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

Mahanadi Power Ltd is a Government company in which the Central Government holds no shares. Only the State Government of Odisha is a member. Who is required to cause an annual report on the working and affairs of the company to be prepared under Section 395?

The State Government of Odisha must cause the annual report to be prepared. Section 395 applies when the Central Government is not a member of the Government company, and a sole State Government member then bears the duty to prepare the annual report on the company's working and affairs.

  1. AThe Central Government
  2. BThe State Government of OdishaCorrect
  3. CThe Comptroller and Auditor-General of India
  4. DThe Registrar of Companies

Explanation

Section 395(1) applies where the Central Government is not a member of a Government company. In that case, where only one State Government is a member, that State Government must cause the annual report to be prepared. The Central Government's duty arises only under Section 394 when it is a member.

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