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Report of the month

September 2011

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Adaro Energy Jakarta, Indonesia Report Facts Company name: PT Adaro Energy Tbk Fiscal year end: December 31, 2010 Report title: Creating Sustainable Value from Indonesian Coal President Director: Garibaldi Thohir Number of books: 1 Report length: 228 pages Auditors: Tamudiredja, Wibisana & Rekan Website: http://www.adaro.com/investor_relations Design and production: N/A E-mail contact: investor.relations@ptadaro.com	Report Rating 3.5/5 (Rating scale below) Profile-Mission Adaro is the world’s leading supplier of the cleanest coal energy in the world... Suitable for recycling, our special coal has ultra-low sulphur, ash and nitrogen content. The company is partly controlled by an Indonesian government investment vehicle and partly listed since July 2008. (Source: Annual Report) (Italics are own company’s words) Key Figures Net sales: Rupiah 24,689,333 million EBITDA: Rupiah 8,033,953 million Net income: Rupiah 2,207,313 million Total assets: Rupiah 40,600,921 million Earnings per share: Rupiah 69 Operating margin: 27.4% Return on assets: 5.4% Return on equity: 11.9% (2010 figures sourced from the annual report) Peers and Rivals Bukit Asam Kideco Peabody Energy BHP Billiton Anglo American Xstrata Bumi ...

Triple A > Strongly eye-catching and really inviting report cover, derived from Harvard Business Review style. This style and approach is sustained in most of the chapters of the report (with bold headlines, sound bites...). > 16 Reasons to Invest in Adaro are more than just a button on the cover; they are extensively developed inside –from Best EBITDA Margin (Selected Page) to large reserves of coal, from organic growth to Skilled and Professional Management. All make up a more convincing investment proposition than the one seen in hundreds of annuals. > Financial Highlights span over five years, are displayed in an original format, and are ratio-intensive. > Business model and past and future growth drivers made very clear.

Double A > Board of Directors’ letter gives a good blend of strategic views and a year overview. There is also a special Message by the President Director set in an upbeat tone. > Good review of operations and market environment. > Share information (including details about IPO proceeds) and wrap-up of investor relations activities.

Simple A > 7-point comparison of practices vs. Principles and Recommendations in a decent governance section, especially for a largely government-owned group. > Some charts, maps, sketches add value or animate the pages. > Various community initiatives highlighted.

B Sides > No clear financial goals. > Risk factors and management not up to what should be reported, especially in the industry context. >Lack of transparency on boards’ remuneration. > Financial statements and notes are difficult to read. > No real targets set on responsibility matters, not least regarding the envitonment.

How does the company report in key areas? What are the main report pluses and minuses? The Report Scan gives an overview of strengths and weaknesses, and scores each item. Contact e.com@reportwatch.net

Selected Pages (Adaro Energy Annual Report 2010 p 6 & p 10)	Rating Scale 5 First-Rate 4.5 Excellent 4 Very good 3.5 Sound 3 Average 2.5 Uneven 2 Common 1.5 Substandard 1 Poor 0.5 Uncompetitive The rating is based on ReportWatch internal desk research and does not take into account the independent Rating Panel’s judgment.