CG Presentation on ONGC

8/2/2019 CG Presentation on ONGC

1/37


2/37

INTRODUCTION

ONGC management continues to strive for excellence in goodgovernance and responsible management practices, benchmarkingwith best of global companies.

ONGC has been practicing corporate governance principles much

before it became mandatory. Your company believes that for acompany to be successful it must maintain global standards ofcorporate conduct towards its stakeholders. The company believesthat it is rewarding to be better managed and governed and toidentify its activities with national interest. To that end, yourcompany has always focused on good corporate governance which

is the key driver of sustainable corporate growth and long termvalue creation.


3/37

Corporate Governance RecognizedIn recognition of excellence in Corporate Governance, thefollowing awards have been conferred on ONGC:

'Golden Peacock Award for Excellence in Corporate Governance -2002' by the Institute of Directors;

'ICSI National Award for Excellence in Corporate Governance' - 2003by the Institute of Company Secretaries of India; and

'Golden Peacock Global Award' for Corporate Governance inEmerging Economies -2005 by World Council for CorporateGovernance, U.K.

'Golden Peacock Award for Excellence in Corporate Governance -2005' by the Institute of Directors;

' Golden Peacock Award for Excellence in Corporate SocialResponsibility in Emerging Economies' 2006 - by World Council forCorporate Governance, UK.

'Golden Peacock Award for Excellence in Corporate Governance -2006' by Institute of Directors.


4/37

Board Of Directors

Composition, Meeting And Attendance

The Company is managed by the Board of

Directors, which formulates strategies, policiesand reviews its performance periodically. TheChairman & Managing Director (CMD) and sixwhole-time Directors manage the business of

the Company under the overall supervision,control and guidance of the Board.


5/37

Composition

The Board of Directors has an adequate combination of Executive(Functional) and Non-executive Directors. The Board has 14members, comprising of 7 Functional Directors including theChairman & Managing Director. The CMD is holding additional

charge of Director (Finance) w.e.f 4th July, 2007,on adhoc basis,pending appointment of regular incumbent for which Governmentof India has already initiated action. Besides, the Board comprisesof 6 Non-executive Directors comprising of: 2 part-time officialDirectors and 4 part-time non-official Directors, all nominated byGovernment of India. IOC nominee Director ceases w.e.f 31st July,

2007. To share the experience and business strategies, C&MD, OilIndia Limited and Managing Director, ONGC Videsh Ltd. are inviteesto the meetings of the Board.


6/37

Board Procedure

Institutionalised decision making process

Scheduling and selection of Agenda items for

Board /Committee Meetings

Recording minutes of proceedings at the

Board Meeting

Follow-up mechanism Compliance


7/37

Board Meetings

The minimum and maximum interval between anytwo Board meetings was 13 days and 43 days,respectively.

(i) Being a PSU, all Directors are appointed/ nominatedby the President of India;

(ii) Directors are not related to each other;(iii) Directors do not have any pecuniary relationships or

transactions with the Company;

(iv) The Directorships/Committee Memberships are based

on the latest disclosure received from Directors;(v) None of the Director is a Member of more than 10

Committees or Chairman of more than 5Committees, across all the Companies in which he isa Director.


8/37

Composition and Attendance

a) Executive Directors

b) Non-Executive Directors

(i) Part- time official Directors

(ex

officio)Govt. nominees

(ii) Part- time independent directors


9/37

Strategy Meets

The Company has a practice of periodic

retreats where all members of the Board and

high officials of the Ministry of Petroleum &

Natural Gas discuss issues of Corporate

Strategy and Policy.


10/37

Conclave

To have the benefit of cumulative knowledge

and experience of the elders of the ONGC

family, an assembly of the past and present

members of Oil & Natural Gas Commission

and Board is organized every year.


11/37

Vichar Vishleshan

The Key Executives in-charge of Assets, Basins,

Services and Institutes meet periodically with

the Executive Committee consisting of the

C&MD and the functional Directors to review

performance and to formulate future plans.


12/37

Resume of Directors Proposed to be

re-appointed

The brief resume of Directors including nature

of their experience in specific functional areas

and names of companies in which they hold

directorship and membership/chairmanship of

Board/Committee, who are retiring by

rotation and seeking reappointment is

appended in the notice for calling AnnualGeneral Meeting.


13/37

Audit & ethics committee

REMUNERATION COMMITTEE

SHAREHOLDERS'/INVESTORS' GRIEVANCE

COMMITTEE HUMAN RESOURCE MANAGEMENT COMMITTEE

SHARE TRANSFER COMMITTEE

HEALTH, SAFETY & ENVIRONMENT COMMITTEE POLICY & PLANNING COMMITTEE

OTHER FUNCTIONAL COMMITTEES

PROCEDURES AT COMMITTEE MEETINGS


14/37

AUDIT & ETHICS COMMITTEE The terms of reference of the Audit & Ethics Committee are

in accordance with Section 292A of the Companies Act,

1956 and the guidelines set out in the Listing Agreement. The Committee is headed under the stewardship of Shri

M.M.Chitale, an independent non-executive Director.

Shri Chitale is a Fellow member of the Institute ofChartered Accountants of India and has varied, vast andmultifarious experience in financial management corporateaffairs and accounting matters.

The other members of the Committee, S/Shri U.Sundararajan and Rajesh V. Shah, both part-time non-official independent

Directors, have requisite financial and managementexperience and have held or hold senior positions in otherreputed organizations.


15/37

The terms of reference are broadly as under:

a. Overseeing financial reporting processes and the disclosure of financialinformation, to ensure that the financial statement is correct, sufficientand credible;

b. Recommending audit fees payable to Statutory Auditors appointed byC&AG and approving payments for any other services;

c. Reviewing with management, the periodic financial statement/resultsbefore submission to the Board,focusing primarily on:

any changes in accounting policies and practices;

major accounting entries based on exercise ofjudgement by the

management; qualifications in draft audit report;

significant adjustments arising out of the audit;

the going concern assumption;

compliance with accounting standards;

compliance with stock exchanges and legal requirements concerningfinancial statements;

any related party transactions i.e. transactions of the company of materialnature, with promoters or the management, their subsidiaries or relativesetc. that may have potential conflict with the interest of the company atlarge;


16/37

d. Reviewing with the management, Statutory & Govt. Audit and Internal auditreports, adequacy of internal control systems and recommending improvementsto the management;

e. Reviewing the adequacy of internal audit function, approving internal audit plansand efficacy of the functions including the structure of the internal audit

department, staffing, reporting structure, coverage and frequency of internalaudit;

f. Discussion with internal auditors, any significant findings and follow-up thereon;

g. Reviewing the findings of any internal investigations by the internal auditors into thematters where there is suspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reporting the matter to the Board;

h. Discussion with the Statutory Auditors before the audit commences, the nature andscope of audit, as well as have post-audit discussion including their observations toascertain any area of concern;

i. Reviewing the Company's financial and risk management policies;

j. Looking into the reasons for substantial defaults in payments to shareholders (incase of non-payment of declared dividends) and creditors, and;

k. Reviewing Quarterly Compliance Report confirming adherence to all the applicable

laws, rules, guidelines and internal instructions/manuals including on CorporateGovernance principles and Ethics in business.


17/37

REMUNERATION COMMITTEE

ONGC being a Government Company,appointment and terms and conditions ofremuneration of Executive (whole-time functional)

Directors are determined by the Governmentthrough the Ministry of Petroleum & Natural Gas.Non-executive part-time official Directors (ex-officio) do not draw any remuneration. The part-

time non-official Directors receive sitting fees ofRs. 10,000/- for each Board/Committee meetingattended by them.

SHAREHOLDERS'/INVESTORS'


18/37

SHAREHOLDERS'/INVESTORS'

GRIEVANCE COMMITTEE

The terms of reference include to oversee the redressal ofShareholders'/Investors' complaints/grievances pertainingto share transfers, non-receipt of annual reports, dividendpayments, issue of duplicate certificates, transmission(withor without legal representation) of shares and other

miscellaneous complaints. The Committee is alsoempowered to review the performance of the Registrar andTransfer Agents and recommend measures for overallimprovement in the quality of investor services. It alsosupervises adherence to ONGC Code of Conduct for

Prevention of Insider Trading in Securities. The Committee is headed by Shri Rajesh V. Shah,

Independent Director.

Dy. Company Secretary acts as Secretary to the Committee.

HUMAN RESOURCE MANAGEMENT


19/37

HUMAN RESOURCE MANAGEMENT

COMMITTEE

The terms of reference include consideration

of HR policies & issues and proposals for

promotions below Board

levels. Shri Rajesh V. Shah, Part-time non-

official Director is the Chairman of the

Committee. Director (HR) is

the convenor of the Committee.


20/37

PROJECT APPRAISAL COMMITTEE

The Project Appraisal Committee examines andmakes recommendations to the Board onprojects/capital investment exceeding Rs.150

Crore. Proposals exceeding Rs.150 Crore areappraised in-house, while the proposalsexceeding Rs.250 Crore are first appraised byoutside technical and financial consultants. Shri

U.Sundararajan, Part-time non-official Director isthe Chairman. Director (T&FS) acts as a Convenorof the Committee.


21/37

SHARE TRANSFER COMMITTEE

In order to expedite the process of share transfers andother related activities, the Share Transfer Committeehas been empowered to approve the requests receivedfor share transfer/ transmission/ transposition, issue of

duplicate share certificates, sub-division, consolidation,re-materialization, change of status etc. These requestsare processed through the Registrar & Share TransferAgents, M/s Karvy Computershare Private Ltd. and byM/s MCS Limited, generally once in a fortnight. The

details of transfers are reported to the Board ofDirectors at the ensuing meeting. The Committee isheaded by the Director (Finance) and the Dy. CompanySecretary acts as a Convenor to the Committee.

HEALTH SAFETY & ENVIRONMENT


22/37

HEALTH, SAFETY & ENVIRONMENT

COMMITTEE

The terms of reference includes setting forth

policies on all aspects of Occupational Health,

Safety & Environment Protection.

Shri U.Sundararajan, Part-time non-officialDirector is the Chairman of the Committee.

Director (Onshore) acts as the Convenor.


23/37

POLICY & PLANNING COMMITTEE

The mandate include to look into the matters

pertaining to new areas of business, proposals for

collaborations, joint ventures, amalgamation,

mergers and acquisitions; commercial mattersincluding marketing; periodic performance review

of ONGC Videsh Ltd. and MRPL, both subsidiaries.

The Committee is headed by Shri U. Sundararajan,Part-time non-official Director.

Director (Exploration) is the Convenor.


24/37

OTHER FUNCTIONAL COMMITTEES

Apart from the above, the Board from time to time,constitutes Functional Committees with specificterms of reference as it may deem fit. Meetings ofsuch Committees are held as and when required for

discussing the matter concerning the purposearises. Time schedule for holding the meetings ofsuch functional committee(s) are finalized inconsultation with the Committee Members.

Minutes of the meetings of all such functionalCommittees are circulated to the members of theCommittee and the Board is kept apprised.

PROCEDURES AT COMMITTEE


25/37

PROCEDURES AT COMMITTEE

MEETINGS

Company's guidelines relating to BoardMeetings are applicable to CommitteeMeetings as far as may be practicable. Each

Committee has the authority to engage outsideexperts, advisers and counsels to the extent itconsiders appropriate to assist the Committeein its work. Minutes of the proceedings of each

of the committee meeting are placed beforethe Board for its perusal, noting, ratificationand approval, as the case may be.


26/37

COMPLIANCE OFFICER

The Company Secretary has been nominated

as the Compliance Officer.


27/37

ANNUAL GENERAL MEETINGS


28/37

DIVIDEND HISTORY


29/37

ONGC'S CODE ON INSIDER TRADING

In pursuance of the Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations, 1992 (duly amended),the Board has approved the "Code of Conduct for Prevention ofInsider Trading". The objective of the Code is to prevent purchaseand/or sale of shares of the Company by an Insider on the basis ofunpublished price sensitive information. Under this Code, Insiders(Directors, Advisors, Officers, Designated Employees and otherconcerned persons) are prevented to deal in the Company's sharesduring the closure of Trading Window. To deal securities beyondspecified limit, permission of Compliance Officer is also required. AllDirectors/Advisors/Officers/designated employees are also requiredto disclose related information periodically as defined in the Code,which in turn is being forwarded to the stock exchanges, if any.Company Secretary has been designated as the Compliance Officer.


30/37

DISCLOSURES

MATERIAL CONTRACTS/RELATED PARTY TRANSACTIONS

The Company has not entered into any material financial orcommercial transactions with the Directors or theManagement or their relatives or the companies and firms,etc., in which they are either directly or through their

relatives interested as Directors and/or Partners exceptwith certain PSUs, where the Directors are Directorswithout the required shareholdings. The Company hasobtained declarations from all concerned in this regard,which were noted by the Board. Transactions with related

parties are disclosed in Note No.16 of Schedule 29 to theAccounts in the Annual Report. Being a State enterprise, nodisclosure has been made in respect of the transactionswith subsidiary companies in line with AccountingStandard-18 on Related Party Transactions.


31/37

COMPLIANCES

During the last three years, no penalties or strictureshave been imposed on the Company by the StockExchanges or SEBI or any other statutory authorities,

on matters related to capital markets. It is certified thatthe Company has complied with applicable rules andregulations prescribed by Stock Exchanges, SEBI or anyother statutory authority relating to the capital

markets. All Returns/Reports were filed with instipulated time with Stock Exchanges/other authorities.


32/37

MEANS OF COMMUNICATION

(a) The Company regularly intimates unaudited as well auditedfinancial results to the Stock Exchanges, immediately after theseare taken on record/approved. These financial results are normallypublished in Times of India, Business Standard, Economic Times(English), Navbharat Times and Jansatta (Hindi), other dailies,having wide circulation across the country and also displayed on thewebsite of the Company, www.ongcindia.com and simultaneouslyposted on the Electronic Data Information Filing and Retrievalwebsite namely www.sebiedifar.nic.in. The website is alsoaccessible through a hyperlink 'EDIFAR' from SEBI's official website,www.sebi.gov.in . The official news releases and the presentationsmade to the investors, financial analysts at the periodic investors'meets are also displayed on the Company's website. The results arenot sent individually to the shareholders.

(b) Management Discussion and Analysis Report forms part of theReport of the Directors.


33/37

AUDITORS' CERTIFICATE ON

CORPORATE GOVERNANCE


34/37

SECRETARIAL COMPLIANCE REPORT

Secretarial Compliance Report confirming

Compliance to the applicable provisions of

Companies Act, 1956, Listing Agreement, SEBI

guidelines and all other related rules andregulations relating to capital market, though

not mandatory, obtained from a practicing

Company Secretary, was noted by the Boardand forms part of the Directors' Report.


35/37

SHAREHOLDERS INFORMATION


36/37

STOCK MARKET INFORMATION


37/37

DISTRIBUTION OF SHAREHOLDING

Documents

CG Presentation on ONGC