FILING OF NDH – 2 FORM BY NIDHI COMPANIES

[Mr. M. GOVINDARAJAN]

Statutory compliance by Nidhi Companies

Rule 5 of Nidhi Rules, 2014 provides that a Nidhi company which is incorporated under the provisions of Companies Act, 2013 shall, within a period of 1 year, ensure that it has –

• not less than 200  members;
• Net Owned Funds of Rs.10 lakhs  or more;
• unencumbered term deposits of not less than 10% of the outstanding deposits as specified in rule 14; and
• ratio of Net Owned Funds to deposits of not more than 1:20.

Within 90 from the close of the first financial year after its incorporation and where applicable, the second financial year, Nidhi shall file a return of statutory compliances in Form NDH-1 along with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 with the Registrar duly certified by a company secretary in practice or a chartered accountant in practice or a cost accountant in practice.

If a Nidhi is not complying with above, it shall within 30 days from the close of the first financial year, apply to the Regional Director in Form NDH-2, an application to Regional Director and intimation to Registrar) along with fee specified in Companies (Registration Offices and Fees) Rules, 2014 for extension of time and the Regional Director may consider the application and pass orders within 30 days of receipt of the application.  The Regional Director may extend the period up to 1 year from the date of receipt of application.

Form NDH-2 shall also be filed in the following events-

Opening of branches

Rule 10(3) provides that if a Nidhi proposes to open more than 3 branches within the District or any branch outside the District, it shall obtain the prior permission of the Regional Director by applying in Form NDH-2 along with fee specified in the Companies (the Registration Offices and Fees) Rules, 2014 and an intimation is to be given to the Registrar about opening of every branch within 30 days of such opening.

Closing of branch

Rule 10(6) provides that a Nidhi shall not close any branch, unless, the proposal to close the branch along with the plan as to how the existing deposits have been or shall be paid off and how the existing loan shall be recovered is duly approved by the Board at its meeting and  it has obtained the prior approval of the Regional Director by applying in Form NDH-2 along with fee as specified in the Companies (the Registration Offices and Fees) Rules, 2014 at least 60 days prior to such closure.   the Regional director shall consider such application and pass orders within a period of thirty days of receipt of such application.

• it has obtained the prior approval of the Regional Director by applying in Form NDH-2 along with fee as specified in the Companies (the Registration Offices and Fees) Rules, 2014 at least 60 days prior to such closure.

The Regional director shall consider such application and pass orders within a period of 30 days of receipt of such application.

Withdrawal of unencumbered deposits

Rule 14 provides that every Nidhi shall invest and continue to keep invested, in unencumbered term deposits with a scheduled commercial bank (other than a co-operative bank or a regional rural bank), or post office deposits in its own name an amount which shall not be less than 10% of the deposits outstanding at the close of business on the last working day of the 2^nd  preceding month.  In cases of unforeseen commitments, temporary withdrawal may be permitted with the prior approval of the Regional Director by making application in Form NDH-2 along with fee specified in the Companies (the Registration Offices and Fees) Rules, 2014 for the purpose of repayment to depositors, subject to such conditions and time limit which may be specified by the Regional Director to ensure restoration of the prescribed limit of 10%.

Form NDH-2

The Central Government, vide Notification No. GSR 35 (E), dated 20.01.2023 made the Nidhi (Amendment) Rules, 2023.  Vide this amendment the Central Government substituted a New Form NDH-2, for the existing form.  This amendment came into effect from 23.01.2023.

The language of the application is either in English or in Hindi.  This application has     parts as detailed below-

• Company Information
• Purpose of application
• Other details;
• Profit details;
• Board resolution;
• Attachments;
• Declarations;
• Certificate by practicing professional;
• Certificate by practicing professional.

Company Information

The Corporation Identification Number is to be filled in this part.  Once this CIN number is filled the following particulars will automatically appear-

• Name of the Nidhi;
• Address of the Registered Office;
• Email id;
• Date of incorporation

Financial year end date/date of closure of branch/date of opening of branch/proposed date of closure of branch/date of closure of collection centres – to be filled in DD/MM/YYYY format.

Purpose of application

In this part the purpose for which the application is to be filed is to be indicated by ticking the appropriate information.-

• For extension of time under Rule 5(3);
• For permission of Regional Director for opening of a branch under Rule 10 (3);
• For permission of Regional Director for closing of a branch under Rule 10(6)(a);
• For intimation to Registrar for opening/closing of a branch under Rule 10;
• For intimation to Registrar for closing of collection centers under Rule 10;
• For permission of Regional Director for withdrawal of unencumbered deposits under Rule 14.

Other details

In this part the position as at the end of the previous financial year, based on the audited financial report is given.  The details of information provided are-

• Number of Members;
• Ratio of net owned funds to deposits;
• Details of branches/collection centers- Number of branches/collection centers-

• Name of the branch/collection centre;
• Address of the collection Centre;

• Profit details- profit during the 3 preceding financial years – Net profit after tax;
• In case of temporary withdrawal of unencumbered term deposits, the grounds for seeking approval shall be mentioned briefly.
• Details including the reasons and justifications for the application are to be furnished.

Board resolution

In this part the following are to be furnished-

• Date of passing of the Board resolution –DD/MM/YYYY format;
• Mode of resolution (physical/circular);
• Number of votes casted in favor of the resolution;
• Number of votes casted against the resolution.

Attachments

The following documents are to be attached for the purpose of this form-

• Audited financial statements (last available);
• List of members with PAN and complete residential address along with amount of deposit accepted from each member;
• Optional attachment, if any.

Declaration

In this part the Director/Manager/Company Secretary/CEO/CFO, duly authorized by Board by a resolution shall filed the declaration as to the requirements of the Companies Act, 2013 and the rules made there under in respect of subject matter of form NDH – 2 and matters incidental thereto have been complied with.  It is also to be declared that all the information given in this form is true, correct and complete including the attachments to this form and nothing material has been suppressed.  The resolution No. and the date of resolution by Board of Directors are also to be furnished.  The form is duly to be signed by digitally by the authorized officer of the company.

Certificate by practicing professional

This duly filled and signed form is to be certified either by practicing Chartered Accountant (in whole time practice) or Company Secretary (in practice) or Cost Accountant (in practice).  His status of membership, membership number and certificate of practice number are to be mentioned in the proper boxes.

The practicing professional is to declare that he has been duly engaged for the purpose of certification of the Form NDH-2.  He is to certify that he has gone through the provisions of Companies Act, 2013 and rules made there under for the subject matter of this form and matters incidental thereto and he has verified the particulars, including attachments from the original records maintained by the Company which is the subject matter of this form and found them to be true, correct and compliance and no information material to this form has been suppressed.

He is to further certify that-

• The said records have been properly prepared, signed by the required officers of the company and maintained as per the provision of the Companies Act, 2013 and were to be found in order.
• All the required amendments have been completely and legibly attached to this form.
• It is understood that he is liable for action under Section 448 of the Companies Act, 2013 for wrong certification, if any, found at any state.