MIRA INFORM REPORT

Report Date :

18.01.2011

IDENTIFICATION DETAILS

Name :	P.T. MERCK TBK
Formerly Known As :	P.T. MERCK INDONESIA Tbk.
Registered Office :	Jalan Raya T.B. Simatupang No. 8, Kampung Gedong, Pasar Rebo, Jakarta 13760
Country :	Indonesia
Financials (as on) :	30.09.2010
Date of Incorporation :	14.10.1970
Com. Reg. No.:	No. AHU-AH.01.10-12895
Legal Form :	Public Listed Company
Line of Business :	Pharmaceutical Product Manufacturing

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	US$ 8,500,000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30, 2010

Country Name	Previous Rating (01.04.2010)	Current Rating (30.06.2010)
Indonesia	b1	b1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Name of Company

P.T. MERCK Tbk

company Address

Head Office & Factory

Jalan Raya T.B. Simatupang No. 8 (Head office & Factory)

Jalan Raya T.B. Simatupang No. 57 (Marketing division)

Kampung Gedong, Pasar Rebo

Jakarta 13760

Indonesia

Phones - (62-21) 8413889 (hunting)

Fax - (62-21) 8400492

Email - contact@merck.co.id

Website - http://www.merck.co.id

Land Area - 15,000 sq. meters

Building Area - 6,500 sq. meters

Region - Industrial Zone

Status - Owned

Date of Establishment

a. 14 October 1970 as P.T. MERCK INDONESIA

b. 25 June 1992 as P.T. MERCK INDONESIA Tbk.

c. 04 June 2002 as P.T. MERCK Tbk.

Legal Form

P.T. Tbk. (Perseroan Terbatas Terbuka) or Public Listed Company

Company Registration

The Ministry of Laws and Human Rights

No. AHU-AH.01.10-12895

Dated 26 May 2010

Company Status

Foreign Investment Company (PMA)

Permit by the Government Department :

The Department of Finance

NPWP No. 01.002.148.3-054.000

The Capital Investment Coordinating Board

a. No. 14/II/PMA/1981

Dated 4 June 1981

b. No. 292/III/PMA/2000

Dated 7 March 2000

c. No. 12/II/PMA/2004

Dated 4 February 2004

Holding Companies :

a. MERCK HOLDING GmbH

b. EMEDIA EXPORT GmbH

c. RAINBOW FUND LP

d. HSBC Fund Services Clients A/C 500

Subsidiary Company :

P.T. MULTIREDJEKI KITA (Trading and Distribution of Pharmaceutical Products)

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital - Rp. 22,400,000,000.-

Issued Capital - Rp. 22,400,000,000.-

Paid up Capital - Rp. 22,400,000,000.-

Shareholders/Owners:

a. MERCK HOLDING GmbH - 73.99%

b. EMEDIA EXPORT GmbH - 12.66%

c. RAINBOW FUND LP - 3.58%

d. BP2S Singapore - 1.15%

e. Public - 8.62%

BUSINESS ACTIVITIES

Lines of Business :

a. Pharmaceutical Product Manufacturing

b. Trading and Distribution of Pharmaceutical Chemicals

Production Capacity :

a. Capsules - 270.0 million pieces p.a.

b. Tablets - 1,030.0 million pieces p.a.

c. Syrups - 3.2 million bottles p.a.

d. Injections - 5.0 million ampoules p.a.

e. Creams - 20.0 tons p.a.

f. Granular - 75.0 tons p.a.

g. Drops - 1.5 million bottles p.a

h. Ampuels - 3.5 million pcs. p.a

Total Investment :

Owned Capital - US$ 11.6 million

Started Operation :

1974

Brand Name :

a. SANGOBION

b. NEUROBION

c. BECOMBION

d. EVION

e. SEVEN SEAS etc.

Technical Assistance :

MERCK HOLDING GmbH. of Switzerland

Number of Employee :

848 persons

Marketing Area :

a. Domestic (Local) - 95%

b. Overseas (Export) - 5%

Main Customers :

a. P.T. MULTIREDJEKI KITA (as sole distributor)

b. P.T. TEMPO SCAN PACIFIC

c. P.T. SAWAH BESAR FARMA

d. P.T. BORWITA INDAH, etc.

Market Situation :

Very Competitive

Main Competitors :

a. P.T. KIMIA FARMA Tbk

b. P.T. KALBE FARMA Tbk

c. P.T. PHAROS INDONESIA Tbk

d. P.T. SANBE FARMA

e. P.T. PHAPROS Tbk

Business Trend :

Growing

BANKER, AUDITOR & LITIGATION

Bankers :

a. DEUTSCHE BANK

Jalan Imam Bonjol No. 80

Jakarta Pusat

Indonesia

b. P.T. Bank MANDIRI Tbk

Jalan Jend. Sudirman Kav. 36

Jakarta Selatan

Indonesia

Auditor :

Siddharta Siddharta & Widjaja (KPMG)

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales :

2008 – Rp. 637.1 billion

2009 – Rp. 751.4 billion

2010 – Rp. 584.6 billion (as per 30 September)

Net Profit :

2008 – Rp. 98.6 billion

2009 – Rp. 146.7 billion

2010 – Rp. 91.6 billion (as per 30 September)

Payment Manner :

Almost Promptly

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

President Director - Mr. Ralf Annasentz

Vice Pres. Director - Mr. Koesdianto Setyabudhi

Directors - a. Mr. Dra. Elly Megawati Asali

b. Mrs. Sumonta Achachotipong

c. Dr. Pierre Charbonnier

d. Mr. Bambang Nurcahyo

e. Mr. Nils Kristian Moen

Board of Commissioners :

President Commissioner - Mr. Klaus-Reinhard Bischoff

Commissioners - a. Mr. Parulian Simanjuntak

b. Dr. Ralph Antonius Zaat

Signatories :

President Director (Mr. Ralf Annasentz) or Vice President Director (Mr. Koesdianto Setyabudhi) or one of the Directors (Mrs. Elly Megawati Asali, Mrs. Sumonta Achachotipong, Dr. Pierre Charbonnier, Mr. Bambang Nurcahyo or Mr. Nils Kristian Moen) which must be approved by the Board of Commissioners.

CAPABILITIES

Management Capability :

Good

Business Morality :

Good

Credit Risk :

Below Average

Credit Recommendation :

Credit should be proceeded normally

Proposed Credit Limit :

Moderate amount

Maximum Limit of Credit :

US$ 8,500,000 on the 90 days of payments

OVERALL PERFORMANCE

Originally named P.T. MERCK INDONESIA, it was established in October 1970 with an authorized capital of US$ 2,459,016 entirely was issued and paid up. The previous founding shareholder is E MERCK DARMSTADT of Germany. The company's notarial act had frequently been amended. In 1981 the authorized capital was raised and converted to Rp. 5,600,000,000 entirely issued and paid up. By the same time E MERCK DARMSTADT pulled out as shareholder and it was replaced by MERCK AG ZUG of Switzerland. Concurrently some 30% of its shares had sold to public through the Jakarta Stock Exchange. In 1986 MERCK AG ZUG pulled out and replaced by MERCK ASTRA HOLDING AG of Switzerland. In December 1992 the company was renamed P.T. MERCK INDONESIA Tbk.

In March 1999 the authorized capital was raised again to Rp. 22,400,000,000 fully issued and paid up. By the same time P.T. DANAREKSA of Indonesia and PARMIX Ltd., of the USA joined in as new shareholders. In June 2002 the company was renamed P.T. MERCK Tbk. The latest in May 2010 the board of director and the board of commissioners of the company had been changed (see profile of this report). With this time the composition of its shareholders has been changed to become MERCK HOLDING GmbH (73.99%) and the rest are controlled by EMEDIA EXPORT GmbH (12.66%), RAINBOW FUND LP (3.58%), BP2S Singapore (1.15%) and the Publics (8.62%). The latest revision of notary act was made by Mrs. Linda Herawati, SH., was approved by the Ministry of Law and Human Right in its Decision Letter No. AHU-AH.01.10-12895, dated May 26, 2010.

P.T. MERCK Tbk., is a foreign capital investment (PMA) company dealing with pharmaceutical and chemical industry. It has been operating since 1974 and its plant is located at Jalan Raya T.B. Simatupang No. 8 and No. 57, Kampung Gedong, Pasar Rebo, East Jakarta. Its plant, office and warehouse are standing on 1.5 hectares land. Its office comprises of 5-storey building which is also used for its laboratory facilities.

Meanwhile, its warehouse building is located just around several meters from its office building. It has produced more than 40 kinds of pharmaceutical products. The products are sold with various brands, such as, Sangobion, Evion, Becombion, Neurobion, Seven Seas, etc. Some 5% of the product is exported to Malaysia, Singapore, Vietnam and the Philippines. It also produces chemical basic materials for medicines and foods like Thiamin sulfide, Pigment, Reagensia, Liquid Crystal, etc. These products are exported to Austria, Thailand and Germany, while for local market is handled by P.T. MULTIREDJEKI KITA. In April 2008, the company launched its new products in the form of infant anemia medicines under SANGOBION DROPS.

Apart from that P.T. MERCK Tbk is also the sole agent for MERCK, DR P LOHMANN, NEPERA, LABOCHIM, AMELCO and E FLACHSMANN for various pharmaceutical basic materials like food and cosmetic, vitamins, mineral for pharmaceutical, nicotinamide, silica gel and plan extract. The above products are marketed by P.T. MERCK Tbk directly through its chemical division to various pharmaceutical companies in Indonesia among them are P.T. TEMPO SCAN PACIFIC, P.T. SAWAH BESAR FARMA, P.T. BORWITA INDAH, FE ZUELLIG of Malaysia, FE ZUELLIG of Singapore and others. Generally, the market shares of products of P.T. MERK Tbk in pharmaceutical product sectors are not wide. However, the market shares of products of P.T. MERCK Tbk in health care products such as anemia medicines are the largest namely approximately 20%. The market shares are gained by its product brands of Sangobion, Evion and Nerobion. The operation has been running and growing well within the last five years.

Generally, demand for laboratory and medical equipment and various pharmaceutical products had been growing in the last five years up to the end 2007 as pictured in sales value of national pharmaceutical products, import value and export value issued by the Food and Drug Controlling Board (BPOM). The national pharmaceutical sales, export and import value of products are estimated to be rising by 6% to 8% in the next year. The competition is very tight on account many similar companies operating in the country. The business position of P.T. MERCK Tbk is a sufficiently fairly good because the company has captive market namely the state-owned hospital and private hospital in the country. According the BPOM that national pharmaceutical sales as shown are as the following table.

National Market Trend of Drugs, 2001-2008* (Billion Rupiah)

Year	Total Market	Ethical Drugs	Generic Drugs
2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010*	12.850 15.483 17.458 20.872 23.629 23.173 25.600 28.000 30.000 34.000	7.891 9.618 10.829 12.706 14.675 13.834 13.959 14.215 14.530 15.127	1.547 1.694 1.819 2.136 2.529 2.390 2.295 3,213 3.420 3.610

Source: Food and Drug Controlling Board (BPOM)

*) Estimated

According to financial statement which audited by Sidharta & Sidharta (KPMG), Public Accountant that sales turnover of P.T. MERCK Tbk in 2008 amounted to Rp. 637.1 billion with a net profit of Rp. 98.6 billion rose to Rp. 751.4 billion with a net profit of Rp. 146.7 billion in 2009.

As per 30 September 2010 the sales turnover has reached at Rp. 584.6 billion with a net profit of Rp. 91.6 billion and projected to go on rising by at least 5% in 2011. We observe that P.T. MERCK Tbk is supported by foreign partners with has financially strong and sound behind it. So far, we did not heard that the company having been black listed by the Central Bank (Bank Indonesia). The company usually pays its debts punctually to suppliers. The condense financial statement is shown.

(In million Rp)

Descriptions	30 September 2010	31 December
		2009	2008
A. ASSETS
a. Current Assets	398,187	343,148	298,668
b. Non Current Assets	92,490	90,822	76,396
c. Other Assets	361	1,277	5,373
TOTAL ASSETS = TOTAL LIABILITIES & EQUITY	490,677	433,971	375,064
B. LIABILITIES &STOCKHOLDERS EQUITY
a. Current Liabilities	142,225	68,109	38,420
b. Non Current Liabilities	12,645	11,678	9,320
c. Stockholders Equity : - Paid Up Capital - Additional Paid Up Capital Total Stock holders Equity	22,400 17,561 335,808	22,400 17,561 354,184	22,400 12,561 327,323
C. INCOME STATEMENT
a. Sales Net	584,610	751,404	637,134
b. Operating Profit	119,884	201,452	146,153
c. Net profit	91,585	146,700	98,620

Notes: 31 December 2008, 2009 Audited by Sidharta & Sidharta (KPMG)

*) As per 30 September 2010 un audited

The management of P.T. MERCK Tbk is headed by Mr. Ralf Annasentz (46), a well-experienced professional manager in pharmaceutical products industry and marketing. He has diploma in Economics, Frankfurt, Germany. He joined Merck, Darmstadt in 1987. He has held several positions in Merck KGaA, Darmstadt, Germany, Merck (Pty) Ltd., Johannesburg, South Africa and PT. Merck Tbk., Indonesia. It is also supported and handled by a number of professional managers with wide experience and expertise in the business, having maintained a wide business relation among private businessmen at home and abroad. So far, we did not hear that the management of the company being filed to the district court for detrimental cases or involved in any business malpractices. The company’s litigation record is clean and it has not registered with the black list of Bank of Indonesia. P.T. MERCK Tbk is sufficiently fairly good for business transaction.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.59
UK Pound	1	Rs.72.31
Euro	1	Rs.60.73

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.