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

Kaveri Textiles Ltd, a Government company in liquidation, has the State of Tamil Nadu as its only government member; the Central Government is not a member. Which statement is correct under the Companies Act, 2013?

The State Government must cause the annual report to be prepared and laid before its Legislature. Section 395 applies to a Government company where the Central Government is not a member, and its provisions extend so far as may be to a Government company in liquidation.

  1. AThe State Government must cause an annual report on its working and affairs to be prepared, as the provisions apply so far as may be to a Government company in liquidationCorrect
  2. BNo report is needed because the company is in liquidation
  3. CThe Central Government must still lay a report before Parliament under section 461 for this company
  4. DThe report is required only if the company is listed

Explanation

Section 395(1) puts the reporting duty on the State Government where the Central Government is not a member. Section 395(2) applies these provisions, and section 394, so far as may be, to a Government company in liquidation. Liquidation therefore does not remove the duty.

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