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    Question

    What is the total managerial remuneration payable by a

    public company, to its directors, including managing director and whole-time director, and its manager? 
    A Not exceed eleven per cent of the gross profits Correct Answer Incorrect Answer
    B Not exceed eleven per cent of the net profits Correct Answer Incorrect Answer
    C More than eleven per cent of the gross profits Correct Answer Incorrect Answer
    D More than twelve percent of the gross profits Correct Answer Incorrect Answer
    E Not exceed three per cent of the net profits Correct Answer Incorrect Answer

    Solution

    Section 197. Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits- (1) 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.

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