INTRODUCTION
Related party transactions have always been under the scanner of various regulators. Recently, SEBI fined a large group for taking loans from a financial institution, which was its related party, in violation of SEBI regulations and not disclosing such related party transactions. SEBI also recently amended the definition of a related party by widening it to include certain large shareholders and requiring shareholders’ approval for material related party transactions (in terms of value or as a percentage of turnover). Once the party is identified as a related party, there are certain compliances for the company to follow, including provisions relating to approval and voting for such transactions. The Companies Act, 2013 (the Act) provides definition of the term ‘Related party’ u/s 2(76). On the basis of this definition, there are various compliances required under the Act for transactions with related parties. Schedule III to the Act, which prescribes disclosures required in the financial statements of a Company, also requires certain disclosures related to shareholding of promoters, changes in their shareholding during the year, loans or advances in the nature of loans granted to promoters, directors, key management personnel and the other related parties either severally or jointly with any other person, etc. Accounting Standard 18 and Ind AS 24 also define related party
