1. Related Party Transactions Register (for Board Review)
This register summarises all identified and proposed Related Party Transactions for the period [Insert Reporting Period, e.g., Q2 2025 / Fiscal Year Ended 31 December 2024]. This is an executive summary; the detailed transaction documentation should be available.
| Transaction ID | Related Party (Name & Relationship to Company/Director) | Nature of Transaction (e.g., Sale of Goods, Service Agreement, Loan, Lease, Purchase of Asset) | Value of Transaction (ZAR) | Key Terms & Conditions (e.g., interest rate, payment terms, duration, pricing basis) | Date of Transaction/Agreement | Board Approval Date (if applicable) | Basis for Approval (e.g., Arm's Length, Market Rates, Justification for Deviation) | Status (e.g., Active, Completed, Proposed, Under Review) | Responsible Person/Department | Risk Assessment (Low/Medium/High) | Comments (e.g., Mitigation actions, Rationale, Conflict Management) |
| RPT-001 | ABC Properties (Pty) Ltd (Director X is 50% shareholder) | Office Lease Agreement | R 150,000 p.m. | 5-year lease, RPI-linked annual escalation, market rate confirmed by independent valuation. | 2025-01-01 | 2024-12-10 | Independent valuation confirmed market rates and favourable terms. | Active | Finance Team | Low | Director X recused from discussions and voting. |
| RPT-002 | Director Y (Loan to Director) | Unsecured Loan to Director | R 500,000 | Interest-free, repayment on demand. | 2025-03-15 | 2025-03-10 | Justified by short-term personal liquidity need, repayment expected Q4 2025. | Active | Finance Team | High | Director Y recused. Loan fully disclosed. |
| RPT-003 | Supplier Z (Pty) Ltd (CEO's sibling is MD) | Purchase of Raw Materials | R 2,500,000 | Standard commercial terms, pricing benchmarked against other suppliers. | 2025-04-20 | N/A (Below materiality threshold for explicit board approval) | Internal procurement policy adhered to. Pricing review conducted. | Completed | Procurement/Ops | Medium | CEO declared interest; not involved in supplier selection or negotiation. |
2. Related Party Transactions Oversight Checklist for the Board
This checklist guides the Board's oversight role in identifying, reviewing, approving, and disclosing Related Party Transactions, ensuring adherence to governance principles and legal requirements.
1. Policy and Framework:
- Has the Board reviewed and approved a comprehensive Related Party Transactions Policy that defines:
- What constitutes a "related party" and a "related party transaction" (in line with IFRS and Companies Act definitions)? (Yes/No)
- Thresholds for materiality that trigger specific review and approval levels (e.g., management, Audit Committee, Board, Shareholders)? (Yes/No)
- Procedures for identification, disclosure, review, and approval of RPTs. (Yes/No)
- Procedures for managing conflicts of interest. (Yes/No)
- Is this policy regularly communicated to all directors, prescribed officers, and relevant employees? (Yes/No)
2. Identification and Disclosure:
- Is there a robust system for identifying all related parties and their interests (e.g., annual declarations from directors, prescribed officers, and key management personnel)? (Yes/No)
- Are all potential or actual RPTs promptly and fully disclosed by the involved parties to management and the Board/Audit Committee? (Yes/No)
- Does management maintain a comprehensive and up-to-date Related Party Transactions Register for internal tracking? (Yes/No)
3. Review and Approval Process:
- For all material RPTs, has the Board (or a designated independent committee, e.g., Audit Committee) independently reviewed the terms and conditions? (Yes/No)
- Is the basis for entering into the RPT clearly justified and documented (e.g., commercial rationale, strategic benefit)? (Yes/No)
- Has fairness and arm's-length pricing been assessed for the RPTs? (e.g., through independent valuations, benchmarking against market rates, or comparison with similar non-related party transactions). (Yes/No/N/A for non-commercial RPTs like director loans)
- Are directors or prescribed officers who have an interest in the transaction recused from discussions and voting on that transaction? (Yes/No)
- For RPTs requiring shareholder approval (e.g., loans to directors in certain circumstances under the Companies Act), has this approval been sought? (Yes/No/N/A)
4. Monitoring and Compliance:
- Is there an ongoing process for monitoring the performance and compliance of approved RPTs? (Yes/No)
- Does the Board receive regular reports on all RPTs (including those approved at management level, if below Board thresholds)? (Yes/No)
- Are any potential conflicts of interest that may arise from RPTs actively managed and mitigated? (Yes/No)
- Are RPTs appropriately disclosed in the annual financial statements in accordance with IFRS (IAS 24) and the Companies Act, including the nature of the relationship, the type and volume of transactions, and outstanding balances? (Yes/No)
5. Governance and Documentation:
- Are all discussions, assessments, and decisions related to RPTs duly documented in the board or relevant committee minutes? (Yes/No)
- Does the Company comply with the principles of King IV regarding the governance of RPTs? (Yes/No)
- Has the Board considered whether any RPTs could impact the Company's reputation or public perception? (Yes/No)
3. Board Resolution for Related Party Transactions Approval/Acknowledgement
RESOLVED THAT:
- The Board of Directors of [Company Name] hereby acknowledges receipt and has reviewed the Related Party Transactions Register for the period [Insert Reporting Period], as presented.
- The Board confirms that the Company has a clear policy and robust processes in place for the identification, review, approval, and disclosure of Related Party Transactions, consistent with the Company's commitment to good corporate governance and the requirements of the Companies Act, No. 71 of 2008 (South Africa), and International Financial Reporting Standards (IFRS).
- [SELECT ONE OPTION BELOW - A. for general review/acknowledgment, B. for specific approval of new/material RPTs]:
[A. If this resolution is for acknowledgement of a register of RPTs, with no new specific approvals required at this meeting based on materiality thresholds]:
- The Board notes the Related Party Transactions entered into during the period, being satisfied that they were conducted in accordance with the Company's RPT Policy and deemed to be on an arm's-length basis where applicable, or justified otherwise, with conflicts of interest appropriately managed.
[B. If this resolution is for specific approval of one or more material RPTs listed in the register or separately presented]:
- The Board hereby specifically approves the following material Related Party Transaction(s) detailed in the accompanying documentation/register, having satisfied itself that these transactions are in the best interests of the Company and, where applicable, conducted on an arm's-length basis or justified by compelling commercial rationale:
- [List specific RPTs requiring approval by ID and brief description, e.g., RPT-001: Office Lease Agreement with ABC Properties (Pty) Ltd].
- [Add more as needed].
- The Board confirms that all directors with a declared personal financial interest in these specific transactions have recused themselves from the relevant discussions and voting.
- Management is hereby directed to continue to:
- Ensure strict adherence to the Company's Related Party Transactions Policy.
- Maintain the comprehensive Related Party Transactions Register.
- Report all existing and proposed RPTs to the Board (or relevant committee) as per the Company's policy and materiality thresholds.
- Ensure proper disclosure of all RPTs in the Company's Annual Financial Statements and Integrated Report in accordance with applicable accounting standards and regulatory requirements.
Signed by the Chairperson on behalf of the Board:
[Chairperson's Full Name & Signature]
Chairperson of the Board
Date: [Date of Board Meeting where reviewed/approved]
4. Supporting Documents (To be attached to the Board Pack)
- Detailed Related Party Transactions Register (if more granular than the summary provided).
- Company's Related Party Transactions Policy (if recently updated or new).
- Director's/Prescribed Officer's declarations of interests.
- Independent valuations or benchmarking reports for material RPTs (if applicable).
- Draft agreements or contracts for proposed material RPTs.
- Relevant committee minutes (e.g., Audit Committee) related to RPTs.
- Extracts from the Companies Act or IFRS (IAS 24) definitions of related parties/transactions for reference.
