The Board of Novartis India Limited has announced financial results for the nine-months ended December 31, 2003. Sales for the period was Rs.402.6 crore representing a growth of 1.9per cent over the previous comparable period. Profit before tax was Rs.90.6 crore (prior period Rs.84.7 crore). After providing for the normal tax liability of Rs.21.2 crore and taking into account deferred tax credit of Rs.23.5 crore (explained in paragraph four below), the profit after tax works out to Rs.92.9 crore (prior period Rs.60.7 crore).

The core pharma business with sales of Rs.247.3 crore registered growth of 2.9per cent. The generics business continued to underperform and sales at Rs.83 crore showed a decline of 6per cent. The OTC business grew by 14.7per cent registering sales of Rs.40 crore. Animal health business recorded sales of Rs.32.3 crore with growth of 2.8per cent.

Better price realization and improved product mix in the pharma business in quarter three contributed to improved profitability. This gain was offset primarily by continued price pressures faced by the generics business and higher promotion expenses.

The rifampicin market has been facing severe operational challenges for some time mainly due to surplus capacities, cheaper imports and falling domestic prices. The company does not expect this scenario to change significantly. Consequently the company decided to implement Accounting Standard – Impairment of assets (AS 28) for its Mahad facility. The impairment loss of Rs.65.5 crore has been adjusted against opening General Reserve and the deferred tax credit of Rs.23.5 crore has been credited to the profit and loss account.

During the period under review the company became the first pharmaceutical company in India to receive Exclusive Marketing Rights for Glivec used in the treatment of chronic myeloid leukaemia and gastrointestinal stromal tumours.