1.  We have audited the attached Balance Sheet of Novartis India
 Limited (the ''company''), as at 31st March, 2011, and the related Profit
 and Loss Account and Cash Flow Statement for the year ended on that
 date annexed thereto, which we have signed under reference to this
 report. These financial statements are the responsibility of the
 company''s management. Our responsibility is to express an opinion on
 these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India.  Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
 (together the ''Order'') issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of ''The Companies Act, 1956''
 of India (the ''Act'') and on the basis of such checks of the books and
 records of the company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of Section 211 of the Act;
 
 (e) On the basis of written representations received from the
 directors, as on 31st March, 2011 and taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March, 2011
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner the information required by the Act and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 company as at 31st March, 2011; 
 
 (ii) in the case of the Profit and Loss Account, of the profit for the 
 year ended on that date; and 
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the 
 year ended on that date.
 
 
 
 Annexure to Auditors'' Report
 
 [Referred to in paragraph 3 of the Auditors'' Repcrt of even date to the
 members of Novartis India Limited on the financial statements for the
 year ended 31st March, 2011]
 
 1.  (a) The company is maintaining proper records showing full
 particulars including
 
 quantitative details and situation of fixed) assets.
 
 (b) The fixed assets are physically verified by the management
 according to a phased programme designed to cover all the items over a
 period of three years which), in our opinion, is reasonable having
 regard to the size of the company and the nature of its assets.
 Pursuant to the programme, a portion of the fixed assets has been
 physically verified by the management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the company during the year.
 
 2.  (a) The inventory has beer physically verified by the management
 during the year. In our
 
 opinion, the frequency of verification is reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the company is maintaining proper records of inventory. In our
 opinion, the discrepancies noticed on physical verification of
 Inventory as compared to book records were not material.
 
 3.  (a) The company has not granted any loans, secured or unsecured, to
 companies, firms
 
 or other parties covered in the register maintained under Section 301
 of the Act.  Accordingly, clauses (iii)(b) to (iii)(d) of paragraph 4
 of the Order are not applicable to the company for the current year.
 
 (b) The company has not teken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.  Accordingly, clauses (iii)(f) and
 (iii)(g) of paragraph 4 of the Order are not applicable to the company
 for the current year.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the company and according to the information and
 explanations given to us, we have neither come across nor have we been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements 
 referred to in Section 301 of the Act have been entered in the register 
 required to be maintained under that Section.
 
 (b) In our opinion and according to the information and explanations
 given to us, in respect of the transactions made in pursuance of
 contracts or arrangements entered in the register maintained under
 Section 301 of the Act and exceeding the value of Rupees Five Lakhs in
 respect of any party during the year, prevailing market prices at the
 relevant time are not available as these transactions are of a special,
 nature.
 
 6.  In our opinion and according to the information and explanations
 given to us, the company has complied with the provisions of Sections
 5>8A, 58AA or any other relevant provisions of the Act and the
 Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public. According to the information and
 explanations given to us, no order has been passed by the Company Law 
 Board or National Company Law Tribunal or Reserve Bank of India or 
 any Court or any other Tribunal on the company in respect of the 
 aforesaid deposits.
 
 7.  In our opinion, the company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 company in respect of the products where, pursuant to the Rules made by
 the Central Government of India, the maintenance of cost records has
 been prescribed under clause (d) of sub-section (1) of Section 209 of
 the Act and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained. We have not,
 however, made a detailed examination of the records with a view to
 determine whether they are accurate or complete.
 
 9.  (a) According to the information and explanations given to us and
 the records of the company examined by us, in our opinion, the company 
 is generally regular in depositing undisputed statutory dues including 
 provident fund, investor education and protection fund, employees'' state
 insurance, income-tax, sales tax, wealth tax, service tax, customs
 duty, excise duty, cess and other material statutory dues as applicable
 with the appropriate authorities in India.
 
 (b) According to the information and explanations given to us and the
 records of the company examined by us, there are no dues of wealth-tax,
 service tax and cess which have not been deposited on account of any
 dispute. The particulars of dues of income-tax, sales tax, customs duty
 and excise duty as at 31st March, 2011 which have not been deposited on
 account of a dispute, are as follows -
 
 Name of the   Nature of dues  Amount*   Period to which
                                         the              Forum where the
 statute                       Rs.''OOO   amount relates   dispute is 
                                                          pending
 
 The Income-
 tax             Income-tax     23,128   Assessment Years Appellate
 Act, 1961                               2006-2007 and    Authority - up
                                                          to
                                         2007-2008        Commissioner''s
                                                          level
 
 The Central 
 Sales           Sales tax 
                including      223,986   2000-2001 to     Appellate
   
 Tax Act, 1956 
 and            interest and 
               penalty,                  2008-2009 and    Authority - 
                                                           up to
 Local Sales 
 Tax           as applicable             2010-2011        Commissioner''s
 Acts                                                     level
 
                               9,893     1993-1994,       Tribunal
                                         2000-2001 to 
                                         2002-2003 and 
                                         2004-2005
 
                                 245     1997-1998        The High 
                                                          Court of Kerala
 
 The Customs 
 Act,         Customs Duty       393     2002-2003        Appellate
 1962                                                     Authority - 
                                                          up to
                                                          Commissioner''s
                                                          level
 
 The Central 
 Excise       Excise duty 
              including           551   1990 and June     Appellate
 Act,1944     penalty, as 
              applicable                1993 to October   Authority - 
                                                          up to
 
                                        1993              Commissioner''s
                                                          level
 
                                 4,479  January 1987 to   Customs,Excise
                                        February 1993 and & Service Tax
                                        August 1993 to    Appellate 
                                                          Tribunal 
                                        December 1996
 
 * Net of amounts paid including under piotest.
 
 10.  The company has no accumulated losses as at 31st March, 2011 and
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the records of the company examined by us and the
 information and explanations given to us, the company has not defaultec
 in repayment of dues to any financial institution or bank or debenture
 holders.
 
 12.  The company has not granted any loans and advances on Ihe basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/ societies are not applicable to the
 company.
 
 14.  The company is not a dealer or trader in shares, securities,
 debentures and other investments.
 
 15.  According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others from
 banks or financial institutions during the year.
 
 16.  In our opinion, the company has not obtained any term loans that
 were not applied for the purposes for which these were raised.
 
 17.  On the basis of an overall examination of the Balance Sheet of the
 company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on short-term basis
 which have been used for long-term investment.
 
 18.  The company has not made any preferential allotment af shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The company has not issued any debentures.
 
 20.  The company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the company, carried out in accordance with the generally accepted
 auditing prac\ices in India and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                  For Price Waterhouse
 
                                  Firm Registration No. 007568S
                                  Chartered Accountants
 
                                  Himanshu Goradia 
                                  Partner 
 Mumbai, 24th May 2011            Membership No. 45668