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

The Central Government and the State of Gujarat are both members of Sagar Ports Ltd, a Government company. The Central Government has prepared the annual report on the company's working and affairs. What must the State Government do under the Companies Act, 2013?

The State Government must cause a copy of the Central Government's report 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 in this situation.

  1. APrepare its own separate annual report within one year
  2. BNothing, as only the Central Government need report
  3. CCause a copy of that report to be laid before the House or both Houses of the State Legislature with the audit report and CAG commentsCorrect
  4. DLay the report before Parliament along with the Central Government

Explanation

Under section 394(2), where a State Government is also a member alongside the Central Government, it must cause a copy of the report prepared under section 394(1) to be laid before the State Legislature, together with the audit report and the CAG comments or supplement. It does not prepare its own report; that duty arises under section 395 only where the Central Government is not a member.

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