Dear Shareholder
 
 This year marks the 15th anniversary of the formation of Novartis by
 the global merger of Ciba-Geigy and Sandoz. We are fortunate to have
 the benefit of a rich drug discovery heritage that spans one-and-a-half
 centuries during which period we have made a significant contribution
 to the health of people around the world.
 
 If I were to summarize two core attributes that define Novartis, these
 would be an unshakeable belief in investing in cutting-edge research to
 discover, develop, produce and market innovative healthcare solutions
 for unmet medical needs and a commitment to increase access to
 medicines while protecting its intellectual property through patents.
 
 Novartis leads in healthcare research and its innovative therapies
 straddle one of the widest ranges of disease profiles not just in
 humans but animals as well. Through our business model we are able to
 offer people prevention of illness through vaccines and both the latest
 patented products and low-priced generics together with
 over-the-counter medicines that help keep us well.
 
 Success on these fronts is possibly the strongest vindication of our
 firm belief that patents save lives by stimulating research which leads
 to innovative medicines. With effective patent laws companies such as
 Novartis continue to bring improvements and innovations to patients and
 societies. Access to medicines is a complex problem and must be
 addressed in a holistic way.
 
 During the 15 years that we have been operational as Novartis, from
 1996, India has changed immeasurably. From a country that was on the
 brink of an economic meltdown, just five years before the formation of
 Novartis, India has today emerged as a potential economic superpower.
 In its own way, Novartis has contributed to this transformation by
 continuing to innovate new therapies while improving access to
 medicines for the less privileged.
 
 In this annual report, we present some of our key achievements in these
 areas. Novartis has been at the forefront in the fight against leprosy
 which has seen this ancient scourge being eliminated in all but two
 states of India. Now, along with focusing at subnational level for
 elimination, we are also directing our efforts towards disability
 prevention and medical rehabilitation to improve the quality of life,
 restore equal opportunities and dignity of all leprosy affected
 persons. The innovative approach of disability care service delivery,
 training and reconstructive surgery pioneered by Novartis Comprehensive
 Leprosy Care Association is gradually being adopted by the government
 and other NGOs.
 
 Similarly, Novartis led or supported programmes have led to the
 successful treatment of thousands of TB patients. Our twin initiatives
 - Glivec International Patient Assistance Programme (GIPAP) and
 Novartis Oncology Access (NOA) - provide access to patients of two rare
 cancers, chronic myeloid leukemia (CML) and gastrointestinal stromal
 tumors (GIST). Another path-breaking social business initiative from
 the company - Arogya Parivar - has resulted in enhanced access to
 medicines for over 50 million people across ten states.
 
 As we look ahead to the next decade, the pharmaceutical industry in
 India is on the cusp of a great opportunity to make a place for itself
 in the global arena. There are several challenges, no doubt, but I am
 hopeful that as India takes its rightful place as an economic
 superpower among the comity of nations, the Indian government will
 recognize that all stakeholders - government, multilateral agencies,
 civil society and the pharmaceutical industry - need to work together
 to address India''s healthcare issues.
 
 Protection of intellectual property and regulatory data protection that
 serve to spur innovation are as important as addressing issues of
 health infrastructure, efficiencies in health systems, underfunding of
 healthcare as well as the logistics of distribution of medicines for
 India to count herself among the top nations in the wellness quotient.
 
 Your company looks to partner with all stakeholders in achieving the
 ultimate goal of wellness for all. It is our endeavour to rise to the
 occasion and see India take her rightful place on the global map. I am
 sure we can count on you for your continued engagement and support as
 we strive ahead.
 
 With best wishes
 
 Ranjit Shahani