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

Vindhya Power Ltd is a Government company in which only the State Government of Madhya Pradesh holds shares; the Central Government is not a member. Who is responsible for causing an annual report on the working and affairs of the company to be prepared under Section 395?

The State Government that is the member 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 bears the duty, not the Centre, CAG or the Registrar.

  1. AThe Central Government through the Ministry of Corporate Affairs
  2. BThe State Government which is the member of the companyCorrect
  3. CThe Comptroller and Auditor-General of India
  4. DThe Registrar of Companies of that State

Explanation

Section 395 applies where the Central Government is not a member. 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 under Section 394 only when it is a member.

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