ANNUAL REPORT 2017 - thisisnoble.com

1 ANNUAL REPORT 2017. Noble Group ANNUAL REPORT 2017 ABOUT NOBLE. Noble Group (SGX: CGP) is a supply chain manager focused on purchasing physical commodities and transforming these into customised products for our customers. Our business consists of logistics and transportation, price risk management and hedging, commodity processing and blending, as well as structured and trade finance products. Our business is oriented towards partnering with rather than competing against producer customers and investors, providing best-in-class execution, as we aim to be the best company in the world at moving physical commodities from producers to consumers. Noble Group's key assets are its extensive business relationships with customers and clients, mid-stream supply chain resources, and our people, whose mission is to provide our customers and clients with value-added services.

2 Our objective is to deliver value for shareholders, partners, customers and our people over the long term, based on developing sustainable franchises and business relationships. CONTENTS. CONTENTS. 1 Financial Results 20 Financial REPORT . 22 Corporate Governance 3 CORPORATE REVIEW 24 REPORT of the Directors 38 Financial Summary 7 MANAGEMENT REVIEW. 40 Independent Auditor's REPORT 46 Consolidated Income Statement 17 OUR ManagemenT. 47 Consolidated Statement of Comprehensive Income 48 Consolidated Statement of Financial Position 50 Consolidated Statement of Changes in Equity 52 Consolidated Statement of Cash Flows 53 Statement of Financial Position 54 Notes to Financial Statements 158 Shareholding and Capital Securities Statistics This REPORT provides an update on Noble Group's operations and performance for the year ended 31 December 2017.

3 NOBLE GROUP ANNUAL REPORT 2017. FINANCIAL RESULTS. FINANCIAL RESULTS. year ended year ended (million tonnes/US$ million). 31 Dec 2017 31 Dec 2016. Tonnage(1) Revenue(1) 6, 7, Operating income/(loss) from supply chains, net(1) ( ) Operating income margin Profit/(loss) on supply chain assets(1) ( ) Share of profits and losses of joint ventures and associates(1) ( ) ( ). Total operating income/(loss)(1) ( ) Other income net of other expenses(1) Selling, administrative and operating expenses(1) ( ) ( ). Profit/(loss) before interest and tax(1) ( ) Net finance costs(1) ( ) ( ). Taxation(1) ( ). Adjusted net profit/(loss) from continuing operations(1) ( ) Post-tax profit/(loss) from discontinued operations(2) (1, ) Exceptional items, net of tax(3) (3, ) ( ).

4 Other items(4) ( ) ( ). Non-controlling interests Net profit/(loss) (4, ) (1) Adjusted for post-tax profit/(loss) from discontinued operations, exceptional items and other items. See notes 2, 3 and 4 below and refer to SGX. announcement note 1(a)(i)(A) for additional disclosure. (2) Includes post-tax profit/(loss) from discontinued Global Oil Liquids and North American Gas & Power businesses. (3) Includes exceptional items in the Group's operating income from supply chains from continuing operations along with other non-operational items such as impairment losses on supply chain assets from continuing operations. (4) Includes the results of businesses which the Group has ceased or wound down their operations, however do not meet the criteria of discontinued operations under IFRS.

5 Other items also includes costs associated with repositioning the Group's cost structure, including headcount reductions. These businesses include certain other energy and metals, minerals and ores product divisions in the Americas and Europe. There has not been any significant variance or notable items during the period related to these businesses. 1 Noble Group ANNUAL REPORT 2017. OUR BUSINESS. corporate review NOBLE GROUP ANNUAL REPORT 2017 2. CORPORATE REVIEW. CORPORATE REVIEW. We entered 2017 having re-aligned the Group to focus on our core global energy and hard, mined, commodity businesses, the latter's roots being These discussions were deeply intertwined with the key Asian customer franchises upon which the Group has been built. aimed at managing While the loss of our investment grade rating at the end of 2015 pushed our medium term the maturity of its traded bonds down to 40 cents in the dollar by the end of January 2016, our focus over the rest borrowings, ensuring of that year had been on ensuring our debt traded at levels that ensured credit and funding, in good optimal use of available size and at competitive pricing, continued to be available to us.

6 Cash for the foreseeable This was necessitated by the recognition that access to working capital and medium and long- future so all stakeholders term funding is the critical underpinning of any large commodity trading business, enabling both were treated fairly. inventory and hedge positions to be carried, and funded, as prices move through periods of volatility. Because of this focus, and the importance within days, our bonds were trading below the we had placed on stabilising the markets' view levels seen 15 months earlier. of our financial capability, debt markets for Consequently, in May 2017, the Group our instruments had recovered their poise by announced the commencement of a strategic February 2017 and were trading once more review under the direction of new Chairman, at close to parity.

7 We also entered 2017 with Mr. Paul Brough. As part of the review, the US$2 billion of liquidity headroom. Furthermore, Group mandated Moelis & Company and Morgan we had also just completed the disposal of Noble Stanley to assist with reviewing various strategic Americas Energy Solutions (NAES) for alternatives. The strategic review explored the US$ billion. sale of an interest in the Group or its subsidiaries We believed we were in a position, having or disposals of parts of its business, with a view slimmed down our business substantially while to maximising value for the benefit of the Group's lowering our cost base, to judiciously build our stakeholders and position the Group best for the franchises out once more. challenges and opportunities in the commodities However, our 1st Quarter results in May 2017.

8 Trading industry. showed a loss of US$129 million. This unexpected The strategic review was in the context outcome was largely caused by the Energy Coal of managing the Group's short-term liquidity and Carbon Steel Materials businesses, which challenges as its operating environment would were impacted by a sharp drop in coal prices also continue to be adverse because access to during the period, which created massive price funding had deteriorated, making it nigh on dislocations impacting the hedges in place against impossible to generate the revenue to operate our existing and future exposures. profitably. This loss fractured the confidence that had been rebuilt with markets and our banks and, 3 Noble Group ANNUAL REPORT 2017. CORPORATE REVIEW.

9 The Board's review concluded we needed, term iron ore contract and reduced emphasis on once more, to give priority to reducing Group volumes, and a tighter focus on profitability, in debt, necessitating the sale of our Global Oil our Freight operations. Liquids business, our most working capital In Energy Coal, our total volume was down intensive operation, and the North American 7% year on year , although this would have been Gas & Power business along with other non-core worse but for our ability to offset declining offtake assets. volumes by increasing marketing tonnage, which Subsequent to the review's conclusion, as mentioned above was not impacted by our our asset disposals have generated about trade financing constraints. However, our ability US$525 million in net attributable proceeds to enter new short-term contracts was hindered while all outstanding secured working capital by this issue, as well as liquidity limitations.

10 Funding has also been repaid. In LNG markets, there was a 54% surge in On 15 November 2017 the Board additionally demand in 2017 due to continued strong China announced it had commenced discussions with import demand as the government enforced various stakeholders regarding potential options switching from coal to gas. As with Energy Coal, to address the Company's capital structure and we continued to execute existing contracted flows liquidity position. These discussions were aimed but struggled to add profitable new business. at managing the maturity of its borrowings, Our Metals, Minerals & Ores Segment ensuring optimal use of available cash for the includes our Asian Base Metals business, which foreseeable future so all stakeholders were treated trades and provides supply chain management fairly.