“First in operations, the Company had a total coal production of 77.8 million tons, an increase of 71.9 million tons from 2022. The increase was driven by the Company’s efforts to optimize productivity and continuously pursue cost efficiency.”

Dear Shareholders and Stakeholders,

In 2023, we celebrated the Company’s 50^th anniversary. This golden age speaks for the perseverance we embraced as we navigated through the business obstacles in that 50-year journey. We are grateful that, through solid consolidation with some of the Company’s subsidiaries, we were able to deliver positively in both our finances and operations throughout the entire year. Please allow us on this occasion to report our oversight, guidance, and overview of the Company’s management in 2023.

ECONOMIC OVERVIEW

In 2023, the global economic recovery fell short of expectations, even after the COVID-19 pandemic was officially over. Amidst the threat of a slowing global economy, Indonesia posted a constructive growth rate of 5.05%. This figure further proved the country’s ability to strike a performance balance, as associated with such strong growth was a tamed inflation rate of 2.61%, a low not seen in two decades. The two largest contributors to Indonesia’s Gross Domestic Product (GDP) in 2023 were household consumption and investment, with 4.82% combined, signifying the intensive pace at which the national economy was moving.

We noted that the national coal production output in 2023 reached 770.2 million tons, the highest in history, exceeding the target set at 694.50 million tons. The increase also supported both the nation’s energy security and economic growth, given that coal still remains one of Indonesia’s major export commodities.

ASSESSMENT OF PERFORMANCE OF THE BOARD OF DIRECTORS

As the Board of Commissioners, we applaud the Board of Directors for their synergistic and strategic leadership throughout 2023. The Board of Directors has made all the efforts necessary to maintain the Company’s business sustainability and mapped out realistic plans for the coming years. We have seen how, under their management, the Company was able to deliver more in both finances and operations.

“We are more than certain that, with its mature infrastructure, experience, and readiness, the Company can continue to make progress in the years to come.”

First in operations, the Company had a total coal production of 77.8 million tons, an increase of 71.9 million tons from2022. The increase was driven by the Company’s efforts to optimize productivity and continuously pursue cost efficiency. Second, in finances, the Company’s increasingly improved and stronger financial structure deserves our appreciation. The Company has been seeking to maintain a healthy cash flow balance while increasing profitability. In 2023, The Company recorded a revenues of USD1,679.9 million, a decrease from 2022 of USD1,830.1 million. By the end of 2023, the Company recorded a comprehensive income for the year of USD23.2 million, down from USD556.7 million in 2022. What the Company achieved in 2023 reflects the Board of Directors’ expertise and adaptability. The evaluation of the Company’s achievements led us to the conclusion that the Board of Directors has succeeded in discharging their duties and responsibilities and to our appreciation of their hard work throughout 2023.

OVERSIGHT OF THE FORMULATION AND EXECUTION OF THE COMPANY’S STRATEGY

One of the mandates given to the Board of Commissioners is to oversee how the Company is run. We are fulfilling this mandate by having ourselves observe and oversee every progress and advancement the Company makes. We are supervisory involved in every process run, from formulation, planning, and implementation to the impact of implementing the strategy.

Periodically, we hold joint meetings with the Board of Directors to identify and discuss issues at hand that need to be addressed. The high intensity of meetings and interactions enables us to give immediate approval for decisions that the Board of Directors needs to take to ensure effective and efficient business management. Without diverse experience and competency background, we have been able to contribute from different angles and a variety of opinions that are beneficial to the Company.

Throughout 2023, we did not see any negative impacts or results from the Company’s strategy execution. That’s because we have always ensured that the Company’s business activities are carried out within the applicable legal corridors by respecting and fulfilling the rights of all stakeholders.

VIEWS ON BUSINESS PROSPECTS

Global economic challenges greatly influence the dynamics of the coal mining industry. Drastic climate change, - persistently high interest rate policies, and the recent drop in coal prices will put further pressure on coal demand. We then expect stagnation in the coal industry in the upcoming year.

In response to this, we will support the Board of Directors’ steps to realize the coal downstream project. We are more than certain that, with its mature infrastructure, experience, and readiness, the Company can continue to make progress in the years to come. To secure further growth, the Company must, in an integrated manner, harmonize all business elements such as excellent human resources, responsible governance, productive operations, and healthy finances.

VIEWS ON THE IMPLEMENTATION OF GOVERNANCE COMPANY

Strong and sustainable governance practices are not only implemented for compliance alone. For us here at Bumi Resources, governance practices manifest in our commitment, responsibility, and care that we feel we need to fulfil with consistency to create progressive business growth. We see how, under the leadership of the Board of Directors, there have been positive developments in corporate governance practice. With strict adherence to the fundamental principles of good corporate governance (GCG) practices, which are integrated with environmental, social, and governance (ESG) aspects, the Company ensures that its business is managed not only properly but also transparently. We also ensure that the Company’s corporate governance functions optimally to improve the quality of the Company’s regulatory compliance. Based on the assessment we made in 2023, all the Company’s governance bodies performed their respective duties and responsibilities optimally. We received routine reports from the Audit Committee, Nomination and Remuneration Committee, and Risk Management Committee. Their reports allowed us to make comprehensive analysis and give informed recommendations to the Board of Directors.
In our joint meetings, we monitored and evaluated the Company’s progress in terms of business performance and assisted the Board of Directors in making practical decisions.

CHANGES IN THE COMPOSITION OF THE BOARD OF COMMISSIONERS

Based on the decision of the Annual GMS dated 30 June 2023, the Company has appointed Mr. Anggawira as Independent Commissioner. We would like to welcome Mr. Anggawira, and we hope that he can optimally fulfill the mandate given to him. And in October 2023, Mr. Benjamin Bao (Jianmin Bao) ended his term of office as Commissioner of the Company. The entire Board of Commissioners would like to thank Mr. Benjamin Bao for his dedication and contribution to the Company during his tenure. And as 2024, we also would like to welcome Mr Ben Niu as Commissioner of the Company.

CLOSING

The long journey that we have made to date speaks for the perseverance with which we weathered all the storms as they stood in our way. Having seen how the Company overcame one challenge after another, and with the continued support and engagement of stakeholders, we are optimistic about sustaining the Company’s business long into the future.

We should thank shareholders for their continued trust, which has allowed us to deliver positive and sustainable performance in 2023. We also appreciate the Board of Directors for their effective management of the Company and strategic leadership, which included all subsidiaries
and employees in the process.

We are certain that, with its increasingly strong business foundations and financial structures, the Company can achieve encouraging growth in the years to come.

On behalf of the Board of Commissioners,


Sharif Cicip Sutardjo
President Commissioner and Independent Commissioner