A Crisil study of annual reports for 2000-2001 suggests that the profits of 139 companies, including blue chips such as Wipro, Reliance, Zee Telefilms, Videocon, Spic and Bombay Dyeing, were at variance for years, though Crisil clarified that the accounting policies adopted by the companies are not illegal. Nor do they violate any accounting norm.
Among the cases the Crisil study highlights is that of Wipro, which transferred land from fixed assets to current assets at the market price and adjusted the excess value under capital reserves instead of revaluation reserves. This resulted in Rs 43 crore being added to the Rs 196-crore reserves of the company.
When contacted, Suresh Senapati, chief financial officer of Wipro, said that land is generally put under fixed assets. But since we were planning to sell it, we transferred it to current assets and the excess was put under capital reserves. This is entirely in accordance with the Companies
