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

Both the Central Government and the State of Karnataka are members of 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 its State Legislature, together with the audit report and the CAG's comments or supplement. It does not prepare a separate report.

  1. ATo cause a copy of the Central Government's annual report, with the audit report and CAG comments, to be laid before the State LegislatureCorrect
  2. BTo prepare a separate annual report within six months of the financial year end
  3. CTo file the annual report with the Registrar of Companies
  4. DTo lay the report before Parliament along with the Central Government

Explanation

Section 394(2) says that where a State Government is also a member along with 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; that is the Central Government's task.

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