Some of the biggest names in India Inc have embraced the “green initiative in corporate governance” launched by the Ministry of Corporate Affairs (MCA), changing the way shareholders receive important documents like annual reports. Companies like Reliance Industries, Coal India, Larsen & Toubro, Reliance Communications, ICICI Bank, HDFC and Hindustan Unilever have proposed to send annual reports and other documents such as annual general meeting notices to shareholders in electronic form. The option of receiving annual reports and other documents in electronic form is given to those shareholders who have registered their email ids with the depositories. The registrar and transfer agents (RTAs), which have been assigned this task by the companies, are seeking the consent of shareholders to send annual reports and other documents to their registered email ids. Those shareholders who still want to receive annual reports and other documents in physical form have the option to click on the link in the email sent to them and register their choice. “Almost all companies want to go ahead with this green initiative, except in cases where the number of folios is very less,” said Sanjeev Nandu, director-operations at Link Intime India, one of the leading RTAs in India. “About 35-40 per cent shareholders have their email ids registered with the depositories. Of that, my guess is around 70 per cent will opt for receiving annual reports and other notices through email,” he added. Every year, listed Indian companies spend about Rs.700-800 crore on sending annual reports and other documents to their shareholders, which includes printing and postage expenses, according to officials involved in the business of printing annual reports.
Link Intime’s Nandu estimates companies would save 25-30 per cent of their total cost to send annual reports and other documents to shareholders in physical form in the present financial year and up to 40 per cent in the next couple of years. This means companies will be able to save up to Rs.320 crore in the next 2-3 years by sending annual reports in electronic form. On average, it costs Rs.13-14 to print an annual report of 100 pages, according to industry officials. “The business of printing annual reports could see a drop of 15 per cent this year and 30-35 per cent after 2-3 years,” said Melwyn Fernandes, managing director at SAP Print Solutions, which printed annual reports of more than 100 companies last year, including firms belonging to both Reliance groups and the Tata group. “All major corporations are proposing to send annual reports through email. But, I as an investor, would prefer the convenience of reading the annual report in physical form at any time and at any place,” he added. As per a circular sent by the MCA in April, companies opting to send annual reports and other documents to their shareholders through email would have to display the full text of these documents on their websites well in advance, prior to the mandatory period, and issue advertisements in newspapers stating that copies of these documents are available on the website. – www.business-standard.com
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