GRATUIT TRUST DEED

st
This DEED is made this 21 day of March 2024

Between

And

(a) The employer is desirous of making provision for gratuity payment for its employees upon
their retirement from service at or after a specified age or otherwise or on the becoming
incapacitated prior to such retirement or on leaving the service voluntarily after completion
of service or prescribed or on termination of service after a minimum period of service or to
the nominees in the event of their death , such provision being made in terms of this deed
and the rules annexed here to , hereinafter referred to as the rules , which shall be deemed
to form part of these presents.
(b) It is proposed to set up an irrevocable gratuity trust for providing gratuity benefits and the
employer shall contribute certain sums to the scheme from time to time in accordance with
the rules.
(c) It is intended that such provision shall, interalia , be made by the Trustees entering into a
scheme of insurance of insurer as defined in clause 28BB of section 2 of the income tax Act,
1961 or managing their own fund or premiums / contribution payable therefore shall be
provided by the contribution to be made by the employer to the scheme from time to time
in accordance with the rules.
(d) The scheme shall mean ………………………….. GRATUITY TRUST , Hereinafter referred to ‘The
scheme ‘ or ‘The fund’, the operation of these shall be governed by the presents and the
rules.
(e) The trust shall be established in connection with the business of the employer carried on in
India and not less than ninety per cent of the employees shall employed in India . The trust
and the fund shall be established , located and operated in India and the Trustees shall be
resident in India . All benefit shall be granted by the trust shall be payable in India.
(f) The trustees have at the request of the employer agreed to act as trustees of the scheme in
accordance with the terms of these presents and of the rules with an action to effect
assurance on the lives of the members and to hold the same and other fund upon trust.

NOW THIS WITNESSETH AND IT IS HEREBY DECLARED AND AGREED AS FOLLOWS:

Definitions 2. All word and expression to which special meanings have been given in the
rules shall have the same meanings wherever they appear in these presents.
Date of commencement 3 The scheme shall be deemed to have been established and the
rules shall be deemed to have taken with effect from…………..

Trust irrevocable 4 These present shall constitute a trust set up and the trust shall be
irrevocable in connection with the trade or undertaking carried on in India and not less than
ninety per cent of the employees shall be employed in India. No moneys belonging to the
fund in the hand of the trustees shall be receivable by the employer under any
circumstances not shall the employer have any lien or charge of any description on the fund
or as provided in Rule 5 of schedule IV part B of the Income Tax Act, 1961

Trust Funds 5. The sums in cash and other assets retained by the trustees in the surplus or
Any other account as provided for in the rules and the master policy/ policies issued by
insurer/ s shall constitute the funds of the trust and the trusteed shall hold and employ the
said funds according to these presents and the rules.

The trust fund shall vested in the Trustees . The trustees shall have entire custody,
management and control of the fund shall decide all difference or disputes which may arise
under these presents or under the rules either as to the interpretation thereof or as to the
rights and obligations of the employer or of the members or of the beneficiaries and the
decision of the trustees in all cases shall be final and binding on all parties concerned.

PROVIDED THAT if the decision has any bearing on the provisions of income tax act , 1961 or
the income tax rules, 1962 it shall be forthwith reported to the commissioner of income tax
and if so required by him the trustees shall review the decision.

Master policy 6. With the prior approval of the employer, the trustees shall have the
authority to enter into master policy / policies with insurer/s as may be necessary to
provide death-cum retirement gratuity to the employees of the employer as describe in the
rules of scheme.

Employer to make contribution 7. The employer agrees to make the contribution to the fund
as provided in the rules. Trustees will work towards compliance of all requirements of
employer and master policy /policies.

Employer to furnish all information and to pay all the expenses of administration of the fund
and scheme 8. The employer further agrees to furnish to the trustees all particular
regarding the members and such other information as may be in the possession as the
trustees may require for the purpose of effecting the master policy/ policies.

Expenses incurred by the trustees in connection with the administration of the fund and
scheme including the remuneration of a secretary or of a person to be employed by the
trustees and the audit may be reimbursed by the employer.

Power to amend the fund 9. The trustees may any time by a resolution in writing signed by
not less than two of them and with the consent of employer and in writing and of the insurer
where the variations have a bearing on the terms and conditions of the master policy /
policies effected with the insurer but not otherwise ,alter vary or amend any of the
provision of this deed and the rules.

PROVIDED THAT no such alteration or variation shall be inconsistent with the main objects
of the trust hereby created nor shall such alteration or variation in any way prejudice the
rights or interests of any member or his beneficiary.

PROVIDED FURTHER THAT no such alteration or variation in the rules, constitution, objects
or conditions shall be made without the prior consent of the commissioner of income tax.

Employer’s right to amend the rules of the scheme 10. (a) i) The organization reserves the
right to discontinue making contribution to the scheme at any time, after giving due notice
to the trustees.

ii) The employer may at any time give notice in writing to the trustees of its intention to
amend the rules of the schemes and it shall be lawful for the trustees with the previous
approval of the commissioner of income tax to give effect to such amendments .

PROVIDED THAT no notice is required to be given to the trustees if the commissioner of

iii) The amendment shall ordinarily have effect from the date specified on the notice that
have been served on the trustees . The notice to the trustees shall be in such manner as
may be deemed sufficient by the employer.

iv) Any amendment to the scheme or discontinuance of contribution shall not affect the
benefits already secured for the members under the rules or more particularly by the
premiums paid to an insurer up to date of such amendment of or discontinuance as the case
may be nothing in these present shall place the organization under any obligation to
maintain or keep in force the master policy / policies after the discontinuance of
contribution.

Trustees to carry out directions of the employer (b) The trustees shall comply with and carry
out all such directions put in writing by the employer from time to time in relation to any
matter with respect to which the employer has power under this deed or under the rules to
determine or decide and a certificate from the employer as to the admission of member or
as to the death of the member or his retirement or dismissal from the service of the
employer or as to any other relevant matters shall constitute a good and sufficient authority
to the trustees and shall be conclusive as to all facts stated therein. Every such direction or
certification shall be notified to the trustees in writing signed by a person authorized in this
behalf by the employer and any such notification purporting to contain the direction or
certification as aforesaid shall be a complete protection to the trustees in respect to any
matter therein referred to.

(c) Upon any amendments, alterations or variations being made in the terms and conditions
or the basic of computation of Gratuity for the employees of the employer of its own free
will or as a result of any agreement with the employees or otherwise , the said amendments,
alterations or variations shall take effect for the purpose of the scheme immediately.

Payment of Gratuity 11. (a) On behalf of the employer the trustees shall provide for the
payment of gratuity
i. On termination of service, or
ii. On leaving the service voluntarily after completion of service as prescribed or
iii. On death or
iv. On retirement of the member or
v. Otherwise as provided in the rules of the scheme or as laid down by the organization
form time to time.

Payment of benefits (b) It is expressly provided that all benefits granted by the fund shall be
payable only in India and in one lump sum only.

Trustees liability 12. The trustees shall however not at any time be made liable for the
failure of any bank, organization , firm or insurer or for the dishonesty of any clerk or servant
or attorney or other person with whom any part of the trust property may be deposited or
placed in charge or be liable for any acts or defaults other than their own immediate and ……
acts deed and defaults.

The trustees shall be entitled to be indemnified by the employer against all proceedings ,
costs and expenses occasioned by the claims in connection with the trust not arising from
their willful negligence or dishonesty.

The trustees shall not be responsible for the recovery/collection from the employer as
provided in the rules .

The trustees shall not be bound at the request of the member to take any proceedings
against employer for money which such member feels should have been paid by the
employer to the trustees on such member’s account.

Accounts 13. (a) The accounts of the scheme shall be maintained in India and shall contain
such particular of all financial transactions of the scheme and in such from as the trustees
shall think proper and as required by law.

(b) As soon as may be after the first day of April in each year, the trustees shall take a
general account of the assets of the trust and shall prepare a receipts and payments account
showing the receipts , payments , dealings and transactions during preceding year
termination on the 31st day of march in such form as is considered suitable by the trustees.

(c) The trusties shall appoint auditors who shall have access to all books , papers , vouchers,
accounts and documents connected with the trust and who shall in writing report to the
trustees on the receipts and payments account. A copy of the audited accounts shall be
furnished to the employer and income tax office concerned as may be required by law.
 Payments on members infirmity 14. If any member or his beneficiary under the rules shall in
in the opinion of the trustees be unable by reason of mental incapacity or other cause
ceases to manage his affairs , the trustees shall arrange that any payment payable to such
member of beneficiary be paid to any other person in whose charge or custody such
member or beneficiary shall be as long as the infirmity last and such payment shall be good
sufficient and complete discharge to the trustees.

Number of trustees 15. The number of trustees shall not be less than two and more than
five and a organization as defined in sub-clause (I) of sub section (I) of section 3 of the companies act
1956 shall not be appointed as trustee without the prior approval of commissioner of income tax.

Appointment of trustees to be made by the employer 16. The power of appointing the trustees shall
be vested in the employer who shall be making in such appointments observe the limitation s laid
down in these presents and the employer shall also have power to fill up any time any vacancy in
the number of trustees and to remove the trustees by giving seven days notice in writing to the
trustees at his last known address and to continuing trustees.

The employer shall be under no obligation to fill the vacancy occasioned in respect of any trustees so
removed or any other vacancy in the number of trustees until it shall think fit and so long as the
number of trustees shall not be less than two and pending the filling in of any vacancy, the
continuing trustees shall have power to act.

A member of the trustees can be appointed as a trustees of the fund.

The employer shall appoint as trustees only person who are in its employment in India.

Retirement of trustees 17. (a) A trustees may retire at any time on giving seven days notice in writing
to the employer and to the chairman of the trustees of his desire to do so.

(b) The trustees shall be resident in India. The office of any trustees shall be vacated if the trustee

i Being a director ceases to be a director or

ii Being a employee ceases to be in the service of the employer or

iii If it shall permanently leave India or,

iv For reason of illness or infirmity or mental incapacity shall in the opinion of the other trustees
become incompetent or incapable to act.

Obligation on outgoing trustees to assign policy © in the even of any trustee ceasing to be a
trustees he shall , if necessary , assign or join in assigning the master policy / policies to the
continuing trustees.

Meeting of trustees and Quorum 18. The trustees may meet together for dispatch of business and
adjourn and otherwise regulate their meeting and proceedings as they may think fit. The meeting
shall be deemed to have quorum with two trustees present at the meeting.

Voting as meeting 19. The employer shall nominate one of the trustees to be the chairman of the
trustees, who shall preside at the meeting of the trustees.

The employer shall also appoint a trustee to be an alternate chairman who shall act in the absence
of the chairman and exercise all the powers of the chairman.
Each trustees present at the meeting shall be entitled to one vote on any matter arising thereat and
in case of equality of votes the chairman shall have a second or casting vote.

Decision by majority 20. All matters considered at the meeting shall be decided by a majority of
votes. The trustees shall e at liberty to pass a resolution, which shall be evidenced in writing and
passed by majority after being circulated.

Trustees power to appoint a secretary 21. The trustees shall have power to appoint any one of the
trustees to act as secretary of the fund and the said secretary may be vested with such power of
management of the trust as the trustees may from and time to time absolute discretion determine.

With the consent of the employer the trustees shall have power to employ ant person or persons to
do any legal accountancy or other work which they may consider necessary or expedient in
connection with the management of the trust or of the assets thereof.

It is however provided that no person of the employer holding directorship shall be paid any
remuneration for such service.

Signing of receipts cheques and correspondence 22. A trustees authorized in that behalf by the
board of trustees may conduct all correspondence in relation to the operation of the trust.

A trustee authorized by the board of trustees in the behalf may sign receipts for moneys received.

Cheques on the bank account may be drawn and signed by any two of the trustees on behalf of all
the trustees. The board of trustees shall decide which of the trustees shall open bank on their
behalf.

Trustees to sign on behalf of members 23. Any trustees authorized in this behalf by a resolution of
the trustee shall sign in behalf of member of beneficiaries of the scheme as the case may be, all
proposals , discharges and receipts as may be required under any policy or policies of assurance
effected under the rules hereof as may be necessary for the proper administration of the trust. The
trustees may in their absolute discretion give authority, to give a discharge receipt or
acknowledgement for moneys due under the policy to the member or in the event of his death of his
beneficiary.

Absence of a trustee and power of remaining trustees 24. If any trustee or trustees shall be
temporarily absent from India the trustees who shall remain in India during such absence have full
power to acts under the trusts hereof as if they were the only trustees of these presents.

Investment of fund moneys 25. All moneys contributed to the fund or received or accruing by way of
interest or otherwise to the fund may be deposited in the post office in the saving bank account in
India or in a current account or in a saving account with any schedule bank or utilized for the
purpose of making contributions under the group gratuity scheme with the insurer and to the
extent such moneys as are not so deposited or utilized shall be invested in the manner prescribed
from time to time in the rules 67(2) and 101 of Income tax Rules, 1962.

Trustees to register securities in the name of trust 26. It shall be obligatory on the trustees to
register the trust as the holders of any securities constituting investments belonging to the trust.