Under what circumstances can a public company pay total managerial remuneration to its directors including managing director, whole time director and manager in excess of 11% of the net profits of the company in a financ

As per Section 197 of the Companies Act, 2013, the total managerial remuneration payable by a public company, to its Directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed eleven per cent. of the net profits of that company for that financial year computed in the manner laid down in section 198 except that the remuneration of the Directors shall not be deducted from the gross profits. Provided that the company in general meeting may, authorise the payment of remuneration exceeding eleven per cent. of the net profits of the company, subject to the provisions of Schedule V. Provided further that, except with the approval of the company in general meeting, by a special resolution- (i) the remuneration payable to any one managing director; or whole-time director or manager shall not exceed five per cent. of the net profits of the company and if there is more than one such director remuneration shall not exceed ten per cent. of the net profits to all such Directors and manager taken together; (ii) the remuneration payable to Directors who are neither managing Directors nor whole-time Directors shall not exceed, - (A) one per cent. of the net profits of the company, if there is a managing or whole-time director or manager; (B) three per cent. of the net profits in any other case. Provided also that, where the company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the company before obtaining the approval in the general meeting. Hence a public company can make payment of managerial remuneration to its directors including managing director and whole-time director, and its manager, in excess of 11% of the net profits, by calling a general meeting and obtaining the consent of the shareholders and fulfilling all other obligations as per law.