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CS Executive · Company Law and Practice · Annual Report - Concepts

Both the Central Government and the Government of a State are members of Himgiri Power Ltd, a Government company. Under Section 394(2), what is the duty of the State Government?

The State Government must cause a copy of the annual report prepared by the Central Government to be laid before the House or both Houses of the State Legislature, along with the audit report and the CAG's comments or supplement. It does not prepare a separate report.

  1. APrepare a separate annual report within one year of the financial year end
  2. BLay the Central Government's report before Parliament on its behalf
  3. CCause a copy of the report prepared by the Central Government to be laid before the State Legislature with the audit report and CAG commentsCorrect
  4. DIt has no duty because the Central Government is a member

Explanation

Under section 394(2), where a State Government is a member in addition to the Central Government, it must cause a copy of the report prepared under sub-section (1) to be laid before the House or both Houses of the State Legislature, with the audit report and CAG comments. It does not prepare its own report; the preparation duty rests with the Central Government.

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