GLENCORE PLC 
Glencore has today:
published its Annual Report for the year ended 31 December 2015 on its website www.glencore.com as required by DTR 6.3.5 R (3); and
submitted a copy of the Annual Report to the UK National Storage Mechanism in accordance with LR 9.6.1 R.
The 2015 Annual Report will shortly be available for inspection on the National Storage Mechanism: www.morningstar.co.uk/uk/NSM
Glencore will hold its 2016 Annual General Meeting in Zug on 19 May 2016. The notice of meeting will be released in April 2016.
The Appendix to this announcement contains the following additional information which has been extracted from the 2015 Annual Report for the purposes of compliance with DTR 6.3.5 only:
a description of principal risks and uncertainties;
a note on related party transactions; and
the Directors' Responsibilities Statement.
The Appendix should be read in conjunction with Glencore's Preliminary Results Announcement issued on 1 March 2016 (including the notice on forward looking statements at the end of that announcement). Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This announcement should be read in conjunction with and is not a substitute for reading the full 2015 Annual Report. Page and note references in the text below refer to page numbers and notes in the Annual Report and terms defined in that document have the same meanings in these extracts.
APPENDIX
Glencore's Principal risks and uncertaintiesThe following has been extracted from pages 28 - 35 of the 2015 Annual Report:
Our risk management framework identifies and manages risk in a way that is supportive of our strategic priorities of opportunistically deploying capital, while protecting our future financial security and flexibility. Our approach towards risk management is framed by the ongoing challenge of our understanding of the risks that we are exposed to, our risk appetite and how these risks change over time.
The Board assesses and approves our overall risk appetite, monitors our risk exposure and sets the Group-wide limits, which are reviewed on an ongoing basis. This process is supported by the Audit and HSEC Committees, whose roles include evaluating and monitoring the risks inherent in their respective areas as described on pages 85 - 88.
Our current assessment of our risks, according to exposure and impact, is detailed on the following pages. In compiling this assessment we have indicated the impact of these risks
in comparison with a year ago in the table below.
The commentary on the risks in this section should be read in conjunction with a commentary under Understanding the information on risks which is set out below.
To the extent that any of these risks are realised, they may affect, among other matters: our current and future business and prospects, financial position, liquidity, asset values, growth potential, sustainable development (whether as to adverse health, safety, environmental, community effects or otherwise) and reputation.
The natural diversification of our portfolio of commodities, geographies, currencies, assets and liabilities is a source of mitigation for many of the risks we face. In addition, through our governance processes as noted previously and our proactive management approach we seek to mitigate, where possible, the impacts of certain risks should they materialise. In particular:
our liquidity risk management policy requires us to maintain (via a $3 billion minimum prescribed level) sufficient cash and cash equivalents and other sources of committed funding available to meet anticipated and unanticipated funding needs;
making use of credit enhancement products, such as letters of credit, insurance policies and bank guarantees and imposing limits on open accounts extended;
our management of marketing risk, including daily analysis of Group value at risk (VaR); and
adhering to the principles encapsulated in the Glencore Corporate Practice (GCP) programme.
Understanding the information on risksThere are many risks and uncertainties which have the potential to significantly impact our business, including competitive, economic, political, legal, regulatory, social, business and financial risk. The order in which these risks and uncertainties appear does not necessarily reflect the likelihood of their occurrence or the relative magnitude of their potential material adverse effect on our business.
We have sought to provide examples of specific risks. However, in every case these do not attempt to be an exhaustive list. These principal risks and uncertainties should be considered in connection with any forward looking statements in this document as explained on page 202.
Identifying, quantifying and managing risk is complex and challenging. Although it is our policy and practice to identify and, where appropriate and practical, actively manage such risks to support objectives in managing capital and future financial security and flexibility, our policies and procedures may not adequately identify, monitor and quantify all risks.
The comments below describe our attempts to manage, balance or offset risk. Risk is, however, by its very nature uncertain and inevitably events may lead to our policies and procedures not having a material mitigating effect on the negative impacts of the occurrence of a particular event. Since many risks are connected, our analysis should be read against all risks to which it may be relevant.
In this section, we have sought to update our explanations, reflecting our current outlook.
Mostly this entails emphasising certain risks more strongly than other risks rather than the elimination of, or creation of, risks. To understand the changes in outlook and for more detail on certain risks, our previous annual reports are on our website at: www.glencore.com/investors/reports-and-results/reports/
To provide for concise text:
where we hold minority interests in certain businesses, although these entities are not generally subsidiaries, the interests are mostly taken as being referred to in analysing these risks, and "business" refers to these and any business of the Group;
where we refer to natural hazards, events of nature or similar phraseology we are referring to matters such as earthquake, flood, severe weather and other natural phenomena;
in each case our mitigation of risks will include the taking out of insurance where it is customary and economic to do so;
"risks" include uncertainties;
"laws" include regulations of any type;
a reference to a note is a note to the 2015 financial statements; and
we have referred to our 2015 Sustainability Report which will be published in April 2016.
Risk - The revenue and earnings of substantial parts of our industrial activities and, to a lesser extent, our marketing activities, are dependent upon prevailing commodity prices. Commodity prices are influenced by a number of external factors, including the supply of and demand for commodities, speculative activities by market participants, global political and economic conditions, related industry cycles and production costs in major producing countries.
A significant downturn in the price of commodities generally results in a decline in our profitability and could potentially result in impairment and balance sheet constraints. It is especially harmful to profitability in the industrial activities, which are more directly exposed to price risk due to the higher level of fixed costs, while our marketing activities are ordinarily substantially hedged in respect of price risk and principally operate a service-like margin-based model.
Comments - The significant falls in prices experienced during 2015 and the pessimistic medium-term outlook of many commodity market commentators make this the Group's foremost risk. The continued price declines in our commodities generally, and especially copper and coal, have been a severe drag on our financial performance and have led to material concerns as to the Group's indebtedness levels.
The Group is implementing a significant programme of activities in response, as summarised on the previous page of the 2015 Annual Report. See the Chief Executive Officer's review on page 4 and the financial review on pages 36 - 41.
Details of the significant impairments recorded during the year are contained in note 5. The valuations used for this analysis remain sensitive to price and further deterioration in the price outlook may result in additional impairments.
Against the backdrop of these fluctuations, as we would expect, there were no breaches during 2015 of our $100 million Group VaR limit pertaining to our marketing activities - see page 83.
Risk - We are dependent on the expected volumes of supply or demand for commodities in which we are active, which can vary for many reasons, such as competitor supply policies,
changes in resource availability, government policies and regulation, costs of production, global and regional economic conditions and events of nature.
Comments - This risk is currently prevalent, with demand growth uncertainty in various commodities we produce and market, notably within steel, coal and oil markets.
See the Chief Executive Officer's review on page 4.
Risk - The vast majority of our transactions are denominated in US dollars, while operating costs are spread across many different countries, the currencies of which fluctuate against the US dollar. A depreciation in the value of the US dollar against one or more of these currencies will result in an increase in the cost base of the relevant operations in US dollar terms.
The main currency exchange rate exposure is through our industrial assets, as a large proportion of the costs incurred by these operations is denominated in the currency of the country in which each asset is located. The largest of these exposures is to the currencies listed on page 44.
Comments - This risk is currently prevalent in our industry. However, these fluctuations tend to move in symmetry with those in commodity prices and supply and demand fundamentals as noted above, such that decreases in commodity prices are generally associated with increases in the US dollar relative to local producer currencies and vice versa. Consequently, the current relative strength of the US dollar has been beneficial to us through lower equivalent US dollar operating costs at many of our operations. This positive, however, has been more than offset by the disruption to the world economy and the substantial falls in commodity prices described above.
Risk - We operate and own assets in a large number of geographic regions and countries, some of which are categorised as developing, complex or having unstable political or social climates. As a result, we are exposed to a wide range of political, economic, regulatory and tax environments. Policies or laws in these countries may change in a manner that may be adverse for us. Also, some countries with more stable political environments may nevertheless change policies and laws in a manner adverse to us. We have no control over changes to policies, laws and taxes.
The geopolitical risks associated with operating in a large number of regions and countries, if realised, could affect our ability to manage or retain interests in our industrial activities.
Comments - During 2015, we were subject to significant changes in fiscal policy from countries in South America, Africa and Asia Pacific and we expect this trend to continue in 2016 as the global geopolitical climate continues to evolve, partly affected by falls in commodity prices.
Risks can also arise from the announcement and/or implementation of reductions in workforces and temporary or permanent production stoppages.
See map on page 8 and 9 that sets out our global operational footprint.
Glencore plc issued this content on 08 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 08 March 2016 07:06:22 UTC
Original Document: http://www.glencore.com/assets/media/doc/news/2016/201603080800-2015-Annual-Report-release.pdf
