## AS 18 – Who is NOT a Related Party?
AS 18 explicitly lists scenarios where parties are not treated as related even if they appear connected.
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### A. Common KMP Does NOT Make Two Companies Related
Two companies are not related merely because they share a common KMP.
- Example: Shubham is KMP of both Reliance Ltd and Infosys Ltd.
→ Reliance Ltd and Infosys Ltd are NOT related to each other (unless another relationship exists).
> Contrast with Type E: In Type E, one person controls one company and is KMP of another — that creates a relationship. If they are only KMP of both, no relationship arises.
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### B. Fellow Associates / Co-Associates Are NOT Related
Two companies that are both associates of the same investor are not related to each other.
> Memory aid: Two A's (Associates) are never related to each other — only to their common investor.
| Scenario | Related? |
|---|---|
| AK Ltd holds 30% in ABC Ltd (associate) and 25% in PQR Ltd (associate) | ABC & PQR are NOT related |
| AK Ltd holds 30% in ABC Ltd and 70% in PQR Ltd (subsidiary) | ABC is associate, PQR is sub — they are NOT related to each other |
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### C. Significant Business Volume Alone Does Not Create a Relationship
A single customer, supplier, franchiser, distributor, or general agent transacting a significant volume of business with the enterprise is NOT a related party.
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### D. Parties in Normal Course of Dealings
The following are not related parties by virtue of their normal dealings:
- Providers of finance (banks, financial institutions)
- Trade unions
- Public utilities
- Government departments