BHP Billiton PLC BHP Annual Financial Report 2017 (2238R)

TIDMBLT

RNS Number : 2238R

BHP Billiton PLC

19 September 2017

 
Issued by:      BHP Billiton Plc 
Date:           20 September 2017 
To:             London Stock Exchange 
                 JSE Limited 
For Release:    Immediately 
Contact:        Helen Ratsey [phone] 
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   BHP Billiton Plc - Annual Financial Report 2017 
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UK Listing Authority Submissions

The following documents have today been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.morningstar.co.uk/uk/NSM

   --     Annual Report 2017 

http://www.bhp.com/-/media/documents/investors/annual-reports/2017/bhpannualreport2017.pdf

   --     Sustainability Report 2017 

http://www.bhp.com/-/media/documents/investors/annual-reports/2017/bhpsustainabilityreport2017.pdf

   --     BHP Billiton Plc Notice of Meeting 2017 

http://www.bhp.com/-/media/documents/investors/annual-reports/2017/bhpnoticeofmeetingplc2017.pdf

   --     BHP Billiton Plc Supplementary Notice of Meeting 2017 

http://www.bhp.com/-/media/documents/investors/annual-reports/2017/bhpnoticeofmeetingplc2017supplementarynotice.pdf

   --     Revised Proxy Form (UK Principal Register) 
   --     Revised Proxy Form (South Africa Branch Register) 

The documents (with the exception of the Revised Proxy Forms) may also be accessed via BHP's website - bhp.com - or using the web links above.

Additional Information

The following information is extracted from the Annual Report 2017 (page references are to pages in the Annual Report) and should be read in conjunction with BHP's Final Results announcement issued on 22 August 2017. Both documents can be found at bhp.com and together, constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the Annual Report 2017 in full.

1. Principal risks and uncertainties

1.1 Risk management

Identifying and managing risk and opportunity are central to achieving our corporate purpose of creating long-term shareholder value.

We embed risk management in our critical business activities, functions, processes and systems through the following mechanisms:

   --     Risk assessments - we regularly assess known, new and emerging risks. 

-- Risk controls - we put controls in place over material risks, and periodically assess the effectiveness of those controls.

-- Risk materiality and tolerability evaluation - we assess the materiality of a risk based on the degree of financial and non-financial impacts, including health, safety, environmental, community, reputational and legal impacts. We assess the tolerability of a risk based on a combination of residual risk and control effectiveness.

We apply established processes when entering or commencing new activities in high-risk countries. These include risk assessments and supporting risk management plans to ensure potential reputational, legal, business conduct and corruption-related exposures are managed and legislative compliance is maintained.

For information on our principal risks, refer to section 1.8.3. For information on our risk management governance, refer to sections 2.13.1 and 2.14.

1.2 Principal risks

Robust risk assessment and viability statement

The Board has carried out a robust assessment of BHP's principal risks, including those that would threaten the business model, future performance, solvency or liquidity.

The Directors have assessed the prospects of BHP over the next three years, taking account our current position and principal risks.

The Directors believe a three-year viability assessment period is appropriate for the following reasons. BHP has a two-year budget, a five-year outlook and a 20-year strategic planning horizon. We have publicly stated our view that the outlook for the sector remains challenging and volatile in the short to medium term. This exchange rate and price volatility results in variability in plans and budgets. A three-year period strikes an appropriate balance between long and short-term influences on performance.

The viability assessment took into account, among other things, BHP's commodity price protocols, including low-case prices; the latest funding and liquidity update; the long-dated maturity profile of BHP's debt and the maximum debt maturing in any one year; the Group-level risk profile and the mitigating actions available should particular risks materialise; the Board strategy discussions, which provide a strategic review of BHP's markets and plans under divergent scenarios and consider available strategic options; the flexibility in BHP's capital and exploration expenditure programs under the enhanced Capital Allocation Framework; and the reserve life of BHP's minerals assets and the reserves-to-production life of our oil and gas assets.

The Directors' assessment also took account of additional stress-testing of the balance sheet against two hypothetical significant risk events: a well blow out in the Gulf of Mexico and a low-price environment. The Directors were also mindful of the scenario analysis incorporated in BHP's corporate planning process. These scenarios help identify the key uncertainties facing the global economy and natural resources sector.

Taking account of these matters, and BHP's current position and principal risks, the Directors have a reasonable expectation that BHP will be able to continue in operation and meet its liabilities over the next three years.

Risk factors

 
 External risks 
=================================================================== 
 Fluctuations in commodity prices (including 
  sustained price shifts) and impacts of ongoing 
  global economic volatility may negatively 
  affect our results, including cash flows 
  and asset values 
 
   The prices we obtain for our oil, gas and 
   minerals are determined by, or linked to, 
   prices in world markets, which have historically 
   been subject to significant volatility. 
   Our usual policy is to sell our products 
   at the prevailing market prices. The diversity 
   provided by our relatively broad portfolio 
   of commodities does not necessarily insulate 
   BHP from the effects of price changes. Fluctuations 
   in commodity prices can occur due to price 
   shifts reflecting underlying global economic 
   and geopolitical factors, industry demand, 
   increased supply due to the development 
   of new productive resources or increased 
   production from existing resources, technological 
   change, product substitution and national 
   tariffs. We are particularly exposed to 
   price movements in minerals, oil and gas. 
   For example, a US$1 per tonne decline in 
   the average iron ore price and US$1 per 
   barrel decline in the average oil price 
   would have an estimated impact on FY2017 
   Profit after taxation from Continuing and 
   Discontinued operations of US$142 million 
   and US$48 million, respectively. 
 
   For more information in relation to commodity 
   price impacts, refer to section 1.6.3. Volatility 
   in global economic growth, particularly 
   in developing economies, has the potential 
   to adversely affect future demand and prices 
   for commodities. The impact of sustained 
   price shifts and short-term price volatility, 
   including the effects of unwinding the sustained 
   monetary stimulus in the United States, 
   and uncertainty surrounding the details 
   of the United Kingdom's exit from the European 
   Union, creates the risk that our financial 
   and operating results, including cash flows 
   and asset values, will be materially and 
   adversely affected by short- or long-term 
   volatility in the prevailing prices of our 
   products. 
 Our financial results may be negatively 
  affected by exchange rate fluctuations 
 
   The geographic diversity of the countries 
   in which our assets are located means that 
   our assets, earnings and cash flows are 
   influenced by a variety of currencies. Fluctuations 
   in the exchange rates of those currencies 
   may have a significant impact on our financial 
   results. The US dollar is the currency in 
   which the majority of our sales are denominated 
   and the currency in which we present our 
   financial performance. Operating costs are 
   influenced by the currencies of those countries 
   where our assets and facilities are located 
   and also by those currencies in which the 
   costs of imported equipment and services 
   are determined. 
 Reduction in Chinese demand may negatively 
  impact our results 
 
   The Chinese market has been driving global 
   materials demand and pricing over the past 
   decade. Sales into China generated US$18.9 
   billion (FY2016: US$13.2 billion) or 49.3 
   per cent (FY2016: 42.6 per cent) of our 
   revenue in FY2017. FY2017 sales into China 
   by commodity included 61 per cent Iron Ore, 
   22 per cent Copper, 16 per cent Coal and 
   1 per cent Nickel (reported in Group and 
   Unallocated). A continued slowing in China's 
   economic growth and demand could result 
   in lower prices for our products and materially 
   and adversely impact our results, including 
   cash flows. 
 Actions by governments, regulation, political, 
  community or social events, judicial or 
  community activism or unrest in the countries 
  where our assets are located could have 
  a negative impact on our business 
 
   There are varying degrees of political, 
   judicial and commercial stability and activism 
   in the locations in which we have operated 
   and non-operated assets around the globe. 
   At the same time, our exposure to emerging 
   markets may involve additional risks that 
   could have an adverse effect on the profitability 
   of an operation. Risks in the locations 
   in which we have operated and non-operated 
   assets could include terrorism, civil unrest, 
   judicial activism, community challenge or 

   opposition, regulatory investigation, nationalisation, 
   protectionism, renegotiation or nullification 
   of existing contracts, leases, permits or 
   other agreements, imposts, controls or prohibitions 
   on the production or use of certain products, 
   restrictions on repatriation of earnings 
   or capital and changes in laws and policy, 
   as well as other unforeseeable risks. Risks 
   relating to bribery and corruption, including 
   possible delays or disruption resulting 
   from a refusal to make so-called facilitation 
   payments, may be prevalent in some of the 
   countries where our assets are located. 
   If any of our major assets are affected 
   by one or more of these risks, it could 
   have a material adverse effect on our assets 
   in those countries, as well as BHP's overall 
   operating results, financial condition and 
   prospects. 
 
   Our operated and non-operated assets are 
   based on material long-term investments 
   that are dependent on long-term fiscal stability 
   and could be adversely affected by changes 
   in fiscal legislation, changes in interpretation 
   of fiscal legislation, periodic challenges 
   and disagreements with tax authorities and 
   legal proceedings relating to fiscal matters. 
   The natural resources industry continues 
   to be regarded as a source of tax revenue 
   and can also be adversely affected by broader 
   fiscal measures applying to businesses generally. 
   BHP is currently involved in a number of 
   uncertain tax and royalty matters. For more 
   information, refer to note 5 'Income tax 
   expense' in section 5. 
 
   Our business could be adversely affected 
   by new or evolving government regulations 
   and international standards, such as controls 
   on imports, exports, prices and greenhouse 
   gas emissions. The nature of the industries 
   in which we conduct business means many 
   of our activities are highly regulated by 
   laws relating to health, safety, environment 
   and community impacts. Increasing requirements 
   relating to regulatory, environmental, social 
   or community engagement or approvals can 
   potentially result in significant delays 
   or interruptions and may adversely affect 
   the economics of new mining and oil and 
   gas projects, the expansion of existing 
   assets and operations and the performance 
   of our assets. As regulatory standards and 
   expectations are constantly developing, 
   we may be exposed to increased regulatory 
   review, compliance costs to meet new operating 
   and reporting standards and unforeseen closure 
   and site rehabilitation expenses. 
   Infrastructure, such as rail, ports, power 
   and water, is critical to our business operations. 
   We have assets or potential development 
   projects in countries where government-provided 
   infrastructure or regulatory regimes for 
   access to infrastructure, including our 
   own privately operated infrastructure, may 
   be inadequate, uncertain or subject to legislative 
   change. The impact of climate change may 
   increase competition for, and the regulation 
   of, limited resources, such as power and 
   water. These factors could materially and 
   adversely affect the expansion of our business 
   and ability of our assets to operate efficiently. 
 
   We own assets or interests in countries 
   where land tenure can be uncertain and disputes 
   may arise in relation to ownership and use, 
   including in respect of Indigenous rights. 
   For example, in Australia, the Native Title 
   Act 1993 provides for the establishment 
   and recognition of native title under certain 
   circumstances. 
   New or evolving regulations and international 
   standards are complex, difficult to predict 
   and outside our control. Potential compliance 
   costs, litigation expenses, regulatory delays, 
   rehabilitation expenses and operational 
   impacts and costs arising from government 
   action, regulatory change and evolving standards 
   could materially and adversely affect BHP's 
   future results, prospects and our financial 
   condition. 
 Business risks 
 Failure to discover or acquire new resources, 
  maintain reserves or develop new assets 
  could negatively affect our future results 
  and financial condition 
 The demand for our products and production 
  from our assets results in existing reserves 
  being depleted over time. As our revenues 
  and profits are derived from our oil, gas 
  and minerals assets, our future results 
  and financial condition are directly related 
  to the success of our exploration and acquisition 
  efforts, and our ability to generate reserves 
  to meet our future production requirements 
  at a competitive cost. Exploration activity 
  occurs adjacent to established assets and 
  in new regions, in developed and less-developed 
  countries. These activities may increase 
  land tenure, infrastructure and related 
  political risks. A failure in our ability 
  to discover or acquire new resources, maintain 
  reserves or develop new assets or operations 
  in sufficient quantities to maintain or 
  grow the current level of our reserves could 
  negatively affect our results, financial 
  condition and prospects. Deterioration in 
  commodities pricing may make some existing 
  reserves uneconomic. Our actual exploration 
  drilling activities and future drilling 
  budget will depend on our inventory size 
  and quality, drilling results, commodity 
  prices, drilling and production costs, availability 
  of drilling services and equipment, lease 
  expirations, land access, transportation 
  pipelines, railroads and other infrastructure 
  constraints, regulatory approvals and other 
  factors. 
 
  There are numerous uncertainties inherent 
  in estimating mineral and oil and gas reserves. 
  Geological assumptions about our mineralisation 
  that are valid at the time of estimation 
  may change significantly when new information 
  becomes available. Estimates of reserves 
  that will be recovered, or the cost at which 
  we anticipate reserves will be recovered, 
  are based on uncertain assumptions. The 
  uncertain global financial outlook may affect 
  economic assumptions related to reserve 
  recovery and may require reserve restatements. 
  Reserve restatements could negatively affect 
  our results and prospects. 
 Potential changes to our portfolio of assets 
  through acquisitions and divestments may 
  have a material adverse effect on our future 
  results and financial condition 
 
        We regularly review the composition of our 
        asset portfolio and from time-to-time may 
        add assets to, or divest assets from, the 
        portfolio. There are a number of risks associated 
        with acquisitions or divestments. These 
        include: 
         *    adverse market reaction to such changes or the timing 
              or terms on which changes are made; 
 
 
         *    the imposition of adverse regulatory conditions and 
              obligations; 
 
 
         *    commercial objectives not being achieved as expected; 
 
 
         *    unforeseen liabilities arising from changes to the 
              portfolio; 
 
 
         *    sales revenues and operational performance not 
              meeting our expectations; 
 
 
         *    anticipated synergies or cost savings being delayed 
              or not being achieved; 
 
 
         *    inability to retain key staff and transaction-related 
              costs being more than anticipated. 
 
 
        These factors could materially and adversely 
        affect our reputation, future results and 
        financial condition. 
 Increased costs and schedule delays may 
  adversely affect our development projects 
 
   Although we devote significant time and 
   resources to our project planning, approval 
   and review processes, many of our development 
   projects are highly complex and rely on 
   factors that are outside our control, which 
   may cause us to underestimate the cost or 
   time required to complete a project. For 
   instance, incidents or unexpected conditions 
   encountered during development projects 
   may cause setbacks or cost overruns, required 
   licences, permits or authorisations to build 
   a project may be unobtainable at anticipated 
   costs, or may be obtained only after significant 
   delay and market conditions may change, 
   thereby making a project less profitable 
   than initially projected. 
 
   In addition, we may fail to develop and 
   manage projects as effectively as we anticipate 
   and unforeseen challenges may emerge. 
 
   Any of these may result in increased capital 
   costs and schedule delays at our development 
   projects and materially and adversely affect 
   anticipated financial returns. 
 Financial risks 
 If our liquidity and cash flow deteriorate 
  significantly it could adversely affect 
  our ability to fund our major capital programs 
 
   We seek to maintain a strong balance sheet. 
   However, fluctuations in commodity prices 
   and ongoing global economic volatility could 
   materially and adversely affect our future 
   cash flows and ability to access capital 
   from financial markets at acceptable pricing. 
   If our key financial ratios and credit ratings 
   are not maintained, our liquidity and cash 
   reserves, interest rate costs on borrowed 
   debt, future access to financial capital 
   markets and the ability to fund current 
   and future major capital projects could 
   be adversely affected. 
 We may not fully recover our investments 
  in mining, oil and gas assets, which may 
  require financial write-downs 
 One or more of our assets may be adversely 
  affected by changed market or industry structures, 
  commodity prices, technical operating difficulties, 
  inability to recover our mineral, oil or 
  gas reserves and increased operating cost 
  levels. These may cause us to fail to recover 
  all or a portion of our investment in mining, 
  oil and gas assets and may require financial 
  write-downs, including goodwill, adversely 

  affecting our financial results. 
 The commercial counterparties we transact 
  with may not meet their obligations, which 
  may negatively affect our results 
 
   We contract with many commercial and financial 
   counterparties, including end-customers, 
   suppliers and financial institutions in 
   the context of global financial markets 
   that remain volatile. We maintain a 'one 
   book' approach with commercial counterparties 
   to make sure all credit exposures are quantified 
   and assessed consistently. However, our 
   existing counterparty credit controls may 
   not prevent a material loss due to credit 
   exposure to a major customer segment or 
   financial counterparty. In addition, customers, 
   suppliers, contractors or joint venture 
   partners may fail to perform against existing 
   contracts and obligations. Non-supply of 
   key inputs, such as tyres, mining and mobile 
   equipment, diesel and other key consumables, 
   may unfavourably impact costs and production 
   at our assets. These factors could negatively 
   affect our financial condition and results 
   of assets. 
 Operational risks 
 Unexpected natural and operational catastrophes 
  may adversely impact our assets 
 We have onshore and offshore extractive, 
  processing and logistical operations in 
  many geographic locations. Our key port 
  facilities are located at Coloso and Antofagasta 
  in Chile and Port Hedland and Hay Point 
  in Australia. We have four underground mines, 
  including one underground coal mine. Our 
  operational processes may be subject to 
  operational accidents, such as port and 
  shipping incidents, underground mine and 
  processing plant fire and explosion, open-cut 
  pit wall or tailings/waste storage facility 
  failures, loss of power supply, railroad 
  incidents, loss of well control, environmental 
  pollution, mechanical critical equipment 
  failures and cyber security attacks on BHP's 
  infrastructure. Our minerals and oil and 
  gas assets may also be subject to unexpected 
  natural catastrophes such as earthquakes, 
  floods, hurricanes and tsunamis. Our Western 
  Australia Iron Ore, Queensland Coal and 
  Gulf of Mexico oil and gas assets are located 
  in areas subject to cyclones or hurricanes. 
  Our Chilean copper and Peruvian base metals 
  assets are located in a known earthquake 
  and tsunami zone. Based on our risk management 
  and the limited value of external insurance 
  in the natural resource sector, our risk 
  financing (insurance) approach is to minimise 
  or not to purchase external insurance for 
  certain risks, including property damage 
  and business interruption, sabotage and 
  terrorism, marine cargo, construction, primary 
  public liability and employee benefits. 
  Existing business continuity plans may not 
  provide protection for all the costs that 
  arise from such events, including clean-up 
  costs, litigation and other claims. The 
  impact of these events could lead to disruptions 
  in production, increased costs and loss 
  of facilities. Where external insurance 
  is purchased, third party claims arising 
  from these events may exceed the limit of 
  liability of the insurance policies we have 
  in place. Additionally, any uninsured or 
  underinsured losses could have a material 
  adverse effect on our financial position 
  or results of assets. 
 Breaches in, or failures of, our information 
  technology may adversely impact our business 
  activities 
 
   We maintain and increasingly rely on information 
   technology (IT) systems, consisting of digital 
   infrastructure, applications and networks 
   to support our business activities. These 
   systems may be subject to security breaches 
   (e.g. cyber-crime or activists) or other 
   incidents (e.g. from negligence) that can 
   result in misappropriation of funds, increased 
   health and safety risks to people, disruption 
   to our assets, environmental damage, poor 
   product quality, loss of intellectual property, 
   disclosure of commercially or personally 
   sensitive information, legal or regulatory 
   breaches and liability, other costs and 
   reputational damage. 
 
   Evolving convergence of IT and operational 
   technology (OT) networks across industries, 
   including ours, present additional cyber-related 
   risk as traditionally IT networks have focused 
   on availability of service to the enterprise. 
 Our potential liability from litigation 
  and other actions resulting from the Samarco 
  dam failure is subject to significant uncertainty 
  and cannot be reliably estimated at this 
  time, but could have a material adverse 
  impact on our business 
 
   On 5 November 2015, the Samarco Mineração 
   S.A. (Samarco) iron ore operations experienced 
   a tailings dam failure that resulted in 
   a release of mine tailings, flooding the 
   communities of Bento Rodrigues, Gesteira 
   and Paracatu and impacting other communities 
   downstream and the environment of the Rio 
   Doce basin. Samarco is a joint venture owned 
   equally by BHP Billiton Brasil Limitada 
   (BHP Billiton Brasil) and Vale S.A. (Vale). 
   For information on the Samarco dam failure, 
   refer to section 1.7. 
 
   The Samarco dam failure and subsequent suspension 
   of Samarco's mining and processing operations 
   continue to impact our financial results 
   and will be disclosed as an exceptional 
   item for the year ended 30 June 2017, as 
   described in 1.7 and in note 3 'Significant 
   events - Samarco dam failure' in section 
   5. 
 
   Mining and processing operations remain 
   suspended following the dam failure. Samarco 
   is currently progressing plans to resume 
   operations; however, significant uncertainties 
   surrounding the nature and timing of any 
   resumption of operations remain, including 
   as a result of Samarco's significant debt 
   obligations. For financial information relating 
   to Samarco, refer to note 29 'Investments 
   accounted for using the equity method' in 
   section 5. 
 
   BHP Billiton Brasil is among the defendants 
   named in a number of legal proceedings initiated 
   by individuals, non-governmental organisations 
   (NGOs), corporations and governmental entities 
   in Brazilian federal and state courts following 
   the Samarco dam failure. The other defendants 
   include Samarco, Vale and Fundação 
   Renova. The lawsuits seek various remedies, 
   including rehabilitation costs, compensation 
   to injured individuals and families of the 
   deceased, recovery of personal and property 
   losses, moral damages and injunctive relief. 
 
   Among the claims brought against BHP Billiton 
   Brasil is a public civil claim commenced 
   by the Federal Government of Brazil, the 
   states of Espírito Santo and Minas 
   Gerais, and certain other public authorities 
   (Brazilian Authorities) on 30 November 2015, 
   seeking the establishment of a fund of up 
   to R$20 billion (approximately US$6.1 billion) 
   in aggregate for clean-up costs and damages 
   and a R$155 billion (approximately US$47 
   billion) claim brought by the Federal Public 
   Prosecution Service on 3 May 2016 for reparation, 
   compensation and moral damages in relation 
   to the Samarco dam failure. Given the status 
   of these proceedings, it is not possible 
   at this time to provide a range of possible 
   outcomes or a reliable estimate of potential 
   future exposures for BHP Billiton Brasil. 
   For further details on some of the legal 
   proceedings relating to the Samarco dam 
   failure, refer to section 6. 
 
   On 2 March 2016, BHP Billiton Brasil, together 
   with Vale and Samarco, entered into a Framework 
   Agreement (Framework Agreement) with the 
   Brazilian Authorities to establish a foundation 
   (Fundação Renova) that will develop 
   and execute environmental and socio-economic 
   programs to remediate and provide compensation 
   for damage caused by the Samarco dam failure. 
   The Framework Agreement was ratified by 
   the Conciliation Chamber of the Federal 
   Court of Appeal in Brasilia on 5 May 2016, 
   suspending the R$20 billion public civil 
   claim. However, on 30 June 2016, the Superior 
   Court of Justice issued a preliminary order 
   (Interim Order) suspending the 5 May 2016 
   ratification of the Framework Agreement 
   and reinstating the R$20 billion public 
   civil claim. BHP Billiton Brasil, Vale and 
   Samarco and the Federal Government have 
   appealed the Interim Order before the Superior 
   Court of Justice. 
 
   In light of the significant uncertainties 
   surrounding the nature and timing of ongoing 
   future operations at Samarco and based on 
   currently available information, at 30 June 
   2017, BHP recognised a provision of US$1.1 
   billion, before tax and after discounting 
   (30 June 2016, US$1.2 billion), in respect 
   of BHP Billiton Brasil's obligations under 
   the Framework Agreement. 
 
   The measurement of the provision requires 
   the use of estimates and assumptions and 
   may be affected by, among other factors, 
   potential changes in scope of work and funding 
   amounts required under the Framework Agreement, 
   including further technical analysis required 
   under the Preliminary Agreement (referred 
   to below), the outcome of the ongoing negotiations 
   with Federal Prosecutors, costs incurred 
   in respect of programs delivered, resolution 
   of uncertainty in respect of operational 
   restart, updates to discount and foreign 
   exchange rates, resolution of existing and 
   potential legal claims and the status of 
   the Framework Agreement. As a result, future 
   actual expenditures may differ from the 
   amounts currently provided and changes to 
   key assumptions and estimates could result 
   in a material impact on the amount of the 
   provision in future reporting periods. 
 
   On 18 January 2017, BHP Billiton Brasil, 
   together with Vale and Samarco, entered 
   into a Preliminary Agreement with the Federal 
   Prosecutors' Office in Brazil, which outlines 

   the process and timeline for further negotiations 
   towards a settlement regarding the R$20 
   billion public civil claim and the R$155 
   billion public civil claim. While a final 
   decision by the Court on the issue of ratification 
   of the Framework Agreement is pending, the 
   Preliminary Agreement suspends a R$1.2 billion 
   (approximately US$365 million) injunction 
   order under the R$20 billion public civil 
   claim. The Preliminary Agreement also requests 
   suspension of the public civil claim, with 
   a decision from the Court pending. The R$1.2 
   billion injunction order may be reinstated 
   if a final settlement arrangement is not 
   agreed by 30 October 2017. Given the status 
   of these proceedings, it is not possible 
   at this time to provide a range of possible 
   outcomes or a reliable estimate of potential 
   future exposures for BHP Billiton Brasil. 
 
   With regard to the Preliminary Agreement, 
   the 12(th) Federal Court of Belo Horizonte 
   suspended the R$155 billion claim, including 
   a R$7.7 billion (approximately US$2.3 billion) 
   injunction request. However, proceedings 
   may be resumed if a final settlement agreement 
   is not agreed by 30 October 2017. Given 
   the status of these proceedings, it is not 
   possible at this time to provide a range 
   of possible outcomes or a reliable estimate 
   of potential future exposures for BHP Billiton 
   Brasil. 
 
   In addition, government inquiries and investigations 
   relating to the Samarco dam failure have 
   been commenced by numerous agencies of the 
   Brazilian Government. Other lawsuits and 
   investigations are at the early stages of 
   proceedings, including a shareholder action 
   in the United States against BHP and a Samarco 
   bondholder action in the United States against 
   Samarco, Vale, BHP Billiton Brasil and BHP. 
   For more information on the shareholder 
   and bondholder actions and other lawsuits 
   relating to the Samarco dam failure, refer 
   to section 6.5. Additional lawsuits and 
   government investigations relating to the 
   Samarco dam failure may be brought against 
   BHP Billiton Brasil and possibly other BHP 
   entities in Brazil or other jurisdictions. 
 
   While additional retention structures have 
   been completed, the potential remains for 
   further release or downstream movement of 
   tailings material, which may result in additional 
   claims, fines and proceedings (or impact 
   existing proceedings) and may also have 
   additional consequences on the environment 
   and the feasibility, timing and scope of 
   any restart of Samarco operations. 
 
   Our potential costs and liabilities in relation 
   to the Samarco dam failure are subject to 
   a high degree of uncertainty and cannot 
   be reliably estimated at this time. The 
   total amounts that we may be required to 
   pay will be dependent on many factors, including 
   the timing and nature of a potential restart 
   of operations at Samarco, the number of 
   claims that become payable, the quantum 
   of any fines levied, the outcome of litigation 
   and the amount and timing of payments under 
   any judgements or settlements. Nevertheless, 
   such potential costs and liabilities could 
   have a material adverse effect on our business, 
   competitive position, cash flows, prospects, 
   liquidity and shareholder returns. 
 Cost pressures and reduced productivity 
  could negatively impact our operating margins 
  and expansion plans 
 
   Cost pressures may continue to occur across 
   the resources industry. As the prices for 
   our products are determined by the global 
   commodity markets, we do not generally have 
   the ability to offset these cost pressures 
   through corresponding price increases, which 
   can adversely affect our operating margins. 
   Although our efforts to reduce costs and 
   a number of key cost inputs are commodity 
   price-linked, the inability to reduce costs 
   and a timing lag could materially and adversely 
   impact our operating margins for an extended 
   period. 
 
   Some of our assets, such as those producing 
   copper, are energy or water intensive. As 
   a result, BHP's costs and earnings could 
   be materially and adversely affected by 
   rising costs or supply interruptions. These 
   could include the unavailability of energy, 
   fuel or water due to a variety of reasons, 
   including fluctuations in climate, inadequate 
   infrastructure capacity, interruptions in 
   supply due to equipment failure or other 
   causes and the inability to extend supply 
   contracts on economic terms. 
 
   Many of our Australian employees have conditions 
   of employment, including wages, governed 
   by the operation of the Australian Fair 
   Work Act 2009. Conditions of employment 
   are often contained within collective agreements 
   that are required to be renegotiated on 
   expiry (typically every three to four years). 
   In some instances, under the operation of 
   the Fair Work Act, it can be expected that 
   unions will pursue increases to conditions 
   of employment, including wages, and/or claims 
   for greater union involvement in business 
   decision-making. 
 
   In circumstances where a collective agreement 
   is being renegotiated, industrial action 
   is permitted under the Fair Work Act. Industrial 
   action and any subsequent settlement to 
   mitigate associated commercial damage can 
   adversely affect productivity and customer 
   perceptions as a reliable supplier, and 
   contribute to increases in costs. 
 
   The industrial relations environment in 
   Chile remains challenging and it is possible 
   that we will see further disruptions. Recent 
   changes to labour legislation in Chile have 
   resulted in the right to have a single negotiating 
   body across different operations owned by 
   a single company. This change may lead to 
   a higher risk of operational stoppages that 
   can contribute to an increase in costs and 
   a reduction in productivity. 
 
   More broadly, cost and productivity pressures 
   on BHP and our contractors and sub-contractors 
   may increase the risk of industrial action 
   and employment litigation. 
 
   These factors could lead to increased operating 
   costs at existing assets, interruptions 
   or delays and could negatively impact our 
   operating margins and expansion plans. 
 Non-operated assets have their own management 
  and operating standards, joint venture partners 
  or other companies managing those non-operated 
  assets may take action contrary to our standards 
  or fail to adopt standards equivalent to 
  BHP's standards, and commercial counterparties 
  may not comply with our standards 
 
   We have interests in assets which are operated 
   and managed by joint venture partners or 
   by other companies. Those joint venture 
   partners or other companies have their own 
   management and operating standards, controls 
   and procedures, including health, safety, 
   environment and community (HSEC) standards 
   and may take action contrary to BHP's management 
   and operating standards, controls and procedures. 
   Failure by those joint venture partners 
   or other companies to adopt equivalent standards, 
   controls and procedures at these non-operated 
   assets could lead to higher costs and reduced 
   production, litigation and regulatory action, 
   delays or interruptions and adversely impact 
   our results, prospects and reputation. 
 
   Commercial counterparties, such as our suppliers, 
   contractors and customers, may not comply 
   with our HSEC standards or other standards 
   we apply, causing adverse reputational, 
   legal and financial impacts. 
 Sustainability 
  risks 
 Safety, health, environmental and community 
  impacts, incidents or accidents may adversely 
  affect our people, assets and reputation 
  or licence to operate 
 
   Safety 
 
   Potential safety events that may have a 
   material adverse impact on our people, assets, 
   reputation or licence to operate include 
   fire, explosion or rock fall incidents in 
   underground mining operations, personnel 
   conveyance equipment failures in underground 
   operations, aircraft incidents, road incidents 
   involving buses and light vehicles, incidents 
   between light vehicles and mobile mining 
   equipment, ground control failures, uncontrolled 
   tailings containment breaches, well blowouts, 
   explosions or gas leaks and accidents involving 
   inadequate isolation, working from heights 
   or lifting operations. 
 
   Health 
 
   Health risks faced include fatigue, musculoskeletal 
   illnesses and occupational exposure to substances 
   or agents, including noise, silica, coal 
   mine dust, diesel exhaust particulate, nickel 
   and sulphuric acid mist and mental illness. 
   Longer-term health impacts may arise due 
   to unanticipated workplace exposures or 
   historical exposures of our workforce or 
   communities to hazardous substances. These 
   effects may create future financial compensation 
   obligations, adversely impact our people, 
   reputation, regulatory approvals or licence 
   to operate and affect the way we conduct 
   our assets. 
 
   Given the global location of our assets, 
   we could be affected by a public health 
   emergency such as influenza or other infectious 
   disease outbreaks in any of the regions 
   in which our assets are located. 
 
   Environment 
 
   Our assets by their nature have the potential 
   to adversely impact air quality, biodiversity, 
   water resources and related ecosystem services. 
   Changes in scientific understanding of these 
   impacts, regulatory requirements or stakeholder 
   expectations may prevent, delay or reverse 
   project approvals and result in increased 
   costs for mitigation, offsets or compensatory 
   actions. 
 
   Environmental incidents have the potential 
   to lead to material adverse impacts on our 
   people, communities, assets, reputation 
   or licence to operate. These include uncontrolled 

   tailings containment breaches, subsidence 
   from mining activities, escape of polluting 
   substances and uncontrolled releases of 
   hydrocarbons. 
 
   We provide for operational closure and site 
   rehabilitation. Our operating and closed 
   facilities are required to have closure 
   plans. Changes in regulatory or community 
   expectations may result in the relevant 
   plans not being adequate. This may increase 
   financial provisioning and costs at the 
   affected assets. 
 
   Climate change 
 
   The physical and non-physical impacts of 
   climate change may affect our assets, productivity 
   and the markets in which we sell our products. 
   This includes acute and chronic changes 
   in weather patterns, policy and regulatory 
   change, technological development and market 
   and economic responses. Fossil fuel-related 
   emissions are a significant source of greenhouse 
   gases contributing to climate change. We 
   produce fossil fuels such as coal, oil and 
   gas for sale to customers. We use fossil 
   fuels in our mining and processing operations 
   either directly or through the purchase 
   of fossil fuel based electricity. 
 
   A number of national governments have already 
   introduced, or are contemplating the introduction 
   of, regulatory responses to greenhouse gas 
   emissions, including from the extraction 
   and combustion of fossil fuels to address 
   the impacts of climate change. This includes 
   countries where we have assets such as Australia, 
   the United States and Chile, as well as 
   customer markets such as China, India and 
   Europe. In addition, the international community 
   completed a new global climate agreement 
   at the 21st Conference of the Parties (COP21) 
   in Paris in December 2015. The absence of 
   regulatory certainty, global policy inconsistencies 
   and the challenges presented by managing 
   our portfolio across a variety of regulatory 
   frameworks have the potential to adversely 
   affect our assets and supply chain. From 
   a medium- to long-term perspective, we are 
   likely to see some adverse changes in the 
   cost position of our greenhouse gas-intensive 
   assets as a result of regulatory impacts 
   in the countries where we do business. These 
   proposed regulatory mechanisms may adversely 
   affect our assets directly or indirectly 
   through our suppliers and customers. Assessments 
   of the potential impact of future climate 
   change regulation are uncertain given the 
   wide scope of potential regulatory change 
   in the many countries in which we do business. 
   Examples of this include China, which is 
   launching the world's largest emissions 
   trading system in 2017 and Australia, where 
   the federal government repealed a carbon 
   tax in 2014 and introduced new legislation 
   to take its place. 
 
   There is a potential gap between the current 
   valuation of fossil fuel reserves on the 
   balance sheets of companies and in global 
   equities markets and the reduced value that 
   could result if a significant proportion 
   of reserves were rendered incapable of extraction 
   in an economically viable fashion due to 
   technology, regulatory or market responses 
   to climate change. In such a scenario, stranded 
   reserve assets held on our balance sheet 
   may need to be impaired or written off and 
   our inability to make productive use of 
   such assets may also negatively impact our 
   financial condition and results. 
 
   The growth of alternative energy supply 
   options, such as renewables and nuclear, 
   could also present a change to the energy 
   mix that may reduce the value of fossil 
   fuel assets. 
 
   The physical effects of climate change on 
   our assets may include changes in rainfall 
   patterns, water shortages, rising sea levels, 
   increased storm intensities and higher temperatures. 
   These effects could materially and adversely 
   affect the financial performance of our 
   assets. 
 
   Community 
 
   Our assets and activities may directly impact 
   communities and also risk the potential 
   for adverse impacts on human rights or breaches 
   of other international laws or conventions. 
 
   Local communities may become dissatisfied 
   with our operations or oppose our new development 
   projects, including through legal action 
   leading to, potential schedule delay, increased 
   costs and reduced production. Community-related 
   risks may include community protests or 
   civil unrest, adverse human rights impacts, 
   community health and safety, complaints 
   and grievances, and civil society activism. 
   In extreme cases the risks may affect viability, 
   adversely impacting our reputation and licence 
   to operate. 
 
   Hydraulic fracturing 
 
   Our Onshore US assets involve hydraulic 
   fracturing, which includes using water, 
   sand and a small amount of chemicals to 
   fracture hydrocarbon-bearing subsurface 
   rock formations, to allow flow of hydrocarbons 
   into the wellbore. We depend on the use 
   of hydraulic fracturing techniques in our 
   Onshore US drilling and completion programs. 
 
   In the United States, the hydraulic fracturing 
   process is typically regulated by relevant 
   US state regulatory bodies. Arkansas, Louisiana 
   and Texas (the states in which we currently 
   operate) have adopted various laws and regulations, 
   or issued regulatory guidance, concerning 
   hydraulic fracturing. Some states are considering 
   changes to regulations in relation to permitting, 
   public disclosure, and/or well construction 
   requirements on hydraulic fracturing and 
   related operations, including the possibility 
   of outright bans on the process. For more 
   information, refer to section 7.10. 
 
   While we have not experienced a material 
   delay or substantially higher operating 
   costs in our Onshore US assets as a result 
   of current regulatory requirements, we cannot 
   predict whether additional federal, state 
   or local laws or regulations will be enacted 
   and what such actions would require or prohibit. 
   Additional legislation or regulation could 
   subject our assets to delays and increased 
   costs, or prohibit certain activities, which 
   could adversely affect the financial performance 
   of our Onshore US assets. 
 
   Governance and compliance 
 
   A failure of our governance or compliance 
   processes may lead to regulatory penalties 
   and loss of reputation. We conduct our business 
   in a global environment that encompasses 
   multiple jurisdictions and complex regulatory 
   frameworks. Our governance and compliance 
   processes (which include the review of internal 
   controls over financial reporting and specific 
   internal controls in relation to trade and 
   financial sanctions and offers of anything 
   of value to government officials and representatives 
   of state-owned enterprises) may not operate 
   to identify financial misstatements or prevent 
   potential breaches of law, or of accounting 
   or governance practice. Our BHP Code of 
   Business Conduct, together with our mandatory 
   policies, such as the anti-corruption, trade 
   and financial sanctions and competition 
   policies, may not prevent instances of fraudulent 
   behaviour and dishonesty nor guarantee compliance 
   with legal or regulatory requirements. This 
   may lead to regulatory fines, disgorgement 
   of profits, litigation, allegations or investigations 
   by regulatory authorities, loss of operating 
   licences and/or reputational damage. 
===================================================================== 
 

1.3 Management of principal risks

The scope of our assets and the number of industries in which we conduct our business and engage mean that a range of factors may impact our results. Material risks that could negatively affect our results and performance are described in section 1.8.4 of the Annual Report 2017. Our approach to managing these risks is outlined below.

 
 Principal risk               Risk management approach 
  area 
===========================  ========================================= 
 External risks               The diversification of our 
  Risks arise from             portfolio of commodities, geographies 
  fluctuations in              and currencies is a key strategy 
  commodity prices             for reducing the effects of 
  and demand in major          volatility. Section 1.8.1 describes 
  markets (such as             external factors and trends 
  China or Europe)             affecting our results and note 
  or changes in currency       21 'Financial risk management' 
  exchange rates,              in section 5 outlines BHP's 
  and actions by               financial risk management strategy, 
  governments, including       including market, commodity 
  new regulations              and currency risk. The Financial 
  and standards,               Risk Management Committee oversees 
  and political events         these risks as described in 
  that impact long-term        sections 2.14 and 2.15. We 
  fiscal stability             also engage with governments 
                               and other key stakeholders 
                               to make sure the potential 
                               adverse impacts of proposed 
                               fiscal, tax, resource investment, 
                               infrastructure access, regulatory 
                               changes and evolving international 
                               standards are understood and, 
                               where possible, mitigated. 
===========================  ========================================= 
 Business risks               Our Geoscience and Resource 
  Risks include the            Engineering Centres of Excellence 
  inherent uncertainty         manage governance and technical 
  of identifying               leadership for Mineral Resource 
  and proving reserves,        development and Ore Reserves 

  adding and divesting         reporting as described in section 
  assets and managing          6.3.2. Our governance over 
  our capital development      reporting of Petroleum reserves 
  projects                     is described in section 6.3.1. 
                               We have established investment 
                               approval processes that apply 
                               to all major capital projects 
                               and asset divestment and acquisitions. 
                               The Investment Committee oversees 
                               these as described in sections 
                               2.14 and 2.15. Our Project 
                               Management Centre of Excellence 
                               aims to make sure projects 
                               are safe, predictable and competitive. 
===========================  ========================================= 
 Financial risks              We seek to maintain a strong 
  Continued volatility         balance sheet, supported by 
  in global financial          our Portfolio Risk Management 
  markets may adversely        strategy. As part of this strategy, 
  impact future cash           the diversification of our 
  flows, our ability           portfolio reduces overall cash 
  to adequately access         flow volatility. Commodity 
  and source capital           prices and currency exchange 
  from financial               rates are not generally hedged, 
  markets and our              and wherever possible, we take 
  credit rating.               the prevailing market price. 
  Volatility may               A hedging program for our shale 
  impact planned               gas assets is an exception 
  expenditures, as             and reflects the inherent differences 
  well as the ability          in shale gas assets in our 
  to recover investments       portfolio. A shale gas operation 
  in mining, oil               has a short-term investment 
  and gas projects.            cycle and a price responsive 
  In addition, the             supply base, while hedging 
  commercial counterparties    prices and input costs can 
  (customers, suppliers,       be used to fix investment returns 
  contractors and              and manage volatilities. We 
  financial institutions)      use Cash Flow at Risk analysis 
  we transact with             to monitor volatilities and 
  may, due to adverse          key financial ratios. Credit 
  market conditions,           limits and review processes 
  fail to meet their           are required to be established 
  contractual obligations      for all customers and financial 
                               counterparties. The Financial 
                               Risk Management Committee oversees 
                               these, as described in sections 
                               2.14 and 2.15. Note 21 'Financial 
                               risk management' in section 
                               5 outlines our financial risk 
                               management strategy. 
===========================  ========================================= 
 Operational risks            By applying our risk management 
  Unexpected natural           processes, we seek to identify 
  and operational              catastrophic operational risks 
  catastrophes may             and implement the critical 
  adversely affect             controls and performance requirements 
  our assets. Breaches         to maintain control effectiveness. 
  in IT security               Business continuity plans must 
  processes may adversely      be established to mitigate 
  affect the conduct           consequences. Consistent with 
  of our business              our portfolio risk management 
  activities. Our              approach, we continue to be 
  potential liabilities        largely self-insured for losses 
  from litigation              arising from property damage, 
  and other actions            business interruption and construction. 
  resulting from               IT security controls (to protect 
  the Samarco dam              IT infrastructure, business 
  failure are subject          applications and communication 
  to significant               networks and respond to security 
  uncertainty and              incidents) are in place and 
  cannot be reliably           subject to regular monitoring 
  estimated at this            and assessment. To maintain 
  time. Operating              adequate levels of protection, 
  cost pressures               we also continue to monitor 
  and reduced productivity     the development of threats 
  could negatively             in the external environment 
  affect operating             and assess potential responses 
  margins and expansion        to those threats. 
  plans. Non-operated          The Board has continued to 
  assets may not               focus its attention on responding 
  comply with our              to the tragedy at Samarco. 
  standards                    As that response has now moved 
                               from the immediate, emergency 
                               stage to a more strategic, 
                               structured way of working, 
                               we have transitioned the work 
                               previously carried out by the 
                               Samarco Sub-committee of the 
                               Board to the Risk and Audit 
                               Committee, the Sustainability 
                               Committee, as appropriate, 
                               as well as the Board. 
                               For further information on 
                               BHP's response to the Samarco 
                               dam failure, refer to section 
                               1.7. 
                               BHP has identified a number 
                               of actions that we will take 
                               in the management of tailings 
                               dams and non-operated joint 
                               venture arrangements. For details 
                               of those actions, refer to 
                               section 1.7. 
                               We aim to maintain adequate 
                               operating margins through our 
                               strategy to own and operate 
                               large, long-life, low-cost, 
                               expandable, upstream assets. 
                               Our concentrated effort to 
                               reduce operating costs and 
                               drive productivity improvements 
                               has realised tangible results, 
                               with a reduction in controllable 
                               costs. 
                               The capability to sustain productivity 
                               improvements is being further 
                               enhanced through continued 
                               refinements to our Operating 
                               Model. The Operating Model 
                               is designed to deliver a simple 
                               and scalable organisation, 
                               providing a competitive advantage 
                               through defining work, organisation 
                               and performance measurements. 
                               Defined global business processes, 
                               including 1SAP, provide a standardised 
                               way of working across BHP. 
                               Common processes generate useful 
                               data and improve operating 
                               discipline. Global sourcing 
                               arrangements have been established 
                               to ensure continuity of supply 
                               and competitive costs for key 
                               supply inputs. We seek to influence 
                               the application of our standards 
                               to non-operated assets. 
                               From an industrial relations 
                               perspective, detailed planning 
                               is undertaken to support the 
                               renegotiation of employment 
                               agreements, and is supported 
                               by training and access to expertise 
                               in negotiation and agreement 
                               making. 
===========================  ========================================= 
 Sustainability               Our approach to sustainability 
  risks                        risks is reflected in Our Charter 
  HSEC incidents               and described in section 1.10. 
  or accidents may             Our Requirements standards 
  adversely affect             set out Group-wide HSEC-related 
  people or neighbouring       performance requirements designed 
  communities, assets,         to support effective management 
  reputation and               control of these risks. 
  our licence to               Our approach to corporate planning, 
  operate. The potential       investment decision-making 
  physical impacts             and portfolio management provides 
  and related responses        a focus on the identification, 
  to climate change            assessment and management of 
  may impact the               climate change risks. We have 
  value of BHP, our            been applying an internal price 
  assets and markets           on carbon in our investment 
                               decisions for more than a decade. 
                               Through a comprehensive and 
                               strategic approach to corporate 

                               planning, we work with a broad 
                               range of scenarios to assess 
                               our portfolio, including consideration 
                               of a broad range of potential 
                               policy responses to and impacts 
                               from climate change. We also 
                               track signals across the external 
                               environment to provide timely 
                               insights into the potential 
                               impacts on our portfolio. For 
                               more information on the management 
                               of climate change, refer to 
                               section 1.10.6. 
                               Our approach to engagement 
                               with community stakeholders 
                               is outlined in our minimum 
                               organisational requirements 
                               for Community. We undertake 
                               stakeholder identification 
                               and analysis, social impact 
                               and opportunity assessments, 
                               community perception surveys 
                               and human rights impact assessments 
                               to identify, mitigate or manage 
                               key potential social and human 
                               rights risks. 
                               Our Requirements for Risk Management 
                               standard provides the framework 
                               for risk management relating 
                               to climate change and material 
                               health, safety, environment 
                               and community risks. We conduct 
                               internal audits to test compliance 
                               with Our Requirements standards 
                               and develop action plans to 
                               address any gaps. Key findings 
                               are reported to senior management 
                               and reports are considered 
                               by relevant Board committees. 
                               Our Requirements standards 
                               and action plans are developed 
                               to address any gaps. Key findings 
                               are reported to senior management 
                               and reports are considered 
                               by relevant Board committees. 
                               Our Code of Business Conduct 
                               sets out requirements related 
                               to working with integrity, 
                               including dealings with government 
                               officials and third parties 
                               as described in section 2.16. 
                               Processes and controls are 
                               in place for the internal control 
                               over financial reporting, including 
                               under Sarbanes-Oxley. We have 
                               established anti-corruption, 
                               competition and trade sanctions 
                               performance requirements, which 
                               are overseen by the Ethics 
                               and Compliance function. The 
                               Disclosure Committee oversees 
                               our compliance with securities 
                               dealing obligations and continuous 
                               and periodic disclosure obligations, 
                               as described in sections 2.14, 
                               2.15 and 2.17. 
===========================  ========================================= 
 

2. Related party transactions

There have been no related party transactions that have taken place during the year ended 30 June 2017 that have materially affected the financial position or the performance of the BHP Group during that period. Details of the related party transactions that have taken place during the year ended 30 June 2017 are set out in notes 22 'Key management personnel' and 31 'Related party transactions' to the Financial Statements on pages 194 and 202 of the Annual Report 2017.

3. Directors' Responsibility Statement

The following statement which was prepared for the purposes of the Annual Report 2017 is repeated here for the purposes of complying with DTR 6.3.5. It relates to and is extracted from the Annual Report 2017 and is not connected to the extracted and summarised information presented in this announcement.

"In accordance with a resolution of the Directors of BHP Billiton Limited and BHP Billiton Plc, the Directors declare that:

(a) in the Directors' opinion and to the best of their knowledge the Financial Statements and notes, set out in sections 5.1 and 5.2, are in accordance with the UK Companies Act 2006 and the Australian Corporations Act 2001, including:

   (i)         complying with the applicable Accounting Standards; 

(ii) giving a true and fair view of the assets, liabilities, financial position and profit or loss of each of BHP Billiton Limited, BHP Billiton Plc, the Group and the undertakings included in the consolidation taken as a whole as at 30 June 2017 and of their performance for the year ended 30 June 2017;

(b) the Financial Statements also complies with International Financial Reporting Standards, as disclosed in section 5.1;

(c) to the best of the Directors' knowledge, the management report (comprising the Strategic Report and Directors' Report) includes a fair review of the development and performance of the business and the financial position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that the Group faces;

[Paragraphs related to Australian regulatory requirements have been omitted.]

Signed in accordance with a resolution of the Board of Directors.

Ken MacKenzie, Chairman

Andrew Mackenzie, Chief Executive Officer.

Dated this 7th day of September 2017."

BHP Billiton Plc Registration number 3196209

LEI 549300C116EOWV835768

Registered in England and Wales

Registered Office: Nova South, 160 Victoria Street, London SW1E 1LB United Kingdom

A member of the BHP Group which is headquartered in Australia

This information is provided by RNS

The company news service from the London Stock Exchange

END

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September 20, 2017 02:00 ET (06:00 GMT)