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KASHF FOUNDATION

PROVIDENT FUND RULES

A.THE NAME1.The Fund shall be called the Kashf Foundation Provident Fund.

B.DEFINITIONS 2.In these Rules, unless there is any thing repugnant in the subject or context inconsistent with the meaning assigned: -

i).Accumulated Balance Due to a Member means the balance to his credit, or such portion thereof as may be claimable by him under the Rules of the Fund, on the day he ceases to be an employee of the KASHF.

ii).Annual Accretion in relation to the balance to the credit of a Member, means the increase to such balance in any arising from contributions and interest or profit.

iii).Balance to the Credit of a Member means the total amount to the credit of a Members individual account in the Fund at any time.

iv).Contribution means any sum contributed by or on behalf of any Member out of his salary or by KASHF out of its won money, to the individual account of its Member, but does not include any sum credited as interest or profit.

v).Effective Date means the date on which these Rules come into force in accordance with Rule 3.

vi).Employee means an employee of the KASHF.

vii).Employer means the KASHF.

viii).Family means the Members spouse, legitimate children, step children, parents, sisters and brothers who reside with the Member and are wholly dependent on him.

ix).Financial Year means the calendar year commencing from the Ist day of January and ending on 31st day of December.

x).Fund means a Regular Employee of the KASHF who is a contributor to the Fund.

xii).Pay Period means the period for which salary is paid to any employee by the KASHF.

xiii).Management Staff mean the management staff of the KASHF as defined by the Service Rules of the KASHF.

xiv).Professional Staff means the professional staff of the KASHF as defined by the Service Rules of the KASHF.

xv).KASHF means the Kashf Foundation.

xvi).Regular Employee means an employee of the KASHF other than an apprentice, a probationer, a temporary employee or a consultant hired for a specific purpose or for a temporary period.

xvii).Rules means the KASHF Provident Fund Rules as amended from time to time.

xviii).Salary means the basic salary or basic wage or basic pay including dearness allowance but excluding all other allowances, bonuses, commissions, rewards, honoraria or other perquisites or remunerations. The decision of the KASHF as to the amount of salary shall be final and binding on all parties.

xix).Support Staff means the support staff of the KASHF as defined by the Service Rules of the KASHF.

xx).Trust means the Trust established by the KASHF for the management and control of the Fund by executing a trust deed in accordance with the provisions of the Trust Act, 1882 and Part-I of the Sixth Schedule to the Income Tax Ordinance, 2001.

xxi).Trustees means the Trustees of the Fund appointed under the deed establishing the Trust.

xxii).Words importing the singular number shall, unless a contrary contention appears, be taken to include the feminine gender and vice versa.

xxiii).Words importing the singular number shall, unless a contrary contention appears be taken to include the plural number and vice versa.

C.EFFECTIVE DATE3.These Rules shall come into force on the date of the recognition of the Fund by the Commissioner of Income Tax in accordance with the provisions of Part-1 of the Sixth Schedule to the Income Tax Ordinance, 2001.

D.OBJECTS4.The objects of the Trust are: -

i).to establish a Fund for the benefit of the Regular Employees who become Member of the Fund, and

ii).to accumulate money for the benefit of the Members as future provision for themselves and their families.

E.THE END5.The Fund shall consist of:-

i).all the sums contributed by KASHF

ii)all contributions made by the Regular Employees who are Members of the Fund

iii)accretions to the Fund through investment of its balances or otherwise in accordance with these Rules

iv)securities purchased from the contributions and accretions

v)capital gains arising from the transfer of capital assets.

F.CONTROL AND MANAGEMENT

6.The custody, management, investment and control of the Fund shall be vested in the Trustees.

7.No Trustee shall be entitled to any remuneration from the Fund for work performed by him as Trustee.

8.The Trustees shall be entitled to employ such legal advisors, accountants and other professionals as they may consider necessary or expedient for purposes of the Fund.

9.The costs of, and expenses incidental to, the establishment of the Fund shall be borne by the KASHF. All costs and expenses in connection with the management and administration of the Fund other than the costs of, and expenses incidental to, the establishment of the Fund shall be borne by the Fund, provided that no such costs or expenses shall be charged to the contributions made by the Members.

10.The number of Trustees shall not be less than three nor more than six, one of whom shall be the Chairman of the Trustees. The Trustees shall include one Trustee representing the professional staff and one Trustee representing the support staff.

11.In case of disagreement amongst the Trustees the decision of the majority shall prevail. In case of equality of votes, the Chairman shall have a second and casting vote.

12.Three clear days notice shall be given for a meeting of the Trustees. The quorum for a meeting of the Trustees shall be two if the Chairman is present and three if he is not present. In the absence of the Chairman, the Trustees present may elect one of their members to act as Chairman for purposes of that meeting.

13.The Chief Executive of the KASHF shall nominate the first Trustees. Future Trustees will be appointed in accordance with the provisions of the deed establishing the Trust.

14.A Trustee who is about to absent himself from Pakistan may, with the approval of the other Trustees, delegate to any person qualified to be a Trustee, all or any of his powers during the period of his absence abroad.

15.The Secretary shall be appointed by the Trustees. The Secretary shall be an accountant but shall not himself be a Trustee. The Secretary shall be responsible for maintaining the books and records of the Fund including the individual accounts of the Members, and for implementing decision taken by the Trustees.

G.MEMBERSHIP

16.A Regular Employee on the effective date shall be eligible to become a Member from the said date provided he opts to become a member by applying for Membership in the form prescribed by the Trustees.

17.An Employee on the Effective Date who becomes a Regular Employee after the said date shall be eligible to become a Member with effect from the date of his regularization provided he opts for membership by applying in the form prescribed by the Trustees.

18.An Employee employed after the Effective Date shall become a member with effect from the date of becoming a Regular Employee. Such Employee shall be bound to apply for membership in the form prescribed by the Trustees.

19.Subject to the other provisions of these Rules, a Regular Employee who becomes a member shall remain a Member until he ceases to be an employee of the KASHF.

H.CONTRIBUTION OF MEMBERS.

20.From the date that a Regular Employee becomes a member, he shall contribute to the Fund 10% of his salary for each pay period.

21.The contribution payable by a Member shall be deducted at source by the KASHF from the salary payable to him during each pay period and shall be paid by the KASHF to the Trustees for credit to the individual account of each Member.

22.The contribution payable by a Member from his leave salary shall be the same as prescribed under Rule 21. However, no contribution shall be payable by either the Member or the KASHF for any period of leave without pay.

23.For the purposes of making deductions from the salary of a Member, fractions of a Rupee shall be rounded to the nearest Rupee.

I.CONTRIBUTION OF KASHF

24.The KASHF shall contribute to the Fund, during each pay period, a sum equal to 10% of the salary of all Members of the Fund.

25.The KASHF contribution shall be paid to the Trustees for credit to the individual account of each Member in amounts equal to the contribution of each Member.

J.INVESTMENTS

26.Subject to the provisions of the Income Tax Ordinance, 2001, the Trustees shall invest the moneys of the Fund in accordance with the provisions of section 227 of the Companies Ordinance, 1984, or deposit or invest the sum as permitted by Rule 102 of the Income Tax Rules, 2002.

27.The Trustees may, from time to time, dispose of or realize the investment made by them and, subject to Rule-26, re-invest the proceeds in such manner as the Trustees deem desirable in the interests of the Fund and the Members.

28.All investments shall be made under the joint signatures of not less than two Trustees.

K.ACCOUNTS.

29.The Trustees shall open and operate an account with a Scheduled Bank at Lahore in which shall be deposited the contributions of both the Members and the KASHF. All moneys in such bank account shall be dealt with in accordance with these Rules. The bank account shall be operated by not less than two Trustees nominated by the Trustees for this purpose.

30.The Secretary shall keep and maintain proper books of accounts showing all sums of money received and expended by the Fund, the matters in respect of which receipts and expenditures have taken place, and the assets and liabilities of the Fund, in the manner prescribed by the Income Tax authority under Part-I of the Sixth Schedule to the Income Tax Ordinance, 2001 and the Income Tax Rules, 2002.

31.The Secretary shall maintain an individual account of each Member. Subject to the provisions of Part-I of the Sixth Schedule to the Income Tax Ordinance, 2001, such individual accounts shall be maintained in the manner prescribed in Rule 95 of the Income Tax Rules, 2002.

32.The accounts of the Fund, including the individual accounts of each Member, shall be made up on an annual basis within 150 days of the close of each financial year. Such accounts shall include a statement of income and expenditure, a balance sheet of assets and liabilities and the individual account of each Member.

33.Within 30 days of the preparation of the accounts, the Trustees shall cause accounts to be audited by a firm of Chartered Accountants appointed by the Trustees.

34.As soon as the audit has been completed the Trustees shall cause to be credited to the individual account of each Member the annual accretion to which he is entitled based on the net income of the Fund during the preceding financial year. The annual accretion shall be calculated on a prorata basis in accordance with the total amount standing to the credit of each Member at the close of the preceding financial year. As soon as the annual accretions have been credited to the individual accounts, the Trustees shall send to each Member a statement of his account which shall be deemed to be final and binding on him except for the decision of the Trustees on any error notified to them in writing within 30 days after the receipt of the statement by the Member.

35.The audited accounts shall be placed for approval before the annual meeting of the Members which shall be held not later than the 30th September of each year.

K.WITHDRAWALS FROM THE FUND.

36.Withdrawals by Members from the accumulated balance in their individual accounts may be allowed by the Trustees in the following circumstances: -

(a) to pay expenses in connection with the illness of a Member or a member of his family;

(b) to meet the expenditure on purchase of a motor cycle or scooter provided that authenticated copies of documents substantiating such purchase are deposited with the Trustees of the Fund;

(c) to pay the overseas passage by reason of health or education of a Member or a member of his Family;

(d) to pay expenses in connection with marriages, funerals or ceremonies, which, by the religion of the Member, it is incumbent upon him to perform and in connection with which it is obligatory that expenditure should be incurred;

(e) to pay expenses in connection with the performance of Haj by the Member;

(f) to meet the expenditure on building or purchasing a house or a site for a house, provided that the documents substantiating the building or purchase of such house, or the purchase of such site, are deposited with the Trustees of the Fund;

(g) to meet the expenditure on repairs, renovation or extension of a residential house belonging to the Member;

(h) to pay premiums on policies of insurance on the life of the Member or of his spouse provided that the policy is assigned to the Trustees of the Fund or at their discretion deposited with them and that the receipt granted by the insurance company for the premiums is form time to time handed over to the Trustees for inspection by the Commissioner;

(i) to purchase shares of a public limited company for investment as permitted by the Income tax Rules, 2002;

(j) in case of a Member who has attained the age of fifty years on the date on which withdrawal is permitted

(i) to meet the expenditure on purchase of house and construction of house on land owned by him or a member of his Family anywhere in Pakistan provided that the first installment of the withdrawal under this provision shall be allowed to be drawn only after an agreement has been executed between the Member and the Trustees of the Fund to the effect that the Member shall expend the full amount of the said advance towards the purchase or the building of a house a claimed at the earliest possible opportunity and if the actual amount so expended is less than the amount of permitted withdrawal the Member shall repay the difference into the Fund forthwith and further that if the said house is sold or otherwise alienated by its owner to any other person while the Member is till in service, the Members shall forthwith repay into the Fund the entire amount of the withdrawal together with interest accrued thereon in lump-sum.

(ii) to meet the expenditure on the purchase of agricultural land from Government provided that the first installment of a withdrawal under this provision shall be allowed to be drawn only after an agreement has been executed between the Member and the Trustees of the Fund to the effect that the Member shall expend the full amount of the said advance towards the purchase of the said piece of land at the earliest possible opportunity and if the actual amount so expended is less than the amount of permitted withdrawal the Member shall repay the difference into the Fund forthwith and further that if the said house is sold or otherwise alienated by its owner to any other person while the Member is still in service, the Member shall forthwith repay into the Fund the entire amount of the withdrawal together with interest accrued thereon in lump sum.

(iii) to repay a loan taken from a financial institution provided that the Member shall, within a period of two weeks from the date of withdrawal produce satisfactory evidence before the Trustees to show that the advance has been utilized for the purpose for which it was drawn failing which the entire amount of withdrawal together with interest accrued thereon shall forthwith become repayable to the Fund in a lump-sum;

(k) in the case of a Member proceedings on leave preparatory to retirement; at the discretion of the Trustees withdrawal may be allowed without assigning any reason provided that where the Member rejoins duty on the expiry of his leave, the amount withdrawn together with the interest accruing thereon at the rate allowed by the Fund shall be repaid forthwith to the Fund in a lump sum.

L.LIMITS ON WITHDRAWALS.

37.The Trustees shall not permit a withdrawal in excess of the balance to the credit of a Member.

38.Withdrawals permitted under these Rules shall not exceed the following limits, namely;

(a) in the case of withdrawals permitted under clause (a), (b), (c), or (d) of Rule 36, six months salary of the Member or the total of the Accumulated Balance to his Credit;

(b) in the case of withdrawals permitted under clause (e) of Rule-36, six months salary of the Member or twenty five thousand rupees or the total of the Accumulated Balance to his Credit, whichever is the lowest;

(c) in the case of withdrawals permitted under clause (f) or (g) of Rule-36, thirty-six

(d) in the case of withdrawals permitted under clause (h) of Rule 36, eighteen months salary of the Member or the total of the Accumulated Balance to his Credit, whichever is the less, provided that this restriction shall apply to each withdrawal and not to the total withdrawal;

(e) in the case of withdrawals permitted under clause (i) of Rule-36, six months salary of the Member or eighty percent of the total of the Accumulated Balance to his Credit, whichever is the less;

(f) in the case of withdrawals permitted under clause (j) of Rule-36, twenty-four months salary of the member or eighty percent of the total of the Accumulated Balance to his Credit, whichever is the less;

(g) in the case withdrawals permitted under clause (k) of Rule 36, ninety percent of the Accumulated Balance to the Credit of the Member.

M.SECOND WITHDRAWALS.

39.The Trustees shall not allow a second withdrawal until the sum first withdrawn is fully paid except as under;

(i)Withdrawal (s) may be permitted for the purposes specified in clause (h) of Rule 36, notwithstanding that the sums previously drawn for the same purpose has or have not been repaid.

(ii) A withdrawal may be permitted for any one of the purposes specified in Rule 36 other than that specified in clause (a) thereof notwithstanding that the sum or sums withdrawn for the purposes of clause (e) of Rule 36 has or have not been repaid.

(iii) A withdrawal may be permitted for any of the purposes specified in rule 36 other than those specified in clause (f) and (h) thereof notwithstanding that the sum or sums withdrawn for the purposes of clause (d) of Rule 36 has not been repaid.

N.REPAYMENTS. 40.Where a withdrawal has been allowed for a purpose specified in clauses (f) (h) (i) (j) or (k) of Rule 36 the Trustees may, in their discretion, allow the Member not to re-pay the amount withdrawn.

41.Where a withdrawal is allowed for purposes other than those referred to in Rule 40, the amount withdrawn shall be repaid in not more than 48 equal monthly installments and, at the discretion of the Trustees, shall bear profit on the amount withdrawn or the balance thereof outstanding from time to time at 1% above the rate payable for the time being on the Accumulated Balance in the Fund to the Credit of the Member.

42.Notwithstanding anything contained in Rule 41, where a Member elects not to receive any interest or profit accruing on his Accumulated Balance, no interest or profit shall be charged on the amount withdrawn by such Member from the Fund.

43.The KASHF shall deduct the installments payable under Rule 41 from the salary of the Member and pay them to the Trustee commencing from the second monthly payment made after the withdrawal, in the case of a Member on leave without pay, from the second monthly installment after joining his duty.

O.NOMINATION.

44.A Member may nominate one or more members of his Family as the person (s) entitled to receive the Accumulated Balance to his Credit in the event of death while in the service of KASHF. If a Member nominates more than one member of his Family, he shall specify the share payable to each nominee. A Member may, from time to time, change the nomination (s) made by him through written intimation to the Trustees.

P.PAYMENTS.

45.The Accumulated Balance due to a Member shall be paid to his nominee(s) in the event of the Members death while in the service of the KASHF. In the absence of any nomination such Balance shall be paid to the Members legal heirs as determined under the Personal Law of inheritance applicable to the estate of the deceased Member.

46.In the event of a Members dismissal from the service of the KASHF for misconduct, the Trustees shall with-hold and pay to the KASHF such part of the Accumulated Balance due to a dismissed Member as may be determined by the KASHF to be compensation payable to the KASHF on account of loss caused by such misconduct, and pay to the dismissed Member the remainder of the Accumulated Balance due to him, subject to the provision that the amount paid to KASHF under this Rule shall not exceed the KASHF contribution and the annual accretions attributed thereto.

47.Except as provided under Rule 46, the Trustees shall pay to a Member the Accumulated Balance due to him on the day he ceases to be a Regular Employee of the KASHF. The Member will be entitled to accretions upto the date he ceases to be a Regular Employee.

Q.ASSIGNMENT PROHIBITED.

48.Except as provided under Rule 44, no Member shall transfer, mortgage or charge the Balance due to him or any part thereof, and the Trustees shall not recognize or accept any such transfer, assignment, mortgage or charge. A Member who violates this Rule shall render himself liable to disciplinary proceedings for misconduct by the KASHF.

R.KASHF LIEN49.Subject to the provision contained in Rule 46, the KASHF shall be titled to recover from the Accumulated Balance due to a Member the amount of loss caused to the KASHF on account of the misconduct of the Member as determined in disciplinary proceedings leading to the dismissal of the Member, and the Trustees shall forthwith pay such amount to the KASHF.

50.Except as provided in Rule 46 and 49 and subject to the provisions of the Income Tax Ordinance, the Trustees shall not make any other deductions or recoveries from the Accumulated Balance due to a Member or, as the case may be, to the Members nominee(s) or legal heirs.

S.DECISION OF THE TRUSTEES FINAL

51.Subject to ones right to review before a meeting of all the Trustees, the decision of the Trustees shall be final and binding upon the Members in respect of all matters and disputes relating to or connected with the implementation and interpretation of these Rules or the management and administration of the Fund or the rights and obligations of the Members and their nominee (s) and legal heirs or any matter or dispute arising out of the same.

T.NOTICE

52.For the purposes of these Rules, a notice to the Trustees may be sent by ordinary post or by delivering the same by hand to either the Chairman or the Secretary of the Trustees while a notice to a member or to his nominee (s) or legal heirs may be given, in the case of a Member in the service of the KASHF, by affixing the same on the notice board of the KASHF office in which such Member is serving and, in any other case, through registered A.D. post or courier service to the last known residential address of the Member.

U.AMENDMENT OF THE RULES.

53.The Trustees may at any time amend, alter, vary, add to, repeal or substitute any or all of these Rules subject to:

(i)consent of a majority of the Members at a meeting specially convened for this purpose for which fourteen clear days notice has been given to the Members and at which not less than 50% of the Members are present either in person or through proxy, and

(ii)sanction of the KASHF under the signature of its Chief Executive, and

(iii)approval of the Commissioner of Income Tax.

V.MEETING OF THE MEMBERS.

54.An annual meeting of the Members shall be convened by the Trustees on or before the 30th September of each year for approval of the audited accounts.

55.The Trustees may also at any time convene a meeting of the Members for consideration of matters stated in the notice convening the meeting. Fourteen clear days notice shall be given for a meeting of the Members stating the purpose (s) for which it is being convened. The Chairman of the Trustees shall preside over the meeting. Quorum for the meeting shall be 50% of the Members present in person or through proxy.

56.The Trustees shall convene a meeting of the Members on requisition made by 50% of the Members. The provisions of Rule 55 shall mutates mutandis apply to a meeting convened on requisition of the Members.

W.CLOSURE OF FUND

57.In accordance with the provisions of Part-I of the Sixth Schedule to the Income Tax Ordinance, 2001, the Fund vesting in the Trustees shall not be recoverable save with the consent of all the beneficiary Members.

X.INDEMNIFICATION OF THE TRUSTEES.

58.Every Trustee shall be indemnified by the Fund against all proceedings, costs and expenses arising out of claims relating to the Fund on the basis of decisions made, and actions taken, by the Trustee(s) in good faith and which are not caused by any fraud or willful negligence on the part of the Trustee (s).