Openness of Business — BRSR Core KPI

What this attribute is

Openness of Business is one of the nine BRSR Core KPIs that SEBI requires every Top-1,000 listed entity to subject to independent reasonable assurance. It is the only Core KPI under NGRBC Principle 1 — Ethics, Transparency, Accountability, and the last of the nine to land in this methodology series — completing Batchwise’s coverage of the BRSR Core methodology set alongside the four P6 environmental KPIs (GHG Intensity, Water Withdrawal Intensity, Energy Intensity, Waste Recycled), the three P3 employee-wellbeing KPIs (Wellbeing Spend, POSH Complaints, Female Wages), and the P8 Job Creation in Smaller Towns KPI.

The KPI is multi-component — it is not a single percentage. It captures supply-chain concentration and related-party transparency through three buckets, each with multiple sub-metrics. The breadth is deliberate: SEBI structured the Core KPI to attest the entity’s transparency on all three dimensions in one assurance set, rather than as separate single-figure disclosures.

For the assurance engagement that covers this KPI, see BRSR Core Assurance.

The multi-component structure

The Openness Core KPI covers three buckets, with the following sub-metrics in each:

Bucket	Sub-metrics
A. Trading Houses	(1) Purchases from trading houses as % of total purchases · (2) Number of trading houses · (3) Purchases from top 10 trading houses as % of purchases from trading houses
B. Dealers / Distributors	(4) Sales to dealers / distributors as % of total sales · (5) Number of dealers / distributors · (6) Sales to top 10 dealers / distributors as % of sales to dealers / distributors
C. Share of RPTs	(7) Share of RPTs in purchases as % of total purchases · (8) Share of RPTs in sales as % of total sales · (9) Share of RPTs in loans and advances as % of total loans and advances (per relevant schedules in the audited Balance Sheet) · (10) Share of RPTs in investments as % of total investments (per relevant schedules in the audited Balance Sheet)

All ten sub-metrics are filed together. The exact components, formulae, period basis, and prescribed conventions are set by the BRSR Core taxonomy and the SEBI Industry Standards on Reporting of BRSR Core (December 2024 circular). Entities should follow the convention prescribed there and in the current MCA-published taxonomy.

The BFSI sector has a sector-specific treatment for the conventional purchases-and-sales framing — see the BFSI section below.

Bucket A: Trading Houses

Three sub-metrics measuring the entity’s concentration of inputs through trading-house intermediaries:

Sub-metric (1): Purchases from trading houses
              ÷ Total purchases × 100

Sub-metric (2): Number of trading houses (count)

Sub-metric (3): Purchases from top 10 trading houses
              ÷ Total purchases from trading houses × 100

The first sub-metric measures what share of the entity’s overall procurement runs through trading-house intermediaries (versus direct procurement from manufacturers or service providers). The third sub-metric drills into concentration within the trading-house segment — a high percentage on top-10 indicates a few trading houses dominate the entity’s intermediary sourcing.

Both percentage sub-metrics use the same underlying procurement data; the count sub-metric is a separate enumeration. The entity’s documented classification of which vendors count as “trading houses” governs all three sub-metrics — see the classification basis section below.

Bucket B: Dealers / Distributors

Three sub-metrics, structurally mirroring Bucket A but on the sales side:

Sub-metric (4): Sales to dealers / distributors
              ÷ Total sales × 100

Sub-metric (5): Number of dealers / distributors (count)

Sub-metric (6): Sales to top 10 dealers / distributors
              ÷ Total sales to dealers / distributors × 100

Sub-metric (4) measures the share of the entity’s sales going through the dealer / distributor channel (versus direct enterprise sales, retail, end-consumer, or other channels). Sub-metric (6) drills into concentration within the dealer / distributor segment.

The entity’s documented classification of which customers count as “dealers / distributors” governs all three sub-metrics. As with trading houses, the classification basis is entity policy, not a statutory definition.

Bucket C: Share of RPTs

Four sub-metrics covering the share of related-party transactions (RPTs) across the four transaction classes the BRSR Core format asks about:

Sub-metric (7): Share of RPTs in purchases
              = RPT purchases ÷ Total purchases × 100

Sub-metric (8): Share of RPTs in sales
              = RPT sales ÷ Total sales × 100

Sub-metric (9): Share of RPTs in loans and advances
              = RPTs (loans/advances) ÷ Total loans and advances
                (per relevant schedules in the audited Balance Sheet) × 100

Sub-metric (10): Share of RPTs in investments
              = RPTs (investments) ÷ Total investments
                (per relevant schedules in the audited Balance Sheet) × 100

Sub-metrics (7) and (8) work off the same purchases / sales registers as Buckets A and B (with a different slicing — by RPT status rather than by counterparty type). Sub-metrics (9) and (10) work off the relevant schedules in the audited Balance Sheet — the entity’s audited financial-statement loans / advances and investments schedules, sliced for the related-party subset. The assurance approach for these sub-metrics typically cross-references the financial auditors and the relevant audited financial-statement and / or invoice-level data.

The Openness KPI is not a standalone BRSR-specific calculation framework — it is built on top of data the entity is already maintaining for financial-statement and statutory compliance purposes, sliced and presented per the BRSR Core format. The related-party scope (which counterparties count as “related parties”) is a separate question — see the Related-Party Scope section below.

Trading-house and dealer / distributor classification basis

The SEBI BRSR Core annexure gives the measurement structure for Buckets A and B but does not provide a detailed legal definition of “trading house” or “dealer / distributor”. Both buckets therefore depend on the entity’s classification basis as an implementation matter — a documented policy applied uniformly across the vendor and customer masters:

• Trading house — practical interpretation: an intermediary that buys goods from manufacturers / producers and re-sells to the entity, without substantive value-add or transformation. The entity’s policy needs to specify the threshold or criteria used (e.g., revenue mix of the vendor, vendor’s own classification, contract type, or a documented qualitative assessment).
• Dealer / distributor — practical interpretation: a customer that buys for re-sale rather than for end-use. Same documentation discipline applies.

The classification basis applied should be disclosed alongside the figures. The assurance partner reviews for documentation and consistency rather than against a statutory definition. Year-on-year reclassifications materially affect the percentages and should be flagged in the BRSR notes when they occur.

Related-party scope

The BRSR Openness disclosure is built on the entity’s related-party data, which is commonly aligned with the related-party definitions under:

• Companies Act, 2013 §2(76) — the statutory definition for all Indian companies, covering directors and their relatives, KMP and their relatives, firms and private companies in which directors or managers are interested, and other categories
• SEBI LODR Regulation 2(1)(zb) — the listed-entity-specific definition that may extend the §2(76) population
• Indian Accounting Standard (Ind AS) 24 — the accounting-standard related-party disclosure framework, which governs how related parties and related-party transactions are presented in audited financial statements

The BRSR Openness KPI is not a re-disclosure of any of these — it is a separate BRSR reporting construct that sits on top of the same underlying related-party data, sliced and presented per the BRSR Core format. The entity should document which definition basis it has applied (most commonly the Ind AS 24 framework, since the BRSR data needs to reconcile to the audited financials) and apply it consistently across all four Bucket C sub-metrics.

The audit-trail spans all of the underlying regimes: the BRSR Core engagement on Bucket C typically draws on the same RPT register that the statutory audit, the LODR-23 audit committee review, and the Ind AS 24 disclosure all draw on.

BFSI sector treatment

Banking, financial services, and insurance (BFSI) entities have an accounting structure where the conventional “purchases” and “sales” framing of Buckets A and B does not map cleanly to their business model. The SEBI Industry Standards on Reporting of BRSR Core (December 2024 circular) sets sector-specific treatment for BFSI entities on the Openness KPI — entities in BFSI should refer to that circular for the applicable mechanics and apply them consistently.

The non-BFSI structure described in the rest of this page (Buckets A and B as conventional purchases-and-sales framing) applies to manufacturing, services, infrastructure, and other sectors.

Worked example

Illustrative only — not representative of a typical company. Openness percentages vary materially by sector, business model, and procurement / sales channel design. A fully integrated manufacturer with no intermediary procurement and no dealer channel will report low percentages on Buckets A and B; a wholesale-distribution-led FMCG entity will report high percentages on Bucket B; a multi-subsidiary group will report high percentages on Bucket C. The numbers below are constructed to make the calculation structure clear; an actual filing must use the entity’s audited records on the basis prescribed by the SEBI Industry Standards circular.

Same diversified mid-cap manufacturer used in the prior worked examples — declared operational-control boundary, standalone listed entity, FY 2024-25:

Bucket A: Trading Houses

Sub-metric	Calculation	Value
(1) Purchases from trading houses ÷ total purchases	₹86 Cr ÷ ₹680 Cr	12.6%
(2) Number of trading houses	enumerated count	34
(3) Purchases from top 10 trading houses ÷ total trading-house purchases	₹62 Cr ÷ ₹86 Cr	72.1%

Bucket B: Dealers / Distributors

Sub-metric	Calculation	Value
(4) Sales to dealers / distributors ÷ total sales	₹742 Cr ÷ ₹1,847 Cr	40.2%
(5) Number of dealers / distributors	enumerated count	117
(6) Sales to top 10 dealers / distributors ÷ total dealer / distributor sales	₹318 Cr ÷ ₹742 Cr	42.9%

Bucket C: Related Party Transactions

Sub-metric	Calculation	Value
(7) Purchases from related parties ÷ total purchases	₹54 Cr ÷ ₹680 Cr	7.9%
(8) Sales to related parties ÷ total sales	₹89 Cr ÷ ₹1,847 Cr	4.8%
(9) Loans and advances to related parties ÷ total loans and advances (per audited BS)	₹12 Cr ÷ ₹38 Cr	31.6%
(10) Investments in related parties ÷ total investments (per audited BS)	₹240 Cr ÷ ₹385 Cr	62.3%

(Sub-metrics (9) and (10) reconcile to the relevant schedules in the audited Balance Sheet for FY 2024-25; the related-party slice reconciles to the entity’s Ind AS 24 disclosure in the same financials.)

The BRSR XBRL filing carries each of the ten sub-metric values in the relevant taxonomy elements (verify the current MCA-published BRSR taxonomy for the exact element names), with both current-year and previous-year values populated where the reporting structure requires comparative figures.

Source-document evidence

The full evidence-document inventory is on Document Evidence Requirements. For the Openness KPI specifically:

Buckets A and B (purchases and sales sides)

• Vendor master with trading-house tagging — flag for purchases-side classification (trading house vs other vendor types), with the entity’s documented classification policy retained as evidence
• Customer master with dealer / distributor tagging — flag for sales-side classification, same documentation discipline
• Purchase records for the financial year — reconciled to the audited financial statements purchases line
• Sales records for the financial year — reconciled to the audited financial statements revenue from operations line
• Top 10 enumeration records — the entity’s calculation working showing which 10 trading houses (or dealers / distributors) qualify as the top 10 for the sub-metric, with the period-basis treatment disclosed

Bucket C (related-party transactions)

• Related-party register / transaction log — the entity’s RPT log per Ind AS 24 / Companies Act §188 / LODR-23, with the same definition basis applied across all four sub-metrics
• Audit committee minutes documenting RPT approvals and reviews during the year
• Audited Balance Sheet — loans and advances schedule — for sub-metric (9) denominator
• Audited Balance Sheet — investments schedule — for sub-metric (10) denominator
• Ind AS 24 reconciliation — the BRSR figures should reconcile to the entity’s Ind AS 24 related-party disclosure in the audited financials; the reconciliation working is workpaper evidence

Cross-cutting

• Entity’s documented classification and definition policies — for trading-house, dealer / distributor, and related-party classifications; the basis applied for each is disclosed alongside the figures

What this KPI captures — and what it doesn’t

Worth being explicit about scope:

• Captures: concentration of purchases through trading-house intermediaries, concentration of sales through dealer / distributor channels, and the share of related-party transactions in the entity’s total purchases, sales, loans / advances, and investments. A transparency-of-business-relationships metric.
• Does not capture: the terms of those transactions (whether prices are arm’s length, whether contract terms are commercially reasonable), the governance around those relationships (whether RPTs were properly approved, whether trading-house relationships were competitively bid), or the quality of the dealer / distributor or trading-house counterparties.

Those qualitative dimensions are covered (where covered) by the broader P1 Essential disclosures (conflicts of interest, fines and penalties), the audit committee’s RPT-approval framework under LODR Regulation 23, and the entity’s qualitative BRSR narrative. The Openness Core KPI is a structural-concentration measure, not a transaction-quality measure.

Common practice patterns in audit

Common practice patterns observed in BRSR engagements — not SEBI-recognised categories of finding:

1. Trading-house classification basis undisclosed. The percentage is reported without disclosing the entity’s policy for which vendors count as trading houses (versus manufacturers, service providers, others). The basis should be disclosed alongside the figures and held consistent year-on-year.
2. Dealer / distributor classification inconsistency across the customer master. Mid-year reclassifications, or different classification rules applied to different business segments, materially affect the Bucket B percentages. The classification policy should be a single documented set of rules applied uniformly.
3. Top 10 period basis undisclosed. Sub-metrics (3) and (6) require a “top 10” enumeration — calculated on full-year cumulative purchases / sales, year-end snapshot, or another basis. The basis should be disclosed; year-on-year consistency matters.
4. Related-party reconciliation gap with Ind AS 24. The Bucket C sub-metric values do not reconcile to the entity’s Ind AS 24 disclosure in the audited financials. Most commonly traced to a definition-basis mismatch (BRSR using LODR-23 scope but Ind AS 24 disclosure using a different scope). The two must be reconciled.
5. Loans / advances and investments not pulled from audited Balance Sheet schedules. Some entities calculate these denominators from internal records rather than the audited Balance Sheet schedules. The SEBI material indicates these should come from the audited Balance Sheet — internal-record denominators create unnecessary reconciliation work for the assurance partner.
6. BFSI sector treatment misapplied. Non-BFSI entities sometimes adopt the BFSI sector treatment thinking it is “easier” — or BFSI entities apply the conventional purchases-and-sales framing thinking it is more familiar. The sector treatment should match the entity’s actual sector classification.
7. Implementation matter — entity-policy edge cases. A range of edge cases on this KPI (newly-incorporated subsidiaries during the year, change in related-party status mid-period, intra-group reclassifications, etc.) need an entity-policy treatment rather than a SEBI-prescribed rule. The entity should adopt a documented policy for these edge cases and apply it consistently year-on-year — flagged here as an implementation matter, not a recurring SEBI finding category.

XBRL filing

This KPI is filed in the BRSR XBRL instance document under multiple elements from the MCA-published BRSR taxonomy module — one element per sub-metric (the multi-component structure means several XBRL elements are involved). Element names and unit references should be verified against the current MCA taxonomy version before generating the instance document. Both current-year and previous-year context references must be populated where the reporting structure requires comparative figures.

See XBRL Taxonomy for BRSR for the structural overview.

How this KPI rolls up into the BRSR Core engagement

This is the only BRSR Core KPI under Principle 1. The signed BRSR Core assurance report attests all ten sub-metrics (across the three buckets) to reasonable assurance under SAE 3000 (Revised). Workpapers retained by the assurance partner cover the trading-house and dealer / distributor classification basis, the related-party scope and reconciliation to Ind AS 24, the audit committee minutes for RPT approvals, the top-10 enumeration period basis, the reconciliation of loans / advances and investments figures to the audited Balance Sheet schedules, and the BFSI sector treatment if applicable.

For the engagement that produces the signed BRSR Core assurance opinion, see BRSR Core Assurance.

Related reading

• NGRBC Principle 1 — Ethics, Transparency, Accountability — parent pillar
• GHG Emission Intensity per Revenue — sibling P6 Core KPI
• Water Withdrawal Intensity — sibling P6 Core KPI
• Spend on Wellbeing as % of Revenue — sibling P3 Core KPI
• Female Wages as % of Total Wages — sibling P3 Core KPI
• POSH Complaints Disclosure — sibling P3 Core KPI
• Job Creation in Smaller Towns — sibling P8 Core KPI
• Document Evidence Requirements — full evidence checklist
• XBRL Taxonomy for BRSR — XBRL filing structure
• BRSR Core Assurance — service