Every March, crores of people receive bulky annual reports from companies they own shares in. But how often do they thumb through the pages? Rarely.
Now, in a bid to save paper and trees, the Ministry of Corporate Affairs (MCA) has asked companies to give shareholders and customers the option of receiving the reports and other documents in electronic format (read e-mail).
The MCA’s single-page circular issued in April could set off a green revolution.
Many companies have now started sending annual reports, bills and other documents to customers in electronic format. The companies need a formal go-ahead from shareholders and customers before sending the documents by e-mail.
“The MCA has taken a green initiative in corporate governance by allowing paperless compliances by companies…,” said Kamna Sharma, assistant director, MCA, in the circular.
Reliance Industries Ltd (RIL), one of the country’s largest companies with a huge shareholder base, claimed to have saved about 200 tons of paper this year. “RIL sent electronic annual reports to 7.5 lakh of its approximately 35 lakh shareholders,” the company’s spokesperson said.
Reliance Industrial Infrastructure also sent a out similar communication. It will send its 2010-11 annual report to 40,000 of its 1.35 lakh shareholders electronically. This would help save 3 tons of paper as well as huge printing costs, the company claimed.
A number of large companies have approached shareholders and customers for permission to send soft copies of documents.
“We proposed to send documents such as the notice of the annual general meeting, audited financial statements, directors’ report and auditors’ report henceforth to shareholders in electronic form,” read an email sent by Grasim, a major textile player, to shareholders.
Some companies are opting for innovation. “When I consented to receiving a soft copy of my monthly phone bill, Vodafone sent me a small potted plant as a token of appreciation,” said a customer of the mobile phone service provider.
A Vodafone spokesperson said: “Vodafone has 135 million subscribers and gives customers an option of paperless billing. We are also driving transactions with vendors towards an electronic real-time settlement system, hence eliminating paper.” The company, however, did not specify the number of customers that have accepted the electronic billing option.
It is expected that even if a fraction of all shareholders and customers accept the companies’ proposals, hundred of kilograms of paper could be saved.