employees are critical assets for the success and sustainability of the Company's performance and upholding the philosophy that "Every Manager is an HR Manager"

We expect the learning center of Adaro Institute in Jakarta will commence in 2011 serving as the center for leadership and managerial competency development. Meanwhile the learning center in Kalimantan is expected to roll out in 2013 functioning as the center for professional competency development, particularly technical competency involving mining, mechanical, electrical, and other competencies related to Adaro operations in mining and energy.

The installation of an advanced Human Resources Information System in 2010 enables the Company to effectively manage its resources and productivity and expedite administrative process.

During the year, the Company also engaged in an internal assessment program involving middle level managers to senior managers to provide effective succession planning and identify rising stars of the future. Job grading and job banding were also refined to ensure that our talents are put in the right place with the right incentives. Job evaluations were enhanced to better measure performance against targets and aligning individuals goals with the corporate objectives and strategies.

OTHER ESSENTIAL PROGRAMS IN 2010

1. Recruitment Policy: Identifying Future Leaders
Highly qualified and competent employees with above average motivation form the basis of a bigger and better Adaro. Our recruitment policy puts internal resources first to meet our manpower needs. This provides our employees with substantial opportunities to optimize their self-development according to their job aspirations. External recruitment is conducted to locate the best talents from the market to strengthen our manpower resources. Cooperation with reputable universities is also made through regular campus recruitment and job fairs.

2. Training and Development: Towards People Excellence
As a pilot program, Mining Professional Development Program (MPDP) has been set up to source and develop talented graduates in mining, geology, geotechnical , civil, and environmental engineering, thus, strenghtening the supervisory level in the organization, particularly in mining activity.

Adaro continues to provide extensive training and development programs for its employees covering various areas of expertise including both soft and hard skills.

In 2010, Adaro Energy, Adaro Indonesia and SIS spent a total of US$1.97 million on training, an increase of 31% over 2009.

3. Safety, Health, and Environment (SHE): Towards Operating Excellence
Given the importance of SHE towards Adaro's operating excellence, we ensure every employee and those of our business partners posses sufficient level of SHE awareness. Our continuous approach to intensify the awareness on SHE has been conducted through daily morning talks at operating subsidiaries together with routine training programs.

Every employee is obliged to hold the required certification to ensure technical competency and so minimize operational risk.

4. Communication Culture: Opernness and Synergy
Adaro realizes we would never enjoy employee support without appropriate communication from senior management. In line with this spirit, we encourage open communication between management and employees. Informal meetings are organized between the Board of Directors (BOD) and Senior Management and managerial level employees on a regular basis with the aim of discussing ongoing company developments and information exchange in order to promote team synergy.