Thursday, October 05, 2006

Navaratna Status to BSNL

Navaratna status is conferred by Department of Public Enterprises. To be qualified as a Navaratna, the company must obtain a score of 60 (of the total 100). The score is based o six parameters which include net profit to net worth, total manpower cost to total cost of production or cost of services, PBDIT (Profit Before Depreciation, Interest and Taxes) to capital employed, PBIT to turnover, EPS (Earning per share) and inter-sectoral performance. Additionally, a company must first be a miniratna and must have four independent directors on its board before it can be made a navaratna.

The navaratna status will empower a company to invest up to Rs. 1000 cr or 15% of their net worth on a single project without seeking government approval. In a year, these companies can spend up to 30% of their net worth not exceeding Rs. 1000 cr. They will also have the freedom to enter joint ventures, form alliances and float subsidiaries abroad.