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Report of the month

December 2008

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PaperlinX Mount Waverley, Victoria, Australia Report Facts Company name: PAPERLINX Limited Fiscal year end: June 30, 2008 Report title: People. Paper. Progress. Chairman: David Meiklejohn Chief executive officer: Tom Park Number of books: 3 Report length: 32 + 108 + 16 pages Auditors: KPMG Design: Amanda Roach Design Investor relations e-mail: N/A	Report Rating 3.5/5 (Rating scale below) Profile-Mission (Excerpts, as from the report) PaperlinX is one of the world’s largest fine paper merchants. Distributing nearly four million tonnes of … paper… and graphic products… in five continents. 27 countries. 366 locations. 780,000 tonnes manufactured.(Report p 1, p 4) Key Figures Sales: Aus$ 7,485.1 million EBITDA: Aus$ 254.3 million Profit before tax: Aus$ 100.4 million Basic earnings per share: Aus cents 10.1 Cash dividends: Aus cents 6.5 Return on capital employed: 5.7% Debt to debt and equity: 28.7% (Source: figures sourced from the annual report) Some Competitors INTERNATIONAL PAPER WEYERHAEUSER GEORGIA-PACIFIC DOMTAR ABITIBIBOWATER KIMBERLY-CLARK STORA ENSO UPM SCA ...

Pluses > Strongly stated mission, profiling and identity, thanks to the simple yet effective use of visual features on paper: a P-based cover, a visual thread with full-page illustrated breaks –also used for number highlights (see Selected Page below), an intensive use of the yellow corporate color. > Highlights and Summary financials span over 3 to 5 years and include key ratios and good segment data. > An update on Major business initiatives. > Good yet relatively short overviews of business areas. > Excellent contents about governance: from board presentation and details to the extensive Directors’ report, from the shareholding structure to directors’ interests and remuneration.

Pluses-minuses > Note 45 fairly describes financial risks and their management. But it’s note 45 ending on Report p 102. > Yet containing worthwhile data, a paper-thin Sustainability Report (16 pages) doesn’t fulfil up to best practice in the industry, e.g. with goals lacking in figures and set for the coming year only.

Minuses > The Full financial report is not most aptly named as it just consists of statements and 46 accompanying notes. These are mainly made of plainly put tables without further commentary. > The Finance overview is really one: half a page (report p 43) that writes one (1!) line about equity and less than four (4!) on Cash Flow and Working Capital. Actually, the extended Report adds very little financial information value to the compact Review. > Shareholder enquiries? Directed to an anonymous Share Registry. No investor relations contacts and not many extras on the website. > Why not showing the same care for designing the extended Report as the one used in the Review? The former seems to be in the hands of accountants while the latter is made by… merchants.

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 (p 24 of PAPERLINX Annual Review 2008)	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.