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RELATED PARTY DISCLOSURESAS 18RELATED PARTY RELATIONSHIPSEnterprises that directly or indirectly control or are controlled by, or are under common control with, the reporting enterpriseAssociates & joint ventures of the reporting enterprise & investing party or venturer in respect of which the reporting enterprise is an associate or a joint ventureKey management personnel and relatives of such personnelIndividuals or their relatives owning, directly or indirectly, an interest in voting power of the reporting enterprise that gives them control or significant influence.Enterprises over which Individuals or Key management personnel or their relatives is able to exercise significant influence. RELATED PARTY RELATIONSHIPSTwo companies have a director in common unless the director is able to affect the policies of both companies in their mutual dealings A single customer, supplier, franchiser, distributor, or general agent with whom an enterprise transacts a significant volume of business merely by virtue of economic dependenceProviders of financeTrade unionsPublic utilitiesGovernment departments & agencies including sponsored bodiesRELATED PARTY Parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.RELATED PARTY TRANSACTION CONTROLOwnership, directly or indirectly, of more than of voting powerA transfer of resources or obligations between related parties, regardless of whether or not a price is charged.Control of the composition of the board of directors of a company A substantial interest in voting power and the power to direct, by statute or agreement, the financial and/or operating policiesSIGNIFICANT INFLUENCEParticipation in financial &/or operating policy decisions, but not control of ASSOCIATE JOINT VENTUREa contractual arrangement whereby two or more parties undertake an economic activity which is subject to joint control.An enterprise in which an investing reporting party has significant influence& which is neither a subsidiary nor a joint venture of that party.JOINT CONTROL The contractually agreed sharing of power to govern the policies of an economic activity so as to obtain benefits from it.KEY MANAGEMENT PERSONNELHOLDING COMPANY A company having one or more subsidiaries.Those persons who have the authority and responsibility for planning, directing and controlling the activities of the reporting enterprise.SUBSIDIARYA company in which another company holds either by itself &/or through one or more subsidiaries, more than in face value of its equity share capitalRELATIVESpouse, son, daughter, brother, sister, father & mother who may influence, or be influenced by, in his/her dealings with the reporting enterprise.A company of which another company controls, either by itself &/or throughone or more subsidiaries, the composition of its board of directors.FELLOW SUBSIDIARYA company is considered to be a fellow subsidiary of another company if both are subsidiaries of the same holding company.SIGNIFICANT INFLUENCEIf an investing party holds, directly or indirectly through intermediaries, 20% or more of the voting power of the enterprise unless it can be clearly demonstrated that this is not the case.If the investing party holds, directly or indirectly through intermediaries, less than 20 % of the voting power of the enterprise unless such influence can be clearly demonstrated.An enterprise is considered to control the composition of BODs A person cannot be appointed as director without the exercise in his favour by that enterprise of such a power as aforesaidA persons appointment as director follows necessarily from his appointment to a position held by him in that enterprise; or company/subsidiary thereofIf it has the power, without the consent or concurrence of any other person, to appoint or remove all or a majority of directors of that companyIn case of a Governing Body, Director shall be substituted with member.Any person is considered to have a substantial interest in an enterprise if that enterprise owns, directly or indirectly, 20% or more interest in the voting power of the other enterprise. The Related Party IssueThe operating results and financial position of an enterprise may be affected by a related party relationship even if related party transactions do not occur.Without related party disclosures, there is a general presumption that transactions reflected in financial statements are consummated on an arms- length basis between independent parties. Because there is an inherent difficulty for management to determine the effect of influences which do not lead to transactions, disclosure of such effects is not required by this Standard.Sometimes, transactions would not have taken place if the related party relationship had not existed. If interest is included as a part of the cost of inventories such interest is considered as a segment expense.SEGMENT REPORTINGInternal financial reporting system as the starting point for identifying items that can be directly attributed to segments.The organisational & internal reporting structure of whether its dominant source of geographical risks will normally provide evidence The risks and returns are influenced both by the geographical location of its operations and also by the location of its customers Allocation to segments would not be based on Internal financial reporting system but pursuant to their respective definitions If a particular item of depreciation or amortisation is included in segment expense, the related asset is also included in segment assets. Segment liabilities do not include borrowings and other liabilities that are incurred for financing rather than operating purposes.SEGMENT REPORTINGIntra-enterprise transactions are eliminated while preparing enterprise financial statements, except to the extent that such intra-enterprise balances and transactions are within a single segment.Segment revenue, segment expense, segment assets and segment liabilities are determined before intra-enterprise balancesOPERATING SEGMENTSOrganisational components for which information is reported internally IDENTIFYING REPORTABLE SEGMENTSIf the risks and returns of an enterprise are affected predominantly by differences in the products and services it produces, its primary format for reporting segment information should be business segments with secondary information reported geographically and vice-versaIf they are based neither on individual products or servicesnor to the geographical areas in which it operates choose anyone as the primary segment with the other secondary segmentIf risks and returns of an enterprise are strongly affected by both, as evidenced by a matrix approach then the enterprise should usebusiness segments as its primary segment & geographical segments as its secondary reporting format; andBUSINESS & GEOGRAPHICAL SEGMENTSBusiness and geographical segments for external reporting purposes should be those organisational units for which information is reported to BODs and to CEO for the purpose of evaluating the units performance & for making decisions about future allocations of resourcesA segment that meets the definition should not be further segmentedBODs should determine its business segments and geographical segments for external reporting purposes based on the factors in the definitions rather than on the basis of its system of internal financial reporting Those segments that do not satisfy the definitions should look to the next lower level of internal segmentation If such lower-level segment meets the definition, the criteria in paragraph 27 for identifying reportable segments should be applied to that segmentREPORTABLE SEGMENTSA segment should be identified as a reportable segment ifIts segment assets are 10% or more of the total assets Its revenue from sales to external customers and from transactions with other segments is 10% or more of the total revenue of all segments; OrIts segment result, whether profit or loss, is 10% or more of the combined result of all segments in profit or loss whichever is greater; OrA segment which is not a reportable segment, may be designated as a reportable segment at the discretion of the management of the enterprise. If that segment is not designated as a reportable segment, it should be included as an unallocated reconciling item.If total external revenue attributable to reportable segments constitutes less than 75% of the total enterprise revenue, additional segments should be identified as reportable segments, even if they do not meet the aboveREPORTABLE SEGMENTSA segment identified as a reportable segment in immediately preceding period should continue to be a reportable segment for the current period If a segment is a reportable segment in the current period restate to reflect the newly reportable segment as a separate segment in the preceding-period Do the segments reflected in Internal Financial Reporting System meet the definitions in Para 5Use segments reported to BODs & CEOsDo some segments meet the definitions in Para 5YesNoMay be Reportable SegmentsGo to next level of internal segmentationYesNoDoes the segments exceed the quantitative thresholdsMay be Reportable SegmentsYesNo