The company has also approved the appointment of a reputed independent external agency to conduct a joint fact-finding study for the discrepancies in the inventory and the reasons behind the same.
These discrepancies were discovered during the course of the annual physical verification of inventory undertaken by the company for the financial year that ended on March 31. The verification exercise had commenced on April 6.
“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,” Ramkrishna Forgings said in a statement.
On the basis of the final joint report by independent external agencies, the company will appropriately account the impact in its financial statements, on a one-time basis, the statement said further.
Ramkrishna Forgings has also warned in its exchange filing that the potential adverse impact may rise post the fact-finding study on the net worth of the company. Highlighting that this was the first ever incident of such a kind in the company’s history, the management reiterated that the promoters are committed to protect and preserve stakeholder interests.
Promoters of the company have also assured investors that they intend to fund any potential adverse impact through permissible instruments, post the conclusion of the fact-finding study.
Shares of Ramkrishna Forgings are trading 7.5% lower on Monday at ₹610.
