The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGO’s. Together this coalition share information about value creation, preservation or erosion is the next step in the evolution of corporate reporting.

<IR> has three key foundations:

1. Value Creation for the organization and others

2. The increase, decrease or transformations through the organization’s activities and outputs.

3. The Organization Value Creation Process.


The primary purpose of an integrated report is to explain to financial capital providers how an organization creates value over time. The best way to do so through combination of qualitative and quantitative information, which were six capital comes in.

The capitals are stock of value that are affected or transformed by the activities and outputs of an organization. The framework categorizes them as financial, manufactured, intellectual, human, social and relationship, and natural. Across six categories, all the forms of capital of an organization uses or affects should be considered.

An organization’s business model draws on various capital inputs and show how its activities transform them into outputs.

1. Financial Capital: Funds that are generated through profits, borrowings and equity are used for manufacturing of products and provisioning of services.

2. Manufactured Capital: Manufacturing Plants, Machineries, equipment and technological aspects considered throughout the manufacturing process.

3. Human Capital: Motivated Employees with required skills, capabilities and experience in a safe and secure work environment.

4. Intellectual Capital: Knowledgebase of organization including patents, new process, systems, trademarks, copyright, innovative ideas.

5. Social and relationship capital: Relationship with stakeholders like customers, shareholders, investors and the society at large.

6. Natural Capital: Renewable and Non- Renewable resources utilized by organization or impacted its operations.

As per SEBI Circular SEBI/HO/CFD/CMD/CIR/P/2017/10 dated 06-02-2017 Integrated Reporting may be adopted on a voluntary basis from financial year 2017-18 which are required to prepare Business Responsibility Report (BRR).

The Information related Integrated Reporting may be provided:

(i) in the annual report separately, or

(ii) by incorporating in Management Discussion & Analysis, or

(iii) by preparing a separate report (Annual Report as per IR framework).

In 2013, the International Integrated Reporting Council (IIRC) released a framework for integrated reporting. The framework establishes principles and concepts that govern the overall content of the Report.

<IR> Framework

Form of Report and Relationship with other information

1. An integrated Report should be designated, identifiable communication.

Application of the <IR> Framework

2. Any Communication claiming to be integrated report and referencing the framework should apply all the requirements identified in bold italics type unless:

    • The unavailability of reliable information or specific legal prohibitions results in an inability to disclose information.
    • Disclosure of material information would cause significant competitive harm.

3. In the case of unavailability of reliable information or specific legal prohibitions, an integrated report should:

    • Indicate the nature of information that has been omitted
    • Explain the reasons why it has been omitted
    • In the case of the unavailability of data, identify the steps being taken to obtain the information and the expected time frame for doing so.

Responsibility for an Integrated Report

1. An integrated report should include a statement from those charged with governance that includes:

    • An acknowledgement of their responsibility to ensure the integrity of the integrated report.
    • Their opinion or conclusion about whether, or the extent to which the integrated report is prepared in accordance with <IR> Framework.

Where legal or regulatory requirements preclude a statement of responsibility from those charged with governance, this should be clearly stated.


Strategic focus and future orientation

1. An integrated report should provide insight into the organization’s strategy, and how that relates to its ability to create value in the short, medium and long term to its use of and effects on the capitals.

Connectivity of Information

2. An integrated report should show a holistic picture of combination, interrelatedness and dependencies between the factors that affect the organization’s ability to create value over time.

Stakeholder relationships

3. An integrated report provide insight into the nature and quality of the organization’s relationships with its key stakeholders, including how and to what extent the organization understands, takes into account and responds their legitimate needs and interests.


4. An integrated report should disclose information about matters that substantively affect the organization’s ability to create value over the short, medium and long term.


5. An integrated report should be concise.

Reliability and completeness

6. An integrated report should include all material matters, both positive and negative, in a balanced way and without material error.

Consistency and Comparability

7. The information in an integrated report should be presented:

    • On a basis that is consistent overtime
    • In a way that enables comparison with other organizations to the extent it is material to the organization’s own ability to create value over time.


Organization overview and external environment

1. An integrated report should answer the question: What does the organization do and what are the circumstances under which it operates?


2. An integrated report should answer the question: How does the organization’s governance structure support its ability to create value in the short, medium and long term?

Business Model

3. An integrated report should answer the question: What is the Organization’s business model?

Risks and Opportunities

4. An integrated report should answer the question: What are the specific risk and opportunities that affect the organization’s ability to create value over the short, medium and long term, and how is the organization dealing with them?

Strategy and resource allocation

5. An integrated report should answer the question: Where does the organization want to go and how does it intend to get there?


6. An integrated report should answer the question: To what extent has the organization achieved its strategic objectives for the period and what are its outcomes in terms of effect on the capitals?


7. An integrated report should answer the question: What Challenges and uncertainties is the organization likely to encounter in pursuing its strategy, and What are the potential implications for its business model and future performance?

Basis of preparation and presentation

8. An integrated report should answer the question: How does the organization determine what matters to include in the integrated report and how are such matters quantified or evaluated?

1. Details about capital as input

2. Company Strategy

3. Value created during the year by each capital (outcomes)

4. Stakeholder Engagement

5. Risk- Risk Management

6. Strategic objective of the company

7. External risk and their likely impact


Author Bio

Qualification: CA in Job / Business
Location: KOLKATA, West Bengal, India
Member Since: 16 Mar 2021 | Total Posts: 1

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April 2021