17 November 2009
Hi Friends My query On whether the following 2 company are related or not Apple Pvt Ltd Company, where Mr A and Mr B is a director , Orange Ltd Company is another Company where Mr A is the director, and Mango Ltd Company is another Company where Mr B is the Director. Now there is a transaction between Orange and Mango, wheather in the annual report of Orange Ltd it has to be reported, whether Sec 297, 301, and AS-18 will apply Hope you understand my question Thanks and Regards CA L.GopalShah Chartered Accountant Bhubaneswar
18 November 2009
Section 297 applies when there is a contract between the company and a director of the company or his relative, a firm in which such a director or relative is a partner, any other partner in such a firm, or a private company of which the director is a member or director.
So 297 & 301 does not apply in trasaction between Orange & Mango as there is no common director
As per AS - 18 related party relationships described in (a) to (e) below:
enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries);
associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;
individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;
key management personnel and relatives of such personnel; and
enterprises over which any person described in (c) or (d) is able to exercise significant influence. This includes enterprises owned by directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise.
So for this who will have to check. No help in this point
Inface Apple, Mango and Orange all are Under the control and under the influence of one director, who is the director in only Apple Ltd. Apple Ltd is BSE listed Company Now i want to know wether should Apple and Mango relationship will be related party transaction under AS-18, whether it will come under disclosure in notes to account
as per AS 18- Name of the related party and nature of the related party relationship where control exists should be disclosed irrespective of whether or not there have been transactions between the related parties
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