- A threshold-based framework was introduced to decide when Related Party Transactions (RPTs) are material.
- For companies with turnover up to ₹20,000 crore, RPTs are material if they exceed 10% of annual consolidated turnover.
- For companies with turnover above ₹20,000 crore, RPTs are material if they exceed ₹2,000 crore.
- This replaces the earlier flat ₹1,000 crore limit, which was considered rigid.
- Aim: To balance investor protection with ease of doing business and streamline compliance.
- Significance: Ensures clarity, better governance, and transparency in disclosures of related party dealings.
Question:
Q.1 Under SEBI’s revised framework, what is the materiality limit for Related Party Transactions (RPTs) in companies with turnover above ₹20,000 crore?a) ₹1,000 crore
b) ₹1,500 crore
c) ₹2,000 crore
d) ₹2,500 crore
Answer: c) SEBI set a uniform ₹2,000-crore cap for companies with turnover above ₹20,000 crore.
