Ramkrishna Forgings' promoters to fund external agency's audit of inventory; despite hit to co's net worth by 4-5 percent

The company's filing said, "Promoters are giving an assurance to the investors that they intend to fund the same through permissible instruments"

Promoters of Ramkrishna Forgings have offered to fund an external audit of the company's inventory to detect suspected discrepancies. In a recent exchange filing, the company said that the promoters have decided to do this despite the possibility that the exercise may likely have an adverse impact of 4-5 percent of the net worth of the company.

In April 26 filing, the company said that the decision to do such an exercise was taken after its annual physical verification of the inventories for FY25, which started on April 6, 2025. The filing said, "it was observed that there have been certain discrepancies in certain cases of inventory."

Following this, the company's the Audit Committee approved the appointment of such external agencies "in the interest of ensuring transparency, accountability and adherence to the highest standards of Corporate Governance and to mitigate future recurrence of such nature".

"While the Physical Verification process is continuing, as per the internal estimates of the Company, a likely adverse impact of the order of 4% to 5% of the Net Worth of the Company is indicated. On the basis of the final joint report by the Independent External Agencies, the Company will appropriately account the impact in its Financial Statements on a one-time basis."

Also read: India Inc's corporate governance improves, first time in 9 years IiAS' scorecard has no company listed in the bottom tier

The filing said that, despite the risk of an adverse finding, the promoters are committed to upholding the highest standards of corporate governance. It said, "The Promoters of the Company understanding the potential adverse impact that may arise pursuant to the fact-finding study, on the Net Worth of the Company, stands firmly committed to protect and preserve the stakeholders’ interest to uphold highest standards of Corporate Governance. It was further noted this is a first ever incident of its kind in the history of the Company."

"Further, in order to mitigate the potential adverse impact assessed upon conclusion of the factfinding study, the Promoters are giving an assurance to the investors that they intend to fund the same through permissible instruments as permitted under applicable laws."