Corporate Goverence Report

ONGC strongly believes that Corporate Governance in any organisation derives its genesis from culture and mindset of the organisation and is based on the principles of integrity, fairness, equity, transparency, accountability and commitment to the values. It is a way of life rather than a mere legal compulsion.

The premise of Corporate Governance framework in ONGC is based on the following key drivers:

• Adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders including customers, employees and society at large.

• A sound system of internal control to mitigate the risks to achievement of business objectives both short term and long term.

• Compliance of laws, rules & regulations in true letter and spirit.

• Independent verification of the Company's financial reporting.

• Strategic supervision by the Board of Directors of appropriate composition, size, varied experience and commitment to discharge their responsibilities.

• Timely and balanced disclosure of all material information to all the stakeholders.

• Clearly defined standards against which performance of responsibilities can be measured.

• A clear delineation of shareholders' rights.

• Accuracy and transparency in disclosures regarding operations, performance, risk and financial position.

Based on the aforesaid objectives and in compliance with the disclosure requirements of Clause 49 of the 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:

1. Corporate Governance Recognitions
At the outset, it may be mentioned that many organisations have recognised the excellence in Corporate Governance in ONGC and the following accolades have been conferred on ONGC in recent years:

i. 'ICSI National Award for Excellence in Corporate Governance for 2011'- Certificate of Recognition by the Institute of Company Secretaries of India.

ii. 'ICSI National Award for Excellence in Corporate Governance-2010'- by the Institute of Company Secretaries of India;

iii. 'Golden Peacock Global Award' for Corporate Governance by World Council for Corporate Governance, U.K. in the years 2005, 2007,2008 and 2009

iv. 'Golden Peacock Award' for Excellence in Corporate Social Responsibility in Emerging Economics 2006 by World Council for Corporate Governance, U.K in 2006;

2. Board of Directors

2.1 Composition
The Company is managed by the Board of Directors, which formulates strategies, policies and reviews its performance periodically. The Chairman & Managing Director (CMD) and Six Whole-Time Directors viz. Director (Onshore), Director (Technology & Field Services), Director (Finance), Director (Offshore), Director (Exploration) and Director (Human Resources), manage the business of the Company under the overall supervision, control and guidance of the Board.

The Board of Directors has an adequate combination of Executive (Functional) and Non-executive Directors. As on 31st March, 2012, the Board of Directors had 13 members, comprising of 5 Functional Directors (including the Chairman & Managing Director) and 8 Non-executive Directors (comprising 1 part-time official nominee Director and 7 part-time non-official Directors) 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.

The composition of the Board of Directors of ONGC as on 31.03.2012 complies with the provisions of Clause 49 of the Listing Agreement, except that for the periods from 1st April, 2011 to 19th June, 2011 and from 10th November, 2011 to 13th December, 2011, the Board of Directors did not comprise of the required number of Independent Directors as per the terms of the above mentioned Listing Agreement.

2.2 Board/ Committee Meetings and Procedures
(A) Institutionalised decision making process

With a view to institutionalize all corporate affairs and setting up systems and procedures for advance planning for matters requiring discussion/ decisions by the Board, the Company has defined guidelines for the meetings of the Board of Directors and Committees thereof. These guidelines seek to systematize the decision making process at the 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) The meetings are convened by giving appropriate advance notice after obtaining approval of the Chairman of the Board/ Committee. To address specific urgent need, meetings are also being called at a shorter notice. In case of exigencies or urgency resolutions are passed by circulation.

(ii) Detailed agenda containing the management reports and other explanatory statements are circulated in advance in the agenda format amongst the members for facilitating meaningful, informed and focussed decisions at the meetings. Where any document or the agenda is of confidential nature, the same is tabled with the approval of CMD. Sensitive subject matters are discussed at the meeting without written material being circulated. In special and exceptional circumstances, additional or supplemental item(s) on the agenda are permitted.

(iii) The agenda papers are prepared by the concerned officials, sponsored by the concerned Functional Directors and approved by the CMD. Duly approved agenda papers are circulated amongst the members of the Board/ Committee by the Company Secretary or by the convener of the Committee.

(iv) The meetings of the Board/ Committees are generally held at the Company's Registered Office in New Delhi.

(v) Presentations are made to the Board/ Committee covering Finance, Production, Operations, major Business Segments, Human Resources, Marketing, Joint Venture operations, whenever required.

(vi) 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 agenda for discussion. Senior officials are called to provide additional inputs to the items being discussed by the Board/Committee, as and when required.

(vii) 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.

(C) Recording minutes of proceedings at the Board Meeting

Minutes of the proceedings of each Board/Committee meeting are recorded. Draft minutes are circulated amongst all members of the Board/ Committee for their critical appreciation and comments. The comments are incorporated in the minutes, which are finally approved by the Chairman of the Board/ Committee. These minutes are confirmed in the next Board/ Committee Meeting. Minutes of the meetings of the Committees are also noted by the Board in its next meeting. The finalized minutes are entered in the Minutes Book.

(D) Follow-up mecha nism


The guidelines for the Board/ Committee meetings provide for an effective post-meeting follow-up, review and reporting process for the action taken on decisions/instructions/directions of the Board and Committee. As per the Board's decision, the Company Secretary intimates the 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 the areas of their responsibilities in the next meeting. Functional Directors submit follow-up Action Taken Report (ATR) once in a quarter.

(E) Safety Snapshots

Considering the fact that ONGC is in hydrocarbon business, safety is paramount for continued operations within the organisation. With a view to apprise the Board regarding various safety measures being taken throughout the length and breadth of ONGC, as well as to seek their guidance in the implementation of these measures, periodic presentations are made to the Board of Directors in the form of Safety Snapshots.

(F) Presentation after the meeting

With a view to keep the members of the Board apprised with the latest developments in the Industry, presentations on the subjects relevant to E&P business are being made periodically to the Board. This also ensures that the Directors are constantly in touch with the developments in the Industry in general and ONGC in particular in its operations.

(G) Compliance
Functional Directors are responsible to ensure adherence to all the applicable provisions of law, rules, guidelines etc. A Quarterly Compliance Report (collected from all work centres) confirming adherence to all the applicable laws, rules, guidelines and internal instructions/ manuals, including Corporate Governance, is reviewed by the Audit & Ethics Committee and the Board.

(H) Training and Evaluation of Non-Executive Board Members

(a) Pursuant to 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 with regard to Training of Directors it is provided that the company “shall undertake training programme for its new Board members (Functional, Government Nominee and Independent) in the business model of the company including risk profile of the business of the company, responsibility of respective Directors and the manner in which such responsibilities are to be discharged. They shall also be imparted training on Corporate Governance, model code of business ethics and conduct applicable for the respective Directors.”

Further, in terms of Non-Mandatory Requirements as per Annexure I D to Clause 49 of the Listing Agreement with the Stock Exchanges it is provided as under:

“A company may train its Board members in the business model of the Company as well as the risk profile of the business parameters of the company, their responsibilities as directors, and the best ways to discharge them.”

Board of Directors have approved a three tier training policy for Independent Directors:

• Induction Training;

• External Training;

• Board Presentation.


The 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 has been advantageous and fruitful in taking business decisions.

(b) Policy on Performance Evaluation of Directors

In terms of the non-mandatory requirements stated in Annexure ID of clause 49 of the Listing Agreement with the Stock Exchanges it is provided as follows:

Mechanism for evaluating Non-Executive Board Members

The performance evaluation of non-executive directors could be done by a peer group comprising the entire Board of Directors, excluding the director being evaluated; and Peer Group evaluation could be the mechanism to determine whether to extend /continue the terms of appointment of non-executive directors.

Further as per the Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs, it is stipulated as follows:

“Evaluation of Performance of Board of Directors, Committees thereof and of Individual Directors:

The Board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors. The Board should state in the Annual Report how performance evaluation of the Board, its committees and its individual directors has been conducted.

CRISIL had conducted a study on Governance and Value Creation in ONGC and one of the Key recommendations of the aforesaid study was:

Formal appraisal process for board as a whole should be institutionalized

In line with best practices, board should undertake a formal and rigorous annual evaluation of its own performance; performance of independent directors can be evaluated through a peer evaluation process.”

Accordingly, with a view to comply with the aforesaid non-mandatory recommendations as well as to put in place a policy in this regard, a Policy on Performance Evaluation of Directors was approved by the Board in principle.

(c) Board Charter

As per Clause 3.5 of the guidelines on Corporate Governance for CPSEs, a clear definition of the roles and the division of responsibilities between the Board and the management is necessary to enable the Board to effectively perform its role. The Board of each CPSE may be encouraged to articulate its corporate governance objectives and approach (within the board parameters of the guidelines and the general perception of business risk) to satisfy the expectations of its majority shareholders and other stakeholders. This charter should be read in conjunction with the Company's Memorandum and Articles of Association. As a good Corporate Governance practice a Board Charter will assist directors in fulfilling their responsibilities as a board member. The Board Charter sets out the respective roles, responsibilities and authorities of the Board and of Management in the governance, management and control of the organization.

The Board of ONGC has approved in-principle a Board Charter.

Both the Policy of Performance Evaluation of Directors and the Board Charter shall be finalised by Independent Directors.


2.3 Board Meetings

During 1st April, 2011 to 31st March, 2012, Twelve Board meetings were held on April 27, May 30, June 28, July 28, August 29, September 27,November 04, December 01,2011 and January,04, February,08, March 07 & 15,2012

The minimum and maximum interval between any two Board meetings was 08 day and 38 days respectively.


The details of number of Board meetings attended by Directors, attendance at last AGM, number of other directorship/committee membership held by them during the year 2011-12 are tabulated below:-

 
 
 
# Does not include Directorships of Foreign Companies, Section 25 Companies and Private Limited Companies.
* Chairmanship/ Membership of the Audit Committee and Shareholders'/ Investors' Grievance Committee of Public
Listed Companies (including ONGC).

Notes:

(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 & Conclave

The 9th Strategy Meet 2011 'Abhyuday' was held on November 11 & 12, 2011 at Anand in Gujarat where all members of the Board and senior officials of the Ministry of Petroleum & Natural Gas participated. Intense discussions and deliberations took place during this two days meet covering areas of concerns and growth for ONGC. 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 the erstwhile Oil & Natural Gas Commission and Board is organized every year. 10th ONGC Conclave-Mantrana, to maximise momentum, was organized during January 15 &16, 2012 at Bhubaneswar.

4. Vichar Vishleshan

The Key Executives In-charges of Assets, Basins, Services, Institutes and Corporate Functions meet periodically with CMD and the functional Directors to review performance and to formulate future plans. During the year under review, 11th Key Executives Meet (Vichar Vishleshan XI) was organized during 11th-13th May, 2012 at Mysore on the theme “Strategising Today for Sustaining Growth beyond 2030”.

5. Resume of Directors Proposed to be Re-appointed

The brief resume of Directors retiring by rotation and Additional Director 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 is appended to the notice of the 19th Annual General Meeting.

6. Board Committees

The Company has the following Committees of the Board:

6.1 Audit & Ethics Committee


The terms of reference of the Audit & Ethics Committee are in accordance with Section 292A of the Companies Act, 1956, guidelines set out in Clause 49(II) 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.

Composition

Shri S.Balachandran was the Chairman of the Committee upto 10.11.2011. Thereafter, the Committee was headed under the stewardship of Smt. Usha Thorat, an Independent non-executive Director upto 10.02.2012. Smt. Usha Thorat has a Master's degree in Economics from the Delhi School of Economics. She joined the Reserve Bank in April 1972. During her career in the RBI spanning 38 years, she has had a stint in virtually each and every area of central banking. Besides banking regulation/supervision, rural/urban cooperative banking, deposit insurance and currency management, she has rich experience in the areas of foreign exchange and reserves management, debt management of central and state governments, development and regulation of money, forex and government securities markets, rural planning and credit, cooperative banking, customer service and grievance redressal, and payment and settlement systems.

All members of the Committee have requisite financial and management experience and have held or hold senior positions in other reputed organizations.

Director (Finance), Chief-Corporate Finance and Chief Internal Audit are the permanent invitees. Representatives of Statutory Auditors and Cost Auditors are invited to attend and participate in the meetings, whenever required. Functional Directors, Executives of Finance and other departments are invited on need basis.

The Chairman of the Audit & Ethics Committee was present at the last AGM of the Company.

Company Secretary acts as the Secretary to the Committee.

The role of the Audit & Ethics Committee includes the following:

(i) 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.

(ii) Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the
statutory auditor and the fixation of audit fees of the Statutory Auditors.

(iii) Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

(iv) Reviewing, with the management, the annual financial statements before submission to the Board for approval, with
particular reference to:

• Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (2AA) of section 217 of the Companies Act, 1956

• Changes, if any, in accounting policies and practices and reasons for the same

• Major accounting entries involving estimates based on the exercise of judgment by management

• Significant adjustments made in the financial statements arising out of audit findings

• Compliance with listing and other legal requirements relating to financial statements

• Disclosure of any related party transactions

• Qualifications in the draft audit report.

(v) Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.

(vi) 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 offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

(vii) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.

(viii) Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

(ix) Discussion with internal auditors on any significant findings and follow up there on.

(x) 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.

(xi) 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.

(xii) To look into the reasons for substantial defaults in the payment to the depositors, shareholders (in case of non payment of declared dividends) and creditors.

(xiii) To review the functioning of the Whistle Blower Mechanism.

(xiv) The Audit Committee should have discussions with the auditors periodically about internal control systems, the scope of audit including the observations of the auditors and review the half-yearly and annual financial statements before submission to the Board and also ensure compliance of internal control systems.

(xv) To review the Audit paras referred to A&EC by the Internal Audit / Board and / or Govt. of India and to provide its suggestions / guidance / comments on the issues referred to it.

(xvi) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

(xvii) The Audit Committee shall review the financial statements, in particular, the investments made by the unlisted subsidiary company.

Annual Report on the working of the Audit Committee

As advised by the Comptroller & Auditor General (C&AG) in its Report No. CA 22 on Corporate Governance in Listed Government Companies, in order to present a comprehensive view of the working of the Audit & Ethics Committee of ONGC the second and third Annual Report on the working of the Audit Committee for the year 2009-10 & 2010-11 was placed in the 97th meeting of the Audit & Ethics Committee held on 27.09.2011.The fourth Annual Report on the working of the Audit Committee for the year 2011-12 is under finalisation and shall be presented to the Audit & Ethics Committee shortly.

The aforementioned report briefly give a background about the constitution, the legal framework, terms of reference, items considered by the Audit Committee and the details of observation / suggestion of Audit Committee and action taken thereon during the year.

Audit & Ethics Committee Meetings

During 1st April, 2011 to 31st March,2012, Ten meetings of Audit & Ethics Committee were held on April 27, May 30, June 28, July 28, August 29, September 27, October 13/14, November 04, 2011 and January 04, February 08, 2012.

The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
 
Attendance
 
     
Members No of Meeting held during the tenure No of meeting attended
Shri S. Balachandran (upto 10.11.2011) 8 8
Shri Santosh Nautiyal (upto 10.11.2011) 8 8
Shri S.S.Rajsekar (upto 10.11.2011) 8 7
Smt Anita Das   10 7
Dr. D. Chandrasekharam (from 29.07.2011)  6 6
Smt Usha Thorat (from 29.07.2011 to 10.02.2012) 6 3
Shri Arun Ramanathan (from 29.07.2011) 6 6
Shri O.P.Bhatt (from 05.01.2012) 1 1
Prof. S.K. Barua (from 05.01.2012)  1 1
Permanent Invitees:  
Shri D.K. Sarraf, Director (Finance) (upto 15.09.2011) 5 5
Shri A.K.Hazarika, (holding Additional Charge of Director (Finance) (upto 02.10.2011)  1 1
Shri S. Dhandapani, Chief-Internal Audit (from 01.06.2011) 10 10
Shri Pradeep Prasad, Chief I.A(upto 30.05.2011) 2 2
Shri A. K. Banerjee, GGM -CCF(from 01.06.2011) 8 8
Shri Sudhir Vasudeva(Holding Additional Charge of Director Finance from 03.10.2011) 4 4
6.2 Remuneration Committee

ONGC, being a Central Public Sector Undertaking, the appointment, tenure and remuneration of directors are decided by the Government of India. However, 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. The Remuneration Committee of ONGC was headed by Smt. Anita Das, Independent Director upto 04.01.2012 thereafter Smt. Sushama Nath, an Independent Director, became the Chairperson.

Shri S. Balachandran, Shri Santosh Nautiyal, Shri S.S.Rajsekar Dr. D. Chandrasekharam, Smt Usha Thorat, Prof. Deepak Nayyar, and Shri Arun Ramanathan, Independent Directors were/are the members of the Committee.

Director (HR) and Director (Finance) are the permanent Invitees.

Three meetings of the above Committee were held on April 27, June 28 and December 30, 2011.

The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
 
Attendance
 
Members No of Meeting held during the tenure No of meeting attended
Smt. Sushama Nath (Chairperson from 05.01.2012) None -
Smt. Anita Das  3 3
(Chairperson upto 04.01.2012 & Member thereafter)    
Shri S. Balachandran (upto 28.07.2011) 2 2
Shri Santosh Nautiyal (upto 10.11.2011) 2 2
Shri S.S.Rajsekar (upto 10.11.2011) 2 2
Shri Arun Ramanathan (from 29.07.2012) 1 -
Dr. D. Chandrasekharam (from 29.07.2012) 1 1
Smt. Usha Thorat (from 29.07.2011 to 10.02.2012) 1 1
Shri Deepak Nayyar (from 29.07.2011) 1 1
Permanent Invitees:
Shri D.K. Sarraf, Director (Finance) 2 2
(upto 15.09.2011)
Shri Sudhir Vasudeva, 1 1
(As Director (Finance) (from 03.10.2011)
Shri K.S.Jamestin, Director(HR) 2 2
(from 25.05.2011)
 
6.2.1 Directors' Remuneration

ONGC being a Government Company, terms and conditions of appointment and of remuneration of Executive (whole-time functional) Directors are determined by the Government through administrative ministry, the Ministry of Petroleum & Natural Gas. Non-executive (part-time official) Directors do not draw any remuneration. The Non-executive (part-time non-official) Directors are paid sitting feesRs 20,000/- for each Board/ Committee meeting attended by them.

Remuneration of Directors during 1st April 2011 to 31st March, 2012 was as follows:

(a) Executive Directors Rs in million
Sl. No.
Name
Salary including DA
Other benefits & perks
Performance Incentives
Contriution to PF & other Funds
Provision for Leave, Gratuity & PRBS as per AS-15
Grand Total
Term
1 Shri Sudhir Vasudeva 1.47 0.67 1.42 0.18 0.22 3.96 28.02.2014
2 Shri A.K. Hazarika  1.57 0.8 1.27 0.19 0.33 4.16 30.09.2012
3 Shri U.N.Bose  1.86 0.88 1.27 0.19 0.32 4.52 30.11.2012
4 Shri S.V.Rao 1.43 0.87 0.11 0.18 0.2 2.79 31.03.2013
5 Shri K. S. Jamestin 1.35 0.51 1.21 0.15 0.24 3.46 31.07.2014
6 Shri D K Sarraf 0.82 0.26 (0.69) 0.09 0.12 0.59 15.09.2011
 
Note:

1. The amount of director's remuneration as given above is different from the amount stated in note no. 39.3.2 of the Notes to accounts due to the reversal of excess provision for Performance Related Pay (PRP) made for the year 2010-11 to the Ex-CMD and Ex-Directors.

2. Performance related pay of Functional Directors (including CMD) is paid as per DPE norms.

3. Notice period of 3 months or salary in lieu thereof is required for severance of service.

(b) Non-Executive Directors (Part-time non-official)

Non-Executive non-official Directors were paid sitting fee@Rs20,000/-for attending each meeting of the Board/ Committees thereof. Details of sitting fees paid during the period of 1st April to 31st March, 2012 under review are as follows:
 
Names
Sitting fees ( Rs in Million)
Shri S. Balachandran upto 10.11.2011
0.78
Shri Santosh Nautiyal upto 10.11.2011
0.66
Smt Anita Das
0.76
Shri S.S. Rajsekar upto 10.11.2011
0.54
Dr D.Chandrasekharam 
0.6
Smt. Usha Thorat  from 20.06.2011
0.26
 Shri Arun Ramanathan from 20.06.2011
0.64
 Prof Deepak Nayyar from 20.06.2011
0.22
 Prof. S.K.Barua
0.2
 Shri O.P. Bhatt
0.06
 Smt. Sushama Nath
0.2
Total
4.92
 
6.2.2 Stock Options

The Company has not issued any Stock Options to its Directors/ Employees.

6.2.3 Equity Shares Held by Directors

Except as stated hereunder, none of the Directors, hold any Equity Shares in the Company as per the declarations made by them to the Company:
 
Name of Directors
No. of Shares held
Shri Sudhir Vasudeva
2,580
Shri A.K. Hazarika
4,640
Shri U.N.Bose
1,192
Shri D.K.Sarraf
3,192
Shri S.V.Rao
2,880
Shri K. S. Jamestin
3,600
Shri Sudhir Bhargava
360
 
6.3 Shareholders'/ Investors' Grievance Committee

The Shareholders'/ Investors' Grievances Committee specifically looks into redressing of Shareholders' and Investors' complaints/ grievances 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 Committee also monitors implementation and compliance of Company's Code of Conduct for Prevention of Insider Trading in ONGC's securities.

The Committee is headed by Prof. Deepak Nayyar, an Independent Director. Shri S.S. Rajsekar, Shri S. Balachandran, Smt. Usha Thorat, Shri Arun Ramanathan, Shri O.P. Bhatt, Prof. S.K. Barua and Smt. Sushama Nath were/ are the Members of the Committee.

Director (HR) & Director (Finance) are the permanent invitees of the Committee. The Company Secretary acts as a Convener to the Committee.

During the year 2011-12, Three meetings were held on September 26, 2011 and January 04 and March 15 , 2012.

The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
 
Attendance
Members
No. of meetings held during the tenure
No. of meetingsattended
Prof. Deepak Nayyar (from 29.07.2011)
3
2
Shri S.S.Rajsekar (upto 10.11.2011)
1
1
Shri S. Balachandran (upto 10.11.2011)
1
1
Smt. Usha Thorat (from 29.07.2011 to 10.02.2012)
2
-
Shri Arun Ramanathan (from 29.07.2011)
3
3
Prof. S.K.Barua (from 05.01.2012)
1
-
Shri O.P.Bhatt  (from 05.01.2012)
1
-
Smt. Sushama Nath (from 05.01.2012)
1
1
Permanent  Invitees
Director ( HR) 
3
3
Director (Finance)
3
1
 
6.3.1 Compliance Officer

Shri N.K. Sinha, Company Secretary is the Compliance Officer. The Company Secretary is primarily responsible to ensure compliance with applicable statutory requirements and is the interface between the management and the regulatory authorities for governance matters.

6.3.2 Redressal of Investors' Grievance

The Company addresses all complaints, suggestions and grievances of the investors expeditiously and usually resolves the issues within 7 days except in case of dispute over facts or other legal constraints.

Except for the complaints pertaining to 'Offer for Sale' by Government of India, the Company received 3192 shareholders' complaints from Stock Exchanges/ SEBI which inter-alia includes non-receipt of dividend/ annual report, issue of Bonus Shares, payment for fraction Bonus Shares etc. The complaints were duly attended 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 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 likewise processed and confirmation communicated to investors and Depository Participants within 10 working days.

The total number of complaints/ queries/ correspondence received and replied/ attended to the satisfaction of the shareholders was 8464. There was no complaint pending as on 1st April, 2012.
 
6.3.3 Settlement of Grievances

Investors may register their complaints in the manner stated below:
 
 
6.3.4 Investor Relations Cell

In line with global practices, the Company is committed to maintain, 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 www.ongcindia.com. This website provides updates on financial statements, investor-related 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 seeking information.

A Core Team comprising of senior, experienced officials, headed by Director (Finance) have been assigned the responsibilities for up-keeping the said link and also to serve as a platform for the shareholders to express their opinions, views, suggestions, etc. to understand the influencing factors in their investment decision-making process. Besides, the said team is also instrumental in maintaining close liaison and to share information through periodic meets including tele-conferencing in India and abroad, regular press meets with investment bankers, research analysts, the media, institutional investors etc. The Company is committed to take such other steps as may be necessary to fulfil the expectations of the stakeholders.

6.4 Human Resource Management Committee
The terms of reference include consideration of all issues/ areas concerning Human Resource Planning & Management, HR policies & initiatives and Promotions for the post of Group General Manager (GGM) and Executive Director (ED) and appeals of officers in terms of CDA Rules of ONGC.
 

Shri S. S. Rajsekar was the Chairman of the Committee upto 10.11.2011 and thereafter, Prof. S.K.Barua headed the Committee. Shri Sudhir Bhargava, Shri S. Balachandran, Dr. D. Chandrasekharam, Smt. Usha Thorat, Prof. Deepak Nayyar, Smt. Sushama Nath, CMD and all Functional Directors were/are the members of the Committee. Director (HR) is the Member-Convener of the Committee.

During 1st April, 2011 to 31st March, 2012, Seven meetings were held on May 30, June 28, August 29, November 30, December 30, 2011, February 08 and March 15, 2012.
The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-

 
6.5 Project Appraisal Committee

The Project Appraisal Committee examines and makes recommendations to the Board on projects/ capital investment exceeding Rs2500 million. Proposals upto Rs2500 million are appraised in-house, while the proposals exceeding Rs2500 million are first appraised by Financial Institutions and thereafter 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.

Shri Santosh Nautiyal, was the Chairman of the Committee upto 10.11.2011. Thereafter, the Committee is headed under the stewardship of Shri O.P. Bhatt, an Independent Director. Shri Sudhir Bhargava, Shri S. Balachandran, Shri S.S. Rajsekar, Smt. Anita Das, Dr. D. Chandrasekharam, Smt. Usha Thorat, Shri Arun Ramanathan, Prof. S.K. Barua, Smt. Sushama Nath, Shri Sudhir Vasudeva, Shri D.K. Sarraf & concerned Functional Director were/are the members of the Committee. Director (Offshore) is the Member-Convener of the Committee.

During 1st April, 2011 to 31st March, 2012, Ten meetings were held on: April 27, June 28, July 28, August 29, September 27, November 03/ 30, December 30, 2011 & January 04 and March 07/15, 2012 .

The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
 
 
 
Members
No. of meetings held during the tenure
No of meeting attendend
Shri S. Balachandran (upto 10.11.2011)
6
6
Shri Santosh Nautiyal (upto 10.11.2011) 
6
6
Shri S.S. Rajsekar (upto 10.11.2011)
6
5
Smt Anita Das 
10
9
Shri Sudhir Vasudeva, Director (Offshore) 
10
10
Shri D.K.Sarraf (upto 15.09.2011)
4
4
Shri Sudhir Bhargava
10
10
Shri A.K.Hazarika* 
1
1
Shri U.N.Bose *
5
5
Shri K. S. Jamestin*
2
2
Dr. D. Chandrasekharam (from 29.07.2011)
7
6
Smt. Usha Thorat (from 29.07.2011 to 10.02.2012)
5
1
Shri Arun Ramanathan (from 29.07.2011)
7
7
Shri S. V. Rao *
2
2
Shri O.P.Bhatt (from 05.01.2012)
2
-
Prof. S.K. Barua (from 05.01.2012)
2
2
Smt. Sushama Nath (from 05.01.2012)
2
2
*These Directors attended the meetings as member concerning the Projects of their responsibilities
 
 
6.6 Health Safety & Environment (HSE) and Sustainable Development Committee

Pursuant to the DPE guidelines on Sustainable Development for CPSEs, the Board of Directors of the Company in its 227th meeting held on 8th February, 2012 had approved re-designating the existing HSE Committee as “Committee of Board on HSE & Sustainable Development” w.e.f. 08.02.2012.

The terms of reference includes review of policy, processes and systems on Safety, Health, Environment and Ecology aspects, approve Sustainable Development (SD) policy and revise the same at periodic intervals, approve SD plan (short, medium and long term) in the context of the SD guidelines, provide apex level guidance for SD projects and targets, oversee SD performance, approve annual SD evaluation report, approve annual SD budget and help and oversee alignment of SD projects/activities with the organization's business goals and the national and international trends.

Shri S. S. Rajsekar was the Chairman of the Committee upto 10.11.2011. Thereafter, the Committee is headed by Dr. D. Chandrasekharam. Director (Onshore) acts as a Member-Convener. The other members of the Committee were/are Shri Sudhir Bhargava, Shri Santosh Nautiyal, Smt. Anita Das, Prof. Deepak Nayyar, Prof. S.K.Barua, Shri O.P.Bhatt, Smt. Sushama Nath, CMD and all functional Directors.

During 1st April, 2011 to 31st March, 2012, Two meetings were held on June 4, and November 30, 2011.

The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
 
Members
No of meetings held during the tenure
No of meeting attendend
Dr.D.Chandrasekharam (from 29.07.2011)
1
-
Shri Sudhir Bhargava
2
1
Shri Santosh Nautiyal (upto 10.11.2011) 
1
1
Shri S.S.Rajsekar (upto 10.11.2011)
1
1
Smt. Anita Das
1
1
Prof. Deepak Nayyar (from 29.07.2011)
1
-
Prof. S.K.Barua * (from 05.01.2012)
-
-
Shri O.P.Bhatt * (from 05.01.2012)
-
-
Smt. Sushama Nath * (from 05.01.2012)
-
-
Shri A.K.Hazarika
2
2
Shri U.N.Bose
2
2
Shri S.V.Rao
2
1
Shri K.S.Jamestin
2
2
Shri D.K.Sarraf (upto 15.09.2011)
1
-
Shri Sudhir Vasudeva
2
2
* No meeting of HSE has been convened after their appointment as members of the same.
 
6.7 Financial Management Committee

Mandate of the Committee includes looking into the matters pertaining 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, Periodical Performance Review of subsidiaries.

Shri S. Balachandran was the Chairman of the Committee upto 10.11.2011. Thereafter, the Committee is headed by Shri Arun Ramanathan, an Independent Director. Shri Santosh Nautiyal, Smt Anita Das, Prof. Deepak Nayyar, Prof. S.K. Barua, Shri O.P.Bhatt, Smt. Sushama Nath, Director (Finance) and concerned Functional Directors are the members and Company Secretary is the Member Convener.

During 1st April, 2011 to 31st March, 2012, Six meetings of the Committee were held on April 27, May 30, September 27, November 04, November 30, 2011 and March 15, 2012.
The details of meetings attended by the members and their tenure as member of the above Committee is reflected in the table below:-
 
Members
No. of meeting held during the tenure
No of meeting attendend
Shri Arun Ramanathan (from 29.07.2011)
4
4
Shri S. Balachandran (up to 10.11.2011)
4
4
Shri Santosh Nautiyal (upto 10.11.2011)
4
4
Smt. Anita Das
6
5
Prof Deepak Nayyar (from 29.07.2011)
4
-
Prof. S.K. Barua (from 05.01.2012)
1
1
Shri O.P. Bhatt (from 05.01.2012)
1
-
Smt.  Sushama Nath (from 05.01.2012)
1
1
Shri Sudhir Vasudeva, As Director
Finance/ Offshore  (from 03.10.2011)
3
Shri. A.K.Hazarika
1
1
Shri D.K.Sarraf (up to 15.09.2011)
2
2
6.8 Committee on Dispute Resolution

The members of the committee in their 20th meeting held on 28th July, 2011, had approved re-designating the existing COD for Redressal of Grievances of the Parties as “Committee on Dispute Resolution”.

The Committee has been constituted to review the dispute between ONGC and its vendors / contractors for suitable redressal.

Shri Santosh Nautiyal, an Independent Director was the Chairman of the Committee upto 28.07.2011. Thereafter,

Smt. Usha Thorat became the Chairperson of the Committee from 29.07.2011 till her resignation from the Board. Smt Anita Das, an Independent Director became Chairperson of the Committee w.e.f. 05.01.2012. Other members of the Committee were/are Shri S.S. Rajsekar, Shri S. Balachandran, Shri Santosh Nautiyal, Dr. D. Chandrasekharam, Prof. Deepak Nayyar, Shri Arun Ramanathan, Shri O.P.Bhatt. Director (Finance), Director (Onshore) and concerned Functional Directors are the members.

Director (T&FS) is the Member-Convener of the Committee.

During 1st April, 2011 to 31st March, 2012, Four meetings of the committee were held on April 27, July 28, November 04, 2011 and February 08, 2012.
 
The details of meetings attended by the members and their tenure as member of the above Committee are reflected in the table below:-
 
Members
No. of meeting held during the tenure
No of meeting attendend
Smt. Usha Thorat (upto 10.02.2012)
2
2
Smt. Anita Das 
4
3
Shri S.S. Rajsekar  (upto 10.11.2011)
3
3
Shri Santosh Nautiyal (upto 10.11.2011)
3
3
Shri S. Balachandran (upto 10.11.2011)
3
3
Dr. D. Chandrasekharam
2
2
Prof. Deepak Nayyar (from 29.07.2011)
2
-
Shri Arun Ramanathan (from 29.07.2011)
2
2
Shri O.P.Bhatt (from 05.01.2012)
1
1
Shri A.K. Hazarika
4
4
Shri U.N. Bose
4
4
Shri D.K. Sarraf (upto 15.09.2011)
2
2
Shri Sudhir Vasudeva As Director Finance/ Offshore
3
2
 
6.9 Other Functional Committees

Apart from the above, the Board also 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 for discussing the matter concerning the purpose arises. Time schedule for holding the meetings of such Committees is finalized in consultation with the Committee members.

7. Code of Conduct for Members of the Board and Senior Management

The Company is committed to conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations. A code of conduct, evolved in line with the industry practices was adopted by the Board on the recommendations of Audit and Ethics Committee. A copy of the Code has been placed on the Company's website www.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:

“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 2011-12”.

7.1 ONGC Code on Insider Trading

In pursuance of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, the Board has approved the "The Code of Internal Procedures and Conduct in dealing with the Securities of ONGC”. 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.
 
7.2 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 2011-12 was submitted to the Board in its meeting held on 29th May, 2012.

8. Finance Manual
ONGC Finance Manual is a compendium based on the existing practices and systems, comprehensively covering various finance activities such as accounting, budgeting, costing, pre-audit, treasury management etc. This manual provides the users with existing practices, processes, finance policies & procedures, and guides Finance officers while ensuring consistency and uniformity across locations in terms of processes and methodologies followed. The detailed documented guidelines/policies of Finance function in ONGC is also of great help for new incumbents and Finance officers on transfers. The knowledge documented would enlighten new team members including outside agencies like Statutory Auditors, Government Auditors associated with ONGC for years to come.

9. Subsidiary Monitoring Framework

The Company has two direct subsidiary companies, Mangalore Refinery & Petrochemicals Ltd. (MRPL, listed, material) and ONGC Videsh Ltd. (OVL, 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. As a majority shareholder, the Company nominates its representatives on the Boards of subsidiary companies and monitors the performance of such companies periodically.

In terms of Clause 49.III (ii) and (iii) of the Listing Agreement and DPE guidelines, performance of the listed and unlisted subsidiary companies is reviewed by the Audit and Ethics Committee and the Board 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 Subsidiary 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.

10. Annual General Meetings
Location, date and time of the AGMs held during the preceding 3 years are as under:
 
Year Location
Date
Time (IST)
2008-09 Siri Fort Auditorium, Khel Gaon, August Kranti Marg, New Delhi- 110049 23.09.2009 10.00 a.m.
2009-10  Siri Fort Auditorium, Khel Gaon, August Kranti Marg, New Delhi- 110049 23.09.2010 10.00 a.m.
2010-11 Siri Fort Auditorium, Khel Gaon, August Kranti Marg, New Delhi- 110049 30.08.2011 10.00 a.m
 
There was no special resolution passed by the Company at the last Three Annual General Meetings. No resolution requiring Postal Ballot is proposed at the ensuing AGM.
 
11. Disclosures

11.1 Material Contracts/ Related Party 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.

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, 2012. 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.
 

11.2 Compliances

The Company has complied with applicable rules 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.

12. 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 www.ongcindia.com The results are not sent individually to the shareholders.

News Release, Presentation etc.: The official news releases, detailed presentations made to media, institutional investors, financial analysts etc. are displayed on the Company's website www.ongcindia.com

• Website: The Company's website www.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 inter-alia, Audited Accounts, Consolidated Financial Statements, Directors' Report, Management Discussion and Analysis (MD&A) Report, Auditors' Report, Corporate Governance Report including Information for the Shareholders and other important information is circulated to the members and others entitled thereto.

13. Shareholders' Information

13.1 Annual General Meeting

Date : 24th September, 2012

Time : 10:00 Hrs

Venue : Siri Fort Auditorium, Khel Gaon, August Kranti Marg, New Delhi-110049.


13.2 Financial Calender

Adoption of Quarterly Results for the Quarter ending Tentative date of the meeting of the Board
30-Jun-12  11th August, 2012
30-Sep-12  9th November, 2012
31-Dec-12  11th February, 2013
March 31, 2013(audited)   28th May, 2013

These dates are 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.

13.3 Book Closure Period

The Book Closure period is from Tuesday, the 18th September, 2012 to Monday, the 24th September, 2012 (both days inclusive) for the payment of Final Dividend.

13.4 Dividend Payment Date

Final Dividend would be paid on or after 24th September, 2012.

13.5 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:

Name & Address Telephone/Fax/E-mail ID/Website ID Trading  Symbol
Bombay Stock Exchange Ltd. (BSE) Telephone:022-22721233/4 500312 ONG CORP. LTD
P.J.Towers, Dalal Street, Fax: 022-22721919
Mumbai-400001 E-mail: info@bseindia.com
Website:www.bseindia.com
National Stock Exchange of India Ltd. (NSE) Telephone: 022-26598100-8114 ONGC
Exchange Plaza, Plot no. C/1, G Block,  Facsimile: 022-26598120
Bandra-Kurla Complex, Bandra(E),  E-mail: cc_nse@nse.co.in
Mumbai-400051  Website:www.nseindia.com
   
13.6 Listing Fees

Annual listing fees for the year 2011-12, as applicable have been paid to the above Stock Exchanges.

13.7 Demat ISIN Numbers in NSDL & CDSL
(Stock Code): INE213A01029

Annual Custody Fee has been paid to NSDL and CDSL for the Financial Year 2011-12.

13.8 Stock Market Information

The stock price performance of ONGC scrip during the period 1st April, 2011 to 31st March, 2012 in comparison to BSE is plotted below:
 
 
13.8.1 Market Price Data: High, Low During Each Month in Last Financial Year
 
Month
Bombay Stock Exchange
National Stock Exchange
High (Rs)
Low (Rs)
Volume
High (Rs)
Low (Rs)
Volume
April'11
20-Nov-00
278.9
1,09,58,664
325.65
278.55
67,968,982
May'11
10-Nov-00
261.9
1,65,30,371
315.8
261.4
119,360,247
June'11
297.4
248
1,33,46,273
297.5
248.05
96,755,523
July'11
290.55
226.95
1,08,54,630
290.9
268.4
68,020,920
August'11
289.75
260.5
78,10,284
290.15
260
81,387,533
September'11
280
253.4
1,08,51,067
280.55
253.25
123,887,248
October'11
294.7
260.25
54,19,020
294.8
259.75
54,036,499
November'11
288.3
241.9
69,25,636
288.05
241.75
52,460,601
December'11
277
245
50,06,011
277.8
244.75
43,508,594
January'12
282.6
253.2
62,89,623
282.8
253.2
49,144,891
February'12
303.9
269.2
1,50,04,646
304.25
269
102,298,134
March'12
296.5
254.1
80,51,652
296.45
254
86,957,222
 
Source: Web sites of BSE and NSE
 
14. 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)

With a view to expedite the process of share transfer which are received in physical form, the Board had constituted an Officers Committee which usually meets once in a fortnight to consider and approve 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 to the Shareholders'/ Investors' Grievance 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.

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.

The total number of transfer deeds processed and shares transferred during the last three years are as under:
 
Years
No. of transfer deeds processed
No. of shares transferred
2011-12
2,628
51,931
2010-11
475
11,991
2009-10
175
16,575
 
15. Shareholding Pattern as on 31st March, 2012
 
Category
No. of Shares held
Percentage of Shareholding
President of India
5,922,546,522
69.23
Banks, Financial Institutions and Insurance Companies
860,196,421
10.05
Foreign Institutional Investors
457,291,000
5.35
Mutual Funds & UTI
133,097,560
1.56
NRIs
4,213,020
0.05
Bodies Corporate:
Government Companies
Others
863,524,496
151,262,156
10.09
1.77
Employees
6,455,350
0.07
Public
156,903,595
1.83
Total
8,555,490,120
100
 
15.1 Top 10 Shareholders as on 31st March, 2012
 
S.No Name
No.of Shares held
% of total Shareholding
1 President of India 5,922,546,522 69.23
2 Life Insurance Corporation of India  664,450,862 7.77
3 Indian Oil Corporation Limited 657,923,428 7.69
4 GAIL (India) Limited 205,601,068 2.4
5 Franklin Templeton Investment Funds  90,935,334 1.06
6 ICICI Prudential Life Insurance Company Limited 39,913,007 0.47
7 LIC of India Market Plus Growth Fund 34,092,760 0
8 LIC of India Market Plus 1 Growth Fund 32,922,508 0
9 LIC of India Profit Plus Growth Fund 29,092,440 0.34
10 LIC of India Money Plus Growth Fund 27,261,852 0.32
 
15.2 Distribution of Shareholding by Size as on 31st March, 2012
 
Category  
Number of Shareholders
% of Shareholders
Total number of Shares
% of Shareholding
1- 500 488,811 90 62,091,843 0.73
501 - 1000 25,682 5 18,654,009 0.22
1001 - 2000 13,016 2 18,956,006 0.22
2001 - 3000 6,211 1 15,498,605 0.18
3001 - 4000 5,798 1 20,637,095 0.24
4001 - 5000 1,736 0 7,697,674 0.09
5001 - 10000 1,459 0 9,566,949 0.11
10001 & Above 1,560 0 8,402,387,939 98.21
Total 544,273 100 8,555,490,120 100
 
15.3 Geographical Distribution of Shareholders as on 31st March, 2012
 
S. No City
Shareholders
Shareholding
Nos
% age
No of shares
%age  of holding
1 MUMBAI
105,969
19.47
2,278,454,441
26.63
2 NEW DELHI 
40,969
7.53
6,143,620,276
71.81
3 AHMEDABAD
32,523
5.98
11,400,370
0.13
4 KOLKATA
26,089
4.79
14,388,403
0.17
5 BANGALORE
23,720
4.36
5,406,750
0.06
6 CHENNAI
20,209
3.71
17,869,290
0.21
7 VADODARA
17,140
3.15
7,595,583
0.09
8 DEHRADUN
5,573
1.02
5,781,769
0.07
9 JORHAT
4,350
0.8
4,636,545
0.05
10 OTHERS 
267,731
49.19
66,336,693
0.78
Total
544,273
100.00
8,555,490,120
100.00
 
 
15.4 History of Paid-up Equity Share Capital (Face Value of Rs 5 Each)
 
Year No. of Shares
Cumulative
Details
1993-94
10
10
Initial Subscription to the Memorandum of Association on 23rd June, 1993
1993-94
34,28,53,716
34,28,53,726
Issued to the President of India on 1st February, 1994  on  transfer of Undertaking of Oil and Natural Gas Commission in terms of  Oil and Natural Gas  Commission(Transfer of Undertaking and Repeal) Act, 1993
1994-95
66,39,300
34,94,93,026
Issued to the Employees at a premium of Rs260 per  Share (includes 600 shares issued in 1995-96) 
1995-96
107,64,40,966
142,59,33,992
Issue of Bonus Shares in ratio of 3.08: 1 on 24.04.1995 by Capitalization of General Reserve
2006-07
(-)18,972
142,59,15,020
Forfeiture of Shares on 12.04.2006
2006-07
71,29,57,510
213,88,72,530
Issue of Bonus Shares in ratio of 1:2 on 08.11.2006  by Capitalization of General Reserve.
2010-11
8,555,490,120
Each equity Share of ONGC was split from the face  value of Rs10 into two equity shares of the face value  of  Rs5 each 
Bonus Shares were issued in the ratio of 1:1 by Capitalization of Reserves to the shareholders  as on 09.02.2011 (Record Date).
2011-12
8,555,490,120
President of India (PoI) acting through Ministry of Petroleum & Natural Gas, Govt. of India on  05.03.2012 has sold 420,416,170 number of equity  shares (4.91% shares) in ONGC through the offer for sale through Stock Exchange Mechanism.
 
16. Corporate Benefits
Dividend History
 
Years
Rate (%)
Per Share (Rs)
Amount  (Rs in million)
2007-08
Interim
180
18
38,500
Final 
140
14
29,944
2008-09
Interim
180
18
38,500
Final 
140
14
29,944
2009-10
Interim
180
18
38,500
Final 
150
15
32,083
2010-11
Interim
320
32
68,443.92
Final 
15
1
6,416.62
2011-12
First Interim
125
6
53,471.84
Second Interim
30
2
12,833.23
Final (Proposed)
40
2
17,110.98
 
 
17. Transfer of Unpaid/ Unclaimed Dividend Amount to Investor Education & Protection Fund (IEPF)

During the year under report, an amount of Rs2,09,69,930.00 and Rs1,37,58.917.00 pertaining to unpaid dividend for the financial year 2003-04 (Final) and 2004-05 (Interim) respectively was transferred to the Investor Education & Protection Fund (IEPF) set up by the Central Government. This is in accordance with the sections 205A and 205C of the Companies Act, 1956 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 21st September, 2005 for the financial year 2004-05 and interim dividend declared on 23rd December, 2005 for the financial year 2005-06 will be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government by 20th October, 2012 and 22nd January, 2013 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:-
 
Financial Year 
Date of Declaration
Proposed Date for transfer to IEPF*
2004-05- Final
21.09.2005
20.10.2012
2005-06- Interim
23.12.2005
22.01.2013
 
*Indicative dates, actual dates may vary
 
18 Dematerialization of Shares and Liquidity
S.No.
Description
No. of Share Holders
Shares
%  of Equity
1
CDSL
122,364
6,814,885,679
79.66
2
NSDL
412,819
1,733,182,730
20.26
3
PHYSICAL
9,090
7,421,711
0.09
Total
544,273
8,555,490,120
100
 
The shares of the Company are in compulsory dematerialized segment and are available for trading in depository system of both
 
19. Outstanding GDRs/ ADRs / Warrants or Convertible Instruments

No GDRs/ ADRs/ Warrants or Convertible Instruments have been issued by the Company during the year.

20. Assets/ Basins/ Plants/ Institutes
 
a. Assets c. Plants
1 Mumbai High Asset, Mumbai 1 Uran Plant, Uran
2 Neelam & Heera Asset, Mumbai 2 Hazira Plant, Hazira
3 Bassein & Satellite Asset, Mumbai 3 C2 C3 C4 Plant, Dahej, Gujarat
4 Ahmedabad Asset, Ahmedabad  d.    Institutes
5 Ankleshwar Asset, Ankleshwar 1 Keshava Deva Malaviya Institute of Petroleum
6 Mehsana Asset, Mehsana Exploration (KDMIPE), Dehradun
7 Rajahmundry Asset, Rajahmundry 2 Institute of Drilling Technology (IDT), Dehradun
8 Karaikal Asset, Karaikal 3 Institute of Reservoir Studies, (IRS) Ahmedabad 
9 Assam Asset, Nazira 4 Institute of Oil & Gas Production Technology
10 Tripura Asset, Agartala (IOGPT), Navi Mumbai
11 Eastern Offshore Asset, Kakinada,  5 Institute of Engineering & Ocean Technology
Andhra Pradesh (IEOT), Navi Mumbai
b. Basins 6 Geo- data Processing & Interpretation Center
1 Western Offshore Basin, Mumbai (GEOPIC), Dehradun
2 Western Onshore Basin, Vadodara 7 ONGC Academy, Dehradun
3 KG-PG Basin, Chennai 8 Institute of Petroleum Safety, Health &
4 Cauvery Basin, Chennai Environment Management (IPSHEM) Goa.
5 Assam & Assam-Arakan Basin, Jorhat 9 Institute of Biotechnology & Geotectonics
6 MBA Basin and CBM Development Project, Studies (INBIGS), Jorhat
Kolkata/Bokaro 10 School of Maintenance Practices 
7 Frontier Basin, Dehradun (SMP), Vadodara
11 Centre for Excellence in Well Logging 
(CEWL), Vadodara
12 Regional Training Institutes (RTIs) Navi Mumbai,
Chennai, Sivasagar &  Vadodara. 
 
21. Investor Services and Addresses for Shareholders' Correspondence.

These have been given at 6.3.3 and 6.3.4 above

22. Risk Management

The Risk Management Policy has been rolled out across the organization in all Assets, Basins, Plants, Institutes and offices. The Risk Management Committee reviews various types of risks whether present or future and apprises the same to the management.

23. 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 the Directors' Report forming part of the Annual Report. The Certificate has also been forwarded to the Stock Exchanges where the securities of the Company are listed.
 

24. Adoption of Non-mandatory 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:-

1 The Company has constituted a Remuneration Committee (refer para 6.2).

2 With regard to Shareholders' Rights, communication of financial results are being published widely and also hosted on the Company's website (refer para 12).

3 As far as Audit Qualifications are concerned, the Company is in the regime of unqualified financial statements.

4 A Board Charter has been formulated to define the role of the Board. The same shall be finalised by the Independent Directors.

Whistle Blower Policy

In terms of Clause 49 of the Listing Agreement, one of the non-mandatory clauses provides that a Listed company may establish a mechanism for employees to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy. Also in terms of Clause 8 of DPE guidelines on Corporate Governance for CPSEs issued in 2007, company may establish a mechanism for employees to report to the management concerns of unethical behaviour etc. Accordingly ONGC has implemented Whistle Blower Policy on 30th November, 2009.

ONGC has provided ample opportunities to encourage the employees to become whistle blowers (employees 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.

25. Guidelines on Corporate Governance By DPE

In May, 2010, the Department of Public Enterprises has come out with Guidelines on Corporate Governance for Central Public Sector Enterprises which have replaced the Guidelines issued in 2007. The fresh guidelines of 2010 are now mandatory in nature. ONGC is complying with these guidelines.

No Presidential Directives have been issued during the period 1st April, 2011 to 31st March, 2012.

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 administrative and office expenses were 4.82% of total expenses during 2011-12 as against 4.95% during the previous year.

26. Secretarial Compliance Report

Secretarial Compliance Report confirming compliance to the applicable provisions of Companies Act, 1956, 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 Directors' Report.


27. Fee to Statutory Auditors

The fee paid/ payable to the Statutory Auditors for the year was 16.20 million (previous year Rs15.85 million) including 0.83 million (previous year 0.83 million) as fee for certification of Corporate Governance Report, and 4.14 million (previous year Rs3.31million) for limited review report and Rsnil (previous year 0.13 million) for NELP certification plus reasonable travelling and out of pocket expenses actually incurred / reimbursable.

 
 
 
ONGC ANNUAL REPORT 2011-12