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June 5, 2001
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Money > Business Headlines > Report June 5, 2001 |
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Rolta brand valued at Rs 12.20 billionBaburajan K The Bombay-based infotech major Rolta India has internally valued the Rolta brand at Rs 12.20 billion for the year 2000. The valuation is based on the widely-used brand-earnings multiple model. According to the company, the escalating value of Rolta brand indicates that its financial growth will continue to be consistent and sustainable. It is the result of a relentless pursuit of quality in manufacturing, selling, service, advertising and marketing. Rolta, which also offers Internet services in Bombay, has valued its human resources at Rs 14.20 billion as per a study conducted on the Lev & Schwartz model. Around 87 per cent of its professionals are equipped with relevant engineering, postgraduates and PhD degrees necessary to deliver competent customer relations. The company's attrition at less than 10 per cent over the year is far below the prevailing infotech industry average. Around 72 per cent of Rolta's personnel are 35 years or less, the company said in its annual report for 2000. The company had engaged the services of Deloitte Haskins & Sells, chartered accountants, for valuing its brand, human resources and the economic value added for 1999. The brand valuation was based on the following methodology: determine brand earnings, determine the brand-strength or brand-earning multiple, compute the brand value by multiplying the brand earnings with the multiple derived by determining brand-strength. The HR valuation was based on the following assumptions: employee compensation includes all direct and indirect benefits earned both in India and abroad, the average annual increment is based on the increment paid during the last three years, retirement age is as per company policy and future earnings have been discounted at the weighted average cost of capital of Rolta. The Lev & Schwartz model belongs to the category of the present value-based model. The model is salary-based one. The basic assumption of this model is that the employee will not leave the organisation till retirement. This model attempts to value the organisation's HR using the economic concept of human capital. Powered by YOU MAY ALSO WANT TO READ:
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