Required: 2.1 Describe the nature of related part transactions which exists in each of the following: a. Within the Black Ltd Group including Yellow Ltd b. Between Pink Ltd and the Black Ltd group c. Between Grey Ltd and the Black Ltd group 2.2 Discuss why it is important to disclose related party transactions, explaining the criteria which determine a related party relationship.

On 1 July 2019 Black Ltd was formed out of the reorganization of a group of companies with foreign operations. The directors are reluctant to disclose related party information as they feel that such transactions are a normal feature of business and need not be disclosed. Under the new group structure Black owns 80% of Red Ltd,60% of Green Ltd and 30% of White Ltd. Black exercises significant influence over White Ltd. The directors of Black Ltd are also directors of Red Ltd and Green Ltd but only one director of Black Ltd sits on the management board of White Ltd. The management board of White Ltd comprises of five directors. Originally the group comprised of five companies but the fifth company Yellow Ltd which was a 70% subsidiary of Black Ltd, was sold on 31 January 2020. There were no On 1 July 2019 Black Ltd was formed out of the reorganization of a group of companies with foreign operations. The directors are reluctant to disclose related party information as they feel that such transactions are a normal feature of business and need not be disclosed. Under the new group structure Black owns 80% of Red Ltd,60% of Green Ltd and 30% of White Ltd. Black exercises significant influence over White Ltd. The directors of Black Ltd are also directors of Red Ltd and Green Ltd but only one director of Black Ltd sits on the management board of White Ltd. The management board of White Ltd comprises of five directors. Originally the group comprised of five companies but the fifth company Yellow Ltd which was a 70% subsidiary of Black Ltd, was sold on 31 January 2020. There were no