AUDIT REPORT GRUOP 5

A.   An overview of the company

        Merck has been active in Indonesia since 1970, when the first representation was opened.Merck aims for best solutions for our patients and customers in all countries we operate. In Indonesia we do business in pharmaceuticals, life science solutions and chemicals. For information on products and services, please contact us or visit the respective division website.

          Founded in 1970, PT Merck Tbk went public in 1981, and was one of the first companies registered on the Indonesia Stock Exchange. The majority of the shares are held by the Merck Group, headquartered in Germany the oldest pharmaceutical and chemical companies in the world. For further information on our headquarter, you can visit www.merckgroup.com

          PT Merck Tbk. is a leading multinational company in the pharmaceutical and chemical business in Indonesia.In pharmaceutical, we manufacture and markets well-known pharmaceutical brands such as Neurobion®, Sangobion® and Glucophage® in a cGMP certified facility.In Chemical business, Merck markets a whole range of laboratory reagents, pigments and other specialty chemicals.

          Our comprehensive distribution network ensures product availability throughout the archipelago. Please contact us to help locate the nearest distributor to you.

B.     AUDIT

a.       DEFINITION OF  AUDIT

Auditing is defined as a systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose. In any auditing the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis formulates his judgment which is communicated through his audit report.

b.      OPINIONS OF ADUIT

An audit opinion is expressed on audited statements. It is required that an auditor state in the opinion that generally accepted accounting principles have been followed that they have been applied on a basis consistent with that used the preceding year and Types of Audit Opinions is

1.   Unqualified opinion — The unqualified opinion has no reservations concerning the financial statements. This is also known as a clean opinion meaning that the financial statements appear to be presented fairly.

2.    Unqualified Opinion With Explanatory Language

3.   Qualified opinion — This means that the auditor has taken exception to certain current-period accounting applications or is unable to establish the potential outcome of a material uncertainty.

4.   Disclaimer opinion — This is a special type of audit report that should be issued when the auditor permits his or her name to be associated with financial statements that were not examined in accordance with generally accepted auditing standards.

5.    Adverse opinion — This is a type of audit opinion which states that the financial statements do not fairly present the financial position, results of operations, and changes in financial position, in conformity with generally accepted accounting principles.

C.    AUDIT PROCEDURE

1.      Recording or recording accounting systems. The first step in the audit procedure is to establish and prove the systems used to record or transaction record.

2.      Review and preliminary evaluation.

3.      Testing compliance (compliance tests). Compliance testing, such as its name, is designed to ensure that internal controls are used or relied upon by auditors in practice can run well. The nature of this test depends on the nature of the control, but essentially this testing includes checking the transaction as proof of compliance.

4.      Match the financial statements as the principal basis of recording transactions. At the end of the year or period, it is important to check that the accounts contained in the financial statements in accordance with the basis of recording transactions.

5.      Substantive testing. Substantive tests designed to reinforce or justify the underlying transactions and balances financial statements.

6.      Thorough analysis.

7.      Detailed testing.

8.      Ensure compliance organization account code.

9.      Ensure compliance with accounting standards.

10.  Testing of truth and honesty.

11.  Analytical testing.

12.  Audit events after the balance sheet date.

13.  Test management reports.

14.  Representation letter.

15.  Partner or auditors review the audit work that has been done.

D.      AUDIT RESULT

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