Regulation 22 - Rights and meetings of unit holders - Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014

CHAPTER VI RIGHTS OF UNIT HOLDERS, GENERAL OBLIGATIONS, DISCLOSURES AND REPORTING Rights and meetings of unit holders. 22. (1) The unit holder shall have the rights to receive income or distributions as provided for in the Offer document or trust deed. (2) With respect to any matter requiring approval of the unit holders,- (a) a resolution shall be considered as passed when the votes cast by unit holders, so entitled and voting, in favour of the resolution exceed a certain percentage, as specified in this regulation, of the 23 [ total votes cast ] ; 24 [ (aa) the voting threshold specified under these regulations shall be calculated on the basis of unit holders present and voting. Explanation. The unit holders voting through the electronic voting facility and postal ballot shall be counted for the determination of unit holders present and voting; ] (b) the voting may also be done by postal ballot or electronic mode; (c) a notice of not less than twenty one days either in writing or through electronic mode shall be provided to the unit holders 25 [ : ] 26 [ Provided that a meeting of unit holders may be called after giving shorter notice than that specified in this clause if consent, in writing or by electronic mode, is accorded thereto - i. in case of an annual meeting, by not less than ninety-five percent of the unit holders entitled to vote thereat; and ii. in case of any other meeting, by majority of the unitholders in number entitled to vote thereat and who represent not less than ninety-five percent of such part of the units by value as gives a right to vote at the meeting. ] (d) voting by any person who is a related party in such transaction as well as associates of such person(s) shall not be considered on the specific issue; (e) manager shall be responsible for all the activities pertaining to conducting of meeting of the unit holders, subject to overseeing by the trustee: Provided that in respect of issues pertaining to the manager such as change in manager including removal of the manager or change in control of the manager, Trustee shall convene and handle all activities pertaining to conduct of the meetings: Provided further that in respect of issues pertaining to the trustee such as change in the trustee, the trustee shall not be involved in any manner in the conduct of the meeting. 27 [ (f) for all unit holder meetings, the manager shall provide an option to the unit holders to attend the meeting through video conferencing or other audio visual means and the option of remote electronic voting in the manner as may be specified by the Board. ] (3) An annual meeting of all unit holders shall be held not less than once a year within one hundred and twenty days from the end of financial year and the time between two meetings shall not exceed fifteen months. (4) With respect to the annual meeting of unit holders,- (a) any information that is required to be disclosed to the unit holders and any issue that, in the ordinary course of business, may require approval of the unit holders may be taken up in the meeting including,- (i) latest annual accounts and performance of the REIT; (ii) approval of auditor and fees of such auditor, as may be required; (iii) latest valuation reports; (iv) appointment of valuer, as may be required; (v) any other issue including special issues as specified under sub-regulation (6); (b) for any issue taken up in such meetings which require approval from the unit holders, votes cast in favour of the resolution shall 1 [be more than] 28 [ fifty per cent of the total votes cast for the resolution unless otherwise specified under these regulations. ] . (5) In case of,- (a) any approval from unit holders required under regulation 18, 19 and 21; (b) any transaction, other than any borrowing, value of which is equal to or greater than twenty five per cent. of the REIT assets; (c) any borrowing in excess of specified limit as required under sub-regulation (2) of regulation 20; (d) any issue of units after initial offer by the REIT, in whatever form, other than any issue of units which may be considered by the Board under sub-regulation(6); (e) increasing period for compliance with investment conditions to one year in accordance with proviso to sub-regulation (9) of regulation 18; (f) any issue, in the ordinary course of business, which in the opinion of the sponsor(s) or trustee or manager, is material and requires approval of the unit holders, if any; 16 [****] (g) any issue for which the Board or the designated stock exchange requires approval under this sub-regulation, approval from unitholders shall be required where the votes cast in favour of the resolution shall be 2 [more than] 29 [ fifty per cent of the total votes cast for ] the resolution. (6) In case of ,- (a) any change in manager including removal of the manager or change in control of the manager; (b) any material change in investment strategy or any change in the management fees of the REIT; (c) the sponsor(s) or manager proposing to seek delisting of units of the REIT; 8 [ **** ] (e) any issue, not in the ordinary course of business, which in the opinion of the sponsor(s) or manager or trustee requires approval of the unit holders; (f) any issue for which the Board or the designated stock exchanges requires approval under this sub-regulation; (g) any issue taken up on request of the unit holders including: (i) removal of the manager and appointment of another manager to the REIT; (ii) removal of the auditor and appointment of another auditor to the REIT; (iii) removal of the valuer and appointment of another valuer to the REIT; (iv) delisting of the REIT if the unit holders have sufficient reason to believe that such delisting would act in the interest of the unit holders; (v) any issue which the unit holders have sufficient reason to believe that acts detrimental to the interest of the unit holders; (vi) change in the trustee if the unit holders have sufficient reason to believe that acts of such trustee is detrimental to the interest of the unit holders, approval from unit holders shall be required where the votes cast in favour of the resolution shall be 30 [ at least sixty per cent of total votes cast for ] the resolution: 22 [ (h) introduction of unit based employee benefit scheme after an initial offer; (i) unit based employee benefit scheme proposed at the time of initial offer; Explanation. For any unit based employee benefit scheme proposed at the time of initial offer, the manager shall obtain the approval of the unitholders on such proposed scheme after listing of the REIT and shall ensure that the scheme is not implemented until such approval is obtained; (j) acquisition of units by the employee benefit trust as specified in sub-regulation (3) of regulation 17C: Provided that approval by way of a separate resolution shall be required in case of secondary acquisition and such approval shall mention the percentage of secondary acquisition that could be undertaken subject to the limits specified under regulation 17D; (k) issuance of units to the employee benefit trust as specified in clause (a) of sub-regulation (1) of regulation 17C; (l) transfer of units to the employee benefit trust as specified in clauses (b) and (c) of sub-regulation (1) of regulation 17C; (m) approval by way of a separate resolution shall be required for grant of options to identified employees, during any one year, equal to or exceeding one per cent. of the unit capital of the REIT at the time of grant of options; (n) variation of the terms of the unit based employee benefit scheme including repricing of the options; ] 9 [ **** ] 10 [ (6A) No person, other than sponsor(s), its related parties and its associates, shall acquire units of a REIT which taken together with units held by him and by persons acting in concert with him in such REIT, exceeds twenty-five per cent of the value of outstanding REIT units unless approval from seventy five per cent. of the unit holders by value excluding the value of units held by parties related to the transaction, is obtained: Provided that if the required approval is not received, the person acquiring the units shall provide an exit option to the dissenting unit holders to the extent and in the manner as may be specified by the Board. ] (7) With respect to the right(s) of the unit holders under clause (g) of sub-regulation (6),- (a) not less than twenty five per cent. of the unit holders by value, other than any party related to the transactions and its associates, shall apply, in writing, to the trustee for the purpose; (b) on receipt of such application, the Trustee shall require the manager to place the issue for voting in the manner as specified in these regulations; (c) with respect to sub-clause (vi) of clause (g) of sub-regulation (6) , not less than sixty per cent. of the unit holders by value shall apply, in writing, to the manager for the purpose. (8) In case of any change in sponsor or 11 [ inducted ] sponsor or change in control of sponsor or 11 [ inducted ] sponsor 17 [ or conversion to Self-Sponsored Manager ] ,- 12 [ (a) prior to such changes, approval from seventy-five per cent of the unit holders by value excluding the value of units held by parties related to the transaction shall be obtained; ] (b) 18 [ if the required approval is not received ] ,- (i) in case of change of sponsor or 11 [ inducted ] sponsor, the proposed 11 [ inducted ] sponsor 13 [ **** ] shall provide the dissenting unit holders an option to exit by buying their units 14 [ in the manner specified by the Board; ] ; 15 [ (ii) in case of change in control of the sponsor or inducted sponsor, the said sponsor or inducted sponsor shall provide the dissenting unit holders an option to exit by buying their units in the manner as specified by the Board; Explanation: Change in sponsor or inducted sponsor shall mean any change due to entry of a new sponsor 19 [ or ] exit of an existing sponsor. ] 20 [ (iii) in case of conversion to Self-Sponsored Manager, the Manager shall provide the dissenting unit holders an option to exit by buying their units in the manner specified by the Board. ] (c) if on account of such sale, the number of unit holders forming part of the public falls below 4 [as required under sub-regulation (2A) of Regulation 14] two hundred or below 5 [ the trustee may provide a period of one year to the manager to rectify the same, failing which], the 6 [manager] shall apply for delisting of the units of the REIT in accordance with regulation 17. 21 [ (9) The existing sponsor(s) proposing to disassociate as sponsor(s) by seeking to convert the Manager to Self-Sponsored Manager shall comply with the following conditions: (i) the REIT has been listed for a period of at least five years; (ii) the REIT has undertaken not less than twelve distributions on a continuous basis and has complied with the distribution norms as per these Regulations in the preceding five years; (iii) the REIT is rated AAA by a registered credit rating agency for a continuous period of five years immediately preceding exit of the sponsor; (iv) during the period of preceding five years, the REIT has not breached, at any time, the maximum leverage thresholds specified in these regulations; (v) the Manager is meeting the net worth criteria for the sponsor as specified in these regulations; (vi) the minimum unitholding requirement applicable to sponsor(s) and sponsor group(s) shall be complied with, on or after the date of conversion of the Manager to Self-Sponsored Manager, by the Manager, shareholders of the Manager and/or group entities of Manager: Explanation: Manager, shareholders of the Manager and/or group entities of Manager may acquire units of the REIT for the purpose of compliance of the above condition. (vii) the sponsor(s) or its associate(s) do not own or control the Manager of the REIT on or after the date of conversion of the Manager to Self-Sponsored Manager; (viii) the Sponsor has not transferred / sold assets to the REIT in the last three years and no assets/ projects shall be acquired by the REIT from the outgoing sponsor(s) for a period of one year from the date of conversion to Self-Sponsored Manager; (ix) at least one of the sponsor(s) proposing to disassociate should have been a sponsor of the REIT for a minimum period of five years; (x) the REIT shall not have any under-construction properties acquired from the sponsor that have not commenced commercial operations; (xi) unitholders approval in terms of sub-regulation (8) of this regulation and consent of the Trustee has been obtained for conversion to Self-Sponsored Manager; (xii) such other condition as may be specified by the Board. ] *************** NOTES:- 1 Substituted not be less than one and a half times by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 2 Substituted not less than one and half times by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 3 Substituted three by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 4 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 5 Substituted for twenty five per cent. of the total outstanding units by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 6 Substituted for trustee the trustee may provide a period of one year to the manager to rectify the same, failing which 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 8. Omitted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 before it was read as, (d) the value of the units held by a person along with its associates other than the sponsor(s) and its associates exceeding fifty per cent. of the value of outstanding REIT units, prior to acquiring any further units; 9. Omitted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 before it was read as, Provided that in case of clause (d), if approval is not obtained, the person shall provide an exit option to the unitholders to the extent and in the manner as may be specified by the Board. 10. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 11. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 before it was read as re-designated 12. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 before it was read as, (a) prior to such changes, approval shall be obtained from the unit holders wherein votes cast in favour of the resolution shall not be less than three times the votes cast against the resolution; 13. Omitted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 before it was read as who proposes to buy the units 14. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 15. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 before it was read as, (ii) in case of change in control of the sponsor or re-designated sponsor, the sponsor or re-designated sponsor shall provide the dissenting unit holders an option to exit by buying their units; 16. Omitted vide Notification No. SEBI/LAD-NRO/GN/2023/144 dated 16-08-2023 before it was read as, 7 [ (fa) de-classification of the status of sponsor; ] 17. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/144 dated 16-08-2023 18. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/144 dated 16-08-2023 before it was read as, if such change does not receive the required approval 19. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/144 dated 16-08-2023 before it was read as, with or without 20. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/144 dated 16-08-2023 21. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/144 dated 16-08-2023 22. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/193 dated 09-07-2024 23. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. 26-09-2024 before it was read as, votes cast against 24. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. 26-09-2024 25. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. 26-09-2024 before it was read as, ; 26. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. 26-09-2024 27. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. 26-09-2024 28. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. 26-09-2024 before it was read as, the votes cast against the resolution 29. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. 26-09-2024 before it was read as, the votes cast against 30. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. 26-09-2024 before it was read as, not less than 3 [one and half] times the votes cast against