Provision for Gratuity

Hello Friends,

Can anyone please tell me whether a newly commenced (2years old) company is  required to make a provision for gratuity. 
As the provision is to be created for the employees who have completed 5 years of service..
And in case of a newly formed company, the company does not complete 5 years so there is no question of employees completing 5 yrs... So is the the newly formed comany liable to make the provision from the 1st year itself???

Please let me know as sooon as possible and also where exactly is it stated...