Ramkrishna Forgings Limited has informed the Exchange regarding Board meeting held on Jun 14, 2025.
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Ramkrishna Forgings' board on June 14, 2025 noted a joint fact-finding report by CLA IVC LLP and Salarpuria & Partners on inventory discrepancies at its Jamshedpur plants. The probe, commissioned by the Audit Committee in April 2025, found that erroneous SAP entries and unrecorded rejections led to overstatement of work-in-progress, raw material, and scrap inventory worth Rs. 22,052.43 Lakhs as of March 31, 2025, and Rs. 5,022.26 Lakhs as of March 31, 2024. The net adverse impact on the company's net worth is approximately Rs. 20,260 Lakhs, or 6.73% of net worth as of March 31, 2025. The company has already booked this shortage in its FY25 and FY24 results, and says there is no further financial impact from the final report. No unauthorized payments to vendors or third parties were found, and no evidence of fraud emerged. Management will take disciplinary action against employees, tighten internal controls, and appoint an external SAP consultant within 4-6 months.
For shareholders, the financial hit is largely already absorbed in previously reported results, but the disclosure of weak internal controls and SAP-related process errors may weigh on sentiment and invite closer regulatory or auditor scrutiny going forward.