Slug flow in closed conduit has enormous engineering applications ranging from oil exploration rigs, bubble column reactors, air lift pump to the critical hydrodynamics of the nuclear reactors cooling. The knowledge regarding the hydrodynamics of bubble is a priori for its pragmatic applications in mixing and heat transfer applications. Therefore, researchers have given a due attention to explore the relevant fluidic physics related to the rise of a slug bubble or a Taylor bubble in a closed conduit. Nevertheless, annular bubble has its own importance in the engineering applications involving the annular geometry. This paper results from an ongoing experimental campaign to comprehend the interfacial reconstruction of a fully developed Taylor bubble to an annular bubble at the inception of an annuli. The phenomenon has been observed by using a high speed photography camera and has been further analyzed by using MATLAB image processing tools. Interfacial reconstruction is a complex phenomenon with various processes occurring simultaneously which are rich in physics. The preliminary step towards the comprehension of the phenomenon is the clear demarcation of the stages involved in the transition process. The interfacial reconstruction occurs in six stages namely, retardation of fully developed Taylor bubble, plateau formation , doughnut shape formation and nucleation of lobes, preferential rise of leading lobe and retraction of lagging lobe, thread formation of lagging lobe and finally, manifestation of an annular bubble. Furthermore, the results from some new observations regarding the effect of large bubble volume for a given annular geometry have also been proposed. Thinning and simultaneous oscillations of liquid bridge and perturbations in the annular film during the consumption of large bubble volumes results in a bubble cluster. Vortex shedding and generation of satellite bubbles are the features of interfacial reconstruction which enhance the mixing and local heat transfer coefficient.