LODR Chapter

Introduction

• Contributed 8 to 10 marks in the last three years.
• Complete chapter revision and PYQs.
• Practice answer writing.

Applicability

• Applies to non-convertible securities, IDRs, mutual funds, SME platforms.
• In-principle approval must be obtained from the stock exchange.

Related Party

• Comes under Section 2, Sub-section 76 and 77.
• Promoter group or person holding 10% or more shares.
• Not applicable to mutual funds.

Independent Director

• Should not be related to the promoter group.
• Relies only on director remuneration.
• Minimum pecuniary relationship for three years.

Structure of Directors

• 50% non-executive directors.
• If the chairperson is executive, 50% independent.
• Board meetings: Four times a year with a 120-day gap.

Audit Committee

• At least three directors, 2/3 independent.
• Chairperson should be an independent director.
• Four meetings a year with a maximum 120-day gap.

Related Party Transactions

• Material transactions: 1000 crores or 10% of annual turnover.
• Audit committee approval is necessary.
• Omnibus approval is valid for one year.

Material Subsidiary

• Contributes more than 20% of the company's income.
• Appointment of an independent director.
• Review of related financial statements and board meeting minutes.

Corporate Governance

• Paid-up share capital less than 10 crores and net worth less than 25 crores.
• Not applicable to companies listed on the SME exchange and companies in insolvency.

Case Study

• SEBI notice to India Steel Works Limited.
• Shareholder approval required under Regulation 17.
• Discussion on the appointment of a woman director.

Conclusion

• Overview of various important aspects under LODR.
• Key points for preparing for upcoming questions.