Stolt-Nielsen Limited
Annual Report 2021
Contents
Directors’ Report
02 Financial Highlights 2021
03 Our Business
04 Chief Executive Officer’s Statement
06 Business Model
08 %XVLQHVV5HYLHZ
08 Stolt Tankers
10 Stolthaven Terminals
12 Stolt Tank Containers
14 Stolt Sea Farm
16 Stolt-Nielsen Gas
17 *URZLQJ6XVWDLQDEO\
18 Responsibility to Stakeholders
20 Health and Safety
25 Environment
32 People
40 &RUSRUDWH*RYHUQDQFH
41 Chairman's Statement
42 Board of Directors
44 Corporate Governance Report
49 )LQDQFLDO3HUIRUPDQFH
50 Financial Review
Forward-looking Statements
Included in this publication are various
‘forward-looking statements’, including
statements regarding the intent, opinion,
belief or current expectations of the Company
or its management with respect to, among other
things, (i) goals and strategies, (ii) plans for new
development, (iii) marketing plans, the Company’s
target markets, (iv) evaluation of the Company’s
markets, competition and competitive positions,
and (v) trends which may be expressed or implied
by financial or other information or statements
contained herein. Such forward-looking statements
are not guarantees of future performance and
involve known and unknown risks, uncertainties
and other facts that may cause the actual results,
performance and outcomes to be materially
different for any future results, performance
or outcomes expressed or implied by such
forward-looking statements. These factors
include in particular, but are not limited to, the
matters described in the Principal Risks section
on pages 60-62.
Financial Statements
63 Independent Auditors’ Report
69 Consolidated Income Statement
70 Consolidated Statement of Comprehensive Income
71 Consolidated Balance Sheet
72 Consolidated Statement of Changes in Shareholders’ Equity
73 Consolidated Statement of Cash Flows
74 Notes to the Consolidated Financial Statements
146 Responsibility Statement
Other Information
148 GRI Content Index
151 Shareholder Information
152 Offices and Facilities
DIRECTORS’ REPORT
Focused on
delivering long-term
sustainable growth
Stolt-Nielsen is a long-term investor
and manager of businesses, creating value
from opportunities in bulk-liquid logistics,
distribution and land-based aquaculture.
The Stolt-Nielsen portfolio consists
of Stolt Tankers, Stolthaven Terminals,
Stolt Tank Containers, Stolt Sea Farm
and investments in LNG.
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DIRECTORS’ REPORT
1
Operating profit
(US $ millions)
US $234m
187
182
190
194
2017 2018 2019 2020 2021
234
Net profit
(US $ millions)
US $79m
79
25
2017 2018 2019 2020 2021
19
54
50
Operating revenue by business
(US $ millions)
Stolt Tankers
Stolthaven Terminals
Stolt Tank Containers
Stolt Sea Farm
Corporate and Other
1,166
244
662
108
1
53%
1%
30%
5%
11%
2%
Total assets by business
(US $ millions)
Stolt Tankers
Stolthaven Terminals
Stolt Tank Containers
Stolt Sea Farm
Stolt-Nielsen Gas
Corporate and Other
2,248
1,308
590
144
114
232
13%
48%
5%
28%
3%
Operating profit by business
1
(US $ millions)
29%
26%
34%
10%
Stolt Tankers
Stolthaven Terminals
Stolt Tank Containers
Stolt Sea Farm
Stolt-Nielsen Gas
69
62
82
24
2
1%
Operating revenue
(US $ millions)
US $2,181m
2,181
2,032
2,125
1,997
2017 2018 2019 2020 2021
1,955
1. Excludes Corporate and Other loss
Financial Highlights 2021
Our Performance
(In US $ millions, except per share data)
2021 2020 2019 2018
Operating revenue 2,181.1 1,955.1 2,032.1 2,125.5
Operating profit 233.7 189.9 181.9 187.1
Net profit 78.8 25.4 19.1 54.0
Net profit per share
Basic $1.47 $0.43 $0.35 $0.89
Diluted $1.47 $0.43 $0.35 $0.89
Weighted average number of Common Shares and Common Share
equivalents outstanding
Basic 53.5 61.4 60.6 61.3
Diluted 53.5 61.4 60.6 61.3
2 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
2
Our Business
At a Glance
Stolt Tankers
1
Stolt Tankers operates the world’s largest fleet of chemical tankers,
providing safe, reliable and high-quality global transportation
services for bulk-liquid chemicals, edible oils, acids and clean
petroleum products.
77
deep-sea parcel tankers
81
coastal and inland tankers
3m
total deadweight tonnes
See pages 8-9 for more details
Stolt Tank Containers
2
Stolt Tank Containers is a leading provider of logistics
and transportation services for door-to-door shipments
of bulk-liquid chemicals and food-grade products.
43,500
tank containers in the fleet
140,000
shipments
22
depots and hubs
See pages 12-13 for more details
Stolt-Nielsen Gas
3
Investing in opportunities to ship and distribute liquefied natural
gas (LNG).
47.2%
ownership of Avenir LNG
2.5%
ownership of Cool Company Ltd
2.5%
ownership of Golar LNG
See page 16 for more details
Stolthaven Terminals
Our global terminal network provides safe, high-quality storage
and distribution services for chemicals, clean petroleum products,
gas, vegetable oils, biofuels and oleochemicals in key markets and
hubs worldwide.
4.9m
m
3
of storage capacity
2
11
wholly owned terminals
4
joint-venture terminals
See pages 10-11 for more details
Stolt Sea Farm
Stolt Sea Farm is the world’s most advanced high-tech aquaculture
company, and the premier provider of high-quality turbot and sole in
an environmentally sound manner.
14
land-based fish farms
5,700
tonnes turbot production capacity
1,570
tonnes sole production capacity
See pages 14-15 for more details
1. Includes joint ventures and managed ships.
2. Includes joint ventures.
3. As at the date of this report.
3Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Chief Executive Officer's Statement
Positive results during
a volatile year
“We maintained our focus and set the
course for a positive year.”
There was considerable global uncertainty as we began our financial
year, and, like 2020, 2021 will be remembered for the impact of
Covid-19. In addition to the pandemic, we experienced two other notable
one-off events: the six-day Suez Canal closure, which disrupted global
supply chains, and the Houston freeze, which affected customers’
operations. I am proud of how we maintained our focus and set the
course for a positive year despite these challenges.
We began 2021 with a strong balance sheet, a solid asset base and
a market-leading platform. This placed us in a strong position not
only to withstand the considerable disruption caused by Covid-19
restrictions, but also to operate and prosper under challenging
operating environments. Our success is fostered by our people, our
culture, our diverse business portfolio and our ability to quickly adapt.
Financial performance
The Group’s 2021 results were underpinned by the strong performance
and market conditions at Stolt Tank Containers, supported by steady
progress at Stolthaven Terminals and an impressive turnaround at
Stolt Sea Farm and our joint ventures continued to make a steady
contribution to our financial performance. However, we failed to see
the market improvement we had hoped for at Stolt Tankers as the
segment was affected by weakening spot rates.
The Group reported a net profit of $78.8 million with earnings per
share of $1.47, compared with $25.4 million and $0.43 in 2020. Efforts
to manage our capital expenditure resulted in a $66.6 million year-on-
year reduction in debt, including lease liabilities, to $2,436.1 million and
positive free cash flow (cash from operations less cash used in investing
activities) of $143.2 million. Shareholders’ equity was $1,472.9 million at
year end, compared with $1,418.6 million a year ago.
Stolt Tankers’ (ST) operating revenue increased to $1,165.6 million from
$1,113.1 million in 2020. Operating profit was $68.8 million, down from
$84.6 million last year. Profits were held down by lower spot rates and
deep-sea volumes as swing tonnage from a historically weak product
tanker market moved into chemicals. ST remains focused on driving
transformation through our Going Further initiative, and has continued
to invest in people and innovation, optimising processes and driving
cost efficiencies.
Stolthaven Terminals’ (SHVN) results were in line with expectations.
Full-year operating revenue increased slightly to $243.6 million from
$238.5 million in 2020. Operating profit was $62.3 million, down from
$68.8 million due to higher operating and administrative and general
costs. Utilisation improved over the year, which we anticipate will
result in higher rates. Performance was bolstered by favourable storage
market conditions in the US. However, weaker conditions in Asia Pacific
and Australia affected overall results.
Stolt Tank Containers’ (STC) revenue increased to $662.4 million,
from $520.6 million in 2020, with operating profit of $81.6 million,
up from $51.2 million. STC continued to set new shipment records,
and consequently fleet utilisation rose to 71.6% from 67.8%. Markets
remained strong, with rising freight rates and higher demurrage revenue
compensating for costly inefficiencies in global supply chains. Although
tight ocean liner capacity, truck driver shortages and port congestion
created a challenging operating environment, we managed to improve
our margin per shipment.
At Stolt Sea Farm (SSF), we expanded our geographical markets for
turbot, resulting in record sales of 8,100 tonnes, an increase of 6.5%
compared with last year, and at a higher average price. We also saw
robust demand for both turbot and sole during the traditionally strong
summer season, which led to higher sales volumes and solid price
increases. Full-year revenue rose to $108.6 million, compared with
$79.7 million in 2020. Operating profit increased to $24.4 million, up
from a loss of $8.4 million the previous year, in part due to a significant
positive swing in the fair-value accounting for inventory. Excluding the
impact of the fair-value adjustment, SSF’s full-year operating profit was
$7.1 million, compared with a loss of $3.4 million in 2020.
Stolt-Nielsen Gas (SNG) holds our investments in liquefied natural
gas (LNG) logistics, with 47.2% ownership in Avenir LNG Ltd and 2.5%
in both Golar LNG Ltd and Cool Company Ltd. Avenir’s strategy is to
source, ship, store, distribute and sell LNG to small-scale, stranded
communities that do not have access to a natural gas grid. In 2021,
Avenir reached a milestone in its development and now has assets
operating across Asia Pacific, Europe and the Americas. Its terminal in
Sardinia opened in August, three ships were delivered during the year
and one was delivered in January 2022. Avenir Allegiance, which was
delivered in December 2021, was subsequently sold to Chinese buyers
at a gain. Two vessels are employed under charter arrangements with
Petronas and New Fortress Energy, and two ships have entered service
to supply Avenir’s own customers.
Dividends and employee incentive plans
In November, we were able to raise our dividend and signal our
intention to provide increasing returns to shareholders over the
coming years. On November 3, 2021, the Board approved an interim
dividend of $0.50 per Common Share, payable on December 2, 2021
to shareholders of record as of November 9, 2021. A final dividend
of $0.50 per Common Share was recommended by the Board on
February 24, 2022, subject to the approval of shareholders at the
Company’s Annual General Meeting on April 21, 2022.
4 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
4
On October 6, 2021, Stolt-Nielsen cancelled 5,610,000 Common Shares
and 1,402,500 Founder's Shares, which the Company previously held
as Treasury Shares. These were subsequently available for re-issue.
Following the share cancellation, the Company holds 5,000,000
Common Shares and 1,250,000 Founder's Shares in treasury, equal
to 8.54% of issued Common and Founder's Shares.
Stolt-Nielsen compensates its employees through salaries, short-term
profit-sharing and long-term performance incentive plans, comprising
cash rewards and benefits. In early 2021, our incentive plans made
payments of $6.65 million.
Performing while transforming
The pandemic highlighted the benefits of our business transformation
strategy, particularly our investments in technology and digitalisation.
It is no small achievement that our teams kept all systems running
smoothly, enabling us to maintain contact with colleagues and
customers. Our digital modernisation programmes are moving full
steam ahead, including investments in cutting-edge technology to
reduce emissions across our fleet and terminals, as well as additional
field automation to boost safety, sustainability and process efficiencies.
These investments not only help us provide better services, but by
evolving into a more data-driven company, they also enable innovations
that will ensure we remain the leader in our markets and benefit our
people, customers and other stakeholders.
People are an important element of our ongoing transformation, and
changes to our leadership team will help position the Company for long-
term success. After 22 years, Michael W. Kramer has stepped down as
President of Stolt Tank Containers and will now focus his deep industry
knowledge on marketing efforts for our three logistics businesses. Michael
is succeeded by Hans Augusteijn, who joined Stolt Tankers in 2019. Our
Board of Directors also welcomed Janet Ashdown as a new Director.
Janet brings significant experience of managing complex supply chain
operations at BP and has a strong interest in the energy transition and
the broader environmental, social and governance (ESG) agenda.
Making a valuable difference
Many of our colleagues have experienced Covid-19 first-hand, and life
under lockdown has meant more challenges and anxiety for everyone.
I want to pay tribute to all our colleagues who have kept our ships
moving, our depots, terminals and farms running, and vital products
flowing around the world. They are our own heroes, working exceptionally
hard every day. I’d also particularly like to thank Mark Martecchini, former
President of Stolt Tankers, who is leaving us in April 2022 after 38 years.
His efforts over many decades have contributed greatly to our success.
Once again, this year our seafarers demonstrated remarkable
resilience and flexibility as scheduling and crew changes were affected
by Covid-related restrictions. The health and wellbeing of staff are key
priorities, you can read more about how we are supporting our people
on pages 33-34. Stolt Tankers continued its accelerated vaccination
programme for crew members. To date, we have vaccinated over
90% of our seafarers and started a booster programme.
An important lesson from the pandemic is that global cooperation and
concerted action are not only possible, but are essential to addressing
the challenges of our time. We strive to deliver long-term value for
our stakeholders and society at large by contributing to those United
Nations Strategic Development Goals where we can make a difference.
This includes continuing to promote diversity and inclusion and care for
our employees, contractors and communities. It also includes ongoing
management of our environmental impact as we work towards
the targets set last year for reducing our carbon footprint. In 2021,
we undertook environmental data benchmarking, completed our
materiality assessment, and began our Task Force on Climate-related
Financial Disclosures (TCFD) assessment.
A compelling investment proposition
Our strong balance sheet and diverse business portfolio places
Stolt-Nielsen in a strong position to capitalise on current and future
opportunities, and we see tremendous potential in providing customers
with the high-quality services and products we are known for. We
remain focused on our bottom line – on executing our strategy while
operating safely, reliably and sustainably.
We continue to build resilience in the balance sheet and reduce debt
amid a backdrop of global uncertainty and rising inflation. At the same
time, we are transforming to create greater value from our assets and
investments over the long term. As part of this, we are becoming more
diversified, more agile and better integrated across our business. These
economies of scale help us maximise value creation in rapidly evolving
markets – and enable us to leverage synergies and drive continuous
improvement in operational performance. The strength of our business
model was clear this year, with profit reaching $79 million even without
an improvement in the chemical tankers market.
A positive outlook
I remain positive about the future of all our businesses. The
development of the Stolt Tankers fleet – adding ships through new
buildings, acquiring competitors and purchasing modern second-hand
ships at attractive prices – means we are well positioned to capitalise
on the pending recovery. Should conditions for an IPO of Stolt Tankers
be right in the coming years, we are ready to act quickly.
We are in a similarly strong position at Stolthaven Terminals and Stolt
Tank Containers, where we have invested in additional capacity, our
market-leading platforms, our people and digitalisation. Stolt Sea Farm’s
new land-based recirculation farms for sole production in Cervo, Spain
and Tocha, Portugal underpin our long-term growth strategy for meeting
increasing market demand in a sustainable, cost-efficient manner. In all
our investments, we are focused on delivering a growing, long-term and
sustainable cash flow to our shareholders.
2022 and beyond
In January 2022, I announced my intention to step down as Chief
Executive Officer. I will continue as CEO and as a Director on the
Board until the appointment process for a successor has taken place and
a smooth transition period is completed. The intention is for me to assume
the role of Chairman of the Board, subject to shareholder approval, once
my replacement is found. I joined Stolt-Nielsen in 1990 and have been CEO
since 2000. It has been a great pleasure and honour to work with so many
remarkable people over the years and I have enjoyed it tremendously.
However, I feel that now is the right time to step aside and let a fresh pair
of hands take the Company forward. I plan to maintain my close ties and
contribute to the success of Stolt-Nielsen for many more years.
N
Niels G. Stolt-Nielsen
Chief Executive Officer
Stolt-Nielsen Limited
March 14, 2022
5Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Business Model
What we do
Stolt Tankers
Stolt Sea Farm
Stolt-Nielsen Gas
Our business
portfolio
Who we are
We are a long-term
investor and manager
of businesses, creating
value from opportunities
in bulk-liquid logistics,
distribution and
land-based aquaculture.
Our business model ensures we create
valuefor our stakeholders through
innovation, quality, customer service and
safety for both people and the environment.
Our mission and business model are
underpinned by our commitment to
growing sustainably.
Our mission
To provide growing
ORQJWHUPFDVKˌRZ
to shareholders.
Stolt Tank Containers
Stolthaven Terminals
6 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
6
How we do it How we create value
Industry expertise
Invests in industries where
Stolt-Nielsen can leverage its
knowledge and experience. Facilitates
the sharing of industry knowhow to
deliver superior growth and strong
cash flow.
Portfolio management
Market-leading businesses in global
bulk-liquid logistics, an innovative
land-based aquaculture business and
LNG investments.
Corporate structure
Cost-efficient financial, strategic and
other centralised services. Balance
sheet strength and diversified cash
flow provides flexibility to deliver
returns through organic growth,
M&Aand strategic partnerships.
Expert knowledge
A deep understanding of core
markets of logistics, distribution
and aquaculture.
2
1
3
Innovation and technology
Invented the modern parcel tanker,
pioneering land-based aquaculture and
ongoing R&D investment. Our culture
champions digitalisation, collaboration
andcontinuous improvement.
Quality and reliability
Safe and reliable operations for employees
and external stakeholders while delivering
quality services valued by customers.
Financial strength
A strong balance sheet and focus on cash
flow generation supports our mission and
helps maximise investment opportunities.
7Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Business Review
Stolt Tankers
Strong culture
and leading platform
drive sustainable
results
“We reduced year-on-year fuel
consumption by 5%, supporting our
commitment to being an efficient,
sustainable business.”
Performance
(US $ millions) 2021 2020 2019
Operating revenue
1,166
1,113 1,148
Operating profit
69
85 57
Percentage of Group total
of total revenue of total operating profit
1
1. Excludes Corporate and Other loss of $5 million.
Stolt Tankers (ST) provides safe, reliable and high-quality
transportation services for bulk-liquid chemicals, edible oils, acids
and clean petroleum products. We are the world’s leading operator
of deep sea and regional chemical tankers, with a 158-strong fleet
totalling three million deadweight tonnes. Our global deep-sea fleet is
supported by regional chemical tanker and barging services in Europe,
Asia Pacific, the Caribbean and the Gulf of Mexico.
2021 review
2021 was characterised by challenging conditions, and Stolt Tankers
demonstrated its ability to adapt and deliver despite market volatility.
Operating revenue reached $1,165.6 million, a 4.7% year-on-year
increase from 2020. Operating profit was $68.8 million, down 18.7%
from 2020. First-half results were affected by the freeze in Houston,
US, which led to the shutdown of customers’ production facilities.
Covid-related port closures and curtailed oil supplies throughout the
year also impacted performance. Although increased bunker costs
were offset by bunker surcharges passed through to customers, ST
was affected by weakening spot rates as medium range (MR) ships
moved into chemical trade lanes.
Our resilience and continued achievements were rooted in several
factors. Customers are at the heart of everything we do, and those
relationships remained strong thanks to our dedicated people, winning
culture and ongoing innovation. Volumes remained robust, with our
agility enabling us to balance contracts of affreightment (COAs) with
spot business as conditions shifted. Key renewals and contracts were
completed, and we are developing a new customer portal that puts ST
at the cutting-edge of the digital experience in shipping.
During the year we focused on capitalising on our leading platform
and managing capital expenditure while increasing net tonnage to
support fluctuating supply and demand. Five ships bought from
Chemical Transportation Group (CTG) in 2020, joined the Stolt
Tankers Joint Service (STJS) in the first quarter. E&S Tankers – our
joint venture with John T Essberger Group – exceeded expectations,
with synergies driving an additional $1 million of savings above initial
projections. Our innovative pool approach attracted interest from
Tufton Investment Limited, and we entered into an agreement for
seven of its chemical tankers to join the STJS.
This year, we recycled Stolt Spruce and Stolt Selje at substantial book
gains amid high steel prices, and sold Stolt Transporter and the joint
venture ship Stolt Botan. We agreed a settlement with the underwriters
for the Stolt Groenland, resulting in a net write-off of $13 million.
53% 29%
8 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
8
Business Review (continued)
Our Going Further business transformation initiative delivered
ongoing benefits as we continued investing in people and innovation,
optimising processes and driving cost efficiencies. Most notably, we
reduced bunker consumption by 5% year-on-year, generating both
cost and carbon savings.
Our people demonstrated remarkable commitment in challenging
conditions, with both onshore staff and seafarers affected by new
Covid-19 variants that impacted schedules and our ability to complete
crew changes. To enhance employee engagement and development,
we implemented new training, mentorship and digital learning
programmes (see page 34). We also bolstered our safety culture
through our ongoing Slashed Zero programme with initiatives such
as the Stolt Unbreakable Life Saving Rules, which you can read more
about on pages 21-23. We recognise that safety is an industry-wide
issue, and we launched a joint initiative with Odfjell Tankers to share
learnings and best practices.
Sustainability was another focus area in 2021 as we made good
progress towards reducing carbon intensity by 50% (relative to 2008
levels) by 2030. We achieved our targeted reduction in our Annual
Efficiency Ratio (AER), which decreased by 3.3% during the year
thanks to our efforts to optimise operational processes and
technology (read more on page 28).
Industry cooperation is critical to meeting challenges around zero-
carbon shipping, and we continued to champion collaboration in this
area. We joined the Mærsk Mc-Kinney Møller Center for Zero Carbon
Shipping, seconding staff to joint decarbonisation projects. We are
also spearheading industry discussions regarding the introduction of
shipping into the European Union Emissions Trading System (ETS),
including how carbon taxation can be fairly distributed across the
supply chain. Another innovative collaboration, this year was with
our customer, BASF, which involved ST helping to design and build
a new inland tanker that can operate at extremely low water levels
on the river Rhine. This innovative tanker is setting a new standard
for cargo transport at a time when water levels are becoming
more unpredictable.
2022 outlook
Despite recent volatility, the fundamentals of the chemical and
clean petroleum product markets remain strong. They are poised
to improve in the second half of 2022, although uncertainty remains
due to potential new Covid-19 variants and the uneven global recovery
of all industries. We will further develop our fleet while preserving our
financial strength, consolidate our competitive position and benefit
from expected increases in spot markets as activity normalises and
oil supplies increase.
In 2022, we will maintain our focus on fostering a winning culture,
achieving cost and process efficiencies, accelerating digitalisation
and becoming a more data-driven organisation. This will help us
deliver next-generation customer service, network savings and
carbon reductions – as well as attract and retain the best talent.
L
Lucas Vos
President
Stolt Tankers
9Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Business Review (continued)
Stolthaven Terminals
Capitalising on market
conditions while focused
on safety and customer
experience
“Our position in the chemical
market proved a major strength as
we helped customers adapt to supply
chain challenges.”
Performance
(US $ millions) 2021 2020 2019
Operating revenue
244
239 251
Operating profit
62
69 69
Percentage of Group total
of total revenue of total operating profit
1
1. Excludes Corporate and Other loss of $5 million.
Stolthaven Terminals has a well-established reputation for high-
quality, flexible, safe and sustainable bulk-liquid storage services,
which help customers maximise value from their supply chains.
We operate 15 terminals across key locations globally, providing
4.9 million m
3
of storage capacity for bulk liquids including chemicals,
clean petroleum products, liquefied petroleum gases, vegetable
oils, biofuels and oleochemicals. Each terminal is located close to
customers’ operations, meaning that we can adapt quickly to their
changing needs.
We offer customers added agility by collaborating with Stolt Tankers
and Stolt Tank Containers. Working closely with Stolt Tankers at
multiple locations, we provide an efficient ship-to-shore interface that
limits potential demurrage exposure for our customers. By partnering
with Stolt Tank Containers, we also offer solutions that can help
reduce logistics costs for customers.
2021 review
Utilisation and throughput volumes increased over the year, despite
ongoing challenges related to Covid-19, rising inflation, global supply
chain disruption and major weather-related events. Our full-year
operating revenue was $243.6 million, compared with $238.5 million
in 2020. Operating profit was $62.3 million, down from $68.8 million in
2020, driven by higher operating and administrative and general costs.
This year, Stolthaven benefited from a stable chemical market and
robust demand for biofuels, with the business in a stronger position
than those more exposed to weaker petroleum markets. However,
at several locations the ongoing low demand for transportation
fuels affected rates and throughput of clean petroleum products.
Our performance was buoyed by favourable storage market
conditions in the US, although weaker conditions in Asia Pacific
and Australia affected overall results.
Our people worked tirelessly to support customers amid supply
chain disruptions related to container shipping, port congestion and
trucking shortages, which led to an increasing number of enquiries
from customers looking to switch from isotanks to bulk storage.
Stolthaven is playing a leading role in discussions around the
challenges the industry faces, and in 2021 I was appointed Chair
of the European Petrochemical Association (EPCA) Supply Chain
Program Committee.
I am particularly proud of our safety and business continuity
achievements this year. Safety metrics maintained their positive
trends, including almost halving Lost Time Injury Frequency (LTIF)
from 0.98 in 2020 to 0.52 in 2021. (Read more about safety on
pages 20-24.) Our US terminals were recognised by our customers
as being among the first to resume operations after the Houston
freeze and Hurricane Ida in New Orleans, reflecting our commitment
to safe operations and customer service.
11% 26%
10 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
10
Facility upgrades progressed at Mount Maunganui, New Zealand,
Dagenham, UK, Westport, Malaysia and Ulsan, South Korea. In
the second quarter of 2021, we completed decommissioning of
our terminal in Wynyard, New Zealand, with independent reports
confirming there was no site contamination during our tenure.
We also explored potential greenfield terminals in Ceyhan, Turkey
and Kaohsiung, Taiwan. In Australia, Stolthaven received welcome
recognition by achieving the maximum government grant under the
Boosting Diesel Storage programme, which offers future development
opportunities for our Newcastle facility.
As well as investing in physical assets, we focused on projects to
support our five strategic pillars: digitalisation, innovation, customer
centricity, sustainability and employee engagement. This year, we
completed planning work for several key digitalisation and innovation
initiatives, including additional field automation and the Internet of
Things, which explores how we can connect and exchange data
between our own and third-party systems and devices over the
internet. As part of our ongoing customer centricity programme, we
further developed plans for integrating our digital systems with our
customers’ and providing faster information.
We also made progress towards our goal of making our primary
activities, including the storage and handling of products, carbon
neutral by 2040. This included increasing our use of renewable
energy, with 100% of energy now coming from green sources at four
terminals. We continued exploring opportunities around the hydrogen
value chain and ways the industry and customers can best manage
the implications of the EU Green Deal. Read more about our 2021
environmental initiatives on pages 27-30.
As part of ongoing efforts to improve the employee experience, in
2021 we conducted a global engagement survey. This showed an
overall improvement since last year as we have launched several
initiatives relating to employee wellbeing, training and recognition in
response to feedback previously received (read more on pages 34-35).
Stolthaven had record low staff turnover in 2021 despite high levels
of churn in the overall labour market, and I am proud of our efforts
to foster such a strong and highly valued culture.
2022 outlook
In 2022, we expect the chemical market to remain stable despite rising
energy costs and supply chain challenges. Asia is the biggest demand
driver in this segment, and Stolthaven is well positioned to capitalise
on this while benefiting from our diversification and strength across
other regions. The petroleum market is more affected by Covid-19,
meaning transportation fuel in particular is poised to recover as
restrictions ease. Inflation is likely to affect ongoing operational and
investment costs, which will need to be reflected in higher rates for
customers. However, ongoing geopolitical tensions in Europe and
uncertainty around the recovery of China’s economy may hold
back volumes.
We will continue to explore opportunities related to the energy
transition, including biofuels, chemical recycling and the hydrogen
value chain. We will also progress our digitalisation, asset
management and customer centricity strategies, rolling out the
initiatives planned this year and progressing facility developments
and greenfield investments.
G
Guy Bessant
President
Stolthaven Terminals
11Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Business Review (continued)
Stolt Tank Containers
A record year, reflecting
our dedication and
customer centricity
“We achieved new shipment records
against a backdrop of Covid-19 supply
chain disruption, global inflation and
worldwide logistics challenges.”
Performance
(US $ millions) 2021 2020 2019
Operating revenue
662
521 529
Operating profit
82
51 56
Percentage of Group total
of total revenue
of total operating profit
1
1. Excludes Corporate and Other loss of $5 million.
Stolt Tank Containers (STC) is a leading provider of logistics and
transportation services for door-to-door shipments of bulk-liquid
chemicals and food-grade products. With our global capabilities, we
help customers minimise costs and increase efficiency across their
supply chains.
STC has a fleet of more than 43,500 tank containers and is a leader
in the worldwide door-to-door bulk-liquid logistics industry. Our 22
full-service depots and refurbishing facilities give us direct control
over tank handling, cleaning, and maintenance, ensuring our fleet and
cargo handling operations consistently meet the highest standards for
quality, reliability, safety, and environmental protection.
2021 review
2021 was a year of strong performance and new shipment records as
STC’s agility, dedication, creativity, and customer centricity enabled us
to capitalise on market conditions.
Full-year operating profit was $81.6 million, a 59% increase on 2020.
Markets remained strong throughout the year, with rising freight
rates and higher demurrage revenue compensating for rising costs.
Although inflation, tight ocean liner capacity, trucking shortages and
port congestion created a difficult operating environment, we passed
on additional costs to customers and improved margin per shipment.
Customers clearly recognise the value and reliability STC offers in an
environment experiencing unprecedented supply chain challenges.
Our food-grade business grew by 8.6% and our chemical business
grew by 8.4%. Income from food-grade operations rose 31.6%, as
shipments reached new records and our customer base expanded.
Importantly, STC also has a strong foundation for ongoing growth.
We maintain the largest fleet in the industry, and this year boosted
capacity by 8.7% while increasing utilisation to 72% from 68%
in 2020. Investment continued and our depot in Grangemouth,
Scotland and loaded storage facility in Singapore are now operational.
The rebuilding of our depot in Kaohsiung, Taiwan progressed, as did
the redevelopment of our cleaning station in Houston, US.
STC’s transformation roadmap delivered ongoing benefits to the
Company and our customers. We continued to integrate with
customers and vendors electronically, developed our configured price
quotation programme and worked to enhance our mySTC.com portal,
which gives us a competitive advantage by making it even easier
to work with us. Digitalisation of processes boosted efficiency
and delivered cost savings. Additional robotics deployments saved
2,250 working days over the year, and our new digital platforms offer
greater visibility of carrier performance and allocations, allowing us to
maximise limited carrier space.
30% 34%
12 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
12
During 2021, everyone at STC went above and beyond to support
colleagues and customers in the most complex logistics environment
ever. Their ability to navigate challenges related to Covid-19 and
across ocean freight vendors and inland supply chains worldwide –
and to deliver for customers time and time again – underpinned STC’s
strong performance. At the beginning of 2021, we completed our first
comprehensive employee engagement survey, and the results have
helped improve recruitment, training, and the support we give to staff.
Read more about our 2021 people-related initiatives on pages 33-35.
2021 also featured important progress on sustainability as we
assessed the baseline for our Scope 1 emissions (from our own
operations) and developed a platform that allows us to measure
our impact. Work is ongoing to accurately measure our Scope 3
emissions (largely from our transportation partners) which are
more complex. This will further position us to serve industries with
a growing sustainability focus. We have also seen more customers
looking to transition from unsustainable, single-use flexi-bags to
re-usable steel tanks to minimise the environmental footprint of
their supply chain.
2022 outlook
On February 1, 2022, I stepped down as STC President after 22 years
to assume a new role for SNL’s three logistics businesses. I leave an
exceptional team in the capable hands of Hans Augusteijn, who has
served as Stolt Tankers’ Director of Strategy since 2019.
Under Hans’ guidance and the leadership of the STC management
team, the business is well placed to benefit from ongoing strong
demand across all regions. Both food-grade and chemicals
businesses will grow, and we will expand our fleet to capitalise on
these opportunities. Logistics challenges will remain as inflation and
supply chain costs rise during the year. STC will continue to expand its
vendor network and foster long-term relationships, which will help gain
more space allocations on ships and give customers more choice.
Our ambitious digitalisation strategy will advance in 2022, with
developments across automation and our mySTC.com platform
keeping us at the cutting edge of digital customer experience in
the industry.
M
Michael W. Kramer
President Emeritus
Stolt Tank Containers
13Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Business Review (continued)
Stolt Sea Farm
Impressive turnaround
and a strong foundation
for growth
“We set a new record for annual sole
output, had our best month for turbot
output and achieved our highest-ever
revenue for a single month.”
Performance
(US $ millions) 2021 2020 2019
Operating revenue
108
80 100
Operating profit
24
(8) 8
Percentage of Group total
of total revenue of total operating profit
1
1. Excludes Corporate and Other loss of $5 million.
Stolt Sea Farm (SSF) is a pioneer in land-based aquaculture and our
purpose is to ensure future generations continue to enjoy wonderful
seafood. The business focuses on sustainable growth and building
partnerships with customers and communities, while adhering to high
animal welfare and environmental protection standards.
Fish is widely accepted to be one of the most sustainable sources of
animal protein. We pay rigorous attention to ensuring our operations
have a positive environmental impact and two of our 14 farms are
located on legally protected natural marine reserves.
We are known for our innovation and pioneering technologies,
including highly specialised, custom-designed facilities. Thanks to
decades of research and development, we are the only aquaculture
company that can consistently produce the highest-quality sole and
turbot in commercial volumes. SSF products feature on restaurant,
hotel and foodservice menus as well as supermarket shelves in more
than 30 countries. Our annual production capacity totals a remarkable
1,570 tonnes of sole and 5,700 tonnes of turbot.
2021 review
Our 2021 achievements reflect our flexibility and resilience –
characteristics shown by everyone at SSF during the year. The
pandemic continued to have an impact, notably at the beginning and
end of the year as Covid-19 variants prompted additional government
restrictions. The entire market was affected by Omicron’s negative
effect on demand, with consumption and prices impacted for all
species and products, not just sole and turbot.
Despite this backdrop, SSF had a remarkable turnaround from 2020,
with full-year revenue of $108.6 million (compared with $79.7 million
in 2020) and operating profit of $24.4 million (compared with an
operating loss of $8.4 million in 2020). This performance was driven
by a boom in demand as hospitality re-opened, with record-high
average prices for sole and turbot during the traditionally strong
summer season. Our people demonstrated impressive agility in these
fluctuating conditions, adapting production volumes, driving sales and
delivering the quality and efficiency SSF is known for.
Our two new land-based recirculation aquaculture system (RAS)
farms in Cervo, Spain and Tocha, Portugal had their first full year
of sole production and exceeded expectations for biomass growth.
We have now initiated scoping activities for three more RAS farms.
Expansion works for our packing facility in Spain were completed
in record time, and the improvements have made it a much better
place to work while boosting efficiency. Operational improvements
in Iceland progressed and had positive results; in 2022, we will
consolidate these changes and increase production.
Turbot performance also rebounded in 2021, demonstrating the
success of our investments in facilities and husbandry. Stocks
recovered following a pandemic-driven biomass reduction in 2020,
and we achieved high productivity despite inflation affecting feed and
energy costs.
5% 10%
14 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
14
SSF has long been a pioneer when it comes to sustainability in
aquaculture. 2021 was our first full year of industrial trials for new
feed formulas with lower fishmeal and fish oil content. The trials
were successful, putting the business on track to achieve its 2030
environmental target of reducing fish products in our feed by 65% for
sole and 50% for turbot (relative to 2020 levels). Read more about our
environmental initiatives on pages 27-31.
SSF’s diversification strategy also continued. We achieved a careful
balance of our existing product mix to drive sales as conditions
changed. In 2020 and into the first quarter of 2021, we responded
to the shutting of hospitality by shifting 65% of sales to retail. From
the second quarter, as hospitality reopened, we shifted back to
foodservice to meet booming demand.
Overall, in 2021, 70% of sales came from foodservice and 30% from
retail, reflecting pre-Covid-19 dynamics. Our Value-Added Products
(VAPs) such as pre-packaged fillets, remain key to our diversified
offering, and in 2021 helped broaden our retail customer base as we
sold the frozen stock inventoried in 2020. We also began developing a
robust VAP strategy to develop this segment and transition to a more
consumer-oriented company in the most efficient, profitable and
sustainable way.
2021 was a year of transition at SSF as we progressed our Going
Further business transformation initiative. We laid key foundations
for our next growth phase, from scouting sites for new farms
to designing new facilities and planning construction of new
hatcheries and broodstock areas. We also reorganised and expanded
the SSF sales team, bringing in a new Chief Commercial Officer and
establishing processes and skills that will accelerate our entry into
new markets.
During the year we also completed strategy and planning work for
SSF’s digital transformation initiative, one of the most ambitious
projects on our agenda. This will help us make more insight-led
decisions, boost operational efficiency, improve the employee
experience and offer more value to customers. Efforts included
working with external consultants to determine our approach and
prioritise projects for future implementation.
2022 outlook
2022 is a major milestone for SSF as we celebrate our 50-year
anniversary. The business has evolved into a true aquaculture
pioneer, reflecting the vision and dedication of many people over the
years. We will mark our half-century with a series of events involving
our people, partners, customers and local communities.
We anticipate prices remaining high in 2022, for both sole and
turbot, with SSF achieving solid production volumes that allow us
to capitalise on demand. SSF’s business and digital transformation
initiatives will enter new phases as we proceed with projects that
enhance decision-making, productivity and cost-efficiency. We will
continue planning for three new RAS farms and for enhancements to
our Spanish packing facility, which will meet operational requirements
for greater VAP production. In 2022, we will also continue to focus on
our product and species diversification strategy.
J
Jordi Trias
President
Stolt Sea Farm
15Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Business Review (continued)
Stolt-Nielsen Gas
Avenir LNG –
–
a blueprint
for growth in a rapidly
developing market
2021 was a transformative year, with
new partnerships, a new terminal and
an expanded fleet in operation.
Performance
(US $ millions) 2021 2020 2019
Operating revenue
–
– –
Operating profit
2
(4) (4)
Percentage of Group total
of operating profit
1
1. Excludes Corporate and Other loss of $5 million.
Stolt-Nielsen Gas (SNG) is our investment arm focused on the
liquefied natural gas (LNG) segment. As the energy transition gathers
momentum, LNG offers a cleaner, more cost-effective, reliable fuel
that will play an increasingly important role in decarbonisation.
SNG owns 47.2% of NOTC-listed Avenir LNG Ltd and holds a 2.5%
stake in both Golar LNG and Cool Company Ltd. Avenir’s other
primary shareholders are Höegh LNG and Golar LNG. Avenir’s
strategy is to source, ship, store, distribute and sell LNG to industries
and communities that lack access to a natural gas grid. Golar is one
of the world’s largest independent owners and operators of marine-
based LNG midstream infrastructure, and is active in liquefaction,
transportation and regasification. Cool Company Ltd aims to become
a growth vehicle and consolidator of modern LNG carriers, providing
investors with direct market exposure to an expected continued
strength in the LNG freight market.
SNG reported an operating profit of $2.1 million for 2021. The
profit was the result of recording a $3.2 million gain on sale of
land in Canada, partially offset by losses from various ongoing
development projects.
Avenir LNG 2021 review
2021 was a transformative year for Avenir as it became a fully
operational LNG supplier with core assets in service. Its first LNG
bunkering and supply vessel (LBV), the 7,500-cbm Avenir Advantage,
successfully operated under charter to Malaysian energy company
Petronas. Its second LBV, the 7,500-cbm Avenir Accolade, was
delivered in March 2021, and chartered to New Fortress Energy.
A significant milestone was reached when Avenir’s first onshore LNG
terminal opened at the port of Oristano, Sardinia. Avenir has an 80%
stake in the terminal through Higas Srl (HIGAS), and the terminal will
enable the Company to provide a fully integrated offering, sourcing
LNG from international markets, shipping it to Sardinia, storing it and
distributing it to customers across the island. The HIGAS terminal
received its commissioning cargo in May from the Avenir Accolade
and fully opened in August. In September, Avenir took delivery of the
Avenir Aspiration, a third 7,500-cbm capacity LBV that will operate in
the Mediterranean and serve the terminal.
In December 2021, the Avenir Allegiance, the first of two 20,000-cbm
vessels, was delivered, and subsequently sold to a Chinese port
operator company for a profit. Avenir’s fourth 7,500-cbm capacity
LBV, the Avenir Ascension, was delivered in January 2022 and will
serve customers in the Baltics.
2022 outlook
Although the challenging energy market is expected to impact LNG
during 2022, the medium- and long-term outlook remains strong.
The distinct specialisms of Avenir’s three main shareholders have
contributed to a proven blueprint for growth.
With its combined onshore and bunkering capabilities, Avenir is
well positioned to capitalise on LNG demand in a range of industries,
including as a marine fuel. In 2022, Avenir will take delivery of its final
20,000-cbm capacity LBV, which will be chartered to Shell.
1%
16 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
16
17Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Growing Sustainably
As an organisation that stores and transports raw materials for many everyday products –
and produces a sustainable food source at our fish farms – we recognise the impact that our
operations have on the environment, our communities, our colleagues and external stakeholders.
Sustainability is therefore integrated with our strategy and underpins operations across Stolt-Nielsen.
Responsibility
to Stakeholders
Pages 18-19
Environment
Pages 25-31
People
Pages 32-39
Health
and Safety
Pages 20-24
18 Stolt-Nielsen Limited | Annual Report 202118
DIRECTORS’ REPORT
Growing Sustainably (continued)
Responsibility
to Stakeholders
Sustainable growth, sustainable value
The markets we serve – from packaging, agriculture, construction and
electronics to automotive, textiles, food and healthcare – are affected
by global demographic and economic trends. And that means our
business is also driven by factors such as population growth, demand
for sustainable food sources, urbanisation, burgeoning middle classes
and ageing populations.
Stolt-Nielsen has an important role in addressing the environmental
and social impacts of these factors – and in helping deliver
sustainable value to our stakeholders. We take that role seriously.
Engaging with stakeholders
Collaboration is key to our sustainability approach, and we work
closely with our customers, suppliers, investors, employees and
communities to make the greatest possible contribution through
our activities.
We are also active in engaging with trade associations and other
sector-specific organisations on industry trends and best practices.
These include the International Chamber of Shipping, INTERTANKO,
ITOPF, Maersk Mc-Kinney Mqller Center for Zero Carbon Shipping,
Global Maritime Forum, IMPA|Save, Koninklijke BLN-Schuttevaer,
HiLo, the Ship Recycling Transparency Initiative, International
Liquid Terminals Association, Associacion Petroquimica y Quimica
Latinoamericana, Clean Cargo, Tank Storage Association, Bulk
Liquids Industry Association Inc, American Fuel & Petrochemical
Manufacturers, Singapore Chemical Industry Council, the
International Tank Container Organization, the European
Petrochemical Association, the European Federation of
Aquaculture Producers and the Norwegian Seafood Council.
Aligning with global best practices
Stolt-Nielsen is a signatory of the UN Global Compact and we
are working to reduce our environmental impact in line with its
objectives and the UN Sustainable Development Goals (SDGs),
which are a framework for meeting the world’s greatest challenges
and opportunities by 2030. Stolt-Nielsen has the potential to make
the greatest contribution to SDGs 12, 13 and 14 – Responsible
Consumption and Production, Climate Action and Life Below Water,
and we use them to guide our approach to sustainability.
Maintaining strong governance
Our commitment to building a sustainable business comes from the
very top, with the Board of Directors pledging its full commitment in
areas ranging from health and safety to emissions reduction, water
conservation and employee wellbeing. We also have well-established
safety, quality and environmental management systems in place
to ensure sustainability principles are embedded in our culture,
operations and risk management approach. Climate change poses
potential risks and we therefore ensure all our businesses build
mitigation approaches into their strategies.
In 2020, we established the Stolt-Nielsen sustainability taskforce,
which is chaired by the Managing Director of APAC and MEA. It
also includes two members of our executive management team in
addition to representatives from each division and key stakeholder
groups. It meets regularly to discuss performance and opportunities,
and sustainability reports are made to the Board each quarter. In
April 2021, the taskforce held a virtual sustainability summit, which
featured presentations from leading external experts to provide
insight on best practices from other organisations, including
industries outside logistics.
For more information on our sustainability policies and progress,
please visit: www.stolt-nielsen.com/sustainability/
Assessing our impact
During 2021 we surveyed a broad range of stakeholders across all
our businesses, including customers and investors, as part of our
materiality assessment process. The results of these surveys were
then used to identify key sustainability themes to focus on in our
strategy and reporting. Employees from across the Company also
completed a questionnaire to rank those sustainability topics that
they considered most important to our ongoing success.
The resulting materiality diagram (opposite) illustrates the relative
importance of the material topics identified by both internal and
external stakeholders. Our sustainability strategy is aligned to
these topics, and in 2021 we established additional data baselines
for priority areas so we can more effectively measure our progress.
19Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Material topics
The diagram below includes the areas of environmental, social and
governance (ESG) focus that we have identified as key to our business
and most important to our stakeholders.
Each coloured dot represents an area of focus that has been identified
through our materiality assessment process.
Those closest to the centre are areas that Stolt-Nielsen can impact
most directly. Our ability to impact each area decreases as you move
from the centre of the diagram outwards.
This report has been prepared in accordance with the GRI
core standard option and covers several of the Sustainability
Accounting Standards Board (SASB) sustainability topics for marine
transportation. During the year, we also began our climate change
risk assessment using the Task Force on Climate-related Financial
Disclosures (TCFD) framework.
(See our GRI Content Index on pages 148-150.)
Importance to stakeholders
H
High
M
Medium
L
Low
G
o
v
e
r
n
a
n
c
e
E
n
v
i
r
o
n
m
e
n
t
a
l
S
o
c
i
a
l
H
H
H
H
H
H
H
M
M
M
M
M
M
L
L
L
Climate change
risk management
GHG emissions
VOC / Other emissions to air
Air quality
Biodiversity
Energy use
Water use
Waste
Business ethics
Technology
and innovation
Community
impact
Recruitment
and retention
Diversity and
inclusion
Modern slavery
and child labour
Health
and safety
Compliance
Financial
sustainability
Cyber
security
M
M
Our operations
Supply chain
Society
20 Stolt-Nielsen Limited | Annual Report 202120
DIRECTORS’ REPORT
Growing Sustainably (continued)
Health and Safety
Stolt-Nielsen is committed to achieving zero
harm across all operations. Our commitment
drives a safety-focused culture rooted
in sound governance, robust processes,
specialist training, incident management and
reporting. During 2021, we saw year-on-year
improvements in our safety performance as
we reinforced these areas.
Indicator 2021 performance Explanation Business Reference
Total Recordable
Case Frequency
(TRCF)
1.80
(2020: 2.34)
Improved performance overall, driven
by improvements at Stolthaven Terminals
and Stolt Tank Containers.
• GRI 403-9
• See page 24
Lost Time Injury
Frequency
(LTIF)
0.77
(2020 0.89)
Improved performance overall,
driven by a significant improvement at
Stolthaven Terminals.
• GRI 403-9
• See page 24
Serious Incidents
0
(2020: 0)
Zero serious incidents in 2021, for the
second consecutive year.
• GRI 403-9
• GRI 306-1
• GRI 306-2
• See page 24
Business key
Stolt TankersStolthaven TerminalsStolt Tank ContainersStolt Sea Farm
Performance key
Negative change from prior year Positive change from prior year No change from prior year
21Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Committed to zero harm
GRI 403
Our commitment to zero harm requires a strong, safety-focused
culture. This culture is driven from the top, with the management
team and Board of Directors receiving detailed safety KPI reports
on a quarterly basis. We ensure the Company is:
• Meeting or exceeding the latest industry standards
• Measuring the number of incidents and near misses
• Monitoring and reporting in line with established procedures and
compliance requirements
• Tracking and delivering training as scheduled
At the same time, our culture emphasises personal responsibility to
mitigate risks, protect colleagues and drive continuous improvement
across all processes and operations.
Adapting to Covid-19
All Stolt-Nielsen businesses continued active measures to keep
people safe, including ongoing hygiene protocols and testing in
line with local government guidelines. We also enhanced our virtual
training capabilities and conducted virtual meetings where possible.
Stolt Tankers continued its enhanced cleaning regimes on
board its ships, alongside social distancing and regular testing.
Shore leave was cancelled and wherever possible we complete
operations with zero ship-to-shore contact. To protect our crew,
from November 15, 2021 it is a requirement for everyone joining
our ships to be vaccinated. As at the date of this report, more than
90% of our seafarers have received their Covid-19 vaccines and we
have started the roll out of boosters.
Stolthaven Terminals maintained complete service for all
customers – not a single hour of operations was lost due to
Covid-19, demonstrating the robustness of safety management.
Stolt Tank Containers is classed as an essential business in
every market in which it operates, and all services continued in
compliance with local regulations. In contrast to 2020, Covid-19
had a limited impact on Stolt Sea Farm during 2021, with operations
continuing at normal levels.
Fostering a safety-focused culture
In 2021, our businesses continued to drive initiatives that foster a
safety-focused culture. Stolt Tankers enhanced its Slashed Zero
programme, which seeks to minimise behavioural risks involved
in operations and reduce personal injuries across the fleet. To help
drive cultural change on board ships, 2021 activity focused on the
behavioural aspects of safety, emphasising positive reinforcement
and rewarding successes. For example, employees demonstrating
good safety behaviour received positive annotations to their
appraisals and received congratulatory letters from management.
The leadership team also met with ships via Microsoft Teams
to discuss their safety statistics and highlight achievements and
areas for further improvement. Another effective initiative involved
revising our approach to reporting safety statistics to ships. Instead
of focusing on the number of incidents, we now headline reports with
accident-free trends, highlighting successes and demonstrating that
zero accidents is achievable for sustained periods.
Stolt Tankers holds an annual Ship of the Year competition to increase
health and safety awareness and raise standards. Our fleet is judged
on criteria that covers safety, port state and customer inspections,
audit results, off-hire, claims and cost-efficiency. In 2021, Stolt Renge
and Stolt Yuri were jointly named Ship of the Year. Learn more about
the competition at stolt-nielsen.com/our-businesses/stolt-tankers/
ship-of-the-year/
In December 2020, Stolthaven Terminals launched EcoPortal, a
new digital safety management system. All incidents, near misses
and non-conformities are now captured, managed and analysed
through this single global system, giving full transparency and timely
information to management. As a result, we can derive trends and
learnings faster than ever, driving a key element of our continuous
improvement efforts to achieve safety excellence. Because it provides
a global overview of safety across Stolthaven, EcoPortal highlights
areas that require additional safety training. It also encourages all
employees to be more proactive in improving safety by providing
them with an opportunity to submit their ideas for improvements.
In 2021, several customers recognised Stolthaven Terminals for its
safety performance and culture. Santos was named the best liquid
bulk storage terminal in Brazil by Raízen, in the safety and productivity
category. It also achieved best safety management performance in a
HSEQ audit by COVESTRO. Singapore won Terminal of the Year in the
Dow 2020 SEA S4TAR programme.
Following its employee engagement survey, Stolt Tank Containers
increased communication with staff on safety issues. Leadership
conducted townhalls and managers scheduled more regular
meetings with their teams – all of which received positive feedback.
We also extended our focus on dangerous goods safety, improving
our training programme for the safe transportation and storage of
heat-sensitive substances. In addition, we implemented training on
following International Maritime Dangerous Goods (IMDG) guidelines,
with ten employees qualifying as Dangerous Goods Safety Advisers.
As a result of our efforts during the year, a major customer named
STC ‘most transparent tank container operator’ when it comes to
health and safety matters.
Stolt Sea Farm conducted research into ways of enhancing the
safety culture in areas including biosanitary waste management,
animal welfare, farm hygiene and food safety. The initiative identified
ways to improve employee communication and training, and new
processes and e-learning modules were then introduced to reinforce
best practices. SSF also recently appointed a new head of health and
safety to bring more rigour and standardisation to processes across
the business.
Stop Work Authority Programme
The Stop Work Authority programme has been in place since 2014.
It empowers everyone at Stolt-Nielsen to intervene and put a stop to
work that appears unsafe. Onshore and seafaring staff alike receive
training on using this authority. They also receive a handy card
(available in 18 languages) reminding them of the processes for
taking action and raising concerns.
22 Stolt-Nielsen Limited | Annual Report 202122
DIRECTORS’ REPORT
Growing Sustainably (continued)
Enhancing process safety
We constantly look at ways to improve process safety throughout
the asset lifecycle. From early design and throughout operations and
maintenance, we follow robust procedures to prevent leaks, spills,
technical failures and breakdowns. We also drive innovation to
mitigate risks and provide a safer working environment.
In 2021, Stolt Tankers and Stolthaven Houston conducted an
initial trial in which ships’ tanks were cleaned while berthed, with
wastewater discharged directly into a treatment plant. As well as
reducing bunkers and associated carbon emissions, this brought
safety benefits by mitigating risks associated with ship channel
transits and berth-shifting. In addition, it reduced ship crew working
hours by around 10%.
Stolthaven Terminals also launched Connected Worker, its flagship
project for digitalising processes in the field. Technology and
automation help reduce the risk of human error, reduce paperwork,
improve communication and provide real-time data, all of which
improve safety and efficiency. Automation can also reduce the risk of
personal injuries because it is no longer necessary for employees to
be so close to operations. The first pilots of Connected Worker are
planned for Santos, Brazil, and Singapore in 2022.
In 2021, despite the pandemic Stolthaven made additional
investments in field automation. For example, automated valves for
nitrogen, steam and other utilities were introduced. Drones were used
in tank inspections in Houston, US and in Moerdijk, the Netherlands,
we upgraded two tank pits to introduce more automation. Santos,
Brazil and New Orleans, US also have extensive ongoing
modernisation programmes.
Stolt Tank Containers opened a new tank wash facility in
Grangemouth, Scotland, which is SQAS accredited and designed to
the highest safety standards. The installation of modern cleaning
equipment also improves safety. STC also renewed several quality
and safety certificates during the year, including ISO 9001 and ISO
22000, which we re-certified against the updated version of the
standard ISO 22000-2018. We renewed SQAS for tank cleaning
services at Moerdijk, the Netherlands, and completed the SQAS
assessment – including the EFTCO food section – at our new
depot in Grangemouth, Scotland. In addition, STC received customer
recognition for the high quality of our safety practices. We maintained
our EcoVadis silver rating with an increased score.
Providing specialist health and safety training
Regular training is key to promoting a safety-focused culture.
From toolbox talks and in-house seminars to external sessions and
certifications, we maintain active training schedules that improve risk
awareness and help prevent incidents.
Covid-19-related challenges continued to affect face-to-face training
in 2021. However, we maintained our schedules and ensured all staff
were able to access learning and development opportunities. Virtual
training continued, as did ongoing communication on topics such as
processes, standards and learnings from incidents and near misses.
At Stolt Tankers, 100% of seafarers received training. In total, the fleet
ran almost 1,400 sessions onboard, equating to approximately 20,000
training hours. Because sessions were held within each regional service,
they also helped us identify and understand specific issues. Crew
also completed 22,500 additional training hours on our digital training
portal. This career management system delivers bespoke Stolt Tankers
content that includes our procedures, safety rules and risk
assessments as core principles.
Stolt Tankers also introduced the Stolt Unbreakable Life Saving Rules
in 2021. These rules address the root causes of common accidents
and include messaging on how not following them endangers lives.
For example, one rule makes it compulsory to wear a helmet when
in the engine room or on open seas, and to facilitate compliance we
redesigned our helmets to make them lighter and more comfortable.
Twenty ships were involved in formulating the rules, and we trialled
them on five ships before rolling the initiative out across the fleet.
In 2021, Stolthaven Terminals introduced several new global safety
and operations standards as part of our ongoing drive to achieve
safety and operations excellence. These included a risk management
standard, which features an updated risk matrix, which is used to
assess the safety of new installations and modifications to our
existing facilities. Standards were developed with input from each
terminal and then communicated across the business – on sites, via
townhall meetings and in training sessions. We are also developing
the Stolthaven Academy, which brings together all global training
and education efforts in one platform – from e-learning to on-the-job
and classroom training. The aim is to make training more accessible
while also providing enhanced insights. The Academy will be launched
in 2022.
23Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Stolt Tank Containers maintained training schedules despite Covid-19
social distancing and travel restrictions. We increased online training
via our online learning management system and improved our
onboarding programme for new joiners. All depot employees also
received monthly training in topics such as handling dangerous goods,
preventing risk and working in confined spaces. STC continued to use
its global safety management system to plan and monitor training,
with 92% of staff completing their statutory and STC-required training
sessions in 2021.
All new Stolt Sea Farm employees receive training in occupational
health and safety, workplace risk, hazard identification and accident
prevention. Machinery operators receive additional training on role-
specific risks. In 2021, SSF conducted research to improve training
effectiveness, which led to the creation of more virtual sessions and
online modules. These included quality and food safety best practices
in line with Spanish regulatory requirements.
Engaging employees
Employee engagement and communication are key to our progress
in fostering a safety-focused culture.
In 2021, Stolt Tankers conducted a safety maturity survey to assess
the current state of its culture. Nearly 2,000 staff participated in the
survey, and 100 interviews were conducted. The results provided
insights into potential areas of weakness and highlighted the need
for the business to become more proactive, encourage employees to
take more initiative and ensure safety is more widely perceived as a
bottom-up culture instead of a top-down directive. Several initiatives
will be rolled out in 2022 to address these findings.
Another successful employee engagement initiative was an
inter-ship competition on safety and wellbeing topics. We used a
software programme that could be accessed offline, so it was simple
for ships to engage. Sixty ships participated in the first competition
focused on preventing hand injuries, with ships competing against
each other on their knowledge.
Stolthaven Terminals is a signatory of the Tank Storage
Association’s (TSA) charter to ensure we maintain our leadership
in major hazard best practices. We are focused on making
safety everyone’s responsibility and regularly undertake employee
engagement surveys on safety attitudes to inform initiatives that
improve employee welfare, communication and participation. In
2020, we created working groups based on engagement survey
results, and these continued to drive positive changes in 2021.
For example, at our terminal in Dagenham, UK, the working group
recommended enhanced shift scheduling that is improving
work/life balance.
Stolthaven Annual Safety Days for staff, vendors and families
continued where Covid-19 restrictions allowed. These popular
events combine interactive experiences, contests and opportunities
for everyone to learn more about safety processes and technologies.
They are also a chance to recognise those who go further, with
awards presented to people who go the extra mile to make our
workplaces safe.
To increase awareness of important health and safety issues, this
year Stolt Tank Containers launched a monthly bulletin with updates
on lessons learned and ways to standardise best practices, which has
been well received. To help continuously improve our performance,
our Depot General Managers held more frequent virtual meetings
throughout the year to share lessons learned and discuss personal
injuries, near misses and sustainability. These meetings improved
collaboration across our global team and generated several local
action plans which cover topics such as reducing our carbon footprint,
and identifying and mitigating against near misses.
Stolt Sea Farm held regular townhalls in local languages, with a
particular focus on evolving Covid-19 protocols. We also increased
communication with employees via video and displayed information
in common areas across sites. During the year an employee survey
found that for SSF employees, the most valued aspect of working was
the high level of health and safety protection in place.
24 Stolt-Nielsen Limited | Annual Report 202124
DIRECTORS’ REPORT
Growing Sustainably (continued)
Positive trends, new achievements
During the year we saw improvements in both overall Total Recordable
Case Frequency (TRCF) and Lost Time Injury Frequency (LTIF) rates
across our logistics businesses: TRCF fell to 1.80 (2020: 2.34) and LTIF
fell to 0.77 (2020: 0.89). We require our people to report all events that
impact health, safety, and/or the environment. Serious incidents are
defined as those having a ‘high severity’ according to the Company's
incident severity matrix. There were no serious incidents during the
year (2020: zero) and the last fatality of an employee or contractor
was in 2018.
We require all our operations to report any incident that impacts the
environment using our management systems. We classify any spill
that involves a release of materials that pose a major health and
safety risk to people or damage to the environment as significant.
There were no significant spills during the year.
Stolt Tankers improved its safety performance again this year.
86% of ships, excluding those in joint ventures, were incident free,
compared with 67% in 2020, and 85% were injury free (2020: 81%
1
).
At Stolthaven Terminals, several sites achieved new records for the
number of days without lost time injuries: Houston, US achieved
1,400 days, New Orleans, US 1,000 days and Singapore 950 days.
We saw a similar trend at Stolt Tank Containers – our Kaohsiung
depot in Taiwan and Zhangjiagang and Tianjin depots in China have
not recorded a single lost time injury since 2014.
At Stolthaven Terminals there was a significant reduction in
both TRCF and LTIF as a result of increased training, awareness
campaigns and improved safety management processes.
Stolt Tank Containers saw a reduction in TRCF, however its LTIF
increased compared with 2020, in part driven by more accurate
reporting of low severity incidents.
1. Restated for the period of December 01, 2019 to November 30, 2020.
Previously reported for the calendar year.
Stolt Sea Farm’s operations are significantly different from our
logistics businesses, so we use different safety benchmarks. Its
safety performance is measured against the index used by the
Spanish Ministry of Labour and Social Economy for occupational
incidents in the fisheries and aquaculture sector, which calculates
the average number of occupational safety incidents per worker.
We achieved 2.9% for 2021 (2020: 3.2%), compared with the
aquaculture industry average of 6.9% (2020: 7.6%).
At the beginning of each year, we conduct an external audit of three
farms to evaluate any changes to our health and safety risks. This
year’s audits identified 43 priority-one risks (2020: 32), which are
risks that could lead to legal non-compliance and possible serious
accidents. Following mitigation activity during the year, as of
November 30, 2021, we had 28 priority-one risks outstanding.
1. Per 1,000,000 hours exposure.
2. Per 200,000 hours exposure.
3. Includes joint ventures.
4. TRCF and LTIF data excludes Stolt Sea Farm.
Average number of occupational safety
incidents per worker
2021 2020
Achieved
2.9% 3.2%
Compared with the aquaculture industry
6.9% 7.6%
0
1
2
Total Recordable Case Frequency (TRCF)
2019 2020 2021
2019 2020 2021
2019 2020 2021
Serious incidents
Lost Time Injury Frequency (LTIF)
Zero Zero
Stolt Tankers
1
Stolthaven Terminals
2, 3
Stolt Tank Containers
2
Overall Group
4
0.3
0.6
0.9
1.2
0
1
2
3
4
5
6
7
8
25Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Environment
Stolt-Nielsen has far-reaching environmental
ambitions. From emissions reduction and
energy efficiency to waste management
and water conservation, we take a strategic
approach to improving our performance.
2021 was a defining year, with comprehensive
efforts to establish environmental data baselines
and reporting practices that will help us measure
our progress and achieve our ambitions.
Indicator 2021 performance Explanation Business Reference
GHG Emissions
Scope 1
5.5%
1
2021: 1,626,515 MT
1
2020: 1,720,663 MT
2
The reduction was mainly down to
operational efficiency improvements of
5.7%. Scope 2 and 3 greenhouse gas (GHG)
emissions are not currently available. We are
working towards publishing the data.
1. Including Scope 1 GHG emissions from E&S
Tankers’ fleet of 39,803 MT CO
2
in the third and
fourth quarters. This fleet operates under a separate
data reporting system.
2. Excluding Scope 1 GHG emissions from SNITS
(inland tankers) subsidiary of 91,383 MT CO
2
.
This fleet operates under a separate data
reporting system.
• GRI 305-1
• See pages 28-29
GHG Emissions
Scope 1 and Scope 2
1
0.1%
2021: 108,884 MT
2020: 108,947 MT
Slight reduction in CO
2
generated, despite
increased throughput. Several terminals
now purchase electricity from green
suppliers. We are also investing in
technology and research, ranging from
pipe heating optimisation to on-site
installations of solar panels.
1. Includes joint ventures.
• GRI 305-1
• See pages 28-29
GHG Emissions
Scope 1
1
11.0%
2021: 11,972 MT
2020: 13,426 MT
Reduction in CO
2
emissions was achieved
through the purchase of renewable energy,
continuous focus on improving efficiency
and investing in technology to reduce
energy consumption.
CO
2
emissions per tank received by our
fully owned depots fell from 199 kg in 2020
to 185 kg in 2021.
1. Includes depots only.
• GRI 305-1
• See pages 28-29
GHG Emission
Intensity (AER)
3.3%
2021: 11.06
2020: 11.44
Stolt Tankers uses the Annual Efficiency
Ratio (AER) to measure the intensity of its
carbon emissions. This measures carbon
emissions relative to a ship’s capacity
and distance travelled. AER decreased
by 3.3% during the year.
• GRI 305-4
• GRI 305-5
• See page 28
26 Stolt-Nielsen Limited | Annual Report 202126
DIRECTORS’ REPORT
Growing Sustainably (continued)
Indicator 2021 performance Explanation Business Reference
Sulphur Oxide
Emissions
3.6%
2021: 7,352,302 kg
2020: 7,629,003 kg
1
Initiatives to reduce overall fuel
consumption resulted in a significant
reduction in SOx emissions from our fleet.
1. Restated to reflect the correction of manually
entered data.
• GRI 305-7
• See pages 28-29
Nitrogen Oxide
Emissions
7.2%
2021: 46,193,438 kg
2020: 49,777,754 kg
1
Overall NOx emissions reduced in line
with our GHG Scope 1 emissions.
1. Restated to reflect the correction of manually
entered data.
• GRI 305-7
• See pages 28-29
Energy
Consumption
1
3.3%
2021: 58,000,000 KWh
2020: 60,000,000 KWh
The amount of energy consumed by
terminals depends on the products
stored, the amount of product pumped
and weather conditions. To reduce
consumption we are deploying new
technologies and more efficient devices.
1. Includes joint ventures.
• GRI 302-1
• GRI 302-5
• See page 29
Water
Consumption
1
19.4%
2021: 430,000 m
3
2020: 360,000 m
3
There was a significant increase in
water consumption during 2021 due
to increased tank cleaning, driven by a
changing product mix at our Houston and
Singapore terminals. As product volume
increased so did the requirements for tank
and line cleaning.
1. Includes joint ventures.
• GRI 303-5
• See page 30
Water
Consumption
12.3%
2021: 112,100m
3
2020: 127,800m
3
There was a decrease in water use at
our wholly-owned depots as we focused
on improving efficiencies, collecting
rainwater and recycling condensate
from heating where possible.
• GRI 303-5
• See page 30
Waste to Landfill
1
11.4%
2021: 5,964 m
3
2020: 6,733 m
3 2
All waste from our ships is disposed of
in line with the International Convention
for the Prevention of Pollution from
Ships (MARPOL).
1. Includes Stolt Tankers’ shipping operations only.
2. Restated due to late reporting from some ships.
• GRI 306-5
• See pages 30-31
Business key
Stolt TankersStolthaven TerminalsStolt Tank ContainersStolt Sea Farm
Performance key
Negative change from prior year Positive change from prior year No change from prior year
27Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Ambitions for reducing our environmental impact
Stolt Tankers
• Reduce carbon intensity by 50% (relative to
2008 levels) by 2030
• Have at least one carbon-neutral ship in the
fleet by 2030
• Run a carbon-neutral business by 2050
Stolthaven Terminals
• Primary activities, including the storage and
handling of products, to be carbon-neutral
by 2040
Stolt Tank Containers
• 50% renewable energy consumption at wholly
owned depots by 2030
• In line with IMO commitments, a 40% reduction
in our transportation partners’ carbon footprint
(relative to 2008 levels) by 2030
Stolt Sea Farm
• Zero waste to landfill by 2030, focusing
on recycling and energy recovery
• Reduction of fish products in our ongrowing
feed (relative to 2020 levels) by 2030: 65%
reduction for sole and 50% reduction for turbot
Strategic planning, sound governance
GRI 307
The Stolt-Nielsen approach to protecting the environment is
underpinned by strong governance frameworks and processes.
These are regularly reviewed to ensure they adhere to changing
regulations and incorporate the latest best practices.
Part of this involves regularly testing and updating business
contingency and emergency response plans for all our sites and
across our fleet, ensuring teams are fully equipped to manage
potential incidents such as collisions, contamination, spills, leaks,
fires or explosions. For land-based facilities in areas at risk of extreme
weather events, such as flooding or hurricanes, contingency plans
ensure operations can return to normal quickly and safely. We test
our plans in many ways, including conducting drills in partnership with
customers, local incident response services and regulatory agencies.
These emergency response activities give our teams the opportunity
to share lessons learned across different locations, refine their plans,
and develop strong working relationships with stakeholders.
Our facilities and ships report all incidents that have the potential to
impact the environment using our robust management system. We
classify any spill that involves a release of materials that pose a major
health and safety risk to people or damage to the environment as
significant. We are pleased to report that there were no significant
spills in 2021.
Our approach to protecting the environment is driven by our ambition
to reduce our environmental impact. We established goals for all
our businesses in 2020, and during 2021 focused on establishing
baselines for our environmental data. These baselines provide a
deeper understanding of our carbon footprint, which puts us in a
strong position to plan initiatives that help achieve our ambitions.
In 2021, to better align with the International Maritime Organization
(IMO) and the shipping industry, and to enable more accurate
benchmarking, Stolt Tankers modified the way it measures carbon
intensity across the fleet, moving from using the Energy Efficiency
Operational Indicator (EEOI) to the Annual Efficiency Ratio (AER). For
2021, we measured our 2008 emissions baseline using the AER. Our
baseline was validated by the world’s leading maritime classification
society DNV, and we measured a 29% reduction in CO
2
emissions
since 2008.
In addition, we developed the capability to report carbon emissions
using the Sea Cargo Charter, which helps customers to better
understand the sustainability of their supply chain. As part of this,
we participated in the committee that developed the reporting criteria.
To help enforce strong environmental practices across Stolt Tankers’
supply chain, we also launched a new responsible supplier agreement,
which assesses suppliers against a set of environmental criteria. We
are pleased to report that 100% of new vendors signed up, and we
have an ongoing audit programme for existing suppliers based on
their risk profile.
Once again, Stolt Tankers’ environmental efforts received positive
recognition, retaining its silver rating from EcoVadis for sustainability.
During the year, 99 of our ships were awarded the CSA Certificate of
Environmental Achievement. In addition, 72% of our ships (42 in total)
that called at US ports during the past three years became eligible
for the US Coast Guard’s Qualship 21 certification. Membership is
testament to the quality of our fleet – less than 20% of all foreign-
flagged vessels operating in the US meet the strict eligibility
requirements.
Stolthaven Terminals also identified key environmental baselines for
the first time. To support our journey towards meeting our ambitions,
we established a dedicated sustainability team with members from
all wholly-owned sites. The team is helping to improve sustainability
performance by sharing successes and best practices and identifying
opportunities. Front-line employees are central to helping achieve our
goals, so Stolthaven Terminals is using an online ideation platform to
crowd-source ideas on environmental initiatives from them.
28 Stolt-Nielsen Limited | Annual Report 202128
DIRECTORS’ REPORT
Growing Sustainably (continued)
Stolt Tank Containers (STC) also established baselines and processes
for gathering ongoing emissions, water, energy and fuel usage data
across the business. We are a member of the Clean Cargo Working
Group, an organisation that is dedicated to reducing the environmental
impact of global goods transportation and promoting responsible
shipping. During the year, Stolt Tank Containers also used several
EcoTransIT emissions calculation tools to begin analysing and
calculating its Scope 3 transport emissions from the purchase of
transportation services. The EcoTransIT methodology is compliant
with the Global Logistics Emissions Council (GLEC) framework and
gives us the ability to calculate our Scope 3 emissions across all
modes of transport. We are pleased to report that we maintained
our EcoVadis silver sustainability rating for another year.
Stolt Sea Farm established baselines for measuring environmental
performance at its operations in France, Spain and Portugal and
began analysing more detailed data for Norway and Iceland. An
integrated quality, food safety and environmental management
system including ISO 9001 and ISO 14001certifications was
implemented across our operations in France, Spain and Portugal.
This year our Norwegian operations also achieved their ISO 9001,
ISO 14001 and Global GAP certifications. In Iceland, our operations
are also Global-GAP-certified.
Reducing emissions
GRI 305
Stolt Tankers is, by far, the Company’s largest greenhouse gas
producer. It is focused on cutting emissions by 50% by 2030 (relative
to 2008 levels), exceeding the IMO’s target of achieving this reduction
by 2050. In 2021, Stolt Tankers reduced its fuel consumption by 5%
compared with 2020. This supported a reduction in greenhouse
emissions of 5.5%.
Savings were achieved through several initiatives, including
improved operational and technical efficiencies and fleet optimisation.
Maintenance programmes were enhanced, with extra hull cleaning
and propeller polishing, as well as the installation of several advanced
propeller boss cap fins which make our ships more hydrodynamic.
Further improvements were made to voyage planning, with speed and
trim optimised according to real-time weather data. In 2021, capital
funding of $5.1 million was also approved for a range of technology
investments to reduce the carbon footprint of Stolt Tankers’ managed
ships over the coming years.
2021 saw two major new emission reduction initiatives at Stolt Tankers.
Firstly, we became an official partner of the Mærsk Mc-Kinney Møller
Center for Zero Carbon Shipping, which is committed to creating zero-
carbon solutions for the maritime industry. As a partner, Stolt Tankers
will directly contribute by seconding R&D and shipping experts, as well
as using our vessels for testing.
Secondly, Stolt Tankers trialled the use of a marine biofuel produced
from certified sustainable feedstocks. We assessed the viability of the
future use of biofuels in both engines and boilers, testing the fuel’s
impact on consumption, power and reliability. Initial results were very
positive – the equipment performed as expected, and the use of the
second-generation biofuel resulted in an 80% to 90% reduction in well-
to-exhaust carbon emissions when compared with traditional fuels.
Other projects in 2021 included our ongoing work as a partner in the
HySHIP project, which is designing a ship powered by liquid hydrogen.
In March, we were a signatory to a two-year consortium agreement
for Concepts of Ammonia/Hydrogen Engines for Marine Application
(Cahema). We also joined a coalition to explore cold ironing, which
has the potential to reduce emissions from chemical tankers by using
electricity supplies in port rather than running ship engines.
Stolt Tankers uses the Annual Efficiency Ratio (AER) to
calculate carbon intensity across its fleet. This is the first year
Stolt Tankers has used AER – moving from the Energy Efficiency
Operational Indicator (EEOI) to better align with IMO and shipping
industry reporting.
Stolt Tankers’ 2021 AER was 11.06, compared with 11.44 in 2020.
1. Includes E&S Tankers fleet
AER trend over the last five years
Gram CO
2
emitted per deadweight
tonne of capacity and distance travelled.
2017 2018 20202019 2021
1
10.0
12.5
15.0
11.06
12.71
11.83
11.80
11.44
29Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Although its emissions of CO
2
are relatively low, Stolthaven Terminals
is working on several projects to reduce them. Energy scans are being
carried out at all our terminals, with the results informing detailed
plans to transition sites to zero carbon.
Another emission reduction initiative was a joint trial in Houston,
US with Stolt Tankers to treat waste shoreside instead of at sea.
Not only were 5,800 m
3
of tank wash water directed to our onsite
wastewater treatment plant, but the initial layby tank cleaning saved
139 tonnes of fuel.
Stolthaven Terminals also explored ways to reduce transport-related
emissions. For example, Santos, Brazil partnered with a local nitrogen
generation station to reduce carbon emissions by minimising the
need for trucks to transport nitrogen. The partnership will deliver an
estimated 24% saving.
Some products stored at our terminals can emit vapours, and
we use several techniques to prevent these from entering the
atmosphere, including vapour recovery systems, scrubbers, flares,
internal floating roofs and nitrogen blankets. As a result of these,
our terminal in New Orleans, US, has achieved an 18.3% reduction in
volatile organic compound (VOC) emissions between 2016 and 2020.
We plan to roll out these techniques at our wholly-owned terminals to
reduce our VOC emissions across our network.
Stolt Tank Containers’ emissions benchmarking led to two priority
initiatives in 2021: in Singapore, steam boilers were switched from
diesel to gas, and in Moerdijk, the Netherlands we switched to
renewable diesel, leading to a 90% reduction in carbon emissions.
We also continued our ongoing emissions reduction projects such as
reconfiguring depot floorplans, which reduces overall fuel use through
more efficient container movements. In Houston, US, the updated
configurations were fully implemented at the beginning of 2021.
Fish has one of the lowest carbon footprints of all animal-based
protein sources. Stolt Sea Farm works to minimise emissions as
much as possible across its operations and supply chain. In 2021,
SSF worked with the National Association for Aquaculture in Spain
to calculate the carbon footprint for turbot. This will help the industry
drive down emissions in areas such as feed supply.
Managing energy consumption
GRI 302
In 2021, Stolt Tankers carried out a range of initiatives to improve
the energy efficiency of its fleet, including installing variable
frequency drives (VFDs) that regulate and save energy on pumps
and mechanical devices. Investments of $1.5 million were approved
to upgrade measuring and monitoring equipment across the fleet,
which is essential to reducing fuel consumed. We also encourage
sustainable behaviour on board ships, focusing on stopping
equipment on time and optimising shaft generator usage, which
saved 3,805 tonnes of fuel.
Stolthaven Terminals’ main source of energy consumption comes
from producing steam for heating products and cleaning tanks,
as well as powering pumps and equipment for mixing and cooling.
The amount of energy consumed depends on the products stored,
the amount of product pumped and weather conditions. We continue
to invest in improving heat exchange processes. We are also incorporating
new technologies and deploying more efficient devices, such as using
a fully solar solution for gear switching for the onsite train network
in Houston, US. In addition, we expanded our programme of using
airborne drones to identify energy leakages and unwanted emissions,
using them in Houston, US and Singapore. This delivers major energy
savings as there is no need to empty or clean tanks for inspection.
Stolthaven also increased its use of green energy this year. In Santos,
Brazil, Moerdijk, the Netherlands, Dagenham, UK and our New Zealand
terminals, 100% of electricity now comes from green sources. Our
terminal in Singapore has 500 solar panels, which provide 160 MWh
of electricity annually. We added solar panels at our Dagenham,
UK site too, which are saving around 9MWh of electricity per year.
To drive R&D in this area, Stolthaven continued working with the
Technical University of Delft on the Terminal of the Future initiative,
which is exploring what energy-efficient terminals of the future might
look like.
Stolt Tank Containers began a project to track its energy use. This
generated a baseline, which has led to the introduction of a range of
improvement programmes including incorporating solar panels into
upgrades at our depot in Kaohsiung, Taiwan and replacing exterior
yard lighting with solar panel lights in Zhangjiagang, China. In
Singapore, benchmarking showed substantial opportunities for
reducing energy consumption by moving from diesel to gas boilers,
and we are planning to install a natural gas pipeline at the depot.
Stolt Sea Farm operations require relatively high levels of energy to
pump water around its farms from the sea. We are always looking
at ways to boost the energy efficiency of this process, for example
by installing variable frequency drives that optimise motor operations
and upgrading pumps to more efficient models. We are powering our
Spanish operations with 100% renewable energy. Major contributors
to energy efficiency are our two new recirculation aquaculture system
(RAS) farms, which are unique to us. In 2021, Stolt Sea Farm’s
energy consumption increased to 52,658.5 MWh, compared with
49,745.8 MWh, due to higher volumes of fish production during the
year. Energy consumption per kilogramme of fish produced at our
own facilities during the year was 9.03 KWh/kg in 2021, compared
to 9.29 KWh/kg in 2020.
30 Stolt-Nielsen Limited | Annual Report 202130
DIRECTORS’ REPORT
Growing Sustainably (continued)
Water conservation
GRI 303
During 2021, Stolt Tankers launched its electronic Tank Cleaning
Manual (eTCM), a bespoke platform to define a common, more
efficient cleaning standard across the fleet and reduce the resources
involved in tank cleaning. The platform enables better information and
best practice sharing, which helps to reduce water and chemical use,
and fuel consumption. We also completed a pilot water conservation
project called Cleaning Alongside, which involves cleaning tanks
in port rather than at sea to allow wash water to be reclaimed.
Six ships were involved in the pilot, during which 5,800 m
3
of wash
water was reclaimed and 139 tonnes of fuel was saved, leading
to a corresponding decrease in emissions.
At several Stolthaven Terminals facilities, we collect rainwater on
site to use for tank washing and fire-hose testing, which reduces our
reliance on mains water sources. For example, in Santos, Brazil, we
are on track to double rainwater use from 7% (1,366 m
3
) of onsite
water consumption to 14% by 2022. In Houston, US, ongoing tank
farm paving separates the storm water and chemical drainage
systems, diverting approximately 16,565 m
3
of water away from the
wastewater treatment plant. Since 2020, our Houston terminal has
increased condensate collection from less than 10% to approximately
70%. Condensate collection systems were upgraded in New Orleans,
US as well, with valve and pipe enhancements improving the recapture
of heat energy, reducing water use and minimising the impact of
treating water effluents.
Stolt Tank Containers implemented several water conservation
initiatives in 2021. These included a project to map water
consumption at our depot in Dubai, UAE, with additional flow meters
installed to provide more detailed data. In Kandla, India we introduced
a new process to collect rainwater for cleaning and repairs. The
project is expected to reduce mains water consumption by between
20% and 30%.
Stolt Sea Farm selects locations for its farms to ensure access to
the highest-quality water – and invests significantly to improve this.
Our new RAS farms recirculate water continuously, minimising water
consumption, and all our farms are designed and managed so that
water in the outflow is as clean as at intake.
Managing waste
GRI 306 and 307
Stolt Tankers is part of the 5% of worldwide shipowners committed
to working towards a sustainable blue economy. It is certified to
international environmental standard ISO 14001 and all waste from
ships – including hazardous waste – is disposed of in line with the
International Convention for the Prevention of Pollution from Ships
(MARPOL). During 2021, we achieved an 11.4% reduction in waste
to landfill from Stolt Tankers’ shipping operations (2021: 5,964 m
3
,
2020: 6,733 m
3
). As a member of IMPA ACT and as part of our
responsible procurement programme, we also work closely with
our suppliers to look for sustainable alternatives to single-use plastics.
Two ships were sent for recycling in 2021. Stolt Tankers and its preferred
recycling yards operate in accordance with the IMO 2009 Hong Kong
Convention for the Safe and Environmentally Sound Recycling of Ships.
We are also a founding member of the Ship Recycling Transparency
Initiative: www.shiprecyclingtransparency.org, an online platform
reporting ship recycling against a set of predefined criteria.
Ships delivered for recycling hold an inventory of hazardous
materials, and accredited auditor DNV verifies that each vessel has
been properly prepared before issuing a ‘Certificate Ready to Recycle’.
Weekly reports track the entire recycling process including all required
environmental permits and waste management. The Shree Ram
Group’s yards 78/81 and V7, used by Stolt Tankers, became the first in
India to receive certification from Lloyd’s Register Asia confirming they
comply with Article 13 of EU Regulation 1257/2013. This certification
moves both yards a significant step closer to receiving full EU approval.
To minimise the risk of spills and soil contamination across the
Stolthaven Terminals network, we have invested in concreting tank
pits and installing liquid-tight bunds to secondary containment areas.
In the past year, we upgraded approximately 7,000 m
2
in Malaysia,
and, as part of upgrades in Dagenham, UK, invested in 11,000 m
3
of
new liquid-tight bund.
Stolthaven is also digitalising a range of processes to reduce paper
use and improve accuracy through its Connected Worker programme.
In 2021, we introduced wireless devices for operators at two terminals,
as part of a paper reduction pilot. Operator paper use was cut to zero,
and we are now deploying the devices across our network.
Interactive sessions on waste reduction for employees were also
held at the Annual Safety Day at Houston, US, which included an
environment station where all team members received reusable
water bottles and useful information on how to recycle electronics,
conserve water and dispose of household waste properly. Meanwhile,
our terminal in Singapore led a recycling initiative with other local
businesses. In total, 1.2 tonnes of electronics were collected and
individual components including copper wire, plastic casings and
other parts were reused.
31Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
At Stolt Tank Containers, we make ongoing improvements to our
maintenance and repair processes to ensure tank containers can be
used over many years. The average lifespan of each tank is around
20 years and more than 90% of materials are recycled when they
reach the end of their lifecycle. Tank containers are far more sustainable
than flexi-bags, which are discarded after each shipment. On average,
each flexi-bag adds the equivalent of 7,000 single-use plastic carrier
bags to landfill.
Stolt Sea Farm aims to achieve zero waste to landfill by 2030. In 2021,
we achieved environmental management ISO 14001 certifications
across all our operations, excluding Iceland. This certification provides
clear baseline data and uniform criteria for driving progress towards
this goal.
1. Includes Stolt Tankers’ shipping operations only.
2. Restated due to late reporting from some ships as those voyages were completed
after the publication of our last Annual Report.
Promoting biodiversity and responsible farming
GRI 304
Stolt Tankers works in accordance with Ballast Water Convention D-2
requirements, which dictate the maximum levels of viable organisms
allowed to be discharged into the ocean. We have retrofitted a total
of 62 ships as part of our efforts to install the most efficient water
treatment plants across the fleet, making good progress towards
our goal of covering 100% by 2024. We also completed our biofouling
management plan, which is designed to protect the biodiversity of the
oceans by eliminating the transfer of invasive species via our ships.
Many of the world’s endangered habitats are where land meets the
sea. Our terminals and depots are located in these areas, so we take
particular care of the surrounding environment to protect native
species. For example, Louisiana, US has some of the only swamp
habitats left in the western world. In 2021, the team from our New
Orleans terminal joined the Communities Restoring Urban Swamp
Habitats campaign, planting 70 cypress trees to help rebuild habitat
resilience across 40 acres of wetlands. Stolt Tank Containers’ depot in
Mumbai, India also organised a tree-planting drive at a local village as
part of its ongoing sustainability programme. Members of the team
worked with the Dighode village council to hold the event, which
involved local children helping to plant fruit-tree saplings and learning
about the importance of protecting the environment.
Stolt Sea Farm is committed to responsible farming and transparency.
During 2021, we continued working with feed suppliers to evidence
sustainable fisheries certifications for the fish meal and fish oil used
in the formulation of our fish feed. We are also working with leading
fish feed manufacturers to investigate new feed formulas with lower
fishmeal and fish oil content, which reinforces our leadership position
when it comes to preserving scarce natural resources. To ensure
transparency and traceability, we are also looking at ways to improve
labelling for all our products.
For more on our environmental performance, please visit:
stolt-nielsen.com/sustainability/environment/
Waste to landfill 2020
M
3 1,2
Food waste
Plastics
Domestic waste
1,929
179
2,749
Incinerator ashes
Operational waste
Other waste
115
1,610
151
Food waste
Plastics
Domestic waste
1,701
166
2,425
Incinerator ashes
Operational waste
Other waste
122
1,414
135
Waste to landfill 2021
M
3 1
6,733
Total
5,964
Total
Oil waste management
2020 M
3 1,2
To reception facilities
Incinerated
Through 15ppm
oily water separator
879
8,752
4,449
563
7,529
5,946
To reception facilities
Incinerated
Through 15ppm
oily water separator
Oil waste management
2021 M
3 1
14,080
Total
14,038
Total
32 Stolt-Nielsen Limited | Annual Report 202132
DIRECTORS’ REPORT
Growing Sustainably (continued)
People
Our people continued to demonstrate
remarkable commitment and resilience
during the second year of the pandemic.
We enhanced our support in areas such as
wellbeing, performance management and
training to help them to rise to new challenges.
Indicator 2021 performance Explanation Business Reference
Number of
People Employed
6,553
(2020: 6,402)
Our people, both at sea and onshore,
are our most valuable asset.
• GRI 102-7
• GRI 102-8
• See page 38
Employees
by Gender
67.8%
Male
(2020: 69.8%)
32.2%
female
(2020: 30.2%)
Stolt-Nielsen is committed to promoting
a diverse and inclusive workforce. We are
working to improve the gender balance
across our operations.
• GRI 405-1
• See pages 35, 38
and 39
Senior Managers
by Gender
79.4%
male
(2020: 79.6%)
20.6%
Female
(2020: 20.4%)
We improved our Board diversity during the
year and at Stolt Tankers we aim to have
shortlists that are 50% female for all
onshore roles.
We are developing support groups,
mentoring, and coaching programmes to
help more women advance.
• GRI 405-1
• See page 39
Voluntary
Employee
Turnover
4.0%
(2020: 3.0%)
Like many organisations ‘Covid churn’
meant we experienced an increase
in voluntary turnover during 2021.
However, our voluntary employee
turnover remains lower than comparable
industry benchmarks.
• GRI 401-1
• See pages 35
and 39
‘Speak Up’ Reports
16
(2020: 15)
The number of ‘Speak Up’ reports was
steady for 2021. All reports are taken
seriously and investigated thoroughly.
• GRI 102-17
• See page 36
Business key
Stolt TankersStolthaven TerminalsStolt Tank ContainersStolt Sea Farm
Performance key
Increase since prior year Decrease since prior year No change from prior year
33Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Ongoing transformation, rising engagement
2021 marked the second year of our Going Further business
transformation programme, which harnesses the talents of our people
along with technology, innovation and process optimisation to ensure
we achieve our strategic goals. It also marked the end of Workforce
Vision 2021, our three-year people strategy. Workforce Vision 2021
provided a structure for empowering teams and strengthening
our culture and included five drivers aligned to business needs:
inspirational leadership, recruitment and onboarding, talent
management, learning and development, and reward strategy.
This year, we implemented a range of HR, learning and development,
and digitalisation initiatives to boost our agility and further embed ‘The
Stolt Way’ as we continued adapting to new ways of working. These
included enhancing our HR operating model to streamline processes
and develop an HR data analytics framework with KPIs for measuring
performance and driving continuous improvement.
We pride ourselves on being an employer of choice in our industries,
with competitive benefits and fair remuneration. Stolt-Nielsen (SNL)
compensates employees through salaries and short- and long-term
incentive plans comprising cash rewards and benefits. In February
2021, our profit-sharing and performance incentive plans made
payments of $6.65 million. These included rolled-over payments held
back by the Compensation Committee in 2020 due to low profit levels.
Promoting employee wellbeing
GRI 404
Employee wellbeing and resilience are key elements of our
people strategy and transformation programme – and they
remained a central focus in 2021 as the pandemic continued to
present challenges.
For the first time in SNL’s history, we completed a global wellbeing
survey. With an 81% response rate, the results showed that 90% of
people felt they could rely on both their personal network and the
Company’s leadership to make the right decisions in managing
through the pandemic. It revealed that 81% of respondents feel they
could work effectively, although 32% asked for additional support in
terms of new equipment, workload planning and communication to
help boost effectiveness and engagement.
Based on the feedback, we took actions including increasing
communication about hygiene protocols and local government
guidelines as restrictions changed, making a ‘rest-and-break’ software
application available to help staff improve ergonomics while working
at screens; holding more townhalls and virtual meetings to increase
engagement; and providing online remote team management training
for leadership.
We also enhanced mental health support and resilience training based
on survey feedback. This included launching a new module called
‘What is Resilience?’ on our learning platform, as well as developing
an e-learning module to help employees nurture skills for reducing
the impact of adversity.
The Stolt Way
We have four core values that shape the way we do business.
We call these ‘The Stolt Way’ – reflecting the principles we have
committed to since the Company began.
Commit to go further
We always look to do better and achieve more
Collaborate for success
Working together we are stronger
Act pragmatically
We are clear and straightforward in everything we do
Create solutions
We find new ideas and make them work
34 Stolt-Nielsen Limited | Annual Report 202134
DIRECTORS’ REPORT
Growing Sustainably (continued)
Supporting seafarer welfare
Seafarers are some of the unsung heroes of the Covid-19 pandemic
and have made huge personal sacrifices. Stolt Tankers is committed
to their fair treatment and welfare – a commitment that has been
reinforced during the past two years.
Due to lockdowns and international travel restrictions, our crews –
like those across the entire shipping industry – were unable to join
or leave ships at scheduled times. Our sea personnel team worked
tirelessly to enable smooth crew changes, rerouting ships to ensure
people could return to their families on time. We also continued
to work with airlines and authorities worldwide to advocate for
recognition of the essential role seafarers play in global supply chains.
We supported our seafarers in many ways during this challenging
year, including providing access to the Covid-19 vaccine regardless
of whether it was available in people’s home countries. To protect our
seafarers, customers and supply chains, vaccination became mandatory
for everyone joining Stolt Tankers ships from November 15, 2021.
As of the date of this report, more than 90% of our seafarers are
vaccinated, and we have begun the roll out of boosters.
We also focused on ways to increase seafarer engagement.
We maintained close communication links with ships, provided
ongoing support from onshore teams, delivered enhanced Company
information through our mobile app and conducted regular leadership
visits via video conferencing. All in-house training was digitalised,
and we introduced three detailed mental health modules and four
resilience sessions, which had 100% participation and benefited
more than 4,500 people.
In addition, we continued to offer seafarers a range of other
benefits to promote wellbeing and support recruitment and
retention. These included:
• Medical insurance for all immediate family members
• Onboard exercise equipment
• Increased daily internet access for all seafarers
• Career counselling, guidance and management, emphasising
continuous employment to ensure high levels of expertise and
develop outstanding cadets for life-long careers
• Cutting-edge training programmes covering safety and operational
requirements, as well as wellbeing
• Dedicated helpline for accessing professional mental health
support, anonymously if they wish
• Onboard social events
• Empowerment of ship management teams to drive pride
of ownership
Improving the employee experience
GRI 401
As part of efforts to leverage innovation through the Going Further
programme, 2021 involved a deep look at the employee experience
and associated opportunities for digitalisation.
To improve employee communication, we introduced more virtual
townhalls with leadership teams and live question-and-answer
sessions. We also standardised HR policies globally, simplifying
them and enhancing the employee value proposition to make
both the benefits and expectations associated with a career at
Stolt-Nielsen clearer. Tailored content was also developed and shared
on our StoltWorld intranet, creating a convenient, self-service way for
people to access the information that matters most to them – from
policies and performance management to training schedules and
annual leave requests.
During the year, we optimised the employee experience in other
ways, too. During the pandemic, we learned that many of our roles
can deliver the same high-quality service wherever they are located,
so we introduced a new working-from-home policy. We also
implemented a new global onboarding process for new starters
that includes a buddy system.
Ongoing employee engagement is central to our success. In 2021,
we conducted employee engagement surveys with Stolt Tankers,
Stolthaven Terminals, Stolt Tank Containers and Stolt-Nielsen
corporate functions, which had a high response rate of 81%.
Employees had a positive view of the Company, rating it above
logistics industry benchmarks in areas such as training, workload
and remuneration. Of the respondents, 70% of people said the
Company provides good opportunities for personal development
and growth (industry benchmark: 66%), and 71% stated that they
were not seriously considering leaving the Company (industry
benchmark: 63%).
Areas for improvement included non-financial recognition, which
reflected challenges around celebrating achievements together
during the pandemic. In response to this feedback, we have
launched several initiatives, such as introducing training on
recognition in our Slashed Zero programme and deploying tools
to make recognition easier and more impactful. For example, in
Houston, US, we launched the Bonusly, which provides a central
platform for rewarding colleagues’ achievements. In Manila, the
Philippines, we introduced the Kudos Kart rewards programme,
where staff are awarded points for their achievements, which they
can exchange for exclusive Stolt-Nielsen merchandise.
Stolt Sea Farm also conducted an employee ‘work climate survey’
during the year. The results were very positive, with the majority of
employees considering the Company both responsible and fair. We
identified several areas where we can focus our efforts in the coming
year, including communications and training.
35Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Developing and retaining staff
GRI 404
A key element of Going Further is empowering people to make
decisions within their role – so they enjoy the fulfilment that comes
with delivering world-class services and products, and making a real
difference to customers and colleagues.
Our learning and development approach reinforces this, as does
our commitment to fair rewards and broad opportunities. We are
proactive in helping people develop their careers, identifying skills
needed to progress within their current roles and as future leaders.
Our learning management system tracks training and helps people
apply their learning in day-to-day work.
Two major initiatives during 2021 were our Learning@Stolt
online platform and our leadership development overview (LEAD)
programme. Learning@Stolt, created in partnership with Skillsoft,
brings together our own and third-party training in a user-friendly,
on-demand platform. We rolled it out to managers this year, and it
will ultimately become available to all employees.
To support professional development and retention, we updated
our performance review processes in 2021. We moved away from
evaluating employees on specified attributes and started evaluating
performance based on our corporate values, which ensures people
are better aligned with the Company’s vision and culture. To help
strengthen relationships with managers and ensure people feel
their successes are recognised, we aim to make performance
conversations positive, collaborative experiences with 360-degree
feedback. 100% of those eligible received a performance review
in 2021.
Overall employee turnover increased during 2021 to 7.5% (2020: 6.1%).
Our voluntary turnover remains lower than comparable industry
benchmarks. In 2021 voluntary turnover was 4.0% (2020: 3.0%).
Fostering a diverse and inclusive place to work
GRI 405
Our people represent more than 50 nationalities. We are proud
of our diversity and committed to providing an inclusive and safe
environment that celebrates differences. We do this by:
• Encouraging people to share their ideas and experiences
• Listening and respecting the views of others
• Supporting actions that help to make a difference
• Understanding our own unconscious biases
• Continuing to recruit and promote talent – wherever we find it.
We take our Equal Opportunities Policy seriously: recruiting, training
and developing the best people regardless of gender, ethnic origin,
age, religion or belief, marriage or civil partnership, pregnancy or
parenthood, sexual orientation, gender identity or disability.
As of the end of 2021, almost 800 employees, including our senior
management team, had completed an online training module on
recognising and challenging unconscious biases. As part of our
wider diversity and inclusion efforts, Stolt Tankers aims to have
shortlists for onshore vacancies that are 50% female for all roles.
In addition, Stolt Tankers has designed a new style of boilersuit to
be more suitable and comfortable for female colleagues on ship
and shore.
In 2021, Stolthaven Terminals published its diversity and inclusion
statement and, through an employee engagement survey, created
relevant data baselines for each terminal. We also encouraged
applications from female candidates and under-represented
cultures for all positions at Stolthaven’s headquarters in Rotterdam,
the Netherlands.
Stolthaven is also taking a more prominent leadership position
globally when it comes to diversity and inclusion. We joined the
Women’s International Shipping & Trading Association (WISTA),
whose mission is to attract and support women in management
levels in the maritime, trading and logistics sectors. Stolt-Nielsen's
Chief HR Officer Anne van Dassen Müller also participated in the
European Petrochemical Association (EPCA) Diversity Board.
This year, Stolt Sea Farm began an equality plan for the next four years
in consultation with employees and agreed to by five trade unions in
Spain. We conducted a global survey, which informed diversity and
inclusion strategies in areas such as recruitment, career development
and communication. No significant differences were found between
men and women with regard to salaries or fair treatment.
36 Stolt-Nielsen Limited | Annual Report 202136
DIRECTORS’ REPORT
Growing Sustainably (continued)
Promoting ethical working
GRI 102 and GRI 205
We are proud of our reputation for doing the right thing, which makes
us a company people want to work for and do business with.
We comply with relevant laws wherever we operate, and our Code of
Business Conduct is displayed at all our sites and available in local
languages. The Code provides a global framework that applies to
everyone who works with and for us – from Directors and officers to
staff, contractors and consultants. It requires everyone to act ethically,
with integrity and in accordance with relevant laws, regulations and
Company policies. It also sets standards for maintaining professional
relationships and avoiding conflicts of interest, bribery and corruption.
Anyone who breaches the Code is subject to disciplinary action, up to
and including employment termination.
The Board of Directors, through its Audit Committee, reviews the Code
annually to ensure it meets the Company’s evolving needs. In 2021,
the Board approved an update, which included additional guidance
on complying with local and international laws on data protection and
privacy, combatting financial crime and eliminating modern slavery.
Each year, all shore-based staff must reconfirm compliance with
the Code, and those with access to our online learning platform
complete an online training module to maintain their awareness
and understanding of anti-bribery and corruption measures. In 2021,
100% of those required to do so successfully completed the module.
You can find our Code of Business Conduct online at:
stolt-nielsen.com/investors/code-of-business-conduct/
Our Spea
k
Up culture
GRI 102
We encourage employees to raise concerns about unethical
behaviour and any potential, suspected or actual breaches of
our Code of Business Conduct with their local managers, HR or
legal representatives.
We also have an online platform, known as ‘Speak Up’,
which anyone internal or external can use to report concerns
confidentially (and, where local law permits, anonymously),
without fear of retaliation, victimisation, discrimination or
disadvantage. These reports are taken seriously and investigated
thoroughly by the Head of Operational Audit with oversight from
the Audit Committee.
In 2021, 16 (2020: 15) Speak Up reports were received and
thoroughly investigated. The relatively high number in the ‘other’
category related to broad employee relations issues that were
all addressed.
Stolt Tankers
Safety
Discrimination/Harassment
Other
Compliance
16
Total
3
4
1
8
4
8
1
16
Total
Corporate
Stolt Sea Farm
Stolthaven Terminals
3
By type By business
Speak Up reports
37Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Protecting human rights
GRI 408 and GRI 409
We are a signatory to the UN Global Compact and support the
principles set out in the UN Universal Declaration of Human Rights,
the UN Guiding Principles on Business and Human Rights and the
International Labour Organization Core Conventions. Stolt Tankers
is also a member of IMPA ACT, and supports its Code of Conduct
relating to labour and human rights. In addition, Stolthaven Terminals’
and Stolt Tank Containers’ sustainability policies include commitments
to upholding internationally proclaimed human rights and preventing
child labour. We are dedicated to ensuring everyone is treated fairly
and that correct safety procedures are always followed, including the
wearing of appropriate personal protective equipment.
These commitments extend across the supply chain. Many of
the countries we operate in have high risks of human rights,
environmental or business ethics abuses, and we closely monitor
these areas across our supply chain partners. In 2021, Stolt Tankers
implemented a new responsible procurement agreement in which
suppliers commit to freedom of association, the right to collective
bargaining, the abolition of forced and child labour, and the
prohibition of discrimination. 100% of new suppliers have signed up
to the agreement and we have updated our requirements for when
we renew contracts with existing suppliers.
For ship recycling, we only select yards that operate in accordance
with the International Maritime Organization’s (IMO) 2009 Hong Kong
Convention for the Safe and Environmentally Sound Recycling of
Ships. Stolt Tankers always has one surveyor on site per vessel to
ensure workers’ rights and conditions are always protected. Onsite
surveyors monitor the process from start to finish in areas such as
safe working practices and compliance. During ship recycling, each
month we randomly validate the status, permits, salary and insurance
for five workers to mitigate against human rights breaches. We are
also rigorous in enforcing health and safety protocols to protect
workers, and in 2021 we upgraded on site medical facilities and
purchased a new ambulance to ensure staff have access to rapid
treatment should the need arise.
We received no human rights or child labour grievance
reports against Stolt-Nielsen during the year. You can find our
Modern Slavery and Human Trafficking Statement 2021 here:
stolt-nielsen.com/sustainability/modern-slavery-and-human-
trafficking-statement-2021/
Ensuring compliance at sea
Stolt Tankers’ ships operate with valid International Transport
Workers’ Federation (ITF) union agreements on collective
bargaining for all seafarers on board. We also adhere to: the Maritime
Labour Convention (MLC) Seafarers’ Bill of Rights; the International
Convention on Standards of Training, Certification and Watchkeeping
for Seafarers (STCW); the International Convention for the Safety
of Life at Sea (SOLAS); and the International Convention for the
Prevention of Pollution from Ships (MARPOL). Port state control and
flag state inspections verify our compliance with these conventions.
We document MLC compliance within our ship management system.
Additional vetting is conducted during routine onboard inspections
as part of the Oil Companies International Marine Forum/Chemical
Distribution Institute (OCIMF/CDI) tanker management and self-
assessment process. Compliance is also verified through periodic
International Safety Management (ISM) audits, which are carried
out on behalf of flag states by DNV, the world’s largest ship
classification society.
Supporting our communities
GRI 413
We are responsible members of our communities. Our support
goes beyond the financial; we play an active part in wider communities
that include our customers, employees, neighbours, local authorities,
government organisations, NGOs and suppliers.
We contribute both as an employer and as a purchaser of goods
and services from local businesses. We hire locally and train
people for rewarding careers. And our teams are active in
supporting projects related to the environment, education and
social and economic development.
In 2021, we re-launched the Stolt-Nielsen Employee Disaster Relief
Fund to support our staff in New Orleans, US who were impacted
by Hurricane Ida. All our colleagues were accounted for and safe, but
many experienced financial hardship in the aftermath. For every $1.00
donated to the Fund, Stolt-Nielsen contributed $2.00. In Rotterdam,
the Netherlands, $5,700 was donated to Het Vergeten Kind, a charity
that supports vulnerable children, and in London, UK $6,500 was
donated to the homelessness charity Shelter. In Santos, Brazil,
employees donated 350 food boxes to families living nearby who
were experiencing financial difficulties due to the pandemic. Santos
employees also donated hygiene products to the local community.
At Stolt Sea Farm, where we depend on local communities for our
workforce, we renewed our partnership with the municipality of
Camariñas in Galicia, Spain, sponsoring their event ‘Mostra do Encaixe’
dedicated to embroidery artisans. This important celebration attracts
visitors from all over Spain and around the world and during the
pandemic continued to be held virtually. During the summer we
supported the annual ‘Cofradia de Pescadores de Lira’ food festival.
Attendees sampled the fine seafood caught by local fishermen, as
well as our farmed turbot, demonstrating that aquaculture and fishing
activities can complement each other.
38 Stolt-Nielsen Limited | Annual Report 202138
DIRECTORS’ REPORT
Growing Sustainably (continued)
Recruitment
Number of people employed
1
2021 2020
Region Sea personnel Onshore staff Total Sea personnel Onshore staff Total
Europe 1,067 979 2,046 1,065 931 1,996
North America 1 506 507 2 518 520
Asia 3,060 704 3,764 3,038 633 3,671
Rest of world 15 221 236 15 200 215
Total Group
4,143 2,410 6,553 4,120 2,282 6,402
1. As at November 30.
New employees by gender and age
2
Male Female
Aged
un
der 30
Aged
30 to 50
Aged
over 50
Aged
under 30
Aged
30 to 50
Aged
over 50 Total
Aged
under 30
Aged
30 to 50
Aged
over 50 Total Total Total Total
Total new
employees
2021
86 166 25 277 76 98 7 181 162 264 32 458
New employees by gender and age (%)
2
New employees by r
region
(%)
2. All gender data excludes sea personnel due to shipping traditionally being a very male-dominated industry with limited female entrants. Only 0.4% of our seafarers are female.
Male aged 30 to 50
Male aged under 30
Male aged over 50
Female aged under 30
18.8
36.2
5.5
16.6
Female aged 30 to 50
Female aged over 50
21.4
1.5
2021 2021
North America
Europe
Asia
Rest of world
29.2
53.4
10.7
6.7
39Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Turnover
Voluntary employee turnover (%)
Voluntary employee turnover by gender and age (%)
1
Employee turnover by region
Region
2021 2020
Voluntary
leavers
Voluntary
employee turnover
Total employee
turnover
Voluntary
leavers
Voluntary
employee turnover
Total employee
turnover
Europe 109 5.3% 9.4% 52 2.6% 5.3%
North America 42 8.3% 12.8% 35 6.7% 13.7%
Asia 126 3.3% 8.5% 102 2.8% 5.4%
Rest of world 10 4.2% 9.3% 6 2.8% 6.5%
Total group
267 4.0% 7.5% 195 3.0% 6.1%
Gender Diversity
Gender breakdown of employees by seniority
1
Percentage of people employed by gender
1
1. All gender data excludes sea personnel due to shipping traditionally being a very male-dominated industry with limited female entrants. Only 0.4% of our seafarers are female.
2021 2020
North America
Europe
Asia
Rest of world
North America
Europe
Asia
Rest of world
3.0%
Total
4.0%
Total
4.2
5.3
8.3
3.3
2.8
2.6
6.7
2.8
2021
Male aged 30 to 50
Male aged under 30
Male aged over 50
Female aged under 30
Female aged 30 to 50
Female aged over 50
18.4
6.9
2.8
13.1
10.4
4.7
As at November 30, 2021
Male Female
Executive management team
91.7% 8.3%
Senior managers
79.8% 20.2%
Middle managers / Sr. professionals
76.8% 23.2%
Supervisors / Professionals
39.4% 60.6%
Blue collar workers
90.6% 9.4%
Total Group
67.8% 32.2%
As at November 30, 2021
Male Female
71.6%
28.4%
North America
76.7%
23.3%
Asia
54.5%
45.5%
Rest of world
73.3%
26.7%
Total Group
67.8%
32.2%
Europe
Total Group
2021
region
40 Stolt-Nielsen Limited | Annual Report 202140
DIRECTORS’ REPORT
Corporate Governance
Stolt-Nielsen is subject to Corporate Governance regulations under the Norwegian Code of
Practice for Corporate Governance. The Company’s Corporate Governance Report is prepared
in accordance with section 4.4. of the Oslo Børs Rule Book II – Issuer Rules.
Chairman’s
Statement
Board
of Directors
Corporate Governance
Report
Page 41 Pages 42-43 Pages 44-48
41Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Chairman’s Statement
“The Board’s role is vital in shaping
Stolt-Nielsen as an industry leader and
sustainable business.”
The Board and I are committed to upholding the best interests of
Stolt-Nielsen Limited (SNL) shareholders. From people and culture to
safety and the environment, the Board’s role is vital in shaping SNL as
an industry leader and sustainable business.
As Chairman, one of my key responsibilities is ensuring the Board has
a wide range of experience. This breadth helps us carry out our vital
governance role on behalf of shareholders – allowing us to support
and challenge the management team as it shapes the strategy.
I am also responsible for ensuring stakeholder interests are effectively
and comprehensively considered on issues such as regulation,
sustainability and health and safety. This includes chairing regular
Board meetings to confirm that internal controls and risk management
systems are being executed appropriately.
I also oversee the operational audit function. This ensures SNL is
compliant with regulations and Company policy, particularly in financial
reporting. ‘Speak Up’ is an online reporting system that anyone can use
to flag concerns about our business (see page 36). The operational audit
function manages ‘Speak Up’, and I oversee processes for investigating
any concerns raised.
In January 2022, it was announced, that I will step down as your
Chairman and that Niels G. Stolt-Nielsen will succeed me, subject
to shareholder approval and once a new CEO has been appointed.
It has been an honour to serve as Chairman for the past six years
and I look forward to continuing to contribute to the Board as
Director, Chairman of the Audit Committee and a member of the
Compensation Committee. Niels has the business acumen and the
empathy needed to make an outstanding Chairman, and he carries the
culture of Stolt-Nielsen, which has been vital to our success, deep inside
of him. I wish him every success.
Each Director is elected by SNL shareholders and is required to put
common interests first. The Board’s primary role is to ensure good
governance, risk management and financial controls are in place
on behalf of shareholders. Board members hold positions on two
committees. The Audit Committee assures the accuracy of financial
reporting, while the Compensation Committee ensures the
remuneration and benefits structure is competitive.
In April 2021, we welcomed Janet Ashdown to the Board. Janet is
a highly experienced Director who has served on the boards of four
FTSE 250 companies operating across a range of industries. She also
brings expertise from her 30-year career at BP plc, where she managed
complex supply chain operations and distribution processes, gained
expertise in markets that are key for SNL and developed a strong
interest in the energy transition and ESG agenda.
The SNL Board has eight members, five of whom are independent. It
follows the provisions set out in the Norwegian Governance Code (see
page 44), and I am confident it effectively discharges its responsibilities.
Knowledge sharing and oversight
Together, the Directors bring a wealth of expertise and perspectives.
We strive to expand our knowledge to provide effective guidance. To
act in the Company’s best interests and support management with
decision-making, Directors need an in-depth, up-to-date understanding
of SNL business operations.
During 2021, the SNL Board of Directors and Audit Committee held
one meeting in Bermuda and three virtual Board meetings. Each
business presents updates to the Board throughout the year, and
Directors also receive quarterly safety, and monthly management
reports, which provide insight into market trends and the position
and assets of each business. Directors also meet regularly with
senior management and participate in strategic and operational
reviews. Unfortunately, due to Covid-19 restrictions, Directors were
unable to conduct in-person visits to SNL facilities and assets in 2021.
A sustainable business
The Board is committed to embedding sustainability throughout the
strategy and operations of Stolt-Nielsen. This includes formulating,
communicating and measuring targets for improving safety,
protecting the environment, ensuring employee wellbeing and
implementing effective quality management systems. We have
established ambitious targets for reducing our environmental
impact in line with the UN Global Compact (UNGC), to which SNL is
a signatory. 2021 marked a breakthrough year in our environmental
agenda, with comprehensive efforts to establish data baselines and
reporting practices. These baselines provide a better understanding
of our impact, which puts SNL businesses in a strong position
to meet our goals. View the Board’s sustainability pledge at:
stolt-nielsen.com/sustainability/our-commitment/
People and culture
The Board continually monitors issues related to SNL’s culture
and values. SNL’s Code of Business Conduct and approach to
SHEQ are outlined on pages 36 and 20-23 of this report and can
also be viewed at www.stolt-nielsen.com. During 2021, everyone
at SNL demonstrated their flexibility and resilience as the pandemic
continued. The tools and processes launched in 2020 continued to
enable safe, efficient operations. On behalf of the Board, I would like
to extend our sincere gratitude to all employees for their extraordinary
efforts and commitment to each other and our customers throughout
2021. They truly embody ‘The Stolt Way’ – our longstanding commitment
to excellence, collaboration, pragmatism and creativity.
S
Samuel Cooperman
Chairman of the Board
42 Stolt-Nielsen Limited | Annual Report 202142
DIRECTORS’ REPORT
Corporate Governance (continued)
Board of Directors
1.
Samuel Cooperman
Chairman of the Board of Directors,
Audit Committee Chairman and
Compensation Committee Member
Appointment
Mr Samuel Cooperman is an independent Board
member and has served as Chairman of the Board
of Directors since 2016. He has been a Director of
Stolt-Nielsen Limited since 2008 and Chairman of the
Audit Committee since 2009. He became a member
of the Compensation Committee in 2016.
Experience
Mr Cooperman joined Stolt-Nielsen in 1974 and held
a number of senior management positions, including
Chairman and Chief Executive Officer of Stolt-Nielsen
Transportation Group, before retiring from the Company
in 2003. Mr Cooperman was a member of the Executive
Committee of the International Chamber of Shipping
until May 2010, and also served as Vice-Chairman for
two years. He holds BS and MS degrees in Electrical
Engineering from Columbia University and from the
Graduate School at the University of Pennsylvania,
respectively, and an MBA from Temple University.
Mr Cooperman is a US citizen.
Other Appointments
Mr Cooperman is the Chief Executive Officer of
Cooperman Weiss Consulting LLC.
2.
Niels G. Stolt-Nielsen
Director and Chief Executive Officer
Appointment
Mr Niels G. Stolt-Nielsen has served as Chief Executive
Officer since November 2000. He has been a Director of
Stolt-Nielsen Limited since 1996.
Experience
Mr Stolt-Nielsen joined Stolt Tankers in 1990 in
Greenwich, Connecticut, US. In 1994 he relocated
to China to open and head Stolt-Nielsen Limited’s
representative office in Shanghai. He was the President
of Stolt Sea Farm from 1996 until 2000 when he became
Chief Executive Officer of Stolt-Nielsen Limited. From
September 2002 until March 2003, he also served as
Interim Chief Executive Officer of Stolt Offshore S.A.
Mr Stolt-Nielsen graduated from Hofstra University in
1990 with a BS degree in Business and Finance. He is
a Norwegian citizen.
Other appointments
Mr Stolt-Nielsen is the Chairman of the Board of
Avenir LNG and a Director of Golar LNG Ltd.
Committee Chairman
Audit Committee
Compensation Committee
C
A
C
A
C
A
A
1. Samuel Cooperman
3. Janet Ashdown
5. Rolf Habben Jansen
7. Jacob B. Stolt-Nielsen
2. Niels G. Stolt-Nielsen
4. Jan Chr. Engelhardtsen
6. Håkan Larsson
8. Tor Olav Trøim
43Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
3.
Janet Ashdown
Director
Appointment
Ms Ashdown is an independent Board member and
was appointed as a Director of Stolt-Nielsen Limited in
April 2021.
Experience
Ms Ashdown is a highly experienced Non-Executive
Director and has served on the boards of four FTSE 250
companies. She joined BP plc in 1980 and led several
large businesses as a senior executive during her
30 years with the company. In her last role with BP,
Ms Ashdown was responsible for a £20bn network of
fuel outlets across the UK. With experience of managing
complex supply chain operations, Ms Ashdown also
has a deep understanding of industrial distribution
businesses and a strong interest in the energy transition,
hydrogen and carbon capture, and the broader ESG
agenda. Ms Ashdown holds a BSc in Engineering from
Swansea University, UK and is a British citizen.
Other Appointments
Ms Ashdown is Non-Executive Director and Chair,
Corporate Sustainability Committee and Remuneration
Committee at RHI Magnesita N.V; Non-Executive
Director and Chair, Remuneration Committee at Victrex
plc; Senior Independent Director and Chair Sustainability
and Governance Committee Nuclear Decommissioning
Authority at the Department for Business, Energy and
Industrial Strategy, UK.
4.
Jan Chr. Engelhardtsen
Director and Audit Committee Member
Appointment
Jan Chr. Engelhardtsen was appointed to the Board
of Directors in March 2018 and is a member of the
Audit Committee.
Experience
Mr Engelhardtsen served as Chief Financial Officer of
Stolt-Nielsen Limited for 26 years. He held several key
positions during his career with the Company, including
President of Stolt Tank Containers, which saw him play
an important role in our entry into this sector and in
setting the foundation for what is a very successful
business today. Mr Engelhardtsen also served as
President of Stolthaven Terminals, Chief Financial
Officer of Stolt Offshore S.A., and President and
General Manager of Stolt-Nielsen Singapore Pte.
Mr. Engelhardtsen holds an MBA from the Sloan
School of Management at the Massachusetts Institute
of Technology, as well as undergraduate degrees in
Business Administration and Finance. He is a
Norwegian citizen.
Other appointments
Mr Engelhardtsen is a Director of Avenir Limited and
New York Cruise Lines, Inc.
5.
Rolf Habben Jansen
Director
Appointment
Mr Rolf Habben Jansen is an independent Board
member and has served as a Director of Stolt-Nielsen
Limited since December 2015.
Experience
Mr Habben Jansen began his career at Royal Nedlloyd
before joining Danzas, the Swiss logistics firm, which
merged with DHL in 1999. He was Head of Global
Customer Solutions at DHL from 2006 until joining
Damco as Chief Executive Officer in 2009, leaving in
2014 to join Hapag-Lloyd. He is a Dutch citizen and
graduated from Rotterdam’s Erasmus University in
1991 with a degree in Economics.
Other appointments
Mr Habben Jansen is Chief Executive Officer of
Hapag-Lloyd AG and Co-Chairman of the World
Shipping Council.
6.
Håkan Larsson
Director, Compensation Committee
Chairman, and Audit Committee Member
Appointment
Mr Håkan Larsson is an independent Board member.
He has served as Chairman of the Compensation
Committee since 2016 and has been a member of the
Audit Committee since 2009. He joined the Board of
Stolt-Nielsen Limited in June 2007.
Experience
Mr Larsson was Chief Executive Officer of Schenker AG
from 2000 to 2003 and of Rederi AB Transatlantic from
2003 to 2007. Since 2007, he has held numerous board-
level positions. Mr Larsson holds a Bachelor of Economics
degree from the Gothenburg School of Economics and
is a Swedish citizen.
Other appointments
Mr Larsson is Chairman of Valea Holding AB and
Helian AB. He is also a Director of Viking Supply Ships AS.
7.
Jacob B. Stolt-Nielsen
Director
Appointment
Mr Jacob B. Stolt-Nielsen has served as a Director of
Stolt-Nielsen Limited since 1995.
Experience
Mr Jacob B. Stolt-Nielsen joined the Company in
1987 and served in various positions in Oslo, Singapore,
Greenwich, Connecticut, Houston, Texas and London.
He was President of Stolthaven Terminals from 1992
until 2000, when he founded and served as Chief
Executive Officer of SeaSupplier Ltd. In 2003,
Mr Stolt-Nielsen became Executive Vice President
of Stolt-Nielsen Limited and in 2012 he founded
Norterminal AS. He is also a founder of Hydrogen
Source AS and Narvik Batteri AS. Mr. Stolt-Nielsen
graduated from Babson College in 1987 with a BS
degree in Finance and Entrepreneurial studies. He is
a Norwegian citizen.
Other appointments
Mr Stolt-Nielsen is Chief Executive Officer of Norterminal AS
and is a board member of Stolt-Nielsen Holdings AS,
SN Terminal AS, Hydrogen Source AS and New York
Cruise Lines, Inc.
8.
Tor Olav Trøim
Director
Appointment
Mr Tor Olav Trøim is an independent Board member
and has served as a Director of Stolt-Nielsen Limited
since April 2016.
Experience
Mr Trøim was an equity portfolio manager with
Storebrand ASA and Chief Executive Officer for the
Norwegian Oil Company DNO AS until 1995. He was
employed by Seatankers Management Co. from 1995
to 2014. During this period he was also, at various times,
Chief Executive Officer of a number of related public
companies, including Frontline Limited, Knightsbridge
Tankers, Ship Finance Ltd. and Seadrill Ltd. He has
served as a director on the boards of Frontline, Marine
Harvest ASA, Golden Ocean Group Limited, Seadrill Ltd,
Archer Limited and Aktiv Kapital ASA, among others. In
2014, Mr Trøim established Magni Partners UK, which
focuses on research and consultancy in the energy
industry. He graduated as M.Sc. Naval Architect from
the University of Trondheim, Norway in 1985 and is a
Norwegian citizen.
Other appointments
Mr Trøim is Chairman of Golar LNG Ltd and Borr
Drilling Ltd, Director at Vaalerenga Fotball AS and owner
of Magni Sport and Magni Partners UK, where he is also
Managing Partner.
Tenure
4 1-10 years
2 11-20 years
2 20+ years
50% 25% 25%
44 Stolt-Nielsen Limited | Annual Report 202144
DIRECTORS’ REPORT
Corporate Governance (continued)
Corporate Governance Report
Relevant Legislation and Codes of Practice
for Corporate Governance
Stolt-Nielsen Limited’s (‘SNL’ or the ‘Company’) Corporate Governance
addresses the division of roles between SNL’s shareholders, Board of
Directors, and executive management.
SNL is a company incorporated in Bermuda with Norway as its home
state in the European Economic Area. The Companies Act 1981 of
Bermuda (the “Bermuda Companies Act”) governs the incorporation,
organisation and executive management of SNL. As a company
listed on Oslo Børs, SNL is also subject to certain obligations set out
in Euronext Rule Book I and Oslo Børs Rulebook II and, in addition,
certain provisions of the Norwegian Securities Trading Act and other
relevant Norwegian rules and regulations, including certain provisions
of the Norwegian Securities Trading Regulations.
According to the Oslo Børs Rulebook II, the Norwegian Code of
Practice for Corporate Governance (the “Norwegian Code of Practice”)
also applies to the Company as no such code has been implemented
in Bermuda. Adherence to the Norwegian Code of Practice is based
on a “comply or explain” principle, whereby companies are expected
to either comply with its principles and recommendations, or explain
the deviation and what alternative solutions it has selected.
Pursuant to the Norwegian Accounting Act and the Oslo Børs
Rulebook II, the Company has summarised any expansions
or deviations in the SNL Bye-Laws from the provisions of
Chapter 5 of the Norwegian Public Limited Liability Companies
Act (dealing with General Meetings of Shareholders). This
summary, together with the Company’s Bye-Laws, are available
at: stolt-nielsen.com/investors/governance/. The Norwegian
Code of Practice is available at www.nues.no/English.
1. Implementation and Reporting on
Corporate Governance
SNL has a Code of Business Conduct which applies to all directors,
officers, employees, contractors and consultants of the Group.
The Code of Business Conduct is reviewed annually by the Audit
Committee and approved by the Board of Directors. The Company’s
overarching business conduct guidelines, including ethical and social
responsibility guidance, are set out in its Code of Business Conduct
and, where appropriate, more specific policies have been developed
to provide more detailed guidance.
The reasons for the deviations from the principles and recommendations
of the Norwegian Code of Practice and the solutions the Company has
selected are explained throughout this Corporate Governance Report.
2. Business
In compliance with the Bermuda Companies Act and common
practice for Bermuda companies, SNL's Memorandum of Association
describes its objectives and purposes as "unrestricted".
The Board of Directors sets, evaluates, and regularly reviews
the Group’s objectives, overall strategy and principal risks, taking
into account sustainability, including how matters relating to the
environment, social issues, the working environment, equality and
non-discrimination are integrated into the value creation. This is
further described in the Business Review and Growing Sustainably
sections of this Annual Report.
Deviation from the Norwegian Code of Practice: the Company’s objects
are unrestricted under the SNL Bye-Laws, which is customary for a
Bermuda company, but publicly disclosed in a manner that enables
SNL’s shareholders to anticipate its activities.
3. Equity and Dividends
The Board of Directors is of the opinion that the Company currently
has a suitable capital structure to meet its objectives, strategy and risk
profile. The authorised share capital of SNL is US $65,016,250, divided
into 65,000,000 Common Shares, each with a par value of US $1.00,
and 16,250,000 Founder’s Shares, each with a par value of US $0.001.
As of November 30, 2021, 58,523,796 Common Shares and 14,630,949
Founder’s Shares were issued, and 53,523,796 Common Shares and
13,380,949 Founder’s Shares were outstanding. In accordance with
provisions of the SNL Bye-Laws, the authorised share capital of SNL
may only be increased, reduced or otherwise altered by resolution of
the shareholders. The Board of Directors, subject to any shareholder
resolution to the contrary, has the power to issue any unissued shares
of the Company within the limits of the authorised capital.
In accordance with the provisions of the SNL Bye-Laws and the
Bermuda Companies Act, the Company may purchase its own shares
for cancellation or acquire such shares as treasury shares on such
terms as the Board of Directors shall think fit. Historically, the Annual
General Meeting of Shareholders of SNL has authorised the Company,
or any wholly-owned subsidiary, to purchase Common Shares of the
Company from time to time in the open market, subject to certain
conditions and in conformity with applicable laws and standards.
The Board of Directors has resolved to continue share purchases,
if any, on the terms approved at the Annual General Meeting.
The Board of Directors has established a dividend policy that is available
on the SNL website: stolt-nielsen.com/investors/dividends/. Under
Bermuda law, a company's board of directors may not declare or
pay
dividends if there are reasonable grounds for believing that the
company is, or would be after the payment, unable to pay its liabilities
as they become due or that the realisable value of its assets would
thereby be less than its liabilities.
Deviation from the Norwegian Code of Practice: none.
45Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
4. Equal Treatment of Shareholders
SNL has two classes of shares, Common Shares and Founder's
Shares, which carry rights as set forth in the SNL Bye-Laws. Subject
to such rights, the Company treats shareholders within each class
equally, in accordance with the Norwegian Code of Practice and
the Norwegian Securities Trading Act. Only the Common Shares are
listed on Oslo Børs. You can find the list of our major shareholders
at: stolt-nielsen.com/investors/share-price-information/ and the
SNL Bye-Laws at: stolt-nielsen.com/investors/governance/
Any transactions SNL carries out in its own shares are carried out
either through Oslo Børs or at prevailing stock exchange prices if
carried out in any other way.
Deviation from the Norwegian Code of Practice: none.
5. Shares and Negotiability
Only the SNL Common Shares are listed on Oslo Børs. The SNL Bye-
Laws limit individual shareholdings of the Company’s shares to 20%
of the issued and outstanding shares (unless such ownership shall
have been approved in advance by the Board of Directors), single US
person shareholdings to 9.9% and shareholders of any single country
in aggregate to 49.9%. However, these do not apply to any person
who was a shareholder of Stolt-Nielsen S.A. (which amalgamated with
the Company on November 18, 2010) as of August 31, 1987, or any
Affiliate or Associate (as such terms are defined in the SNL Bye-Laws)
of such person, except in certain circumstances outlined in Bye-Law 74
of the SNL Bye-Laws, which are available at: stolt-nielsen.com/
investors/governance/
According to the SNL Bye-Laws, the Board of Directors is authorised
to further restrict, reduce or prevent the ownership of shares if it
appears to the Board of Directors that such ownership may threaten
SNL with adverse consequences, including but not limited to adverse
tax consequences, hostile takeover attempts or adverse governmental
sanctions. The Board of Directors has to date not made use of its
authority and will not use its authority unless the transfer will have
sufficient adverse consequences for the Company and in no event if
the exercise of such rights may cause disturbances in the market or
would be in conflict with mandatory laws or regulations. Please also
refer to section 14 below for an explanation of the Board’s approach
to takeovers.
Deviation from the Norwegian Code of Practice: a summary of the
provisions of Chapter 5 of the Norwegian Public Limited Liability
Companies Act where the SNL Bye-Laws expand or deviate from the
provisions of such Act can also be found on the Company’s website
at stolt-nielsen.com/investors/governance/
6. General Meetings
The Board of Directors or the Chairman are responsible for calling
both Annual and Special General Meetings of shareholders. At any
General Meeting, two or more persons present in person throughout
the meeting and representing in person or by proxy issued voting
shares in the Company, shall form a quorum for the transaction of
business, except for those matters under the Bermuda Companies
Act for which a specified super-majority vote is required, in which case
a quorum representing one-third of the issued and outstanding shares
entitled to vote is required.
The Company is obligated to hold an Annual General Meeting every
year at such time and place as the Board of Directors or Chairman
shall designate.
A shareholder or group of shareholders representing at least one-tenth
of the outstanding voting shares may request a Special General Meeting
in writing, indicating the agenda thereof. The Board of Directors will be
obligated to convene the meeting forthwith.
Notices for both Annual and Special General Meetings shall be sent by
mail (or by such other method pursuant to the SNL Bye-Laws) to all
holders entitled to attend and vote no later than 21 days before the
date set for the General Meeting. Notices shall provide sufficiently
detailed, comprehensive, and specific information on all matters to
be
considered at the General Meeting, voting instructions and the
opportunity to vote by proxy. Matters at the General Meetings are
restricted to those set forth in the agenda.
The foregoing provisions relating to the holding of, and conduct at,
General Meetings are set forth in the SNL Bye-Laws, as well as in
relevant provisions of the Bermuda Companies Act.
SNL is under the majority control of Fiducia Ltd., a company owned
by a trust established for the benefit of the Stolt-Nielsen family. As of
November 30, 2021, Fiducia Ltd. controls 64.82% of the outstanding
shares of SNL entitled to vote generally on matters brought to a
vote of the shareholders of SNL. When the shares held by trusts
established for the benefit of members of the Stolt-Nielsen family
together with shares held by individual members of the Stolt-Nielsen
family are taken into account, the combined shareholdings total
66.27% of the outstanding shares of SNL entitled to vote generally
on matters brought to a vote of the shareholders of SNL.
Deviation from the Norwegian Code of Practice: General Meetings are
typically held by shareholders granting proxies, with voting instructions
being given to such proxies ahead of the General Meeting. As such, the
Chairman or the full Board of Directors may, but do not always, attend
General Meetings.
46 Stolt-Nielsen Limited | Annual Report 202146
DIRECTORS’ REPORT
Corporate Governance (continued)
7. Nomination Committee
Neither Bermuda law nor the SNL Bye-Laws require that a nomination
committee be established. Consequently, SNL has not established a
nomination committee. Members of the Board of Directors identify
and evaluate proposed candidates for nomination to the Board of
Directors based on merit. Individuals are selected for nomination
to the Board of Directors because of their business or professional
experience, and their array of talents and perspectives, to promote
a culture that generates the diversity of thought, approach and ideas
needed to further the Company’s strategic objectives.
The Board of Directors regularly reviews its composition, to ensure
that it can attend to the common interests of all shareholders
and meet the Company’s need for expertise, capability, diversity
and independence. The Board of Directors also monitors that its
members have sufficient capacity to carry out their duties. Directors’
external commitments are described earlier in this Corporate
Governance Report.
Deviation from the Norwegian Code of Practice: the Company does
not have a Nomination Committee, but the Board of Directors has put
processes in place to review its performance and composition on an
ongoing basis, as described above.
8. Board of Directors: Composition
and Independence
The business affairs of SNL are managed under the direction of the
Board of Directors. The Board of Directors may delegate authority
to the Chairman, specified committees of the Board of Directors,
or to SNL’s executive management. SNL does not have a corporate
assembly as this is not required under Bermuda law.
As provided in the SNL Bye-Laws, the Board of Directors shall be
composed of at least three and not more than nine Directors. The
Board of Directors believes that the optimal size for the Board is six
to eight Directors. The Board of Directors’ size is flexible depending
on the circumstances and the qualifications of proposed candidates.
Directors are elected at the Annual General Meeting. Directors shall
hold office for such term as decided by the General Meeting, or in
absence of such determination, until the next Annual General Meeting
or until their successors are elected or appointed or their office is
otherwise vacated. Directors may be removed only for cause by a
vote at a Special General Meeting held for that purpose. In the event
of a vacancy on the Board of Directors, the remaining members of the
Board of Directors may fill such vacancy and appoint a member to act
until the next General Meeting at which the Directors are re-elected.
The foregoing provisions relating to the election, removal and
replacement of Directors are set forth in the SNL Bye-Laws.
Five of the current eight SNL Directors, namely Samuel Cooperman,
Janet Ashdown, Rolf Habben Jansen, Håkan Larsson and Tor Olav
Trøim, are considered to be independent from the Company’s major
shareholders, the executive management, and the Company’s main
business associates according to the Norwegian Code of Practice.
In the view of the Board of Directors, the composition of the Board and
Board Committees ensures continuity and experience and is suitable
to represent the interests of the minority shareholders.
The Chairman of the Board of Directors is elected by the Annual
General Meeting. The Chief Executive Officer is a member of the
Board of Directors.
Information on the members of the Board of Directors can be
found earlier in this Corporate Governance Report, and an up-to-date
composition of the Board of Directors is maintained and available
on the Company’s website at: stolt-nielsen.com/about-us/
leadership-team/
Deviation from the Norwegian Code of Practice: as permitted under
Bermuda law and customary for Bermuda companies, the Company’s
Chief Executive Officer has been elected to the Board of Directors by
the Annual General Meeting.
9. The Work of the Board of Directors
Board Meetings
The Board of Directors, acting as a collegiate body, has ultimate
responsibility for the management of the Company. The Board of
Directors holds at least four regularly scheduled meetings a year,
as well as ad-hoc meetings when required. Meeting schedules are
approved annually by all members of the Board of Directors. The
Board of Directors may appoint a Board Secretary, who does not
need to be a member of the Board of Directors.
Decisions of the Board of Directors shall be taken by a majority of the
votes cast by the Directors present and represented at such meeting,
provided a quorum is present. A majority of the Directors then in office
shall constitute a quorum. The Board of Directors may also act by
unanimous written consent.
The Audit Committee has established processes to monitor all
transactions which may give rise to conflict or potential conflict
of interest. Members of the Board of Directors and executive
management must notify the Audit Committee and Board of
Directors if they have any material direct or indirect interest in any
proposed transaction to be entered into by SNL. Following such
notification, and unless disqualified by the Chair of the relevant
Audit Committee or Board of Directors meeting, a Director may vote
in respect of any such matter and may be counted in the quorum for
such meeting.
Board Meetings: Executive Sessions
Executive management is available to discuss matters of concern to
the Board of Directors, and the Board of Directors has regular access
to executive management. The basic duties and responsibilities of
the Directors include attending Board of Directors’ meetings, preparing
for meetings by advance review of any meeting materials and actively
participating in the Board of Directors’ discussions. Directors are also
expected to make themselves available outside scheduled meetings
for advice and consultation.
The Board of Directors ensures that SNL has effective internal controls in
accordance with the regulations that apply to its activities, including
SNL’s corporate values and ethical guidelines.
47Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Board Committees
The Board of Directors has established an Audit Committee and
a Compensation Committee. The Board of Directors periodically
reviews the size, structure and function of the Board Committees.
The Audit Committee and Compensation Committee have written
terms of reference, which are reviewed and reassessed by the
relevant Committee and approved by the Board of Directors on an
annual basis.
The Audit Committee is composed of at least two members. Each
member of the Audit Committee shall normally qualify as independent
pursuant to all applicable regulatory requirements.
The Audit Committee has overall responsibility for overseeing
the accounting and financial reporting processes of the Company,
the audits of the Company's financial statements, and the work of
the Company's external auditor and Operational Audit department.
The Audit Committee also recommends the external auditor’s
appointment, compensation and retention. Under Bermuda law the
appointment of the external auditor has to be made by shareholders
in General Meeting, but the approval of the external auditor’s
compensation may be delegated by the shareholders to the Board
of Directors.
The Compensation Committee is composed of at least two
members. At least one member of the Compensation Committee
shall normally qualify as independent pursuant to all applicable
regulatory requirements.
The Compensation Committee is responsible for compensation
strategy, overall salary reviews and awards under its compensation
programmes. It reviews and approves all aspects of senior executive
management compensation, including performance incentive and
equity-based compensation plans.
Each Committee has a Chair who reports on the activities of such
Committee at each meeting of the full Board of Directors.
The members of the Committees are set out earlier in this Corporate
Governance Report, and an up-to-date list is also maintained on
the Company’s website at: stolt-nielsen.com/about-us/
leadership-team/
Agreements with Related Parties
The Board of Directors reviews, at least annually, the financial and
other relationships between each Director and SNL. Through the
Audit Committee, the Board of Directors has adopted guidelines and
procedures to ensure that, should any transaction involving related
parties be considered, such transactions would be appropriately
reviewed for potential conflict-of-interest situations, with the aim of
preventing value from being transferred to related parties. Any such
transactions would require approval from the Audit Committee or
Board of Directors and be disclosed in the Notes to the Financial
Statements of this Annual Report.
Deviation from the Norwegian Code of Practice: none.
10. Risk Management and Internal Control
The Board of Directors is ultimately responsible for SNL’s system of
internal control, which covers financial, operational and compliance
controls as well as risk management processes. SNL’s system of
internal control is designed to manage rather than eliminate the risk
of failure to achieve business objectives and to provide reasonable
assurance that SNL is operating legally, ethically and within approved
financial and operational policies and procedures with sufficient
safeguards against material financial statement misstatements
or loss of assets.
The main elements of the Company’s system of internal control over
financial reporting include the Code of Business Conduct and other
corporate governance and compliance policies, global accounting
policies and procedures, financial reporting risk assessments, annual
budgets, authorisation limits, periodic reporting and evaluation of
budgeted versus actual results. The different layers of control allow
for a greater probability that errors in financial reporting are identified
early and corrected.
SNL’s business heads conduct an annual review of SNL’s
most significant areas of exposure to risk, which are detailed
in the Directors’ Report of this Annual Report. The Operational
Audit department provides assurance that the Company has
appropriate internal control, risk management and related
corporate governance systems in place throughout the organisation,
performs regular independent audit reviews of these systems to
assure adherence and recommend improvements, and reports to
the Audit Committee accordingly.
The Board of Directors, through the Audit Committee, oversees the
monitoring of compliance with the system of internal control over
financial reporting. At its quarterly meeting the Audit Committee
reviews and discusses results of internal audits performed by
the Operational Audit department. This also includes matters of an
ethical nature. All employees, customers, suppliers and other parties
have direct access to the Audit Committee, through the Company’s
whistleblowing system, to report any potential illegal or unethical
matters. This confidential system can be accessed on the Company’s
website at: report.whistleb.com/en/stolt-nielsen
Deviation from the Norwegian Code of Practice: none.
48 Stolt-Nielsen Limited | Annual Report 202148
DIRECTORS’ REPORT
Corporate Governance (continued)
11. Remuneration of the Board of Directors
The Board of Directors reviews the Directors’ compensation
periodically. The review includes a comparison of the Company’s
compensation practices against the practices of comparable US and
European companies. The remuneration of the Board of Directors
reflects its responsibility, expertise, time commitment, and the
complexity of SNL’s activities. The remuneration is not linked to
the performance of the Company.
Members of the Board of Directors and/or companies with which they
are associated shall not in principle take on specific assignments for
SNL in addition to their appointment as a member of the Board of
Directors. If they do nonetheless take on such assignments this
shall be disclosed to and receive prior approval from the full Board
of Directors. The remuneration for such additional duties shall be
approved by the Board of Directors.
The remuneration awarded to the Board of Directors for their
service as Directors is disclosed in aggregate in this Annual
Report. Any remuneration in addition to normal directors’ fees
is specifically identified.
Deviations from the Norwegian Code of Practice: none.
12. Salary and Other Remuneration for
Executive Manage
ment
The Compensation Committee of SNL is responsible for
compensation strategy, overall salary reviews and awards under its
compensation programmes. It reviews and approves all aspects of
senior executive management compensation, including performance
incentive compensation plans to ensure that such plans are linked
to long-term value creation for the shareholders or the Company's
earnings performance over time.
The Company has in place an annual and a long-term incentive
plan aimed at tying executive management’s compensation
with the performance of the Company. All performance related
compensation is capped at a maximum percent of the salary of the
executive management.
Deviation from the Norwegian Code of Practice: Bermuda law does not
require guidelines for the remuneration of executive personnel to be
communicated to the Annual General Meeting, but the Compensation
Committee carefully evaluates executive management’s salary and
other remuneration based on the key principles described above.
13. Information and Communications
All information distributed to SNL shareholders is published on SNL’s
website. SNL promptly submits all press releases to Oslo Børs, and
disseminates such press releases through an approved news wire
service that provides simultaneous and broad distribution.
Copies of audited financial statements of SNL are distributed to
shareholders prior to the Annual General Meeting and filed with
Oslo Børs in accordance with its requirements. SNL publishes each
year the dates for major events such as its Annual General Meeting,
publication of interim reports, public presentations and dividend
payment date if appropriate. These dates are available on SNL’s
website at stolt-nielsen.com/investors/financial-calendar/
After each quarterly earnings release, SNL holds a conference call
to discuss the results and respond to investor and analyst questions.
The conference call is open to all those who wish to participate.
Twice per year, executive management endeavours to hold the results
conference call in front of a live audience. All conference calls have a
telephone dial-in and are webcast with playback options available.
Deviation from the Norwegian Code of Practice: none.
14. Takeovers
The Board of Directors will publicly disclose any serious offer for SNL,
or a substantial portion of the assets of SNL, and will to the extent
applicable follow the Norwegian Securities Trading Act and the
recommendation in the Norwegian Code of Practice, and act in
the best interests of the Company, if any serious offer is received.
In most of SNL’s financing agreements the Company has certain
change of control provisions that would trigger a default in the event
of a take-over, unless waivers were obtained from lenders.
Fiducia Ltd. currently has an ownership interest in the Company which
may deter a third party from attempting to take control of SNL.
Deviation from the Norwegian Code of Practice: none
15. Independent Auditor
The Audit Committee is responsible for the oversight of the work
of the Company's Independent Auditor, and for recommending
the Independent Auditor’s appointment. The Audit Committee has
established guidelines in respect of the use of the Independent
Auditor by the Company’s executive management for services
other than the audit, which should be approved in advance. The
Audit Committee shall receive annual written confirmation from the
Independent Auditor that such firm continues to satisfy all applicable
requirements for independence. In addition, the Independent Auditor
shall provide the Audit Committee with a summary of all services in
addition to audit work that has been undertaken for the Company.
The Independent Auditor shall submit the main features of the plan
for the audit of SNL to the Audit Committee annually.
The Independent Auditor shall participate in meetings of the Audit
Committee that deal with the annual accounts and half-year results.
At these meetings, the Independent Auditor shall comment on
any material changes in the Company’s accounting principles and
material management estimates and judgements, and report all
matters on which there have been disagreements between the
firm and the executive management of the Company, if any.
The Independent Auditor shall at least once a year present to the
Audit Committee commentary on any significant internal control
findings arising during the audit.
The Audit Committee shall hold a meeting with the Independent Auditor
at least once a year at which neither the Chief Executive Officer nor
any other member of the executive management is present.
Deviation from the Norwegian Code of Practice: none.
Financial Performance
Financial
Review
Pages 50-62
Independent
Auditors’ Report
Pages 63-68
Financial
Statements
Pages 69-146
49Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Financial Review
Jens F. Grüner-Hegge
Chief Financial Officer
Management’s Discussion
of Operating Performance
This section discusses Stolt-Nielsen
Limited’s (SNL) operating results and
financial condition for the years ended
November 30, 2021 and 2020. This
discussion consists of:
• Results of Operations
• Business Segment Information
• Liquidity and Capital Resources
• Critical Accounting Estimates
• Principal Risks
• Treasury Shares
• Going Concern and
• Subsequent Events
Results of Operations
Below is a summary of SNL’s consolidated financial data for November 30, 2021 and 2020:
For the years ended November 30,
(in thousands) 2
2021
2020
Operating Revenue
$
2
2,181,082
$ 1,955,136
Operating expenses (
(1,459,706)
(1,308,904)
Depreciation and amortisation (
(295,459)
(292,262)
Impairment of assets (
(10,000)
(12,394)
G
Gross Profit
415,917
341,576
Gross margin
1
19.1%
17.5%
Share of profit of joint ventures and associates
3
39,470
32,437
Administrative and general expenses (
(220,464)
(187,679)
Reversal of impairment on joint venture loan
–
–
3,557
Loss on disposal of assets, net (
(3,010)
(794)
Other operating income
2
2,218
1,640
Other operating expense (
(436)
(810)
O
Operating Profit
233,695
189,927
Operating margin
1
10.7%
9.7%
Non-operating income (expense):
F
inance expense – finance leases (
(11,072)
(9
,478)
Finance expense – debt and other (
(116,212)
(129,884)
Finance income
2
2,375
3,695
Foreign currency exchange loss, net (
(2,673)
(5,258)
Other non-operating expense, net (
(2,902)
(1,525)
P
Profit from continuing operations before
income tax
103,211
47
,477
Income tax expense (
(24,405)
(8,321)
P
Profit from Continuing Operations
78,806
39,156
Loss from discontinued operations
–
–
(13,788)
N
Net Profit
$
7
78,806
$ 25,368
Attributable to:
Equity holders of SNL $
7
78,806
$ 26,295
Non-controlling interests
–
–
(927)
$
7
78,806
$ 25,368
For the years ended November 30,
(in thousands) 2021 2020
Profit before one-time items
$
8
89,306
$ 47,993
One-time items:
Im
pairment of assets (
(10,000)
(12,394)
Distribution from insurance company
1
12,500
–
R
eversal of impairment on joint venture loan
–
–
3,557
Stolt Groenland loss, net of insurance settlement (
(13,000)
–
P
Profit from Continuing Operations
$
7
78,806
$ 39,156
50 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
50
Consolidated Income Statement
Profit from continuing operations of SNL was $78.8 million for 2021,
compared with $39.2 million in 2020. Excluding the one-time items
described in the table on the previous page, profit from continuing
operations was $89.3 million for 2021, compared with $48.0 million
in 2020, or a $41.3 million improvement. The most significant factors
affecting SNL’s performance in 2021 were:
• Stolt Tankers reported an operating profit of $68.8 million, a
decrease of $15.8 million or 18.7% compared to the prior year
operating profit of $84.6 million. Higher variable time charter
expenses, ship owning costs and loss on sale of assets more than
offset the improvement in deep-sea freight and demurrage revenue.
• Stolthaven Terminals reported an operating profit of $62.3 million
compared to $68.8 million in 2020 primarily as a result of higher
operating and administrative and general expenses.
• Stolt Tank Containers (STC) reported an operating profit of
$81.6 million, up from $51.2 million in 2020, an increase of
$30.4 million or 59.4%. The increase was largely the result of an
increase in transportation margins due to tight capacity, increases
in demurrage from logistical bottlenecks and customers holding on
to tanks longer, and higher ancillary revenues.
• Stolt Sea Farm reported an operating profit of $24.4 million,
compared with an operating loss of $8.4 million in 2020, a
$32.8 million improvement. Excluding the fair value on the
biological assets in both years, operating profit increased by
$10.4 million. This was due to the higher turbot and sole prices
and sales volumes as 2020 had been significantly impacted by
Covid-19 and as the new sole farms in Spain and Portugal had a
full year of operations.
• Stolt-Nielsen Gas reported an operating profit of $2.1 million in 2021
versus a loss of $4.0 million in 2020. The profit was largely due to
a $3.2 million gain on a land sale. Excluding this gain, the losses in
both years were mainly attributable to the Group’s share of losses
related to the development of various small-scale LNG projects at
Avenir LNG.
• Corporate and Other operating loss was $5.5 million, compared to
the prior year loss of $2.3 million.
• SNL concluded its sale of the Caviar division in 2020 and recorded
a loss from discontinued operations of $13.8 million in that year.
Operating revenue
Operating revenue was $2,181.1 million in 2021, which was
11.6% higher than in 2020, mainly owing to higher freight rates
at Stolt Tank Containers, higher bunker surcharge revenue at
Stolt Tankers and higher volumes sold and sales prices for turbot
and sole at Stolt Sea Farm.
Stolt Tankers’ revenue increased by $52.5 million, mainly due to a
$36.8 million increase in deep-sea bunker surcharge revenue and
$9.9 million higher deep-sea freight revenue. The higher bunker
surcharge revenue was caused by the 25.5% increase in bunker
prices compared to last year. Deep-sea freight revenue increased
mainly due to a higher number of ships in the deep-sea fleet and
1.3% higher average freight rate.
Stolthaven Terminals’ revenue increased by $5.1 million compared to
2020, an increase of 2.1%. This increase was primarily due to higher
operating revenue in New Orleans, Singapore and Dagenham, partially
offset by a decrease in the average utilisation rate to 90.9% in 2021
from 92.4% in 2020.
Stolt Tank Containers’ revenue increased by $141.8 million, or 27.2%,
in 2021 largely due to the impact of increased freight rates and an
8.4% increase in shipments combined with increased demurrage and
ancillary revenues of $19.3 million.
Stolt Sea Farm’s operating revenue increased by $28.8 million, or
36.1%, in 2021 as a result of higher volumes sold and higher sales
prices for turbot and sole .
Gross profit
SNL’s gross profit increased by $74.3 million or 21.8% to
$415.9 million in 2021 compared to the prior year, reflecting higher
transportation margins at Stolt Tank Containers and higher volumes
sold and stronger price recovery for turbot and sole at Stolt Sea Farm.
Stolt Tankers’ gross profit decreased by $0.2 million in 2021, to
$156.5 million, as the increase in revenues was offset by $32.3 million
higher bunker costs, more variable time charter hire expenses and an
increase in ship management costs.
Gross profit for Stolthaven Terminals was $78.1 million in 2021,
compared with $79.1 million in 2020, a decrease of $1.0 million.
Gross profit decreased from the impact of higher personnel, utilities
and maintenance costs, partially offset by higher operating revenue.
Stolt Tank Containers saw an increase in gross profit of $36.4 million
to $153.8 million as a result of increased shipments and improved
margins per shipment between the years.
Stolt Sea Farm’s gross profit increased by $35.7 million to $32.4 million
from a loss of $3.3 million, as a result of a strong market demand in
the second half of the year that allowed higher sales volumes and
higher sales prices, as well as higher fair value on biological assets.
Share of profit of joint ventures and associates
SNL’s share of the profits from non-consolidated joint ventures and
associates in 2021 was $39.5 million, up from $32.4 million in 2020.
Stolt Tankers’ share of profit from joint ventures decreased by
$1.8 million to $9.1 million while Stolthaven Terminals’ share of profit
increased by $3.8 million to $29.9 million. See the Business Segment
Information section for further discussion. The Group’s investment in
Avenir also improved by $3.1 million as ships were delivered in 2020
and 2021.
Administrative and general expenses
Administrative and general expenses were $220.5 million in 2021, up
from $187.7 million in 2020, an increase of $32.8 million. This was
largely due to preventive measures taken during 2020 to counteract
the potential effects on liquidity of Covid-19. Measures included a
Company-wide hiring freeze, travel ban and reduction in the use of
consultants, which have since been relaxed. In addition, profit sharing
and long-term incentive expenses were higher in the current year due
to improved earnings.
Reversal of impairment on joint venture loan
The Group impaired a long-term advance to Tianjin Lingang
Stolthaven Terminal Co by $3.6 million in 2018 based on review
of its credit risk. Since 2018, the terminal’s results have improved.
Therefore, the impairment was reversed in 2020.
Jens F. Grüner-Hegge
2021
Operating Revenue
2,181,082
(1,459,706)
(295,459)
(10,000)
Gross Profit
415,917
19.1%
39,470
(220,464)
–
(3,010)
2,218
(436)
Operating Profi
t
233,695
10.7%
(11,072)
(116,212)
2,375
(2,673)
(2,902)
Profit from continuing operations before
income tax
103,211
(24,405)
Profit from Continuing Operations
78,806
–
Net Profit
78,8
06
Attributable to:
78,806
–
78,806
Profit before one-time items
89,306
One-time items:
(10,000)
12,500
–
(13,000)
Profit from Continuing Operations
78,806
51Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Financial Review (continued)
(Loss) gain on disposal of assets, net
SNL recorded a net loss on disposal of assets of $3.0 million in 2021
compared with a loss of $0.8 million in 2020. In 2021, it included a
$13.0 million loss on the derecognition of the Stolt Groenland, net of
insurance, partially offset by the gain on sale of three ships and land
in Canada.
Other operating income and other operating expense
Other operating income was $2.2 million in 2021, compared with
$1.6 million in 2020.
Other operating expense was $0.4 million in 2021, compared with
$0.8 million in 2020.
Finance expense
Finance expense was $127.3 million in 2021, down from $139.4 million
in 2020. Interest on debt decreased by $13.7 million, owing to lower
interest rates and lower outstanding debt balances. Interest on leases
was $11.1 million, compared with $9.5 million in 2020 due to the
renewal of several large tanker time charter agreements and
additional tank container leases.
Finance income
Finance income was $2.4 million in 2021, down by $1.3 million
compared with 2020. The decrease was due to short-term investing
of excess funds in 2020 as additional liquidity was secured to counter
possible negative effects of Covid-19.
Foreign currency exchange loss
In 2021, SNL had a foreign currency exchange loss of $2.7 million,
compared with a $5.3 million loss in 2020. In 2021, the loss was
primarily the result of foreign exchange derivative losses while in
2020 it was due to the effect of the weakening of EUR, ISK and GBP
on intercompany advances with non-USD subsidiaries.
Other non-operating expense, net
Non-operating expense was $2.9 million in 2021 compared with a
non-operating expense of $1.5 million in 2020.
Income tax expense
Income tax expense was $24.4 million in 2021, compared to $8.3 million
in 2020. The increase in income tax expense was due to taxes on the
return to profit in Stolt Sea Farm, the write-off of deferred tax assets at
the New Orleans terminal, increased deferred tax in the UK owing to
an income tax rate increase and adjustments made for uncertain
tax provisions.
Loss from discontinued operations attributable to SNL
shareholders
Loss from discontinued operations attributable to SNL shareholders
was $13.8 million in 2020. The Group completed the sale of the Caviar
business in October 2020.
Non-controlling interest
During 2020, SNL acquired the 25% interest in Sterling Caviar from the
minority shareholder.
Business Segment Information
This section summarises the operating performance for each of
SNL’s principal business segments. The Corporate and Other category
includes corporate-related expenses and all other operations which
are not reportable as separate business segments.
For the years ended November 30,
(in thousands) 2
2021
2020
Operating revenue:
Stolt Tankers
$
$
1,165,617
$ 1,113,095
Stolthaven Terminals
2
243,592
238,527
Stolt Tank Containers
6
662,443
520,631
Stolt Sea Farm
1
108,568
79,747
Corporate and Other
8
862
3,136
T
Total
$
2,181,082
$ 1,955,136
Operating profit:
Stolt Tankers
$
$
68,817
$ 84,643
Stolthaven Terminals
6
62,259
68,794
Stolt Tank Containers
8
81,597
51,188
Stolt Sea Farm
2
24,440
(8,350)
Stolt-Nielsen Gas
2
2,096
(4,015)
Corporate and Other (
(5,514)
(2,333)
T
Total
$ 233,695
$ 189,927
52 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
52
Stolt Tankers
Operating revenue
Operating revenue increased by $52.5 million in 2021, with deep-sea
revenue increasing by $55.2 million and regional revenues decreasing
by $2.7 million.
Deep-sea revenue increased from a combination of higher bunker
surcharge, freight and demurrage revenue. Bunker surcharge
revenue increased by $36.8 million due to 25.5% higher bunker prices
compared to the prior year. Deep-sea freight revenue increased by
$9.9 million as operating days were up 7.9% due to the acquisition of
three ships acquired from Chemical Transportation Group (CTG) in the
first quarter of 2021 and Tufton Investments joining the Stolt Tankers
Joint Services (STJS) with six ships. The effect was partially offset
as cargo volume carried decreased by 0.6%, reflecting the pressure
of swing tonnage moving in from a historically low medium-range
product tanker market. Average freight rates increased by 1.3%
between the periods. While Contracts of Affreightment (COA) rates
increased due to renewals and cargo mix, the rates on spot business,
which contributed approximately 32.5% of total deep-sea freight
revenue, decreased by 5.4%. Demurrage revenue increased by
$5.9 million due to more waiting time spent in port.
Regional fleet revenue decreased by $2.7 million because the
European coastal ships were time chartered into the joint venture
with Essberger Tankers as of January 1, 2021, reducing revenues
to the time charter equivalent pool pay-out. Partially offsetting this
were improved revenues in the Caribbean coastal and European
barging fleets.
The average Sailed-In Time-Charter Index for the deep-sea fleet for
2021 was 0.52, compared with 0.57 for 2020, a decrease of 8.8%.
The sailed-in revenue (revenue less trading expenses) for 2021 was
$18,524 versus $19,941 in 2020, a decrease of 7.1%.
As of November 30, 2021, Stolt Tankers owned and/or operated 158
ships and barges, representing 2.93 million deadweight tons (dwt),
compared to 153 ships and barges and 2.78 million dwt at the end
of 2020.
Number
of ships
Millions
of dwt
% of STJS net
earnings for
the year ended
November 30,
2021
Stolt Tankers Joint Service
(STJS):
Stolt Tankers Limited (52 owned) 55 1.85 75%
NYK Stolt Tankers S.A. 8 0.24 10%
Hassel Shipping 4 AS 8 0.26 10%
Tufton Investment 6 0.13 5%
T
Total Stolt Tankers Joint Service
77 2.48
100%
Ships in owned regional services
(25 owned) 61 0.28
Ships in joint venture regional
services (all owned by joint
ventures) 20 0.17
T
Total
158 2.93
Operating profit
Operating profit decreased by $15.8 million, to $68.8 million in 2021
from $84.6 million in 2020. The $52.5 million increase in revenue was
more than offset by an increase in operating expenses, a higher loss
on sale of assets and lower share of profit from joint ventures.
Operating expenses increased by $56.6 million, with $32.3 million
of the increase being the result of higher bunker costs. The average
price of very low sulphur fuel (VLSF) and intermediate fuel oil (IFO)
consumed in 2021 was $465 per ton, up 25.5% from $370 per ton in
2020. Variable time charter hire expenses increased by $23.3 million,
partly due to the entry of Tufton ships into the STJS and NYK
Stolt Tankers S.A. entering two additional ships into the STJS. Ship
management costs were $8.3 million or 4.2% higher than prior year
mainly due to the acquisition of three ships in the first quarter of 2021
and to higher manning cost caused by Covid-19. Partially offsetting
this was a $12.5 million capital refund from an insurance underwriting
club which was accrued at November 30, 2021.
Included in the $5.7 million loss on sale of assets was a $13.0 million
loss on the derecognition of the Stolt Groenland, net of insurance.
Partially offsetting this loss were gains recorded on the sale of
three ships.
Stolt Tankers’ share of profit from joint ventures decreased by
$1.8 million to $9.1 million. The equity pickup from NYK Stolt Tankers
S.A. decreased due to three dry-dockings during the year while the
South East Asian joint venture Stolt NYK Asia Pacific Services
provided lower earnings as a result of fewer operating days. The
Chinese joint venture Shanghai SC-Stolt Shipping Ltd had a strong
year whereas in 2020 Covid-19 impacted it heavily at the beginning
of the year.
2021
Operating revenue:
$
1,165,617
243,592
662,443
108,568
862
Total
$
2,181,082
$
68,817
62,259
81,597
24,440
2,096
(5,514)
Total
$ 233,695
53Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Financial Review (continued)
Stolthaven Terminals
Operating revenue
Stolthaven Terminals’ revenue increased to $243.6 million in 2021
from $238.5 million in 2020. This increase of $5.1 million or 2.1% was
mainly due to higher operating revenue in New Orleans, Singapore
and Dagenham, which was partially offset by the lower revenue from
Santos due to the weakening of the Brazilian real, operations ceasing
in Wynyard and a decrease in the average utilisation rate to 90.9% in
2021 from 92.4% in 2020. The decrease in the average utilisation rate
was mainly due to a lower average leased capacity in Houston, only
partly offset by a higher average leased capacity in New Orleans
and Australia.
Total available average capacity at the wholly-owned terminals
increased slightly to 1,745,680 cubic metres in 2021 from 1,732,747
cubic metres in 2020. The addition of new capacity in New Orleans
in 2020 and 2021 was partially offset by capacity taken out of
service in Wynyard due to the exit at the end of its land lease in 2020.
Product handled decreased to 13.3 million metric tons in 2021 from
13.7 million metric tons in 2020.
Operating profit
Operating profit decreased by $6.5 million to $62.3 million in 2021
from $68.8 million in 2020. There were the following one-time items:
For the years ended November 30,
(in thousands) 2
2021
2020
Terminal operating profit before
one-time items
$ 72,259
$ 77,631
One-time items:
Asset impairment in Australia
(10,000)
_
Good
will impairment in Australia
_
(12
,394)
Reversal of impairment of joint
venture loan
_
3,557
T
Terminal operating profit
$ 62,259
$ 68,794
The operating profit before one-time items decreased by
$5.4 million. The revenue increase of $5.1 million, discussed above,
and $3.8 million higher share of joint venture income was more than
offset by higher operating and administrative and general expenses.
Operating expenses increased by $4.7 million to $93.1 million in
2021 from $88.4 million in 2020. This increase was driven by higher
personnel and utility costs at almost all terminals as well as higher
maintenance costs in New Orleans caused by Hurricane Ida and
the 2021 decommissioning cost for Wynyard. Administrative and
general expenses increased by $6.3 million primarily because of
higher personnel and project costs. Both operating and administrative
and general personnel costs in 2020 were low due to Covid-19 cost-
saving initiatives, government assistance in Singapore and $1.1 million
of pension credits in the US.
Share of profit of Stolthaven Terminals’ joint ventures and associates
increased by $3.8 million. In general, the increase was due to the
weakening of the US dollar from the prior year. In addition, it was the
result of an income tax incentive for energy efficiency investments
at the joint venture terminal in Antwerp, Belgium; a higher leased
capacity and lower finance expense at the joint venture terminal in
Ulsan, Korea; and a higher utilisation rate at the joint venture terminal
in Tianjin, China.
54 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
54
Stolt Tank Containers (STC)
Operating revenue
Stolt Tank Containers’ revenue increased to $662.4 million in 2021
from $520.6 million in 2020, an increase of $141.8 million or 27.2%.
This was primarily due to the impact of increases in freight rates
due to tight container ship capacity and a shortage of truck drivers
contributing to world-wide supply chain congestion. Also improving
revenue were an 8.4% increase in shipments and increased
demurrage and ancillary revenues of $19.3 million, respectively.
In 2021, STC handled 140,395 tank container shipments, compared
with 129,476 shipments in 2020, which represents a 8.4% increase.
Average utilisation increased to 71.6% in 2021, from 67.8% in 2020.
The fleet increased by 8.7% to 43,342 tank containers at the end of
2021 compared to 39,874 tank containers at the end of 2020.
STC’s rates in most major markets increased because of strong
market conditions combined with higher freight costs which caused
a shortage of both ship and trucking capacity as well as a challenging
logistics market. STC’s rates were also impacted by changing trade
patterns as a result of Covid-19 lockdowns around the world
throughout 2021.
Operating profit
Stolt Tank Containers reported an operating profit of $81.6 million, up
from $51.2 million in 2020, an increase of $30.4 million or 59.4%. The
increase was largely due to the revenue increase discussed above.
Partially offsetting this were increases in ocean and inland freight
costs as the result of higher rates charged plus the increased
number of shipments. Administrative and general costs were also
higher due to additional resources needed to service the business
at higher shipment levels, especially considering the challenging
market conditions.
Stolt Sea Farm (SSF)
Operating revenue
Stolt Sea Farm’s revenue increased by $28.8 million, or 36.1%, to
$108.6 million in 2021 from $79.7 million in 2020, due to a strong
demand in the second half of the year together with the additional
volumes from the two new sole farms in Spain and Portugal. Turbot
volumes increased by 6.5% while turbot prices increased by 17.5%.
Sole volumes increased by 82.7% while sole prices increased by 3.3%.
Operating profit
Stolt Sea Farm reported an operating profit including fair value gain on
biological assets of $24.4 million in 2021 compared to an operating
loss of $8.4 million in 2020, a year-on-year increase of $32.8 million.
Excluding the fair value gain on biological assets of $17.4 million in
2021 and loss of $5.0 million in 2020, operating profit increased by
$10.4 million. This was due to the higher revenue partially offset by
higher operating expenses as a result of the increase in sales volume.
The increase in the fair market value on the biological assets was
mainly a result of the higher turbot and sole prices and the increase
in the sole volume.
Stolt-Nielsen Gas (SNG)
Stolt-Nielsen Gas is an investment arm of SNL focusing on the
liquefied natural gas (LNG) segment with holdings in Avenir LNG Ltd
and Golar LNG Ltd. Avenir’s results are reported as a joint venture, while
changes in the share price of the Golar investment are reported
as Other Comprehensive Income. Stolt-Nielsen Gas reported an
operating profit of $2.1 million in 2021 versus a loss of $4.0 million in
2020. The profit was due to a gain on the disposal of land in Canada,
while the underlying losses in both years were mainly attributable to
SNL’s share of the start-up and administrative and general costs at
Avenir LNG.
Corporate and Other
Corporate and Other operating loss was $5.5 million, compared with
the prior year loss of $2.3 million. The loss increased by $3.2 million,
primarily due to higher profit sharing in the current year as a result of
higher profits.
2021
Terminal operating profit before
one-time items
$ 72,259
(10,000)
_
_
Terminal operating profit
$ 62,259
55Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Financial Review (continued)
Liquidity and Capital Resources
F
or the years
ended November 30,
(in thousands)
2
2021
2020
Summary Cash Flows
Net cash provided by operating activities:
Net profit
$
$ 78,806
$ 25,368
Loss from discontinued operations
–
–
13
,788
Profit from continuing operations
7
78,806
39,156
Depreciation, impairment and amortisation
3
305,459
304,656
Share of profit of joint ventures and associates
(39,470)
(32,437)
Finance expense, net of income
1
124,909
135,667
Income tax expense
2
24,405
8,321
Fair value adjustment on biological assets (
(17,379)
4,985
Other adjustments to reconcile net profit to net cash from operating activities
7
7,716
2,279
Changes in working capital assets and liabilities (
(60,225)
16,303
Dividends from joint ventures and associates
2
22,869
15,440
Other, net
1
1,326
(1,095)
Cash generated from operations
4
448,416
493,275
Net interest paid, including debt issuance costs (
(121,786)
(131
,694)
Income taxes paid (
(2,803)
(5,212)
N
Net cash generated from operating activities – continuing activities
$
3
323,827
$ 356,369
Net cash used in operating activities – discontinued activities
$–$ (3,589)
Cash flows from investing activities:
Capital expenditures (
(185,486)
(140,748)
Purchase of intangible assets (
(4,688)
(4,752)
Investment in joint venture and associate (
(21,173)
(15
,000)
Proceeds from sales of assets
2
29,741
14,567
Other
1
1,005
4,323
N
Net cash used in investing activities – continuing operations
$ (
(180,601)
$ (141,610)
Net cash provided by investing activities – discontinued operations
$ –
$ 3,456
Net cash used for financing activities:
Increase in short-term bank loans
40,000
–
Repayment of long-term debt (
(312,827)
(396,016)
Proceeds from issuance of long-term debt
1
141,950
288,530
Principal payments on leases (
(43,432)
(39,754)
Dividends paid (
(26,829)
(13,465)
N
Net cash used in financing activities
$
(201,138)
$ (160,705)
Effect of exchange rate changes on cash (
(5,987)
(2
,305)
Net (decrease) increase in cash and cash equivalents
$
(63,899)
$ 51,616
56 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
56
Net cash provided by operating activities
In 2021, SNL generated cash from continuing operations of $323.8 million,
compared with $356.4 million in 2020. The decrease in cash generated
from operations was owing to higher net working capital as a result of
increased activity and a year end insurance receivable, partially offset by
higher EBITDA at STC and Stolt Sea Farm and lower interest payments.
Net cash used in investing activities
Net cash used in investing activities from continuing operations was
$180.6 million in 2021, compared with $141.6 million in 2020.
The most significant uses of cash for investing during 2021 were:
i. capital expenditures of $185.5 million, $44.7 million higher than
in 2020
ii.purchase of computer software of $4.7 million
iii.purchase of shares in Golar LNG Ltd for $3.0 million in 2021
iv.investment of $21.0 million in Avenir LNG Ltd.
Offsetting the uses of cash were proceeds from the sale of ships and
other assets of $29.7 million, compared with $14.6 million in 2020.
Cash capital expenditures by business are summarised below:
For the years ended November 30
(in thousands) 2
2021
2020
Stolt Tankers
$
$
119,584
$68,114
Stolthaven Terminals
43,650
59,281
Stolt Tank Containers
13,745
7,768
Stolt Sea Farm
7,698
5,195
Corporate and Other
809
390
T
Total
$
185,486
$140,748
During the year ended November 30, 2021, the Group spent
$185.5 million on property, plant and equipment. Cash spent
during the period primarily reflected:
i. $103.1 million on tanker projects, including amounts related to the
purchase of three second-hand 26,000 dwt ships, deposits for a
barge newbuilding, costs for life extensions of ships and safety,
environmental and regulatory assets
ii.$18.2 million on drydocking of ships
iii.$43.7 million on terminals expansion and maintenance projects
iv.$13.7 million on the purchase of tank containers and construction
at depots
v.$7.7 million on Stolt Sea Farm capital expenditures
Net cash used in financing activities
Net cash outflow from financing activities totalled $201.1 million in
2021, compared with $160.7 million in 2020.
The significant cash sources from 2021 financing activities were
$40.0 million of incremental borrowing on the revolving credit facility
and uncommitted credit lines, and net proceeds from long-term debt
issuances of $142.0 million, compared with $288.5 million in 2020.
The 2021 debt issuances comprised:
i. $77.0 million floating-rate facility with CMB Financial Leasing Co. Ltd.
including the three newly acquired CTG ships
ii.$65.0 million fixed-rate term loan facility with KFW IPEX-BANK
GMBH, using Stolthaven Dagenham and Stolthaven Moerdijk
terminals as collateral
The principal uses of cash for financing activities in 2021 were:
i. $312.8 million in repayment of long-term debt, compared with
$396.0 million in 2020
ii.$43.4 million of principal payments on lease liabilities, compared
with $39.8 million in 2020
iii.$26.8 million in dividend payments, compared with $13.5 million in 2020
Indebtedness
SNL’s total consolidated debt, excluding debt issuance costs, was
$2,460.3 million as of November 30, 2021 and $2,530.7 million as of
November 30, 2020, as set out in the table below.
(in thousands) 2
2021
2020
Short-term bank loans
$
$ 40,000
$–
Long-term debt
(including current portion)
2,209,803
2,337,198
Long-term lease liabilities
(including current maturities)
210,450
193,515
Total debt on Consolidated Financial
Statements
2,460,253
2,530,713
Available unused facilities:
Committed revolving credit line
309,883
258,100
Uncommitted short-term bank lines
of credit
45,000
65,000
Total unused facilities
354,883
323,100
Total debt and unused facilities
$
$ 2,815,136
$ 2,853,813
Long-term debt in the table above excludes debt issuance costs
of $24.2 million and $28.1 million as of November 30, 2021 and
2020, respectively.
Short-term debt
Short-term debt consists of debt obligations to banks under uncommitted
lines of credit and bank overdraft facilities which can be withdrawn by
the banks on short notice. SNL had access to $65.0 million of such
facilities, of which $45.0 million was unused during the year ended
November 30, 2021.
During 2020 and 2021, SNL also had two committed revolving credit lines
of which $20.0 million was outstanding on the Secured Reducing Multi-
Currency Revolving Loan Facility (“Secured RCF”) at November 30, 2021.
The collateralised share pledge facility was terminated in December 2020
and replaced with a new $100.0 million credit line with DNB (UK) Limited
and Swedbank AB. As of November 30, 2021, the amount available under
the two committed revolving credit lines amounted to $309.9 million.
Future availability of the Secured RCF is dependent on the amount
of available collateral which varies with fluctuations in ship values.
Amounts borrowed pursuant to these facilities bore an average
interest rate of 2.6% for the year ended November 30, 2021.
2021
Summary Cash Flows
$ 78,806
–
78,806
305,459
(39,470)
124,909
24,405
(17,379)
7,716
(60,225)
22,869
1,326
448,416
(121,786)
(2,803)
Net cash generated from operating activiti
es – continuing activities
323,827
Net cash used in operating activities – discontinued activities
(185,486)
(4,688)
(21,173)
29,741
1,005
Net cash used in investing activities – continuing o
perations (180,601)
Net cash provided by investing activities – discontinued operations
$–
40,000
(312,827)
141,950
(43,432)
(26,829)
Net cash used in financing activities
$
(201,138)
(5,987)
N
et (decrease) increase in cash and cash equivalents
$
(63,899)
57Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Financial Review (continued)
Long-term debt
Long-term debt consists of debt collateralised by mortgages on
SNL’s ships, tank containers and terminals, unsecured bank loans at
Stolt Sea Farm, $175.0 million of unsecured bonds denominated in
US dollars as well as the $282.3 million unsecured bond financing
denominated in NOK (NOK 2,550 million after removing the effect
of the cross-currency interest rate swaps). It does not include the
off-balance sheet arrangements discussed below. SNL’s long-term
debt (including debt issuance costs) was $2,185.6 million and
$2,309.1 million as of November 30, 2021 and 2020, respectively,
as set out below:
(in thousands)
2021
2020
Long-term debt
$
$ 2,185,644
$ 2,309,141
Less: Current maturities
(490,502)
(255,805)
$
$ 1,695,142
$ 2,053,336
Long-term lease liabilities
IFRS 16, Leases (IFRS 16), requires all but immaterial or short-term
leases to be recorded on the balance sheet. As of November 30, 2021,
SNL had long-term lease liabilities for ships, terminal facilities, tank
containers, barges, land, permits, computer and office equipment
and offices. Certain of the leases contain clauses requiring payments
in excess of the base amounts to cover operating expenses related
to the leased assets. Such payments are expensed in the period
of payment.
Reconciliation of Net Cash Flows to Movement
in Net Debt
SNL had the following changes in net debt, which is defined as
short-term loans, long-term debt and lease liabilities, less cash and
cash equivalents.
(in thousands)
2021
2020
Decrease (increase) in cash and cash
equivalents for the year
$
$ 63,899
$ (51,616)
Cash inflow from increase in debt
181,950
288,530
Cash outflow from repayments
of debt
(312,827)
(396,016)
Cash outflow from finance leases
(43,432)
(39,754)
Change in net debt resulting from
cash flows
(110,410)
(198
,856)
Lease liabilities capitalised,
net of retirements
63,591
226,400
Currency movements
38,255
71,510
Debt issuance costs and other
movements
5,901
6,460
Movement in net debt in the year
(2,663)
105,514
Opening net debt
2,314,889
2,209,375
Closing net debt
$
$ 2,312,226
$ 2,314,889
During 2021, SNL met its liquidity needs through a combination of
cash generated from operations, borrowings from commercial banks,
issuance of bonds and proceeds from the sale of assets.
Generally, Stolt Tankers was able to operate with a minimum of
working capital by tight credit terms to customers, keeping accounts
receivable to a minimum, and by obtaining standard credit terms of
30 to 90 days from most suppliers.
For Stolthaven Terminals and Stolt Tank Containers, a normal
business operating cycle prevails with balanced credit terms. For
Stolt Sea Farm, the production cycle for various farmed fish species is
several months to years, requiring a normal level of working capital to
finance inventory.
Ships, terminals, tank containers and investments in equity
instruments can be an important source of liquidity, as these
assets can be used to secure debt or can be sold and, if needed,
leased back. SNL realised proceeds from the sale of ships and other
assets of $29.7 million in 2021, compared to $14.6 million in 2020.
SNL’s objectives when managing capital are to safeguard its ability
to continue as a going concern, in order to provide returns for shareholders
and benefits for other stakeholders, and to maintain an optimal capital
structure to reduce the cost of capital. SNL monitors capital on the
basis of the ratio of debt to tangible net worth (shareholders’ equity
less intangible assets, non-controlling interests and other components
of equity). During the year ended November 30, 2021, debt and lease
liabilities decreased by $66.6 million. Excluding lease liabilities, debt
decreased by $83.5 million. Tangible net worth increased by $54.8 million
from November 30, 2020. This was primarily due to net profit of
$78.8 million and actuarial gains on defined benefit pension schemes
of $14.3 million, partially offset by declared dividends of $40.2 million.
The debt to tangible net worth ratio was 1.44 at November 30, 2021
from 1.53 at November 30, 2020. This is below the 2.25 threshold
included as a debt covenant in most of SNL’s debt agreements.
Off-Balance Sheet Arrangements
In addition to the obligations recorded on SNL’s consolidated balance
sheets, certain commitments that will result in future cash outlays
are not recorded on the Company’s consolidated balance sheets. In
addition to long-term debt interest payments, these off-balance sheet
arrangements consist of immaterial or short-term leases, committed
capital expenditures and the retained and contingent interests
discussed in the Significant Contractual Obligations table below.
Leases
In accordance with IFRS 16, all leases other than those that are immaterial
or less than one year are capitalised. Future commitments for short-
term or immaterial leases were $3.2 million at November 30, 2021,
compared with $4.0 million at November 30, 2020.
58 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
58
Significant Contractual Obligations
SNL has various contractual obligations, some of which are required to be recorded as liabilities in the Consolidated Financial Statements.
SNL’s operating leases, committed capital expenditures, long-term debt and lease liability interest payments and other executory contracts
are not required to be recognised as liabilities on the Company’s consolidated balance sheets. As of November 30, 2021, SNL’s other purchase
obligations were not material. The following summarises SNL’s significant contractual obligations as of November 30, 2021, including those
reported on the Company’s consolidated balance sheet and others that are not:
(in thousands) Total
Less
than 1 yr
1-3 yrs. 4-5 yrs.
More than
5 yrs.
Contractual cash obligations:
Short-term bank loans $ 40,000 $ 40,000 $ – $ – $ –
Long-term debt
1
2,209,803 497,384 733,980 551,125 427,314
Lease principal payments 210,450 43,473 72,499 25, 831 68,647
Lease interest payments 97,855 9,257 12,522 7,725 68,351
Operating leases 3,217 1,916 1,014 287 –
Committed capital expenditures 75,687 65,933 9,754 – –
Long-term fixed rate debt interest payments 248,966 76,987 102,975 43,424 25,580
Long-term variable rate debt interest payments
2
59,011 12,292 20,469 14,517 11,733
Derivative financial liabilities
2
15,031 7,626 4,851 2,162 392
Pension and post-retirement benefit obligations
3
3,871 3,871 – – –
T
Total contractual cash obligations:
$ 2,963,891 $ 758,739 $ 958,064 $ 645,071 $ 602,017
1. Excludes debt-issuance cost.
2. Long-term variable rate debt interest payments and derivative financial liabilities are based on the rates in effect at November 30, 2021. Derivative financial liabilities are based
on undiscounted cash flows.
3. Pension and post-retirement benefits contributions – SNL includes these amounts based on current estimates of contributions to the pension plans that may be required.
The Company has not disclosed possible payments beyond the next 12 months owing to the significant difficulty in forecasting these amounts with any accuracy.
Financial Risk Management
SNL is exposed to a variety of financial risks, including market risk,
credit risk and liquidity risk. The Company’s overall risk management
programme focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on SNL’s financial performance. This
is covered in more detail in the annual financial statements.
Critical Accounting Estimates
In the preparation of SNL’s Financial Statements, there are a number
of areas where assumptions have been made about the future,
management judgements and estimates. Such areas could experience
significantly different outcomes should these assumptions, judgements
and estimates differ from actual results. The key areas where
estimates and judgements make significant differences are:
• Voyage revenue and costs
• Depreciation and residual values
• Review of impairment triggers
• Impairment of Australia Terminals’ assets
• Investments in joint ventures and associates
• Insurance claims receivable and provisions
• Pension and other post-retirement benefits
• Right-of-use assets and lease liabilities
To obtain a better understanding of SNL’s detailed accounting policies
in these areas, please see Note 2 to the Financial Statements.
2021
$ 2,185,644
(490,502)
$ 1,695,142
2021
$ 63,899
181,950
(312,827)
(43,432)
(110,410)
63,591
38,255
5,901
(2,663)
2,314,889
$ 2,312,226
59Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Financial Review (continued)
Principal Risks
Each business segment considers strategic, operational and financial
risks and identifies actions to mitigate those risks. These risk profiles
are updated at least annually. The principal risks and uncertainties for
the next financial year are discussed below.
Bunker fuel and freight costs
Bunker fuel constitutes one of the major operating costs of the tanker
fleet and price changes can have a material impact on SNL’s results.
Although efforts are made to reduce the impact of price changes
by passing bunker fuel costs through to customers or through
the Company’s bunker hedging programme, a significant portion is
incurred solely by the Company. Approximately 66% of Stolt Tankers’
STJS revenue in 2021 was derived from COA. Approximately 91%
of these COA had provisions to pass through fluctuations in fuel
prices to customers. As a result the expected cover from COA equals
approximately 61% of the total deep-sea bunker price exposure.
The profitability of the remaining Stolt Tankers’ STJS revenue earned
under COA and all spot revenue was directly impacted by changes in
fuel prices, subject to the Company’s hedging programme. In addition,
the bunker surcharge clauses can result in the Company providing
customers with rebates in periods of lower bunker prices. SNL’s policy
is to hedge a minimum of 50% of expected bunker purchases within
the next 12 months, through either bunker surcharges clauses
included in COA or through financial instruments.
In December 2020, this programme yielded $0.1 million in
unrealised and realised losses (offset by bunker price decreases
since the start of the hedge programme). The hedge programme
ended in December 2020.
On January 1, 2020, the International Maritime Organization (IMO)
implemented a new regulation to reduce the amount of sulphur oxide.
Ships are now required to use marine fuels with a sulphur content of
no more than 0.50% against the previous limit of 3.50%.
Stolt Tankers is taking a multifaceted approach to low-sulphur fuel.
Certain of the deep-sea newbuildings delivered in the past two years
(including to joint ventures) have been fitted with wet hybrid scrubbers
in order to reduce sulphur emission. The rest of the Stolt Tankers
fleet has switched to Marine Gas Oil or alternative fuels, depending
on availability, usability and cost efficiency.
The vast majority of the COA now include adapted bunker surcharge
clauses to cover the higher fuel prices.
For Stolt Tank Containers, the impact of increased freight costs
due to tight capacity on container ships in select markets, additional
surcharges, and fluctuations in fuel prices can result in downward
pressure on margins. Cost increases are passed on to customers
when possible. Given quoted rate validity periods to customers, there
is a negative impact on margins in periods of rising freight costs until
rates can be increased.
Tanker and tank container industry risk
The tanker industry is cyclical and volatile, which may lead to
reductions and/or volatility in freight rates, volumes and ship values.
Fluctuations in the rates that Stolt Tankers can charge result from
changes in the supply and demand for ship capacity and changes in
the supply and demand for the products carried, particularly the bulk
liquids, chemicals, edible oils, acids and other specialty liquids that are
the majority of the products that the Company transports. Factors
influencing demand include supply for products shipped, economic
growth, environmental development and the distances that products
are moved by sea. Factors influencing supply include the number
of new ships and recycling of old ships, changes in regulations,
the strength of the clean petroleum products tanker markets and
availability of capacity at shipyards.
Stolt Tankers mitigates these risks by actively managing the mix of
business between COA and spot and utilises various tools to increase
fleet flexibility and decrease risk. Contract business tends to be
less volatile in terms of both rates and volumes than spot business.
Management endeavours to increase the contract percentage and
lengthen contract duration during periods of uncertainty or when
management determines that market conditions are likely to
deteriorate. In general, Stolt Tankers maintains a relatively high
percentage of contract business. Stolt Tankers also actively manages
its charter periods to allow a certain number of ships to be redelivered
on short notice. Within the owned fleet, Stolt Tankers endeavours to
maintain a balanced age profile. Through this technique, fleet size can
be managed by early retirement of older ships when demand is soft
and life extension of ships during periods of higher demand.
The tank container industry is also cyclical and volatile, which may
lead to reductions and/or volatility in freight rates and shipment
volumes. Fluctuations in the rates that Stolt Tank Containers can
charge its customers result from new competition attempting to
aggressively grow market share combined with an over-supply of
tank containers in the market. Stolt Tank Containers mitigates this
risk by actively managing customer relationships and pricing as well
as maintaining a balance of owned and leased tanks. Fleet size can
easily be managed by the on-hire and off-hire of leased tanks.
Climate change risk
SNL may incur substantial costs as a result of changes in weather
patterns due to climate change. Increases in the frequency, severity
or duration of severe weather events such as hurricanes, typhoons
or other severe weather events could result in asset loss, injuries, lost
earnings, difficulty in obtaining insurance and higher costs. Changes
in sea water temperature can adversely impact growth rates of fish,
harm the fish and lead to losses of fish. To counteract future climate
changes, there have been increasingly stringent regulations, such
as the requirement to use low sulphur fuels, and violations can
lead to significant fines and penalties. Future regulations could
result in making SNL assets prematurely obsolete or require costly
investments. We are also monitoring new regulations, such as the
EU Emissions Trading System, which starting in 2023 will require
the purchase of carbon-offset credits. This will drive an increase in
the Company’s operating expenses and could impact the profitability
and cash flow of the Group unless offset by higher revenue. In order
to mitigate the cost increase, SNL is including wording in its COAs
that would allow cancellation of the contracts if no amicable solution
is found for the recovery of the added cost. In addition, SNL continues
in its efforts to reduce bunker consumption and thereby reduce the
cost of the EU Emissions Trading System regulation.
60 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
60
SNL’s assets and procedures are designed to avoid contaminations,
spills, leaks, fires and explosions, with safety equipment installed to
minimise the impact of such incidents. SNL employees regularly
review and test emergency response plans through safety drills,
partnering with local incident response services and regulatory
agencies. Drills involve the safe evacuation of our workforce,
visitors and all other parties from our ships, terminals, depots,
farms and offices. SNL is also using its expertise and strong industry
relationships to investigate and explore new technologies to enable
the move towards a low-carbon future.
Newbuilding risk
SNL spends substantial sums during the construction of parcel tanker
newbuildings without earning revenue and without assurance that
ships will be completed on time or at all. Avenir LNG has commitments in
respect of these newbuildings, of which $34.9 million is with recourse
to SNL.
The risks with respect to newbuildings arise because SNL is typically
required to pay substantial amounts as progress payments during
construction of a newbuilding, but does not derive any revenue from
the ship until after its delivery. SNL’s receipt of newbuildings could be
delayed temporarily or indefinitely because of:
• Quality or engineering problems
• Work stoppages or other labour disturbances at the shipyard
• Bankruptcy or other financial crisis of the shipbuilder
• A backlog of orders at the shipyard
• SNL requests for changes to the original ship specifications
• Shortages of, or delays in, the receipt of necessary equipment or
construction materials, such as steel
If the delivery of a ship is materially delayed, this could adversely affect
the business and its results of operations, cash flow and financial
condition. SNL manages these risks by agreeing to industry standard
provisions dealing with compensation for delays and rights to terminate
the newbuilding contract. Any progress or down payments made by
the Company under the newbuilding contracts are secured by refund
guarantees issued by commercial banks or government institutions
to cover the repayment obligation by the shipyards in case of a
yard default.
Political and geopolitical risk
SNL has international operations, and its business, financial condition
and results of operations may be adversely affected by changing
economic, political and government conditions in the countries and
regions where SNL’s ships and tank containers are employed, and
terminals are located.
SNL is also exposed to geopolitical risks where territorial and other
disputes between countries could lead to the outbreak of war or the
existence of international hostilities that could damage the world
economy, adversely affect the availability of, and demand for,
petroleum and chemical products and adversely affect SNL’s ability
to operate ships, terminals or tank containers. Moreover, SNL operates
in a sector of the economy that is likely to be adversely affected by
the impact of political instability, terrorist or other attacks and war
or international hostilities, for example, the recent invasion of Ukraine
by Russia.
For an effective and competitive global chemical shipping business,
managing geopolitical risk is a strategic imperative. Cross-border
expansion to facilitate corporate growth is a significant contributor to
growth. In some cases, cargoes are located in or destined for troubled
or developing markets where considerable cultural, infrastructure,
security or technology challenges must be met. At the same time,
economic and population growth, especially in Asia, is creating new
demand for petroleum and chemical products. Sufficient supply must
be in place with supporting infrastructure and distribution to meet
demand in these high growth markets.
Project development risks
Stolthaven Terminals is working on various projects at its wholly
owned and joint venture terminals. The development of terminal
operations and jetties involves significant upfront investment in
infrastructure and there are risks inherent in such developments,
including political, regulatory, currency exchange, liquidity, financial,
contractual and structural risks. The occurrence of one or more of
these risk factors could delay the project and result in increased
project costs. Different countries carry varying degrees of risk
depending on social, cultural, political and financial development and
stability. Efforts are made to mitigate these risks by employing local
country and regional representatives to act as liaisons with local
authorities and to devise appropriate mitigating actions.
Stolt Sea Farm biological asset inventory price risk
All mature turbot and sole are held at fair value less costs of sale
and costs related to harvest. A fair-value adjustment is also made
at the point when previously juvenile turbot and sole are considered
to become mature, which typically occurs when the fish reach a
specified weight. Fair value is determined on the basis of market
prices, and gains and losses from changes in fair value are recognised
in the income statement.
The fair value of these assets fluctuates significantly based upon
the season, competition, market conditions and existing supply. The
fair-value adjustment recognised in the current year was a gain of
$17.4 million in operating profit, compared with a $5.0 million loss in
2020. Fair value adjustments have a direct impact on SNL’s income
statement and there is a risk that the fair value adjustment recognised
in a year could negatively impact SNL’s income statement.
Currency risk
Most of the revenue earned by Stolt Tankers and Stolt Tank
Containers is denominated in US dollars, whilst a significant portion
of the divisions’ operating expenses is incurred in other currencies,
primarily the euro, the Norwegian kroner, the Singapore dollar,
Japanese yen, Philippines peso and the British pound. When there is a
mismatch between revenue and expense currencies, any depreciation
of the revenue currency relative to the expense currency will decrease
profit margins.
On average in 2021, the US dollar has weakened by approximately 5%
against the euro, causing a decrease in profit margins. SNL’s foreign
currency hedging policy is to hedge between 50% to 80% of the
Company’s expected foreign currency operating exposures over
the next 12 months.
61Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
Financial Review (continued)
Cyber risk
There is a risk that an external third party could gain unauthorised
access to SNL’s information technology systems for the purpose of
financial gain, industrial espionage, sabotage or terrorism.
SNL has virus, spam and malware protection, an isolated environment
for its business applications, firewalls and other network and data
centre protection and an identity management system. As with all
companies, these security measures are still vulnerable to third-party
security breaches, employee error, malfeasance, faulty password
management or other irregularities. For example, third parties may
attempt to fraudulently induce employees or customers to disclose
user names, passwords or other sensitive information, which may in
turn be used to access SNL’s information technology systems.
SNL devotes significant resources to network security, data encryption
and other security measures to protect its systems and data, but
these security measures cannot provide absolute security. To the
extent SNL might experience a breach of its systems and be unable
to protect sensitive data or physical assets, such a breach could
negatively impact SNL’s financial position.
Disease outbreaks and pandemic risks
SNL’s operations are global in nature and rely on a significant number
of operational staff and third-party suppliers to run smoothly. As has
been evidenced by the recent Covid-19 pandemic, disease outbreaks
can put significant restrictions on the movement of people and their
ability to get to their place of work as well as restrictions on the
operations of our assets. Although SNL’s ship operations have
continued mostly uninterrupted, there has been a delay in the
performance of shore-side support operations and delay in
transferring crew to and from the ships. Tank containers are
dependent on SNL container depots for cleaning and pre-load
preparations, and the depots are reliant on their employees being
able to come to work, and third-party truckers and rail lines being
able to transport the containers. Stolt Sea Farm’s sales suffered
as demand for turbot decreased drastically during lockdown since
a large percentage of its sales are to the hotel, restaurant and
catering sectors.
If the movement of people and transport operations are restricted,
this could limit SNL’s ability to meet commitments to customers and
could impact financial results. Likewise, any outbreak on-board our
ships or at one of our terminals could impact operations of individual
assets. The severity of the impact of such disruptions would depend
on the spread and duration of the disease. Furthermore, the reduction
in economic activity following Covid-19 will result in reduced movements
of goods, which could have a direct impact on the demand for SNL
services, and could result in reduced utilisation and lower revenue. To
the extent possible, business continuity plans have been updated and
implemented to mitigate any negative impact on the businesses from
a wide-spread and long-lasting disease of the coronavirus type.
Financing risk
The Group’s businesses are capital intensive and, to the extent the
Group does not generate sufficient cash from operations, the Group
may need to raise additional funds through public or private debt to
fund capital expenditures and to refinance maturing debt instruments.
Adequate sources of capital may not be available when needed or
may not be available at favourable terms. The Group’s ability to obtain
financing is dependent on various factors, such as financial market
conditions for unsecured debt and financial institutions’ appetite for
secured ship, tank container or terminal financing.
The Group has a diversified debt structure and has access to a wide
range of funding sources from banks, leasing companies and the
Nordic bond market. The Group also maintains significant availability
under its committed credit facilities, as well as cash on hand, to
mitigate the risk of short-term interruptions to the financial markets.
Treasury Shares
On October 6, 2021, the Group cancelled 5,610,000 Common Shares
and 1,402,500 Founder’s Shares. At November 30, 2021, SNL held
5,000,000 Treasury Shares. See Note 30 in the Financial Statements.
Going Concern
The annual Financial Statements have been prepared under the going
concern assumption.
Subsequent Events
See Note 34 in the Consolidated Financial Statements for significant
events occurring after November 30, 2021.
N
Niels G. Stolt-Nielsen
Chief Executive Officer
Stolt-Nielsen Limited
J
Jens F. Grüner-Hegge
Chief Financial Officer
Stolt-Nielsen Limited
March 14, 2022
62 Stolt-Nielsen Limited | Annual Report 2021
DIRECTORS’ REPORT
62
Opinion
In our opinion, Stolt-Nielsen Limited’s group financial statements (the “financial statements”):
• give a true and fair view of the state of the group’s affairs as at 30 November 2021 and of its profit and cash flows for the year
thenended;
• have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the
EuropeanUnion; and
• have been prepared in accordance with the requirements of the Companies Act 1981 (Bermuda).
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated Balance Sheet as at
30November 2021; the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Cash Flows and the Consolidated Statement of Changes in Shareholders’ Equity for the year then ended; and the notes
tothe financial statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report.
Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance
with these requirements.
Our audit approach
Overview
Materiality:
• Overall materiality: $21.8m (2020: $19.6m) based on 1% of revenue.
• Performance materiality: $16.4m (2020: $14.7m)
Audit Scope:
• Full scope audits of the Deep Sea Trading and Owning divisions of Stolt Tankers, and
StoltTank Containers, the largest trading divisions of the group.
• Full scope audits of Property Plant and Equipment at the Singapore and Houston terminals
within the Stolthaven Terminals division.
• Specified procedures over certain financial statement line items for Stolt Sea Farm Spain,
certain Stolt Tankers entities and the shared service centre in Manila.
• Audit of certain financial statement line items across the group, including Cash and cash
equivalents, Restricted cash, Investments in and advances to joint ventures and associates,
Long-term debt, Short-term bank loans, Derivative financial instruments, Insurance claim
receivables, Income tax expense, Income tax receivable, Income tax payable, Deferred tax
assets, Deferred tax liabilities, Right-of-use assets, lease liabilities, Administrative and general
expenses, and Employee benefit assets and liabilities.
• The reporting locations subject to audit procedures accounted for 75% of the group’s revenue
and 67% of the group’s total assets.
Key audit matters:
• Accounting for claims
• Voyage revenue recognition
Independent auditors’ report to the members
of Stolt-Nielsen Limited
Report on the audit of the
JURXSˋQDQFLDOVWDWHPHQWV
63Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Materiality
Audit scope
Key audit
matters
Independent auditors’ report to the members
of Stolt-Nielsen Limited (continued)
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Inparticular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all of ouraudits we also addressed
the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
ourprocedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and
regulations related to regulations implemented by the International Maritime Organisation (“IMO”) and the International Convention
forthe Prevention of Pollution from Ships (“MARPOL”), Bribery Act 2010 (“UK”) and international tax legislation, and we considered
theextent to which non-compliance might have a material effect on the financial statements. We also considered those laws
andregulations that have a direct impact on the financial statements such as the Companies Act 1981 (Bermuda). We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override
ofcontrols), and determined that the principal risks were related to the posting of inappropriate journal entries and the application
ofmanagement bias in accounting estimates or judgements. The group engagement team shared this risk assessment with the
component auditors so that they could include appropriate audit procedures in response to such risks in their work. Audit procedures
performed included:
• Inquiring of management, the head of operational audit and the Audit Committee as to known or suspected instances of
non-compliance with laws and regulations and fraud;
• Reviewing minutes of meetings of those charged with governance;
• Assessing matters reported on the group’s “Speak Up” system and the results of management’s investigation of such matters;
• Challenging assumptions and judgements made by management in connection with significant accounting estimates;
• Considering recent correspondence with legal advisors in respect of uncertain legal matters;
• Identifying and testing journal entries, in particular journal entries posted with unusual account combinations or those posted by
unexpected users; and
• Testing material consolidation adjustments.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance
with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of
not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, asfraud may involve
deliberate concealment by, for example, forgery or intentional misrepresentations or through collusion.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
Impairment of assets and the impact of the COVID-19 pandemic, which were key audit matters last year, are no longer included because
the group has demonstrated an ability to positively respond to the challenges of the pandemic during 2020 and 2021 and we have seen
a relatively low impact of the pandemic on business operations and performance, and in projections of future performance. Otherwise,
the key audit matters below are consistent with last year.
64 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Key audit matter How our audit addressed the key audit matter
Accounting for claims
Management make judgements about the
group’sexposure to legal claims, and the
amountsrecoverable under insurance, in
relationtoclaims associated with incidents
involving the MSC Flaminia, Stolt Groenland
andStolt Commitment. At 30 November 2021
therewas a provision of $165.5m in relation
tothese claims, and an associated insurance
reimbursement receivable of $162.9m,
recordedonthe balance sheet.
This is considered to be a key audit matter
becausethere is an inherent level of estimation
uncertainty in assessing the group’s exposure to
claims from third parties and the recoverability of
amounts from insurance providers. In particular
wehave focussed our audit effort on assessing
management’s exposure to claims with reference
toguidance received from legal counsel, and
assessing whether insurance claim receivables
meet the threshold of ‘virtually certain’ required
inorder for them to be recognised on the
balance sheet.
Refer also to notes 19 and 26 in the consolidated
financial statements.
We performed the following procedures:
• Obtained confirmations from the group’s insurance providers with respect to
thestatus of insurance claims under their policies. Where direct confirmations
were not obtained, we performed alternative procedures including a review
ofinsurance policies and inquiry of 3
rd
party providers, as well as assessing
payments made by the insurance providers to assess the recoverability of
amounts recorded.
• Obtained the views of both internal and external legal counsel to consider the
outcome of prior year litigation, including developments and settlements, and
the status of new claims.
• Evaluated the group’s accounting for insurance claims, amounts recoverable
under insurance and cash received to date. We also assessed management’s
estimate of future settlements of outstanding claims with reference
toclaimsreceived and representations from external legal counsel.
• Assessed the adequacy of the claims related disclosures in the
financialstatements.
Based on the procedures performed, we noted no material issues from our work.
Voyage revenue recognition
The Stolt Tankers division reported $1.2bn of
revenue in 2021 which is mostly recognised over
time using an estimated percentage of completion
for voyages in progress at the balance sheet date.
This is considered to be a key audit matter due
tothe complexity of the revenue recognition
policies for Stolt Tankers. We have assessed
thatthe revenue in this division carries a
higherriskof material error as its calculation
ismore judgemental in nature. In particular, we
focussedour audit effort on the calculation of
voyage revenue and costs, and estimates over
thepercentage of completion of voyages at
yearend, due to the inherent level of estimation
uncertainty in these areas.
Refer also to note 3 in the consolidated
financialstatements.
We performed the following procedures:
• Assessed the methodology for estimating and reviewing the amount
ofrevenuerecognised at the year end and compared this to the relevant
accounting guidance under IFRS 15, Revenue from contracts with customers.
• Tested key controls across the revenue cycle, including those over key systems
and automated calculations of revenue and voyage accruals.
• Obtained a sample of voyage contracts to understand the key terms relevant to
the recognition of revenue in the year.
• Compared the estimated percentage completion at the year end to the actual
percentages post year end, and also considered the accuracy of the opening
balance sheet position in a similar manner.
• Agreed a sample of revenue recorded throughout the year to cash receipts.
• Performed subsequent receipts testing for a sample of revenue transactions
recorded pre year end.
• Tested the run-off of the voyage accruals after year end.
• Tested post year end credit notes to assess the accuracy of the
yearendposition.
• Tested the voyage revenue cut off by agreeing a sample of revenue accruals
andrevenue items recorded pre-year end to supporting documentation.
• Tested a targeted sample of aged voyage accounting items on the balance
sheet to assess the recoverability of the associated assets and adequacy of
voyage accruals.
Based on the procedures performed, we noted no material issues from our work.
65Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statementsas
a whole, taking into account the structure of the group, the accounting processes and controls, and the industry inwhich it operates.
Stolt-Nielsen Limited has six divisions that operate globally: Stolt Tankers which operates chemical tankers for the transportation
ofbulk-liquid chemicals, oils, acids and clean petroleum products; Stolthaven Terminals which provides storage for bulk-liquid
chemicals, oils, acids and clean petroleum products; Stolt Tank Containers which provides transportation for bulk-liquid chemicals and
food-grade products; Stolt Sea Farm which operates farms producing premium fish species; Stolt-Nielsen Gas which focuses mainly on
the development of LNG supply chains; and Corporate and Other. The group has a number of subsidiaries, joint ventures and associates,
including those within the divisions mentioned and also operates a shared service centre in Manila. Our scoping considerations for the
group audit were based both on financial significance and risk.
Using audit teams based in Rotterdam, Houston and Manila, we have performed full scope audits of Stolt Tank Containers and of the
Deep Sea Trading and Owning divisions of Stolt Tankers, due to the financial significance of these components. In addition, specified
procedures over Stolt Tankers administrative and general expenses and Stolt-Nielsen Inland Tanker Service (“SNITS”) revenue were
performed alongside desktop review procedures for other fleets.
For Stolthaven Terminals, a full scope audit of Property, Plant and Equipment has been carried out at Stolthaven Houston and
Stolthaven Singapore.
For Stolt Sea Farm, specified procedures have been performed over certain material financial statement line items in Stolt Sea Farm
Spain by our local team in this territory.
Certain procedures have also been performed at a group level in London over additional items, including Cash and cash equivalents,
Restricted cash, Investments in and advances to joint ventures and associates, Long-term debt, Short-term bank loans, Derivative
financial instruments, Insurance claim receivables, Income tax expense, Income tax receivable, Income tax payable, Deferred tax
assets,Deferred tax liabilities, Right-of-use assets, lease liabilities, Administrative and general expenses, and Employee benefit assets
and liabilities, to gain coverage over these financial statement line items as a whole across the group. Procedures were performed
oncertain processes undertaken by the shared service centre in Manila to the extent that those processes contribute to the financial
information of the components as noted above. Work is also performed over centralised functions such as tax, treasury, legal and
pensions, as well as the consolidation, by the group team in London.
Where work was performed by teams outside of the UK, we determined the level of independent involvement needed at those local
operations to be able to conclude whether sufficient, appropriate audit evidence had been obtained as a basis for our opinion on
theconsolidated financial statements as a whole. We issued formal, written instructions to the teams outside the UK, setting out the
workto be performed by each of them and maintained regular communication throughout the audit cycle. These interactions included
participating in planning and clearance meetings with our teams in The Netherlands and The United States of America, holding regular
video conference calls, as well as reviewing working papers remotely and assessing matters reported.
In total the work performed accounted for 75% of consolidated group revenue and 67% of the group’s total assets. At the group level we
also carried out analytical and other procedures on the components not covered by the procedures described above.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These,together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of
ouraudit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
bothindividually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality $21.8m (2020: $19.6m).
How we determined it 1% of revenue.
Rationale for benchmark applied
Based on the benchmarks used in the annual report, we believe that revenue is the primary
measure generally used by the shareholders in assessing the performance of the group.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. Therange
of materiality allocated across components was between $1.5m to $10.25m.
Independent auditors’ report to the members
of Stolt-Nielsen Limited (continued)
66 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope ofouraudit and the
nature and extent of our testing of account balances, classes of transactions and disclosures, for example indetermining sample sizes.
Our performance materiality was 75% (2020: 75%) of overall materiality, amounting to $16.4m
(2020: $14.7m) for the group financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment
andaggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above $1.1m
(2020: $1.0m) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of
accounting included:
Review of management’s base case and severe but plausible downside scenario, ensuring the directors have considered all appropriate
factors. This included consideration of the future cash flows, the liquidity position of the group, available financing facilities, the timing
ofcontractual debt repayments and committed capital expenditure and the relevant liquidity requirements thatexist as part of the
contractual arrangements with current lenders.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group’s ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s ability
tocontinue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
reportthereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the
otherinformation and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report,
any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
ofthis other information, we are required to report that fact. We have nothing to report based on these responsibilities.
67Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Responsibility Statement set out on page 146, the directors are responsible for the preparation of
thefinancial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view.
Thedirectors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s ability to continue as a going concern,
disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors
eitherintend to liquidate the group or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
isahighlevel of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
orintheaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financialstatements.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
Wewill often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Section90
of the Companies Act 1981 (Bermuda) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Watford
March 14, 2022
a. The maintenance and integrity of the Stolt-Nielsen Limited website is the responsibility of the directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since
they were initially presented on the website.
b. Legislation in Bermuda governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Independent auditors’ report to the members
of Stolt-Nielsen Limited (continued)
68 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Consolidated Income Statement
For the years ended November 30,
(in thousands, except per share data) Notes 2021 2020
Operating Revenue 3, 4 $ 2,181,082 $ 1,955,136
Operating Expenses 5 (1,459,706 ) (1 ,308,904 )
Depreciation and amortisation 14, 15, 16 (295,459 ) (292 ,262 )
Impairment of assets 14, 16 (10,000 ) (12,394 )
Gross Profit 415,917 341,576
Share of profit of joint ventures and associates 17 39,470 32,437
Administrative and general expenses 5 (220,464 ) (187 ,679 )
Loss on disposal of assets, net 7 (3,010 ) (794 )
Reversal of impairment on joint venture loan – 3,557
Other operating income 2,218 1,640
Other operating expense (436 ) (810 )
Operating Profit 233,695 189,927
Non-Operating (Expense) Income
Finance expense on lease liabilities
8 (11,072 ) (9,478 )
Finance expense on debt 8 (116,212 ) (129 ,884 )
Finance income
8 2,375 3,695
Foreign currency exchange loss, net (2,673 ) (5,258 )
Other non-operating expense, net (2,902 ) (1,525 )
Profit from continuing operations before income tax 103,211 47,477
Income tax expense 9 (24,405 ) (8,321 )
Profit from continuing operations 78,806 39,156
Loss from discontinued operations
33 – (13,788 )
Net Profit $ 78,806 $ 25,368
Attributable to:
Equity holders of Stolt-Nielsen Limited 78,806 26,295
Non-controlling interests – (927 )
$ 78,806 $ 25,368
Earnings per share:
Profit from continuing operations attributable to equity holders of Stolt-Nielsen Limited
Basic 31 $ 1.47 $ 0. 65
Diluted 31 $ 1.47 $ 0.6 5
Net profit attributable to equity holders of Stolt-Nielsen Limited
Basic 31 $ 1.47 $ 0. 43
Diluted 31 $ 1.47 $ 0.4 3
Notes 1 to 34 are an integral part of these Consolidated Financial Statements.
69Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
For the years ended November 30,
(in thousands) Notes 2021 2020
Net profit $ 78,806 $ 25,368
Items that will not be reclassified subsequently to profit or loss:
Actuarial gain on pension schemes 25 15,542 10,841
Actuarial gain on pension scheme of joint venture 17 1,489 379
Deferred tax adjustment on defined benefit and other post-employment
benefit obligations 9 (2,709 ) (859 )
Items that may be reclassified subsequently to profit or loss:
Net income on cash flow hedges 4,587 7,986
Reclassification of cash flow hedges to income statement 15,085 (21,824 )
Net income (loss) on cash flow hedges held by joint ventures and associates 17 3,834 (3,877 )
Deferred tax adjustment on cash flow hedges 9 (689 ) 623
Exchange differences arising on translation of foreign operations (18,899 ) 23,407
Deferred tax on translation of foreign operations 9 119 545
Exchange differences arising on translation of joint ventures and associates 17 (11,354 ) 20,642
Change in value of investment in equity instruments 18 8,681 (9,133 )
Net profit recognised as other comprehensive income 15,686 28,73 0
Total comprehensive income $ 94,492 $ 54,098
Attributable to:
Equity holders of Stolt-Nielsen Limited $ 94,492 $ 55,025
Non-controlling interests – (927 )
$ 94,492 $ 54,098
Notes 1 to 34 are an integral part of these Consolidated Financial Statements.
70 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Consolidated Balance Sheet
As of November 30,
(in thousands) Notes 2021 2020
ASSETS
Current Assets:
Cash and cash equivalents 10 $ 123 ,868 $ 187,767
Restricted cash 10
Receivables, net 11 285,749 220,264
Insurance claim receivables 11 58,598 –
Inventories, net 12
Biological assets 13 50,344 30,129
Prepaid expenses 76,645 63,128
Derivative financial instruments 22 589 157
Income tax receivable 987 5,811
Other current assets 54,351 41,542
Total Current Assets 664,213 556,648
Property, plant and equipment 14
Right-o
f
-use assets 15 203,048 189,40 5
Investments in and advances to joint ventures and associates 17 611,906 585,984
Investment in equity instruments 18 37,873 26,305
Deferred tax assets 9 9,238 13,5 06
Intangible assets and goodwill 16 38,967 40,836
Employee benefit assets 25 25,370 17,867
Derivative financial instruments 22 6,868 9,242
Insurance claims receivables 19 162,887 191,706
Other non-current assets 19,702 13,306
Total Non-Current Assets 3,971,996 4,108,217
Total Assets $
$ 4,664,865
LIABILITIES AND SHAREHOLDERS’ EQUIT
Y
Current Liabilities:
Short-term bank loans 23 $ 40,000 $ –
Current maturities of long-term debt 24 490,502 255,805
Current lease liabilities 15 43,473 35,640
Accounts payable 20 114,607 92, 030
Accrued voyage expenses and unearned revenue 51,328 48,601
Dividend payable 30 26,8 29 13,448
Accrued expenses 197,904 165,301
Provisions 26 2,968 9,376
Income tax payable 12,534 8,844
Derivative financial instruments 22 10,239 61,814
Other current liabilities 37,543 30,992
Total Current Liabilities 1,027,927 721,851
Long-term debt 24 1,695 ,142 2,053 ,336
Long-term lease liabilities 15 166,977 157,875
Deferred tax liabilities 9 68,025 55,867
Employee benefit liabilities 25 31,720 39,365
Derivative financial instruments 22 7,938 21,044
Long-term provisions 26
Other non-current liabilities 1,425 3,932
Total Non-Current Liabilities 2,135,353 2,524,367
Total Liabilities 3,163,280 3,246,218
Shareholders’ Equity 30
Founder’s Shares 14 16
Common Shares 58,524 64,134
Paid-in surplus 195,466 314,454
Retained earnings 1,584,978 1,532,060
Other components of equity (255,002 )
(
)
Less – Treasury shares (111,051 )
(
)
Total Shareholders’ Equity 1,472,929 1,418,647
Total Liabilities and Shareholders’ Equity $ 4,636,209 $ 4,664,865
Notes 1 to 34 are an integral part of these Consolidated Financial Statements.
71Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Consolidated Statement of Changes in Shareholders’ Equity
(in thousands)
Common
Share
s
Founder’s
Share
s
Paid-in
surplus
Treasury
share
s
Retained
earnin
gs
Foreign
currency
(
a
)
Hedging
(
a
)
Fair value
(
a
)
Attributable to
equity holders
of SN
L
Non-
controlling
interest
s
Total
Balance, December 1, 201
9
$ 64,134 $ 16
$ 149,808 $ (71,005 ) $ 1,507,520
$ (177,217 ) $ (24,468 ) $ (73,050 ) $ 1,375,738 $ 927 $ 1,376,665
Comprehensive income (loss)
Net profit
(
loss
)
(
)
Other comprehensive income
(loss)
Translation adjustments, ne
t
Remeasurement of post-
employment benefit obligations,
net of ta
x
Fair value adjustment on
equity investments – – – – – – –
(
)
(
)
(
)
Net loss on cash flow hedges
and reclassifications to income
statement, net of taxes – – – – – –
(
)
(
)
(
)
Total other comprehensive
income
(
loss
)
(
)
(
)
Total comprehensive income
(loss) – –
Transactions with
Shareholders
Cash dividends paid –
$0.25 per Common Share
(
b
)
(
)
(
)
(
)
Cash dividends paid –
$0.005 per Founder’s Share
(
b
)
(
)
(
)
(
)
Forgiveness of subsidiary’s loan
by non
-
controlling interes
t
Transfer of treasury shares – – 16 4 , 6 4 6
(
)
Total transactions with
shareholders – –
(12,116 )
Balance, November 30, 2020 $ 64 , 1 34 $ 16 $ 314,454 $ (235,651 ) $ 1,532,060 $ (132,623 ) $ (41,560 ) $ (82,183 ) $ 1,418,647 $ – $ 1,418,647
Comprehensive income (loss)
Net profi
t
Other comprehensive income
(loss)
Translation adjustments, ne
t
(
)
(
)
(
)
Remeasurement of post-
employment benefit obligations,
net of ta
x
Fair value adjustment on
equity investments
Net gain on cash flow hedges
and reclassifications to income
statement, net of taxes
Total other comprehensive
income (loss)
(
)
Total comprehensive income
(loss)
Transactions with
shareholders
Cash dividends paid –
$0.75 per Common Share (c)
(
)
(
)
(
)
Cash dividends paid –
$0.005 per Founder’s Share
(
c
)
(
)
(
)
(
)
Cancellation of shares
(
)
(
)
(
)
Total transactions with
shareholders (5,610 ) (2 ) (118,98 8 ) 124,600 (40,210 ) – – – (40,210 ) – (40,210 )
Balance, November 30, 2021 $ 58,524 $
$ (111,051 ) $ 1,584,978 $ (162,757 ) $ (18,743 ) $ (73,502 ) $ 1,472,929
a. Other components of equity on the balance sheet of $255.0 million and $256.4 million at November 30, 2021 and 2020, respectively, are composed of foreign currency,
hedging and fair value.
b. The $13.4 million is the 2020 interim dividend for Common Shares and $0.1 million for Founder’s Shares.
c. The $40.1 million is the 2020 final and 2021 interim dividends for Common Shares and 0.1 million for Founder’s Shares.
Notes 1 to 34 are an integral part of these Consolidated Financial Statements.
72 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows
For the years ended November 30,
(in thousands) Notes 2021 2020
Cash generated from continuing operations 32 $ 448,416 $ 493,275
Interest paid (120,807 ) (130,465 )
Debt issuance costs (3,379 ) (3,220 )
Interest received 2,400 1,991
Income taxes paid (2,803 ) (5,212 )
Net cash generated from operating activities – Continuing operations 323,827 356,369
Net cash used for operating activities – Discontinued operations – (3 ,589 )
Cash flows from investing activities
Capital expenditures
14 (185,486 ) (140 ,748 )
Purchase of intangible assets 16 (4,688 ) (4,752 )
Investment in joint venture and associate 17 (21,173 ) (15,000 )
Proceeds from sales of assets 14 29,741 14,567
Repayment of advances to joint ventures and associates, net 17 4,570 4,907
Acquisition of shares of Golar LNG, Limited 18 (3,000 ) –
Other, net (565 ) (584 )
Net cash used in investing activities – Continuing operations (180,601 ) (141,610 )
Net cash provided by investing activities – Discontinued operations – 3,456
Cash flows from financing activities
Increase in short-term bank loans 23 40,000 –
Proceeds from issuance of long-term debt 24 141,950 288,530
Repayment of long-term debt 24 (312,827 ) (396 ,016 )
Principal payments on leases 15 (43,432 ) (39 ,754 )
Dividends paid 30 (26,829 ) (13,465 )
Net cash used in financing activities (201,138 ) (160,70 5 )
Net (decrease) increase in cash and cash equivalents (57,912 ) 53,921
Effect of exchange rate changes on cash and cash equivalents
(5,987 ) (2,305 )
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year $ 123,868 $ 187,767
Notes 1 to 34 are an integral part of these Consolidated Financial Statements.
73Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
1. General Information
and Stolt Tank Containers (“STC”), is engaged in the worldwide transportation, storage and distribution of bulk liquid chemicals, edible oils, acids,
processes and markets turbot and sole. Furthermore, the Group has investments in the gas industry through its 47.2% holding of Avenir LNG
Limited (“Avenir LNG”) and its 2.5% holding of Golar LNG Limited at November 30, 2021. Avenir LNG sources, ships, stores, distributes and
sells liquefied natural gas (“LNG”) to industries and communities that lack access to a natural gas grid. Golar LNG Limited is one of the
world’s largest independent owners and operators of marine-based LNG midstream infrastructure, and is active in liquefaction, transportation
and regasification.
The Company is a limited liability holding company incorporated in Bermuda on June 11, 2010. The Company is listed on the Oslo Stock
Exchange under the ticker symbol SNI and the registered address is Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda , with the
registration number EC 44330.
2. Summary of Significant Accounting Policies
Basis of preparation
The Consolidated Financial Statements of the Group have been prepared using accounting policies consistent with International Financial
Reporting Standards as adopted by the European Union (“IFRS”) and interpretations issued by the IFRS Interpretations Committee.
Accounting policies have been applied on a consistent basis with the prior year, except when new accounting policies have been adopted.
The Consolidated Financial Statements are prepared and published according to the provisions of Bermuda company law.
The presentation currency used in these Consolidated Financial Statements is the US dollar. The functional currency of the Company is the
US dollar.
Going concern
Notwithstanding the Group having net current liabilities of $363.7 million, management is of the opinion that the Group’s cash flows from
operations plus committed new financing will continue to provide the cash necessary to fully repay the USD bond of $175.0 million due
in September 2022 and balloon payments on two tank container financings of $138.2 million in May and November 2022 and satisfy
the Group’s working capital requirements and capital expenditures commitments, as well as make scheduled debt repayments, remain in
compliance with the Group’s financial covenants and satisfy the Group’s other financial commitments for the 12 months from the date of this
report. On February 16, 2022, management finalized a new $415.0 million senior secured credit facility secured by 19 of the Group’s chemical
tankers. This senior secured facility is replacing the current committed revolving credit facility maturing in October 2022 and $181.0 million of
floating-rate term loans, all secured by certain of the Group’s ships. In addition, on March 2, 2022, the Group closed on a $128.0 million fixed-rate
borrowing agreement using a group of tank containers as collateral. Cash will be drawn on this facility subsequent to the balloon payment in
May 2022 of one of the tank container financings.
The Covid-19 pandemic has resulted in significant disruptions in global economic activities, causing the operations of the Group, its customers,
suppliers and other stakeholders to be impacted. The Group has attempted to maintain normal operations within the guidelines of governmental
requirements and while keeping the safety of its employees in mind.
The Group has considered Covid-19’s impact on the Group’s liquidity in connection with the use of a going concern basis of presentation in the
preparation of the Consolidated Financial Statements. While the scale and duration, as well as the impact, of Covid-19 remain uncertain, having
considered various downside scenarios, management is of the opinion that the Company’s cash flows from operations, projected financing
and available credit facilities will continue to provide the cash necessary to satisfy the Company’s working capital requirements, scheduled debt
repayments and committed capital expenditures for the next 12 months. Therefore, the Group continues to adopt the going concern basis in
preparing the Consolidated Financial Statements.
Basis of measurement
The Consolidated Financial Statements are prepared on the historical cost basis except for derivative financial instruments, financial instruments
measured at fair value through other comprehensive income, defined benefit plan assets and biological assets, all of which are stated at their
fair value.
74 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists where a parent entity is either exposed to, or has rights to, variable returns from
its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. A parent entity has power
over the subsidiary when it has existing rights to direct the relevant activities of the subsidiary. The relevant activities are those that significantly
affect the subsidiary’s returns. The ability to approve the operating and capital budget of a subsidiary, and the ability to appoint key management
personnel, are decisions that demonstrate that the Group has existing rights to direct the relevant activities of a subsidiary. In assessing control,
potential voting rights that are currently exercisable or convertible are taken into account.
The Financial Statements of subsidiaries are included in the Consolidated Financial Statements from the date that control begins until the date
that control ceases. Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring the accounting policies used
in line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Foreign currency
(i) Foreign currency transactions
The individual Financial Statements of all Group companies are presented in the functional currency of the primary economic environment in
which the subsidiaries and equity method investees operate.
Transactions in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate prevailing at that date.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are not retranslated, while non-monetary
assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates prevailing at the
dates the fair values were determined.
Foreign exchange differences arising on translation are recognised in the income statement, except for those differences arising from hedging
and monetary balances with foreign operations where settlement is not planned and unlikely to occur, which are recorded in other
comprehensive income. Differences related to hedging of operating expenses are recorded in operating expenses.
(ii) Foreign operations
For the purpose of presenting Consolidated Financial Statements, the assets and liabilities of the Group’s foreign operations, including goodwill
and fair value adjustments arising on consolidation, are translated at foreign exchange rates prevailing at the balance sheet date. The revenues
and expenses of foreign operations are translated at an average rate for the period where this rate approximates the foreign exchange rates at
the dates of the transactions. The differences are recorded in other comprehensive income.
Other significant accounting policies
Accounting policies for individual balance sheet and income statement accounts are included in the respective footnotes.
New standards that are not yet effective
There are no standards that are not yet effective that are expected to have a material effect on the Group’s financial statements.
Accounting policies that became effective during the year
There are no new accounting policies that have become effective during the year that have had a material effect on the Group’s
financial statements.
Critical accounting judgements and key sources of estimation uncertainty
In connection with the preparation of the Consolidated Financial Statements, management has made assumptions and estimates about
future events, and applied judgements that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures.
The assumptions, estimates and judgements are based on historical experience, current trends and other factors that management believes to
be relevant at the time the Consolidated Financial Statements are prepared. Actual results may differ from these estimates. On a regular basis,
management reviews the accounting policies, assumptions, estimates and judgements to ensure that the Consolidated Financial Statements
are presented fairly and in accordance with IFRS and Bermuda company law, applied on a consistent basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the change affects both as per IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.
75Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical accounting estimates and judgements are those that have a significant risk of having a material impact on the Consolidated
Financial Statements. Management believes the following areas are the significant judgements and estimates used in the preparation of
the Consolidated Financial Statements:
Critical accounting judgement
or estimation
Sources of estimation uncertainty
Effect if actual results differ
from assumptions
Voyage revenue and costs
The Group generates a majority of its revenues
through its tanker segment from the transportation
of liquids by sea and inland waterways under
contracts of affreightment or through contracts
on the spot market. Tankers recognise the majority
of their operating revenue over time on a prorated
basis based on the time cargo is loaded to its
estimated dispatch. When calculating the voyage
revenue and costs, this recognition is first based
on ‘budgeted voyage legs’ that are reviewed
and updated annually. After the voyage legs have
begun, they are updated for actual results and the
latest updated estimates.
I
n applying the percentage of
completion method, the revenues and
expenses for voyages still in progress
at the end of the reporting period
are estimated and prorated over
the period of the service provided
for each active contract.
For each voyage leg, estimates are
made of revenues and related costs
based on available actual information,
current market parameters such
as fuel cost and customer contract
portfolios, and relevant historical data,
such as port costs.
Revenue and cost estimates are
updated continually throughout the
voyage to account for changes in
voyage patterns, to include the most
up-to-date data and to finalise
revenues and expenses.
The accrued voyage and prepaid voyage
expense accounts are used to adjust
revenues billed and vendor invoices
received to the appropriate amounts to
be recognised based on the percentage
of completion method of accounting.
Management does not believe there would
be a material change if the percentage
of completion method was based on
full voyages or other criteria. However,
if actual results are not consistent with
estimates or assumptions, revenues or
costs may be over or understated.
At November 30, 2021 and 2020,
the accrued voyage expense account
was $51.3 million and $48.6 million,
respectively, of which $29.1 million and
$26.8 million related to contract liabilities
for unearned revenues.
Prepaid expenses included $11.9 million
and $13.7 million of prepaid invoices for
voyages in progress applicable to periods
subsequent to November 30, 2021 and
2020, respectively.
76 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical accounting judgement or estimation Sources of estimation uncertainty
Effect if actual results differ
from assumptions
Depreciation and residual values
Ships, barges, tank containers and terminals
are depreciated on a straight-line basis over
their estimated useful lives, after reducing for
the estimated residual value.
Estimated useful lives are based on past
experience, expected future performance
and management’s estimate of the period over
which the asset will provide economic benefit.
For ships and barges, residual values are
estimated based on the steel price, the estimated
light displacement tonnage of the fleet and
current trends in the price of recycling of ships.
For the majority of the fleet, the steel price used
is the average steel price for the last three years.
For ships expected to be recycled in the next
three years, the steel price at the previous
year end date is used.
The evaluation of residual values and estimated
useful lives for tank containers is based on the
steel price of different grades of steel.
In the case of terminals, the lives of terminals can
range up to 40 years and the prices of steel and
construction costs can vary across different
terminals. If there is a material change in the
estimated life of the terminal or price of steel,
then the estimates are revised.
Both estimated useful lives and the residual
values are evaluated annually, and the effect of any
change is considered as a revision of accounting
estimates, and the effect is reflected in the future
depreciation charge.
In order to achieve component
accounting, the Group uses the
weighted average useful economic
life of the asset. In the case of ships, in
the past, estimated useful lives of the
components of the ships range from
an estimated 25 to 30 years. However,
actual lives of the components of
ships or barges may be different
depending on many factors such
as quality of maintenance and repair
and the type of product carried by
the ships or barges which may
result in a shorter or longer life.
Future useful lives could be reduced
based on customer preferences,
new technological advances,
governmental and industry regulations,
and the effects of climate change.
In the case of tank containers, the
estimated useful life ranges between
10 and 20 years, depending on the
supplier and the quality of steel used.
Residual values are difficult to
estimate given the long lives of ships,
barges and tank containers, the
uncertainty as to future economic
conditions and the price of steel,
which is considered as the main
determinant of the residual price.
If the estimated economic useful life
has to be reduced in future periods, an
impairment loss or additional depreciation
expense could result.
A decrease in the useful life of the ship,
barge, terminal or tank container or fall
in the residual value would have the effect
of increasing the annual depreciation
charge and potentially resulting in an
impairment loss.
If the residual value is overestimated,
this would reduce the annual depreciation
and overstate the value of the assets.
See Note 14 for further details.
77Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical accounting judgement or estimation Sources of estimation uncertainty
Effect if actual results differ
from assumptions
Review of impairment triggers
Under IAS 36, Impairment of Assets, external
and internal sources of information are to be
reviewed for potential triggers of asset impairment
for each Cash Generating Unit (“CGU”) in the
business segments.
External triggers include:
• Observable indications of declining value of the
CGU beyond normal use.
• Adverse changes in the CGU’s technological,
market, economic or legal environment.
• Increase in market interest rates which would
affect the discount rate used in calculating the
asset’s value in use.
• Carrying value of the net assets of the entity was
more than its market capitalisation.
Internal triggers include:
• Evidence of obsolescence or physical damage
of the CGU’s assets.
• Significant adverse changes which have
changed or will change how the CGU’s
assets are used.
• Indications, through review of internal reports,
that the economic performance of a CGU’s
assets are or will be worse than expected.
• Other specific risks within each CGU.
At November 30, 2021, the book equity of
the Group was more than its market capitalisation.
However, the market capitalisation has increased
from the prior year. No unrecorded impairment was
noted in the prior year, the discount rate expected
to be applied for future cash flows has decreased,
there was no change in the CGU assessment,
and, except in one case, the expected cash flows
had not deteriorated materially nor had any other
external or internal trigger been noted. Therefore,
no further testing was required for any of the CGUs
other than the Australia terminals CGU, which is
discussed below.
There is significant judgement
required to determine whether
an external or internal trigger has
been met.
Uncertainties related to impairment
triggers include:
• Effect of future technological
advances on the value of
our assets.
• Determination of the future effects
of climate change on asset values.
• Effect of current and expected
future changes to the political
environments in which the
CGUs operate.
• Changes in rules and regulations
(for example, taxes on carbon usage).
• Effect of market capitalisation,
which has increased from the prior
year but which is still less than the
net assets of the entity.
• Evaluation of factors related to the
discount rate.
If the judgement applied in determining
whether there was an impairment trigger
was incorrect or the fact pattern on which
it was based changes, this could result
in an impairment test being required and,
possibly, an impairment being reflected in
the Consolidated Financial Statements.
78 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical accounting judgement or estimation Sources of estimation uncertainty
Effect if actual results differ
from assumptions
Impairment of Australia terminals’ assets
The Australia CGU with a net book value of assets
of $136.9 million has had a deterioration of results
over the past several years and had a further
reduction of its expected future results from the
prior year projections.
The recoverable amount for the Australia terminals
business was determined based on the Value in
Use (“VIU”). The recoverable amount was based on
a discounted cash flow basis using board approved
projections in the five-year plan carried over
into perpetuity using growth rates of 2.4% and
a risk-adjusted weighted average cost of capital.
As a result of the impairment review, the plant,
property and equipment was impaired by
$10.0 million.
Calculating the net present value
of the future cash flows requires
assumptions to be made in respect
of highly uncertain matters. Based
on management judgement and
past experience, the following
key assumptions were used in
the projections:
• Future escalation of price and
cost increases based on
expected contracts.
• Customer rates on existi
ng
a
nd future contracts and the
spot market.
• Future capital expenditures.
• Expected utilisation rates and
throughput volumes.
• Determination of the future effects
of climate change on asset values.
• Pre-tax discount rate of 6.9% based
on the weighted average cost of
capital, specific for Australia.
• An average growth rate for
revenues and costs in perpetuity
of 2.4%.
If the judgement applied in determining the
recoverable amount of the terminal assets
is incorrect or the fact pattern on which
it is based changes, this could result in a
different impairment being reflected in the
Consolidated Financial Statements.
For example, an increase of 1.0% in the
discount rate would result in a further
impairment of $26.6 million.
79Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical accounting judgement Sources of estimation uncertainty
Effect if actual results differ
from assumptions
Investments in joint ventures and associates
The Consolidated Financial Statements include the
Group’s results and all other entities in which the
Group has control, except where control over
the operations is limited by significant participating
interests held by another investor. The Group has
$611.9 million in investment and advances in joint
ventures and associates.
Determination of whether an entity is an investment
in a joint venture or associate is based on certain
relevant activities such as the ability to approve the
operating and capital budgets of an entity and the
ability to appoint key management personnel.
There are a number of areas where
significant judgement is exercised
to establish whether an entity needs
to be consolidated or reported under
the equity method of accounting.
To establish whether an entity is a
consolidated subsidiary, a joint venture
or an associate, key areas of
judgement include:
• Qualitative analysis of an entity
including review of, among other
factors, its capital structure,
contractual terms, key decisions
requiring unanimous approval,
related party relationships and the
design of the entity.
• Rights of partners regarding
significant business decisions,
including disposals and acquisitions
of assets.
• Board and management
representation and ability to appoint
key management personnel.
• Potential voting rights.
• Ability to make financing decisions.
• Approval of operating and capital
budgets and contractual rights of
other shareholders.
The exercise of judgement in these
areas determines whether a particular
entity is consolidated as a subsidiary
or accounted for under the equity
method throughout the lease term.
If the judgement applied in determining
the accounting treatment of an entity is
incorrect or the fact pattern on which it
is based changes, such entities may need
to be consolidated or accounted for as
an investment at cost. For example, it is
possible that an investment is accounted
for as a joint venture or associate using
the equity method despite having an
ownership interest exceeding 50%, where
the investor does not exercise direct or
indirect control over the investee. To the
extent that the Group is deemed to control
these entities, the entities would have to be
consolidated. This would affect the balance
sheet, income statement, statement of
cash flows and debt covenants.
See Note 17 for further details.
80 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical accounting judgement or estimation Sources of estimation uncertainty
Effect if actual results differ
from assumptions
Insurance claims receivable and Provisions
The Group is exposed to substantial risks that
are inherent in the industries the Company’s
businesses operate in and which may result
in third-party claims and increased expenses.
These may include marine disasters, such as
collisions and other problems involving the
Group’s ships, as well as injuries, death, third-
party property damage, explosions and other
similar circumstances or events.
For reported claims and incidents, the Group has
established provisions for expected future losses
and legal expenses on third-party claims. At
November 30, 2021, Short-term and Long-term
provisions for claims were $165.5 million.
The Group has obtained customary levels of
insurance for liabilities arising from operations,
including loss of or damage to third-party
property and death or injury to employees
or third parties.
A receivable is recorded for the claims where
it is virtually certain that the Group will receive
reimbursement. At November 30, 2021, the long-
term Insurance claims receivable for third-party
claims was $162.9 million.
The provisions for claims is based on the
following key judgements and estimations:
• Historical trends and patterns of
loss payments.
• Replacement costs and inflation.
• Results of litigation.
• Economic location and public attitudes.
• Relevant law and interpretation of case law.
• Applicable insurance company estimates.
When determining whether or not the
Group will, with virtual certainty, be
reimbursed for claims, the following
information will be considered:
• Obligation of the insurance company or
underwriter under the insurance policy.
• Historical payout of applicable insurance
company on the current and any similar
prior claim.
• Public or regulatory rating of underwriter
or insurance companies.
• On multi-layered (primary and excess)
policies, payments by the previous layer.
Amounts ultimately paid for losses and
legal costs can vary significantly from
the level of reserves originally set. If
the judgement applied is incorrect or
changes over time, this could result
in future losses in the Consolidated
Financial Statements.
See Notes 19 and 26 for further details.
Pensions and other post-retirement benefits
The Group sponsors defined benefit pension plans
and a supplemental executive retirement plan
covering eligible employees. At November 30, 2021,
the Employee benefit asset was $25.4 million and
Employee benefit liability was $31.7 million. Net
periodic pension costs and accumulated benefit
obligations are determined in accordance with
IAS 19R, Employee Benefits, using a number
of estimates including the discount rate to
apply to future benefit payments, the rate
of compensation increases, retirement ages and
mortality rates. These estimates have a significant
impact on the amounts reported. The Group’s
pension cost consists of service costs and
interest costs.
Management considers a number
of factors in developing the pension
assumptions, including an evaluation
of relevant discount rates, expected
return on assets, mortality, expected
changes in wages and retirement
benefits, analyses of current market
conditions and input from actuaries
and other consultants.
A 0.25% increase in the discount rate
assumption for the defined benefit
obligation would result in a decrease
of $7.7 million, and a 0.25% decrease
in discount rate assumption would
result in an increase of $8.0 million in
the defined benefit obligation.
The effect of a 1% change in the
assumed healthcare cost trends on the
accumulated post-retirement benefit
obligation at the end of 2021 would
have a negligible impact, owing to steps
taken on the US Retirement Healthcare
Plan to mitigate the risk.
If more than one of these assumptions
were changed simultaneously,
the cumulative impact would not
necessarily be the same as if only one
assumption were changed in isolation.
See Note 25 for further details and
further scenarios.
81Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical accounting judgement or estimation Sources of estimation uncertainty
Effect if actual results differ
from assumptions
Right-of-use assets and Lease liabilities
Key judgements in adopting IFRS 16, Leases
(“IFRS 16”) include whether to include extension
options on leases, the discount rate to use to
calculate the initial right-of-use asset and lease
liability and determining the portion of lease
payments representing non-lease services.
In determining the lease term,
management considers all facts
and circumstances that create
an economic incentive to exercise
an extension option. Extension
options are only included in the lease
term if the lease is reasonably certain
to be extended and does not require
the lessor to agree on new terms.
The discount rate used to calculate
the lease liability is the rate implicit
in the lease, if it can be readily
determined, or the lessee’s
incremental borrowing rate if not.
As the rate implicit in the lease
is not known, management uses
the Group’s incremental borrowing
rate for all leases. The incremental
borrowing rate is determined based
on a series of inputs including: the
risk free rate based on government
bond rates; a country-specific risk
adjustment; a credit risk adjustment;
and an entity-specific adjustment
where the entity risk profile is different
to that of the Group.
For time charters of a ship, the
time charter payment must be split
between the lease of a specific ship
and the cost for crew, maintenance
and other operating expenses.
The Group has based the non-lease
component on the cost to perform the
same work for ships of similar classes
as the ship under contract.
If the discount rate were to decrease
by 1%, the right-of-use asset and lease
liability would increase by $11.0 million.
If the percent of the time charter
allocated to the service component
decreased by 1%, the right-of-use asset
and lease liability would have increased
by $0.6 million and operating expenses
would have decreased by approximately
$0.2 million in the year.
See Note 15 for further details.
82 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
3. Business and Geographic Segment Information
The Group has five reportable segments: Tankers, Terminals, Tank Containers, Stolt Sea Farm and Stolt-Nielsen Gas. The nature of these
segments is described in Note 1. Reportable segments are defined as components of an enterprise for which separate financial information is
available that is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and in assessing performance.
The Company’s Executive Management team has been identified as the chief operating decision makers as they direct the allocation of
resources to operating segments based on the net profit (loss) of each respective segment.
The “Corporate and Other” category includes Stolt Bitumen, corporate-related items and the results of other insignificant operations not
reportable under other segments.
The basis of measurement and accounting policies of the reportable segments are the same as those described in Note 2 and in the footnotes
that support the financial statements. Inter-segment sales and transfers are not significant and have been eliminated and not included in the
following table. Indirect costs and assets have been apportioned between the segments of the Group on the basis of corresponding direct costs
and assets.
The following tables show the summarised financial information, in US thousand dollars, for each reportable segment:
For the year ended and as of
November 30, 2021 Tankers Terminals
Tank
Containers
Stolt Sea
Farm
Stolt-
Nielsen Gas
Corporate
and Other
(a) Total
Operating revenue
$ 1,165,617 $ 243,592 $ 662,443 $ 108,568 $ – $ 862 $ 2,181,082
Depreciation, amortisation
and impairment (b) (175,364) (72,392 ) (43,667 ) (7,268 ) – (6,768 ) (305,459 )
Share of profit of joint ventures and
associates
9,066 29,885 467 – 52 – 39,470
Operating profit (loss) 68,817 62,259 81,597 24,440 2,096 (5,514 ) 233,695
Finance expense (c) (62,146 ) (38,617 ) (14,810 ) (3,299 ) (5,280
)
(3,132) (127,284 )
Finance income 231 325 529 – – 1,290 2,375
Profit (loss) from continuing operations
before income tax 7,350 24,167 63,803 20,027 (3,295 ) (8,841 ) 103,211
Income tax expense (1,518) (9,641 ) (5,778 ) (6,212 )
–
(1,256) (24,405 )
Net profit (loss) 5,832 14,526 58,025 13,815 (3,295 ) (10,097 ) 78,806
Balance Sheet
Capital expenditures (d) 122,933 42,566 13,511 6,878
–
3,519 189,407
Investments in and advances to
j
oint ventures and associates 233,184 273,913 25,312 – 79,497 – 611,906
Intangible assets and goodwill 7,276 531 18,016 265
–
12,879 38,967
Segment assets 2,247,553 1,308,142 590,411 143,800 113,690 232,613 4,636,209
a. Corporate and Other includes Stolt Bitumen.
b. Includes impairment losses of $10.0 million for Terminals.
c. Interest is allocated to the business segments based on the average interest rate of the Group times a percentage of each segment’s net asset base.
d. Capital expenditures include additions to property, plant and equipment, net of grant receipts, drydocking, ship deposits and intangible assets other than goodwill
.
Capi
tal expenditures do not include capitalised right-of-use assets.
83Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
For the year ended and as of
November 30, 2020
Tankers
Terminals
(a)
Tank
Containers
Stolt Sea
Farm
Stolt-
Nielsen Gas
Corporate
and Other
(b)
Tot
al
Operating revenue
$ 1,113,095 $ 238,527 $ 520,631 $ 79,747 $ – $ 3,136 $ 1,955,136
Depreciation, amortisation
and impairment (c) (179,222 ) (70,949 ) (39,064 ) (7,734 ) – (7,687 ) (304,656 )
Share of profit (loss) of joint
ventures and associates 10,851 26,054 (1,403 ) – (3,065 ) – 32,437
Operating profit (loss) 84,643 68,794 51,188 (8,350 ) (4,015 ) (2,333 ) 189,927
Finance expense (d) (71,246 ) (40,420 ) (15,411 ) (3,600 ) (5,225 ) (3,460 ) (139,362 )
Finance income 595 606 478 – – 2,016 3,695
Profit (loss) from continuing operations
before income tax
11,710 29,458 34,737 (13,230 ) (9,408 ) (5,790 ) 47,477
Income tax (expense) benefit (1,904 ) (6,510 ) 1,221 2,401 – (3,529 ) (8,321 )
Profit (loss) from continuing operations 9,806 22,948 35,958 (10,829 ) (9,408 ) (9,319 ) 39,156
Net profit (loss) 9,806 22,948 35,958 (24,617 ) (9,408 ) (9,319 ) 25,368
Balance Sheet
Capital expenditures (e) 61,906 56,364 7,485 1,914 – 4,452 132,121
Investments in and advances to
j
oint ventures and associates
224,090 276,669 25,906 – 59,319 – 585,984
Intangible assets and goodwill 6,505 743 17,225 347 – 16,016 40,836
Segment assets 2,288,717 1,347,752 534,389 123,508 80,536 289,963 4,664,865
a. Terminals operating profit includes $3.6 million reversal of impairment on a terminal joint venture loan.
b. Corporate and Other includes Stolt Bitumen.
c. Includes impairment losses of $12.4 million for Terminals.
d. Interest is allocated to the business segments based on the average interest rate of the Group times a percentage of each segment’s net asset base.
e. Capital expenditures include additions to property, plant and equipment, net of grant receipts, drydocking, ship deposits and intangible assets other than goodwill
.
Capi
tal expenditures do not include capitalised right-of-use assets.
The following table sets out operating revenue by country for the reportable segments. Tankers, Terminals and Tank Containers’ operating
revenue is allocated on the basis of the country in which the cargo is loaded. Tankers and Tank Containers operate in a significant number
of countries. Revenues from specific foreign countries which contribute significantly to total operating revenue are disclosed separately.
SSF operating revenue is allocated on the basis of the country in which the sale is generated.
84 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
For the years ended November 30,
(in thousands) 2021 2020
Operating Revenue:
Tankers:
US $ 412,654 $ 430,491
South America 27,385 30,961
The Netherlands 90,166 83,580
Belgium 62,086 62,241
Other Europe 70,043 81,362
South Korea 34,311 37,076
Malaysia 61,281 58,119
Indonesia 58,788 49,490
Other Asia 114,386 56,645
Saudi Arabia 64,912 85,418
Other Middle East 92,897 65,547
Africa 74,669 72,165
Other 2,039 –
$ 1,165,617 $ 1,113,095
Terminals:
US $ 138,357 $ 136,198
Singapore 37,107 34,337
Australia and New Zealand 15,529 16,298
Brazil 18,951 20,377
United Kingdom 20,579 18,50
4
The Netherlands 13,069 12,813
$ 243,592 $ 238,527
Tank Containers:
US $ 106,675 $ 109,661
South America 34,556 30,452
France 55,894 51,063
The Netherlands 40,703 34,839
Ital
y
18,916 17,022
German
y
21,859 17,241
Other Europe 33,135 23,255
Singapore 90,397 55,849
Japan 22,580 16,955
China 127,888 75,029
India 27,902 18,42
4
Other Asia 54,277 41,755
Middle East 17,427 14,422
Other 10,234 14,664
$ 662,443 $520,631
Stolt Sea Farm:
US $ 3,685 $ 2,156
Spain 51,994 37,516
France 9,968 7,891
Ital
y
20,318 15,567
German
y
4,371 4,271
Other Europe 17,822 11,989
Other 410 357
$ 108,568 $ 79,747
There were no customers of Tankers, Terminals, Tank Containers or SSF segments that accounted for more than 10% of the consolidated
operating revenue for the years ended November 30, 2021 and 2020.
85Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
The following table sets out the key elements of sources of revenue:
For the year ended November 30, 2021
(in thousands)
Tankers Terminals
Tank
Containers
Stolt Sea
Farm
Other Total
Revenue recognised over time:
Freight revenue $ 1,014,550 $ – $ 519,786 $ – $ – $ 1,534,336
Storage and throughput revenue – 162,446 – – – 162,446
1,014,550 162,446 519,786 – – 1,696,782
Revenue recognised at a point in time:
Demurrage and ancillary revenue 151,067 – 142,657 – – 293,724
Turbot and sole – – – 108,568 – 108,568
Railcar revenue – 19,583 – – – 19,583
Utility revenue – 24,578 – – – 24,578
Dock, product handling and other revenue – 36,985 – – 862 37,847
151,067 81,146 142,657 108,568 862 484,300
$ 1,165,617 $ 243,592 $ 662,443 $ 108,568 $ 862 $ 2,181,082
For the year ended November 30, 2020
(in thousands)
Tankers Terminals
Tank
Containers
Stolt Sea
Farm
Other Total
Revenue recognised over time:
Freight revenue $ 1,009,253 $ – $ 397,229 $ – $ – $ 1,406,482
Storage and throughput revenue – 161,384 – – – 161,384
1,009,253 161,384 397,229 – – 1,567,866
Revenue recognised at a point in time:
Demurrage and ancillary revenue 103,842 – 123,402 – – 227,244
Turbot and sole – – – 79,747 – 79,747
Railcar revenue – 20,263 – – – 20,263
Utility revenue – 22,407 – – – 22,407
Dock, product handling and other revenue – 34,473 – – 3,136 37,609
103,842 77,143 123,402 79,747 3,136 387,270
$ 1,113,095 $ 238,527 $ 520,631 $ 79,747 $ 3,136 $ 1,955,136
The following table sets out non-current assets excluding long-term deferred income tax assets and long-term pension assets by country for
the reportable segments. Non-current assets include property, plant and equipment, right-of-use assets, intangible assets, investments in and
advances to joint ventures and associates, investment in equity instruments and certain other non-current assets.
Non-current assets by country are only reportable for the Terminals and Sea Farm operations. Stolt Tankers, Tank Container and Stolt-Nielsen
Gas operations operate on a worldwide basis and are not restricted to specific locations. Accordingly, it is not possible to allocate the assets of
these operations to specific countries. The total net book value of non-current assets for Tankers amounted to $1,896.4 million and $2,023.0 million
for the years ended November 30, 2021 and 2020, respectively. For Tank Containers, the total net book value of non-current assets amounted
to $421.0 million and $418.7 million, for the years ended November 30, 2021 and 2020, respectively. For Stolt-Nielsen Gas, the net book value of
non-current assets amounted to $111.0 million and $80.5 million, for the years ended November 30, 2021 and 2020, respectively.
86 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
As of November 30,
(in thousands) 2021 2020
Non-current Assets:
Terminals:
US $ 440,387 $ 439,330
The Netherlands 64,131 69,509
Singapore 216,994 232,821
Australia and New Zealand 137,470 148,321
United Kingdom 83,657 86,072
Brazil 34,793 35,375
South Korea 121,029 119,267
Belgium 105,372 110,781
China 39,689 37,531
Other 7,823 9,089
$ 1,251,345 $ 1,288,096
Stolt Sea Farm:
Spain $ 42,046 $ 43,166
Norway 1,053 1,197
Portugal 10,908 10,903
Iceland 12,244 12,614
France 1,539 1,969
$ 67,790 $69,849
The Group has no material revenues or non-current assets in Bermuda, its country of domicile.
4. Operating Revenue
Accounting policy
Operating revenue is recognised when performance obligations are met, which transfer the control of goods or provide services to the customer,
at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services, net of discounts
and sales taxes.
Costs to obtain a contract are immediately expensed when the related revenue is expected to be recognised within one year.
(i) Tankers
Revenue is recognised upon delivery of services in accordance with the terms and conditions of the contract of affreightment or spot contract and
such services are performed over time. For voyages in progress at the end of a period, the uncertainty and the dependence on estimates are greater
than for finalised voyages. The Group recognises a percentage of the estimated revenue for the voyage equal to the percentage of the estimated
duration of the voyage completed at the balance sheet date. Demurrage and other revenues are uncertain elements of revenue and are recognised
when incurred and generally invoiced at the end of the month.
The Group operates the Stolt Tankers Joint Service (the “Joint Service”), an arrangement in which the Group acts as the principal for the delivery
of services and provides the coordinated marketing, operation and administration of deep-sea intercontinental parcel tankers owned or chartered
by the Group. As the Group acts as the principal in the arrangement, all revenue relating to the Joint Service is recognised on a gross basis in the
income statement. Certain ships that are not owned by the Group are time chartered by the Group from participants in the Joint Service. The time
charter expense is calculated based upon the combined operating revenue of the ships which participate in the Joint Service less combined voyage
expenses, overhead costs, and commissions to outside brokers and upon each ship’s cargo capacity, its number of operating days during the
period, and its assigned earnings factor.
(ii) Terminals
Tank storage rentals, including minimum guaranteed throughputs, are recognised over the contractual period during which the services are
rendered. These charges are mostly due at the beginning of the month to which such charges relate. Revenues from additional throughput fees,
ancillary fees, and railcar storage, loading, switching and other fees based on actual usage are recognised at the point in time when those services
are delivered.
87Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
(iii) Tank Containers
Transportation revenue is recognised upon delivery of services in accordance with the agreement with customers and is recognised over time
using a measure of progress. For tank container movements in progress at the end of a period, the uncertainty and the dependence on estimates
are greater than for finalised movements. The Group recognises a percentage of the estimated revenue for the movement using the percentage
of effort (‘input method’) required at origin and destination. Demurrage and other revenues are uncertain elements of revenue and are recognised
when incurred and generally invoiced at the end of the month.
(iv) SSF
Revenues are recognised when performance obligations are satisfied by transferring control of a good or service to the customer. Where the
terms of sale are free on board, revenue is recognised on dispatch of products to the customer. Revenue is recognised on delivery where the terms
of sale include costs, insurance, freight and destination duty paid. The amount recorded as revenue includes all amounts recognised according
to the terms of sale, including shipping and handling costs billed to customers, and after deductions for claims or returns of goods, rebates and
allowances against the price of goods.
An analysis of the Group’s revenue for the year (excluding finance income – see Note 8), is as follows:
For the years ended November 30,
(in thousands) 2021 2020
Revenue from the rendering of services $ 2,072,514 $ 1,875,389
Revenue from the sale of goods 108,568 79,747
$ 2,181,082 $ 1,955,136
Revenue generated by Tankers under contracts of affreightment was approximately 62% and 71% of the tanker division’s total revenue for the
years ended November 30, 2021 and 2020, respectively. All other revenue generated is from spot contracts.
Payment terms generally do not have a financing element. Variable consideration is limited to that related to variable costs which are
contractually passed on to the customer and uncertain revenues such as demurrage.
5. Operating Expenses
Accounting policy
(i) Tankers
Tankers operating expenses include costs directly associated with the operation and maintenance of the parcel tankers and barges. These types
of costs include time charter costs, the service element of leases, bunker fuel costs, port costs, manning costs (for example, ship personnel and
benefits), sublet costs, repair and maintenance of tankers, commission expenses, barging and trans-shipment costs, canal transit costs, insurance
premiums and other ship owning expenses (for example, agency fees, provisions, ship supplies, cleaning, cargo survey costs and foreign exchange
hedging costs).
(ii) Terminals
Operating expenses of Terminals consist of costs directly associated with the operation and maintenance of the terminals. These types of costs
include labour and employee benefit costs, utilities, rail car hire expenses, real estate taxes for sites, maintenance and repair costs, regulatory
expenses, disposal costs, storage costs and other operating expenses (for example, insurance, survey costs, cleaning, line haul, rail costs and tank
car hire costs).
(iii) Tank Containers
Operating expenses of Tank Containers consist of costs directly associated with the operation and maintenance of the tank containers. These
types of costs include ocean and inland freight charges, short-term tank rental expenses, cleaning and survey costs, additional costs (services
purchased and charged through to customers), maintenance and repair costs, storage costs, insurance premiums and other operating expenses
(for example, depot expenses, agency fees and refurbishing costs).
(iv) SS
F
SSF op
erating expenses include production cost of goods sold (‘PCOGS’), which are costs incurred for the production of juvenile fish and
the subsequent growing of juvenile fish into adult fish ready for market. These PCOGS include costs to produce eggs for fertilisation, onsite
labour/personnel costs, feed costs, energy costs, contract grower fees, repair and maintenance costs, oxygen costs and veterinary fees.
Other costs included within operating expenses are costs of fish purchased from third parties, freight costs to customers, all primary and
secondary processing and packaging costs, distribution and handling costs, storage, import duties, inventory write downs, mortality losses
and fair value movements.
88 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Operating expenses comprised the following:
For the years ended November 30,
(in thousands) 2021 2020
Ocean and inland freight charges $ 285,579 $ 203,595
Bunker fuel costs 243,512 211,650
Operating employees’ benefit expenses 194,905 184,771
Charter and lease expenses 160,181 137,611
Port charges 143,072 143,678
Maintenance and repairs 61,928 61,684
Cleaning costs 44,291 38,062
Tank container ancillary billable costs 39,272 31,213
Purchase of biological assets 31,351 22,397
Repositioning of tank containers 28,756 23,683
Ship supplies and provisions 28,305 25,697
Storage and other tank container move-related costs 28,282 30,989
Facilities and utilities 25,879 24,398
Expenses related to biological assets 22,558 22,748
Commissions 22,416 27,225
Sublet expenses 20,796 12,172
Service element of leases 19,759 19,929
Insurance 30,036 31,941
Insurance capital distribution (12,500 ) –
Voyage costs 13,534 14,549
Barging and trans-shipments 10,544 4,993
Owning costs 9,999 6,532
Regulatory costs 5,536 4,373
Rail expenses 4,533 4,889
Biological assets market valuation adjustment (17,379 ) 4,985
Bunker hedge (gain) loss (Note 22) (100) 2,613
Other expenses 14,661 12,527
Total operating expenses $ 1,459,706 $ 1,308,904
An analysis of administrative and general expenses is as follows:
For the years ended November 30,
(in thousands) 2021 2020
Administrative and general employees’ benefit expenses $ 172,207 $ 148,669
Information systems 15,068 14,662
Professional fees 12,966 7,269
Office expenses 6,107 5,843
Legal fees 3,874 964
Management fee to joint venture 1,731 –
Travel and entertainment expenses 1,460 2,003
Investor relations and publicity 978 1,129
Communication expenses 929 1,202
Office lease expenses 856 1,766
Bank non-interest fees 1,441 1,505
Other 2,847 2,667
Total administrative and general expenses $ 220,464 $ 187,679
89Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
An analysis of employee benefit expenses included in operating expenses and administrative and general expenses is as follows:
For the years ended November 30,
(in thousands, except employee data) 2021 2020
Salaries $ 265,621 $ 254,183
Social security expenses 21,677 18,437
Pension expenses for defined contribution plans (Note 25) 19,476 17,765
Profit sharing and long-term incentive programmes 8,857 4,233
Travel of seafarers and relocation 14,446 11,673
Medical and life insurance 11,065 10,328
Training 4,768 4,187
Temporary and contract employees 11,192 9,104
Pension expenses for defined benefit plans and post-retirement benefit plan (Note 25) 2,284 (17 )
Expatriate expenses 1,453 1,497
Other benefits 6,273 2,050
Total employee benefit expenses $ 367,112 $ 333,440
Average number of employees:
Tankers* 4,635 4,605
Tank Containers 776 743
Terminals 579 581
Stolt Sea Farm 448 459
Other 73 66
Total average number of employees 6,511 6,454
* Including seafarers working on joint venture or third-party ships.
6. Auditors’ Remuneration
The analysis of auditors’ remuneration is as follows:
For the years ended November 30,
(in thousands) 2021 2020
Fees payable to the Group auditors and associates for the audit of the consolidated financial statements
and subsidiary statutory audits $ 2,773 $ 2,987
Fees payable to the Group auditors and associates for other services as detailed below 181 729
Total fees $ 2,954 $ 3,716
Assurance support $ – 527
Tax services 24 $ 62
Half-year reviews 100 100
Other 57 40
Total non-audit fees $ 181 $ 729
The audit and non-audit fees relate to PricewaterhouseCoopers LLP and its associate firms.
90 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
7. Loss on Disposal of Assets, net
Loss on disposal of assets, net, comprised the following:
For the years ended November 30,
(in thousands) 2021 2020
Loss on sale of ships $ (4,877) $ (993 )
(Loss) gain on sale of tank containers (2,063) 522
Gain on sale of land 3,217 –
Gain (loss) on sale of other assets 713 (323 )
$ (3,010 ) $ (794 )
During 2021, loss on sale of ships includes $13.0 million on the loss on the Stolt Groenland, net of insurance proceeds, partially offset by gains on
the recycling of Stolt Selje and Stolt Spruce and sale of Stolt Transporter.
During 2020, Tankers recorded a loss of $1.0 million on the sale of Stolt Razorbill and recycling of Stolt Vestland.
8. Finance Expenses and Income
Accounting policy
(i) Finance expenses
Finance expenses are recognised in the income statement as they accrue, using the effective interest method.
For finance leases, lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge
is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
(ii) Finance income
Finance income is recognised in the income statement as it accrues, using the effective interest method.
For the years ended November 30,
(in thousands) 2021 2020
Finance expense on debt
Interest on loans $ 93,351 $ 103,631
Amortisation of debt issuance costs 7,315 7,290
Realised loss on interest rate swaps (Note 22) 10,654 13,497
Commitment fees 4,299 3,436
Financial loss on early retirement of bonds – 2,700
Other interest expense 1,345 461
Total interest expense 116,964 131,015
Less interest capitalised to property, plant and equipment (752 ) (1,131 )
$ 116,212 $ 129,884
Finance expense on lease liabilities
Interest on lease liabilities $ 11,072 $ 9,478
Finance income
Interest from joint ventures $ 1,500 $ 2,460
Interest on bank deposits 731 736
Other 144 499
$ 2,375 $ 3,695
The average interest rates used to capitalise interest to property, plant and equipment were 5.1% and 5.4% for 2021 and 2020, respectively.
91Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
9. Income Tax
Accounting policy
Income tax represents the sum of current tax and deferred tax. Income tax is recognised in the income statement except to the extent that it
relates to items recognised directly in equity or other comprehensive income, in which case the tax treatment follows the accounting treatment
for the underlying item.
Current tax is the sum of tax payable in respect of the taxable profit for the current year and any adjustment to tax payable in respect of previous
years. Taxable income differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or
deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet date.
The Group operates in many territories with complex and varied tax systems. Management exercises judgement in relation to the level of provision
required in respect of uncertain tax positions. For positions not agreed with tax authorities where different interpretations of legislation could lead to
a range of outcomes, judgements are made for each position considering particular circumstances and advice obtained.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the corresponding amounts used in the calculation of taxable income. The following temporary differences are not
provided for: the initial recognition of goodwill for which no tax deduction is available; the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit other than in a business combination; and differences relating to investments in subsidiaries and joint ventures if it is
probable that the temporary difference will not reverse in the foreseeable future and the Group can control the reversal. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or
substantively enacted at the balance sheet date.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and recognised only to the extent that it is probable that
sufficient future taxable income will be available to allow the asset to be utilised based on Board-approved budgets and up-to-date expectations of
future trading. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off. Current tax assets are set off against
current tax liabilities when they relate to income taxes levied by the same taxation authority. The Group intends to settle its current tax assets and
liabilities on a net basis. The Company is incorporated in Bermuda, which is a non-taxable jurisdiction.
The following tables present the components of the income tax expense for the years ended November 30, 2021 and 2020:
For the years ended November 30,
(in thousands) 2021 2020
Current income tax expense $ 10,789 $ 6,374
Adjustments in respect of prior years 79 (3,894 )
10,868 2,480
Deferred income tax expense 11,495 1,359
Adjustments in respect of prior years 2,042 4,482
13,537 5,841
Total income tax expense $ 24,405 $ 8,321
92 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
The following reconciles the actual income tax expense to income taxes computed at the Bermuda statutory tax rate of nil:
For the years ended November 30,
(in thousands) 2021 2020
Profit from continuing operations before income tax expense $ 103,211 $ 47,477
Loss from discontinued operations before income tax expense – (13,788)
Profit before income tax expense 103,211 33,689
Tax at the Bermuda statutory tax rate – –
Differences between the Bermuda and other tax rates 8,589 4,388
Non-taxable income and disallowed expenses 6,647 67
Impact of change in UK corporate tax rates 1,271 –
Provision for uncertain tax positions 2,675 –
Changes in the recognition of tax losses 2,798 3,652
Adjustments in respect of prior years 2,121 588
Other differences, net 304 (374)
Total income tax expense $ 24,405 $ 8,321
Substantially, all of the Group’s international shipping operations are carried out in subsidiaries incorporated in the Netherlands, which imposes
income tax on a fixed profit calculated by reference to the deadweight tonnage of the ships in the fleet rather than on the operating profits of the
business. Based on the calculation, the Group incurred tax in the Netherlands of $0.5 million for both the years ended November 30, 2021 and
2020 which is included in Income tax expense.
The following are the major deferred tax (liabilities) assets recognised and the movement thereon:
(in thousands)
Accelerated tax
depreciation
Retirement benefit
obligations
Tax losses
Derivatives
Other Total
Balance, December 1, 2019 $ (77,459 ) $ 9,362 $ 30,468 $ 585 $ (157 ) $ (37,201)
Credit (charge) to income statement 763 (48 ) (8,123 ) – 1,567 (5,841)
(Charge) credit to Other comprehensive
income
–
(859 ) –
623
54
5 309
Exchange differences (10 ) (21 ) 387 63 (47 ) 372
Balance, November 30, 2020 $ (76,706 ) $ 8,434 $ 22,732 $ 1,271 $ 1,908 $ (42,361 )
(Charge) credit to income statement (12,826 ) 146 3,818 – (4,675 ) (13,537)
(Charge) credit to Other comprehensive
income – (2,709 ) –
(689
) 119 (3,279)
Exchange differences 306 38 (267) – 313 390
Balance, November 30, 2021 $ (89,226 ) $ 5,909 $ 26,283 $ 582 $ (2,335 ) $ (58,787)
93Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Certain deferred tax assets and liabilities have been offset when there is a legally enforceable right to set off. The following is the analysis of the
deferred tax balances (after offset) for financial reporting purposes:
As of November 30,
(in thousands) 2021 2020
Deferred tax liabilities $ (68,025 ) $ (55,867)
Deferred tax assets 9,238 13,506
$ (58,787 ) $ (42,361 )
The following is an analysis of the deferred taxes as of November 30, 2021 that are expected to be recovered or settled less than and more than
twelve months after November 30, 2021:
(in thousands)
Less than
12 Months
More than
12 Months
Total
D
eferred tax liabilities $ (566 ) $ (67,459 ) $ (68,025)
Deferred tax assets 1,615 7,623 9,238
$ 1,049 $ (59,836 ) $ (58,787)
As of November 30, 2021, the Group has unused national corporate tax losses of $75.6 million (2020: $84.8 million) and unused regional tax
losses of $35.1 million (2020: $48.1 million) available for offset against future profits. A deferred tax asset of $28.3 million at November 30, 2021
(2020: $23.1 million) has not been recognised in respect of losses carried forward at the balance sheet date. These losses have arisen in Group
companies where profits are not forecast for the foreseeable future.
Deferred income tax liabilities of $15.6 million at November 30, 2021 (2020: $52.1 million) have not been recognised for the withholding tax
and other taxes that would be payable on the undistributed earnings of certain subsidiaries. Such amounts are considered permanently
reinvested, which means that the deferred income tax liabilities will not be realised in the foreseeable future. Undistributed earnings totalled
$0.3 billion at November 30, 2021 (2020: $0.8 billion).
The Group’s income tax provisions are made in line with Group accounting policy. However, amounts asserted by tax authorities could be greater
or less than the amounts accrued and reflected in the Group’s consolidated balance sheet. Accordingly, provisions have been made to reflect
uncertainties in tax positions. Provisions made for uncertain tax positions may be revised in future periods as underlying matters are resolved
or as they develop.
10. Cash and Cash Equivalents and Restricted Cash
Accounting policy
Cash and cash equivalents comprise cash balances and short-term time deposits with an original duration of less than three months, which are
subject to an insignificant risk of changes in value.
As of November 30,
(in thousands) 2021 2020
Cash deposit $ 111,639 $ 116,808
Short-term time deposits 12,229 70,959
Cash and cash equivalents $ 123,868 $ 187,767
Restricted cash $ 6,096 $ 109
Cash and cash equivalents comprise cash and short-term time deposits held by the Group. At November 30, 2021 and 2020, respectively,
$6.1 million and nil were placed as collateral for a derivative instrument and included in restricted cash.
94 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
11. Receivables, Net
Accounting policy
Trade and other receivables are recognised initially at transaction price and are subsequently stated at amortised cost, less allowances for expected
credit losses. The Group measures the loss allowance for trade receivables at an amount equal to the lifetime expected credit losses. The amount
of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to its recognised amount is recognised as
an impairment loss or a reversal of an impairment loss in the Consolidated income statement. Trade and other receivables are written off (either
partially or in full) when there is no reasonable expectation of recovery.
Contract assets represent the right to receive consideration for goods or services transferred to the customer. If the Group partially satisfies its
performance obligations by transferring goods or services to a customer before the customer pays consideration or before payment is due, a
contract asset is recognised for the earned consideration that is conditional on further performance obligations being satisfied.
A trade receivable represents the Group’s right to an amount of consideration where all performance obligations have been satisfied. Accrued
revenue are trade receivables which have not yet been invoiced to customers.
Expected credit losses on trade receivables are calculated by using the provision matrix approach. The provision matrix is determined based on
historical observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates.
Provision for expected credit losses is made when the Group does not expect to collect all amounts due. Changes in estimation basis or in
economic conditions could lead to a change in the level of provision recorded and, consequently, on the charge or credit to profit or loss.
Impairment on receivables is measured as lifetime expected credit losses.
As of November 30,
(in thousands) 2021 2020
Customer trade receivables $ 270,765 $ 216,473
Contract assets 15,068 9,693
Accrued revenue 6,313 7,562
Withholding tax 5,000 –
Interest 1,227 850
Other 7,505 3,916
305,878 238,494
Allowance for impairment on customer trade and accrued receivables (20,129 ) (18,230 )
Receivables, net $ 285,749 $ 220,264
Insurance claims receivables $ 58,598 $ –
Increase in customer trade receivables is due to additional activity at STC. See Note 21 for an analysis of the credit risk of receivables.
Contract assets
A contract asset has been recorded for STC’s transportation revenue which has been earned but not yet invoiced. Contract assets are typically
invoiced within a month of any accrual.
As of November 30, 2021 As of November 30, 2020
<1 year >1 year <1 year >1 year
Balance, December 1 $ 9,693 $ – $ 6,806 $ –
Transfer to trade receivables (514,411) – (394,342) –
Revenue recognised (current year performance obligations) 519,786
– 39
7,229 –
Balance, November 30 $ 15,068 $ – $ 9,693 $ –
95Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
12. Inventories, Net
Accounting policy
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in, first-out principle and includes
expenditures incurred in acquiring the inventories and bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
The cost of items transferred from biological assets to inventory is the fair value less costs to sell at the date of harvest.
Inventories as of November 30, 2021 and 2020 consisted of the following:
November 30, 2021
(in thousands)
Terminals SSF Other Total
Raw materials $ – $ 235 $ 8 $ 243
Consumables 447 – 1,941 2,388
Finished goods – 4,355 – 4,355
$ 447 $ 4,590 $ 1,949 $ 6,986
November 30, 2020
(in thousands)
Terminals
SSF
Other Total
Raw materials $ – $ 207 $ 8 $ 215
Consumables 712 – 1,531 2,243
Finished goods – 5,283 – 5,283
$
712 $ 5,490 $ 1
,539 $
7,741
The cost of inventory included in operating expenses in 2021 and 2020 was $72.6 million and $60.5 million for Stolt Sea Farm, $6.4 million
and $5.8 million for Stolt Tank Containers and $0.3 million and nil for Stolthaven Terminals, respectively. Inventory was written down by nil and
$1.0 million in the years ended November 30, 2021 and 2020, respectively. Bunkers of $35.9 million and $21.0 million were included in prepaid
expenses at November 30, 2021 and 2020, respectively.
13. Biological Assets
Accounting policy
During 2021, Biological assets primarily comprised turbot and sole, which include fish with and without an active market for sale (‘mature’ and
‘juvenile’ fish), which are farmed by the Group.
(i) Turbot and sole
Turbot is considered ‘mature’ when it weighs more than 300 grams, while juvenile turbot weighs less than 300 grams. Sole is considered mature
at 200 grams. All mature turbot and sole are held at fair value less costs to sell and costs related to packaging. Gains and losses from changes in
fair value are recognised in the income statement. Fair value is determined on the basis of quoted prices in the principal market for the fish, where
such information is available. The fair value adjustment on biological assets has no cash impact and does not affect the result of operations before
unrealised fair value adjustments.
Juvenile turbot and sole are carried at cost less provision for impairment, as management does not believe that reliable fair values exist.
This approach is used to measure juvenile turbot and sole for the following reasons:
• There is no active market for juvenile turbot or sole.
• A non-active market price based on discounted cash flows requires a number of variables and assumptions which historically cannot be reliably
determined. Key variables and assumptions for turbot and sole include mortality rate, time to maturity, rate of growth and market price at the
point of harvest. Given the specific circumstances for juvenile assets, any assumptions are subjective.
• The extent of these uncertainties also results in difficulty in determining the appropriate discount rate.
A fair value adjustment is made at the point when previously juvenile turbot and sole is considered to mature. These fair value adjustments are
recognised in the income statement.
After harvest, the produce from harvest is treated as inventory and the fair value at the point of harvest is treated as the cost of the inventory.
96 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
(ii) Sturgeon
Sturgeon are ‘mature’ when they reach 3 kilograms per fish. The fair value of mature sturgeon is estimated at market value less costs to sell and
costs related to packaging estimated based on the meat price of sturgeon and its weight.
Sturgeon and caviar that the sturgeon produces are fair valued at the point of harvest. After harvest, the caviar produced from harvest is treated as
inventory and the fair value at the point of harvest is treated as the cost of the inventory. The fair value adjustment on biological assets has no cash
impact and does not affect the result of operations before unrealised fair value adjustments.
There is no active market for juvenile sturgeon. They are therefore carried at cost less provision for impairment for the same reasons as those
stated above for the juvenile turbot and sole.
In October 2020, the Group sold Sterling Caviar, Inc. (“Caviar”), which was the Group’s only business producing and marketing sturgeon and caviar.
Caviar has been treated as a discontinued operation for the year ended and as of November 30, 2020. See Note 33 for further disclosures.
Biological assets in the balance sheet
As of November 30,
(in thousands) 2021 2020
Turbot and sole $ 50,344 $ 30,129
$ 50,344 $ 30,129
Biological assets are the work in process: live turbot and sole that are in the process of production. The biological assets are transferred to
inventory after being harvested.
Reconciliation of changes in book value of turbot and sole
(in thousands) 2021 2020
Balance at December 1, $ 30,129 $ 33,766
Increases owing to production and purchases 47,111 41,529
Gain (loss) from change in fair value 17,379 (3,748 )
Effect of changes in foreign currency rates (2,002) 1,623
Decreases owing to mortalities (866 ) (1,688 )
Transfer to inventory (41,407 ) (41,353 )
Balance at November 30, $ 50,344 $ 30,129
97Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Reconciliation of changes in book value of sturgeon
(in thousands) 2021 2020
Balance at December 1, $ – $ 8,432
Increases owing to production and purchases – 5,039
Loss from change in fair value – (553 )
Decreases owing to mortalities – (393 )
Transfer to inventory – (3,905 )
Business disposal – (8,620 )
Balance at November 30, $ – $ –
Fair value adjustments on biological assets in the income statement in continuing operations
For the years ended November 30,
(in thousands) 2021 2020
Work in process, turbot and sole $ 17,379 $ (3,748 )
Finished goods – (1,237 )
Total fair value adjustment recognised in operating expenses $ 17,379 $ (4,985 )
Fair value adjustments on biological assets in the income statement in discontinued operations
For the years ended November 30,
(in thousands) 2021 2020
Work in process, sturgeon $ – $ (553 )
Total fair value adjustment recognised in discontinued operations $ – $ (553 )
Value of biological assets at fair value
Volumes of biomass (in tonnes)
For the years ended and
as of November 30,
(in tonnes) 2021 2020
Volume of biomass harvested during the year (live weight) 5,732 5,959
Volume of biomass in the water at year end (live weight) 4,039 3,409
Value of juvenile biological assets at cost
As of November 30,
(in thousands) 2021 2020
Turbot and sole $ 3,933 $ 3,602
Total assets held at cost included in the balance sheet $ 3,933 $ 3,602
The income statement impact relating to the change in carrying value when juvenile assets have reached maturity is immaterial for the years
ended November 30, 2021 and 2020.
The Group is exposed to risks arising from fluctuations in the price of turbot and sole and monitors the effect of price changes on profitability.
As of November 30,
(in thousands) 2021 2020
Work in process, turbot and sole $ 46,411 $ 26,527
Total assets held at fair value included in the balance sheet $ 46,411 $ 26,527
98 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
14. Property, Plant and Equipment
Accounting policy
(i) Recognition and measurement
Property, plant and equipment is stated at cost less accumulated depreciation and any recognised impairment loss.
Cost includes expenditures that are directly attributable to the acquisition of the asset. Borrowing costs directly attributable to the construction
of significant assets are added to the cost of such assets until they are ready for their intended use. The cost of ships includes the contract price,
pre-delivery costs incurred during the construction of newbuildings, borrowing costs and any material expenses incurred upon acquisition such as
improvements and delivery expenses to prepare the ships for their initial voyage.
(ii) Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful life of each component of an item of property,
plant and equipment. Land and assets under construction are not depreciated. Property, plant and equipment is depreciated to a residual value
which reflects management’s estimate of scrap value or otherwise recoverable value at the end of the estimated useful life of the asset. Residual
values and economic lives are reviewed annually.
(iii) Subsequent costs – drydocking costs
Upon acquisition of a ship, the estimated cost of each component of drydocking is deducted from the initial cost of the ship and separately
capitalised and depreciated over its estimated life. Ships drydock every five years thereafter. After a ship is 15 years old a shipping society
classification intermediate survey is performed between the second and third year of the five-year drydocking period. The Group capitalises a
substantial portion of the costs incurred during drydocking, including the survey costs, and depreciates those costs on a straight-line basis from the
time of completion of a drydocking or intermediate survey based on the estimated life of each component of the drydocking. The residual value of
the drydocking components is zero. The Group expenses costs related to routine repairs and maintenance incurred during drydocking that do not
improve or extend the useful lives of the ships. If the drydock results in an extension of the life of a ship, then the estimated useful life of the ship is
changed accordingly.
(iv) Impairment of tangible and intangible assets with finite useful lives
Tangible assets and intangible assets with finite lives are tested for impairment if there are indications of impairment. The carrying amounts of
the Group’s tangible and finite-lived intangible assets are reviewed at each balance sheet date to determine whether there is any indication of
impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the extent of any impairment loss. Where the
asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Ship newbuildings and other assets under construction are tested for impairment when there is an indication of
impairment.
The Group measures the recoverable amount of assets by comparing their carrying amount with the higher of their fair value less costs of disposal
(“FVLCD”) or value in use (“VIU”).
FVLCD is determined as the amount that would be obtained from the sale of the asset in an orderly transaction between market participants.
FVLCD is generally determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset,
including any expansion projects, and its eventual disposal, using assumptions that an independent market participant may take into account.
These cash flows are discounted at an appropriate rate to arrive at a net present value of the asset.
VIU is determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form
and its eventual disposal. VIU is determined by applying assumptions specific to the Group’s continued use and cannot take into account future
development. These assumptions are different from those used in calculating fair value and consequently the value in use calculation is likely to
give a different result to a fair value calculation.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in the income statement.
An impairment loss, other than for goodwill, is reversed when there is an indication that the impairment loss may no longer exist and there has been
a change in the estimates used to determine the recoverable amount.
99Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
(v) Estimated useful lives
The estimated useful lives are as follows:
Average Years
Buildings 15 to 50
Ships a
nd barges 25 to 30
Tank containers 10 to 20
Plant and equipment:
Terminal tanks and structures 10 to 30
Terminal other support equipment and other assets 5 to 20
SSF transportation equipment 4 to 5
SSF operating equipment and other assets 5 to 15
Other assets 5 to 20
Leasehold improvements 5 to 10
Average years exclude immaterial assets.
(vi) Disposals
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the income statement.
The below table shows owned property, plant and equipment.
Cost
(In thousands) Land Buildings
Ships and
Barges
Tank
Containers
Plant and
Equipment
Leasehold
Improvements
Construction
In Progress Total
Balance at December 1, 2019 $ 58,435 $ 128,761 $ 3,270,821 $ 494,922 $ 1,426,252 $ 8,555 $ 108,743 $ 5,496,489
Additions 34 3,553 – 1,328 3,649 1,462 125,181 135,207
Grant receipts – (1,689 ) – – (2,945) – (2,390 ) (7,024)
Disposals and retirements – (532 ) (131,383 ) (14,216 ) (27,837) (263 ) (886 ) (175,117)
Sale of Caviar division (86 ) (2,047 ) – – (6,688) – (977 ) (9,798)
Net foreign exchange
differences 1,693 4,992 4,800 1,173 17,487 135 1,893 32,173
Transfers (2,082 ) 6,369 49,077 – 83,092 5 (136,461 ) –
Reclasses and other (290 ) 238 (425 ) (771 ) 960 (220 ) (25 ) (533)
Balance at November 30,
2020 $ 57,704 $ 139,645 $ 3,192,890 $ 482,436 $ 1,493,970 $ 9,674 $ 95,078 $ 5,471,397
Additions 1,756 3,201 75,074 3,142 8,819 168 93,168 185,328
Grant receipts – (179 ) – – (497) – – (676)
Disposals and retirements – (2,917 ) (174,864 ) (9,818 ) (15,647) (351 ) (3,783 ) (207,380)
Net foreign exchange
differences (766 ) (3,124 ) (2,941 ) 196 (19,777) (486 ) (1,509 ) (28,407)
Transfers – 5,
350
52,756 – 58,275 – (116,381 ) –
Reclasses and other (7 )
–
6 1 (370) (134 ) 875 371
Balance at November 30,
2021 $ 58,687 $ 141,976 $ 3,142,921 $ 475,957 $ 1,524,773 $ 8,871 $ 67,448 $ 5,420,633
100 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Accumulated depreciation
and impairment
(in thousands)
Land Buildings
Ships and
Barges
Tank
Containers
Plant and
Equipment
Leasehold
Improvements
Construction
In Progress
Total
Balance at December 1,
2019
$ – $ 49,927 $ 1,525,166 $ 222,887 $ 552,843 $ 6,541 $
–
$ 2,357,364
Depreciation expense – 5,915 158,059 18,771 63,869 401 – 247,015
Sale of Caviar division – (818 ) – – (5,081) – – (5,899)
Disposals and retirements – (520 ) (120,619 ) (10,960 ) (26,130) (263 ) – (158,492)
Net foreign exchange
differences –
1,027 3,165 310 6,900 (51 )
–
11,351
Reclasses and other – 176 (394 ) (41 ) 229 28 – (2)
Balance at November 30,
2020 $
– $ 55,707 $ 1,565,377 $ 230,967 $ 592,630 $ 6,656 $
–
$ 2,451,337
Depreciation expense – 2,992 153,253 18,144 69,153 699 – 244,241
Impairment expense – – – – 10,000 – – 10,000
Disposals and retirements – (1,988 ) (104,040 ) (7,729 ) (13,495) (347 ) – (127,599)
Net foreign exchange
differences –
(712 ) (2,031 ) 132 (10,666) (630 )
–
(13,907)
Reclasses and other – (397 ) 681 (360 ) 725 (225 ) – 424
Balance at November 30,
2021 $
– $ 55,602 $ 1,613,240 $ 241,154 $ 648,347 $ 6,153 $
–
$ 2,564,496
Net book value:
At November 30, 2020 $ 57,704 $ 83,938 $ 1,627,513 $ 251,469 $ 901,340 $ 3,018 $ 95,078 $ 3,020,060
At November 30, 2021 $ 58,687 $ 86,374 $ 1,529,681 $ 234,803 $ 876,426 $ 2,718 $ 67,448 $ 2,856,137
During the year ended November 30, 2021, the Group had additions of property, plant and equipment of $185.3 million. Cash spent during
the year was $185.5 million and primarily reflected i) $103.1 million on tankers capital expenditures, ii) $43.7 million on terminal capital
expenditures , iii) $18.2 million on drydocking of ships , iv) $13.7 million on the purchase of tank containers and construction at depots,
and v) $7.7 million on Stolt Sea Farm capital expenditures. Interest of $0.5 million was capitalised on the new construction of terminals.
Tankers capital expenditures include the purchase of three second-hand ships from Chemical Transportation Group (“CTG”) and a deposit
of $8.1 million for a barge newbuilding.
During the year ended November 30, 2020, the Group had additions of property, plant and equipment of $135.2 million. Cash spent
during the period was $147.5 million and primarily reflected i) $59.3 million on terminal capital expenditures, ii) $22.1 million on drydocking
of ships, iii) $46.0 million on tankers capital expenditures, iv) $7.8 million on the purchase of tank containers and construction at depots,
and v) $12.3 million on Stolt Sea Farm capital expenditures. Interest of $1.1 million was capitalised on the new construction of terminals.
Tankers capital expenditures include deposits of $8.2 million on the second-hand ships from CTG.
Proceeds of $29.7 million were received from the sale of ships, sale of land and retirement of tank containers and other assets during the year
ended November 30, 2021.
During the fourth quarter of 2021, management determined that the repairs of the Stolt Groenland, which had an explosion onboard in 2019,
would not be viable. As a result, the Group entered into a settlement agreement with its hull and machinery insurers for which the settlement
was received after the year end. This resulted in a loss of $13.0 million, net of insurance proceeds, which has been included in Loss on disposal
of assets. A related receivable from the insurers is included in Insurance claim receivables. The portion of the term loan which was secured by
the Stolt Groenland has been reclassed as Current portion of long-term debt of $30.5 million at November 30, 2021 and repaid subsequent to
year end.
Certain property, plant and equipment assets have been pledged as security on loans. See Note 23 for additional details.
Plant and equipment principally includes assets of the Terminal and Stolt Sea Farm businesses.
101Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Impairment of non-current assets
See Note 2 for further discussion of impairment.
Terminals
The Group booked an impairment of $10.0 million on the property, plant and equipment for the Australia business segment in the year ended
November 30, 2021. The impairment testing was performed using projected, board-approved future cash flows based on VIU. The recoverable
amount was based on a discounted cash flow basis using approved projections in the five-year plan and with a risk adjusted weighted average
cost of capital.
15. Right-of-use assets and lease liabilities
Accounting policy
(i) Right-of-use assets
Right-of-use assets are measured initially at cost based on the associated lease liability, adjusted for any payments made before inception, initial
direct costs and an estimate of the dismantling, removal and restoration costs required in the terms of the lease.
Subsequent to initial recognition, the Group depreciates the right-of-use assets over the term of the lease or, if shorter, the leased asset’s remaining
economic life.
(ii) Lease liabilities
In respect of leases of low-value items and those that are less than 12 months, the Group recognises an expense on a straight-line basis over
the life of the lease. For all other leases, the Group recognises a right-of-use asset and corresponding liability at the date the leased asset is made
available to the Group.
Lease liabilities are measured at the present value of the future lease payments, excluding any payments relating to non-lease components. Future
lease payments include options to the extent that it is reasonably certain that such payments will be made. The payments are discounted at the rate
implicit in the lease or, where that cannot be measured, at an incremental borrowing rate.
Lease liabilities are remeasured when there is a change in future lease payments arising from a change in an index or rate or if the Group changes
its assessment of whether it will exercise an extension or termination option. When a lease liability is remeasured in this way, a corresponding
adjustment is made to the carrying value of the right-of-use asset, or is recorded to profit or loss if the carrying amount of the right-of-use asset has
been reduced to zero.
Time charter contracts include the lease of a specific ship and a non-lease component for crew, maintenance and other operating expenses. When
measuring lease liabilities, the non-lease component has been separated from the lease component based on internal sources of ships of similar
classes as the ship under contract. The non-lease element is recorded in Operating expenses as the Service component of leases.
Subsequent to initial recognition, the Group records an interest charge in respect of the lease liability.
(iii) Lease expenses
Short-term leases (defined as less than one year) and low value leases are expensed in the income statement.
(iv) Variable lease consideration
The Group operates the Joint Service, delivering freight services to customers in which external ships participate. The lease payments to external
parties are entirely variable and therefore not included when calculating the lease liability. The variable lease payment, less a management fee,
is included in the income statement as Charter and lease expense.
102 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Right-of-Use Assets
The below table shows right-of-use assets, held under lease agreements.
Cost
(in thousands)
Land Buildings
Ships and
Barges
Tank
Containers
Plant and
Equipment
Total
Adoption of IFRS 16 on December 1, 2019 $ 61,562 $ 18,181 $ 65,565 $ 44,892 $ 4,100 $ 194,300
New leases and other increases 2,505 1,591 19,756 13,607 3,148 40,607
Retirements and other decreases (714 ) (220 ) (6,142 ) – (1,765) (8,841)
Net foreign exchange differences 5,226 (597 ) 772 – (879) 4,522
Balance at November 30, 2020 $ 68,579 $ 18,955 $ 79,951 $ 58,499
$ 4,604 $ 230,588
New leases and other increases 10,842 2,409 19,396 33,049 2,490 68,186
Retirements and other decreases (2,088 ) (1,950 ) (10,478 ) (11 ) (208) (14,735)
Net foreign exchange differences (2,884 ) (484 ) (691 ) 154 (154) (4,059)
Balance at November 30, 2021 $ 74,449 $ 18,930 $ 88,178 $ 91,691 $ 6,732 $ 279,980
On
December 1, 2019, an amount of $194.3 million was recognised as right-of-use assets on transition to IFRS 16, Leases, using the modified
retrospective approach. Prior to December 1, 2019 and during 2020 and 2021, the Group entered into leases for land, offices, ships, barges,
tank containers and terminal and sea farm equipment. At November 30, 2021, the Group has leases expiring from 2022 to 2070.
Accumulated depreciation
(in thousands) Land Buildings
Ships and
Barges
Tank
Containers
Plant and
Equipment Total
Depreciation expense $ 2,871 $ 4,025 $ 20,008 $ 13,909 $ 957 $ 41,770
Retirements and other decreases – – (1,061 ) – – (1,061)
Net foreign exchange differences (63 ) 242 171 (35 ) 59 374
Reclasses and other 62 64 – – (26) 100
Balance at November 30, 2020 $ 2,870 $ 4,331 $ 19,118 $ 13,874
$ 990 $ 41,183
Depreciation expense 3,024 4,493 19,136 18,401 1,203 46,257
Retirements and other decreases (601 ) (1,487 ) (8,501 ) (3 ) (175) (10,767)
Net foreign exchange differences (63 ) (128 ) (371 ) 46 (54) (570)
Reclasses and other 190 (4 ) – – 643 829
Balance at November 30, 2021 $ 5,420 $ 7,205 $ 29,382 $ 32,318 $ 2,607 $ 76,932
Net book value:
At November 30, 2020 $ 65,709 $ 14,624 $ 60,833 $ 44,625 $ 3,614 $ 189,405
At November 30, 2021 $ 69,029 $ 11,725 $ 58,796 $ 59,373 $ 4,125 $ 203,048
103Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Lease Liabilities
As of November 30,
(in thousands) 2021 2020
Contractual undiscounted cash flows:
Less than:
1 year $ 52,730 $ 44,120
2 years 48,175 37,790
3 years 36,876 33,476
4 years 22,551 27,521
5 years 11,005 17,030
Thereafter 136,998 125,540
Total undiscounted cash flows 308,335 285,477
Total lease liabilities (discounted based on the Group’s incremental borrowing rate) 210,450 193,515
Less current maturities (43,473 ) (35,640 )
Non-current $ 166,977 $ 157,875
See Note 8, Finance expenses and income, for interest expense from lease liabilities.
Operating Leases
Minimum future lease commitments, under agreements which expire at various dates through 2026, are as follows:
(in thousands) 2021 2020
Less than:
1 year $ 1,916 $ 3,358
2 years 611 321
3 years 403 228
4 years 228 81
5 years 59 15
$ 3,217 $ 4,003
The commitments for the year ended November 30, 2021 related to leases in which the exemption has been utilised to exclude short-term
(less than one year) and low-value leases (leases with total payments of less than $5,000) and consist of tank containers, ships, barges, offices
and equipment leases.
Rental and charter hire expenses under operating lease agreements for the years ended November 30, 2021 and 2020, were $35.8 million and
$36.6 million, respectively. There was no sub-lease income in either year.
Variable lease consideration included in Charter and lease expenses related to charter hire expenses to participants in the Joint service was
$124.0 million and $103.4 million, respectively, for the years ended November 30, 2021 and 2020.
There were no non-cancellable sub-leases during the years ended November 30, 2021 and 2020.
104 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
16. Intangible Assets and Goodwill
Accounting policy
Goodwill represents amounts arising on the acquisition of subsidiaries, associates and joint ventures. Goodwill arising on acquisition represents the
difference between the cost of the acquisition and the fair value of the net identifiable assets acquired. Identifiable intangible assets are those that
can be sold separately, or which arise from legal rights regardless of whether those rights are separable.
Goodwill is initially recognised at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is allocated to
cash-generating units and is not amortised but is tested annually for impairment, or more frequently when there is an indication that the CGU is
impaired. With respect to associates and joint ventures, the carrying amount of goodwill is included in the carrying amount of the investment in
the associate or joint venture.
Goodwill is tested for impairment on an annual basis for each CGU to which the goodwill is allocated. When goodwill is monitored at the level of a
group of CGUs, it is tested for impairment at that level. The Group’s unimpaired goodwill relates to the Tankers and Tank Container segments.
In the case of bargain purchases, the excess of net assets acquired over the fair value of the consideration paid arising on an acquisition is
recognised in other operating income in the income statement in the period in which the acquisition is completed.
Other intangible assets with finite lives that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses.
Amortisation of customer contracts is charged to operating revenue over the life of the contracts based on the underlying cash flows. Other
finite-lived intangibles are charged to the income statement under operating expenses over the estimated useful lives of the intangible assets
on a straight-line basis. The trademark intangible is being amortised over a 10-year life while the customer relations and contract intangibles are
amortised from two to 14 years and computer software is amortised over an average life of three to 10 years.
See Note 14 for the accounting policy for the impairment of intangible assets with finite lives.
105Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Intangible assets are shown below:
(in thousands) Goodwill Trademark
Customer
Relations/
Contracts
Computer
Software Other Total
Cost:
Balance, December 1, 2019 $ 32,372 $ 1,436 $ 8,647 $ 57,360 $ 503 $ 100,318
Additions – – – 4,711 41 4,752
Disposals and retirements – – (1,221 ) (7 ) (49 ) (1,277 )
Net foreign exchange differences 2,085 119 557 2,699 71 5,531
Reclasses – – – 204 9 213
Balance, November 30, 2020 $ 34,457 $ 1,555 $ 7,983 $ 64,967 $ 575 $ 109,537
Additions – – – 4,655 33 4,688
Disposals and retirements – – – (3,327 ) – (3,327 )
Net foreign exchange differences (730 ) (77) (338 ) (2,578 ) (48 ) (3,771 )
Reclasses – – – (267 ) 314 47
Balance, November 30, 2021 $ 33,727 $ 1,478 $ 7,645 $ 63,450 $ 874 $ 107,174
Accumulated amortisation:
Balance, December 1, 2019 $ – $ 1,436 $ 8,083 $ 40,897 $ 311 $ 50,727
Amortisation charge for the year – – 111 3,302 64 3,477
Impairment charge for the year 12,394 – – – – 12,394
Disposals and retirements – – (1,221 ) (6 ) (34 ) (1,261 )
Net foreign exchange differences – 119 802 2,381 53 3,355
Reclasses – – – – 9 9
Balance, November 30, 2020 $ 12,394 $ 1,555 $ 7,775 $ 46,574 $ 403 $ 68,701
Amortisation charge for the year – – 114 4,847 – 4,961
Disposals and retirements – – – (3,263 ) – (3,263 )
Net foreign exchange differences – (77) (338 ) (1,860 ) (34 ) (2,309 )
Reclasses – – – (164 ) 281 117
Balance, November 30, 2021 $ 12,394 $ 1,478 $ 7,551 $ 46,134 $ 650 $ 68,207
Net book value:
At November 30, 2020 $ 22,063 $ – $ 208 $ 18,393 $ 172 $ 40,836
At November 30, 2021 $ 21,333 $ – $ 94 $ 17,316 $ 224 $ 38,967
Other than goodwill, all intangible assets were subject to amortisation as of November 30, 2021 and 2020.
During the year ended November 30, 2021, the Group spent $4.7 million on intangible assets, mainly on the acquisition of computer software.
The Tankers and Tank Containers segments goodwill has been tested for impairment as of November 30, 2021 and 2020. In addition, in 2020,
Terminals segment was tested for impairment which resulted in the full impairment of goodwill of $12.4 million related to a prior year business
combination in the Terminals segment.
At November 30, 2021, goodwill primarily consisted of $5.2 million for goodwill on a prior year acquisition of the Tankers segment and
$16.1 million related to a prior year business combination in the Tank Containers segment.
Revaluation for foreign exchange differences for goodwill and other intangibles amounted to a loss of $1.5 million in the same period.
The trademark intangible was amortised over a 10-year life and is now fully amortised while the customer relations and contracts intangibles
are being amortised from two to 14 years and have less than four years remaining. Computer software is being amortised over an average life
of three to 10 years.
106 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
17. Investments in and Advances to Joint Ventures and Associates
Accounting policy
(i) Associates
Associates are those entities over which the Group is able to exercise significant influence but does not control or jointly control the entities’
financial and operating policies. Significant influence is exercised generally through direct or indirect ownership of 20% to 50% of the voting rights.
Such investments in associates are recorded in the Consolidated Financial Statements using the equity method and are initially recognised at cost.
The Consolidated Financial Statements include the Group’s share of the total comprehensive income of associates based on the equity method of
accounting, from the date that significant influence begins until the date that significant influence ceases.
Investments in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Group’s share of net assets of
the associate, less any impairment in the value of individual investments. Where necessary, adjustments are made to the Financial Statements of
associates to bring the accounting policies used into line with those used by the Group.
When the Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of
an associate.
(ii) Joint Ventures
Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement. Joint control requires
unanimous consent of the parties sharing control in the decision-making on relevant activities. The Consolidated Financial Statements include
the Group’s share of the total comprehensive income of joint ventures based on the equity method of accounting, from the date that joint control
begins until the date that joint control ceases. Where necessary, adjustments are made to the Financial Statements of joint ventures to bring the
accounting policies used into line with those used by the Group.
Material investments are those that the Group considers to be strategic to its operations and whose investment balance is material.
107Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Investments in and advances to joint ventures and associates, which are all accounted for using the equity method of accounting, consisted of
the following:
(in thousands) Location
1
2021
% Shares
2021
% Voting
Rights
As of November 30,
2021 2020
Joint Ventures:
Tankers material joint ventures:
NYK Stolt Tankers S.A. Panama 50 50 $ 40,639 $ 40,894
Stolt NYK Asia Pacific Services Inc. Liberia 50 50 23,983 24,782
NYK Stolt Shipholding Inc. Liberia 50 50 40,632 40,375
Shanghai SC-Stolt Shipping Ltd China 49 50 39,956 37,126
Hassel Shipping 4 AS Norway 50 50 81,021 74,510
Tankers non-material joint ventures:
SIA LAPA, Ltd Latvia 70 50 1,314 1, 077
Shanghai New Xing Yang Marine Services Co. Ltd China 40 40 61 189
227,606 218,953
Terminals material joint ventures:
Oiltanking Stolthaven Antwerp, NV Belgium 50 50 105,372 110,781
Jeong-IL Stolthaven Ulsan Co. Ltd South Korea 50 50 121,029 119,267
Tianjin Lingang Stolthaven Terminal Co. China 65 50 26,524 24,586
Tianjin Lingang Stolthaven Jetty Company China 40 50 13,165 12,945
Terminals non-material joint venture:
Stolthaven (Westport) Sdn. Bhd. Malaysia 49 50 6,908 8,072
272,998 275,651
Tank Containers non-material joint ventures:
Hyop Woon Stolt Transportation Services Co. Ltd South Korea 50 50 3,892 3,503
Kanoo Tank Services Ltd. Saudi Arabia 60 50 16,115 16,864
Vado Tank Cleaning SRL Italy 50 50 980 1,761
Laem Chabang Tank Service Co. Ltd. Thailand 49 49 1,443 1,289
FSTS CO., Ltd Thailand 49 49 978 834
23,408 24,251
Stolt-Nielsen Gas material joint ventures:
Avenir LNG Limited Bermuda 47 47 79,497 59,319
Subtotal 603,509 578,174
Non-material associates:
Brovig SS II Indre Selskap Norway 50 50 5,414 5,137
Essberger & Stolt Tankers GMbH & Co KG
2
Germany 28 28 164 –
N.C. Stolt Transportation Services Co. Ltd Japan 50 50 1,388 1,186
Norterminal A.S. Norway 25 25 915 1,017
N.C. Stolt Chuyko Transportation Services Co. Ltd Japan 35 35 516 470
Subtotal 8,397 7,810
$ 611,906 $ 585,984
1. Represents the country of the principal place of business as well as the country of incorporation, except for NYK Stolt Tankers S.A., Stolt NYK Asia Pacific Services Inc.,
NYK Stolt Shipholding Inc., Hassel Shipping 4 AS, Essberger & Stolt Tankers GMbH & Co KG, Brovig SS II Indre Selskap and Avenir LNG Limited which operate on a world-wide
or regional basis.
2. On January 1, 2021, Stolt Tankers BV entered into a joint venture with John T. Essberger Group for the operation of their combined parcel tanker fleets trading within Europe.
The joint venture, Essberger & Stolt Tankers GMbH & Co KG (“E&S Tankers”), is trading certain of the Group’s parcel tankers ranging in size from 2,800 to 11,300 dwt.
108 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
(in thousands)
Joint
Ventures
Associates Total
Balance, December 1, 2019 $ 534,429 $ 8,099 $ 542,528
Share of profit of joint ventures and associates 32,203 234 32,437
Dividends (15,216 ) (224 ) (15,440 )
Net foreign exchange differences 20,950 (308 ) 20,642
Net (loss) gain on cash flow hedges held by joint ventures and associates (3,886 ) 9 (3,877 )
Repayment of advances to joint ventures, net (4,907 ) – (4,907 )
Reversal of prior year provision against advances 3,557 – 3,557
Net actuarial gain on pension schemes held by joint venture 379 – 379
Investment in joint venture 15,000 – 15,000
Disposal of associate (4,794 ) – (4,794 )
Other 459 – 459
Balance, November 30, 2020 $ 578,174 $ 7,810 $ 585,984
Share of profit of joint ventures and associates 38,858 612 39,470
Dividends (22,629 ) (240 ) (22,869 )
Net foreign exchange differences (11,396 ) 42 (11,354 )
Net gain on cash flow hedges held by joint ventures and associates 3,834 – 3,834
Repayment of advances to joint ventures, net (4,570 ) – (4,570 )
Net actuarial gain on pension schemes held by joint venture 1,489 – 1,489
Investment in joint venture and associate 21,000 173 21,173
Other (1,251 ) – (1,251 )
Balance, November 30, 2021 $ 603,509 $ 8,397 $ 611,906
109Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Summarised financial information of material joint ventures
The below table provides summarised financial information of the Group’s material joint ventures, representing 100% of the respective amounts
included in the individual joint ventures’ Financial Statements as of and for the years ended November 30, 2021 and 2020. The figures have been
amended to reflect modifications for differences in accounting policy.
NYK Stolt
Tankers S.A.
Stolt NYK Asia
Pacific Services Inc.
NYK Stolt
Shipholding Inc.
Shanghai SC-Stolt
Shipping Ltd
Hassel Shipping
4 AS
(in thousands) 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Selected Balance
Sheet Information
Cash and cash
equivalents $ 4,650 $ 12,750 $ 2,341 $ 5,735 $ 11,101 $16,270$ 20,562 $ 11,372 $ 21,822 $18,182
Current assets,
other than cash 9,358 7,369 9,921 7,777 2,140 5,124 7,220 7,960 9,996 7,696
Current assets 14,008 20,119 12,262 13,512 13,241 21,394 27,782 19 ,332 31,818 25,878
Non-current assets 207,734 160,722 42,140 42,196 185,186 189,406 58,239 61,045 310,471 319,811
Total Assets 221,742 180,841 54,402 55,708 198,427 210,800 86,021 80,377 342,289 345,689
Financial liabilities,
other than accounts
payable
10,186 7,811
– – 9,388 10
,626 – –
16,369 16
,356
Other current liabilities 1,900 3,189 6,436 6,145
– – 5,928 5
,795 3,058 –
Current liabilities 12,086 11,000 6,436 6,145 9,388 10,626 5,928 5,795 19,427 16,356
Financial liabilities 157,417 120,485 – – 107,069 117,490 – – 167,608 183,998
Non-current liabilities 5,212 8,787
–
– 702 1,932 – – 435 2,942
Total non-current
liabilities 162,629 129,272
–
– 107,771
119,422 – – 168,043 186,940
Net Assets $ 47,027 $ 40,569 $ 47,966 $49,563 $ 81,268 $80,752$ 80,093 $ 74,582 $ 154,819 $142,393
Selected Income
Statement
Information
Operating revenue $ 52,609 $ 45,190 $ 74,308 $77,797 $ 40,964 $47,592$ 43,487 $ 32,986 $ 60,690 $58,180
Depreciation and
amortisation 14,822 11,845
– 13
,699 13,554 13,233 4,798 4,470 13,827 13,809
Finance income
–
–
328 771 14 53 – – 5102
Finance expense 4,818 4,909
– 6
,572 1,925 2,990 – –
8,762 10
,161
Profit (loss) before
taxes
2,878 6,712 (1,587 ) (3,142 ) (788 ) 3,903 7,568 4,695 9,610 9,884
Income tax expense
– –
– –
– – 1,889 90
9 ––
Net profit (loss) 2,878 6,712 (1,587 ) (3,142 ) (788 ) 3,903 5,679 3,786 9,610 9,884
Other comprehensive
income (loss) 3,576 (3,187 )
– – 1,304 (1
,296) 2,575 5,035 2,817 (3,210)
Total comprehensive
income (loss) $ 6,454 $ 3,525 $ (1,587 ) $ (3,142 ) $ 516 $ 2,607 $ 8,254 $ 8,821 $ 12,427 $ 6,674
Dividends received
by Group
$ – $ – $ – $–$–$–$
1,217 $ 1 ,394 $ – $–
Long-term financial liabilities for NYK Stolt Tankers S.A. included shareholder loans of $35.1 million and $42.2 million for the years ended
November 30, 2021 and 2020, respectively. Of the financial liabilities included in NYK Stolt Shipholding Inc., $42.0 million related to notes
payable to Stolt NYK Asia Pacific Services Inc. at both November 30, 2021 and 2020.
110 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
In addition to the table above, Avenir LNG Limited is publicly traded on the Norwegian over-the-counter (“NOTC”) market. The financial
statements for December 31, 2020 have been filed on the NOTC. Avenir LNG Limited had total assets of $172.3 million, total liabilities of
$46.3 million and total net assets of $126.0 million. Avenir LNG Limited also published earnings releases containing unaudited financial
information on a quarterly basis up until September 30 2021. For the nine months to September 30, 2021 Avenir LNG Limited disclosed
a net loss of $1.3 million and as at September 30, 2021 had total assets of $223.0 million, total liabilities of $66.3 million and net assets of
$156.7 million. Share of profit of Avenir LNG Limited from October 1, 2021 to November 30, 2021 is based on management’s best estimate
of Avenir LNG Limited’s performance. The market price of Avenir LNG Limited shares was NOK 8.00 per share at November 30, 2021.
The Group owned 85.8 million shares of Avenir LNG Limited at November 30, 2021.
Tianjin Lingang Stolthaven Terminal Co. has $8.0 million and $6.8 million of shareholder loans at November 30, 2021 and 2020, respectively.
The above joint ventures, other than Avenir LNG Limited, are private companies and there are no quoted market prices available for their shares.
Oiltanking Stolthaven
Antwerp, NV
Jeong-IL Stolthaven
Ulsan Co. Ltd
Tianjin Lingang
Stolthaven
Terminal Co.
Tianjin Lingang
Stolthaven
Jetty Company
(in thousands) 2021 2020 2021 2020 2021 2020 2021 2020
Selected Balance Sheet Information
Cash and cash equivalents $ 5,450 $19,285$ 14,660 $ 3,738 $ 2,974 $ 1,986 $ 3,792 $ 2,752
Current assets, other than cash 27,793 15,152 17,438 37,431 823 927 3,263 3,057
Current assets 33,243 34,437 32,098 41,169 3,797 2,913 7,055 5,809
Non-current assets 371,936 407,350 395,248 401,409 42,521 43,806 27,979 28,424
Total Assets 405,179 441,787 427,346 442,578 46,318 46,719 35,034 34,233
Financial liabilities, other than accounts
payable 49,939 28,849 101,608 142,190 2,357 2,281 – –
Other current liabilities 13,673 11,812 39,121 35,470 6,560 6,313 1,767 1,528
Current liabilities 63,612 40,661 140,729 177,660 8,917 8,594 1,767 1,528
Financial liabilities 112,492 158,449 51,636 35,889 6,851 10,530 – –
Non-current liabilities 58,543 63,583 2,347 541 258 284 – –
Total non-current liabilities 171,035 222,032 53,983 36,430 7,109 10,814 – –
Net Assets $ 170,532 $179,094 $ 232,634 $228,488 $ 30,292 $ 27,311 $ 33,267 $32,705
Selected Income Statement Information
Operating revenue $ 116,112 $109,912 $ 95,518 $90,740$ 10,440 $ 7,872 $ 10,016 $10,020
Depreciation and amortisation 34,158 31,685 12,514 11,402 2,964 2,728 1,438 1,410
Finance income –– – – – – 29 –
Finance expense 5,717 6,146 2,774 4,311 693 307 – 15
Profit before taxes 25,027 23,351 39,250 36,858 2,041 827 5,082 5,527
Income tax expense 5,297 6,012 8,774 9,492 – – 1,270 1,365
Net profit 19,730 17,339 30,476 27,366 2,041 827 3,812 4,162
Other comprehensive (loss) income (6,118) 13,867 (15,051 ) 14,108 940 1,731 1,105 2,043
Total comprehensive income $ 13,612 $31,206$ 15,425 $41,474$ 2,981 $ 2,558 $ 4,917 $ 6,205
Dividends received by Group $ 11,087 $ 6,254 $ 5,639 $ 3,924 $– $ – $ 1,742 $ 1,242
111Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Description of the nature of activities of the material joint ventures
NYK Stolt Tankers S.A. is a joint venture with NYK Line which owns eight parcel tankers that participate in the Joint Service. The Group performs
marketing, operational, administration and ship-owning services for NYK Stolt Tankers S.A.’s fleet in the deep-sea intercontinental market.
The Group considers the investment in NYK Stolt Tankers S.A. to be strategic as it provides sophisticated tonnage to the Joint Service.
Stolt NYK Asia Pacific Services Inc. (“SNAPS”) is a joint venture with NYK Line which operates 11 ships in the East Asia and South East Asia
areas, with the tankers marketed by the Group’s offices in these regions. NYK Stolt Shipholding Inc (“NSSH”) is a ship-owning joint venture and
owns the ships operated by SNAPS. The investments in SNAPS and NSSH are considered to be strategic to the Group by serving the East Asia
and South East Asia markets and supporting customers of the Joint Service.
Hassel Shipping 4 AS is a 50% joint venture with J.O. Invest AS for the joint ownership and operation of eight 33,000 dwt, stainless steel,
chemical tankers. The ships are operated through the Joint Service. This joint venture is considered to be strategic as it provides sophisticated
tonnage to the Joint Service.
Shanghai SC-Stolt Shipping Ltd is a 49% owned joint venture with Shanghai Junzheng Logistics Co. Ltd to operate chemical tankers in the
Chinese coast cabotage market. As of November 30, 2021, the joint venture operated eleven ships. It is considered to be a joint venture as all
significant decisions are made unanimously.
Avenir LNG Limited is a 47% owned joint venture with Golar LNG Limited and Höegh LNG Holdings Ltd. and supplies LNG for the power,
bunkering, trucking and industrial markets. Avenir LNG Limited raised an additional $42 million through the issue of new shares during the year,
of which the Group purchased 50% for $21.0 million and Golar LNG Limited and Höegh LNG Holdings Ltd. purchased $10.5 million each. It is
considered to be a joint venture as the Group, along with Golar LNG Limited and Höegh LNG Holdings Ltd., have the ability to make significant
decisions unanimously.
Oiltanking Stolthaven Antwerp, NV (“OTSA”) is a 50% owned joint venture with Oiltanking GMBH and has a terminal facility in Antwerp, Belgium
which provides independent tank terminal services in the Port of Antwerp for bulk liquid products, animal and vegetable oils and gas and other
products. The investment in OTSA is considered to be strategic to the Group as it is integral to the Group’s ability to provide an efficient ship-
terminal interface.
Jeong-IL Stolthaven Ulsan Co. Ltd (“JSTT”) is a 50% owned joint venture that owns a terminal facility in Ulsan, South Korea which provides
independent tank terminal services for primarily clean petroleum and chemical products. The Group considers its investment in JSTT to be
strategic as it is integral in the Group’s ability to provide an efficient ship-terminal interface.
Tianjin Lingang Stolthaven Terminal Co., a 65% owned joint venture with the Lingang Harbor Affairs Company (“LHAC”), owns a terminal facility
in Tianjin, China. It is considered to be a joint venture as all significant decisions are made unanimously.
Tianjin Lingang Stolthaven Jetty Company, a 40% owned joint venture with LHAC, owns and operates a jetty and docks in Tianjin, China. It is
considered to be a joint venture as all significant decisions are made unanimously.
112 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Reconciliation of Summarised Financial Information from Prior Year Net Assets to Investment in and Advances to Joint Ventures
NYK Stolt
Tankers S.A.
Stolt NYK Asia
Pacific Services Inc.
NYK Stolt
Shipholding Inc.
Shanghai SC-Stolt
Shipping Ltd
Hassel
Shipping 4 AS
(in thousands) 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Net Assets:
Balance, December 1 $ 40,569 $ 36,990 $ 49,563 $52,705$ 80,752 $78,198$ 74,582 $ 70,109 $ 142,392 $135,792
Profit (loss) for
the year
2,878 6,712 (1,587) (3,142) (788 ) 3,903 5,679 3,786 9,610 9,884
Dividends – – –– – – (2,483 ) (2,845 ) – –
Other comprehensive
income (loss) 3,576 (3,187 ) –– 1,304 (1,296) 2,575 5,035 2,817 (3,210)
Other 4 54 (10 ) – – (53) (260 ) (1,503 ) – (74)
Balance, November 30 47,027 40,569 47,966 49,563 81,268 80,752 80,093 74,582 154,819 142,392
Percentage owned 50% 50% 50% 50% 50% 50% 49% 49% 50% 50%
Interest in joint venture 23,514 20,284 23,983 24,782 40,634 40,375 39,246 36,545 77,410 71,196
Purchase adjustment
to property – – –– – – – – 3,573 3,314
Eliminations of
transactions with the
Group
(444 ) (484 ) –– – – – – – –
Advances 17,569 21,094 –– – – – – – –
Other – – –– (2 ) – 710 581 38 –
Investment in and
advances to joint
ventures $ 40,639 $ 40,894 $ 23,983 $24,782$ 40,632 $40,375$ 39,956 $ 37,126 $ 81,021 $74,510
113Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Oiltanking Stolthaven
Antwerp, NV
Jeong-IL Stolthaven
Ulsan Co. Ltd
Tianjin Lingang
Stolthaven
Terminal Co.
Tianjin Lingang
Stolthaven
Jetty Company
(in thousands) 2021 2020 2021 2020 2021 2020 2021 2020
Net Assets:
Balance, December 1 $ 179,094 $160,396 $228,488 $194,861 $ 27,311 $ 24 ,753 $ 32,705 $29,605
Profit for the year 19,730 17,339
30,476 27,366 2,041 827 3,812 4,162
Dividends (22,174 ) (12,508) (11,279) (7,847 ) – – (4,355 ) (3,105)
Other comprehensive (loss) income (6,118 ) 13,867
(15,051) 14,108 940 1,731 1,105 2,043
Balance, November 30 170,532 179,094
232,634 228,488 30,292 27,311 33,267 32,705
Percentage owned 50% 50% 50% 50% 65% 65 % 40% 40%
Interest in joint venture 85,266 89,547
116,317 114,244 19,690 17,752 13,307 13,082
Advances – – – – 6,834 6,834 – –
Purchase adjustment to property 4,827 5,158
– – – – – –
Goodwill 15,279 16,076
4,712 5,023 – – – –
Other – –
– – – – (142 ) (137)
Investment in and advances
to joint ventures
$ 105,372 $110,781
$121,029 $119,267 $ 26,524 $ 24,586 $ 13,165 $12,945
Summarised financial information for non-material joint ventures and associates
In aggregate, the Group’s investments in and advances to non-material joint ventures were $31.7 million and $33.6 million, and in the non-material
associates were $8.4 million and $7.8 million, for the years ended November 30, 2021 and 2020, respectively. The below summarises the
financial information of the non-material joint ventures and associates:
For the years ended
November 30,
(in thousands) 2021 2020
Joint Ventures
Profit before taxes $ 8,122 $ 6,275
Income tax expense 1,536 1,226
Net profit 6,586 5,049
Other comprehensive (loss) profit (1,512 ) 655
Total comprehensive income $ 5,074 $ 5,704
For the years ended
November 30,
(in thousands) 2021 2020
Associates
Profit before taxes $ 1,595 $ 235
Income tax expense 335 73
Net profit 1,260 162
Other comprehensive loss (292 ) (522 )
Total comprehensive income (loss) $ 968 $ (360 )
Commitments
The Group has no commitments to joint ventures as of November 30, 2021. Capital commitments in joint ventures are in Note 27.
See Note 28 for amounts due from and to the Group from joint ventures and associates.
114 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
18. Investments in Equity Instruments
Accounting policy
Investments in equity instruments which are designated as fair value through other comprehensive income (“FVTOCI”) are carried at their fair value
and remeasured each period. Movements in the carrying amount are taken through other comprehensive income. Upon disposal of these equity
investments, any balance within other comprehensive income for these equity investments is reclassified to retained earnings and is not
reclassified to profit or loss.
Equity investments designated at FVTOCI
At November 30, 2021, the Group had investments in Golar LNG Limited and Ganesh Benzoplast Limited (“GBL”), that have been designated
as FVTOCI as they are not held for trading by the Group.
On December 7, 2020, the Group acquired 342,857 shares of Golar LNG Limited at $8.75 per share.
In 2020, the Group’s joint venture in India, Stolt Rail Logistics Systems Limited, was sold to the joint venture partner, GBL, in exchange for
shares in GBL. The transaction valued the GBL shares at 62 Indian rupees each ($0.835) or $5.1 million, which was used as the fair value
for the year-end, owing to the proximity of the sale to November 30, 2020. GBL is listed on the Bombay Stock Exchange.
There were no dividends received in the years ended November 30, 2021 and 2020.
Investments in equity instruments increased owing to the change in fair market value of the Golar LNG Limited and GBL shares in 2021.
A summary of changes in value of investments in equity instruments for the year ended November 30, 2021 and 2020 is summarised below:
As of November 30, 2021 2020 2021 2020 2021 2020
(in thousands) Golar LNG Limited
GBLTotal
Number of equity shares 2,673 2,330 6,111 6,111
Percentage of shareholding 2.5% 2.3% 9.8% 9.8%
Share price as of November 30 $11.80 $9.10 $1.04 $0.835
Gain (loss) on FVTOCI $ 7,337 $ (9,133) $ 1,344 $ – $ 8,681 $ (9,133)
Cumulative (loss) gain on FVTOCI (74,846) (82,183) 1,344 – (73,502) (82,183)
Value of investment $ 31,537 $21,202$ 6,336 $ 5,103 $ 37,873 $26,305
115Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
19. Long-term Insurance Claims Receivable
Accounting policy
The Group maintains insurance to cover a number of risks including employee health, workers’ compensation, pollution, damages to hull and
machinery for each of our ships, property damages, war damage and general liabilities for third-party claims. The Group recognises a provision
for future expected payments to third parties plus self-insured liabilities (deductibles) in respect of all claims (see Note 26).
The Group recognises insurance reimbursement receivables from insurers for third-party claims at the time the recovery is virtually certain.
Substantially all of the long-term insurance reimbursement receivables are for claims such as collision, property damage, pollution, environmental
damage, general average, injury and cargo. The liabilities associated with the claims are estimated based on the specific merits of the individual claims.
At November 30, 2021 and 2020, respectively, the Group included $162.9 million and $191.7 million for long-term insurance claims receivables.
For 2021, substantially all of the Long-term insurance claims receivables and Long-term provision relate to the civil action as a result of the fire
on the MSC Flaminia (see Note 29).
All of the Group’s insurance policies are subject to coverage limits, exclusions and deductible levels. While the Group believes that the estimated
accrued claims reserves are adequate, the ultimate losses can differ.
20. Accounts Payable
Accounting policy
Accounts payable are initially valued at their fair value and subsequently at amortised cost.
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received or is entitled to consideration.
When consideration is paid by a customer before the Group transfers goods or services to satisfy the performance obligation, a contract liability
is recognised. Contract liabilities are recognised as revenue when the Group satisfies the contractual performance obligations.
As of November 30,
(in thousands) 2021 2020
Trade payables $ 99,642 $ 80,834
Withholding and value added tax 11,903 6,561
Insurance premiums payable 115 3,349
Other 2,947 1,286
$ 114,607 $ 92,030
Contract liabilities
2021 2020
(in thousands) <1 year >1 year <1 year >1 year
Balance, December 1 $ 26,787 $ – $ 28,477 $ –
Revenue recognised (from opening balance) (26,787) – (28,477 ) –
Revenue recognised (current year) (987,763) – (980,776 ) –
Cash received in advance of performance obligation 1,016,855 – 1,007,563 –
Balance, November 30 $ 29,092 $ – $ 26,787 $ –
Contract liabilities are typically recognised as revenue within 45 days of the completion of the performance obligation. Contract liabilities are
included in Accrued voyage expenses and unearned income.
116 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
21. Financial Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Group’s
activities expose it to a variety of financial risks such as market risk (including currency risk, political risk, cash flow interest rate risk and price
risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge
certain risk exposures. Risk management is carried out by a central Treasury department under policies approved by the Board of Directors.
Group Treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written
principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit
risk, use of derivative financial instruments and investment of excess liquidity.
Risk Exposure arising from Measurement Management
Market risk –
foreign exchange
Future commercial transactions
Recognised financial assets and
liabilities not denominated in US dollars
Cash flow forecasting
Sensitivity analysis
Forward foreign exchange
contracts and cross-currency
interest rate swaps
Market risk –
interest rate
Long-term borrowings at variable rates Sensitivity analysis Cross-currency interest rate
swaps, interest rate swaps
Market risk –
commodity price
Changes in fuel prices Cash flow forecasting
Sensitivity analysis
Bunker surcharge clauses and
bunker swaps
Credit risk
Cash and cash equivalents, trade
receivables, derivative financial
instruments, available-for-sale debt
instruments and held-to-maturity
investments
Ageing analysis
Credit ratings
Diversification of bank deposits,
credit limits and letters of credit
Investment guidelines for available-
for-sale and held-to-maturity
investments
Liquidity risk
Borrowings and other liabilities Rolling cash flow
forecasts
Availability of committed credit
lines and borrowing facilities
Market risk
The Group is exposed to market risk, including changes in interest rates, currency exchange rates, price risk and bunker fuel costs. To manage
the volatility relating to these exposures, the Group enters into derivative transactions in accordance with Group policies. The financial impact of
these instruments is offset by corresponding changes in the underlying exposures being hedged. Derivative instruments are not held for trading
or speculative purposes.
The Group analyses its interest rate exposure based on sensitivity analysis. Scenarios are simulated, taking into consideration refinancing,
renewal of existing positions, alternative financing and hedging.
The Group calculates the impact on profit and loss of a defined interest rate shift. At November 30, 2021, 18.4% of the Group’s long-term debt
had variable interest rates. At November 30, 2021, if interest rates on the Group’s short-term and long-term debt had been 10 basis points
higher/lower with all other variables held constant, the calculated pre-tax profit for the year would have been $0.4 million lower/higher, mainly
as a result of higher/lower interest expense on floating-rate debt for which the interest rate has not been hedged.
In addition, for bunker fuel risk, the majority of the contracts of affreightment (“COA”) entered into by the Group’s Tanker segment include
provisions intended to pass through fluctuations in fuel prices to customers. The Group’s policy is to hedge a minimum of 50% of expected
bunker purchases within the next 12 months through either bunker surcharges included in the COAs or through hedging. For the years ended
November 30, 2021 and 2020, the expected coverage from fluctuations in bunker fuel prices was 60.7% and 68.1%, respectively.
Political and geopolitical risk
SNL is exposed to geopolitical risks where territorial and other disputes between countries could lead to the outbreak of war or the existence
of international hostilities that could damage the world economy, adversely affect the availability of, and demand for, petroleum and chemical
products and adversely affect SNL’s ability to operate ships, terminals or tank containers. Moreover, SNL operates in a sector of the economy
that is likely to be adversely affected by the impact of political instability, terrorist or other attacks, war or international hostilities, for example, the
recent escalation of hostilities in the Ukraine.
117Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Most of the revenue earned
by Tankers and Tank Containers is in US dollars, while a significant portion of their operating expenses is incurred in other currencies, primarily
the euro, the Philippine peso, the Singapore dollar, the Japanese yen and the British pound. When there is a mismatch between revenue and
expense currencies, any depreciation of the revenue currency relative to the expense currency will decrease profit margins. In addition, exposure
occurs when a member of the Group holds accounts receivable or payable in a non-functional currency.
At November 30, 2021, prior to the effect of hedging, if the US dollar had weakened/strengthened by 5% against the major currencies mentioned
above, with all other variables remaining constant, the recalculated pre-tax profit for the year would have been approximately $7.5 million
higher/lower, mainly due to the effect of operating and administrative and general expenses, net of revenues, from non-US dollar transactions
as well as foreign exchange gains or losses on the remeasurement of non-US dollar-denominated account receivable and payable balances
through the income statement.
SNL’s policy is to hedge between 50% to 80% of the Group’s expected future foreign currency exposure and 100% of its future committed capital
expenditures denominated in foreign currencies.
Concentration of credit risk
Trade receivables are from customers across all lines of the Group’s business. The Group extends credit to its customers in the normal course
of business. The maximum exposure to credit risk is the net customer accounts receivable balance of $250.6 million and cash balance of
$123.9 million. The Group regularly reviews its accounts receivable by performing credit checks upon entering into an initial sales contract with
a customer and by the respective business controllers regularly reviewing the days past due accounts receivable reports. The majority of trade
receivables are in US dollars.
An analysis of the age of customer trade receivables that are past due is as follows:
As of November 30, 2021
(in thousands)
Not
Impaired Impaired
Current $ 142,818 $ –
Up to 30 days past due 59,017 940
31 to 60 days past due 18,131 473
61 to 90 days past due 8,240 244
Greater than 91 days past due 22,430 18,472
$ 250,636 $ 20,129
As of November 30, 2020
(in thousands)
Not
Impaired
Impaired
Current $ 122,801 $ –
Up to 30 days past due 44,795 1,041
31 to 60 days past due 12,802 523
61 to 90 days past due 4,519 372
Greater than 91 days past due 15,479 14,141
$ 200,396 $ 16,077
No collateral is held on any accounts receivable.
118 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Concentration of credit risk (continued)
The only material loss allowance held against financial assets relates to trade receivables and is calculated on a lifetime expected loss basis.
There have been no changes in the estimation techniques applied in the calculation of the loss allowance during the year.
The allowance for impairment on customer trade receivables changed as follows:
As of November 30,
(in thousands) 2021 2020
Allowance for impairment on customer trade and accrued receivables, brought forward $ 18,230 $20,213
Impairment recognised (recovered) 3,145 (686)
Accounts written off (1,246) (1,297)
Balance at the end of the year $ 20,129 $18,230
The amount of the impairment allowance on receivables is based on the age of unpaid balances, information about the current and expected
future financial condition of customers and the markets in which they inhabit, and other relevant information. Management does not believe
significant risk exists in connection with concentrations of credit as of November 30, 2021. There have been no significant changes to the
impairment allowance because of changes in the gross carrying amount of trade receivables.
There are no significant amounts written off which are still subject to enforcement activity.
The Group’s cash is held by a diverse group of financial institutions, which is monitored on an annual basis by Treasury.
Liquidity risk
Cash flow forecasting is performed by the operating entities of the Group and is aggregated at the corporate level. The Treasury department
monitors rolling forecasts of the Group’s liquidity requirements to ensure the Group has sufficient cash to meet operational needs while
maintaining sufficient headroom on its undrawn committed borrowing facilities (see Note 23) at all times so that the Group does not breach
borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans,
covenant compliance, compliance with internal balance sheet ratio targets and certain currencies’ restrictions. The Group also reviews and
monitors sensitivities.
119Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
22. Financial Instruments
Accounting policy for financial instruments
IFRS 9 contains a classification and measurement approach for financial assets and liabilities, including derivative instruments that reflects the
business model in which assets are managed and their cash flow characteristics.
Under IFRS 9, all financial instruments are initially measured at fair value. In addition, for financial assets or liabilities not remeasured at fair value
through profit or loss, financial instruments are adjusted for transaction costs. The classification of a financial asset is determined at initial
recognition; however, if certain conditions are met, an asset may subsequently need to be reclassified.
IFRS 9 contains three principal classification categories for financial assets, based on the business models under which they are held:
Amortised cost: The Group classifies its financial assets at amortised cost only if both of the following criteria are met: the assets are held within a
business model with the objective of collecting the contractual cash flows and the contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal outstanding. Income from these financial assets is included in finance income using
the effective interest rate method. The Group’s assets measured at amortised cost include trade and other receivables, cash and cash equivalents
and advances from joint ventures and associates.
Fair value through other comprehensive income (FVTOCI): Assets that are held for collection of contractual cash flows and for future sales,
where the assets’ cash flows represent solely payments of principal and interest and dividends, are measured at fair value through other
comprehensive income.
Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost or FVTOCI are measured at fair value through
profit or loss.
(i) Impairment
As required by IFRS 9, the Group adopted an “expected credit loss model” which requires the Group to account for expected credit losses and
changes in those expected credit losses at each year end or half-year to reflect changes in credit risk since initial recognition. In other words, it is
no longer necessary for a credit event to have occurred before credit losses are recognised. Credit losses are calculated as the present value of the
difference between all contractual cash flows that are due and all cash flows that the entity expects to receive. Expected credit losses are the sum
of all possible credit losses, weighted by their probability of occurrence.
The “12-month expected credit losses” approach is applied to all financial assets with the exception of trade receivables and advances to joint
ventures. Both these asset classes generally do not contain a significant financing component. For these assets, the Group applies the simplified
approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables, net of any
allowance losses. The allowance loss measurement is determined by applying a simplified approach equalling the lifetime expected credit losses.
Under the simplified approach, the tracking of changes in credit risk is not required, but instead the base lifetime expected credit loss at all times is
applied. An allowance for loss is made for potentially impaired receivables during the year in which they are identified based on a periodic review of
all outstanding amounts. Losses are recorded within selling, marketing and distribution expenses in the income statement. Trade receivables are
deemed as impaired when there is an indication of significant financial difficulties of the debtor (delinquency in or default on payments occurs,
probability of bankruptcy or need for financial reorganisation).
(ii) Fair value estimation
The information below summarises financial instruments carried at fair value, by valuation method. The different levels have been defined
as follows:
New business quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices) (Level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The Group’s investments in Golar LNG Limited and GBL are measured using quoted prices in an active market (Level 1). The Group’s derivative
assets and liabilities are measured using inputs other than quoted prices (Level 2). The Group’s mature biological assets are measured using inputs
other than quoted prices (Level 2). There have been no changes in the fair value methodology in the periods presented.
(iii) Hedge accounting
In accordance with IFRS 9’s transition provisions for hedge accounting, the Group has not applied the IFRS 9 hedge accounting requirements and
will continue to apply the hedge accounting requirements of IAS 39.
120 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Accounting policy for derivative assets and liabilities
The Group enters into forward exchange contracts to hedge foreign currency transactions, interest rate swaps to hedge the risk of variability
of interest payments, cross-currency interest rate swaps to hedge the risk of variability of interest and principal payments on non-US dollar
denominated borrowings and bunker fuel hedge contracts to lock in the price for a portion of forecasted bunker fuel requirements. No instruments
are held for speculative purposes.
For bonds and loan facilities where it is determined that there is an interest rate or foreign currency risk that should be hedged, the derivative
financial instrument acquired will have critical terms that mirror those of the underlying debt. In these circumstances, it is the Group’s objective
to achieve 100% effectiveness.
Derivative financial instruments are initially recognised at fair value at the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each balance sheet date. The resulting gain or loss on remeasurement is recognised immediately in the income
statement unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition of any resultant
gain or loss on the income statement depends on the nature of the item being hedged. The impact in the income statement is shown in interest,
foreign currency exchange gain (loss) or operating expenses as appropriate, based on the underlying of the derivative.
(i) Determination of fair value
The fair value of interest rate swaps, cross-currency interest rate swaps and foreign exchange contracts is based on discounted cash flow models
based upon the valuations received from financial institutions, taking into account current interest rates and foreign exchange rates.
(ii) Cash flow hedges
The Group applies cash flow hedge accounting to its interest rate swaps and cross-currency interest rate swaps.
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly probable
forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recognised directly in other comprehensive
income. Any ineffective portion of the hedge is recognised immediately in the income statement.
When the forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, the associated cumulative
gain or loss recognised in other comprehensive income is removed and included in the initial cost or other carrying amount of the asset or liability.
If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gains and losses
that were recognised directly in equity are reclassified into the income statement in the same period or periods during which the asset acquired or
liability assumed affects profit or loss, i.e. when finance income or expense is recognised.
When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationship but the hedged
forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is recognised in accordance with the
above policy when the transaction occurs. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss
recognised in other comprehensive income is recognised in the income statement immediately.
Any unrealised and realised gains or losses on foreign exchange forward contracts are taken directly to the income statement.
(iii) Embedded derivatives
Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics
are not closely related to the host contract. Contracts are assessed for embedded derivatives at inception of such contracts or when the Group
becomes party to them. Embedded derivatives that have been separated from host contracts are measured at fair value at each balance sheet
date. Any gains or losses arising from changes in fair value are taken directly to the income statement.
121Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
The Group holds the following financial instruments:
November 30, 2021 November 30, 2020
(in thousands) Current
Non-
current
Total
carrying
value Fair value Current
Non-
current
Total
carrying
value Fair value
Financial Assets
Financial assets at FVTOCI
Investments in equity instruments
– listed $ –
$ 37,873 $ 37,873 $ 37,873 $ – $ 26,305
$ 26,305 $ 26,305
Financial assets at amortised cost
Cash and cash equivalents 123,868 – 123,868 123,868 187,767 – 187,767 187,767
Restricted cash 6,096 – 6,096 6,096 109 – 109 109
Trade receivables 344,347 – 344,347 344,347 220,264 – 220,264 220,264
Loans and advances to joint ventures
and associates –
34,725 34,725 34,725 – 39,324
39,324 39,324
Other current assets 54,351 – 54,351 54,351 41,542 – 41,542 41,542
$ 528,662 $ 72,598 $ 601,260 $ 601,260 $ 449,682 $ 65,629 $ 515,311 $ 515,311
Financial Liabilities
Financial liabilities at amortised cost
Accounts payables, excluding
withholding and value added taxes $ 102,704
$ – $ 102,704 $ 102,704 $85,469$ –
$ 85,469 $ 85,469
Accrued expenses and accrued
voyage expenses
249,232
– 249,232 249,232 213,902 –
213,902 213,902
Dividend payable 26,829 – 26,829 26,829 13,448 – 13,448 13,448
Long-term lease obligations, including
current maturities 43,473
166,977 210,450 210,450 35,640 157,875
193,515 193,515
Short-term loans and long-term debt,
including current maturities and
excluding debt issuance costs
537,385
1,712,418 2,249,803 2,386,211 262,144 2,075,054
2,337,198 2,518,852
$ 959,623 $ 1,879,395 $ 2,839,018 $ 2,975,426 $ 610,603 $ 2,232,929 $ 2,843,532 $ 3,025,186
November 30, 2021 November 30, 2020
(in thousands) Current
Non-
current
Total
carrying
value
Fair value Current Non-current
Total
carrying
value
Fair value
Derivative Financial Instruments
at Fair Value
A
ssets
Foreign currency exchange contracts
– cash flow hedges
$ 6
$ – $ 6 $ 6 $157$–
$ 157 $ 157
Cross-currency interest rate swaps
– cash flow hedges 583
6,868 7,451 7,451 – 9,242
9,242 9,242
$ 589 $ 6,868 $ 7,457 $ 7,457 $ 157 $ 9,242 $ 9,399 $ 9,399
Liabilities
Bunker swaps $ – $ – $ – $ – $ 251 $ – $ 251 $ 251
Cross-currency interest rate swaps
– cash flow hedges 972 – 972 972 53,787 –
53,787 53,787
Foreign currency exchange contracts 2,649 – 2,649 2,649 –– – –
Interest rate swaps 6,618 7,938 14,556 14,556 7,776 21,044 28,820 28,820
$ 10,239 $ 7,938 $ 18,177 $ 18,177 $ 61,814 $ 21,044 $ 82,858 $ 82,858
122 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Fair value of financial instruments
The estimated fair value amounts of financial instruments have been determined by the Group, using appropriate market information and
valuation methodologies. Considerable judgement is required to develop these estimates of fair value, so the estimates provided here are not
necessarily indicative of the amounts that could be realised in a current market exchange.
The carrying amount of cash and cash equivalents, receivables, other current assets, account payable (excluding withholding and value added
tax payables), accrued expenses and dividend payable are a reasonable estimate of their fair value, owing to their short maturity. Long-term
leases are exempt from disclosure of fair value measurements so fair value equals book value. Long-term debt in the table above excludes debt
issuance costs of $24.2 million and $28.1 million, as of November 30, 2021 and 2020, respectively. The estimated value of the Group’s senior
unsecured bond issues is based on traded values, while the value on the remaining long-term debt is based on interest rates as of November 30, 2021
and 2020, respectively, using the discounted cash flow methodology. The fair values of the Group’s foreign exchange and bunker contracts
are based on their estimated market values as of November 30, 2021 and 2020, respectively. Market value of interest rate and cross-currency
interest rate swaps was estimated based on the amount the Group would receive or pay to terminate its agreements as of November 30, 2021
and 2020.
The estimated value of the Group’s financial assets and marketable securities are based on traded value. The estimated value of its senior
unsecured bond issues is based on traded values (Level 1 valuation method), while the values on the remaining long-term debt are based on
interest rates as of November 30, 2021 and 2020, respectively, using the discounted cash flow methodology (Level 2 valuation method). The fair
values of the Group’s foreign exchange and bunker contracts are based on their estimated market values as of November 30, 2021 and 2020.
Market value of interest rate and cross-currency interest rate swaps was estimated based on the amount the Group would receive or pay to
terminate its agreements as of November 30, 2021 and 2020.
The Group’s financial instruments did not result in any income or loss recognised in the income statement.
Derivatives
The Group has derivative assets of $7.5 million and $9.4 million as of November 30, 2021 and 2020, respectively and derivative liabilities of
$18.2 million and $82.9 million as of November 30, 2021 and 2020, respectively. All the Group’s derivative activities are financial instruments
entered with major financial institutions and brokers for hedging the Group’s committed exposures or firm commitments with major financial
credit institutions, shipbuilders and ship-repair yards. The fair values of the Group’s foreign exchange contracts and cross-currency interest
rate swaps are based on their estimated market values as of November 30, 2021 and 2020, respectively. Derivative financial instruments
are measured using inputs other than quoted values. There have been no changes in the valuation techniques since November 30, 2019.
Net derivative assets for cross-currency interest rate swaps are higher by $51.0 million primarily owing to the maturity of the 2021 NOK bond.
These bonds were fully hedged using cross-currency interest rate swaps.
None of the Group’s derivative activities are publicly traded financial instruments. Instead, the financial instruments have been entered into with
major financial institutions and brokers. The Group holds foreign exchange forward contracts, commodity contracts and interest rate swaps,
which subject the Group to a minimum level of counterparty risk. The Group does not believe that it has a material exposure to credit risk from
third parties failing to perform according to the terms of hedge instruments. The cumulative net (losses) gains recognised in equity were as
follows at November 30, 2021 and 2020:
As of November 30,
(in thousands) 2021 2020
Interest rate derivatives $ (12,703) $ (27,448 )
Cross-currency interest rate swaps (2,308) (7,235 )
Foreign currency derivatives (10) (10 )
Foreign exchange and interest rate hedges held by joint ventures (4,325) (8,173)
Deferred income tax gain on the interest rate derivatives 603 1,306
$ (18,743 ) $ (41,560 )
123Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Foreign currency
The following foreign exchange contracts, maturing through September 2022, were outstanding as of November 30, 2021 and 2020:
Purchase
(in local currency, thousands) 2021 2020
Norwegian krone 3,005 –
Euro 38,250 23,000
Singapore dollar 10,085 1,166
British pound 14,250 9,000
The US dollar equivalent of the currencies which the Group had contracted to purchase was $72.4 million and $40.2 million as of November 30,
2021 and 2020, respectively.
The Group utilises foreign currency derivatives to hedge committed and forecasted cash flow exposures. Most of these contracts have been
designated as cash flow hedges.
The Group has elected to apply non-hedge accounting treatment for all contracts. Gains and losses on hedges of committed commercial
transactions are recorded as a foreign exchange gain or loss.
Interest rate and cross-currency interest rate swaps
The Group had interest rate and cross-currency interest rate swaps with notional values of $595.0 million and $786.2 million as of November 30,
2021 and 2020, respectively. These derivatives have been designated as cash flow hedges. For the years ended November 30, 2021 and 2020,
$10.7 million and $13.5 million, respectively, were recognised in finance expense. Any remaining amounts currently in other comprehensive
income are expected to be reclassified to earnings between 2022 and 2030.
Other
The Group had a forward contract with notional value of $10.1 million as of November 30, 2021 for the purchase of 2,723,186 Class A
shares of Odfjell S.E. (“Odfjell”). The Group has elected to apply non-hedge accounting treatment for this derivative. Gains and losses on
the future contract were recorded in Other non-operating (expense) income and collateral of 50% of the value of the derivative was included
in Restricted cash.
124 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Maturity of financial liabilities
For the year ended November 30, 2021
(in thousands)
Less than
1 yr
2-3 yrs 4-5 yrs
More than
5 yrs
Total
Contractual obligations:
Accounts payable, excluding withholding and value added taxes $ 102,704 $ – $ – $ – $ 102,704
Accrued expenses and dividend payable 276,061 – – – 276,061
Long-term lease liabilities, including current maturities 43,473 72,499 25, 831 68,647 210,450
Interest on long-term lease liabilities 9,257 12,522 7,725 68,351 97,855
Short-term loans 40,000 – – – 40,000
Long-term debt, including current maturities 497,384 733,980 551,125 427,314 2,209,803
Interest on long-term debt 89,279 123,444 57,941 37,313 307,977
Derivative financial liabilities 7,626 4,851 2,162 392 15,031
Total contractual obligations $ 1,065,784 $ 947,296 $ 644,784 $ 602,017 $ 3,259,881
For the year ended November 30, 2020
(in thousands)
Less than
1 yr
2-3 yrs 4-5 yrs
More than
5 yrs
Total
Contractual obligations:
Accounts payable, excluding withholding and value added taxes $ 85,469 $ – $ – $ – $ 85,469
Accrued expenses and dividend payable 227,350 – – – 227,350
Long-term lease liabilities, including current maturities 35,640 58,650 36,653 62,572 193,515
Interest on long-term lease liabilities 8,714 12,616 7,897 62,304 91,531
Long-term debt, including current maturities 262,144 845,012 721,371 508,671 2,337,198
Interest on long-term debt 105,491 164,119 81,996 53,905 405,511
Derivative financial liabilities 61,793 15,559 2,538 2,404 82,294
Total contractual obligations $ 786,601 $ 1,095,956 $ 850,455 $ 689,856 $ 3,422,868
Long-term debt in the table above excludes debt issuance costs of $24.2 million and $28.1 million as of November 30, 2021 and 2020,
respectively. Derivative financial liabilities are stated at future undiscounted cash flows; therefore, they do not agree to the balance sheet.
125Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
23. Short-Term Bank Loans
Accounting policy
Interest-bearing borrowings are recognised initially at fair value less directly attributable transaction costs. Subsequent to initial recognition, interest-
bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement
over the period of the borrowings on an effective interest basis.
Outstanding short-term bank loans were $40.0 million and nil at November 30, 2021 and November 30, 2020, respectively. The short-term bank
loans consisted of $20.0 million of debt obligations to banks under uncommitted lines of credit and bank overdraft facilities and $20.0 million
under its Secured Reducing Multi-Currency Revolving Loan Facility Agreement (“Secured RCF”). As of November 30, 2021, the Group had
available undrawn committed credit lines of $309.9 million from the Secured RCF.
The Group completed the Secured RCF in 2016, securing it to certain of the Group’s fleet of chemical tankers. The agreement is with 11 banks,
and the syndication was led by the three bookrunners: Nordea Bank, DNB Bank ASA and Danske Bank. The weighted average interest rate was
2.6% and 4.0% for November 30, 2021 and 2020, respectively.
The Group entered into a 24-month Revolving Credit Facility during the year ended November 30, 2021. This agreement is with two banks:
DNB (UK) Limited and Swedbank AB for a total of $100 million and expires on December 31, 2022. As of November 30, 2021 the facility was
undrawn and there is no weighted average interest rate as the facility has not been utilised during the year.
The Group also has $65.0 million of uncommitted lines of credit facilities which are payable on demand and can be withdrawn by the banks at
short notice. The weighted average interest rate during the year ended November 30, 2021 was 2.1% and as the facilities were undrawn during
the year ended November 30, 2020 there was no average interest rate.
Commitment fees for unused lines of credit were $4.3 million and $3.4 million for the years ended November 30, 2021 and 2020, respectively.
Several of the short-term and long-term credit facilities contain various financial covenants applicable either quarterly or annually, which, if not
complied with, could result in the acceleration of repayment of amounts due and could limit the ability of the Group to draw funds from time to
time. At November 30, 2021 and 2020, the Group was in compliance with the financial covenants under its debt agreements.
Agreements executed in connection with certain debt obligations, both short-term and long-term, require that the Group maintains defined
financial covenants, including, but not limited to, minimum consolidated tangible net worth of $600.0 million, maximum ratio of consolidated
debt to consolidated tangible net worth of 2.25 : 1 and minimum ratio of consolidated EBITDA to consolidated interest expense of 2 : 1. Most of
the debt agreements provide for a cross default in the event of a default in another agreement. In the event of a default that extends beyond the
applicable remedy or cure period, lenders may accelerate repayment of amounts due to them.
126 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
24. Long-Term Debt
Accounting policy
Interest-bearing borrowings are recognised initially at fair value less directly attributable transaction costs. Subsequent to initial recognition, interest-
bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement
over the period of the borrowings on an effective interest basis.
Long-term debt as of November 30, 2021 and 2020, consisted of the following:
(in thousands) Notes 2021 2020
Preferred ship fixed rate mortgages:
Fixed interest rates ranging from 2.7% to 5.4% (2020: 2.7% to 5.4%), maturities vary through 2027 (i) $ 518,510 $ 581,073
Preferred ship variable rate mortgages:
Interest rates ranging from 2.6% to 3.0% (2020: 3.0% to 4.9%), maturities vary through 2029 (ii) 400,065 364,969
Senior secured credit facilities (iii) 785,560 771,512
Senior unsecured bond issues (iv) 455,225 562,599
Bank loans:
Interest rates ranging from 1.5% to 3.2% (2020: 1.8% to 7.7%), maturities vary through 2026 (v) 26,284 28,988
2,185,644 2,309,141
Less – current maturities (490,502 ) (255,805 )
$ 1,695,142 $ 2,053,336
The classification of debt and the interest rates shown in the above table are after considering existing interest rate hedges.
Long-term debt
The majority of long-term debt is denominated or swapped into US dollars, with $155.9 million and $177.1 million denominated in other
currencies and not swapped to US dollars as of November 30, 2021 and 2020, respectively.
Long-term debt consists of debt collateralised by mortgages on ships, tank containers and terminals, as well as $455.2 million unsecured bond
financing at November 30, 2021.
(i) Preferred ship fixed rate mortgages
During February and March 2019, the Group received $241.6 million under a fixed-rate borrowing agreement, involving eight ships. The agreement
is with Development Bank of Japan, ING Bank N.V., National Australia Bank, Société Générale and a group of private investors at fixed interest
rates ranging from 4.16% to 4.27%. There are equal quarterly payments for each ship for an average tenor of eight years. At the end of the
agreement, the Group has an option to purchase the ships by paying fixed amounts. As the option to repurchase was virtually certain to be
exercised by the Group at the date of the borrowing, the transaction has been treated as collateralised debt. This debt refinanced the acquisition
debt relating to the Jo Tankers acquisition in 2016.
With the deliveries of five newbuildings, in late 2016 through 2017, the Group drew down $57.2 million in 2016, $219.6 million in 2017 and $7.6 million
in 2018 under the $291.8 million term loan with Export and Import Bank of China and Standard Chartered Bank, signed August 15, 2013. The loans
are secured by the newbuildings and is being repaid over 10 years. Interest has been fixed at an average rate of 4.94%.
(ii) Preferred ship variable rate mortgages
During March 2021, the Group closed a $77.0 million floating-rate facility with CMB Financial Leasing Co. Ltd. (“CMBFL Facility”) including three
newly acquired CTG ships. There are quarterly repayments for each ship over ten years whereby the Group has an option to purchase the ships
by paying $12.8 million for each ship. As the option to repurchase was virtually certain to be exercised by the Group at the date of the borrowing,
the transaction has been treated as collateralised debt.
In August 2019, the Group closed a $415.6 million floating-rate facility with CMBFL Facility, involving 20 ships. There are equal quarterly
payments for each ship for an average tenor of seven years and floating interest rates, ranging from 2.92% to 3.0% in 2021. At the end of the
agreement, the Group has an option to purchase the ships by paying fixed amounts. As the option to repurchase was virtually certain to be
exercised by the Group at the date of the borrowing, the transaction has been treated as collateralised debt. The loan was used to pay down
existing debt and for general corporate purposes.
(iii) Senior secured credit facilities
On December 3, 2020, the Group entered into a $65.0 million fixed-rate term loan facility using Stolthaven Dagenham and Stolthaven Moerdijk
terminals as collateral. The facility agreement is with KFW IPEX-BANK GMBH for six years. There are eight equal payments of 6.25% of the total
commitment beginning in 2023 with a final balloon obligation of $32.5 million.
In July 2019, Stolthaven New Orleans LLC issued $200.0 million Senior Secured Notes with a group of private investors. The private placement
has a ten-year term at a fixed interest rate of 5.15% and is secured by the terminal in Braithwaite, Louisiana. Proceeds from the Notes were used
for general corporate purposes.
127Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
(
iii) Senior secured credit facilities (continued)
On May 24, 2017, the previous Stolthaven Singapore terminal loan facility was refinanced with a seven-year SGD 280.0 million ($202.4 million)
term loan facility. The agreement is with a bank club deal consisting of United Overseas Bank Limited, DBS Bank Ltd, Oversea-Chinese Banking
Corporation Limited, and Australia and New Zealand Banking Group Limited and has a fixed interest rate of 4.16%
.
On M
ay 20, 2016, the Group entered into a $131.3 million fixed-rate borrowing agreement using a group of tank containers as collateral.
The agreement is with ING Bank N.V., Development Bank of Japan and a group of private investors for six and a half years at a fixed interest
rate of 3.4%. There are 26 equal payments of $3.6 million each and at the end of the agreement, the Group has an option to purchase the tank
containers by paying a fixed amount of $59.1 million. As the option to repurchase was virtually certain to be exercised by the Group at the date
of the borrowing, the transaction has been treated as collateralised debt.
On November 20, 2015, the Group entered into a $166.4 million fixed-rate borrowing agreement using a group of tank containers as collateral.
The agreement is with ING Bank N.V. and a group of private investors for six and a half years at a fixed interest rate of 3.3%. There are 26 equal
payments of $4.6 million each and at the end of the agreement, the Group has an option to purchase the tank containers by paying a fixed
amount of $74.9 million. As the option to repurchase was virtually certain to be exercised by the Group at the date of the borrowing, the
transaction has been treated as collateralised debt.
On February 19, 2015, the Group announced that it had closed a $250.0 million private placement with American International Group. The private
placement has a term of 10 years and is secured by the Group’s terminal in Houston. The loan was used to pay down existing debt and for
general corporate purposes.
(iv) Senior unsecured bond issue
On June 16, 2020, the Group completed a placement of senior unsecured bonds for NOK 1.25 billion (swapped into $132.0 million) in a new
three-year bond issue, carrying a coupon of three months NIBOR plus 4.5%. The Group swapped the bond proceeds into a US dollar obligation at
a fixed interest rate of 5.19%. The settlement date for the bonds was June 29, 2020. Net proceeds from the bond issue were used to repurchase
$78.1 million of the SNI05 bonds with maturity date of March 18, 2021 and for general corporate purposes.
On February 5, 2020, the Group completed a placement of senior unsecured bonds for NOK 1.3 billion (swapped into $141.5 million) in a new
four-year bond issue carrying a coupon of three months NIBOR plus 3.65%. The Group swapped the bond proceeds into a US dollar obligation
at a fixed interest rate of 5.44%. The settlement date for the bonds was February 20, 2020. Net proceeds from the bond issue were used to
repurchase $53.4 million of the SNI06 bonds with maturity date of April 8, 2020 and for general corporate purposes.
On September 8, 2017, the Group completed the placement of senior unsecured bonds for $175.0 million in a new five-year bond issue
carrying a fixed coupon rate of 6.375%. Net proceeds from the bond issue were used to repay a bond maturing in March 2018 and for
general corporate purposes.
On June 8, 2016, the Group completed an increase of NOK 500.0 million ($61.8 million) on its bond issuance maturing in 2019, NOK 150.0 million
($18.5 million) on its bond issuance maturing in 2020 and NOK 200.0 million ($24.7 million) on its bond issuance maturing in 2021. The Group
swapped the bond proceeds into US dollar obligations at fixed interest rates of 5.49% for 2019, 5.78% for 2020 and 5.99% for 2021 bond issuances.
On March 3, 2014, the Company finalised a placement of senior unsecured bonds in a total amount of NOK 1,250.0 million (approximately
$207.0 million) in a new seven-year bond issue. The settlement date for the new bonds was March 18, 2014. The Company swapped the bonds
into US dollar obligations at a fixed interest rate of 5.89%.
(v) Bank loans
During 2020, the Group entered into a EUR 4.0 million ($4.5 million), five-year facility with Banco Santander, EUR 5.0 million ($5.6 million)
,
s
even-year facility with CAIXA and EUR 4.3 million ($4.9 million), five-year facility with Banco Bilbao Vizcaya Argentaria (“BBVA”). All were
fully drawn during 2020.
During 2018, a new facility was agreed with CAIXA for EUR 7.0 million, which was fully drawn on July 3, 2018, and with BBVA of EUR 7.0 million
which was drawn for EUR 1.0 million during 2018 and EUR 6.0 million in 2019.
(vi) Debt issuance costs
Debt issuance costs of $24.2 million and $28.1 million have been netted against long-term debt at November 30, 2021 and 2020, respectively.
Debt issuance costs recognised in the income statement as part of effective interest rates were $7.3 million for both the years ended
November 30, 2021 and 2020.
128 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Analysis of net debt
Net debt at November 30, 2021 comprises lease liabilities of $210.5 million (2020: $193.5), short-term bank loans of $40.0 million (2020: nil)
and long-term debt, including current maturities, of $2,185.6 million (2020: $2,309.1 million) less cash and cash equivalents of $123.9 million
(2020: $187.8 million).
(in thousands)
At December
1, 2020
Cash flow
Exchange
differences
Other
movements
At November
30, 2021
Cash deposits $ 116,808 $ 818 $ (5,987 ) $ – $ 111,639
Short-term time deposits 70,959 (58,730 ) – – 12,229
Cash and cash equivalents 187,767 (57,912 ) (5,987 ) – 123,868
Borrowings:
Short-term bank loans – (40,000 ) – – (40,000)
Long-term debt, including current maturities (2,309,141) 170,877 (41,479 ) (5,901 ) (2,185,644 )
Lease liabilities, including current maturities (193,515 ) 43,432 3,224 (63,591 ) (210,450)
Net debt $ (2,314,889 ) $ 116,397 $ (44,242 ) $ (69,492) $ (2,312,226 )
(in thousands)
At December
1, 2019
Cash flow
Exchange
differences
Other
movements
At November
30, 2020
Cash deposits $ 110,207 $ 8,906 $ (2,305 ) $ – $ 116,808
Short-term time deposits 25,944 45,015 – – 70,959
Cash and cash equivalents 136,151 53,921 (2,305 ) – 187,767
Borrowings:
Long-term debt, including current maturities (2,345,526) 107,486 (67,111 ) (3,990 ) (2,309,141 )
Lease liabilities, including current maturities – 39,754 (4,399 ) (228,870 ) (193,515 )
Net debt $ (2,209,375 ) $ 201,161 $ (73,815 ) $ (232,860 ) $ (2,314,889 )
Short-term time deposits included within cash and cash equivalents relate to term deposits repayable within three months.
In the year ended November 30, 2021, other non-cash movements in net debt primarily represent $63.6 million of new or modified leases, net of
reductions and $7.3 million amortisation of debt issuance costs offset by the capitalisation of debt issuance costs of $3.4 million.
In the year ended November 30, 2020, other non-cash movements in net debt primarily represent $194.3 million of lease liabilities recognised
on the implementation of IFRS 16, Leases and $34.6 million of new or modified leases, net of reductions and $7.3 million amortisation of debt
issuance costs offset by the capitalisation of debt issuance costs and interest to debt of $3.2 million.
129Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
25. Pension and Other Post-Retirement Benefit Plans
Accounting policy
(i) Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred. The Group
has no further payment obligations once the contributions have been paid.
(ii) Defined benefit plans and other post-employment benefits
The Group’s net obligation in respect of defined benefit pension plans and other post-employment benefits is calculated separately for each plan
by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is
discounted to determine its present value, and the fair value of any plan assets (at bid price) is deducted.
The liability discount rate for each plan is based on the yield curve of a portfolio of high-quality corporate bonds that have maturity dates which are
approximately the same as the terms of the respective plans’ obligations. The calculation is performed by a qualified actuary using the projected
unit credit method.
The current service cost of the defined benefit plan, recognised in the income statement in employee benefit expense, reflects the increase in the
defined benefit obligation resulting from employees’ service in the current year, benefit changes, curtailments and settlements.
When the benefits of a plan are increased, the increased benefit relating to past service by employees is recognised as an expense in the income
statement immediately.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense in the income statement.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in
Other comprehensive income in the period in which they arise.
Where the calculation results in a benefit to the Group, the asset recognised is limited to the present value of any future refunds from the plan or
reductions in future contributions to the plan.
Gains and losses on the curtailment or settlement of a defined benefit plan are recognised at the time the curtailment or settlement occurs.
A curtailment occurs when the Group adopts a significant reduction in the number of employees covered by a plan or changes the terms of a
defined benefit plan such that a significant part of future earnings to current employees will no longer qualify for benefits or will qualify only for
reduced benefits.
(iii) Short-term and long-term cash-based benefits
Short-term employee benefit obligations are measured on an undiscounted basis while long-term cash-based employee benefit obligations are
discounted based on expected payment date. They are expensed in the period in which the related service is provided. An accrual is recognised for
the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to
pay this amount as a result of past service provided by the employees and the obligation can be estimated reliably.
At November 30, 2021, the Group operated a number of pension plans for the benefit of its employees throughout the world, with varying rights
and obligations depending on the conditions and practices in the specific countries. The Group’s pension plans are provided through both defined
benefit and defined contribution arrangements. These plans are regulated by the respective regulators in each of the countries where they are
set up.
The Group operates defined benefit plans in the United States, the United Kingdom, Bermuda, the Netherlands, Norway, the Philippines and Japan.
One of the defined benefit plans covers certain ship officers and other seafarers while the others are for shore-based employees. Company-sponsored
defined contribution pension plans are currently provided in all of the above countries and Spain. The Group also operates an unfunded post-retirement
medical plan in the United States.
Defined benefit plans provide benefits based on the employees’ length of pensionable service and their final pensionable salary or other criteria.
Defined contribution plans offer employees individual funds that are converted into benefits at the time of retirement.
130 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Defined benefit plans
The Group’s significant defined benefit pension plans are in the United States, Bermuda, the Netherlands and the United Kingdom.
The Pension Committees participate in the governance of each of the significant defined benefit pension plans. These Pension Committees
comprise representatives who are employees and former employees. In addition, actuarial advisers and investment management advisers
also participate in the Pension Committee meetings. The Pension Committees for plans act in the best interest of the plan participants and are
responsible for setting certain policies, such as strategic asset allocation, investment and contribution policies in consultation with the Group.
The defined benefit plans expose the Group to actuarial risks such as longer than expected longevity of members, lower than expected return on
investments and higher than expected inflation, which may increase the liabilities or reduce the value of assets of the plans.
Recognising these risks, the Group has adopted an approach of moving away from providing defined benefit plans. All defined benefit plans have
also been closed to future accrual and new entrants.
The Group follows a coordinated strategy for the funding and investment of its defined benefit pension plans subject to abiding by all local laws
and regulations applicable to those plans. The assets of the plan are generally held separately from those of the Group and are administered by
local management in the respective countries. The Group has no legal obligation to settle these liabilities with any immediate contributions or
additional one-off contributions. The Group intends to continue to contribute to each defined benefit pension and post-retirement medical plan
in accordance with the latest recommendations of each plan actuary and its pension funding policy.
In terms of investments, the Group’s aim is for the value of defined benefit plan assets to be maintained at close to the value of the
corresponding benefit obligations, allowing for some short-term volatility.
Plan assets are invested in a diversified range of asset classes, predominantly comprising bonds and equities. In some locations, such as
the United Kingdom, plan trustees and other bodies have legal and fiduciary responsibility for the investment of plan assets, and decisions
on investment strategy are taken in consultation with the Group.
The Group monitors its exposure to changes in equity markets, interest rates and inflation, and measures its balance sheet pension risk using a
risk-based approach. Strategic asset allocation studies and asset-liability studies are carried out periodically for the significant pension plans.
On a quarterly basis, the performance of all investments across the significant defined benefit plans is reviewed with the Group’s investment
management advisers.
Pension plans overview
As of November 30,
(in thousands) 2021 2020
Present value of funded obligations $ (247,310 ) $ (257,336 )
Fair value of plans assets 240,960 235,838
$ (6,350) $ (21,498)
The amounts recognised at November 30, consisted of the following:
As of November 30,
(in thousands) 2021 2020
Non-current assets $ 25,370 $ 17,867
Non-current liabilities (31,720 ) (39,365 )
Net accrued cost $ (6,350) $ (21,498)
131Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
US post-retirement healthcare plan
US-based employees retiring from the Group, having attained the age of 55 with at least 10 years of cumulative US service by January 1, 2018,
or who become disabled, were eligible to receive both pre-Medicare and post-Medicare benefit offerings for themselves and their eligible dependants.
Employees working until age 65 with at least ten years of US cumulative service are eligible for post-Medicare benefits only. All benefits are unfunded.
Components of defined benefit cost
The net periodic benefit cost for the Group’s defined benefit pension plans (including a retirement arrangement for one of the Group’s ex-Directors)
and US post-retirement healthcare plan shown above for the years ended November 30, 2021 and 2020, consisted of the following:
For the years ended
November 30,
(in thousands) 2021 2020
Service cost $ 611 $ 543
Interest cost, net 628 1,192
Settlement gain – (2,302 )
Cost of plan administration 1,045 550
Net periodic benefit cost (income) $ 2,284 $(17)
Impact on equity
Remeasurements that are recognised in Other comprehensive income are as follows:
For the years ended
November 30,
(in thousands) 2021 2020
Effect of changes in demographic assumptions $ (302 ) $ (1,128 )
Effect of changes in financial assumptions 4,745 (21,999 )
Effect of experience assumptions (241 ) 2,509
Return on plan assets (excluding interest income) 11,340 31,459
Remeasurements recognised in other comprehensive income $ 15,542 $10,841
The following tables set out the change in benefit obligations for the Group’s defined benefit pension plans and US post-retirement medical plan
and the change in plan assets for the defined benefit pension plans.
Change in benefit obligation
For the years ended
November 30,
(in thousands) 2021 2020
Benefit obligations at beginning of year $ 257,336 $ 246,728
Current service cost 604 543
Past service cost 7 –
Settlement gain – (2,302 )
Interest cost 5,608 6,816
Benefits paid (11,699 ) (12,028 )
Foreign exchange rate changes (344 ) 1,374
Settlement payments – (4,413 )
Remeasurements:
Effect of changes in demographic assumptions 302 1,128
Effect of changes in financial assumptions (4,745 ) 21,999
Effect of experience adjustments 241 (2,509 )
Benefits obligation at end of year $ 247,310 $257,336
132 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Change in plan assets
For the years ended
November 30,
(in thousands) 2021 2020
Fair value of plan assets at beginning of year $ 235,838 $ 212,914
Return on plan assets (excluding interest income) 11,340 31,459
Interest income 4,980 5,624
Company contributions 1,819 1,812
Foreign exchange rate changes (273 ) 1,020
Settlement payments – (4,413 )
Benefits paid (11,699 ) (12,028 )
Expenses paid (1,045 ) (550 )
Fair value of plan assets at end of year $ 240,960 $235,838
Change in asset ceiling
There were no defined benefit plans whose recognition of assets was limited.
Participant profile
The defined benefit obligation by participant status is as follows:
As of November 30,
(in thousands) 2021 2020
Actives $ 52,253 $ 55,914
Vested former employees not yet retired 51,517 54,741
Retirees 143,540 146,681
$ 247,310 $ 257,336
The number of participants are as follows:
As of November 30,
2021
2020
Actives 964 917
Vested former employees not yet retired 542 562
Retirees 683 682
2,189 2,161
133Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Key actuarial assumptions
The following are the assumptions used in the measurement of the projected benefit obligation for the Group’s defined benefit pension plans
and the accumulated projected benefit obligation for US post-retirement medical plan benefits:
As of November 30,
2021 2020
Weighted-average assumptions to determine projected benefit obligations:
Discount rate 2.47 % 2.23%
Rate of compensation increase 3.94 % 3.92%
Rate of pension increases 3.26 % 2.70%
Rate of price inflation 3.37 % 2.93%
Life expectancy for an individual currently at 65:
Male
21.2 yrs
23.5 yrs
21.1 yrs
Female 23.1 yrs
The net period pension expense and retiree medical expense is based on the prior year’s weighted average assumptions for the projected
benefit obligation.
Exposure to variances in healthcare cost trends have been mitigated to the extent that a 1% change would have a negligible effect on the
accumulated post-retirement benefit obligation at the end of 2021.
Impact on Defined Benefit Obligation
Change in
Assumption Increase in Assumption Decrease in Assumption
Discount rate 0.25% Decrease by 3.1% Increase by 3.2%
Salary growth rate 0.25% Increase by 0.0% Decrease by 0.0%
Pension growth rate 0.25% Increase by 0.4% Decrease by 0.3%
Increase by 1 Year in Assumption Decrease by 1 Year in Assumption
Life expectancy Increase by 2.8% Decrease by 2.9%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation
to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit
method at the end of the reporting year) has been applied as when calculating the pension liability recognised within the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year.
134 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Fair value of plan assets
The Group’s defined benefit pension plans’ assets and weighted-average asset allocation as of November 30, 2021 and 2020, by category, were
as follows:
As of November 30,
(in thousands) 2021 % 2020 %
Cash and cash equivalents $ 2,166 1% $ 2,353 1%
Equity instruments 63,592 26% 96,374 41%
Debt instruments 159,229 66% 122,702 52%
Real estate 12,161 5% 10,722 4%
Investment funds 1,799 1% 1,607 1%
Assets held by insurance company 285 – 330 –
Other 1,728 1% 1,750 1%
Total $ 240,960 100% $ 235,838 100%
The fair value of all plan assets was based on quoted market prices, except for cash and one fund with a value of $21.2 million.
It is the Group’s policy to invest pension plan assets for its defined benefit plans to ensure that there is an adequate level of assets to support
benefit obligations to participants and retirees over the life of the plans, maintain liquidity in plan assets sufficient to cover current benefit
obligations and earn the maximum investment return consistent with a prudent level of investment and actuarial risk.
Investment return is the total compounded annual return, calculated as interest and dividend income and realised and unrealised capital gains
and losses, less expenses of the plan.
The Group expects to contribute $3.9 million to its defined benefit pension and post-retirement benefit plans in 2022.
Weighted average duration of the defined benefit obligation is 12.9 years.
Expected maturity analysis of undiscounted pension and post-employment benefits
As of November 30, 2021
(in thousands)
Less than
a year
Between
1-2 years
Between
2-5 years
More than
5 years Total
Pension benefits $ 12,823 $ 22,131 $ 22,043 $ 60,218 $ 117,215
Post-employment benefits 471 982 773 1,376 3,602
Total $ 13,294 $ 23,113 $ 22,816 $ 61,594 $ 120,817
As of November 30, 2020
(in thousands)
Less than
a year
Between
1-2 years
Between
2-5 years
More than
5 years
Total
Pension benefits $ 11,210 $ 24,038 $ 22,097 $ 57,110 $ 114,455
Post-employment benefits 504 967 926 1,448 3,845
Total $ 11,714 $ 25,005 $ 23,023 $ 58,558 $ 118,300
The above tables exclude vested deferred participants who have not started their retirement payments.
The Group also provides defined contribution plans to certain of its qualifying employees. Group contributions charged to expense for these
plans were $19.5 million and $17.8 million for the years ended November 30, 2021 and 2020, respectively.
135Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
26. Provisions
Accounting policy
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to settle the obligation. Provisions are measured at management’s best estimate
of the expenditure required to settle the obligation at the balance sheet date. If the effect is material, provisions are recognised at present value by
discounting the expected future cash flows at a pre-tax rate that reflects the time value of money.
When a contract becomes onerous, the present obligation under the contract is recognised as a provision and measured at the lower of the
expected cost of fulfilling the contract and the expected cost of terminating the contract as far as they exceed the expected economic benefits of
the contract. Additions to provisions and reversals are generally recognised in the Consolidated Income Statement.
The present value of the recognised obligations associated with the retirement of property, plant and equipment (asset retirement obligations) that
result from the acquisition, construction, development or normal use of an asset is added to the carrying amount of the related asset. The additional
carrying amount is depreciated over the useful life of the related asset. Additions to and reductions from the present value of asset retirement
obligations that result from changes in estimates are generally recognised by adjusting the carrying amount of the related asset and provision.
If the asset retirement obligation is settled for other than the carrying amount of the liability, the Company recognises a gain or loss on settlement.
A provision is established for obligations under lease agreements to dismantle and/or restore leased property to its original condition.
Short–term provisions
(in thousands)
Claims
provisions
Perth Amboy
environmental
provision
Decommissioning
provision
Restructuring
Onerous
contract
provision
Total
Balance at December 1, 2020 $ 7,285 $ 214 $ 889 $ 468 $ 520 $ 9,376
Additional (reversal) provisions
recognised, net (3,422 ) 300 (24) 382
(260 ) (3,024 )
Reductions arising from payments (1,825 ) (147 ) (883) (472 ) (221 ) (3,548)
Net foreign exchange differences 161 – 18 24 (39 ) 164
Balance at November 30, 2021 $ 2,199 $ 367 $ – $ 402 $ – $ 2,968
The claims provision is in relation to short-term claims made against the Group by external parties. See further discussion in the Long-term
provisions section below.
In 2013, the Group sold land in Perth Amboy, New Jersey. The sale price included an obligation to remediate for certain environmental matters
at the site. The provision is based on the expected future costs to remediate the land.
The decommissioning provision at November 30, 2020 related to the restoration costs on the Wynyard, New Zealand terminal. Restoration was
completed during the year.
A restructuring provision has been established in relation to the closure of the Wynyard, New Zealand terminal. A final payment to an employee
was paid in December 2021.
The onerous contract provision related to the short-term portion of the land lease at Wynyard, New Zealand. The lease runs until April 12, 2022,
but operations have now ceased and the final lease payment has been made.
Long–term provisions
(in thousands)
Environmental
provision
Asset
retirement
obligations
Claims
provision
Onerous
contract
provision
Total
Balance at December 1, 2020 $ 551 $ 356 $ 191,824 $ 217 $ 192,948
Reductions arising from payments – (4 ) (28,480) (186 ) (28,670)
Net foreign exchange differences (17 ) (30 ) (74) (31 ) (152)
Balance at November 30, 2021 $ 534 $ 322 $ 163,270 $ – $ 164,126
The environmental provision relates to ground water and soil disposal remediation costs necessary to remedy various contamination risks identified
in Stolthaven terminals. The provision is based on the present value of the expected costs to remediate the land. As at November 30, 2021, the
remaining environmental provision relates entirely to the Port Alma, Australia terminal.
136 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
26. Long–term provisions (continued)
The asset retirement obligations relate to an obligation to dismantle and/or restore leased property to its pre-leased condition. At November 30, 2021,
these amounts related to obligations on the offices in London and Manila. Amounts are estimated based on the present value of the expected
future costs to restore the leased property in accordance with the lease contracts and are expected to be utilised in two to seven years.
The claims provision relates to claims made against the Group by external parties. These relate to third-party claims such as collision, property
damage, pollution, environmental damage, general average, injury and cargo claims. In most cases, legal provisions are settled on a net basis by
insurance companies. The provision was based on the latest expected costs and primarily related to the civil action as a result of the fire on the
MSC Flaminia, the collision involving the Stolt Commitment and the explosion related to the Stolt Groenland (see Note 29). See Note 19, for the
amount that is considered to be virtually certain to be recovered from insurance companies. The timing of the payments of these provisions is
expected to be greater than one year. The amount decreased due to payments made by the insurance companies and changes in estimates of
expected loss.
The onerous contract provision related to the land lease at Wynyard, New Zealand. The lease runs until April 12, 2022, but operations have
now ceased and the final lease payment has been made.
27. Commitments and Contingencies
As of November 30, 2021, and 2020, the Group had total capital expenditure purchase commitments outstanding of approximately $75.7 million
and $167.4 million, respectively. At November 30, 2021, $10.5 million of the total related to installments on a barge newbuilding. In addition,
the Group has committed to other tanker projects of $1.9 million, terminal projects of $38.0 million and tank container projects of $24.3 million.
Of the total purchase commitments at November 30, 2021, $66.0 million are expected to be paid over the next 12 months.
Purchase commitments of joint ventures and associates
The Group’s joint ventures and associates had $138.4 million and $202.4 million of total capital expenditure purchase commitments on
November 30, 2021 and 2020, respectively. As of November 30, 2021, this amount included commitments for Avenir LNG Limited of $99.3 million
which includes one 7,500 cbm LNG newbuilding and two 20,000 cbm LNG newbuildings. The Group, Golar LNG Limited and Höegh LNG Holdings Ltd
(collectively, the “Founding Shareholders”) have also granted a guarantee with joint and several liability for two 20,000 cbm LNG newbuildings
for $69.8 million. A deed of indemnity has been entered into by the Founding Shareholders which limits the Group’s recourse to $34.9 million.
The remaining $29.5 million of Avenir LNG Limited commitments is without recourse to the Group. Further joint venture commitments include
$39.1 million for the terminal joint ventures, which are without recourse to the Group.
Of the total purchase commitments at November 30, 2021 for joint ventures and associates, $136.2 million is expected to be paid over the next
12 months. The commitments will either be paid out of the existing liquidity of those joint ventures or through external financing, which is in the
process of being raised.
Environmental
The Group’s operations involve the carriage, use, storage and disposal of chemicals and other hazardous materials and wastes. The Group is
subject to applicable international and national health, safety and environmental laws relating to the protection of the environment, including
those governing discharges of pollutants to air and water, the generation, management and disposal of hazardous materials and wastes and
the clean-up of contaminated sites.
The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), commonly known as Superfund, was enacted by
the US Congress on December 11, 1980. This law created a tax on the chemical and petroleum industries and provided broad federal authority
to respond directly to releases or threatened releases of hazardous substances that may endanger public health or the environment. This law
and similar state environment statutes and common laws can impose liability for the entire clean-up of contaminated sites or for third-party
claims for property damage and personal injury, regardless of whether the current owner or operator owned or operated the site at the time of
the release of contaminants or of the legality of the original disposal activities.
Actual or discontinued operations in the US may, therefore, trigger a future liability. Owing to the uncertainty whether or the length of time before
any liability may occur, it is currently not considered probable that a liability will arise and consequently no provision has been recorded.
137Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
28. Related Party Transactions
The Group is ultimately controlled by trusts established for the benefit of the Stolt-Nielsen family. Compensation and Board fees are provided
to certain members of the Stolt-Nielsen family. There are no other transactions between the Group and the Stolt-Nielsen family, other than those
described below.
Employee and officer loans and advances
Included in Other current assets are loans and advances to employees and officers of the Group of $0.2 million and $0.1 million as of
November 30, 2021 and 2020, respectively. In addition, included in Other non-current assets are loans and advances to employees and officers
of the Group of $0.5 million at November 30, 2021 and 2020. Such loans and advances primarily represent secured housing loans that have
been provided to former employees in connection with their relocation, along with advances for travel and other costs. Of the total loans and
advances, $0.5 million were interest-bearing, with interest rates ranging from 6.0% to 7.0% as of November 30, 2021 and 2020. Interest received
was less than $0.1 million for both 2021 and 2020.
Board of Directors and key management compensation
Key management includes the Executive Officers and Presidents of the Group’s major businesses. Total compensation and benefits of the
Board of Directors and the key management were as follows:
For the years ended November 30,
(in thousands) 2021 2020
Board fees $ 885 $ 835
Salary and benefits 4,733 4,563
Profit sharing 1,008 837
Long-term incentives 751 1,228
Defined benefit pension cost 259 300
Defined contribution pension cost 428 522
Total compensation and benefits $ 8,064 $ 8,285
Average number of key managers included 9 9
At the end of 2021 and 2020, the Board of Directors consisted of eight and seven members, respectively. Insurance has been taken out for the
Board of Directors and Executive Officers in respect of their potential liability to the Group and third parties.
Transactions with joint ventures and associates
The consolidated balance sheets include the following items related to transactions with the Group:
As of November 30,
(in thousands) 2021 2020
Joint ventures:
Amounts due from the Group
$ 16,447 $ 13,959
Amounts due to the Group 50,185 57,692
Included within Amounts due to the Group are $15.5 million and $18.4 million as of November 30, 2021 and 2020, respectively, for receivables
from joint ventures and associates. These amounts are reflected in the consolidated balance sheets as Other current assets. The remaining
amounts due to the Group are included in Investments in and advances to joint ventures and associates. Amounts due from the Group are
included in Other current liabilities in the consolidated balance sheets.
The long-term advances to NYK Stolt Tankers S.A. of $17.6 million and $21.1 million as of November 30, 2021 and 2020, respectively, bear
interest at six-month LIBOR plus 1%. The Group had also made long-term advances of $17.1 million and $18.2 million to other joint ventures and
associates at November 30, 2021 and 2020, respectively. Interest on these range from 4.8% to 6.5% in 2021 and 2020. Interest received in cash
for 2021 and 2020 was $0.3 million and $0.8 million, respectively.
138 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Transactions with joint ventures and associates (continued)
The joint ventures and associates include the following items related to transactions with the Group:
For the years ended November 30,
(in thousands) 2021 2020
Joint Ventures
Charter hire revenue
1
$ 120,835 $ 103,370
Tank container cleaning station revenue 1,312 9,620
Charter hire expense 48,524 44,358
Management and other expenses 18,990 12,711
Freight and joint service commission expense 1,720 1,179
Finance expense
1,500 2,460
Other expense
372 633
Associates
Bareboat revenue $ 4,775 $ 2,388
Commission, management and other revenue
2
3,798 –
Tank container cleaning station revenue 3,801 3,440
1. The charter hire revenues are amounts distributed to NYK Stolt Tankers S.A. and Hassel Shipping 4 AS, joint ventures of the Group, for their share of the Joint Service’s
revenue.
2. Represents commission and management fees paid to E&S Tankers as the joint venture trades certain of the Group’s European fleet.
The Group has a 24.99% interest in Norterminal A.S. which is a company working on storage projects in northern Norway. The remaining 75.01%
of Norterminal A.S. is controlled by S-N Terminal A.S., a company wholly owned by one of SNL’s Directors who is a member of the Stolt-Nielsen
family. The Group’s investment in Norterminal A.S. was $0.9 million and $1.0 million as of November 30, 2021 and 2020, respectively.
29. Legal Claims and Proceedings
There are various legal proceedings arising in the ordinary course of business, and in cases where the Group believes the likelihood of losses is
probable and can be estimated, provisions are recorded. While ongoing legal proceedings could have a material adverse effect on the Group’s
consolidated financial position or results of operations in the future, the Group believes that none of these matters will have a material adverse
effect on its business or financial condition.
During 2021 and 2020, the Group has been involved in certain civil litigation cases, which are described below.
Collision involving Stolt Commitment
On December 16, 2015, the Stolt Commitment was involved in a collision with the general cargo ship Thorco Cloud, while in the Singapore Strait.
As a result, the Thorco Cloud sank with the loss of three lives, and three other crewmen being unaccounted for. She was carrying steel and
project cargo. The Stolt Commitment was damaged in the collision and arrangements were made to transship the cargo on board in Malaysia,
following which she went for repair. General Average was declared. The wreck of the Thorco Cloud, which is in two pieces, may require removal
along with the removal of bunkers on board the ship when she sank. Claims have been made against the Stolt Commitment and her insurers
by the owners of the Thorco Cloud and her insurers, the bereaved families of the deceased/missing crewmen, and those interested in the cargo
on board the Thorco Cloud. Claims have been notified by the Stolt Commitment to the owners of the Thorco Cloud and her insurers. Significant
progress was made in 2021 to resolve the majority of the outstanding claims arising out of this casualty. Certain claims are expected to be
resolved in early 2022 while certain other claims may require further time to resolve, perhaps beyond 2022. At November 30, 2021, the Group
has recorded a provision for the expected future liability, along with a receivable for related insurance reimbursements. It is not expected that
there will be a material adverse effect on the Group’s business or financial condition.
139Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Civil actions as a result of Hurricane Isaac
At the end of August 2012, Hurricane Isaac caused widespread flooding in southern Louisiana, including an unprecedented storm surge at
the terminal in New Orleans/Braithwaite of about 13 feet of water. The storm surge overtopped the Parish levee system and despite extensive
efforts to prepare the terminal for the impact of the hurricane, extensive damage was sustained to various portions of the facility, including
several tanks, causing some tank releases of stored product to occur. Multiple notices were made to the relevant authorities. The protective
measures taken in and around the terminal were successful in retaining a considerable amount of the releases. Following the hurricane,
the rail cars stored at the terminal were inspected and no leaks were detected.
All regulatory claims brought by the state and federal regulators against the terminal for i) failure to properly provide notice in accordance
with the respective regulatory requirements, and ii) the release of certain chemical products being stored at the terminal have been resolved.
Following the flooding at the terminal, two class actions and multiple individual actions were filed at the District Court in the Parish of
Plaquemines, State of Louisiana. All actions allege pollution of the claimants’ properties with liquids stored at the terminal and allegedly
released as a consequence of the flooding. The actions are being defended and the monitoring of air quality, sampling of the flood waters and
soil testing, all carried out in cooperation with the various government authorities, have shown results within the guidelines established by the
Louisiana Department of Environmental Quality. All these matters, including the legal fees for the defence, are covered by insurance maintained
by the Group and it is not expected that they will have a material adverse effect on its business or financial condition.
Civil actions as a result of the fire on the MSC Flaminia
On July 14, 2012, a fire broke out aboard the MSC Flaminia during the ship’s crossing of the Atlantic Ocean in cargo hold number 4. During the
crew’s attempt to extinguish the fire, an explosion occurred. Stolt Tank Containers had 29 tank containers onboard the ship, three of which were
stowed in cargo hold number 4. These tank containers carried various products for various customers. STC filed claims for the replacement
value of the tank containers and the product carried. In August 2012, vessel interests declared General Average. The vessel was initially hauled
to Germany and then sailed onward to Romania for inspection, investigation and discharge operations.
On May 29, 2013, the vessel interests, namely the owner, manager and operator filed counter and cross-claims against STC and Deltech, the
shipper of the three tank containers stowed in cargo hold number 4, alleging that these tank containers were the cause of the fire and that STC
did not adequately warn of the inherently dangerous nature of the cargo. Since that time, several other cargo claimants have filed cross-claims
against STC and Deltech.
The case remains pending in the US Federal Court sitting in the Southern District of New York. All fact and expert discovery on liability has
been completed. The trial format was set up in three phases, with Phase 1 dedicated solely to the findings of fact, with Phase 2 dedicated to
allocating liability among responsible defendants. Phase 3 is to determine recoverable damages. The Phase 1 trial occurred during the Fall
of 2017. The Phase 2 trial was completed in August 2018. The US District Court for the Southern District of New York delivered a judgment
on September 10, 2018, which held the Group jointly liable with Deltech for the incident where the counterparties are alleging damages of
$186.0 million, excluding interest. The claim is covered by insurance and the Group has recorded a deductible of $0.3 million plus a provision
for the expected future liability, as well as a receivable for related insurance reimbursements. The judgment has been appealed by the defendants,
STC and Deltech. The hearing on appeal before the Court of Appeals in New York was heard on May 15, 2020. The final phase of the trial
(Phase 3) to assess the quantum of damages is expected to proceed in 2022. It is not expected that there will be a material adverse effect
on the Group’s business or financial condition.
Legal Proceedings related to Explosion on the Stolt Groenland
Stolt Tankers B.V. and Stolt Groenland B.V. (“Stolt”) are involved in legal proceedings in South Korea arising out of the September 28, 2019
explosion and fire aboard the Stolt Groenland while the ship was berthed in Ulsan. There was no loss of life and no pollution. Stolt has cooperated
and continues to fully cooperate with the relevant authorities in the resulting incident investigation and with claimants to reach an early resolution
of their respective proven claims. Stolt has applied to limit liability in the South Korea court and is defending certain ship officers who are subject
to a travel ban from leaving the country during the pendency of the criminal charges filed against them by the South Korean public prosecutor for
their involvement in the casualty. The claims are fully covered by insurance. It is not expected that there will be a material adverse effect on the
Group’s business or financial condition. At November 30, 2021, the Group has recorded a provision for the expected future liability, along with a
receivable for related insurance reimbursements.
General
The ultimate outcome of governmental and third-party legal claims and proceedings is inherently difficult to predict. The Group’s operations are
affected by international and domestic environmental protection laws and regulations. Compliance with such laws and regulations may entail
considerable expense, including ship modifications and changes in operating procedures.
140 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
30. Common Shares, Founder’s Shares, Paid-in Surplus and Dividends Declared
Accounting policy
Equity capital stock
The Company’s capital comprises equity capital stock. Equity capital stock is measured based on net proceeds.
Dividends
Dividends recommended by the Board of Directors are recognised in the Financial Statements when they have been approved by the shareholders
at the Annual General Meeting (“AGM”). Interim dividends are recognised when approved by the Board of Directors.
Treasury shares
Upon the Group’s purchase of its own shares (Treasury shares), the consideration paid is deducted from equity attributable to equity holders until
the shares are cancelled, reissued or otherwise disposed of. In cases where such shares are subsequently sold or reissued, any consideration
received is included in equity attributable to equity holders.
Founder’s Shares
par value $0.001 per share
Common Shares
par value $1 per share
Shares
Issued
Treasury
Shares
Shares
Issued
Treasury
Shares
Balance at December 1, 2019 16,033,449 902,500 64,133,796 3,610,000
Transfer of Treasury shares from Paid-in surplus to Treasury shares – 1,750,000 – 7,000,000
Balance at November 30, 2020 16,033,449 2,652,500 64,133,796 10,610,000
Cancellation of shares (1,402,500 ) (1,402,500 ) (5,610,000 ) (5,610,000 )
Balance at November 30, 2021 14,630,949 1,250,000 58,523,796 5,000,000
Share rights
The Group’s authorised share capital consists of 65,000,000 Common Shares, par value $1.00 per share, and 16,250,000 Founder’s Shares, par
value $0.001 per share. As of November 30, 2021, there were 58,523,796 (2020: 64,133,796) Common Shares issued, of which Treasury shares
were 5,000,000 (2020: 10,610,000). Except for matters where applicable law requires the approval of both classes of shares voting as separate
classes, Common Shares and Founder’s Shares vote as a single class on all matters submitted to a vote of the Shareholders, with each share
entitled to one vote. All issued and outstanding shares have been fully paid.
Under the Bye-Laws, holders of Common Shares and Founder’s Shares participate in annual dividends, if any are declared by the Group, in the
following order of priority: (i) $0.005 per share to Founder’s Shares and Common Shares equally; and (ii) thereafter, all further amounts are
payable to Common Shares only.
Furthermore, the Bye-Laws also set forth the priorities to be applied to each of the Common Shares and Founder’s Shares in the event of a
liquidation. Under the Bye-Laws, in the event of a liquidation, all debts and obligations of the Group must first be paid and thereafter all remaining
assets of the Group are paid to the holders of Common Shares and Founder’s Shares in the following order of priority: (i) Common Shares
rateably to the extent of the par value thereof ($1.00 per share); (ii) Common Shares and Founder’s Shares participate equally up to $0.05 per
share; and (iii) thereafter, Common Shares are entitled to all remaining assets.
Dividends
On November 3, 2021, the Group’s Board of Directors declared an interim dividend of $0.50 per Common Share and $0.005 per Founder’s Share
to shareholders of record as of November 10, 2021. The total amount of the dividend was $26.8 million, which was classified as an interim
dividend and paid on December 2, 2021.
On February 11, 2021, the Group’s Board of Directors recommended a final dividend for 2020 of $0.25 per Common Share payable on
May 5, 2021 to shareholders of record as of April 22, 2021. The dividend was approved at the Group’s Annual General Meeting of Shareholders
held on April 15, 2021 in Bermuda. The total amount of the dividend was $13.4 million.
On November 19, 2020, the Group’s Board of Directors declared an interim dividend of $0.25 per Common Share and $0.005 per Founder’s Share
to shareholders of record as of November 26, 2020. The total gross amount of the dividend was $13.4 million, which was classified as an interim
dividend and paid on December 10, 2020.
Treasury shares
In 2016, the Company pledged 7,000,000 Treasury shares as collateral for a loan and shares transferred to Paid-in surplus. On November 26, 2020,
the Company cancelled the collateralised loan and the treasury shares transferred out of Paid-in surplus and back to Treasury shares.
The Board has authorised the purchase of up to $30.0 million worth of the Company’s Common Shares, of which the Company has utilised
$21.3 million prior to 2020, leaving $8.7 million available for future purchases.
141Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
Founder’s Shares and Treasury shares
As of November 30, 2021, 13,380,949 (2020: 13,380,949) of Founder’s Shares had been issued to Fiducia Ltd, net of Treasury shares. Additional
Founder’s Shares are issuable to holders of outstanding Founder’s Shares without consideration, in quantities sufficient to maintain a ratio of
Common Shares to Founder’s Shares of 4 to 1.
As of November 30, 2021, 5,000,000 (2020: 10,610,000) Treasury shares were held by the Group. The Group also held 1,250,000 (2020: 2,652,500)
of Founder’s Shares. Note that dividends are not paid on Treasury shares held by the Group.
Capital management
The Group defines capital as net debt and equity attributable to equity holders of SNL. The Group’s objectives when managing capital are to
safeguard the Group’s ability to continue as a going concern to provide returns for shareholders and benefits for other stakeholders, and to
maintain an optimal capital structure to reduce the cost of capital. To maintain or adjust the capital structure, the Group may adjust the amount
of dividends paid to shareholders, return capital to shareholders, issue new shares, repurchase shares or sell assets to reduce debt.
The Group monitors capital on the basis of the ratio of debt to tangible net worth. This is calculated as short-term and long-term debt and
lease liabilities divided by equity attributable to equity holders less intangible assets and excluding other components of equity. The Group’s
management targets maintaining a ratio of debt to tangible net worth at or below 1.50. As of November 30, 2021 and 2020, the ratio of debt
to equity attributable to equity holders of SNL less intangible assets and excluding other components of equity was as follows:
As of November 30,
(in thousands) 2021 2020
Short-term loans, long-term debt and lease liabilities $ 2,436,094 $ 2,502,656
Equity attributable to equity holders of SNL less intangible assets and excluding other components of equity 1,688,964 1,634,177
Debt to tangible net worth 1.44 1.53
The debt to tangible net worth of 1.44 at November 30, 2021 is in line with management’s expectations and below its target ratio of 1.50.
The Group has external restrictions on its capital, which are its bank covenants. See Note 23 for further details.
31. Earnings per Share
Accounting policy
Basic Earnings per Common share (“EPS”) is calculated by dividing net profit by the weighted average number of shares outstanding during the
year. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding during the year for all potentially dilutive shares
and equivalents outstanding during the year using the Treasury stock method.
As further discussed in Note 30, Founder’s Shares, which provide the holder thereof with certain control features, only participate in earnings to
the extent of $0.005 per share for the years in which dividends are declared, and are limited to $0.05 per share upon liquidation. For the purposes
of calculating EPS, dividends paid on Founder’s Shares are deducted from earnings to arrive at net profit attributable to holders of Common
Shares. Founder’s Shares are not included in the basic or diluted weighted average shares outstanding in the calculation of earnings per
Common Share.
The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations:
142 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
For the years ended November 30,
(in thousands, except per share data) 2021 2020
Net profit (loss) attributable to equity holders of SNL
From continuing operations $ 78,806 $ 40,083
From discontinued operations – (13,788 )
Net profit attributable to equity holders of SNL 78,806 26,295
Less: Dividends on Founder’s Shares (67) (67 )
Net profit attributable to holders of Common Shares $ 78,739 $ 26,228
Basic and diluted weighted average shares outstanding 53,524 61,447
Basic earnings per share
From continuing operations attributable to equity holders of SNL 1.47 0.65
From discontinued operations – (0.22 )
Basic earnings per share attributable to equity holders of SNL $ 1.47 $ 0.43
Diluted earnings per share
From continuing operations attributable to equity holders of SNL 1.47 0.65
From discontinued operations – (0.22 )
Diluted earnings per share attributable to equity holders of SNL $ 1.47 $ 0.43
143Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements (continued)
32. Reconciliation of Net Profit to Cash Generated from Continuing Operations
For the years ended November 30,
(in thousands) 2021 2020
Net profit $ 78,806 $ 25,368
Loss from discontinued operations – 13,788
Profit from continuing operations 78,806 39,156
Adjustments to reconcile net profit to net cash from continuing operating activities:
Depreciation of property, plant and equipment 290,498 288,782
Amortisation of intangible assets 4,961 3,480
Impairment of goodwill and property, plant and equipment 10,000 12,394
Reversal of impairment on joint venture loan – (3,557 )
Finance expense, net 124,909 135,667
Net periodic benefit expense of defined benefit pension plans 2,284 98
Income tax expense 24,405 8,321
Share of profit of joint ventures and associates (39,470 ) (32,437 )
Fair value adjustment on biological assets (17,379 ) 4,985
Foreign currency exchange loss, net 2,673 5,258
Unrealised bunker hedge gain (251 ) (314 )
Loss on disposal of assets, net 3,010 794
Changes in assets and liabilities, net of effect of acquisitions and divestitures:
Increase in receivables (81,937 ) (100 )
Increase in restricted cash (6,096 ) –
Decrease in inventories 1,309 890
(Increase) decrease in biological assets (4,660 ) 630
(Increase) decrease in prepaid expenses and other current assets (31,452 ) 265
Increase in accounts payable and other current liabilities 62,611 14,618
Contributions to defined benefit pension plans (1,819 ) (1,812 )
Dividends from joint ventures and associates 22,869 15,440
Other, net 3,145 717
Cash generated from continuing operations $ 448,416 $ 493,275
144 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
33. Discontinued Operations
In October 2020, the Group sold Sterling Caviar, Inc. (“Caviar”) for $3.5 million, net of expenses. Caviar was a separate cash generating unit,
which produced and marketed caviar and sturgeon in California. As such, Caviar has been treated as a discontinued operation on the income
statement for the year ended November 30, 2020.
The financial information related to the discontinued operations is as follows:
For the year ended
November 30,
(in thousands) 2020
Revenue $ 4,156
Operating expenses (5,967 )
Depreciation, amortisation and impairment (894 )
Gross loss (2,705 )
Administrative and general expenses (1,861 )
Other operating expense (13)
Operating loss (4,579 )
Finance expense and other expenses (99)
Loss from operations (4,678 )
Loss recognised on measurement of fair value less cost to sell Caviar (9,110 )
Loss from Discontinued Operations $ (13,788 )
The loss recognised on measurement of fair value less cost to sell was based on the following:
(in thousands)
Accounts receivable $ 326
Inventory 2,147
Biological assets 8,620
Prepaid expenses 84
Plant, property and equipment 3,899
Total Assets $ 15,076
Accounts payable 306
Accrued expenses 2,160
Total Liabilities $ 2,466
Carrying value of assets disposed 12,610
Proceeds, net of expenses 3,500
Loss on disposal $ (9,110 )
Net cash provided by investing activities for discontinued operations relates to the proceeds on sale of $3.5 million, less $45,000 of capital expenditures.
34. Subsequent Events
Subsequent to November 30, 2021, the Company acquired or entered into forward contracts for 562,255 Odfjell Class A shares for a total of
3,285,441 shares. This represents 5% of Odfjell’s total Class A shares.
On March 2, 2022, the Group entered into a $128.0 million floating-rate borrowing agreement using a group of tank containers as collateral.
The agreement is with ING Bank N.V. and a group of private investors for six and one-quarter years. There are 26 equal payments and at the end
of the agreement, the Group has an option to purchase the tank containers by paying a fixed amount. As the option to repurchase was virtually
certain to be exercised by the Group at the date of the borrowing, the transaction has been treated as collateralised debt.
On February 24, 2022, the Company’s Board of Directors recommended a final dividend for 2021 of $0.50 per Common share, to be voted on at
the Group’s Annual General Meeting (“AGM”) for shareholders to be held on April 21, 2022. If confirmed by the AGM, the dividend will be paid on
May 11, 2022 to shareholders of record as of April 27, 2022.
On February 16, 2022, the Group entered into a sustainability linked secured loan agreement for $415.0 million, consisting of a term loan of
$180.9 million and a revolving credit line of $234.1 million. The loan syndication was with 14 banks and led by three bookrunners: Nordea Bank
Abp, Danske Bank A/S and DNB (UK) Limited. It expires on February 16, 2028 and is secured by 19 ships. The Group expects to draw down on
the term loan on March 15, 2022 to fully repay the loan with Export and Import Bank of China and Standard Chartered Bank.
On February 1, 2022, the Group acquired 1.0 million shares or 2.5% of Cool Company Limited (“CoolCo”) for $10.0 million. CoolCo is listed on the
Norwegian OTC.
145Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
Responsibility Statement
We confirm, to the best of our knowledge, that the consolidated Group and Company Financial Statements for the period December 1, 2020 to
November 30, 2021 have been prepared in accordance with IFRS as adopted by the European Union and give a true and fair view of the Group’s
assets, liabilities, financial position and profit as a whole. In preparing these Financial Statements, we are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and accounting estimates that are reasonable;
• State whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and
explained in the Financial Statements;
• Prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
We are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclosure
with reasonable accuracy at any time the financial position of the Company and the Group and enable us to ensure that the Financial Statements
comply with the Bermuda Company Act of 1981. We are also responsible for safeguarding the assets of the Company and the Group, and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. We are responsible for the maintenance
and integrity of the Company’s website. We highlight that legislation in Bermuda governing the preparation and dissemination of Financial
Statements may differ from legislation in other jurisdictions.
We also confirm, to the best of our knowledge, that the Financial review and the Business Review include a fair review of important events that
have occurred during the financial year and their impact on the Financial Statements, as description of the principal risks and uncertainties facing
the Group and material related party transactions.
The Financial Statements on pages 69 to 145 were approved and signed on behalf of the Board of Directors.
Niels G. Stolt-Nielsen Jens F. Grüner-Hegge
Chief Executive Officer Chief Financial Officer
London
March 14, 2022
146 Stolt-Nielsen Limited | Annual Report 2021
FINANCIAL STATEMENTS
147Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
Other Information
GRI Content
Index
Pages 148-150
Shareholder
Information
Page 151
Offices
and Facilities
Pages 152-157
148 Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
GRI Content Index
GRI Content Index
This report has been prepared according to GRI Standard: Core Option. The table below provides an overview of the relevant GRI Standards for
our material topics on page 19 and where to find further information in this report or online. Stolt-Nielsen has reported the information cited in
this GRI content index for the period December 1, 2020 to November 30, 2021, unless otherwise stated. Our last Annual Report was published
in March 2021.
Disclosure Page / Location
General Disclosures in accordance with GRI 102
Organisational Profile
102-1 Name of the organisation Page 1
102-2 Activities, brands, products, and services Pages 3, 8-16 and stolt-nielsen.com
102-3 Location of headquarters Page 74
102-4 Location of operations Pages 152-157
102-5 Ownership and legal form Pages 44-45
102-6 Markets served Pages 3, 18-16, 85 and stolt-nielsen.com
102-7 Scale of the organisation Pages 3, 38-39, 69-71, 85 and 152-157
102-8 Information on employees and other workers Pages 32-39
102-11 Precautionary Principle or approach Contents page
102-13 Membership of associations Page 18
Strategy
102-14 Statement from senior decision-maker Pages 4-5
102-15 Key impacts, risks, and opportunities Pages 8-16 and 60-62
Ethics and integrity
102-16 Values, principles, standards, and norms
of behaviour
Pages 32-39, 44-48 and stolt-nielsen.com/investors/
code-of-business-conduct/
102-17 Mechanisms for advice and concerns about ethics Pages 36, 41 and report.whistleb.com/en/stolt-nielsen
Governance
102-18 Governance structure Pages 41-48
102-20 Executive-level responsibility for economic,
environmental, and social topics
Page 18
102-21 Consulting stakeholders on economic,
environmental, and social topics
Pages 18-19
102-22 Composition of the highest governance body
and its committees
Pages 42-43 and 46-47
102-23 Chair of the highest governance body Pages 41-42
102-24 Nominating and selecting the highest
governance body
Page 46
102-26 Role of highest governance body in setting purpose,
values, and strategy
Page 41
102-27 Collective knowledge of highest governance body Pages 41-43
102-29 Identifying and managing economic,
environmental, and social impacts
Pages 18-19 and 60-62
102-31 Review of economic, environmental,
and social topics
Pages 18-19
102-32 Highest governance body’s role in
sustainability reporting
Pages 18, 41 and
stolt-nielsen.com/sustainability/our-commitment/
149Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
Disclosure Page / Location
Stakeholder engagement
102-40 List of stakeholder groups Page 18
102-42 Identifying and selecting stakeholders Page 18
102-43 Approach to stakeholder engagement Pages 18 and 34
102-44 Key topics and concerns raised Pages 19 and 60-62
Reporting practice
102-45 Entities included in the consolidated
financial statements
Pages 3, 152-157
102-46 Defining report content and topic boundaries Page 19
102-47 List of material topics Page 19
102-48 Restatements of information Pages 24, 26 and 31
102-49 Changes in reporting None
102-50 Reporting period This GRI Content Index
102-51 Date of most recent report This GRI Content Index
102-52 Reporting cycle This GRI Content Index
102-53 Contact point for questions regarding the report Page 151
102-54 Claims of reporting in accordance with the
GRI Standards
Page 19 and this GRI Content Index
102-55 GRI content index This GRI Content Index
102-56 External assurance Pages 63-68
Additional specific GRI disclosures for Stolt-Nielsen’s material topics:
Financial sustainability / Climate change risk management: GRI 201 Economic performance 2016
201-1 Direct economic value generated and distributed Page 2, 37 and 69-145
201-2 Financial implications and other risks
and opportunities due to climate change
Pages 60-61
Business ethics: GRI 205 Anti-corruption 2016
205-2 Communication and training about anti-corruption
policies and procedures
Page 36 and stolt-nielsen.com/sustainability/our-commitment/
205-3 Confirmed incidents of corruption and actions taken Page 36
Energy use: GRI 302 Energy 2016
302-1 Energy consumption within the organisation Pages 26 and 29
302-5 Reductions in energy requirements of products
and services
Page 29
Water use: GRI 303 Water 2016
303-1 Interactions with water as a shared resource Page 30
303-2 Management of water discharge-related impacts Page 30
303-4 Water discharge Page 30
303-5 Water consumption Pages 26 and 29
Biodiversity: GRI 304 Biodiversity 2016
304-1 Operational sites owned, leased, managed in,
or adjacent to, protected areas and areas of
high biodiversity value outside protected areas
Pages 14 and 31
304-2 Significant impacts of activities, products,
and services on biodiversity
Page 31 and stoltseafarm.com
150 Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
GRI Content Index (continued)
Disclosure Page / Location
Emissions / Air Quality: GRI 305 Emissions 2016
305-1 Direct (Scope 1) GHG emissions Pages 25 and 28-29
305-4 GHG emissions intensity Pages 25 and 28-29
305-5 Reduction of GHG emissions Pages 25 and 28-29
305-7 Nitrogen oxides (NOX), sulphur oxides (SOX),
and other significant air emissions
Pages 26 and 29
Waste: GRI 306 Waste 2020
306-1
306-2
306-3
Waste generation and significant waste-related impacts
Management of significant waste-related impacts
Waste generated
Pages 26 and 30-31
Pages 26 and 30-31
Pages 26 and 30-31
306-5 Waste directed to disposal Pages 26 and 30-31
Compliance: GRI 307 Environmental compliance 2016
307-1 Non-compliance with environmental laws and
regulations
Pages 27 and 30
Health and Safety: GRI 403 Occupational health and safety 2016
403-1 Occupational health and safety management system Pages 21-23
403-2 Hazard identification, risk assessment, and
incident investigation
Pages 21-22
403-5 Worker training on occupational health and safety Pages 21-23
403-6 Promotion of worker health Page 23
403-8 Workers covered by an occupational health and
safety management system
Page 21
403-9 Work-related injuries Pages 20 and 24
Recruitment and retention: GRI 401 Employment 2016 and GRI 404 Training and education 2016
401-1 New employee hires and employee turnover Pages 35 and 38-39
404-1 Average hours of training per year per employee Page 22 (Seafarers only)
404-2 Programmes for upgrading employee skills and
transition assistance programs
Page 35
404-3 Percentage of employees receiving regular
performance and career development reviews
Page 35
Diversity and inclusion: GRI 405 Diversity and equal opportunity 2016
405-1 Diversity of governance bodies and employees Pages 38-39 and 43
Modern slavery and child labour: GRI 408 Child labour 2016 and GRI 409 Forced or compulsory labour 2016
408-1
409-1
Operations and suppliers at significant risk
for incidents of child labour
Operations and suppliers at significant risk
for incidents of forced or compulsory labour
Page 37
Page 37 and stolt-nielsen.com/sustainability/
modern-slavery-and-human-trafficking-statement-2021/
and stolt-nielsen.com/sustainability/our-commitment/
Community impact: GRI 413 Local communities 2016
413-1 Operations with local community engagement,
impact assessments, and development programmes
Page 37
151Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
Shareholder Information
Shareholder Information
Stock Listing
Common Shares
On Oslo Børs under symbol SNI
Shares Outstanding
(as of November 30, 2021)
Common Shares – 53,523,796
Country of Incorporation: Bermuda
Annual General Meeting
April 21, 2022 at 11:00 am
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
Registrar
Common Shares – VPS
DNB Bank ASA
Dronning Eufemias gate 30
0191 Oslo, Norway
Tel: +47 23 26 80 16
Email: sten.sundby@dnb.no
Auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
UK
Financial Information
Copies of press releases and quarterly
earnings releases are available at:
www.stolt-nielsen.com or by contacting:
Stolt-Nielsen M.S. Ltd
Aldwych House
71-91 Aldwych
London WC2B 4HN
UK
Tel: +44 20 7611 8960
Email: investors@stolt.com
Investor Relations and
Press Enquiries
Shareholders, securities analysts,
portfolio managers, representatives
of financial institutions may contact:
Jens F. Grüner-Hegge
Stolt-Nielsen M.S. Ltd
Aldwych House
71-91 Aldwych
London WC2B 4HN
UK
Tel: +44 20 7611 8985
Email: j.gruner-hegge@stolt.com
For media enquiries please contact:
Ellie Davison
Stolt-Nielsen M.S. Ltd
Aldwych House
71-91 Aldwych
London WC2B 4HN
UK
Tel: +44 20 7611 8926
Email: e.davison@stolt.com
152 Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
Offices and Facilities
Offices and Facilities
Stolt Tankers
Argentina – Buenos Aires
Stolt-Nielsen Argentina S.A.
Moreno 584, 2nd floor, Office ‘A’
C1091AAL, Capital Federal
Buenos Aires
Argentina
Tel: +54 11 4345 5001
Australia – Melbourne
Stolt-Nielsen Australia Pty. Ltd.
6th Floor
60 Albert Road
South Melbourne
VIC 3205
Australia
Tel: +61 39820 3288
Brazil – São Paulo
Stolt-Nielsen Brazil Afretamento Ltda.
Al. Santos 2224, 3 Andar Cerqueira Cesar
São Paulo 01418-200
Brazil
Tel: +55 11 3897 4999
China – Shanghai
Room 1101, Raffles City Office Tower
No. 268 Xizang Middle Road
Shanghai 200001
China
Tel: +86 21 5877 9779
India – Mumbai
Stolt-Nielsen India Pvt Ltd
A-901, Godrej Coliseum,
Behind Everard Nagar, Sion East
Mumbai 400022
India
Tel: +91 22 2406 5600
Japan – Tokyo
Stolt-Nielsen Japan Co. Ltd.
Urban Shibakoen 4F
3-1-13, Shibakoen
Minato-ku, Tokyo 105-0011
Japan
Tel: +81 3 6841 7001
Netherlands – Rotterdam
Stolt Tankers B.V
Westerlaan 5
3016 CK Rotterdam
The Netherlands
Tel: +31 10 299 6666
Philippines – Manila
Stolt-Nielsen Philippines Inc.
6th Floor V. Corporate Centre
125 L.P. Leviste St.
Salcedo Village
Makati City 1227
Manila
Philippines
Tel: +63 2 830 7900
Singapore
Stolt Tankers Singapore Pte. Ltd.
#10-01 mTower
460 Alexandra Road
Singapore 119963
Tel: +65 6273 4844
South Africa – Durban
Stolt-Nielsen Africa Pty. Ltd.
49 Richefond Circle
2nd Floor, Unit 9
Ridgeside Office Park
Umhalanga
Durban 4319
South Africa
Tel: +27 31 561 4122
Switzerland – Zug
Stolt-Nielsen Switzerland AG
Baarerstrasse 149
6302 Zug
Switzerland
Tel: +41 41 766 30 20
Taiwan – Taipei
Stolt-Nielsen Taiwan Co. Ltd.
6F, No.96, Sec 1
Jian Guo N. Road
Taipei 105
Taiwan
Tel: +886 2 2518 5078
UAE – Dubai
Stolt-Nielsen Middle East DMCC
Office 1802, Swiss Tower, Cluster Y
Jumeirah lake Towers
Dubai
UAE
PO Box 337246
Tel: +971 4 5129800
US – Houston
Stolt Tankers USA, Inc.
15635 Jacintoport Blvd
Houston, Texas 77015
USA
Tel: +1 281 457 0303
US – New Orleans
Stolt Tankers USA, Inc.
2444 English Turn Road
Braithwaite
Louisiana 70040
USA
Tel: +1 504 682 1610
153Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
Stolthaven Terminals
Australia – Newcastle
Stolthaven Newcastle (Terminal)
Lot 2 Steelworks Road
Mayfield
Newcastle
New South Wales 2304
Australia
Tel: +61 498 762076
Australia – Port Alma
Stolthaven Port Alma (Terminal)
Barjool – Port Alma Road
Port Alma
Queensland
Australia
Tel: + 62 3 9931 1880
Australia – West Melbourne
Stolthaven Coode Island (Terminal)
42-52 Mackenzie Road
West Melbourne
Victoria
Australia
Tel: +61 408 090802
Belgium – Antwerp
Oiltanking Stolthaven Antwerp (Terminal)
Haven 623, Scheldelaan 450
2040 Antwerp
Belgium
Tel: +31 6 46308337
Brazil – São Paulo
Stolthaven Santos (Terminal)
R. Augusto Scaraboto, 215
Alemoa – Santos – São Paulo
11095-500
Brazil
Tel: + 55 13 3295 9000
China – Tianjin
Tianjin Stolthaven Lingang Terminal Co
No.468 Bohai 15 Road
Lingang Industrial Area
Binhai New Area, Tianjin
P.R. China
Tel: +86 22 6661 9951
Malaysia – Westport
Stolthaven (Westport) Sdn Bhd
Petrochemical Jetty
Westport
42009 Port Klang
Selangor Darul Ehsan
Malaysia
Tel: + 60 3 31011551
Netherlands – Moerdijk
Stolthaven Moerdijk B.V. (Terminal)
Middenweg 30 – Port number M374
4782 PM
Moerdijk
The Netherlands
Tel: +31 168 334373
Netherlands – Rotterdam
Stolt-Nielsen Holdings B.V
Westerlaan 5
3016 CK Rotterdam
The Netherlands
Tel: +31 10 299 6666
New Zealand – Bluff
Stolthaven Bluff (Terminal)
Island Harbour
Bluff
New Zealand
Tel: +64 2 1614807
New Zealand – Mount Maunganui
Stolthaven Mount Maunganui (Terminal)
Corner Hewletts Rd & Tasman Quay
Mount Maunganui
New Zealand
Tel: +64 2 1614807
154 Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
Offices and Facilities (continued)
Republic of Korea – Ulsan
Jeong IL Stolthaven Ulsan (Terminal)
297, Sanam-ro
Onsan-eup, Uljoo-gun
Ulsan City
Republic of Korea
Tel: +82 2 7896811
Singapore – Jurong Island
Stolthaven Singapore Pte Ltd (Terminal)
22 Tembusu Crescent
Jurong Island
Singapore
Tel: +65 64 774530
UK – Dagenham
Stolthaven Dagenham (Terminal)
Hindmans Way
Dagenham
Essex RM9 6PU
UK
Tel: +44 20 8593 7211
US – Houston
Stolthaven Houston Inc.
15602 Jacintoport Blvd
Houston
Texas 77015
USA
Tel: +1 281 860 6800
US – New Orleans
Stolthaven New Orleans LLC
2444 English Turn Road
Braithwaite, LA 70040
USA
Tel: +1 504 682 9989
Stolt Tank Containers
Offices
Argentina – Buenos Aires
Stolt-Nielsen Argentina S.A.
Stolt Tank Containers Department
Moreno 584, 2nd floor, Office A
C1091AAL, Capital Federal
Buenos Aires
Argentina
Tel: +54 11 4345 5001
Australia – Melbourne
Stolt-Nielsen Australia Pty. Ltd.
Level 14, 60 Albert Road
South Melbourne VIC 3205
Australia
Tel: +61 3 9820 3288
Bermuda – Hamilton
Stolt Tank Containers Leasing Ltd
1 Bermudiana Road
Hamilton
HM08
Bermuda
Tel: +1 441 292 7337
Brazil – Santos
Stolt-Nielsen Brazil Afretamento Ltda.
Rua Frei Gaspar, 51 – Conj. 22 – Centro
Santos/SP
CEP 11010-091
Brazil
Tel: +55 13 3219 4558
Brazil – São Paulo
Stolt-Nielsen Afretamento Brazil Ltda.
Al. Santos 2224, 3 Andar Cerqueira Cesar
São Paulo, SP 01418-200
Brazil
Tel: +55 11 3897 4999
China – Shanghai
Stolt-Nielsen Transportation (Shanghai) Ltd
and:
Shanghai Stolt-Nielsen Logistics Ltd
1101, Raffles City Office Tower
No. 268 Xizang Middle Road
Shanghai 200001
China
Tel: +86 21 6198 2200
China – Shenzen
Stolt-Nielsen Transportation (Shanghai) Ltd.
Shenzhen Rep. Office
Block C1, 7/F, Times Plaza
No.1 Taizi Road
Shekou, Shenzhen 518067
China
Tel: +86 755 2667 6359
China – Tianjin
Stolt-Nielsen Transportation (Shanghai) ltd.
Tianjin Rep Office
Room 1703, Future Plaza, Tower A
No. 103 Wei Di Road
Hexi, Tianjin 300201
China
Tel: +86 22 2837 2278
Colombia – Bogota
Stolt Tank Containers Colombia Ltda.
Carrera 16 # 97-48, Piso 6
Edificio Torre 97
Bogota, D.C
Colombia
Tel: +57 1 443 0460
155Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
France – Le Havre
Stolt Tank Containers France SAS
12 Cours Commandant Fratacci
BP 31382
76600 Le Havre
France
Tel: +33 2 32 79 63 00
Germany – Hamburg
Stolt Tank Containers Germany GmbH
Ida-Ehre-Platz 12
20095 Hamburg
Germany
Tel: +49 40 35 09 08 0
India – Mumbai
Stolt-Nielsen India Pvt Ltd
A-901, Godrej Coliseum,
Behind Everard Nagar, Sion East
Mumbai 400022
India
Tel: +91 22 2406 5600
Italy – Savona
Stolt Tank Containers Italy Srl
Piazza Ilaria Alpi, 2 int. 5
17100 Savona
Italy
Tel: +39 019 860944
Japan – Tokyo, Minato-Ku
Stolt-Nielsen Japan Co Ltd
Urban Shibakoen 4F
3-1-13, Shibakoen
Minato-ku, Tokyo 105-0011
Japan
Tel: +81 3 5562 7001
Mexico – Mexico City
Stolt-Nielsen Mexico S.A. de C.V.
Calle Violeta No 16
Col San Jose de Jaral
Atizapan de Zaragoza
Mexico City
C.P. 52924
Mexico
Tel: +52 55 5308 2609
Netherlands – Rotterdam
Stolt Tank Containers B.V. (Headquarters)
Westerlaan 5
3016 CK Rotterdam
The Netherlands
Tel: +31 0 10 281 8888
Philippines – Manila
Stolt-Nielsen Philippines Inc.
6th Floor V. Corporate Centre
125 L.P. Leviste St.
Salcedo Village
Makati City 1227
Manila
Philippines
Tel: +63 2 830 7900
Saudi Arabia – Al Khobar
Stolt Tank Containers Saudi Arabia Ltd
Eastern Cement Tower
3rd Floor, Office 305, P.O. Box 1634
Al Khobar 31952
Saudi Arabia
Tel: +96 613 887 0969
Saudi Arabia – Jeddah
Kanoo Tank Services (Sahreej)
c/o: Kanoo Terminal Services Ltd
King Faisal Road, Opposite Al Sudais
Warehouse, Near Petromin, Al Khumra Area,
Jeddah
Saudi Arabia
Tel: +966 56 5527078
Singapore
Stolt-Nielsen Singapore Pte. Ltd.
460 Alexandra Road
#10-01 mTower
Singapore 119963
Tel: +65 6273 4844
South Africa – Durban
13 The Boulevard
Westway Office Park
Westville
Durban
South Africa 4319
Tel: +27 31 561 4122
Taiwan – Taipei
Stolt-Nielsen Taiwan Co. Ltd.
6F, No. 96, Sec 1
Jian Guo N. Road
Taipei 105
Taiwan
Tel: +886 2 2518 5078
156 Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
Offices and Facilities (continued)
UAE – Dubai
Stolt-Nielsen Middle East DMCC
Office 1802, Swiss Tower, Cluster Y
Jumeirah lake Towers
Dubai
UAE
PO Box 337246
Tel: +971 4 5129800
UK – Romford
Stolt Tank Containers UK Ltd.
Stolt-Nielsen House
1-5 Oldchurch Road
Romford, Essex
RM7 0BQ
UK
Tel: +44 1708 746 070
US – Houston
Stolt-Nielsen USA Inc.
15635 Jacintoport Blvd
Houston, Texas 77015
USA
Tel: +1 281 457 0303
US – Linden, NJ
Stolt-Nielsen USA Inc.
c/o Infineum USA L.P.
Park & New Brunswick Avenue
CAB 139
Linden, New Jersey 07036
USA
Tel: +1 908 474 6030
Stolt Tank Containers
Depots
China – Jiangsu
Zhangjiagang Stolt Tank Container
Logistics Co Ltd.
90 Shanzheng Road, Jiangsu Environmental
Protection New Material Industrial Park,
Zhangjiagang Free Trade Zone
Jiangsu 215600
China
Tel: +86 512 5871 9105
China – Tianjin, Hangu
Tianjin Binhai Stolt Container Terminal Co Ltd.
92 Zi Dong St., Hangu Ind. Park, Hangu
District
Tianjin 300480
China
Tel: +86 22 67158593
India – Gujarat
Stolt Tank Containers Cleaning &
Repair Kandla Pvt Ltd
Plot 344, Situated at GIDC-Phase II,
Mithirohar, Gandhidham 370201,
Kutch District, Gujarat
India
Tel: +91 99 79852662
India – Maharashtra
SPS Intermodal Services (India)
Private Limited
Plot No. 36/1 A
Dhigode Village
Uran Taluka, Raigad District
Maharashtra 410207
India
Tel: +91 99 8789 5780
Italy – Vado
Italy – Vado Tank Cleaning srl
Via G. Bertola 53
17047 Vado Ligure
Italy
Tel: +39 0192160106
Tel: +39 0192162103
Japan – Kobe
N.C. Stolt Transportation Services Co. Ltd
7-1, 6-Chome, Minatojima, Chuo-Ku
Kobe, Hyogo-pref 650-0045
Japan
Tel: +81 78 3032371
Japan – Nagoya
N.C. Stolt Chukyo Transportation
Services Co. Ltd
1152, Fujimae, 1-Chome, Minato-Ku
Nagoya, Aichi-pref 455-0855
Japan
Tel: +81 52 3031120
Japan – Tokyo, Ota-Ku
N.C. Stolt Transportation Services Co. Ltd
1-21 Tokai 4-Chome, Ota-Ku,
Tokyo 143-0001
Japan
Tel: +81 3 37999447
157Stolt-Nielsen Limited | Annual Report 2021
OTHER INFORMATION
Republic of Korea – Yangsan
Hyop Woon Stolt Transportation
Services Co. Ltd
#800-6 Hogae-Dong, Kyung Nam
Yangsan City 50567
Republic of Korea
Tel: +82 55 3830841
Republic of Korea – Ulsan
Hyop Woon Stolt Transportation
Services Co Ltd
No: 58-13 Haknam-Ri, Onsan-Eup, Ulju-Kun
Ulsan City 44992
Republic of Korea
Tel: +82 52 2371434
Netherlands – Moerdijk
Stolt Container Terminal Moerdijk B.V.
Middenweg 30, 4782 PM Moerdijk
The Netherlands
Tel: +31 1682 00000
Oman – Sohar
Joint Tank Services Sohar
P.O. Box: 360, Plot 3525
Sohar Free Zone, Sohar
Sultanate of Oman
Tel: +968 95919632
Saudi Arabia – Dammam
Kanoo Tank Services (Sahreej)
Behind GCC Olayan Yard,
Near King Abdul Aziz Sea Port Area
Dammam
Saudi Arabia
Tel: +966 56 5527078
Saudi Arabia – Jeddah
Kanoo Tank Services (Sahreej) – Jeddah
Shams Container Terminal Yard
Al Moulysaa, Jeddah 22623
Al Khumrah Al Saif Beach Road
Behind Guazain Roundabout
Jeddah
Kingdom of Saudi Arabia
Tel: +966 56 5527078
Saudi Arabia – Jubail
Kanoo Tank Services (Sahreej) – Jubail
Lot 6, Block 2, Section N,
Logistics Industrial Park,
P.O. Box 1806
Al Jubail 31951
Kingdom of Saudi Arabia
Tel: +966 56 5527078
Singapore – Jurong Island
Stolt Container Terminal Pte Ltd
23 Ayer Merbau Road
Jurong Island
Singapore 627825
Tel: +65 68610520
Thailand – Chonburi
Laem Chabang Tank Services Co. Ltd
Hemaraj Chonburi Industrial Estate,
369/2 Moo 6, Tambon Bowin,
Amphur Sriracha,
Chonburi 20230
Thailand
Tel: +66 38 3464224
Thailand – Chonburi
Thailand – FSTS
(Fusion Stolt Tank Services) Co. Ltd.
Hemaraj Chonburi Industrial Estate
369/2 Moo 6, Tambon Bowin,
Amphur Sriracha
Chonburi 20230
Thailand
Tel: +66 38 3464224
Taiwan – Kaohsiung
Stolt Container Terminal Co Ltd
No 14 Chu Kang 3rd Street,
Ta Fa Industrial District
Kaohsiung 83164
Taiwan
Tel: +886 7 7872660
UAE – Dubai
Joint Tank Services FZCO
Plot No. S41004, Street No. S1102
PO Box 17512
Jebel Ali Free Zone (South)
Dubai
UAE
Tel: +971 4 8807801 Ext 107
UK – Grangemouth
Tankwash Limited
Mc Cafferty Way
Dalgrain Industrial Estate
Scotland FK3 8 EB
UK
Tel: +44 75 8443 6146
US – Houston
Stolt-Nielsen USA Inc.
16300 Dezavala, Building 3,
Channelview
Texas 77530
USA
Tel: +1 281 8606302
Stolt Sea Farm
Spain – Santiago de Compostela
Stolt Sea Farm
Edificio Quercus
C/Letonia nº 2
Polígono Costa Vella
15707 Santiago de Compostela
Spain
Tel: +34 981 837501
4
th
Floor, Aldwych House,
71–91 Aldwych
London
WC2B 4HN
United Kingdom
Tel: +44 207 611 8960
stolt-nielsen.com