Annual Report 2011

Bumi plc Annual Report 2011
Delivering protable growth from coal
Bumi plc | Introduction Annual Report 2011
Bumi is a leading FTSE listed thermal coal group with interests in the largest coal producing assets in Indonesia the worlds largest seaborne coal exporting nation. Our primary activity is to explore, mine and process coal.
Revenue ($) Operating prot ($)
1.4bn
Underlying earnings ($)*
280m
Underlying EBITDA ($)*
33m
427m
* Bumi uses non-GAAP measures as key nancial indicators to assess the underlying performance of the Group.
More information
The Bumi plc Annual Report is accessible online at: www.bumiplc.com
Introduction
2 4 6 8 Who We Are What We Do Chairmans Statement Chief Executive Ofcers Statement 10 Group Strategy In Action 12 Market Overview 14 Delivering Protable Growth
Business Review
18 18 19 22 25 26 28 Operating Review PT Berau PT Bumi Financial Review Capital Projects Reserves and Resources Principal Risks and Uncertainties 30 Health, Safety, Environment and Communities
Governance
38 40 41 45 45 48 48 48 49 Board of Directors Executive Management Governance Report Board Committees Audit Committee Nomination Committee Remuneration Committee Conicts Committee Health, Safety, Environment and Communities Committee 50 Remuneration Report 62 Other Statutory Information 69 Statement of Directors Responsibilities
Financial Statements
Other Information
126 Shareholder Information 72 Independent Auditors Report Group 74 Consolidated Income Statement 75 Consolidated Statement of Comprehensive Income 76 Consolidated Balance Sheet 77 Consolidated Statement of Changes in Equity 78 Consolidated Statement of Cash Flows 79 Notes to the Financial Statements 116 Independent Auditors Report Company 118 Parent Company Balance Sheet 119 Parent Company Statement of Changes in Equity 120 Parent Company Statement of Cash Flows 121 Notes to the Parent Company Financial Statements
The Introduction, Business Review and Governance sections make up the Directors Report in accordance with the Companies Act 2006.
2011 results: Underlying EBITDA of $427m Underlying earnings of $33m Operating prot of $280m, driven by higher volumes and stronger coal prices Coal mined at PTBerau increased from 17.4mtonnes to 19.4mtonnes; PTBumi increased coal mined from 60.4mtonnes to 65.9m tonnes Major expansion phase underway across the Wider Group
Underlying EBITDA
($m)
500 400 300 200 100 0 June 2011 December 2011
Operating profit
($m)
300 250 200 150 100 50 0 June 2011 December 2011
Coal mined
PT Berau and PT Bumi (100% basis) 100 80 60 40 20 0 June 2011 December 2011
(millions of tonnes)
DEFINITIONS
For the purposes of this Annual Report the following denitions are used: Company or Bumi Group Wider Group PT Berau or subsidiary PT Bumi or associate = Bumi plc = Bumi plc and PT Berau = Bumi plc, PT Berau and PT Bumi = PT Berau Coal Energy Tbk, a company listed on the Indonesia Stock Exchange = PT Bumi Resources Tbk, a company listed on the Indonesia Stock Exchange
Who We Are
The Wider Groups coal operations are located in East and South Kalimantan, Indonesia. The majority of the mines are situated within 30 kilometres of the coast from where coal is shipped to key Asian destinations.
Main customer areas Operations PT Berau asset PT Bumi asset
Indonesia
Berau
Kalimantan KPC Sumatra
FBS Arutmin
Pendopo Jakarta
Pendopo
Type: Thermal coal Concession area: 17,840ha Total reserves: 687Mt CCoW* until: 2039
Arutmin
Fajar Bumi Sakti

Type: Thermal coal Concession area: 9,054ha Total reserves: 12Mt CCoW*: 2018/2028
Kaltim Prima Coal

Type: Thermal coal Concession area: 90,960ha Total reserves: 1,292Mt CCoW* until: 2021
Berau
* CCoW denotes Coal Contract of Work which permits the undertaking of coal operations for a dened period.
Introduction
CUSTOMERS
PT Berau*
7 6 5 4
PT Bumi*
1. Mainland China 49.4% 14.7% 13.7% 8.5% 8.4% 0.3%
6 5 2 7 8 11 10 9 1
1.
Japan
22.4% 16.3% 15.5% 11.9% 8.3% 7.6% 7.1% 4.1% 2.0% 1.2%
2. Indonesia 3. Taiwan 4. South Korea 5. India
2. India 3. Mainland China 4. Indonesia 5. Taiwan 6. Europe 7. Malaysia 8. Philippines
6. Hong Kong (SAR of China) 5.0% 7. Japan
9. Hong Kong (SAR of China) 3.6% 10. Thailand 11. South Korea
* 2011 calendar year.
COAL RESERVES
Thermal coal
100% basis (million tonnes)
Bumi plc economic interest %
Bumi plc attributable share (million tonnes)
PT Berau Proven Probable Total reserves PT Bumi Proven Probable Total reserves Wider Group 1,225 1,176 2,401 2,848 19.9% 21.9% 20.9% 29.6% 244 258 502 843 159 288 447 76.2% 76.2% 76.2% 121 220 341
Note: Reserves are as at 31 December 2011. For further reserves information see pages 26 to 27.
MAJOR CAPITAL PROJECTS
PT Berau
PT Bumi KPC
KPC Arutmin
Project
Overland Conveyor/ Power Plant
Overland Conveyor
Three 18MW Power Stations
Overland Conveyor/ Coal Processing Plant
Expected Completion
2012/15 10m
Q2 2012 32m
Q1 2013
Q2/Q3 2012 14m
Production volume (tonnes per annum)
What We Do
Bumi plc is a FTSE listed thermal coal producer with one of the largest organic expansion plans in thermal coal.
Strategy Bumiplc is a leading thermal coal company, with interests in the largest coal-producing assets in Indonesia, the worlds biggest exporter of thermal coal. The Wider Groups key assets are PTBerau, which is the countrys fth largest coal producer, and a 29% interest in PTBumi, which is the biggest coal producer in Indonesia. Both PTBerau and PTBumi have cost competitive positions in thermal coal, with all mining operations situated in the lower half of the cost curve. Bumiplcs strategy is to create a leading thermal coal champion with a focus on executing one of the largest organic expansion plans in thermal coal. The Wider Groups coal mined is forecast to increase from the current level of 85m tonnes to 140m tonnes by2014. A key focus of the strategy is simplifying Bumiplcs structure, reducing levels of indebtedness and funding costs across the Wider Group, and integrating and optimising its coal asset base to attain best in class performance across all operations. An operational benchmarking study across all the coal businesses, including a review of contractor performances, is underway. The aim of the benchmarking study is to unlock value from existing assets through cost and productivity improvements which will further drive shareholdervalue. PT Berau PTBerau is the fth largest coal producer in Indonesia. PTBerau has three principal open cut mining operations in its concession area of northeastern Kalimantan, namely Lati, Binungan and Sambarata. Production of thermal coal is blended to adjust the overall quality grade of the coal, with caloric values ranging from 5,000kcal/kg to 5,700kcal/kg (on a gross as received basis) for use in coal red powerplants. PTBeraus coal mined in 2011 amounted to 19.4m tonnes, an increase of 12% over 2010. Its key markets are all located in Asia and its customers are mainly utility companies and coal trading entities.
(In million tonnes)
Seaborne thermal coal market

Indonesia Rest of the world
605 524 25% 75% 70% 30%
629 31% 69%
646 31% 69%
655 36%
714 41%
760 43%
815
854
64%
59%
57%
In 2011, PTBerau derived 15% of its total revenue from domestic sales and the balance from export sales. PTBerau subcontracts all of its mining, barging, drilling and blasting operations. This allows it to minimise capital expenditures and working capital requirements and to focus on exploration, mine planning, supervision and sales and marketing. PTBerau works closely with its mining contractors, including BUMA and Saptaindra Sejati, which undertake land clearing, overburden removal, coal excavation and haulingactivities. Once the coal is mined, crushed and stockpiled, contractors transport the coal by barge to a transhipment area at Muara Pantai in the Sulawesi Sea located approximately 50 to 100kilometres from the ports at Lati, Suaran and Sambarata. At Muara Pantai, higher energy coal from the Sambarata mine is blended with coal from the Lati and Binunganmines. PTBeraus level of production is set to increase signicantly in the near term. A number of expansion projects are underway including a new overland conveyor and the upgrading of existing coal handling facilities such as its barge loaders and crushers at the Lati coal handling facilities. Construction of a new crushing line and stockpile were completed in May2011. PTBerau is forecast to increase coal mined by 50% to 30mtonnes per annum by 2014. Coal mined in 2012 is forecast to be 23m tonnes.
2005
2006
2007
2008
2009
2010
2011
2012F
2013F
Source: Barclays Capital
Historical coal spot price
(FOB Newcastle)
(US$/tonne)
200
68.1%
150
73.2%
78.7%
100
50
31.9% 26.8%
21.3%
2001
Source: Bloomberg
2003
2005
2007
2009
2011
Introduction
PT Bumi PTBumi is the largest thermal coal producer in Indonesia. Its principal coal operations are Kaltim Prima Coal (KPC) and Arutmin, both located inKalimantan. The largest operation within PTBumi is KPC, which operates in East Kalimantan. KPCs two principal mining areas are Sangatta and Bengalon. The Sangatta mining area is close to the port facilities at Tanjung Bara, which is linked to the mine by an overland conveyor. The Bengalon mining area is also close to the coast, being linked to its port facilities by a haul road. PTBumis second largest operation, Arutmin, operates in a concession area in the southeast of Kalimantan and has seven mines, namely the Senakin, Satui, Mulia, Asam Asam, Batulicin, Sarongga and Kintap mines, all strategically located near Arutmins port facility, North Pulau Laut CoalTerminal. PTBumi mines a substantial portion of the coal it produces through mining contractors. At KPC, approximately 60% of production is mined through three contractors, Pamapersada (PAMA), Thiess and DarmaHenwa with the balance mined by KPC itself. At Arutmin all the production is mined through contractors, including Thiess, BUMA, DarmaHenwa, PAMA and Cipta Kridatama. Around 88% of production for PTBumi is exported, primarily to Asia, with the balance going to domesticsales. PTBumis caloric values range from 4,200 6,700kcal/kg (on a gross as received basis). Both KPC and Arutmin have competitive transportation costs with the majority of operations located within 30 kilometres of the coast. As a result of this and its competitive cost base, all operations are situated in the lower half of the cost curve. The proximity of primary coal markets in Asia provides PTBumi with an additional freight cost advantage over competitors in Australia and SouthAfrica. PTBumi is set to increase production signicantly over the near term. The largest portion of the higher output will come from KPC, where production is
expected to increase over the near term from 41m tonnes to 70m tonnes, a 70% increase. The increase will be achieved by stepping up owner operated and contractor mining activities, the construction of a new coal crusher, three 18MW power stations and a new overland beltconveyor. At Arutmin, three expansion projects involving construction of port facilities, overland belt conveyors and coal processing plants will see coal mined increasing from 25m tonnes to 40m tonnes over the near term. Coal mined for PTBumi in 2012 is expected to be 75mtonnes. Bumi Resources Minerals (BRM) BRM is an exploration company with an interest in one operating mine and a number of exploration projects. BRM is listed on the Indonesia Stock Exchange and is 87% owned by PTBumi. For more information please refer to page21.
BUSINESS MODEL
We aim to become the leading UK listed thermal coal producer with world class coal mining assets which will deliver superior shareholder returns over the long term. Our focus is on assets which have advantaged cost positions, clear expansion proles and long lives. Through our subsidiary, PT Berau, we are pursuing a model that drives sharing of best practice and the pursuit of synergies across the Wider Group such as benchmarking and integrating our supply chain. The use of a number of mining contractors allows for efcient use of capital and diversies our mining risk prole. We invest signicant amounts of expansionary capital into developing new mines and infrastructure to further exploit our reserves, at the lowest cost, and extend the mine life. We also regard our performance in health, safety, the environment and community affairs as a key element of our operational performance. We believe thermal coal prices are forecast to remain strong over the medium term with continued high levels of demand from Asia where the overwhelming majority of our customer base is concentrated. These attributes, together with strong governance and risk management, allow us to support the creation of long term value for all our stakeholders.
Chairmans Statement
We created a London listed Indonesian coal champion with the foundations for long term commercial success.
Our vision is to become the leading UK listed thermal coal producer.
sector. This is in part due to the unique location of the mines, which are mostly within 30 kilometres of the coast a geographical advantage. The assets also maintain a competitive edge over other coal producers in terms of freight and shipping costs. A clear strategy Our vision is to become the leading UK listed thermal coal producer through the development of our world class asset base. The main thrust of our strategy is to deliver on what is acknowledged to be the most signicant expansion programme in the industry. In 2011, PTBerau and PTBumi mined 85m tonnes of thermal coal, and this is planned to increase to around 140m tonnes by 2014. PTBerau and PTBumi are currently on track to achieve this stated target, and a signicant amount of new infrastructure is being installed in the key operating units of PTBerau, KPC and Arutmin. Another key aspect of our strategy focuses on optimising our asset base. Although we occupy a very competitive cost position, with the majority of operations in the rst or second cost quartiles, we believe there is scope to further improve the way we operate. To this end, in August 2011 we announced a Group wide benchmarking review of all our coal miningoperations. The nal strand of our strategy is to lower the Wider Groups underlying level and cost of debt. We recognise the need to lower the net debt position of our associate, PTBumi, and are exercising our inuence to address this. In October 2011, PTBumi announced it would reduce its debt levels by recouping certain loans and investments and in November 2011 it renanced $600m of the China Investment Corporation (CIC) debt, thereby reducing its annual interest expense. Corporate governance The UK Corporate Governance Code (the Code) calls for company chairmen to report to shareholders directly on governance matters and this can be found in our Governance Report on page 41 where we demonstrate our commitment to pursuing the highest standards of corporate governance. The Boards agenda this year was shaped by the creation of a FTSE listed coal champion and to ensure Bumiplc has an appropriate range and balance of skills, experience and background on the Board. Our Non-Executive Directors have made themselves available, often at short notice, when we have had to hold additional Board and Board Committee meetings.
Indra Bakrie Chairman
I am delighted to announce that, in our rst year, Bumiplc has made signicant progress in putting together one of the largest thermal coal businesses in the world. It has been an exciting and productive 12months, during which time we have started to put in place the foundations for long term commercialsuccess. Throughout 2011 we delivered high levels of performance and met our volume targets. We assembled a strong, independent Board comprising directors with extensive commercial experience across diverse nationalities. And we are executing on our strategy for delivering value to our stakeholders andinvestors. The creation of a FTSE listed coal business In November 2010, Vallar plc announced its intention to acquire interests in PTBumi and PTBerau, Indonesias largest and fth largest coal producers respectively. Through these transactions, which were completed in March and April 2011 respectively, we created a London listed Indonesian coal champion at a cost of $3.4 billion. We attained our premium listing in June 2011, and in December 2011 we entered the FTSEindex. With our interests in PTBerau and PTBumi, we have created, on a 100% basis, the largest thermal coal producer in the world and we have acquired assets with some of the lowest operating costs in the
Introduction
7
Each of them has been unstinting in the time they have been prepared to commit to the Company. In accordance with the recommendations of the Code, all of the Directors will stand for re-election in 2012, with the exception of James Campbell and Badung Tariono who will be retiring at the AGM. I wish to thank both James and Badung for their hard work and wish them well for the future. We are committed to ensuring that we, as a Board, act in the best interests of all our shareholders. We recognise that the shareholding structure of the Company requires us to ensure that the interests of all shareholders are well represented in the proceedings of the Board and the composition of the Board, together with the establishment of a Conicts Committee, is evidence of the steps we have taken to achieve this. Due to ill health, our CEO, Ari Hudaya, has not been able to attend all the Board meetings this year. As a result, the Board appointed Nalin Rathod to take over as CEO with effect from 26 March 2012. Nalin has over 20 years experience in the Indonesian coal business. On behalf of the Board, I wish to thank Ari for all his hard work in successfully launching Bumiplc and wish him a speedy return to full health. On 30 December 2011, PTBakrie & Brothers Tbk announced that it and Long Haul Holdings (together known as the Bakrie Group), which had been the joint owners of a 47.6% stake in Bumiplc, sold half of the stake to PTBorneo Lumbung Energi & Metal Tbk (PTBorneo), an Indonesian listed coal company. The Bakrie Group and PTBorneo now jointly own the 47.6% stake in Bumiplc. As a result of the above changes, Samin Tan became Chairman of Bumiplc and Nathaniel Rothschild and I will remain as Non-Executive Directors with myself as Co-Chairman from 26March 2012. At the same time Scott Merrillees, a director of PTBorneo, became Chief Financial Officer, taking over from Andrew Beckham who left the Board on 26 March 2012. On behalf of the Board, I would like to welcome Samin, Nalin and Scott and also to thank Andrew for all his efforts during theyear. Health, Safety, Environment and Communities The Board regards the Groups performance in health, safety, environmental and community affairs as a key element of its operational performance. To oversee this key area the Company has established a specic committee, whose membership includes an experienced technical advisor, and a report of the Groups activities can be found in the HSEC section on page 30. Our focus remains on prioritising the health and safety of our employees, minimising the Groups environmental impact and engaging constructively with communities to create lasting economic and social value. Having had zero fatalities at PTBerau for the last three years the most disappointing aspect of this year has been safety, with four fatalities in 2011. The Board is committed to zero harm. All fatalities in the Company and its subsidiarys operations are required to be reported at Board meetings and PTBerau is separately reviewing its health and safety procedures and operations in order to ensure that safety is, and is seen as being, a key indicator of successful operationalmanagement. I would like to thank our management and all our employees for their hard work during 2011. Their contribution has helped to make our rst year of business a real success and we look forward to building on the great work and progress we have achieved so far. Lastly, I welcome the appointment of Samin Tan as Bumiplcs new Chairman and wish him all the best in taking Bumiplc forward to the next stage.
Indra Bakrie Chairman
Samin Tan was appointed as Chairman of Bumi plc on 26 March 2012, replacing Indra Bakrie. He is the President Director of Renaissance Capital. Between 2007 and 2011 Samin headed PT Borneo as its President Director. Prior to this, he was Deputy Managing Partner of the Indonesian consulting practice of Deloitte Touche and Head of the Indonesian tax practice of Deloitte Touche.
Chief Executive Officers Statement

I am pleased to report a strong operational performance for 2011 thanks to increased production volumes and higher thermal coal prices.
To date, we are able to report good progress against these targets. In 2011, PTBerau increased coal mined by 2m tonnes to 19.4m tonnes, an increase of 12%, and PTBumi increased production by 5.5m tonnes to 66m tonnes, an increase of9%. At PTBerau the expansion plans are on track with approval to construct a 42kilometre overland conveyor at Binungan. At PTBumis KPC operation, work began on the Sangatta expansion. The second overland conveyor at KPC is under construction and should be completed in the rst half of 2012. Likewise, the Melawan crusher and conveyor are on track for completion in 2012, and work has now commenced on upgrading the Bengalonfacilities.
Ari Hudaya Chief Executive Ofcer
The Wider Group is currently undertaking one of the largest expansions in thermal coal.
At Arutmin, construction of the West Mulia and Asam-Asam coal processing plants and conveyors is underway, with completion expected by the second half of2012. Optimising our asset base In August 2011 we began a benchmarking review of all our major coal operations. The aim of the exercise is to maximise operational and cost efficiencies at all mines and the results of the study will be implemented across the Wider Group. The review will also enable us to benchmark performance and share best practice. Reducing overall cost and level of debt Levels of net debt vary across the Wider Group. Our subsidiary, PTBerau, had net debt of $291m as at 31December 2011. PTBerau successfully launched a $500m bond at a xed rate of 7.25% in March2012 to renance an existing debt facility, as well as to fund a capex programme to construct an overland conveyor and related power plant. At PTBumi, net debt stands at $4.2billion. During the year PTBumi made progress in renancing a portion of this debt and identifying further ways to reduce overall levels of indebtedness. In November, PTBumi announced they had completed repayment, two years ahead of schedule, of $600m of the $1.9billion CIC debt. The amount was renanced with the China Development Bank at LIBOR+ 6.7%. The effect of this debt renancing will reduce PTBumis annual interest expense by around $72m. It also expects to repay early the remainder of the $1.3billion CIC debt in October 2012 ($600m), and in October 2013($700m).
In this, our rst year of existence as Bumiplc, I am pleased to report a strong operating and nancial performance for 2011. Thanks to increased production volumes and higher realised thermal coal prices, we achieved an operating prot of $280m and underlying earnings of $33m. It is an operating performance which everyone at Bumiplc should be extremely proud of. Performance against strategy Our aim is to be the leading UK listed thermal coal producer. As outlined by our Chairman in the introduction to this report, we have devised a clear strategy in support of this goal which focuses on: Delivering sector leading growth Optimising our asset base Reducing overall levels and cost of debt
In 2011 we performed well in each of these core strategic areas. Delivering sector leading growth The Wider Group is currently undertaking one of the largest expansions in thermal coal. This will see total volumes of coal mined on a 100% basis rising from 85m tonnes in 2011 to 140m tonnes in 2014, an increase of over 60%. Over this period PTBerau will increase coal mined from 19.4m tonnes in 2011 to 30m tonnes, and PTBumi from 66m tonnes to 110mtonnes.
Introduction
Growth
The Wider Group is undertaking one of the largest expansions in thermal coal. This will see PT Berau and PT Bumi increasing output signicantly.
Optimisation
A major benchmarking exercise across the Wider Group is underway. The aim is to maximse operational and cost efciencies.
Deleveraging
A key goal is to reduce the cost and levels of indebtedness at PT Berau and PT Bumi. PT Bumi has renanced $600m of $1.9bn debt owing to the China Investment Corporation which will reduce PT Bumis annual interest expense.
In addition, in 2011 PTBumi reached an agreement on the repayment to PTBumi of a $231m investment with Recapital in the rst half of 2012. It was also agreed that a $251m loan to Bukit Mutiara, another Recapital company, would be repaid, half in 2012 and the balance in 2013. Bumi Resources Minerals (BRM) In June we announced a proposed restructuring involving the acquisition of 75% of BRM, a diversied base metals exploration company, for $2.1billion from PTBumi. Due to ongoing market uncertainties the proposed acquisition did not proceed. Health, Safety, Environment and Communities We believe that running our business in a socially and environmentally responsible way is fundamental to our licence to operate. In terms of safety, we had a disappointing performance at PTBerau where we recorded four contractor fatalities. Any loss of life is totally unacceptable and PTBerau is currently reviewing its health and safetyprocedures. Outlook While the global economic recovery continues to be fragile, there is increasing evidence of some improvement in fundamentals. Recent data indicates that Chinese GDP is expected to grow at around 7% for 2012. Improving economic data from the US is also encouraging. As such, while European industrial activity remains weak, global demand for key commodities remains robust.
In terms of thermal coal, the demand picture looks well supported for the Pacic region, with growing demand for lower caloric value coal from Indonesia forecast for India and China. While the Newcastle price has fallen in the nal quarter of 2011, with weak demand in Europe affecting even Asian markets, growing demand from India and China is expected to support current pricing in the near term, particularly as restocking for the summer period begins in the second quarter. Readily available natural gas in the US is pushing some thermal coal volumes into the Atlantic region, already impacted by weak European coal markets. With one of the strongest growth proles in the industry over the next few years, the Wider Group expects to be a major beneciary of strong thermal coal fundamentals over the medium and long term. Lastly, I would like to thank all our employees for their hard work during the year and wish my successor, Nalin Rathod, all the best for the future.
Ari Hudaya Chief Executive Ofcer, Bumi plc
Nalin Rathod was appointed as CEO of Bumi plc on 26 March 2012, replacing Ari Hudaya. He is currently President Commissioner of KPC and Arutmin and a Commissioner of PT Bumi, BRM and PT Gorontalo Minerals. He was also managing director of Capital Managers Asia Pte Ltd, a nancial advisory rm operating in Asia. Nalin has over 20 years experience in the Indonesian coal mining sector.
10
Group Strategy In Action

Bumi plcs strategy is to create the leading UK thermal coal champion with a focus on executing one of the largest ever organic expansion plans in thermal coal.
Strategic Goals
Growth Optimisation Deleveraging With our close proximity to the fastest growing thermal coal markets in Asia, we aim to grow production signicantly over the near term
Commentary
Our location means that we have a freight distance advantage over competitors situated in Australia, South Africa and Colombia Thermal coal imports are set for robust growth in India and China driven by increased demand for coal red power stations Historical coal spot price trends over the past 10 years show an upward trend For more information on market trends see pages 12 and 13
We are working towards best in class performance for all operations
Major drive to enhance operating efciencies Operational benchmarking study underway, including review of contractor performances Review of supply chain across all businesses, covering existing operations and expansion programmes Review of health and safety procedures by PT Berau following four contractor fatalities in 2011
Reducing the overall level of indebtedness and cost of debt in the Wider Group
Intention to reduce the Wider Groups cost and level of overall debt PT Berau issued $500m bond at xed rate of 7.25% in March 2012 to repay $340m of existing debt and nance capital projects PT Bumi, our 29% owned associate, to receive $231m from investment in Recapital in H1 2012 and $251m in 2012/13 First $600m tranche of CIC debt renanced by PT Bumi in October 2011 at LIBOR + 6.7% Cost of debt for PT Bumi decreased from 14.5% in 2010 to 12.2% in 2011
Introduction
11
Assessing progress
KPI* Coal mined
(mt) 13.1
08
PERFORMANCE
LINK TO STRATEGY Allows us to measure our growth targets
14.3
09
17.4
19.4
12% 57% 73% 3% -30% 67%
10
11
Revenue
($m) 631 800
08 09
Links to our growth goals
1,657 1,055
10 11
Operating prot
($m) 146
08
536 291
09
Enables us to measure our growth and optimisation targets
310
10 11
Operating margin
(%) 23.1
08
36.4
29.4 32.4
10 11
Links to both our growth and optimisation goals
09
Net debt
($m) 182
08 09 10
285
330 231
11
Net debt and cost of debt measures how we are managing our capital structure
EBITDA
($m) 153
08
564 299
09
EBITDA is a key driver to reduce net debt
338
10 11
* 100% of PT Berau under local management reporting, in accordance with Indonesian GAAP.
12
Market Overview
Thermal coal prices are forecast to remain strong over the medium term, with continued high levels of demand from Asia.
Asia driving demand for thermal coal Coal is the cheapest and most easily accessed energy source in the world. Coal currently provides around 40% of the worlds electricity and is projected to supply over half of the worlds electricity needs by 2030. China is the worlds largest consumer of thermal coal, accounting for nearly half of the worlds coal production. Coal accounted for 71% of Chinas energy needs in 2008 more than three times the share of the US. Chinas rapid pace of urbanisation and growing middle class has fuelled this growth. Yet on a relative basis the US consumes almost four times the amount of electricity per capita than China. In India, coal accounts for around two thirds of electricity generation. The demand for Indian electricity has grown at a faster rate than investment in coal production capacity. As a consequence Indias level of coal imports have almost tripled in ve years. The Wider Group is one of the largest exporters of thermal coal in the world. The overwhelming majority of the Groups customer base is concentrated in Asia, in the form of power utility and coal trading companies. The Wider Group also sells a signicant amount of coal domestically to the local Indonesian powerutility. The international coal markets are highly competitive. Principal competitors in Asia include large coal producers from Australia, South Africa and China. The Wider Group has competitive advantages over its Australian and South African competitors for its primary customers in Asia given its proximity to these customers. The Wider Group also competes against other Indonesian producers. The global coal markets and in particular, Asian coal markets, are expected to become increasingly competitive as a number of new mines and processing facilities are developed in differentcountries. However, the positive demand conditions over the medium term are expected to support the Wider Groups production prole goingforward. Pricing The long term pricing trends for internationally traded coal are cyclical and subject to uctuations. Unlike most other major commodities, there is no single global
The new overland conveyor at KPCs Sangatta mine has been successfully installed, which will increase capacity by 32m tonnes per annum.
Introduction
13
pricing standard for coal. As a result, the prices vary signicantly in different geographical markets and according to product type. Each brand of thermal coal has distinctive features, mainly in terms of caloric value, moisture, ash and sulphur content. These features, and overall quality, dictate selling prices. Across all markets, the Wider Group employs international marketing agents to sell its coal products. For PTBerau, this is Noble. PTBumi uses Glencore as its marketing agent and Mitsubishi for its Japanese sales. Global economic summary and outlook In 2011, sovereign debt issues loomed large, principally in Europe and the US. Governments in these regions have been faced with difficult decisions on how to reduce budget decits. The Eurozone, in particular, faced signicantly higher borrowing costs, with bond yields rising in certain countries. The emerging market economies have not been left unscathed as levels of demand weakened, and China in particular saw slower levels of growth. Thermal coal prices are forecast to remain strong over the medium term, with continued high levels of demand from Asia. India is expected to increase its levels of thermal coal imports over the next few years, and Chinas electricity demand is also expected to growsignicantly.
Coal consumption by geography (%)
10 9 8 5 4 1 3 6 7
INDIA AND CHINA: KEY DRIVERS FOR THERMAL COAL

In India and China, coal fuelled power generation provides the majority of electricity to the grid. Recent power shortages in China have underlined the need for further investment in coal red power generating capacity, with Chinese local producers struggling to meet demand. In India, persistent shortages of electricity have resulted in new capacity additions, with greater levels of thermal coal imports. India imports (m tonnes) have grown at a steady pace over the last five years
1. 2. 3. 4. 5. 6. 7. 8.
2
China USA Europe India Others Japan Russia Australia Indonesia
48% 15% 14% 8% 5% 3% 3% 1% 1% 2%

Thermal Coal Coking Coal
90 80 70 60 50 40 30 20 10 0 1990 2000 2005 2006 2007 2008 2009
30
60
9.
10. Others
Source: IEA, Antique
2010
China imports (m tonnes)

Thermal Coal Coking Coal
200
150
49 129
100
50
1990
2000
2005
2006
2007
2008
2009
2010
14
Delivering Protable Growth

A major expansion programme across the Wider Group is underway over the next few years.
The Wider Group, on a 100% basis, has one of the strongest thermal coal growth pipelines in the world. Organic growth is a critical part of our strategy and through PTBerau and PTBumi the Wider Group is now commencing one of its most active phases in expanding production. With a strong pricing outlook for thermal coal, driven in particular by higher levels of electricity demand from Asia and other emerging markets, the organic growth prole will help meet this increased level of thermal coal demand. Indonesia: a key producer Indonesia is uniquely positioned to meet the burgeoning demand for seaborne thermal coal, particularly for Asia. The country has emerged as the worlds largest exporter of thermal coal, supplying around one third of the seaborne market. Indonesia has been a natural source of coal for India, as well as Japan and China, due to its location and abundant reserves. In China the low sulphur, low ash Indonesian coals are ideal for blending with local coals and in India, the new coal red electricity generating plants will be optimised around the use of Indonesian coal. In 2010, India sourced 66% of its imported thermal coal fromIndonesia. The Wider Group has an unrivalled suite of low cost thermal coal assets, ideally located in east and south Kalimantan, mostly located within 30kilometres of the coastline. PT Berau PTBeraus coal mined in 2011 amounted to 19.4m tonnes, an increase of 12% over 2010. PTBeraus level of production is set to increase signicantly in the near term. A number of expansion projects are underway including the construction of a 42km overland conveyor at Binungan and the upgrading of existing coal handling facilities, such as its barge loaders and crushers at the Lati coal handling facilities. Construction of a new crushing line and stockpile was completed in May 2011. PTBerau is forecast to increase coal mined by 50% to 30m tonnes per annum by 2014. Coal mined in 2012 is forecast to be around 23mtonnes. PT Bumi PTBumi is set to increase production signicantly over the near term. In 2011, KPC and Arutmin between them produced 65.7m tonnes of thermal coal. The largest portion of the higher output will come from
PT Beraus production is set to increase signicantly in the near term. A number of expansion projects have commenced, including a new overland conveyor at PT Beraus Binungan mine and the upgrading of existing coal handling facilities.
Introduction
15
Above: The new overland conveyor (left) at KPCs Sangatta mine runs parallel to the existing conveyor (right). Both conveyors transport coal to the Tanjung Bara Coal Terminal from where it is shipped to key Asian destinations.
KPC, where coal mined is expected to increase over the near term from 41m tonnes to 70m tonnes, a 70% increase. The increase will be achieved by stepping up both owner operated and contractor mining activities as well as the construction of a new coal crusher. A second overland conveyor has been successfully installed at Sangatta which will increase capacity by 32mtonnes per annum. As a result of the second conveyor, as well as the new coal crusher and additional conveyors between pits, KPCs
coal mined is forecast to increase by 10% in 2012, from 41mtonnes in 2011 to 45m tonnes in2012. At Arutmin, three expansion projects involving construction of port facilities, overland belt conveyors and coal processing plants will see coal mined increasing from 25m tonnes to 40mtonnes per annum in the near future. Coal mined is expected to increase from the current rate of 25mtonnes per annum to 30mtonnes in 2012, an increase of20%.
Volumes set to grow significantly

PT Berau PT Bumi
140
30 110
70
2007
2008
2009
2010
2011
2012E
2013E
2014E
* Based on 100% output in PT Berau and PT Bumi
Coal consumption growth (bn tonnes) in India and China over 2000-2010
China India
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 01 02 03 04 05 06 07 08 09 10
Business Review
Business Review
18 18 19 22 25 26 28 Operating Review PT Berau PT Bumi Financial Review Capital Projects Reserves and Resources Principal Risks and Uncertainties 30 Health, Safety, Environment and Communities
17
18
Bumi plc | Business Review Annual Report 2011
Operating Review
PT BERAU
Coal mined
(millions of tonnes) 13.1
08
17.4 14.3
09 10
19.4
+ 11.8%
In terms of sales by destination, 49% of sales went to mainland China, 14% to Taiwan and 22% to the rest of Asia, with the remaining 15% sold domestically intoIndonesia. In terms of PTBeraus coal reserves, a new JORC report published in June 2011 showed total reserves increasing by 35% to 467m tonnes at 31December 2010, from 346m tonnes at 31December 2009.
11
Key facts
118,400 Ha 1st Generation CCoW CCoW expires 26 April 2025 Mines Lati Binungan Sambarata Main brands of coal Agathis Sungkai Sungkai HS Mahoni Mahoni B Eboni HS
PTBeraus assets are located in the north-eastern part of Kalimantan and consist of three operating mines, namely Lati (which is the largest mine, accounting for circa 56% of PTBeraus output), Binungan andSambarata. PTBerau recorded a strong operating performance for 2011. Despite high levels of rainfall, PTBerau mined 19.4m tonnes of coal, a 12% increase over 2010, and recorded sales of 20.0m tonnes of coal. The increase in coal mined was mainly due to the opening of new pits (Lati East 2, Binungan pit H Blok 7 East; Parapatan). PTBeraus average selling price for the year was $81.4/tonne (2010: $59.6/tonne). Production cost of sales at PTBerau was $38.0/tonne (2010: $29.1/tonne). The increase in the cost of sales from 2010 was mainly due to an increase in the stripping ratio, greater haulage distances (between the coal mined and the coal processing plant), higher fuel prices, and higher contractor rates. The average stripping ratio for the period was 9.5 bcm/tonne (2010: 8.2 bcm/tonne).
PT Berau: Production Data

2011 2010
Coal mined (millions of tonnes) Sales (millions of tonnes) FOB average selling price ($/tonne) Production cost of sales ($/tonne) Stripping ratio (bcm/tonne)1
1
19.4 20.0 81.4 38.0 9.5
17.4 17.1 59.6 29.1 8.2
Bank cubic metres (bcm) of overburden removed per tonne of coal mined.
PT Berau has increased levels of coal mined over the past four years by almost 50%, from 13 million tonnes in 2008 to over 19 million tonnes in 2011.
Business Review
19
Bumi plc holds a 29.2% interest in PT Bumi, which in turn owns 65% of KPC, 70% of Arutmin, 50% of Fajar Bumi Sakti, 85% of Pendopo Energi Batubara, and 87.1% of BRM.
PT BUMI
Kaltim Prima Coal (KPC)

Coal mined
(millions of tonnes) 41.0 37.5 40.3 39.3
+ 4.3%
KPC mined 41.0m tonnes of coal in 2011, a slight increase over 2010, despite a 20-day crusher shutdown at Bengalon, a contractor strike at Sangatta from 10November to 27December and operational issues experienced by a contractor at the Bengalon site. The second half production in 2011 of 22.7m tonnes represented a 24% increase over the rst half. KPCs average selling price of $98.6/tonne was 32%higher than2010. Production costs of sales at KPC were $49.1/tonne against $37.2/tonne in the prior year. The main reasons for the increase were a higher stripping ratio, greater distances from the coal mined to the coal processing plant, higher fuel costs, and higher contractor costs. The average stripping ratio for the year was 12.1bcm/tonne (2010: 11.7bcm/tonne).
Key facts
90,960 Ha 1st Generation CCoW CCoW expires 31 December 2021 Mining areas Sangatta Bengalon Main brands of coal Prima Pinang Melawan
08
09
10
11
The largest operation within PTBumi is KPC, which operates in East Kalimantan. KPCs two mining areas are Sangatta and Bengalon. The Sangatta mining area is close to the port facilities at Tanjung Bara, which is linked to the mine by an overland conveyor. The Bengalon mining area is also close to the coast, being linked to its port facilities by a haul road.
KPC: Production Data

2011 2010
1
41.0 40.5 98.6 49.1 12.1
39.3 40.0 74.8 37.2 11.7
20
Operating Review (continued) PT BUMI
Arutmin
Coal mined
(millions of tonnes) 19.3 20.8 15.4
08 09 10 11
24.7
+ 18.5%
The average stripping ratio for the year was 10.2bcm/tonne (2010: 8.1bcm/tonne). The increase in the stripping ratio was mainly due to the reopening of previously closed pits to take advantage of higher coal prices, and the opening of new pits. The stripping ratio was also impacted by the higher levels of rainfall, resulting in ooding, which led to coal being mined in alternative areas with a greater amount of overburden compared with the prioryear.
Key facts
70,153 Ha 1st Generation CCoW CCoW expires 1 October 2019 Mines Senakin Satui Batulicin Mulia Kintap (West Mulia) Asam Asam Sarongga Main brands of coal Satui Eco Coal Arutmin Senakin Sarongga
PTBumis second largest operation, Arutmin, operates in a concession area in the southeast of Kalimantan and has seven mines, all strategically located near Arutmins port facility, North Pulau Laut CoalTerminal. Arutmin mined 24.7m tonnes of coal in 2011, 18% higher than the prior year, despite the impact of barge delays and idle equipment due to a shortage of qualied operators at its contractors. The increase was mainly due to the reopening of previously closed pits, as well as the opening of new pits. However, this has also led to an increase in the stripping ratio (see table). Arutmins average selling price of $83.8/tonne was 34% higher than 2010. Production cost of sales at Arutmin was $38.7/tonne against $33.9/tonne in the prior year. The increase was mainly due to the higher stripping ratio and higher fuelprices.
Arutmin: Production Data

2011 2010
1
24.7 22.8 83.8 38.7 10.2
20.8 20.4 62.6 33.9 8.1
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PT BUMI
Fajar Bumi Sakti (FBS)

FBS is a 50% subsidiary of PTBumi. It holds rights to exploit and mine coal in a concession area of 984.50hectares in Loa Ulung, Kutai Kartanegara, East Kalimantan under a Kuasa Pertambangan (KP) issued by the Government of Indonesia. On 10June 2008, FBS obtained an extension of the KP for a further 10years. The Loa Ulung operations consist of an open pit mine with 12m tonnes of coal reserves (non-JORC compliant). Two additional development projects (Guruh Putra Bersama (GPB) and Ade Putra Tanrajeng (APT)) are beingevaluated.
Pendopo Energi Batubara

Pendopo is an 85% subsidiary of PTBumi. It has a 17,840hectare concession area located in Muara Enim, South Sumatra, with a 30-year operating permit, from 5May 2009 until 5May 2039. Pendopo has 1,102m tonnes of resources, including 687m tonnes of reserves (JORC compliant), calculated as at August 2008, which are mainly suitable for powergeneration. Pendopo is currently at the development stage, with several types of projects under assessment, including mine-mouth power generation, coal upgrading and coal gasication. On 23 February 2012, Pendopo announced that it had formed a consortium with DHEnergy and South Koreas POSCO Engineering &Construction, to build two 300-megawatt power plants on Indonesias Sumatra island, which Pendopo would supply its coal to.
Bumi Resources Minerals (BRM)

BRM is 87% owned by PTBumi and has interests in one operating mine and a number of explorationprojects: BatuHijau a copper-gold mine in West Sumbawa, Indonesia. BatuHijau is the second largest copper producer in Indonesia. BatuHijau is majority owned by Newmont Mining (USA) and Sumitomo (Japan). BRM owns a 24% interest through its 75% owned subsidiary PTMulti Daerah Bersaing (giving BRM an 18% economic interest). Production at BatuHijau was 283m lbs of copper and 318thousand ozs of gold in 2011. Dairi Prima a zinc-lead mining concession in North Sumatra, Indonesia owned by Dairi Prima, BRMs 80% owned subsidiary. Dairi Primas total resources are estimated at 25.1m tonnes of ore, which includes 11m tonnes of reserves (JORC standard). Dairi is also one of only a few mines in the world with zinc deposit grades above11%. Gorontalo a copper-gold mining concession in northern Sulawesi, Indonesia owned by Gorontalo Minerals, BRMs 80% owned subsidiary. Exploration drilling activities commenced in October 2011 in the concessions Sungai Mak and Cabang Kiri sites to determine reserves and resources to JORC standard. Mauritania comprising four iron ore concession areas and two phosphate concession areas in Mauritania owned by Bumi Mauritania, BRMs 60% owned subsidiary, under six exploration licences. The exploitation permit to develop its Tamagot site was obtained in January 2012. Citra Palu a mining concession for various metals, including gold and molybdenum, in Central and South Sulawesi, Indonesia, held by BRMs 96% owned subsidiary. Exploration drilling activities started in November 2011 in the concessions Poboya site, one of the projects gold prospects, to determine reserves and resources to JORCstandard. Konblo Bumi a number of alluvial and kimberlite diamond as well as gold mining concessions in Liberia, held by BRMs 94% ownedsubsidiary.
22
Financial Review
Strong revenues of $1,407m and operating prot of $280m. Underlying earnings per share of $0.17, up from a loss of $0.21 in 2010.
2011 was a year where Bumiplc transformed from a cash shell to a FTSE 250 mining company through the successful completion of its acquisition of PTBerau and an interest in PTBumi on 8April 2011 and 4March 2011, respectively. This years Group results include 10months contribution from thosebusinesses. The Group changed its presentational currency from GB pounds to US dollars from 1January 2011 to reect the fact that the majority of the Groups costs and revenues are now in US dollars. Review of nancial results Group revenue reects that of PTBerau only and was $1,407m in the year. Gross prot was $486m, representing a gross margin of 35%. Group operating prot was $280m and Group prot before nance items and tax was $241m, the difference of $39m being our share of the net loss of PTBumi. PTBumis results were impacted by early stage project costs expensed in line with Bumiplc Group accounting policies and amortisation of the fair value uplift in relation to the Purchase Price Allocation of $24m.
Prices and volumes Seaborne thermal coal prices showed a strong performance in 2011, and were buoyed by strong demand in our key markets of China, India and Japan. Prices are set by reference to the FOB Newcastle coal (GCNEWC) index, All Price Index 4 (API4) and the Japanese benchmark price and then adjusted for qualitative factors such as caloric value, moisture, ash and sulphur content. The GCNEWC averaged around $122/tonne in 2011, an increase of 23%. As noted in the Operating Review, PTBeraus sales volumes for the 12month period increased 17% to 20mtonnes (2010: 17mtonnes), at an average selling price of $81.4/tonne (2010:$59.6/tonne). Cost of sales Cost of sales represents that of PTBerau as it is the only producing subsidiary in the Group. Cost of sales increased mainly due to increased volumes, higher fuel prices and higher stripping ratios. Fuel prices are linked to crude oil prices and the West Texas Intermediate Cushing Crude Oil benchmark (WTI) of oil prices averaged $95/bbl in 2011, an increase of20%.
Business Review
23
PTBeraus average strip ratio increased from 8.2bcm/tonne in 2010 to 9.5bcm/tonne in 2011 due to longer coal hauling distances and the opening up of new pits. Included in cost of sales is the amortisation of mining licences that were fair valued on the acquisition of PTBerau of $83m. Other operating costs At a Group level, costs increased year on year due to completion costs of the PTBumi and PTBerau acquisitions and the costs associated with the proposed acquisition of BRM before the decision not to proceed was taken. In addition, general and administrative and distribution and marketing costs now include costs incurred by PTBerau. Finance items, tax and other Net nance costs include a loss of $286m (2010: $62m loss) in relation to the movement on acquisition related nancial instruments. This is a non-cash cost that has arisen due to the relative movement in PTBerau, PTBumi and Vallar plc share prices and the Indonesian rupiah exchange rate between 1January 2011 and the completion of the acquisitions. Excluding these items, net nance cost was $70m in the year, reecting the borrowings of PTBerau. Although the Group was loss making, the income tax expense was $167m (2010: nil). This is due to the large derivative losses and net nance cost which are not tax deductible, resulting in a prot for taxpurposes. The loss for the year attributable to owners of the parent was $319m, primarily due to the movement in acquisition related nancial instruments of $286m, income tax of $167m, share of loss of the associate of $39m and corporate transaction costs of $66m. Impacting the results is the amortisation of the cost of the mining licenses that have arisen as a result of a Purchase Price Allocation in accordance with IFRS 3. In 2011, the post tax and interest amount charged to earnings was $43m in respect of PTBerau and $24m in respect of PTBumi. Underlying earnings and underlying EBITDA Management believes that underlying earnings and underlying EBITDA more clearly reects the operating and nancial performance of the business. They are calculated in the table opposite. Acquisitions in the year Bumiplc completed its acquisition of 75% of PTBerau and 25% interest in PTBumi in the year for consideration of $1.6billion and $1.8billion respectively. In June2011, the investment in PTBerau was increased to 85% through a mandatory cash offer of $214m. By 15July 2011, the investment in PTBumi was increased to 29% through a share exchange of 15m Bumiplc shares for 868m shares in PTBumi. The value of the exchange was $306m. Management has completed their assessment of the fair value of the assets and liabilities acquired and the Purchase Price Allocation, as set out in Note13 to the nancial statements. In performing this exercise, we have taken a cautious view regarding certain business development assets and allocated zero value to them on acquisition. This has been compensated by a corresponding increase in the value allocated to mining licences. For PTBerau, $75m of business development assets was allocated zero value and for PTBumi, $247m was allocated zerovalue. On 18 May 2011, PTBerau acquired 100% of PTMutiara Tanjung Lestari (MTL), a company incorporated in Indonesia engaged in mining services, for $11m. The whole of the consideration was satised in cash and the fair value of the assets acquired was $2m and goodwill of $9m. Also on 18May 2011, PTBerau acquired 100% ownership of PTPelayaran Sandita Parkasa Maritim (PSPM), a company incorporated in Indonesia engaged in shipping services, for $8m. The whole of the consideration was satised in cash and the fair value of the assets acquired was $7m and goodwill of$1m. Cash ow Cash ows from operations were $435m, 55%above operating prot. Tax paid for 2011 was $255m, mainly due to the increase in taxable prots at PTBerau. Purchase of property, plant and equipment was $66m, due to the commencement of expansion projects to achieve the Groups production target of 30m tonnes by2014. Net cash paid for acquisitions was $17m, relating to the acquisitions of MTL and PSPM and net cash received of $489m (2010: net cash paid of $739m) relating to the completion of the PTBerau acquisition. Dividends received by the Group were $30m.
Underlying earnings and underlying EBITDA

2011 $m 2010 $m
Net earnings Add back: Corporate transactions costs Movement on acquisition related nancial instruments Underlying earnings/(loss) Non-controlling interests Taxation Finance income Finance cost Depreciation and amortisation Underlying EBITDA
(319) 66 286 33 37 167 (13) 83 120 427
(108) 32 62 (14) (1) (15)
24
Financial Review (continued)

Balance sheet Goodwill arising on the acquisitions of subsidiaries in the year amounted to $1,320m and intangible mining properties were valued at $2,912m at the acquisition date. Similarly, notional goodwill arising on the interest acquired in the associate was $3,862m and intangible mining properties were fair valued at $8,581m, at the PTBumi level. Both assets were tested for impairment at the year end, and we are satised that the carrying values are not impaired. Further details are shown in Note 12 to the nancialstatements. During the year, the Company entered into a scheme of arrangement where the share capital of Bumiplc was reduced from $2,150m to $4m and distributable reserves of $2,146m were created. For 2011, Group net debt includes the net debt position of PTBerau and was $222m, whereas in 2010 there was a net cash position of $324m. Net debt to total capital was 4.6% in 2011 and there was no debt in2010. The Group has assessed its cash needs and the Board approved the issue of a $500m bond by PTBerau at a xed rate of 7.25% which will be used to repay approximately $340m of outstanding bank loans at PTBerau and to fund capital expenditures required for expanding thebusiness. In line with our stated strategy of deleveraging the Wider Group, the Group has been using its inuence to encourage PTBumi to reduce its debt and interest cost. During the year, the rst $600m tranche of the CIC debt was repaid on 8 November 2011, and renanced with the China Development Bank at LIBOR plus 6.7%, saving an estimated interest cost of $72m a year. In order to facilitate debt repayment, PTBumi has reached agreement with Recapital on the repayment to PTBumi of a $231m investment in the rst half of 2012. It was also agreed that a $251m loan to Bukit Mutiara, another Recapital company, would be repaid, half in 2012 and half in 2013. Capital expenditure The Groups capital expenditure of $101m related principally to PTBerau. Expenditure at Lati was on upgrading the crusher and port facilities, at Binungan on upgrading the hauling facilities, atSambarata to increase the coal-crushing and stock-piling capacities and there were also some land acquisitionpayments. Going concern In assessing the Groups going concern status the Directors have taken into account the factors set out in the Business Review and Principal Risks and Uncertainties, the Groups cash balances, borrowings, cash ow projections, current commodity prices and the markets expectations of future prices. The Directors have also considered the Groups operating cost prole and its capital expenditure and nancingplans. The Directors, having made appropriate enquiries, have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Therefore they continue to adopt the going concern basis of accounting in preparing the nancialstatements.
Business Review
25
Capital Projects
Capital expenditure for the Wider Group in 2012 is expected to be approximately $664m on a 100% basis (Bumiplc share: $277m). This includes $133m for nance leases, and $154m for sustaining capitalexpenditure. The table below summarises the key projects that are scheduled to help the Wider Group achieve its expansion programme targets.
Capital Projects
Projects Total projected cost (100%)1 Own capital expenditure (100%) Description
PT Berau Lati $75m $75m Upgrading existing coal handling facilities and construction of additional infrastructure, including a second barge-loading conveyor at Lati Port. Constructing additional coal processing plant, dredging along the Berau River to increase the capacity of barges, and hard-surfacing and widening the Lati coal-hauling road to accommodate 120 tonne trucks (instead of 30-tonne trucks) in all weather conditions. Expansions and upgrades expected to be completed by 2013. Coal crushing, stockpiling capacity and barge loading capacity expected to increase from 13m tonnes per annum to 18m tonnes per annum. Binungan $65m $65m Upgrading coal receiving and stockyard facility, construction of additional infrastructure including a new crushing plant, stockpile, conveyor line and a new 20 kilometre hauling road to support the new pit at Binungan Block 8, scheduled to complete in 2014. Construction of additional infrastructure including a new coal receiving and stockpiling facility and a new coal crusher, expected to complete by 2013. The coal crushing and stockpiling capacity is expected to increase from the current 3.7m tonnes per annum to approximately 8m tonnes per annum. OLC and related power plant $300m $300m To transport coal between Binungan Block 8 and the Binungan coal processing plant to Suaran port, with a capacity of 10m tonnes per annum. Expected to complete in stages between 2012 and 2015.
Sambarata
$35m
$35m
PT Bumi Kaltim Prima Coal Power generators Second OLC and Tanjung Bara Coal Terminal (TBCT) Melawan crusher and Western OLC Barge loading facility extension Inul workshop and facilities $150m $135m $100m $20m $40m $40m Three 18MW power station. First unit to be commissioned in March 2013, with the nal unit to be commissioned in July 2013. Expected to be commissioned in June 2012. This is expected to increase capacity by 32m tonnes per annum. Expected to be commissioned in December 2012. The crusher and OLC are expected to increase capacity by 20m tonnes per annum. Expected to be completed November 2012, with a capacity of 12m tonnes per annum. To reduce distance of moving mobile equipments to workshop for maintenance and support new pits being opened at Inul and Kamodo in 2013/14. Expected commissioning in June 2012. Both OLC and CPP are expected to have a capacity of 14m tonnes per annum. Commissioning expected in September 2012. Both OLC and CPP are expected to have a capacity of 14m tonnes per annum. The project is expected to be completed in November 2012 and should increase the North Pulau Laut Coal Terminal (NPLCT) capacity to 19m tonnes per annum. To complete camp construction, land acquisition, mine access roads, tailings ponds, and infrastructure. A 1m tonnes per annum concentrator will be constructed between Q4 2012 and Q3 2013. Mining of ore expected to start Q3 2013, with rst concentrate available from Q4 2013.
1
Arutmin Asam-Asam OLC and coal processing plant (CPP) West Mulia OLC and CPP Continuous barge unloader $50m $45m $45m
Bumi Resources Minerals Dairi Prima $370m $370m
Business units have entered into agreements with contractors, who will carry out the construction of some of these projects, and subsequently charge a rental fee to the business units for the use of the assets. Therefore, not all of these costs will be incurred by the business units as their own capital expenditure.
26
Reserves and Resources

Reserves Reserves and resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, December 2004 (the JORC Code), which represents current best practice for reporting reserves and resources. The JORC Code requires the use of reasonable assumptions, including the use of projected long term commodity prices, in calculating reserve estimates. Reserve and resource information in the tables below is based on information compiled by Competent Persons (as dened by JORC). Each has had a relevant estimation experience and is a member of a recognised professional body whose members are bound by a professional code of ethics. Each Competent Person consents to the inclusion in this report of information they have provided, which has been used to calculate the reserves at 31December 2011. The reserve gures in the following table represent the Life of Mine reserves on a 100% basis, which extend beyond existing licence periods (including CCoWs for coal operations). Metric units are used throughout. The gures used in the calculations are often more precise than the rounded numbers shown in the tables, hence small differences might result if the calculations are repeated directly using the gures in these tables.
Thermal coal
Mine Bumi plc share % Classication Tonnes (ROM) (millions) Yield (%) Marketable tonnes (millions) Quality (kcal/kg)
PT Berau Lati 76.2% Proven Probable Total Binungan 76.2% Proven Probable Total Sambarata 76.2% Proven Probable Total Total PT Bumi Kaltim Prima Coal Sangatta (including Bengalon) 19.0% Proven Probable Total Arutmin Senakin 20.4% Proven Probable Total Satui 20.4% Proven Probable Total Batulicin 20.4% Proven Probable Total East Mulia 20.4% Proven Probable Total West Mulia 20.4% Proven Probable Total Asam-Asam 20.4% Proven Probable Total 21 21 42 51 7 58 5 19 24 31 16 47 51 73 124 49 50 99 81% 77% 79% 100% 100% 100% 90% 83% 85% 100% 100% 100% 100% 100% 100% 100% 100% 100% 17 16 33 51 7 58 4 16 20 31 16 47 51 73 124 49 50 99 6,580 6,580 6,580 6,500 6,310 6,481 6,360 6,380 6,375 4,320 4,120 4,255 4,160 4,030 4,083 4,300 4,260 4,281 849 443 1,292 99% 100% 844 443 1,287 5,366 4,977 5,235 57 99 156 60 150 210 42 39 81 447 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 57 99 156 60 150 210 42 39 81 447 5,740 5,110 4,945 5,005
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27
Thermal coal continued
Mine Bumi plc share % Classication Tonnes (ROM) (millions) Yield (%) Marketable tonnes (millions) Quality (kcal/kg)
Sarongga
20.4%
Proven Probable Total
12 4 16 410
100% 100% 100%
12 4 16 397
3,570 3,540 3,563 4,822
Total Pendopo Energi Batubara Total 24.8% Proven Probable Total
145 542 687
100% 100% 100%
145 542 687 2,288
Resources The following tables contain details of mineralisation that management believe has a reasonable prospect of being economically extracted in the future, some of which has not yet been classied as Proven or Probable Reserves. This material is dened as Mineral Resources under the JORC Code. Estimates of such material are based largely on geological information with only preliminary consideration of the modifying factors (mining, economic, etc.). While in the judgement of the Competent Person there are realistic expectations
thatall or part of the Mineral Resources will eventually become Proven or Probable Reserves, there is no guarantee that this will occur, as the result depends on further technical and economic studies, and economic conditions in the future. As in the case of reserves, estimates are completed using or testing against Bumiplcs long term pricing and market forecasts. Resources include the coal reserves disclosed previously, i.e. resources are not additional to the coal reserves.
Thermal coal
Mine Bumi plc share % Measured Indicated Inferred Tonnes (MTIS) Quality (kcal/kg)
PT Berau Lati Binungan Sambarata 76.2% 76.2% 76.2% 115 133 74 322 PT Bumi Kaltim Prima Coal Sangatta (including Bengalon) Arutmin Senakin Satui Batulicin East Mulia West Mulia Asam-Asam Sarongga Non-operating Total Fajar Bumi Sakti Tabang Pendopo Energi Batubara 14.6% 24.8% 124 319 239 558 211 225 574 1,102 3,993 2,301 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% 80 142 46 78 63 80 20 33 542 110 68 63 69 66 149 27 64 616 215 50 62 133 174 106 251 106 1,097 405 260 171 280 303 335 298 203 2,255 6,212 6,795 6,404 5,153 5,094 5,022 4,300 5,571 5,507 19.0% 3,520 3,083 2,525 9,128 5,969 185 862 90 1,137 134 235 73 442 434 1,230 237 1,901 5,082 4,622 5,850 4,883
28
Principal Risks and Uncertainties

Understanding and managing the principal risks and uncertainties that arise from pursuing the Groups objectives is important to achieving Bumi plcs success. Bumi plcs risk management processes, summarised in the Audit Committee Report, are forward looking to make the Company more resilient and prepared for the challenges and opportunities which lie ahead.
Risk
Coal price
Coal prices could uctuate unfavourably. The demand and price for coal will be largely determined by global supply and demand and the strength of the global economic environment. Coal price volatility can result in material and adverse movement in the Groups operating results, asset values, revenues and cash ows. It may also compromise the ability of the Group to adjust the timing of capital expenditure and deliver growth in future years as expansion projects may not be viable at lower prices. The Group life of mine planning processes consider coal price forecasts, operating costs, market demand and production capacity and adjust plans and activities as far as possible to maintain margins.
Context
Impact
Mitigation
Project delivery
Failure to meet project delivery objectives, timetables and budgets. The Group has high production expansion targets which depend on execution of signicant capital projects, in particular regarding mine infrastructure. Failure to meet project delivery and growth timetables may affect operational performance, delay cash inows, increase capital costs and reduce protability as well as having a negative impact on the Groups reputation. Group management have a track record of delivering capital projects and has recently enhanced its team by hiring additional experienced project managers.
Contractor reliance and performance

Failure to effectively manage contractors resulting in cost inefciencies and Group standards not being met. The Group relies on contractors for all mining operations. Failure to manage contractors effectively may affect operational performance, delay cash inows, increase capital costs and reduce protability as well as having a negative impact on the Groups reputation. Group management have a track record of managing contractors and works closely with them on a day to day basis so that performance issues can be addressed as soon as they arise. At the operational level a newly formed contractor management team will, in 2012, conduct a review with a view to enhancing its procedures for managing contractors.
Country risk
The Groups businesses may be affected by political and legal developments in Indonesia, including changes to scal and regulatory regimes. The Group has no control over political and legal changes. It recognises that its licence to operate through mining rights is dependent on a number of factors, including compliance with regulations. Potential impacts include expropriation of assets, further imposition of royalties or taxation targeted at mining companies, licences to operate not being renewed and requirements for local ownership or benecation. Political changes can also result in civil unrest and the nullication of mining permits and leases. The Group maintains a dialogue with central and local government and regulators, and responds to developments through annual mine planning activities. This dialogue is coordinated by the local external relations teams.
Associates
Failure to achieve expected standards of operational and governance performance in associates. Group management is establishing operational and governance performance standards for the Group. Management of noncontrolled assets, including associates may not adopt or comply with Group standards. Financial loss and reputational damage may arise due to different standards of governance and operational performance. Group management seeks to align the standards of operational and governance performance of PT Bumi with those of Bumi plc through communication of requirements and Bumi plc representation on the PT Bumi Board.
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Risk
Failure to meet expectations and standards of a UK plc across HSEC areas.
Context
The transition to a UK plc introduces new standards and expectations across different HSEC areas which go beyond the legal obligations and practices required in Indonesia.
Impact
Reputational damage, nancial impacts and operational disruption may arise if standards are not achieved.
Mitigation
HSEC governance has been established and continues to be put into place. A risk based work programme is underway supported by independent advisors.
Health, Safety, Environment and Communities
Safety
Failure to maintain high levels of safety management can result in harm to the Groups employees and contractors. Achievement of a safe operating environment is a legal requirement and responsibility. Within contracted operations this depends to a large extent on the competency of, and controls over, contractors. A greater number of incidents affecting the safety of employees and contractors may lead to lost production time, compensation claims and enforcement of legal responsibilities against those in charge of operations. A review of existing safety practices at mine operations commenced in 2011 leading to the development of an improvement programme targeted initially at signicant risk areas. The response programme will involve establishing a new working model with contractors.
Environment
Mining permits can be delayed or withdrawn due to the failure to achieve necessary environmental standards, particularly in relation to the conservation of biodiversity, ambient noise levels and maintenance of pre-existing air and water quality. Environmental protection is an increasing area of focus under Indonesian legislation and is subject to global scrutiny. Delays to operations and production targets through mining permits being deferred or withdrawn and reputational and nancial consequences from perceived or actual environmental damage. There is a dedicated environment team that monitors compliance with local legislation and regulations. The Group plans to develop an approach to enhance environmental management in late 2012.
Communities
Disruption to operations as a result of community disputes. Mining companies have to demonstrate long term social responsibility to communities impacted by operations. Failure to maintain supportive relationships with local communities and government may adversely affect the Groups reputation as well as its ability to maintain operations and bring projects into production. The Groups operations have a history of strong community relations, working collaboratively with communities and local government. Enhanced working practices, aligned to international standards, are being developed during 2012.
Employees
Inability to recruit, develop or retain appropriate skills for the Group. Local operations are subject to competition for skilled labour. Recruitment and retention can be challenging given the location of the Groups operations. Possible increased costs, interruptions to existing operations and delay in new projects arising from a shortage of employees, the Groups employees having inadequate skills or due to industrial disputes. Local human resources teams have arrangements in place to manage recruitment and retention which will continue to receive attention in 2012 in light of the expansion targets. Local operations maintain an active relationship with local labour unions.
Business integrity
Failure to comply with the Groups Code of Conduct including failure to prevent acts of fraud, bribery, corruption or anticompetitive behaviour. In addition to operating in a country where the risk of corruption is high (as indicated by indices prepared by independent NGOs), the UK legal requirements and expected practices go beyond those commonly adopted in Indonesia. Reputational, legal and nancial consequences due to non-compliance with Group policies and requirements, including anti-bribery and corruption legislation. The development and implementation of UK governance standards has been a priority of the Board. Policy development in key areas such as anti-bribery and corruption has been progressed in conjunction with operational management with an implementation programme agreed for 2012.
Shareholders
The actions of its major shareholders. Bumi plc has three signicant shareholders with substantial other business interests. Such shareholders or parties related to them may enter into contractual relationships with the Group or its associate. The Groups operations and reputation could be affected by the actions of its major shareholders and the effects of related party contracts. The structure of the Board, with a full complement of active INEDs, together with a Conicts Committee to monitor all contracts with related parties mitigates this risk.
Financial risk
Failure to manage nancial arrangements and operating cash ows. The Group carries signicant debt and requires cash ows for large projects. Inability to execute strategy from not meeting short term nancial commitments. The Group has signicant cash reserves to meet short and medium term liquidity requirements and completed a $500m bond issue in March 2012.
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Health, Safety, Environment and Communities

Overview A high standard of health, safety, environment and community (HSEC) performance is a critical goal for the Group. Our strategy for growth depends upon operating with the support and collaboration of governments, business partners, communities and employees. The Companys overall governance practices relating to HSEC are supported by the values set out in the Bumiplc Code of Conduct which was adopted by the Boards of Bumiplc and PTBerau in 2011. The transition from a national operating company environment to an international plc creates new obligations and expectations with regard to HSEC governance and performance. We recognise that it is the duty of the Group to work towards achieving these standards and expectations. This work also gives us the opportunity to contribute to raising HSEC standards in emerging economies, which represent an increasing share of the worlds mineral wealth. Our ambition and approach is expressed through our Group Statement ofIntent. Our HSEC programme commenced in April 2011. Consistent with our overall Group philosophy, our approach is to work at a local level, building on what is already in place in the operating companies to achieve standards commensurate with those expected by commonly accepted international practices. We are therefore working in close collaboration with PTBerau to enable Group goals to be implemented in a practical manner. The HSEC governance model centres on the Company providing the overarching framework of policy and guidance with local implementation of procedures and decisions being the responsibility of the operating companies. Through structured internal reporting Bumiplc will exercise oversight with appropriate Group interventions, for example in respect of capital projects and major third party contracts. The Group framework will be subject to continual improvement and will form the basis for the standard in the event of further acquisitions. The framework will be shared with all associate and joint venture companies, including the Companys associate, PTBumi, demonstrating our intention to seek to use our inuence to raise standards inHSEC. Independent consultants have been retained by the Bumiplc HSEC Committee to support the Committee and the Group through ongoing independent review, challenge and guidance. It is intended that the Group will build internal capacity in terms of resources and systems to enable self-sufficiency in Group HSECmanagement. We understand that the achievement of sustainable development requires consideration of issues wider than HSEC, including socio-economic development, contractor management, human resource management and conduct and ethics. All of these areas will receive attention on the basis of a risk based approach to prioritisation andresponse. HSEC governance structure HSEC forms an integral part of our corporate governance structure. The HSEC Committee (see page49) was established by the Board in 2011 and is directly involved in overseeing the Groups approach to HSEC and ensuring that the primary components of an HSEC governance and management framework are in place to demonstrate appropriate Bumiplc oversight. Tony Redman, an experienced mining professional is the technical advisor (HSEC Advisor) on the HSEC Committee (his biography is on page 49). Executive responsibility is held through the Group General Counsel and Company Secretary, with the CEO having ultimate responsibility for HSECperformance. One of the HSEC Committees primary considerations has been the introduction of a governance structure to provide guidance and oversight over HSEC operations
Group Statement of Intent Access to mineral resources is fundamental to global economic growth and their exploitation in increasingly challenging environments is inevitable. We believe it is the duty of international mining companies to take responsibility for, and to support local managements aspirations regarding, HSEC. Bumi plc wants to innovate and succeed in developing sustainable mining practices that unlock social and economic capacity but at the same time conserve and protect social and natural heritage. This will be challenging and will take time. It will require us in Bumi plc to develop a broader view of performance, achieve inclusive governance and put greater focus on long term goals achieved through short to medium term milestones. To enable us to achieve this, it is our intention to operate under the following principles: Enable our operating companies to build the capacity and understanding that is necessary for local decisions and practices to deliver international standards on a consistent basis Work in collaboration and partnership with government, contractors and communities to achieve a shared governance framework that reects the interaction of responsibilities and dependencies Exercise a stewardship based decision model recognising that our activity at any asset is temporary and that the social and natural environments have to be sustained after mining has stopped Apply global governance that has, at its centre, adoption of local solutions that understand local needs and priorities
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Bumi plc is committed to contributing to local and regional development to benet the communities affected by coal operations. In 2011, as part of the Groups community programme, PT Berau engaged with 26 villages.
across the Group and ensure clear internal reporting and accountability. Having explored different structures, the structure adopted by the HSEC Committee is set out below. The key parts of this structure include: The Bumiplc Board level HSEC Committee comprising independent Non-Executive Directors and also the HSEC Advisor provides strategic direction and challenge to the Board and management. The Committee members have particular understanding of the operating environment inIndonesia A Bumiplc HSEC team comprising the Group General Counsel and Company Secretary and the HSEC Advisor has been established to provide guidance and oversight over Group operations. The Group General Counsel and Company Secretary reports to the CEO and, with the HSEC Advisor, to the HSEC Committee
At PTBerau an executive HSEC Committee comprising the President Director of PTBerau, and members of his executive team is responsible for overseeing and approving, amongst other matters, HSEC risks and mitigation plans, key operating procedures, including in relation to contractor management, integration of HSEC into operating decisions, including capital expenditure, and overall performance against plan in PTBerau An operational management structure in PTBerau which includes executive led teams for HSE and, separately, Community. Both report directly to the President Director. This structure has been revised during 2011 on the basis of the Group recommendations. During 2012 the Group will consider how these teams, in particular the HSE team, achieve appropriate governance and control over the contractor companies responsible for mining operations undertaken by PTBerau
HSEC governance structure

PLC Committee PLC Committee
PLC HSEC team
HSEC team
Entities
PT Berau HSEC Committee
Associates and joint ventures
Within entities
HSE
Community
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Health, Safety, Environment and Communities (continued)

Group Model for HSEC development Through the work completed in 2011, the Group put in place a structured programme to establish key fundamentals of HSEC governance. It is planned that this approach will become the standard model for integration of new assets as well as the continued collaboration with existing assets. It is designed toachieve: Collaborative working across the Group Effective alignment of local and Group needs andpriorities Balanced decision making based on key risks Internal and external transparency It also highlighted the need to further consider the operating model between management andcontractors. Based on the gap analysis ndings, it was determined that strengthening of the governance framework for HSEC was an essential rst step. With respect to performance the Group determined that safety management and community development were the priority issues to address through the development of Group standards. This prioritisation reects the operating phase of the existing mines and the demands that will be placed on management in connection with the expansion of operations. Environmental compliance is already a priority and will be maintained, however the Group determined a stewardship based approach to environmental protection should start to be developed in late 2012. Health management provisions and procedures will also be considered further in 2012. Safety Good safety management is recognised to be critical to the continuation and efficiency of operations. The Group has prioritised safety, along with communities, to receive detailed attention with the intention to raise standards to an international level. PTBerau is certied to OSHAS 18001 with a set of operating procedures in place which are overseen through the HSE function. Despite the focus on safety, 2011 has been a disappointing year. Four separate events in PTBerau, resulting in four fatalities, are unacceptable to us. There were no fatal events in the preceding three years. These events, and the resulting management actions agreed with the regulatory authorities in Indonesia, were reported to the Board in December 2011. Progress will continue to be overseen by the Bumiplc HSEC Committee and Board. The scope and quality of the lost time injury frequency (LTIF) data is an area of focus for 2012 with a view to achieving more complete reporting, including contractors and shipping operations. A more detailed review of safety practices in key areas is now underway in PTBerau, which commenced in 2012 as part of the response to the fatal events. This review, which is being completed by independent consultants, will form the basis for an ongoing programme of work which will consider: Model for managing contractors Minimum skill requirements and training for contractors and staff Behaviour change Critical Standard Operating Procedures Safety performance reporting
The key steps of the model developed and applied in 2011 to PTBerau are shown below: Gap analysis and risk based priority setting using international standards, including the ICMM and IFC frameworks as well as internationally recognised internal control and reporting frameworks (the Internal Controls framework: COSO and Global ReportingInitiative) Design of governance framework and supporting tools, including determination of operating company HSEC structures, the relationship between local and Group standards, internal reporting templates, risk assessment and mitigationrequirements Integration support providing guidance and practical help to assist the operating companies to implement enhanced and/or new procedures and review decisions and programmes Collaborative oversight involving, in addition to general communication, oversight by the Bumiplc HSEC team, including attendance where appropriate at HSEC Committee meetings in local operations to ensure decision making respects local as well as Group needs and to help escalation of relevant matters to the Board, and Formal reporting creating the basis for executive and Board review of progress and performance against risks
Priorities for 2011 and 2012 The HSEC gap analysis was performed in JulySeptember 2011. It involved visits and interviews with the operating company management at the head office in Kalimantan and at two of PTBeraus operating mines. The gap analysis showed that local operations were operating above the typical standard for mining companies in Indonesia. It also showed that there was a shortfall against international expectations with a primary focus on compliance rather than risk and the implementation and enforcement of many of the writtenprocedures.
Progress against the work programme will be overseen by the HSEC Committee throughout2012.
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CASE STUDY COMMUNITY ENGAGEMENT AND DEVELOPMENT IN KALIMANTAN
The focus for community projects and programmes is agreed with the local community groups on the basis of an annual mapping exercise. The 2011 mapping included 26 villages. Key focus areas were: Education and knowledge PT Berau established six dormitories for school children from remote areas with a capacity for more than 400 students, and almost 300 scholarships for higher education were provided. In addition PT Berau has provided more than 180 teacher scholarships as part of a four year programme started in 2009. In mid 2011, PT Berau began construction of a 500 person per year training centre with a focus on developing skilled mechanics and heavy equipment operators. Health and nutrition In 2011, PT Berau provided free basic medical check ups, immunisations and food supplements to more than 5,500 local children below the age of ve. PT Berau in conjunction with the University of Indonesia and the local government launched a nutrition and health programme to promote awareness around maintaining general health within local communities. Cultural environment To support the preservation of local culture and heritage, PT Berau sponsored cultural events of the two former sultanates of Gunung Tabur and Sambaliung. In 2011, PT Berau, in cooperation with National Geographic Indonesia, launched a project to document the local ethnic and culture
of the Dayak Punan natives. PT Berau also sponsored initiatives to promote the traditional arts of Dayak Punan natives. Infrastructure and economic development In the agricultural sector, the priority for 2011 was to work with small scale enterprises to improve productivity of 168 ha of cocoa plantation owned by 163 local farmers as well as to assist local development of rubber and orange plantations. By the end of 2011, PT Berau had provided houses in eight villages with electricity, and there are plans to extend this to more villages in 2012 as well as to begin to provide wastewater treatment facilities to further villages over a four year period.
34
Health, Safety, Environment and Communities (continued)

Community The Group is committed to contributing to local and regional development to benet the communities affected by its operations. This is achieved through employment, provision of infrastructure and assets for public use, as well as voluntary and statutory investment. Our operations have a history of strong community relations, working collaboratively with communities and local government, and the gap analysis work completed in 2011 showed that community programmes are well established in PTBerau. Community development programmes are approved in consultation with local government and communities and are implemented through a network of community representatives against annual plans. Mine closure plans were submitted in 2011 in line with new legislative requirements and have been approved for all the operating mines. These closure plans include provision and plans for long term social development. No major events of community outrage or disruption have occurred in2011. However, we recognise that the relationship between mining companies, communities and government with respect to socio-economic contribution is under intense scrutiny. We also recognise that community action against mining companies has a rising prole within other parts of Indonesia. It is therefore an area which the Group has prioritised for attention. The Group approach is to provide and enforce a policy and framework that enables and ensures consistent local implementation. The Group is developing central guidance in the form of a Group Practice Guide containing the Group aims, principles and a framework for the planning, delivery and monitoring of all community interaction. It is based on commonly accepted best practice, including the World Bank and IFC standards as well as the methodologies set out by ICMM. Responsibility for implementation, including decisions on local priorities and methods of response, remain the responsibility of the operating companies. By putting this model in place, the Group is condent it can achieve and demonstrate a consistent and appropriate strategy and approach while maintaining necessary local autonomy to respond in a manner suitable to localcircumstances. The Group Practice Guide builds on the procedures already in place and covers: Community projects and programmes (referred locally as CSR) Land acquisition Resettlement Donations In 2011, PTBerau spent $5.5m on these community initiatives. PTBeraus community work is funded through its normal business planning and budgeting processes with implementation performed by management working in conjunction with the Dharma Bhakti Berau Coal Foundation. Under the current ve year agreement (2012 to 2016) PTBerau is required to invest at least $30m into community projects andprogrammes. In addition to the community projects, PTBerau has dened procedures for land acquisition. Acquisition agreements are determined directly with the land owner with pricing thresholds based on past sales transaction in the market, reecting the class of land and the type of land title held. With the plans for mine expansion, this is a key area of focus. As at the end of 2011, the majority of the acquisition agreements were in place for the areas impacted by the 2012/2013 expansion plans. As part of the expansion preparation, PTBerau plans to undertake its rst community resettlement late in 2012. This will involve moving 110households into threenewly built villages. The planning is well progressed with all parties in agreement. This programme will be subject to review through the Group monitoring processes and by externalparties. Environment Environmental stewardship is an important objective for the Group recognising the sensitivity of the natural environments in which the Group is operating. Consistent with Indonesian regulations, environmental planning for the mining operations commence at the mine development phase and are refreshed throughout the operational phase in order that environmental impacts of operations are mitigated and long term environmental impact ismanaged. In 2011, the introduction of the mine closure plan requirement introduced a new longer term perspective. These closure plans have been submitted and approved, and reect the environmental reclamation programmes already committed to by PTBerau. Meanwhile, shipping activities are required to comply with environmental regulations for maritime activities. Based on the gap analysis exercise, current mining operations achieved compliance in the majority of areas which are subject to environmental permit conditions in 2011, including wastewater discharge, environmental impact on communities and land reclamation. Land reclamation programmes have progressed in line with agreed 2011 plans. PTBerau works with a number of universities to review the environmental condition of reclaimed areas and monitors biodiversity on an annual basis. All of PTBeraus operations have successfully maintained ISO14001 certication since 2008.
It is in the process of being adopted and such adoption will be reviewed in mid 2012.
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The Group plans to focus on developing an environmental stewardship approach starting in late 2012. Key areas of focus for the mining operations will be energy efficiency, carbon impact and biodiversity management. There will be a programme to review the environmental procedures and standards in the shippingoperations. Health The Group recognises the increasing importance of managing health issues within the workforce. In the case of PTBerau, all mining operations are performed by contractors which represent the area presenting the highest risks to health. During 2012, the Group will work to determine how to progress an increased level of occupational health awareness and management in itsoperations. Employees The development and well-being of our people is important to ensure we develop the capacity we need to meet our business goals and play a key role in the local communities where we have operations. In 2011, the Bumiplc Board and the Board of PTBerau approved the Bumiplc Code of Conduct which is designed to align our people around a common purpose and set of values. The different cultures in which we operate create different inherent expectations and behaviours, and our success depends on always operating in a manner that is consistent with our Code of Conduct. A whistleblowing helpline is also being established which is available 24 hours a day, sevendays a week to all employees as well as third parties affected by our operations. This will be communicated and adopted in 2012. As at the end of 2011, the Group had more than 750employees and 10,500 contractor personnel. Contractor personnel work across coal hauling and processing, maintenance, shipping and logistics as well as catering and wider service support. The contractor headcount has grown by more than 10%in the year. Through 2011, PTBerau maintained its established employment policies recognising local legal requirements. The general approach observed in PTBerau towards human resources aligns to the principles that the Group is seeking to adopt,in particular: Open recruitment processes that also draw on local communities where possible and as required by law Performance review and feedback processes that support skill development and progression Consideration to employee health, safety andwellbeing Pay and remuneration in line with industry standard levels in country Clear contracting and grievance procedures andmechanisms
Skill shortages and loss of staff to competitors in the mining industry is a key issue for all mining companies in Indonesia. To help ensure access to skills and resources, PTBerau runs an internship programme for graduates in mine engineering, geology, civil engineering, forestry, environmental, economics, and sociology. The internship consists of a one year programme where successful candidates are offered a permanentposition. The Group recognises the right of its employees to freely associate and join labour unions and maintains active relationships with those unions. In PTBerau almost 50% of employees are members of a labour union. There have been no cases of strikes or employee disruption occurring in 2011 in the Group.
Environmental stewardship is an important objective for the Group, recognising the sensitivity of the natural environment in which we operate.
Governance
Governance
38 40 41 45 45 48 48 48 49 Board of Directors Executive management Governance Report Board Committees Audit Committee Nomination Committee Remuneration Committee Conicts Committee Health, Safety, Environment and Communities Committee 50 Remuneration Report 62 Other Statutory Information 69 Statement of Directors Responsibilities
37
38
Bumi plc | Governance Annual Report 2011
Board of Directors (from 26 March 2012)
Samin Tan Chairman
Indra Bakrie Co-Chairman
Nalin Rathod Chief Executive Ofcer
Scott Merrillees Chief Financial Ofcer
Samin Tan was appointed to the Board on 26 March 2012 and became Chairman of the Company replacing Indra Bakrie. He is the President Director of Renaissance Capital. Between 2007 and 2011 Samin headed PT Borneo as its President Director. Prior to this, he was Deputy Managing Partner of the Indonesian consulting practice of Deloitte Touche and Head of the Indonesian tax practice of Deloitte Touche.
Indra Bakrie was Chairman of the Company until 26 March 2012 and is now Co-Chairman of the Company. Over the past 20 years, he has helped numerous businesses succeed in diverse sectors such as plantations, oil and gas exploration and trading, real estate, and infrastructure. Indra graduated from the University of Southern California in 1976 with a major in Business Administration.
Nalin Rathod was appointed to the Board on 26 March 2012 and became Chief Executive Ofcer, replacing Ari Hudaya. He is currently President Commissioner of KPC and Arutmin and a Commissioner of PT Bumi, BRM and PT Gorontalo Minerals. He was also managing director of Capital Managers Asia Pte Ltd, a nancial advisory rm operating in Asia. Nalin has over 20 years experience in the Indonesian coal mining sector.
Scott Merrillees was appointed to the Board on 26 March 2012 and became Chief Financial Ofcer, replacing Andrew Beckham. Prior to that he served as Director of Corporate Finance and Investor Relations at PT Borneo. He previously served as South East Asia Head of Natural Resources for ANZ Bank and President Director for BNP Paribas Securities Indonesia. Other roles have included Research Director for UBS Securities Ltd in Indonesia.
Rosan Roeslani Non-Executive Director
James Campbell Non-Executive Director
Ari Hudaya Non-Executive Director
Nathaniel Rothschild Non-Executive Director
Rosan Roeslani is President Director of PT Berau and currently serves as President Director of Recapital and Commissioner of PT Mahaka Media. He is also on the Board of Commissioners for PT Lativi Mediakarya, PT Lupita Amanda, PT Saratoga Investama Sadaya and several other multinational companies based in Indonesia.
James Campbell is co-founder of the Company alongside Nathaniel Rothschild. From 2001 to 2008, James was Chairman of Australian listed nickel producer Minara Resources. Prior to this, he held a variety of operational roles and Board appointments within the Anglo American Group. James was Managing Director of De Beers Industrial Diamond Division, Chairman of AngloCoal, Chairman of AngloBase, an Executive Director of Anglo American plc, a Director of AngloGold, AngloPlatinum, Richards Bay Coal Terminal Company and of De Beers Centenary.
Ari Hudaya was Chief Executive Ofcer of the Company until 26 March 2012. Ari has been President Director of PT Bumi since 2001, and has much experience in the Asian natural resources sector. Previously he was President Director of both KPC and Arutmin, as well as Enercorp. He is a Director of IndoCoal Resources, Kalimanatan Coal and Sangatta Resources. Ari graduated from Institut Teknologi Bandung with a degree in Mechanical Engineering in 1983.
Nathaniel Rothschild is one of the founders of the Company and was Co-Chairman of the Company until 26 March 2012. He is also a Non-Executive Director of Genel Energy plc and Barrick Gold Corporation. Nathaniel is a member of the Belfer Centers International Council at the John F. Kennedy School of Government at Harvard University and holds an MA in History from Oxford University.
Governance
39
Board Committees
The Board is supported by the following committees:
Independent Non-Executive Directors
Nomination Audit Conicts Remuneration Health, Safety, Environment Chairman of Committee and Communities
Sir Julian Horn-Smith Deputy Chairman and Senior Independent Director Sir Julian Horn-Smith is the Deputy Chairman and Senior Independent Director of the Company. He has more than 25 years experience in the telecommunications sector and joined Vodafone Group at its foundation. Prior to this he held positions at both Phillips and Mars GB. In 2005 Sir Julian became CEO of Vodafone. He currently acts as a senior adviser to investment bank UBS and CVC Capital Partners, and is on the Board of Directors of Lloyds Banking Group plc and De La Rue plc.
Sony Harsono Non-Executive Director
Sir Graham Hearne Non-Executive Director
Lord Renwick Non-Executive Director
Sony Harsano has been a professional business adviser for over 30 years. He was previously Chairman for one of Indonesias biggest accountancy rms. He now serves as CEO of Harsono Hadibroto Consulting and is Chairman of the IndonesiaJapan Economic Committee of the Indonesian Chamber of Commerce (KADIN). He is also a member of the Board of Advisers to the United StatesIndonesia Society (USINDO).
Sir Graham Hearne is Chairman of Catlin Group Limited and Braemar Shipping Services Group Plc. Prior to this he was Chairman of Enterprise Oil plc until 2002. He is also a NonExecutive Director of Genel Energy plc.
Lord Renwick is currently Vice Chairman of Investment Banking at J.P. Morgan Europe and Vice Chairman of J.P. Morgan Cazenove. He also serves as a Non-Executive Director and Chairman of the Remuneration Committee of Kazakhmys plc, Chairman of Fluor Limited and is a Director of Compagnie Financiere Richemont AG. He has previously served as a Director of BHP Billiton plc, British Airways plc, Fluor Corporation and SABMiller plc.
Amir Sambodo Non-Executive Director
Steven Shapiro Non-Executive Director
Badung Tariono Non-Executive Director
Philip Yeo Non-Executive Director
Amir Sambodo is currently the President Director of PT Tuban Petrochemicals Industries, one of the biggest petrochemical producers in Indonesia. He founded Indonesian business technology magazine PT Teknopreneur Indonesia and is President Commissioner of PT Tekno Ventura. Amir is also the current Special Adviser to the Coordinating Minister for Economic Affairs in Indonesia.
Steven Shapiro is a member of the Board of Directors of Barrick Gold Corporation and El Paso Corporation. He has served as Executive Vice President and Chief Financial Ofcer of Burlington Resources Inc. and as Senior Vice President, Chief Financial Ofcer and a Director at Vastar Resources, Inc. Steven has also spent 16 years in various roles of increasing responsibility with Atlantic Richeld Company (ARCO).
Badung Tariono was appointed to the Board as a Non-Executive Director with effect from 1 July 2011. He is currently Head of Private Equity at Trimegah Securities in Jakarta, and has worked at UBS OConnor Limited in London where he specialised in the energy, metal and mining sectors. Previously, he was a Senior Portfolio Manager at ABN AMRO Asset Management and Finance and Business Performance Advisor at Shell International Exploration and Production (EP), both based in the Netherlands.
Philip Yeo is Chairman of SPRING Singapore and a member of the United Nations Committee of Experts in Public Administration (CEPA). He is also Chairman of SingBridge International Investments Pte Ltd, a wholly owned subsidiary of Temasek Holdings; Chairman of Accuron Technologies Pte Ltd; Chairman of Medical Technologies Investment Company Holdings Pte Ltd; Chairman of Ascendas Property Fund Trustee Pte Ltd; and Chairman of i-Globe Partners, a Singapore based venture capital fund. Philip is also a member of the Board of Directors of United Overseas Bank and City Development Ltd (CDL).
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Executive Management (as of 31December 2011)

5
Key
1 2 3 4 5
Daren Morris Andrew Beckham Nick von Schirnding Paul Vickers Ari Hudaya
Ari Hudaya Chief Executive Ofcer
Andrew Beckham Chief Financial Ofcer
See biography on page 38.
Andrew Beckham was a Director and Chief Financial Ofcer of the Company until 26 March 2012. He has been Chief Financial Ofcer of PT Bumi since December 2006 and a Director of PT Bumi since June 2010. He is also currently a Director of Herald Resources. Andrew graduated from Portsmouth University with an Honours Degree in Economics.
Nick von Schirnding Group Head of Communications & Investor Relations Nick von Schirnding is Group Head of Communications & Investor Relations and is a member of the Group Executive team. Prior to joining the Company in May 2011, he was Head of Investor & Corporate Affairs at Anglo American plc and has also worked for the De Beers and Minorco mining groups. Nick von Schirnding is a qualied lawyer.
Paul Vickers Group General Counsel and Company Secretary Paul Vickers joined Bumi plc as Group General Counsel and Company Secretary in February 2011. Prior to joining the Company, Paul has held senior executive roles with Cadbury Schweppes plc, Cable & Wireless plc, Pearson plc and 3UK (part of the Hutchison Whampoa Group). Paul began his career at Slaughter & May. He is responsible for legal and company secretarial affairs, compliance, HSEC and HR for the London ofce. Paul is also acting Group Head of Internal Audit and Risk Management.
Daren Morris Group Head of Mergers and Acquisition Daren Morris was a founding member of the Company and joined Bumi plc as Group Head of Mergers and Acquisitions in April 2011. Prior to joining the Company, he was a managing director at UBS Investment Bank and Morgan Stanley. Daren is a qualied chartered accountant and has a degree in physics from Oxford University.
Governance
41
Governance Report
The Governance Report set out below is designed to provide shareholders with a comprehensive summary of the Groups governance arrangements and an explanation of how the Company has applied the main principles of the UK Corporate Governance Code (Governance Code) as relevant for the Company in 2011. The Directors believe that the Company has complied with the provisions set out in the Governance Code since the Directors joined the Board of Bumiplc on 11April 2011 (and references in this Governance Report to 2011 shall be construed as meaning from this date) except that, when he joined the Board as Chairman, Indra Bakrie was not independent within the criteria of the Governance Code on the date of his appointment as he was nominated as a Director of the Company by PTBakrie & Brothers Tbk and Long Haul Holdings Ltd (together the BakrieGroup) which are substantial shareholders in theCompany. The rst meeting of the Board of Directors of the Company took place on 11 April 2011 in Jakarta. On 17 June 2011, the Company issued a prospectus applying for its issued voting ordinary share capital to be admitted to the premium listing segment of the Official List and to the London Stock Exchange, and for such shares to be admitted to trading on the London Stock Exchanges main market for listed securities. On 28 June 2011, the Companys ordinary shares were admitted to trading on the London Stock Exchanges main market for listed securities and it became the parent company of Vallarplc (now Vallar Limited) and the ultimate owner of Vallarplcs interests in PTBerau and PTBumi. The details of Vallar plcs original acquisition of a 75% interest in PTBerau and a 25% interest in PTBumi (which closed on 8 April 2011 and 4March 2011, respectively) are set out in a prospectus issued by Vallar plc on 24February 2011 and the 2010 Annual Report for Vallar plc which was issued on 28April2011. Leadership The Board is responsible to Bumiplcs shareholders for creating and delivering sustainable shareholder value through the management of the Groups businesses within the Companys governance framework. This framework is based on the principles in the Governance Code. The Boards role is to set Group strategy and values and to ensure that appropriate standards, controls and resources are in place to deliver it. As well as oversight responsibility for nancial performance, internal controls and risk management of the Group, the Board has a formal schedule of matters specically reserved to it for its decision (which is available at www.bumiplc.com). These include major variations from and changes to the annual budget, material capital projects and investments, acquisitions and disposals, andnancing. Certain aspects of the Boards responsibilities have been delegated to the following committees (Committees) and the terms of reference of such committees are available at www.bumiplc.com: Audit Committee; Remuneration Committee; Nomination Committee; Health, Safety, Environment and Communities (HSEC) Committee; and the ConictsCommittee. A list of the individual Directors, their biographies and Committee memberships is set out on pages 38 and 39. As described in the Chairmans statement on pages 6 and 7 and as announced following the Board meeting on 26March 2012, the Board comprises 16Directors and Messrs Samin Tan, NalinRathod and Scott Merrillees replaced Messrs Indra Bakrie, Ari Hudaya and Andrew Beckham as Chairman, CEO and CFO of the Company, respectively. Andrew Beckham stepped down from the Board and was replaced by Scott Merrillees as CFO, whilst Indra Bakrie became Co-Chairman and Messrs Nathaniel Rothschild and Ari Hudaya became non-independent Non-Executive Directors of the Company. The biographies of the new Directors are set out on pages 38 and 39. The Board has resolved that all Directors will be subject to re-election annually by the shareholders starting with the Annual General Meeting (AGM) in 2012. The resolutions to be proposed regarding such re-elections and the appointment of new Directors are set out in the Companys notice of AGM (AGM Notice) which is being issued at the same time as this Annual Report. One of the resolutions to be proposed at the AGM is to change the Articles of Association of the Company to increase the permitted size of the Board to 18members to enable the appointment of furtherDirectors. The Board and its Committees have regular scheduled meetings and hold additional meetings as and when necessary. During 2011, the Board met ve times on scheduled occasions and two additional meetings took place. Directors are expected, where possible, to attend all Board meetings, relevant Committee meetings and the AGM. The core activities of the Board and its Committees are documented and planned on an annual basis with an annual schedule of agenda items and the maintenance of, and follow up on, a list of matters arising from each meeting. During the course of 2011, the Board has been establishing an effective governance framework to support the management of the Groups activities and guide the affairs of the Group in pursuing its strategy. The Groups strategy is discussed on a regular basis at Board meetings and from 2012 one scheduled Board meeting will be focused specically on this subject and plans for future growth.
42
Governance (continued)
Board meetings attended by each Director during 2011
Directors Meetings attended
Indra Bakrie Nathaniel Rothschild Ari Hudaya Andrew Beckham James Campbell Rosan Roeslani Independent Non-Executive Directors Sir Julian Horn-Smith Lord Renwick Steven Shapiro Sir Graham Hearne Amir Sambodo Philip Yeo Sony Harsono Badung Tariono1
1
7/7 7/7 3/7 7/7 7/7 7/7 7/7 7/7 7/7 7/7 7/7 7/7 7/7 3/3
Sir Julian Horn-Smith is the Senior Independent Director (SID) and Deputy Chairman of the Company. His role and responsibilities as SID are also set out in the Responsibilities Statement. As well as maintaining contact with major shareholders and making himself available to shareholders whose concerns have not been satised through the normal channels, the SID is the Chairman of the Nomination Committee and is also responsible for ensuring that the performance of the Board, its Committees and all Directors (including the Chairman) is formally and rigorously evaluated at least once a year working as appropriate with the Nomination Committee. Effectiveness During 2011, the Board was made up of 14 Directors comprising the Chairman (Indra Bakrie), the Co-Chairman (Nathaniel Rothschild), two Executive Directors, two non-independent Non-Executive Directors and eight INEDs. As mentioned above, the membership of all the Board Committees comprises only INEDs. The Board considers all its INEDs to be independent in accordance with the Governance Code and reviews the independence of its INEDs annually in accordance with the criteria set out within the Governance Code. The Board believes that there is an appropriate range and balance of skills, experience, independence and knowledge on the Board. The Board also believes there is an appropriate balance between independent and non-independent Directors and that the Non-Executive Directors have a broad range of experience gained in a suitable variety of private sector and government backgrounds internationally, and particularly inIndonesia. As founders of the Company, Messrs Nathaniel Rothschild and James Campbell are not considered independent together with Messrs IndraBakrie, AriHudaya, AndrewBeckham and RosanRoeslani who were appointed under relationship agreements entered into with two signicant shareholders of the Company, the Bakrie Group and PTBukit Mutiara. These relationship agreements were fully disclosed when shareholder approval was received for the acquisition of the interests in PTBerau and PTBumi. Under the terms of those relationship agreements, the Bakrie Group can nominate for appointment up to three Directors for the positions of Chairman, Chief Executive Officer and Chief Financial Officer, and PTBukit Mutiara can nominate for appointment one Non-Executive Director, subject to each of the Bakrie Group and PTBukit Mutiara respectively retaining control of 15% of the votes able to be cast at general meetings of the Company. These relationship agreements also regulate relations between such shareholders and the Company with provisions which require that the Company will comply with the Listing Rules; the Company will be capable
Appointed 1 July 2011.
Both the Companys subsidiary, PTBerau, and its associate, PTBumi, are separately listed on the Indonesia Stock Exchange. As part of the governance framework, in 2011 oversight of the management of the Companys subsidiary PTBerau was achieved through the presence on the PTBerau Board of one of the Companys Non-Executive Directors, Rosan Roeslani, as PTBeraus President Director. In the case of its associate PTBumi, the ability of the Company to seek to inuence the activities of PTBumi was achieved through common Board membership, which in 2011 comprised Messrs Hudaya and Beckham who were the President Director and CFO respectively, of PTBumi. The roles of the Chairman and the Chief Executive Officer are separate and their responsibilities are set out in a statement approved by the Board and signed by the then Chairman in 2011 (Responsibilities Statement) which is available at www.bumiplc.com. The Chairman is responsible for the leadership and effective running of the Board. The Chief Executive Officer is responsible for the running of the Groups business within the authorities delegated by theBoard. The structure of the Board is designed to ensure that the independent Non-Executive Directors (INEDs) are in a position to constructively challenge and help guide strategy, monitor management and the reporting of performance, and to satisfy themselves regarding the standards of the Groups nancial controls and systems of risk management. In accordance with the Governance Code at least half of the members of the Board are independent and the membership of all the Committees comprise only INEDs (and in the case of the HSEC Committee, an independent technicaladvisor).
Governance
43
at all times of carrying on its business independently of such shareholders; all transactions and relationships between the Company and such shareholders are at arms-length on a normal commercial basis; and the goodwill, reputation and commercial interests of the Company are maintained. The INEDs meet without the Executive Directors and the non-independent Non-Executive Directors at the end of each scheduled Board meeting and at other times when appropriate, such as on the occasion of the proposed acquisition of BRM by the Company and following the receiptof a notice under Section303 of the Companies Act 2006 from PTBorneo requesting changes to theBoard. The responsibilities of the Nomination Committee are set out on page 48 and include succession planning and determining the selection criteria and suitability of prospective candidates having regard to the overall balance of skills, knowledge and experience on the Board and recommendations from the Companys major shareholders. The Committee recognises the importance of diversity and when recruiting ensures that there are no obstacles to the Committee having visibility of suitable candidates for possible appointment to the Board, in particular regardless ofgender. The Nomination Committee reviews the background and proles of the candidates using independent external consultants and search rms when appropriate and interviews are also carried out before candidates are recommended to the Board. In the case of appointments in 2011 and those proposed in the AGM Notice, as the focus was on Indonesian background and experience the Nomination Committee sought suggestions from its shareholders. Following this, candidates were the subject of detailed background checks by an independent consultant followed by meetings with, at a minimum, the SID and one other member of the Committee before being recommended to the Board. The same process was followed regarding the appointment of Messrs Tan, Rathod and Merrillees who were nominated in accordance with the above mentioned relationship agreement with the BakrieGroup. Whilst Non-Executive Directors are appointed by the Board for an initial three year term, all Directors will be subject to re-election annually by the shareholders starting with the AGM in 2012. Subsequent appointment is subject to review by the Nomination Committee. Their terms of appointment are available for inspection in accordance with the Governance Code and the Board is satised that their other duties do not conict with their time commitments as Directors of the Company. The Chairmans other commitments are as indicated in his prole on page 38 and do not affect his ability to devote sufficient time to the Company. As disclosed in their proles on page 38 and 40, Ari Hudaya and Andrew Beckham are also the President Director and CFO respectively of PTBumi, an associate of the Company, and in addition to being a non-independent Non-Executive Director of the Company, Rosan Roeslani is also the President Director of PTBerau, a subsidiary of the Company and President Director of Recapital. In each case the Board believes these roles are complementary to the interests of, and do not affect the ability of such Directors to devote sufficient time to, the Company. All Directors appointed to the Board receive an induction programme which, depending upon their qualications and experience, will include presentations and briengs, meetings with senior management and visits to key sites and offices. Ongoing professional development is provided to all Directors. In 2011, the Boards professional development focused primarily on the responsibilities and duties of a director of a premium listed company as well as briengs on developments in corporate governance and the UK Bribery Act. Board site visits are also considered important and, in April 2011, a three day visit to Kalimantan was arranged to enable the Directors to meet with key personnel, receive detailed briengs on the operations and expansion plans, and visit local offices and mine locations at PTBerau, KPC andArutmin. All Directors have access to the advice and services of the Group General Counsel and Company Secretary who is responsible to the Board for ensuring the Board procedures are complied with. The Group General Counsel and Company Secretary is responsible for advising the Board, through the Chairman, on all governance matters. Under the direction of the Chairman, the Group General Counsel and Company Secretarys responsibilities include ensuring good information ows within the Board and its Committees, and between senior management and Non-Executive Directors, as well as facilitating induction and assisting with professional development asrequired. The Group General Counsel and Company Secretary acts as secretary to the Board and to each of its Committees. The appointment or removal of the Group General Counsel and Company Secretary is a matter for the Board as a whole. Directors may obtain independent professional advice at the Companys expense if they believe it may be required in the furtherance of their duties. In 2011, the Board, the Audit and Remuneration Committees and individual Director evaluations were conducted by the SID and the Chairmen of the Committees using written questionnaires which covered a number of key areas, including access to timely, clear and accurate information, the responsibilities of the Board and such Committees, the relationship between the Board and management, and ongoing development for Non-Executive Directors. The results of the evaluations were considered by the SID and the Committee Chairmen and have either been addressed or will form part of the agenda for the Board and such Committees in2012.
44
Governance (continued)
Following these evaluations, the Directors concluded that the Board and its Committees operate effectively and also considered that each Director is contributing effectively and demonstrating commitment to the role. As mentioned in the Chairmens letter on pages 6 and 7, Ari Hudayas attendance record in 2011 was compromised by his ill health but this did not affect his commitment to the Company. The Board, Committee and individual Director evaluations will be facilitated by an independent external facilitator in 2012, and at least once every three years going forwards in accordance with the Governance Code. Accountability Through this Annual Report and, as required, through other periodic nancial statements the Board is committed to providing shareholders with a clear assessment of the Companys position and prospects. Statements regarding the status of the Company as a going concern and the Directors responsibilities for reporting the nancial statements can be found on pages 24 and 69, respectively. The terms of reference of the Audit Committee comply with the provisions of the Governance Code and accordingly statements regarding the review of the Companys internal control and risk management systems, arrangements by which staff may in condence raise concerns about possible improprieties, the appointment of external auditors, and the provision of non-audit services by the auditors can be found in the Audit Committee report on pages 45 to 47. The Board has overall responsibility for the Groups system of internal control. The system of internal control includes nancial, operational and compliance controls, risk management procedures and a review of their effectiveness at least annually. The Board has delegated its responsibility for reviewing the effectiveness of these controls to the Audit Committee. The results of the Audit Committees work were reported to and considered by the Board, which retains responsibility for the disclosures on internal control in the Annual Report. Similarly, while the Audit Committee is responsible for oversight of the effectiveness of the risk management systems, accountability for identifying and managing risks rests with the Board and executive management team. The internal control systems are designed to meet the Groups needs and manage the risks to which it is exposed, although these cannot be altogether eliminated. Such systems can only provide reasonable but not absolute assurance against material misstatement or loss. The Board conrms that a system of internal controls for the period ended 31December 2011 has been designed and is being established in accordance with the revised Turnbull Guidance on Internal Control published by the FRC to assist with implementing the Governance Code. The Board, with advice from the Audit Committee, has reviewed the effectiveness of the Groups system of internal controls. With Bumiplc in its rst year, and PTBerau a new public company only from August 2010, 2011 has been a period of evolution for the Groups system of internal controls and this will continue in the current year. Signicant progress has been achieved during the period, as reported, and plans have been established to address areas where the system of internal controls can be strengthened. The Boards review process included consideration of the outcome of the work of the Audit Committee and reports provided by the ExecutiveDirectors. This review excludes associates of the Company as the management of Bumiplc does not have the ability to dictate or modify the internal controls of these entities and therefore can only recommend that local management adopts the Groups standards where relevant and appropriate. Remuneration Details of the level and make up of the Directors remuneration and the work of the Remuneration Committee as required by the Governance Code and the Large and Medium-sized Companies and Groups (Accounts and Reports Regulations 2008) can be found in the Remuneration Report on pages 50 to 61. Relations with shareholders The Board supports the objectives of the UK Stewardship Code and welcomes opportunities to engage constructively with shareholders. The Board also recognises the importance of maintaining an ongoing relationship with the Companys shareholders based on frequent and purposeful dialogue. During 2011, a number of meetings with institutional shareholders were held both in the UK and internationally by the Chairman, Co-Chairman, Chief Executive Officer, Chief Financial Officer, the SID and the Group Head of Communications and Investor Relations to ensure that the investor community received a balanced and comprehensive view of the Groups performance and the issues it faced during its rstyear. The Board monitors the views of shareholders by way of a report from the Group Head of Communications and Investor Relations at every Board meeting covering investor feedback as well as analysts and brokers reports and briengs, and a summary of the main movements in shareholdings. The Chairman, Co-Chairman and the SID remain available to meet institutional shareholders to discuss any issuesorconcerns.
Governance
45
Shareholders are keptinformed of the progress and performance of the Group through the Annual Report, half year results, production reports, interim management statements, and the AGM. This information and other signicant announcements of the Group are released to the London Stock Exchange and are available on www.bumiplc.com. The Companys rst AGM will be held on 14June 2012 at the Institute of Directors, 116PallMall, London SW1Y5ED. This will provide all shareholders with the opportunity to vote on the resolutions put to shareholders and, for those shareholders who are able to attend, to ask questions of the Board of Directors, including the Chairmen of the Committees. The AGM Notice is set out in a separate document accompanying the Annual Report and the result of the AGM voting on all resolutions will be published on the Companyswebsite.
Board Committees
Audit Committee
The full terms of reference of the Committee can be found on the Companys website, www.bumiplc.com, or can be obtained from the Group General Counsel and Company Secretary. Role of the Committee The Audit Committees remit includes the following: monitoring the integrity of the nancial statements of the Company and any formal announcements relating to the Companys nancial performance, including reviewing signicant nancial reporting judgements contained in them; reviewing the effectiveness of the procedures for the identication, assessment and reporting ofrisk; monitoring the role and effectiveness of the Groups internal audit function including approving the annual program of internal audit work and the appointment or removal of the head of internalaudit; reviewing the effectiveness of the Companys internal controls; reviewing arrangements by which staff may in condence raise concerns about possible improprieties regarding nancial reporting and other matters; considering and making recommendations to the Board on the appointment of the external auditors, including approving the remuneration and terms of engagement of the external auditors; approving the scope of the external auditors annual audit programme and reviewing the output; monitoring and reviewing the external auditors independence and the effectiveness of the audit process, taking into account the planning of, and results from, their work; and developing, implementing and monitoring compliance with a policy on the engagement of the external auditors to supply non-audit services.
Members Meetings attended
Lord Renwick Steven Shapiro Sir Graham Hearne Sony Harsono Amir Sambodo*
4/4 4/4 4/4 4/4 3/3
* joined the Committee in June 2011.
Lord Renwick
Chairman
All members of the Audit Committee are INEDs and Messrs Steven Shapiro and Sony Harsono have recent and relevant nancial experience as required by the Governance Code. The meetings of this Committee are normally attended by the Chief Financial Officer, the Group Financial Controller, the external auditors (who have direct access to the Chairman of the Committee) and, for internal audit reviews, KPMG following their appointment to support the Group internal audit and risk functions. At the end of every meeting the Committee has the opportunity to meet alone with the external auditors. The secretary to the Committee is the Group General Counsel and CompanySecretary. The Chairman of the Committee reports to subsequent meetings of the Board and the Board receives a copy of the minutes of each meeting once these have been approved by the Committee. The Committees effectiveness was reviewed as part of the Board evaluation process and it was concluded to have operated effectively.
46
Board Committees (continued)

Activities during the year The Audit Committee met four times during 2011. The annual work programme includes meeting prior to the publication of the Companys full and half year results and other regular scheduled items, areas considered to require particular focus and mattersarising. In this rst year for the Group, the priority for the Audit Committee has been to establish a framework of risk management and internal controls to be operated throughout the Group with oversight from the Bumiplc Board, its Committees and executive management all in accordance with the guidance set out in the Governance Code and in the Committee of Sponsoring Organisations of the Treadway Commission (COSO)framework. The development of the framework of controls has been informed by nancial reporting procedures work performed in connection with the prospectus for the premium listing issued by the Company on 17June 2011, and supported through the engagement of KPMG reporting to the Group General Counsel and Company Secretary acting as the Group Head of Internal Audit and Risk Management until a permanent appointment is made. Whilst the Committees primary focus is on the Group, it has also sought to inuence the Wider Group insofar as it is able to do so, through recommending to PTBumi the adoption of Group governance and control policies where relevant andappropriate. In respect of nancial reporting, in addition to reviewing the above mentioned prospectus and the 2011 half year and full year results, theCommittee: oversaw the implementation of a series of policies, practices and controls in relation to nancial reporting and, in particular, Group reportingprocesses; reviewed and approved the Group accounting policies, including the introduction of new accounting policies, and the Groups rst IFRS budget and ve year plan; conducted regular reviews of balance sheet items, including the carrying value of assets, business development funds and the repayment of related party balances; reviewed the fair values ascribed to the assets and liabilities on the acquisition of PTBerau and interests in PTBumi; oversaw the development of a process to manage expenditure over the full project life cycle which is to be implemented in 2012; reviewed managements reporting of reserves andresources; reviewed the process designed to ensure the external auditors are aware of all relevant information as required under Sections 418 and 419 of the Companies Act; reviewed the work undertaken to support the going concern statement; and reviewed the management representation letter to the external auditors.
The Committee has also overseen the development of a risk management framework and an internal audit framework for the Group. The Groups risk management and internal audit planning commenced in April 2011. The Companys aim was to build risk management and internal audit frameworks to achieve standards commensurate with those expected by commonly accepted international practices which could be implemented in a practical and comprehensive manner, and replicated with any future acquisitions. Consistent with the overall Group philosophy, our approach is to work at a local level, building on what is already in place, using the model developed by Bumiplc. The approach includes: a gap analysis providing insights into the status of local company practices using international standards, including the IIA frameworks as well as internationally recognised internal control and reporting frameworks (COSO); the design of an integration plan and mechanisms, including internal reporting templates, risk assessment workshop materials and annual plans; integration support providing guidance and practical help to implement enhanced and/or new procedures and review prior programmes; collaborative oversight to ensure decision making respects local and Group needs and to help escalation of relevant matters to the Board;and formal reporting creating the basis for the review of progress and reports by the AuditCommittee.
The Groups approach is to identify the key risks that could have a signicant impact on the ability of the Group to achieve its objectives, analyse those risks, ensure appropriate responses are put in place to mitigate the risks and monitor the implementation and effectiveness of such controls with regular reporting to the Audit Committee. The principal aim of the risk management system is the management of business risks that are signicant to the fullment of the Groups strategic objectives, with a view to enhancing the value of the shareholders investment and the safeguarding of assets. Due to the limitations inherent in any risk management system, this is designed to manage rather than eliminate risk. The development and implementation of the Bumiplc risk management framework took place in 2011 with the support of KPMG and resulted in the delivery of a continuous process for identifying, evaluating and managing the signicant risks faced by the Group which supports the Principal Risks and Uncertainties
Governance
47
set out on pages 28 to 29. This process also delivered a Group risk register for 2011, regular reports at Committee meetings and the further development ofrisk assessment programmes to be applied in 2012, ineach case working closely with the Head of Internal Audit at PTBerau. The Committee regularly reviews and reports on this process to the Board, and considers that it complies with the revised Turnbull Guidance on Internal Control published by the FRCincluded with the GovernanceCode. The Committee is also responsible for Group internal audit. The role of the internal audit function is to help Bumiplc achieve its objectives by systematically evaluating and helping to improve risk management, internal controls and corporate governance. In 2011, with the assistance of KPMG, appointed on a co-source basis to support the development and implementation of the internal audit framework for the Group, a Group internal audit plan for 2011 was delivered together with detailed plans for 2012, in each case working closely with the Head of Internal Audit at PTBerau. In addition the Audit Committee also oversaw: the development of the Groups Code of Conduct which was adopted by the Boards of Bumiplc and PTBerau in 2011; with the assistance of Freshelds Bruckhaus Deringer LLP and PricewaterhouseCoopers LLP (PwC), the initiation of an anti-bribery and corruption (ABC) programme for the Group which is being rolled out in 2012 with policies covering key risk areas that have been approved by the Board; and the appointment of an internationally recognised independent third party helpline provider based in the US, Global Compliance, to implement a whistleblowing policy for the Group which is also to be rolled out in 2012. Accordingly the Committee recommended to the Board that PwC be re-appointed as the Groups auditors for a further year. The Board has accepted this recommendation and has proposed a resolution to shareholders for the re-appointment of PwC in the AGM Notice which accompanies this AnnualReport. The Committee also reviewed PwCs engagement letter and determined its remuneration in accordance with the authority given to it by shareholders, such remuneration being considered appropriate by theCommittee. The Committee has approved a policy which provides clear guidance regarding non-audit work that may be undertaken by the external auditors. Whilst the Committee believes that in certain circumstances it is appropriate for non-audit work to be undertaken by the external auditors these are limited and, in a normal year, total non-audit fees paid to the external auditors would be expected to be lower than total audit fees. However, the Committee has recognised that 2011 has been an exceptional year for the Group, reecting its formation, and has resulted in the non-audit fees being higher than the audit fees. At each meeting, the Committee reviews the nature and amount of non-audit work performed by the auditors, as well as the fees charged, with a particular focus on ensuring that the engagement of such services does not undermine the auditors independence andobjectivity. An analysis of fees paid in respect of audit and non-audit services provided by PwC for 2011 is set out in note 6 on page 91. The majority of non-audit services provided by PwC during the year relate to work in connection with the prospectus for the premium listing, the proposed acquisition of PTBerau and investment in PTBumi and the proposed acquisition of BRM. Having reviewed such non-audit services the Committee is satised that they were provided efficiently by the external auditors and did not prejudice their independence orobjectivity.
During the period, the Audit Committee met four times and received regular reports, including internal audit reports, regarding the Companys risk management and internal control systems which allowed it to monitor key matters, performance against objectives and follow up on actions to be taken to remedy any signicant failings or weaknesses identied from such reports. The Committee is also responsible for managing the relationship with PwC, the Groups external auditors on behalf of the Board. The Committee reviews the independence and objectivity of the external auditors and carries out an annual assessment taking into consideration their qualications and expertise, regulatory requirements and the effectiveness of the audit process. Following their assessment in respect of 2011, the Committee has concluded that the external auditors have demonstrated appropriate qualications and expertise, have remained independent of the Group and that the audit process was effective.
48
Nomination Committee
Sir Julian Horn-Smith (Chairman) Philip Yeo Lord Renwick Amir Sambodo
3/3
3/3 3/3 1/3
The members of the Committee are all INEDs and free of any relationship that would affect their impartiality in carrying out their responsibilities. The secretary to the Committee is the Group General Counsel and CompanySecretary. The Chairman of the Committee reports to subsequent meetings of the Board and the Board receives a copy of the minutes of each meeting once these have been approved by the Committee. The full terms of reference of the Committee can be found on the Companys website, www.bumiplc.com, or can be obtained from the Group General Counsel and Company Secretary. Activities during the year During the year under review, the Nomination Committee met three times. Its activities included reviewing the composition of the Board; recommending to the Board the appointment of Badung Tariono as Non-Executive Director; recommending that all Directors should retire at the 2012 AGM and all future AGMs and, where appropriate, stand for re-election; and overseeing the evaluation of the Board and the Audit and Remuneration Committees which was led by the Chairman of those Committees.
Sir Julian Horn-Smith

Chairman
Role of the Committee The Nomination Committee is responsible for reviewing the structure and composition of the Board; identifying, evaluating and recommending candidates to join the Board and making recommendations regarding their election and re-election by shareholders. The Committee also oversees succession planning for the Directors and other senior executives and, with the SID, the annual evaluation of the Board and itsCommittees.
Remuneration Committee
The Remuneration Committees principal responsibility is for the setting, reviewing and recommending to the Board for approval Bumiplcs overall remuneration policy and strategy, and the setting of remuneration arrangements for Executive Directors and Executive management. Full details of the Committees responsibilities, and a report of its activities during the year, are set out in the Remuneration Report on pages 50 to 61.
Conicts Committee
Steven Shapiro (Chairman) Sony Harsono Lord Renwick Philip Yeo
3/3 3/3 3/3 3/3
Role of the Committee The Conicts Committee assists the Board to oversee any conicts of interest concerning Directors (including, but not limited to, potential conicts arising from personal investment activities and other professional activities such as directorships with third parties) and related party transactions involving the Company, its shareholders or any Director. The members of the Committee are all INEDs and free of any relationship that would affect their impartiality in carrying out their responsibilities. The secretary to the Committee is the Group General Counsel and Company Secretary.
Steven Shapiro
Chairman
Governance
49
The Chairman of the Committee reports to subsequent meetings of the Board and the Board receives a copy of the minutes of each meeting once these have been approved by the Committee. The full terms of reference of the Committee can be found on the Companys website, www.bumiplc.com, or can be obtained from the Group General Counsel and Company Secretary.
Activities during the year The Conicts Committee met three times during the year under review. In addition to overseeing the procedure for the identication and monitoring of Directors existing or potential conicts, during 2011 the Conicts Committee developed a Group wide process for the monitoring and, where appropriate, approval of related party transactions, the implementation of which will be reviewed in 2012.
Health, Safety, Environment and Communities Committee

the HSEC Committee has also appointed PwC, a recognised leader in this eld, to support the HSEC Committee in the delivery of its objectives. The members of the HSEC Committee are all independent and free of any relationship that would affect their impartiality in carrying out their responsibilities. The secretary to the Committee is the Group General Counsel and Company Secretary. The Chairman of the Committee reports to subsequent meetings of the Board and the Board receives a copy of the minutes of each meeting once these have been approved by the Committee. The full terms of reference of the Committee can be found on the Companys website, www.bumiplc.com, or can be obtained from the Group General Counsel and Company Secretary. Activities during the year Under its terms of reference, the HSEC Committee meets not less than three times a year. As the Board was not established until April 2011 only two meetings were held in the remainder of 2011, but a further meeting was held prior to the issue of this Annual Report, and not less than three meetings will be held in2012. A report on HSEC in2011 is set out on pages 30 to 35.
Amir Sambodo (Chairman) Philip Yeo Sony Harsono Tony Redman (Technical advisor)
2/2 2/2 2/2 2/2
Amir Sambodo
Chairman
Role of Committee The Committee assists the Board to oversee management processes, standards and strategies designed to manage risks regarding health, safety, the environment and relationships with communities (together referred to as HSEC). To enhance its effectiveness and ensure objectivity in the delivery of its key responsibilities, one of the members of the HSEC Committee, Tony Redman, is a technical advisor with extensive mining experience having worked in the mining industry for nearly 40years with Anglo American plc (latterly as Group Technical Director before his retirement). In addition,
50
Remuneration Report
Letter from the Chairman of the Remuneration Committee

Dear Shareholder, I am pleased to introduce our rst Directors report on remuneration, which sets out our remuneration policy for Executive Directors. We are committed to creating a remuneration and governance framework which adheres to the highest standards of corporate governance and the key pillars of best practice. Within this framework, the principal aim of our remuneration policy is to align executive remuneration with the interests of our shareholders and the creation of long term shareholder value. 2011 was an important year for the Committee as the acquisitions were completed and we developed and started to implement our remuneration policy, and this process will continue in 2012. Since the establishment of the Bumi plc Remuneration Committee on 11 April 2011, key activities included: Determination of the overall executive remuneration policy for Bumi plc Within this policy, the agreement of the remuneration packages for the Executive Directors for 2011, the Companys rst year as a UK listed business Agreeing executive service contracts The development of the Bumi Incentive Plan, which was approved by shareholders. Consideration of overall performance for 2011 and determination of the bonuses due For 2011, it was determined that no annual bonuses would be paid by Bumi plc to either of the Executive Directors. I would like to thank my colleagues on the Committee for their hard work and valuable input during the year. The Committee looks forward to receiving your support at the AGM on 14 June 2012. Sir Graham Hearne Chairman of the Remuneration Committee
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Introduction This report has been prepared in accordance with the requirements of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. The report also meets the relevant requirements of the Listing Rules of the Financial Services Authority, and describes how theBoard has complied with the principles and provisions of the UK Corporate Governance Code relating to remuneration matters. The report will bepresented at the AGM on 14 June 2012 for approval and shareholders will be able to ask questions on the report at the AGM. The report is divided into two parts: The rst part sets out the Companys remuneration policy and the governance structures which underpin it. This is not required to be audited The second part contains the remuneration tables that have been audited in accordance with the relevant statutory requirements
The table details the members of the Remuneration Committee, their role, the number of meetings the Committee had during the year and their respectiveattendance. The members of the Committee are all INEDs and free from any relationship that would affect their impartiality in carrying out their responsibilities. Thesecretary to the Committee is the Group General Counsel and Company Secretary. The Chairman of the Committee reports to subsequent meetings of the Board and the Board receives a copy of the minutes of each meeting once these have been approved by the Committee. The Committees terms of reference are available on the Companys website, www.bumiplc.com or can be obtained from the Group General Counsel and Company Secretary. Advisors to the Committee During the year, the Committee appointed Deloitte LLP (Deloitte) to provide independent advice to the Committee on all aspects of executive remuneration. Deloitte did not provide any other services to the Company during the year. The Committee also consulted with the Chairman and Co-Chairman who were invited to attend some Committee meetings during the year. No person was present during the part of a meeting when their own remuneration was being discussed.
Members
Meetings attended
Sir Graham Hearne (Chairman) Sir Julian Horn-Smith Amir Sambodo
3/3
2/3 3/3
The Remuneration Committee The Committee determines the remuneration packages, and any changes to the service contracts, of the Chairman, Co-Chairman, Executive Directors and other senior executives. The Committee also reviews and administers all incentive plans which apply to Executive Directors and senior management. The Chairman, Co-Chairman and Executive Directors determine the fees for the Non-ExecutiveDirectors.
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Remuneration Report (continued)

Principles of Executive Remuneration policy The Executive Remuneration policy is designed to provide a competitive and performance related package which supports the delivery of the strategy and the creation of long term shareholder value. It is based on the following key principles: Provide a market competitive reward to attract and retain executives of the calibre needed to deliver on the Group strategy Include a signicant variable element which is aligned to corporate performance, both over the nancial year and in terms of long term shareholder value Support the delivery of strategic goals Ensure that remuneration structures do not encourage excessive risk taking Uphold the key principles of best practice on executive remuneration Principles of competitive positioning When considering how to position the remuneration packages for the Executive Directors, the Committee considers market data from UK listed companies of a similar size and complexity, as well as practice in the UK listed mining sector. This data is provided by the independent advisors to the Committee. The Committee positions salaries and incentive opportunities at what would be considered a market competitive level against the market data, taking into account the capabilities and experience of the individual. Salaries are normally positioned around the market mid point, although the Committee does not seek to match the median. The Committee takes into account pay and conditions throughout the Group.
Components of the Bumi plc remuneration framework for Executive Directors

Component Base salary Fixed Purpose/link to strategy To provide market competitive xed pay for the size, scope and responsibility of the role. To provide a market competitive benet package for the size, nature and location of the role. This includes appropriate relocation and expatriate benets. To provide a performance related element of the package linked to the delivery of strong annual performance. Performance is normally assessed against key nancial and operational measures which support the execution of the strategy and the delivery of value for shareholders. Variable Long term To provide a performance related element of the package linked to the delivery of shareholder value over the long term. The award may take the form of: Performance Shares under the Bumi Incentive Plan subject to relative TSR performance against two mining sector comparator groups Founder Securities which deliver value based on the increase in the Bumi share price above 10. Note: The terms Performance Shares and Founder Securities are dened on pages 54 and 55. Maximum annual award: 200% of salary Bumi plc shares Three years Quantum In 2011: CEO: 650,000 CFO: 400,000 Market rates Delivery Cash Performance Period Ongoing
Benets
Cash/other
Ongoing
Annual bonus
Maximum opportunity: 150% of salary
Cash
Annual
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Key features of the annual bonus policy for Executive Directors are: Maximum annual opportunity: 150% of salary
31% 35% 34%
Balance between fixed and variable pay

(%)
Target
Payments under the annual bonus are based on the Committees assessment of performance against stretching annual targets. Signicant outperformance is normally required to receive the highest levels of bonus payment Targets are set for nancial and operational measures which the Committee determines, on an annual basis, to be the most appropriate measures to support the ongoing delivery of the Company strategy, as set out on pages 10 and 11 of this Annual Report A range of measures are used to ensure that the bonus is well balanced and rewards Executive Directors for the achievement of a number of different objectives in the year, which are all related to the delivery of the Companys strategy
Maximum
22%
33%
45%
20
40
60
80
100
Salary Annual Bonus Long term incentive
The chart shows the balance between the xed and variable components of the remuneration framework for Executive Directors at target and maximum performance, illustrating the signicant portion which is related to performance and to long term shareholder value creation.
Base salary Base salaries are set at a market competitive rate based on UK listed companies of a similar size and complexity, as well as practice in the UK listed mining sector, taking into account the capabilities and experience of the individual and the size, scope and responsibility of the role. The annual base salaries for the Executive Directors in 2011 are shown in the tablebelow.
Name Position 2011 base salary ()
The Executive Directors did not participate in a pension plan nor receive any allowances in respect of pension from Bumi plc. Amounts in respect of benets for Directors during 2011 are shown in the table on page60. Annual bonus The purpose of the annual bonus is to provide a performance related element of the package linked to the delivery of strong annual performance and stretching targets related to key nancial, operational and strategic goals. For 2011, the maximum annual bonus opportunity was 150% of salary. In assessing performance for 2011, the Committee took into account that 2011 was a year of transition for the Company as the acquisitions were completed and integrated. In these circumstances it was not practicable to set predetermined nancial and operational objectives for the Executive Directors. Based on the Committees assessment of the Companys performance during the year, the Committee determined that no annual bonuses would be awarded to the Executive Directors in respect of the 2011 nancial year. As noted in footnote4 on page60, PTBumi determined that AriHudaya would be paid a bonus in respect of 2011. No cost relating to this bonus will be borne by Bumiplc.
Ari Hudaya Andrew Beckham
CEO CFO
650,000 400,000
During 2011, in addition to their roles as Executive Directors of Bumi plc, Ari Hudaya and Andrew Beckham continued with their duties as Executive Directors of PTBumi. The salaries, benets and annual bonus opportunities described in this report represent the maximum entitlement receivable under the service agreements with Bumi plc in respect of services to all Group companies and associates. Under the service agreements, the Company may set off any entitlement against amounts received from other Group companies orassociates. There were no increases to the base salaries for AriHudaya and Andrew Beckham in 2012. Benets The Committees policy is to provide a market competitive benet package for the size, nature and location of the role. This may include, depending on the location and scope of the role, private health insurance, life assurance, company car provision, housing and relocation allowances, and other expatriate benets (such as travel allowances and assistance with tax compliancefees).
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Key features of the overall long term incentive policy for Executive Directors are: Award size: 200% of salary Awards may be delivered in the form of Performance Shares under the Bumi Incentive Plan, in the form of Founders Securities, or a mixture of both Awards in the form of Performance Shares are subject to relative total shareholder return (TSR) performance over a three year period against two comparator groups (coal specic and a broader mining sector index) Awards are subject to clawback in certain scenarios
Long term incentives The purpose of the Companys long term incentive awards is to support one of the key principles of the executive remuneration policy that a signicant proportion of the overall remuneration package should be linked to the delivery of shareholder value over the long term. Long term incentive awards may be made under either the Bumi Incentive Plan or, if made available by VallarCapital LP (Vallar Capital), in the form of Founders Securities. The key terms of both are discussed in the sectionsbelow. Bumi Incentive Plan Performance Shares are awarded under the Bumi Incentive Plan which is the Companys main vehicle for making share based long term incentive awards to Executive Directors and senior management. The Plan was approved by shareholders in 2011. The key terms of the Plan, which is intended to be aligned with best practice, are summarised below:
The maximum award that may normally be granted in any nancial year is 200% of salary (400% in exceptional circumstances as determined by theCommittee) Awards will normally vest at the end of a three year period. It is the Committees policy that awards will normally vest only to the extent that stretching performance conditions have been met over thisperiod Awards are subject to clawback such that the Committee may reduce the size of outstanding awards if it becomes known that the participant had engaged in any activity which, in the opinion of the Committee, amounted to serious misconduct, fraud or misstatement or where effective risk management has been undermined, or any act or omission by the participant has contributed to material losses or serious reputational damage Unvested awards will normally lapse on cessation of employment. In the event of certain circumstances which include illness, injury, disability and redundancy, the Committee will normally allow an award to continue until the normal vesting date, and vest taking into account the achievement of applicable performance conditions and the period of time that has elapsed since the award was granted. In the case of death, an award may vest immediately taking into account time and performance to that date In the event of a change of control of Bumi, the extent to which awards may vest will be at the discretion of the Committee taking into account the performance of Bumi and the period of time which has elapsed since the date of the award and having regard to the interests of shareholders In any 10year period, not more than 10% of the issued share capital of Bumiplc may be issued or issuable under the Bumi Incentive Plan or any other share plan of the Company
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International Coal Mining Comparator Group
50% of the Performance Shares Arch Coal (US) Consol Energy (US) Peabody Energy (US) Walter Energy (US) New Hope Corporation (Australia) Whitehaven Coal (Australia) New World Resources (UK) Adaro Energy (Indonesia) Bayan Resources (Indonesia) Indo Tambangraya Megah (Indonesia) Tambang Batubara Bukit Asam (Indonesia) Banpu (Thailand) Exxaro Resources (South Africa) Sakari Resources (Singapore)
HSBC Global Mining index

50% of the Performance Shares This represents a commonly used index for measuring the performance of the global mining industry
Companys ranked TSR position Upper quartile or above Median Below median
Vesting (% of maximum) 100% 25% 0%
Companys TSR vs index Above index + 8% p.a. Equal to the index Below the index
Vesting (% of maximum) 100% 25% 0%
Straight line vesting between these points
Straight line vesting between these points
In addition vesting is also subject to the Committee being satised that the vesting outcome suitably reects the underlying nancial performance of the Company over the period. TSR will be calculated in US dollars at the start and end of the relevant period, using three month averaging to smooth the impact of share price volatility.
Bumi Incentive Plan performanceconditions The extent to which Performance Share awards under the Bumi Incentive Plan may vest depends on the Companys TSR performance over a three year period measured against two comparator groups as shown in the table above. Relative TSR has been chosen as the performance measure for the Performance Shares because it aligns reward with the delivery of superior market performance against appropriate sector benchmarks over the long term. Founders Securities The Committee may also approve long term incentive awards being made to Executive Directors in the form of Founder Securities. The Founder Securities were issued to members of Vallar Capital at the time of the otation of Vallar plc. The holders of the Founders Securities have agreed that up to 20% of the Founder Securities may be made available to be awarded to Bumi plc management, including ExecutiveDirectors. A detailed description of the Founders Securities can be found in the Bumi plc prospectus issued in June 2011, a copy of which is available on the Companys website, www.bumiplc.com. Broadly, the structure of the Founders Securities is economically equivalent to a conventional net settled share option over Bumi shares
with an exercise price of 10. As a result, thepotential value which can be realised by holders isdirectly aligned to the increase in the Bumi shareprice. Where such awards are made, all decisions regarding the size and terms of the awards will be made by the Committee. The awards will be subject to the same key terms as the Bumi Incentive Plan (set out above), including continued employment over a vesting period of at least three years and terms on cessation of employment and change of control. The Committee considers that the Founder Securities have the following benets as a vehicle for making long term incentive awards to executives: The level of reward for senior executives is fundamentally aligned to the creation of shareholder value through the increase in the Bumi share price There is no incremental dilutive cost to shareholders as the Founder Securities are already in existence and are held by VallarCapital
No long term incentive awards were granted to AriHudaya or Andrew Beckham in, or in respect of2011.
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Termination arrangements for former Executive Directors Ari Hudaya and Andrew Beckham stepped down from their roles as Executive Directors on 26 March 2012. AriHudaya will remain on the Board as a Non-Executive Director. As at the date of this report, the nal details of their termination arrangements had not been conrmed and these will be disclosed in next years report.
Executive Director service contracts The service contracts for Executive Directors who served during the nancial year contained the following keyterms.
Provision Detailed terms
Contract dates
Contracts for both Executive Directors who served during the nancial year were signed on 16 June 2011 with effective dates of 22 November 2010 for Ari Hudaya and 17 December 2010 for Andrew Beckham 12 months by either Company or Director Payment in lieu of notice of up to 12 months salary
Notice period Termination payment
Remuneration of the Non-Executive Directors The Non-Executive Directors have letters of appointment on the terms set out in the table below.
Director Role Date of appointment
Indra Bakrie Nathaniel Rothschild Sir Julian Horn-Smith James Campbell1 Rosan Roeslani Lord Renwick Steven Shapiro Sir Graham Hearne Amir Sambodo Philip Yeo Sony Harsono Badung Tariono
Chairman Co-Chairman Deputy Chairman and Senior Independent Director Non-Executive Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive
11 April 2011 11 April 2011 22 February 2011 11 April 2011 11 April 2011 22 February 2011 11 April 2011 11 April 2011 11 April 2011 11 April 2011 11 April 2011 1 July 2011
All Non-Executive Directors ofces can be terminated without notice. The Chairman and Co-Chairman appointments in 2011 can be terminated on 12 months notice.
1
James Campbell also has a consultancy agreement in place with the Company under which he assisted and contributed to the management of the operations and development of the Wider Groups businesses and mining assets, as well as the extension of activities into new businesses or geographic areas, for a fee of 5,000 per day. No compensation is payable to him upon the termination of the consultancy agreement other than in respect of accrued fees or expenses outstanding as at the date of termination. The agreement contains non-compete and non-solicitation clauses which apply during the term of the agreement.
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Fees for Non-Executive Directors are set at levels that are sufficient to attract and retain individuals with the required skills and experience to allow the Board to effectively carry out its duties, taking into account the responsibility of the role and the time commitments required. The fee policy is set out in the table below. From 2012, all fees are payable in cash.
Non-Executive Director fee policy
Company Chairman/Co-Chairman Senior Independent Director Non-Executive Director fee Additional fees for Committees Audit Committee Chairman Member Remuneration Committee Chairman Member Nomination Committee Chairman Member Conicts Committee Chairman Member Health, Safety, Environment and Communities Committee Chairman Member Additional attendance fee for any Committee or Board meeting attended that involves more than 12 hours travel
200,000 140,000 70,000
20,000 10,000
15,000 7,000
10,000 4,000
15,000 6,000
15,000 6,000 5,000
Indra Bakrie and Nathaniel Rothschild elected to waive their fees with effect from 1 July 2011. With the exception of Rosan Roeslani (described below), Non-Executive Directors do not receive any other form of remuneration from the Group or participate in any Group incentive scheme. As referred to on page 43, Rosan Roeslani is Non-Executive Director of Bumi plc and receives non-executive fees (per the table above) in respect of these duties. RosanRoeslani is also the President Director of PTBerau which, whilst a subsidiary of Bumiplc, retains a listing on the Indonesia Stock Exchange. The remuneration package for RosanRoeslani in respect of his executive duties at PTBerau is determined by the remuneration committee of PTBerau and is outside the remit of the Committee. RosanRoeslanis remuneration package as the President Director of PTBerau comprises a base salary and participation in annual bonus arrangements. Amounts in respect of these for the relevant period of account are shown in the table on page60, in accordance with the reporting requirements under the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations2008.
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Non-Executive Directors Share Matching Awards At the time of the placing of Vallar plc, Sir Julian Horn-Smith, Lord Renwick, Steven Shapiro and SirGraham Hearne (the Participating Non-Executive Directors) subscribed for ordinary shares at the placing price of 10 per share as part of the IPO, up to a maximum subscription of 150,000 each (15,000 ordinary shares). On subscription for these shares, each Participating Non-Executive Director became eligible to subscribe for two matching shares (Matching Shares) for every ordinary share acquired at that time up to a maximum of 30,000shares. The Matching Shares were subject to vesting conditions and were to vest in two equal tranches subject to the satisfaction of the vesting criteria. The rst of these tranches would vest either on or after the rst anniversary of appointment as a Non-Executive Director of Vallar plc or on or after the date of completion of an acquisition, as contemplated by the Vallar IPO Prospectus, whichever date is later. The second tranche would generally vest on the date of such completion, provided that it occurred prior to the second anniversary of his appointment as a Non-Executive Director of Vallar plc. Both of these criteria were satised during 2011 and the Participating Non-Executive Directors subscribed for their full allocation of Matching Shares which were allotted on15July2011. Details of the awards under this plan are shown in the table on page61.
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Directors interests in shares
Director Number of ordinary shares held as at 31 December 2011
Indra Bakrie Nathaniel Rothschild1,2 Ari Hudaya Andrew Beckham Sir Julian Horn-Smith James Campbell3 Rosan Roeslani4 Lord Renwick5 Steven Shapiro Sir Graham Hearne Amir Sambodo Philip Yeo Sony Harsono Badung Tariono
1 2
Nil 21,142,418 Nil 5,300 45,000 1,906,460 23,667,250 55,000 55,000 55,000 Nil Nil Nil Nil
3 4
11,178,872 of the shares in which Nathaniel Rothschild is interested are held by connected parties. As at 31 December 2011, Nathaniel Rothschild was also interested in 4,365,000 Founder Securities, of which 1,820,000 Founder Securities were held by connected parties. These shares are held by Vallar Capital LP. James Campbell is also interested in 500,000 Founder Securities. All shareholdings of PT Bukit Mutiara have been attributed to Rosan Roeslani in the table above by virtue of his benecial ownership of PT Recapital Advisers which gives him an indirect interest in approximately 71.6% of the issued share capital of PT Bukit Mutiara. In accordance with the terms of the Mutiara Share Transaction Arrangements which are described in the prospectus issued by the Company on 17 June 2011, 24,524,851 shares which were due to be issued to PT Bukit Mutiara under the terms of Vallar plcs original acquisition of a 75% interest in PT Berau (details of which are set out in a prospectus issued by Vallar plc on 24 February 2011) were instead issued direct to Long Haul Holdings Ltd in the form of suspended voting ordinary shares in the capital of Vallar plc. On 28 February 2011, 50,000 Redeemable Deferred Shares were allotted and issued fully paid up for cash to enable the Company to satisfy the minimum share capital requirement for it to be re-registered as a public company under the Companies Act. The Redeemable Deferred Shares are not transferable, the holders are not entitled to receive notice of (or attend or vote at) general meetings and are not entitled to receive dividends, and they may be redeemed at their nominal value following a request made by either the Company or the holder. At the time of issue, Lord Renwick volunteered to assist this process by having these Redeemable Deferred Shares allotted in his name solely for the purpose noted above and no other. The intention is to redeem these shares as soon as practicable.
Changes since 1 January 2012 During the period from 1 January to 12 April 2012, the only changes to the Directors interests were in respect of the Founder Securities and shares held by Nathaniel Rothschild. On 4 January 2012, Nathaniel Rothschilds interests in Founder Securities reduced by 178,109 and he is currently interested in 4,186,891 Founder Securities, of which 1,820,000 are held by connected parties. On 4January 2012, Nathaniel Rothschilds interests in ordinary shares reduced by 125,000 and on 3 and 4 April 2012, Nathaniel Rothschild purchased 507,500 shares. He currently holds 21,524,918 ordinary shares of which 11,178,872 are held by connected parties.
Total Shareholder Return performance graph

Bumi plc
160
FTSE 100 HSBC Global Mining Index
120
80
40
July 2010
December 2010
December 2011
The chart shows the Total Shareholder Return of Bumi since listing, compared to the FTSE 100 and the HSBC Global Mining Index over the same period. The Company considered these indices to be relevant benchmarks for comparison purposes.
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AUDITED INFORMATION Directors emoluments for the period ended 31 December 2011 The emoluments for 2011 for Directors of Bumi plc who served during the nancial year are set out in the table below. The emoluments include remuneration receivable from Bumi plc and Vallar plc.
Salary / fees Directors Chairmen Indra Bakrie1 Nathaniel Rothschild2 Executive Directors Ari Hudaya3,4 Andrew Beckham3 Non-Executive Directors Sir Julian Horn-Smith5 James Campbell Rosan Roeslani6 Lord Renwick7 Steven Shapiro7 Sir Graham Hearne7 Amir Sambodo Philip Yeo Sony Harsono Badung Tariono11 174 104 98 124 129 119 108 92 97 40 2,402
1
Bonus 2011 000
Benets9 2011 000
Other 2011 000
Total10 2011 000 137 130
2011 000 137 130
650 400
4 50
654 450
174 958 199 98 124 129 119 108 92 97 40 0 54 95 2,551
Amounts shown in the table represent fees paid to Indra Bakrie in respect of the year until 30 June 2011. He waived his fees of 100,000 receivable for services provided from 1 July 2011. 22,050 of Indra Bakries fees relate to services in respect of 2010 and which were paid in 2011. 2 Amounts shown in the table represent fees paid to Nathaniel Rothschild in respect of the year until 30 June 2011. He waived his fees of 100,000 receivable for services provided from 1 July 2011. 24,600 of Nathaniel Rothschilds fees relate to services in respect of 2010 and which were paid in 2011. 3 The amounts shown in the table represent amounts receivable under the service agreements with Bumi plc. For Ari Hudaya, all salary and benets were paid by PT Bumi. For Andrew Beckham, his salary was paid by PT Bumi until 30 June 2011 and by Bumi plc from 1 July 2011 onwards. 4 PT Bumi determined that Ari Hudaya be paid a bonus of $583,000 in respect of 2011. No cost relating to this bonus will be borne by Bumi plc. 5 33,333 of the annual fee was paid in the form of ordinary shares, as part of the Share Matching Awards referred to on page 58. 6 Rosan Roeslani is a Non-Executive Director of Bumi plc and receives fees in respect of these duties (per the table above). Rosan Roeslani is also an Executive Director of PT Berau which, whilst a subsidiary of Bumi plc, retains a listing on the Indonesia Stock Exchange. Rosan Roeslanis remuneration package as an Executive Director of PT Berau comprises a base salary of IDR 2,195,301,082 ($251,636 at an exchange rate of IDR 8,724: $1) and participation in an annual bonus arrangement, under which a bonus of IDR 3,917,142,714 ($449,002 at the same exchange rate) was paid in respect of 2011. 7 30,000 of the annual fee was paid in the form of ordinary shares, as part of the Share Matching Awards referred to on page 58. 8 Represents amounts received under the consultancy agreement as referred to on page 56. 9 Benets include: car and driver, accommodation, school fees, travel expenses, private medical insurance and permanent health insurance. 10 As this is the rst Directors Remuneration Report of Bumi plc, there is no comparative data shown in the table for 2010. Data for Directors of Vallar plc for the year ended 31 December 2010 is shown in the Vallar plc Annual Report for that period. 11 Badung Tariono was appointed on 1 July 2011.
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Share Matching Awards The interests of the Participating Non-Executive Directors in Share Matching Awards (as described in more detail on page58) are set out below. In order to participate in the awards below, each Participating Non-Executive Director was required to subscribe for 15,000 shares in the Placing of Vallar plc.
Date on which Matching Shares were awarded Total Matching Shares at 1 January 2011 Vested and subscribed for during 2011 Total Matching Shares outstanding at 31 December 2011 Share price on date of allotment of Matching Shares
Director
Subscription price for each Matching Share
Date on which Matching Shares allotted
Sir Julian Horn-Smith Sir Graham Hearne Lord Renwick Steven Shapiro
9 July 2010 9 July 2010 9 July 2010 9 July 2010
30,000 30,000 30,000 30,000
(30,000) (30,000) (30,000) (30,000)
0 0 0 0
1.00 1.00 1.00 1.00
15 July 2011 15 July 2011 15 July 2011 15 July 2011
11.20 11.20 11.20 11.20
The share price as at 31 December 2011 was 880p. The share price ranged between 1,400p (high) and 707p (low) during the year. This Remuneration Report was approved by the Board on 12April 2012 and signed on its behalf by:
Sir Graham Hearne Chairman of the Remuneration Committee
12 April 2012
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Other Statutory Information

This section contains additional information which the Directors are required by law and regulation to include within the Annual Report.
Company registration Bumiplc is domiciled in England and incorporated and registered in England and Wales with the registered number 7460129. Its registered office is 2ndFloor, 4Grosvenor Place, London SW1X 7HJ. Principal activities Bumiplc is a leading FTSE listed thermal coal group with interests in the largest coal-producing assets in Indonesia through its 85% holding in PTBerau and 29% holding in PTBumi. Business review A detailed review of the Groups performance and future prospects is presented in the Chairmans Statement (on pages 6 to 7), the Chief Executive Officers Statement (on pages 8 to 9) and the Business Review on pages 16 to 35. Share Capital The Company has three classes of ordinary shares which carry no right to xed income: Voting Ordinary Shares, Suspended Voting Ordinary Shares and Redeemable Deferred Shares. At the date of this Annual Report, the issued share capital of the Company comprised 180,514,285 Voting Ordinary Shares of 0.01 each (representing approximately 74.90% of the total issued share capital), 60,442,782 Suspended Voting Ordinary Shares of 0.01 each (representing approximately 25.08% of the total issued share capital) and 50,000 Redeemable Deferred Shares of 1.00 each (representing approximately 0.02% of the total issued share capital). During the year the Company undertook a court approved reduction of capital involving a reduction in the nominal value of the Companys Voting Ordinary Shares and Suspended Voting Ordinary Shares to create additional distributable reserves for the Company going forwards. On 6 July 2011, the High Court issued an order sanctioning the reduction in the nominal value of the Companys voting ordinary shares and suspended voting ordinary shares from 6.00 to0.01. Share rights The rights and obligations attached to the Companys ordinary shares are set out in the Articles of Association, copies of which can be obtained from Companies House in the UK or by writing to the Group General Counsel and Company Secretary. Subject to the provisions of the Companies Act, and without prejudice to any rights attached to any existing shares or class of shares, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine or, subject to and in default of such determination, as the Board may determine. The Board may issue shares which are to be redeemed or are liable to be redeemed at the option of the Company or the holder. Subject to the Companys Articles of Association and to the Companies Act, the unissued shares of the Company (whether forming part of the original or any increased capital) are at the disposal of the Board. Voting Ordinary Shares Holders of Voting Ordinary Shares are entitled to attend, speak and vote at general meetings of the Company, and to appoint proxies to exercise their rights. Holders of Voting Ordinary Shares may receive a dividend and on a winding up may share in the assets of the Company. Suspended Voting Ordinary Shares For the purposes of the rights and restrictions attaching to the Suspended Voting Ordinary Shares: acting in concert shall have the meaning given in the City Code (as applied by the UK Panel on Takeovers and Mergers), and references to acting in concert shall be construed as acting in concert in relation to the Company, but references to acting in concert with the Sellers or either of them or any Affiliate shall not include any member of the Issuer Concert Party Group; Affiliate shall mean, in relation to the Sellers, (i)any person that directly or indirectly controls, is controlled by, or is under common control with either Seller (but excluding the Company and any person or entity controlled by the Company), (ii)any person holding shares as nominee for either Seller or any of their Affiliates (but only in relation to the shares so held) and (iii)any person holding shares which represent an identiable, distinct partnership interest of either Seller or any of their Affiliates (but only in relation to the shares so held), and, for the purposes of this denition, control, when used with respect to any person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise (and controlled shall be construed accordingly); Group means the Company and its subsidiary undertakings and parent undertakings and any subsidiary undertakings of any such parent undertakings for the time being and Group member shall be construed accordingly (for these purposes, subsidiary undertaking and parent undertaking shall have the meanings given to them in section 1162 of the Companies Act 2006);
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Issuer Concert Party Group means each Non-Seller Director, the Company and each other Group member and any person acting in concert with a Non-Seller Director or a Group member other than the Sellers, any Seller Nominated Director and anyAffiliate; Maximum Voting Percentage shall mean such percentage as would, in the event of either Seller or any Affiliate subsequently acquiring one additional Voting Ordinary Share, result in one of the Sellers or any Affiliate being required to make a mandatory offer for the Company under Rule 9 of the City Code; Non-Seller Director means a Director of the Company who is not a Seller Nominated Director; Seller Nominated Director means any director of the Company appointed at the request of the Sellers, or either of them; Sellers Voting Shareholding shall mean the Voting Rights for the time being of the Sellers and any Affiliates in the aggregate being expressed as a percentage of the total Voting Rights at such time; Voting Rights shall mean, in relation to the Company, rights attaching to shares in the Company to vote at general meetings of the Company on all, or substantially all, matters. Except as set out below, the Suspended Voting Ordinary Shares shall rank pari passu with the Voting Ordinary Shares in all respects and no action shall be taken by the Company in relation to, or offer made by the Company to the holders of, the Voting Ordinary Shares unless the same action is taken in respect of, or the same offer is made to the holders of, the Suspended Voting Ordinary Shares. Subject to this, the rights and restrictions attaching to the Suspended Voting Ordinary Shares are set outbelow. 1. On a distribution of prots (whether by cash dividend, dividend in specie, scrip dividend, capitalisation issue or otherwise), the Suspended Voting Ordinary Shares shall rank pari passu with the rights to distributions of prots attaching to the Voting Ordinary Shares. 2. On a return of capital, whether on a winding up or otherwise, the Suspended Voting Ordinary Shares shall rank pari passu with the rights to the assets of the Company attaching to the Voting OrdinaryShares. 3. A holder of Suspended Voting Ordinary Shares shall be entitled to receive notice of, and to attend and speak at, any general meeting of the Company, but shall not be entitled to vote in respect of any Suspended Voting Ordinary Shares held, except on any resolution: (a) proposed by any person other than PTBakrie & Brothers Tbk and Long Haul Holdings Ltd (Sellers) or either of them or any Affiliate or any person acting in concert with either Seller or any Affiliate, to wind up the Company or to present a petition to wind up the Company, other than for the purposes of a reconstruction or amalgamation whilstsolvent, (b) proposed by any person other than the Sellers or either of them or any Affiliate or any person acting in concert with either Seller or any Affiliate, to appoint an administrator or to present a petition for the appointment of an administrator in relation to the Company, or to approve any arrangement with the Companyscreditors, (c) proposed by the Board of Directors of the Company, to sell all or substantially all of the undertaking of the Company (provided that such resolution is not in connection with a transaction to which the UK City Code on Takeovers and Mergers (City Code)applies), (d) proposed by the Board of Directors of the Company for the purposes of, or in connection with, any scheme of arrangement of the Company under the Act under which a body corporate (Newco) will acquire the Company and the holdings of the members of Newco following the scheme becoming effective will be substantially the same as the holdings of the members of the Company immediately before the scheme becoming effective;or (e) proposed by any person other than the Sellers or either of them or any Affiliate or any person acting in concert with either Seller or any Affiliate, in accordance with the articles of association of the Company, to vary, modify or abrogate any of the class rights attaching to the Suspended Voting OrdinaryShares, in any which case each holder of Suspended Voting Ordinary Shares on a show of hands shall have one vote, and on a poll shall be entitled to vote on the resolution on the basis of one vote for each Suspended Voting Ordinary Share held. For the purposes of any resolution of a type referred to in paragraphs (a) to (d) above, the Suspended Voting Ordinary Shares shall be treated for all purposes as being of the same class as the Voting Ordinary Shares (and any other suspended voting ordinary shares issued on substantially equivalent terms to the Suspended Voting Ordinary Shares) and no separate meeting or resolution of the holders of the Suspended Voting Ordinary Shares shall be required to be convened orpassed. 4. The rights attaching to the Suspended Voting Ordinary Shares shall not be, and shall not be deemed to be, varied or abrogated in any way by the creation, allotment or issue of any Voting OrdinaryShares. 5. Upon a transfer of Suspended Voting Ordinary Shares by either Seller or an Affiliate to a person who is not an Affiliate or a Seller, such Suspended Voting Ordinary Shares shall convert into Voting Ordinary Shares (on a one for one basis) automatically upon, and contemporaneously with, registration by the Company (or its registrar) of the transfer in the register of members of the Company following receipt of a duly executed stock transfer form and the share certicates in respect of such Suspended Voting OrdinaryShares. 6. Upon: (a) a transfer of Voting Ordinary Shares by either Seller or an Affiliate to a person who is not an Affiliate or a Seller; or
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Other Statutory Information (continued)

(b) any issue of further shares by the Company as a result of which the Sellers Voting Shareholding is reduced below the Maximum Voting Percentage, such number of Suspended Voting Ordinary Shares as, immediately following conversion, will result in the Sellers Voting Shareholding being equal to the Maximum Voting Percentage, shall convert into Voting Ordinary Shares (on a one for one basis) automatically upon, and contemporaneously with, registration by the Company (or its registrar) of the transfer in the register of members of the Company following receipt of a duly executed transfer form and the share certicates in respect of such Voting Ordinary Shares or the issue of such further shares. In any such case, a proportionate number of each holders holding of Suspended Voting Ordinary Shares, also taking into account the conversion into Voting Ordinary Shares of any other suspended voting ordinary shares issued on terms substantially equivalent to the terms of the Suspended Voting Ordinary Shares, shall be so converted (in each case rounded up or down to the nearest whole number as determined by any Director in his absolutediscretion). At any time, either Seller (or any Affiliate) shall be entitled (but shall not be bound) to require the Company to convert Suspended Voting Ordinary Shares into Voting Ordinary Shares, on a one for one basis, so long as such conversion does not result in the Sellers Voting Shareholding being more than the Maximum Voting Percentage. Within 21 days after the conversion of any Suspended Voting Ordinary Shares into Voting Ordinary Shares, the Company shall forward to the relevant Seller or Affiliate (as the case may be), at its own risk, free of charge, a denitive certicate for the appropriate number of fully paid up Voting Ordinary Shares and a new certicate for any unconverted Suspended Voting Ordinary Shares comprised in the certicate surrendered by it. Pending the despatch of denitive certicates, transfers shall be certied against the register of members of theCompany. The Company shall use best endeavours to procure that the Voting Ordinary Shares arising on conversion of the Suspended Voting Ordinary Shares are admitted to the Official List and to trading on London Stock Exchange plcs main market for listed securities. No admission to listing or admission to trading shall be sought for the Suspended Voting Ordinary Shares whilst they remain Suspended Voting Ordinary Shares. 1. The Redeemable Deferred Shares shall not betransferable. 2. The holders of the Redeemable Deferred Shares are not entitled to receive notice of, or to attend or vote at, any general meeting of the Company. 3. Subject to the Companies Act, any Redeemable Deferred Share shall be redeemed on the next business day following written notice requesting such redemption being given by either the Company or the relevant holder of the Redeemable Deferred Share to the other. 4. On redemption of any Redeemable Deferred Share, the Company shall pay to the holder in full the amount paid up or credited as paid up on such Redeemable Deferred Share. 5. On a return of capital, holders of Redeemable Deferred Shares shall be entitled only to the payment of the nominal amounts of those shares, after repayment to the holders of any and all Voting Ordinary Shares and Suspended Voting Ordinary Shares then in issue of the amount paid up or credited as paid up on those Voting Ordinary Shares and Suspended Voting Ordinary Shares held by them respectively. 6. The holders of the Redeemable Deferred Shares have no right to receive any dividend or other distribution (whether of capital or income) other than as set out in (5.) above. Voting rights Subject to any rights or restrictions attached to any shares, on a show of hands every member who is present in person shall have one vote and on a poll every member present in person or by proxy shall have one vote for every share of which he is theholder. No member shall be entitled to vote at any general meeting, either in person or by proxy, unless all moneys presently payable by him in respect of shares in the Company have been paid. If at any time the Board is satised that any member, or any other person appearing to be interested in shares held by such member, has been duly served with a notice under section 793 of the Companies Act 2006 and is in default for the prescribed period in supplying to the Company the information thereby required, or, in purported compliance with such a notice, has made a statement which is false or inadequate in a material particular, then the Board may, in its absolute discretion at any time thereafter by notice to such member direct that in respect of the shares in relation to which the default occurred, the member shall not be entitled to attend or vote either personally or by proxy at a general meeting or at a separate meeting of the holders of that class of shares or on a poll. Restrictions on transfer of shares There are no specic restrictions on the transfer of shares in the Company other than:
7.
8.
9.
10.
Redeemable Deferred Shares The rights and restrictions attaching to the Redeemable Deferred Shares are as set out below.
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(i) the Redeemable Deferred Shares shall not betransferable; (ii) the right of the Board to refuse to register the transfer of a certicated share that is not fully paid, provided that the refusal does not prevent dealings in shares in the Company from taking place on an open and proper basis. The Board may also refuse to register the transfer of a certicated share unless the instrument of transfer (a) is lodged, duly stamped (if applicable), at the office or at another place appointed by the Board accompanied by the certicate for the share to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; (b)is in respect of only one class of shares; and (c)is in favour of not more than fourtransferees; (iii) pursuant to the Companys share dealing code whereby the Directors of the Company require, and employees require, approval to deal in Bumiplcs shares; (iv) certain restrictions may from time to time be imposed by laws and regulations; and (v) where a person whose shares represent at least a 0.25% interest in Bumiplcs shares has been served with a disclosure notice and has failed to provide the Company with information concerning interests in those shares, except as provided in theArticles. The Company is not aware of any agreements between holders of the Companys shares that may result in restrictions on the transfer of securities or on votingrights. Pursuant to the terms of certain arrangements entered into at the time between Long Haul Holdings Ltd and PTBukit Mutiara, on closing of the Companys acquisition of 25% of the issued share capital of PTBumi, 24,524,851 Voting Ordinary Shares were issued by the Company to Long Haul Holdings Ltd. Under the terms of those arrangements, the Company understands that as at 31 December 2011 those shares were the subject of an (unexercised) right of re-transfer to PTBukit Mutiara. No person has any special rights of control over the Companys share capital and all issued shares are fullypaid. Appointment and replacement of Directors The rules for the replacement and appointment of Directors are set out in the Articles of Association. Under the terms of a relationship agreement entered into by the Company and the Bakrie Group on 16June 2011 and a relationship agreement entered into by the Company and PTBukit Mutiara (Mutiara) on 16 June 2011, the Bakrie Group can nominate up to three Directors, to hold the positions of Chairman, Chief Executive Officer and Chief Financial Officer respectively, and Mutiara can nominate one Non-Executive Director, subject to each of the BakrieGroup and Mutiara retaining control of 15% of the votes able to be cast at general meetings of theCompany. Articles of Association The Articles themselves may be amended by special resolution of the shareholders. Powers of the Directors Subject to the provisions of the Companies Acts, the Companys Articles of Association and to any directions given by special resolution, the business of the Company shall be managed by the Board, which may exercise all the powers of the Company. Directors The Directors of the Company are listed on pages 38 and39. Sir Julian Horn-Smith and Lord Renwick were appointed as Directors on 22 February 2011. Capita Trust Corporate Services Limited and ColinBenford, the rst Directors of the Company, resigned on 22 February 2011. Indra Bakrie, Nathaniel Rothschild, Ari Hudaya, Andrew Beckham, James Campbell, Rosan Roeslani, Sir Graham Hearne, Steven Shapiro, Amir Sambodo, Philip Yeo and Sony Harsono were appointed as Directors on 11 April 2011. Badung Tariono was appointed a Director of the Company on 1 July 2011. On 26 March 2012, Samin Tan, Nalin Rathod and Scott Merrillees were appointed as Directors of the Company and Chairman, Chief Executive Officer and Chief Financial Officer respectively. Andrew Beckham resigned as a Director of the Company; Indra Bakrie became Co-Chairman of the Company; and Nathaniel Rothschild and Ari Hudaya became non-independent Non-ExecutiveDirectors. It was further agreed at the Board meeting on 26March 2012 that Alexander Ramlie, Graham Holdaway and Jean Mizrahi would be proposed as Directors of the Company at the 2012AGM. James Campbell and Badung Tariono will retire as Directors of the Company at the 2012 AGM on 14June2012. Directors interests The Board of Directors interests in shares in the Company are detailed on page59. Directors indemnities The Company has entered into deeds of indemnity with each of its Directors which are qualifying indemnity provisions for the purpose of the Companies Act 2006. Directors insurance Directors and officers liability insurance is provided for all Directors of the Company. Directors share options (if relevant) Details of Directors share options are provided in the Directors Remuneration Report on page59.
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Employment policies The Group is an equal opportunities employer and bases all decisions on individual ability regardless of race, religion, gender, sexual orientation, age ordisability. Applications for employment by disabled persons will always be fully considered, having regard to their particular aptitudes and abilities. Should any employee become disabled, every practical effort is made to provide continued employment. Depending on their skills and abilities, they will enjoy the same career prospects and scope for realising their potential as other employees. Appropriate training will be arranged for disabled employees, including retraining for alternative work for those who become disabled, to promote their career development within theorganisation. Supplier payment policy The Group does not follow any specied code or standard on payment practice across its businesses. Businesses aim to adopt fair practises, which reect local and industry norms. The Group values its suppliers and recognises the benets of maintaining good relations including the maintenance of payment terms. It is the Groups policy to agree the payment terms with each supplier at the start of business and to ensure that they are aware of the terms of payment. The Group had 44days purchases outstanding at 31December 2011 (2010: nildays) based on the average daily amount invoiced by suppliers during theyear. Signicant Agreements The Companies Act 2006 requires the Company to disclose the following signicant agreements that contain provisions entitling the counterparties to exercise termination or other rights in the event of a change of control of the Company: Relationship Agreements The Company has entered into (i) a relationship agreement with members of the Bakrie Group dated 16June 2011 (the Bakrie Relationship Agreement) and (ii) a relationship agreement with Mutiara dated 16June 2011 (the Mutiara Relationship Agreement). The Bakrie Relationship Agreement and the Mutiara Relationship Agreement are together referred to herein as the Relationship Agreements. The principal purpose of the Relationship Agreements is to ensure that the Company is capable at all times of carrying on its business independently of the Bakrie Group and of Mutiara (and their respective associates) and that all transactions and relationships between the Company and either members of the Bakrie Group or Mutiara are at arms length and on a normal commercial basis. Each of the Relationship Agreements will terminate on the earlier of: (a) the Company ceasing to have any of its ordinary shares listed on the Official List and traded on the London Stock Exchanges main market for listed securities; and (b) the Bakrie Group together with its associates (in the case of the Bakrie Relationship Agreement) or Mutiara together with its associates (in the case of the Mutiara Relationship Agreement) ceasing to be entitled to exercise or control the exercise of 10% of more of the votes available to be cast on all or substantially all matters at general meetings of theCompany. Pursuant to the terms of the Relationship Agreements, it has been agreed, among other things,that: (i) the Bakrie Group and Mutiara (in respect of the applicable Relationship Agreement, the Relationship Party) will, and will procure so far as it is reasonably able to do so that each of its associates will (a) conduct all transactions and relationships with any member of the Group, and ensure that all arrangements and agreements between the Relationship Party or any of its associates and the Company or any other member of the Group are entered into, on arms length terms and on a normal commercial basis; (b) not take any action which precludes or inhibits any member of the Group from carrying on its business independently of the Relationship Party and its associates; (c) not exercise any of its voting rights or other rights and powers to procure any amendment to the Articles of Association of the Company which would be inconsistent with or breach any provision of the applicable Relationship Agreement or the ability of any member of the Group to carry on its business independently of the Relationship Party and its associates; (d) when paragraph 11.1.7R(3) of the Listing Rules applies to the Company, abstain from voting on any resolution required by paragraph 11.1.7R(3) of the Listing Rules to approve a related party transaction (as dened in paragraph 11.1.5R of the Listing Rules) involving the Relationship Party or any of its associates as the relatedparty; (e) comply with all provisions of the Listing Rules, the Disclosure and Transparency Rules, the requirements of the London Stock Exchange and the Financial Services and Markets Act 2000, that apply to it in connection with the Company; and (f) not to do anything within their power to cause or authorise to be done anything which would prejudice either the Companys status as a listed company or its suitability for listing, or listing on the premium listing segment of the OfficialList; (ii) provided that the Relationship Party and its associates are entitled to exercise or control the exercise of 15% or more of the votes able to be cast on all or substantially all matters at general meetings of the Company, the Relationship Party
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shall be entitled to nominate for appointment to the Board of Directors of the Company: in the case of Mutiara, one Director (to hold the position of Non-Executive Director) and, in the case of the Bakrie Group, three Directors (one to hold the position of Chairman, one to hold the position of Chief Executive Office and one to holder the position of Chief Financial Officer), in each case by giving notice to theCompany; (iii) pursuant to the Bakrie Relationship Agreement, provided that the Bakrie Group and its associates are entitled to exercise or control the exercise of 15% or more of the votes able to be cast on all or substantially all matters at general meetings of the Company, the Bakrie Group shall be entitled to nominate for appointment the President Commissioner and the President Director and a majority of the Board of Commissioners and directors of PTBumi and the Company shall take all such steps as are available to it under Indonesian law to seek to appoint the President Commissioner and/or President Director of PTBumi, as the case may be, in accordance with the nomination of the Bakrie Group; and (iv) the Relationship Party will be restricted from voting on transactions where there is a conict of interest between it and the Group. 12.5% Guaranteed Senior Secured Notes On 8 July 2010, Berau Capital Resources Pte. Ltd. (Berau Capital), a wholly owned nance subsidiary of PTBerau, issued $350m aggregate principal amount of 12.5% guaranteed senior secured notes. Berau Capital also issued an additional $100m aggregate principal amount of 12.5% guaranteed senior secured notes on 29July 2010 (together with the $350m aggregate principal amount of 12.5% guaranteed senior secured notes, the 12.5% Guaranteed Senior Secured Notes). PTBerau Capitals obligations under the 12.5% Guaranteed Senior Secured Notes are guaranteed by PTBerau and certain of its subsidiaries and subsidiary undertakings (collectively known as the PTBerau Group). The maturity date of the notes is 8July 2015. The notes bear interest from 8July 2010 at the rate of 12.5% per annum, payable semiannually every 8January and 8July commencing on 8January2011. Berau Capital must make an offer to repurchase all of the 12.5% Guaranteed Senior Secured Notes outstanding at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, no later than 30 days after a change of control. For these purposes, a change of control is the occurrence of any of the following events: (i) the merger, amalgamation or consolidation of PTBerau with or into another entity or the merger or amalgamation of another entity with or into PTBerau, or the sale of all or substantially all the assets of PTBerau to another entity, other than PTRecapital Advisors and its affiliates; (ii) PTRecapital Advisors and its affiliates are the benecial owners of less than 50.1% of the total voting power of the voting stock of PTBerau; (iii) individuals who on 8 July 2010 constituted the Board of Directors of PTBerau, together with any new Directors whose election was approved by a vote of at least a majority of the Directors then still in office who were either Directors or whose election was previously so approved, cease for any reason to constitute a majority of the Board of Directors then in office; or (iv) the adoption of a plan relating to the liquidation or dissolution of PTBerau. The acquisition by the Bumi Group of its interest in PTBerau (the Berau Transaction) constituted a change of control under the indentures governing the 12.5% Guaranteed Senior Secured Notes. Berau Capital made a change of control offer for all of such notes at 101% of their principal amount, plus accrued and unpaid interest within the requisite 30day period. At the end of the acceptance period for that offer, no noteholder had accepted theoffer. PTBerau Senior Secured Credit Facility On 23July 2010, PTBerau and Rognar HoldingsBV entered into a $400m senior secured credit facility (the Berau Senior Secured Credit Facility) with Credit Suisse AG, Singapore Branch as lead manager, facility agent and security agent and the nancial institutions listed therein as lenders. The PTBerau Group drew down the entire $400m available under this facility on 23July 2010. The facility comprised two tranches: (i)tranche A in a principal amount of $300m and (ii)tranche B in a principal amount of $100m. Interest for the tranche A loan was payable quarterly and accrued at the rate of LIBOR plus a margin of 4.75% per annum. The tranche A loan was scheduled to amortise in 13quarterly instalments on the last day of each calendar quarter from 31March 2011 through 31March 2014 plus one nal instalment on 23July 2014. The repayment amount of each instalment varies and is set forth in the facility agreement. Interest for the tranche B loan was payable quarterly and accrued at the rate of LIBOR plus a margin of 5.75% per annum. The tranche B loan was scheduled to amortise in three equal instalments on 30September 2014, 31December 2014 and 23April 2015. The lenders also had the right to require the PTBerau Group to prepay the loans in full (together with accrued interest and an amount equal to the margin that would have accrued on the loans from the day of prepayment to 23July 2011) immediately following a change of control of PTBerau or PTBerauCoal. PTBerau was the borrower under the PTBerau Senior Secured Credit Facility and its obligations under this facility ranked pari passu with its obligations under its guarantee of the 12.5% Guaranteed Senior SecuredNotes. Prior to the completion of the acquisition of 75% of PTBerau by Bumiplc (the PTBerau Transaction), PTBerau received a waiver from the lenders under the PTBerau Senior Secured Credit Facility of certain rights, including any prepayment rights thereunder that would have arisen as a result of the PTBerauTransaction.
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The PTBerau Senior Secured Credit Facility was repaid in full upon the issue of the 7.25% Guaranteed Senior Secured Notes described below. 7.25% Guaranteed Senior Secured Notes On 13 March 2012, PTBerau issued $500m aggregate principal amount of 7.25% guaranteed senior secured notes (the 7.25% Guaranteed Senior Secured Notes). PTBeraus obligations under the 7.25% Guaranteed Senior Secured Notes are guaranteed by certain other members of the PTBerau Group. The maturity date of the notes is 13March 2017. The notes bear interest from 13March 2012 at the rate of 7.25% per annum, payable semiannually every 13March and 13September commencing on 13September 2012. PTBerau must make an offer to repurchase all of the 7.25% Guaranteed Senior Secured Notes outstanding at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, no later than 30 days after a change of control. For these purposes, a change of control is the occurrence of any of the following events: (i) the merger, amalgamation or consolidation of PTBerau with or into another entity or the merger or amalgamation of another entity with or into PTBerau, or the sale of all or substantially all the assets of PTBerau to another entity, other than Bumiplc and its affiliates; (ii) Bumiplc and its associates are the benecial owners of less than 50.1% of the total voting power of the voting stock of PTBerau; (iii) individuals who on 13March 2012 constituted the Board of Directors of PTBerau, together with any new Directors whose election was approved by a vote of at least a majority of the Directors then still in office who were either Directors or whose election was previously so approved, cease for any reason to constitute a majority of the Board of Directors then in office; or (iv) the adoption of a plan relating to the liquidation or dissolution of PTBerau. Charitable and political donations During the year the Group made charitable donations of $8,801 to local charities in Indonesia. The Group made no political donations during theyear. Substantial shareholdings The table below shows those shareholders who have been notied to the Company as holding substantial shareholdings amounting to more than 3% of the issued share capital of the Company, as at the date of this report. Annual General Meeting The Annual General Meeting (AGM) will be held on 14 June 2011 at the Institute of Directors, 116Pall Mall, London SW1Y5ED. Full details about the AGM, including explanatory notes, are contained in the AGM Notice which will be sent to shareholders with the Annual Report for the year ended 31December 2011. The AGM Notice sets out the resolutions to be proposed at the AGM and an explanation of each resolution. All documents relating to the AGM are available on the Companys website at www.bumiplc.com. Auditors The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office, and a resolution that they be re-appointed will be proposed attheAGM. Statement of disclosure of information to the auditors Each of the Directors who held office at the date of the approval of this Annual Report conrms that, so far as they are aware, there is no relevant audit information of which the Companys auditors are unaware and each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Companys auditors are aware of thatinformation. By order of the Board
Paul Vickers Group General Counsel and Company Secretary
12 April 2012
Substantial shareholdings
Name of holder Number of Voting Ordinary shares Percentage of voting rights %
PT Borneo PT Bukit Mutiara Nathaniel Rothschild BlackRock Inc Abu Dhabi Investment Council Schroder Investment Management Ltd Taube Hodson Stonex Partners LLP
54,154,285 23,667,250 21,524,918 9,907,542 7,500,000 7,197,288 5,703,919
29.99 13.11 11.92 6.36 4.15 3.99 3.16
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Statement of Directors Responsibilities

The Directors are responsible for preparing the Annual Report, the Directors Remuneration Report and the nancial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare nancial statements for each nancial year. Under that law, the Directors have prepared the Group and parent company nancial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law, the Directors must not approve the nancial statements unless they are satised that they give a true and fair view of the state ofaffairs of the Group and the Company and of the prot or loss of the Group for that period. In preparing these nancial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable IFRSs, as adopted by the European Union, have been followed subject to any materialdepartures disclosed and explained in the nancial statements; prepare the nancial statements on the going concern basis unless it is inappropriate to presume that theGroup and Company will continue inbusiness. The Directors are responsible for the maintenance and integrity of the Companys website. Legislation in the United Kingdom governing the preparation and dissemination of nancial statements may differ from legislation in other jurisdictions. Directors Statement pursuant to the Disclosure and Transparency Rules Each of the Directors, whose names and functions are listed in the Remuneration Report conrm that, to the best of their knowledge: the Group nancial statements, which have been prepared in accordance with IFRSs, as adopted by the EU, give a true and fair view of the assets, liabilities, nancial position and result of the Group and Company; and the Directors report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that theyface.
By order of the Board
Ari Hudaya Director
12 April 2012
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Companys transactions and disclose with reasonable accuracy at any time the nancial position of the Group and the Company and enable them to ensure that the nancial statements and the Directors Remuneration Report comply with the Companies Act 2006 and, as regards the Group nancial statements, Article 4 of the IASRegulation. They are also responsible for safeguarding the assets of the Group and the Company and hence fortaking reasonable steps for the prevention and detection of fraud and other irregularities.
72 74 75 76 77 78 79 79 79 89 Independent Auditors Report Group Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Balance Sheet Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements General information Principal accounting policies Critical accounting judgements and key sources of estimation uncertainty 90 Segmental analysis 91 Net operating costs 91 Auditors remuneration 92 Underlying earnings and underlying EBITDA 92 Employee numbers and payroll costs 93 Finance income and costs 93 Taxation 94 Earnings per share 95 Intangible assets 96 Business combinations 100 Property, plant and equipment 101 Investment in associate 101 Inventories 102 Trade and other receivables 102 Cash and cash equivalents 102 Trade and other payables 103 Financial Instruments by category 104 Borrowings 105 Financial instruments 106 Financial risk management 108 Deferred tax 109 Share capital, share premium and merger reserve 111 Non-controlling interests 111 Consolidated cash ow analysis 112 Contingent liabilities and contingent assets 112 Commitments 113 Related party transactions 115 Principal subsidiaries and associated company 115 Subsequent event 116 Independent Auditors Report Company 118 Parent Company Balance Sheet 119 Parent Company Statement of Changes in Equity 120 Parent Company Statement of Cash Flows 121 Notes to the Parent Company Financial Statements
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72
Bumi plc | Financial Statements Annual Report 2011
Independent Auditors Report to the Members ofBumiplc

We have audited the Group nancial statements of Bumiplc for the year ended 31 December 2011 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows and the related notes. The nancial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. Respective responsibilities of Directors and auditors As explained more fully in the Statement of Directors Responsibilities set out on page 69, the Directors are responsible for the preparation of the Group nancial statements and for being satised that they give a true and fair view. Our responsibility is to audit and express an opinion on the Group nancial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Boards Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Companys members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report isshown or into whose hands it may come save where expressly agreed by our prior consent in writing. Scope of the audit of the nancial statements An audit involves obtaining evidence about the amounts and disclosures in the nancial statements sufficient togive reasonable assurance that the nancial statements are free from material misstatement, whether caused byfraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Groups circumstances and have been consistently applied and adequately disclosed; the reasonableness of signicant accounting estimates made by the Directors; and the overall presentation of the nancial statements. In addition we read all the nancial and non nancial information in the Annual Report to identify material inconsistencies with the audited nancial statements. If we become aware of any material misstatements or inconsistences we consider the implications for our report. Opinion on nancial statements In our opinion the Group nancial statements: give a true and fair view of the state of the Groups affairs as at 31 December 2011 and of its loss and cash ows for the year then ended; have been properly prepared in accordance with IFRSs as adopted by the European Union; and have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the lASRegulation.
Opinion on other matters prescribed by the Companies Act 2006 In our opinion: the information given in the Directors Report for the nancial year for which the Group nancial statements are prepared is consistent with the Group nancial statements; and the information given in the Governance Section with respect to internal control and risk management systems and about share capital structures is consistent with the nancial statements.
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Matters on which we are required to report by exception We have nothing to report in respect of the following: Under the Companies Act 2006 we are required to report to you if, in our opinion: certain disclosures of Directors remuneration specied by law are not made; or we have not received all the information and explanations we require for our audit; or a corporate governance statement has not been prepared by the parent company.
Under the Listing Rules we are required to review: the Directors statement, set out on page 24, in relation to going concern; the part of the governance section relating to the Companys compliance with the nine provisions of the UK Corporate Governance Code specied for our review; and certain elements of the report to shareholders by the Board on Directors remuneration.
Other matter We have reported separately on the parent company nancial statements of Bumiplc for the year ended 31December 2011 and on the information in the Remuneration Report that is described as having been audited.
Ross Hunter (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 12 April 2012
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Consolidated Income Statement

Year to 31 December 2011 $m 9 months to 31 December 2010 $m
Note
Revenue Cost of sales Gross prot General and administrative expenses Distribution and marketing expenses Costs associated with corporate transactions Operating prot/(loss) Share of loss of associate Prot/(loss) before nance items and income tax Finance income Finance costs Movement on nancial instruments at fair value through prot or loss Net nance costs Loss before income tax Income tax Loss for the year/period Prot/(loss) attributable to: Owners of the parent Non-controlling interests Loss per ordinary share Basic Diluted
1,407 (921) 486 (96) (44) (66)
(15) (32) (47) (47) 1 (62) (61) (108) (108)
5 15 9 9 9
280 (39) 241 13 (83) (286) (356) (115)
10
(167) (282)
(319) 26 37
$
(108)
$
11 11
(1.66) (1.66)
(1.61) (1.61)
The notes on pages 79 to 115 form part of these consolidated nancial statements.
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Consolidated Statement of Comprehensive Income

Note
Loss for the year/period Other comprehensive income Share of other comprehensive income of associate Income tax recognised in other comprehensive income Total comprehensive expense for the year/period Total comprehensive expense attributable to: Owners of the parent Non-controlling interests 26 15 10
(282)
(108)
2 (280)
(108)
(317) 37
(108)
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Consolidated Balance Sheet

31 December 2011 $m 31 December 2010 $m
Note
Non-current assets Goodwill Exploration and evaluation assets Property, plant and equipment Investment in associate Total non-current assets Current assets Inventories Financial assets Trade and other receivables Cash and cash equivalents Total current assets Total assets Current liabilities Trade and other payables Borrowings Current taxation Total current liabilities Non-current liabilities Borrowings Deferred tax liabilities Provisions Total non-current liabilities Total liabilities Equity Ordinary shares Share premium Share based payment reserve Merger reserve Retained earnings/(accumulated losses) Total attributable to owners of the parent Non-controlling interests Total equity Total equity and liabilities 26 25 25 25 4 141 2,248 1,551 3,944 691 4,635 7,518 622 1 428 (108) 943 31 974 983 21 24 745 1,277 25 2,047 2,883 9 19 21 625 85 126 836 9 9 16 22 17 18 30 495 608 1,133 7,518 659 324 983 983 12 12 14 15 1,320 4 3,039 2,022 6,385
The notes on pages 79 to 115 form part of these nancial statements. The nancial statements were authorised for issue by the Board of Directors on 12April 2012 and signed on its behalf by
Ari Hudaya Director
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Consolidated Statement of Changes in Equity

Attributable to owners of the parent Share based payment reserve $m Non controlling interest $m
Note
Ordinary shares $m
Share premium $m
Merger reserve $m
Retained earnings $m
Total $m
Total equity $m
At date of incorporation Capital injected by non-controlling interests Ordinary shares issued Ordinary shares repurchased and cancelled Share based payment reserve Total comprehensive expense At 31 December 2010 Investment in associate Acquisition of subsidiary Capital reduction Exchange of Founder Shares Reduction in NCI following mandatory cash offer Share based payment reserve Dividend paid Total comprehensive expense At 31 December 2011 25 25
635 (13) 622 1,014 514 (2,146) 4
141 141
1 1 (1)
437 (9) 428 1,031 604 185 2,248
(108) (108) 2,146 (162) (8) (317) 1,551
1,072 (22) 1 (108) 943 2,186 1,118 23 (8) (1) (317) 3,944
31 31 864 (23) (206) (12) 37 691
31 1,072 (22) 1 (108) 974 2,186 1,982 (214) (1) (12) (280) 4,635
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Consolidated Statement of Cash Flows

Note
Net cash ows generated from/(used in) operations Interest paid Tax paid Net cash generated from/(used in) operating activities Cash ows from investing activities Interest received Acquisition of subsidiary, net of cash acquired Purchase of property, plant and equipment Capitalised exploration and evaluation expenditure Dividends received from associate Net cash generated from/(used in) investing activities Cash ows before nancing activities Cash ows from nancing activities Proceeds from the issue of Founder Shares and Founder Securities Proceeds from the issue of ordinary shares Repurchase and cancellation of ordinary shares Purchase of non-controlling interests Costs associated with Initial Public Offering Proceeds from borrowings Repayment of borrowings Dividends paid to non-controlling interests in subsidiaries Net cash (used in)/generated from nancing activities
27
435 (63) (255) 117
(6) (6)
5 472 (66) (4) 30 437 554
1 (739) (738) (744)
(214) 5 (60) (12) (281)
31 1,072 (22) (32) 1,049
Effect of foreign exchange rates Net increase in cash and cash equivalents Opening cash and cash equivalents Closing cash and cash equivalents
11 284 324 608
19 324 324
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Notes to the Financial Statements
1. General information 1.1. Denition When reference is made to the Top Company in these nancial statements, it means Vallar Ltd (formerly Vallar plc) up until 27 June 2011 and Bumiplc from 28 June 2011. When reference is made to the Group in these nancial statements, it means Vallar Ltd (formerly Vallar plc) and its subsidiaries to 27 June 2011 and Bumiplc and its subsidiaries from 28 June 2011. When reference is made to the Company in these nancial statements it means Bumiplc. Bumiplc is the ultimate parent company of the Bumiplc group of companies (Bumi). It is incorporated, domiciled and registered in England and Wales as a public company limited by shares. The ordinary shares of the Company are traded on the London Stock Exchange and its registered office is 2nd Floor, 4 Grosvenor Place, London SW1X 7HJ. Bumiis the new holding company of the Vallar Ltd (formerly Vallar plc) group of companies. The main subsidiary PTBerau Coal Energy Tbk (PTBerau) is a coal mining group of companies listed on the Indonesia Stock Exchange. The Company also holds an investment in an associate, PTBumi Resources Tbk (PTBumi), which is also listed on the Indonesia Stock Exchange and is also engaged in coal mining operations and exploration and development of mineral mining concessions. 1.2. Scheme of arrangement On 10 March 2011, Vallar Ltd (formerly Vallar plc) announced its intention to put in place a new parent company for the Group, Bumi, being a company incorporated in England and Wales that is tax resident in the United Kingdom. The introduction of the new holding company was implemented by means of a scheme of arrangement under Article 125 of the Companies (Jersey) Law (the Scheme). The Scheme became effective on 28 June 2011. Upon implementation of the Scheme, Bumihad the same proportionate interest in the prots, net assets and dividends of PTBerau and PTBumi and their respective subsidiaries as Vallar Ltd (formerly Vallar plc) had prior to the effective date of the Scheme. The Scheme falls outside the scope of IFRS 3 Business Combinations. Accordingly, following the guidance regarding the selection of an appropriate accounting policy provided by IAS 8 Accounting policies, changes in accounting estimates and errors, the Scheme has been accounted for using the principles of merger accounting. With merger accounting, the carrying values of the assets and liabilities of the parties to the combination are not required to be adjusted to fair value on consolidation and the difference between the carrying values and nominal value of shares issued is recorded in a merger reserve.
2. Principal accounting policies The principal accounting policies applied in the preparation of these consolidated nancial statements are set out below. These policies have been consistently applied, unless otherwise stated. 2.1. Basis of preparation a) Statement of compliance These consolidated nancial statements of Bumihave been prepared in accordance with International Financial Reporting Standards (IFRSs) and International Financial Reporting Standards Interpretations Committee Interpretations (IFRICs) as adopted by the European Union (IFRSs as adopted by the EU), and the Companies Act 2006 applicable to companies reporting under IFRS. These consolidated nancial statements have been prepared under the historical cost convention, as modied by the revaluation of nancial assets and nancial liabilities (including derivative instruments) at fair value through prot or loss. The preparation of nancial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Groups accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signicant to the consolidated nancial statements are disclosed in note 3. These consolidated nancial statements are presented in millions of US dollars ($) except where otherwise indicated in the auditors remuneration and related party transactions notes.
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Notes to the Financial Statements (continued)
2. Principal accounting policies continued b) Comparative numbers In accordance with the requirements of merger accounting, the comparative information in these consolidated nancial statements has been extracted from the Vallar Ltd (formerly Vallar plc) consolidated nancial statements for the nine months ended 31 December 2010 and translated to US dollars. Those nancial statements incorporated the results of Vallar Ltd (formerly Vallar plc) and its subsidiary undertakings for the period thenended. c) Going concern The Directors have, at the time of approving these consolidated nancial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, the Group continues to adopt the going concern basis of accounting in preparing these consolidated nancial statements. 2.2. New accounting standards The Group applied all applicable standards and interpretations published by the IASB and as endorsed by the European Union for the year beginning 1 January 2011. The Group did not early adopt any standard or interpretation published by the IASB and endorsed by the European Union for which the mandatory application date is after 1 January 2011. The following new standards, interpretations and amendments to standards and interpretations have been issued, subject to EU endorsement, but are not effective for the nancial year beginning 1 January 2011 and have not been early adopted by the Group:
Effective date for periods beginning on or after
Amendments to IAS 1 Presentation of Items of Other Comprehensive Income IFRS 9 Financial Instruments IFRS 10 Consolidated nancial statements IAS 27 (Revised 2011) Separate nancial statements IFRS 11 Joint arrangements IAS 28 (Revised 2011) Investments in associates and joint ventures IFRS 12 Disclosure of interests in other entities IFRS 13 Fair value measurement IFRIC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine
1 July 2012 1 January 2015 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2012 1 January 2013 1 January 2013
The impact on the Groups nancial statements of the future standards, amendments and interpretations is still under review, but the Group does not currently expect any of these changes to have a material impact on the results or net assets of the Company or the Group with the exception of IFRIC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine. This interpretation considers when and how to account separately for benets arising from the production stage stripping activity, as well as how to measure these benets both initially and subsequently. The interpretation, also addresses the recognition of production stripping costs as an asset, initial measurement of the stripping activity asset and subsequent measurement of the stripping activity asset. The full impact is still being assessed by the Group.
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2.3. Consolidation The consolidated nancial information consists of the consolidation of the nancial statements of the Company and its subsidiaries. a) Subsidiaries Subsidiaries are all entities over which the Group has the power to govern the nancial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. All intragroup transactions, balances, income and expenses are eliminated on consolidation. b) Associates An associate is an entity in which the Group has an equity interest and over which it has the ability to exercise signicant inuence. Under the equity method, investments in associates are carried at cost plus post acquisition changes in the Groups share of the net assets of the associate, less any impairment in the value of individual investments. The income statement reects the Groups share of the results of the associate, which is net of interest and taxation and presents this as a single line item in arriving at Group prot before nance items and income tax on the face of the income statement. The Groups share of post acquisition movements in other comprehensive income is recognised in the statement of comprehensive income. c) Transactions with non-controlling interests The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. d) Transactions between entities under common control Business combinations involving entities under common control are accounted for as if the acquisition had occurred at the beginning of the earliest comparative year presented or at the date that common control was established, if later. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the Groups controlling shareholders nancial statements. Any differences on consolidation are recognised directly in equity. 2.4. Business combinations and goodwill The Group uses the purchase method of accounting to account for business combinations in accordance with IFRS 3 (revised). The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as incurred. Identiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interests proportionate share of the acquirees net assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Groups share of the identiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the incomestatement.
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2. Principal accounting policies continued 2.5. Foreign currency translation a) Change in functional currency With the proposed acquisition of PTBerau and PTBumi agreed in November 2010, the Directors concluded that the most appropriate functional currency of Vallar Ltd (formerly Vallar plc) is US dollars. This reected the fact that the majority of Vallar plc business became inuenced by pricing in international commodity markets, with a US dollar economic environment. The previous functional currency of Vallar plc was the British pound. On the date of the change of functional currency, from 1 January 2011, all assets, liabilities, issued capital and other components of equity and income statement items were translated into USdollars at the prevailing exchange rate. As a result of the change in functional currency, the Companys functional and presentation currency are now the same. Comparative amounts have been re-presented. b) Presentation currency The Groups nancial statements are presented in millions of US dollars ($) in line with its functional currency. c) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. 2.6. Revenue recognition Revenue comprises the fair value of the consideration received or receivable from the sale of goods (coal) in the ordinary course of the Groups activities. Revenue is shown net of applicable sales taxes, returns, rebates and discounts and after eliminating sales within the Group. Under the terms of PTBeraus Coal Contract of Work (CCoW), the Government of Indonesia (the Government) is entitled to 13.5% of the coal production of PTBerau. Rather than deliver coal to the Government, as agreed PTBerau markets and sells the Governments coal entitlement and pays the Government the cash proceeds less certain charges. Revenue in the income statement includes the proceeds of the sales of the Governments entitlement as the Group suffers the credit risk associated with these sales. The Governments entitlement is recognised as a royalty expense as part of the cost of sales. Sales revenue is only recognised on individual sales when persuasive evidence exists that all of the following criteria are met: the signicant risks and rewards of ownership of the product have been transferred to the buyer; neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold, has been retained; the amount of revenue can be measured reliably; it is probable that the economic benets associated with the sale will ow to the Group; and the costs incurred or to be incurred in respect of the sale can be measured reliably.
These conditions are satised when title passes to the customer. In most instances sales revenue is recognised when the product is delivered to the destination specied by the customer, which is the vessel on which it will be shipped, the destination port or the customers premises. The sale prices are based on the Newcastle Free on Board (FOB) benchmark with relevant adjustment for caloric value, moisture, ash and sulphur content and other factors. Occasionally, products are provisionally priced. When the price adjustment for a particular year has not been agreed with the customer at the time a delivery is to be made, the Group will continue to invoice coal at the prior years price and adjust the price after reaching an agreement with the customer. When this occurs, the Group records the sales revenue on a prevailing market price for the coal and adjusts the sales revenue amount when a price agreement is reached with the customer.
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2.7. Exploration and evaluation expenditure and assets Exploration and evaluation activity involves the search for coal and mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identied resource. Exploration and evaluation activity includes: Gathering exploration data through topographical, geochemical and geophysical studies Exploratory drilling, trenching and sampling Determining and examining the volume and grade of the resource Surveying transportation and infrastructure requirements
Administration costs that are not directly attributable to a specic exploration area are charged to the income statement. Licence costs paid in connection with a right to explore in an existing exploration area are capitalised and amortised over the term of the permit. Exploration and evaluation expenditure is charged to the income statement as incurred except in the following circumstances, in which case the expenditure is capitalised. In respect of coal and mineral activities: the acquisition of a concession or licence area of interest at the exploration and evaluation stage from a thirdparty, which is measured at fair value on acquisition; otherwise when the existence of a commercially viable mineral deposit has been established.
Capitalised exploration and evaluation expenditure is not depreciated as the asset is not available for use, but is monitored for indications of impairment. Where a potential impairment is indicated, an assessment is performed for each area of interest in conjunction with the group of operating assets (representing a cash generating unit) to which the exploration is attributed. To the extent that capitalised expenditure is not expected to be recovered it is charged to the income statement. Cash ows associated with capitalised exploration and evaluation expenditure are classied as investing activities in the consolidated statement of cash ows, and exploration and evaluation expenditure related cash ows that are expensed are classied as operating cash ows. 2.8. Property, plant and equipment Property, plant and equipment is stated at cost, less accumulated depreciation. The cost of property, plant and equipment comprises the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the estimated costs of decommissioning the assets and site rehabilitation costs to the extent that they relate to the asset and are the responsibility of the Group. The cost of an item of property, plant and equipment is capitalised into its various components where the useful life of the components differ from the main item of property, plant and equipment to which the component can be logically assigned. Expenditure incurred to replace or modify a signicant component of property, plant and equipment is capitalised and any remaining carrying value of the component replaced is written off as an expense in the income statement. Subsequent expenditure on property, plant and equipment is only capitalised when the expenditure enhances the value or output of the asset beyond original expectations and it can be measured reliably. Costs incurred on repairing and maintaining assets are recognised in the income statement in the period in which they are incurred. Gains and losses on the disposal of property, plant and equipment, which are represented by the proceeds on disposal of such assets less their carrying values at that date, are recognised in the income statement.
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2. Principal accounting policies continued When proven reserves are determined and development is sanctioned, capitalised exploration and evaluation expenditure is reclassied as mining properties, and is disclosed as a component of property, plant and equipment. All subsequent development expenditure relating to the construction of infrastructure required to operate the mine is capitalised and classied as assets under construction. Development expenditure is net of proceeds from the sale of ore extracted during the development phase. On completion of the development phase, all assets included in assets under construction are reclassied as either plant and equipment or miningproperties. Mining properties includes assets in production and in development assets transferred from exploration and evaluation expenditure, deferred stripping performed in the development of the mine, and the fair value of mineral resources acquired through business combinations. Mining properties in development and acquired mineral resources are not depreciated until production commences. Property, plant and equipment, including mining properties, are depreciated over their useful lives, the lease term, or the term of the CCoW, whichever is shorter. Depreciation commences when an asset is available for use. The major categories of property, plant and equipment are depreciated on a straight line basis, except for the mining properties in production, which are depreciated on a units of production (UoP) basis as follows:
Category Estimated Useful Life
Land and buildings Plant and equipment Furniture, xtures and ofce equipment Assets under construction Mining properties
20 years 3 to 30 years 3 to 8 years not depreciated over CCoW on a UoP basis
Residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Changes to the estimated residual values or useful lives are accounted for prospectively. Costs associated with commissioning new assets, in the period before they are capable of operating in the manner intended by management, are capitalised. Development costs incurred after the commencement of production are capitalised to the extent they are expected to give rise to a future economic benet. Interest on borrowings related to construction or development projects is capitalised until the point when substantially all the activities that are necessary to make the asset ready for its intended use are complete. 2.9. Deferred stripping It is necessary to remove overburden and other waste materials to open the mining area before production commences. The process of removing overburden and waste materials is referred to as stripping. Where a mine operates several open pits that are regarded as separate operations for the purpose of mine planning, stripping costs are accounted for separately by reference to the ore from each separate pit. If, however, the pits are highly integrated for the purpose of mine planning, the second and subsequent pits are regarded as extensions of the rst pit in accounting for stripping costs. In such cases, the initial stripping (i.e. overburden and other waste removal) of the second and subsequent pits is considered to be production phase stripping relating to the combined operation. The Groups determination of whether multiple pit mines are considered separate or integrated operations depends on each mines specic circumstances. In the development stage of a mine, before production commences, stripping costs are capitalised as part of mining properties and amortised on a UoP basis over the life of the mine. This includes any advance payments to contractors, where mining activities are outsourced, to compensate for the relatively high cost of overburden removal, which arises in the early stages of a mines life. Stripping costs incurred in the production phase are deferred to the extent that the actual stripping ratio in the period exceeds the life of mine stripping ratio. These deferred costs are then released to the income statement as production costs, in those periods where the actual stripping ratio is less than the life of mine stripping ratio.
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The life of mine stripping ratio is calculated as the total expected amount of overburden to be removed over the life of the mine, divided by the total expected amount of coal to be mined over the life of the mine. The life of mine stripping ratio is reviewed regularly and, where necessary, amended to reect changes in the economically mineable coal reserves, and a more detailed understanding of the overburden to be removed. The accounting effects of changes to the life of mine stripping ratio are applied prospectively. 2.10. Impairment of non-nancial assets Assets that have an indenite useful life such as goodwill or intangible assets not ready for use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identiable cash ows (cash generating units). Non-nancial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. 2.11. Financial instruments Financial assets The Group classies its nancial assets in the following categories: at fair value through prot or loss, loans and receivables or as available for sale. The classication depends on the nature and purpose for which the nancial instruments were acquired. Management determines the classication of its nancial instruments at initial recognition. The designation of nancial instruments is re-evaluated at every reporting date. a) Financial assets at fair value through prot or loss Derivatives are included in this category unless they are designated as hedges. The Group does not designate any other nancial assets as fair value through prot or loss. Assets in this category are classied based on their maturity. The Group does not acquire nancial assets for the purpose of selling in the short term. Financial assets carried at fair value through prot or loss are initially recognised at fair value. Gains and losses on initial recognition resulting from fair values that do not include any observable market conditions for the same instrument are deferred and recognised in the income statement in full on completion. b) Loans and receivables Loans and receivables are non-derivative nancial assets with xed or determinable payments that are not quoted in an active market. They are classied as current assets or non-current assets based on their maturity date. Loans and receivables comprise cash and cash equivalents and trade and other receivables (excluding prepayments) in the balance sheet. Loans and receivables are carried at amortised cost less any impairment. i. Cash and cash equivalents Cash and cash equivalents comprise cash on hand, deposits held at call with banks, and other short term highly liquid investments. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash, generally have an original maturity of 90 days or less and are subject to an insignicant risk of adverse changes in value. However, certain deposits of greater duration can be classied as cash equivalents if the funds can be withdrawn at short notice with an insignicant risk of adverse changes in value. ii. Trade and other receivables Trade receivables are recognised initially at fair value and are subsequently measured at amortised cost, using the effective interest rate method, reduced by any provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due. Indicators of impairment would include signicant nancial difficulties of the debtor, likelihood of the debtors insolvency, default in payment or a signicant deterioration in credit worthiness. Any impairment is recognised in the income statement. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to the income statement. Included in this account are the trade receivables which pertain to amounts due from customers for coal sold in the ordinary course of business.
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2. Principal accounting policies continued c) Available for sale nancial assets Available for sale nancial assets include the Groups investments in non-consolidated companies and equity or debt instruments that do not satisfy the criteria for classication in another category. These items are measured at fair value on initial recognition plus transaction costs. At each balance sheet date, available for sale nancial assets are measured at fair value. For listed companies, fair value is determined based on the quoted market price at the balance sheet date. For unlisted companies, fair value is measured based on standard valuation techniques such as discounted future cash ows. Changes in fair value are recorded directly in other comprehensive income, except when the decline in the value of the investment below its historical acquisition cost is judged signicant or prolonged enough to require an impairment. In this case, the loss is recognised in the income statement under impairment charges. Only impairment losses recognised on debt investments may be reversed through the income statement. Interest on available for sale nancial assets is calculated using the effective interest method recognised in the income statement. Dividends on available for sale nancial assets are recognised in the income statement as part of nance income when the Groups right to receive payment is established. When nancial assets classied as available for sale are sold, the accumulated fair value adjustments recognised in equity are included in the income statement. Financial liabilities Financial liabilities are classied as nancial liabilities at fair value through prot or loss or at amortised cost, as appropriate. Financial liabilities are recognised initially at fair value and, in the case of nancial liabilities at amortised cost, inclusive of directly attributable transaction costs. The subsequent measurement of nancial liabilities depends on their classication as follows: a) Financial liabilities at fair value through prot or loss Financial liabilities at fair value through prot or loss include mainly derivative liabilities unless they are designated as effective hedging instruments. Financial liabilities at fair value through prot or loss are stated at fair value, with changes in fair value during a reporting period immediately recognised in the income statement. b) Financial liabilities at amortised cost After initial recognition, trade and other payables, interest bearing loans, notes and borrowings are measured at amortised cost using the effective interest rate method taking into account principal repayments or reductions. The calculation also takes into account any premium or discount paid or received either on acquisition or on redemption. It also includes transaction costs and fees that are an integral part of the effective interest rate. Gains and losses are recognised in the income statement when the liabilities are derecognised. Included in this category are trade and other payables and borrowings. i. Trade and other payables Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade and other payables are classied as current liabilities if payment is due within one year otherwise they are presented as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. ii. Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowing using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre payment for liquidity services and amortised over the period of the facility to which it relates.
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c) Derecognition of nancial liabilities The Group derecognise nancial liabilities when, and only when, the Groups obligations are discharged, transferred, cancelled or expired. 2.12. Inventories Inventories are valued at the lower of cost and net realisable value, primarily on a weighted average cost basis. Cost of coal inventories is determined by a twelve month rolling weighted average of historical production costs, while cost of spare parts inventories are valued at cost, determined on a moving average basis. Stores and consumable supplies are charged to production in the period they are used. Allowance for inventory obsolescence is provided to reduce the carrying values of inventories to their net realisable value based on the review of the status of the inventories at the end of the period. 2.13. Leases The Group leases certain property, plant and equipment. Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of ownership, are classied as nance leases. Finance leases are capitalised at the commencement of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. All other leases are classied as operating leases. Payments under operating leases are charged to the income statement on a straight line basis over the term of the relevant lease. For nance leases, each lease payment is allocated between the liability and nance charges. The corresponding rental obligations, net of nance charges, are included in other long term payables. The interest element of the nance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property, plant and equipment acquired under nance leases are depreciated over the shorter of the useful life of the asset and the lease term. 2.14. Provisions Provisions are recognised when (i) the Group has a present legal or constructive obligation as a result of past events; (ii) it is probable that an outow of resources will be required to settle the obligation; and (iii) the amount can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre tax rate that reects current market assessments of the time value of money and the risks specic to the obligation. The increase in the provision due to the passage of time is recognised as interest expense. a) Environmental rehabilitation provision The Group has an obligation to undertake restoration, rehabilitation and environmental work when environmental disturbance is caused by the development or ongoing production of a mining property. It is anticipated that these costs will be incurred over a period in excess of 20 years. Rehabilitation costs are a normal consequence of mining, and are provided for as and when a legal or constructive obligation to incur costs associated with rehabilitation arises. The environmental rehabilitation provision consists of costs associated with continuous mine reclamation during mine operations. Long term environmental rehabilitation provisions are measured based on the net present value of the estimated future costs. Although the ultimate cost to be incurred is uncertain, the Groups businesses estimate their respective costs based on feasibility and engineering studies using current restoration standards and techniques, taking into account the Groups environmental policy and current Indonesian environmental and regulatory requirements, including the requirements of the CCoW. The unwinding of the discount applied in establishing the net present value of provisions is charged to the income statement in each accounting period as a nancing cost.
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2. Principal accounting policies continued b) Mine closure provisions Mine closure provisions, which include decommissioning, demobilisation and other closure activities, are recognised when the economic life of the mine ends within the period of the existing life of the CCoW because they relate to the facilities which are in use over the life of the mine. The initial mine closure provision together with other movements in the provisions for environmental costs, including those resulting from new disturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discount rates are capitalised in mining properties, within property, plant and equipment. These costs are then depreciated over the useful life of the assets to which they relate on a UoP basis. 2.15. Taxation The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated nancial information. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable prot will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and assets arising on consideration except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is provided in respect of fair value adjustments on acquisitions. These adjustments may relate to assets such as mining rights or resources that, in general, are not eligible for income tax allowances. In such cases, the provision for deferred tax is based on the difference between the carrying value of the asset and its nil income tax base. The existence of a tax base for capital gains tax purposes is not taken into account in determining the deferred tax provision relating to such mining rights or resources because it is expected that the carrying amount will be recovered primarily through use and not from disposal. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. 2.16. Ordinary shares Ordinary shares are classied as equity. Where any group company purchases the Companys ordinary shares, the consideration paid, including any directly attributable incremental costs is deducted from equity attributable to the Companys owners until the shares are cancelled or reissued. 2.17. Merger Reserve Upon implementation of the Scheme, the Groups ordinary shares have been re-presented as that of Bumiplc, with a nominal value of 6. The difference between Vallar Ltds (formerly Vallar plc) net assets and the nominal value of the shares in issue is recorded in the merger reserve. In addition, certain consolidation adjustments are also recorded in the merger reserve.
89
3. Critical accounting judgements and key sources of estimation uncertainty The preparation of consolidated nancial statements in accordance with IFRS requires the use of critical estimates and assumptions to determine the value of assets and liabilities, and contingent assets and liabilities at the balance sheet date, and revenues and expenses reported during the period. Due to uncertainties inherent in the estimation process, the Group regularly revises its estimates in light of currently available information. Final outcomes could differ from those estimates. The main estimates used in preparing the Groups consolidated nancial information are presented below. 3.1. Determination of coal reserve estimates The Group reports its coal reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, December 2004 (the JORC Code), prepared and published by The Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia. The term coal reserve is dened in the JORC Code as the economically mineable part of a measured and/or indicated coal resource. Coal reserves are subdivided in order of increasing condence into probable coal reserves and proved coal reserves. Under the JORC Code, the term coal resource refers to a concentration or occurrence of coal of intrinsic economic interest in or on the Earths crust in such form and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a coal resource are known, estimated or interpreted from specic geological evidence and knowledge. Coal resources are subdivided, in order of increasing geological condence, into inferred, indicated and measured categories. Reserves determined in this way are used in the calculation of depreciation, amortisation and impairment charges, the assessment of life of mine stripping ratios and in forecasting the timing of the payment of close down and restoration costs and clean up costs. In assessing the life of a mine for accounting purposes, mineral resources are only taken into account where there is a high degree of condence for economic extraction. There are numerous uncertainties inherent in estimating coal reserves, and assumptions that are valid at the time of estimation may change signicantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated. 3.2. Recoverable amount of property, plant and equipment and goodwill The recoverable amount of goodwill and property, plant and equipment is based on estimates and assumptions regarding, in particular, the expected market outlook and future cash ows associated with the assets. Predicted future cash ows include estimates of future costs to produce proven and probable reserves, future commodity prices, foreign exchange rates and discount rates. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in an impairment. 3.3. Denition of underlying earnings and underlying earnings before interest, tax, depreciation and amortisation (underlying EBITDA) The Group presents underlying earnings and underlying EBITDA as an additional measure to provide greater understanding of the underlying business performance of its operations. The adjustments made to net earnings to arrive at underlying earnings and underlying EBITDA are explained in note 7. 3.4. Capitalisation and deferral of production stripping costs The Group defers stripping costs incurred during the production stage of its operations when the actual stripping ratio for a specic period exceeds the expected average stripping ratio over the life time of the mine or pit. Such deferred costs are then charged against reported prots to the extent that, in subsequent periods, the current period ratio falls below the average stripping ratio. The expected average ratio is based on proven and probable reserves of the mine. The expected average stripping ratio is highly dependent on the design of the mine and on the technical and economic parameters of the project. The Group regularly reviews the expected average stripping ratio of the mine.
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3. Critical accounting judgements and key sources of estimation uncertainty continued 3.5. Taxation Taxes are paid by the Groups subsidiary in Indonesia under a number of different regulations and laws, which are subject to varying interpretations. In addition, these can change frequently and the judicial system does not have well developed rules of precedent. This, in turn, may result in transactions and activities that have not been challenged in the past being scrutinised in greater detail and additional taxes may be assessed based on new interpretations of the legislation and tax positions. Accordingly, managements interpretation of such legislation as applied to the transactions and activity of the Groups subsidiary, may be challenged by the relevant authorities. Under Indonesian tax laws, scal periods up until 2007 remain open for 10 years, or until the end of 2013 whichever is earlier and scal periods ending after 2007 remain open for ve years after the time that the tax becomes due. At the date of these nancial statements, the Groups subsidiary, PTBerau has received several tax assessment letters that are not yet nalised. PTBerau has led objections and/or appeals that are still in process or pending decisions, the outcomes of which are not presently determinable. Management believes that its interpretation of the relevant legislation is appropriate and the tax position included in these nancial statements will be sustained. 3.6. Purchase Price Allocation: goodwill and fair values of assets acquired in a businesscombination According to the denitions of IFRS 3 Business Combinations the value to be used in the application of the acquisition method is the fair value. Fair value is dened as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arms length transaction. Guidance on fair value measurements with respect to assets acquired in a business combination indicates that quoted market prices in active markets provide the most reliable estimate of fair value. If no market exists for an asset, the fair value is the amount that the entity would have paid for the asset, at the acquisition date, in an arms length transaction between knowledgeable and willing parties, on the best information available, including the outcome of recent transactions for similar assets and the results of using other fair value measurement techniques, such as discounting estimated future net cash ows from the asset. The Purchase Price Allocation process involves signicant management judgements and estimations. Allocation of the purchase price affects the future results of the Group, as assets with nite useful lives are amortised whereas goodwill and assets with indenite useful lives are not amortised, and could result in differing amortisation charges based on the allocation to goodwill and assets with nite useful lives. Similar judgements and estimations were also made in relation to the acquisition of the interest in PTBumi.
4. Segmental analysis In accordance with the provisions of IFRS 8 Operating Segments, the operating segments used to present segment information were identied on the basis of internal reports used by the Board of Directors to allocate resources to the segments and assess their performance. The Board of Directors is the Groups chief operating decision maker within the meaning of IFRS 8. The Board of Directors considers the business from a product perspective and has determined that the Group has a single reportable segment, being coal mining. Information on nancial performance and net assets is presented in the income statement and balance sheet.
Revenue Year to 31 December 2011 Non-current assets 31 December 2011
$m China Taiwan Indonesia India South Korea Hong Kong United Kingdom Total 763 203 175 103 98 65 1,407
% 54 15 12 7 7 5 100
$m 6,384 1 6,385
% 100 100
91
5.
Net operating costs

Changes in inventories of nished goods and work in progress Stripping and mining costs Employee costs Freight and handling costs Net foreign exchange gains Coal processing and other production costs Government royalties paid and payable Depreciation and amortisation expense Costs associated with corporate transactions Professional and legal fees (including auditors remuneration) Operating lease rentals
(12) 519 34 101 (11) 53 164 120 66 33 3
32 9
6. Auditors remuneration Services provided by the Companys auditor During the year the Group, including its overseas subsidiaries, obtained the following services from the Companys auditor.
Fees payable to the Companys auditor in relation to: The audit of the parent company and consolidated nancial statements The audit of subsidiaries Fees related to the audit of the Company and its subsidiaries Audit related assurance services1 Total fees for audit and audit related services Services related to transactions2 Taxation advisory services3 All other non-audit services4 Total fees
1
1.9 0.2 2.1 0.9 3.0 8.7 0.8 0.7 13.2
0.1 0.1 0.1 3.6 0.4 4.1
3 4
Includes fees in respect of the review of Bumi plcs interim nancial statements, and quarterly reviews of PT Berau nancial information, as required by the Indonesia Stock Exchange. Comprises fees in respect of work as reporting accountants for the acquisition of PT Berau, the investment in PT Bumi, the premium listing of Bumi plc and the proposed acquisition of BRM that did not proceed; also includes work in relation to a bond offering by PT Berau (2010: includes fees in respect of the acquisition of PT Berau, the investment in PT Bumi and acting as reporting accountants in connection with prospectuses issued by Vallar plc). Includes taxation related advice in relation to transactions. Includes fees of $0.3m in respect of advice on the Groups Health, Safety, Environment and Communities programme and $0.3m in relation to advice regarding the Groups response to the UK Bribery Act.
The prior year comparatives reect those of the Vallar plc consolidated nancial statements.
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7. Underlying earnings and underlying EBITDA Underlying earnings and underlying EBITDA exclude separate items. Separate items are those items of nancial performance that the Group believes should be separately disclosed. Separate items include when applicable, impairment of goodwill and other assets, costs of acquiring and integrating acquisitions, fundamental restructuring of business, prot or loss on disposal of a business or signicant other asset, material claims and settlements and signicant gains and losses on derivative instruments.
Loss attributable to owners of the parent Exclusions from underlying earnings: Movement on acquisition related nancial instruments Corporate transaction costs Separate Items Underlying earnings/(loss) Add back/(deduct): Depreciation and amortisation Finance income Finance costs Income tax Non-controlling interest Underlying EBITDA
(319) 286 66 352 33 120 (13) 83 167 37 427
(108) 62 32 94 (14) (1) (15)
8. Employee numbers and payroll costs The average number of employees, excluding contractors and associates employees by principal location of employment was:
Year to 31 December 2011 9 months to 31 December 2010
Indonesia United Kingdom
799 10 809
10 10
Payroll costs in respect of the employees included in the tables above were:
Wages and salaries Social security costs Post employment benets Share based payments Total payroll costs
28 28
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9.
Finance income and costs

Finance income Interest receivable and other nance income Total nance income Finance costs Interest payable and other nance costs Total nance costs Movement on acquisition related nancial instruments Net nance costs (83) (83) (286) (356) (62) (61) 13 13 1 1
10.
Taxation
Tax charged to the consolidated income statement in the year: Current tax UK Corporation Tax at 26.25% (2010: 28%) Current year/period Overseas tax Current year/period Deferred tax (origination and reversal of temporary differences) Total tax charged to consolidated income statement (203) 36 (167)
The movement in deferred tax, from $1,313m recognised as fair value at date of acquisition to $1,277m at the end of the year, relates to the release of $36m of the deferred tax liability linked to the depreciation of mining properties recognised in the Purchase Price Allocation following the acquisition of PTBerau. The Groups tax charge was higher than the UK statutory rate and can be reconciled as follows:
Loss before tax Add back: Share of net loss from associate
(115) 39 (76)
(108) (108) 30 (30)
UK Corporation Tax at 26.25% (2010: 28%) Expenses not deductible for tax purposes Tax losses for which no deferred tax asset was recognised Short term timing differences Dividend withholding taxes Effect of differences between local and United Kingdom tax rates Total tax charged to consolidated income statement
20 (111) (5) 4 (4) (71) (167)
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10. Taxation continued In the prior year, Vallar Ltd (formerly Vallar plc) was incorporated and subject to Jersey income tax at a rate of0%. In the Budget on 23 March 2011, it was announced that the UK corporation tax rate will reduce from 28% to 23% over a period of three years from 2011. The rst reduction in UK corporation tax from 28% to 26% relating to the period from 1 April 2011 to 31 March 2012 was substantially enacted on 29 March 2011. The second reduction in UK corporation tax from 26% to 25% relating to the period from 1 April 2012 onwards was substantially enacted on 5 July 2011. A further reduction from 25% to 24% from 1 April 2012 was announced in the budget on 21 March 2012. The Indonesian corporate tax rate is 25%, with the exception of the tax charged within a CCoW which incurs a tax rate of 45%. No income tax has been charged or credited directly to equity or other comprehensive income during the year or preceding period.
11. Earnings per share (EPS) The calculation of earnings per ordinary share is based on prot attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares in issue during the year. In addition to the earnings per share required by IAS 33 Earnings per Share, underlying EPS has also been calculated and is based on earnings excluding the effect of separately disclosed items. It has been calculated to allow shareholders to have a better understanding of the trading performance of the Group. Details of the underlying EPS are set out below:
Loss attributable to ordinary shareholders Separate items (note 7) Underlying earnings/(loss) Number of shares (millions) Basic weighted average number of ordinary shares1 Potentially dilutive share options Diluted weighted average number of shares
(319) 352 33
(108) 94 (14)
192 192
$
67 67
$
Basic loss per share Effect of potentially dilutive share options Diluted loss per share Basic underlying earnings/(loss) per share Effect of potentially dilutive share options Diluted underlying earnings/(loss) per share
1
(1.66) (1.66) 0.17 0.17
(1.61) (1.61) (0.21) (0.21)
Basic weighted average number of ordinary shares in the prior year is stated as the number of ordinary shares in issue at 31 December 2010, which the Directors believe provides a more relevant basis for the EPS than a weighted average.
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12.
Intangible assets
Exploration and evaluation assets $m
Goodwill $m
Cost At 1 January 2011 Acquired through business combinations Additions At 31 December 2011 Accumulated amortisation and impairment losses At 1 January 2011 Charge for the year At 31 December 2011 Net book value at 31 December 2011 4 1,320 4 4 1,320 1,320
Impairment tests for goodwill Goodwill arising through acquisitions has been allocated to individual or groups of cash generating units (CGUs), each representing the lowest level in the Group at which goodwill is monitored for internal management purposes. The carrying value of the Groups goodwill of $1,320m has predominantly arisen on the acquisition of PTBerau on 4 March 2011 (see note 13), which is treated as a single CGU. The Groups annual impairment review resulted in no impairment charge for 2011. PTBeraus recoverable amount has been assessed based on fair value less costs to sell using discounted cash ows, in line with the policy in note 2. Expected future cash ows are inherently uncertain and could materially change over time. They are signicantly affected by a number of factors, including reserves and production estimates, commodity prices, discount rates, future operating costs and capital expenditure. Cash ow projections are based on nancial budgets and production plans to the end of the CCoW, including two 10 year extensions, appropriately risk adjusted. The key assumptions relating to the calculation of PTBeraus fair value less costs to sell are the long term thermal coal price, operating costs, and discount rates. Future selling prices and operating costs have been estimated in line with the Group policy. Management believes that, currently, there are no reasonably possible changes in any of the key assumptions that would lead to the recoverable amount being below the carrying amount, except for the long term thermal coal price. The forecast benchmark thermal coal price is within the range published by market analysts of $108 to $125 per tonne, in nominal terms. This price is then adjusted for various coal quality parameters, such as caloric value, moisture, ash content, sulphur content, to derive the expected realised selling prices, on a FOBbasis. Post tax cash ows were estimated for the period of the CCoW, based on a post tax discount rate of between 9.7% and 10.3%, expressed in nominal terms. The operating costs included in the fair value assessment are calculated based on PTBeraus production plans for the remainder of the CCoW including extensions. Price assumptions for inputs are based on analysis of market fundamentals and are made consistent with related output price assumptions. Based on the assessment of fair value less costs to sell, the recoverable amount signicantly exceeds the carrying value at 31 December 2011. This calculation is highly sensitive to changes in the key assumptions, and a 10.5% decrease in the long term thermal coal price, in isolation, would lead to the fair value less costs to sell of PTBerau being equal to its carrying amount. However, management believe that a decrease in the long term thermal coal price would coincide with an associated benecial impact on input costs which would, to a certain extent, offset the impact of the change in the long term thermal coal price.
96
13. Business combinations 13.1. Investment in subsidiary Acquisition of PTBerau On 4 March 2011, Vallar Ltd (formerly Vallar plc) completed the acquisition of 26,175,000,000 PTBerau shares (representing 75% of the issued ordinary shares of PTBerau) at IDR 540 per PTBerau share, by payment of $739m in cash for 35% of PTBerau and the issue to the vendor of 52,297,680 Bumiplc ordinary shares in consideration for 40% of PTBerau. On 4 March 2011, Vallar Ltd (formerly Vallar plc) obtained control of PTBerau. Legal completion followed on 8 April 2011 when shares were exchanged. PTBerau is a holding company that indirectly owns 90% of PTBerau Coal, the fth largest coal producer in Indonesia in terms of production volume. PTBerau Coal engages in open cut mining of coal in its concession area in East Kalimantan, where it holds coal mining rights until 26April 2025 under a CCoW. On 14 June 2011, Vallar Ltd (formerly Vallar plc) increased its holding in PTBerau through a mandatory cash offer for the remaining shares following the acquisition described above. Vallar Ltd (formerly Vallar plc) acquired an additional 3,398,999,404 shares in PTBerau for $214m and its total ownership following this acquisition is 29,573,999,404 shares, representing 85% of the issued ordinary shares of PTBerau. In the period from 4 March 2011, the date of acquisition, to 31 December 2011, the business has contributed $1,407m of revenues and $296m of prot before tax. If the acquisition had occurred on the rst day of this reporting period, the contributions would have been $1,657m of revenues and $376m of prot before tax. Final details of net assets acquired and fair value adjustments are set out as follows.
97
Book value prior to acquisition $m
Fair value adjustments $m
Final fair value $m
Non-current assets Goodwill Goodwill arising on acquisition Property, plant and equipment Available for sale nancial asset1 Due from related parties Other non-current assets Total non-current assets Current assets Inventories Trade and other receivables Other current assets Cash and cash equivalents Total current assets Total assets Current liabilities Trade and other payables Borrowings Current taxation Total current liabilities Non-current liabilities Borrowings Deferred tax liabilities Provisions Total non-current liabilities Total liabilities Net attributable assets including goodwill Fair value of non-controlling interest2 Bumi plc share (75%) Consideration satised by: Cash paid in November 2010 Adjustment to fair value of consideration3 Transfer from nancial instruments to consideration Fair value of shares issued Total consideration Other subsidiaries acquired Cash inow on acquisitions: Net cash of acquired companies Cash paid for other subsidiaries (net of cash acquired) Net acquisition of subsidiaries per cash ow statement 489 (17) 472 739 (269) 470 1,118 1,588 19 765 115 7 887 1,582 456 54 1,198 1,252 1,275 1,996 819 1,313 7 2,139 2,857 2,452 (864) 1,588 442 52 201 695 4 19 23 446 71 201 718 15 411 20 489 935 2,038 5 5 3,271 20 411 20 489 940 5,309 410 610 75 6 2 1,103 (410) 1,310 2,441 (75) 3,266 1,310 3,051 6 2 4,369
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13.
1
Business combinations continued
In nalising the allocation of the purchase price to the identiable assets and liabilities of PT Berau, the Directors have decided to allocate zero value to the available for sale nancial asset. With a corresponding increase in the value attributable to the coal mining properties at acquisition, there is no overall effect on the value of net assets acquired. The fair value of the non-controlling interest is calculated with reference to the PT Berau share price on the date of acquisition. Adjustments to the fair value of consideration relate to movements in the PT Berau share price, Vallar Ltd (formerly Vallar plc) share price and the Indonesian Rupiah exchange rate between the date of the Berau Sale and Purchase of Shares Agreement on 16 November 2010 and the completion of the acquisition of PT Berau.
Goodwill arising on acquisition is associated with the recognition of a deferred tax liability in respect of the fair value of mining properties. Acquisition costs incurred on the PTBerau transactions expensed in the year were $21m. Other acquisitions On 18 May 2011, the Group acquired 100% of PTMutiara Tanjung Lestari, a company incorporated in Indonesia engaged in mining services, for $11m. The whole of the consideration was satised in cash and the fair value of the assets acquired was $2m, with the difference representing goodwill arising on expected synergies. Also on 18 May 2011, the Group acquired 100% ownership of PTPelayaran Sandita Parkasa Maritim, a company incorporated in Indonesia engaged in shipping services, for $8m. The whole of the consideration was satised in cash and the fair value of the assets acquired was $7m, with the difference representing goodwill arising on expected synergies.
99
13.2. Investment in associate Acquisition of shares in PTBumi On 4 March 2011, Vallar Ltd (formerly Vallar plc) completed its acquisition of 5,193,350,000 PTBumi Shares (representing 25% of the issued ordinary share capital of PTBumi) at IDR 3,025 per PTBumi Share, in consideration of the payment, 90,072,216 ordinary shares were issued. Final details of net assets acquired and fair value adjustments are set out below:
Book value prior to acquisition $m Fair value adjustments $m Final fair value $m
Net assets acquired Goodwill Goodwill arising on acquisition Property, plant and equipment Exploration and evaluation assets Investments in associates Other non-current assets1 Inventories Available for sale nancial assets Trade and other receivables Derivative nancial instruments Other current assets Cash and cash equivalents Trade and other payables Current tax Derivative nancial instruments Borrowings Deferred tax liabilities Provisions Other liabilities Non-controlling interests Net attributable assets including goodwill Bumi plc share 25% Satised by: Fair value of shares issued Adjustment to fair value of shares issued2 Total consideration (non-cash)
1
243 2,267 390 1,167 932 107 373 923 488 221 207 (977) (298) (133) (4,102) (385) (154) (233) (247) 789
(243) 3,862 7,146 (390) 515 (101) 111 3 (103) 6 (136) 94 (41) 36 (463) (3,646) (30) 51 (329) 6,342
3,862 9,413 1,682 831 218 376 820 494 85 301 (1,018) (298) (97) (4,565) (4,031) (184) (182) (576) 7,131 1,783 1,910 (127) 1,783
In nalising the allocation of the purchase price to the identiable assets and liabilities of PT Bumi, the Directors have reduced the value of the business development funds on acquisition by $247m. There is a corresponding increase in the value of coal mining properties, with no overall effect on the value of net assets acquired. Adjustments to the fair value of shares relate to movements in the PT Bumi share price, Vallar Ltd (formerly Vallar plc) share price and the Indonesian Rupiah exchange rate between the date of the PT Bumi Sale and Purchase of Share Agreement on 16 November 2010 and the completion of the acquisition of PT Bumi on 4 March 2011.
Acquisition costs incurred on the PTBumi transaction expensed in the year were $21m.
100
14.
Property, plant and equipment

Plant, furniture, xtures and ofce equipment $m
Mining1 properties $m
Land and buildings $m
Assets under construction $m
Total $m
Cost At 1 January 2011 On acquisition of subsidiary Additions Transfers Disposals At 31 December 2011 Accumulated depreciation At 1 January 2011 Depreciation for the year Disposals At 31 December 2011 Net book value at 31 December 2011
1
2,948 34 2,982
15 9 24
20 12 8 40
75 55 (17) 113
3,058 101 3,159
(115) (115)
(2) (2)
(3) (3)
(120) (120)
2,867
22
37
113
3,039
Mining properties include deferred stripping costs of $36m. Amortisation of deferred stripping costs of $34m is included within depreciation for the year.
In accordance with the CCoW, certain xed assets recorded in the consolidated nancial statements remain the property of the Government of Indonesia. However, PTBerau has an exclusive right to use the xed assets over the CCoW period. Depreciation expense of $120m has been charged to cost of sales. No borrowing costs were capitalised during the period of this report. Property, plant and equipment includes no amounts under nance leases.
101
15.
Investment in associate
2011 $m
At 1 January Acquisition of 25% interest in PT Bumi 3.9% step up on 5 July 2011 0.3% step up on 15 July 2011 Share of loss Share of other comprehensive income Dividends received Other equity movements At 31 December
1,783 282 24 (39) 2 (30) 2,022
On 5 and 15 July 2011, the Group acquired a further 13,880,802 and 1,179,745 of shares in PTBumi for a total non-cash consideration of $306m as part of a share for share exchange. As at 31 December 2011, the market value of the Groups interest in PTBumi, which is listed on the Indonesia Stock Exchange, was $1,470m. The Group does not believe this value represents the fair value of the underlying business, as stock markets are subject to short term volatility and this market value does not reect the premium attached to the holding of a signicant inuence. Additionally, future discounted cash ows also support the carrying value of the investment in associate. The Groups share of the results of its associate, and its aggregated assets (including goodwill) and liabilities as at 31December 2011 are as follows:
Country of incorporation Assets $m Liabilities $m Revenue $m Loss $m Interest held %
Name
PT Bumi
Indonesia
5,208
(3,132)
974
(39)
29.2
16.
Inventories
Raw materials and consumables Work in progress Finished products Total inventories
7 23 30
The cost of inventories recognised as an expense and included in cost of sales amounted to $562m (2010: $nil).
102
17.
Trade and other receivables

31 December 2011 Due within one year $m 31 December 2010 Due within one year $m
Trade receivables Tax recoverable Other receivables Prepayments and accrued income Total trade and other receivables
128 309 44 14 495
Trade and other receivables includes VAT recoverable of $309m. This represents amounts claimed by PTBerau Coal from the Government of Indonesia. This amount is part of an ongoing dispute with the Government which resulted from a change in the VAT law in 2001 when coal became a VAT exempt supply. This change meant that PTBerau Coal can no longer claim credits for its input VAT on purchases. However, under the CCoW, PTBerau Coal is indemnied against Indonesian taxes not in effect at the time of signing of the CCoW. On this basis, PTBerau Coal claimed reimbursement for input VAT paid from 2001. The claims were rejected and PTBerau Coal began setting off the VAT receivable against royalty payments due under the CCoW. The VAT receivable and royalty payable amounts have been disclosed separately on a gross basis within trade and other receivables and trade and other payables, respectively. The Groups exposure to credit and currency risks related to trade and other receivables are disclosed in note 23.
18.
Cash and cash equivalents

Cash at bank and in hand Short term bank deposits Total cash and cash equivalents
480 128 608
26 298 324
Cash and cash equivalents include amounts that are held as collateral for bank loans and senior notes.
19.
Trade and other payables

Trade payables Amounts owed to related parties Royalties Tax and social security Other payables Accruals and deferred income Total trade and other payables
132 1 315 18 7 152 625
9 9
Royalties payable includes $309m, accumulated from 2001 to December 2011 for offset against VAT input recoverable from the Government of Indonesia, as disclosed in note 17. Amounts owed to related parties are unsecured with no xed payment date and are interest free.
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20. Financial Instruments by category Financial assets The carrying amounts and fair values of nancial assets are as follows:
31 December 2011 Estimated fair value $m Carrying value $m 31 December 2010 Estimated fair value $m Carrying value $m
Financial assets At fair value through prot or loss Financial derivatives Loans and receivables Cash and cash equivalents Trade and other receivables Total nancial assets
608 172 780
608 172 780
659 324 983
659 324 983
Financial liabilities The carrying amounts and fair values of nancial liabilities are as follows:
31 December 2011 Estimated fair value $m Carrying value $m 31 December 2010 Estimated fair value $m Carrying value $m
Financial liabilities At amortised cost Trade and other payables Borrowings Total nancial liabilities
140 850 990
140 830 970
9 9
9 9
Fair value hierarchy An analysis of nancial assets carried at fair value is set out below:
Financial assets At fair value through prot or loss Level 1 Total nancial assets
659 659
Level 1 assets are valued using unadjusted quoted prices in active markets for identical nancial instruments. This category includes exchange traded derivatives.
104
21. Borrowings An analysis of borrowings is set out below:

31 December 2011 Due within one year $m Due after one year $m Total $m Due within one year $m 31 December 2010 Due after one year $m Total $m
Bank loans Senior secured notes Total
76 9 85
269 476 745
345 485 830

31 December 2011 $m

31 December 2010 $m
Debt falling due: In one year or less Between one and two years Between two and ve years Total borrowings 85 115 630 830
The carrying amounts of the Groups borrowings are all denominated in US dollars. a) Bank Loans On 23 July 2010, PTBerau entered into a $400m Senior Secured Credit Facility with Credit Suisse AG, Singapore Branch. PTBerau drew down the entire $400m available under this facility. The facility comprises two tranches: (i) Tranche A in a principal amount of $300m and (ii) Tranche B in a principal amount of $100m. Interest for the Tranche A loans is payable quarterly and accrues at the rate of London Interbank Offered Rate (LIBOR) plus a margin of 4.75% per annum. Interest for Tranche B loans is payable quarterly and accrues at the rate of LIBOR plus a margin of 5.75% per annum, an additional utilisation fee is also payable on this tranche of 2.25% per annum. b) Senior Secured Notes On 8 July 2010, PTBerau issued $350m of 12.5% Guaranteed Senior Secured Notes (Senior Notes). PTBerau then issued an additional $100m of 12.5% Guaranteed Senior Secured Notes on 29 July 2010. The maturity date of the notes is 8 July 2015. The Senior Notes bear interest from 8 July 2010 at the rate of 12.5% per annum, payable semiannually. There were no undrawn committed borrowing facilities at 31 December 2011 (2010: $nil).
105
22. Financial instruments The Groups nancial instruments comprise of:

Acquisition of PT Berau $m Acquisition of PT Bumi $m Step up of PT Bumi $m Total $m
On incorporation Fair value of nancial instrument on initial recognition1 Subsequent fair value (loss)/gain charged to the income statement Deferred loss/(gain) on initial recognition recognised in balance sheet As at 31 December 2010 Fair value of nancial instrument on initial recognition Subsequent fair value (loss)/gain charged to the income statement Deferred gain on initial recognition recognised in balance sheet Write off deferred gain/(loss) on initial recognition to income statement Transfer to cost of investment As at 31 December 2011
1
701 (126) 20 595 (105) (20) (470)
118 64 (118) 64 (309) 118 127
21 10 (21) 21 (31)
819 (62) (98) 659 21 (404) (21) 119 (374)
Retranslated due to change in presentation currency.
a) Under the PTBerau Sale and Purchase of Shares Agreement, the Group paid $739m, on 16 November 2010 and committed to exchange 52,297,680 of the Top Companys shares as consideration for 75% of the equity of PTBerau on 8 April 2011. The cash advance and embedded share for share exchange derivative were classied, together, as a nancial instrument at fair value through prot or loss. The initial fair value loss of $20m arising on 16 November 2010, calculated as the difference between the fair value of the PTBerau shares to be received and the cash paid plus fair value of the Top Companys shares to be issued was deferred until control of PTBerau passed to the Group on 4 March 2011. On that date it was recognised in the income statement. The subsequent fair value loss of $105m ($126m loss in the 9 months to 31 December 2010) was recognised in the income statement. Also on 4 March 2011, when control of PTBerau passed to the Group, the nancial asset of $470mwas transferred to the cost of the investment in PTBerau. b) Under the PTBumi Sale and Purchase of Shares Agreement, the Group committed to a share for share exchange as consideration for 25% of PTBumi. The number of shares to be exchanged was xed on 16 November 2010, but share exchange and completion occurred on 4 March 2011. The share for share exchange is classied as a derivative nancial instrument. The initial fair value gain of $118m arising on 16 November 2010, calculated as the difference between the fair value of the PTBumi shares to be received and fair value of the Top Companys shares to be issued, was deferred until the transaction closed on 4 March 2011, at that point it was recognised in the income statement. The subsequent fair value loss of $309m for the period to 31 December 2011 ($64m gain in the 9 months to 31 December 2010) was recognised in the income statement. Also on 4 March 2011, when the Group gained signicant inuence over PTBumi, an amount of $127m was set against the cost of the investment in PTBumi. c) On 27 June 2011, the Group entered into sale and purchase agreements with a number of shareholders in PTBumi pursuant to which Bumiplc agreed to purchase shares in the capital of PTBumi (representing approximately 4.2% of the issued ordinary share capital of PTBumi) in consideration for the issue, to the Selling PTBumi Shareholders of 15,059,827 Bumiplc Voting Ordinary Shares, disclosed in note 15. These transactions closed on 5 July 2011 and 15 July 2011, at which point the Groups total shareholding in PTBumi was increased to 29.2%. The share for share exchange is classied as a derivative nancial instrument. The initial fair value gain of $21m arising on 27 June 2011, calculated as the difference between the fair value of the Bumiplc shares to be received and fair value of the Companys shares to be issued, was deferred until the transactions closed on 5 July 2011 and 15 July 2011. The subsequent fair value gain of $10m was recognised in the income statement for the year to 31 December 2011. On 5 July 2011 and 15 July 2011, when control of the shares passed to the Group the nancial asset of $31m was transferred to the cost of the investment in PT Bumi.
106
23. Financial risk management 23.1. Financial risk factors The Groups policies with regard to nancial risk management are clearly dened and consistently applied. They are a fundamental part of the Groups long term strategy covering areas such as foreign exchange risk, commodity price risk, interest rate risk, credit risk, liquidity risk and capital risk management. 23.2. Market risk a) Foreign exchange risk Management believes the Group is naturally hedged against foreign exchange risk. The percentage of costs in US dollars is aligned with the revenues the Group receives in US dollars. This relationship also holds true for the Groups revenues and costs in the Indonesian Rupiah. At 31 December 2011, it is estimated a general increase of 5% in the value of US dollar against the Indonesian Rupiah would have decreased the Groups operating prot by approximately $2.6m. This analysis assumes all other variables remain constant. A 5% increase has been used based on management judgement and historical experience to best reect future movements. b) Commodity price risk The movement in coal prices is determined by macro economic factors, with short term global supply and demand conditions further adding to volatility. The Group has taken steps to mitigate this risk by modelling the impact of movements in coal prices, closely monitoring the cost components, and adjusting plans and activities accordingly. The Groups normal policy is to sell its products at prevailing market prices. Exceptions to this rule are subject to strict limits laid down by the Board and to internal controls. The Board does not generally believe commodity price hedging would provide long term benet to shareholders. Contract prices for coal are generally agreed annually with customers, although volume commitments vary by product. c) Interest rate risk The Groups interest rate risk arises from long term borrowings. Borrowings issued at variable rates expose the Group to cash ow interest rate risk, which is offset by cash held at variable rates. Borrowings issued at xed rates expose the Group to fair value interest rate risk. A 1% increase in the oating interest rate would have a positive $2.6m impact on the consolidated prot for the year, as the Groups debt is largely at a xed rate. A 1% increase in interest rates has been used based on management judgement and historical experience to best reect future movements. 23.3. Credit risk Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, deposits with banks and nancial institutions and receivables. The Group places funds with banks and nancial institutions only if independently rated with a minimum rating of B1. The maximum exposure the Group faces due to credit risks on cash and cash equivalents is as follows:
Cash and cash equivalents AAA AAA+ Other Total cash and cash equivalents 134 385 83 6 608 324 324
107
The Group requires all customers to provide irrevocable letters of credit or pay by conrmed electronic transfer, amethod that is only applicable to Indonesian Government State Owned Enterprises. The historical level of customer default is minimal and as a result the credit quality of year end trade receivables is considered to be high. Of the year end trade receivables balance, the following were past due at 31 December:
Not yet due Less than one month Total trade receivables
108 20 128
The overdue receivables ageing prole above is typical of the industry in which certain of the Groups businesses operate. Given this, the existing insurance cover (including letters of credit from nancial institutions) and the nature of the related counterparties, these amounts are considered recoverable. There was no impairment provision at 31 December 2011 (2010: $nil). 23.4. Liquidity risk Cash ow forecasting is performed in the operating entities of the Group and aggregated by Group Finance. Group Finance monitors rolling forecasts of the Groups liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its debts at all times so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Groups debt nancing plans, covenant compliance, compliance with internal balance sheet ratio targets and external regulatory and legal requirements. The table below analyses the Groups nancial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash ows:
Carrying Contractual amount cash ows $m $m Six months or less $m 612 months $m 12 years $m 25 years $m More than ve years $m
At 31 December 2011
Non-derivative nancial liabilities Bank loans Senior notes Trade payables Total 345 485 625 1,455 392 648 625 1,665 41 28 625 694 56 28 84 122 56 178 173 536 709
There were no nancial liabilities at 31 December 2010. The table below provides information about the contractual undiscounted maturities and interest rate prole of the Groups bank loans and senior notes at 31 December 2011:
2012 $m 2013 $m 2014 $m 2015 $m 2016 $m 2017 $m Carrying amount $m
Bank loans Average interest rate Senior notes Average interest rate Total
235 5.0% 235
105 8.3% 485 12.5% 590
2 8.0% 2
3 7.5% 3
345 485 830
The Group had no bank loans and senior notes at 31 December 2010.
108
23. Financial risk management continued 23.5. Capital risk management The Groups objectives when managing capital are to provide returns for shareholders and benets for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Borrowings Share capital and share premium Reserves1 Total capital

1
830 145 3,799 4,774
622 321 943
Reserves include retained earnings, share based payment reserve and merger reserve.
The Group is not subject to any externally imposed capital requirements.
24. Deferred tax Deferred tax assets The Group has deferred tax assets relating to unused tax losses of $28m (2010: $nil) and unremitted earnings from the associate of $7m (2010: $nil). These deferred tax assets have not been recognised as it is not expected that taxable prots will be available against which these assets can be utilised. Deferred tax liabilities The movement in deferred tax liabilities during the year is as follows:
Mining properties $m Other $m Total $m
At 1 January 2011 Acquired through business combinations Credited to the income statement At 31 December 2011
1,310 (36) 1,274
3 3
1,313 (36) 1,277
109
25.
Share capital, share premium and merger reserve

Redeemable Deferred Shares (thousands) Total
Issued and fully paid
Ordinary shares (thousands) Voting Suspended Voting Total
Par value (restated)
Ordinary shares $m
Share premium $m
Merger reserve $m
On incorporation on 31 March 2010 Ordinary shares issued on 9 July 2010 following completion of initial public offering Ordinary shares repurchased and cancelled on 16 August 2010 Balance as at 31 December 2010 Shares issued in relation to PT Bumi transaction on 4 March 2011 Transfer between categories of ordinary shares Shares issued in relation to PT Berau transaction on 8 April 2011 Shares allotted PT Bumi step up transaction on 5 July 2011 Transfer between categories of ordinary shares Capital reduction adjustment on 7 July 2011 PT Bumi step up transaction on 15 July 2011 Share options exercised by Directors Transfer between categories of ordinary shares Exchange of Founder Shares Transfer between categories of ordinary shares Balance as at 31 December 2011
6.00
68,718 (1,375) 67,343 28,861 11,902 27,773 13,880 5,949 1,180 120 557 16,064 6,885 180,514
61,211 (11,902) 24,525 (5,949) (557) (6,885)
68,718 (1,375) 67,343 90,072 52,298 13,880 1,180 120 16,064
50 50
6.00 6.00
635 (13) 622
119 22 141
437 (9) 428 1,031 604 185 2,248
6.00 6.00 6.00 1.00 6.00
878 514 136 (2,146)
0.01 0.01 0.01 0.01 0.01
60,443 240,957
25.1. Ordinary Shares On 31 March 2010, two ordinary shares of 1 each were subscribed for at par value. On 9 July 2010, a written resolution of the sole member of the Top Company authorised the issue of 68,718,229 ordinary 1 shares at a price of 10 per share. On 16 August 2010, pursuant to the terms of a repurchase option, the Company repurchased 1,375,495 ordinary shares of 1 each in the Top Company at a price of 10 per ordinary share. PTBumi transaction The PTBumi transaction closed on 4 March 2011. At the closing of this transaction, the Top Company issued 90,072,216 Top Company Shares to the Bakrie Group for 25% of PTBumi, of which 28,861,172 were Top Company Voting Ordinary Shares and 61,211,044 were Top Company Suspended Voting Ordinary Shares.
110
25. Share capital, share premium and merger reserve continued PTBerau transaction At the closing of the PTBerau transaction on 8 April 2011, PTBukit Mutiara transferred title to, and registered ownership of, shares comprising 75% of PTBerau to Vallar Investments UK Ltd and the Top Company issued 52,297,680 Top Company Shares, of which 27,772,829 were Top Company Voting Ordinary Shares issued to PTBukit Mutiara and 24,524,851 were Top Company Suspended Voting Ordinary Shares issued to the Bakrie Group (pursuant to PTBukit Mutiara requirements). As part of the PTBerau transaction, the Top Company also agreed to pay $739m in cash consideration. Of this amount, approximately $639m was paid to PTBukit Mutiara on 18 November 2010 and, following the closing of the PTBumi transaction, the balance was released to PTBumi, repaying part of a loan owed by PTBukit Mutiara to PTBumi. The closing of the PTBerau transaction triggered a mandatory cash offer for the remaining issued share capital of PTBerau, which has now completed, with the Groups aggregate holding in PTBerau increasing to 84.7% as a result. Transfer between classes of shares The Top Company Suspended Voting Ordinary Shares convert into Voting Ordinary Shares on a one for one basis automatically on issue of new Voting Ordinary shares by the Company. This is to ensure that PTBakrie Brothers Tbk, Long Haul Holdings and affiliates percentage ownership in the Top Company Voting Ordinary Shares remains at 29.9%. Increase in investment in PTBumi On 27 June 2011, the Group entered into sale and purchase agreements with a number of shareholders in PTBumi pursuant to which Bumiplc agreed to purchase shares in PTBumi representing approximately 4.2% of the issued share capital of PTBumi in consideration for the issue to the selling PTBumi shareholders of 15,059,827 Bumiplc Voting Ordinary Shares. These purchases were completed during July 2011. Capital reduction On 7 July 2011, the Company undertook a capital reduction. Repurchase of non-controlling interest On 6 October 2011, the Founder Shares, a separate share class of Vallar Holding Company Ltd, were exchanged for 6.67% of the fully diluted ordinary shares of the Company, with a value of $185m. Further details are set out in a prospectus issued by Vallar Ltd (formerly Vallar plc) on 24 February 2011 and the 2010 Annual Report for Vallarplc, which was issued on 28 April 2011. 25.2. Redeemable Deferred Shares The Redeemable Deferred Shares were allocated and issued in order for Bumiplc to satisfy the minimum share capital requirement for the Company to be reregistered as a public company under the Companies Act 2006, which was effected on 1 March 2011. There are 50,000 Redeemable Deferred Shares of 1 each in the capital ofBumiplc that carry no voting rights and have no economic value. 25.3. Merger Reserve Upon implementation of the Scheme, the Groups ordinary shares have been re-presented as that of Bumiplc, with a nominal value of 6. The difference between the Vallar Ltds (formerly Vallar plc) net assets and the nominal value of the shares in issue is recorded in the merger reserve. In addition, certain consolidation adjustments are also recorded in the merger reserve. No dividends have been paid or proposed for the year. 25.4. Founder Securities Founder Securities are a further separate class of equity share capital in Vallar Holding Company Ltd. The holders of the Founder Securities have the right to exchange the Founder Securities for ordinary shares in the Company to a value of 15% of the increase in value from the initial public offering value of 10. The original performance conditions attached to these shares were met in the year. Further details are set out in a prospectus issued by Vallar Ltd (formerly Vallar plc) on 24 February 2011 and the 2010 Annual Report for Vallar plc, which was issued on 28 April 2011.
111
26.
Non-controlling interests
2011 $m 2010 $m
At 1 January Issue of Founder Shares and Securities Acquired through business combination Share of prot in the year Purchase of non-controlling interests mandatory cash offer PT Berau Purchase of non-controlling interests Founder Shares Dividends paid to non-controlling interests At 31 December
31 864 37 (206) (23) (12) 691
31 31
Transactions with non-controlling interests are dealt with in note 30 Related party transactions.
27. Consolidated cash ow analysis 27.1. Reconciliation of loss before tax to cash ows from operations
Loss before income tax Add back/(deduct): Depreciation and amortisation Movement on nancial instruments at fair value through prot or loss Net nance costs/(income) Costs associated with initial public offering Share of loss from associate Foreign exchange gains in operating costs Increase in inventories Increase in operating receivables Increase in operating payables Increase in provisions Deferred stripping Cash ows generated from/(used in) operations
(115) 120 286 70 39 (11) (10) (56) 129 18 (35) 435
(108) 62 (1) 32 9 (6)
27.2. Reconciliation of net cash ow to movement in net (debt)/cash

1 January 2011 $m Debt acquired on acquisition $m Exchange 31 December adjustments 2011 $m $m
Cash ows $m
Cash Borrowings Total net (debt)/cash
324 324
(775) (775)
273 (55) 218
11 11
608 (830) (222)
112
28. Contingent liabilities and contingent assets Contingent liabilities The Group is subject to various claims in the normal course of business. These include but are not restricted to land claims. Occasionally local residents issue claims against the Group and the associate with regard to the mining on areas of land where ownership is in dispute between the Group and local inhabitants. The majority of cases are resolved with no material liability assumed by the Group and the associate. No contingent liabilities were secured on the assets of the Group at 31 December 2011 or 31 December 2010. Other Specic Contingent Liabilities Offset of Coal Production Royalties with input VAT The Group has a contingent liability in respect of the coal sharing royalties payable to the Government ofIndonesia which have been offset against VAT recoverable amounting to $309m. Please see note 17 for furtherdetails. Contractual mine service fee agreement claim PTBumi has an ongoing dispute with a contractor regarding the contractual mining service fee and its escalation formula. The contractor is claiming the escalation formula no longer reects the actual increase in its operating costs. The associate believes the contractors rate is supported by other comparative mining contractors rates. Contingent assets There were no signicant contingent assets in the Group or the associate at 31 December 2011 or 31 December 2010.
29. Commitments At 31 December the Group had the following outstanding capital commitments and commitments under non-cancellable operating leases:
Capital commitments
Contracted but not provided: Assets under construction 149 149

31 December 2011 $m

31 December 2010 $m
Operating leases
Expiry date Within one year Greater than one year, less than two years Greater than two years, less than ve years Greater than ve years 16 4 3 23
Operating leases relate principally to land and buildings, vehicles and shipping vessels.
113
30. Related party transactions During the year ended 31 December 2011, the Group entered into the following transactions in the ordinary course of business with related parties and entities related to them:
Nathaniel Rothschild and James Campbell 2011 $m
Nathaniel Rothschild 2011 $m
Rosan Roeslani 2011 $m
Indra Bakrie 2011 $m
Total 2011 $m
Purchase of goods Purchase of services Finance income
(4.9) (4.9)
(0.5) 0.4 (0.1)
(23.7) (23.7)
(2.9) (2.9)
(23.7) (8.3) 0.4 (31.6)
At 31 December 2011, the following balances were held with related parties:
Nathaniel Rothschild and James Campbell 2011 $m
Nathaniel Rothschild 2011 $m
Rosan Roeslani 2011 $m
Indra Bakrie 2011 $m
Total 2011 $m
Assets Cash and cash equivalents Liabilities Trade and other payables 3.9 (0.1) (0.1) (1.2) (1.2) (1.3) 2.6 3.9 3.9
Transactions with Directors Nathaniel Rothschild The Group conducted transactions with entities related to Nathaniel Rothschild, the sole activity being the payment of business expenses. Rosan Roeslani The Group conducted transactions with entities related to Rosan Roeslani, the key activities being insurance services and the lease of office buildings. PTBank Pundi Indonesia Tbk is a bank related to Rosan Roeslani. Term deposits at the PTBank Pundi Indonesia Tbk have market interest rates. Indra Bakrie The Group conducted transactions with PT Petromine Energy Trading, a subsidiary of PT Bakrie and Brothers Tbk, a listed entity on the Indonesia Stock Exchange, which is related to the Bakrie family. The sole activity is the supply of fuel. Nathaniel Rothschild and James Campbell The Group conducted transactions with an entity related to Nathaniel Rothschild and James Campbell, the sole activity being the supply of professional services. The agreement to provide professional services was terminated in the year. In 2010, the Group paid fees of $7.7m to entities related to Nathaniel Rothschild and James Campbell. All transactions are considered by the Directors to be undertaken at standard market rates. Other transactions During the year, Vallar Capital LP, a related party, exercised its right to exchange the Founder Shares, a separate share class of Vallar Holding Company Ltd, for 6.67% of the fully diluted ordinary shares of the Company. Please see note 25 for further details. There were no material transactions with the associate during the year.
114
30. Related party transactions continued Key management personnel In accordance with IAS 24 Related Party Disclosures, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, excluding any Director (executive and non-executive) of the Group. Disclosure of Directors emoluments, pension entitlements, share options and long term incentive plan awards required by the Companies Act 2006 and those specied for audit by Regulation 11 and Schedule 8 of the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 are included in the Remuneration Report. Compensation for key management was as follows:
Wages and salaries Social security costs Post employment benets Share based payments Termination benets
1.4 1.4
Transactions between PTBumi and Bumiplc Directors The Group is voluntarily disclosing these further transactions to increase the transparency of the nancial statements. These amounts are stated at 100% of balances and transactions held by PTBumi.
Rosan Roeslani1 2011 $m Indra Bakrie1 2011 $m Total 2011 $m
Purchase of goods Finance income
27 27
Rosan Roeslani1 2011 $m
(508) (508)
Indra Bakrie1 2011 $m
(508) 27 481
Total 2011 $m
Assets Loans receivable Other nancial assets Liabilities Trade and other payables
1
259 242 501
(44) (44)
259 242 (44) 457
Includes all entities related to stated individuals.
Rosan Roeslani PTBumi has an investment with PTRecapital Asset Management, a company related to Rosan Roeslani. PTBumi also has a loan with PTBukit Mutiara, a company related to Rosan Roeslani. The loan facility has a principal amount of up to $300m and attracts an interest rate of 12% per annum payable quarterly. Indra Bakrie PTBumi conducted transactions with PTPetromine Energy Trading, a subsidiary of PT Bakrie and Brothers Tbk, a listed entity on the Indonesia Stock Exchange, which is related to the Bakrie family. The sole activity is the supply of fuel.
115
31.
Principal subsidiaries and associated company

Country of incorporation Business Effective ownership percentage 31 December 2011 31 December 2010
Subsidiary undertakings
PT Berau Coal Energy Tbk PT Berau Coal Tbk Vallar Investments UK Ltd Vallar Holding Company Ltd1 Vallar Ltd Associated undertaking PT Bumi Resources Tbk
1
Indonesia Indonesia
Coal Coal
84.7 76.2 100 100 100 29.2
100 100 100
UK Management Services Co Jersey Jersey Indonesia Holding Co Holding Co Coal
The Founder Shares and Securities represent a separate share class in Vallar Holding Company Ltd and do not convey any voting rights therefore do not affect the ownership percentage of Vallar Holding Company Ltd.
32. Subsequent event On 13 March 2012, PTBerau issued xed rate guaranteed senior notes of $500m, with a term of ve years and a coupon rate of 7.25% payable semiannually. PTBerau used the net proceeds to repay the balance outstanding on its bank loan and will use the remainder of the proceeds to fund capital expenditure and other operating expenses.
116
Independent Auditors Report to the Members of Bumiplc

We have audited the Parent Company Financial Statements of Bumiplc for the year ended 31 December 2011 which comprise Parent Company Balance Sheet, Parent Company Statement of Changes in Equity, Parent Company Statement of Cash Flows and the related notes. The nancial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006. Respective responsibilities of Directors and auditors As explained more fully in the Statement of Directors Responsibilities set out on page 69 the Directors are responsible for the preparation ofthe parent company nancial statements and for being satised that they give a true and fair view. Our responsibility is to audit and express an opinion on the parent company nancial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Boards Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Companys members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Scope of the audit of the nancial statements An audit involves obtaining evidence about the amounts and disclosures in the nancial statements sufficient to give reasonable assurance that the nancial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of whether the accounting policies are appropriate to the parent companys circumstances and have been consistently applied and adequately disclosed; the reasonableness of signicant accounting estimates made by the Directors; and the overall presentation of the nancial statements. In addition we read all the nancial and non-nancial information in the Annual Report to identify material inconsistencies with the audited nancial statements. If we become aware of any material misstatements or inconsistencies we consider the implications for our report. Opinions on nancial statements In our opinion the parent company nancial statements: give a true and fair view of the state of the Companys affairs as at 31 December 2011 and of its cash ows for the period then ended; have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and have been prepared in accordance with the requirements of the Companies Act 2006. Opinions on other matters prescribed by the Companies Act 2006 In our opinion: the part of the Directors Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and the information given in the Directors Report for the nancial year for which the parent company nancial statements are prepared is consistent with the Parent Company Financial Statements.
117
Matters on which we are required to report by exception: We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or the Parent Company Financial Statements and the part of the Directors Remuneration Report to be audited are not in agreement with the accounting records and returns; or certain disclosures of Directors remuneration specied by law are not made; or we have not received all the information and explanations we require for our audit.
Other matter We have reported separately on the Group nancial statements of Bumiplc for the year ended 31 December 2011.
Ross Hunter (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 12 April 2012
118
Parent Company Balance Sheet

31 December 2011 $m
Note
Non-current assets Investment in subsidiary Total non-current assets Current assets Cash and cash equivalents Total current assets Total assets Current liabilities Amounts owed to subsidiaries Total current liabilities Total liabilities Equity Ordinary shares Share premium Other reserve Retained earnings Total equity Total equity and liabilities 5 5 4 141 1,757 2,176 4,078 4,079 1 1 1 4,079 3 4,079 4,079
These nancial statements on pages 118 to 122 have been approved for issue by the Board of Directors on 12 April 2012 and signed on its behalf by
Ari Hudaya Director
119
Parent Company Statement of Changes in Equity

Note Ordinary shares $m Share premium $m Other1 reserve $m Retained earnings $m Total $m
At incorporation Prot for the period Issue of ordinary shares Capital reduction Dividends At 31 December 2011
1
5 2,150 (2,146) 4
141 141
1,757 1,757
30 2,146 2,176
30 4,048 4,078
The other reserve was created as part of the Scheme. The difference between Vallar Ltds (formerly Vallar plc) net assets and the value of its ordinary shares is represented in the Bumi plc parent company accounts as other reserves.
120
Parent Company Statement of Cash Flows

Period to 31 December 2011 $m
Note
Cash ows from operating activities Prot before tax Adjustments for: Movement on nancial instruments at fair value through prot or loss Increase in operating payables Net cash generated from operating activities Cash ows from nancing activities Net increase in cash and cash equivalents Opening cash and cash equivalents Closing cash and cash equivalents (31) 1 2 30
121
Notes to the Parent Company FinancialStatements

1. General information, statement of compliance and basis of preparation Bumiplc is a public limited company incorporated and domiciled in the United Kingdom under the CompaniesAct 2006 and is listed on the London Stock Exchange. The Companys registered address is 2nd Floor, 4 Grosvenor Place, London SW1X 7HJ. The Companys registered number is 7460129. The nancial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRSs) and International Financial Reporting Interpretations Committee Interpretations (IFRICs) as adopted by the European Union. They also comply with those parts of the Companies Act 2006 applicable to companies reporting under IFRSs. The nancial statements are presented in US dollars, rounded to the nearest million. They are prepared under the historic cost convention, as modied by nancial assets and liabilities (including derivative instruments) at fair value through prot or loss. The principal accounting policies applied in the preparation of these nancial statements are set out in note 2.
2. Accounting policies The Company is the ultimate parent entity of the Group. The Companys nancial statements are included in Bumiplcs consolidated nancial statements for the year ended 31 December 2011. As permitted by section 408 of the Companies Act, the Company has not presented its own income statement or statement of comprehensive income. The Companys prot for the period was $30m. The accounting policies applied in the preparation of these Company nancial statements are, where relevant, the same as those set out in note 2 to the Group nancial statements with the addition of the following: Investments Investments in subsidiaries are stated at cost less provision for impairment.
3.
Investment in subsidiary
2011 $m
At incorporation Additions At 31 December
4,079 4,079
The Companys sole investment is in Vallar Ltd (formerly Vallar plc), which is a 100% owned subsidiary incorporated in Jersey and is an intermediate group holding company. Details of indirectly held subsidiaries and the associate are disclosed in note 31 of the Group nancial statements.
4. Financial risk management The Companys sole signicant risk is liquidity risk, relying on intercompany funding. This is managed through effective cash ow forecasting.
122
Notes to the Parent Company FinancialStatements (continued)
5.
Share capital and share premium

Number of shares 000s Ordinary shares $m Share premium $m
At incorporation Issue of ordinary shares At 31 December 2011
240,957 240,957
4 4
141 141
The ordinary shares have a par value of 0.01 per share. All issued shares are fully paid. All shares have the same rights. A further 50,000 of Deferred Redeemable Shares of 1.00 were issued on 28 February 2011. For further details please refer to note 25 of the Group nancial statements.
6. Related party transactions Subsidiaries The Company transacts and has outstanding balances with its subsidiaries. Amounts due to subsidiaries are disclosed on the face of the Company balance sheet. These amounts are repayable on demand and are non-interest bearing. Key management personnel Key management personnel are deemed to be the members of the Board of Directors of the Company. It is this Board which has responsibility for planning, directing and controlling the activities of the Company. Key management personnel compensation is disclosed in the Remuneration Report of the Group. There were no other material related party transactions.
123
Other Information
Other Information
126 Shareholder Information
125
126
Bumi plc | Other Information Annual Report 2011
Shareholder Information
Financial Calendar Q1 Interim Management Statement: Annual General Meeting: Half Year Results: Q3 Interim Management Statement: 10 May 2012 14 June 2012 9 August 2012 8 November 2012
Registered ofce 2nd Floor 4 Grosvenor Place, London SW1X 7HJ United Kingdom Telephone: +44 (0)20 7201 7500 Company website: www.bumiplc.com Registered in England and Wales: 7460129 Registrars Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4ZT United Kingdom Email: ssd@capitaregistrars.com Telephone: +44 (0) 871 664 0300 for UK callers Calls to the above number are charged at 10p per minute plus network extras. Lines are open Monday to Friday from 9am to 5.30pm. Telephone number from outside the UK: +44 (0) 208 639 3399 If you have any queries regarding your shareholding, please contact the registrars. Sponsor JPMorgan Cazenove Limited 20 Moorgate London EC2R 6DA United Kingdom
Corporate Brokers JPMorgan Cazenove Limited 20 Moorgate London EC2R 6DA United Kingdom Credit Suisse International One Cabot Square London E14 4QL United Kingdom BofA Merrill Lynch 2 King Edward Street London EC1A 1HQ United Kingdom Barclays Capital 5 The North Colonnade Canary Wharf London E14 4BB United Kingdom Auditors PricewaterhouseCoopers LLP 1 Embankment Place, London, WC2N 6RH United Kingdom Solicitors Freshelds Bruckhaus Deringer LLP 65 Fleet Street London EC4Y 1HT United Kingdom
Warning to shareholders Share fraud includes scams where investors are called out of the blue and offered shares that often turn out to be worthless or non-existent, or an inated price for shares they own. These calls come from fraudsters operating in boiler rooms that are mostly based abroad. While high prots are promised, those who buy or sell shares in this way usually lose their money. The Financial Services Authority (FSA) has found most share fraud victims are experienced investors who lose an average of 20,000, with around 200m lost in the UK each year. Protect yourself If you are offered unsolicited investment advice, discounted shares, a premium price for shares you own, or free company or research reports, you should take these steps before handing over any money: 1. 2. Get the name of the person and organisation contacting you. Check the FSA Register at www.fsa.gov.uk/fsaregister to ensure they are authorised.
3. 4. 5. 6.
Use the details on the FSA Register to contact the rm. Call the FSA Consumer Helpline on 0845 606 1234 if there are no contact details on the register or you are told they are out of date. Search the FSAs list of unauthorised rms and individuals to avoid doing business with. REMEMBER: if it sounds too good to be true, it probably is.
If you use an unauthorised rm to buy or sell shares or other investments, you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong. Report a scam If you are approached about a share scam you should tell the FSA using the share fraud reporting form at www.fsa.gov.uk/scams, where you can nd out about the latest investment scams. You can also call the FSA Consumer Helpline on 0845 606 1234. If you have already paid money to share fraudsters you should contact Action Fraud on 0300 123 2040.
Forward Looking Statements
This Annual Report includes forward looking statements with respect to the business, strategy and plans of Bumi and its current goals, assumptions and expectations relating to its future nancial condition, performance and results. By their nature, forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause actual results, performance or achievements of Bumi to be materially different
from any future results, performance or achievements expressed or implied by such forward looking statements. Shareholders are cautioned not to place undue reliance on the forward looking statements. Except as required by the Listing Rules and applicable law, the Company does not undertake any obligation to update or change any forward looking statements to reect events occurring after the date of this AnnualReport.
Other Information
127
128
Bumi plc | Other Information Annual Report 2011
Notes:
Registered ofce: 2nd Floor, 4 Grosvenor Place London, SW1X 7HJ Tel: +44 (0)20 7201 7500 Fax: +44 (0)20 7201 7501
www.bumiplc.com
Designed and produced by Addison www.addison.co.uk Printed on Revive 100 White Silk paper and Revive Premium White uncoated paper. These papers have been independently certied according to the rules of the Forest Stewardship Council (FSC). The inks used are all vegetable oil based. Printed at Pureprint Group, ISO14001. FSC certied and CarbonNeutral.

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Bumi plc Annual Report 2011

Delivering protable growth from coal

Bumi plc | Introduction Annual Report 2011

The Bumi plc Annual Report is accessible online at: www.bumiplc.com

500 400 300 200 100 0 June 2011 December 2011

300 250 200 150 100 50 0 June 2011 December 2011

Bumi plc | Introduction Annual Report 2011

Main customer areas Operations PT Berau asset PT Bumi asset

Fajar Bumi Sakti

Kaltim Prima Coal

2. Indonesia 3. Taiwan 4. South Korea 5. India

2. India 3. Mainland China 4. Indonesia 5. Taiwan 6. Europe 7. Malaysia 8. Philippines

6. Hong Kong (SAR of China) 5.0% 7. Japan

* 2011 calendar year.

100% basis (million tonnes)

Bumi plc economic interest %

Bumi plc attributable share (million tonnes)

MAJOR CAPITAL PROJECTS

Overland Conveyor/ Power Plant

Three 18MW Power Stations

Overland Conveyor/ Coal Processing Plant

Q2/Q3 2012 14m

Production volume (tonnes per annum)

Bumi plc | Introduction Annual Report 2011

Seaborne thermal coal market

605 524 25% 75% 70% 30%

629 31% 69%

646 31% 69%

Source: Barclays Capital

Historical coal spot price

Bumi plc | Introduction Annual Report 2011

Our vision is to become the leading UK listed thermal coal producer.

Indra Bakrie Chairman

Indra Bakrie Chairman

Bumi plc | Introduction Annual Report 2011

Chief Executive Officers Statement

Ari Hudaya Chief Executive Ofcer, Bumi plc

Bumi plc | Introduction Annual Report 2011

Group Strategy In Action

We are working towards best in class performance for all operations

LINK TO STRATEGY Allows us to measure our growth targets

12% 57% 73% 3% -30% 67%

Links to our growth goals

Enables us to measure our growth and optimisation targets

Links to both our growth and optimisation goals

EBITDA is a key driver to reduce net debt

Bumi plc | Introduction Annual Report 2011

INDIA AND CHINA: KEY DRIVERS FOR THERMAL COAL

China USA Europe India Others Japan Russia Australia Indonesia

48% 15% 14% 8% 5% 3% 3% 1% 1% 2%

90 80 70 60 50 40 30 20 10 0 1990 2000 2005 2006 2007 2008 2009

Source: IEA, Antique

China imports (m tonnes)

Source: IEA, Antique

Bumi plc | Introduction Annual Report 2011

Delivering Protable Growth

Volumes set to grow significantly

* Based on 100% output in PT Berau and PT Bumi

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 01 02 03 04 05 06 07 08 09 10

Source: IEA, Antique

Bumi plc | Business Review Annual Report 2011

PT Berau: Production Data

19.4 20.0 81.4 38.0 9.5