TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2023
X X X X Extracts X X X X
X X X X Extracts X X X X
....India (Real Estate Investment Trusts) Regulations, 2014, (1) in regulation 2, in sub-regulation (1), - (a) clause (g) shall be substituted with the following clause, namely - "(g) "change in control", - (i) in case of a body corporate, - (A) if its shares are listed on any recognized stock exchange, shall be construed with reference to the definition of control in terms of regulations framed under clause (h) of sub-section (2) of section 11 of the Act; (B) if its shares are not listed on any recognized stock exchange, shall be construed with reference to the definition of control as provided in sub-section (27) of section 2 of the Companies Act, 2013 (18 of 2013); (ii) in a case other than a body corporate, shall be construed as any change in its legal formation or ownership or change in controlling interest. Explanation- For the purpose of sub-clause (ii), the expression "controlling interest" means an interest, whether direct or indirect, to the extent of not less than fifty percent of voting rights or interest;"; (b) after clause (qa), the following clause shall be inserted, namely - "(qai)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....more of its gross turnover or total income: Provided that the pecuniary relationship or transaction with the REIT, its Holdco and/or SPV, parties to the REIT, its holding company, subsidiary or associate or their promoters or directors in relation to points (A) to (D) shall not exceed two percent of its gross turnover or total income or fifty lakh rupees or such higher amount as may be specified from time to time, whichever is lower. (vi) who, neither himself or herself, nor whose relative(s) - (A) holds or has held the position of a key managerial personnel or is or has been an employee of the Holdco and/or SPV, parties to the REIT or its holding, subsidiary or associate or any company belonging to parties to the REIT, in any of the three financial years immediately preceding the financial year in which he/she is proposed to be appointed: Provided that in case of a relative who is an employee other than a key managerial personnel, the restriction under this clause shall not apply for his/her employment; (B) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ders in accordance with the procedure for selection of auditors, as may be specified by the Board."; (b) after sub-regulation (6), the following sub-regulation shall be inserted, namely - "(6A) The manager of the REIT shall not appoint or re-appoint- (a) an individual as the auditor for more than one term of five consecutive years; and (b) an audit firm as the auditor for more than two terms of five consecutive years: Provided that- (i) the individual auditor who has completed the term under clause (a) shall not be eligible for re-appointment as the auditor in the same REIT for a period of five years from the date of completion of the term; (ii) the audit firm that has completed its term under clause (b), shall not be eligible for reappointment as the auditor in the same REIT for a period of five years from the date of completion of its term."; (3) in regulation 13, after sub-regulation (4), the following sub-regulation shall be inserted, namely - "(5) The auditor shall undertake a limited review of the audit of all the entities or companies whose accounts are to be consolidated with the accounts of the REIT as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e expression "company secretary" wherever it occurs, shall be read as "compliance officer"; (iv) the expression "executive director" wherever it occurs, shall be read as "non-independent director"; (v) the expression "non-executive director" wherever it occurs, shall be read as "independent director"; (vi) the expression "Board of Directors of the listed entity" wherever it occurs, shall be read as "Board of Directors of Manager"; (vii) the expression "subsidiary of listed entity" wherever it occurs, shall be read as "HoldCo and/or SPV of REIT, as applicable". Additional Requirements. 26B. (1) The Board of Directors of the Manager shall comprise of not less than six directors and have not less than one woman independent director. (2) The quorum for every meeting of the Board of Directors of the Manager shall be one-third of its total strength or three directors, whichever is higher, including at least one independent director. Explanation - The participation of the directors by video conferencing or by other audio-visual means shall be counted for the purpose of quorum and shall be recorded by the Manager. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r."; (7) after Schedule VII, the following schedule shall be inserted, namely, - "SCHEDULE VIII: GOVERNANCE NORMS PART A: MINIMUM INFORMATION TO BE PLACED BEFORE BOARD OF DIRECTORS OF THE MANAGER [See Regulation 26B (4)] The following minimum information to be placed before Board of Directors of the manager: (a) annual operating plans and budgets and any updates. (b) capital budgets and any updates. (c) quarterly results for the REIT and its operating divisions or business segments. (d) minutes of meetings of audit committee and other committees of the Board of Directors of Manager. (e) the information on recruitment and remuneration of senior officers just below the level of Board of Directors, including appointment or removal of Chief Financial Officer and the Compliance Officer (f) show cause, demand, prosecution notices and penalty notices, which are materially important. (g) fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. (h) any material default in financial obligations to and by the REIT, HoldCo. and/or SPV. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these deficiencies; (d) they have indicated to the auditors and the Audit committee: (i) significant changes in internal control over financial reporting during the year; (ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and (iii) instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the manager's internal control system over financial reporting of REIT." BABITHA RAYUDU, Executive Director [ADVT.-III/4/Exty./611/2022-23] Footnotes: 1. The Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 was published in the Gazette of India on September 26, 2014 vide No. LAD-NRO/GN/2014/15/11/1576. 2. The Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 was subsequent....