Ola Electric on Tuesday said the inconsistencies in inventory figures flagged by its statutory auditor, BSR & Co., were a one-off incident triggered by the company linked to a restructuring its network operations in Q4 FY25.
The auditor had flagged that it recorded 19 cases where the scooter count at stores and money owed by customers to Ola Electric, as per its books, did not match the company’s quarterly returns filed with banks in FY25.
It had also noted that the firm did not have appropriate internal control system for the physical verification of raw materials and finished foods located at its stores and distribution centres which could result in material misstatements in the company’s inventories, cost of materials and change in inventories of finished goods, stock-in-trade and work-in-progress account balances, according to reports.
According to the electric vehicle maker, the restructuring exercise taken up to improve efficiency and cut costs, led to a temporary change in its inventory processes. Because of this, the physical verification of inventory at its wholly owned subsidiary, Ola Electric technologies Private Ltd, could take place.
Instead, the company validated its inventory using its enterprise resource planning (ERP) system—the central software platform that manages and records core business operations.
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Ola Electric said that the company has always had a practice of conducting physical verification that has already been mentioned in past audit reports. For FY25, the physical verification relating to its scooters and raw materials at stores for its subsidiary was “appropriately conducted and no discrepancies were noted.”
The Bhavish Aggarwal-led company said that based on these arguments, there has been no element of misplacements of inventory and no financial impact on the company.
The auditor’s report comes at a time when the company is facing intense competition in the electric two-wheeler segment and mounting losses weighing down on the company’s share price.
Ola Electric shares were down 2.3% at Rs 58.5 apiece on BSE as of 11:08 AM on Wednesday. Share price of the firm has slumped about 30.4% year-to-date.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director at Ola Electric.)
Edited by Megha Reddy
