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Report of the month

April 2008

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BASF Ludwigshafen, Germany "I am proud of the BASF team that has again put all its energies into continuing the success story of BASF – The Chemical Company." Dr. Jürgen Hambrecht (Excerpt from the Chairman's Letter) Report Facts Company name: BASF SE Fiscal year end: December 31, 2007 Report title: Shaping the future Chairman of the Board: Dr. Jürgen Hambrecht Number of books: 1 Report length: 220 pages Auditors: KPMG Deutsche Treuhand Design: Strichpunkt E-mail: medien-service@basf.com	Report Rating 4/5 (Rating scale below) Profile-Mission (Excerpts, as from the report) BASF is the world's leading chemical company. We are starting 2008 with new structures. We have reorganized our segments These are Chemicals, Plastics, Performance Products, Functional & Agricultural Solutions,Oil & Gas. (ifc, p 1, p 12) (Italics are own company's words) Key Figures Sales: € 57,951 million EBIT: € 7,316 million Net profit: € 4,065 million Earnings per share: € 8.32 Dividend per share: € 3.90 Return on equity: 22.4% Return on assets: 16.4% Equity ratio: 42.9% Employees: 95,175 (Source: figures sourced from the annual report) Some Competitors BAYER DOW CHEMICAL DUPONT AKZO NOBEL SUMITOMO CHEMICAL LYONDELL DSM

Very good > In spite of its volume (220 pages), this is a well-managed reporting exercise. How? Thanks to a number of reading facilities and facilitators: covers; use of header; footer used for background information, charts, tables; clear tables; glossary; index. Not that many annuals strike a good balance: between length, volume and reader-friendliness; between quantity of information and quality of communication. This one does. > Economic, industry and customer trends set up the scene and give an insight into growth drivers. > Crystal-clear performance and liquidity analysis, as well as segment reviews (including brief summaries and factors influencing sales). > Effects of changes in the consolidation scope and of acquisitions described with transparency.

Good > DIY chart or table comparisons made possible on the IR website, which also contains other extra functionalities and adds real value to the printed version (see Selected Page below). > Maximized use of all covers -and flaps- especially the inside ones: key figures, segment key data, calendar, contact. Still, the report ending sequence (made of a Ten-year Summary) could be more communicative. > New employees featured from the cover on, also in a group photo where they make their way with board members. > Comprehensive historical figures, also for share data. > Group outlook and opportunities, with planned capital expenditures by segment and region.

Buts > Even managed with such Deutsche efficiency, 220 pages of quite thick paper spirally bound make it heavy. > Two Economic Goals versus almost 20 other ones. Responsible? Or just overplaying “sustainability” to the detriment of core business and financial objectives? These ones just consisting of EBIT and Dividend.

Green? > Our goals set forth more non-economic and financial targets than energy, emissions, safety, employee ones. > The company states that the report combines the financial and sustainability report in one publication (p 4). There are certainly a few worthwhile indicators and some initiatives, but responsibility-related matters are far from what should be expected –and reported- from a large chemical company.

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 Page (online version of p 53 of BASF Annual Report 2007)	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.