An environmentally friendly initiative from the corporate affairs ministry to save paper by allowing companies to send annual reports by email has fallen flat. Shareholders are not thinking green, it seems.
In most companies, about three-fourths of the shareholders did not respond to requests to share their email addresses. For instance, only 5% of its shareholders of auto maker Premier Ltd provided email IDs while engineering firm Cummins India managed to collect email IDs of 18% of its investors.
"Of our 33,000 shareholders only 6,000 provided their email ID to receive soft copies of the annual report. In fact, close to 10,000 had initially given their IDs, but 4,000 backed out later," said an official who handles investor relations at Cummins.
"This is a good initiative to save trees. But the only thing is that we have to make it work," said Maitreya Doshi, chairman and MD, Premier.
"We have about 7,000 listed companies. All of them put together will have a shareholder base of 30 million. Assuming each company brings out a 60-page annual report, total consumption is 1.8 billion pages," he said. And that is what Corporate India hopes to turn into electronic form.
"I think there is indifference on the part of individual shareholders," said Pramod Mehendale, director, Link Intime, a share registry firm. "Most of the companies have taken some initiative to send annual reports via e-mail. Of our clientele of 800 companies, only 50 have not taken any effort," he said.
Some corporate executives say a large portion of these hardbound copies go directly into dustbin as many investors are not interested in annual reports at all. "The government can tweak this rule a bit to save this initiative. Making soft copies of annual reports available on the sites of the company and stock exchanges should be considered paperless compliance of the law. And companies should be mandated to give physical form of report to only those who place a specific demand for it," said Doshi.