R1
Health, safety, and environment (HSE)
Our approach to risk management focusses on building resilience across the organisation through a welldefined framework and strong governance oversight. Structured processes support the early identification and evaluation of risks across our global operations, allowing timely mitigation and informed decisionmaking. Risk perspectives remain closely connected with strategic planning and operational execution, enabling the business to respond effectively to changing market, regulatory and operational conditions.
During the year, the framework underwent a comprehensive refresh, including the articulation of risk appetite statements, recalibration of scoring methodologies, reassessment of risk scales, and identification of key risk indicators, strengthening the structure and objectivity of risk insights. Continuous monitoring and refinement of the risk landscape ensure preparedness for emerging challenges, reinforcing risk awareness throughout the organisation and protecting long-term value while enabling pursuit of opportunities.
Note:
1. GMRC: Group Risk Management Committee 2. Executive Committee
Our risk framework balances materiality and defined risk tolerance levels to provide reasonable assurance against significant losses. A structured and consistent process enables clear identification, assessment and reporting of risks to the Board. Established management systems, operating processes and strong ethical standards guide the way risks are monitored and addressed across the organisation.
Heatmap represents residual risk profile
Risks across existing operations and ongoing projects are identified using a standardised assessment methodology and designated risk officers are responsible for coordinating risk management activities. Risk reviews are conducted during quarterly business-level meetings to assess exposures and decide on mitigation actions.
At both business and Group levels, risk officers promote risk awareness and strengthen a risk management culture across the organisation. Risk mitigation actions are embedded into the Key Result Areas (KRAs) and Key Performance Indicators (KPIs) of process owners, integrating risk management into business activities through Key Risk Indicators (KRIs).
The scope, authority and resources of Management Assurance Services (MAS) are periodically reviewed by the Audit Committee. MAS recommends improvements to the control environment and reviews adherence to the Company’s philosophy, policies and procedures.
Internal audit planning follows a risk-based approach, incorporating inputs from senior management, business teams and the Audit Committee to align audit coverage with key risk areas. Financial analysis and prevailing economic and business conditions are also considered to ensure focus on the most relevant risks.
Risk decrease (Y-o-Y)
Risk unchanged (Y-o-Y)
Risk increase (Y-o-Y)
The key risks identified for FY 2025-26 that may affect our operations are outlined below. The order does not indicate their likelihood, potential impact or velocity. Each risk has been assessed considering events, economic conditions, business dynamics and regulatory developments during the year.
Compliance with stringent health, safety and environmental (HSE) regulations remain critical, with stakeholder expectations expected to intensify over the coming decade. Environmental degradation and climate change mitigation failure continue to feature among the key areas of focus across the industry. Our global operations are subject to evolving emission regulations, which may increase compliance costs, levies, litigation exposure and administrative requirements. Tightening greenhouse gas (GHG) regulations, including carbon pricing and emission reduction targets, could further elevate costs and influence demand dynamics.
Our success relies on strong relationships with local communities. Failing to address their concerns may weaken trust, affecting our reputation and licence to operate and grow.
We prioritise constructive engagement with stakeholders through a multi-pronged approach to manage social and regulatory risks.
Mining operations generate waste that can cause injuries, loss of life, environmental damage and production disruptions. Tailings dam failure, although rare, remains a critical risk with significant financial and reputational consequences.
Tailings dam safety is prioritised through a multi-pronged approach.
Operations face challenges related to raw material sourcing, infrastructure constraints, and issues around ash utilisation and evacuation.
Growing operations require accelerated exploration to replenish reserves faster than depletion. Failure to discover new resources or expand existing ones may constrain growth. Reserve estimates for ore, oil and gas involve uncertainties linked to geological, technical and economic assumptions, which may change as new information emerges.
Increasing reliance on digital technologies heightens exposure to cybersecurity risks. Breaches could result in data theft, financial loss and operational disruption, affecting business continuity and system integrity.
Operational risks such as equipment failure, infrastructure damage, geological uncertainties, technical issues, extreme weather and natural disasters may disrupt production and increase costs.
Cairn India holds a 70% interest in the Rajasthan Block. The production sharing contract (PSC) was extended for 10 years under the Pre-NELP policy; however, the revised terms are less favourable and subject to conditions. Delays in the planned production ramp-up could affect profitability.
Operations across multiple jurisdictions expose the Group to evolving legal and regulatory requirements. Changes in regulations may increase costs or introduce restrictions such as higher royalties, taxes, export duties or revisions to mining rights and related legislation.
Changes in tax structures or tax-related litigation may affect the Group's profitability.
Product prices and demand are influenced by global economic, political, environmental and social factors. Operations across multiple currencies also expose the Group to exchange rate fluctuations that may affect earnings, cash flows and reserves.
Failure to achieve expansion project objectives may delay key business milestones.
Constraints in accessing capital could limit the availability of funds required to support operations, meet liquidity needs, and refinance obligations, while failure to maintain the Group's credit rating could adversely affect borrowing costs and access to financing on competitive terms.
