ONGC Board interacts with shareholders at 28th Annual General Meeting

Energy Major ONGC held its 28th Annual General Meeting (AGM) on 24 September 2021. CMD Subhash Kumar interacted with the shareholders during the annual event, along with the Directors of the Energy Maharatna. The interactive session with the shareholders went on for an hour after the Chairman’s AGM speech.

CMD interacts with shareholders at 28th Annual General Meeting
The ONGC Board during the 28th AGM. From left: Independent Director Amitava Bhattacharyya,
Director (T&FS) OP Singh, Director (HR) Dr Alka Mittal, CMD Subhash Kumar, Company Secretary Rajni Kant,
Director (Exploration) RK Srivastava and Director (Offshore) Pankaj Kumar

Over a dozen shareholders participated in the interactive session through video-conferencing. CMD Subhash Kumar gave each one sharing or raising queries at the occasion his full attention. He assured the shareholders of a rich future prospect for ONGC through strategic partnership and investments to cater to the long-term objectives of the organization, taking the major ongoing energy transition into stride.

The Annual General Meeting was also graced by the presence of Director (HR) Dr Alka Mittal, Director (Exploration) RK Srivastava, Director (T&FS) Om Prakash Singh, Director (Offshore) Pankaj Kumar, Company Secretary Rajni Kant, Key Executives of ONGC and other officials. Director (Onshore) Anurag Sharma was on an official trip to Assam, which was participated by the Minister. The AGM was held virtually in view of the ongoing COVID-19 pandemic and all COVID-19 safety protocols were followed during the event.

CMD and Directors after the AGM
CMD and Directors after the AGM

The event started with CMD Subhash Kumar formally bringing the 28th AGM to order, after which Company Secretary Rajni Kant read key business items, compliances, dividend, recent appointment of Director (Offshore) Pankaj Kumar, etc.

The CMD then delivered his address on the occasion. Click here to read CMD’s speech on 28th AGM

The address by the CMD was followed by an interactive session with the shareholders, during which shareholders of the organization made suggestions for improvements in business and CSR outreach, raised queries about the operations and financials and sought information. The shareholders appreciated the visionary leadership of ONGC in unison and complimented the Energy Maharatna and all its employees for receiving numerous recognitions and awards in the industry. The shareholders appreciated the corporate governance of ONGC vide which even the small shareholders are taken care of.

Responding to the issues of the shareholders, the CMD thanked all the shareholders for joining the AGM and making such deep analytical comments which “provide us with knowledge inputs to manage the company better”. “We value the relationship with each shareholder.” Complementing the shareholders for the in-depth analysis behind the pin-pointed questions raised during the interaction, he said, “Like ONGC, our shareholders are also unique”.

The CMD said that it is with the contribution and suggestions of the shareholders every year that ONGC is able to improve and grow as an Energy Major. Mr Kumar said that the year marred with COVID-19 pandemic and its effects have been one of many disruptions. “However, the technology through which we are connected today is a gift of these trying times”. He expressed hope the AGM is organized in hybrid mode in the future – both physical and virtual simultaneously. He also greeted all the participants on Rajbhasha Pakhwada for the promotion of Hindi language. “सभी शेयरधारकों को मेरी शुभकामनाएं।.” The CMD then responded to the queries raised during the interaction.

CMD Subhash Kumar addressing the shareholders at 28 AGM
CMD Subhash Kumar addressing the shareholders at 28th AGM

Reports.ongc.co.in brings you excerpts from the CMD’s response, issue-wise:

Gas vertical

Responding to a query on gas vertical of ONGC, the CMD said that its 5 per cent shares in IGX and its gas subsidiary are strategic decisions aimed at securing the interest of the organization in the long run. He said that gas has a bright future in the major ongoing energy transition. He expressed that both the decisions are forward looking steps to build a stronger business context for ONGC. The long term objective of ONGC is to deepen its strength in Oil and Gas business and establish itself as a major player during the major ongoing energy transition via investments and subsidiaries.

Employees

Answering a question regarding the reducing number of employees over the years, the CMD informed that ONGC currently has around 28,500 employees. “Technology has enabled us to do the same work with less employees,” he said, while adding that induction of fresh executives are on the anvil. Mentioning the age mix of the organization is changing, he said that the average age in ONGC is coming down. We recruit people from all over India, giving all a fair chance of coming on board, he added.

Subsidiaries

Talking about the subsidiaries of ONGC and their performance, Mr Kumar said that difficult times are a test of strength of the ONGC business model. “Our results have demonstrated that our integrated model has been helpful. When our upstream business was not at its best, subsidiaries’ performance helped. So, we need to continue our downstream integration.” On OVL monetization, he said that a decision will be taken on such strategic cases at appropriate time.

Speaking about the losses in its subsidiary MRPL, the CMD said that the losses are due to low GRM globally and reiterated that its subsidiaries are generally doing well. “ONGC has a strong business model and also has the fund capacity to invest but is looking for the right prospects. We have a low debt-equity ratio which enables us to raise debts at competitive terms, whenever needed.”

Consumer oil prices

Addressing a point raised by one of the shareholders about consumer price of fuel, the CMD said that the price hike can be attributed to the increase in average crude price, which has spiked from $42 per barrel during FY 2020-21 to $72 per barrel now.

Crossholding shares

Speaking about crossholding of shares among Public Sector Enterprises in Oil and Gas Sector, the CMD said it is based on a policy decision. Mr Kumar was responding to a query raising crossholding of shares between ONGC, IOCL, GAIL, LIC and other PSEs. As far as LIC holding ONGC shares goes, it is an autonomous business decision by them.

Independent Directors

When one of the shareholders raised the issue of non-appointment of a second Independent Director, as per statutes, the CMD said that ONGC values the presence of Independent Directors as their presence makes deliberations richer and brings different angles in discussions. The Government is taking action for the same and an Independent Director is expected to be appointed soon.

Taxes

Responding to a query about taxes, Mr Kumar said that ONGC follows a conservative accounting policy and deposits taxes even in in case where our position is strong, so that no liability remains. “We are confident to get refunds,” he said. He further said that while PAT behavior is difficult to project, Quarter 1 and 2 have been showing good indications with rising oil prices and with gas prices increasing from 1 October 2021.

Dividend

Some of the shareholders asked about the possibility of special dividend, to which the CMD said that ONGC has given dividend of over 40 per cent even when the price of crude was in negative last year. “We will continue to distribute wealth to shareholders as per the dividend policy of ONGC on our website.” He also noted that the share prices of ONGC are looking up. While mentioning that share prices are dynamic and depending on various factors, “ONGC is hopeful the market will reflect the organization’s good fundamentals”.

Women employees

Mr Kumar said that the percentage of women employees has been increasing in ONGC for the past few years. He said that ONGC is doing its best to make ONGC a more inclusive and safer workplace for women. Considering that ONGC is an upstream sector, ONGC has good representation of women employees, even in fields. It will improve further under the leadership of Director (HR) Dr Alka Mittal, he said.

Environment

Responding to a question about ONGC’s efforts towards protection of environment and reduction of single-use plastics, the CMD said that ONGC is committed to the cause of environment safety. He also said that offices of organization have turned almost paperless, with all office work being done on digital platforms.

Sports and CSR

The CMD also noted some suggestions on promotion of sports and sponsorship of sports teams and players. He said that the Energy Maharatna is one of the biggest contributors in promotion of sports and Corporate Social Responsibility (CSR). He also mentioned that seven in the contingent which represented India at the recent Tokyo Olympics were full-time ONGCians.

A glimpse from the AGM
A glimpse from the AGM

Independent Director Amitava Bhattacharyya proposed the vote of thanks and expressed gratitude to the shareholder family for their active participation in the 28th AGM. He said that the CMD has deep knowledge of the organization’s operations and Oil and Gas sector in general. “Every interaction with him has benefitted us all,” he said. Mr Bhattacharyya also thanked the Directors and the Energy Soldiers in the fields whose tireless work has led the organization to its continued success in Energy Sector, overcoming all challenges.