Related Party Transaction Register — Sec 188 / AS 18 / Ind AS 24
RELATED PARTY TRANSACTION REGISTER
Entity: {{client_name}} · Year ended: {{period_end}} · Prepared by: __________ · Reviewed by: __________
Purpose: maintain a single register of every related party and every transaction with a related party during the year, testing each against Sec 188 approval thresholds and AS 18 / Ind AS 24 disclosure requirements. This register is the working paper feeding Form AOC-2 (Board’s Report annexure) and Form 3CD clause 23 (Sec 40A(2)(b) specified-person payments).
Part A — Related party master (Sec 2(76) + AS 18 / Ind AS 24 test)
| Name of party | Relationship (director / KMP / relative / holding-subsidiary-associate / entity with common KMP, etc.) | Basis of relationship (Sec 2(76) test) | Also "related" under AS 18 / Ind AS 24? (control / significant influence / KMP compensation) | Party added/removed during year (note date) |
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Note: the Companies Act (Sec 2(76)) and accounting-standard (AS 18 / Ind AS 24) definitions of "related party" overlap but are not identical — AS 18 / Ind AS 24 additionally require disclosure of KMP compensation and close-family-member transactions that may sit outside Sec 188. Test every party against both columns; do not assume one definition subsumes the other.
Part B — Transaction log
| Party | Nature of transaction (sale/purchase of goods, property, leasing, services, agent appointment, office of profit, underwriting) | Amount (₹) | Terms (credit period, pricing basis) | Arm’s-length? (Y/N + comparable used) | Board approval date & resolution ref | Shareholder approval required? (Rule 15(3) test below) | Shareholder approval date & resolution ref (if required) |
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Part C — Rule 15(3) shareholder-approval threshold test
Board approval under Sec 188(1) is mandatory for every related party transaction regardless of value. Shareholder approval by ordinary resolution is additionally required once a transaction crosses these thresholds (Rule 15(3), Companies (Meetings of Board and its Powers) Rules 2014 — turnover/net worth computed on the preceding year’s audited financial statements):
| Transaction type | Threshold requiring shareholder approval | This transaction’s value | Threshold crossed? (Y/N) |
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| Sale, purchase or supply of goods or materials | 10% of turnover (directly or through appointment of agent) | | |
| Selling or buying property of any kind | 10% of net worth (directly or through appointment of agent) | | |
| Leasing of property of any kind | Lower of 10% of net worth or 10% of turnover | | |
| Availing or rendering of services | 10% of turnover (directly or through appointment of agent) | | |
| Appointment to any office or place of profit (company, subsidiary or associate) | Monthly remuneration exceeding ₹2.5 lakh | | |
| Underwriting the subscription of securities/derivatives | 1% of net worth | | |
A related party who is also a member of the company must not vote on the ordinary resolution approving the transaction (Sec 188(1), second proviso). Where multiple thresholds could apply to one transaction, test against the specific category in the table above, not a blended figure.
Part D — Arm’s-length and audit cross-references
| Party | Arm’s-length evidence (comparable quote/market rate/valuation, or note if none obtained) | 3CD clause 23 (Sec 40A(2)(b)) — reasonable & FMV assessment | AOC-2 line item ref |
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Every Sec 188(1) contract or arrangement must be referred to in the Board’s Report in Form AOC-2 (Rule 8(2), Companies (Accounts) Rules 2014) along with the justification for entering into it — the Part D reference column ties each register line to its AOC-2 disclosure. Form 3CD clause 23 separately requires reporting of payments to specified persons under Sec 40A(2)(b) of the Income-tax Act — a related-party test under tax law, broader in places than Sec 2(76); do not assume the Companies Act related-party list is a complete answer to clause 23.
Part E — Conclusion
Conclusion on completeness of the related-party population and compliance of tested transactions with Sec 188, AS 18 / Ind AS 24 and AOC-2: ____________________________________________
| Prepared by | Reviewed by | Engagement partner |
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