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Delta Dunia MakMur annual rePOrt 2009 a

ANNUAL REPORT

Delta Dunia MakMur annual rePOrt 2009b

Company Profile 04Financial Highlights 08Operational Performance 10Message from the President Commissioner 12Business Strategy 16Message from the President Director 20Operating review 26Financial review 38Corporate Governance 40Financial Statement 49

cONTENTS

Delta Dunia MakMur annual rePOrt 2009 1

2009: towards a leading integrated coal mining platform in Indonesia

> DeltaDuniahassuccessfullyenteredthecoalsectorbyacquiringPTBukitMakmurMandiriUtama(BUMA)

> BUMAisthesecondlargestcoalcontractor,withaportfoliooflongtermcontractsworthoverUS$5billionwithleadingmines

>Significantcoalsectorgrowthprospects• Rapidlyexpandingexportmarkets–China,afirsttime

netimporterin2009• Governmentcoal-basedprogramtoboostthenational

powergrid

Delta Dunia MakMur annual rePOrt 20092


cOMPANY PROFILE

Institutions & Public

Northstar Tambang Persada

Pte Ltd

60%

40%

+

Delta

An investment holding company focused on capturing value and realizing growth potential in the coal mining sector

Delta – the holding companyPTDeltaDuniaMakmurTbk(Delta)isalistedinvestmentholdingcompany.TheshareholdersofDeltaarecomprisedofNorthstarTambangPersadaPte.Ltd.,aSingaporevehiclecontrolledbyNorthstarEquityPartnersIILtd.,witha40%shareholding,andpublicandinstitutionalinvestorsowningtheremaining60%.

Deltawasestablishedin1991andinitiallyengagedinavarietyofbusinessesincludingrealestatedevelopment,textilemanufacturingandexporting.ItsshareshavebeenlistedontheIndonesiaStockExchange(IDX)sinceJune2001.InNovember2009followingashiftofinvestmentstrategy,Deltaacquired100%ofthesharesofPTBukitMakmurMandiriUtama(BUMA).

ThemanagementofDeltahasstatedthatitwillconcentrateoncapturingvalueacrossthecoalminingchainbyevaluatingpotentialstrategicacquisitionsinthecontractor,miningandsales&marketingareas.Additionally,theteamwilllooktodivestthelegacypropertyassetsstartingin2010.

PT Bukit Makmur Mandiri Utama (BUMA)Establishedin1998,BUMAiscurrentlythesecondlargestminingcontractorinIndonesia’scoalsector,providingopen-cutminingandoperationservicestocoalminingconcessionowners.


BUMA

VisionTo lead in total mining services through long term preferred partnerships

MissionTo provide trusted total mining services through competent people, high quality engineering, efficient processes, a Safety, Health and Environment (SHE) culture and community development

BUMAmanagesaportfoliooflong-termoperatingagreementswithsomeofIndonesia’slargestcoalproducers,suchasPTBerauCoal,PTAdaroIndonesia,PTKidecoJayaAgungandcertainsubsidiariesofPTBayanResources.Miningcontractsrangeforperiodsfromthreetotenyears.BUMAhasareputationforreliability,efficiencyandalongstandingtrackrecordofcustomerretention.

BUMAhasover8,000employeesandoperatesapproximately3,200unitsofheavyequipmentusedincoalminingandlogistics,includingbulldozers,excavators,graders,cranes,drillingmachines,primemoversanddumptrucks.

OperationsaremainlylocatedinEastandSouthKalimantan,thelocationofthemajorityofIndonesiancoalreserves.Inthepastfiveyears,BUMA’soverburdenremovalandcoalproductiongrewbycompoundedannualgrowthratesof25.2%and13.6%,respectively.


MALAYSIA

SINGAPORE

VIETNAM

PHILIPPINES

AUSTRALIA

TIMOR LESTE

THAILAND

INDONESIAJava

Sumatra

Sulawesi

Papua

Kalimantan

Pontianak

Banjarmasin

Palangkaraya

Balikpapan

Samarinda

LATI

BINUNGAN

SUARAN

PIK

LANNABBE

BAYAN

KIDEcO

MGM

ADARO

ARUTMIN

coal mining contracts:

Bayan - Gunungbayan Pratamacoal Period:2007 - 2013

Marunda Graha Mineral (MGM) Period:2003 - 2012

KidecoPeriod:2004 - 2019

Adaro Period:2009 - 2013

Arutmin Period:2008 - 2011

coal mining contracts:

Berau - Lati Period:1998 - 2018

Berau - Binungan Period:2003 - 2018

Berau - Suaran Port Period:2003 -2018

Bayan - Perkasa InakakertaPeriod:2007 - 2012

Lanna Harita Indonesia Period:2001 - 2013

Bukit Baiduri Energi (BBE) - Merandai Period:2001 - 2010

MAP OF OPERATIONS

Kalimantan


Acquisition Overview• August2009–PTDeltaDuniaMakmur

Tbk.(Delta)signsaCSPAwithJohanLensaandPTBukitMakmurWidyatopurchase100%sharesofPT.BukitMakmurMandiriUtama(BUMA)

• 29October2009–BUMAexecutesloandocumentationwithaSyndicatedBankGroupforUS$285million

• 2November2009–BUMAissuesaUS$315millionHighYieldBondthroughitswhollyownedSingaporesubsidiary,PrimeDigPteLtd.

• 6November2009- Deltaacquires100%sharesofBUMA(minusoneshareasperregulations)

- NorthstarTambangPersadaPteLtd(NTP)acquires40%ofDeltashares

- PublicplacementofDeltasharestointernationalinstitutionalinvestors.Asaresult60%ofDelta’ssharesheldbypublic.

- Followingthecompletionoftheacquisition,BUMAistheprincipaloperatingsubsidiaryofDelta,accountingforpracticallyallofitsoperatingrevenues,netincomeandtotalassets.

• 11November2009–DeltaEGMS:shareholdersapprovedthefollowingappointments:- Mr.ErryFirmansyahasPresidentCommissionerofDelta

- Mr.PatrickWalujoasCommissionerofDelta

- Mr.ThomasHustedasDirectorofDelta• 21December2009–DeltaEGMS:

shareholdersapprovedthefollowingappointments:- Mr.HagiantoKumalaasPresidentDirectorofDelta

- Mrs.ArianiVidyaSofjanasDirectorofDelta

ntP 1 PuBliC / inStitutiOnS

Shareholding Structure

Delta

BuMa

leGaCy PrOPerty aSSetS 3

40% 60%

100% 2

1 Northstar Tambang persada Pte Ltd (Singapore) 2 Less one share as required by Indonesian regulations3 Three small property subsidiaries (PT Margamas Griya Royalty - 99.99%, PT Nusa Makmur cipta Sentosa - 99.99%

and PT Sanur Hasta Mitra - 90%)


FINANcIAL HIGHLIGHTS

DELTA DUNIA

Income StatementinRpbn 20081) 2009* Gross Amount2) 2009* Net Amount3)

Netrevenue 10 6,351 1,129

Costofrevenues 0 4,860 813

Grossprofit 10 1,491 316

Operatingexpenses 5 255 100

Operatingprofit 5 1,236 216

EBITDA 6 2,096 1,076

Othercharges-net -13 -614 -322

Income(loss)beforeincometaxexpense -9 622 -106

Taxexpenses 1 270 55

Profitbeforepre-acquisitionincome -10 352 -160

Pre-acquisitionincome 0 512 0

Profitbeforeminority

interests

-10 -160 -160

Minorityinterests 0 0 0

Netprofit -10 -160 -160

Recurringprofit4) -2 106 13

Balance SheetInRpbn 20081) 2009*

Cash 1 543

STinvestments 148 43

Accountsreceivable 1 1,719

Othercurrentassets 149 660

Undevelopedland 119 128

Fixedassets–net 2 3,176

Othernon-currentassets 9 301

Total Assets 429 6,571

Accountspayable 0 360

LTdebt–current 50 328

Othercurrentliabilities 9 276

LTdebt 0 5,326

Othernon-currentliabilities 9 81

Total Liabilities 68 6,370

Minority interests 8 8

Total Equity 353 193

Financial Ratio (Gross Method)

2009*

Grossmargin 23.5%

Operatingmargin 19.5%

EBITDAmargin 33.0%

Pretaxmargin 9.8%

Netmargin -2.5%

Recurringnetmargin 1.7%

*BUMAwasconsolidated/acquiredinNovember20091)AsRestated2)Grossamountincludes12-monthBUMA’sresultsand

pre-acquisitionresultsareeliminatedatthenetprofitline.

3)Netamountreflects2-monthsofBUMAresults,fromrevenuetonetprofit

4)Excludingnon-recurringitems.


BUMA

Income StatementInRpbn 2008 2009 YoY

Netrevenue 6,765 6,350 -6.1%

Netrevenueexcludingfuel 4,748 5,182 9.1%

Costofrevenues 5,352 4,851 -9.4%

Grossprofit 1,413 1,498 6.1%

Operatingexpenses 219 246 12.2%

Operatingprofit 1,194 1,253 4.9%

EBITDA 1,968 2,103 6.9%

Othercharges-net -847 -344 -59.5%

Incomebeforeincometaxexpense 347 909 162.3%

Taxexpenses 118 277 134.9%

Netprofit 229 632 176.4%

Recurringprofit1) 627 653 4.1%

Balance SheetInRpbn 2008 2009 YoY

Cash 429 492 14.7%

Accountsreceivable 1,662 1,718 3.4%

Othercurrentassets 952 601 36.9%

Receivables-relatedparty 24 2,466 10291.6%

Fixedassets–net 3,120 3,039 2.6%

Othernon-currentassets 180 290 61.7%

Total Assets 6,366 8,607 35.2%

Accountspayable 508 360 -29.2%

STdebt 810 328 -59.5%

Othercurrentliabilities 159 266 67.1%

LTdebt 3,197 5,326 66.6%

Othernon-currentliabilities 73 78 6.5%

Total Liabilities 4,748 6,358 33.9%

Total Equity 1,617 2,249 39.1%

Financial Ratio2)

2008 2009

Grossmargin 29.8% 28.9%

Operatingmargin 25.1% 24.2%

EBITDAmargin 41.5% 40.6%

Pretaxmargin 7.3% 17.5%

Netmargin 4.8% 12.2%

Recurringnetmargin 13.2% 12.6%

1)excludingnon-recurringitems2)excludingfuel


coal Production mmtons

2008 2009

3633

-9.9%

coal Haulage mmtons

2008 2009

1215

27.5%

Overburden Removal mmbcm

2008 2009

262278

6.0%

Monthly Strip Ratio(overburden:coal)14.0

12.0

10.0

8.0

6.0

4.0

2.0

0.0

7.7x8.6x 8.2x

9.0x 8.8x9.2x

8.4x8.9x 8.9x

8.0x8.3x

7.9x

J 09 F M A M J J A S O N D

mm:millionbcm:bankcubicmeterofrock

OPERATIONAL PERFORMANcE


2001 2002 2003 2004 2005 2006 2007 2008 2009

6.79.7

11.3

17.3

23.5

32.3 32.736.4

32.8

Historical coal Production mmtons

Historical Overburden Removal mmbcm

2001 2002 2003 2004 2005 2006 2007 2008 2009

50.9 56.6 61.5

90.3

139.7

190.7

207.0

262.1 277.7

Historical Implied Strip Ratio

2001 2002 2003 2004 2005 2006 2007 2008 2009

12.0

9.0

6.0

3.0

0.0

7.6x

5.8x 5.4x 5.2x5.9x

6.3x5.9x

7.2x

8.5x


MESSAGE FROM THE PRESIDENT cOMMISSIONER

Erry Firmansyah PresidentCommissioner


Dear Shareholder,

The results and work in progress towards a bright future IampleasedtowelcomeyoutothefirstannualreportofPTDeltaDuniaMakmurTbk,duringaparticularlyinterestingphaseforthecompanyanditsstakeholders.

During2009,Deltaunderwentachangeinownershipandatookonacompletelynewfocus-theexcitinganddynamiccoalminingsector.Tosucceedwiththenewfocusasaninvestmentholdingcompanypursuinggrowthandvalue,Deltaanditsmanagementhaverespondedrapidlytoopportunitiesemerginginthesector.Inlightofthis,thefinancialcondition,asreportedattheendof2009,shouldbeseenasatransitionalstageaheadofwhatwebelievewillbeasignificantandpositivestepchangeinthescopeofoperationsandearningspotentialinthenextfewyears.

Theresultin2009fortherecord,wasalossofRp160billion,duetofinancingcostsassociatedwiththeprincipalsubsidiary,PTBukitMakmurMandiriUtama(BUMA)andaprovisiontakenagainstthelegacypropertyportfolio.Intheinterestsoftransparentreporting,additionaldetailonthefinancialperfomanceofthesubsidiaryis

presentedonpage9oftheannualreporttofullyreflecttheunderlyingperformanceandconditionofthecoalcontractingbusiness.

Investment view Turningbacktothepastyear,commoditiesprovedtobeastrongthemein2009,representingaboutonethirdoftheJakartaCompositeIndexbymarketcapitalization.Coalwasparticularlyfavored,basedonstrongfundamentalsasannualindustryproductionreachedanewhighof254milliontonnes,up5.8percent,alevelconsiderablyabovepreviousGovernmentestimatesofaround230milliontonnes.Theofficialforecastfor2010callsfortenpercenthigheroutputat280milliontonnes,withover70percentofproductiondestinedforexportmarketsinadditiontoanexpectedriseindemandasnewGovernmentpowergenerationprojectscomeonline.

Comparedwithitsmaincompetitors,AustraliaandSouthAfrica,Indonesia’sthermalcoalexportscontinuetobenefitfromseveralfactors,notleastoneofthelowestcashminingcostsintheAsiaPacificregion:afunctionofopencutminingtechniquesandextensivereserves.ProximitytoChina,IndiaandotherkeyAsianimporters,isasecondfactor.


Localmarketprospectsforthecoalindustrylookbright.Indonesia’sGovernmentpolicycallsforreducedrelianceonoilbasedpowergenerationandanincreasingroleformorecosteffectivecoalintheenergymix,risingfromabout11percentin2007to33percentby2025.Theincreaseistobedrivenbycoal-firedelectricitygenerationwithover40newplantsplannedbyPTPerusahaanListrikNegaraPersero(PLN).

Bidshavebeensoughtforafurther70smallcoal-firedgeneratingstationstoaddresssupplyneedsoutsideJavaandnationalelectricityconsumptionisestimatedtohaverisenover40percentinthefiveyearsto2008.Fortheimmediatefuture,PLNhasindicatedcoal-firedelectricalpowergenerationcapacitywillriseto18.0GWby2010(from10.4GWbackin2007)whichwouldliftdomesticcoalconsumptiontoabout54milliontonnesby2010,anincreaseof75percentfromabout31milliontonnesin2007.

Expansionofotherhighcoalusageindustries,includingcementandpaperwillalsoboostdemand.Undertheseconditionsweviewthefutureprospectsforyourcompanyasextremelyfavorable.

GovernanceFollowingthechangeofownership,theBoardofCommissionerswasconsiderablystrengthenedwiththeadditionoffournewmembersinthefinalquarteroftheyear.ItakethisopportunitytothankSiswanto,whoservedin2008asPresidentCommissionerandfromwhomIhavesucceeded.IampleasedtonotehehasagreedtocontinuetoserveasanIndependentCommissioneralongwithBennyWirawansa,asCommissioner.WeappreciatetheeffortsofStevenCahyadiwhosteppeddownfromtheBoardofCommissioners,andwelcomethreenewmembers,PatrickWalujoasVicePresidentCommissioner,NurdinZainalasIndependentCommissionerandIldaHarmynasCommissioner.

AnumberofappointmentsweremadetotheBoardofDirectors,andIwelcomeHagiantoKumalaasPresidentDirector,ThomasHustedasFinanceDirectorandArianiSofjanasDirectorandHeadofInvestorRelations.

ItisourviewthattheBoardofDirectorsofBUMA,havemanagedtheoperationsofthesubsidiarysatisfactorilyandthattherearenomajormattersoutstandingtoreport.Wenoteasoundperformanceintermsofoperationsandinparticular,thecontinuationofanoutstandingsafetyrecordatthesubsidiarycompany.

Inclosingwetakethisopportunitytothankallouremployeesfortheireffortsduringaperiodofchange,ourbusinesspartnersandourcustomers,andnotleastourshareholdersforcontinuingtheirsupportandforsharingourlongtermvisionofDeltaasaleadingintegratedcoalminingplatform,capturingvalueacrosstheentirecoalminingchain.

ForandonbehalfoftheBoardofCommissioners

Erry Firmansyah President commissioner


BUSINESS STRATEGY

coal sector fundamentals

Deltaviewsthecoalsectorashavingsignificantandsustainedpotential.Asalowcostandreliablesourceofenergy,coalwillcontinuetobeindemandinAsiaforthelongterm.Indonesia’sresourcebaseassuresitspositionaskeyexporterofthermalcoal,enjoyingsubstantialrevenuesfromexportsintoregionalgrowtheconomies,notleastChinaandIndia.Domestically,theGovernmentofIndonesiahasplacedcoalatthecenterofextensiveinfrastructureprogramsforboostingelectricitysupply.

Post acquisition: 4 strategic themes

TheacquisitionofcoalcontractorBUMAtowardstheendof2009haspositionedDeltaasthesecondlargestoperatorinasectorwhichhandlesapproximately90percentofthecoalindustry’sannualproduction.BUMAhasbuiltasignificantmarketshareandofferssoundgrowthprospectsbaseduponanexcellentportfoliooflongtermcontractsthatgeneratestable,highqualityrevenuestreams.LeadingmineconcessioncustomersincludePTBerauCoal,PTAdaroIndonesia,PTKidecoJayaAgung,BayanResourcesGroup,PTArutminIndonesiaandLannaResources.BUMAhasarespectedmanagementteamwithaprofessionaltrackrecordthatcombinesstrongcustomerloyaltyandhighcontractrenewalrates,withequipmentsupplierrelationshipsthatyieldcostsavingsandattractivetermstosupportfutureexpansion.Inthefirstfewmonthsofassumingmajoritycontrol,wehaveintroducedfurthercoalindustryandfinancialexpertiseattheDeltaBoardleveltosustainourexpansionplans,superviseorganicgrowthandaddvalue.


Wewillconcentrateonfourthemes:

• Maintainareputationasareliable,costeffectivecontractor

• Strongemphasisoncostmanagementandsavingstoimproveoperatingmargins

• Boostbusinessandcapacityexpansionplanstomeetrisingdemandforcontractmining

• Capitaliseonopportunitiestotakeoverunderperformingcontractsand/orreplacecontractors

Thusfar,ataformativestageinthelifeofthecompanywehavebeenabletosecuresatisfactoryunderlyingannualgrowthof9percentinnetrevenues(excludingfuelcosts)atthesubsidiarylevel,basedonoverburdengrowthof6percentrepresentingacontributionofover82percentofgrossrevenue.Theresultsfor2009takeintoaccountanumberofnon-recurringcostsassociatedwithfinancingandthestrategicshiftinbusinessdirectionofDeltaitself,underthenewownershipstructure.Theyearahead,2010,willpresentthechancetoengageourplansandgrowthprogramsoverafullcalendar.

Vertical expansion and integration strategies

DeltaseekstobeanactiveconsolidatorintheIndonesiancoalsector.Themanagementteamhasidentifiedafewopportunitiestoselectivelyexpandalongthecoalsectorvaluechain.Wearefocusedoncapturingvaluebyintegratingminingservicecapabilities,includingoverburdenremoval,coalproductionandtransportation.

Lookingforward,weseekabalancedexposuretotheunderlyingcommoditybyselectivelyidentifyingopportunitiesincoaltradingandmarketingviastrategicalliancesaswellastoaddvaluethroughtheacquisitionofminingconcessions.Keyconsiderationstothisstrategyincludescale,integration,captivebusinessandstabilityofcorerevenuesandearnings.


1 23

4

5 6

DELTA, BOARD OF cOMMISSIONERS

1 Siswanto IndependentCommissioner2 Benny Wirawansa Commissioner3 Nurdin Zainal IndependentCommissioner4 Ilda Harmyn Commissioner5 Patrick Walujo VicePresidentCommissioner6 Erry Firmansyah PresidentCommissioner


1

2 3

4 5

DELTA, BOARD OF DIREcTORS

1 Thomas Husted Director2 Ariani Vidya Sofjan Director3 Hagianto Kumala PresidentDirector4 Gunawan Angkawibawa Director5 Henry Kurniawan Latief Director


MESSAGE FROM THE PRESIDENT DIREcTOR

Hagianto KumalaPresidentDirector


Dear Shareholder,

Delta Results for 2009Welcome to the 2009 annual report of PT Delta Dunia Makmur Tbk. (Delta) covering a year in which the acquisition of PT Bukit Makmur Mandiri Utama (BUMA) was successfully completed.

Consolidated revenue in 2009 was Rp 1,129 billion with recurring net profit of Rp 13 billion. The results as presented in this report include the post acquisition earnings of BUMA for the two months ended December 31st 2009. Assuming contribution from BUMA on a full year gross basis, consolidated revenue was Rp 6,351 billion and operating profit was Rp 1,236 billion respectively in 2009. Extraordinary expenses were incurred firstly in respect of an impairment to Delta’s property portfolio and secondly in the form of financing and acquisition costs. After deduction of these extraordinary items and an adjustment for pre-acquistion income, Delta reported a loss of Rp 160 billion in 2009.

BUMA’s key performance highlightsThe underlying business performance of the subsidiary BUMA featured net revenue growth of 9.1 per cent, (excluding fuel costs) to Rp 5,182 billion. This was based on rising volumes of overburden removed, up 6 per cent to 277.7 million bank cubic meters (bcm), contributing 82 per cent to total gross revenue at BUMA. Coal production was down 9.9 per cent to 32.8 million tons (mmt). Two contracts were discontinued

during 2009, representing 16.9 per cent and 2.6 per cent of 2008 and 2009 production respectively. The implied stripping ratio was 8.5x in 2009, a substantial increase from 7.2x in 2008. Coal hauling volumes for the year grew by 27.5 per cent to 15.1 mmt. Over the past nine years BUMA has grown overburden volume by 5.4 times and coal mined by 5 times.

Positive outlook Prospects remain good for the sector, and hence for the contracting business. Though considerably below the all time peak in 2008, coal prices were again rising during 2009, as, for the first time, China became a net coal importer. Demand in the region as a whole has been strengthening, with economic growth levels resuming an upward trend. Recent export contract terms announced are approaching the US$100 per ton mark, as this report is being completed, an indicator that we may expect sustained growth during the year ahead.

A key focus for the next twelve months will be on a program of further improvements at BUMA and we look forward to reporting on the outcome of these measures. I would like to take this opportunity to thank our stakeholders for their support and extend our appreciation to all BUMA Board members who have guided the subsidiary through another year of sound progress. Finally, I would like to thank all BUMA employees for their dedication and hard work, our suppliers and the banks who have supported us over the last year.

For and on behalf of the Board of Directors

Hagianto KumalaPresident Director


BUMA, BOARD OF DIREcTORS

1 Achmad Kharis Director2 Budikwanto Kuesar PresidentDirector3 William Surnata Director

1

2

3


The BUMA coal Mining Value chain

DueinparttothehistoricaldevelopmentofminingregulationsinIndonesia,coalproducerstypicallycontractouttheoperationoftheircoalconcessionstothirdpartyminingoperators,suchasBUMA,underlong-termoperatingagreements.Thepracticeofappointingthirdpartyminingoperatorsdatesbacktothefirstgenerationofcoalconcessions.TheseconcessionsstipulatedthatthetitletoallequipmentpurchasedandusedbytheconcessionholderwithrespecttoitsconcessionwouldremainthepropertyoftheGovernmentupontheexpirationoftheconcession.

Asacoal-miningcontractor,BUMA’sresponsibilitiescoveralargepercentageoftheoverallcoalminingvaluechainincludingmininginfrastructuredevelopmentandconstruction,landclearing,removaloftopsoil,drillingandblasting,overburdenremoval,coalmining,hauling,reclamationandrehabilitation.In2009BUMAemployedover8,000staffoperatingmorethan3,200unitsofequipment,includingbulldozers,excavators,cranes,drillingmachines,primemoversanddumptrucks.

OPERATING REVIEW

contractor’s Role in the coal Mining Process

GEOLOGY & PLANNING

OVERBURDEN REMOVAL /cOAL MINING LOAD & HAUL PROcESSING BARGING

· Licenses· Exploration&Evaluation

· Geology–Modeling&interpretation

· Long-TermMinePlanning

· Long-TermandShort-TermMinePlanning

· Drilling&Blasting· Stripping· Excavation

· Loading· Haulage· Roadbuildingandmaintenance

· Reclamation

· Washing· Crushing/grinding

·Processingtoport

TYP

ICA

L AC

TIvI

TIES

BUMA’s core Scope of Work Mine Owners’ core Scope of Work


customers and contract PortfolioSeveralrenewalandnewcontractsweresignedduringtheyear.InSeptemberacontractextensionforanotherfouryearswassignedwithLannaHaritaIndonesia,toexpireDecember2013.Amonthlateranextensionto2019oftheexistingcontractwassignedwithKidecoJayaAgungandinNovemberaoneyearcontracttoDecember2010wascompletedwithBukitBaiduriEnergy.

BUMA’stopfivecustomersaccountedforabout83percentofrevenuein2009,withoutexceptionalllargescaleproducersandexportersinthecoalindustryinIndonesia,withsignificantreservesandalongtrackrecordofprofitableoperations.Asof2009,BUMAhas11customercontractsinIndonesiawithacontractvalueofapproximatelyUS$5billion.


WebelievethatBUMAhasestablishedastrongreputationasbeingamongthemostreliableandefficientminingservicecontractorsinIndonesia,withastrongperformancetrackrecordformeetingitscontractedtargetsandcoaldeliveryobligations.Todate,noneofBUMA’scustomershave,ifsorequestedbyBUMA,refusedtoextenditsoperatingagreementsupontheirexpiry,norhavetheyexercisedtheirearlyterminationrightswithrespecttoBUMA’soperatingagreements.

Production PlanningBUMA’sperformanceisbasedondetailedproductionplanningandmonitoringinconjunctionwiththelong-termplansoftheconcessionownersofeachoftheminesitesinwhichweoperate.Forthesmallerminesitismoreusualtoprepareanannualmineplan.Ourproductionplanningteamsmonitoronaquarterly,monthly,weeklyanddailybasisanddailybriefingsareconductedwithminesuperintendentstoensureprogressisbeingmadetoachieveproductiontargets.TheBUMAMineControlCenterSystem(MCC)iscontinuouslyupdatedwithrelevantdatafromeachoperationtoensureperformancemonitoringiseffective.


Rain FactorCoalminingoperationswillceaseduringheavyraininordertoensurethatsafeminingstandardsareapplied.CertainregionsofIndonesia,inparticularKalimantan,inwhichallofBUMA’sminingprojectsarelocated,havearainyseasonwhichusuallyoccursfromOctobertoApril.Incontrasttotheprevioustwoyearsofexceptionallyheavyrainfall,thewetseasonin2009didnotcausemajordisruptionstotheproductionprocess.Routineprecautionarymeasuresincludetheupgradingofin-pithaulingroadsbyusinggraveltopreventvehiclesfromslipping.Thismethodalsohelpsconservefuelandimproveequipmentavailability.

BUMA: mining equipment and fleetBUMA’sminingoperationsdependgreatlyonitsplant,machinery,andequipmentperformance.Equipmentsizeisacompetitiveadvantage-operatinglargescaleunitswithhighercapacityhelpstoreducelabourrequirementsand,fuelusagepertonneofcoalandperbcmofoverburden.

BUMA’smanagementpreferstopurchasenewequipmentversusrentalofusedequipmentduetothehigherutilizationrateswhichcanbeachievedbynewandmoretechnologicallyadvancedmachinery.ThesizeofBUMA’soperationsgeneratessubstantialbargainingpowerwithequipmentsupplierswithinIndonesiatoobtain:betterequipmentdiscounts,orderpriority,flexiblepaymentterms,superiorsupportandexcellentaftersalesservice.

StrongbuyingpoweralsomeansBUMAhasbeengenerallylessaffectedbyrisingequipmentpricesandtightequipmentsupply.BUMAhastheoptiontopurchaseequipmentviatheIndonesianGovernment’s‘MasterList’facilitywhichofferseligibilityforlowerimportduty.MajorsuppliersincludePTUnitedTractorHeavyIndustry(S)Pte.Ltd.,PTUnitedTractorsTbk,PTTrakindoUtamaandPTEkaDharmaJayaSaktiTbk.

ConsignmentofsparepartsatBUMA’ssitestosupportthemainequipmentbrandsreducesBUMA’sworkingcapitalneeds,reducesobsoletestockandprovidesassuranceofpartavailabilityonsite.Manufacturerwarrantiesfornewequipmentpurchasestypicallylastforaperiodofsixmonths.StrictmaintenanceroutinesoperateatBUMAworkshopslocatedateachminingsite.Regularandappropriatelytimedoverhaulshelpprolongtheoperationallifeofmachinery,rangingfromthreetoeightyears.BUMAgenerallyusesOEMreplacementpartsandcomputer-basedmaintenancemanagementsystemstocontrolsparepartinventorylevels,purchasingandwarranty.

Closemonitoringofequipmentutilizationandstatuscontinuedin2009,allowingmanagementtomakeeffectivedecisionsonequipmentallocations.Totransferheavyminingequipment,BUMAhasalsoinvestedinitsownlandingcraftwhichplyriversandtheirtributariesbetweentherelevantconcessions.


Fuel and consumablesRepresentingthelargestelementofcostofsales,fuelcostswerereducedin2009asonecustomer,Adaro,optedtoprovidefueldirectly,ratherthanviaBUMA.ThisisapositivedevelopmentforBUMAreducingtheamountofworkingcapitalrequiredtomanagefuelsupply.BUMAprocuresasubstantialamountofitsfuelrequirementsfromPertamina,underasupplyagreementbasedoninternationalmarketpriceslesstheamountofapplicablediscounts.Fuelcostsarepassedthroughtoconsumersgiventhatallcontracttermsallowforfuelcostescalation.Effortscontinuedduringtheyearwiththe“HydrocarbonProject”:aninitiativetoimprovefuelefficiencyandextendtheusefullifeofallequipment.

BUMAsecuresthemajorityofitsradialtiresthroughdirectlong-termfixed-pricecontractswithtireproducertherebyprotectingagainsttheriskoftireshortages,agrowingissueinlinewiththesubstantialminingsectorexpansioninrecentyears.

Information Management SystemsBUMAusesseveralinformationtechnologymanagementsystems.MineControlCentermonitorsproductionactivitieson-siteanddistributesinformationtodivisionalheads.FleetEdmonitorsequipmentperformanceandhistoricalrecordsforequipmentplanningandcosting.TheIntegratedInventoryControlSystemrunsallinventorycontrolreportsonobsolescence,inventoryturnoverandconsumption,andreportsstockanalysis,itemhistory,partsallocationandpurchaseorders.

Inadditiontothesesystems,BUMAalsohasaproprietarytirecontrolandmanagementsystemtoidentifythemostappropriatetiresforindividualprojects,calculatetiredeliveryschedules,monitortirerelateddowntimes(scheduledversusnon-scheduled),andtoprovidereportsandanalysessuchasimmediatereal-timecomparisonofdifferenttirebrandresults.

BUMAhasalsosecuredtelecommunicationssupporttolinkwithallofitsmininglocationswhicharegenerallylocatedintheremotepartsofKalimantanwherelocaltelecommunicationinfrastructureiseithernon-existentorrudimentary.CommunicationswiththesesitesaremadethroughtheVSATnetwork(VerySmallApertureTerminal),whichprovidesvoice,VoIP,fax,email,internetanddataconnectivity.


InApril2010,BUMAwillcommencetheimplementationofanEnterpriseResourcePlanning(“ERP”)systemusingSAPsolutionstooptimizetheperformanceofthebusinessprocesses,coveringfinance,humancapitalmanagement,informationtechnology,operationsandcorporateservices.TheimplementationofSAPERPisbeingdonebyDeloitteConsultingandisexpectedtogoliveforselectedmodulesinearly2011.

Health and SafetyBUMAemphasizesandplacesgreatimportanceonworkplacesafetyinallofitsminingoperations,andhasimplementedIndonesianandinternationallyrecognizedstandardsforindustrialhealthandsafety.Workplacesafetyisanimportantfactortakenintoaccountwhendeterminingmineplansandincreasingproductioncapacityatthemines.BUMA’sproprietaryhealth,safetyandenvironmentalmanagementinitiative,B’Safefocusesonhazardidentificationandriskassessment,aswellascontrolandmitigationofpotentialhazards.B’SafeisbasedonOHSAS(Occupational,HealthandSafetyAssessmentSeries)18001,ISO14001andIndonesianlaborregulations.Currently,BUMAhasobtainedOHSAS18001certificationswithrespecttoitsactivitiesonminingsiteslocatedattheAdaro,KidecoandIMKconcessions,andtheLatiminelocatedontheBerauconcession.

Allplantandequipmentisinspectedbeforeuseon-site,andissubjecttodailyinspectionsandmaintenanceinaccordancewithmanufacturerspecifications.Personalprotectiveequipmentisprovidedforallemployees,andallrequiredsafeguardsunderIndonesianhealthandsafetyregulationshavebeenimplemented.

AllofBUMA’semployeesreceivebasicsafetytrainingandspecializedtrainingwithrespecttohigh-riskworkactivities.BUMAalsoprovidescomprehensivetrainingandassessmentforallplantoperators,drivers,riggers,craneoperators,andsafetymanagementtrainingforallsupervisorypersonnel.

BUMA’ssafetyperformancehasimprovedovertheyears,asevidencedbythedecreasesinitsLostTimeInjuryFrequencyRate(“LTIFR”)andPropertyDamageFrequencyRate(“PDFR”).LTIFRmeasuresthenumberofincidentsperonemillionmanworkinghours,involvinginjurythatpreventsareturntowork,andPDFRmeasuresthenumberofunscheduledbreakdownsperonemillionequipmentworkinghours.

Environmental IssuesEnvironmentalawarenessandresponsibilityisequallyimportant,withISO14001accreditationfortheenvironmentalmanagementsystemsatfourminesites(Adaro,Kideco,Lati,andBinungan-Suaran).Furthersiteaccreditationisplannedtobecompletedintheyearahead.


Human Resources Development and TrainingPeopledevelopmentisaconstantcommitmentasthescaleandrangeofcontractscontinuestoexpandandinevitablycustomerstandardsandexpectationsrise.BUMAhasinvestedinequipmentsimulationdisplaysinordertoprovideeffectiveandefficienttrainingasnew,moresophisticatedmachineryisavailable.Simulatorsareaneffectivemeanstoensureoperatorscanmasterthenecessaryskillsinashortperiodoftime.

Throughtheyearimprovementswereexecutedtostrengthenthecapabilityofthetrainingcentertoprovidecomprehensiveandeffectivecoursesforalloperatorsandfrontlinemanagement.Advancedtechnicaltrainingwasalsoimplementedtobuildcompetenceinengineering,includingcoursestosupportupgradesinmineplanningsoftwareandhardware.Intensivemechanicaltraininghasimprovedknowledgeandtechnicalskillsformechanics.


Looking Ahead: Operational ImprovementsTherewereanumberofspecificimprovementprogramsin2009thatrequirespecialmention.Theseincludedupgradesinthestandardofoverburdenhaulingroadsbylayeringgravelinordertoimprovecycletimes,topreserveundercarriagelifetime,andtopreventagainstexcessivefuelusagethroughlackoftractiononslipperysurfaces.Plansareunderwaytoshifttolarger

capacitiesforthetruckfleet:inexcessof150tonpayloads,inordertoachievehigherproductivity,equipmentavailability,utilization,costeffectivenessandimprovedsafety.Multi-stagepumpsarebeinginstalledtoimprovedrainagefordeepmineareasinexcessof100metersandplansareunderwaytocompleteadispatchingsystemby2012inordertoimprovefleetmanagement.


FINANcIAL REVIEW

Overview – a shift of investment strategyIn2009,DeltamadeastrategicchangeinitsinvestmentfocusbyenteringthecoalminecontractingbusinessthroughtheacquisitionofPTBukitMakmurMandiriUtama(BUMA).AnewmanagementteamhasbeeninstalledbyshareholderstopropelDeltatoaleadingpositionintheIndonesiancoalindustry.Aspartofthetransformation,thelegacypropertybusinesses,whichoperateasseparatesubsidiaries,willbestrategicallydivestedstartingin2010.

Important InformationTheauditedfinancialstatements,includingtheincomestatementandfinancialpositionpresentedforDelta,theparentcompany,reflecttheperformanceofBUMAforonlypartof2009,theyearinwhichtheacquisitionoccurred.ThusnomeaningfulcomparisonwiththeresultsforDeltain2008ispossible.Fortransparencyandclaritythecommentarybelowincludesreferencetoselectedcomparativedatacoveringboth2009and2008,sourcedfromtheaccountsofBUMAinordertogivethereaderaproperperspectiveonthesubsidiary’sperformance,yeartoyear.

Deltaanditsprimarysubsidiary,BUMA,arerequiredtoreportthefinancialperformanceinRupiahtocomplywithregulatoryrequirements.BUMA’srevenueisreceivedinUSDollarsorinRupiah,peggedtotheprevailingUSDollarexchangerateatthetimeofinvoicing.MostcostsarealsoinUSDollars.AlldebtfinancingisdenominatedinUSDollarssinceitisprimarilyusedtofinanceimportedheavyequipment.AverageRupiahtoUSDollarexchangeratesin2008wereRp10,950/US$andin2009wereRp9,400/US$.

Operating IncomeDelta’sprinciplesourceofrevenueofRp6,351billionin2009(onagrossmethodbasis)wasfromthecoalcontractingoperationsofBUMA.RevenuesgeneratedbyBUMAarebasedonlong-termcontractswithformula-basedpricingforunitratesofoverburdenvolumesremoved,coaltonnagesexcavatedandcoaltonnageshauledtopreagreeddestinations.Contractsalsocontainadjustmentsforchangesinverticalandhorizontaldistancestravelledaswellasanychangeinsiteconditions.In2009therevenuesofBUMAwereRp6,350billion(2008:Rp6,765billion),slightlyloweryearonyearasaresultofloweraveragefuelpricesandduetoachangeofpracticeasonemajorcustomerstartedtoprovideitsownfuel.Fuelcostsarefullypassedthroughandthusprofitabilitywasunaffected.

AlthoughBUMAdoesnottakedirectcommoditypricerisk,itdoesbenefitfromahighcoalpriceenvironmentwhenmineownersaccelerateproductionplanstomonetizehighprices.BUMAalsobenefitsasmarginalcoaldepositsbecomeprofitable.Thistypicallyresultsinanincreaseinstripratios,whichtranslatesintohigheroverburdenremovalvolumetoproducethesametonnageofcoal.


BUMA’stotalcostofrevenue,excludingfuelcost,increasedby10.5%yearonyear,mostlydrivenbyanincreaseintireandblastingmaterialcosts.OperatingexpensesatBUMAwerehigherby12.2%yearonyearbasedonincreasesinsalaries,benefitsandgeneraloverheadanddepreciation.ThistranslatesintoanoperatingincomeofRp1,253billionin2009(2008:Rp1,194billion).BUMArecordedRp2,103billioninEBITDAwhichequatesto40.6%EBITDAmargintonetrevenue(revenueexcludingfuelcost)in2009,relativelystablecomparedtothe2008EBITDAmarginof41.5%.Onaconsolidatedbasis,DeltarecordedanEBITDAofRp2,096billionin2009andoperatingincomeofRp1,236billion.

Non-operating income (expenses)DeltarecordedatotalofRp614billioninnetnon-operatingexpenses,derivedfromtheincreaseininterestexpenseattheBUMAlevelofRp250billionaswellasseveralextraordinaryexpenseswithanaggregateamountofRp436billion,relatingtotheimpairmentofitspropertyportfolioaswellasfinancingandacquisitioncosts.TheseexpenseswereoffsetbyforeignexchangetranslationgainsofRp329billionmainlyontheUSDollardenominateddebt.Taxes and pre-acquisition income adjustments Delta’stotaltaxpaymentwasRp270billion.Aftertheeliminationofthepre-acquisitionincomefromBUMA,priortoDeltaacquiringsharesofBUMA,Delta’snetlosswasRp160billionin2009.Excludingtheextraordinaryitemsmentionedabove,Delta’snetincomewasRp13billion.

Financial position

AssetsTheCompany’sconsolidatedcurrentassetsamountedtoRp2,965billion,comprisedmainlyofBUMA’sreceivablesofRp1,719billionwhilecashandshortterminvestmentamountedtoRp586billion.Receivablesgrowthof3%attheBUMAlevelwasinlinewiththegenerallevelofbusinessactivityfortheyear.InventoriesofRp198billionreflectedfuelandtirestocksheld,amongotheritems,fortheoperationoftheminingcontractingbusiness.

NoncurrentassetsamountedtoRp3,605billion,primarilyconsistingofminingequipment.

LiabilitiesConsolidatedcurrentliabilitiesamountedtoRp964billion,comprisingofRp360billionoftradepayablesonfuel,equipmentmaintenanceandsparesinventorieswhilethecurrentportionoflongtermdebtamountedtoRp328billion.

Non-currentliabilitiesofRp5,407billionincludetheSeniornotesfacilityofUS$315millionandtheUS$285millionsyndicatedloansattheBUMAlevel.


cORPORATE GOVERNANcE

AtDeltawedefinegoodgovernanceasconductingbusinessandengagingwithstakeholdersinamannerwhichistransparent,responsible,accountable,fair,independentandsustainable.

Governanceispracticedthroughoutalloperationsandatalllevelsofouroperations(includingthoseofoursubsidiaries)andisreflectedin:• Distinctrolesandresponsibilitiesagreed

fortheBoardsofCommissionerswhoareaccountabletoallshareholdersandfortheBoardofDirectorswhoareaccountabletotheBoardofCommissionersandshareholders;

• Wellarticulatedbusinessobjectivesandclearstrategieswithwhichtoattaintheobjectives;

• Theadoptionoffairandethicalpracticeinbusiness,operationsandcommunications;

• Theimplementationofprudentriskmanagementandtimely,accuratereportsanddisclosures;

• Thesettingofsafety,healthandenvironmentalstandards;

• Aprogramofcorporatesocialresponsibilitywhichmitigatesandmaximizesournegativeandpositiveimpactonourneighbors.

Governance StructureInNovemberandDecember2009someimportantmanagementchangeswerecompletedtoensurecohesive,effectivemanagementandgovernanceforboththelistedholdingcompanyandprincipalsubsidiary.

Shareholders ThroughtheAnnualGeneralMeetingofShareholders(AGM),shareholdersdeterminethecompositionoftheBoardsofCommissionersandDirectors;voteonissuesrequiringmajorityconsensus,andapproveimportantCompanyresolutions.

In 2009, several shareholder meetings took place: • ThefirstExtraordinaryGeneralMeetingof

Shareholders(EGMS)wason30June2009andthefollowingwasagreed:(i)thechangeandextensionofthecorebusinessoftheCompany,(ii)increaseofauthorizedcapitalfromRp1trilliontoRp1.35trillion,(iii)placementoffundininvestmentinstrumentand(iv)appointanadditionaldirector.

• EGMSon30September2009passedthefollowingkeyresolutions:(i)approvalfortheacquisitionprocessofPTBukitMandiriMakmurUtama(BUMA),(ii)changeinthescopeofactivitiesoftheCompanyfromapropertydevelopertoanintegratedminingandenergycontractor,(iii)changeoftheCompany’snamefromPTDeltaDuniaPropertyTbk.toPTDeltaDuniaMakmurTbk.

• EGMSon11November2009and21December2009approvedtheappointmentoftheBoardofCommissionersandBoardofDirectors.


DELTA

Board of commissioners As of 31 December 2009, there were six Commissioners, two of whom were Independent Commissioners.

Erry Firmansyah – President commissioner Mr.FirmansyahhasservedasthePresidentCommissionerofDeltasinceNovember2009.HealsoservesasaCommissioneroftheStateOwnedAssetsManagementCompany(thesuccessorofIBRA).Priortohiscurrentposition,hewasthePresidentDirectoroftheIndonesiaStockExchangefromApril2002toAugust2009andthePresidentDirectorofKliringSentralEfekIndonesia(KSEI)from1998to2002.HewasappointedasControlleroftheLippoGroupin1991andasaDirectorofLippoLandin1995.HisbeganhisprofessionalcareerwithPriceWaterhouseasanauditor.HeisagraduateoftheUniversityofIndonesia.

Patrick Sugito Walujo – Vice President commissionerMr.WalujohasservedastheVicePresidentCommissionerofDeltasinceNovember2009.Heisaco-founderofNorthstarEquityPartners,aleadingIndonesiafocusedprivateequityfund.PriortoNorthstar,heservedasSeniorVicePresidentofPacificCenturyGroupVenturesLtdinTokyoandasaninvestmentbankerwithGoldmanSachs,basedinLondonandNewYork.HeholdsaBachelorofScience,majoringinOperationsResearch&IndustrialEngineeringfromCornellUniversity,USA.

Siswanto – Independent commissionerMr.SiswantohasservedasanIndependentCommissionerofDeltasince2008.HeholdsseveralconcurrentpositionsincludingPresidentDirectorofPTSafira,DirectorofPTMuliaBhaktiAbadi,CommissionerofPTLajuPerdanaIndah,CommissionerofPTTrubaBaraBanyuenimandIndependentCommissionerofPTTrubaAlamManunggalTbk.HeisaretiredBrigadierGeneraloftheIndonesianArmy.

Nurdin Zainal – Independent commissionerMr.ZainalhasservedasanIndependentCommissionerofDeltasinceNovember2009.Heretiredin2006asaMajorGeneralinthearmedforcesandsubsequentlyservedinseveralprivatesectorpositions.HeisagraduateoftheNationalTenacityInstitution(Lemhannas)andholdsamastersdegreeinmanagementfromSTIEWidyaJayakarta,Jakarta.

Ilda Harmyn – commissionerMr.HarmynhasservedasaCommissionerofDeltasinceDecember2009.HecurrentlyservesasanOperationsDirectoratNorthstarPacificCapital.From1996to2008,heworkedinseveralpositionsatKaltimPrimaCoal,thelastpositionbeingtheGeneralManagerforMiningOperationsandContractMining.HeholdsaBachelorDegreeinMiningEngineeringfromBandungInstituteofTechnology.

Benny Wirawansa – commissionerMr.WirawansahasservedasaCommissionerofDeltasinceDecember2007.Priortothisposition,Mr.WirawansawastheChiefOperatingOfficeratthePalmSpringGolfandBeachResortonBatamIslandfrom2004to2007.In2008,hewasappointedasaCommissionerofEmeraldaGolfandCountryClub.

Responsibilities – Board of commissioners TheBoardofCommissioners(BoC),ledbyPresidentCommissioner,ErryFirmansyah,provideconsultancyandsupervisionfortheBoardofDirectors,andmonitordecisionandpolicymakingandstrategyimplementation.TheBoCprovidesanassessmenttotheShareholdersontheBoardofDirectors’performancetowardsthestatedbusinessplanandbudget,andontheirfinancialandotherreports.

MembersoftheBoardofCommissionersareappointedbyShareholdersduringtheAGM,andservetermsoffouryears;subsequenttermsmaybeservedwithShareholderapproval.


Board of DirectorsAsof31December2009,theBoDcomprisedfivemembers.

Hagianto Kumala – President DirectorMr.KumalahasservedasthePresidentDirectorofDeltasinceDecember2009.Priortothisposition,heservedasthePresidentDirectorofPTUnitedTractorsTbk.(UT)from1999to2007andasaCommissionerfrom2007to2009.HewasthePresidentCommissionerofBerauCoalfrom2001to2004havingbeenaCommissionerfrom1998to2001.FormerpositionsincludePresidentCommissionerand/orCommissioneratPTPamapersadaNusantara,PTToyotaAstraMotor,PTKomatsuIndonesia,PTAstraAgroLestariTbk.andPTAstraGraphiaTbk.,amongothers.HeholdsaBachelorDegreeinIndustrialEngineeringfromBandungInstituteofTechnology.

Thomas Husted – Director Mr.HustedhasservedasaDirectorofDeltasinceNovember2009.In2008hefoundedPacificOceanCapital,aninvestmentfirmbasedinSingapore.From2004to2007Mr.HustedwastheHeadofCorporateFinanceatPTBankDanamonIndonesia.HejoinedCitigroupin1999andheldvariouspositionswithintheCorporateandInvestmentBankinIndonesia,SaudiArabiaandHongKong.HeisagraduateoftheUniversityofArizonaandColumbiaUniversityinNewYorkCity.

Ariani Vidya Sofjan – DirectorMs.SofjanhasservedasaDirectorandHeadofInvestorRelationsofDeltasinceDecember2009.ShepreviouslyservedasanExecutiveDirectorofPTNorthstarPacificCapital.From2003to2008shewastheHeadofResearchatMandiriSekuritasandwasaSeniorAnalystfrom1999to2003atBahanaSecurities.ShebeganhercareerasanEquityAnalystwithDeutscheMorganGrenfellAsiain1994.SheholdsaBachelorofSciencedegreeinFinancefromOklahomaStateUniversity,USA.

Gunawan Angkawibawa – DirectorMr.AngkawibawahasservedasaDirectorofDeltasince2007.Hiscareerfocushasbeenpropertydevelopment.PriortojoiningDelta,hewastheGeneralManagerofDevelopmentfortheSurabayaInternationalTradeCenter.HegraduatedfromTrisaktiUniversityinengineeringstudiesandholdsamasterdegreeinmanagementfromPrasetiyaMulyaSchoolofManagement.

Henry Kurniawan Latief – DirectorMr.LatiefhasservedasaDirectorofDeltasince2009.HeholdsabachelordegreeincomputersciencefromtheUniversityofBinaNusantara.


Responsibilities – Board of DirectorsUnderPresidentDirectorHagiantoKumala,theBoardofDirectors(BoD)isresponsibleformanagingtheCompanytowardsthecompletionofitsbusinessplanandinaccordancewithprevailingregulations.TheBoDdeterminesstrategiesandbudgets,andmeasuresoperationalsuccessbaseduponperformanceagainststatedCompanystrategiesandmeasurabletargets.

MembersoftheBoardofDirectorsareappointedbyShareholdersduringtheAGMandservetermsoftwoyears;subsequenttermsmaybeservedwithShareholderapproval.

Remuneration of the Board of commissioners and the Board of DirectorsTotalremunerationfortheBoardofCommissionersandtheBoardofDirectorsfortheyear2009wasRp570million.

Good Governance committeesToassistwithandensuretheimplementationofgoodgovernancepracticesthroughouttheCompany,theBoardsofCommissionersandDirectorsaresupportedbythreegovernancebodies:theAuditCommittee,theInternalAuditDivision,andtheCompany’sCorporateSecretary.

The Audit committeeTobeappointedbyandresponsibletotheBoardofCommissioners,theAuditCommittee’sprimaryroleswillbetoassisttheBoCinfulfillingitsresponsibilities;independentlymonitorandevaluatefinancialinformationandreportingwithintheCompany,andimplementriskmanagement,internalcontrol,andassurance.

TheAuditCommitteecomprisesaChairmanandtwomembers;bothofwhichareindependentofthemajorityshareholdersoftheCompany.

Siswanto – chairmanSteven cahyadi – MemberDarius Handoko – Member

Internal AuditAspartofriskmanagement,theInternalAuditDivision(IAD)conductsinternalauditactivitiesbasedupontheCompany’sannualauditplan,asapprovedbytheBoardofDirectors.TheIADreportstotheBoardofDirectorsandtotheAuditCommittee.

External AuditAppointedbytheBoardofDirectorswithAGMapproval,externalauditoftheCompany’sfinancialstatementswasconductedbyTjiendradjaja&HandokoTomo(Mazars)forthefiscalyear2009.

corporate SecretaryReportingtothePresidentDirector,theCorporateSecretaryensuresthattheCompanyisawareofandcomplieswithallprevailinglawsandregulations.TheCorporateSecretaryalsofacilitatesthesmoothandtimelyflowofinformationbetweentheCompanyanditsstakeholders,andliaiseswiththecapitalmarketauthorities.

AllkeycorporateinformationisreadilyavailableontheCompany’swebsiteatwww.deltadunia.com.Asat31December2009,theroleofCorporateSecretarywasheldbyAndreSoelistyo.


BUMA

John Lensa – President commissionerMr.LensahasservedasthePresidentCommissionerofBUMAsince2009.Heistheoriginalfounderandmanagerofthecompanyuntilitssalein2009.From1988to2000,heperformedpalmoilcontractingworkforPTAstraAgroLestariTbk.,theSalimandSinarMasGroups.From1994to1998,hebegantheminingcontractingbusinessasasubcontractorofPTPamapersadaNusantara.From1980to1987,hewasinvolvedinthecontractingbusinessthroughPTUnicoUtama,acompanyinvolvedindam,roadandhighwayconstruction.

Patrick Sugito Walujo – Vice President commissionerMr.WalujohasservedastheCommissionerofBUMAsinceNovember2009.Heisaco-founderofNorthstarEquityPartners,aleadingIndonesiafocusedprivateequityfund.PriortoNorthstar,heservedasSeniorVicePresidentofPacificCenturyGroupVenturesLtdinTokyoandasaninvestmentbankerwithGoldmanSachsbasedinLondonandNewYork.HeholdsaBachelorofScience,majoringinOperationsResearch&IndustrialEngineeringfromCornellUniversity,USA.

Sunata Tjiterosampurno – commissionerMr.TjiterosampurnowasappointedasaCommissionerofBUMAinNovember2009.HehasbeenanExecutiveDirectorofNorthstarAdvisorsPte.Ltd.since2006.BeforejoiningNorthstar,hewasanInvestmentBankerforPTDanareksaSekuritasandpriortothataconsultantofBostonConsultingGroup,advisingclientsoncapitalmarket,strategyandbusinessrestructuringacrossdifferentindustries.HebeganhiscareeratLippoSekuritas-SBCWarburgasAssistantVicePresidentinEquityResearch.HeearnedhisMasterinFinancefromLondonBusinessSchoolin2002andBachelorofBusinessAdministrationfromUniversityofWisconsin,Madisonin1995.


Board of Directors

Budikwanto Kuesar – President DirectorMr.KuesarhasservedasthePresidentDirectorofBUMAsince2009.HewastheManagingDirectorofBUMAfrom2001to2009.Mr.KuesarbeganhiscareeratPTUnitedTractorsTbkasAdministrationDepartmentHeadin1974.HeheldseveraladditionalpositionswithinUnitedTractorsuntilbecomingtheDeputyGeneralManagerforthePlantHireMiningDivisionin1991.In1992,hewastransferredtoPTPamapersadaNusantara(Pama),whereheservedasOperationsDirectoruntil2001.HegraduatedfromAkademiPendidikanKejuruanin1973.

William Surnata – Director – cFOMr.SurnatahasservedasaDirectorofBUMAsince2009.HejoinedBUMAin2004astheHeadofBusinessDevelopment.PriortojoiningBUMA,Mr.Surnatawasacareerbanker.HegraduatedfromUniversitasParahyanganinBandungwithadegreeincivilengineering.

Achmad Kharis – Operation DirectorMr.KharishasservedasaDirectorofBUMAsince2009.HisprimaryresponsibilitiesaretooverseeBUMA’sdaytodaybusinessandmarketingoperations.PriortojoiningBUMAin1998,heworkedatPTPamapersadaNusantara(Pama)asanoperationalmanager.HegraduatedfromUniversitasGajahMadainYogyakartawithadegreeingeology.


ThisAnnualReportandtheaccompanyingfinancialstatementsandrelatedfinancialinformationaretheresponsibilityofthemanagementofPTDeltaDuniaMakmurTbk.andhavebeenapprovedbythemembersoftheBoardofDirectorsandtheBoardofCommissionerswhosesignaturesappearbelow:

Board of commissioners

Erry FirmansyahPresidentCommissioner

Patrick WalujoVicePresidentCommissioner

SiswantoIndependentCommissioner

Nurdin ZainalIndependentCommissioner

Ilda HarmynCommissioner

Benny WirawansaCommissioner

Board of Directors

Hagianto KumalaPresidentDirector

Thomas Husted Director(CFO)

Ariani Vidya SofjanDirector

Gunawan AngkawibawaDirector

Henry Kurniawan Latief Director


SHARE INFORMATION

2009: Share Price Range by Quarter

Period Highest Lowest closing Volume Value Frequency

Q1 520 470 520 80,000 39,875,000 11

Q2 1,080 500 960 43,633,000 36,025,790,000 3,279

Q3 2,100 920 1,880 995,548,000 1,728,958,152,500 37,537

Q4 1,990 1,400 1,690 1,612,813,500 2,619,041,990,000 46,613

History of Stock Listing

Number of Shares Year

InitialPublicOffering 205,770,930 2001

ChangeofShareOwnership 205,770,930 2002

ChangeofShareOwnership 205,770,930 2003

RightIssueI 2,777,895,930 2004

CapitalStockIncrease 3,395,205,930 2007

ChangeofParValue

FromRp50toRp100pershare

6,790,411,860 2008

Total shares 6,790,411,860


ADDRESSES

PT Delta Dunia Makmur Tbk.Cyber2Tower,28thfloorJl.HRRasunaSaidBlokX-5No.13Jakarta12950,Indonesia

T+62-2129021352F+62-2129021352www.deltadunia.com

PT Bukit Makmur Mandiri Utama (BUMA)KomplekHarmoniMasBlokA/7,8,9,36Jl.JembatanDuaJakarta14450,Indonesia

T+62-216613636F+62-216618917/8

PUBLIc AccOUNTANT

Tjiendradjaja & Handoko Tomo (Mazars)Jl.SisingamangarajaNo.26,2ndfloorJakarta12120,Indonesia

T+62-217202605F+62-2172788954www.mazars.co.id


consolidated Financial StatementsWith Independent Auditors‘ Report

For the Year Ended December 31, 2009(With comparative Figures for the Year Ended December 31, 2008)

PT Delta Dunia Makmur Tbk (Formerly PT Delta Dunia Property Tbk) and Subsidiaries


Table of contents

BoardofDirectors’Statement

IndependentAuditors’Report

1ConsolidatedBalanceSheet

3ConsolidatedStatementofIncome5ConsolidatedStatementofChangesinEquity

6ConsolidatedStatementsofCashFlows

8NotestotheConsolidatedFinancialStatements


PT Delta Dunia Makmur Tbk.Cyber2Tower,28thfloorJl.HRRasunaSaidBlokX-5No.13Jakarta12950,IndonesiaT+62-2129021352F+62-2129021352 www.deltadunia.com>

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