Preliminary Results 2011

RNS Number : 6433Y

Glencore International PLC

05 March 2012

NEWS RELEASE

Baar, 5 March 2012

Preliminary Results 2011

HIGHLIGHTS

US $ million	2011	2010	Change

Key statement of income and cash flows highlights:
Revenue	186 152	144 978	28%
Adjusted EBITDA ¹	6 464	6 201	4%
Adjusted EBIT ¹	5 398	5 290	2%
Glencore net income pre significant items ²	4 060	3 799	7%
Income before attribution	4 268	4 106	4%
Earnings per share (Basic) (US $)	0.72	0.35	106%
Funds from operations (FFO) ³	3 522	3 333	6%

US $ million	2011	2010	Change

Key financial position highlights:
Total assets	86 165	79 787	8%
Glencore shareholders' funds ¹	29 265	19 613	49%
Net debt ³	12 938	14 756	- 12%
Current capital employed (CCE) ¹	22 479	19 588	15%
Ratios:
Adjusted current ratio ¹	1.53x	1.26x	21%
FFO to Net debt	27.2%	22.6%	20%
Net debt to Adjusted EBITDA	2.00x	2.38x	- 16%
Adjusted EBITDA to net interest	7.63x	6.91x	10%
¹ Refer to glossary on page 78 for definitions and calculations. ² Refer to page 6. ³ Refer to page 8.

• Industrial activities Adjusted EBIT up 18% compared to 2010, benefiting from generally stronger commodity prices and increased production.

• Marketing activities Adjusted EBIT, excluding agricultural products which was adversely impacted by the unprecedented volatility and disruption in the cotton market, was over 10% higher than 2010.

• Copper equivalent ¹ production volumes increased 16% in 2011 driven by a strong performance from the industrial activities including:

- Kazzinc: completion of the new copper smelter and increased gold production;

- Katanga: 57% production increase of copper metal contained as a result of the phase III expansion;

- Mutanda: current production has increased 47,000 MT to 64,000 MT. The growth is part of its 110,000 MT copper development project which is tracking ahead of schedule;

- Prodeco: 45% increase in production from 2010 attributable to the current expansion project; and

- Aseng field in Block I - Equatorial Guinea: first oil produced in Q4 2011.

• Significant increase in Kazzinc's mineral reserves at the Vasilkovskoye, Maleevsky and Ridder-Sokolny deposits with contained gold up 50%, contained copper up 136% and contained zinc up 67%.

• Strong and improving cashflow coverage ratios with FFO to Net debt increasing 20% from 22.6% to 27.2% and Net debt to Adjusted EBITDA falling to 2.00 times from 2.38 times.

• Prior to the announcement of the proposed merger with Xstrata, both S&P (via an upgrade) and Moody's (via stabilisation of outlook) improved their credit ratings on Glencore to BBB (stable) and Baa2 (stable) respectively. Following the merger announcement, both agencies have flagged possible upgrade potential.

• The Directors propose a final dividend of $ 0.10 per share, bringing the total dividend for the year to $ 0.15 per share.

Glencore's Chief Executive Officer, Ivan Glasenberg, commented:

"Glencore delivered a solid performance in 2011, despite challenging economic conditions and markets. In particular, the industrial business benefited from stronger average prices for the key commodities it produces as well as the planned increase in production at many operations including Prodeco, Katanga, Kazzinc and Mutanda. Thus far in 2012, market conditions have improved and the year has started well across all segments of our business. Emerging market urbanisation will continue to increase commodity intensity per capita as the demand for goods and products that industrialised societies take for granted increases. This demand dynamic alongside the strength of our organic growth prospects will continue to be a fundamental driver of our business in 2012."

In addition, Glencore has today published on its website a presentation which contains a summary of the 2011 preliminary results as well as further information which Glencore intends to use in meetings with shareholders. This presentation is available at www.glencore.com .

For further information please contact:

Investors & analysts	Media	Finsbury (Media)
Paul Smith	Simon Buerk	Guy Lamming
t: +41 (0)41 709 24 87	t: +41 (0)41 709 26 79	Dorothy Burwell
e: paul.smith@glencore.com	e: simon.buerk@glencore.com	t: +44 (0)20 7251 3801

Elisa Morniroli	Charles Watenphul	Company secretary
t: +41 (0)41 709 28 18	t: +41 (0)41 709 24 62	John Burton
e: elisa.morniroli@glencore.com	e: charles.watenphul@glencore.com	t: +41 (0)41 709 26 19
		e: john.burton@glencore.com

website: www.glencore.com

Chief Executive Officer's review

2011 witnessed a number of events which inevitably disrupted the pattern of the global economy in the short term and with it the demand for commodities. The Japanese Tsunami severely impacted domestic and regional supply/demand patterns, while the Arab Spring tightened the outlook for global energy markets with resultant higher prices in oil. This had broader ramifications for the global economy as it struggled to sustain the growth delivered during 2010 as the issue at the heart of the 2008-09 financial and economic crisis, namely general levels of indebtedness in developed economies, remained unaddressed. The dilemma for governments of developed economies since then has been and remains how to maintain consumption and investment growth while attempting to signal serious intent to the bond markets about reducing sovereign debt.

In light of this challenging economic environment we are pleased that Glencore has been able to continue to deliver a healthy financial performance with Glencore net income, pre-significant items, increasing by 7% to $ 4.1 billion in 2011. This increase was supported by solid underlying profitability in the marketing business against a generally difficult market backdrop. The industrial business benefited from stronger average prices for the key commodities it produces as well as the increased production at many operations including Prodeco, Katanga, Kazzinc and Mutanda.

The improved financial performance and extensive fund raising activities completed during the year provides us with a resilient balance sheet and financial flexibility with close to $ 7 billion of committed liquidity at the end of the year, over twice the stated $ 3 billion minimum we set ourselves. This financial flexibility allowed us to continue to pursue various inorganic growth opportunities as we announced a number of bolt on acquisitions including Umcebo, Optimum Coal and Rosh Pinah Zinc. In addition, we also completed the takeover offer in respect of the minority shareholding in Minara Resources.

Our listing on the London and Hong Kong Stock Exchanges in May 2011 was the largest ever IPO of ordinary shares on the premium listing segment of the London Stock Exchange and the first simultaneous London primary and Hong Kong secondary IPO. The resulting governance and shareholder structure serves to align the interests of all stakeholders in the Company. The Board of Directors proposes a final dividend of $ 0.10 per share for 2011.

Glencore's IPO also coincided with the start of the next stage of our journey of value creation which will see us deliver organic industrial growth conservatively in excess of 50% by 2014, substantially ahead of our peer group average. This in turn should help drive volumes and enhanced returns within our marketing business, particularly in copper, coal and oil. In 2011, our key industrial expansion projects continued to progress with the portfolio overall on track and within budget giving us confidence that we can deliver considerable growth in the next twelve months even absent an improvement in the economic environment.

The announcement on 7 February of our proposed merger with Xstrata is the logical next step for two complementary businesses to create a new powerhouse in the global commodities industry. This is a natural combination which will realise immediate and ongoing value from marketing the combined Group's products to maximise supply chain margin opportunities including via blending, swapping and storing to meet customers' needs more efficiently and cost effectively. Furthermore, the combined Group's enhanced scale, diversification and financial flexibility in combination with Glencore's existing relationship with thousands of third-party commodity producers worldwide, is expected to allow us to capitalise on more opportunities to grow the enlarged asset base. The new Company, Glencore Xstrata, will be the most diverse major resource group which will be in a position to realise immediate and ongoing value for its shareholders.

Looking ahead, in the short-term we expect a continuation of the healthy growth seen within emerging markets during 2011. Whilst looking to the longer term, we see no change to the fundamental drivers for healthy markets in our major commodities. Emerging market urbanisation will continue to increase commodity intensity per capita as people strive to improve their living standards to a level which is taken for granted in developed societies. China will continue to remain the central driving factor given its existing scale, resources and growth objectives.

Ivan Glasenberg

Chief Executive Officer

Financial Review

BASIS OF PRESENTATION OF FINANCIAL INFORMATION

The financial information included in this preliminary announcement has been prepared on a basis as outlined in note 1 of the financial statements. It is presented in the Chief Executive Officer's Report and the Financial Review sections before significant items unless otherwise stated to provide an enhanced understanding and comparative basis of the underlying financial performance. Significant items are items of income and expense which, due to their financial impact and nature or the expected infrequency of the events giving rise to them, are separated for internal reporting and analysis of Glencore's results.

In accordance with Listing Rule 12.43 (b), it is noted that the Profit Forecast amounts disclosed in the Trading Update published 7 February 2012 are unchanged from the respective amounts disclosed in this preliminary announcement.

results

Adjusted EBIT increased 2% to $ 5,398 million in 2011 compared to 2010. The 2011 results benefited from generally higher average prices for the key commodities Glencore produces and mostly greater volumes handled by our marketing groups, tempered by the marked decline in agricultural marketing performance. Nonetheless, the Group's large scale, vertically integrated business model, spanning a diverse commodity portfolio, served to underpin a modest overall rise in Group profitability.

Adjusted EBIT

Adjusted EBIT by business segment is as follows:

US $ million	Marketing activities	Industrial activities	2011 Adjusted EBIT		Marketing activities	Industrial activities	2010 Adjusted EBIT

Metals and minerals	1 242	1 357	2 599	48%	1 401	1 160	2 561	48%
Energy products	697	375	1 072	20%	450	235	685	13%
Agricultural products	- 8	- 39	- 47	- 1%	659	58	717	14%
Corporate and other ¹	- 20	1 794	1 774	33%	- 173	1 500	1 327	25%
Total	1 911	3 487	5 398	100%	2 337	2 953	5 290	100%
¹ Corporate industrial activities include $ 1,893 million (2010: $ 1,729 million) of Glencore's equity accounted share of Xstrata's income.

Marketing Adjusted EBIT declined by 18% to $ 1,911 million in 2011, primarily due to the underperformance of our agricultural products division largely associated with the unprecedented volatility and disruption in the cotton market.

Industrial Adjusted EBIT was up by 18% to $ 3,487 million in 2011, benefiting from generally stronger commodity prices and increased production at many operations, as ongoing expansionary plans are progressed.

The metals and minerals segment Adjusted EBIT increased slightly to $ 2,599 million, with 17% growth in the industrial asset portfolio, driven by stronger metal prices and increased production, offsetting an 11% decline in marketing contribution. The latter was due to lower profits from the ferroalloys and zinc/copper departments which benefited in 2010 from strong physical purchasing and restocking fundamentals while overall firm physical premia and volumes were maintained during 2011.

The largest increase in Adjusted EBIT in 2011 was from the energy segment, up 56% to $ 1,072 million, primarily due to the stronger oil market fundamentals during the first half of the year. Increased coal volumes from Prodeco and commencement of oil production at the Aseng field in Q4 2011 accounted for the 60% increase in industrial energy EBIT contribution to $ 375 million.

The agricultural products segment had a negative Adjusted EBIT of $ 47 million in 2011, compared to a contribution of $ 717 million in 2010. The year-on-year decline was significantly impacted by the cotton activities, where extreme market volatility produced an outcome of ineffective hedging due to the dislocation of physical and paper markets and high levels of physical contractual non-performance by suppliers and customers.

Our agricultural asset portfolio is currently in a phase of considerable targeted expansion and development, which is expected to translate into enhanced scale and performance going forward. The 2011 result, in large part, reflects the current negative biodiesel production margin environment in Europe.

Corporate and other primarily relates to the Group's equity accounted interest in Xstrata and the variable pool bonus accrual, the net result of which increased from $ 1,327 million to $ 1,774 million. Xstrata accounted for $ 164 million (up 10%) of this improvement, with overhead reduction accounting for the balance.

Revenue

Revenue for the year ended 31 December 2011 was $ 186,152 million, a 28% increase compared to $ 144,978 million in 2010. The increase is primarily due to higher average commodity prices for most of the commodities which the Group produces and markets. Higher year-on-year average prices were notable in crude oil (39% for Brent), copper (17%), wheat (22%) and gold (28%) however, given the relatively high contribution of Glencore's oil business to Group revenue, the increase in average oil prices is the largest driver of the total revenue increase over the period.

Cost of goods sold

Cost of goods sold for the year ended 31 December 2011 was $ 181,938 million, a 30% increase from $ 140,467 million in the year ended 31 December 2010. This increase was primarily due to the higher commodity prices noted above and the resulting impact on the purchases of the respective commodities.

Selling and administrative expenses

Selling and administrative expenses for the year ended 31 December 2011 were $ 857 million, a 19% reduction from $ 1,063 million in 2010, primarily due to lower variable employee compensation charges.

Share of income from associates and jointly controlled entities

Share of income from associates and jointly controlled entities for the year ended 31 December 2011 was $ 1,972 million, a 8% increase from $ 1,829 million in 2010. The improvement is primarily due to the higher earnings flow-through from Xstrata, supported by an increasing contribution from Mutanda.

Other expense - net

Net other expense for 2011 was $ 511 million, compared to $ 8 million in 2010. The net amount in 2011 primarily comprised $ 344 million of expenses related to Glencore's listing, a $ 92 million of mark-to-market loss in respect of various minority holdings in listed companies, $ 63 million related to final costs associated with the settlement of the Prodeco option and $ 32 million of asset impairments.

Interest income

Interest income for the year ended 31 December 2011 was $ 339 million, a 21% increase over 2010. Interest income includes interest earned on various loans extended, including to companies within the Russneft Group which primarily accounted for the overall increase compared to the prior year.

Interest expense

Interest expense for the year ended 31 December 2011 was $ 1,186 million, a 3% decline from $ 1,217 million 2010, or flat, when taking into account $ 39 million of capitalised borrowing costs written off in 2010.

Interest expense on floating rate debt decreased by $ 40 million to $ 511 million from $ 551 million (excluding significant items) over 2011. Floating rate debt is predominantly used to fund fast turning and liquid working capital, the funding cost of which is taken into account in transactional pricing and terms and accordingly sought to be "recovered" in Adjusted EBIT of our marketing activities.

Interest expense on fixed rate funding was $ 675 million in 2011, an increase of $ 48 million over 2010. The net increase is due to the Eurobond and Swiss Franc bond issuances in March 2010 and October 2010/January 2011.

Income taxes

A net income tax credit of $ 264 million was recognised during the year ended 31 December 2011 compared to an expense of $ 234 million for the year ended 31 December 2010. The 2011 credit resulted primarily from the recognition of substantial tax benefits that were crystallised following the reorganisation of the Glencore Group as part of the Listing. It has been Glencore's historical experience that its effective tax rate pre significant items on pre-tax income, excluding share of income from associates and jointly controlled entities and dividend income has been 10% as illustrated in the table below. Following the Listing related Restructuring which crystallised significant available future tax benefits as noted above, it is expected that the future effective tax rate will increase relative to the past as going forward, old structure employee shareholder payments will no longer be available to offset marketing related taxable income.

Earnings

A summary of the differences between Adjusted EBIT and Glencore net income, including significant items, is set out below:

US $ million	2011	2010

Adjusted EBIT	5 398	5 290
Net finance costs	- 847	- 897
Net other items ¹	- 5	- 152
Income tax expense	- 250	- 234
Non controlling interests	- 236	- 208
Glencore net income pre significant items	4 060	3 799
Earnings per share (Basic) pre significant items (US $)	0.72	1.02

Other expense - net ¹
Mark to market movements on investments held for trading	- 92	0
Mark to market valuation of certain coal forward contracts	25	- 790
Listing related expenses	- 344	0
Net gain on restructured Russneft interests	0	46
Net impairment (charge)/reversal	- 6	674
Prodeco call option expense	- 63	- 225
Impairment of non current inventory	- 26	0
Gain on revaluation of Vasilkovskoye Gold	0	462
Other	0	- 23
Write off of capitalised borrowing costs ²	0	- 39
Net gain/(loss) on disposal on investments	9	- 6
Net deferred tax asset recorded - mainly Listing/Restructuring benefits ³	514	0
Share of Associates' exceptional items ⁴	- 45	0
Non controlling interest portion of significant items ⁵	16	- 147
Total significant items	- 12	- 48
Attribution to hybrid and ordinary profit participation shareholders	0	- 2 460
Income attributable to equity holders	4 048	1 291
Earnings per share (Basic) (US $)	0.72	0.35
¹ Recognised within other expense - net, see note 3 of the financial statements. ² Recognised within interest expense. ³ Recognised within income tax credit/(expense), see note 4 of the financial statements. ⁴ Recognised within share of income from associates and jointly controlled entities, see note 2 of the financial statements. ⁵ Recognised within non controlling interests.

significant items

Significant items are items of income and expense which, due to their financial impact and nature or the expected infrequency of the events giving rise to them, are separated for internal reporting and analysis of Glencore's results to provide a better understanding and comparative basis of the underlying financial performance.

In 2011, Glencore recognised $ 12 million of significant expenses which comprised a positive $ 25 million (2010: negative $ 790 million) of mark to market adjustments associated with certain fixed price forward coal sales contracts relating to Prodeco's future production that did not qualify for "own use" or cash flow hedge accounting, $ 92 million of negative mark to mark adjustments on interests in other investments classified as held for trading and carried at fair value, with Glencore's interest in Century Aluminum Company cash settled equity swaps, Volcan Compania Minera S.A.A. and Nyrstar N.V. accounting for the majority of such movements, and $ 344 million of expenses related to the Listing of Glencore. These expenses were largely offset by the recognition of $ 514 million of net tax credits relating primarily to certain income tax deductions that were crystallised, following the reorganisation of Glencore prior to Listing. See notes 3 and 4 of the financial statements for additional details.

The net amount for 2010 included $ 225 million of Prodeco call option expenses, offset by $ 674 million of impairment reversals following the rebound in market conditions and underlying valuation assumptions. 2010 also included a $ 462 million gain ($ 315 million, net of non controlling interests) related to the revaluation of the initial 40% interest in Vasilkovskoye Gold immediately prior to the acquisition of the remaining 60% interest in February 2010. See note 3 of the financial statements for additional details.

Liquidity and capital resources - Cash Flow

Cash generated by operating activities before working capital changes

Net cash generated by operating activities before working capital changes in the year ended 31 December 2011 was $ 4,101 million, a decrease of $ 133 million (3%) compared to 2010 or up 5% pre significant items, taking into account $ 325 million of relevant Listing/Restructuring related expenses incurred during the year. The pre significant items increase is consistent with the improved earnings.

Working capital changes

Net working capital increased by $ 3,174 million during the year ended 31 December 2011 compared to an increase of $ 2,998 million in 2010. Much of the 2011 increase occurred in December 2011 alone ($ 2.4 billion), as Glencore was presented with highly attractive 'funded' commodity sourcing opportunities. Most of this working capital investment is temporary in nature and is expected to reverse during H1 2012.

Net cash used by investing activities

Net cash used by investing activities was $ 3,690 million in 2011 compared to $ 4,755 million in 2010. The net outflow in 2011 primarily related to the continued capital expenditure programs in respect of Vasilkovskoye Gold's production ramp up, the various West African upstream oil development projects, the development of the Mutanda copper/cobalt mine and production expansion at Katanga and Prodeco. In addition, a few 'bolt on' investments were progressed, including securing a 31.2% interest in Optimum Coal and 43.7% of Umcebo Coal as well as increasing various existing equity related holdings, including in Volcan, Century Aluminum and Minara Resources. The 2010 net outflow included the $ 2,000 million base amount in relation to the exercise of the Prodeco call option.

Net cash generated by financing activities

During 2011, in addition to regular bank and bond financing activities, Glencore refinanced the $ 2.8 billion ($ 2.3 billion drawn) bank loans secured by Xstrata shares with new 2 year $ 2.7 billion equivalent facilities and raised $ 7.6 billion net of issue costs via equity offerings on the London and Hong Kong stock exchanges.

ASSETS, LEVERAGE AND WORKING CAPITAL

Total assets were $ 86,165 million as at 31 December 2011 compared to $ 79,787 million as at 31 December 2010. Over the same time period current assets increased from $ 44,296 million to $ 45,731 million. The adjusted current ratio at 31 December 2011 was 1.53 compared to 1.26 at 31 December 2010. This improvement is attributable to the refinancing of the Xstrata secured bank loans and the resulting reclassification from current to non current borrowings, the repayment of various 're-drawable' short term facilities and the investment in working capital as noted above. Non current assets increased from $ 35,491 million as at 31 December 2010 to $ 40,434 million as at 31 December 2011, primarily due to the capital expenditure programs noted above and the equity accounting pick-up of our share of Xstrata's earnings.

Consistent with 31 December 2010, 99% ($ 13,785 million) of total marketing inventories were contractually sold or hedged (readily marketable inventories) at 31 December 2011. These inventories are readily convertible into cash due to their liquid nature, widely available markets, and the fact that any associated price risk is covered either by a physical sale transaction or a hedge transaction on a commodity exchange or with a highly rated counterparty. Given the highly liquid nature of these inventories, which represent a significant share of current assets, Glencore believes it is appropriate to consider them together with cash equivalents in analysing Group net debt levels and computing certain debt coverage ratios and credit trends. Balance sheet liquidity is very healthy such that current capital employed plus liquid stakes in listed associates (at book carrying value) covers 143% of Glencore's total gross debt as at 31 December 2011. 

Net debt

US $ million	2011	2010

Borrowings	28 029	30 132
Commodities sold with agreements to repurchase	39	484
Gross debt	28 068	30 616
Cash and cash equivalents and marketable securities	- 1 345	- 1 529
Net funding	26 723	29 087
Readily marketable inventories	- 13 785	- 14 331
Net debt	12 938	14 756

Movement in net debt

US $ million	2011	2010

Cash generated by operating activities before working capital changes	4 101	4 234
Listing related cash expenses included in number above (via statement of income)	325	0
Net interest paid	- 798	- 802
Tax paid	- 472	- 323
Dividends received from associates	366	224
Funds from operations	3 522	3 333

Non current advances and loans	- 320	- 825
Acquisition of subsidiaries	- 350	- 624
Purchase and sale of investments	- 760	- 2 060
Purchase and sale of property, plant and equipment	- 2 626	- 1 470
Working capital changes, excluding readily marketable inventory movements and other	- 3 720	- 1 640
Share issuance, net of issue costs and Listing related cash expenses included in the statement of income (see above)	7 291	0
Acquisition of additional interest in subsidiaries	- 315	- 75
Dividends paid	- 364	- 30
Cash movement in net debt	2 358	- 3 391
Debt assumed in business combination	- 204	- 745
Foreign currency revaluation of non current borrowings and other non cash items	- 68	70
Profit participation certificates redemptions	- 268	- 504
Non cash movement in net debt	- 540	- 1 179
Total movement in net debt	1 818	- 4 570
Net debt, beginning of period	- 14 756	- 10 186
Net debt, end of period	- 12 938	- 14 756

Net debt as at 31 December 2011 decreased to $ 12,398 million from $ 14,756 million as at 31 December 2010, with the proceeds raised from the Listing extensively deployed in progressing the Group's key capex and development programs (Prodeco, Oil Exploration and Production and Mutanda), securing a selection of new investments and stake-building in existing holdings and short term funding of non readily marketable inventory working capital.

The ratio of Net debt to Adjusted EBITDA improved from 2.38 times in 2010 to 2.00 times as at 31 December 2011, while the ratio of FFO to Net debt improved from 22.6% in 2010 to 27.2% in 2011.

Capital resources and financing

During the year ended 31 December 2011, the following notable financing activities took place:

• In January, Glencore issued additional 5 year, 3.625% CHF 225 million ($ 235 million) bonds;

• In February and August, Glencore redeemed the $ 700 million 8% Perpetual bonds at par;

• In May, Glencore replaced the previous 364 day $ 1,375 million and $ 515 million committed revolving credit facilities with two new 364 day committed revolving credit facilities for $ 2,925 million and $ 610 million respectively, both with a one year term extension option at Glencore's discretion. In addition, Glencore extended the final maturity of $ 8,340 million of the $ 8,370 million medium term revolver for a further year to May 2014. In aggregate, the new facilities represent an overall increase in committed available liquidity of $ 1,645 million;

• In May, Glencore International plc was admitted to trading on the London and Hong Kong Stock Exchanges in what was the largest ever IPO of ordinary shares on the premium listing segment of the London Stock Exchange and the first simultaneous London primary and Hong Kong secondary IPO. The offer represented 16.94% of Glencore International plc's post-IPO issued share capital and raised a net $ 7,291 million; and

• In June, Glencore refinanced the $ 2.8 billion ($ 2.3 billion drawn) facilities secured by Xstrata shares with new 2 year $ 2.7 billion equivalent facilities.

Glencore's main refinancing requirements over the next twelve months relate to a few secured borrowing base working capital -facilities which ordinarily require extension/renewal each year. However, these tend to be routine given the underlying strong collateral and their modest amounts in the context of our overall balance sheet and funding/liquidity levels. As at 31 December 2011, Glencore had available committed undrawn credit facilities and cash amounting to $ 6.8 billion (as a financial policy, Glencore has a $ 3 billion minimum threshold requirement).

Value at risk (VaR)

One of the tools used by Glencore to monitor and limit its primary market risk exposure, namely commodity price risk related to its physical marketing activities, is the use of a VaR computation. VaR is a risk measurement technique which estimates the potential loss that could occur on risk positions as a result of movements in risk factors over a specified time horizon, given a specific level of confidence. The VaR methodology is a statistically defined, probability based approach that takes into account market volatilities, as well as risk diversification by recognising offsetting positions and correlations between commodities and markets. In this way, risks can be measured consistently across all markets and commodities and risk measures can be aggregated to derive a single risk value. Glencore has set a consolidated VaR limit (1 day 95%) of $ 100 million representing less than 0.5% of Glencore shareholders' funds.

Glencore uses a VaR approach based on Monte Carlo simulations and is computed at a 95% confidence level with a weighted data history using a combination of a one day and one week time horizon.

Average market risk VaR (1 day 95%) during the year ended 31 December 2011 was $ 39 million (2010: $ 43 million), representing a modest 0.1% of shareholders' -equity.

Whilst it is Glencore's policy to substantially hedge its commodity price risks, there remains the possibility that the hedging instruments chosen may not always provide effective mitigation of the underlying price risk. The hedging instruments available to the marketing businesses may differ in specific characteristics to the risk exposure to be hedged, resulting in an ongoing and unavoidable basis risk exposure. Residual basis risk exposures represent a key focus point for Glencore's commodity department teams who actively engage in the management of such.

Credit ratings

In light of our extensive funding activities, investment grade ratings are of utmost importance to us. Prior to the announcement of the proposed merger with Xstrata, both S&P (via an upgrade) and Moody's (via stabilisation of outlook) improved their credit ratings on Glencore to BBB (stable) and Baa2 (stable) respectively. Following the merger announcement, both agencies have flagged possible upgrade potential.

Dividend

The Directors have proposed a 2011 final dividend of $ 0.10 per share, amounting to $ 692 million. The interim dividend of $ 0.05 per share, amounting to $ 346 million, was paid on 30 September 2011.

Dividend dates	2012

Annual General Meeting	9 May
Ex-dividend date (UK and Hong Kong)	16 May
Last time for lodging transfers in Hong Kong	4:30 pm (HK) 17 May
Record date in Hong Kong	Opening of business (HK) 18 May
Record date in UK	Close of business (UK) 18 May
Deadline for return of currency election form (Jersey shareholders)	21 May
Applicable exchange rate date	25 May
Payment date	1 June

Shareholders on the Jersey register, may elect to receive the dividend in Sterling, Euro or Swiss Francs. The Sterling, Euro or Swiss Franc amount will be determined by reference to the exchange rates applicable to the U.S. Dollar seven days prior to the dividend payment date. Shareholders on the Hong Kong branch register will receive their dividends in Hong Kong Dollars. Further details on dividend payments, together with currency election and dividend mandate forms, are available from Glencore's website (www.glencore.com) or from the Company's Registrars. The Directors have proposed that the final dividend will be paid out of capital contribution reserves. As such, the final dividend would be exempt from Swiss withholding tax. As at 31 December 2011, Glencore International plc had CHF 14.4 billion of such capital contribution reserves in its statutory accounts.

Notional allocation of debt and interest expense

Glencore's indebtedness is primarily arranged centrally, with the proceeds then applied to marketing and industrial activities as required.

Glencore does not allocate borrowings or interest to its three operating segments. However, to assist investors in the assessment of overall performance and underlying value contributors of its integrated business model, Glencore notionally allocates its -borrowings and interest expense between its marketing and industrial activities as follows:

• At a particular point in time, Glencore estimates the borrowings attributable to funding key working capital items within the marketing activities, including inventories, net cash margining and other accounts receivable/payable, through the application of an appropriate loan to value ratio for each item. The balance of Group borrowings is allocated to industrial activities (including Glencore's stake in Xstrata).

• Once the average amount of borrowings notionally allocated to marketing activities for the relevant period has been estimated, the corresponding interest expense on those borrowings is estimated by applying the Group's average variable rate cost of funds during the relevant period to the average borrowing amount. The balance of Group interest expense and all interest income is allocated to industrial activities. The allocation is a company estimate only and is unaudited. The table below summarises the notional allocation of borrowings and interest and corresponding implied earnings before tax of the marketing and industrial activities for the year ended 31 December 2011.

US $ million	Marketing activities	Industrial activities	Total

Adjusted EBIT	1 911	3 487	5 398
Interest expense allocation	- 295	- 891	- 1 186
Interest income allocation	-	339	339
Allocated profit before tax	1 616	2 935	4 551
Allocated borrowings ¹ - 31 December 2011	14 247	13 821	28 068
Allocated borrowings ¹ - quarterly average	13 161	14 703	27 864
¹ Includes commodities sold with agreement to repurchase.

Based on the implied equity funding for the marketing activities' working capital requirements, as well as the relatively modest level of non current assets employed in the marketing activities (assumed to be equity funded), the return on notional equity for the marketing activities continued to be very healthy in 2011. The industrial activities' return on notional equity, although respectable, is being held back by mostly mid stage oil, copper, coal and gold development and expansion projects, where significant investments have been made to date, however the projects did not contribute to earnings in the year at anywhere near where their full production potential is expected to be.

Going concern

The financial position of the Group, its cash flows, liquidity position and borrowing facilities are outlined above and the business activities of the Group's segments are detailed in the sections following. Furthermore, note 23 of the consolidated financial statements includes the Group's objectives and policies for managing its capital, its financial risk management objectives, details of its financial instruments and hedging activities and its exposure to credit and liquidity risk.

In May 2011, the Company's shares were admitted to trading on the London and Hong Kong Stock Exchanges. Concurrently with this admission process, the Company implemented an offer for subscription of new ordinary shares. Pursuant to this offer, 922,713,511 ordinary shares were issued, representing 16.94% of the Group's post admission issued share capital raising proceeds of $ 7,291 million net of expenses.

The Directors believe, having made appropriate enquiries, that the Group has adequate resources to continue its operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.

The Directors have made this assessment after consideration of the Company's budgeted cash flows and related assumptions, undrawn debt facilities, debt maturity review, analysis of debt covenants, and in accordance with Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009 published by the UK Financial Reporting Council.

Subsequent events Affecting OUR FINANCIAL POSITION

• On 7 February 2012, Glencore announced its intention to acquire an additional 37.5% stake in Chemoil for cash consideration of $ 174 million. The transaction is expected to close in Q2 2012.

• On 7 February 2012, the Glencore Directors and the Independent Xstrata Directors announced that they had reached an agreement on the terms of a recommended all-share merger (the "Merger") of equals of Glencore and Xstrata to create a unique $ 90 billion natural resources group. The terms of the Merger provide Xstrata shareholders with 2.8 newly issued shares in Glencore for each Xstrata share held. The Merger is to be effected by way of a Court sanctioned scheme of arrangement of Xstrata under Part 26 of the UK Companies Act, pursuant to which Glencore will acquire the entire issued and to be issued ordinary share capital of Xstrata not already owned by the Glencore Group. The Merger is subject to shareholder, anti-trust and regulatory approvals.

Metals and minerals

US $ million	Marketing activities	Industrial activities	2011	Marketing activities	Industrial activities	2010

Revenue	43 317	8 667	51 984	37 889	7 322	45 211
Adjusted EBITDA	1 247	2 122	3 369	1 401	1 868	3 269
Adjusted EBIT	1 242	1 357	2 599	1 401	1 160	2 561
Adjusted EBITDA margin (%)	3%	24%	-	4%	26%	-
Allocated average CE ¹	7 746	15 108	22 854	7 018	12 208	19 226
Adjusted EBIT return on average CE	16%	9%	11%	20%	10%	13%
¹ The simple average of segment current and non current capital employed (see note 2 of the financial statements), adjusted for production related inventories, is applied as a proxy for marketing and industrial activities respectively.

Market conditions

Selected average commodity prices

	2011	2010	Change

S&P GSCI Industrial Metals Index	440	393	12%
LME (cash) zinc price ($/t)	2 193	2 159	2%
LME (cash) copper price ($/t)	8 813	7 543	17%
LME (cash) lead price ($/t)	2 397	2 147	12%
Gold price ($/oz)	1 573	1 227	28%
Metal Bulletin alumina price ($/t)	374	332	13%
LME (cash) aluminium price ($/t)	2 398	2 173	10%
LME (cash) nickel price ($/t)	22 843	21 811	5%
Metal Bulletin cobalt price 99.3% ($/lb)	16	18	- 11%
Iron ore (Platts 62% CFR North China) price ($/DMT)	169	147	15%

Currency table

	Average 2011	Spot 31 Dec 2011	Average 2010	Spot 31 Dec 2010	Change in average prices

AUD : USD	1.03	1.02	0.92	1.02	12%
USD : COP	1 848	1 939	1 897	1 908	- 3%
EUR : USD	1.39	1.30	1.33	1.34	5%
GBP : USD	1.60	1.55	1.55	1.56	3%
USD : CHF	0.89	0.94	1.04	0.94	- 14%
USD : KZT	147	148	147	147	0%
USD : ZAR	7.26	8.09	7.32	6.63	-1%

Metal prices generally increased over 2011 compared to 2010 with the GSCI Industrial Metals Index increasing by 12% from -December 2010 to December 2011. However, with the exception of aluminium, base metals prices were on average 10% -15% lower in H2 2011 compared to H1 2011, which reflected increased investor and end user caution on the global growth outlook.

2011 was impacted by various macro events, such as the nuclear accident in Japan, social upheavals in North Africa and the Middle East and the ongoing sovereign debt crisis in Europe. The pressures on equity and debt markets, driven by the financial uncertainties, had a knock-on effect on commodity markets, where prices decreased and demand weakened.

Zinc/Copper/Lead

2011 markets were particularly characterised by supply disruptions and continuing decline in mine ore grades. Chile, which produces around one third of the world's copper, saw its year on year production fall by 3.2%, while production from Indonesia was severely impacted by the more than three month strike at the Grasberg mine. Production declined on an outright basis and is expected to continue to do so well into 2012 until the production cycle from ore to metal is re-established. This lack of supply growth explains the relative strength in prices witnessed in the face of weak demand in Europe and USA. Lack of new production is also relevant for zinc, though with China not being a net importer, zinc metal prices were relatively weaker.

The second half was dominated by reactions to the European financial crisis, in terms of price volatility on the terminal markets and consumer behaviour and purchasing patterns. Inventories in China had declined from the high levels since the purchases in 2009 and 2010 when prices were lower. Inventories in the US and Europe, which had seen major drawdowns since 2009, had not been rebuilt amid the uncertainty over Europe and were in fact cut even further throughout 2011 and remain that way. Chinese buyers on the other hand, have used price weakness in the fourth quarter to purchase large amounts of metal for nearby delivery and rebuild the inventory pipeline to a more 'normal' level, particularly for copper. We also saw the first signs of demand strength in the US during Q4 2011, most evident in the automobile sector where production was ramped up, following the supply chain disruptions in Japan and Thailand. There has been good consumer demand for zinc although purchasing was for current demand with no emphasis on restocking.

Alumina/Aluminium

The above mentioned market disruptions added complexity to the alumina/aluminium business, which created several profitable transaction opportunities that allowed the department to maintain a robust and profitable base in 2011.

The more recent decline in prices has increased producer margin pressure with many no longer able to cover their production cost. Indications for aluminium premiums for duty unpaid, in-warehouse material at the beginning of 2011 were $ 110 - 135 per tonne, with an average 2011 range of approximately $ 110 - 130 per tonne and a more recent level of $ 95 - 120 per tonne. Investor demand for physical metal, supported by wide contangos, has kept overall physical markets reasonably balanced.

Ferroalloys/Nickel/Cobalt/Iron Ore

The global stainless steel industry experienced a continued slowdown in H2 2011, due to interalia destocking in all markets across the distribution chain. Other ferroalloy consuming industries such as aerospace, automotive, oil and gas and plating remained strong throughout the second half.

The 2011 cobalt price was lower (11%) compared to 2010. The main reasons were (i) overstocking in the Chinese battery market, (ii) oversupply of producer metal and (iii) the loss of market share of Japanese battery producers (mostly due to a strong Yen). These factors were especially acute in Q4. Many producers reduced their inventory over year-end, based on pessimistic forecasts for
Q1 2012 however, we believe activity will be reasonable based on strong demand in the superalloy and battery sectors.

The iron ore price initially kept at a high level due to strong Chinese crude steel production matching the increased availability of material however, this balance started to change around September 2011. Prices declined due to the postponement of certain European allocations, tighter credit availability and poor steel sales in China. These concerns led to market prices falling c. $ 60 per DMT in a six week period to c. $ 115 per DMT at the end of October. Despite lower Chinese steel production levels, prices then recovered and stabilised in the $ 135 - 140 per DMT range, slightly above many marginal-cost producers' cost of production.

MARKETING

Highlights

Overall the 2011 result was solid albeit lower than the record 2010 performance. The decline in performance was partly due to lower profits from the ferroalloys and zinc/copper departments (which performed strongly in 2010 when physical purchasing and restocking in Asia was particularly intensive), offset by higher volumes and profits in the aluminium/alumina department.

Adjusted EBIT for 2011 was $ 1,242 million, compared to $ 1,401 million in 2010, a reduction of 11%.

Financial information

US $ million	2011	2010	Change

Revenue	43 317	37 889	14%
Adjusted EBITDA	1 247	1 401	- 11%
Adjusted EBIT	1 242	1 401	- 11%

Selected marketing volumes sold

	Units	2011	2010	Change

Zinc metal and concentrates ¹	million MT	2.7	2.9	- 7%
Copper metal and concentrates ¹	million MT	1.9	1.9	-
Lead metal and concentrates ¹	million MT	0.7	0.7	-
Gold	thousand toz	756	589	28%
Silver	thousand toz	11 128	8 527	31%
Alumina/aluminium	million MT	11.4	10.6	8%
Ferroalloys (incl. agency)	million MT	2.7	2.6	4%
Nickel	thousand MT	191.4	193.9	- 1%
Cobalt	thousand MT	22.9	17.9	28%
Iron ore	million MT	10.3	9.3	11%
¹ Estimated metal unit contained.

Zinc/Copper/Lead

2011 zinc volumes were lower at 2.7 million tonnes vs. 2.9 million tonnes in 2010, while copper and lead volumes were consistent between the two years. 2011 profits were lower than 2010 but remained strong. The decline was from a high base in 2010 which benefited from strong physical purchases and restocking in Asia.

Alumina/Aluminium

In 2011, the marketed volumes for alumina/aluminium increased to 11.4 million tonnes compared to 10.6 million tonnes in 2010, representing an increase of 8%. Arbitrage opportunities in aluminium were more favourable in 2011, with increased opportunities for inventory financing transactions and cash and carry deals. 2011 profits were higher than 2010.

Ferroalloys/Nickel/Cobalt/Iron Ore

Chrome ore output levels from South African producers continued to ramp up during 2011, which ensured a steady increase in monthly volumes.

Overall nickel volumes for all types of products remained strong and were similar to 2010 levels.

Cobalt volumes remained strong for the whole of 2011 compared with 2010 and confirmed existing trends in intermediate products, with a marked increase in exports.

Despite a slow start to the year due to severe supply disruptions in Canada, Brazil and Australia and the loss of supply from India due to the monsoon and the export ban iron ore volumes increased by 1 million tonnes in 2011 compared to 2010, mainly due to increased availability of spot cargos in H2 2011.

Overall profits in 2011 were slightly below 2010 levels with a mixture of positive and negative year-on-year performances within the various individual commodity books.

INDUSTRIAL ACTIVITIES

Highlights

• Metals and minerals' industrial activities performance continued to improve during 2011, driven by higher average prices in 2011 and increased production volumes at many of our operations.

• Total industrial revenues for metals and minerals were $ 8,667 billion, up 18% from $ 7,322 billion in 2010. Adjusted EBITDA and Adjusted EBIT for 2011 were $ 2,122 million and $ 1,357 million, up 14% and 17%, compared to $ 1,868 million and $ 1,160 million in 2010.

Financial information

US $ million	2011	2010	Change

Revenue
Kazzinc	2 262	1 855	22%
Other Zinc	1 029	901	14%
Zinc	3 291	2 756	19%
Katanga	528	496	6%
Mopani	1 155	863	34%
Other Copper	2 493	2 072	20%
Copper	4 176	3 431	22%
Alumina/Aluminium	520	422	23%
Ferroalloys/Nickel/Cobalt/Iron ore	680	713	- 5%
Total	8 667	7 322	18%

Adjusted EBITDA
Kazzinc	862	815	6%
Other Zinc	297	225	32%
Zinc	1 159	1 040	11%
Katanga	198	168	18%
Mopani	328	218	50%
Other Copper	219	214	2%
Copper	745	600	24%
Alumina/Aluminium	60	- 9	n.m.
Ferroalloys/Nickel/Cobalt/Iron ore	83	189	- 56%.
Share of income from associates and dividends (includes Mutanda)	75	48	56%
Total	2 122	1 868	14%
Adjusted EBITDA margin (%)	24%	26%	-

Adjusted EBIT
Kazzinc	561	579	- 3%
Other Zinc	191	115	66%
Zinc	752	694	8%
Katanga	141	109	29%
Mopani	207	68	204%
Other Copper	161	179	- 10%
Copper	509	356	43%
Alumina/Aluminium	50	- 17	n.m.
Ferroalloys/Nickel/Cobalt/Iron ore	- 29	79	n.m.
Share of income from associates and dividends (includes Mutanda)	75	48	56%
Total	1 357	1 160	17%

Capex
Kazzinc	439	350	-
Other Zinc	131	110	-
Zinc	570	460	-
Katanga	325	221	-
Mopani	163	130	-
Other Copper	116	92	-
Copper	604	443	-
Alumina/Aluminium	20	31	-
Ferroalloys/Nickel/Cobalt/Iron ore	76	67	-
Total	1 270	1 001	-

Production data

thousand ¹		Using feed from own sources	Using feed from third party sources	2011 Total	Using feed from own sources	Using feed from third party sources	2010 Total	Own feed change

Kazzinc
Zinc metal	MT	246.0	54.8	300.8	239.1	61.7	300.8	3%
Lead metal ²	MT	35.6	66.2	101.8	33.1	67.7	100.8	8%
Copper metal ³	MT	51.2	1.8	53.0	48.0	1.8	49.8	7%
Gold	toz	390	39	429	326	22	348	20%
Silver	toz	4 299	5 571	9 870	5 182	1 549	6 731	- 17%
Katanga
Copper metal ³	MT	91.2	-	91.2	58.2	-	58.2	57%
Cobalt ⁴	MT	2.4	-	2.4	3.4	-	3.4	- 29%
Mutanda
Copper metal ³	MT	63.7	-	63.7	16.3	-	16.3	291%
Cobalt ⁴	MT	7.9	-	7.9	8.9	-	8.9	- 11%
Mopani
Copper metal ³	MT	101.4	103.0	204.4	94.4	103.0	197.4	7%
Cobalt ⁴	MT	0.6	0.3	0.9	0.8	0.3	1.1	- 25%
Other Zinc (Los Quenuales, Sinchi Wayra, AR Zinc, Portovesme)
Zinc metal	MT	30.5	123.2	153.7	27.9	116.7	144.6	9%
Zinc oxide	DMT	75.5	-	75.5	68.0	-	68.0	11%
Zinc concentrates	DMT	461.2	-	461.2	390.6	-	390.6	18%
Lead metal	MT	11.9	-	11.9	14.2	-	14.2	- 16%
Lead concentrates	DMT	61.0	-	61.0	56.6	-	56.6	8%
Tin concentrates	DMT	4.7	-	4.7	3.8	-	3.8	24%
Silver metal	toz	754	-	754	871	-	871	- 13%
Silver in concentrates	toz	7 978	-	7 978	7 781	-	7 781	3%
Other Copper (Cobar, Pasar, Punitaqui)
Copper metal	MT	-	164.1	164.1	-	176.0	176.0	n.m.
Copper concentrates	DMT	204.9	-	204.9	185.5	-	185.5	10%
Cobalt	MT	-	0.2	0.2	-	-	-	n.m.
Silver contained	toz	1 035	-	1 035	450	-	450	130%
Alumina/Aluminium (Sherwin)
Alumina	MT	-	1 460	1 460	-	1 259	1 259	n.m.
Nickel/Cobalt (Murrin Murrin)
Nickel metal	MT	28.5	1.5	30.0	27.7	0.7	28.4	3%
Cobalt	MT	1.9	0.2	2.1	1.9	0.1	2.0	0%

Total Zinc contained	MT	563.1	178.0	741.1	514.3	178.4	692.7	9%
Total Copper -contained	MT	362.6	268.9	631.5	268.6	280.9	549.5	35%
Total Lead contained	MT	82.5	66.2	148.7	77.8	67.6	145.4	6%
Total Tin contained	MT	2.2	-	2.2	1.9	-	1.9	16%
Gold (incl. Gold equivalents) ⁵	toz	706	164	870	562	47	609	26%
Total Alumina	MT	-	1 460	1 460	-	1 259	1 259	n.m.
Total Nickel	MT	28.5	1.5	30.0	27.7	0.7	28.4	3%
Total Cobalt	MT	12.8	0.7	13.5	15.0	0.4	15.4	- 15%
¹ Production is included on a 100% basis. Controlled industrial assets only with the exception of Mutanda (40% owned) where Glencore has operational control. ² Lead metal includes lead contained in lead concentrates. ³ Copper metal includes copper contained in copper concentrates and blister copper. ⁴ Cobalt contained in concentrates and hydroxide. ⁵ Gold/Silver conversion ratio of 1/44.53 and 1/60.63 for 2011 and 2010 respectively based on average prices.

Operations

Kazzinc (Glencore interest: 50.7%)

Zinc and lead output in 2011 was in line with 2010 production levels. Processing silver-rich Dukatsky concentrate contributed to a 47% increase in silver production from 6.7 million toz in 2010 to 9.9 million toz in 2011. Production of gold was 429,000 toz, a 23% increase compared to 2010 production of 348,000 toz.

Kazzinc is near completion of its New Metallurgy project at an estimated cost of $ 926 million. The project consisted of the construction of a 70,000 tonnes per annum IsaSmelt Copper smelter/refinery, a new acid plant, modernisation of the existing lead plant and construction of the necessary auxiliary operations.

The new copper smelter was commissioned in August 2011 with first copper cathode produced in the last few days of August which met all international requirements. By the end of 2011, nearly 13,000 tonnes of copper cathode had been produced at the Ust-Kamenogorsk copper smelter with a gradual ramp up to the 70,000 tonnes per annum design capacity expected in 2012.

Ore processing at Altyntau Kokshetau was 5.7 million tonnes in 2011, a 61% increase compared to 2010. The Altyntau mills were each stopped in June and July for 45 days to allow work to be completed which is expected to result in processing production capacity increasing to 8.0 million tonnes per annum by 2013. Reinforcement of the foundations underneath the two ball mills went well with both mills coming back into operation by the end of July and end of August respectively. Some gold recovery issues still exist despite the installation of extra fine grinding capacity during the 45 days stoppage period, which is expected to allow the liberation of more gold in the grinding stage and therefore increased recovery. This challenge predominantly relates to the extremely hard nature of the ore which makes it difficult to grind below the necessary 4 microns in order to recover the gold. As a result, Kazzinc failed to meet its gold production target in 2011, however gold recovery rates have recently been improving.

In April 2011, Glencore conditionally agreed to increase its stake in Kazzinc from 50.7% to 93.0% for a total transaction consideration of $ 3.2 billion (consisting of the issuance of $ 1 billion of Glencore shares at its IPO price, equating to approximately 117 million shares, and $ 2.2 billion in cash). Glencore and the seller are currently targeting an agreed Q3 2012 completion date.

As a result of further exploration drilling and technical studies, Kazzinc significantly increased its JORC compliant mineral reserves, at the Vasilkovskoye, Maleevsky and Ridder-Sokolny deposits with gold up 50%, silver up 84%, copper up 136%, lead up 62% and zinc up 67% compared to the JORC compliant reserves outlined in the IPO prospectus adjusted for depletion during 2011 (see separate RNS release 5 March 2012). The effect of the higher mineral reserves has been to increase copper production, as compared to the plan outlined in the IPO prospectus, from own mined sources by 76% in 2012 and 230% in 2015.

Katanga (Glencore interest: 75.2%)

Katanga's contained copper in ore mined in 2011 amounted to 198,600 tonnes, a 51% increase compared to 2010.

Ore mined and hoisted at the KTO underground mine in 2011 was 1.6 million tonnes (at an average 3.71% copper content), an increase of 23% compared to 2010, whilst ore mined at the KOV Open Pit in 2011 was 2.5 million tonnes, 249% above 2010 production levels. The copper grade of ore mined from the KOV Open Pit for 2011 averaged 4.98% copper content.

Ore milled at the Kamoto concentrator in 2011 amounted to 4.1 million tonnes, an increase of 40% compared to 2010. The current milling capacity at Kamoto of 7.7 million tonnes per annum of ore is sufficient to support the life of mine plan through to 2014.

479,900 tonnes of total concentrate were produced, representing a 58% increase compared to 2010. Katanga continued to increase the production of oxide concentrate for sale as a finished product. The construction of a 120,000 tonnes per annum concentrate filtration and bagging facility was commissioned in the third quarter of 2011.

Copper produced in metal and concentrate for 2011 totalled approximately 91,200 tonnes, an increase of 57% compared to 2010. Total cobalt production in 2011 was 2,400 tonnes, 29% lower than in 2010 as a result of lower head grades in the current copper ore body.

Katanga experienced certain operational disruptions at the old existing installations during 2011. During Q4 2011, Katanga's Board announced that it had approved the Updated Phase IV Expansion. This acceleration of the Phase IV will address the problems experienced during 2011. Consistent with the completion of the Phase III Expansion project Katanga commissioned a front end engineering and early works report, which identified the following key items:

• an additional 100,000 tonnes per annum solvent extraction plant, over and above the 200,000 tonnes per annum solvent extraction ("SX") plant described in the ITR ("Independent Technical Report") to be constructed in front of the existing Luilu electrowinning ("EW") plant. The ITR detailed the conversion of the existing copper electrowinning facility at the Luilu refinery to a 200,000 tonnes per annum capacity copper electrowinning facility fed by the 200,000 tonnes per annum solvent extraction plant;

• Katanga reaching higher copper and cobalt production levels sooner than the timelines described in the ITR;

• an increase in expansionary capital expenditures from approximately $ 537 million (as described in the ITR) to approximately $ 635 million due primarily to the inclusion of the additional solvent extraction plant and an in-pit crusher at KOV Open Pit; and

• the increase of copper production to 270,000 tonnes per annum of LME Grade A copper and thereafter the expansion of copper production to 310,000 tonnes per annum, utilising anticipated cash flows from operating activities.

In order to expedite the commencement of the Updated Phase IV Expansion project, Katanga finalised the execution of a facility of up to $ 515.5 million from Glencore which will fund the portion of the project not already covered by Katanga's existing operating cash flow.

A further facility of $ 120 million was drawn in full to fund the redemption on 30 December 2011 of Katanga's outstanding CAD 125 million 14% debentures which otherwise would have been due for repayment on 30 November 2013.

For further information please visit www.katangamining.com

Mutanda (Glencore interest: 40%)

Mutanda is accounted for as an associate under Glencore's operational control.

Total copper production in 2011, including both cathodes and copper in concentrate, was 63,700 tonnes. Copper cathodes contributed 44,000 tonnes to the year's production which was significantly higher than the forecast of 24,000 tonnes. Total copper production in H2 2011 of 37,900 tonnes was 47% higher than the 25,800 tonnes in H1 2011.

Total cobalt production in 2011, including both cobalt in hydroxide and cobalt in concentrate, was 7,900 tonnes. Total cobalt production in both concentrate and hydroxide in H2 2011 was 4,300 tonnes, an 18% increase compared to the 3,600 tonnes produced in H1 2011.

The Phase I Hydrometallurgical Plant achieved design capacity of 20,000 tonnes per annum of annualised copper cathode production in January 2011. Under the Phase II project (construction of a 40,000 tonnes per annum SX/EW plant), EW2 and EW3 tank houses were commissioned ahead of schedule in April and June respectively.

The completion of the front end (milling and leaching) of the Phase II plant and associated cobalt circuit is expected in Q1 2012. This, along with the already commissioned EW2 and EW3 tank houses, will increase overall plant capacity to 60,000 tonnes per annum of copper cathodes and 18,000 tonnes per annum of cobalt in hydroxide at design feed grades.

The optimisation of the front end of the Phase III plant and the associated cobalt circuit is expected to be completed by the end of Q2 2012 and Q4 2012 respectively which, along with the already commissioned EW4 tank house, will result in the overall hydrometallurgical complex being capable of producing 110,000 tonnes per annum of copper cathodes and 23,000 tonnes per annum of cobalt in hydroxide at design feed grades.

The acid plant, which has a design capacity of 390 tonnes per day sulphuric acid and 73 tonnes per day SO₂ capacity, is currently being commissioned. The cost of the sulphuric acid plant and all three Phases of the Hydrometallurgical Plant is expected to be $ 734 million.

Mutanda also continues to assess various other expansion options and is currently considering whether to expand the current plant capacity to 210,000 tonnes per annum (with an initial cost estimate of $ 670 million) or to expand the existing plant capacity to 150,000 tonnes per annum in conjunction with the construction of a new 100,000 tonnes unit sulphide concentrator.

Mutanda, in conjunction with Katanga and Kansuki, is engaged in a project to secure power for all three operations through the refurbishment of two turbines at the Inga dam which is expected to provide 450 megawatts of power. The project is being executed in partnership with SNEL, the national power operator in the DRC, and EGMF, the project contractor. The initial cost estimate is $ 340 million, which will be contributed by Mutanda, Katanga and Kansuki. The amount invested will be recovered via lower electricity tariffs.

Glencore holds a 50% interest in Kansuki Investments Sprl which in turn holds a 75% interest in Kansuki Sprl, the owner of the Kansuki concession, thereby giving Glencore an effective interest of 37.5%. Kansuki is a 185 square kilometre copper and cobalt pre-development project which borders the Mutanda concession. A total of $ 135 million of capital expenditure for mine and plant development has been committed of which $ 103 million has been spent. Exploration of the Kansuki concession is ongoing. Discussions with respect to a potential combination of the Mutanda and Kansuki operations are ongoing with a view to ultimately obtaining a majority stake in the merged entity.

Mopani (Glencore interest: 73.1%)

Total contained copper in ore hoisted and mined was 6% higher than in 2010 whilst total contained copper in concentrate for 2011 was 9% higher than 2010 due to the improved ore deliveries from mining. 2011 gross anode production from the smelter of 208,200 tonnes was 5% higher than 2010 levels, which was driven by increased concentrate receipts and improved recoveries.

Total finished copper from own sources in 2011 was 7% higher compared to 2010 whilst total finished copper for 2011 at 204,400 tonnes, including purchased material and toll, was the highest achieved since Mopani's inception.

Finished cobalt production in 2011 was 18% lower compared to 2010, primarily due to the lower cobalt grades in both Mopani and purchased concentrates. Cobalt production was further adversely affected by the re-alignment of the Nkana concentrator to maximise copper concentrate production as well as the cobalt roaster being put on care and maintenance.

There are a series of major capital expenditure projects underway to increase mine production and continue to improve and modernise the smelter. The Synclinorium project is a new shaft development which should provide access to 115 million tonnes of copper ore and is expected to yield 4 million tonnes per annum of ore by 2018 replacing and improving on production from the current ore bodies in Nkana. It will be mined for approximately 18 years with an average grade of 1.85% copper content and 0.06% cobalt content. Forecast capital expenditure for the project is $ 323 million.

In metallurgy, the Smelter Phase III project is currently underway and includes the installation of three new converters, gas cleaning equipment and a second acid plant, which will improve sulphur dioxide emissions capture to above 97%. The project is on schedule and forecast capital expenditure for the project is $ 145 million.

Other Zinc

Los Quenuales (Glencore share: 97.5%)

Los Quenuales, which comprises of the Iscaycruz and Yauliyacu mines, continued its strong production performance in H1 2011 throughout the whole year.

Total ore processed at Iscaycruz was 43% higher than in 2010 (the mine having reopened in April 2010). Zinc and lead head grades did decline modestly but the higher overall volumes resulted in a 24% increase in the production of zinc concentrates whilst lead concentrate production levels effectively remained unchanged.

Total ore processed at Yauliyacu was 2% lower than in 2010, although zinc concentrate production remained unchanged due to improvements in recovery and head grade. In late April 2011, Los Quenuales ceased production of a single complex bulk concentrate, instead opting for separation into lead and copper concentrates. These separate concentrates are more readily saleable under current market conditions. In aggregate, as a result of the slight reduction in volumes treated and lower head grades, Yauliyacu produced 5% less bulk/lead/copper concentrates in 2011.

Sinchi Wayra (Glencore share: 100%)

Production at Sinchi Wayra was significantly higher compared to 2010. Ore treated and zinc concentrate produced was 15% higher whilst lead and tin concentrates produced were 29% and 25% higher respectively. These improvements were the result of a number of efficiency programs and low value/short pay-back capex expansion projects. These positive factors were slightly offset by a heavier than normal rainy season. Recovery issues in the Colquiri concentrator, as noted in the Interim Report 2011, have been addressed and largely resolved.

Negotiations with the Bolivian government to amend Sinchi Wayra's mining contracts in accordance with the new constitution are ongoing and whilst progress has been made, the final outcome and the timing thereof cannot be determined at this stage.

AR Zinc (Glencore share: 100%)

Production levels were consistent with prior years and in line with expectations, with zinc metal production increasing by 6% year on year.

The Palpala lead smelter had a maintenance shutdown during January and returned to full capacity thereafter however, as a result of the shutdown, lead metal production for the year was 17% lower than 2010 levels.

The Aguilar mine produced 15% more lead in concentrate compared to 2010, with the surplus unable to be treated at Palpala -being exported.

Perkoa (Glencore interest: 50.1%)

Construction is currently ongoing, with first production expected later this year. It is expected that the mine plan will be improved by adding a new opencut source of ore, increasing planned plant capacity. These planned improvements which should also -increase the life of mine and total overall production.

Other Copper

Cobar (Glencore interest: 100%)

Total production for 2011 was 44,700 tonnes of copper contained, an 11% reduction compared to 2010. This decrease is largely attributable to a temporary reduction in loader availability and lower head grades.

The main capital expenditure project currently underway is the shaft extension which will reduce operating costs per unit, allow access to more ore and increase production. The project is expected to be completed by the end of 2013 and total forecast capital expenditure for the project is $ 175 million.

Punitaqui (Glencore interest: 100%)

During 2011 Punitaqui produced 39,000 tonnes of copper concentrates, an encouraging first full year of production given operations only started toward the end of 2010, following the mine's acquisition in February 2010 and subsequent refurbishment.

Alumina/Aluminium

Sherwin Alumina (Glencore interest: 100%)

Production in 2011 was 1,460,100 tonnes, an increase of 16% compared to 2010, which was primarily due to the restart of the fifth digestor unit at the beginning of 2011.

Key capital expenditure projects include the re-bundling of the vertical heat exchangers which is ongoing and the increase in calciner capacity which is close to completion.

Ferroalloys/Nickel/Cobalt/Iron Ore

Murrin Murrin (Glencore interest: 100%)

Production in 2011 was 30,000 tonnes of nickel packaged and 2,100 tonnes of cobalt packaged, a 6% and 5% increase compared to 2010 production of 28,400 tonnes of nickel and 2,000 tonnes of cobalt. This increase was despite production being impacted by various issues including a series of electrical storms, heavy rain and flooding as well as maintenance issues.

The failure of an acid plant heat exchanger in June saw production continuing at a reduced rate before the tie-in of a new temporary unit in July. In October, the acid plant was shut to facilitate the tie-in of the replacement heat exchanger. Production subsequently improved in the second half of the year, reflecting increased plant availability and increased processed ore-grade following the ramp-up to full production from the Murrin Murrin East ore body.

Capital expenditure in 2011 was strictly contained and included the development of the Murrin Murrin East mine, commissioning of the high-density slurry project and work on a sixth reduction autoclave and second flash vessel unit in the refinery's nickel circuit, all of which commenced prior to 2011.

In September 2011, Glencore launched an all cash offer to acquire all the remaining Minara shares not already owned by Glencore. In November, following the successful closure of the offer, Glencore acquired the remaining shares and now owns 100%. The total consideration in respect of the minority buyout was approximately $ 265 million.

Energy products

US $ million	Marketing activities	Industrial activities	2011	Marketing activities	Industrial activities	2010

Revenue	114 756	2 309	117 065	87 850	1 499	89 349
Adjusted EBITDA	724	571	1 295	470	359	829
Adjusted EBIT	697	375	1 072	450	235	685
Adjusted EBITDA margin (%)	1%	25%	-	1%	24%	-
Allocated average CE ¹	5 168	4 762²	9 930²	5 614²	3 376 ²	8 989 ²
Adjusted EBIT return on average CE	13%	8%	11%	8%	7%	8%
¹ The simple average of segment current and non current capital employed (see note 2 of the financial statements), adjusted for production related inventories, is applied as a proxy for marketing and industrial activities respectively. ² For the purposes of this calculation, capital employed has been adjusted to exclude Russneft, Atlas, PT Bakrie and Oteko Group loans (see note 8 of the financial statements), which generate interest income and do not contribute to Adjusted EBIT.

Market conditions

Selected average commodity prices

	2011	2010	Change
S&P GSCI Energy Index	333	266	25%
API2 ($/t)	122	93	31%
API4 ($/t)	116	92	26%
Prodeco realised price ($/t) ¹	95	82	16%
Shanduka realised export price ($/t)	108	96	13%
Shanduka realised domestic price ($/t)	43	35	23%
Oil price - Brent ($/bbl)	111	80	39%
¹ As at 31 December 2011, 27 million tonnes had been sold forward at an average price of $ 94 per tonne.

The underlying fundamentals of global energy markets generally improved during 2011 with average prices appreciably higher during 2011 than 2010. The GSCI Energy Index increased by 25% from December 2010 to December 2011.

Coal

During H1 2011 demand for coal was strongly supported by cold weather related demand, combined with supply shortages due to Australian flooding and adverse weather conditions in Colombia, which left the traded market relatively tight. The effect of the Japanese earthquake and tsunami on nuclear generation also played a role in increasing -demand for coal, especially in the environmentally sensitive Atlantic markets.

Thereafter, the global financial crisis and uncertainty surrounding consumption patterns led to many players taking a cautious approach towards longer term commitments and a move to a more spot price oriented market. This resulted in lower demand and prices. Prices fell further towards the end of the year, impacted by mild weather and robust coal supplies, especially from the US, which affected the Atlantic markets, whereas the Asian markets remained more robust and -resilient, although the general trend was also lower.

Oil

Brent front month prices started the year at $ 95 per barrel and ended at $ 107 per barrel, ranging between $ 93 per barrel and $ 127 per barrel, with most of the volatility seen during the first half of the year. During 2010, the range was between $ 70 per barrel to $ 95 per barrel. The increased volatility in H1 2011, driven by events in the Middle East and North Africa, the Japanese Tsunami and nuclear accident, European sovereign debt concerns and the IEA's decision to release strategic reserves in June, provided numerous marketing opportunities. For example, the removal of Libya's light sweet crude caused a sharp tightening of supplies of this grade. During H2 2011, oil prices trended downwards, and oil markets became dominated by bank and sovereign credit developments. The resulting unpredictability during this period resulted in more challenging trading conditions.

WTI became further dislocated from international grades in the second half of the year due to the domestic US crude benchmark's captive delivery location. The differential between Brent-WTI started the year at $ 2 per barrel differential, reaching a peak of $ 28 per barrel in mid-October before narrowing to $ 9 per barrel at the end of December 2011. The market ended with Brent and gasoil in backwardation but with gasoline showing the expected contango into the driving season.

Marketing

Highlights

2011 saw a strong year-on-year improvement, however this reflects, to a large extent, the weak base comparable period for oil marketing in 2010. 2011 continued to be negatively impacted by the weak freight environment in both the dry and wet market segments.

Adjusted EBIT for 2011 was $ 697 million, compared to $ 450 million in 2010, an increase of 55%.

Financial information

US $ million	2011	2010	Change

Revenue	114 756	87 850	31%
Adjusted EBITDA	724	470	54%
Adjusted EBIT	697	450	55%

Selected marketing volumes sold

million	2011	2010	Change

Thermal coal (MT)	91.0	92.2	- 1%
Metallurgical coal (MT)	4.1	8.0	- 49%
Coke (MT)	0.3	0.7	- 57%
Crude oil (bbls)	271.4	375.0	- 28%
Oil products (bbls)	577.8	522.9	10%

Coal

Actual volume reduction was applicable to the more specialised metallurgical coal and coke products, whereas thermal coal volumes were fairly stable year on year.

The reduced volatility and lower overall freight rates resulted in fewer arbitrage opportunities between the various origins, with smaller volumes of cross market arbitrage being available. The reduction in volumes of generally higher margin specialised products resulted in a negative variance compared to 2010, although overall profitability remained solid.

The outlook for 2012 remains positive, although some market weakness can be expected during the early part of the year due to the uncertainty surrounding the European sovereign debt crisis. Thereafter, we expect demand to pick up and remain stable on the back of lower inventories and reduced nuclear capacity. The availability of good quality coal is likely to remain constrained with most of the growth in production centred on lower quality products, which is therefore likely to allow good quality coal to enjoy solid premiums over the rest of the market.

Glencore's focus remains committed to continue a growth strategy around strengthening of global partnerships with key players in the Pacific and Atlantic markets and to build up arbitrage and multi sourcing capabilities beyond equity investments. Glencore is well placed in this respect with most of its production and equity partnerships covering premium quality coal.

Oil

On an overall barrels per day basis, volumes decreased by 5% to 2.3 million barrels per day in 2011 from 2.5 million barrels per day in 2010. Despite this modest decline in volume, there was no material impact to the department's overall business coverage in support of profit opportunities and future growth potential.

Whilst high volatility and favourable physical supply/demand conditions provided more opportunities in H1 2011, the market during H2 2011 proved more challenging, with weaker expectations for developed market economic growth, poor refining margins and weak freight rates, resulting in fewer arbitrage opportunities. Despite a general improvement in freight in the months leading up to May 2011, challenging conditions returned for the remainder of the year with the renewed sovereign debt crisis, evidenced by market oversupply (particularly of larger vessels), continuing high bunker fuel prices and lower back-haul.

Industrial activities

Highlights

• The energy industrial segment delivered a substantially improved performance during 2011 on the back of production increases at our coal operations in Colombia.

• Industrial revenues in 2011 were $ 2,309 million versus $ 1,499 million in 2010, an increase of 54%. Adjusted EBITDA and Adjusted EBIT for 2011 was $ 571 million and $ 375 million respectively, up 59% and 60% compared to $ 359 million and $ 235 million in 2010.

• Our coal mining and infrastructure expansion in Colombia is progressing well with Puerto Nuevo more than 50% complete and expected to be commissioned in Q1 2013.

• The Aseng oil field in Block I started production in November 2011, well ahead of its initial estimated timeline, with a total production of 2.8 million barrels by year-end, in excess of 50,000 barrels per day.

Financial information

US $ million	2011	2010	Change

Revenue
Prodeco	1 344	954	41%
Shanduka	323	292	11%
Coal	1 667	1 246	34%
Oil	642	253	154%
Total	2 309	1 499	54%

Adjusted EBITDA
Prodeco	418	278	50%
Shanduka	75	47	60%
Coal	493	325	52%
Oil	23	- 12	n.m.
Share of income from associates and dividends	55	46	20%
Total	571	359	59%
Adjusted EBITDA margin (%)	25%	24%	-

Adjusted EBIT
Prodeco	281	199	41%
Shanduka	49	14	250%
Coal	330	213	55%
Oil	- 10	- 24	n.m.
Share of income from associates and dividends	55	46	20%
Total	375	235	60%

Capex
Prodeco	510	277	-
Shanduka	29	27	-
Coal	539	304	-
Oil	706	514	-
Total	1 245	818	-

Production data

thousand MT ¹	Own	Buy-in Coal	2011 Total	Own	Buy-in Coal	2010 Total	Own production change

Thermal Coal
Prodeco	14 586	195	14 781	10 042	230	10 272	45%
Shanduka (Export) ²	498	-	498	385	-	385	29%
Shanduka (Domestic) ²	5 422	802	6 224	7 006	497	7 503	- 23%
Total	20 506	997	21 503	17 433	727	18 160	18%
¹ Controlled industrial assets only. Production is on a 100% basis. ² Shanduka production for 2010 restated to a saleable basis, previously reported on a 'ROM' (Run of Mine) basis.

thousand bbls	2011 Total	2010 Total	Change

Oil ¹
Block I	2 785	-	n.m.
Total	2 785	-	n.m.
¹ On a 100% basis. Glencore's ownership interest in the Aseng field is 23.75%

Operations

Prodeco (Glencore interest: 100%)

Total own coal production in 2011 was 14.6 million tonnes, an increase of 46% compared to 10.0 million tonnes in 2010. This substantial increase is largely attributable to the broad expansion project underway, which is forecast to increase production to 21 million tonnes by Q4 2013.

At the Calenturitas mine, Sector A has been opened contributing 4.3 million tonnes of the 7.6 million tonnes produced in 2011, a 46% increase from 5.2 million tonnes in 2010. Production at the La Jagua mine was 7.0 million tonnes, a 46% increase compared to 4.8 million tonnes in 2010.

The increased production across Prodeco's mines was somewhat constrained by the previously communicated delays in delivery of mining equipment from Japan in the aftermath of the Tsunami as well as the downtime of 21 rain days in excess of budget, primarily due to exceptionally heavy rains in October and November.

The largest capital expenditure project currently underway is the construction of the new direct loading port (Puerto Nuevo in Cienaga), which will provide Prodeco with higher annual throughput capacity and a lower operating cost, compared with the -current port at Puerto Prodeco (Zuñiga). The project is on schedule and expected to be commissioned in Q1 2013.

The remaining capital expenditure projects relate to ongoing mine fleet expansion and mine-based infrastructure support, which is substantially complete.

Shanduka (Glencore interest: 70%)

Total saleable own coal production for 2011 was 5.9 million tonnes, a 20% decrease compared to 2010 production of 7.4 million tonnes. This decrease was primarily due to the Kendal operations being placed on care and maintenance, which had the effect of reducing lower-margin domestic sales.

A pre-feasibility study related to the Springboklaagte project is progressing well and is showing positive results.

Umcebo (Glencore interest: 43.7%)

Glencore completed the acquisition of a 43.7% stake in Umcebo in December 2011. The transaction secures access to long-life resources from South Africa's principal coal field in Mpumalanga, which has established infrastructure for the transport of export quality thermal coal. In addition, it also secures an eventual 1.5 million tonnes of export allocation in Phase V of the Richards Bay Coal Terminal expansion.

Umcebo currently has three thermal coal mines in operation (Middelkraal, Kleinfontein and Klippan) and a standalone wash plant, with an aggregate annual production capacity of approximately 6.0 million tonnes of saleable coal. Furthermore, the Wonderfontein mine is scheduled to commence production in late 2012, with an annual saleable production capacity of 2.7 million tonnes.

Oil Exploration & Production (Glencore interest: Block I: 23.75%/Block O: 25%)

First production from the Aseng field (Block I - Equatorial Guinea) was achieved on 6 November 2011, ahead of the planned start-up of Q1 2012. Gross oil production achieved to the end of December 2011 was 2.8 million barrels, an average daily rate of over 50,000 barrels per day. Gross oil production since the start of 2012 has averaged 55,000 barrels per day.

Subsea development drilling and well completion work on the Alen gas/condensate field (Block O - Equatorial Guinea) remains ongoing, whilst the shallow water wellhead platform arrived and was installed in H2 2011. The project remains on schedule for first production in late 2013 with a target flow rate of 37,500 barrels per day.

Agricultural products

US $ million	Marketing activities	Industrial activities	2011	Marketing activities	Industrial activities	2010

Revenue	13 744	3 359	17 103	8 238	2 180	10 418
Adjusted EBITDA	- 8	23	15	659	107	766
Adjusted EBIT	- 8	- 39	- 47	659	58	717
Adjusted EBITDA margin (%)	n.m.	1%	-	8%	5%	-
Allocated average CE ¹	3 323	1 631	4 953	2 368	1 106	3 474
Adjusted EBIT return on average CE	0%	- 2%	- 1%	28%	5%	21%
¹ The simple average of segment current and non current capital employed (see note 2 of the financial statements), adjusted for production related inventories, is applied as a proxy for marketing and industrial activities respectively.

Market conditions

Selected average commodity prices

	2011	2010	Change

S&P GSCI Agriculture Index	490	363	35%
CBOT corn no.2 price (US¢/bu)	680	428	59%
ICE cotton price (US¢/lb)	137	94	46%
CBOT soya beans (US¢/bu)	1 317	1 049	26%
NYMEX sugar # 11 price (US¢/lb)	27	22	23%
CBOT wheat price (US¢/bu)	709	582	22%

Grain and oil seeds prices weakened in H2 2011, but nevertheless remained higher than in 2010. The GSCI Agriculture Index was on average 35% higher in 2011 compared to 2010.

A substantial Russian wheat production recovery, a record Australian wheat crop and reduced US feed demand due to high prices provided some relief to the tight supply/demand situation. South American production was however impacted by drought and global supplies are still not burdensome. With demand underpinned by growth in Asia, good crops will be required in 2012 to match expected demand.

Russian and Ukrainian export restrictions were lifted mid-2011, in response to good crops in both countries, but following near record exports from Russia, domestic prices again strengthened in late 2011.

The cotton market began to normalise by late 2011 after a period of unprecedented volatility. In H2 2011 prices ranged between US¢ 90 and US¢ 110 per pound, having been as high as US¢ 214 per pound early in the year. As noted earlier, contract performance issues and the disconnect between futures prices and physical markets at various times during the year, created a very challenging environment.

Marketing

Highlights

Grain, oil seed, sugar and freight volumes all trended higher in 2011, which is a positive development in an otherwise difficult year. Marketing Adjusted EBIT/EBITDA in 2011 was - $ 8 million compared to 2010's record $ 659 million. A number of factors, as described below, had an impact on the results, however cotton was far and away, the key negative.

Grain and oil seeds performed reasonably well but not on a par with 2010, which was a particularly strong year. Export restrictions in H1 2011 proved challenging, as did the European debt crisis induced volatility and uncertainty. When restrictions in Russia and the Ukraine were lifted, our up country infrastructure, elevator network and port ownership proved valuable in enabling the swift export of goods.

As noted before, in the cotton business, non and/or delayed contract performance by suppliers in a rising market, non-performance of customer contracts in the subsequent declining market and, by historical standards, the unprecedented disconnect/imperfect correlation between the futures market and the physical markets, created enormous challenges. These factors caused significant loss/opportunity cost to numerous market participants and the industry, in general, is now undergoing a review in -respect of pricing and performance enhancing mechanisms, length of contacts etc.

Financial information

US $ million	2011	2010	Change

Revenue	13 744	8 238	67%
Adjusted EBITDA/EBIT	- 8	659	n.m.

Selected marketing volumes sold

million MT	2011	2010	Change

Grains	25.3	20.9	21%
Oil/oilseeds	10.8	9.4	15%
Cotton	0.5	0.2	150%
Sugar	0.7	0.5	40%

Industrial activities

Highlights

With the exception of biodiesel production, processed volumes were considerably higher in 2011 compared to 2010. The significant increase in wheat milling production was due to an acquisition. The asset portfolio is in a phase of targeted expansion with a focus on storage, handling and oilseed processing facilities. Two new oilseed processing plants were acquired in 2011 and our new build projects remain on budget and time schedule.

Financial information

US $ million	2011	2010	Change

Revenue	3 359	2 180	54%
Adjusted EBITDA ¹	23	107	- 79%
Adjusted EBIT ¹	- 39	58	n.m.
Adjusted EBITDA margin (%)	1%	5%	-
Capex	221	71	-
¹ Includes share of income from associates and dividends of $ 18 million (2010: $ 19 million).

Production data

thousand MT	2011	2010	Change

Farming	827	587	41%
Oilseed crushing	2 008	1 593	26%
Oilseed crushing long term toll agreement	948	727	30%
Biodiesel	569	831	- 32%
Rice Milling	304	212	43%
Wheat Milling	1 001	362	177%
Sugarcane Processing	906	0	n.m.
Total	6 563	4 312	52%

Operations

Rio Vermelho (Glencore interest: 100%)

During 2011 Rio Vermelho crushed a total of 906,000 tonnes of sugarcane, producing 75,000 cubic metres of hydrous ethanol. Production was however below expectations, due to severe frosts which affected the region in June and August, and consequently lowered agricultural yields.

Rio Vermelho farmed 68% of its sugarcane feedstock in 2011, the balance of which was supplied by independent farmers. The share of own-farmed sugarcane is expected to increase over subsequent crop cycles as Rio Vermelho expands its own plantations.

A five year expansion plan is underway to increase crushing capacity from 1.0 million tonnes to 2.6 million tonnes, construct a Very High Pol ("VHP") sugar plant with a capacity of 260,000 tonnes and an anhydrous ethanol production capability of up to 80,000 cubic metres as well as the construction of a cogeneration plant capable of supplying 200,000 megawatt hours of surplus electricity to the grid. The first phase of the project, namely the construction of the VHP sugar plant, is expected to be completed by mid-2012. The total estimated project cost is $ 322 million.

Other Agricultural Products

Oilseed crushing

Processed volumes increased in 2011 versus 2010, however soybean crush margins, particularly in South American in H2 2011, were subdued. In December 2011, we acquired two soft seed processing facilities at Ústí in the Czech Republic and at Bodaczów in Poland, production of which will only be realised in 2012. Our Hungarian plant construction completed and commenced commissioning in December. The Timbues soya bean facility in Argentina is scheduled for completion by the end of H1 2012. These four facilities will add 3.6 million tonnes of processing capacity to our portfolio, including Glencore's share of Timbues of 2.0 million tonnes.

Biodiesel

Poor biodiesel esterification margins negatively impacted the 2011 results. Overcapacity in the EU and legislative changes that effectively diminished biodiesel demand were the main underlying causes. In response, we reduced our production volume by 32% compared to 2010 and took the unfortunate, but necessary measure of mothballing the Schwarzheide plant. The outlook in Europe remains challenging. In Argentina, our Renova joint venture performed well and the outlook is more positive, supported by the government's efforts to boost local biodiesel consumption.

Rice and wheat milling

Rice milled volumes rose by 43% in 2011, with better Argentine and Uruguayan rice crops. Wheat milling volume rose substantially due to our late 2010 acquisition of 50% of the Brazilian milling company Predilito. Both rice and wheat milling performed satisfactorily. In Brazil, the business is supported by strong brand recognition.

Farming

Overall farm production rose 41% and the business performed reasonably well due to favourable weather conditions and large crops.

Consolidated statement of income

for the years ended 31 December

US $ million	Notes	2011	2010

Revenue		186 152	144 978
Cost of goods sold		- 181 938	- 140 467
Selling and administrative expenses		- 857	- 1 063
Share of income from associates and jointly controlled entities		1 972	1 829
Gain/(loss) on sale of investments		9	- 6
Other expense - net	3	- 511	- 8
Dividend income		24	13
Interest income		339	281
Interest expense		- 1 186	- 1 217
Income before income taxes and attribution		4 004	4 340
Income tax credit/(expense)	4	264	- 234
Income before attribution		4 268	4 106

Attribution to hybrid profit participation shareholders	13	0	- 367
Attribution to ordinary profit participation shareholders	13	0	- 2 093

Income for the year		4 268	1 646

Attributable to:
Non controlling interests		220	355
Equity holders		4 048	1 291

Earnings per share
Basic (US $)	14	0.72	0.35
Diluted (US $)	14	0.69	0.35

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of comprehensive income

for the years ended 31 December

US $ million	Notes	2011	2010

Income for the year		4 268	1 646

Exchange (loss)/gain on translation of foreign operations		- 59	26
Loss on cash flow hedges		- 15	- 182
(Loss)/gain on available for sale financial instruments	7	- 1 206	25
Share of other comprehensive loss from associates and jointly controlled entities		- 25	- 43
Income tax relating to components of other comprehensive income		- 2	2
Net loss recognised directly in equity		- 1 307	- 172
Cash flow hedges transferred to the statement of income, net of tax		6	6
Other comprehensive loss		- 1 301	- 166
Total comprehensive income		2 967	1 480

Attributable to:
Non controlling interests		214	373
Equity holders		2753	1 107

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of financial position

as at 31 December

US $ million	Notes	2011	2010

Assets
Non current assets
Property, plant and equipment	5	14 639	12 088
Intangible assets	6	210	0
Investments in associates and jointly controlled entities	7	18 858	16 766
Other investments	7	1 547	2 438
Advances and loans	8	4 141	3 830
Deferred tax assets	4	1 039	369
		40434	35 491
Current assets
Inventories	9	17 129	17 393
Accounts receivable	10	21 895	18 994
Other financial assets	24	5 065	5 982
Prepaid expenses and other assets		297	118
Marketable securities		40	66
Cash and cash equivalents	11	1 305	1 463
		45 731	44 016
Assets held for sale	12	0	280
		45 731	44 296
Total assets		86 165	79 787

Equity and liabilities
Capital and reserves - attributable to equity holders
Share capital	13	69	37
Reserves and retained earnings		29 196	5 387
		29 265	5 424
Non controlling interests		3 070	2 894
		32 335	8 318
Hybrid profit participation shareholders	13	0	1 823
Ordinary profit participation shareholders	13	0	12 366
Total net assets attributable to profit participation shareholders, non controlling interests and equity holders		32 335	22 507
Other non current liabilities
Borrowings	17	19 844	18 251
Deferred income	18	158	164
Deferred tax liabilities	4	1 399	1 308
Provisions	19	953	719
		22 354	20 442
Current liabilities
Borrowings	17	8 185	11 881
Commodities sold with agreements to repurchase	9	39	484
Accounts payable	21	18 160	15 973
Provisions	19	98	172
Other financial liabilities	24	4 804	8 066
Income tax payable		190	217
		31 476	36 793
Liabilities held for sale	12	0	45
		31 476	36 838
Total equity and liabilities		86 165	79 787

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of cash flows

for the years ended 31 December

US $ million	Notes	2011	2010

Operating activities
Income before income taxes and attribution		4 004	4 340
Adjustments for:
Depreciation and amortisation		1 066	1 026
Share of income from associates and jointly controlled entities		- 1 972	- 1 829
Increase in non current provisions		1	11
(Gain)/loss on sale of investments - net		- 9	6
Unrealised mark to market movements on other investments		92	178
Impairments and other non cash items - net		72	- 434
Interest expense - net		847	936
Cash generated by operating activities before working capital changes		4 101	4 234
Working capital changes
Increase in accounts receivable ¹		- 1 797	- 4 142
Decrease/(increase) in inventories		239	- 1 724
(Decrease)/increase in accounts payable ²		- 1 616	2 868
Total working capital changes		- 3 174	- 2 998
Income tax paid		- 472	- 323
Interest received		121	229
Interest paid		- 919	- 1 031
Net cash (used)/generated by operating activities		- 343	111
Investing activities
Payments of non current advances and loans		- 320	- 825
Acquisition of subsidiaries, net of cash acquired	22	- 350	- 624
Disposal of subsidiaries		4	0
Purchase of investments		- 919	- 191
Xstrata rights issue settlement via exercise of Prodeco call option	3	0	- 2 000
Proceeds from sale of investments		155	131
Purchase of property, plant and equipment		- 2 606	- 1 657
Payments for exploration and evaluation		- 204	- 233
Proceeds from sale of property, plant and equipment		184	420
Dividends received from associates		366	224
Net cash (used) by investing activities		- 3 690	- 4 755
Financing activities
Share issuance, net of issue costs	13	7 616	0
Proceeds from issuance of Swiss Franc and Euro bonds		237	2 317
(Repayment of)/proceeds from Perpetual bonds		- 681	327
Repayment of Euro bonds		- 700	0
Proceeds from Convertible bonds		0	283
Proceeds from other non current borrowings		221	776
Repayment of other non current borrowings		- 169	- 413
Proceeds from Xstrata secured bank loans		384	0
(Repayment of)/net proceeds from current borrowings		- 1 493	2 945
Acquisition of additional interest in subsidiaries		- 315	- 75
Payment of profit participation certificates		- 861	- 883
Dividend paid to non controlling interests		- 18	- 28
Dividend paid to equity holders of the parent	15	- 346	- 2
Net cash generated by financing activities		3 875	5 247
(Decrease)/increase in cash and cash equivalents		- 158	603
Cash and cash equivalents, beginning of year		1 463	860
Cash and cash equivalents, end of year		1 305	1 463
¹ Includes movements in other financial assets, prepaid expenses, other assets and other non cash current assets. ² Includes movements in other financial liabilities and current provisions.

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of changes in equity

for the years ended 31 December

US $ million	Retained earnings	Share premium ¹	Other reserves ¹	Total reserves and retained earnings	Share capital	Total equity attributable to equity holders	Non controlling interests	Total equity

At 1 January 2010	4 413	0	- 18	4 395	46	4 441	1 258	5 699
Class B shares redeemed pursuant to the Restructuring ¹	0	0	0	0	- 46	- 46	0	- 46
Ordinary shares issued pursuant to the Restructuring ¹	0	0	9	9	37	46	0	46
At 1 January 2010 (restated)	4 413	0	- 9	4 404	37	4 441	1 258	5 699
Income for the year	1 291	0	0	1 291	0	1 291	355	1 646
Other comprehensive (loss)/income	- 43	0	- 141	- 184	0	- 184	18	- 166
Dividends paid ²	- 2	0	0	- 2	0	- 2	0	- 2
Return of capital to non controlling interests	0	0	0	0	0	0	- 28	- 28
Change in ownership interest in subsidiaries	0	0	- 134	- 134	0	- 134	59	- 75
Acquisition of subsidiaries	0	0	0	0	0	0	1 232	1 232
Equity portion of Convertible bonds	0	0	12	12	0	12	0	12
At 31 December 2010 (restated)	5 659	0	- 272	5 387	37	5 424	2 894	8 318

At 1 January 2011	5 659	0	- 272	5 387	37	5 424	2 894	8 318
Income for the year	4 048	0	0	4 048	0	4 048	220	4 268
Other comprehensive loss	- 25	0	- 1 270	- 1 295	0	- 1 295	- 6	- 1 301
Conversion of HPPS and PPS profit participation plans ¹	0	13 821	0	13 821	16	13 837	0	13 837
Conversion of LTS and LTPPS profit participation plans ¹	- 5 701	5 694	0	- 7	7	0	0	0
Issue of share capital ¹	0	7 607	0	7 607	9	7 616	0	7 616
Tax on Listing related expenses ³	0	21	0	21	0	21	0	21
Equity settled share-based payments ⁴	58	0	0	58	0	58	0	58
Change in ownership interest in subsidiaries	0	0	- 98	- 98	0	- 98	- 235	- 333
Acquisition of subsidiaries	0	0	0	0	0	0	215	215
Dividends paid ²	0	- 346	0	- 346	0	- 346	- 18	- 364
At 31 December 2011	4 039	26 797	- 1 640	29 196	69	29 265	3 070	32 335
¹ See note 13. ² See note 15. ³ See note 4. ⁴ See note 16.

The accompanying notes are an integral part of these consolidated financial statements.

Notes to the financial statements

1. Accounting policies

Corporate information

The Glencore Group (Glencore) is a leading integrated marketer and producer of natural resources, with worldwide activities in the marketing of metals and minerals, energy products and agricultural products and the production, refinement, processing, storage and transport of these products. Glencore operates on a global scale, marketing and distributing physical commodities sourced from third party producers and own production to industrial consumers, such as those in the automotive, steel, power generation, oil and food processing industries. Glencore also provides financing, logistics and other services to produ-cers and consumers of commodities. Glencore's long experience as a commodity merchant has allowed it to develop and build upon its expertise in the commodities which it markets and cultivate long-term relationships with a broad supplier and customer base across diverse industries and in multiple geographic regions. Glencore's marketing activities are supported by investments in industrial assets operating in Glencore's core commodities.

This preliminary announcement was authorised for issue in accordance with a Directors' resolution on 5 March 2012.

Listing/Restructuring of the Group

On 24 May 2011, Glencore International plc (the "Company") was admitted to the Official List of the UK Listing Authority and commenced trading on the London Stock Exchange's premium listed market and on the Hong Kong Stock Exchange on 25 May 2011 via a secondary listing (the "Listing"). The Company is incorporated in Jersey, domiciled in Switzerland, and is the new ultimate parent company of Glencore and owner of 100% of the issued share capital of Glencore International AG, following a restructuring of the ownership interests in Glencore International AG immediately prior to admission (the "Restructuring") (see note 13). The Company's registered office is at Queensway House, Hilgrove Street, St Helier, Jersey, JE1 1ES.

Although this consolidated financial information has been released in the name of the parent, Glencore International plc, it represents in-substance continuation of the existing Group, headed by Glencore International AG and the following accounting treatment has been applied to account for the Restructuring:

• the consolidated assets and liabilities of the subsidiary Glencore International AG were recognised and measured at the pre-Restructuring carrying amounts, without restatement to fair value;

• the retained earnings and other equity balances recognised in the consolidated statement of financial position reflect the consolidated retained earnings and other equity balances of Glencore International AG, as at 24 May 2011, immediately prior to the Restructuring, and the results of the period from 1 January 2011 to 24 May 2011, the date of the Restructuring, are those of Glencore International AG as the Company was not active prior to the Restructuring. Subsequent to the Restructuring, the equity structure reflects the applicable movements in equity of Glencore International plc, including the equity instruments issued to effect the Restructuring and the Listing; and

• comparative numbers presented in the consolidated financial statements are those reported in the consolidated financial statements of Glencore International AG, for the year ended 31 December 2010, except for the presentation of the share capital, other reserves and per share amounts, which have been restated to reflect the change in the nominal value of the ordinary shares resulting from the Restructuring as if Glencore International plc had been the parent company during such periods.

Basis of preparation

The financial statements included within this preliminary announcement are based on the Group's financial statements which are prepared in accordance with:

• International Financial Reporting Standards (IFRS) and interpretations as adopted by the European Union (EU) effective as of 31 December 2011; and

• IFRS and interpretations as issued by the International Accounting Standards Board (IASB) effective as of 31 December 2011.

The financial statements are prepared under the historical cost convention except for the revaluation to fair value of certain financial assets, liabilities and marketing inventories and have been prepared on a going concern basis. The Directors have made this assessment after consideration of the Group's budgeted cash flows and related assumptions, including appropriate stress testing thereof, key risks and uncertainties, undrawn debt facilities and debt maturity review and in accordance with the Going Concern and Liquidity Guidance for Directors of UK Companies 2009 published by the Financial Reporting Council. Further information on Glencore's business activities, cash flows, liquidity and performance are set out in the Financial Review and its objectives, policies and processes for managing its capital and financial risks are detailed in note 23.

All amounts are expressed in millions of United States Dollars, unless other-wise stated, consistent with the predominant functional currency of Glencore's operations.

The unaudited financial information for the year ended 31 December 2011 and audited financial information for the year ended 31 December 2010 contained in this document does not constitute statutory accounts as defined in Article 105 of Companies (Jersey) Law 1991. The financial information for the year ended 31 December 2011 has been extracted from the financial statements of Glencore International plc which will be delivered to the Registrar in due course. The audit report for 31 December 2011 is yet to be signed by the auditors.

Changes in accounting policies and comparability

The following amendments to the existing standards and interpretations were adopted as of 1 January 2011:

• IAS 24 - Related Party disclosures;

• IFRIC 14 - Prepayments of a minimum funding requirement (amendment);

• IFRIC 19 - Extinguishing financial liabilities with equity instruments.

The adoption of these new and revised standards and interpretations did not have a material impact on the recognition, measurement or disclosure of reported amounts.

In addition, Glencore adopted IFRS 2 - Share-based Payment which details the accounting and disclosure requirements with respect to the phantom equity award plan (see note 16) established concurrent with the Listing and IAS 38 - Intangible Assets with respect to the acquisition of the Pacorini Group and other business combinations completed during the year and the recognition and accounting for goodwill and other intangible assets (see notes 22 and 6).

At the date of authorisation of these financial statements, the following standards and interpretations applicable to Glencore were issued but not yet effective:

• IFRS 9 - Financial Instruments

• IFRS 10 - Consolidated Financial Statements

• IFRS 11 - Joint Arrangements

• IFRS 12 - Disclosure of Interests in Other Entities

• IFRS 13 - Fair Value Measurement

• IAS 19 - Employee Benefits (2011)

• IAS 27 - Separate Financial Statements (2011)

• IAS 28 - Investments in Associates and Joint Ventures (2011)

• Amendments to IFRS 7 - Financial Instruments: Disclosures

• Amendments to IAS 1 - Presentation of Items of Other Comprehensive Income

• Amendments to IAS 12 - Deferred Tax: Recovery of Underlying Assets

• Amendments to IAS 32 - Offsetting Financial Assets and Financial Liabilities

• IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine

The Directors are currently evaluating the impact these new standards and interpretations will have on the financial statements of Glencore.

Principles of consolidation

The consolidated financial statements of Glencore include the accounts of the Company and its subsidiaries. A subsidiary is an entity that is ultimately controlled by the Company. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Control is usually assumed where Glencore ultimately owns or controls more than 50% of the voting rights, unless evidence exists to the contrary. The results of subsidiaries acquired or disposed of during the year are consolidated from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intercompany balances, transactions and unrealised profits are eliminated.

Non controlling interests in subsidiaries are identified separately from Glencore's equity and are initially measured either at fair value or at the non controlling interests' proportionate share of the fair value of the acquiree's identifiable net assets. Subsequent to acquisition, the carrying amount of non controlling interests is the amount of those interests at initial recognition plus the non controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non controlling interests even if this results in the non controlling interests having a deficit balance.

Changes in Glencore's interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions with any difference between the amount by which the non controlling interests are adjusted and the fair value of the consideration paid or received being recognised directly in equity and attributed to equity holders of Glencore.

Investments in associates, jointly controlled entities and joint venture operations

Associates and jointly controlled entities (together Associates) in which Glencore exercises significant influence or joint control are accounted for using the equity method. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control over those policies. Significant influence is presumed if Glencore holds between 20% and 50% of the voting rights, unless evidence exists to the contrary. Joint control is the contractually agreed sharing of control over an economic entity where strategic and/or key operating decisions require unanimous decision making.

Equity accounting involves Glencore recording its share of the Associate's net income and equity. Glencore's interest in an Associate is initially recorded at cost and is subsequently adjusted for Glencore's share of changes in net assets of the Associate, less any impairment in the value of individual investments. Where Glencore transacts with an Associate, unrealised profits and losses are eliminated to the extent of Glencore's interest in that Associate.

Changes in Glencore's interests in Associates are accounted for as a gain or loss on disposal with any difference between the amount by which the carrying value of the Associate is adjusted and the fair value of the consideration received being recognised directly in the statement of income.

Where Glencore undertakes activities under joint venture operation or asset arrangements, Glencore reports such interests using the proportionate consolidation method. Glencore's share of the assets, liabilities, income, expenses and cash flows of jointly controlled operations or asset arrangements are consolidated with the equivalent items in the consolidated financial statements on a line by line basis.

Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method of accounting, whereby the identifiable assets, liabilities and contingent liabilities (identifiable net assets) are measured on the basis of fair value at the date of acquisition. Acquisition related costs are recognised in the statement of income as incurred.

Where a business combination is achieved in stages, Glencore's previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date Glencore attains control) and the resulting gain or loss, if any, is recognised in the statement of income.

Where the fair value of consideration transferred for a business combination exceeds the fair values attributable to Glencore's share of the identifiable net assets, the difference is treated as purchased goodwill, which is not amortised but is reviewed
annually for impairment and when there is an indication of impairment. Any impairment identified is immediately recognised in the statement of income. If the fair value attributable to Glencore's share of the identifiable net assets exceeds the consideration transferred, the difference is immediately recognised in the statement of income.

Similar procedures are applied in accounting for the purchases of interests in Associates. Any goodwill arising from such purchases is included within the carrying amount of the investment in Associates, but not amortised thereafter. Any excess of Glencore's share of the net fair value of the Associate's identifiable net assets over the cost of the investment is included in the statement of income in the period of the purchase.

The main operating and finance subsidiaries and investments of Glencore are listed in note 30.

Non current assets held for sale and disposal groups

Non current assets and assets and liabilities included in disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use, they are available for immediate
disposal and the sale is highly probable. Non current assets held for sale are measured at the lower of their carrying amount or fair value less costs to sell.

Revenue recognition

Revenue is recognised when the seller has transferred to the buyer all significant risks and rewards of ownership of the assets sold. Revenue excludes any applicable sales taxes and is recognised at the fair value of the consideration received or receivable to the extent that it is probable that economic benefits will flow to Glencore and the revenues and costs can be reliably measured. In most instances sales revenue is recognised when the product is delivered to the destination specified by the
customer, which is typically the vessel on which it is shipped, the destination port or the customer's premises.

For certain commodities, the sales price is determined on a provisional basis at the date of sale as the final selling price is subject to movements in market prices up to the date of final pricing, normally ranging from 30 to 90 days after initial booking. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable. The revenue adjustment mechanism embedded within provisionally priced sales arrangements has the character of a commodity derivative. Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value are recognised as an adjustment to revenue. In all cases, fair value is estimated by reference to forward market prices.

Interest and dividend income is recognised when the right to receive payment has been established, it is probable that the economic benefits will flow to Glencore and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the applicable effective interest rate.

Foreign currency translation

Glencore's reporting currency and the functional currency of the majority of its operations is the U.S. Dollar as this is assessed to be the principal currency of the economic environment in which they operate.

Foreign currency transactions

Transactions in foreign currencies are converted into the functional currency of each entity using the exchange rate prevailing at the transaction date. Monetary assets and liabilities outstanding at year end are converted at year end rates. The resulting exchange differences are recorded in the consolidated statement of income.

Translation of financial statements

For the purposes of consolidation, assets and liabilities of group companies whose functional currency is in a currency other than the U.S. Dollar are translated into U.S. Dollars using year end exchange rates, while their statements of income are translated using average rates of exchange for the year. Goodwill and fair value adjustments arising from the acquisition of a foreign -operation are treated as assets and liabilities of the foreign -operation and are translated at the closing rate. Translation adjustments are included as a separate component of shareholders' equity and have no statement of income impact to the extent that no disposal of the foreign operation has occurred.

Repurchase agreements

Glencore enters into repurchase transactions where it sells certain marketing inventories, but retains all or a significant portion of the risks and rewards relating to the transferred inventory. Repurchase transactions are treated as collateralised borrowings, whereby the inventories are not derecognised from the statement of financial position and the cash received is recorded as a corresponding obligation within the statement of financial position as "commodities sold with agreements to repurchase" or, if the repurchase obligation is optional, within "trade advances from buyers".

Borrowing costs

Borrowing costs are expensed as incurred except where they relate to the financing of construction or development of qualifying assets in which case they are capitalised up to the date when the qualifying asset is ready for its intended use.

Retirement benefits

Glencore operates various pension schemes in accordance with local requirements and practices of the respective countries. The annual costs for defined contribution plans that are funded by payments to separate trustee administered funds or insurance companies equal the contributions that are required under the plans and are accounted for as an expense. Glencore uses the projected unit credit actuarial method to determine the present value of its defined benefit obligations and the related current service cost and, where applicable, past service cost.

Actuarial gains and losses are accounted for using the corridor method. Under this method, to the extent that any cumulative unrecognised actuarial gain or loss exceeds 10% of the greater of the present value of the defined benefit obligation and the fair value of plan assets, that excess is recognised in income over the expected average remaining working lives of the employees participating in the plan. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight line basis over the average period until the benefits become vested.

Share-based payments

Equity-settled share-based payments

Equity-settled share-based payments are measured at the fair value of the awards based on the market value of the shares at the grant date. Fair value excludes the effect of non market-based vesting conditions. The fair value is charged to the statement of income and credited to retained earnings on a straight-line basis over the period the estimated number of awards are expected to vest.

At each balance sheet date, Glencore revises its estimate of the number of equity instruments expected to vest as a result of the effect of non market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to retained earnings.

Cash-settled share-based payments

For cash-settled share-based payments, a liability is initially recognised at fair value based on the estimated number of awards that are expected to vest, adjusting for market and non market based performance conditions. Subsequently, at each reporting period until the liability is settled, the liability is remeasured to fair value with any changes in fair value recognised in the statement of income.

Income taxes

Income taxes consist of current and deferred income taxes. Current taxes represent income taxes expected to be payable based on enacted or substantively enacted tax rates at the period end and expected current taxable income, and any adjustment to tax payable in respect of previous years. Deferred taxes are recognised for temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, using enacted or substantively enacted income tax rates which will be effective at the time of reversal of the underlying temporary difference. Deferred tax assets and unused tax losses are only recognised to the extent that their recoverability is probable. Deferred tax assets are reviewed at reporting period end and amended to the extent that it is no longer probable that the related benefit will be realised. To the extent that a deferred tax asset not previously recognised fulfils the criteria for recognition, an asset is recognised.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same authority and Glencore has both the right and the intention to settle its current tax assets and liabilities on a net or simultaneous basis. The tax effect of certain temporary differences is not recognised principally with respect to the initial recognition of an asset or liability (other than those arising in a business combination or in a manner that initially impacted accounting or taxable profit) and temporary differences relating to investments in subsidiaries and associates to the extent that Glencore can control the timing of the reversal of the temporary difference and it is probable the temporary difference will not reverse in the foreseeable future. Deferred tax is provided in respect of fair value adjustments on acquisitions. These adjustments may relate to assets such as extraction rights that, in general, are not eligible for income tax allowances.

Royalties, extraction taxes and other levies/taxes are treated as taxation arrangements when they have the characteristics of an income tax including being imposed and determined in accordance with regulations established by the respective government's taxation authority.

Current and deferred tax are recognised as an expense or income in the statement of income, except when they relate to items that are recognised outside the statement of income (whether in other comprehensive income or directly in equity) or where they arise from the initial accounting for a business combination.

Exploration and evaluation expenditure

Exploration and evaluation expenditure relates to costs incurred on the exploration and evaluation of potential mineral and petroleum resources and includes costs such as researching and analysing historical exploration data, exploratory drilling, trenching, sampling and the costs of pre-feasibility studies. Exploration and evaluation expenditure for each area of interest, other than that acquired from the purchase of another company, is charged to the statement of income as incurred except when the expenditure will be recouped from future exploitation or sale of the area of interest and it is planned to continue with active and significant operations in relation to the area, or at the reporting period end, the activity has not reached a stage which permits a reasonable assessment of the existence of commercially recoverable reserves, in which case the expenditure is capitalised. Purchased exploration and evaluation assets are recognised at their fair value at acquisition.

Capitalised exploration and evaluation expenditure is recorded as a component of mineral and petroleum rights in property, plant and equipment.

All capitalised exploration and evaluation expenditure is monitored for indications of impairment. Where a potential impairment is indicated, an assessment is performed for each area of interest or at the cash generating unit level. To the extent that capitalised expenditure is not expected to be recovered it is charged to the statement of income.

Development expenditure

When commercially recoverable reserves are determined and such development receives the appropriate approvals, capitalised exploration and evaluation expenditure is transferred to construction in progress. Upon completion of development and commencement of production, capitalised development costs are transferred as required to either mineral and petroleum rights or deferred mining costs and depreciated using the unit of production method (UOP).

Property, plant and equipment and intangible assets

Property, plant and equipment and intangible assets are stated at cost, being the fair value of the consideration given to acquire or construct the asset, including directly attributable costs required to bring the asset to the location or to a condition necessary for operation and the direct cost of dismantling and removing the asset, less accumulated depreciation and any accumulated impairment losses. Intangible assets include goodwill, future warehousing fees and trademarks.

Property, plant and equipment and intangible assets are depreciated to their estimated residual value over the estimated useful life of the specific asset concerned, or the estimated remaining life of the associated mine, field or lease. Depreciation commences when the asset is available for use. Identifiable intangible assets with the finite life are amortised on a straight-line basis over their expected useful life. Goodwill is not depreciated.

The major categories of property, plant and equipment are depreciated on a UOP and/or straight-line basis as follows:

Buildings	10 - 45 years
Land	not depreciated
Plant and equipment	3 - 30 years/UOP
Mineral rights and development costs	UOP
Deferred mining costs	UOP

Assets under finance leases, where substantially all the risks and rewards of ownership transfer to the Group as lessee, are capitalised and amortised over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. All other leases are classified as operating leases, the expenditures for which, are charged against income over the accounting periods covered by the lease term.

Deferred stripping costs

Stripping costs incurred in the development of a mine (or pit) before production commences are capitalised as part of the cost of constructing the mine (or pit) and subsequently amortised over the life of the mine (or pit) on a unit of production basis. Production stripping costs are deferred when the actual stripping ratio incurred significantly exceeds the expected long term average stripping ratio and are subsequently amortised when the actual stripping ratio falls below the long term average stripping ratio. Where the ore is expected to be evenly distributed, waste removal is expensed as incurred.

Mineral and petroleum rights

Mineral and petroleum reserves, resources and rights (together Mineral Rights) which can be reasonably valued, are recognised in the assessment of fair values on acquisition. Mineral Rights for which values cannot be reasonably determined are not recognised. Exploitable Mineral Rights are amortised using the UOP over the commercially recoverable reserves and, in certain circumstances, other mineral resources. Mineral resources are included in amortisation calculations where there is a high degree of confidence that they will be extracted in an economic manner.

Restoration, rehabilitation and decommissioning

Restoration, rehabilitation and decommissioning costs -arising from the installation of plant and other site preparation work, discounted to their net present value, are provided for and capitalised at the time such an obligation arises. The costs are charged to the statement of income over the life of the operation through depreciation of the asset and the unwinding of the discount on the provision.

Costs for restoration of subsequent site disturbance, which is created on an ongoing basis during production, are provided for at their net present values and charged to the statement of income as extraction progresses.

Other investments

Equity investments, other than investments in Associates, are recorded at fair value unless such fair value is not reliably determinable in which case they are carried at cost. Changes in fair value are recorded in the statement of income unless they are classified as available for sale, in which case fair value movements are recognised in other comprehensive income and are subsequently recognised in the statement of income when realised by sale or redemption, or when a reduction in fair value is judged to be a significant or prolonged decline.

Impairment

Glencore conducts at least annually an internal review of asset values which is used as a source of information to assess for any indications of impairment. Formal impairment tests are carried out at least annually for cash generating units containing goodwill and for all other non current assets when events or changes in circumstances indicate the carrying value may not be recoverable.

A formal impairment test involves determining whether the carrying amounts are in excess of their recoverable amounts. An asset's recoverable amount is determined as the higher of its fair value less costs to sell and its value in use. Such reviews are undertaken on an asset-by-asset basis, except where assets do not generate cash flows independent of other assets, in which case the review is undertaken at the cash generating unit level.

If the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recorded in the income statement to reflect the asset at the lower amount.

An impairment loss is reversed in the statement of income if there is a change in the estimates used to determine the recoverable amount since the prior impairment loss was recognised. The carrying amount is increased to the recoverable amount but not beyond the carrying amount net of depreciation or amortisation which would have arisen if the prior impairment loss had not been recognised. Goodwill impairments and impairments of available for sale equity investments are not subsequently reversed.

Provisions

Provisions are recognised when Glencore has a present obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits that can be reliably estimated will be required to settle the liability.

Inventories

The majority of marketing inventories are valued at fair value less costs to sell with the remainder valued at the lower of cost or net realisable value. Unrealised gains and losses from changes in fair value are reported in cost of goods sold.

Production inventories are valued at the lower of cost or net realisable value. Cost is determined using the first in first out (FIFO) or the weighted average method and comprises material costs, labour costs and allocated production related overhead costs. Financing and storage costs related to inventory are -expensed as incurred.

Cash and cash equivalents

Cash and cash equivalents comprise cash held at bank, cash in hand and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

Financial instruments

Financial assets are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available for sale financial assets depending upon the purpose for which the financial assets were acquired. Financial assets are initially recognised at fair value on the trade date, including, in the case of instruments not recorded at fair value through profit or loss, directly attributable transaction costs. Subsequently, financial assets are carried at fair value (other investments, derivatives and marketable secur-ities) or amortised cost less impairment (accounts receivable and -advances and loans). Financial liabilities other than derivatives are initially recognised at fair value of consideration received net of transaction costs as appropriate and subsequently carried at amortised cost.

Convertible bonds

At the date of issue, the fair value of the liability component is determined by discounting the contractual future cash flows using a market rate for a similar non convertible instrument. The liability component is recorded as a liability on an amortised cost basis using the effective interest method. The equity component is recognised as the difference between the fair value of the proceeds as a whole and the fair value of the liability component and it is not subsequently remeasured. On conversion, the liability is reclassified to equity and no gain or loss is recognised in the statement of income and upon expiry of the conversion rights, any remaining equity portion will be transferred to retained earnings.

Derivatives and hedging activities

Derivative instruments, which include physical contracts to sell or purchase commodities that do not meet the own use exemption, are initially recognised at fair value when Glencore becomes a party to the contractual provisions of the instrument and are subsequently remeasured to fair value at the end of each reporting period. Fair values are determined using quoted market prices, dealer price quotations or using models and other valuation techniques, the key inputs for which include current market and contractual prices for the underlying instrument, time to expiry, yield curves, volatility of the underlying instrument and counterparty risk.

Gains and losses on derivative instruments for which hedge -accounting is not applied, other than the revenue adjustment mechanism embedded within provisionally priced sales, are recognised in cost of goods sold.

Those derivatives qualifying and designated as hedges are -either (i) a Fair Value Hedge of the change in fair value of a recognised asset or liability or an unrecognised firm commitment, or (ii) a Cash Flow Hedge of the change in cashflows to be received or paid relating to a recognised asset or liability or a highly probable transaction.

A change in the fair value of derivatives designated as a Fair Value Hedge is reflected together with the change in the fair value of the hedged item in the statement of income.

A change in the fair value of derivatives designated as a Cash Flow Hedge is initially recognised as a cash flow hedge -reserve in shareholders' equity. The deferred amount is then released to the statement of income in the same periods during which the hedged transaction affects the statement of income. Hedge ineffectiveness is recorded in the statement of income when it occurs.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in shareholders' equity and is recognised in the statement of income when the committed or forecast transaction is ultimately recognised in the statement of income. However, if a forecast or committed transaction is no longer expected to occur, the cumulative gain or loss that was recognised in equity is immediately transferred to the statement of income.

A derivative may be embedded in a "host contract". Such combinations are known as hybrid instruments and at the date of issuance, the embedded derivative is separated from the host contract and accounted for as a stand alone derivative if the criteria for separation are met. The host contract is accounted for in accordance with its relevant accounting policy.

Critical accounting policies, key judgments and estimates

The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual outcomes could differ from those estimates.

Glencore has identified the following areas as being critical to understanding Glencore's financial position as they require management to make complex and/or subjective judgments and estimates about matters that are inherently uncertain:

Valuation of derivative instruments

Derivative instruments are carried at fair value and Glencore evaluates the quality and reliability of the assumptions and data used to measure fair value in the three hierarchy levels, Level 1, 2 and 3, as prescribed by IFRS 7. Fair values are determined in the following ways: externally verified via comparison to quoted market prices in active markets (Level 1); by using models with externally verifiable inputs (Level 2); or by using alternative procedures such as comparison to comparable instruments and/or using models with unobservable market inputs requiring Glencore to make market based assumptions (Level 3). For more details refer to note 24.

Depreciation and amortisation of mineral and petroleum rights, project development costs and plant and equipment

Mineral and petroleum rights, project development costs and certain plant and equipment are amortised using UOP. The calculation of the UOP rate of amortisation, and therefore the annual amortisation charge to operations, can fluctuate from initial estimates. This could generally result when there are significant changes in any of the factors or assumptions used in estimating mineral or petroleum reserves, notably changes in the geology of the reserves and assumptions used in determining the economic feasibility of the reserves. Such changes in reserves could similarly impact the useful lives of assets depreciated on a straight line basis, where those lives are limited to the life of the project, which in turn is limited to the life of the proven and probable mineral or petroleum reserves. Estimates of proven and probable reserves are prepared by experts in extraction, geology and reserve determination. Assessments of UOP rates against the estimated reserve and resource base and the operating and development plan are performed regularly.

Impairments

Investments in Associates and other investments, advances and loans and property, plant and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be fully recoverable or at least annually for goodwill and other indefinite life intangible assets. If an asset's recoverable amount is less than the asset's carrying amount, an impairment loss is recognised. Future cash flow estimates which are used to calculate the asset's fair value are based on expectations about future operations primarily comprising estimates about production and sales volumes, commodity prices, reserves and resources, operating, rehabilitation and restoration costs and capital expenditures. Changes in such estimates could impact recoverable values of these assets. Estimates are reviewed regularly by management.

Provisions

The amount recognised as a provision, including tax, legal, restoration and rehabilitation, contractual and other exposures or obligations, is the best estimate of the consideration required to settle the related liability, including any related interest charges, taking into account the risks and uncertainties surrounding the obligation. The Group assesses its liabilities and contingencies based upon the best information available, relevant tax laws and other appropriate requirements.

Restoration, rehabilitation and decommissioning costs

A provision for future restoration, rehabilitation and decommissioning costs requires estimates and assumptions to be made around the relevant regulatory framework, the magnitude of the possible disturbance and the timing, extent and costs of the required closure and rehabilitation activities. To the extent that the actual future costs differ from these estimates, adjustments will be recorded and the statement of income could be impacted. The provisions including the estimates and assumptions contained therein are reviewed regularly by management.

Taxation

Deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those deferred tax assets are likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the tax assets when they do reverse. These judgements are subject to risk and uncertainty and hence, to the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised in income in the period in which the change occurs. The recoverability of deferred tax assets including the estimates and assumptions contained therein are reviewed regularly by management.

Fair value

In addition to recognising derivative instruments at fair value, as discussed above, an assessment of fair value of assets and liabilities is also required in accounting for other transactions, most notably, business combinations and disclosures related to fair values of marketing inventories, financial assets and liabilities. In such instances, fair value measurements are estimated based on the amounts for which the assets and liabilities could be exchanged at the relevant transaction date or reporting period end, and are therefore not necessarily reflective of the likely cashflow upon actual settlements. Where fair value measurements cannot be derived from publicly available information, they are estimated using models and other valuation methods. To the extent possible, the -assumptions and inputs used take into account externally verifiable inputs. However, such information is by nature subject to uncertainty, particularly where comparable market based transactions rarely exist.

2. segment information

Glencore is organised and operates on a worldwide basis in three core business segments - metals and minerals, energy products and agricultural products, with each business segment responsible for the marketing, sourcing, hedging, logistics and industrial investment activities of their respective products and reflecting the structure used by Glencore's management to assess the performance of Glencore.

The business segments' contributions to the Group are primarily derived from the net margin or premium earned from physical marketing activities (net sale and purchase of physical commodities), provision of marketing and related value-add services and the margin earned from industrial asset activities (net resulting from the sale of physical commodities over the cost of production and/or cost of sales) and comprise the following underlying key commodities:

• Metals and minerals: Zinc, copper, lead, alumina, aluminium, ferro alloys, nickel, cobalt and iron ore, including smelting, refining,
mining, processing and storage related operations of the relevant commodities;

• Energy products: Crude oil, oil products, steam coal and metallurgical coal supported by investments in coal mining and oil production operations, ports, vessels and storage facilities;

• Agriculture products: Wheat, corn, barley, rice, oil seeds, meals, edible oils, biofuels, cotton and sugar supported by investments in farming, storage, handling, processing and port facilities.

Corporate and other: statement of income amounts represent Glencore's share of income related to Xstrata and other unallocated Group related expenses (mainly variable pool bonus accrual). Balance sheet amounts represent Group related balances.

The financial performance of the segments is principally evaluated with reference to Adjusted EBIT/EBITDA which is the net result of revenue less cost of goods sold and selling and administrative expenses plus share of income from associates and jointly controlled entities and dividend income as disclosed on the face of the consolidated statement of income. Furthermore, given that funding costs in relation to working capital employed in the marketing activities are sought to be "recovered" via transactional terms, the performance of marketing activities is also assessed at a net income level.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. Glencore accounts for inter-segment sales and transfers where applicable as if the sales or transfers were to third parties, i.e. at current market prices.

2011 US $ million	Metals and minerals	Energy products	Agricultural products	Corporate and other	Total

Revenue from third parties	51 984	117 065	17 103	0	186 152

Marketing activities
Adjusted EBIT	1 242	697	- 8	- 20	1 911
Depreciation and amortisation	5	27	0	11	43
Adjusted EBITDA	1 247	724	- 8	- 9	1 954

Industrial activities
Adjusted EBIT	1 357	375	- 39	1 794	3 487
Depreciation and amortisation	765	196	62	0	1 023
Adjusted EBITDA	2 122	571	23	1 794	4 510

Total adjusted EBITDA	3 369	1 295	15	1 785	6 464
Depreciation and amortisation	- 770	- 223	- 62	- 11	- 1 066
Total adjusted EBIT	2 599	1 072	- 47	1 774	5 398

Significant items ¹
Other expense - net ²					- 511
Share of Associates' exceptional items ³					- 45
Interest expense - net					- 847
Gain on sale of investments					9
Income tax credit					264
Income before attribution					4 268
¹ Significant items of income and expense which, due to their financial impacts, nature or the expected infrequency of the events giving rise to them, have been separated for internal reporting and analysis of Glencore's results. ² See note 3. ³ Share of Associates' exceptional items comprise Glencore's share of exceptional charges booked directly by Xstrata ($ 25 million) and Century ($ 20 million).

2011 US $ million	Metals and minerals	Energy products	Agricultural products	Corporate and other	Total

Current assets	18 506	17 605	5 110	3 165	44 386
Current liabilities	- 7 676	- 11 312	- 1 589	- 2 675	- 23 252
Allocatable current capital employed	10 830	6 293	3 521	490	21 134

Property, plant and equipment	9 367	4 210	1 062	0	14 639
Intangible assets	169	29	12	0	210
Investments in Associates and other investments	2 950	1 060	206	16 189	20 405
Non current advances and loans	1 280	2 723	138	0	4 141
Allocatable non current capital employed	13 766	8 022	1 418	16 189	39 395

Other assets¹	0	0	0	2 384	2 384
Other liabilities²	0	0	0	- 30 578	- 30 578
Total net assets	24 596	14 315	4 939	- 11 515	32 335

Additions to non current assets	1 463	1 510	227	0	3 200
¹ Other assets include deferred tax assets, marketable securities and cash and cash equivalents. ² Other liabilities include borrowings, deferred income, deferred tax liabilities, non current provisions and commodities sold with agreements to repurchase.

2010 US $ million	Metals and minerals	Energy products	Agricultural products	Corporate and other	Total

Revenue from third parties	45 211	89 349	10 418	0	144 978

Marketing activities
Adjusted EBIT	1 401	450	659	- 173	2 337
Depreciation and amortisation	0	20	0	10	30
Adjusted EBITDA	1 401	470	659	- 163	2 367

Industrial activities
Adjusted EBIT	1 160	235	58	1 500	2 953
Depreciation and amortisation	708	124	49	0	881
Adjusted EBITDA	1 868	359	107	1 500	3 834

Total adjusted EBITDA	3 269	829	766	1 337	6 201
Depreciation and amortisation	- 708	- 144	- 49	- 10	- 911
Total adjusted EBIT	2 561	685	717	1 327	5 290

Significant items ¹
Other expense - net ²					- 8
Share of Associates' exceptional items					0
Interest expense - net					- 936
Loss on sale of investments					- 6
Income tax expense					- 234
Income before attribution					4 106
¹ Significant items of income and expense which, due to their financial impacts, nature or the expected infrequency of the events giving rise to them, have been separated for internal reporting and analysis of Glencore's results. ² See note 3.

2010 US $ million	Metals and minerals	Energy products	Agricultural products	Corporate and other	Total

Current assets	17 901	15 759	5 958	2 869	42 487
Current liabilities	- 8 597	- 11 237	- 2 000	- 2 594	- 24 428
Allocatable current capital employed	9 304	4 522	3 958	275	18 059

Property, plant and equipment	8 860	2 489	739	0	12 088
Investments in Associates and other investments	2 134	1 108	157	15 805	19 204
Non current advances and loans	813	2 832	113	72	3 830
Allocatable non current capital employed	11 807	6 429	1 009	15 877	35 122

Other assets¹	0	0	0	2 178	2 178
Other liabilities²	0	0	0	- 32 852	- 32 852
Total net assets	21 111	10 951	4 967	- 14 522	22 507

Additions to non current assets	1 001	818	71	0	1 890
¹ Other assets include deferred tax assets, marketable securities, cash and cash equivalents and assets held for sale. ² Other liabilities include borrowings, deferred income, deferred tax liabilities, provisions, commodities sold with agreements to repurchase and liabilities held for sale.

Geographical information

US $ million	2011	2010

Revenue from third parties ¹
The Americas	45 836	39 183
Europe	70 323	47 724
Asia	47 759	42 820
Africa	20 538	13 975
Oceania	1 696	1 276
	186 152	144 978

Non current assets ²
The Americas	4 535	3 755
Europe	17 293	15 224
Asia	5 838	5 880
Africa	4 555	2 702
Oceania	1 486	1 293
	33 707	28 854
¹ Revenue by geographical destination is based on the country of incorporation of the sales counterparty. ² Non current assets are non current operating assets other than financial instruments and deferred tax assets.

3. Other expense - net

US $ million	Notes	2011	2010

Changes in mark to market valuations on investments held for trading - net		- 92	- 178
Changes in mark to market valuation of certain coal forward contracts ¹		25	- 790
Listing related expenses	13	- 286	0
Other Listing related expenses - Phantom equity awards	16	- 58	0
Gain on settlement of restructured Russneft loans	8	0	382
Impairment on equity interest in various Russneft Group entities	8	0	- 336
(Impairment)/impairment reversal		- 6	674
Prodeco transaction and related expenses		- 63	- 225
Impairment of non current inventory ¹		- 26	0
Revaluation of previously held interest in newly acquired businesses	22	0	462
Foreign exchange (loss)/gain		- 8	31
Other		3	- 28
Total		- 511	- 8
¹ These other expense items, if classified by function of expense would be recognised in cost of goods sold. All other amounts in Other expense - net are classified by function.

In addition to foreign exchange gains/(losses) and mark to market movements on investments held for trading, other expense - net includes other significant items of income and expense which due to their non operational nature or expected infrequency of the events giving rise to them are reported separately from operating segment results. Other expense - net includes, but is not limited to, impairment charges/reversals, revaluation of previously held interests in business combinations, restructuring and closure costs and Listing related expenses.

Changes in mark to market valuations on investments held for trading - net

Primarily relates to movements on interests in other investments classified as held for trading and carried at fair value, with Glencore's interest in Century Aluminum Company cash settled equity swaps, Volcan Compania Minera S.A.A. and Nyrstar N.V. accounting for the majority of the movement in 2011 and 2010.

Changes in mark to market valuation of certain coal forward contracts

Represents movements in fair value of certain fixed price forward coal sales contracts relating to Prodeco Group's (Prodeco) future production, into which it plans to physically deliver. Following the legal reacquisition of Prodeco in March 2010, from an accounting perspective, these forward sales contracts could not technically be classified as 'own use' or as cashflow hedges, which would have deferred the income statement effect until performance of the underlying future sale transactions. As at year end, approximately 8.4 million tonnes (2010: 19.3 million tonnes) of such coal had been sold forward at a fixed price in respect of quarterly periods to the end of 2013.

Listing related expenses

Expenses incurred in connection with the Listing that relate to obtaining the listing for ordinary shares, the Restructuring and/or change in the employee shareholder profit attribution model, rather than the costs incurred solely in relation to the issuance of the new (primary) equity (see note 13), comprise $ 91 million of stamp duty costs, $ 42 million of professional advisors' costs and $ 153 million of compensation related costs.

Impairment reversal

In 2010, during the regular assessment of whether there is an indication of an asset impairment or whether a previously recorded impairment may no longer be required, an upward revision of long term base metals and coal price assumptions resulted in an impairment reversal of $ 674 million against Glencore's interest in Xstrata. The recoverable amount of Glencore's share of the underlying net assets has been determined on the basis of its fair value less costs to sell using discounted cash flow techniques.

Prodeco transaction and related expenses

In March 2009, Xstrata acquired Prodeco for $ 2 billion and concurrently granted Glencore an option to repurchase Prodeco within 12 months for $ 2.25 billion plus notional profits accrued during the option period and the net balance of any cash invested. Given the fixed price repurchase option, the conditions for derecognition/disposal of Prodeco were not met under IFRS and as a consequence, Prodeco's operations remained in the consolidated financial statements, while the "proceeds" were deferred and recognised as a liability. In March 2010, the option was exercised. Following the exercise of the option, in addition to the option repurchase expenses (including the option premium and profit entitlement), $ 115 million of additional depreciation expense was recognised in 2010 to reflect the depreciation that would have been charged if the related assets had not previously been classified as held for sale. Expenses recorded in 2011 relate to the final settlement of the option price.

Revaluation of previously held interest in newly acquired businesses

In February 2010, Kazzinc purchased the remaining 60% of Vasilkovskoye Gold (see note 22). At the date of acquisition, the previously owned 40% interest was revalued to its fair value and as a result, a net gain of $ 462 million was recognised.

4. Income taxes

Income taxes consist of the following:

US $ million	2011	2010

Current income tax expense	- 417	- 292
Deferred income tax credit	681	58
Total tax credit/(expense)	264	- 234

The effective Group tax rate is different from the statutory Swiss income tax rate applicable to the Company for the following reasons:

US $ million	2011	2010

Income before income taxes and attribution	4 004	4 340
Less: share of income from Associates	- 1 972	- 1 829
Parent company's and subsidiaries' income before income tax and attribution	2 032	2 511
Income tax expense calculated at the Swiss income tax rate	- 312	- 401
Effect of different tax rates from the standard Swiss income tax rate	- 102	- 78
Tax exempt income, net of non-deductible expenses and other permanent differences	14	254
Tax implications of the Restructuring and Listing, including deductions/losses triggered ¹	687	0
Effect of available tax losses not recognised, and other changes in the valuation of deferred tax assets ²	- 19	135
Effect of change in tax rate on deferred tax balances	- 2	- 145
Other	- 2	1
Income credit/(expense)	264	- 234
¹ As part of the Restructuring (see note 13), the potential amounts owing to the shareholder employees under the various active profit participation plans were settled and crystallised income tax deductions/losses in Switzerland and other countries that can be carried forward and applied against future taxable income. $ 381 million (2010: $ nil million) of deferred tax assets related to future deductible amounts and tax losses have not been brought to account. ²In 2010, following the regular assessment and review of business plans related to Katanga Mining Limited, it was determined that a substantial portion of the previously unrecognised tax losses could be recognised.

The tax credit/(expense) relating to components of other comprehensive income/(loss) and share premium is as follows:

US $ million	2011	2010

Cash flow hedges ¹	- 2	2
Listing related expenses ²	21	0
Income tax relating to components of other comprehensive loss and share premium	19	2
¹ Recognised in other comprehensive income. ² Recognised in share premium.

Deferred taxes as at 31 December 2011 and 2010, are attributable to the items detailed in the table below:

US $ million	Notes	2011	2010

Deferred tax assets ¹
Tax losses carried forward		892	274
Mark to market valuations		12	45
Other		135	50
Total		1 039	369

Deferred tax liabilities ¹
Depreciation and amortisation		- 1 217	- 926
Mark to market valuations		- 19	- 320
Other		- 163	- 62
Total		- 1 399	- 1 308
Deferred tax - net		- 360	- 939

Reconciliation of deferred tax - net
Opening balance		- 939	- 538
Recognised in income for the year		681	58
Recognised in other comprehensive loss and share premium		19	2
Business combination	22	- 121	- 461
Closing balance		- 360	- 939
¹ Asset and liability positions in the same category reflect the impact of tax assets and liabilities arising in local tax jurisdictions that cannot be offset against tax assets and liabilities arising in other tax jurisdictions.

Deferred tax assets are recognised for tax losses carried forward only to the extent that realisation of the related tax benefit is probable. As at 31 December 2011, $ 1,445 million (2010: $ 562 million) of deferred tax assets related to available loss carry forwards have been brought to account, of which $ 892 million (2010: $ 274 million) are disclosed as deferred tax assets with the remaining balance being offset against deferred tax liabilities arising in the same respective entity. $ 861 million (2010: $ 257 million) of the aforementioned net deferred tax assets arise in entities that have been loss making in 2011 and 2010. In evaluating whether it is probable that taxable profits will be earned in future accounting periods, all available evidence was considered. These forecasts are consistent with those prepared and used internally for business planning and impairment testing purposes. Following this evaluation, it was determined there would be sufficient taxable income generated to realise the benefit of the deferred tax assets. Available gross tax losses carried forward and deductible temporary differences, for which no deferred tax assets have been recognised in the consolidated financial statements are detailed below and will expire as follows:

US $ million	2011	2010

1 year	11	75
2 years	28	56
3 years	127	38
Thereafter	956	270
Unlimited usage	978	124
Total	2 100	563

As at 31 December 2011, unremitted earnings of $ 18,573 million (2010: $ 12,255 million) have been retained by subsidiaries and associates for reinvestment. No provision is made for income taxes that would be payable upon the distribution of such earnings.

5. Property, plant and equipment

US $ million	Notes	Land and buildings	Plant and equipment	Mineral and petroleum rights	Deferred mining costs	Total

Gross carrying amount:
1 January 2011		1 281	9 187	4 484	542	15 494
Business combination	22	108	591	76	0	775
Additions		36	2 411	416	148	3 011
Disposals		- 17	- 431	0	- 2	- 450
Other movements		113	287	- 359	- 13	28
31 December 2011		1 521	12 045	4 617	675	18 858

Accumulated depreciation and impairment:
1 January 2011		239	2 556	548	63	3 406
Depreciation		36	710	260	56	1 062
Disposals		- 6	- 263	2	0	- 267
Impairments ¹		32	15	0	10	57
Other movements		22	- 21	- 40	0	- 39
31 December 2011		323	2 997	770	129	4 219
Net book value 31 December 2011		1 198	9 048	3 847	546	14 639
¹ Consists of impairments of specific assets recorded during the period which are immaterial both individually and in aggregate.

US $ million	Notes	Land and buildings	Plant and equipment	Mineral and petroleum rights	Deferred mining costs	Total

Gross carrying amount:
1 January 2010		1 066	6 255	1 718	229	9 268
Business combination	22	370	910	2 283	91	3 654
Additions		26	1 346	422	96	1 890
Disposals		- 35	- 525	- 38	- 2	- 600
Reclassified from held for sale	12	112	908	73	155	1 248
Other movements		- 258	293	26	- 27	34
31 December 2010		1 281	9 187	4 484	542	15 494

Accumulated depreciation and impairment:
1 January 2010		235	1 810	364	14	2 423
Depreciation		77	752	171	26	1 026
Disposals		- 15	- 177	- 12	0	- 204
Reclassified from held for sale	12	7	128	7	10	152
Impairments ¹		5	4	0	12	21
Other movements		- 70	39	18	1	- 12
31 December 2010		239	2 556	548	63	3 406
Net book value 31 December 2010		1 042	6 631	3 936	479	12 088
¹ Consists of impairments of specific assets recorded during the period which are immaterial both individually and in aggregate.

Plant and equipment includes expenditure for construction in progress of $ 1,389 million (2010: $ 1,343 million) and a net book value of $ 317 million (2010: $ 64 million) of obligations recognised under finance lease agreements. Mineral and petroleum rights include expenditures for exploration and evaluation of $ 306 million (2010: $ 379 million). Depreciation expenses included in cost of goods sold are $ 1,049 million (2010: $ 893 million), in selling and administrative expenses $ 13 million (2010: $ 18 million) and in other expense - net Prodeco transaction related expenses $ nil million (2010: $ 115 million).

During 2011, $ 44 million (2010: $ 2 million) of interest was capitalised within property, plant and equipment. With the exception of project specific borrowings, the rate used to determine the amount of borrowing costs eligible for capitalisation was 4% (2010: 5%).

6. Intangible Assets

US $ million	Notes	Goodwill	Future warehousing fees	Other	Total

Cost:
1 January 2011		0	0	0	0
Business combination	22	36	0	13	49
Reclassified from held for sale	12, 22	133	32	0	165
31 December 2011		169	32	13	214

Accumulated amortisation and impairment:
1 January 2011		0	0	0	0
Amortisation expense¹		0	3	1	4
31 December 2011		0	3	1	4
Net carrying amount		169	29	12	210
¹ Recognised in cost of goods sold.

Pacorini

Goodwill of $ 133 million and the future warehousing fees have been recognised as part of the acquisition of the Pacorini metals warehousing business, see note 22.

The goodwill is attributable to synergies expected to arise in conjunction with the metals marketing division's expected increased activities. In assessing whether goodwill has been impaired, the carrying amount of the cash generating unit was compared with its recoverable amount. The recoverable amount was determined by reference to the value in use which utilises pre-tax cash flow projections based on the approved financial budgets for 5 years which incudes factors, such as inventory levels, volumes and operating costs, discounted to present value at a rate of 10%. The cash flows beyond the 5 year period have been extrapolated using a declining growth rate of 10% per annum which is the projected long term reduction in average inventory levels for the warehousing business.

The future warehousing fees represent the expected income receivable on metal in the warehouses as at the date of acquisition when the metal is expected to be physically withdrawn from the warehouses in future periods based on the expected holding periods. Future warehousing fees are amortised over their useful economic lives of 5 years.

OceanConnect

Goodwill of $ 30 million has been recognised as part of the acquisition of certain assets constituting the business of OceanConnect. The goodwill is attributable to synergies expected to arise from the enhancements to the energy products marketing division's existing business activities and improvements in its service offerings to its customers.

Other

Other intangible assets primarily consist of trademarks for agricultural products and are amortised over their estimated useful economic lives of 10 years.

7. Investments in associates and other investments

A list of the principal operating, finance and industrial subsidiaries and Associates and other investments is included in note 30.

US $ million	2011	2010

Xstrata plc	16 187	14 616
Other listed Associates	1 337	895
Listed Associates	17 524	15 511
Non listed Associates	1 334	1 255
Investments in Associates	18 858	16 766

Listed associates

As at 31 December 2011, the fair value of listed Associates using published price quotations was $ 16,157 million (2010: $ 24,511 million). Glencore has completed a detailed assessment of the recoverable amount of investments where indicators of impairment were identified and concluded that the recoverable value supports the carrying value of these investments and that no impairment is required.

Optimum

In October 2011, Glencore acquired a 31.2% interest in Optimum Coal Holdings Limited ("Optimum") for $ 382 million. Glencore has agreements to acquire an additional 28.5% interest in Optimum for cash consideration of $ 304 million (ZAR 2,480 million), the closing of which is subject to the receipt of applicable regulatory approvals which are expected in 2012.

US $ million	2011	2010

Available for sale
United Company Rusal ("UCR")	842	2 048
	842	2 048
Fair value through profit and loss
Volcan Compania Minera S.A.A.	359	187
Nyrstar N.V.	105	117
Century Aluminum Company cash settled equity swaps	78	73
Jurong Aromatics Corporation Pte Ltd	55	0
Other	108	13
	705	390
Other investments	1 547	2 438

As at 31 December 2011, $ nil million (2010: $ 113 million) of Glencore's investment in UCR was pledged as a guarantee against certain borrowings of UCR.

Summarised financial information in respect of Glencore's Associates, reflecting 100% of the underlying Associate's relevant figures, are set out below.

US $ million	2011	2010

Current assets	12 129	12 214
Non current assets	69 884	65 033
Current liabilities	- 8 919	- 9 309
Non current liabilities	- 24 620	- 23 197
Net assets	48 474	44 741
Revenue	39 940	48 116
Net profit	6 194	4 941

The amount of corporate guarantees in favour of joint venture entities as at 31 December 2011 was $ 50 million (2010: $ nil million). Glencore's share of joint venture entities' capital commitments amounts to $ 301 million (2010: $ 831 million).

8. advances and loans

US $ million	2011	2010

Loans to Parents	0	72
Loans to Associates	840	426
Other non current receivables and loans	3 301	3 332
Total	4 141	3 830

Loans to Associates generally bear interest at applicable floating market rates plus a premium.

Other non current receivables and loans comprise the following:

US $ million	2011	2010

Counterparty
OAO Russneft Interest bearing loan at 9% per annum (see note below)	2 211	2 082
Atlas Petroleum International Limited ("Atlas") Interest bearing loans at LIBOR plus 3% ¹	246	477
Secured marketing related financing arrangements ²	365	301
PT Bakrie & Brothers Tbk Interest bearing secured loans at LIBOR plus 10%	80	200
Oteko Group Interest bearing loan at LIBOR plus 6%	86	25
Other ³	313	247
Total	3 301	3 332
¹ Primarily relates to carried interest loans associated with the development of the Aseng oil project in Equatorial Guinea, where Atlas is one of the equity partners. The operator of the field and project is Noble Energy, based in Houston. The Aseng project commenced oil production in Q4 2011, and loans are being repaid from oil proceeds. ² Various marketing related financing facilities, generally secured against certain assets and/or payable from the future sale of production of the counterparty. The weighted average interest rate of the loans is 10% and on average are to be repaid over a 3 year period. ³ $ 74 million (2010: $ nil million) relates to amounts owing in respect of future rehabilitation and restoration obligations.

Russneft loans

In December 2010, OAO Russneft ("Russneft") completed a significant debt amendment and restatement with its major lenders, whereby Glencore's previously existing facilities, including some amounts which had been advanced for conversion into Russneft equity, were consolidated into a single facility. The consolidated facility, with a principal amount of $ 2,080 million, bears interest at 9% per annum, with 3% paid quarterly and the remaining 6% capitalised and payable along with the principal which is expected in monthly installments over a 3 year period commencing Q4 2017, but in any event, not before repayment of the debt owing to the other major lender. The facility is secured by a second ranked charge over certain of Russneft's assets.

In 2010, Glencore accounted for this amendment and restatement as a substantial modification, which resulted in derecognition of all amounts carried under the previous facilities including principal, accrued interest and equity conversion advances and recognition, at fair value, of the consolidated facility. The transaction resulted in a gain (after taking into account the carrying value of the principal, net of allowance for doubtful accounts, and the accrued interest ($ 1,413 million) and equity conversion advances
($ 285 million)) of $ 382 million during the period ended 31 December 2010.

The 2010 loan amendment also constituted a loss event with respect to Glencore's equity holdings in certain Russneft subsidiaries due to the increased leverage, amended repayment profile and the enhancement of prioritised security of the consolidated loans and, as a consequence, an impairment charge of $ 336 million was recognised against other investments during the period ended 31 December 2010.

9. Inventories

US $ million	2011	2010

Production inventories	3 150	2 805
Marketing inventories	13 979	14 588
Total	17 129	17 393

Production inventories consist of materials, spare parts, work in process and finished goods held by the production entities. Marketing inventories are commodities held by the marketing entities. Marketing inventories of $ 13,785 million (2010: $ 14,331 million) are carried at fair value less costs to sell.

Glencore has a number of dedicated financing facilities, which finance a portion of its marketing inventories. In each case, the inventory has not been derecognised as the Group retains the principal risks and rewards of ownership. The proceeds received are recognised as either current borrowings, commodities sold with agreements to repurchase or trade advances from buyers, depending upon their funding nature. As at 31 December 2011, the total amount of inventory secured under such facilities was $ 1,834 million (2010: $ 2,426 million). The proceeds received and recognised as current borrowings were $ 1,631 million (2010: $ 1,338 million), as commodities sold with agreements to repurchase $ 39 million (2010: $ 484 million) and as trade advances from buyers $ nil million (2010: $ 67 million).

10. Accounts receivable

US $ million	2011	2010

Trade receivables ¹	15 903	12 663
Trade advances and deposits ¹	3 022	4 297
Associated companies ¹	643	494
Other receivables	2 327	1 540
Total	21 895	18 994
¹ Collectively referred to as receivables.

The average credit period on sales of goods is 28 days (2010: 28 days).

As at 31 December 2011, 8% (2010: 5%) of receivables were between 1- 60 days overdue, and 3% (2010: 2%) were greater than 60 days overdue. Such receivables, although contractually past their due dates, are not considered impaired as there has not been a significant change in credit quality of the relevant counterparty, and the amounts are still considered recoverable taking into account customary payment patterns and in many cases, offsetting accounts payable balances.

The movement in allowance for doubtful accounts is detailed in the table below:

US $ million	2011	2010

Opening balance	155	302
Released during the year	- 28	- 16
Incurred during the year	43	58
Utilised during the year ¹	- 41	- 189
Closing balance	129	155
¹ The amount utilised during 2010 primarily comprises the Russneft loan amendment and restatement (see note 8).

Glencore has a number of dedicated financing facilities, which finance a portion of its receivables. In each case, the receivables have not been derecognised, as the Group retains the principal risks and rewards of ownership. The proceeds received are recognised as current borrowings (see note 17). As at 31 December 2011, the total amount of trade receivables secured was $ 2,934 million (2010: $ 2,349 million) and proceeds received and classified as current borrowings amounted to $ 2,265 million (2010: $ 1,950 million).

11. Cash and cash equivalents

US $ million	2011	2010

Bank and cash on hand	981	1 090
Deposits and treasury bills	324	373
Total	1 305	1 463

As at 31 December 2011, $ 80 million (2010: $ 23 million) was restricted. $ 47 million has been placed in escrow for the pending acquisition of Rosh Pinah (see note 26).

12. Assets and liabilities held for sale

In March 2011, the plan to merge the Pacorini metals warehousing business with a third party was abandoned and the net assets (assets of $ 280 million and liabilities of $ 45 million) previously classified as held for sale in 2010 were reclassified to the respective line items in the statement of financial position at depreciated cost as detailed below:

US $ million	Total

Property, plant and equipment	4
Intangible assets	165
Inventory	13
Accounts receivable	79
Cash and cash equivalents	19
Total assets	280

Non current borrowings	- 1
Accounts payable	- 31
Income tax payable	- 4
Current borrowings	- 9
Total liabilities	- 45

13. Share capital and reserves

	Number of shares (thousand)	Share capital (US $ million)	Share premium (US $ million)

Authorised:
31 December 2011 Ordinary shares with a par value of $ 0.01 each	50 000 000	-	-

Issued and fully paid up:
1 January 2010 - Class B shares	150	46	0
Class B shares redeemed pursuant to the Restructuring	- 150	- 46	0
Ordinary shares issued pursuant to the Restructuring	3 716 495	37	0
1 January 2010 (restated) - Ordinary shares	3 716 495	37	0

31 December 2010 (restated) - Ordinary shares	3 716 495	37	0
Ordinary shares issued in exchange for HPPS and PPS profit participation obligations	1 617 268	16	13 821
Ordinary shares issued in exchange for LTS and LTPPS profit participation obligations	666 237	7	5 694
Ordinary shares issued at Listing ("primary issuance")	922 714	9	7 887
Share issue costs associated with the primary issuance	-	-	- 280
Tax on Listing related expenses	-	-	21
Dividends paid	-	-	- 346
31 December 2011 - Ordinary shares	6 922 714	69	26 797

Restructuring

Prior to the Listing, Glencore's articles of incorporation authorised the issuance of non voting profit participation certificates ("PPC") with no nominal value to its employees enabling them to participate in four profit sharing arrangements: Hybrid Profit Participation Shareholders (HPPS), Ordinary Profit Participation Shareholders (PPS), Glencore L.T.E. Profit Participation Shareholders (LTS) and Long Term Profit Participation Shareholders (LTPPS). The profit sharing arrangements entitled the employees to a portion of Glencore shareholders' funds accumulated during the period that such employees held the PPCs. The PPCs attributed Glencore International AG's consolidated net income pro rata based on the 150,000 Class B shares issued as at 31 December 2010.

Immediately prior to the Listing, Glencore implemented a Restructuring whereby amounts owing to the then shareholder employees under the various active profit participation plans were settled in exchange for new ordinary shares and the ultimate ownership interests in Glencore International AG were assumed via Glencore International plc. The accounting outcome of these transactions is outlined below:

Settlement of the profit participation plans

The accounting for the settlement of the four profit participation plans was similar, whereby the outstanding balances under each

plan prior to Listing were exchanged for an equivalent number of ordinary shares at the Listing price of 530 pence ($ 8.56) per share. The difference between the nominal and fair value of the new ordinary shares issued was recognised as a share premium.

Reorganisation of the ultimate parent company

Following the settlement of the profit participation plans described above, Glencore International plc replaced Glencore Holding AG as the ultimate parent company and Glencore International AG became a wholly owned subsidiary of Glencore International plc, the entity listed on the London and Hong Kong stock exchanges.

Listing

On 24 May 2011, Glencore International plc issued 922,713,511 ordinary shares which comprised 891,463,511 shares to institutional

investors (the "International Offer") at a price of 530 pence ($ 8.56) per share on the London Stock Exchange, and 31,250,000 shares

to professional and retail investors in Hong Kong (the "Hong Kong Offer") at a price of HK$ 66.53 ($ 8.56) per ordinary share. The gross proceeds raised were $ 7,896 million and total transaction (Restructuring and Listing) and related expenses incurred were $ 566 million. $ 280 million of the transaction costs were attributable to the issue of new (primary) equity and have been deducted against share premium while $ 286 million were attributable to stamp duty and other expenses associated with the above noted Restructuring as well as an allocation of transaction costs that jointly related to the issuing of the new (primary) equity and the listing of the Company and as such have been charged to income during the year (see note 3). Joint transaction costs were allocated based on the ratio of new shares issued, in relation to total shares outstanding.

Reserves

US $ million	Notes	Translation adjustment	Equity portion of Convertible bonds	Cash flow hedge reserve	Net unrealised gain/ (loss)	Net ownership changes in subsidiaries	Other reserves	Total

At 1 January 2010		- 7	77	- 89	0	0	1	- 18
Ordinary shares issued pursuant to the Restructuring		0	0	0	0	0	9	9
At 1 January 2010 (restated)		- 7	77	- 89	0	0	10	- 9
Exchange gain on translation of foreign operations		8	0	0	0	0	0	8
Loss on cash flow hedges, net of tax	23	0	0	- 180	0	0	0	- 180
Gain on available for sale financial instruments	7	0	0	0	25	0	0	25
Cash flow hedges transferred to the statement of income, net of tax		0	0	6	0	0	0	6
Change in ownership interest in subsidiaries	22	0	0	0	0	- 134	0	- 134
Equity portion of Convertible bonds	17	0	12	0	0	0	0	12
At 31 December 2010 (restated)		1	89	- 263	25	- 134	10	- 272

At 1 January 2011		1	89	- 263	25	- 134	10	- 272
Exchange loss on translation of foreign operations		- 53	0	0	0	0	0	- 53
Loss on cash flow hedges, net of tax	23	0	0	- 17	0	0	0	- 17
Loss on available for sale financial instruments	7	0	0	0	- 1 206	0	0	- 1 206
Cash flow hedges transferred to the statement of income, net of tax		0	0	6	0	0	0	6
Change in ownership interest in subsidiaries	22	0	0	0	0	- 98	0	- 98
At 31 December 2011		- 52	89	- 274	- 1 181	- 232	10	- 1 640

14. Earnings per share

US $ million	Notes	2011	2010

Profit attributable to equity holders for basic earnings per share		4 048	1 291
Interest in respect of Convertible bonds		135	130
Profit attributable to equity holders for diluted earnings per share		4 183	1 421

Weighted average number of shares for the purposes of basic earnings per share (thousand)		5 657 794	3 716 495
Effect of dilution:
Equity settled share-based payments	16	22 790	0
Convertible bonds	17	406 738	238 061
Weighted average number of shares for the purposes of diluted earnings per share (thousand)		6 087 322	3 954 556

Basic earnings per share (US $)		0.72	0.35
Diluted earnings per share (US $)		0.69	0.35

15. Dividends

US $ million	2011	2010

Paid during the year:
Final dividend for 2010 - $ nil per Class B share (2009 - $ 13.33 per Class B share)	0	2
Interim dividend for 2011 - $ 0.05 per ordinary share (2010 - $ nil per Class B share)	346	0
Total	346	2

Proposed final dividend for 2011 - $ 0.10 per ordinary share (2010 - $ 13.33 per Class B share)	692	2

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Dividends declared in respect of the year ended 31 December 2011 will be paid on 1 June 2012. The 2011 interim dividend was paid on 30 September 2011.

16. Share-based payments

2011 Phantom Equity Awards

In April and May 2011 in connection with the Listing, phantom equity awards were made to certain employees in lieu of interests in Glencore's existing equity ownership schemes. These equity awards will vest on or before 31 December 2013, subject to the continued employment of the award holder. Phantom equity awards may be satisfied in shares by the issue of new ordinary shares, by the transfer of ordinary shares held in treasury or by the transfer of ordinary shares purchased in the market (in each case with a market value equal to the value of the award at vesting, including dividends paid between Listing and vesting), or in cash. Glencore currently intends to settle these awards through the issuance of shares. Based on the Listing offer price, the aggregate number of ordinary shares underlying the awards is 24,024,765. The fair value of the awards at the issue date was $ 8.56 per award for an aggregate fair value of $ 206 million determined by reference to the Listing price at the grant date. As at year end, the number of shares underlying the awards was 22,789,924. The total expense recognised in the period was $ 58 million (2010: $ nil million).

17. Borrowings

US $ million	Notes	2011	2010

Non current borrowings
144A Notes		947	946
Xstrata secured bank loans		2 688	0
Convertible bonds		2 152	2 132
Eurobonds		3 612	3 725
Sterling bonds		996	999
Swiss Franc bonds		882	639
Perpetual notes		347	735
Ordinary profit participation certificates		750	1 059
Committed syndicated revolving credit facility		5 907	6 744
Finance lease obligations	26	278	63
Other bank loans		1 285	1 209
Total non current borrowings		19 844	18 251

Current borrowings
Committed syndicated revolving credit facility		0	515
Committed secured inventory/receivables facility	9/10	1 700	1 700
Committed secured receivables facilities	10	1 181	700
Bilateral uncommitted secured inventory facilities	9	1 015	888
U.S. commercial paper		512	310
Xstrata secured bank loans		0	2 292
Eurobonds		0	765
Perpetual notes		0	292
Ordinary profit participation certificates		533	796
Finance lease obligations	26	39	4
Other bank loans ¹		3 205	3 619
Total current borrowings		8 185	11 881
¹ Comprises various uncommitted bilateral bank credit facilities and other financings.

144A Notes

$ 950 million 6% coupon Notes due 2014. The Notes are recognised at amortised cost at an effective interest rate of 6.15% per annum.

Xstrata secured bank loans

In June 2011, Glencore refinanced the $ 2.8 billion facilities ($ 2.3 billion drawn) with new 2 year $ 2.7 billion equivalent facilities. The facilities have been accounted for as secured bank loans which bear interest at a rate of U.S. $ LIBOR plus 95 basis points per annum. As at 31 December 2011, shares representing $ 5,343 million (2010: $ 4,199 million) of the carrying value of Glencore's investment in Xstrata were pledged as security.

Convertible bonds

$ 2,300 million 5% coupon convertible bonds due December 2014. The bonds are convertible at the option of the investors into 406,737,932 ordinary shares of Glencore International plc. The bonds consist of a liability component and an equity component. The fair values of the liability component ($ 2,211 million) and the equity component ($ 89 million) were determined, using the residual method, at issuance of the bonds. The liability component is measured at amortised cost at an effective interest rate of 5.90% per annum.

Euro, Sterling and Swiss Franc bonds

The Group has issued bonds denominated in Euro, Sterling and Swiss Franc where upon issuance, the principal amounts and the future interest payments were swapped (using instruments which qualify as cash flow hedges) into their U.S. Dollar equivalent. The details of amounts issued and outstanding are as follows:

US $ million	Maturity	Initial US $  equivalent	US $ fixed interest rate in %	2011	2010

Euro 600 million 5.375% coupon bonds	Sep 2011	-	-	0	765
Euro 850 million 5.250% coupon bonds	Oct 2013	1 078	6.60	1 045	1 080
Euro 750 million 7.125% coupon bonds	April 2015	1 200	6.86	944	968
Euro 1 250 million 5.250% coupon bonds	March 2017	1 708	6.07	1 623	1 677
Eurobonds		3 986		3 612	4 490

GBP 650 million 6.50% coupon bonds	Feb 2019	1 266	6.58	996	999
CHF 825 million 3.625% coupon bonds	April 2016	828	4.87	882	639
Total		6 080		5 490	6 128

In January 2011, Glencore issued additional CHF 225 million ($ 235 million) 3.625% interest bearing bonds due April 2016.

Perpetual notes

During 2011, Glencore redeemed $ 700 million of the 8% perpetual notes at par, leaving a total of $ 350 million of 7.5% Perpetual bonds outstanding.

Ordinary profit participation certificates

Profit participation certificates bear interest at 6 month U.S. $ LIBOR, are repayable over 5 years and in the event of certain triggering events, which include any breach of a financial covenant, would be subordinated to unsecured lenders.

Committed revolving credit facilities

In May 2011, Glencore replaced the previous 364 day $ 1,375 million and $ 515 million committed revolving credit facilities with two new 364 day committed revolving credit facilities for $ 2,925 million and $ 610 million respectively, both with a one year term extension option at Glencore's discretion. In addition, Glencore extended the final maturity of $ 8,340 million of the $ 8,370 million medium term revolver for a further year to May 2014. In aggregate, the new facilities represent an overall increase in committed available liquidity of $ 1,645 million. Funds drawn under the facilities bear interest at U.S. $ LIBOR plus a margin ranging from 110 to 175 basis points per annum.

Committed secured inventory/receivables facility

In November 2011, Glencore renewed the 364 day committed $ 1.7 billion secured inventory and receivables borrowing base facility under the same terms. Under the program, Glencore has the option to pledge up to $ 750 million of eligible base metals inventory or up to $ 1.7 billion of eligible receivables. Funds drawn under the facility bear interest at U.S. $ LIBOR plus 110 basis points per annum.

Committed secured receivables facilities

Includes a 364 day $ 200 million committed secured receivables financing program due February 2012 which, has been extended to August 2012, and a six month $ 750 million multi-currency program due June 2012. Funds drawn under the facilities bear interest at U.S. $ LIBOR or, in relation to any loan in Euro, EURIBOR, plus a margin ranging from 105 to 115 basis points per annum.

U.S. commercial paper

Glencore has in place a stand alone U.S. commercial paper program for $ 1,000 million rated A2 and P2 respectively by Standard & Poor's and Moody's rating agencies. The notes issued under this program carry interest at floating market rates and mature not more than 270 days from the date of issue.

18. deferred income

During 2006, Glencore entered into an agreement to deliver a fixed quantity of silver concentrate, a by-product from its mining operations, for a period of 15 years at a fixed price for which Glencore received an upfront payment of $ 285 million. The outstanding balance represents the remaining non current portion of the upfront payment. The upfront payment is released to revenue at a rate consistent with the implied forward price curve at the time of the transaction and the actual quantities delivered.

19. Provisions

Non current

US $ million	Post retirement benefits ¹	Employee entitlement	Rehabilitation costs	Other ²	Total

1 January 2010	59	85	236	165	545
Provision utilised in the year	- 4	- 2	- 5	- 22	- 33
Accretion in the year	0	0	22	0	22
Provisions assumed in business combination	4	0	3	0	7
Additional provision in the year	1	15	123	39	178
31 December 2010	60	98	379	182	719

1 January 2011	60	98	379	182	719
Provision utilised in the year	- 1	- 17	- 14	- 56	- 88
Accretion in the year	0	0	24	0	24
Provisions assumed in business combination	0	0	43	14	57
Additional provision in the year	2	35	142	62	241
31 December 2011	61	116	574	202	953
¹ See note 20. ² Other includes provisions in respect of mine concession obligations of $ 52 million (2010: $ 54 million), construction related contractual provisions of $ 27 million (2010: $ 29 million), export levies of $ 45 million (2010: $ 42 million) and deferred purchase consideration of $ 33 million (2010: $ 21 million).

Employee entitlement

The employee entitlement provision represents the value of state governed employee entitlements due to employees upon their termination of employment. The associated expenditure will occur in a pattern consistent with when employees choose to exercise their entitlements.

Rehabilitation costs

Rehabilitation provision represents the accrued cost required to provide adequate restoration and rehabilitation upon the completion of extraction activities. These amounts will be settled when rehabilitation is undertaken, generally at the end of a project's life, which ranges from 2 to 50 years. In South Africa, the Group makes contributions to rehabilitation trusts to meet some of the costs of rehabilitation liabilities.

Current

US $ million	Onerous contracts	Demurrage and related claims	Other	Total

1 January 2010	1	51	23	75
Provision utilised in the year	0	- 14	- 6	- 20
Additional provision in the year	92	24	1	117
31 December 2010	93	61	18	172

1 January 2011	93	61	18	172
Provision utilised in the year	- 89	- 10	- 8	- 107
Additional provision in the year	0	23	10	33
31 December 2011	4	74	20	98

20. Personnel costs and employee benefits

Total personnel costs, which includes salaries, wages, social security, other personnel costs and share-based payments but excludes attribution to profit participation shareholders, incurred for the years ended December 31, 2011 and 2010, were $ 1,723 million and $ 1,677 million, respectively. Personnel costs related to consolidated industrial subsidiaries of $ 1,203 million (2010: $ 885 million) are included in cost of goods sold. Other personnel costs are included in selling and administrative expenses and share-based payments are included in other expense.

The Company and certain subsidiaries sponsor various pension schemes in accordance with local regulations and practices. Eligibility for participation in the various plans is either based on completion of a specified period of continuous service, or date of hire. The plans provide for certain employee and employer contributions, ranging from 5% to 16% of annual salaries, depending on the employee's years of service. Among these schemes are defined contribution plans as well as defined benefit plans. The main locations with defined benefit plans are Switzerland, the UK and the US.

Defined contribution plans

Glencore's contributions under these plans amounted to $ 21 million in 2011 and $ 11 million in 2010.

Defined benefit plans

The amounts recognised in the statement of income are as follows:

US $ million	2011	2010

Current service cost	19	14
Interest cost	19	16
Expected return on plan assets	- 15	- 11
Net actuarial losses recognised in the year	13	5
Past service cost	2	1
Exchange differences	- 2	0
Total	36	25

The actual return on plan assets amounted to a gain of $ 4 million (2010: gain of $ 14 million).

The amounts recognised in the statement of financial position are determined as follows:

US $ million	Notes	2011	2010

Present value of defined benefit obligations		513	422
Less: fair value of plan assets		- 284	- 267
Unrecognised actuarial losses		- 164	- 91
Restrictions of assets recognised		- 4	- 4
Liability in the statement of financial position	19	61	60

Movement in the present value of the defined benefit obligation is as follows:

US $ million	2011	2010

Opening defined benefit obligation	422	363
Current service cost	19	14
Interest cost	19	16
Past service cost	2	1
Benefits paid	- 26	- 27
Actuarial loss	67	17
Exchange differences on foreign plans	1	- 5
Other movements	9	43
Closing defined benefit obligation	513	422

Movement in the present value of the plan assets is as -follows:

US $ million	2011	2010

Opening fair value of plan assets	267	232
Expected return on plan assets	15	11
Contribution from the employer	26	27
Actuarial loss	- 20	- 5
Exchange differences on foreign plans	3	- 5
Other movements	- 7	7
Closing fair value of plan assets	284	267

The plan assets consist of the following:

US $ million	2011	2010

Cash and short term investments	10	5
Fixed income	109	115
Equities	120	96
Other	45	51
Total	284	267

The overall expected rate of return is a weighted average of the expected returns of the various categories of plan assets held. Glencore's assessment of the expected returns is based on historical return trends and analysts' predictions of the market for the asset class in the next twelve months.

The principal actuarial assumptions used were as follows:

	2011	2010

Discount rate	3-7%	3-6%
Expected return on plan assets	3-8%	3-8%
Future salary increases	2-5%	2-6%
Future pension increases	3-4%	3-4%

Mortality assumptions are based on the latest available standard mortality tables for the individual countries concerned. These tables imply expected future lifetimes (in years) for employees aged 65 as at the 31 December 2011 of 18 to 24 for males (2010: 18 to 24) and 20 to 25 (2010: 22 to 25) for females. The assumptions for each country are reviewed each year and are adjusted where necessary to reflect changes in fund experience and actuarial recommendations.

The Group expects to make a contribution of $ 26 million (2010: $ 27 million) to the defined benefit plans during the next financial year.

Summary historical information:

US $ million	Present value of defined benefit obligation	Fair value of plan assets

2009	363	232
2008	324	190
2007	370	260

21. ACCOUNTS PAYABLE

US $ million	2011	2010

Trade payables	14 523	12 278
Trade advances from buyers	852	634
Associated companies	1 511	1 788
Other payables and accrued liabilities	1 274	1 273
Total	18 160	15 973

22. Acquisition and disposal of subsidiaries

2011

Acquisitions

During 2011, Glencore acquired interests in various businesses, the most significant being Umcebo Mining (Pty) Ltd ("Umcebo"). The net cash used in the acquisition of subsidiaries and the fair value of the assets acquired and liabilities assumed at the date of acquisition are detailed below:

US $ million	Umcebo¹	Other	Total

Property, plant and equipment	555	220	775
Intangible assets	0	13	13
Investments in Associates	10	0	10
Loans and advances ²	30	6	36
Inventories	10	13	23
Accounts receivable ²	34	19	53
Cash and cash equivalents	4	14	18
Non controlling interest	- 208	- 7	- 215
Non current borrowings	- 57	- 12	- 69
Deferred tax liabilities	- 118	- 3	- 121
Provisions	- 53	- 4	- 57
Accounts payable	- 84	- 28	- 112
Current borrowings	0	- 7	- 7
Total fair value of net assets acquired	123	224	347
Goodwill arising on acquisition ³	0	36	36
Less: cash and cash equivalents acquired	4	14	18
Less: contingent consideration ⁴	0	15	15
Net cash used in acquisition of subsidiaries	119	231	350
¹The fair values are provisional due to the complexity of the valuation process. The finalisation of the fair value of the assets and liabilities acquired will be completed within 12 months of the acquisition. ²Represents the gross contractual amount for loans and advances and accounts receivable. ³None of the goodwill arising on acquisition is deductible for tax purposes. ⁴The contingent consideration related to the purchase of assets of OceanConnect ranges between $ 5 million and $ 15 million based on future earnings of the business acquired.

Umcebo

In December 2011, in order to increase its South African coal market presence, Glencore completed the acquisition of a 43.7% stake in Umcebo, an unlisted South African coal mining company, for $ 123 million cash consideration. Although Glencore holds less than 50% of the voting rights, it has the ability to exercise control over Umcebo as the shareholder agreements allow Glencore to control the Board of Directors through the ability to appoint half of the Directors and the CEO, who has the casting vote in respect of the financial and operating policies of Umcebo. The acquisition was accounted for as a business combination with the non controlling interest being measured at its percentage of net assets acquired.

If the acquisition had taken place effective 1 January 2011, the operation would have contributed revenue of $ 309 million and a loss before attribution of $ 3 million. Glencore's share of income and revenue from the date of these acquisitions amounted to $ nil million due to the fact that the acquisition was completed in late December 2011.

Other

Other comprises primarily acquisitions of 100% interest of crushing plants in the Czech Republic and 90.7% interest of crushing plants in Poland for cash consideration of $ 82 million and $ 71 million, respectively, a 100% interest in Sable Zinc Kabwe Limited, a Zambian metal-processing plant for cash consideration of $ 29 million and certain assets related to the business of OceanConnect for total consideration of $ 30 million. The goodwill recognised in connection with these acquisitions principally related to OceanConnect.

If these acquisitions had taken place effective 1 January 2011, the operations would have contributed revenue of $ 104 million and a loss before attribution of $ 19 million. Glencore's share of revenue and loss from the date of these acquisitions amounted to $ 1,321 million and $ 9 million, respectively.

2010

Acquisitions

During 2010, Glencore acquired controlling interests in various businesses, the most significant being Vasilkovskoye Gold, Chemoil Energy Limited (Chemoil) and Pacorini. The net cash used in the acquisition of subsidiaries and the fair value of the assets acquired and liabilities assumed at the date of acquisition are detailed below:

US $ million	Vasilkovskoye	Chemoil	Pacorini	Other¹	Total

Property, plant and equipment	2 855	519	0	280	3 654
Investments in Associates	0	69	0	0	69
Inventories	44	317	0	93	454
Accounts receivable	103	703	0	76	882
Cash and cash equivalents	13	108	0	11	132
Assets held for sale	0	0	277	0	277
Non controlling interest	- 947	- 230	0	- 55	- 1 232
Non current borrowings	- 14	- 166	0	- 61	- 241
Deferred tax liabilities	- 365	- 96	0	0	- 461
Accounts payable	- 81	- 493	0	- 212	- 786
Current borrowings	0	- 494	0	- 10	- 504
Liabilities held for sale	0	0	- 68	- 0	- 68
Total fair value of net assets acquired	1 608	237	209	122	2 176
Less: amounts previously recognised through investments and loans	1 403	0	0	17	1 420
Less: cash and cash equivalents acquired	13	108	0	11	132
Net cash used in acquisition of subsidiaries	192	129	209	94	624
¹ Includes the acquisitions of a 76% interest in Rio Vermelho, a 60% interest in Biopetrol Industries AG and a 100% interest in Minera Altos de Punitaqui.

Vasilkovskoye

In February 2010, Kazzinc purchased the remaining 60% of Vasilkovskoye Gold, a gold development company, that it did not previously own for $ 1,140 million to enhance its existing gold production base. The acquisition was funded through the payment of $ 205 million and the issuance of new Kazzinc shares which resulted in Glencore's ultimate ownership in Kazzinc being diluted from 69% to 50.7% (without a loss of control). The dilution resulted in a loss of $ 99 million which has been recognised in reserves (see note 13). Prior to acquisition, Kazzinc owned a 40% interest in Vasilkovskoye Gold which, at the date of acquisition, was revalued to its fair value of $ 760 million and as a result, a net gain of $ 462 million was recognised in other income (see note 3). The acquisition was accounted for as a business combination with the non controlling interest being measured at its percentage of net assets acquired determined by using discounted cash flow techniques with a discount rate of 8.5%.

For the period post acquisition, Vasilkovskoye Gold contributed revenue of $ 130 million and a loss before attribution of $ 15 million. If the acquisition had taken place effective 1 January 2010, the operation would have contributed revenue of $ 131 million and a loss before attribution of $ 22 million.

Chemoil

In April 2010, Glencore completed the acquisition of a 51.5% stake in Chemoil, a Singapore listed fuel oil storage and supply company, for $ 237 million cash consideration to strengthen its global storage and marketing capabilities. The acquisition was accounted for as a business combination with the non controlling interest being measured at its percentage of net assets acquired.

For the period post acquisition, Chemoil contributed revenue of $ 6,089 million and income before attribution of $ 4 million. If the acquisition had taken place effective 1 January 2010, the operation would have contributed revenue of $ 7,175 million and a loss before attribution of $ 3 million.

Pacorini

In September 2010, Glencore acquired the metals warehousing division of the Pacorini Group for $ 209 million in cash to further enhance its presence in the metals warehousing business. As contemplated at the time of the acquisition, Glencore commenced a review of the strategic alternatives to strengthen Glencore's participation in the metals warehousing business, which was expected to result in a merger involving the acquired business and a third party. As a result, the assets and liabilities were classified as held for sale in 2010.

In March 2011 the plan to merge the Pacorini business with a third party was abandoned due to a breakdown in final negotiations and the net assets previously classified as held for sale in 2010 were reclassified to the respective line items in the statement of financial position at depreciated cost (see note 12). Subsequent to this reclassification, the acquisition accounting was finalised as follows:

US $ million	Provisional fair value as previously reported	Adjustments	Fair value at acquisition

Property, plant and equipment	0	3	3
Intangible assets	0	32	32
Accounts receivable	0	96	96
Cash and cash equivalents	0	21	21
Assets held for sale ¹	277	- 277	0
Non current borrowings	0	- 1	- 1
Deferred tax liabilities ²	0	- 8	- 8
Accounts payable	0	- 62	- 62
Current borrowings	0	- 5	- 5
Liabilities held for sale ¹	- 68	68	0
Total fair value of net assets acquired	209	- 133	76
Goodwill arising on acquisition ²	0	133	133
Less: cash and cash equivalents acquired	21	0	21
Net cash used in acquisition of subsidiaries	188	0	188
¹ Assets and liabilities held for sale have been reclassified to the respective line items in the statement of financial position. ² $ 37 million of goodwill is expected to be deductible for tax purposes.

Disposals

In 2011 and 2010, there were no material disposals of subsidiaries.

23. Financial and capital risk management

Financial risks arising in the normal course of business from Glencore's operations comprise market risk (including commodity price risk, interest rate risk and currency risk), credit risk (including performance risk) and liquidity risk. It is Glencore's policy and practice to identify and, where appropriate and practical, actively manage such risks to support its objectives in managing its capital and future financial security and flexibility. Glencore's overall risk management program focuses on the unpredictability of financial markets and seeks to protect its financial security and flexibility by using derivative financial instruments where possible to substantially hedge these financial risks. Glencore's finance and risk professionals, working in coordination with the commodity departments, monitor, manage and report regularly to senior management, the Audit Committee and ultimately the Board of Directors on the approach and effectiveness in managing financial risks along with the financial exposures facing the Group.

Glencore's objectives in managing its capital (see table below) include preserving its overall financial health and strength for the benefit of all stakeholders, maintaining an optimal capital structure in order to provide a high degree of financial flexibility at an attractive cost of capital and safeguarding its ability to continue as a going concern, while generating sustainable long term profitability. Paramount in meeting these objectives is Glencore's policy to maintain an investment grade rating status. Following the Listing, both S&P (via an upgrade) and Moody's (via stabilisation of outlook) improved their credit ratings on Glencore to BBB (stable) and Baa2 (stable) respectively. Following the announcement of the proposed merger with Xstrata, both the aforementioned agencies have flagged possible upgrade potential.

US $ million	2011	2010

Total net assets attributable to profit participation shareholders, non controlling interests and equity holders	32 335	22 507
Less: non controlling interests	3 070	2 894
Glencore shareholders' funds	29 265	19 613

Commodity price risk

Glencore is exposed to price movements for the inventory it holds and the products it produces which are not held to meet priced forward contract obligations and forward priced purchase or sale contracts. Glencore manages a significant portion of this exposure through futures and options transactions on worldwide commodity exchanges or in over the counter (OTC) markets, to the extent available. Commodity price risk management activities are considered an integral part of Glencore's physical commodity marketing activities and the related assets and liabilities are included in other financial assets from and other financial liabilities to derivative counterparties, including clearing brokers and exchanges. Whilst it is Glencore's policy to substantially hedge its commodity price risks, there remains the possibility that the hedging instruments chosen may not always provide effective mitigation of the underlying price risk. The hedging instruments available to the marketing businesses may differ in specific characteristics to the risk exposure to be hedged, resulting in an ongoing and unavoidable basis risk exposure. Residual basis risk exposures represent a key focus point for Glencore's commodity department teams who actively engage in the management of such.

Glencore has entered into futures transactions to hedge the price risk of specific future operating expenditures. These trans-actions were identified as cash flow hedges. The fair value of these derivatives is as follows:

	Notional amounts		Recognised fair values
US $ million	Buy	Sell	Assets	Liabilities	Maturity

Commodity futures - 2011	0	181	0	101	2012
Commodity futures - 2010	0	187	0	75	2012

Value at risk

One of the tools used by Glencore to monitor and limit its primary market risk exposure, namely commodity price risk related to its physical marketing activities, is the use of a value at risk (VaR) computation. VaR is a risk measurement technique which estimates the potential loss that could occur on risk positions as a result of movements in risk factors over a specified time horizon, given a specific level of confidence. The VaR methodology is a statistically defined, probability based approach that takes into account market volatil-ities, as well as risk diversification by recognising offsetting positions and correlations between commodities and markets. In this way, risks can be measured consistently across all markets and commodities and risk measures can be aggregated to derive a single risk value. Glencore's Board has set a consolidated VaR limit (1 day 95%) of $ 100 million representing less than 0.5% of Glencore shareholders' funds.

Glencore uses a VaR approach based on Monte Carlo simulations and is computed at a 95% confidence level with a weighted data history using a combination of a one day and one week time horizon.

Position sheets are regularly distributed and monitored and weekly Monte Carlo simulations are applied to the various business groups' net marketing positions to determine potential future exposures. As at 31 December 2011, Glencore's 95%, one day market risk VaR was $ 28 million (2010: $ 58 million). Average market risk VaR (1 day 95%) during 2011 was $ 39 million compared to $ 43 million during 2010.

VaR does not purport to represent actual gains or losses in fair value on earnings to be incurred by Glencore, nor does Glencore claim that these VaR results are indicative of future market movements or representative of any actual impact on its future results. VaR should always be viewed in the context of its limitations; notably, the use of historical data as a proxy for estimating future events, market illiquidity risks and tail risks. Glencore recognises these limitations, and thus complements and continuously refines its VaR analysis by ana-lysing forward looking stress scenarios and back testing calculated VaR against actual movements arising in the next business week.

Glencore's VaR computation currently covers its business in the key base metals (aluminium, nickel, zinc, copper, lead, etc), coal, oil/natural gas and the main risks in the Agricultural products business segment (grain, oilseeds, sugar and cotton) and assesses the open-priced positions which are those subject to price risk, including inventories of these commodities. Due to the lack of a liquid terminal market, Glencore does not include a VaR calculation for products such as alumina or ferroalloy commodities as it does not consider the nature of these markets, nor the Group's underlying exposures to these products to be suited to this type of analysis. Alternative tools have been implemented and are used to monitor exposures related to these products.

Net present value at risk

Glencore's future cash flows related to its forecast energy, minerals and agricultural production activities are also exposed to -commodity price movements. Glencore manages this exposure through a combination of portfolio diversification, occasional shorter term hedging via futures and options transactions, insurance products and continuous internal monitoring, reporting and quantification of the underlying operations' estimated valuations.

Interest rate risk

Glencore is exposed to various risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its assets and liabilities and cash flows. Matching of assets and liabilities is utilised as the dominant method to hedge interest rate risks. Floating rate debt which is predominantly used to fund fast turning working capital (interest is internally charged on the funding of this working capital) is primarily based on U.S. $ LIBOR plus an appropriate premium. Accordingly, prevailing market interest rates are continuously factored into transactional pricing and terms.

Assuming the amount of floating rate liabilities at the reporting period end were outstanding for the whole year, interest rates were 50 basis points higher/lower and all other variables held constant, Glencore's income and shareholders' funds for the year ended 31 December 2011 would decrease/increase by $ 98 million (2010: decrease/increase by $ 91 million).

Currency risk

The U.S. Dollar is the predominant functional currency of the Group. Currency risk is the risk of loss from movements in exchange rates related to transactions and balances in currencies other than the U.S. Dollar. Such transactions include operating expenditure, capital expenditure and to a lesser extent purchases and sales in currencies other than the functional currency. Purchases or sales of commodities concluded in currencies other than the functional currency, apart from certain limited domestic sales at industrial operations which act as a hedge against local operating costs, are hedged through forward exchange contracts. Consequently, foreign exchange movements against the U.S. Dollar on recognised transactions would have an immaterial financial impact. Glencore enters into currency hedging transactions with leading financial institutions.

Glencore's debt related payments (both principal and interest) are denominated in or swapped using hedging instruments into U.S. Dollars. Glencore's operating expenses, being a small portion of its revenue base, are incurred in a mix of currencies of which the U.S. Dollar, Swiss Franc, Pound Sterling, Australian Dollar, Euro, Kazakhstan Tenge, Colombian Peso and South African Rand are the predominant currencies.

Glencore has issued Euro, Swiss Franc and Sterling denominated bonds (see note 17). Cross currency swaps were concluded to hedge the currency risk on the principal and related interest payments of these bonds. These contracts were designated as cash flow hedges of the foreign currency risks associated with the bonds. The fair value of these derivatives is as follows:

	Notional amounts		Recognised fair values		Average
US $ million	Buy	Sell	Assets	Liabilities	maturity ¹

Cross currency swap agreements - 2011	0	6 080	0	174	2015
Cross currency swap agreements - 2010	0	6 584	0	185	2015
¹ Refer to note 17 for details.

Credit risk

Credit risk arises from the possibility that counterparties may not be able to settle obligations due to Glencore within their agreed payment terms. Financial assets which potentially expose Glencore to credit risk consist principally of cash and cash equivalents, receivables and advances, derivative instruments and non current advances and loans. Glencore's credit management process includes the assessment, monitoring and reporting of counterparty exposure on a regular basis. Glencore's cash equivalents are placed overnight with a diverse group of highly credit rated financial institutions. Credit risk with respect to receivables and advances is mitigated by the large number of customers comprising Glencore's customer base, their diversity across various industries and geographical areas, as well as Glencore's policy to mitigate these risks through letters of credit, netting, collateral and insurance arrangements where appropriate. Additionally, it is Glencore's policy that transactions and activities in trade related financial instruments be concluded under master netting agreements or long form confirmations to enable offsetting of balances due to/from a common counterparty in the event of default by the counterparty. Glencore actively and continuously monitors the credit quality of its counterparties through internal reviews and a credit scoring process, which includes, where available, public credit ratings. Balances with counterparties not having a public investment grade or equivalent internal rating are typically enhanced to investment grade through the extensive use of credit enhancement products, such as letters of credit or insurance products. Glencore has a diverse customer base, with no customer representing more than 3% (2010: 3%) of its trade receivables (on a gross basis taking into account credit enhancements) or accounting for more than 2% of its revenues over the year ended 2011 (2010: 3%).

The maximum exposure to credit risk, without considering netting agreements or without taking account of any collateral held or other credit enhancements, is equal to the carrying amount of Glencore's financial assets plus the guarantees to third parties and Associates (see note 27).

Performance risk

Performance risk arises from the possibility that counterparties may not be willing or able to meet their future contractual physical sale or purchase obligations to/from Glencore. Glencore undertakes the assessment, monitoring and reporting of performance risk within its overall credit management process. Glencore's market breadth, diversified supplier and customer base as well as the standard pricing mechanism in the majority of Glencore's commodity portfolio which does not fix prices beyond three months, with the main exception being coal and cotton where longer term fixed price contracts are common, ensure that performance risk is adequately mitigated. The commodity industry is continuing a trend towards shorter fixed price contract periods, in part to mitigate against such potential performance risk, but also due to the development of more transparent and liquid spot markets, e.g. coal and iron ore and associated derivative products and indexes.

Liquidity risk

Liquidity risk is the risk that Glencore is unable to meet its payment obligations when due, or that it is unable, on an ongoing basis, to borrow funds in the market on an unsecured or secured basis at an acceptable price to fund actual or proposed commitments. Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents through the availability of adequate committed funding facilities. Glencore has set itself an internal minimum liquidity target to maintain at all times, available committed undrawn credit facilities of $ 3 billion (2010: $ 3 billion). Glencore's credit profile, diversified funding sources and committed credit facilities, ensure that sufficient liquid funds are maintained to meet its liquidity requirements. As part of its liquidity management, Glencore closely monitors and plans for its future capital expenditure and proposed investments, as well as credit facility refinancing/extension requirements, well ahead of time.

Certain borrowing arrangements require compliance with specific financial covenants related to working capital, minimum current ratio and a maximum long term debt to tangible net worth ratio. During the period, the Company has complied with these requirements.

As at 31 December 2011, Glencore had available committed undrawn credit facilities, cash and marketable securities amounting to $ 6,831 million (2010: $ 4,220 million). The maturity profile of Glencore's financial liabilities based on the contractual terms is as follows:

2011 US $ million	After 5 years	Due 3 - 5 years	Due 2 - 3 years	Due 1 - 2 years	Due 0 -1 year	Total

Borrowings	3 285	2 178	9 985	4 396	8 185	28 029
Commodities sold with agreements to repurchase	0	0	0	0	39	39
Expected future interest payments	270	547	768	849	942	3 376
Accounts payable	0	0	0	0	18 160	18 160
Other financial liabilities	0	820	39	394	3 551	4 804
Total	3 555	3 545	10 792	5 639	30 877	54 408

Current assets					45 731	45 731

2010 US $ million	After 5 years	Due 3 - 5 years	Due 2 - 3 years	Due 1 - 2 years	Due 0 -1 year	Total

Borrowings	4 152	4 974	7 094	2 031	11 881	30 132
Commodities sold with agreements to repurchase	0	0	0	0	484	484
Expected future interest payments	668	949	766	800	834	4 017
Accounts payable	0	0	0	0	15 973	15 973
Other financial liabilities	0	739	288	955	6 084	8 066
Liabilities held for sale	0	0	0	0	45	45
Total	4 820	6 662	8 148	3 786	35 301	58 717

Current assets					44 296	44 296

24. Financial Instruments

Fair value of financial instruments

The following table presents the carrying values and fair values of Glencore's financial instruments. Fair value is the amount at which a financial instrument could be exchanged in an arm's length transaction between informed and willing parties, other than in a forced or liquidated sale. Where available, market values have been used to determine fair values. When market values are not available, fair values have been calculated by discounting expected cash flows at prevailing interest and exchange rates. The estimated fair values have been determined using market information and appropriate valuation methodologies, but are not necessarily indicative of the amounts that Glencore could realise in the normal course of business.

The financial assets and liabilities are presented by class in the tables below at their carrying values, which generally approximate to the fair values. In the case of $ 28,029 million (2010: $ 30,132 million) of borrowings, the fair value at 31 December 2011 is $ 28,247 million (2010: $ 31,476 million)

2011 US $ million	Carrying value ¹	Available for sale	FVtPL ²	Total

Assets
Other investments ³	0	842	705	1 547
Advances and loans	4 141	0	0	4 141
Accounts receivable	21 895	0	0	21 895
Other financial assets	0	0	5 065	5 065
Cash and cash equivalents and marketable securities	0	0	1 345	1 345
Total financial assets	26 036	842	7 115	33 993

Liabilities
Borrowings	28 029	0	0	28 029
Commodities sold with agreements to repurchase	39	0	0	39
Accounts payable	18 160	0	0	18 160
Other financial liabilities	0	0	4 804	4 804
Total financial liabilities	46 228	0	4 804	51 032
¹Carrying value comprises investments, loans, accounts receivable, accounts payable and other liabilities measured at amortised cost. ²FVtPL - Fair value through profit and loss - held for trading. ³Other investments of $ 1,429 million are classified as Level 1 with the remaining balance of $ 118 million classified as Level 3.

2010 US $ million	Carrying value ¹	Available for sale	FVtPL ²	Total

Assets
Other investments	0	2 048	390	2 438
Advances and loans	3 830	0	0	3 830
Accounts receivable	18 994	0	0	18 994
Other financial assets	0	0	5 982	5 982
Cash and cash equivalents and marketable securities	0	0	1 529	1 529
Total financial assets	22 824	2 048	7 901	32 773

Liabilities
Ordinary and hybrid profit participation shareholders	14 189	0	0	14 189
Borrowings	30 132	0	0	30 132
Commodities sold with agreements to repurchase	484	0	0	484
Accounts payable	15 973	0	0	15 973
Other financial liabilities	0	0	8 066	8 066
Total financial liabilities	60 778	0	8 066	68 844
¹Carrying value comprises investments, loans, accounts receivable, accounts payable and other liabilities measured at amortised cost. ²FVtPL - Fair value through profit and loss - held for trading.

The following tables show the fair values of the derivative financial instruments including trade related financial and physical forward purchase and sale commitments by type of contract as at 31 December 2011 and 2010. Fair values are primarily determined using quoted market prices or standard pricing models using observable market inputs where available and are presented to reflect the expected gross future cash in/outflows. Glencore classifies the fair values of its financial instruments into a three level hierarchy based on the degree of the source and observability of the inputs that are used to derive the fair value of the financial asset or liability as follows:

Level 1 unadjusted quoted inputs in active markets for identical assets or liabilities; or

Level 2 inputs other than quoted inputs included in Level 1 that are directly or indirectly observable in the market; or

Level 3 unobservable market inputs or observable but can not be market corroborated, requiring Glencore to make market

based assumptions.

Level 1 classifications primarily include futures with a tenor of less than one year and options that are exchange traded. Level 2 classi-fications primarily include futures with a tenor greater than one year, over the counter options, swaps and physical forward transactions which derive their fair value primarily from exchange quotes and readily observable broker quotes. Level 3 classifications primarily include physical forward transactions which derive their fair value predominately from models that use broker quotes and applicable market based estimates surrounding location, quality and credit differentials. In circumstances where Glencore cannot verify fair value with observable market inputs (Level 3 fair values), it is possible that a different valuation model could produce a materially different estimate of fair value.

It is Glencore's policy that transactions and activities in trade related financial instruments be concluded under master netting agreements or long form confirmations to enable balances due to/from a common counterparty to be offset in the event of default by the counterparty.

Other financial assets

2011 US $ million	Level 1	Level 2	Level 3	Total

Commodity related contracts
Futures	2 521	528	0	3 049
Options	50	0	0	50
Swaps	67	239	0	306
Physical forwards	0	1 015	458	1 473
Financial contracts
Cross currency swaps	0	76	0	76
Foreign currency and interest rate contracts	61	50	0	111
Total	2 699	1 908	458	5 065

2010 US $ million	Level 1	Level 2	Level 3	Total

Commodity related contracts
Futures	1 168	628	0	1 796
Options	106	43	0	149
Swaps	174	471	0	645
Physical forwards	0	1 744	1 374	3 118
Financial contracts
Cross currency swaps	0	149	0	149
Foreign currency and interest rate contracts	45	80	0	125
Total	1 493	3 115	1 374	5 982

Other financial liabilities

2011 US $ million	Level 1	Level 2	Level 3	Total

Commodity related contracts
Futures	1 643	758	0	2 401
Options	61	51	25	137
Swaps	31	372	0	403
Physical forwards	0	590	416	1 006
Financial contracts
Cross currency swaps	0	766	0	766
Foreign currency and interest rate contracts	76	15	0	91
Total	1 811	2 552	441	4 804

2010 US $ million	Level 1	Level 2	Level 3	Total

Commodity related contracts
Futures	2 786	1 356	0	4 142
Options	25	70	99	194
Swaps	295	489	0	784
Physical forwards	0	1 199	1 019	2 218
Financial contracts
Cross currency swaps	0	660	0	660
Foreign currency and interest rate contracts	37	31	0	68
Total	3 143	3 805	1 118	8 066

The following table shows the net changes in fair value of Level 3 other financial assets and other financial liabilities:

US $ million	Swaps	Physical forwards	Options	Total Level 3

1 January 2010	- 1	681	- 88	592
Total gain/(loss) recognised in cost of goods sold	2	- 209	- 58	- 265
Sales	0	0	- 41	- 41
Realised	- 1	- 117	88	- 30
31 December 2010	0	355	- 99	256

1 January 2011	0	355	- 99	256
Total gain/(loss) recognised in cost of goods sold	0	- 269	1	- 268
Sales	0	0	0	0
Realised	0	- 44	73	29
31 December 2011	0	42	- 25	17

25. AUDITORS' REMUNERATION

US $ million	2011	2010

Remuneration in respect of the audit of Glencore's consolidated financial statements	3	3
Other audit fees, primarily in respect of audits of accounts of subsidiaries	13	11
Total audit fees	16	14
Audit-related assurance services	2	1
Corporate finance services ¹	12	7
Taxation compliance services	2	1
Other taxation advisory services	1	1
Other services	1	1
Total non-audit fees	18	11
Total professional fees	34	25
¹Included within corporate finance services is $ 9 million (2010: $ 6 million) of professional fees related directly to the auditors role as Reporting Accountant in connection with the Listing. The expenses have been classified as Listing related expenses (see note 13).

26. Future commitments

Capital expenditure for the acquisition of property, plant and equipment is generally funded through the cash flow generated by the respective industrial entities. As at 31 December 2011, $ 884 million (2010: $ 787 million), of which 92% (2010: 100%) relates to expenditure to be incurred over the next year, was contractually committed for the acquisition of property, plant and equipment.

Certain of Glencore's exploration tenements and licenses require it to spend a minimum amount per year on development activities, a significant portion of which would have been incurred in the ordinary course of operations. As at 31 December 2011, $ 549 million (2010: $ 404 million) of such development expenditures are to be incurred, of which 57% (2010: 36%) are for commitments to be settled over the next year.

Glencore procures seagoing vessel/chartering services to meet its overall marketing objectives and commitments. At year end, Glencore has committed to future hire costs to meet future physical delivery and sale obligations and expectations of $ 2,171 million (2010: $ 2,608 million) of which $ 570 million (2010: $ 325 million) are with associated companies. 50% (2010: 50%) of these charters are for services to be received over the next 2 years.

As part of Glencore's ordinary sourcing and procurement of physical commodities and other ordinary marketing obligations, the selling party may request that a financial institution act as either a) the paying party upon the delivery of product and qualifying documents through the issuance of a letter of credit or b) the guarantor by way of issuing a bank guarantee accepting responsibility for Glencore's contractual obligations. As at 31 December 2011, $ 8,642 million (2010: $ 8,956 million) of such commitments have been issued on behalf of Glencore, which will generally be settled simultaneously with the payment for such commodity.

Glencore has entered into various operating leases mainly as lessee for office and warehouse/storage facilities. Rental expenses for these leases totalled respectively $ 77 million and $ 66 million for the years ended 31 December 2011 and 2010. Future net minimum lease payments under non cancellable operating leases are as follows:

US $ million	2011	2010

Within 1 year	76	97
Between 2 and 5 years	147	225
After 5 years	120	151
Total	343	473

Glencore has entered into finance leases for various plant and equipment items, primarily vessels and machinery. Future net minimum lease payments under finance leases together with the future finance charges are as follows:

	Undiscounted minimum lease payments		Present value of minimum lease payments
US $ million	2011	2010	2011	2010

Within 1 year	50	5	39	4
Between 2 and 5 years	197	23	164	18
After 5 years	136	95	114	45
Total minimum lease payments	383	123	317	67
Less: amounts representing finance lease charges	66	56
Present value of minimum lease payments	317	67	317	67

Future development and related commitments

Kazzinc

In April 2011, Glencore agreed to acquire additional stakes in Kazzinc. Upon closing, these purchases will increase Glencore's ownership from 50.7% to 93.0% for a total transaction consideration of $ 2.2 billion in cash and $ 1.0 billion in equity based on the Listing price (116.8 million shares). Glencore and seller are currently targeting an agreed Q3 2012 completion date.

Kansuki

In August 2010, Glencore acquired an ultimate 37.5% interest in the Kansuki concession (Kansuki), a 185 square kilometre copper and cobalt pre-development project which borders Glencore's partly owned Mutanda concession in the DRC. In exchange, Glencore has a) an obligation to finance the first $400 million of development related expenditures, if any, as and when such expenditure is incurred, b) the right to operate the operations and c) a life of mine off-take agreement for all copper and cobalt produced by Kansuki. In addition, one of the partners in Kansuki has the right to sell an additional 18.75% ultimate interest to Glencore at the then calculated equity value of the operation, at the earlier of the date the operation produces a minimum annual 70,000 tonnes of copper and August 2013. A total of $ 135 million of capital expenditure for mine and plant development has been committed of which $ 103 million has been spent. Exploration of the Kansuki concession is ongoing. Discussions with respect to a potential combination of the Mutanda and Kansuki operations are ongoing, with a view to ultimately obtaining a majority stake in the merged entity.

Prodeco

Prodeco currently exports the majority of its coal through Puerto Prodeco which operates under a private concession awarded by the Colombian government. This concession expired in March 2009, however the Colombian government has continued to grant Prodeco the right to use the port under annual lease agreements. To comply with new government regulations on loading methods, which became effective from July 2010 and to alleviate itself from the uncertainty of the annual concession renewal process associated with Puerto Prodeco, Prodeco has commenced construction of a new, wholly owned, port facility (Puerto Nuevo) which is estimated to cost $ 567 million and be commissioned over the first half of 2013. If the concession does not continue to be extended, Prodeco's export capability could be curtailed, which would significantly impact operations until Puerto Nuevo is operational. As at 31 December 2011, $ 246 million of the estimated initial investment has been incurred and $ 157 million has been contractually committed and is included in the capital expenditure commitments disclosure above.

Rosh Pinah Zinc Corporation (Proprietary) Limited

In December 2011, Glencore entered into an agreement to acquire an 80.1% interest in Rosh Pinah, an underground zinc/lead mine in south-western Namibia for total consideration of approximately $ 175 million. As at 31 December 2011, $ 47 million have been placed in escrow (see note 11). Closing is subject to the receipt of applicable regulatory approvals which are expected in 2012.

27. Contingent liabilities

The amount of corporate guarantees in favour of associated and third parties as at 31 December 2011, was $ 53 million (2010: $ 69 million). Also see note 7.

Litigation

Certain legal actions, other claims and unresolved disputes are pending against Glencore. Whilst Glencore cannot predict the results of any litigation, it believes that it has meritorious defenses against those actions or claims. Glencore believes the likelihood of any material liability arising from these claims to be remote and that the liability, if any, resulting from any litigation will not have a material adverse effect on its consolidated income, financial position or cashflows.

Environmental contingencies

Glencore's operations, mainly those arising from the ownership in industrial investments, are subject to various environmental laws and regulations. Glencore is in material compliance with those laws and regulations. Glencore accrues for environmental contingencies when such contingencies are probable and reasonably estimable. Such accruals are adjusted as new information develops or circumstances change. Recoveries of environmental remediation costs from insurance companies and other parties are recorded as assets when the recoveries are virtually certain. At this time, Glencore is unaware of any material environmental incidents at its locations.

Bolivian constitution

In 2009 the Government of Bolivia enacted a new constitution. One of the principles of the constitution requires mining entities to form joint ventures with the government. Glencore, through its subsidiary Sinchi Wayra, has, in good faith, entered into negoti-ations with the Bolivian government regarding this requirement. Whilst progress has been made, the final outcome and the timing thereof cannot be determined at this stage.

28. Related party transactions

In the normal course of business, Glencore enters into various arm's length transactions with related parties (including Xstrata and Century), including fixed price commitments to sell and to purchase commodities, forward sale and purchase contracts, agency agreements and management service agreements. Outstanding balances at period end are unsecured and settlement occurs in cash (see notes 8, 10, 13 and 21). There have been no guarantees provided or received for any related party receivables or payables.

All transactions between Glencore and its subsidiaries are eliminated on consolidation along with any unrealised profits and losses

between its subsidiaries and Associates. Glencore entered into the following transactions with its Associates:

US $ million	2011	2010

Sales	1 666	1 086
Purchases	- 10 414	- 9 472
Interest income	42	34
Interest expense	- 1	- 1
Agency income	69	82
Agency expense	0	- 5

Remuneration of key management personnel

The remuneration of Directors and other members of key management personnel recognised in the statement of income including salaries and other current employee benefits amounted to $ 170 million (2010: $ 146 million). Immediately prior to the Listing, Glencore implemented a Restructuring whereby $ 6,130 million of PPS and HPPS amounts owing to the Directors and other members of key management personnel were settled in exchange for new ordinary shares (see note 13).

29. Subsequent events

Subsequent to year end, the following significant events occurred:

•On 7 February 2012, Glencore announced its intention to acquire an additional 37.5% stake in Chemoil for cash consideration of $ 174 million. The transaction is expected to close in Q2 2012.

•On 7 February 2012, the Glencore Directors and the Independent Xstrata Directors announced that they had reached an agreement on the terms of a recommended all-share merger (the "Merger") of equals of Glencore and Xstrata to create a unique $ 90 billion natural resources group. The terms of the Merger provide Xstrata shareholders with 2.8 newly issued shares in Glencore for each Xstrata share held. The Merger is to be effected by way of a Court sanctioned scheme of arrangement of Xstrata under Part 26 of the UK Companies Act, pursuant to which Glencore will acquire the entire issued and to be issued ordinary share capital of Xstrata not already owned by the Glencore Group. The Merger is subject to shareholder, anti-trust and regulatory approvals.

30. List of principal operating, finance and industrial subsidiaries and investments

	Method of consolidation in 2011 ¹	Country of incorporation	% interest 2011	% interest 2010	Main activity

Glencore International plc	P	Jersey
Glencore International AG	F	Switzerland	100.0	n.a.	Operating
Glencore AG	F	Switzerland	100.0	100.0	Operating
Allied Alumina Inc. (Sherwin Alumina)	F	United States	100.0	100.0	Alumina production
Century Aluminum Company ²	E	United States	46.4	44.0	Aluminium production
Glencore Funding LLC	F	United States	100.0	100.0	Finance
Glencore UK Ltd	F	U.K.	100.0	100.0	Operating
Glencore Commodities Ltd	F	U.K.	100.0	100.0	Operating
Glencore Energy UK Ltd	F	U.K.	100.0	100.0	Operating
Glencore Group Funding Limited	F	UAE	100.0	100.0	Finance
Glencore Finance (Bermuda) Ltd	F	Bermuda	100.0	100.0	Finance
AR Zinc Group	F	Argentina	100.0	100.0	Zinc/Lead production
Boundary Ventures Limited ³	E	Burkina Faso	55.7	0.0	Zinc development
Empresa Minera Los Quenuales S.A.	F	Peru	97.5	97.1	Zinc/Lead production
Glencore Exploration (EG) Ltd.	F	Bermuda	100.0	100.0	Oil exploration/development
Glencore Finance (Europe) S.A.	F	Luxembourg	100.0	100.0	Finance
Kansuki Group	E	DRC	37.5	37.5	Copper production
Minera Altos de Punitaqui	F	Chile	100.0	100.0	Copper production
Mopani Copper Mines plc	F	Zambia	73.1	73.1	Copper production
Mutanda Group	E	DRC	40.0	40.0	Copper production
Prodeco Group	F	Colombia	100.0	100.0	Coal production
Recylex S.A.	E	France	32.2	32.2	Zinc/Lead production
Sinchi Wayra Group	F	Bolivia	100.0	100.0	Zinc/Tin production
United Company Rusal Limited	O	Jersey	8.8	8.8	Aluminium production
Finges Investment B.V.	F	Netherlands	100.0	100.0	Finance
Biopetrol Industries AG ⁴	F	Switzerland	60.3	60.3	Biodiesel production
Glencore Grain B.V.	F	Netherlands	100.0	100.0	Operating
Nyrstar N.V.	O	Belgium	7.8	7.8	Zinc/Lead production
Optimum Coal Holdings Limited	E	South Africa	31.2	0.0	Coal production
Pannon Vegetable Oil Manufacturing	F	Hungary	100.0	100.0	Vegetable oil production
Rio Vermelho	F	Brazil	100.0	76.0	Sugar cane/ethanol production
Sable Zinc Kabwe Limited	F	Zambia	100.0	0.0	Copper production
Umcebo Mining (Pty) Ltd ⁵	F	South Africa	43.7	0.0	Coal production
Usti Oilseed Group	F	Czech Republic	100.0	0.0	Edible oil production
Xstrata plc	E	U.K.	34.5	34.5	Diversified production
Zaklady Tluszczowe w Bodaczowie	F	Poland	90.7	0.0	Edible oil production
Chemoil Energy Limited ⁶	F	Hong Kong	51.5	51.5	Oil storage and bunkering
Cobar Group	F	Australia	100.0	100.0	Copper production
Glencore Singapore Pte Ltd	F	Singapore	100.0	100.0	Operating
Kazzinc Ltd.	F	Kazakhstan	50.7	50.7	Zinc/Lead/Copper production
Vasilkovskoye Gold	F	Kazakhstan	100.0	100.0	Gold production
¹P=Parent; F = Full consolidation; E = Equity method; O = Other investment ²Represents Glencore's economic interest in Century, comprising 41.6% (2010: 39.1%) voting interest and 4.8% (2010: 4.9%) non voting interest. ³Although Glencore holds more than 50% of the voting rights, it does not have the ability to exercise control over Boundary Ventures as a result of shareholder agreements which provide for joint control over the governance of the financial and operating policies. ⁴Publicly traded on the Frankfurt Stock Exchange under the symbol A0HNQ5. Glencore owns 46,812,601 shares. ⁵Although Glencore holds less than 50% of the voting rights, it has the ability to exercise control over Umcebo as a result of shareholder agreements which provide Glencore the ability to control the Board of Directors. ⁶Publicly traded on the Singapore Exchange under the symbol CHEL.SI. Glencore owns 666,204,594 shares.
	Method of consolidation in 2011	Country of incorporation	% interest 2011	% interest 2010	Main activity

Katanga Mining Limited ⁷	F	Bermuda	75.2	74.4	Copper production
Murrin Murrin Group	F	Australia	100.0	82.4	Nickel production
Moinho Agua Branca S.A.	F	Brazil	97.0	97.0	Wheat flour milling
Moreno Group	F	Argentina	100.0	100.0	Edible oils production
Pacorini Group	F	Switzerland	100.0	100.0	Metals warehousing
Pasar Group	F	Philippines	78.2	78.2	Copper production
Polymet Mining Corp.	E	Canada	24.1	6.3	Copper production
Portovesme S.r.L.	F	Italy	100.0	100.0	Zinc/Lead production
Renova S.A.	E	Argentina	33.5	33.3	Vegetable oil production
Russneft Group (various companies) ⁸	O	Russia	40.0 - 49.0	40.0 - 49.0	Oil production
Shanduka Coal (Pty) Ltd	F	South Africa	70.0	70.0	Coal production
ST Shipping & Transport Pte Ltd	F	Singapore	100.0	100.0	Operating
Topley Corporation	F	B.V.I.	100.0	100.0	Ship owner
Volcan Compania Minera S.A.A.	O	Peru	6.9	4.1	Zinc production
⁷Publicly traded on the Toronto Stock Exchange under the symbol KAT.TO. Glencore owns 1,433,702,634 shares. ⁸Although Glencore holds more than 20% of the voting rights, it has limited key management influence and thus does not exercise significant influence.

Glossary

Available committed liquidity

US $ million	2011	2010

Cash and cash equivalents and marketable securities	1 345	1 529
Headline committed syndicated revolving credit facilities	11 905	10 260
Amount drawn under syndicated revolving credit facilities	- 5 907	- 7 259
Amount drawn under US commercial paper program	- 512	- 310
Total	6 831	4 220

ADJUSTED CURRENT RATIO

Current assets over current liabilities, both adjusted to exclude other financial liabilities.

ADJUSTED EBIT/EBITDA

US $ million	2011	2010

Revenue	186 152	144 978
Cost of goods sold	- 181 938	- 140 467
Selling and administrative expenses	- 857	- 1 063
Share of income from associates and jointly controlled entities	1 972	1 829
Dividend income	24	13
Share of Associates' exceptional items	45	0
Adjusted EBIT	5 398	5 290
Depreciation and amortisation	1 066	911
Adjusted EBITDA	6 464	6 201

CURRENT CAPITAL EMPLOYED

Current capital employed is current assets, presented before assets held for sale, less accounts payable, other financial liabilities, current provisions and income tax payable.

Copper equivalent

Glencore has adopted a copper equivalent measure to assist in analysing and evaluating across its varied commodity portfolio. The copper equivalent measure is determined by multiplying the volumes of the respective commodity produced or marketed by the ratio of the respective commodity's average price over the average copper price in the prevailing period.

GLENCORE NET INCOME

Income before attribution less attribution to non controlling interests.

GLENCORE SHAREHOLDERS' FUNDS

Total net assets attributable to profit participation shareholders, non controlling interests and equity holders less non controlling interests.

Readily marketable inventories

Readily marketable inventories are readily convertible into cash due to their very liquid nature, widely available markets and the fact that the price risk is covered either by a physical sale transaction or hedge transaction on a commodity exchange or with a highly rated counterparty.

---------------------------------------------------------

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any securities. The making of this announcement does not constitute a recommendation regarding any securities.

This announcement may include statements that are, or may be deemed to be, "forward looking statements", beliefs or opinions, including statements with respect to the business, financial condition, results of operations, prospects, strategies and plans of Glencore. These forward looking statements involve known and unknown risks and uncertainties, many of which are beyond Glencore's control and all of which are based on the Glencore board of director's current beliefs and expectations about future events. These forward looking statements may be identified by the use of forward looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "will", "could", or "should" or in each case, their negative or other variations thereon or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts. Forward looking statements may and often do differ materially from actual results. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Services Authority and the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited), Glencore is not under any obligation and Glencore and its affiliates expressly disclaim any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing Glencore. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward looking statements. Forward looking statements speak only as of the date of this announcement.

The financial information contained in this results announcement has been prepared to comply with the terms of Glencore's listed debt and should not be relied on for any other purpose.

No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per Glencore share for the current or future financial years would necessarily match or exceed the historical published earnings per Glencore share.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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