Dividend Policy

Based on the provisions of Adaro Energy's Articles of Association, if the company books a net profit, than Adaro Energy may distribute dividends to its shareholders based on the Board of Directors' recommendation after obtaining approval from the General Meeting of Shareholders.

Adaro Energy will declare dividends with respect to:

1. operating income, cash flow, capital adequacy and the financial condition of Adaro Energy and its subsidiaries as regards reaching optimum growth in the future;
2. the required fulfilment of reserve funds;
3. Adaro Energy and its subsidiaries' obligations based on agreements with third parties (including creditors); and
4. Compliance to the prevailing laws and regulations and GMS approval.

Adaro Energy will target an annual dividend payout ratio of up to 45% of consolidated net profit. Adaro Energy may also pay interim dividends. Due to the terms of the lending agreements, Adaro Energy's operating companies can only distribute dividends of up to 50% of net profit.