore fields of

the CB/OS-2 block is processed in the onshore

terminal located at Suvali, Gujarat. Three fixed

roof tanks are used to store the processed

crude oil and fuel gas was being used as

blanketing gas to maintain the pressure within

the tank.

The three tanks operate in rotation in

‘receiving mode’, ‘settling mode’ or in ‘dispatch

mode’. When the tank is in the crude receiving

mode, the blanketing gas from within the

tank is displaced by the liquid hydrocarbon

and the blanketing gas gets released to the

atmosphere. This results in cold venting

of hydrocarbon vapours (GHG emissions).

While filling the tankers, the liquid in the

tank is replaced by fuel gas. This leads to

consumption of saleable fuel gas and can

also prove to be a safety hazard.

The vapour balancing initiative was to

effectively use the excess vapour from

“receiving” tank in the “dispatch” tank. By

replacing the use of fuel gas with nitrogen

gas as the blanketing gas, we were able to

eliminate a GHG emission source, reduce

the fire and explosion hazard around the

storage tank and decrease internal fuel gas

consumption.

Says Chandrashekhar Bankar, Production

Manager at Suvali, “The

nitrogen blanketing project

has helped save nearly

225,000 m3 of fuel gas until

March 2014, which can now

be made available for sale. It

has also decreased the cold

venting of the blanket gas.”


10 This number has been corrected. Last year we reported energy intensity to be 1.12 GJ/ Ton of Crude Equivalent Produced

1.54

1.4

ENERGY CONSUMPTION WITHOUT FLARING & VENTING

ENERGY CONSUMPTION WITH FLARING & VENTINGOGP AVERAGE

2012-13

1.42 1.452

1.2231.344 2013-14

ENERGY INTENSITYBY TOTALHYDROCARBONPRODUCED (GJ/Tonne Hydrocarbon Produced)

»

produced for FY 2012-13 (about 14% less).

In upstream production operations, the energy usage is primarily determined by the volume of well �uid handled. In FY 2013-14 our production operation handled

approximately 29,143,813 m3 of well �uid and utilized 16,662,068 GJ of energy resulting in an energy intensity of 0.572 GJ /m3 of well �uid handled. Comparative �gure for the FY 2012-13 was 0.763 GJ/m3 of �uid handled resulting in a 25% lower energy footprint in FY 2013-14.

CHARTING A COURSE FOR GREATER RESOURCE EFFICIENCY


ENERGY INTENSITY

BY TOTALFLUID

HANDLED(GJ/m3 of fluid handled)

»

0.763

0.572

2012-13 2013-14

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

SAVING ENERGY THROUGH EFFICIENT CAPACITY UTILIZATIONCrude oil will flow across a pipeline provided

it is under sufficient pressure to overcome

the frictional flow resistance offered by the

pipeline. The flow resistance is influenced

by the rheological properties of the crude,

which is temperature dependent. In simple

terms, the lesser the friction, the greater the

distance travelled by the oil. This is especially

true for the crude oil extracted by Cairn, which

solidifies at room temperature and needs to

be heated above 65oC in order to achieve an

efficient fluid flow state.

The Rajasthan pipeline, which was

commissioned in 2010 to deliver the crude oil

from the Mangala terminal at Barmer to the

various public and private refineries in Gujarat,

is the world’s longest continuously heated

pipeline. At commissioning, it was envisaged

for a maximum throughput capacity of

160,000 barrels of oil per day (bopd).

The continued success from the Rajasthan

block meant that we soon had more oil to

deliver than that which the existing pipeline

could handle.

The challenge was to increase pipeline

carrying capacity in the shortest time using

the most energy efficient solution. Delivery

of additional pumps that would increase

pipeline throughput would take more than a

year from order.

The Rajasthan operations team was asked to

solve the problem. Their innovation not only

allowed pipeline capacity to increase to more

than 200,000 bopd, but they simultaneously

achieved significant energy savings per barrel

of oil moved through the pipeline. The team

used a two-step approach to achieve the

increased flow.

First, impellers, were trimmed to

accommodate a large flow of fluid. Second,

they used drag reducer chemicals to

significantly reduce the pressure drop due

to pipe friction. These two steps allowed

the team to move 25% higher volume of oil

through the same pipeline system. The

higher volume of oil, which was now flowing

through the pipeline carried greater latent

heat allowing it to maintain a temperature

above 65oC over longer distances. This

meant that fewer intermediate crude heating

stations needed to be operational, resulting

in energy savings.

This modification resulted in 13,986.50 GJ of

energy savings in FY 2012-13

and 17,254.28 GJ in FY 2013-

14. The savings have been

calculated by comparing the

actual energy consumed to

the energy that would have

been consumed had there

been no initiative taken.


Cairn India has significantly increased it's green cover across its operations

»

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

YRENEWABLE ENERGY

Our adoption of renewable energy technologies is still in its infancy. In FY 2013-14 we spent INR 11.21 million on renewable energy, up from our spend of INR 6.4 million in the previous �scal. This constituted about 0.003% of the total capital expenditure made by the company in FY 2013-14. In the same year we produced 74.65 MWh of renewable energy, out of which 72.59 MWh was generated by solar energy and 2.06 MWh was generated by wind energy.

During the year we have initiated discussions on increasing the share of renewables in our energy mix by commissioning project-concept and techno-commercial viability studies on purchasing wind energy through the power distribution grid and on recovery of waste heat from low pressure steam. We are excited about the potential these initiatives offer, especially since we foresee a rise in our energy demand due to higher �uid handling requirements and the application of advanced production technologies such as Enhanced Oil Recovery (EOR).

SEQUESTERING CARBON, NATURALLYWhile several of our energy saving/carbon reduction initiatives are targeted towards our operations, we also realize that these measures need to be supplemented by creating carbon sinks for the GHG emissions that do get released to the atmosphere. A reliable way to capture this

released carbon is by planting trees, since trees act as natural carbon sinks. Additionally, considering the fact that one of the greatest dangers of global warming to our nation is the climate induced increase in erosion of coastal areas by rising sea level and wind and wave action. Hence, it is critical that we focus on strengthening mangrove forests. By increasing the green cover, we are able to meet the multiple requirements of green-belt compliance, improving the biodiversity of the areas where plantation activities take place, coastal protection and increasing the carbon dioxide absorbing capacity of the planet. Cairn India has taken an ambitious long-term target of covering land equivalent to nearly 50% of our occupied area by indigenous trees.

The primary vehicle for coordinating these activities is our in-house program called Project Shrishti coordinated by our land team. In FY 2013-14, we planted nearly 2.7 million trees out of which nearly 2.6 million trees were mangroves. Till date, project Shrishti has been responsible for planting nearly 3.25 million trees over 497 hectares of land.

At an assumed survival rate of 90%, the tree plantations completed till FY 2013-14 have the potential of sequestering approximately 4.3 million11 tonnes of carbon dioxide over the lifetime of the trees (taken at an average of 60 years) or 73,000 tonnes/year. This number is approximately 7% of the operational carbon footprint of the company in FY 2013-14.


11 90%*3.25 million trees * 1.5 ton of CO2/tree for its life (As per http://shrishti.cairnindia.com/Pages/ProjectShrishti.aspx)


MANAGING OUR WATER FOOTPRINT

With global atmospheric carbon dioxide concentrations reaching 400 ppm in 2013, climate change is an ever-present threat and the prospect of warmer temperatures and unpredictable rainfall patterns looms large. In areas of Rajasthan, where fresh water availability has traditionally been scarce, warmer temperatures can play havoc with the already limited resource.

As a resident organization of Rajasthan, Cairn India understands the value of water in a desert area. Effective water management sits at the core of our operations. It is for this reason that we source nearly 99% of our water consumption from saline water sources (with TDS > 2000 mg/litre).

The primary uses for water in our operations are:

� As injection water in our well-pads

� Process water for our operations

� For domestic use at our living quarters and administrative buildings

� For horticulture at our site-grounds and for green-cover development

All the water used in our Rajasthan operations, including that meant for the consumption of our staff, is sourced from the saline Thumbli aquifer and desalinated wherever required, using RO systems. In Ravva, we use the saline ground water found near the coastal belt. Our pipeline operations at Viramgam, source their water from water tankers and Suvali uses the water supplied by the municipal corporation of the area.

Our water consumption for FY 2013-14 is provided in the table below:

The decline in our ground water consumption is primarily due to the rise in water cut (amount of produced water being released with the extracted hydrocarbons). During the reporting period, our water re-injection into the reservoir at Rajasthan was limited by the existing capacities of the re-injection water pumps. We are presently in the process of installing additional re-

injection pumps and we will be increasing the re-injection water volumes in Rajasthan, which will result in a rise in our saline ground water consumption. During the reporting year, we obtained approval from the Central Ground Water Authority (CGWA) to enhance our saline water abstraction from the Thumbli saline groundwater aquifer in Rajasthan to 43,500 m3/day. Our average daily groundwater

WATER CONSUMPTION IN CUBIC METER

DIRECT ENERGY SOURCE Unit 2013-14 2012-13 % Change

Ground Water (Saline) M3 11,301,451 14,037,439 -19%

Municipal Supply M3 34,307 31,466 +9%

Water Tankers M3 81,277 98,995 -18%

Total Fresh Water (Municipal + Water Tanker) M3 115,584 130,461 -11%

Total Water Withdrawn (Saline + Fresh Water) M3 11,417,035 14,167,900 -19%

Water Use/Tonne of Hydrocarbon Produced 0.995 1.35 -26%



EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

MAKING EVERY DROP COUNTOur operations team had a very clear mandate

at the beginning of the year – conserve water

by improving reuse/recycling and through

water-use efficiency. Though most of our

fresh water need is being met by desalinating

saline groundwater, we know that fresh water

is one of the most valuable global resources.

Over the course of the year our Rajasthan

operations team has undertaken several

initiatives that will enable the use of fresh

water efficiently and make every drop count.

EFFICIENT UTILIZATION OF WATER:

Our sites at Mangala (MPT), Bhagyam and

Raageshwari (RGT) have initiated drip-water

irrigation projects that will service their green

cover plantation initiatives. In FY 2013-14,

Mangala completed a site survey for a drip

irrigation system that is planned for an area of

10 hectares. Dr Bhoma Ram Jat, Environment

Manager for our Rajasthan operations, who

has been spearheading the initiative says that

the proposed system will

save approximately 60% of

water used from plantation

activities because of the

sub-surface design of the

watering pipes, which

results in water reaching


abstraction during FY 2013-14 from the Thumbli aquifer was approximately around 23,750 m3/ day.

We have ensured that no fresh water is utilized for our increased production operations and there is no adverse effect on shallow fresh water aquifers. We project that our water consumption during the life of the Rajasthan operation will remain less than 1% of the available

saline water resources. However, given the sensitivity of the subject, we are diligently continuing reporting to the authorities the results of a comprehensive aquifer monitoring program, including potential subsidence monitoring. We are con�dent that the geological systems will behave in the manner that we have predicted and will have negligible impact on any community water resource.

GROUND WATER (SALINE)

MUNICIPAL SUPPLY

WATER TANKERS

SOURCES OF WATER2013-14

0.7%0.3%

99%

»



MANAGING OUR WATER FOOTPRINT

the roots directly and minimized water loss

due to evaporation. This project is based on

a similar pilot project that was conducted

over an area of 5.6 hectares at the same site.

That project, which had 2,250 saplings saved

approximately 360 KL of water per month

or 0.16 KL of water per sapling per month.

A similar drip irrigation project at RGT Well

Pad 4 and Well Pad 7 covering an area of

approximately 2 hectares is saving around 480

KL of water per annum.

Collectively, these projects have the potential

to save nearly 13,000 KL of freshwater per

annum.

RECYCLING AND REUSE:

Water conservation and reuse has been

a focus area for sustainability initiatives

in Rajasthan. There are several initiatives

underway at our Rajasthan operation sites

to recycle and reuse our waste water stream.

During FY 2013-14, a project to channel non-

polluting waste streams from the Mangala

terminal production facility was commissioned,

including the use of means measures such as

low pressure steam condensate, boiler blow

down, and enabling permeate from RO treated

guard pond water to the rain water storage

tank for co-mingling. Approximately 600 m3

of water is generated per day, which is used

for plant greenbelt maintenance. MPT is also

using the STP treated domestic water for its

lawn and plantation needs. This effort saves

approximately 120 KL of fresh water use per

day. We are also achieving an additional saving

of 25 KL of freshwater per day by using the

STP treated industrial domestic water for the

Desert Park and the CCR carpet lawn. A similar

system in RGT saves about 7,000 KL of water

per annum.

Our Bhagyam facility has also initiated a

unique sewage water treatment project using

a reed bed system that will not require any

energy or chemicals to treat the water. This

project will treat approximately 25 KL of water

per day, which can be used

for horticulture purposes.

Collectively, these projects

have the potential to save

nearly 69,000 KL of water

per annum.

In 2013-14, Cairn reused/recycled 111,036 m3 of water, or nearly 1% of the total water used. Compared to FY 2012-13, we increased the amount of recycled water in use by 138%.

WATER RECYCLED/REUSED(cubic meters)

46, 746

111, 036

2012-13 2013-14

»


EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

HANDLING OUR WASTE STREAM

FY 2013-14 has been the year of fruition of our efforts to �nd a sustainable solution to our waste disposal. Since our early days of exploration activity in the Rajasthan block we have been exploring the idea of making our drill cuttings a resource, which could be useful for other industry / purpose. We collaborated with the Tata Energy Research Institute (TERI) and worked on applying the bio-remediation technologies to the drilling waste. At the same time we required our drilling contractors to bring in the latest commercial development in environmentally friendly drilling �uids. Our persistence in these early endeavours has resulted in obtaining approval from the Central Pollution Control Board (CPCB) to co-process the synthetic drilling mud contaminated drill cuttings in cement kilns. We are also actively pursuing, based on

the studies conducted, to seek approval to use the water based mud drill cuttings as road sub-base / hard standing material in the clay/ silt bereft sandy environment of Rajasthan.

On successful implementation of the above initiatives almost all the waste categorized as hazardous will be recycled to authorized users / re-processors.

SOLID WASTE In FY 2013-14 our total hazardous waste generated decreased by nearly 4% compared to FY 2012-13. Our non-hazardous waste numbers increased by 228%

There was no disaggregated waste generated by our operations during the �scal year.

Drilling mud and drill cuttings from our production operations form the largest solid waste stream. In FY 2013-14, our drilling waste increased by 270%. We have

increased our capacity to handle this waste. Earlier in the year, we had undertaken a pilot program that would allow drill cuttings to be used as raw material for the cement industry. The testing phase of the project has been completed successfully and we have been able to obtain Central Pollution Control Board (CPCB) permissions

WASTE GENERATED

TYPE OF WASTE Disposal Method Unit 2013-14 2012-13 % Change

Hazardous WasteSold to government certified waste han-dlers

MT 1,526 1,584 -3.6%

Our hazardous waste includes: ATF Sludge/Oil, Batteries, Discarded chemical containers, Oil soaked cotton waste/gloves, Oil filters, Oily sand, Oily sludge, Paint peelings, Insulated waste (PUF/Thermacol/Mineral wool), Spent acti-vated carbon, Spent chemicals, Spent resin from used ion exchange/DM plant, Spent/used lube oil, Waste oil

Non-Hazardous Waste

Recycled, sold to third-party waste handlers, sent to landfill

MT 1,028 318 +223%

Our non-hazardous waste includes: Biomedical waste, Canteen waste (organic waste), Demolition/Construction waste, E-Waste, Garbage, Glass, Metal scrap, Organic waste (horticulture), Paper/Corrugated boxes, Plastic, Rubber, Wood


HANDLING OUR WASTE STREAM

for the sale of this waste as raw material to the cement industry. In FY 2014-15, we shall be focusing our efforts to commercialize this opportunity and thereby reduce the drilling waste disposed. In the meanwhile, part of our drilling waste is sent to government authorized third party handlers, while the remaining is stored in designated areas for waste disposal owned by the company.

PRODUCE AND WASTE WATER Cairn’s wastewater stream consists of our domestic waste water, process waste water and produced water – which is a by-product of our drilling operations. It is our endeavour to recycle and reuse as much of this waste water as possible. Nearly 100% of our domestic water is reused for horticulture purposes after being treated in our STP plant. In FY 2013-14, we discharged 770,585 cubic

meters of water from our operations in Suvali and Ravva.

This is an increase of 26% from FY 2012-13. In Suvali, the waste water stream consisted entirely of produced water, while in Ravva the waste water stream was a combination of domestic sewage water, process water and produced water. In both these locations the treated wastewater is discharged into the sea.

As our �elds mature, we anticipate the total water cut to go up. In other words, we will be extracting larger quantities of produced water along with the hydrocarbons. Currently, we recycle more than 95%

of the produced water back into the sub-surface hydrocarbon reservoir. This makes it possible for us to achieve zero surface discharge of produce water on land outside our premises from any of our processing facilities.

TOTAL EFFLUENT DISCHARGE

Unit 2013-14 2012-13 % Change

Total Water Discharged Cubic Meters 770,585 611,338 +26%

Biological Oxygen Demand (BOD) Mg/litre 23.8 23.5 +1%

Chemical Oxygen Demand (COD) Mg/litre 183.2 Not Reported

Total Suspended Solids Mg/litre 30.4 33.0 -8%

Oil & Grease Mg/litre 6.79 6.75 +1%

PRODUCED WATER

Unit 2013-14 2012-13 % Change

Total Produced Water Cubic Meters 17,008,245 8,276,344 +106%

Produced Water Re-injected Cubic Meters 16,323,926 7,898,051 +107%

% Re-injected 95.97% 95.40%

Hydrocarbon Discharged within Produced Water KG 4,549 4,788 -5%

DRILLING WASTE(cubic meters)

11, 256

41, 677

2012-13 2013-14

»


EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

EN

VI

RO

N M E N T S US

TA

IN

AB

IL

IT

Y

SEWAGE WATERAll our operating facilities have sewage treatment plants installed. The treated sewage after UV disinfection is used for maintaining the greenbelt. In Rajasthan, where we have geographically spread out operations, we have a sewage collection and transportation system through tankers to the nearest terminal for treatment. During this reporting period we enhanced the sewage treatment capacity at the Mangala terminal from 80 m3 per day to

330 m3 per day. This will suf�ce to meet the projected sewage generation from the increase in manpower due to the increased production activities. The treated discharge at all locations meets the regulatory discharge standards. During the reporting period we generated a total of 111,036 m3 of sewage as compared to 46,746 m3 during FY 2012-13. The increase is mainly attributed to the increased contractor workforce in the Rajasthan block.

DRILLING WASTE(cubic meters)


HIGHLIGHTS FROM NEXT YEAR’S SUSTAINABILITY REPORTCairn is embarking on an ambitious plan to maximize its oil extraction. Our 10-3-300 plan will see us attempt to achieve 10 billion barrels of oil equivalent in place, 3 billion barrels of oil equivalent realized, and 300,000 barrels per day of production. To achieve this target we will take the help of scenario-based integrated plans and set-up tracking / reviews that support implementation of best practices and enhance performance to world class standards by deploying cutting-edge technologies.

We will also venture into new extraction technologies such as hydraulic fracturing, which has the potential to change our production volumes, our environmental footprint and alter the social contract with the communities where we operate.

In this context, it will become a business imperative to embed sustainability performance metrics in our decision-models and processes. We will look to our Sustainability Steering Committee to provide the company guidance on how to move ahead in a sustainable manner.

However, given the nature of our expansion plan, we anticipate that our environmental performance metrics will show noticeable declines. We also anticipate that our formidable safety record will be tested. But forewarned is forearmed and we are putting in place systems and processes to bolster our existing infrastructure. We will be monitoring our performance closely to ensure that we do not see significant declines in our sustainability performance.

FY 2014-15 will also see the company re-visit our CSR and local sourcing strategies in light of the revised Company’s Bill, which recommends companies to spend at least 2% of their 3-year average profit-after-tax on community and CSR initiatives.

Lastly, sustainability performance can only be driven if we effectively engage with our employees, contractors and vendor partners. We will continue our campaign to help our internal stakeholders understand the relevance of sustainability in their daily jobs, because we strongly believe effective, sustainable, and impactful change can only begin from within.


Sustainability will continue to remain an integral part of our growth story

»

CONSOLIDATED LIST OF GRI INDICATORS

»


ENERGYEN3 (Direct energy consumption):

Unit 2013-14 2012-13 % Change

Remarks

Diesel GJ 291,585 202,295 44.13% Increase in scope of accounting: Diesel consumption of contract vehicles included this year.

Fuel Gas GJ 16,340,458 14,573,975 12.12% Increased captive energy consumption to meet the increase in hydrocarbon production.

Renewable Energy GJ 276 276 0% In the offshore platforms at the Ravva asset solar panel suffered damage due to cyclonic storms. Overall RE generation compensated by solar energy generation from new solar panels installation in the Rajasthanasset.

TOTAL GJ 16,632,319 14,776,546 12.55%

OG2 (Amount invested in Renewable energy):

Amount invested INR 11,213,734 6,400,000 75% New initiatives in renewable energy taken inRajasthan.

OG3 (Renewable energy generated):

Solar Energy MWh 74.72 72.59 2.9%

Wind Energy MWh 2.06 2.06 0%

TOTAL MWh 76.78 74.65 2.8% Refer comment on EN3 – Renewable Energy.

EN4 (Indirect energy consumption):

Electricity sourced from Grid GJ 29,749 28,901 2.93%

TOTAL ENERGY (EN3+EN4) GJ 16,662,068 14,805,447 +12.54%

Energy Intensity (total energy used/T of HC produced)

GJ/T of HC

1.452 1.419 2.33% Energy spent in combustion + flaring + venting.

Energy Intensity (energy consumed / T of HC produced)

GJ/T of HC

1.344 1.223 9.89% Energy spent in combustion only as per OGP methodology.

Increase due to increased water cut in the well fluid.

Energy Intensity based on fluid handled

GJ/m3 of fluid

0.572 0.753 (-) 24.04%

Indicator calculated based on the volume of well fluid handled (produced water+oil).

EN5 (Direct energy saved):

Direct energy saved GJ 17,709 14,032 26% Last year, we had not reported energy savings of 13,987 GJ resulting from initiatives taken to increase crude-oil evacuation pipeline capacity and had reported only 45 GJ the energy saved due to astro-timers. In FY 2013-14, energy savings arising from crude oil evacuation pipeline operation, energy efficient light bulb replacement, introduction of electric powered golf cart for internal plant movement and energy saved due to astro-timers.

CONSOLIDATED LIST OF GRI INDICATORS: ENVIRONMENT


WATEREN8 (Water withdrawal):

Source of Water Unit 2013-14 2012-13 % Change

Remarks

Ground Water (Saline) m3 11,301,451 14,037,439 (-)19.5% Decrease in void replacement water injectioninRajasthan.

Ground Water (Fresh) m3 81,277 88,252 (-)7.9% Correction in the consumption figure for FY 12-13 from 98,995 m3 to 88,252 m3.

Surface Water m3 Nil Nil -

Rain Water m3 Nil Nil -

Municipal Supply m3 34,307 31,466 9%

Total m3 11,417,035 14,157,157 -19.36%

EN9 (Water sources significantly affected by withdrawal of water):

No water sources significantly affected by withdrawal of water. Our cumulative water consumption during the entire life of Rajasthanoperationwillremainlessthan1%oftheavailablesalinegroundwaterresourcesintheregionandtheresourcebeingutilized by Cairn India is not being used by the local community due to its high salinity.

EN10 (Water Reused/Recycled):

Water recycled/reused m3 111,036 46,746 137.5% Increase in activity and manpower leading to increase in sewage generation. Note: The water recycled figure does not include the produced water recycled into the reservoir.

% of water Recycled % 0.97% 0.33% 193.9%

BIODIVERSITYEN11, EN12, EN13, EN14, OG4, EN25

We had conducted a study to map our operational areas with respect to notified environmentally sensitive locations such as notified forests / sanctuaries / reserves to understand our impact on Biodiversity using the IBAT tool. As per the study findings, none of our land owned, leased, managed or adjacent to, protected areas and areas of high biodiversity value outside protected areas.

GHG EMISSIONSEN16 (Total Direct & Indirect GHG emissions):

Unit 2013-14 2012-13 % Change

Remarks

Total Direct GHG emissions (Scope 1)

Tonnes CO

2E

1,051,144 (1,187,792)

960,303 (1,055,181)

+9.5% (+12.6%)

The GHG emission figure has increased due to gas consumption increase in captive energy generation to cater to increase in production. (Numbers in parentheses account for a 13% correction to account for fugitive emissions, leakages and other wastage in FY 2013-14 and 9.88% correction in 2012-13).

Total Indirect GHG emissions (Scope 2)

Tonnes CO

2E

7,355 7,145 +2.9%

TOTAL Tonnes CO

2E

1,058,499 (1,195,147)

967,448 (1,062,326)

+9.4% (+12.5%)

2012-13 number has been revised from 990,447 tons of CO

2e


Unit 2013-14 2012-13 % Change

Remarks

GHG Emission Intensity Tonnes CO

2E /

‘000 T HC

92.25 (104.16)

92.69 (101.78)

-0.47% (+2.3%)

EN17 (Other relevant indirect GHG emissions):

Since Scope 3 emissions are not within the boundary of the report, quantified emissions are not reported.

EN18 (GHG emissions Reductions):

GHG emissions reduced Tonnes CO

2e

93,484 20 Not compared

Last year we had reported only the GHG emission due to energy replaced through renewable and energy saved due to astro-timers. This year we are reporting in addition to the above the GHG emission reductions due to decrease in flaring and venting and energy saved as reported in EN5

OTHER AIR EMISSIONSEN19 (Ozone Depleting Substances Emissions):

Unit 2013-14 2012-13 % Change

Remarks

R-22 (CFC 11 equivalent) KG 20.88 Not reported

- R-22 = 379.66 kg; CFC 11 equivalent = 0.055

R-407 (CFC 11 equivalent) KG 0 Not reported

- R-407 = 99 kg; CFC 11 equivalent = 0

R-134a KG 0 Not reported

- R-134a = 2 kg; CFC 11 equivalent = 0

TOTAL KG 480.66 - -

EN20 (SOx, NOx and other significant air emissions):

NOx Tonnes 2,066 1,812 14.06% NOx emission for FY 2012-13 corrected to 1811.95 from 1495.40. Increase in FY 2013-14 corresponds to increase in energy consumption due to increased production

NOx Intensity (T/MMT HC produced)

T/MM T HC

180.06 173.56 3.75%

SOx Tonnes 4.46 3.94 13.2%%

SOx Intensity (T/MM T HC produced)

T/MM T HC

0.39 0.38 2.63%

VOC Tonnes 110.50 134.424 (-)17.8% VOC emission for FY 2012-13 corrected to 134.424 from 236.51

VOC Intensity (T/MM T HC produced)

T/MM T HC

9.63 12.88 (-) 25.23%

Particulate Matter Tonnes 2.69 Not reported

-



WASTE WATEREN21 (Total Water Discharge):

Unit 2013-14 2012-13 % Change

Remarks

Water discharged into the sea m3 770,585 611,338 26.0% Corresponds to increase in produced water volume at Ravva (~13.5%) and Suvali (~ 62%).

BOD mg/ltr 23.8 23.5 1.3%

COD mg/ltr 183.2 Not reported

-

TSS mg/ltr 30.4 33.0 -7.9%

Oil and Grease mg/ltr 6.79 6.75 0.6%

OG5 (Produced Water):

Total Produced Water m3 17,008,245 8,276,344 106% DuetoincreaseinwatercutinRajasthanfields (Mangala and Bhagyam)

ProducedWaterRe-injected m3 16,323,926 7,898,051 107%

Produced Water Discharged (after treatment in ETP)

m3 684,319 378,294 80.9% Refer to comment in EN21

Hydrocarbon discharged within produced water

Kg 4,549 2,308 97.1% Due to increase in volume of produced water discharged to sea in Ravva & Suvali

WASTEEN22 (Total Waste generated):

Unit 2013-14 2012-13 % Change

Remarks

Hazardous Waste Tonnes 1,526 1,584 -3.64%

Non-Hazardous Waste Tonnes 1,028 318 223%

OG7 (Drilling Waste):

Drilling Waste (Drill Mud + Drill Cuttings)

Tonnes 41,677 Not report-ed

-

EN24 (Waste deemed hazardous under Basel Convention):

Cairn does not transport any waste internationally nor do we import it from any other country.

SPILLSEN23 (Number & Volume of significant spills):

Unit 2013-14 2012-13 % Change

Remarks

No. of spills Number 3 0 -

Volume of spills Litres 571 0 -

Out of the 3 spills, one spill was significant as the volume spilled was 400 litres (Significant spill for Cairn is any spill greater than 1 barrel = ~159 litres of oil). Spill Details: Light Crude Oil was spilled on blender and CTM paved area at Cairn CTM in Viramgam IOCL terminal. The spill happened because pipeline isolation procedure was not followed. Spill response team was mobilized to collect and clean up the area contaminated with light crude oil. There was no impact on the local community as the spill happened within the premises of Viramgam IOCL terminal. There was no impact on environment as the spill occurred within a contained concrete paved area. The only impact was the generation of hazardous waste due to the clean-up of the area with oily cotton waste, which was later disposed of to GPCB authorized SEPPL site, Bhachau.


HYDROCARBON FLARED AND VENTEDOG6 (Volume of flared & vented hydrocarbon):

Unit 2013-14 2012-13 % Change

Remarks

HC Flared SCM Flaring is continuous

HC Continuously Flared SCM 38,469,321 62,560,986 -38.5% Reduction in flare volume in Mangala due to increased captive consumption.

HC Vented SCM 1,090,527 3,711,994 -70.6% Decrease in pigging isolation of gas line in the midstream operations.

HC Continuously Vented SCM Nil Nil Nil

OG8 (Benzene, Lead and Sulphur content in fuels):

Not applicable to Cairn India.

EN28 (Significant fines and non-monetary sanctions):

No fines or non-monetary sanctions were received in the reporting period.

EN29 (Significant environmental impacts of transporting products and materials):

Not Reported

ENVIRONMENTAL EXPENDITUREEN30 (Environment Protection Expenditure):

Unit 2013-14 2012-13 % Change

Remarks

Environmental Expenditure INR 159,067,975 74,000,000 115% Significant increase in expenditure towards greenbelt development and associated facilities

LABOUR PRACTICES AND DECENT WORKWORKFORCE BREAK-UP

LA1 (Total workforce break-up):

Gender 2013-14 2012-13 % Change Remarks

Junior Management Level (Band 1)

Male 947

Break-up was not reported

-

Female 110 -

Middle Management Level (Band 2)

Male 459 -

Female 32 -

Senior Management Level (Band 3)

Male 92 -

Female 3 -

TOTAL EMPLOYEES Male 1498 1213 23.5%

Female 145 104 39.4%

Short Term Employment Con-tracts (STECs)

Male 2217

29.4%

Female 0

Direct Consultants (DCs) Male 138157

-12.1%

Female 10



Third Party Contractors (TPCs) Male 56746

1,132.6%

Female 41

Contract Workers Male 7546Not Reported

-

Female 32 -

EMPLOYEE HIRES AND TURNOVERLA2 (Employee hires and turnover break-up):

Age Group Gender 2013-14 2012-13 % Change Remarks

New Employee Hires

Less than 30Male 229 142 61%

Female 38 16 138%

30 to 50Male 189 130 45%

Female 17 5 240%

More than 50Male 38 7 443%

Female 0 0 -

Employee Turnover

Less than 30Male 41 43 0%

Female 2

30 to 50Male 65 88 22%

Female 4

More than 50Male 6 12 50%

Female 0

LA3 (Benefits provided to full-time employees only):

Life insurance, Health care/Health Insurance, Disability/Invalidity coverage, Parental leave - Maternity / Paternity, Retirement provision, Stock ownership. Some temporary employees like STECs are provided Life/Health Insurance and Disability coverage

LA4 (Employees covered by collective bargaining agreements):

Cairn India does not have a collective bargaining agreement since we are not unionised

LA5 (Minimum notice period regarding significant operational changes):

Minimum notice period is in compliance with the Industrial Dispute Act for any significant operational change as defined in GRI 3.1. In addition Cairn India follows a mutually agreeable approach in matters concerning any change in the working arrangement for any of our employees. Through mutual discussion and based on a balanced approach, a feasible solution is foundwhichmeetstheoperationalobjectivitiesandtheemployee’sconcerns.

OCCUPATIONAL HEALTH & SAFETYLA6 (Percentage of total workforce represented in formal Health & Safety committees):

We have a Health, Safety and Environment and Security (HSES) Committee in place. The committee is structured at corporate as well as site level with representation from all functions at both the site level and corporate level. The HSES committees represent 100% of our workforce.

LA7 (Rate of Injury, Lost Days) – Operations ONLY:

Gender 2013-14 2012-13 % Change

Remarks

Reportableinjuries

Male 14 12 (+) 16.67%

FY 2012-13 number has been revised from 23 to 12 for the purpose of comparison based on the boundary of report. In the SR FY 12-13 we hadreportedinjuriesfortheentireorganization.

Female 0 0

CONSOLIDATED LIST OF GRI INDICATORS: LABOUR PRACTICES AND DECENT WORK


Occupational diseasesMale 0 0

Female 0 0

FatalitiesMale 0 0

Female 0 0

Lost Man Days

Male 120 113 (+) 6.20%

FY 2012-13 number has been revised from221aswehadreportedinjuriesforthe entire organization.

Female 0 0

Man-hours worked Combined 24,980,086 17,656,760 (+) 41.48%

Man-hours related to operations only; FY 2012-13 number has been corrected from 15,175,374 hours worked

Absenteeism Combined 1,042 Not Reported

Lost Day Rate - Lost days per million man-hours

Combined 4.80 6.40

InjuryRate-Injuriespermillionman-hours

Combined 0.56 0.68

Occupational Disease Rate – Occupational Diseases per million man-hours

Combined 0 0

LA8 (Programs to assist the workforce, their families or community members regarding serious diseases):

Serious Disease Name Program Recipient Education/ awareness

Counselling Prevention/ Risk Control

Treatment

RepeatedStressInjury

Workers Yes Yes Yes Yes

Worker’s families No No No NA

Community Members No No No No

Heat Stress

Workers Yes NA Yes Yes

Worker’s families No NA No No

Community Members Yes No No No

Work Related Stress

Workers Yes Yes Yes Yes

Worker’s families Yes Yes Yes Yes

Community Members No No No No

Commentary: Cairn also provides education/awareness, counselling and prevention/risk control programs to community members for serious diseases such as Cancer, Malaria/Fileria/Dengue, Lifestyle diseases, and Tuberculosis.

TRAININGLA10 (Training Data):

Total Training Hours by employee category:

Gender Unit 2013-14 2012-13 % Change Remarks


Male Hours 48,890 2,512 1,846% Rise in training hours due to 45 days continuous train-ing for management and graduate engineering trainee recruits. Program introduced this year

Female Hours 5,924 40 14,710%


Male Hours 19,012 19,168 -1%

Female Hours 1,038 584 78%

OCCUPATIONAL HEALTH & SAFETY




Male Hours 4,070 13,256 -69%

Female Hours 100 1,720 -94%

Average training hours per employee category:


Male Hours 51.63

Not Reported

-

Female Hours 53.85


Male Hours 41.42

Female Hours 32.44


Male Hours 44.24

Female Hours 33.33

LA11 (Programmes for skill management and lifelong learning):

Technical Career Architecture, Technical Capability Development, Learning Management System. For more details, refer section – ‘Training, Development’ in the report

LA12 (Percentage of employees receiving regular performance reviews):

100% of the employees receive performance and career development reviews, irrespective of their gender.

DIVERSITY & EQUAL OPPORTUNITYLA13 (Workforce and Governance Body break-up as per gender, age group, minority groups):

Employees (Gender disaggregated data):

Gender Unit 2013-14 2012-13 % Change Remarks


Male No. 947

Break-up Not Reported

Female No. 110


Male No. 459

Female No. 32


Male No. 92

Female No. 3

Governance Body – Board (Gender disaggregated data):

Board of DirectorsMale No. 7 7

Female No. 1 1

Employees break as per age group:

Age Group Unit 2013-14 2012-13 % Change Remarks


Under 30 No. 543 Not Reported

30 to 50 No. 504

Over 50 No. 10


Under 30 No. 18

30 to 50 No. 437

Over 50 No. 36


Under 30 No. 0

30 to 50 No. 54

Over 50 No. 41


DIVERSITY & EQUAL OPPORTUNITYGovernance Body – Board (Age disaggregated data):

Board of Directors

Less than 30 No. 1 1

30 to 50 No. 0 1

More than 50 No. 7 6

Employees, by minority group:

Minority Group Unit 2013-14 2012-13 % Change Remarks


Expats No. 0

Not Reported

Non-Expats No. 1057


Expats No. 5

Non-Expats No. 486


Expats No. 21

Non-Expats No. 74

Governance Body (Board), by minority group:

Board of DirectorsExpats No. 1 1

Non-Expats No. 7 7

LA14 (Ratio of basic salary and remuneration - women to men):

Age Group Unit 2013-14 2012-13 % Change Remarks

Ratio of basic salary of women to men


Ratio 0.89 Not Reported





Ratio of remuneration of women to men


No. 0.85 Not Reported





HUMAN RIGHTSINVESTMENT & PROCUREMENT PRACTICES

HR1 (Significant investment agreements screened for human rights concerns):

Nil

HR2 (Significant suppliers, contractors screened for human rights concerns):

Nil. However, in FY 2013-14 we initiated the following steps with our vendor partners:1. Over 110 local vendors were trained on topics such as (i) Delivery management, (ii) Quality control and assurance, (iii) Regulatory compliance, (iv) Ethical behaviour and integrity, and (v) Human rights awareness.2. A questionnaire to assess the maturity level of our local vendor partners on human rights matters has been circulated. Results from the questionnaire are awaited.



NON-DISCRIMINATIONHR4 (Total number of incidents of discrimination and corrective actions taken):

Two cases were reported during the reporting period. Both the cases have been thoroughly inquired into and resolved leading to termination of the employees against whom allegations were levied.

CHILD LABOUR, FORCED & COMPULSORY LABOURHR6 (Operations and significant suppliers having significant risk of child labour) and HR7 (Operations and significant suppliers having significant risk of forced and compulsory labour):

None of our operations run the risk of child/ forced labour as there is a strict enforcement of ‘No child/forced labour’ achieved through awareness building, direct supervision, security controls, integrated audits and special third party audits.

We recognize that when it comes to work carried out at vendor facilities, especially sub-contracted works, there may a potential risk of child/forced labour practices. In order to curb these practices, vendors and contractors are required to sign Cairn India’s ‘Code of Business Ethics’ and provide an annual disclosure of compliance.

SECURITY PRACTICESHR8 (Percentage of security personnel who have received human rights training):

100% of our security personnel (including those hired from third-party contractors) have received orientation training that includes human rights concepts and components.

INDIGENOUS RIGHTSHR9 (Total number of incidents of violations involving rights of indigenous people):

Not Applicable – as none of our operations are near areas where indigenous communities are present.

ASSESSMENTHR10 (Percentage and number of operations that have been subject to human rights reviews):

No independent human rights related assessment has been carried out during the reporting period.

OG9 (Operations where indigenous communities are present and affected by activities):

None of our operations are near areas where indigenous communities are present.

REMEDIATIONHR11 (Number of grievances related to human rights):

Cairn has formulated the Internal Complaints Committee (ICC) to address internal human rights grievances. In FY 2013-14, two grievances were reported to the ICC by our staff. Both these grievances were resolved by the close of the reporting period. No grievances were carried over from the last reporting period.

CONSOLIDATED LIST OF GRI INDICATORS: HUMAN RIGHTS


SOCIETYLOCAL COMMUNITIES

SO1 (Local community engagement, impact assessments and development programs):

In FY 2013-14, we began the work for expanding our operations. As part of the process of seeking approvals from the appropriate government authorities, we held several public hearing meetings with village communities, explaining to them the environmental and social impacts of our expanded operations.

For more information, please refer to the section – ‘Engaging with local communities’

SO9 (Operations with significant potential for or actual negative impacts) & SO10 (Prevention and mitigation measures implemented)

Our employees are empowered to take corrective actions should they encounter actual or potential negative impacts to communities or operations. At a community level, our CSR team works alongside the community, our operations and our HSE teams, to understand and mitigate any actual or potential negative impacts we may be having on the community.

For more information, please refer to the section – ‘Taking Direct Action’.

OG10 (Number and description of significant disputes)

Cairn considers any dispute pending over 3 months as significant for the organization. In FY 2013-14, we faced 4 such disputes. All disputes were related to land compensation related issues.

OG11 (Number of sites that have been decommissioned)

No site has been decommissioned in the reporting period.

CORRUPTIONSO2 (Percentage and number of business units analysed for risk of corruption):

We ensure a strict adherence to our Code of Business Ethics which mitigates the risks related to corruption. For more details, please refer to the section – ‘Ensuring ethical business practices’.

SO3 (Percentage of employees trained in organization’s anti-corruption policies and procedures)

To ensure that our workforce abides by our Code of Business Ethics and follows good business practices, we undertake several policy and behaviour socializing programs around the year and across the company.

For more details, please refer to the section – ‘Socializing good conduct’.

SO4 (Actions taken in response to incidents of corruption)

There were 16 complaints related to unethical business practices. Out of these, 11 complaints have been resolved, while 5 are still under investigation.

PUBLIC POLICYSO5 (Public policy positions and participations in public policy development and lobbying):

As a company policy, Cairn India does not engage in any covert lobbying for issues of corporate interest. We need to interact with the Central and the State governments at different levels and we have clearly defined controls and methods for engaging with the government. Cairn India has a presence in international associations including the International Association of Oil & Gas Producers (OGP), and in national industry associations including the Association of Oil & Gas Operators (AOGO), Con-federation of Indian Industries (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), Associated Chambers of Commerce and Industry (ASSOCHAM) and Petroleum Federation of India (PetroFed) among others. Cairn India actively engages with these associations for the policy formulation /advancement / improvement of public good and national interest towards Energy Security, Sustainable Business Principles, Governance and Administration and Inclusive Development Policies.

SO6 (Total value of financial and in-kind contributions to political parties, politicians)

Nil

CONSOLIDATED LIST OF GRI INDICATORS: SOCIETY


COMPLIANCESO8 (Monetary value of significant fines and number of non-monetary sanctions for non-compliance with laws and regulations)

No fines or non-monetary sanctions were imposed on us during the reporting period.

INVOLUNTARY RESETTLEMENTOG12 (Operations where involuntary resettlement took place):

None

ASSET INTEGRITY AND PROCESS SAFETYOG13 (Number of process safety events, by business activity):

0 Tier 1 process safety events. 9 Tier 2 process safety events. All incidents involved spills or leakages of oil and chemicals. All have been resolved after following due process.

PRODUCT RESPONSIBILITY

CUSTOMER HEALTH & SAFETYPR1 (Life cycle stages in which health and safety impacts of products and services are assessed):

Cairn India only produces ‘processed crude’ and natural gas. The processed crude and the natural gas meet the buyer’s specification. The crude that does not meet the quality requirements is automatically routed to the offspec tank for reprocessing. Thus waste product generation and disposal is completely eliminated.

The sale of our products is regulated by the Government of India through the provisions of the ‘Production Sharing Contract’ and the sale is made to government nominated buyers. Since we do not have any direct retail customers, we are of the opinion that product responsibility aspects related to product advertising and marketing communications are not material to us.

Health and safety impacts of production/storage/disposal of crude oil/natural gas are continuously monitored. This applies to all the life cycle stages i.e. from exploration and production to delivery of the product at the respective delivery point. We have had no incidents of non-compliance with regulatory or voluntary codes concerning health and safety of our products.

A significant portion of our crude oil and natural gas is transported via pipeline. The pipeline stretches over 670 km, crossing 270 villages and 2 state boundaries. To ensure that the crude oil is transported safely, we have taken several technological measures to ensure pipeline integrity. The pipeline has been designed with “several layers of engineering” to prevent spills from occurring. In the eventuality that a spill does occur, we have deployed state-of-the-art technology that allows us to detect the exact location of the spill in real time. We have also installed cameras all along the pipeline to continuously visually monitor the pipeline.

We have also instituted a pipeline safety awareness campaign to engage with the villagers who live in the vicinity of the pipeline. The campaign is designed to inform the local villages the do’s and don’ts around our pipeline infrastructure and provide information on what steps to take in case of a breach of pipeline integrity.

PR2 (Incidents of non-compliance concerning health and safety impacts of products and services during their life cycle):

Nil

CONSOLIDATED LIST OF GRI INDICATORS: PRODUCT RESPONSIBILITY


ECONOMICECONOMIC PERFORMANCE

EC1 (Direct economic value generated and distributed):

Economic Value Generated

Unit 2013-14 2012-13 % Change Remarks

Net Sales INR Million 187,617 175,242 7%

Revenues from Financial Investments

INR Million 15,025 9,183 63.61%

Revenue from Sales of Assets INR Million 2 1,179 -99.83%

Economic Value Distributed

Operating Costs INR Million 41,060 36,933 11%

Total Payroll Expenses INR Million 2,332 698 234%

Total Benefit Costs INR Million 410 335 22.40%

Dividends to Shareholders INR Million 23,864 21,965 8.64%

Interest Payments to Providers of Loans

INR Million 0 0 -

Interest of Debts & Borrowings INR Million 150 687 -78.16%

Payment to Government INR Million 5,614 6,550 -14.30%

Community Investments INR Million 477 209 127%

Economic Value Retained

Economic value retained INR Million 128,737 118,228 8.88%

EC2 (Financial implications and other risks and opportunities due to climate change):

Response remains same as last year.

Cairn India’s offshore assets are vulnerable to the climate change induced severe weather events such as increased cyclonic activity in eastern and western coasts of India. This will result in increased risk to the safety and security of the installations and production down-time due to weather related impacts of cyclonic storms and resultant coastal flooding. Changes in rainfall pattern could pose a major risk in the Rajasthan asset, either due to increased probability of major flood events or severe drought.

Currently, climate change is not regarded as a significant investment risk for the retail investors in Cairn India. With Cairn India’s growth plan to be a global player in hydrocarbon exploration and production, it is likely that Cairn India’s performance on GHG emission and the mitigation and adaptation measures adopted will be a significant issue for the global investor.

EC3 (Coverage of the organization’s defined benefit plan obligations):

Our defined benefit plan for employees consists of Provident Fund (PF), Superannuation, and Gratuity. For Provident Fund, 12% of the basic salary is contributed by each employee and the same amount is matched by Cairn India. Superannuation forms 15% of the basic salary, and Gratuity contribution towards each employee is 4.81% of basic salary. We also have a Voluntary Provident Fund Scheme (VPF). The VPF Scheme is over and above the mandatory 12% PF contribution.

We have separate funds maintained for each type of employee benefit. The Gratuity and Superannuation funds are managed by Life Insurance Corporation of India (LIC), while the PF is overseen by the Regional Provident Fund Commission (RPFC), Chennai. The payment due is deposited to LIC and RPFC on a monthly basis as part of the employees’ payroll payment. Contract employees are also entitled to PF and gratuity as per their employment terms with the contractor and in accordance with labour laws.

In FY 2013-14, our contribution towards PF, Superannuation and Gratuity was INR 496.3 million.

EC4 (Significant financial assistance received from government):

We do not get any financial assistance or specific benefits from the Government of India besides those provided to the sector in general. The company is the beneficiary of a 7-year tax holiday for our Rajasthan asset that will end in FY 2015-16. The benefit received from this program is held in a Minimum Alternate Tax account and will accrue to the organization against our tax liabilities after 2015-16.

CONSOLIDATED LIST OF GRI INDICATORS: ECONOMIC


MARKET PRESENCEEC6 (Policy, practices, and proportion of spending on locally-based suppliers):

To ensure that our presence benefits the local communities where we operate, we have introduced a local content policy, which requires us to give first priority to those individuals who live in the same district as our operational sites when it comes to employing (directly or indirectly) an unskilled or semi-skilled workforce, subject to availability and project requirements. For more information, please refer to the section – ‘Engaging Local Vendors - Building Capacity’

EC7 (Procedures for local hiring and proportion of senior management hired from local community):

Cairn India has a merit-based hiring policy for our skilled employees. Individuals hired at a managerial level are categorized as national (local) and expat employees. Senior management at Cairn is represented by our Band 3 level employees. On March 31st, 2014, we had 74 national and 21 expat employees (28%) in Band 3. Our operations require a highly skilled workforce and owing to the rural nature of the regions where we operate, it is often difficult to find individuals from local communities with the requisite qualifications to be employed at our operational sites. To help develop individual skills and bridge this gap, we are in the process of establishing the Cairn Centre of Excellence (CCoE), which aims to provide vocational training programs targeted at meeting the requirements of the oil & gas industry. Once operational, we hope this initiative will accelerate the absorption of individuals into skilled positions in the oil & gas sector.

INDIRECT ECONOMIC IMPACTSEC8 (Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro-bono engagement):

In FY 2013-14 Cairn India contributed INR 477 million towards our CSR initiatives. Our focus has been to improve the quality of life for the thousands of individuals who live in the rural communities surrounding our operations.

For more information, please refer to the section – ‘CSR: Interventions to uplift communities’

EC9 (Understanding and describing significant indirect economic impacts):

We have not undertaken any formal exercise to study the indirect economic impact of our operations on the communities where we operate.

Having said that, Cairn’s influence on our stakeholders and on the communities where we operate goes beyond the immediate financial transactions with our stakeholders.

(i) Our insistence on maintaining high standards of safety, quality, and ethical behaviour has resulted in a cascading effect among our vendor partners. Over the years we have observed a marked improvement in the manner in which our vendors conduct business, which has resulted in improved quality, productivity, and safety performance. (ii) Our presence in Barmer and Ravva has resulted in a general upswing in the economic conditions of the region. More details on this transition can be found in the section – ‘Our Local Economic Impact’. (iii) Through the Cairn Enterprise Centre, we provide vocational training to members from the local community, thereby improving their employability. In FY 2013-14, we trained 950 youth out of which 760 were linked to jobs.

For more information please refer to section – ‘How Cairn India adds value to local economies.’

OG1 (Volume and type of estimated proved reserves and production):

Reserve Type Unit As on 31st Mar, 2014 As on 31st Mar, 2013

Proved and Probable (2P WI) Total Reserves

Oil MMSTB 261.98 279.57

Gas BSCF 71.26 18.58

Proved and Probable (2P WI) (Developed)

Oil MMSTB 168.22 182.38

Gas BSCF 18.27 17.17

Proved and Probable (2P WI) (Undeveloped)

Oil MMSTB 93.76 97.19

Gas BSCF 52.99 1.41

Criteria or methodologies used for calculation:

Cairn India Group's gross reserve estimates are updated annually at the very least, based on the forecast of production profiles, determined on an asset-by-asset basis, using appropriate petroleum engineering techniques. The estimates of reserves and resources have been derived in accordance with the Society for Petroleum Engineers “Petroleum Resources Management System (2007)". The changes to the reserves are generally on account of future development projects, application of technologies such as enhanced oil recovery techniques and true up of the estimates.


DISCLOSURE ON MANAGEMENT APPROACH

As an oil and gas company, Cairn India recognizes the

importance of optimal utilization and conservation of natural

resources. We believe that a comprehensive understanding

of the environmental impact of our operations is critical

and an early identification of potential environmental

and social risks is vital to the development of an effective

Environmental and Social Management plan (ESMP).

Our HSE policy calls upon the organization to comply with

all national environmental laws and regulations, prevent

environmental pollution, monitor, improve and disclose our

environmental performance, preserve biodiversity, train

and build capacity of our employees on environmental

issues, prioritize emergency preparedness, and respond to

stakeholder concerns on environmental matters.

In order to comprehensively address the impact of our

operations on the environment along with our impact on

the economy and society, we have also recently adopted a

Sustainability Policy at the corporate level.

Our operations are designed to extract hydrocarbons from

a deep sub-surface hydrocarbon reservoir. The extraction

process requires fossil fuels to power our operations and

water to help maintain the pressure of the oil and gas wells.

In addition to extracting oil, the process also results in the

generation of solid wastes including drilling waste, process

and produced waste water, and air emissions including

greenhouse gases (GHG) such as carbon dioxide and

methane.

To minimize the use of carbon-intensive fossil fuels, we use

the relatively low-carbon-content, excess associate gas,

which is released along with the crude oil, to power our

operations. We also try and minimize gas flaring and cold

venting to reduce gas wastage. The water required for our

operations and reservoir re-injection is obtained from saline

aquifers so as not to deplete the fresh water resources of the

area. All of our domestic waste water is treated and reused

to maintain the green-cover around our sites and more than

95% of the produced water is recycled as injection water.

The well pad design enables multiple well drillings from one

location, thereby reducing the requirement for large tracts of

land for locating production wells.

We benchmark our environmental performance to industry

standards compiled by the International Association of Oil &

Gas Producers (OGP). To provide a focused direction to our

biodiversity preservation initiatives, we are also members of

the International Union for Conservation of Nature (IUCN).

Our energy use and greenhouse gas emissions intensities

compare well with the performance of other oil and gas

entities in the industry. In FY 2014-15, we are targeting to

attain a greenhouse gas intensity of 100 tonnes of CO2e

/ ‘000 tonnes of hydrocarbon produced. We have also

incorporated a green cover plantation program to help meet

our compliance requirements, preserve biodiversity, prevent

soil erosion and act as a carbon sink. In the mid-term, we

plan to increase the nation’s green-cover by planting trees

on an area that is equivalent to 50% of the total land area

under our use.

To help us achieve our GHG emission intensity target, we

have made it a part of our corporate Key Performance

Indicator(s) (KPIs), which are monitored by our top

management. The land team has taken ownership of helping

us achieve our green-cover targets.

In addition, we have also established well-rehearsed

protocols in the eventuality of an oil-spill – both on-shore

and off-shore. The responsibility of implementation of these

protocols rests with the site-teams who are trained and

socialized in these protocol processes.

The responsibility for ensuring the implementation of the

Sustainability Policy lies with the top management including

the Chief Executive Officer and Board of Directors.

We have setup monitoring mechanisms to help us ensure

that we are able to sustain a high level of environmental

performance across all our sites. The compliance to ESMPs

is monitored through comprehensive compliance audits

and environmental and social monitoring programs.

We have also adopted the internationally recognized

standard on Environment Management Systems (EMS) ISO

14001:2004 and all the project sites of Cairn India are ISO

certified. Periodic inspections and audits are conducted

for monitoring the continuing implementation of these

standards.

ENVIRONMENT


To help realize the intended outcome of our environmental

and sustainability policies, we give utmost importance to

the training and raising awareness of our employees and

contract workforce on these subjects. We have conducted

multiple awareness sessions across all our sites explaining

the key environmental impacts of our operations, basics of

sustainability, the relevance of sustainability in our work and

daily life, and ways of factoring in sustainability concerns in

our decision making.

Cairn publicly discloses its environmental performance and

has been reporting its GHG emission intensity since 2002.

We have also been participating in the Carbon Disclosure

Project (CDP) since 2009 and since 2013 we have begun

publishing our Sustainability and Business Responsibility

reports.

The oil and gas industry, and particularly the E&P sector, is

complex, largely technology-driven and requires a highly-

skilled workforce to achieve consistent, safe recovery of

hydrocarbons. This is especially true as we approach the

end of the era of easy oil. The demand for a highly-skilled

workforce makes it a very competitive industry. The sector

also involves undertaking potentially hazardous activities

that can negatively impact the environment and people

across our teams and local communities.

To manage this complex business environment we have

assigned our human resources (HR) and health, safety,

environment, and quality (HSEQ) teams the responsibility

to provide a productive and safe work environment for our

employees and contract workers.

HUMAN RESOURCES

An organization depends on its team of people to drive

performance, growth and success. Cairn India has been able

to deliver consistent economic growth primarily because

of the collective efforts and excellence of its employees.

At Cairn India, we believe that employee potential must

be identified early, nurtured and provided the opportunity

to deliver and grow. The Company invests in keeping its

workforce engaged, excited and motivated. We strive

to recruit meritorious and talented personnel, build

competence and enhance skills, and provide challenging

career paths for each person in our vast team.

We are an equal opportunity employer and do not

discriminate on the basis of gender, class, caste, colour or

other such profiling parameters. Employees from different

nationalities and regions have come together to make Team

Cairn all that we are today. To clearly articulate and guide

our commitment to creating a fair and productive workplace

for our employees we have developed several HR policies

including our Code of Business Ethics, recruitment, relocation,

leave and rehire policies. We also adhere to a policy of equal

remuneration for both men and women for equal work.

We take steps to encourage merit, increase local

representation in the workforce, and provide a judicious mix

of training, development and mentorship under experienced

leaders. Most importantly, we trust our people, respect

them, and offer roles and responsibilities that encourage

professional growth. Our employee development strategies

seek to leverage the skills of our workforce to meet the

business growth requirements company and the career

growth objectives of individual employees. The Individual

Development Assessment Plan (IDAP) is a key component

of our HR process and aims to help employees evolve to

their highest potential within the company and functional

area. This program is in-built into our performance appraisal

system.

The Harvard Manager Mentor (HMM) program, is an example

of an online learning resource that has been customized

to the needs of our employees and the organization as a

whole. Our HMM modules are structured under 4 topics:

Personal Effectiveness, Leadership, Talent Management and

Communicating Effectively. This program has positively

impacted performance across management levels at Cairn

India.

We ensure that our employees get compensation and

benefits commensurate with the value of their services and

skills. Our focus is on building long-term relationships with

them. Our benefit plans for employees help cover their

financial requirements during their active working lives as

well as during the post-retirement years.

In the case of gender diversity, we do acknowledge that the

ratio of female to male employees is imbalanced and we

believe this is on account of the nature of our operations.

Cairn is striving to create an organization, work structures

and atmosphere where women feel comfortable taking on

the challenge of building a career with the company. We

are actively focusing on hiring women across management

levels and functions and are also intensifying our efforts to

ensure that we increase the number of women choosing

LABOUR PRACTICES AND DECENT WORK


DISCLOSURE ON MANAGEMENT APPROACH: LABOUR PRACTICES AND DECENT WORK

non-technical as well as technical E&P careers. We are also

making our human resources policies flexible enough to

meet specific personal requirements of women employees

such as enhanced security during late work hours,

sabbaticals, flexible working hours and re-entry into jobs, all

ensuring that the workplace is more woman friendly. Going

ahead we plan to introduce accelerated career paths for

women identified as possessing a high potential to develop

as leaders.

HEALTH & SAFETY

Health and safety are of paramount importance to the

company and we take pro-active steps to maintain the

safety of our operations. Cairn’s safety culture rests on some

key principles:-

n A shared understanding of potential hazards and safety risks;

n An inherently safe design;

n An effective and comprehensive hazard management

approach; and

n An optimal investment in Health and Safety.

Our systems need to accommodate the variable safety

standards displayed by the large number of contract

workers performing multiple activities at our sites. Their

performance and compliance with our Safety Management

System is critical to our HSE performance. Managing the

health and safety systems and processes of our contractors

and others in our supply chain is an important area of focus.

Our contracting procedures and contractor management

plans factor in HSE compliance requirements to help us

achieve our HSE objectives.

In addition to operational safety risks, vehicle accidents

are a known and familiar cause of fatalities in the oil and

gas industry. Road safety is a key issue for our business

performance, not just vis-à-vis our own team, but also

within the extended network of contract suppliers and the

community surrounding our operations sites.

Cairn India has a comprehensive Road Transport Safety

Policy and procedures in place that are implemented

across our sites and offices to minimize road accident risks.

This policy is part of the other policies within our safety

management systems. Our HSE policy is the overarching

document that guides our safety behaviour. It asks our

workforce to comply with all national laws and regulations

related to health and safety, identify hazards and risks in

order to implement mitigation controls, provide training

to all employees and contractors, foster a culture where

incidents and near miss cases are regularly reported, and

periodically test emergency management systems.

At our work-sites a constant vigil on quality throughout the

year, across all the operational assets, ensures corrective as

well as preventive action. All work is regulated through a

‘Work Permit System’. We strictly enforce safety procedures

and systems that include - Electrical Isolation, Simultaneous

Operations (SIMOPS), Job Hazard Identification, Confined

Space Entry controls, Positive Isolation, Degassing and

Nitrogen purging. An integrated electronic E-permit system

has also been introduced recently.

We have adopted a ‘Risk Based Inspection’ approach to

synchronize frequency of inspection with the criticality of

any process or equipment. Cairn India has predominantly

adopted the PAS 55 approach to asset management.

An independent asset integrity team is entrusted to take

care of asset integrity functions across all our assets. The

annual maintenance plan and life cycle plan is chalked out

meticulously for each piece of equipment and for every

instrument. A corrosion coupon system is extensively being

used to monitor the corrosion rate of our materials and

equipment.

HUMAN RIGHTS

At Cairn India we understand that human rights must be

advanced and protected not only through legal compliance

but by keeping the spirit of rights and justice at the forefront

of all that we approach, plan and implement.

We are dedicated to maintaining the highest standards

of ethical governance, to upholding and protecting

human rights, to respecting the rights and dignity of

every stakeholder, and to promoting an inclusive growth


SOCIETY

Cairn India has a history of developing linkages, relationships

and interfaces between the business community and civil

society. We are proactive in engaging with communities and

stakeholders using multiple platforms and opportunities,

some formalized and others in the nature of informal

dialogue and interaction. The goal has been to arrive at

a collective vision and joint implementation of plans and

programs to make the concept of ‘partners in prosperity’ a

reality for all.

Cairn strives to make a positive social impact across

geographical areas and developmental needs. Corporate

Social Responsibility (CSR) is an integral part of the way

in which we conduct our business. In fact, it is integral to

our perception of ourselves as corporate citizens. It is our

conviction that business growth is only sustainable when

communities and company stakeholders prosper as the

result of our business operations and conduct. CSR in Cairn

is not viewed as philanthropy but as a logical and strategic

choice based on our 3R ideology - 'Respect, Relationships

and Responsibility'.

Cairn follows an integrated approach towards social

development primarily comprising:

n Community Engagement Cells: Set up at different

locations to encourage one-on-one contact with

members of the local community to address any

grievances and stay in tune with the pulse of the

population. These cells also facilitate hiring of local

labour, vehicles and equipment for which we follow a

clear, systematic and transparent process.

n Community Development Programs: Focused on overall

socio-economic development, our target is to reach

all households in our area to ensure inclusive growth.

This we seek to achieve through interventions in health,

education, youth skills training and employment and

farm-based and other livelihood projects.

n Local Vendor Development: Promotion and

development of local vendors enables massive economic

benefits for the local population. To facilitate this,

we have institutionalized a process that incorporates

multiple components including a Vendor Development

Cell, our Local Content Policy, HSE, training focused on

Quality Control and management and recognition of

Good Practice.

n Local Employment Strategy: Defines the measures to

be taken to make equal opportunities available to the

local population through the implementation of the

Procurement Supply Chain Management (PSCM) Policy

for Local Content. The vendor and local contractor

selection criteria are such that they ensure the availability

of economic opportunities to the local community.

The contracting process is undertaken in a transparent

manner. It is aimed at benefiting those who have been

model. Human rights tenets are at the core of our Code of

Business Ethics, Sustainability Policy and CSR policy. These

policies set out our commitment as an employer, and as a

responsible member of the global business community, to

fair and non-discriminatory practices.

We have included assessment of human rights issues as

part of the gated-process that we adopt for our projects.

We have a zero-tolerance policy towards child and forced

labour. We do not operate within or near any habitats with

indigenous people and the issues related to these operating

circumstances are not among the challenges we have

faced so far. We ensure that our suppliers, contractors, and

business partners are sensitized to human rights issues

and that they declare their acceptance and monitor their

adherence to human rights affirmative standards, processes

and parameters.

In case of a grievance raised by any member of our

organization or of the local community, Cairn India has

formalized processes and systems for grievance resolution.

At our sites we have stakeholder engagement and grievance

cells to oversee any complaints that may be received

from the local community. We have also setup an Ethics

Committee (overseen by the Company Secretary), which

looks into cases of human rights violation by the company,

its employees, and its suppliers and contractors. For our

employees, an Internal Complaints Committee overseen by

our Human Rights department, has also been established to

investigate harassment and alleged rights violations.

Within the organization, induction and HSE trainings include

discussions on human rights issues including child labour,

gender and caste based discrimination, working conditions

and facilities for workers - and the broader understanding of

the sustainability policy as applicable to the individual’s roles

and responsibilities.


DISCLOSURE ON MANAGEMENT APPROACH: SOCIETY

contributors of land as a first priority target group and the

local communities thereafter. However, compliance with

our HSE requirements is mandatory. Focused efforts are

taken to improve employability of the local community

through skill and vocational development initiatives.

At Cairn we continually evaluate our interventions for impact

and conduct periodic impact assessment studies. Most of

our past research has shown a trend of improvement in the

socio-economic status of the communities impacted by our

business and operations.

As noted by IFC in their document ‘Environmental and Social

Review Summary’ focusing on Cairn India, “The Cairn India

Group Framework Land Acquisition and Compensation Plan

(LACP) outlines the principles and guidelines being followed

in acquiring land/ROU for any of the Group’s operations in

India and in providing associated compensation covering loss

of the use of land, physical displacement, impacts to assets

such as built structures, seasonal and perennial crops and

impacts to livelihoods and economic displacement.”

The land acquisition and compensation process is generally

undertaken in accordance with the following methods of

acquisition, depending on the project specific requirements:

n Permanent land acquisition in accordance with the Land

Acquisition Act

n Permanent land acquisition through direct negotiation

with land owners

n Temporary land acquisition in accordance with the

direction of the Government Revenue Department

n Temporary land acquisition through direct lease

arrangement with land owners

n Right of User (ROU) acquisition in accordance with the

Petroleum and Minerals Pipeline (Acquisition of Right of

User Inland) Act, 1962

None of the land acquired till date has required any

involuntary resettlement of people. Our Land Acquisition

and Compensation Framework document provides direction

and guidance on dealing with such situations if and when

they arise. Our approach is based on fair and equitable

justice in all such dealings, upholding the intent and spirit of

applicable legislation in dealing with voluntary or involuntary

resettlement.

Cairn is committed to conducting business within a strongly

ethical framework and has a zero-tolerance approach

towards any incident of breach of ethics. Cairn has adopted

a strict Code of Business Ethics and all our employees,

vendors and suppliers are required to abide by this code. We

have constituted an Ethics Committee as well as an internal

audit team to address any cases of corruption that are

brought to our notice.

As a company policy, we do not engage in any covert

lobbying for issues of corporate interest. We need to

interact with the Central and the State governments at

different levels and we have clearly defined controls and

methods for engaging with the government. We have

mapped and assigned responsibilities for Cairn India

officials for interaction with each level of government. All

these are strictly under the monitoring overview of top

management. Cairn India has a presence in the International

Association Oil and Gas Producers (OGP), and in national

industry associations like the Association of Oil & Gas

Operators (AOGO), Confederation of Indian Industries (CII),

Federation of Indian Chambers of Commerce and Industry

(FICCI), Associated Chambers of Commerce and Industry

(ASSOCHAM) and Petroleum Federation of India (PetroFed)

among others. The company actively engages with these

associations for the policy formulation /advancement /

improvement of public good and national interest aiming at

Energy Security, Sustainable Business Principles, Governance

and Administration and Inclusive Development Policies. We

actively contribute to and work closely with the industry

associations and the government to arrive at informed policy

decisions.

STAKEHOLDER ENGAGEMENT

Consistent dialogue with stakeholders is essential for many

reasons but particularly so for assessing emerging risks and

identifying potential solutions and opportunities. At Cairn we

employ formal and informal processes to engage with our

stakeholders. Each department is responsible for ensuring

that there is continuous and effective engagement with their

primary internal and external stakeholders during the course

of their daily operations.


INTERNAL STAKEHOLDER ENGAGEMENT

Cairn has developed several formal communication

channels to ensure that information about evolving ground

realities reaches the organization’s decision-makers in a

timely manner. Internal channels of communication include

town hall meetings, daily leadership update forums, HSE

leadership and Sustainability Steering Committee meetings,

site-level risk sub-committees, employee engagement

surveys, incidents reporting through the Cairn Incident

Management System (CIMS), and the various engagement

forums at site – both formal and informal. This allows us to

keep a finger on the pulse of day-to-day functioning and

relationship with our employees and contract workforce.

EXTERNAL STAKEHOLDER ENGAGEMENT

DIRECT CHANNELS

Risks and opportunities also exist and evolve in the external

environment and we have several formal channels to engage

with our key external stakeholders. The company has well-

defined structures for conducting formalized dialogues with

them.

INDIRECT CHANNELS

Industry conferences, associations with industry bodies

such as Association of Oil and Gas Operators (AOGO), CII,

FICCI, and ASSOCHAM, feedback received at the Cairn

Enterprise Centre and employee experience form the basis

of the indirect external stakeholder feedback received by the

company.

Collectively, our internal engagement forums and our direct

and indirect channels of interaction with stakeholders

help us identify key issues that impact the organization.

This provides relevant information to senior management

enabling strategic planning and timely and effective

decisions.

STAKEHOLDER ENGAGEMENT MECHANISMSTAKEHOLDER MODE OF ENGAGEMENT FREQUENCY OF ENGAGEMENT

JV Partners and Directorate of Hydrocarbons

Operational Committee (OC), Technical Committee (TC), and Management Committee (MC) meetings.

Quarterly, Annually.

Suppliers, Vendors, and Contractors Tender process, Workshops, Annual Conferences.

At time of EOI, bidding process, pre-mobilization. Daily after signing of contract. Quarterly, annually – as applicable.

Employees Training, Townhall meetings, HSE leadership tours, Awareness sessions, Road shows, Campaigns, Celebrations of National Safety Day, Environmental Day.

Monthly, quarterly, annually - as applicable.

Media Press releases, AGM, 1:1 interviews As needed.

Investors Telephone, Email, Webex, One-on-one meetings, Group meetings, Website, Corporate Presentation, Quarterly press releases, Quarterly earnings presentation, Quarterly earnings call, Annual report, Site visits, Road shows, Investor conferences.

Average 6 interactions/week over the last 6 months (Buy side + Sell side).

Regulators (DGMS, MoEF, PCB, etc.) Meetings, Conferences, Applications. As per business requirement.

Industry Groups (CII, ASSOCHAM, FICCI, AOGO, PetroFed

Conference, Mutual aid schemes.

Regular consultations with key stakeholders, multiple meetings, presence in Strategic forums.

As per opportunity; On-going basis.

District Administration Interaction with various departmental heads and the district collector.

Weekly.

Panchayati Raj Institution During the village meeting and discussion with the Zila Parishad.

Weekly.

Local Community Engagement Cell, community meetings, informal and formal interaction with local community.

Daily.

Civil Society Organizations One on one interaction, formal and informal discussions etc..

Partner NGOs - weekly; New NGOs - As may be required and as appropriate.

Cairn India is the fastest growing energy company in the world,

»


G3.1 CONTENT INDEX - OIL & GAS SECTOR SUPPLEMENTApplication Level B+ Third-party-checked Assured

byDNV-GL

STANDARD DISCLOSURES PART I: Profile Disclosures

1. Strategy and Analysis

Profile Disclosure

Disclosure Level of reporting

Location of disclosure For partially reported disclosures, indicate the part not reporter

Reason for omis-sion

Explanation for the reason for omission

1.1 Statement from the most senior decision-maker of the organization.

Fully Notes from the CEO's office; Page 4

1.2 Description of key impacts, risks, and opportunities.

Partially Aligning Business to Material Issues; Page 20, Annual Report 2013-14; Page 44, Sustainability Report 2012-13; Page 32

Impact on sustainability trends, risks and opportu-nities is under analysis

Does not exist

Will be reported fully by 2015-16.

2. Organizational Profile

Profile Disclosure


Location of disclosure For partially reported disclosures, indicate the part not reporter



2.1 Name of the organization. Fully Cairn India Limited

2.2 Primary brands, products, and/or services.

Fully Annual Report 2013-14; Page 100

2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, andjointventures.

Fully Annual Report 2013-14; Page 28-30

2.4 Location of organization's headquarters.

Fully About Cairn India;Page 1

2.5 Number of countries where the organization operates, and names of countries witheithermajoropera-tions or that are specifically relevant to the sustaina-bility issues covered in the report.

Fully About Cairn India;Page 1

2.6 Nature of ownership and legal form.


2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).


2.8 Scale of the reporting or-ganization.

Fully About Cairn India; Page 1 Organizational Structure;Page 8

GRI INDEX


Profile Disclosure


Location of disclosure For partially reported disclosures, indicate the part not reported



2.9 Significant changes during the reporting period regarding size, structure, or ownership.

Fully Organizational Structure;Page 8

2.10 Awards received in the reporting period.

Fully Awards; Page 10

3. Report Parameters

3.1 Reporting period (e.g., fiscal/calendar year) for information provided.

Fully FY 2013-14

3.2 Date of most recent previ-ous report (if any).

Fully FY 2012-13

3.3 Reporting cycle (annual, biennial, etc..)

Fully Annual

3.4 Contact point for questions regarding the report or its contents.

Fully The People Story;Page 13

3.5 Process for defining report content.

Fully About the Report;Page 9, The People Story; Page 13, Advancing the Sustainability Agenda; Page 16

3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facili-ties,jointventures,suppli-ers). See GRI Boundary Pro-tocol for further guidance.

Fully Organizational Structure, Report Scope & Bound-ary;Page 8

3.7 State any specific limi-tations on the scope or boundary of the report (see completeness principle for explanation of scope).


3.8 Basisforreportingonjointventures, subsidiaries, leased facilities, outsourced operations, and other en-tities that can significantly affect comparability from period to period and/or between organizations.


3.9 Data measurement tech-niques and the bases of calculations, including as-sumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indi-cator Protocols.

Fully Measurement Methodology; Page 9

GRI INDEX: REPORT PARAMETERS


Profile Disclosure



Reason for omission


3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the rea-sons for such re-statement (e.g.,mergers/acquisitions, change of base years/pe-riods, nature of business, measurement methods).

Fully Measurement Methodology; Page 9Re-statement of informa-tion, wherever applicable, is provided at the relevant section along with its effect and reason.

3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.

Fully None

3.12 Table identifying the location of the Standard Disclosures in the report.

Fully GRI Index; Page 103

3.13 Policy and current practice with regard to seeking external assurance for the report.

Fully Assurance Strategy; Page 9

4. Governance, Commitments, and Engagement

4.1 Governance structure of the organization, includ-ing committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.

Fully Governance Structure, Cairn's Sustainability Report 2012-13; Page 22-25

4.2 Indicate whether the Chair of the highest gov-ernance body is also an executive officer.

Fully Governance Structure, Cairn's Sustainability Report 2012-13; Page 23

4.3 For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members.


4.4 Mechanisms for share-holders and employees to provide recommendations or direction to the highest governance body.


GRI INDEX: REPORT PARAMETERS


Profile Disclosure



Reason for omission


4.5 Linkage between compen-sation for members of the highest governance body, senior managers, and exec-utives (including departure arrangements), and the organization's performance (including social and envi-ronmental performance).

Fully Governance Structure, Cairn's Sustainability Re-port 2012-13; Page 22

4.6 Processes in place for the highest governance body to ensure conflicts of inter-est are avoided.


4.7 Process for determining the composition, qualifica-tions, and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity.


4.8 Internally developed state-ments of mission or values, codes of conduct, and prin-ciples relevant to economic, environmental, and social performance and the status of their implementation.

Fully Principles and Policies, Cairn's Sustainability Re-port 2012-13; Page 28

4.9 Procedures of the highest governance body for over-seeing the organization's identification and manage-ment of economic, environ-mental, and social perfor-mance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of con-duct, and principles.


4.10 Processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental, and social performance.

Not Does not exist

GRI INDEX: GOVERNANCE, COMMITMENTS, AND ENGAGEMENT


Profile Disclosure



Reason for omission


4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organi-zation.

Partially Cairn India understands that our impact of en-vironmental assets and social systems can have adverse consequences if not managed at the com-mencement of operations. It is this thinking that resulted in the company sourcing our water from saline water sources, despite the additional pu-rification expenses for our RO plants. For our Mangla Development Pipeline, we made the decision to re-route the pipeline to avoid passing through wildlife habitats in the Rann of Kutch. This demonstrates our precautionary ap-proach

4.12 Externally developed eco-nomic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.

Fully Cairn's Sustainability Report 2012-13:Principles and Policies, Page 28; Environment Sustainability Page 50; Worker safety, Page80;

4.13 Memberships in associa-tions (such as industry as-sociations) and/or national/international advocacy organizations in which the organization: * Has posi-tions in governance bodies; *Participatesinprojectsor committees; * Provides substantive funding beyond routine membership dues; or * Views membership as strategic.

Fully Cairn Sustainability Report 2012-13: Industry Associations; Page 27

Cairn Sustainability Re-port 2013-14: Engaging with Regulators; Page 60

4.14 COMM

List of stakeholder groups engaged by the organiza-tion.

Fully Listening to our Stake-holders; Page 17

4.15 Basis for identification and selection of stakeholders with whom to engage.

Fully Cairn's Sustainability Re-port 2012-13: Stakeholder Engagement; Page 34

4.16 Approaches to stakehold-er engagement, including frequency of engagement by type and by stakeholder group.

Fully Listening to our Stake-holders; Page 17

GRI INDEX: GOVERNANCE, COMMITMENTS, AND ENGAGEMENT


Profile Disclosure



Reason for omission


4.17COMM

Key topics and concerns that have been raised through stakeholder engagement, and how the organization has respond-ed to those key topics and concerns, including through its reporting.

Fully Material Issues: Environment; Page 21,Material Issues: Social; Page 27,Material Issues: Economic; Page 32

STANDARD DISCLOSURES PART II: Disclosures on Management Approach (DMAs)

G3.1 OGSS DMAs



Reason for omission

Expla-nation for the reason for omis-sion

To be report-ed in

DMA EC Disclosure on Management Approach EC

Aspects

Economic performance Fully Annual Report 2013-14; Page 78

Market presence, including local content

Fully Engaging Local Vendors; Page 38

Indirect economic impacts Partially Consolidated List of GRI Indicators - EC9; Page 97

Financial impact

Not available

2017

Reserves Not Propri-etary informa-tion

DMA EN Disclosure on Management Approach EN

Aspects

Materials Not Not ma-terial

2016

EnergyCOMM

Fully Disclosure on Management Approach – Environment; Page 98

Water Fully Disclosure on Management Approach – Environment; Page 98

Ecosystem services includ-ing biodiversity


Emissions, effluents and waste


Products and services Not Not available

2016

Compliance Fully Disclosure on Management Approach – Environment; Page 98

GRI INDEX: DISCLOSURE ON MANAGEMENT APPROACH


Aspects

Transport Not Not available

2016

Overall Fully Disclosure on Management Approach – Environment; Page 98

DMA LA Disclosure on Management Approach LACOMM

Aspects

Employment Fully Disclosure on Management Approach – Labour Practices and Decent Work; Page 99

Labour/management relations

Fully Disclosure on Management Approach – Labour Practices and Decent Work; Page 99

Occupational Health and Safety

COMM


Training and education Fully Disclosure on Management Approach – Labour Practices and Decent Work; Page 99

Diversity and equal oppor-tunity


Equal remuneration for women and men


DMA HR Disclosure on Management Approach HR

Aspects

Investment and procure-ment practices

Not Not available

2016

Non-discrimination Fully Disclosure on Management Approach - Human Rights; Page 100

Freedom of association and collective bargaining

Fully Disclosure on Management Approach - Human Rights; Page 100

Child labour Fully Disclosure on Management Approach - Human Rights; Page 100

Prevention of forced and compulsory labour


Security PracticesCOMM


Indigenous rightsCOMM


Assessment Fully Disclosure on Management Approach - Human Rights; Page 100

Remediation Fully Disclosure on Management Approach - Human Rights; Page 100



DMA SO Disclosure on Management Approach SO

Aspects

Local communitiesCOMM

Fully Disclosure on Manage-ment Approach - Society; Page 101

CorruptionCOMM

Fully Disclosure on Manage-ment Approach - Society; Page 102

Public policy Fully Disclosure on Manage-ment Approach - Society; Page 102

Anti-competitive behaviour Not Not ap-plicable

Compliance Fully Disclosure on Manage-ment Approach - Society; Page 102

Emergency preparedness Fully Disclosure on Manage-ment Approach - Labour; Page 100

Involuntary resettlement Fully Disclosure on Manage-ment Approach - Society; Page 102

Asset integrity and process safety

Fully Disclosure on Manage-ment Approach - Labour; Page 100

DMA PR Disclosure on Management Approach PR

Aspects

Customer health and safety Fully Consolidated List of GRI Indicators - PR1; Page 95

Product and service label-ling

Not Not ap-plicable

Marketing communications Not Not ap-plicable

Customer privacy Not Not ap-plicable

Compliance Not Not ap-plicable

Fossil fuel substitutes Not Not ap-plicable

STANDARD DISCLOSURES PART III: Performance Indicators

Economic

Economic performance

EC1COMM

Direct economic value gen-erated and distributed, in-cluding revenues, operating costs, employee compen-sation, donations and other community investments, retained earnings, and pay-ments to capital providers and governments.

Fully A Company with an Inclu-sive Growth Model; Page 36, Page 96

EC2COMM

Financial implications and other risks and opportuni-ties for the organization's activities due to climate change.

Partially Consolidated List of GRI Indicators - EC2; Page 96

Financial Implications

2016



Economic performance

EC3 Coverage of the organiza-tion's defined benefit plan obligations.

Fully Consolidated List of GRI Indicators - EC3; Page 96

EC4 Significant financial assistance received from government.


Market presence

EC6COMM

Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.

Fully Consolidated List of GRI Indicators - EC6; Page 97, Engaging Local Vendors - Building Capacity; Page 38

EC7COMM

Procedures for local hiring and proportion of senior management hired from the local community at signif-icant locations of operation.


Indirect economic impacts

EC8COMM

Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engage-ment.

Fully CSR: Interventions to Uplift Communities; Page 40, Consolidated List of GRI Indicators - EC8; Page 97

EC9COMM

Understanding and describ-ing significant indirect eco-nomic impacts, including the extent of impacts.


OG1 Volume and type of esti-mated proved reserves and production.

Fully Consolidated List of GRI Indicators - OG1; Page 97

Environmental

Energy

EN3 Direct energy consumption by primary energy source.

Fully Total Energy Consumption; Page 70, Consolidated List of GRI Indicators - EN3; Page 84

EN4 Indirect energy consump-tion by primary source.

Fully Total Energy Consumption; Page 70, Consolidated List of GRI Indicators - EN4; Page 84

OG2 Total amount invested in renewable energy.

Fully Renewable Energy; Page 75, Consolidated List of GRI Indicators - OG2; Page 84

OG3 Total amount of renewa-ble energy generated by source.

Fully Renewable Energy; Page 75, Consolidated List of GRI Indicators - OG3; Page 84

EN5 Energy saved due to con-servation and efficiency improvements.

Fully Energy Conservation & Renewable Energy Deployment; Page 71, Consolidated List of GRI Indicators - EN5; Page 84

GRI INDEX: PERFORMANCE INDICATORS - ECONOMICS


Energy

EN7 Initiatives to reduce indirect energy consumption and reductions achieved.

Not Not available

Need to es-tablish ac-count-ing mech-anisms

2016

Water

EN8COMM

Total water withdrawal by source.

Fully Managing our water footprint; Page 76, Consolidated List of GRI Indicators - EN8; Page 85

EN9COMM

Water sources significantly af-fected by withdrawal of water.

Fully Consolidated List of GRI Indicators - EN9; Page 85

EN10 Percentage and total vol-ume of water recycled and reused.

Fully Water Recycled/Reuse; Page 78, Consolidated List of GRI Indicators - EN10; Page 85

Biodiversity

EN11 Location and size of land owned, leased, managed in,oradjacentto,protect-ed areas and areas of high biodiversity value outside protected areas.

Fully Consolidated List of GRI Indicators - EN11, EN12, EN13, EN14, OG4, EN25; Page 85

EN12 Description of signifi-cant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.


EN13 Habitats protected or restored.


EN14COMM

Strategies, current actions, and future plans for manag-ing impacts on biodiversity.


OG4 Number and percentage of significant operating sites in which biodiversity risk has been assessed and monitored.



EN16COMM

Total direct and indirect greenhouse gas emissions by weight.

Fully Energy, Afforestation & Climate Change; Page 73, Consolidated List of GRI Indicators - EN16; Page 85

GRI INDEX: PERFORMANCE INDICATORS - ENVIRONMENT


EN17COMM

Other relevant indirect greenhouse gas emissions by weight.

Not Total weight of Indirect GHG emis-sions

Not available


2016

EN18COMM

Initiatives to reduce green-house gas emissions and reductions achieved.


Total weight of Indirect GHG emis-sions

Not available


2016

EN19 Emissions of ozone-deplet-ing substances by weight.


EN20COMM

NOx, SOx, and other signif-icant air emissions by type and weight.


EN21 Total water discharge by quality and destination.

Fully Produced and Waste Wa-ter; Page 80, Consolidat-ed List of GRI Indicators - EN21; Page 87

EN22COMM

Total weight of waste by type and disposal method.

Fully Solid Waste; Page 79, Consolidated List of GRI Indicators - EN22; Page 87


OG5 Volume of formation or produced water.

Fully Produced and Waste Wa-ter; Page 80, Consolidat-ed List of GRI Indicators - OG5; Page 87

EN23COMM

Total number and volume of significant spills.


OG6 Volume of flared and vent-ed hydrocarbon.

Fully Total Flaring and Venting; Page 70, Consolidated List of GRI Indicators - OG6; Page 88

OG7 Amount of drilling waste (drill mud and cuttings) and strategies for treatment and disposal.

Fully Drilling Waste; Page 80, Consolidated List of GRI Indicators - OG7; Page 87

EN24 Weight of transported, im-ported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percent-age of transported waste shipped internationally.


EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significant-ly affected by the reporting organization's discharges of water and runoff.


GRI INDEX: PERFORMANCE INDICATORS - ENVIRONMENT


Products and services

OG8 Benzene, Lead and Sulphur content in fuels.

Not Consolidated List of GRI Indicators - OG8; Page 88

Not ap-plicable

Compliance

EN28 Monetary value of signifi-cant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.


Transport

EN29 Significant environmental impacts of transporting products and other goods and materials used for the organization's operations, and transporting members of the workforce.

Not Not available


2015

Overall

EN30 Total environmental pro-tection expenditures and investments by type.


Social: Labour Practices and Decent Work

Employment

LA1 Total workforce by employ-ment type, employment contract, and region, bro-ken down by gender.

Fully Consolidated List of GRI Indicators - LA1; Page 88

LA2 Total number and rate of new employee hires and employee turnover by age group, gender, and region.


LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by majoroperations.


LA15 Return to work and reten-tion rates after parental leave, by gender.

Not Not available

Infor-ma-tion pend-ing

2015

Labour/management relations

LA4 Percentage of employees covered by collective bar-gaining agreements.


LA5 Minimum notice period(s) regarding significant oper-ational changes, including whether it is specified in collective agreements.


GRI INDEX: PERFORMANCE INDICATORS - LABOUR PRACTICES AND DECENT WORK


Occupational health and safety

LA6 Percentage of total work-force represented in formal jointmanagement-workerhealth and safety commit-tees that help monitor and advise on occupational health and safety programs.


LA7COMM

Ratesofinjury,occupation-al diseases, lost days, and absenteeism, and number of work-related fatalities by region and by gender.

Fully Our Safety Performance; Page 63, Consolidated List of GRI Indicators - LA7; Page 89

LA8 Education, training, coun-selling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.


Training and education

LA10 Average hours of training per year per employee by gender, and by employee category.

Fully Training Data; Page 52, Consolidated List of GRI Indicators - LA10; Page 90

LA11 Programs for skills manage-ment and lifelong learning that support the continued employability of employees and assist them in manag-ing career endings.

Partially Development; Page 53, Consolidated List of GRI Indicators - LA11; Page 91

Information on managing career endings

Not available

2014

LA12 Percentage of employees receiving regular perfor-mance and career develop-ment reviews, by gender.


Diversity and equal opportunity

LA13 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.


Equal remuneration for women and men

LA14 Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation.


GRI INDEX: PERFORMANCE INDICATORS - LABOUR PRACTICES AND DECENT WORK


Social: Human Rights

Investment and procurement practices

HR1 Percentage and total num-ber of significant invest-ment agreements and con-tracts that include clauses incorporating human rights concerns, or that have undergone human rights screening.

Fully Consolidated List of GRI Indicators - HR1; Page 92

HR2 Percentage of significant suppliers, contractors and other business partners that have undergone hu-man rights screening, and actions taken.


Non-discrimination

HR4 Total number of incidents of discrimination and cor-rective actions taken.


Child labour

HR6 Operations and significant suppliers identified as having significant risk for incidents of child labour, and measures taken to contribute to the effective abolition of child labour.

Partially Consolidated List of GRI Indicators - HR6, HR7; Page 93

Prevention of forced and compulsory labour

HR7 Operations and signifi-cant suppliers identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of all forms of forced or compulsory labour.

Partially Consolidated List of GRI Indicators - HR6, HR7; Page 93

Security practices

HR8COMM

Percentage of security personnel trained in the organization's policies or procedures concerning as-pects of human rights that are relevant to operations.


Indigenous rights

HR9COMM

Total number of incidents of violations involving rights of indigenous people and actions taken.


Assessment

HR10 Percentage and total num-ber of operations that have beensubjecttohumanrights reviews and/or im-pact assessments.


GRI INDEX: PERFORMANCE INDICATORS - HUMAN RIGHTS


OG9 Operations where indig-enous communities are present or affected by ac-tivities and where specific engagement strategies are in place.


Remediation

HR11 Number of grievances re-lated to human rights filed, addressed and resolved through formalgrievance mechanisms.


Social: Society

Local communities

SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs.

Fully Engaging with local communities; Page 56, Consolidated List of GRI Indicators - SO1; Page 94

SO9COMM

Operations with significant potential or actual negative impacts on local communities.

Fully Taking Direct Action; Page 57, Consolidated List of GRI Indicators - SO9, SO10; Page 94

SO10COMM

Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities.

Fully Taking Direct Action; Page 57, Consolidated List of GRI Indicators - SO9, SO10; Page 94

OG10 Number and description of significant disputes with local communities and indigenous peoples.


OG11 Number of sites that have been decommissioned and sites that are in the process of being decommissioned.


Corruption

SO2 Percentage and total number of business units analysed for risks related to corruption.

Partially Ensuring ethical busi-ness practices; Page 56, Consolidated List of GRI Indicators - SO2; Page 94

Total business units ana-lysed for risks related to corruption

2016

SO3 Percentage of employees trained in organization's anti-corruption policies and procedures.

Partially Socializing good conduct; Page 54, Consolidated List of GRI Indicators - SO3; Page 94

SO4 Actions taken in response to incidents of corruption.

Fully Ensuring ethical busi-ness practices; Page 56, Consolidated List of GRI Indicators - SO4; Page 94

GRI INDEX: PERFORMANCE INDICATORS - SOCIETY


Public policy

SO5COMM

Public policy positions and participation in public policy development and lobbying.

Fully Engaging with regulators; Page 60, Consolidated List of GRI Indicators - SO5; Page 94

SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.

Fully Consolidated List of GRI Indicators - SO6; Page 94

Compliance

SO8COMM

Monetary value of signifi-cant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

Fully Consolidated List of GRI Indicators - SO8; Page 95

Involuntary resettlement

OG12 Operations where invol-untary resettlement took place, the number of house-holds resettled in each and how their livelihoods were affected in the process.


Asset Integrity and Process Safety

OG13 Number of process safety events, by business activity.

Fully Process Safety; Page 63, Consolidated List of GRI Indicators - OG13; Page 99

Social: Product Responsibility

Customer health and safety

PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improve-ment, and percentage of significant products and servicescategoriessubjectto such procedures.

Fully Consolidated List of GRI Indicators - PR1; Page 95

PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of prod-ucts and services during their life cycle, by type of outcomes.

Fully Consolidated List of GRI Indicators - PR2; Page 95

GRI INDEX: PERFORMANCE INDICATORS - SOCIETY


NVG PRINCIPLES MAPPINGPrinciple Description Sustainability Report Reference

1Businesses should conduct and govern themselves with Ethics, Transparency and Accountability

~ Ethics, Transparency & Governance; Page 34~ Ensuring ethical business practices; Page 36~ Socializing Good Conduct; Page 54~ Governance Structure, Cairn’s Sustainability Report 2012-13; Page 22

2Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle

~ Charting a course for greater resource efficiency; Page 68~ Safety First; Page 61

3Businesses should promote the well-being of all employees

~ DMA on Labour Practices & Decent Work; Page 99~ Engaging Local Vendors; Page 38~ Training, Development & Rewards; Page 52~ Helping employees do the right thing; Page 54~ Socializing a safety culture; Page 61~ Consolidated List of GRI Indicators; Page 84

4Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized

~ Internal stakeholder engagement; Page 17~ External stakeholder engagement; Page 17~ Aligning business to material issues; Page 20~ How Cairn India adds value to local communities; Page 38~ CSR: Spending money to uplift communities; Page 40

5 Business should respect and promote human rights

~ DMA on Human Rights; Page 100~ Human Rights, Cairn’s Sustainability Report 2012-13; Page 100~ Consolidated List of GRI Indicators; Page 84~ Engaging local vendors; Page 38

6Business should respect, protect, and make efforts to restore the environment

~ DMA on Environment; Page 98~ Material Issues: Environment; Page 21~ Energy, Afforestation & Climate Change; Page 68~ Managing our water footprint; Page 76~ Handling our waste stream; Page 79

7Businesses when engaged in influencing public and regulatory policy should do so in a responsible manner

~ Governance Structure, Cairn’s Sustainability Report 2012-13; Page 22~ Engaging with regulators; Page 60

8Businesses should support inclusive growth and equitable development

~ DMA on Society; Page 101~ Material Issue: Social - CSR & Local Community Engagement; Page 30~ A Company with an inclusive growth model; Page 36~ How Cairn India adds value to local economies; Page 38

9Businesses should engage with and provide value to their customers and consumers in a responsible manner

~ External stakeholder engagement; Page 17~ Consolidated List of GRI Indicators; Page 95

NVG TO GRI LINKAGE INDEX


INDEPENDENT ASSURANCE STATEMENT

INTRODUCTION

DNV GL represented by DNV Business Assurance India

Private Limited (‘DNV GL’) has been commissioned by

the management of Cairn India Limited (‘Cairn India or

‘the Company’) to carry out an independent assurance

engagement on the Company’s Sustainability Report

2013 -14 (‘the Report’) in its printed and web formats. This

assurance engagement has been conducted against the

Global Reporting Initiative 2011 Sustainability Reporting

Guidelines Version 3.1 (GRI G3.1) and AccountAbility’s

AA1000 Assurance Standard 2008 (AA1000AS (2008)).

The verification was conducted during January-June 2013,

for the year of activities covered in the Report i.e. 1st April

2013 to 31st March 2014.

The intended users of this assurance statement are

the management of the Company and readers of the

Report. The management of Cairn India is responsible

for all information provided in the Report as well as the

processes for collecting, analysing and reporting the

information presented in the printed and web based

reports, including the maintenance and integrity of the

website. Our responsibility regarding this verification is

to the Company only and in accordance with the agreed

scope of work. The assurance engagement is based on the

assumption that the data and information provided to us

is complete and true. We expressly disclaim any liability or

co-responsibility for any decision a person or entity would

make based on this assurance statement.

SCOPE, BOUNDARY AND LIMITATIONS OF ASSURANCE The scope of work agreed upon with Cairn India includes verification of the following:

n The content of the Sustainability Report – 2013-14

i.e. Review of the policies, initiatives, practices and

performance described in the Report as well as

references made in the Report to the website and

Annual Report;

n Evaluation of the AccountAbility principles and specified

performance information, described below, for a Type

2, moderate level of assurance, in accordance with the

requirements of AA1000AS (2008) detailed below:

n Information relating to the Company’s sustainability

issues, responses, performance data, case studies

and underlying systems for the management of such

information and data;

n Information relating to the Company’s materiality

assessment and stakeholder engagement processes;

n Confirmation that the Report meets the requirements

of GRI G3.1 for an Application Level B+, as declared by

the Company.

The reporting boundary is as set out in the Report and

covers production operations from its assets in India

operations i.e. Barmer in Rajasthan, Ravva in Andhra

Pradesh, Suvali in Gujarat, and the Mangala Development

Pipeline from Barmer to Salaya; no limitations on the

scope of the assurance engagement were encountered

during the verification process. The Report excludes value

chain activities related to exploration, drilling, seismic,

projects etc. The reported data on economic performance

is based on audited financial statements by the

Company’s statutory auditors. No external stakeholders

were interviewed as part of this assurance engagement.

VERIFICATION METHODOLOGY

This assurance engagement was planned and carried

out in accordance with AA1000AS (2008) and the DNV

GL Protocol for Verification of Sustainability Reporting

(‘VeriSustain’ - www.dnv.com/moreondnv/cr/; available

on request). The Report has been evaluated against the

following criteria:

n Adherence to the principles of Inclusivity, Materiality

and Responsiveness as set out in AA1000AS

(2008) and the Reliability of specified sustainability

performance information, as required for a Type 2,

moderate level assurance engagement,

n Adherence to the additional principles of Completeness

and Neutrality as set out in VeriSustain, and

n The principles and requirements of the GRI G3.1 and

the Oil and Gas Sector Supplement (OGSS) for an

Application Level B+.


As part of the engagement, we have verified the

statements and claims made in the Report and assessed

the robustness of the underlying data management

system, information flow and controls. In doing so, we

have:

n Reviewed the Company’s approach to stakeholder

engagement and its materiality determination

process;

n Verified the sustainability-related statements

and claims made in the Report and assessed

the robustness of the data management system,

information flow and controls;

n Examined and reviewed documents, data and other

information made available by the Company;

n Visited the Head Office at Gurgaon and operational

facilities at Barmer, Rava and Suvali;

n Conducted interviews with key representatives

including data owners and decision-makers from

different divisions and functions of the Company;

n Performed sample-based reviews of the mechanisms

for implementing the Company’s sustainability related

policies, as described in the Report;

n Performed sample-based checks of the processes for

generating, gathering and managing the quantitative

data and qualitative information included in the Report.

CONCLUSIONS

Cairn India’s Sustainability Report – 2013-14, provides a fair

representation of the Company’s sustainability policies,

objectives, management approach and performance

during the reporting year. We confirm that the Report,

along with the referenced information in the website and

Annual Report, meets the general content and quality

requirements of GRI G3.1. We confirm that the Report

meets the requirements for GRI application level B+. We

have evaluated the Report’s adherence to the following

principles on a scale of ‘Good’, ‘Acceptable’ and ‘Needs

Improvement’:

Inclusivity: As a part of its stakeholder engagement

process, the Company has developed formal and informal

engagement channels for assessing the emerging risks at

its operational facilities. The responsibility for stakeholder

engagements has been assigned to respective

departments at each operational facility to identify the

stakeholder perceptions and concerns; the engagement

outcomes are validated by the top management team. In

our opinion, the level at which the Report adheres to this

principle is ‘Acceptable’.

Materiality: The materiality determination process is

based on inputs from key stakeholders including suppliers

and local community partners, and the Report focusses

its disclosures on fifteen key material aspects at macro

level for the oil and gas sector and has not missed out any

known material aspects. The management of Cairn India is

of the opinion that the reported material aspects need to

be monitored and managed on a continual basis for their

long term sustainability. In our opinion, the level at which

the Report adheres to this principle is ‘Good’.

Responsiveness: We consider that the Company has

adequately responded to identified key sustainability

aspects and challenges in the local sustainability context,

including aspects related to the oil and gas sector, within

the reporting boundary; Cairn India has implemented

management systems with sustainability as the focus,

to manage its key sustainability parameters. In our view,

the level at which the Report adheres to this principle is

‘Good’.

Reliability: The majority of data and information verified

at the Head Office and three operational sites were

found to be accurate. Some of the data inaccuracies

identified during the verification process were found

to be attributable to transcription, interpretation

and aggregation errors and the errors have been

communicated for correction. Hence in accordance with

AA1000AS (2008) requirements for a Type 2, moderate

level assurance engagement, we conclude that the

specified sustainability data and information presented

in the Report is generally reliable. In our view, the level at

which the Report adheres to this principle is ‘Acceptable’.


SPECIFIC EVALUATION OF THE INFORMATION ON SUSTAINABILITY PERFORMANCES

We consider the methodology and process for

gathering information developed by the Company for its

sustainability performance reporting to be appropriate

and the qualitative and quantitative data included in

the Report was found to be identifiable and traceable;

the personnel responsible were able to demonstrate the

origin and interpretation of the data and its reliability. We

observed that the Report presents a faithful description of

the Company’s sustainability activities.

ADDITIONAL PARAMETERS AS PER DNV’S PROTOCOL

Completeness: The scope of the Report covers

key economic, environment and social aspects and

performance indicators related to GRI G3.1 and the OGSS

for Application Level B+; the reporting boundary covers

the operations of the Company within India. The Report

adequately responds to the disclosure requirements

for Application Level B+ within the selected scope and

boundary. In our opinion, the level at which the Report

adheres to this principle is ‘Good’.

Neutrality: This Report presents a balanced account of the

Company’s sustainability performance, related issues and

performance indicators, in terms of content and tone. In

our opinion, the level at which the Report adheres to this

principle is ‘Good’.

OPPORTUNITIES FOR IMPROVEMENT

The following is an excerpt from the observations

and opportunities for improvement reported to the

management of the Company and are not considered for

drawing our conclusions on the Report; however they are

generally consistent with the management’s objectives:

n The Company may expand the scope and boundary

of reporting to include material aspects from related

activities within its sphere of control and influence i.e.

exploration, drilling, seismic and projects.

n The outcomes of stakeholder engagement related to

socio-economic impacts of the oil and gas industry

and Cairn’s intervention strategy may be analysed and

disclosed, if found material.

n Sustainability performance may be disclosed at regular

intervals for stakeholder to make informed decisions.

n Long term goals and targets may be established for key

sustainability parameters and benchmarked with peers.

DNV GL’S COMPETENCE AND INDEPENDENCE

DNV GL is a global provider of sustainability services,

with qualified environmental and social assurance

specialists working in over 100 countries. DNV GL states

its independence and impartiality with regard to this

assurance engagement. While we did conduct other

third party audits work with Cairn India in 2013-14, in our

judgement this does not compromise the independence

or impartiality of our assurance engagement or associated

findings, conclusions and recommendations. We were

not involved in the preparation of any statements or

data included in the Report, with the exception of this

assurance statement. We maintain complete impartiality

toward any people interviewed.

For DNV GL,

Bangalore, India, 20th June 2014.

Vadakepatth Nandkumar Project Manager,Head-Sustainability and Climate Change Services,DNV Business Assurance India Private Limited, India.

Balasubramoniam, Sivasubramaniam Assurance Reviewer,DNV Business Assurance India Private Limited, India.

CHECK TYRE PRESSUREECO DRIVING

REDUCE YOUR SPEED WHEEL ALIGNMENT

COOK FASTER & SAVESHARING SAVES UNLOAD THE BOOT

Discover oil, by maintaining right tyre air-pressure.

Discover oil, by regularly getting your vehicle's wheel

alignment checked.

Discover oil, by biking whenever possible.

Discover oil, by staying within the green area of the

speedometer.

Discover gas, by cooking with lids close or choosing

pressure cooking.

Discover oil, by carpooling with neighbours or colleagues.

Discover oil, by removing extra weight from the boot as it makes the engine consume more fuel.

CHOOSE PUBLIC TRANSPORT

Discover oil in a metro, by choosing to commute by

public transport.

PSI

DISCOVER OIL BY SAVING IT!To know more about OIL WHAT A KHOJ, visit our ofcial page on Facebook!

total employees - bseindia.com · gri index 105 nvg to gri linkage ... (oisd) awarded our 670 km...

Documents