First Notes - 9 February 2017

SEBI advises listed companies

SEBI advises listed companies to adopt integrated reporting voluntarily



On 2 September 2015, SEBI notified the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). Clause 34(2)(f) of the Listing Regulations requires mandatory submission of Business Responsibility Report (BRR) for top 500 listed entities based on market capitalisation (calculated as on 31 March of every year). The BRR should describe the initiatives taken by the companies from an environmental, social and governance perspective, in the format as specified by SEBI from time to time.

Integrated reporting

The International Integrated Reporting Council (IIRC) was formed in August 2010 and aims to reduce the gap between current reporting and information needs of investors and other stakeholders through the introduction of the concept of Integrated Reporting (IR). There are now over 750 participants in the IR networks worldwide, with, for example, 180 businesses currently practicing IR in Japan alone. More than 1,000 businesses globally are using it to communicate with their investors and there is increasing interest in IR by pioneers in the public sector. Regulators in countries such as Japan, India and the UK are among those taking a greater interest in IR as a route towards achieving more cohesive reporting and promoting financial stability, with the European Commission labelling IR as ‘a step-ahead’.1

The IIRC has prescribed the following guiding principles which underpin the preparation of an integrated report, specifying the content of the report and how information is to be presented:

Principles Overview
Strategic focus and
future orientation

An insight into the organisation’s strategy and how it relates to

  • an organisation’s ability to create value in the short, medium and long term, and
  • its use of and effects on capital should be provided. 
Connectivity of information A holistic picture of the combination, interrelatedness and dependencies between the factors that affect the organisation’s ability to create value over time should be shown.
An insight into the nature and quality of the organisation’s relationships with its key stakeholders, including how and to what extent the organisation understands, takes into account and responds to their legitimate needs and interests should
be provided.
Materiality  Information about matters that substantively affect an organisation’s ability to create value over the short, medium and long term should be disclosed. 
Conciseness  An integrated report should be concise.
Reliability and
All material matters, both positive and negative, in a balanced way and without material errors should be included. 
Consistency and comparability 

The information in an integrated report should be presented:

  • On a basis that is consistent over time, and
  • In a way that enables comparison with other organisations to the extent it is material to the organisation’s own ability to create value over time. 
Disclosure of capital

IIRC has categorised the forms of capital as follows:

  • Financial capital
  • Manufactured capital
  • Intellectual capital      
  • Human capital
  • Social and relationship capital
  • Natural capital. 


New development

On 7 February 2017, SEBI issued a circular advising top 500 listed companies which are required to prepare BRR to adopt IR on a voluntary basis from the financial year 2017-18.  While disclosing IR, companies should take note of the following points:

  • Placement of IR: The information related to IR may be provided in the following ways:
    • As part of annual report with a separate section on IR
    • Incorporating in management discussion and analysis, or
    • By preparing a separate report (annual report prepared as per IR framework).

In case the company has already provided the relevant information in any other report prepared in accordance with national/international requirement/ framework, it may provide appropriate reference to the same in its integrated report so as to avoid duplication of information. 

  • Hosting on company’s website: Companies may host the integrated
    report on their website and provide appropriate reference to the same in their annual report.

Our comments

Financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) often do not tell the entire story of a company’s performance and consequentially do not satisfy the information needs of all stakeholders. Today’s investors, analysts and other users of financial statements seek both financial and non-financial information
such as information on environment consciousness, corporate social
responsibility, etc. for conducting financial analysis and comparison among
different entities for arriving at investment decisions.

While some Indian companies have already been following IR on a voluntary basis, SEBI’s recent circular is likely to encourage other listed companies to include non-financial disclosures in their annual report, hereby adopting international best practices.

It would also be useful if SEBI provides additional guidance for companies to facilitate the adoption of IR and pre-empt questions that companies may have as they evaluate moves to present their IR.

To access the text of the SEBI circular, please click here.



© 2023 KPMG Assurance and Consulting Services LLP, an Indian Limited Liability Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG (Registered) (a partnership firm with Registration No. BA- 62445) converted into KPMG Assurance and Consulting Services LLP (a Limited Liability partnership firm) with LLP Registration No. AAT-0367 with effect from July 23, 2020.

For more detail about the structure of the KPMG global organization please visit

Connect with us

Save, Curate and Share

Save what resonates, curate a library of information, and share content with your network of contacts.