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  "title": "Companies Profits (Workers Participation) Act, 1968",
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  "text": "Page 1 of 10 \r\n \r\n \r\n \r\n \r\n \r\n \r\nTHE COMPANIES PROFITS (WORKERS PARTICIPATION) ACT, \r\n1968 \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n                                                           CONTENTS \r\n       \r\n1.  Short title, extent and commencement. \r\n2. Definitions. \r\n3. Establishment of Fund. \r\n4.  Management of the Fund. \r\n5. Penalty. \r\n6.  Power to call for information. \r\n7. Settlement of disputes, etc. \r\n8. Delegation of power. \r\n9.   Power to make rules. \r\n10.  Act to override other laws. \r\n \r\nTHE SCHEDULE \r\n \r\n \r\n \r\nUpdated till 14.04.2023\r\n \r\nPage 2 of 10 \r\n \r\nTHE COMPANIES PROFITS (WORKERS PARTICIPATION) ACT, 1968. \r\n \r\n1Act No.  XII OF 1968 \r\n \r\n[5th July, 1968]  \r\nAn Act to provide for Participation of workers in the profits of companies. \r\n WHEREAS  it  is  expedient  to  provide  for  participation  of  workers  in  the  profits  of \r\ncompanies and for matters ancillary thereto ; \r\n AND WHEREAS  the national interest of  Pakistan in relation to the achievement of \r\nuniformity within the meaning of clause (2) of Ar ticle131 of the Cons titution requires Central \r\nlegislation in the matter; \r\nIt is hereby enacted as follows :__ \r\n1. Short title, extent and commencement.__ (1) This Act may be called the Companies \r\nProfits (Workers Participation) Act, 1968. \r\n(2)      It extends to the whole of Pakistan. \r\n(3)       It shall come into force at once. \r\n2. Definitions. __ In this Act, unless there is anything repugnant in the subject or context,__ \r\n \r\n(a)  “Board” in relation to a Fund means a Board of Trustees constituted  \r\nunder section 4 for the management and administration of the Fund; \r\n(b)  “company” means a company within the meaning of 2[Companies \r\nOrdinance, 1984 (XLVII of 1984)], and includes— \r\n(i)  a body corporate established by or under any law for the time being \r\nin force; \r\n(ii)  any institution, organization or association whether incorporated or not, \r\ndeclared  by the 3 [ Federal Government] in the official Gazette to \r\nbe a company for the purposes of this Act; \r\n(c)  “Fund” means a Workers Participation Fund established under section 3;  \r\n(d)  “Profits” in relation to a company means such of the “net Profits ” as \r\ndefined in section 87C of the Companies Act, 1913, as are attributable to its  \r\nbusiness, trade, undertakings or other operations in Pakistan;    \r\n4[(dd)  “rules” means rules made under this Act; ]  \r\n \r\n_________________________________________________________________________________ \r\n1For Statement of Objects and Reasons, see Gaz., of P., 1968, Extraordinary, p. 461.  \r\n*The Act has been applied to the Provincially Administered Tribal Areas or to the parts or those areas to which it does not already apply, see \r\nRegulation No. 1 of 1972, s. 2 and Sch. \r\n2 Subs. and ins. by Act IV of 2007, s. 7 sub-sect.(1) clauses (a) & (b) (w.e.f. 1-7-2007).  \r\n3Subs. and shall be deem ed to have been so subs. by the Labour Laws (Amdt.) Act, 1975 (11 of 1975), s. 2 and Sch., for “Central \r\nGovernment” w.e.f. 14-8-1973).  \r\n4Clause (dd) added by the Companies Profit (Workers Participation) (Amdt.) Ordinance, 1970, (12 of 1970), s.2.  \r\n \r\nPage 3 of 10 \r\n \r\n (e)   “scheme” means the scheme set out in the S chedule;   \r\n1[(f)  “worker” in relation to a company, means an employee of the company \r\n2[,including e mployed by or through the contractors ,] who falls within the \r\ndefinition of a worker a s defined in clause (xxx) of section 2 of the Industrial \r\nRelations Ordinance, 2002 (XCI of 2002) and has been 2[working for or in] \r\nthe company  for a period of not less than six months.] \r\n3[3. Establishment of Fund. — (1) Every company to which the scheme applies shall__  \r\n \r\n(a)  establish a Workers Participation Fund in accordance with the scheme as \r\nsoon as the accounts for the year in which the scheme becomes applicable \r\nto it are finalised, but not later than nine months after the close of that year; \r\n4[*] \r\n \r\n5[(b)  subject to adjustments, if any, pay every year to the Fund not later than \r\nnine months after the close of that year five percent of its profits during such \r\nyear 6[* * *]; and \r\n \r\n(c)  furnish to the Federal Government and the Board, not later than nine \r\nmonths after the close of every year of account, its audited accounts for that \r\nyear, duly signed by its auditors.] \r\n \r\n(2) The amount paid to the Fund under clause (b) of sub-section (1) in relation to a year \r\nshall be deemed to have been allocated to the Fund on the first day of the year next succeeding that \r\nyear. \r\n \r\n \r\n4. Management of the Fund.— (1) As soon as may be 7[but not later than two \r\nmonths], after the establishment by a company of a Fund under section 3, there shall be constituted \r\na Board of Trustees consisting of the following trustees, namely:— \r\n \r\n(a)  two persons elected by the workers of the company from amongst themselves; \r\nand \r\n \r\n(b)  two persons nominated by the management of the company of whom at least \r\none shall be a person from the accounts branch of the company. \r\n \r\n(2) The person’s bolding office as trustees s hall elect f or one year a person to be the \r\nchairman of the Board alternately from amongst the trustees elected under clause (a) of sub-section \r\n(I) and those nominated under clause (b) of that sub-section, t he first Chairman being from \r\namongst the latter. \r\n(3) A  trustee shall, unless he sooner ceases to represent the interest he was e lected or \r\nnominated to represent, hold office for such term and on such conditions as may be prescribed by \r\nrules. \r\n \r\n \r\n  1Subs. by Act. III of o6, s.7. \r\n  2 Ins. and Subs. by Act IV of 2007, s. 7 (w.e.f. 1-7-2007).  \r\n3Subs. by the Companies Profits; Workers’ Participation) (Amdt.) Ordinance, 1970 (12 of 1970) s. 3, for the original sections 3 and 4.  \r\n4The word “and” omitted by the Labour Laws (Amdt.) Act, 1977 (17 of 1977), s. 2 and Sch.  \r\n5Subs. ibid., for Cl. (b). which was previously amended by various enactments.  \r\n6Omitted by Act IV of 07,s.7 (with effect from 01-07-2007).  \r\n7Ins. by the Labour Laws (Amdt.) Act, 1977 (17 of 1977), s. 2 and Sch.  \r\n \r\nPage 4 of 10 \r\n \r\n(4) All decisions of the Board shall be expressed in terms of the opinion of the majority of \r\nthe trustees and in the event of the trustees being equally divided in their opinions, the Chairman \r\nshall have and exercise a second or casting vote. \r\n \r\n(5) The Board shall manage and administer the Fund in accordance with the provisions of \r\nthis Act, the scheme and any rules made in this behalf. \r\n \r\n(6) The Board shall, in the exercise of its powers and performance of its functions under this \r\nAct, be subject to such directions as the 1[Federal Government] may from time to time give. \r\n \r\n(7) The 1[Federal Government], if it is of opinion that a trustee or a Board has been \r\npersistently failing in the performance of his or its functions or has generally been act ing in a \r\nmanner inconsistent with the objects and interests of the Fund, may, after giving such trustee or, as \r\nthe case may be, the Board, an opportunity of showing cause against it, by order, __ \r\n \r\n(a)  remove such trustee  from his office or direct that the Board shall stand \r\nsuperseded for such period as may be specified in the order; and \r\n \r\n(b)  direct that, pending the election or nomination of a person in place of the trustee \r\nremoved from office or, as the cast may be, the re-constitution of the Board, the \r\npowers and functions of the trustee so removed or the Board shall be exercised \r\nand performed by a person specified in the order. \r\n \r\n(8) A  casual va cancy in the office of a trustee shall be filled as soon as may be by the \r\nelection or, as the case may be, nomination of another person and the person elected or nominated to \r\nfill such vacancy shall hold office for the unexpired term of his predecessor. \r\n \r\n(9) Upon the supersession of a Board under sub-section (7) the trustees in that Board shall \r\ncease to hold office and references to the Board in this Act, the scheme and the rules shall be \r\nconstrued as references to the officer specified in the order under that sub-section. \r\n \r\n(10)  Before the expiry of the period of supersession, the Board shall be re-constituted in \r\naccordance with the provisions of this Act so as to enable it to take over its functions upon the \r\nexpiry of such period. \r\n \r\n(11)    No act or proceeding of the Board shall be invalid or questioned merely on the ground \r\nof the existence of a vacancy in, or defect in the constitution of the Board.] \r\n \r\n5. Penalty.__ 2 [ (1) Where a company to which the scheme applies fails to comply with \r\nany of the provisions of this Act or the scheme, every director,  manager or other officer \r\nresponsible for the management of the  affairs of  t he company, shall, if the Federal \r\nGovernment by order so directs, pay by way of penalty a s um which may extend to five thousand  \r\nrupees and, in case of a continuing failure, a further sum which may extend to one thousand rupees \r\nfor every day after the first during which the failure continues.] \r\n \r\n(3) A penalty imposed by an order under sub-section 3 [(1)] shall, if it is not paid within \r\nthe time specified in the order, be recoverable as an arrears of land revenue. \r\n \r\n \r\n \r\n1Subs. and shall be deemed to have been so subs. by the Labour Laws (Amdt.) Act, 1975 (11 of 1975) s. 2 and Sch. for “Central \r\nGovernment” (w.e.f.14-8-73) \r\n2Subs. by the Labour Laws (Amdt.) Act, 1977 (17 of 1977), s. 2 and Sch. for sub-sections (1) and (2).  \r\n3Subs.ibid. for “(2)”  \r\n \r\nPage 5 of 10 \r\n \r\n(4) The 1[Federal Government] may, upon an application made in this behalf by any person \r\naggrieved by an order made under sub-section (1) 2 [* * *] within a period of six months \r\nfrom the date of the order, review the order and may, upon such review, pass such order as it may \r\nthink fit. \r\n \r\n3[(5) Notwithstanding anything contained in this Act or the scheme, if any defaulting \r\nemployer strictly complies with the provisions of section 3 and distributes the benefits in accordance \r\nwith paragraph 4 of the scheme for the pe riod of default on or before the date fixed by the Federal \r\nGovernment, no such penalty shall be imposed and the company shall not be liable to pay interest as \r\nprovided in paragraph 2 of the scheme.] \r\n \r\n4[6. Po wer to call for information. __ The 1[Federal Government] may , at any time, call \r\nupon a company or a Board  to furnish it with such information and documents, including the \r\nrecords of the proceedings of the company or  the Board, as may be relevant or useful for the \r\npurpose of, or necessary for ensuring pr oper compliance with, the provisions of this Act, the rules \r\nand the scheme. \r\n \r\n7. Settlement of disputes, etc.__ (1) Any di fference a rising between the Boa rd and the \r\ncompany relating to the ad ministration of the scheme s hall be  reported to the 1[ Federal \r\nGovernment] whose decision thereon shall be final. \r\n   \r\n(2) All claims of a worker relating to the  benefits of the scheme, whether a gainst the \r\nBoard or the company, shall be settled in the same manner as is provided for in the Payment of \r\nWages Act, 1936 (IV of 1936), for the settlement of claims arising out of deductions from wages. \r\n \r\n8. Delegation of power. __ The 1[Federal Government) may, by notification in the official \r\nGazette, direct that all or any of its powers or functions under this 5[Ordinance] may, subject to such \r\nlimitations, restrictions or conditions, if any, as may be specified in the notification, be exercised or \r\nperformed also by any officer subordinate to it or by any authority so specified. \r\n \r\n7[8A. Power to exempt.⸻ The Federal Government may, through notification in the offic ial \r\nGazette,⸻ \r\n \r\n(a) declare that any company or class of companies shall  be exempt from the \r\napplication of the scheme; and  \r\n \r\n(b) exempt any company or class of co mpanies from any amoun t payable under \r\nsection 3 of this Act.] \r\n \r\n9.  Power to make rules. __ The 1[Federal Government] may make rules6 to carry out the \r\npurposes of this Act. \r\n \r\n10. Act   to   override   other   laws. __   The   provisions   of   this   Act   shall   have   effect \r\nnotwithstanding anything contained in any other law for the time being in force, or in a ny \r\ncontract or the memorandum or articles of association of a company.] \r\n \r\n1Subs. and shall be deemed to have been so subs. by the Labour Laws (Amdt.) Act, 1975 (11 of 1975), s. 2 and Sch. for “Central \r\nGovernment”. (w.e.f. 14-8-73).  \r\n 2The words “or sub-section (2)” omitted by Act 17 of 1977 s.2 and Sch.  \r\n3Added by Act III of 06, s.7. \r\n4 Subs. by the Companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (12 of 1970) s. 4 for the original sections 6 and 7. \r\n5Sic. Should read “Act”.  \r\n6For Companies Profits (Workers Participation) Rules, 1971, see Gazette of Pakistan, 1971, Extraordinary, page 1038.  \r\n7Ins. by Act. no. XXXV of 2022. \r\n \r\nPage 6 of 10 \r\n \r\nTHE SCHEDULE \r\n \r\nSCHEME \r\n \r\n[ See Section 2(e)] \r\n \r\n1. Scope of the scheme.__ The scheme applies to all companies 1[*]  engaged in industrial \r\nundertakings w hich satisfy any one of the following conditions, and to such other \r\ncompanies  as the 2[Federal Government] may, by notification in the official Gazette, specify \r\nin this behalf, namely :__ \r\n(i)  The number of workers employed by the company 3[* **] at any time during a \r\nyear is 4[50] or more. \r\n \r\n(ii)  The paid-up capital of the company as on the last day of its accounting year is \r\nRs.20 lakhs or more. \r\n \r\n(iii)  The value of the fixed assets of the company (at cost) as on the last day of  the \r\naccounting year is Rs. 40 lakhs or more5[:] \r\n \r\n       5[Provide that for the companies established on or after 1st day of July 2006,__  \r\n \r\n     (a)   clause (ii) shall have effect  as if for the figure  and word “20 lacs” the figure   \r\nand word “5 million” were substituted; and \r\n \r\n(b)    clause (iii)  shall have effect as if for the figure and word “40 lakhs” the        \r\nfigure and word “20 million” were substituted.] \r\n  \r\n6[Explanation.__ In this scheme,__ \r\n \r\n(a)  “industrial undertaking” means an  institution, organization, enterprise or \r\nestablishment whic h involves the use of electrical., mechanical, thermal, \r\nnuclear or any other form of energy transmitted mechanically and not \r\ngenerated by h uman or animal agency  and w hich is engaged in any one or \r\nmore of the following operation, namely:__ \r\n \r\n(i)  the subjection of goods or materials to any manufacturing, assembly, \r\nfinishing or other artificial or natural process, which changes their \r\noriginal condition or add to their value; \r\n \r\n(ii)  ship-building; \r\n \r\n(iii)  the transformation, generation, conversion, transmission  or \r\ndistribution of electrical energy, including hydraulic power; and  \r\n \r\n(iv)  the working of a mine, oil well or any other source of minera l deposit, \r\nincluding blending, refining and purification or oils and gases; \r\n \r\nand includes companies engaged in the ma rketing and distribution of gas or oil or in the carriage of \r\nmen or goods by sea or air, and any other institution, organization, enterprise or establishment which \r\nthe 2[Federal Government] may, by notification in the official Gazette, declare to be an ind ustrial \r\nundertaking for the purposes of this scheme; and  \r\n \r\n \r\n1The word “primarily” omitted by the Companies Profits (Workers Participation (Amendment) Ordinance, 1970 (12 of 1970), section 5.  \r\n2Subs. and shall be deemed to have been so subs. by the Labour La ws (Amdt.) Act, 1975 (11 of 1975),s.2 and Sch. for “Central \r\nGovernment”, (w.e.f. 14-8-73). \r\n3The words “in any shift” omitted by the Companies Profits (Workers Participation) (Amdt.) Act, 1973 (20 of 1973), s.3. \r\n4Subs. ibid., for “100”.  \r\n5Subs. & added by Act III of 06, s. 7. \r\n6Explanation added, by Ord. 12 of 1970,s.5. \r\n \r\nPage 7 of 10 \r\n \r\n (b)  references to the paid -up capital and the value of the fixed assets  of the \r\ncompany shall,  in th e case of a company incorporated outside Pakistan but \r\nhaving a branch in Pakistan , b e construed as references respectively to the \r\ncapital invested in such branch and value of the fixed assets of the branch.] \r\n \r\n 1[2. Investment of Fund.__ (1) The amount allocated or accruing to the Fund shall be \r\navailable to the company for its business operations. The company may, however, request the Board \r\nto utilize the amount in the Fund for investment under sub-paragraph (7) and the Board may decide \r\nto so invest the amount. \r\n \r\n (2) The company shall pay to the Fund in respect of the amount in the Fund available to it \r\nfor its business operations as aforesaid interest at the rate of 2- 1 / 2% above the bank rate or \r\n75 percent of the rate at which dividend is declared on its ordinary shares, whichever is higher. In \r\ncase there is more than one class of ordinary shares on which different rates of dividend have been \r\ndeclared, then the weighted average of the different rates of dividend shall be taken for the purpose \r\nof determining the rate of interest. The interest to the Fund shall accrue on and from the first day of \r\nthe year next succeeding the year in which the scheme becomes applicable to the company. Even \r\nwhen the company does not wish to utilize the amount available to it under sub-paragraph (1), \r\ninterest at the rate aforesaid shall be payable by the company for the period between the date of \r\nallocation of any amount to the Fund and the date of its investment under sub-paragraph (7). \r\n \r\n(3) If, at any time after the establishment of the  Fund, the company raises any \r\nadditional capital, otherwise than through the issue of bonus or bonus shares, the Fund shall have \r\nthe first option to convert any amount available to the company under sub-paragraph (I) or any of \r\nthe assets of the Fund into ordinary equity capital up to a ceiling of 20 per cent of the paid up \r\ncapital of the company prior to such conversion on 50 per cent of the additional capital, whichever \r\nis less. \r\n \r\nExplanation. —In this sub-paragraph, “additional capital” does not include any capital \r\noffered or to be offered to foreign participates of the company. \r\n \r\n(4) For the exercise of the right of conversion under sub-paragraph (3), the Board shall be \r\ngiven sufficient time to sell assets of the Fund to realise the amount needed for subscription to the \r\nadditional issue of capital by the company. \r\n \r\n(5) The shares acquired in the manner set out in sub-paragraph (3)  Shall participate in \r\nfuture bonus and right issues in the same manner as other shares. \r\n \r\n(6) The shares acquired in the manner set out in sub-paragraph (3) shall carry voting rights \r\nin the same manner as other shares and such voting rights shall be exercised by the Board on behalf \r\nof the Fund. \r\n \r\n(7) The amount in the Fund which, under sub-paragraph (1), the company has \r\nrequested to be utilized for investment under this paragraph my be invested by the Board for the \r\npurchase of any of the following, namely:— \r\n \r\n(a)  I.C. P. Mutual Fund Certificate; \r\n \r\n(b)  National Investment Trust (Unit) Certificates; \r\n \r\n \r\n 1Subs. by the companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (12 of 1970), s. 5, for the original para 2. \r\n \r\n \r\nPage 8 of 10 \r\n \r\n(c)  Government securities including Defence and Postal Savings Certificates; and \r\n \r\n(d)  any other securities approved for the purpose by the 1[Federal Government]. \r\n \r\n2[3. Eligibility to benefits of scheme.__ All workers shall be eligible to the benefits of the \r\nscheme and to participate in the Fund. However, a worker not completing six months of \r\nemployment with the company during a year of account shall not participate in the Fund in respect \r\nof that year \r\n \r\n4. Distribution of benefits to worker.__The share of a worker in the annual allocation to \r\nthe Fund shall be expressed in units or fractions of units (worked out to two places of decimal) of \r\nthe face value of Rs.10 determined in the following manner, namely:— \r\n \r\n3[a)  The number of available units shall be so divided into three parts for the \r\nthree ca tegories of workers mentioned below that a worker in the first of  \r\nthose categories gets four units for each two units that a worker in the second \r\nof those categories gets or for each one unit that a worker in the last of those \r\ncategories gets. \r\n \r\nCategories \r\n \r\n4[1. Workers drawing average monthly wages not exceeding seven thousand five \r\nhundred rupees. \r\n \r\n 2.  Workers drawing average monthly wages exceeding seven thousand five \r\nhundred rupees but not exceeding fifteen thousand. \r\n \r\n 3.  Workers dr awing average monthly wa ges exceeding fifteen thousand \r\nrupees.] \r\n \r\n(b)  The average monthly wages shall be rounded up to the nearest Rs.10. \r\n \r\n(c)  The number of units available to each category of workers shall be \r\ndivided equally among all the workers in that category to determine the share \r\nof each workers of that category. \r\n \r\n5[(d)  Notwithstanding anything contained in this scheme, no worker shall, in any \r\none year, be entitled out of  the annual allocation to units exceeding rupees \r\n6[the amount of 4[four] times of the minimum wages for unskilled workers as \r\ngiven in the schedule of Minimum Wages for unskilled Workers Ordinance, \r\n1969 (W.P. Ord. XX of 1969)] in value in so far as such allocation is relatable \r\nto 7 [* * *] of clause b of sub-section (1) of section 3.  Any amount left out of \r\nannual allocation after the units have been so allocated shall be transferred \r\nto the Fund constituted un der section 3 of  the Workers Wel fare Fund \r\nOrdinance, 1971 (XXXIV of 1971). No part of such amount shall be deemed \r\nto be included in the asset value of the Fund established under this Act and no \r\nindividual worker shall have any lien on this amount by virtue of holding any \r\nunits]. \r\n \r\n \r\n1Subs. and shall be deemed to have been so subs. by the Labour Laws (Amdt.) Act, 1975 (11 of 1975), s. 2 and Sch., for “Central \r\nGovernment”, (w.e.f. 14-8-73).  \r\n2Subs. by the Companies Profits (Workers Participation) (Amendment) Ordinance, 1970 (12 of 1970), section 5, for the original paras 3 and \r\n4.  \r\n3Subs. by the Labour Laws (Amdt.) Ordinance, 1972 (9 of 1972), s. 2 and Sch., for cl. (a).  \r\n4Subs. by Act IV of 07. \r\n 5Subs. by the Labour Laws (Amdt.) Ordinance 1972 (9 of 1972), s. 2 and, Sch., for cl. (d)  \r\n6 Subs by Act III of 2006, s. 7.  \r\n7The words “sub-clause (i) of “omitted by the Companies profits (Workers Participation) (amdt.), Act 1973 (20 of 1973), s. 3.     \r\n \r\nPage 9 of 10 \r\n \r\n Explanations. —  In this paragraph, “average monthly wages” means total \r\nwages dr awn during the year of acco unt divided by 12,  or by the number of \r\nmonths a worker actually worked during a year in respect of which he is entitled \r\nto the benefit under the scheme, as the case may be, and “wages” has the same \r\nmeaning as in clause (vi) of section 2 of the Payment of Wages Act, 1936 (IV of \r\n1936), but does not include any overtime allowance 1[or bonus],  \r\n \r\n5. Disbursement of benefits. __ The disbursement of the benefits from the Fund shall be as \r\nunder: __ \r\n \r\n(a)  100 % of the annual income of the Fund, including capital gains realized, \r\nshall be distributed each year to workers in proportion to their units of \r\nentitlement. \r\n \r\n2[b)  A worker who voluntarily  leaves the employment  of the company or  whose \r\nservices are terminated shall be entitled to receive 100 per cent of the net asset \r\nvalue of the units standing in his name.]; \r\n \r\n3[*  *  *  *  *  * *] \r\n \r\n4[(f)  A worker who continues in the service of the company shall be entitled to receive \r\n100 per cent of the net asset value of the units in his name each year or he may \r\nchoose to leave his share in the Fund :  \r\n  \r\n Provided that a worker while in employment may choose to encash all \r\nthe units standing in his name at any time at his discretion.]. \r\n \r\n(g)  A worker, in the event of his retirement or, his nominated beneficiary, in the \r\nevent of the worker's death (from whatsoever cause) while in the employment of \r\nthe company, shall receive 100 % per cent of the, net asset value of the units \r\nstanding in the worker’s name 5[* * *]. \r\n \r\n6. Definition of the net asset value of the unit. — To determine the net asset value of a unit, \r\nthe total net assets of the Fund, namely, market value of the securities, cash and other assets resulting \r\nfrom the investment and re-investment, capital accretion thereto and all in comes of any kind rising \r\nthere-from shall be divided by the number of units in the Fund. Net asset value of the entire Fund shall \r\nbe computed once every year and each worker's unit en titlement determined at the same time. \r\nAdditional units will be given to the workers according to the amount they voluntarily contribute to the \r\nFund. \r\n \r\n6[7. Employee's own contribution. — A worker may voluntarily choose to contribute a part of \r\nhis wages, cash bonus, dividend or interest to the Fund. For each unit of contribution, he sh all \r\nreceive credit for 1-1/4 units. Contribution received during the course of a year of acco unt sh all, \r\nhowever, be deemed to be contribution received on the last day of that year. If at any time a worker \r\nchooses to leave the employment of the company or 7[his services are terminated or in the event of his \r\nretirement or death or' on the expiry of three years from the date he voluntarily chooses to contribute a \r\npart of his wages, cash bonus, dividend or interest to the Fund, he, at his option, or, in the event of his \r\ndeath, his nominated beneficiary, may], receive the net asset value of the units representing his \r\ncontribution. The contribution by a worker in any one year of account shall not exceed 10 per cent \r\nof his annual wages during such year.] \r\n \r\n \r\n 1Add by Ordinance 4 of 1985, s. 3.  \r\n2Subs. by the Companies Profits (Workers Participation) (Amdt.) Act, 1973 (20 of 1973), s. 3, for cl. (b), which was previously amended by \r\nOrd. 12 of 1970, s. 5. \r\n3Cls. (c), (d) and (e) omitted ibid. \r\n4Subs. by the Companies Profits (Workers’ Participation) (Amdt.) Act, 1973 (20 of 1973), s. 3, for cl. (f)  \r\n5Certain words omitted ibid.  \r\n6Subs. by the Companies Profits (Workers Participation) (Amdt.) Ordinance, 1970 (12 of 1970), s. 5, for the original para 7. \r\n7Subs. by Act, 20 of 1973, s. 3, for certain words. \r\n \r\nPage 10 of 10 \r\n \r\n8. Fiscal concessions to the companies.— All companies to whom the scheme applies shall \r\nbe allowed the allocation made to the scheme as a deduction to arrive at the taxable income. \r\n \r\n9. Tax treatment of the income of the fund.— The income of the Fund including capital \r\ngains shall be exempt from income-tax. \r\n \r\n10. Tax treatment of the income to the workers.— All sums paid out by the Fund shall be \r\nexempt from income-tax in the hand of the workers. \r\n \r\n1[11. Worki ng and location of the Board of Trustees.— The office of the Board of \r\nTrustees shall be located at the factory premises or, if there is more than one factory run by the \r\ncompany, at the registered head office of the company. All expenses of the Board, including the \r\ncost of maintaining accounts, shall be borne by the company.] \r\n \r\n12. Audit of the Fund accounts.— The Fund accounts shall be audited annually at the \r\ncompany's expense in the same manner as the accounts of the company are audited : \r\n \r\nProvided   that   the 2[Federal Government]   may, at   its   own   cost, appoint independent \r\naccountants for a special audit of the accounts of the Fund. \r\n \r\n13. Scheme’s benefits to be in addition to other benefits.— The benefits to a worker \r\nunder t his scheme shall be in addition to, and not in derogation or substitution of, any other \r\nbenefits to which the worker may be entitled under any other law, contract, terms and \r\nconditions of employment or otherwise. \r\n \r\n3[14. Special provision  f or industries working  s easonally.—  Notwithstanding  \r\nanything contained in this Act or this scheme the 2[Federal Government] may, by 4notification in \r\nthe o fficial Gazette, make special provisions for the participation of workers in  the profit of \r\ncompanies engaged in industrial undertakings which operate only for a part of the year. \r\n \r\n15. C ompanies e ngaged in more t han one industrial undertakings.— Notwithstanding \r\nanything contained in this Act or this scheme, the 2[Federal Government] may, at the request of a \r\ncompany which is engaged in more than one industrial undertakings located at di fferent p laces \r\npermit the splitting up of the Fund amongst the various undertakings or groups of \r\nundertakings and constitution of the Board of Trustees for each such undertaking or group of \r\nundertakings; and thereupon the provisions of this Act and this scheme shall have effect in relation \r\nto such undertakings or groups as if each such undertaking or group were a company. \r\n \r\n16. E ntrustment of management of Fund to Investment Corporation of Pakistan \r\netc.— The Board of Trustees may, with the prior approval of the 2[Federal Government], enter into \r\na con tract with the Investment Corporation of Pakistan, the National Investment Trust or the \r\nNational Bank of Pakistan, entrusting the management of the Fund to that Corporation, Trust or  \r\nBank  on  such  fee,  which  sh all  be  pa yable  by  the  com pany,  and  on  such  terms  a nd \r\nconditions as may be mutually agreed upon.] \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n1Subs. by the Companies Profits (Workers Participation) (Amdt.), Ordinance, 1970 (12 of 1970), s. 5, for original para 11. \r\n 2Subs. and shall be deemed to have been so subs. by the Labour Laws, (Amdt.) Act, 1975 (11 of 1975), s. 2 and Sch., for “Central \r\nGovernment” (w.e.f. 14-8-73).  \r\n3Paras.14, 15 and 16 added, ibid., by Ord. 18 of 1970, s. 5.  \r\n4For Such notification, see Gaz. of Pak., 1971, Ext. page 1037.",
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