Why 'single share' owners will still prevail post digital annual reports

Barring Infosys and some other paragons of excellence, Indian companies are not exactly known for being shareholder friendly. Dividends are low and far paced, annual reports get lost in the mail(if they were sent at all), voluntary disclosures are skimped on (segment reporting, impairment testing, last quarter results, consolidated results etc). But ever since the MCA permitted companies to despatch their communications in electronic form, companies have leapt at the chance. No points for guessing why.

Assuming the printing cost of an annual report to be Rs 100(for a good company it will be much more say Rs 200-300), and even a small shareholder base of 10,000 share holders. Rs 10lakh-30Lakh per year, is not to be scoffed at, when it can be achieved by just sending emails and uploading the document on the site. What SEBI failed to achieve through years of Clause 49 circulars, the MCA achieved it within months with a simple circular.

Now, though most demat account holders would now have an email ID linked to it, given that most brokers offer a Rs 50-100 rebate for electronic demat statements etc, but the MCA circular permits them to ask for hard copies of annual reports. And for complex companies with voluminous disclosures, shareholders may still demand the annual report, though psychological studies show that with the inertia element kicking in, some will just grin and bear it.

Another reason to seek the annual report is that if you want to know the details of high paid executives(over Rs 2lakh/month), then most companies send it to shareholders only on request. Hence, holding that token share comes in handy then. 

Many mid cap/small cap investors used to purchase a single share of many companies, merely to get that prized annual report copy. Now that it is available online, they may still retain those shares, merely for the opportunity to attend the company's AGM where they can get snacks/gifts, quiz the management and network with fellow investors. Unless AGMs are made open to all, this tendency of single share owners will continue. And some companies are plagued with them. For example, Wipro has 5010 of them as per its FY 2010-11 annual report