CORPORATE GOVERNANCE REPORT
1.0 Philosophy on code of Governance
Corporate governance is the system by which companies are directed and managed. It influences how the objectives of the company are set and achieved, how risk is monitored and assessed, and how performance is optimised. Good corporate governance structures encourage companies to create value (through enterpreneurism, innovation, development and exploration) and provide accountability and control systems commensurate with the risks involved.
Effective Corporate Governance ensures that long term strategic objectives and plans are established and that the proper management and Management structure are in place to achieve those objectives, while at the same time making sure that the structure functions to maintain the Corporation's integrity, reputation and accountability to its relevant constituencies.
1.1 At ONGC, Corporate Governance is the basis for our decision-making and control processes and comprises responsible, value-based management and monitoring focused on long term success, goal oriented and efficient cooperation between our Managing and Virtual Boards, respect for the interest of our shareholders and employees, transparency and responsibility in all our decisions and an appropriate risk management system
The main objectives that drive Corporate ! Governance in ONGC are:
• A sound system of internal control to mitigate risks associated with achievement of business objectives both short term and long term.
• Compliance of laws, rules & regulations.
• Ensuring corporate success and economic growth
• Minimization of wastages, corruption, risks and mismanagement.
•Adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders, (shareholders, customers, employees and society at large)
• Maintains investor’s confidence, as a result of which, company can raise capital efficiently and effectively.
• Clearly defined standards against which performance of responsibilities are measured
• Accuracy and transparency in disclosures regarding operations, performance, risk and financial status
•A clear delineation of shareholders’ rights
• Timely and balanced disclosure of all material information to all the Stakeholders.
1.2 Further, ONGC has ensured compliance with the objectives of the principles of Corporate Governance stated in clause 49, as brought out below:
A. The Rights of Shareholders
(i) The Company has taken all the necessary steps to ensure the Rights of Shareholders and seek approval of the shareholders as and when required as per the provisions of the Companies Act, 2013 or other legislations. ONGC issues timely press releases regarding the important events. ONGC sends notices through email to all shareholders who have opted for the same and to all others physically by post. It has provided the facility of e-voting for all shareholders. Further, with a view to ensure better participation, it has taken a poll of the shareholders who attend the me eting either in person or thr ough prox y. Independent Scrutinizer is appointed to oversee the entire process.
The notice of the Annual General Meeting explains exhaustively the procedures governing the AGM, voting procedures. These are again explained during the AGM. Sufficient opportunity is provided to the shareholders who attend the meeting to raise queries to the Board of Directors who attend the AGM. All their queries are answered to their satisfaction. The voting on the resolutions is carried out as per the Companies Act, 2013.
The election of the Board members is routed through the General Meeting, where shareholders have a right to participate. However, the power of nomination of the directors on the Board of ONGC, being a Government Company, is with the Government of India.
All shareholders, irrespective of their category, are free to exercise their voting and ownership rights at the AGM and all other forums where their presence is required.
ONGC has a Board level Stakeholders' Relationship Committee which meets periodically to redress the grievances of shareholders. The shareholders have the facility of directly approaching the Company as well as the Registrar & Share Transfer Agent (RTA) to address their queries/grievances, which are addressed within 7 days.
Interests of the minority shareholders are protected and there have been no instances of abusive action by controlling shareholders. The Company has an effective shareholders' redressal system.
(ii) ONGC issues timely press releases regarding important developments. The Annual Report of the Company is very exhaustive and provides every conceivable information on the functioning of the Company. The website of the company is updated continuously to keep the stakeholders apprised of various developments etc.
The capital structure of ONGC comprises only equity shares which do not provide any disproportionate degree of control to any of the owners. All the equity shareholders are treated equitably, irrespective of their location or quantum of their shareholding.
In line with the SEBI (Prohibition of Insider Trading) Regulations, 2015, ONGC has put in place a Code of Internal Procedures and Conduct in dealing with the securities of ONGC.The code is applicable to all the Insiders of ONGC.
The process of conduct of General meetings of the shareholders of ONGC ensures equitable treatment to all shareholders.
Simple and inexpensive procedures are adopted to cast their vote electronically as well as through poll.
B. Role of stakeholders
ONGC recognizes the rights of its stakeholders and its responsibility towards fullfilling their aspirations. The Business Responsibility Report of ONGC brings out in detail the steps being taken by ONGC in this regard. ONGC, being a listed Public Sector Enterprise, conducts and governs itself with Ethics, Transparency and Accountability as per the law of land and ensures compliance of all the policies, rules, regulations etc mandated by the Government of India. Effective Redressal mechanism is available to every stakeholder of the Company, should there be any violation of rights.
The Company encourages its employees to participate in every sphere of its activity and has schemes/ policies with rewards encouraging employees to take part in the various aspects of the functioning of ONGC.
ONGC is covered by RTI Act, 2005 and it provides all information to all citizens of India as per the aforesaid Act.
ONGC has implemented a Whistle Blower Mechanism which gives opportunity to its employees to raise any concerns of ethics or an illegal/immoral activities occurring in an organisation to the Audit Committee. The vendors have the facility of approaching Independent External Monitors to redress their grievance. The company has a Vigilance Department which is headed by an officer on deputation from the Government of India in the rank of Joint Secretary or above.
C Disclosure and Transparency
The Company ensures timely and complete dissemination of information on all matters which require to be made public. The website of the company and the Annual Report of the company contain exhaustive information regarding every aspect of the functioning, financial health, ownership and governance of ONGC.
All disclosures by Company are strictly in accordance with the formats prescribed by the concerned regulatory authority in respect of accounting, financial and non-financial matters.
ONGC disseminates information through press releases, on its website, to the Stock Exchanges etc. Access to all these modes is free for all users.
The Company maintains records of the proceedings of all meetings (Board / Committees/ General meetings, etc.).
The company follows the accounting standards in letter and spirit. The annual audit is conducted by Joint Statutory auditors appointed by the C&AG. ONGC is further subject to supplementary audit by C&AG. Internal Audit Department reports to the Audit & Ethics Committee, apart from periodical oversight by the Government of India and Parliamentary Committees
D Responsibilities of the Board
(i) Disclosure of Information
Members of the Board and Key Managerial Personnel disclose to the board whether they, directly, indirectly or on behalf of third parties, have a material interest in any transaction or matter directly affecting the company.
It is the endeavor of the Board of Directors and the top management of ONGC to ensure that the stakeholders are kept aware of all important developments, while ensuring confidentiality of relevant information
(ii) Key functions of the Board
The Company has an exhaustive Book of Delegated Powers (BDP) and other manuals like Material Management, orks manual etc, which spell out the processes and defines the level (Board / Executive Committee / Functional Director / Key Executive) at which any decision is to be made and are reviewed from time to time to ensure that they are updated and meet the needs of the organization. The company has 13 committees of the Board which deliberate upon various important matters and advise the Board on the course of action to be taken.
The company's governance practices are effectively monitored and reviewed regularly.
The HR policies of ONGC ensure timely selection and placement of various executives and personnel as per needs of the organization and ensures smooth succession. ONGC being a Government Company, follows the remuneration policy approved by the Government of India.
Appointment of directors on the Board of ONGC and the remuneration of functional directors is decided by the Government of India.
The Board members as well as Key Managerial Personnel are required to declare their interest in all contracts and their shareholdings etc. which is noted by the Board. The Company ensures that all related party transactions are brought to the notice / approval of the Audit Committee / Board.
ONGC has implemented SAP system of accounting which ensures total integrity and transparency of every transaction which is subject to independent audit by Joint Statutory Auditors appointed by C&AG. The company has effective internal control systems which conform to the laws of the land.
The process of disclosure of information to the public and issue of press releases etc. is well defined. Board evaluation is within the domain of the Government.
(iii) Other responsibilities
The Board of Directors take strategic decisions which help the management in steering the company in its operations and meeting the expectations of the stakeholders.
ONGC has structured policies and exhaustive manual and procedures in place which ensure that the operations of the company are congruent to its objectives.
The Agenda Items, circulated in advance to the members of the Board, are exhaustive in nature and detailed presentations are made during the course of discussion. The Board is assisted by 13 Committees to enable better management of full Board's time, in depth scrutiny and focused attention. The Independent Directors are provided with every conceivable information to ensure that the interests of the minority shareholders are protected. Further, to strengthen the corporate governance, a dedicated portal has been set up for exclusive use of Directors, where notice/agenda/Presentation/other documents related to each and every Board/Board Level Committee meeting are uploaded to enable the Directors to access those information.
ONGC has a Board approved training policy for directors, details of which have been brought out elsewhere in this report.
ONGC has only one class of equity shareholders at present and the Board treats them all fairly and with equity.
The Board of Directors ensure that highest degree of ethics are adopted while taking every decision and being a PSU, ONGC takes into account the interest of diverse stakeholders.
Every proposal is examined in detail before a decision is taken.
The Committees of the Board, excluded, deliberate upon major proposals before being sent to the Board. This ensures absence of conflict of interest.
The project proposals are first deliberated in detail by the Project Appraisal Committee and then approved by the Board after taking into account the assumptions, cost-benefit, sensitivity and viability analysis as well as appraisal of the project by an independent Financial Institution thereby minimizing any risk.
The Board regularly monitors the Action Taken Report on its decisions. Further, detailed presentation on the implementation of projects which have been approved is made before the Project Monitoring Committee on a periodic basis. Risk areas are outlined and mitigation processes are put in place.
The terms of reference, quorum, periodicity of meeting etc are clearly defined for each of these Committees and approved by the Board.
The job description of each Functional Director including CMD is clearly defined. ONGC signs an MOU with the administrative Ministry defining key parameters of operational, physical and financial performance. The performance of the Functional Directors and the company is measured on the basis of achievement of MOU targets.
The Independent Directors are free to seek any information and have the authority to seek third party independent assessment of any proposal / agenda item for which ONGC makes necessary arrangements.
1.3 Corporate Governance Recognitions
ONGC's Corporate Governance practices have secured many accolades, some of which are:
• 'ICSI National Award for Excellence in Corporate Governance for 2014'- Certificate of Recognition by the Institute of Company Secretaries of India. This is the fifth year in a row that ONGC has bagged this award.
'Best Corporate Governance Award-2012' by the Indian Chamber of Commerce;
'Golden Peacock Global Award' for Corporate Governance U.K. in the years 2005, 2007, 2008, 2009 and 2013
In compliance with the disclosure requirement of clause 49 of the revised listing agreement executed with the stock exchanges as well as the Guidelines on Corporate Governance for Public Sector Enterprises, issued by the Department of Public Enterprises (DPE), the detailed Corporate Governance report of ONGC is as follows:
2. BOARD OF DIRECTORS
The Company is managed by a Board of Directors, which formulates strategies, policies and reviews its performance periodically. The Chairman & Managing Director (CMD) and Six Whole-Time Directors viz. Director (Technology & Field Services), Director (Offshore), Director (Onshore), Director (Exploration), Director (Finance) and Director (Human Resource), manage the business of the Company under the overall supervision, control and guidance of the Board.
The Board of Directors has a combination of Executive (Functional) and Non-Executive Directors. As on 31st March, 2015, the Board of Directors had 9 members, comprising of 6 Functional Directors (including the Chairman & Managing Director) and 3 Non-Executive Directors (comprising 2 part-time official nominee Directors and 1 part-time non-official Director) nominated by the Government of India. To share the global experience and business strategies, Managing Director, ONGC Videsh Limited (OVL) is a permanent invitee to the meetings of the Board.
Except for the period from 1st April, 2014 to 30th April, 2014 and 23rd May, 2014 to 18th June, 2014, the composition of the Board of Directors of the Company during the year 2014-15 did not comply with the provisions of Clause 49 of the Listing Agreement i.e., the Board of Directors did not comprise of the required number of Independent Directors as per the terms of the above mentioned Listing Agreement. The vacancies caused due to retirement/vacation of the independent Directors have also not been filled up within the time period specified in terms of listing agreement. ONGC has been taking up with the Ministry of Petroleum & Natural Gas, Government of India for appointing requisite number of Independent Directors on the Board of ONGC. No separate meeting of Independent Directors was held during 2014-15.
2.2 Board/ Committee Meetings and Procedures
(A) In stitutionalised decision making process
The Company has defined guidelines for the meetings of the Board of Directors and Committees. These guidelines seek to institutionalise the decision making process at meetings of Board/ Committees, in an informed and efficient manner. Company's guidelines relating to Board Meetings are applicable to Committee Meetings as far as practicable.
(B) Scheduling and selection of Agenda items for Board / Committee Meetings
(i) A tentative schedule of the Board Meetings to be held during the ensuing financial year is drawn up and after seeking convenience of the Directors and after approval of the Board, the same is circulated among all the Directors. This helps the management in ensuring that the various agenda items are kept ready in advance and facilitates the Directors to plan their schedule for participation in Board/ Committee meetings well in advance. The meetings of the Committees of the Board are held prior to the Board Meeting after seeking convenience of members.
(ii) The meetings are convened by giving appropriate advance notice after obtaining approval of the Chairman of the Board/ Committee. To address specific urgent needs, meetings are also called at a shorter notice. In case of any exigency, resolutions are passed by circulation.
(iii) Detailed agenda containing management reports and other explanatory statements are circulated in advance in the agenda format amongst members for facilitating meaningful, informed and focused deliberations and decisions at meetings. Document or agenda of confidential nature, are tabled with the prior approval of CMD. Sensitive subject matters are discussed at the meeting without circulation of written material. In special and exceptional circumstances, additional or supplemental item(s) on the agenda are permitted.
(iv) The agenda papers are prepared by concerned officials, sponsored by the concerned functional Directors and approved by the CMD. Duly approved agenda papers are circulated amongst members of the Board/ Committee by the Company Secretary both physically and through email.
(v) The meetings of the Board/ Committees are generally held at the Company's Registered Office at New Delhi.
(vi) Presentations are made to the Board/ Committee covering Finance, Production, Operations, major Business Segments, Human Resources, Marketing, Joint Venture operations, whenever required.
(vii) The members of the Board/ Committee have complete access to all information of the Company and are also free to recommend inclusion of any matter in the agenda for discussion. Senior officials are called to provide additional inputs to the items being discussed by the Board/Committee, as and when required.
(viii)Each Committee has the authority to engage outside experts, advisers and counsels to the extent it considers appropriate to assist the Committee in its work.
ONGC is in the hydrocarbon business, therefore, safety is paramount for continued operations. To apprise the Board regarding various safety measures being taken and to seek their guidance on implementation of these measures, periodic presentations are made to the Board of Directors in the form of Safety Snapshots that include all major incidences related to safety.
Industry Updates & Presentation
With a view to keep the members of the Board apprised with latest developments in the Industry, Industry updates are tabled and presentations on the subjects relevant to E&P business are made periodically to the Board. This also ensures that the Directors are constantly in touch with the problems being faced by the Industry in general and ONGC in particular in its operations.
(C) Recording minutes of proceedings at the Board Meeting
Minutes of the proceedings of each Board/Committee meeting are recorded with all necessary details. Draft minutes are circulated amongst all members of the Board/ Committee for their appreciation and comments that are incorporated in the minutes, which are finally approved by the Chairman of the Board/ Committee. Thereafter, these minutes are confirmed in the subsequent Board/ Committee Meeting. Minutes of the meetings of the Committees are also noted by the Board/ Committee in its next meeting. The finalized minutes are entered in the respective Minutes Books.
(D) Follow-up mechanism
The guidelines/ decisions of the Board/ Committee meetings provide for an effective post-meeting follow-up, review and reporting process for action taken on decisions/instructions/directions of the Board and Committee. As per the Board's decision, the Company Secretary intimates 'Action Points' arising from deliberation during the meeting to the concerned Functional Directors who in turn provide updates to be apprised to the Board on areas of their responsibility in the next meeting. Functional Directors provide follow-up Action Taken Report (ATR) once in a quarter.
Functional Directors are responsible toward ensuring adherence to all applicable provisions of law, rules and guidelines. A Quarterly Compliance Report (collected from all work centres) confirming adherence to all applicable laws, rules, guidelines and internal instructions/manuals, including Corporate Governance, is reviewed by the Audit & Ethics Committee and the Board.
(F) Training and Evaluation of non-executive Board members
a(a) In line with Clause 3.7 of the Guidelines on Corporate Governance for Central Public Sector Enterprises, 2010, issued by Government of India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises and requirement of Listing Agreement with regard to Training of Directors, the company has three tier Training policy for nonexecutive Directors:
• Induction Training
• External Training
• Board Presentation
Non-executive Board members are eminent personalities having wide experience in the field of business, education, industry, commerce and administration. Their presence on the Board is advantageous and fruitful in taking business decisions. The training policy of directors and the details of familiarization/training programmes during 2014-15 can be viewed at <http://www.ongcindia.com/> wps/wcm/connect/ongcindia/Home/investors/ policies/directors-training
(b) Policy on Performance Evaluation of Directors
ONGC being a Government Company, the provisions of Section 134(3)(e) and (p), 149(6)(a) and (c), 152(5) and 178(2), (3) and (4) of the Companies Act, 2013 with regard to appointment, Performance Evaluation etc. have been exempted by Government of India, Ministry of Corporate Affairs vide Gazette notification dated 05.06.15.
2.3 BOARD MEETINGS
During 1st April, 2014 to 31st March, 2015, Thirteen Board meetings were held on 24th April, 29th May, 27th June, 30th July, 13th & 28th August, 19th September, 16th October, 14th November, 12th December, 2014, 21st January, 14th February and 20th March, 2015.
The minimum and maximum interval between any two Board meetings was 13 days and 39 days respectively.
The details of number of Board Meetings attended by Directors, attendance at the last Annual General Meeting, Number of other Directorship/Committee Membership in various companies held by them during the year 2014-15 are tabulated below:-
(i) The Company being a PSU, all Directors are appointed/ nominated by the President of India;
(ii) Directors are not per se 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;
(v) None of the Director is a Member of more than 10 Committees or Chairman of more than 5 Committees, across all the companies in which he is a Director.
3 STRATEGY MEET
A Strategy Meet is organised each year at which all members of the Board and senior of facials of the Ministry of Petroleum & Natural Gas participate. Intense discussion and deliberation takes place covering areas of concerns and grow the for ONGC.
To benefit from cumulative knowledge and experience of seniors of ONGC, an assembly of the past and present members of the Board of the Company is organized each year to focus on action plan for Perspective Plans and future growth strategies.
5. KEY EXECUTIVES' MEET (VICHAR VISHLESHAN)
Key Executives are managers placed just below the Directors of the Board and run day- to-day operations of the Company under the direction and supervision of the Directors. While Key Executives, jointly or severally meet CMD and functional directors as when required an annual meet of all Key Executives with CMD Directors is held to discuss issues of Management an & d operations implementation strategies of Strateg Plans are also discussed to find solutions for them. The 13th Key Executive Meet was held on 20- 21.12.2014 at Alibaug, Maharashtra. The theme of the 13th Meet blended contextual issues with futuristic ones-"Next 'Big' interventions for harnessing potentials". The way forward: "Plan, Projectize Perform".
6. CHANGE AGENTS' MEET
To connect with Gen-next ONGCians, billed as 'Change Agents' and engaging and preparing them for future challenges and for realization of Perspective Plan - 2030, the Change Agent Meet is organized. No meet was held in 2014-15.
7.RESUME OF DIRECTORS PROPOSED TO BE RE-APPOINTED
The notice of the 22nd Annual General Meeting shall Contain the brief resume of Directors retiring by rotation and Additional Directors seeking appointment including nature of their experience in specific functional areas, names of companies in which they hold directorship and membership/ chairmanship of Board/ Committee
8. BOARD COMMITTEES
The Company has the following Committees of the Board:
8.1 AUDIT & ETHICS COMMITTEE (The Commit tee was earlier named as Audit, Ethics and Financial Management Commit tee up to 13.11.2014)
The terms of reference of the Audit & Ethics Committee are in accordance with Section 177 of the Companies Act, 2013, guidelines set out in Clause 49(III) of the Listing Agreement and the Guidelines on Corporate Governance for Central Public Sector Enterprises issued by the Department of Public Enterprises in May, 2010.
Shri Arun Ramanathan, an Independent Director was the chairman of the committee upto 19.06.2014. Thereaf ter, the Committee has been headed by Shri K.N. Murthy w.e.f. 03.11.2014. Prof. S.K. Barua, Shri O.P. Bhatt, Shri S. Ravi, Shri P. Umashankar , Shri U.P. Singh and Shri Shashi Shanker were/are the other members of the Committee. The composition of the Audit & Ethics Committee was not in compliance with Clause 49(III)(A) of the Listing Agreement from 14.12.2014.
All members of the Committee have requisite financial and management experience and have held or hold senior positions in other reputed organizations. Director (Finance) and Chief Internal Audit are permanent invitees. Representatives of Statutory Auditors and Cost Auditors are invited to participate in the meetings whenever required. Functional
Directors, Executives of Finance and other departments are invited, if required. Company Secretary acts as the Secretary to the Committee.
The role of the audit committee has been modified during the year in line with the Companies Act, 2013 and amended Listing Agreement and shall include the following:
1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
2. Recommendation for appointment, remuneration and terms of appointment of auditors of the company;
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
4. Reviewing, with the management and examination of the annual financial statements and auditor’s report thereon before submission to the Board for approval, with particular reference to:
a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (c) of sub- section 3 of Section 134 of the Companies Act, 2013
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Significant adjustments made in the financial statements arising out of audit findings
e. Compliance with listing and other legal requirements relating to financial statements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report.
5. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.
6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the of fer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.
7. Review and monitor the auditor’s independence and performance, and effectiveness of audit process.
8. Approval or any subsequent modification of transactions of the company with related parties;
9. Scrutiny of inter-corporate loans and investments;
10. Valuation of undertaking or assets of the company, wherever it is necessary.
11. Evaluation of internal financial controls and risk management systems.
12. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems;
13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the of ficial heading the department, reporting structure coverage and frequency of internal audit;
14. Discussion with internal auditors on any significant findings and follow up there on.
15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
16. Discussion with statutory auditors before the Audit Commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. The Audit Committee may call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the internal and statutory auditors and the management of the company.
17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holder shareholders (in case of non-payment of declared dividends) and creditors;
18. To oversee & review the functioning of the Vigil mechanism including whistle Blower Mechanism and if any of the members of the committee have a conflict of interest in a given case, they should recuse themselves and the others on the committee would deal with the matter on hand.
19. Approval of appointment of CFO (i.e., the Whole- time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
20. To review the Audit paras referred to A&EC by the internal Audit / Board and / Government of India and to provide its suggestions / guidance / comments on the issues referred to it.
21. The Audit Committee shall review the financial statements, in particular, the investments made by the unlisted subsidiary company.
Audit & Ethics Commit tee Meetings
During 1st April, 2014 to 31st March, 2015, thirteen meetings of Audit & Ethics Committee were held on 7th & 24th April, 19th & 29th May, 13th & 27th June, 13th August, 19th September, 14th& 26th November, 5th December, 2014,14th February and 19th March, 2015.
8.2 NOMINATION AND REMUNERATION COMMITTEE
ONGC, being a Public Sector Undertaking, the appointment, tenure and remuneration of directors are decided by the Government of India. As per the DPE Guidelines, a Remuneration Committee was constituted to decide the annual bonus/variable pay pool and policy for its distribution within the prescribed limits. However, as per Clause 49(IV) of the revised listing Agreement and Section 178 of the Companies Act, 2013, the Company has renamed the Commit tee as Nomination and Remuneration Committee w.e.f. 03.11.2014. The composition of the committee was not in compliance with clause 49(IV)(A) of the Listing Agreement from 14.12.2014. Prof. S.K. Barua, an Independent Director was the Chairman of the Commit tee upto13.12.2014.
Thereaf ter, the Committee has been headed by Shri K.N. Murthy w.e.f. 21.01.2015. Prof. Deepak Nayyar, Shri Arun Ramanathan, Shri P. Umashankar, Shri O.P. Bhatt ,Shri U.P. Singh and Shri D.K. Sarraf were/are the other members of the Committee.
Director (HR) and Director (Finance) are the permanent Invitees. Director (HR) is the convener of the Committee.
One meeting of the above Committee was held on 12th December, 2014.
Role of the Commit tee
I. Recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees involving a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.
II. Shall lay down the evaluation criteria for performance evaluation of Independent Directors.
III. Identif y persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal,
IV. Carry out evaluation of every director’s performance.
V. Formulate the criteria for determining qualifications, positive attributes and independence of a director.
VI. Deciding the Annual Bonus / Variable Pay Pool and Policy for its distribution across the Executives and Non Unionised Supervisors, within the prescribed limits and as per the guidelines issued in this regard by the Government of India.
VII. Consideration of any other item which may be delegated in this regard by the Board of Directors.
VIII. Any other role assigned for the Committee due to changes/modification in the Companies Act, 2013,SEBI & DPE Guidelines.
The details of meeting attended by the members and their tenure as member of the above Committee is reflected in the table below:-
8.2.1 DIRECTORS’ REMUNERATION
ONGC being a Government Company, terms and conditions of appointment and remuneration of Whole-time Functional Directors are determined by the Government through administrative ministry, the Ministry of Petroleum & Natural Gas. The Non-executive (part-time non-of ficial) or Independent Directors are paid sitting fees @ Rs. 20,000/- for each Board/ Committee meeting attended by them.
8.3 STAKEHOLDERS’ RELATIONSHIP COMMITTEE
Stakeholders Relationship Committee specifically looks into redressal of complaints/ grievances of Shareholders and Investors, pertaining to transfer/ transmission of shares, non-receipt of annual reports, dividend payments, issue of duplicate share certificates and other miscellaneous complaints. The Committee oversees and reviews performance of the Registrar and
Transfer Agent and recommends measures for overall improvement in the quality of investor services. The Commit tee also monitors implementation and compliance of Company’s Code of Conduct for Prevention of Insider Trading in ONGC’s securities.
Shri K. N. Murthy, an Independent Director is the Chairman of the Committee. Other Members of the Committee were/are Shri Deepak Nayyar, Shri Arun Ramanathan, Prof. S.K. Barua, Shri O.P. Bhatt, Shri S. Ravi, Director (Finance) and Director (HR). The Company Secretary acts as a Convener of the Committee.
During the year 2014-15, Three meetings were held on 26th June, 19th September, 2014 and 19th March, 2015.
8.3.1 COMPLIANCE OFFICER
Shri N. K. Sinha, Company Secretary and Compliance Of ficer superannuated on 30.06.2015 on attaining the age retirement. Shri V. N. Murthy took over as Company Secretory and designated as Compliance Of ficer of the Company with effect from 01.07.2015, who is primarily responsible to ensure Compliance with applicable statutory requirements. He is the interface between the management and the regulatory authorities on governance matters.
8.3.2 REDRESSAL OF INVESTORS’ GRIEVANCE
The Company addresses all complaints, suggestions and grievances of the investors expeditiously and usually resolves them within 7 days except in case of dispute over facts or other legal constraints.
Except for the complaints pertaining to ‘ONGC Offer for Sale - 2004’ by Government of India, the Company received 30 shareholders’ complaints from Stock Exchanges/ SEBI which inter-alia includes non-receipt of dividend/ annual report, issue of Bonus Shares amongst others. The complaints were duly at tended to and the Company/ RTA have furnished necessary documents / information to the shareholders. As far as the Investors’ Grievances on “ONGC Offer for Sale-2004” is concerned, considerable progress has been made by constant interaction with SEBI,
Department of Disinvestment and MCS.
No request for share transfer is pending beyond 30 days except those that are disputed or sub-judice. All requests for de-materialization of shares are l i k e w i s e p r o c e s s e d a n d c o n f i r m a t i o n communicated to investors and Depositor y Participants within 10 working days.
The total number of complaints/ queries/ correspondence received and replied/ attended to the satisfaction of the shareholders was 2256. The number of complaints pending as on 31.03.2015 are 101 out of which 97 complaints are related to Of fer for Sale- 2004.
8.3.4 INVESTOR RELATIONS CELL
In line with global practices, the Company is commit ted towards maintaining, the highest standards of Corporate Governance, reinforcing the relationship between the Company and its Shareholders. ‘Investor Service Center’ with information frequently required by investors and
analysis is available on the Company’s corporate website w w w.ongcindia.com. This website provides updates on financial statements, investorrelated events and presentations, annual reports, dividend information and shareholding pattern along with media releases, company overview and report on Corporate Governance etc. Existing and potential investors are able to interact with the Company through this link for their queries and for seeking information.
A Core Team comprising of senior, experienced of ficials, headed by Director (Finance) have been assigned the responsibility of up-keep of the said link and to serve as a platform for the shareholders to express their opinions, views, suggestions, to understand the influencing factors in their investment decision-making process. Besides, this, the team is also instrumental in maintaining close liaison and to share information through periodic meets including tele-conferencing in India and abroad, regular interactions with investment bankers, research analysts and institutional investors. The Company is committed to take such additional steps as may be necessary to fulfil the expectations of the stakeholders.
8.4 H U M A N R E S O U R C E M A N A G E M E N T COMMITTEE
The terms of reference include consideration of all issues/ areas concerning Human Resource Planning & Management, HR policies and initiatives and Promotions for the post of Group General Manager (GGM) and Executive Director (ED) and appeals of of ficers in terms of CDA Rules of ONGC. Prof. S. K. Barua, an Independent Director was the Chairman of the committee upto 13.12.2014.
Thereaf ter, the committee has been headed by Shri K. N. Murthy w.e.f 21.01.2015 Shri A.Giridhar, Prof. Deepak Nayyar, Shri P. Umashankar, Shri S. Ravi, Shri O.P. Bhatt, Shri U.P. Singh , CMD and all Functional Directors were/are the members of the Committee. Director (HR) is the Member-Convener of the Committee.
During 1st April, 2014 to 31st March, 2015, six meetings were held on 28th April, 28th May, 29th July, 26th November, 12th December , 2014 and 19th March,2015.
8.5 PROJECT APPRAISAL COMMITTEE
The Project Appraisal Committee examines and makes recommendations to the Board on projects/ capital investment exceeding 2500 million. Proposals upto Rs.2500 million are appraised inhouse, while the proposals exceeding 2500 million are first appraised by Financial Institutions and thereaf ter considered by the Project Appraisal Committee which recommends the proposal to the Board with its views. The Project Appraisal Committee also monitors IOR/ EOR Schemes. It also reviews the activities and operating performance of OVL and MRPL.
Shri O.P. Bhatt, Independent Director was the Chairman of this Committee upto 13.12.2014. Thereaf ter, the Committee has been headed by Shri K.N. Murthy w.e.f. 21.01.2015. Prof. S.K. Barua, Shri A. Giridhar, Shri Arun Ramanathan, Shri P. Umashankar, Shri S. Ravi, Shri U.P. Singh , Shri T.K. Sengupta, Shri A.K. Banerjee & Concerned Functional Director were/are the members of the Committee. Director (Of fshore) is the Member-Convener of the Committee.
During 1st April, 2014 to 31st March, 2015, ten meetings were held on: 28th May, 26th June, 30th July, 13th & 28th August, 19th September, 13th November, 2014, 20th January, 13th February and 19th March, 2015.
8.6 H E A LT H S A F E T Y & E N V I R O N M E N T COMMITTEE(HSE)
The terms of reference includes review of policy, processes and systems on Safety, Health, Environment and Ecology aspects.
Shri P. Umashankar, an Independent Director was the Chairman of the Committee upto 19.09.2014.
Thereaf ter, the Committee has been headed by Shri O.P. Bhatt upto 13.12.2014. Shri A. Giridhar, Prof. Deepak Nayyar, Prof. S.K.Barua, Shri U.P. Singh ,CMD and all functional Directors were/ are members of the Committee. Director (T&FS) acts as
During 1st April, 2014 to 31st March, 2015, t h t wo me etings were held on 19 May & 29th July, 2014.
The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
8.7 FINANACIAL MANAGEMENT COMMITTEE
Role of the Committee includes examining the mat ters per taining to Budget, Delegation of Powers (Empowerment), Commercial Issues, Forex and Treasury Management, Investments, Risk Management, Capital Structure, Issue of Securities, Short and Long Term Loans. Prof. S.K.Barua, an Independent Director was the Chairman of the Commit tee w.e.f 03.11.2014.
Thereaf ter, the Committee has been headed by Shri K.N, Murthy from 21.01.2015. Shri O.P. Bhatt, CMD, Director (Finance) and Concerned Functional Director were/are the other members of the Committee. Company Secretary is the Convener.
During 1st April, 2014 to 31st March, 2015, thr e e me etings of the Commit te e wer e held on 14th November, 12th December, 2014 and 20th January, 2015
The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
8.8 COMMITTEE ON DISPUTE RESOLUTION
The Committee has been constituted to review the disputes bet ween ONGC and its vendors/ contractors for suitable redressal. Shri S.Ravi, an Independent Director, was Chairman of the Committee upto 19.09.2014.Thereaf ter, the Committee has been headed by Shri K.N. Murthy w.e.f. 03.11.2014.Shri Arun Ramanathan, Shri O.P. Bhat t, Prof. S.K. Barua, Director (Finance), Director (Onshore), Director (T&FS), Shri U. P. Singh and Concerned Functional Director were/ are the other members. Director (T&FS) is the Member-Convener of the Committee.
During 1st April, 2014 to 31st March, 2015, five meetings of the committee were held on 24th April, 29th May, 26th June, 28th August, and 13th November, 2014. 8.9 C o r p o r a t e S o c i a l R e s p o n s i b i l i t y a n d Sustainability Development ONGC implements various measures in the area of Corporate Social Responsibilit y across India. Depar tment of Public Enterprise has issued guidelines on implementation of CSR activities by Public Sector Under takings, which require formation of a CSR & SD Committee. Further, in terms of Section 135 of the Companies Act, 2013 it is necessar y to constitute a Corporate Social Responsibility Committee to oversee the CSR activities. Accordingly, a Corporate Social Responsibilit y and Sustainable Development Commit tee was constituted by the Board of Directors in its 246th meeting held on 12.08.2013. Prof. Deepak Nayyar, an Independent Director was the Chairman of the Committee upto 19.06.2014.
Thereaf ter, the Committee has been headed by Prof. S. K. Barua w.e.f. 03.11.2014. CMD, Director (Finance), Director (HR) were/are the other members the Commit tee. Chief CSR act as Convener of the Committee.
The Terms of Reference of the Committee were approved by the Board on 29.04.2015. The CSR policy was approved by the Board on 28.05.2015 and is uploaded on the website of ONGC.
During 1st April, 2014 to 31st March, 2015, four meetings were held on 19th June, 11th December, 2014 , 20th January and 19th March, 2015 8.10 Commit tee of Directors for Issue of Duplicate share Certificates
In compliance of Rule 6(2)(a) of the Companies (Share Capital and Debentures ) Rules, 2014 and General Circular No. 19/ 2014 dated 12.06.2014 of Ministry of Corporate af fairs, Government of India, the Board of Directors in its 264th Meeting held on 12.12.2014 have constituted a Commit tee of Dir ectors for issue of Duplicate Shar e Cer tificates comprising of Director (Finance), Director (T&FS) and Director (HR) Company Secretary acts as Secretary to the Committee of Directors.
The role of the Committee shall be to approve the issue of Duplicate Share Certificates and any other matter incidental thereto.
During 12th December, 2014 to 31st March, 2015 , th One meeting was held on 6 January, 2015 8.11 Risk Management Commit tee
In compliance of SEBI Circular dated 17.04.14 on Corporate Governance, the Board of Directors of the Company in its 264th Meeting held on 12th December, 2014 constituted a Board Level 'Risk Management Commit tee' comprising of Director (Finance), Director (T&FS), Director (Of fshore), Director (Onshore), Director (HR) , Director (Exploration) and Shri K. N. Murthy, Independent Director Director (Finance) is the Chairman of the Committee and Chief Risk Of ficer (CRO) is the convener.
The role of the Committee includes the following:
1. Ensure compliance with Risk Management Policy.
2. Review adequacy and effectiveness of Business Risk Management .
3. Review the organization wide risk portfolio and consider it against the risk appetite.
4. Define, the risk appetite for the Company, advice business units/support functions on risk initiatives.
5. Review and approve changes in the risk appetite of the company.
6. Suggest improvements to risk management techniques and lif t management awareness.
7. Provide quarterly updates to Board through the A&EC on the current risk management procedures and status of key risks.
8. Monitor emerging issues and best practices.
9. Monitor Business Risk Reporting.
10. Ensure communication of Policies and standards to successive levels of Management.
11. Consideration of any other item which may be delegated in this regard by the Board of Directors.
12. Any other role assigned for the Committee due to changes/modification in the Companies Act, 2013, Listing Agreement, SEBI & DPE Guidelines.
8.12 Research and Development Commit tee
The Board of Directors of the company in its 265th Meeting held on 21st January, 2015 have constituted a 'Research and Development Commit tee' comprising of Shri K.N. Mur thy, Independent Director, Director (Finance), Director (T&FS), Director (Of fshore), Director (Onshore), Director(HR) and Director (Exploration).
Director (T&FS) is the convener and the Company Secretary acts as the secretary to the committee. The Terms of Reference of the Research & Development Commit tee shall broadly be to oversee the operations and functioning of the various R&D activities being carried out in the various Institutes of ONGC. It shall also include reviewing the parameters with regard to HR, Capex and Opex of the R&D activities. The final Terms of Reference shall be finalised by the Committee. No meeting of the R&D Committee was held during 2014-15.
8.13 Project Monitoring Commit tee
The Board of Directors of the company in its 265th Meeting held on 21st January, 2015 have constituted a ‘Project Monitoring Commit tee’ comprising of Shri K.N. Murthy, Chairman. Shri U.P. Singh, Director (Finance), Director (Of f shore), Concerned Functional Director are other members of the committee.
Director (Of f shore) is the convener of the committee.
Role of Project Monitoring Commit tee
The role of the Committee shall inter – alia include the following:
During Project Implementation:
1. The Functional Directors shall ensure that the various projects of value more than Rs.100 Crore (capex) being implemented under their domain are placed before the PMC on a periodical basis for monitoring and review.
2. The PMC shall look into the reasons for cost over-run (capex & opex) and time over-run of the project and would advise how to reduce over run of cost & time.
3. It will have the power to order investigation into abnormal delays in implementation of a project
4. The observations and recommendations of the Committee on the various projects shall be placed before the Board for review / information.
5. To recommend closure of the project after its completion / on declaration of its unviability or otherwise.
6. To suggest mechanisms for improvisation in project implementation/ management
7. Any other related issues as may be suggested by the PMC for effective and focussed monitoring of the projects.
Post Project Implementation:
1. The Functional Directors shall put up the status including capex, opex, production achieved, vaiability analysis etc. of each completed project of value more than 100 Crore within 6 months of actual date of completion of a project.
2. Further, performance of every completed project needs to be reviewed at least once in two years.
3. Review to cover functional parameters anticipated at the time of project implementation vis-à-vis actual performance.
4. To suggest measures for improvement, if required.
5. Reporting to Board on lessons learnt.
The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
8.14 OTHER FUNCTIONAL COMMITTEES
Apart from the above, the Board, from time to time, constitutes Functional Committees with specific terms of reference as it may deem fit. Meetings of such Committees are held as and when the need arises. Time schedule for holding the meetings of such Committees is finalized in consultation with Committee members.
9.0 CODE OF CONDUCT FOR MEMBERS OF THE BOARD AND SENIOR MANAGEMENT
The Company is committed towards conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations. The existing code of Conduct has been revised in line with the provisions of the Companies Act, 2013, SEBI Guidelines and Listing Agreement and approved by the Board of Directors of the Company in its 268th meeting held on 29.04.2015 A copy of the Code has been placed on the Company’s website w w w.ongcindia.com. All members of the Board and Senior Management i.e. ‘Key Executives’ have confirmed compliance with the Code of Conduct for the year under review.
A declaration signed by Chairman & Managing Director is given below:
Code of Conduct – Compliance affirmation (Pursuant to Clause 49 of the Listing Agreement) “I hereby confirm that the Company has obtained from the members of the Board and senior management (Key Executives), affirmation that they have complied with the Code of Conduct for Directors and senior management in respect of the financial year 2014-15”
10.0 WHISTLE BLOWER POLICY
In terms of revised Clause 49 of the Listing Agreement, the company shall establish a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct or ethics policy. Accordingly ONGC has implemented the Whistle Blower Policy on 30th November, 2009, which is in line with the Listing Agreement.
ONGC has provided ample opportunities to encourage the employees to become whistle blowers (employe es who voluntarily and confidentially want to bring the unethical practices, actual or suspected fraudulent transactions in the organization to the notice of the competent authority for the greater interest of the organization and the Nation). It has also ensured a very robust mechanism within the same framework to protect them (whistle blowers) from any kind of harm. It is hereby affirmed that no personnel has been denied access to the Audit Committee.
The Company has a Vigilance Department which is headed by an of ficer on deputation from the Government of India in the rank of Joint Secretary or above.
10.1 ONGC’ CODE ON INSIDER TRADING
In pursuance of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board has approved the "The Code of Internal Procedures and Conduct in dealing with the Securities of ONGC” in its 268th Board meeting held on 29.04.2015. The objective of the Code is to prevent purchase and/ or sale of shares of the Company by an Insider on the basis of unpublished price sensitive information. Under this Code, Insiders (Directors, Advisors, Key Executives, Designated Employees and other concerned persons) are prohibited to deal in the Company’s shares/derivatives of the Company during the closure of Trading Window and other specified period(s). To deal in securities, beyond specified limit, permission of Compliance Officer is required.
All Directors/ Advisors/ Officers/ designated employees are also required to disclose related information periodically as defined in the Code.
10.2 CEO/ CFO CERTIFICATION
In terms of Clause 49 of the Listing Agreement, the certification by the CEO and CFO on the financial statement and internal controls relating to financial reporting for the year 2014-15 was submitted to the Board in its meeting held on 28th May, 2015.
10.3 FINANCE MANUAL
ONGC’s Finance Manual is a compendium based on existing practices and systems, comprehensively covering various finance activities such as accounting, budgeting, costing, pre-audit and treasury management. This manual provides the users with existing practices, processes, finance policies & procedures, and guides Finance of ficers while ensuring consistency and uniformity across locations in terms of processes and methodologies.
This manual also helps new incumbents' and Finance officers to enlighten them as well as outside agencies such as Statutory Auditors, Government Auditors associated with ONGC.
11.0 SUBSIDIARY MONITORING FRAMEWORK
The Company has two direct subsidiary companies, Mangalore Refinery and Petrochemicals Ltd. (MRPL) and ONGC Videsh Ltd. (unlisted, non-material). The list of subsidiaries of MRPL and OVL is given in the consolidated accounts of ONGC, which forms part of the Annual Report.
All subsidiaries of the Company are Board managed with their Boards having the rights and obligations to manage such companies in the best interest of their stakeholders. CMD, ONGC is the Chairman of MRPL and OVL.
In terms of Clause 49.V(B) to (G) of the Listing Agreement and DPE guidelines, performance of the listed and unlisted subsidiar y companies is reviewed by the Audit and Ethics Committee and the
Board of ONGC as under:
a) Financial Statements of the listed and unlisted subsidiary companies, are reviewed by the Audit and Ethics Committee;
b) Minutes of the meetings of the Board of Directors are placed before the Company’s Board, periodically;
c) A statement of all significant transactions and arrangements entered into by the Subsidiar y Company are also reviewed by the Company.
The Company does not have any material unlisted subsidiary company in terms of the clause 49 of the Listing Agreement.
13.1 MATERIAL CONTRACTS/ RELATED PART Y TRANSACTIONS
The Company has not entered into any material financial or commercial transactions with the Directors or the Management 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 except with certain PSUs, where the Directors are Directors without the required shareholdings. The Company has obtained declarations from all concerned in this regard, which were noted by the Board. A comprehensive policy on Related Party Transaction (RPT) has been approved by the Board in its 264th meeting held on 12.12.2014. The Policy is in line with the Listing Agreement and Companies Act, 2013. The Policy as above has been uploaded on the website of ONGC.
The details of transactions with related parties are disclosed in Note No. 39 of the Notes to Financial Statements for the year ended 31st March, 2015. Being a State Enterprise, no disclosure has been made in respect of the transactions with State Enterprises, including subsidiary companies, in line with Accounting Standard-18 on Related Party Transactions.
The Company has complied with applicable rules (except as otherwise stated in this report) and the requirement of regulatory authorities on capital market and no penalties or strictures were imposed on the Company during last three years. All returns/ reports were filed within stipulated time with stock exchanges/ other authorities.
14. MEANS OF COMMUNICATION
• Quarterly/ Annual Results:
The Company regularly intimates un-audited as well as audited financial results to the Stock Exchanges, immediately after these are approved. These financial results are normally published in the leading English and vernacular dailies having wide circulation across the country. The results are also displayed on the website of the Company w w w.ongcindia.com. The results are not sent individually to the shareholders
• News Release, Presentation etc.:
The of ficial news releases, detailed presentations made to media, institutional investors, financial analysts etc. are displayed on the Company ’s website w w w.ongcindia.com
• W e b s i t e : T h e C o m p a n y ’ s w e b s i t e w w w.ongcindia.com contains separate dedicated section ‘Investor Relations’ where the information for shareholders is available. Full Annual Report, Shareholding Pattern and Corporate Governance Report etc. are also available on the web-site in a user-friendly manner
• Annual Report: Annual Report containing interalia, Audited Accounts, Consolidated Financial Statements, Board's Report, Management Discussion and Analysis (MD&A) Repor t, Business Responsibility Report, Corporate Governance Report, Auditors’ Report, including Information for the Shareholders and other important information is circulated to the members and others entitled thereto
15. SHAREHOLDERS’ INFORMATION
15.1 ANNUAL GENERAL MEETING
Date : Tuesday, 15 September, 2015.
Time : 10:00 Hrs.
Venue : NDMC Indoor Stadium, Talkatora Garden, New Delhi – 110001.
15.2 FINANCIAL CALENDER
15.2 FINANCIAL CALENDER
Adoption of Quarterly Results for the Quarter ending
Tentative date of the meeting of the Board
30th June, 2015 (with limited review by Statutory Auditors) : Thursday, 13th August, 2015
30th September, 2015 (with limited review by Statutory Auditors) : Thursday, 12th November, 2015
31st December, 2015 (with limited review by Statutory Auditors) : Thursday, 11th February, 2016
31st March, 2016 (audited) Saturday, 28th May, 2016
These dates are tentative and subject to change and the last date for submission of the unaudited quarterly and year to date financial results to the stock exchange is within forty-five days of end of each quarter (except the last quarter). The last date for submission of the financial results of the last quarter is within sixty days from the end of the financial year.
15.3 BOOK CLOSURE PERIOD
The Book Closure period is from ednesday, the 9th September, 2015 to Tuesday, the 15th September, 2015 (both days inclusive) for the payment of Final Dividend.
15.4 DIVIDEND PAYMENT DATE
Final Dividend would be paid on or after 15th September, 2015.
15.5 LISTING ON STOCK EXCHANGES:
The equity shares of the Company are part of the Sensex and S&P CNX Nifty Index and are listed on the following Stock Exchanges
Bombay Stock Exchange (BSE) PJ.
Towers, Dalal Street, Fort Mumbai-400001
Telephone:022-22721233/4 Fax: 022-22721919 E-mail:firstname.lastname@example.org ebsite:www.bseindia.com 500312 ONGC
National Stock Exchange of India Ltd. (NSE)
Exchange Plaza,C-1, G Block, Bandra-Kurla Complex, Bandra(E), Mumbai-400051 Telephone: 022-26598100 -8114 Fax: 022-26598120 E-mail: email@example.com ebsite: www.nseindia.com
15.6 LISTING FEES
Annual listing fees for the year 2014-15, as applicable, have been paid to the above Stock Exchanges.
15.7 DEMAT ISIN NUMBERS IN NSDL & CDSL
(Stock Code): INE213A01029
Custody Fee of NSDL and CDSL has been paid for the Financial Year 2014-15
15.8 STOCK MARKET INFORMATION
The stock price performance of ONGC scrip during the period 1st April, 2014 to 31st March, 2015 in comparison to BSE is plotted below:
16. SHARE TRANSFER SYSTEM
Karvy Computershare Private Ltd. (Karvy) is the Registrar and Share Transfer Agent (RTA) for physical shares. Karvy is also the depository interface of the Company with both National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL)
The transfer of shares received in physical form is overseen by an Officers Committee (constituted by the Board of Directors) which usually meets once in a fortnight to ratif y the shares received for transfer, transmission, re-materialization and dematerialization etc. The shares for transfer received in physical form are transferred expeditiously, provided the documents are complete and the share transfer is not under any dispute. The Minutes of the aforesaid Committee are placed before the Stakeholders’ Relationship Committee. A summary of transfer/ transmission of securities so approved by the aforesaid Committee are placed at Board Meetings.
The share certificates duly endorsed are sent to the shareholders by RTA. Confirmation in respect to the requests for dematerialization of shares is sent to the respective depositories i.e. NSDL and CDSL, expeditiously.
With a view to further expedite the process of transfer and transmission of shares in physical mode, the Board of Directors have authorised the Share
Transfer Agent to process the transfer / transmission. The details of the transfers etc are placed before the Committee of Officers for ratification.
Pursuant to the Clause 47(C) of the Listing Agreement, certificates on half yearly basis confirming due compliance of share transfer formalities by the Company, certificate for timely dematerialization of the shares as per SEBI (Depositories and Participants) Regulations, 1996 are sent to the stock exchanges.
In addition, as a part of the capital integrity audit, a Reconciliation of Share Capital Audit confirming that the total issued capital of the Company is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL, is placed before the Board on a quarterly basis. A copy of the Audit Report is submitted to the stock exchanges.
19. TRANSFER OF UNPAID/ UNCLAIMED DIVIDEND AMOUNT TO INVESTOR EDUCATION & PROTECTION FUND (IEPF)
During the year under report, an amount of Rs.11,661,126.00 and 13,803,858.00 pertaining to unpaid dividend for the financial year 2006-07 (Final) and 2007-08 (Interim) respectively was transferred to the Investor Education & Protection Fund (IEPF) set up by the Central Government. This is in accordance with the Sections 124 and 125 of the Companies Act, 2013 requiring transfer of dividend remaining unclaimed and unpaid for a period of 7 years from the due date to the IEPF.
The unpaid/unclaimed amount of Final Dividend declared on 19th September, 2008 for the financial year 2007-08 and interim dividend declared on 19th December, 2008 for the financial year 2008-09 will be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government by 18th October, 2015 and 18th January, 2016 respectively. Members who have not encashed their dividend warrants pertaining to the said years may approach the Company or its Registrar & Share Transfer Agent for obtaining payment thereof.
Given below are the proposed dates for transfer of the unclaimed dividend to IEPF by the Company:-
21. OUTSTANDING GDRs/ ADRs / WARRANTS OR CONVERTIBLE INSTRUMENTS
No GDRs/ ADRs/ Warrants or Convertible Instruments have been issued by the Company during the year.
22. ASSETS/ BASINS/ PLANTS/ INSTITUTES/CODs A. ASSETS
1. Mumbai High Asset, Mumbai
2. Neelam & Heera Asset, Mumbai
3. Bassein & Satellite Asset, Mumbai
4. Ahmedabad Asset, Ahmedabad
5. Ankleshwar Asset, Ankleshwar
6. Mehsana Asset, Mehsana
7. Rajahmundry Asset, Rajahmundry
8. Karaikal Asset, Karaikal
9. Assam Asset, Nazira
10. Tripura Asset, Agartala
11. Eastern Of fshore Asset, Kakinada, Andhra Pradesh
1. Western Of fshore Basin, Mumbai
2. Western Onshore Basin, Vadodara
3. KG-PG Basin, Chennai
4. Cauvery Basin, Chennai
5. Assam & Assam-Arakan Basin, Jorhat
6. MBA Basin and CBM Development Project,
7. Frontier Basin, Dehradun
1. Uran Plant, Uran
2. Hazira Plant, Hazira
3. C C C Plant, Dahej, Gujarat 2 3 4
1. Keshava Deva Malaviya Institute of Petroleum
Exploration (KDMIPE), Dehradun
2. Institute of Drilling Technology (IDT), Dehradun
3. Institute of Reservoir Studies, (IRS) Ahmedabad
4. Institute of Oil & Gas Production Technology (IOGPT)
5. Institute of Engineering & Ocean Technology (IEOT) Navi Mumbai
6. Geo- data Processing & Interpretation Center (GEOPIC), Dehradun
7. ONGC Academy, Dehradun
8. Institute of Petroleum Safety, Health & Environment
9. Institute of Biotechnology & Geotectonics Studies (INBIGS), Jorhat
10. School of Maintenance Practices (SMP), Vadodara
11. Centre for Excellence in Well Logging (CEWL), Vadodara
12. Regional Training Institutes (RTIs) Navi Mumbai, Chennai, Sivasagar & Vadodara
13. ONGC Energy Centre
E. Centres of Deliveries
1. CBM, New Delhi
2. Shale Gas, Vadodara
3. Deep water, Mumbai
4. High Temperature/ High Pressure, Chennai
23. INVESTOR SERVICES AND ADDRESSES FOR SHAREHOLDERS’ CORRESPONDENCE.
These have been given at 8.3.3 and 8.3.4 above
24. RISK MANAGEMENT
The Risk Management Policy has been rolled out across the organization in all Assets, Basins, Plants, Institutes and of fices.
Details are given under Risk Management Committee.
25. COMPLIANCE CERTIFICATE OF THE AUDITORS
Certificate from the Auditors of the Company, confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is annexed to this Report.
The Certificate has also been forwarded to the stock exchanges where the securities of the Company are listed. ONGC has implemented most of the non mandatory requirements.
26. A D O P T I O N O F N O N - M A N D A T O R Y REQUIREMENTS OF CLAUSE - 49
Beside the mandatory requirement of Clause 49 of the Listing Agreement, the following non-mandatory requirements have been implemented and reflected elsewhere in this report:-
• As far as Audit Qualifications are concerned, the Company is in the regime nil qualifications.
• The Internal Auditor reports directly to the Audit Committee.
27. GUIDELINES ON CORPORATE GOVERNANCE BY DPE
In May, 2010, the Department of Public Enterprises has issued Guidelines on Corporate Governance for Central Public Sector Enterprises which are now mandatory in nature.
No Presidential Directives have been issued during the period 1st April, 2014 to 31st March, 2015. ONGC is complying with these guidelines to the ex tent possible No items of expenditure have been debited in books of accounts, which are not for the purpose of business.
No expenses, which are personal in nature, have been incurred for the Board of Directors and top management.
The General Administrative expenses were 5.32% of total expenses during 2014-15 as against 6.57% during the previous year.
28. SECRETARIAL AUDIT REPORT
Secretarial Audit Report confirming compliance to the applicable provisions of Companies Act, 2013, Revised Listing Agreement, SEBI guidelines, DPE Guidelines and all other related rules and regulations relating to capital market, though not mandatory, obtained from a practicing Company Secretary, was noted by the Board and forms part of the Board's Report.
29. FEE TO STATUTORY AUDITORS
The fee paid/ payable to the Statutory Auditors for the year was Rs.25.01 million (previous year Rs.22.92 million) including Rs.1.12 million (previous year Rs.1.01 million) as fee for certification of Corporate Governance Report, Rs.5.06 million (previous year Rs.5.06 million) for limited review report and Rs.3.66 million (previous year Rs.3.14 million) for other certification including certification under Section 33(2AB) of Income Ta x Act for R&D Institutes plus reasonable travelling and out of pocket expenses actually incurred / reimbursable