Annual Report to Integrated Report: Do You Have to Move, and What Changes If You Do? Every Question, Answered Simply

"Should we move to an integrated report?" comes up every year in finance, compliance and investor relations teams, usually after someone has seen a competitor's glossy new cover. The answers people find tend to be written for experts. This one isn't. It takes the questions in the order people ask them and answers each as simply as possible. If you want the technical version afterwards, with the SEBI paper trail and the Framework in detail, read our integrated reporting explainer.

We'll use one example throughout: a neighbourhood bakery.

What is an annual report?

Think of the bakery's bill book and its school marksheet put together. How much bread was sold, what the flour and electricity cost, how much profit was left, who owns the shop, who checked the accounts and whether the rules were followed.

For a listed company in India, that's the financial statements, the Board's report, the Management Discussion and Analysis (MD&A), the corporate governance report and, for the top 1,000 listed companies, the Business Responsibility and Sustainability Report (BRSR). The law decides most of what goes in. It's thorough, it's accurate, and it mostly tells you what happened.

So what is an integrated report?

It's the baker sitting down with you and explaining the year.

"We sold more cakes because we started taking orders on WhatsApp. Profit fell a little because flour prices rose and we didn't raise ours. Two of our best bakers left, so we've started training three apprentices. The old oven uses too much electricity, so we're replacing it next year. Our biggest risk is a new chain store opening down the road, and this is what we're doing about it."

Same bakery, same numbers. The difference is that everything is connected: the plan, the ingredients, the people, the risks, the results and what comes next. The International <IR> Framework, which is the rulebook for integrated reports, describes it as a concise communication about how a company's strategy, governance, performance and prospects lead to "the creation, preservation or erosion of value over the short, medium and long term". The bakery version is simpler: how do we make money, what do we depend on, what happened, and what's next?

Is it mandatory in India?

No.

In February 2017, SEBI issued a circular saying the top 500 listed companies "may" adopt integrated reporting voluntarily from FY 2017-18. May, not shall. SEBI's latest master circular on the LODR Regulations, issued on 30 January 2026, consolidates that circular and has no integrated reporting requirement in it at all. There's no prescribed format, nothing to file and no penalty for not doing it.

What is mandatory stays mandatory: the annual report under LODR Regulation 34, the Board's report under the Companies Act, 2013, the MD&A, the governance report, and the BRSR for the top 1,000 listed companies, with BRSR Core assessment or assurance extending to the top 1,000 in FY 2026-27 (our BRSR Core checklist has the details).

If it isn't mandatory, why does anyone do it?

Because the people reading the report want the story, not just the bill book.

Long-term investors want to know whether the business will still be making money in five years, and the financial statements can't tell them that on their own. Lenders and rating agencies want to see how risks are managed. Employees, customers and ESG raters want to know what the company depends on and what it affects. An integrated report answers all of them in one place.

It also helps inside the company. Writing one forces the Board and management to agree what the business model is, which issues matter most and how they'll be measured.

Do we have to throw away our annual report?

No. This is the most common misunderstanding.

You keep everything the law requires. What changes is the front of the book. Most Indian companies publish one document called an "Integrated Annual Report": an integrated section at the front (often 60 pages or more), then the statutory reports and financial statements exactly as before. SEBI's 2017 circular said the integrated information could go in the annual report, in the MD&A or in a separate report, and almost everyone has chosen the first.

Of the ten large FY 2025-26 reports we reviewed, nine have an integrated report or an integrated section. TCS, Infosys, HDFC Bank, Reliance, Hindustan Unilever, Bharti Airtel, Larsen & Toubro and Hindustan Zinc all call the whole document integrated. ICICI Bank titles it "Annual Report 2025-26" but labels its first 63 pages "Integrated Report". ITC is the exception, with a conventional statutory "Report and Accounts".

What are the "six capitals" everyone talks about?

They're the bakery's ingredients, in the broadest sense. The Framework groups everything a business uses and affects into six:

An integrated report shows what the company takes from each capital, what it does with them and what it gives back or uses up. The drawing that shows this on one page is called the value creation model, or business model, and it's usually the first thing an investor looks at.

What else does an integrated report contain?

The Framework has eight content elements. Put simply, they're eight questions the report must answer:

1. What does the company do, and in what environment?
2. Who runs it, and how are decisions made?
3. How does it make money? (the business model)
4. What are the biggest risks and opportunities?
5. Where is it going, and how will it get there? (strategy)
6. How did it do against that plan this year?
7. What's likely to happen next, and what could go wrong?
8. How did it decide what to include?

The Framework doesn't insist on a chapter for each. It asks that the report answers all eight and that the answers connect. For the bakery: the plan to take WhatsApp orders (strategy) should link to the new customers (social and relationship capital), the higher sales (financial capital) and the risk from the chain store (risks).

How is it different from the BRSR?

The BRSR is a long questionnaire on ESG that the top 1,000 listed companies must fill in every year, in a format SEBI prescribes. It answers "how much water, how many women, how many safety incidents". An integrated report is voluntary and explains how those same facts connect to the strategy and the money.

They share a lot. The same materiality assessment (the list of issues that matter most) should sit behind both, the numbers should match, and SEBI's BRSR guidance lets companies cross-reference an integrated report rather than repeat themselves. Our BRSR Core explainer covers the BRSR side.

How will life change for our teams?

This is the question people most want answered and least often get a straight answer to. Honestly, the first year is more work, and the work starts earlier.

Finance stops being the only team with numbers in the report. Finance still owns the financial statements, but now also helps put numbers on the other five capitals, and checks that the front section, the MD&A and the BRSR quote the same figures. Expect to maintain one register of key numbers that every section draws from.

Company secretarial keeps every statutory section it has today. What's new is the governance story: how the Board oversees strategy and risk, in plain language, not just attendance tables. The CS also usually coordinates the Board's statement taking responsibility for the integrated report, which the Framework expects and the stronger Indian reports include.

Investor relations becomes the editor. IR usually leads the integrated section, writes or shapes the strategy and business model pages, runs the agency and makes sure the Chairman's letter, the strategy pages and the MD&A tell one story.

Sustainability moves closer to the centre. ESG data that used to live only in the BRSR now appears in the front section, linked to strategy, so it has to be ready and checked earlier.

HR, operations, technology and business heads get asked questions they didn't used to: how many people did we train and why, what did the new plant change, what's our plan for the risks we named. They become contributors, not just data providers.

The Board is asked to agree the business model, the material issues and the risks before the report is written, and to sign off the integrated section at the end.

The good news is that the second year is much easier. The value creation model, the list of material issues and the data flows already exist; you update them rather than build them.

What does the first year look like?

For a company with a 31 March year end, roughly this:

Our guide to starting the annual report has the full statutory calendar that this fits into.

What are the common mistakes in a first integrated report?

Making it a brochure. Pretty pictures and big claims with no numbers behind them. Investors notice.

Leaving out the bad news. An integrated report is meant to show how value is created, preserved or eroded. If nothing went wrong all year, readers won't believe the rest.

Two stories in one book. The front section says one thing, the MD&A says another, and the BRSR has different numbers. This is the easiest mistake to make and the easiest to avoid with one register of numbers.

Making it too long. Conciseness is one of the Framework's seven guiding principles. Some of India's best-known integrated reports run to several hundred pages; the good ones help the reader find the important parts fast.

Quoting an old rulebook. The International Integrated Reporting Council, which wrote the Framework, is now part of the IFRS Foundation, and the current Framework is the January 2021 version. A first report that credits the wrong body on page 2 signals that nobody checked.

So, should we move?

Ask three questions.

Do our investors, lenders or Board want to understand the business better than our current report lets them? If yes, that's the strongest reason.

Can we agree internally on what our business model is, which issues matter most and how we'll measure them? If not, the report will expose it, and it may be worth doing the internal work first.

Do we have the time and the people for a cross-team project that starts in October? If this year is too tight, begin with a smaller step: a business model page, a materiality page and a clearer strategy section in the current report, then complete the move next year.

Moving is a choice, not a compliance deadline. Done well, it turns the annual report from a record of the year into an explanation of the company. For the bakery, that's the difference between showing someone the bill book and telling them why the shop will still be busy in five years.