The Hindu Business Line : Novartis Q4 net profit grows 19.4%

Mumbai May 11 Novartis India Ltd has posted a 19.4-per-cent growth in its net profit for the fourth quarter (Q4) or three months ended March 31, 2007, on the back of a combination of factors including competitive prices, volumes and products.

The company posted a net profit of Rs 23.87 crore for the quarter ended March 31, 2007, as compared to Rs 19.99 crore for the quarter ended March 31, 2006. Total income is Rs 144.64 crore for the quarter ended March 31, 2007 (Rs 121.52 crore).

The company posted a net profit of Rs 88.55 crore for the year ended March 31, 2007, (Rs 107.89 crore). Total income is Rs 592.32 crore for the year ended March 31, 2007, (Rs 591.93 crore).

The previous year had exceptional profits of Rs 17 crore from sale of Goregaon land and a reversal of an old excise duty provision amounting to Rs 8 crore based on a decision by the Bombay High Court, a note from the company said.

During the period under review, Novartis commenced making provision for sales returns based on a detailed evaluation by the business segments, which adversely affected sales by Rs 6 crore.

Accounting norms

The company also decided to implement Accounting Standard 15 on employee benefits resulting in an additional charge of Rs 1 crore to profit and loss accounts, after adjusting a sum of Rs 1 crore to the General Reserve as on April 1, 2006, the note added.

Further, the company said, it had changed the method of providing depreciation on fixed assets from Written Down Value (WDV) method to Straight Line Method (SLM) with effect from April 1, 2005. On the basis of an internal evaluation, the company had revised the estimated useful life of certain fixed assets with effect from April 1, 2005. Such revision in useful lives and change in the method resulted in a net write back of depreciation in the previous year and hence, the depreciation charge for the previous year is not comparable with that for the current year, the company said.

Dividend

The company's board of directors also recommended that the interim dividend of 200 per cent, at Rs 10 per equity share of Rs 5 each, will be the final dividend.

Novartis' shares were marginally up at Rs 323.10 on the Bombay Stock Exchange.