Annual Report and Accounts and Notice of AGM

Coal prices could fluctuate 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 Group's operating results, asset values, revenues and cash flows. 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.

Failure to meet project delivery objectives, timetables and budgets.

The Group has high production expansion targets which depend on execution of significant capital projects, in particular regarding mine infrastructure.

Failure to meet project delivery and growth timetables may affect operational performance, delay cash inflows, increase capital costs and reduce profitability as well as having a negative impact on the Group's reputation.

Group management have a track record of delivering capital projects and has recently enhanced its team by hiring additional experienced project managers.

Failure to effectively manage contractors resulting in cost inefficiencies 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 inflows, increase capital costs and reduce profitability as well as having a negative impact on the Group's 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.

The Group's businesses may be affected by political and legal developments in Indonesia, including changes to fiscal 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 benefication. Political changes can also result in civil unrest and the nullification 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.

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 non-controlled 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.

Failure to meet expectations and standards of a UK plc across HSEC areas.

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.

Reputational damage, financial impacts and operational disruption may arise if standards are not achieved.

HSEC governance has been established and continues to be put into place. A risk based work programme is underway supported by independent advisors.

Failure to maintain high levels of safety management can result in harm to the Group's 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 significant risk areas. The response programme will involve establishing a new working model with contractors.

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 financial 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.

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 Group's reputation as well as its ability to maintain operations and bring projects into production.

The Group's 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.

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 Group's operations.

Possible increased costs, interruptions to existing operations and delay in new projects arising from a shortage of employees, the Group's 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.

Failure to comply with the Group's Code of Conduct including failure to prevent acts of fraud, bribery, corruption or anti-competitive 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 financial 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.

The actions of its major shareholders.

Bumi plc has three significant 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 Group's 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 Conflicts Committee to monitor all contracts with related parties mitigates this risk.

Failure to manage financial arrangements and operating cash flows.

The Group carries significant debt and requires cash flows for large projects.

Inability to execute strategy from not meeting short term financial commitments.

The Group has significant cash reserves to meet short and medium term liquidity requirements and completed a $500m bond issue in March 2012.

Purchase of goods

-

-

(23.7)

-

 (23.7)

Purchase of services

(4.9)

(0.5)

-

(2.9)

(8.3)

Finance income

-

0.4

-

-

0.4

(4.9)

(0.1)

(23.7)

 (2.9)

 (31.6)

Assets

Cash and cash equivalents

-

3.9

-

-

3.9

Liabilities

Trade and other payables

-

-

(0.1)

(1.2)

 (1.3)

-

3.9

(0.1)

(1.2)

2.6

Wages and salaries

1.4

-

Social security costs

-

-

Post employment benefits

-

-

Share based payments

-

-

Termination benefits

-

-

1.4

-

Purchase of goods

-

(508)

(508)

Finance income

27

-

27

27

(508)

481

Assets

Loans receivable

259

-

259

Other financial assets

242

-

242

Liabilities

Trade and other payables

-

(44)

(44)

501

(44)

457