Joshi Ltd. is a listed entity entered into a transaction with related party, namely Hosh Ltd., for an amount of ₹ 59 crore and simultaneously made a payment of ₹ 10 crore for brand use. The turnover of Joshi Ltd. is ₹ 48

CS Executive · Securities Laws and Capital Markets · PYQS · December 2022
Joshi Ltd. is a listed entity entered into a transaction with related party, namely Hosh Ltd., for an amount of ₹ 59 crore and simultaneously made a payment of ₹ 10 crore for brand use. The turnover of Joshi Ltd. is ₹ 480 crore on standalone basis and after considering consolidation of subsidiary & associate is ₹ 610 crore. You, being a company secretary of the company, advise on the following: Whether the payment made for brand uses is a related party transaction or not?

Answer & Explanation:

Yes, the payment made for brand use to Hosh Ltd. for ₹10 crore is also a related party transaction , provided Hosh Ltd. is a related party of Joshi Ltd. Transactions involving payments for brand usage or royalty are specifically covered under related party transactions.

Topics: Related Party Transactions

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