n NISM Certifications
XV NISM Series XV
Medium

Why must companies disclose 'Related Party Transactions'?

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    To assure shareholders transactions are done only with related parties

  2. To inform shareholders if such transactions enrich promoters or certain shareholders at the expense of others

    Correct answer

  3. C

    To show the company can sell outside its network

  4. D

    To comply with SEBI's KYC rules

Why this is the answer

Disclosure ensures transparency and prevents unfair enrichment of promoters at minority shareholders’ expense.

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