Saturday, July 30, 2011

SUGGESTIONS FOR CORPORATE IN INDIA IN SENDING ANNUAL REPORTS AS PER "GREEN INITIATIVES"



Recently I had attended two annual general body meetings conducted on different  dates in respect of two prominent corporates at Chennai.
The shareholders were very much annoyed over the steps taken by the Corporates in not issuing the annual reports to the share holders in order to implement Green Initiatives as advised by Government of India .
The main purpose of Green Initiatives is to protect the environment. The environment can be protected by optimum use of the natural resources available. The use of more paper and paper products indirectly demands abundant raw materials and in this case the raw materials being the trees. Usage of more number of trees for the above reasons indirectly  affects  environment to a great extent which is one among the reasons for “global warming”. This has prompted the Government to implement the scheme. It is only an advice by  the government and not any guidelines

The Corporates in order to implement Green Initiatives communicated their decisions to the shareholders:
·         The annual reports as at each financial year will not be issued at present and in future in physical form  as were done hitherto
·         However, the annual reports will be mailed to the shareholder through the email ids available with them
·         For getting the annual reports through email, the shareholder has to exercise his option as to whether he is willing to receive the report in physical form  or through email
·         In case no confirmation is not received within the stipulated time, the annual reports will be sent through and not as hard copies
Basing upon the above guidelines, the corporates adopted the following procedure in dispatching the annual reports to their shareholders:
·         Some companies sent annual reports wherever they had received options from the shareholders in getting the annual reports in physical form




·         Some companies sent annual reports to all shareholders who were available at the city where the annual general body meeting was proposed to be held – the reasons being that those shareholders would definitely attend the annual general body meeting. Many shareholders who were living in upcountry places other than the place where the annual general body meetings were held were denied the opportunites in getting their annual reports

·         Some companies sent the annual reports to all shareholders in a simplified manner – reducing the number of pages, avoiding printing many photographs, using cost effective paper etc thus reducing the cost of annual reports by more than 60%



·         Shareholders who were sent annual reports through email were compelled to take print outs from the soft versions mailed to them resulting in expenses
In fact shareholders are the true owners of any company. The shareholders in a company can be 100 or 100000. Irrespective of the number of shareholders in a company, it is quite normal that all the shareholders will be eager  to know the performance of their companies. In fact some cute shareholders spend  reasonably a lot of time in going through  the annual reports of their companies thoroughly and they attend the annual general body meetings with the sole intention to point out irregularities in performance, functioning etc apart from offering  good suggestions
It is a wonder, knowing well that the owners (shareholders) should be given ample opportunity to attend the annual general body meetings without causing them any inconvenience, the corporate with a view to implement the green initiatives are found to be taking hard decisions in either issuing or non issuing the annual reports in physical formats
The following are some of the points to be noted by the coporates in regard to issue of annual reports to the shareholders
·         No management can deny their owners(shareholders) in getting their due annual reports. In fact it is the sole responsibility of the managements to make available the reports without fail to the shareholders.
·         Getting an option from the shareholders and basing upon the options,  mailing them the soft versions of annual reports is not quite right on the part of the managements
·         Sending the annual reports to the owners at specific  centres   alone will deprive the owners residing at upcountry locations of the opportunities in perusing the annual reports of their companies.
·         Spending an amount in getting the printed versions of the annual reports will jeopardize the interests of the shareholders
·         Unless printed versions are made available to the shareholders, the shareholders may not be in position to go through the annual reports thoroughly and participate in debates and discussions during the course of annual general body meetings
·         Unless effective debates and discussions by the shareholders take place during the course of any annual general body meetings in regard to the performances made by the companies, the management may not be in position to understand the true sentiments of the shareholders
·         The debates, discussions and viewpoints of the shareholders are mainly for the growth of the organization. Unless the companies are willing to face their shareholders offering good suggestions and observations  boldly during the annual general body meetings, they may lose opportunities in correcting themselves which will help in turn their  competitors flourish in the market
The following are some suggestions as to how best the annual reports can be made available to the shareholders so that they are least inconvenienced.
·         All shareholders are to be sent the annual reports in physical form
·         The annual reports can be prepared in cost effective manner by using minimum number of pages with all required information. Presentation of photographs etc can be avoided
·         In case the shareholders prefer to get the annual reports in soft form, the corporate have to send them the annual reports through email – otherwise – the reports are to be sent in physical form only
·         If the shareholders so desire, they can be sent the annual reports through CDs
By the abovementioned suggestions, the shareholders will not be much inconvenienced and at the same time  the guidelines in regard to Green Initiatives can be well adopted.







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