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Financial Matters – FURTHER

Financial Matters

Source of Funds
The Trustees may accept donations, grants, subscriptions, aids or contributions from any person, government, local authority, or other charitable institution, in cash or in kind, including immovable property free of encumbrances, provided that:

  1. Due diligence is performed on all sources of funds to establish that they are ethically and legally acceptable. The Board of Trustees shall specify the method and criteria for due diligence and then accept or reject a source by a simple majority vote.
  2. The terms and conditions attached to a receipt are not inconsistent with the Objectives of the Trust.
  3. While applying such receipts to the Objectives, the Trustees respect the directions, if any, by the donor.

Use of Funds
All proceeds and other revenues received by the Trustees shall be retained as the Trust Fund in the name of the Trust in one or more accounts with scheduled banks or other authorized investment institutions, with the following stipulations on the use of funds:

  1. Any portion of the Trust Fund not immediately required for current needs shall be invested by the Trustees in riskless long-term investment vehicles in the name of the Trust.
  2. If and when the Trust Fund exceeds Rs. 12,000,000.00 (twelve million rupees) in market value, this sum shall be declared the Principal for Future Generations (“Principal”). Thereafter, the Trust shall keep the Principal invested in a riskless financial instrument and use only the returns from such investment to disburse for the Objectives of the fund. Thenceforth, the Principal shall never be allowed to fall below Rs. 12,000.000.00 (twelve million rupees).
  3. In the course of any fiscal year, the Trust shall use for all its administrative purposes (including but not limited to staff salaries, stationery, operations, maintenance, travel expenses, etc.) no more than 10% of all funds disbursed to the Beneficiaries under the Objectives of the Trust.
  4. The only criterion for determining the eligibility of a Beneficiary shall be his or her inability to pay for healthcare, education, or relief. However, the Trustees must perform due diligence in establishing that a Beneficiary is genuine and deserves assistance from the Trust.
  5. Any use of funds must be approved by the Board of Trustees through a resolution passed by a simple majority that details the following:
    i) The targeted Beneficiary or Beneficiaries.
    ii) Method for conducting due diligence to determine eligibility.
    iii) The amount of funds to be committed to each individual or group.
    iv) The frequency (once, daily, monthly, annual, etc) at which funds shall be disbursed to the Beneficiaries.
  6. If a proposed Beneficiary is a relation, friend, or acquaintance of a Trustee, that particular Trustee must make this fact and the nature of the relationship known to the Board of Trustees before any funds are disbursed. The Board will then decide through a simple majority vote whether or not disbursement of funds from the Trust would be ethical. If a Trustee fails to inform the Board of such a relationship as stipulated, notwithstanding anything contrary stated in this Deed, he or she would be liable to the Trust for reimbursement of any payments disbursed to such a Beneficiary. The Board must also decide whether the Trustee has acted against the interests of the Trust and may terminate his or her appointment through a simple majority vote. The Trustees must ensure that nepotism, conflict of interest, dishonesty and such ills do not touch the Trust.
  7. All bank accounts and other investments shall be operated only by the Chairman or the Secretary. Upon election of a new office holder, the relevant financial institutions shall be informed and appropriate changes made in the signature records.

Audits and Accounts
The Trustees shall keep proper books of accounts for all assets, liabilities and income and expense of the Trust and shall prepare an Income Statement and Balance Sheet for every year as on the last day of June.

  1. The annual accounts of the Trust shall be audited in compliance with Rule 213(a) as specified in Rule 211(2)(f) of Income Tax Rules 2002.
  2. The quorum for a meeting of the Board of Trustees, as defined in 4.1(d), shall be in compliance with Rule 213(c) of Income Tax Rules 2002.
  3. If the Trust is dissolved, in accordance with 4.8(b), its assets shall be transferred as prescribed in Rule 213(d) of the Income Tax Rules 2002.
  4. The Trust shall use its funds solely for promoting its objectives, as required by Rule 213(e) of the Income Tax Rules 2002.
  5. No portion of the Trust’s funds may be used for the benefit of any of the Trustees or their relatives, as prescribed in Rule 213(f) of the Income Tax Rules 2002.
  6. The accounts of the Trust shall be maintained in a scheduled bank or such institutions as listed in Rule 213(g) of the Income Tax Rules 2002.
  7. This Trust Deed shall not be amended without the prior approval of the Commissioner, as required by Rule 213(h) of the Income Tax Rules 2002.
  8. In compliance with Rule 213(i) of the Income Tax Rules 2002, the Trust shall not accumulate surpluses or set apart any amount in excess of twenty-five percent (25%) of the total income for the year, excluding restricted funds as described in 4.3(b).