5. We have determined the matter described below to be the key audit matter to be communicated in our report.
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Key audit matters
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How our audit addressed the key audit matter
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Provision for non-saleable return
(Refer Note 2.3(l) and 2.3(m) to the accompanying financial
statements for material accounting policy information on
provision for sales return and Note 17 and 22 for related
disclosure)
The revenue of the Company consists primarily of sale of
products through various distributions channel who further
sells products in the market. Due to the nature of its business,
the Company gives right of return to its customers in respect
of goods expiring while being in supply chain before reaching
end consumers. The amounts pertaining to such sales return
are estimated at the time of sale and deducted from revenue
and recorded as provisions for sales returns.
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Our audit procedures relating to provision for non-saleable
returns included but were not limited to the following
procedures:
• Obtained an understanding of management’s process
and evaluated the design and tested the operating
effectiveness of the key controls in relation to provision
for non-saleable returns;
• Assessed the appropriateness of the Company’s revenue
recognition accounting policy including those related to
sales return in accordance with applicable accounting
standards;
• Obtained management’s calculations for provision for
sales return, recalculated the amounts, and evaluated
the reasonableness of assumptions used with reference
to historical trends of sales returns, level of inventory
in distribution channel, shelf life of the products, price
change in/new launch of competitive products and
other known factors, based on our understanding of the
business, past practice, industry trends and forecasts;
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Key audit matters
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How our audit addressed the key audit matter
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These estimates are based on analysis of historical trends of
sales return and shelf life of the products along with other
known factors that may significantly impact future sales
returns. These estimates are complex and requires significant
judgement and estimation by the management for establishing
an appropriate accrual. The above complexity leads to a risk
of revenue being misstated due to inaccurate estimation of
such sales return, and hence, it requires significant auditor
attention.
The management has accounted for provision for sales returns
amounting to ' 206.76 Crores as at March 31, 2025 (including
reimbursable sales return amounting to ' 65.26 Crores).
Considering the complexity, significant management
estimates and judgments involved, and the significant auditor
attention required to test such management’s judgment and
estimates, we have identified this as a key audit matter for the
current year.
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• Tested unusual non-standard journal entries based
on certain criteria’s which impacts provision for sales
return recognized during the year;
• Evaluated management’s estimates in determining the
expected sales return by comparing historical accrued
provisions to the actual sales returns and assessed
whether the methodology followed is consistent with
previous year;
• Performed substantive testing on selected samples of
credit notes issued to the customers by testing relevant
approvals and underlying supporting documents;
• T ested the workings in respect of classification of current
and non-current provisions for sales return prepared by
the management including the underlying assumptions;
and
• Assessed the appropriateness and adequacy of
disclosures made in financial statements in accordance
with applicable accounting standards.
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1. We have audited the accompanying financial statements
of Abbott India Limited (‘the Company’), which comprise
the Balance Sheet as at March 31, 2025 the Statement
of Profit and Loss (including Other Comprehensive
Income), the Statement of Cash Flow and the Statement
of Changes in Equity for the year then ended, and notes to
the financial statements, including material accounting
policy information and other explanatory information.
2. In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
financial statements give the information required by
the Companies Act, 2013 (‘the Act’) in the manner so
required and give a true and fair view in conformity with
the Indian Accounting Standards (‘Ind AS’) specified
under Section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015 and other
accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2025 and
its Profit (including Other Comprehensive Income), its
Cash Flows and the Changes in Equity for the year ended
on that date.
BASIS FOR OPINION
3. We conducted our audit in accordance with the
Standards on Auditing specified under Section 143(10) of
the Act. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of
our report. We are independent of the Company in
accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India (‘ICAI’)
together with the ethical requirements that are
relevant to our audit of the financial statements under
the provisions of the Act and the rules thereunder,
and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the Code
of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis
for our opinion.
KEY AUDIT MATTER
4. Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the financial statements of the current period.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITOR’S REPORT THEREON
6. The Company’s Board of Directors are responsible for
the other information. The other information comprises
the information included in the Annual Report, but does
not include the financial statements and our auditor’s
report thereon. The Annual Report is expected to be
made available to us after the date of this auditor’s
report.
Our opinion on the financial statements does not cover
the other information and we will not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information
identified above when it becomes available and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to
be materially misstated.
When we read the Annual Report, if we conclude that
there is a material misstatement therein, we are required
to communicate the matter to those charged with
governance.
RESPONSIBILITIES OF MANAGEMENT AND
THOSE CHARGED WITH GOVERNANCE FOR THE
FINANCIAL STATEMENTS
7. The accompanying financial statements have been
approved by the Company’s Board of Directors. The
Company’s Board of Directors are responsible for
the matters stated in Section 134(5) of the Act with
respect to the preparation and presentation of these
financial statements that give a true and fair view of
the financial position, financial performance including
Other Comprehensive Income, Changes in Equity
and Cash Flows of the Company in accordance with
the Ind AS specified under Section 133 of the Act and
other accounting principles generally accepted in
India. This responsibility also includes maintenance
of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of
the Company and for preventing and detecting frauds
and other irregularities; selection and application of
appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal
financial controls, that were operating effectively
for ensuring the accuracy and completeness of the
on whether the Company has adequate internal
financial controls with reference to financial
statements in place and the operating effectiveness
of such controls;
• Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by management;
• Conclude on the appropriateness of Board of
Directors’ use of the going concern basis of
accounting and, based on the audit evidence
obtained, whether a material uncertainty exists
related to events or conditions that may cast
significant doubt on the Company’s ability to
continue as a going concern. If we conclude that
a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report.
However, future events or conditions may cause the
Company to cease to continue as a going concern;
and
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
12. We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
13. We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and to
communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
14. From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the financial
statements of the current period and are therefore the
key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter
accounting records, relevant to the preparation and
presentation of the financial statements that give a true
and fair view and are free from material misstatement,
whether due to fraud or error.
8. In preparing the financial statements, the Board of
Directors is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using
the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to
do so.
9. The Board of Directors is also responsible for overseeing
the Company’s financial reporting process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE FINANCIAL STATEMENTS
10. Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users
taken on the basis of these financial statements.
11. As part of an audit in accordance with Standards on
Auditing, specified under Section 143(10) of the Act
we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from
fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control;
• Obtain an understanding of internal control
relevant to the audit in order to design
audit procedures that are appropriate in the
circumstances. Under Section 143(3)(i) of the Act
we are also responsible for expressing our opinion
should not be communicated in our report because the
adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such
communication.
OTHER MATTER
15. The financial statements of the Company for the year
ended March 31, 2024 were audited by the predecessor
auditor, S R B C & CO LLP, who have expressed an
unmodified opinion on those financial statements vide
their audit report dated May 09, 2024.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
16. As required by Section 197(16) of the Act, based on our
audit, we rep ort that the C ompany has paid remuneration
to its directors during the year in accordance with the
provisions of and limits laid down under Section 197 read
with Schedule V to the Act.
17. As required by the Companies (Auditor’s Report) Order,
2020 (‘the Order’) issued by the Central Government of
India in terms of Section 143(11) of the Act we give in
the Annexure A a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
18. Further to our comments in Annexure A, as required by
Section 143(3) of the Act based on our audit, we report, to
the extent applicable, that:
a) We have sought and obtained all the information
and explanations which to the best of our knowledge
and belief were necessary for the purpose of our
audit of the accompanying financial statements;
b) Except for the matters stated in paragraph
18(h)(vi) below on reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014
(as amended), in our opinion, proper books of
account as required by law have been kept by the
Company so far as it appears from our examination
of those books. Further, the back-up of the books
of accounts and other books and papers of the
Company maintained in electronic mode has
been maintained on servers physically located in
India, on a daily basis except for an application
used for processing expenses of field employees
where backup taken on daily basis were kept on a
server physically located outside India as stated in
Note 46(i) to the financial statements;
c) The financial statements dealt with by this report
are in agreement with the books of account;
d) In our opinion, the aforesaid financial statements
comply with Ind AS specified under Section 133 of
the Act;
e) On the basis of the written representations received
from the directors and taken on record by the Board
of Directors, none of the directors is disqualified
as on March 31, 2025 from being appointed as a
director in terms of Section 164(2) of the Act;
f) The modification relating to the maintenance of
accounts and other matters connected therewith
are as stated in paragraph 18(b) above on
reporting under Section 143(3)(b) of the Act and
paragraph 18(h)(vi) below on reporting under
Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014 (as amended);
g) With respect to the adequacy of the internal
financial controls with reference to financial
statements of the Company as on March 31, 2025
and the operating effectiveness of such controls,
refer to our separate report in Annexure B wherein
we have expressed an unmodified opinion; and
h) With respect to the other matters to be included
in the Auditor’s Report in accordance with rule 11
of the Companies (Audit and Auditors) Rules, 2014
(as amended), in our opinion and to the best of our
information and according to the explanations
given to us:
i. The Company, as detailed in Note 37 to the
financial statements, has disclosed the impact
of pending litigations on its financial position
as at March 31, 2025;
ii. The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable
losses as at March 31, 2025;
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund
by the Company during the year ended
March 31, 2025;
iv. a. The management has represented that, to the
best of its knowledge and belief, as disclosed
in Note 45(iii) to the financial statements,
no funds have been advanced or loaned or
invested (either from borrowed funds or
securities premium or any other sources or
kind of funds) by the Company to or in any
person(s) or entity(ies), including foreign
entities (‘the intermediaries’), with the
understanding, whether recorded in writing
or otherwise, that the intermediary shall,
whether, directly or indirectly lend or invest
in other persons or entities identified in any
manner whatsoever by or on behalf of the
Company (‘the Ultimate Beneficiaries’) or
provide any guarantee, security or the like on
behalf the Ultimate Beneficiaries;
b. The management has represented that, to the
best of its knowledge and belief, as disclosed
in Note 45(iv) to the financial statements, no
funds have been received by the Company
from any person(s) or entity(ies), including
foreign entities (‘the Funding Parties’), with
the understanding, whether recorded in
writing or otherwise, that the Company shall,
whether directly or indirectly, lend or invest
in other persons or entities identified in any
manner whatsoever by or on behalf of the
Funding Party (‘Ultimate Beneficiaries’) or
provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and
c. Based on such audit procedures performed
as considered reasonable and appropriate
in the circumstances, nothing has come to
our notice that has caused us to believe that
the management representations under sub¬
clauses (a) and (b) above contain any material
misstatement.
v. The final dividend paid by the Company during
the year ended March 31, 2025 in respect of
such dividend declared for the previous year
is in accordance with Section 123 of the Act to
the extent it applies to payment of dividend.
As stated in Note 15 to the accompanying
financial statements, the Board of Directors of
the Company have proposed final dividend for
the year ended March 31, 2025 which is subject
to the approval of the members at the ensuing
Annual General Meeting. The dividend
declared is in accordance with Section 123 of
the Act to the extent it applies to declaration
of dividend.
vi. As stated in Note 46(ii) to the financial
statements and based on our examination
which included test checks, except for instance
mentioned below, the Company, in respect
of financial year commencing on or after
April 1, 2024 has used an accounting software
for maintaining its books of account which
have a feature of recording audit trail
(edit log) facility and the same have been
operated throughout the year for all relevant
transactions recorded in the software.
Further, during the course of our audit we
did not come across any instance of audit trail
feature being tampered with other than the
consequential impact of the exception given
below. Furthermore, except for instance
mentioned above, the audit trail has been
preserved by the Company as per the statutory
requirements for record retention.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm’s Registration No.: 001076N/N500013
Ashlsh Gupta
Partner
Membership No.: 504662
UDIN: 25504662BMOOEW3189
Place : Mumbai
Date : May 15, 2025
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Nature of exception
noted
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Details of Exception
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Instances of
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The audit trail
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accounting software
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feature was not
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for maintaining
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enabled at the
|
|
books of account for
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database level for
|
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which the feature
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accounting software
|
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of recording audit
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to log any direct data
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trail (edit log) facility
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changes, used for
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was not operated
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maintenance of all
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throughout the
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accounting records
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year for all relevant
transactions
recorded in the
software
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by the Company.
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