Introduction

According to the Indian Companies Act (1956), every organisation must present its financial performance reports annually to its stakeholders and different users (Athma & Rajyalaxmi, 2013). An integrated report is a straightforward communication about how an organization’s approach, management, performance, and opportunities, in the context of its exterior circumstances, lead to the outcome of value over the short, medium, and long term (PWC, 2018). Over the last few years, India has seen extraordinary improvement in corporate reporting and disclosures. Investor essentials, societal anticipations and the preface of regulations have all contributed towards the clarity and broadening of corporate disclosures above traditional financial parameters. One critical driver was the circular issued in 2017, by the Securities Exchange Board of India (SEBI) that instructed Top 500 companies should believe in the use of the Integrated Reporting (IR) Framework for annual reporting (Gaud, 2019). Corporate reporting provides readers with a brief and thorough understanding of the organization.1, 2, 3, 4, 5, 6, 7

With the boosted globalization of business, corporate reporting has seen substantial changes in the past three decades that resulted in the increased influence of stakeholder activism. The annual report also has a crucial role to play not only as a means of advancing accountability but also being an important medium for communication between an organisation and their numerous stakeholders (Das, 2015). Integrated Reporting (IR) is the expansion of financial reporting, but this does not mean the end of financial reporting. Since IR does not demonstrate substituting financial reporting; instead, it reflects the evolution and growth of reporting and the company's function in the community (Ghosh, 2019).

The International Integrated Reporting Council (IIRC) is an international collaboration of controllers, investors, corporations, standard setters, accounting experts and NGOs. The IIRC is accountable for directing the development and adoption of the Integrated Reporting (IR) framework across the globe (PWC, 2018). Nowadays, organizations in other countries are following and embracing a recent pattern of reporting called Integrated Reporting (IR) or ‘One Report,’ in which financial reports and sustainability reports are integrated and then delivered in a single report to have a transparent portrait of the organization (Athma & Rajyalaxmi, 2013). Sustainability reporting tends to be the part of Integrated Reporting that Southeast Asian companies are the weakest one, thus it is suggested to companies take some time to ingrain sustainability, before moving to Integrated Reporting (Johnson, 2015). Integrated Reporting is anticipated to transform the priority from the short-term worth created for the shareholders to the long-term worth. Stakeholders request a more significant level of disclosure by the companies and the regulations and subordination standards needed by the regulatory bodies compel the organisations to adopt IR (Athma & Rajyalaxmi, 2015). Not only companies adopting Integrating Reporting (IR) but also their stakeholders are gaining favourable benefits, specifically the investor community (Gaud, 2019).8, 9, 10, 11, 12, 13

IIRC framework described 6 Capitals which a company discloses in their annual reports-

Review of Literature

Integrated Reporting (IR) enables an organization to overwhelm the constraints of traditional financial reporting systems while providing a holistic viewpoint of performance and advancement. A study carried out by taking secondary sources of data and by using the content analysis technique analysed the status and compliance level of IR disclosures by Indian companies with International Integrated Reporting Council (IIRC) guidelines. IIRC guidelines are unique as they assist to reconcile IR practices at the international level and India is one of the countries which is encouraging IR globally. Their research unveiled that not all companies are disclosing their IR but soon it will be an instrument for accomplishing competitive benefit by the companies with a legal set-up to boost IR in a significant manner (Nanjundaswamy & Divyashree, 2019).14, 15, 16, 17, 18, 19 The study also has a limitation in that the study considered only two capitals, and further research should be undertaken by considering the rest of the capitals. By taking the top 500 Indian companies of the year 2018-19 as a base for their study, (Mishra, 2019), analysed the annual report of such companies with respect to their adoption and implementation of IR. ‘Kirloskar Brothers Ltd’ was the first to adopt IR in the year 2013-14. The descriptive and content analysis is performed to find out the company’s level of compliance w.r.t. IIRC framework and thus, the total score of each company is calculated by considering six guiding principles. The study resulted that in India, the adoption of IR is at its initial level but when compared to pan Asia, the results are overwhelming. As all companies are presenting their audited final accounts, none of the principal scores is exceptionally low; hence there is a fair disclosure. ‘Reliability’ and ‘Completeness’ gave the best results among all principles.

A comparative study on IR practices and their progress in India and in abroad was carried out by taking secondary data. The study revealed that to meet compliance with international best practices, India needs an IR movement. Various strategies and approaches seem to be the need of the hour. It was concluded that IR should be comprehensible, credible, and comparable (Bal, 2018). In a study carried by Nanjundaswamy and Hibban, (2022), using secondary data to conceptually examine the concept and future of business reporting in India, it was addressed that ‘IR is going to be the future of business across the country and the globe’ (Hibban, 2022). Various researchers studied the emergence of IR among academicians, accountants, and auditors to evaluate the awareness level and perceived impact of IR and to further evaluate the voluntary compliance level with the Global Research Initiative (GRI) by the selected companies. Their study was both, descriptive and empirical. It was found that only accountants and auditors are well aware of IR but all of them perceive a positive impact of IR on various aspects of the business and there exist some differences in the voluntary compliance level with GRI guidelines. The limitation that the study doesn’t consider all the stakeholders and only 10 companies were considered for the research; leads to a significant opportunity for future researchers to undergo their research after covering these factors (Nanjundaswamy et al., 2020). The findings of a study by Mishra, (2022) on top 500 companies listed by ET concluded that not all Indian companies have adopted IR due to several reasons but still, IR is representing an extensive line of innovation and leaders and finance personnel of various Indian companies have a positive perception towards the IR. The study resulted that IR can be a widespread practice in India. A study conducted by Vitolla et al., (2020) collected data from 87 financial institutions. Nevertheless, financial institutions such as banks play a significant role in development of an economy. Their analysis aims at revealing the numerous factors which affect IR. The study resulted in how the quality of IR is significantly influenced by varied factors and the reports proposed that managers should improve transparency in their IR by diversifying the content and quality of the relevant information.

The available literature indicates that there are different studies on the conceptual nature of IR. Yet there are not many studies researching Integrated Reporting (IR) in India and other developing countries. However, it has been observed from the review that, to comprehend the linkage between financial and non-financial performance, multiple non-financial matters were quantified using various metrics that enabled managers to embed concerns of environmental and social sustainability into their day-to-day decision-making.

Problem Statement and Research Objectives

Integrated reporting (IR) was just a raw concept by 2010. However, today this concept has evolved to a greater extent that over 2500 organisations in more than 70 countries have embedded the concept. In context of India, integrated reporting has not been made mandatory yet. However, organisations may prepare integrated reports along with financial reports on voluntary basis. Today, where the organisations are dynamic in operating their businesses and the stakeholders demand a multidimensional approach to information disclosure due to increased accountability and environmental concerns; it becomes highly crucial for organisations to make integrated reporting practices a part of their annual reports. In India, these disclosures are at a nascent stage and a very few organisations are taking a step to make integrated reports a part of their annual reports. Therefore, the key to this study to investigate the present status of integrated reporting practices of select Indian banks and have a comparative analysis of intra- bank and inter- bank disclosures on the same. Since, banking sector is one of the major sectors driving economy of any country, therefore, our study analysed IR practices of Indian banking sector. Following are the objectives of this study:

Materials and Methods

To conduct the study, the sample was derived from S&P BSE BANKEX of Bombay Stock Exchange. ‘The S&P BSE Bankex index comprises constituents of the S&P BSE 500 that are classified as members of the banks sector as defined by the BSE industry classification system’ (BSE India). The sample space for our study is presented in Table 1. Only 4 banks (HDFC Bank, ICICI Bank, AU First Bank and Kotak Mahindra Bank) out of the 10 banks listed on BSE have disclosures on IR. Therefore, these 4 banks form the sample for our study.

Integrated reports are subset of annual reports of an organisation. Therefore, secondary data was used to conduct this study. The data was primarily collected from select banks annual reports, their integrated reports, and their respective websites for the years 2020-21 and 2021-22. Other online sources such as official website of Reserve Bank of India and Bombay Stock Exchange were also used to collect data for the study. The study is descriptive and conceptual in nature and content analysis is used to analyse the collected data. The content is analysed with respect to each bank’s contribution to the six capitals vis-à-vis financial capital, human capital, intellectual capital, manufactured capital, social & relationship capital, and natural capital for the years 2020-21 and 2021-22. All the six capitals are sub divided into parameters on which banks have made disclosures on. Intra bank and inter- bank comparisons are made as to capital wise disclosure made by the banks.

Discussion and Analysis

The data analysis and interpretation are divided into following categories:

Findings and Conclusion

The aim of our study is to analyse integrated reporting practices of Indian Banking sector taking into account select banks from Bankex. Integrated reports of select banks were analysed and capital wise intra bank comparison for the years 2020-21 and 2021-22 were made along with inter- bank comparison. The analysis reveals that all the banks under study have performed substantially well in the FY 2022 as compared to FY 2021. Only AU Small Finance Bank profit after tax showed reduction in FY 2022 to FY 2021. All the banks are actively engaged in devoting their efforts for betterment of the society. They are taking initiatives to empower women, to increase representation of women among its employees, to organise financial camps, to digitize and expand its operations, to contribute towards CSR and most importantly to revive the environment by reducing greenhouse gas emissions and adding alternative sources of energy in the system. It is also observed that the banks’ major concern was reporting wide disclosures on financial capital as financial capital is one of the capitals that has the most disclosures among other capitals for all the select banks under the study. Inter- bank analysis reveals that ICICI Bank is the top performer in terms of number of disclosures and contribution towards each capital.

Suggestions and Recommendations

The findings of the study have practical implications and suggestions for managers and policy makers in the country. The analysis of annual reports reveal that only private sector banks are making disclosures as to integrated reporting (capital wise). None of the public sector banks have disclosures pertaining to the same. Although, the banks are publicly listed on stock exchange, still only 4 of them are making disclosures as to integrated reporting. This is because IR is not mandatory in India. Organisations prepare IR totally on voluntary basis. However, managers must know that today, stakeholders prefer transparency and accountability on the part of the organisations and therefore, IR is need of the hour. Second, banks’ majorly focus on financial aspect of IR as reflected in financial capital segment of these reports. Managers should equally focus their efforts on other capitals as well. Third, there is a lack of standard reporting format for IRs. Banks are making disclosures on different parameters on their own. The policy makers must ensure to have a standardized reporting format for various disclosures that will help the readers of integrated reports to have a clear and better understanding of the organisation. Lastly, capital wise disclosures should be measurable in quantitative terms that will help the stakeholders to make easy comparisons and analyse performance of the organisations over time.

Source of Funding

None.

Conflict of Interest

None.