ARMS.L Regulatory News (ARMS)

For immediate release

26 June 2013

Bumi plc ("Bumi" or the "Company")

Nick von Schirnding's address to the Bumi plc AGM 26 June 2013

Good morning ladies and gentlemen, thank you for attending our general meeting today.

Introduction

·; I would like to start by apologising for the fact that trading has been suspended in shares in the company

·; As you are aware, we are a fresh management team, we have discovered major issues that need to be addressed and in order to protect the value of your shares, the management and board requested that trading in the shares be suspended temporarily while we take some of the necessary steps to address some of these major issues

·; The situation I faced as CEO on the first of January this year was a company that had not had independent management in charge in 2011 or 2012, controls over its finances that were being flouted and with its major shareholders at war.

·; In short, we were faced with a mess at every level from the board down, from finance to operations.

·; However, over the past six months, I believe significant progress has been made and I would ask for your continued support over the coming year as we complete the work we have started. During the past 6 months we have achieved the following:

- Independent management at the PLC and at Berau

- Installed a new management organisational structure for Berau

- Significantly tightened delegated authorities and payment approvals

- Implemented new contract policies

- Completed a major Financial Reporting Procedures exercise of Berau to ensure requisite controls and systems are not only in place but also working

- Signed an agreement today to recover the majority of funds that had no clear business purpose

- Completed phase one of a benchmarking study which shows significant upside can be achieved by cutting costs

- The exit of all founder shareholders from the board

- We are also finalising the appointment of a CFO and a Chief Mining Officer at Bumi plc, further strengthening the front bench

- We also are progressing with the appointment of an independent chairman, who will join after the separation

- And lastly we are moving Berau and Bumi plc's offices to more appropriate premises

·; The prize is worth fighting for - Berau has a great future as an efficient independent coal producer on the doorstep of Asia's biggest markets.

·; We have the expertise and experience of the management team I am bringing to bear and we have a clear vision in terms of growing production profitably and cutting costs further.

Share Suspension

·; Earlier this year we discovered a number of apparent financial irregularities at Berau for which no clear business purpose could be identified. Some of these went back as far as 2010. We took the difficult decision to request that the shares be temporarily suspended while we sorted out the situation we found ourselves in.

·; It became evident that Group governance policies were not being complied with and an extensive review was undertaken by new management which uncovered evidence of apparent financial irregularities and significant unjustified expenditure.

·; There were concerns about non-compliance with delegated authorities, matters reserved for the Board and failure to fully disclose related party transactions. In response, we undertook an extensive review of contracts and payments to identify counterparties and the extent of any transactions with related parties.

·; We are now putting in place and stress testing with the help of external auditors a new system of financial controls which means that no item of expenditure of more than $1m can be made without the participation of our financial controllers in London.

·; The Company is engaging with the FCA regarding the work that has been done with the aim of securing its approval for the resumption of trading as soon as possible.

Management and governance

·; As you know we have made a number of major management changes at Berau, installing a new chief executive amongst a number of other senior appointments.

·; In addition, we have moved Berau's office to a new location to ensure complete independence.

·; Key members of former management of Berau have been removed.

·; In addition, we are finalising the appointment of two further senior executives at Bumi plc namely a new CFO, a Chief Mining Officer, both to be based in Indonesia as well as the appointment of a new CFO at Berau.

·; At board level we have seen the departure of all the founder shareholders from the board and have also confirmed a new chairman will be appointed once the separation transaction has gone through.

Operations

·; On the operational front we have also made significant progress, launching the first phase of a benchmarking and asset optimization programme. This should see us become even more efficient and we have a significant internal target of cutting costs.

·; We have been operating more efficiently since the start of the year. We confirmed at the end of the first quarter that we are on track to reach our increased production target of 23 million tonnes and our production in April and May remains on target.

·; Critically, our cost base continues to fall with first quarter costs falling by 12% from $53/t to to $46/t. Since then we have lowered unit costs further, by around $1/t YTD. This is especially important as the coal sector continues to experience difficult times with weak coal prices.

·; With regard to the outlook for the remainder of 2013 we have priced and contracted around 90% of 2013 production at an average price of $61 per tonne.

Separation

·; Turning to the Separation. We are progressing the unwinding of PLC's involvement with the Bakries and PT Bumi. This is a complex and difficult situation, involving a number of entities, including relevant regulators. While the mechanics of the separation are still being worked on, I am confident we are nearing the end of this process. And as you will have read today, we have now been informed by the Bakrie Group that they have the full $278m of funding, including $50m in escrow, which is a positive development.

·; An additional factor delaying the separation was the discovery of expenditures with no clear business purpose. There simply can be no separation without recovery.

·; In this regard, I am pleased to report that a settlement agreement has been signed today with the former CEO of Berau, Rosan Roeslani, who has undertaken responsibility to ensure that the majority of funds that were classified as having no clear business purpose at Berau will be recovered. This is major progress and we will put this to a shareholder vote at the same time as the separation transaction.

CONCLUSION

To conclude, I appreciate this has been a miserable time for shareholders - difficult decisions have had to be taken but they have been in the best interests of the long term future of this company. The good news is that we are making real progress on a number of fronts:

- We expect to shortly announce a separation transaction with the Bakries and PT Bumi;

- We have new independent management in place at the PLC and at Berau

- We have put in place a new team and enhanced control systems at Berau to minimise the possibility of any financial irregularities recurring - and we are engaging with the FCA to resume trading in our shares

- We are restructuring the board with an independent chairman, once the separation transaction has been completed.

- We have a high quality, valuable coal asset which will ensure an optimal future for this company.

- In short, step-by-step we are turning this company around.

Thank you.