Annual Report • Apr 14, 2022
Annual Report
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2020-01-01 2020-12-31 ifrs-full:ReserveOfSharebasedPaymentsMember 5493006GOR72R0ZYBN98 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493006GOR72R0ZYBN98 2021-01-01 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493006GOR72R0ZYBN98 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493006GOR72R0ZYBN98 2019-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493006GOR72R0ZYBN98 2020-01-01 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493006GOR72R0ZYBN98 2020-12-31 ifrs-full:NoncontrollingInterestsMember 5493006GOR72R0ZYBN98 2021-01-01 2021-12-31 ifrs-full:NoncontrollingInterestsMember 5493006GOR72R0ZYBN98 2021-12-31 ifrs-full:NoncontrollingInterestsMember 5493006GOR72R0ZYBN98 2019-12-31 ifrs-full:NoncontrollingInterestsMember 5493006GOR72R0ZYBN98 2020-01-01 2020-12-31 ifrs-full:NoncontrollingInterestsMember iso4217:USD iso4217:USD xbrli:shares EXMAR 2021 COLOPHON Board of Directors Nicolas Saverys – Executive Chairman FMO BV represented by Francis Mottrie – CEO ACACIA I BV represented by Els Verbraecken Maryam Ayati Michel Delbaere Wouter De Geest Carl-Antoine Saverys Stephanie Saverys Baron Philippe Vlerick Isabelle Vleurinck Executive Committee FMO BV represented by Francis Mottrie Chief Executive Ocer FINMORE BV represented by Christine Verhaert Chief Financial Ocer FLX Consultancy BV represented by Jonathan Raes Executive Director Infrastructure LISANN AS represented by Jens Ismar Executive Director Shipping Auditor Deloitte Auditors Represented by Mr. Rik Neckebroeck and Mr. Ben Vandeweyer EXMAR NV De Gerlachekaai 20 Tel: +32(0)3 247 56 11 Fax: +32(0)3 247 56 01 Business registration number: 0860.409.202 RPR Antwerp – section Antwerp Website: www.exmar.be E-mail: [email protected] Contact All EXMAR press releases can be consulted on the website: www.exmar.be Questions can be asked by telephone at +32(0)3 247 56 11 or by e-mail to [email protected], for the attention of FINMORE BV represented by Christine Verhaert (CFO) or Mathieu Verly (secretary). In case you wish to receive our printed annual or half year report please mail: [email protected] The Dutch version of this nancial report must be considered to be the ocial version Dear shareholders, 2021 was yet another exceptional year. Our special thanks go out to our colleagues at sea and on shore, who handled the ongoing challenges of the COVID pandemic with great dedication. At this time of writing, the escalating conict in Ukraine is already causing great uncertainty to 2022 not only from the human aspect, but also in terms of stability of global energy markets. In this context, EXMAR’s oating solutions for the export and import of gas are an asset in the energy value chain. For LPG and NH 3 (ammonia), freight rates remained stable at protable levels. LNG natural gas prices continued to increase due to geopolitical tensions and thus rising energy markets. Freight rates in LNG went from highs to lows, and remained very volatile. For the liquefaction barge TANGO FLNG, EXMAR continued to engage with potential partners in commercial negotiations. The underlying energy and natural gas price is a boost. The unit can be used to prevent aring of natural gas. It avoids CO 2 - and methane emissions as well as serving as a fast, deployable oating terminal for natural gas. Our regasication barge FSRU S188 received more requests since the second half of 2021 and in the meantime an agreement was reached with GASUNIE for a ve-year charter. EXMAR sold a design of the fourth OPTI ® -hull, for deployment in the Gulf of Mexico. A major highlight in the past year for EXMAR was the delivery of two of the world’s rst dual-fuel Very Large Gas Carriers (VLGCs), “FLANDERS PIONEER” and “FLANDERS INNOVATION” which are capable of running on LPG as an emissions-reducing fuel. Both have been deployed on long-term charter. Our other ships and barges performed in line with expectations, and our liquidity position was further strengthened in 2021, due to the YPF settlement and the successful GUNVOR arbitration. In November, EXMAR signed a three-year credit agreement with Sequoia Economic Infrastructure Income Fund for an amount of USD 50 million. EXMAR is now actively pursuing innovations and research for energy transition and alternative fuels. EXMAR concluded partnerships for the design of a new CO 2 tanker and new applications for NH 3 (ammonia) and H2 (hydrogen) as new opportunities emerge for the transportation of hydrogen. On behalf of the Board of Directors and the Management of EXMAR, we would like to thank everyone once again for their loyal support to our Company. Nicolas Saverys – Executive Chairman Francis Mottrie – CEO 1 PANORAMA 2021 6 1.1 FINANCIAL OVERVIEW 8 1.2 EXMAR AT A GLANCE 10 1.3 OUR BUSINESS 14 2 ACTIVITY REPORT 22 2.1 SHIPPING 24 2.2 INFRASTRUCTURE 34 2.3 SUPPORTING SERVICES 38 3 CARE FOR TODAY, RESPECT FOR TOMORROW 42 3.1 ESG 44 CONTENT 4 CORPORATE GOVERNANCE STATEMENT 74 4.1. CORPORATE GOVERNANCE STATEMENT 76 5 FINANCIAL REPORT 106 5.1 ANNUAL REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERS 109 5.2 CONSOLIDATED FINANCIAL STATEMENTS 115 5.3 STATUTORY FINANCIAL STATEMENTS 187 6 GLOSSARY 188 1.1 FINANCIAL OVERVIEW 8 1.2 EXMAR AT A GLANCE 10 1.3 OUR BUSINESS 14 1 PANORAMA 8 I 1. PANORAMA 1.1 FINANCIAL OVERVIEW CONSOLIDATED KEY FIGURES International Financial Reporting Standards (IFRS) (1) Management reporting based on proportionate consolidation (2) 2021 2020 2021 2020 CONSOLIDATED STATEMENT OF PROFIT OR LOSS (IN MILLION USD) Revenue 148.2 285.2 247. 0 384.2 EBITDA 51.3 177.5 113.6 239.9 Depreciations and impairment losses -48.9 -38.3 -76.6 -102.2 Operating result (EBIT) 2.4 139.2 37. 0 13 7.6 Net nance result -10.6 -28.4 -21.8 -42.6 Share in the result of equity accounted investees (net of tax) 21.8 -17. 8 -1.5 -2.1 Result before tax 13.6 93.0 13.6 93.0 Tax -1.9 -1.0 -2.0 -1.0 Consolidated result after tax 11.6 92.0 11.6 92.0 of which group share 11.6 91.9 11.6 91.9 INFORMATION PER SHARE (IN USD PER SHARE) Weighted average number of shares of the period 57,226,737 57,226,737 57,226,737 57,226,737 EBITDA 0.90 3.10 1.98 4.19 EBIT (operating result) 0.04 2.43 0.65 2.41 Consolidated result after tax 0.20 1.61 0.20 1.61 INFORMATION PER SHARE (IN EUR PER SHARE) Exchange rate 1.1894 1.1384 1.1894 1.1384 EBITDA 0.75 2.72 1.67 3.68 EBIT (operating result) 0.03 2.14 0.54 2.11 Consolidated result after tax 0.17 1.41 0.17 1.41 (1) The gures in these columns have been prepared in accordance with IFRS as adopted by the EU. i.e. joint ventures accounted for at equity method. (2) The gures in these columns reect management presentation and include the joint-ventures based on the proportionate consolidation method instead of the equity method. A reconciliation between the amounts applying the proportionate method and the equity method is included in Note 3 Reconciliation segment reporting of the 2021 Financial report. 1. PANORAMA I 9 KEY RATIO’S (based on proportionate consolidation method, in million USD) REVENUE TOTAL ASSETS ADJUSTED EBITDA() NET DEBT EBITEBITDA EQUITY RATIO BASIC EARNINGS PER SHARE REVENUE PER SEGMENT ADJUSTED EBITDA PER SEGMENT () 2021 31 Dec 2021 2021 31 Dec 2021 20212021 31 Dec 2021 2021 2020 31 Dec 2020 2020 31 Dec 2020 20202020 31 Dec 2020 2020 2021 Infrastructure 2020 2021 Infrastructure 2020 2021 Shipping 2020 2021 Shipping 2020 Supporting Services 2021 2020 Services 2021 2020 Eliminations 2021 2020 247.0247.0 1,278.11,278.1 56.356.3 492.0492.0 37.037.0 113.6113.6 13 7.713 7.7 65.165.1 -2.4-2.4 92.892.8 26.526.5 -6.5-6.5 -10.0-10.0 41.98%41.98% 0.200.20 384.2 1,229.3 77.7 48 7. 9 13 7. 6 239.9 134.8 68.1 11.8 213.3 46.8 -2.2 -10.7 44.41% 1.61 () : EBITDA adjusted for certain non-recurring transactions for which management believes that excluding these provides better insights in the actual performance of the Group. The following items have been excluded from the adjusted EBITDA calculation: > 2021: early termination fee for the FSRU S188 charter agreement by Gunvor (Infrastructure: USD 56.8 million) and other cancellation fees at Supporting Services (USD 0.5 million); > 2020: settlement fee YPF (Infrastructure: USD 149.1 million) and cancellation fee Excelerate (Services: USD 13.0 million). 10 I 1. PANORAMA EXMAR IN THE WORLD FINANCIAL CALENDAR 28 April 2022 17 May 2022 8 September 2022 27 October 2022 Results 1 st quarter 2022 Annual shareholders meeting Results 1 st semester 2022 Results 3 rd quarter 2022 The EXMAR share is listed on Euronext BRUSSELS and is a part of the BEL Small Index (EXM). Reference shareholder is Saverex NV. SHARE INFORMATION Participation as per 31 December 2021: 59,500,000 Total shares 47. 3 8 8% Freeoat 43.79% Saverex 3.82% EXMAR 5.002% Cobas Asset Management S.G.I.I.C. SA 1.2 EXMAR AT A GLANCE UK France USA Jamaica PERSONNEL 1.2 EXMAR AT A GLANCE 1. PANORAMA I 11 Total 1,849 of which Nationalities 43 Headquarters 83 69 Share female employees headquarters: 45% nationalities present (seafarers and onshore) 1,615 seagoing 234 onshore Luxembourg The Netherlands Belgium - Headquarters China South Korea Nigeria Italy Cyprus India Hong Kong Angola Congo Singapore 12 I 1. PANORAMA TIMELINE February 2021 The accommodation barge WARIBOKO starts its employment for Total Exploration & Production. June 2021 Delivery of FLANDERS INNOVATION. April 2021 EXMAR receives a notice of early ter- mination from charterers GUNVOR, following the positive interim award in the ongoing arbitration in relation to the charter party of the FSRU S188. 1. PANORAMA I 13 July 2021 • Completion ex-yard of EOC’s third OPTI ® based semisubmersible oating production system for KING’S QUAY project in the Gulf of Mexico. • MoU on NH 3 fuelled ship with NUTRIEN. September 2021 • Sale of TEMSE. • Delivery of FLANDERS PIONEER. August 2021 Sale of TOURAINE. October 2021 • Fourth OPTI ® hull design awarded for Shenandoah Project in the Gulf of Mexico. • Joint development of CO 2 -carrier with LATTICE. 14 I 1. PANORAMA EXMAR is a provider of floating solutions for the operation, transportation and transformation of gas. EXMAR’s mission is to serve customers with innovations in the field of offshore extraction, transformation, production, storage and transportation by sea of liquefied natural gases, petrochemical gases and liquid hydrocarbons. 1.3 OUR BUSINESS EXMAR SHIPPING EXMAR is a leading ship owner and operator in the transportation of Liqueed Natural Gas (LNG), Liqueed Petroleum Gas (LPG), Ammonia (NH 3 ) and Petrochemical Gases. These industrial niche shipping markets predominantly feature established play- ers with a long-term operational focus. The unique characteristics of the products transported require highly sophisticated vessels as well as specialized operational skills both on board the vessel and ashore. With expertise and knowledge gained from its shipbuilding origins, EXMAR has become a globally renowned owner and operator in this segment with focus on pioneering energy supply chain solutions and maritime technical innovation. This has been possible through our own in-house technical ship management and technical research and develop- ment department. Today, EXMAR - controls a eet of 37 ships and barges which are either fully owned, owned in joint venture or time chartered. The complete eet list includes the following types of gas tankers and barges: Fully pressurized gas carriers: EXMAR owns 10 pressurized vessels with a capacity of between 3,500-5,000 m 3 . The cargoes, usually LPG or less complex petrochemical gases to transport, are carried at near-ambient temperatures in cylindrical steel pressure tanks designed to withstand pressures up to 20 bar. Fully refrigerated gas carriers (MGC, VLGC): The majority of the EXMAR eet are fully-refrigerated vessels with prismatic cargo tanks designed to carry products at low temperature (mostly fully refrigerated LPG and ammonia) and near-ambient pressure. This is made possible by installed refrigeration plants which ensure these vessels’ eciency for long-haul trading. Fully-refrigerated gas carriers are usually above 20,000 m 3 to benet from economies of scale and scope. • Midsize Gas Carriers (MGC): EXMAR currently owns 17 vessels in joint venture and time charters another two vessels, all with a capacity between 35,000-38,000 m 3 . • Very Large Gas Carriers (VLGC): EXMAR currently owns two state of the art LPG- fuelled vessels with a capacity of 88,000 m 3 and it time-charters one vessel with a capacity of 83,000 m 3 . Liqueed Natural Gas carrier (LNG): EXMAR currently owns one LNG carrier which is pri- marily used for transporting LNG worldwide. She has also served as oating LNG storage in locations where on-site storage facilities are limited. Floating Liquefaction, regasication and accommodation vessels: EXMAR owns two units that are used for liquefaction or regasication of LNG. The Company also owns two purpose-built oshore accommodation barges. Please refer to the Infrastructure chapter for a detailed explanation of the use of these units. 1. PANORAMA I 15 UPDATED FLEET LIST MGC - MIDSIZE GAS CARRIERS Type Capacity 100% (m 3 ) Year built Flag Status Eupen Midsize LPG 39,375 1999 Liberia joint venture Libramont Midsize LPG 38,940 2006 Belgium joint venture Sombeke Midsize LPG 38,902 2006 Belgium joint venture Kaprijke Midsize LPG 38,837 2015 Belgium joint venture Knokke Midsize LPG 38,853 2016 Belgium joint venture Kontich Midsize LPG 38,867 2016 Belgium joint venture Kortrijk Midsize LPG 38,880 2016 Belgium joint venture Kruibeke Midsize LPG 38,871 2017 Belgium joint venture Kallo Midsize LPG 38,850 2017 Belgium joint venture Kapellen Midsize LPG 38,860 2018 Belgium joint venture Koksijde Midsize LPG 38,849 2018 Belgium joint venture Waasmunster Midsize LPG 38,498 2014 Belgium joint venture Warinsart Midsize LPG 38,465 2014 Belgium joint venture Waregem Midsize LPG 38,442 2014 Belgium joint venture Warisoulx Midsize LPG 38,480 2015 Belgium joint venture Wepion Midsize LPG 38,577 2018 Belgium joint venture Bastogne Midsize LPG 35,572 2002 Belgium joint venture Antwerpen Midsize LPG 35,223 2005 Hong Kong time chartered Sylvie Midsize LPG 35,217 2007 Hong Kong time chartered PRESSURIZED SHIPS Type Capacity 100% (m 3 ) Year built Flag Status Sabrina Pressurized 5,018 2009 Hong Kong owned Helane Pressurized 5,018 2009 Hong Kong owned Fatime Pressurized 5,018 2010 Hong Kong owned Debbie Pressurized 3,540 2009 Hong Kong owned Anne Pressurized 3,540 2010 Hong Kong owned Magdalena Pressurized 3,540 2008 Hong Kong owned Joan Pressurized 3,540 2009 Belgium owned Marianne Pressurized 3,540 2009 Belgium owned Elisabeth Pressurized 3,540 2009 Belgium owned Angela Pressurized 3,540 2010 Belgium owned VLGC - VERY LARGE GAS CARRIERS Type Capacity 100% (m 3 ) Year built Flag Status BW Tokyo VLGC 83,270 2009 Singapore time chartered Flanders Pioneer VLGC 87,812 2021 Belgium owned Flanders Innovation VLGC 87,809 2021 Belgium owned FLOATING LIQUEFACTION AND REGASIFICATION BARGES Type Capacity Year built Flag Status FSRU S188 FSRU 3 MTPA 2017 Liberia owned Tango FLNG FLNG 0.5 MTPA 2017 Liberia owned OFFSHORE ACCOMMODATION BARGES Type Capacity Year built Flag Status Nunce Accomodation 350pax 2009 Liberia joint venture Wariboko Accomodation 300pax 2010 Liberia joint venture LNG - LIQUIFIED NATURAL GAS CARRIER Type Capacity 100% (m 3 ) Year built Flag Status Excalibur LNG 138,034 2002 Belgium joint venture 16 I 1. PANORAMA Value chain & cargo To analyse market drivers at work, it is important to understand how energy products are produced and developed throughout the value chain and their use in consumption markets. Unlike dry cargo or crude markets, the products transported are not raw products but are semi- or fully manufactured. For this reason many dierent market forces exert inuence on the business, each one with its own inherent complexity. LNG – Liqueed Natural Gas: LNG can be dened as a natural gas that has been cooled down to liquid form, reducing it to one-six- hundredth of its original volume at minus 164 degrees Celsius. Natural gas is used to produce electricity, and serves as an industrial feedstock for fertilizers and a wide range of plastics. It is also deployed for heating in a commercial or residential setting. To be able to transport LNG, LNG carriers equipped with special insulation have been designed and built forming their own LNG shipping segment. EXMAR owns one LNG carrier which is currently oper- ated in worldwide trading. She is used for the trans- portation of product as well as for oating storage in locations where onshore storage is limited. LPG – Liquid Petroleum Gas: As shown in the LPG value chain, LPG is produced during oil rening or extracted from natural gas liquid processing activities. LPG, mainly propane and butane, is a subsequent by-product. LPG can be used for a variety of purposes such as feedstock in reneries and the petrochemical industry, as fuel for vehicles, agricultural needs such as crop drying or to a lesser extent to feed power plants. With the global continued growth in natural gas production, increasing quantities of LPG are expected to be pro - duced and shipped worldwide. EXMAR currently operates 19 midsize gas carriers (MGC), each with a capacity of between 35,000- 38,000 m 3 . These vessels are fully refrigerated, are equipped with prismatic tanks and move the LPG at temperatures around minus 48 degrees celcius. EXMAR also owns and operates two state of the art dual-fuelled (LPG) vessels. These vessels are very large gas carriers (VLGCs) with a capacity of 88,000 m 3 . These vessels have been designed to run on LPG as a marine fuel, which considerably reduces greenhouse gas emissions (by up to 15% of carbon dioxide, up to 10% of nitrogen oxide, and up to 90% of particulate matter). A third VLGC is in-chartered on longer term. 1. PANORAMA I 17 LPG VALUE CHAIN Upstream market Midstream market Downstream market Rich natural gas Crude oil Petrochemical cracking Petchem gases Propylene, VCM, Ethylene Fuel gas C1, Hydrogen, Pygas, BTX Heavy aromatics, C5/C6 non aromatics Fuel oil Crude C4s, Butadiene, Mixed butylenes Renery cracking Naphta Gas oils Ethane Propane Butanes Condensate Petrochemical cracking Rubbers (car tyres, sport shoes, …) Styrenes (foam, insulations …) Polypropylene (fi bres, fabrics, injection mouldings, car appliances, toys …) Polyvinyl chloride (PVC) (pipes, electric cables, signs, clothing, furniture, healthcare, fl ooring, …) Polyethylene (food packaging, milk, water and juice bottles, power cables, chemical containers, injection mouled products, …) Petchem gases Propylene VCM Ethylene Fuel gas C1 Hydrogen Pygas BTX Heavy aromatics C5/C6 non aromatics Fuel oil Crude C4s Butadiene Mixed butylenes DOWNSTRE AM MARKET Petrochemical cracking Rubbers (car tyres, sport shoes, …) Styrenes (foam, insulations …) Polypropylene (fi bres, fabrics, injection mouldings, car appliances, toys …) Polyvinyl chloride (PVC) (pipes, electric cables, signs, clothing, furniture, healthcare, fl ooring, …) Polyethylene (food packaging, milk, water and juice bottles, power cables, chemical containers, injection mouled products, …) Petchem gases Propylene VCM Ethylene Fuel gas C1 Hydrogen Pygas BTX Heavy aromatics C5/C6 non aromatics Fuel oil Crude C4s Butadiene Mixed butylenes DOWNSTRE AM MARKET Petrochemical cracking Rubbers (car tyres, sport shoes, …) Styrenes (foam, insulations …) Polypropylene (fi bres, fabrics, injection mouldings, car appliances, toys …) Polyvinyl chloride (PVC) (pipes, electric cables, signs, clothing, furniture, healthcare, fl ooring, …) Polyethylene (food packaging, milk, water and juice bottles, power cables, chemical containers, injection mouled products, …) Petchem gases Propylene VCM Ethylene Fuel gas C1 Hydrogen Pygas BTX Heavy aromatics C5/C6 non aromatics Fuel oil Crude C4s Butadiene Mixed butylenes DOWNSTREAM MARKET Petrochemical cracking Rubbers (car tyres, sport shoes, …) Styrenes (foam, insulations …) Polypropylene (fi bres, fabrics, injection mouldings, car appliances, toys …) Polyvinyl chloride (PVC) (pipes, electric cables, signs, clothing, furniture, healthcare, fl ooring, …) Polyethylene (food packaging, milk, water and juice bottles, power cables, chemical containers, injection mouled products, …) Petchem gases Propylene VCM Ethylene Fuel gas C1 Hydrogen Pygas BTX Heavy aromatics C5/C6 non aromatics Fuel oil Crude C4s Butadiene Mixed butylenes DOWNSTRE AM MARKET > Polypropylene bres, fabrics, injection mouldings, car appliances, toys, ... > Polyvinyl chloride (PVC) pipes, electric cables, signs, clothing, furniture, healthcare, ooring, ... > Polyethylene food packaging, milk, water and juice bottles, power cables, chemical containers, injection mouled products, ... > Rubbers car tyres, sport shoes, ... > Styrenes foam, insulations, ... 18 I 1. PANORAMA NH 3 – Anhydrous ammonia: Ammonia (NH 3 ) is usually obtained from adding nitrogen through a steam performing process with natural gas as principal feedstock. It is mainly used as a basic component in the production of fertilizers (urea, nitrates & NPK), civil explosives or caprolactan (for industrial ends such as synthetic textiles and airbags in cars). To support global decarbonization, the focus on am- monia production and storage is increasing glob- ally, considering its potential in terms of a notable reduction in polluting emissions as well as its po- tential as a solution for hydrogen transport. For the shipping sector, ammonia is expected to be used as a mainstream marine fuel in a few years from now, thereby reducing CO 2 emission of tailpipe gases to nearly zero. Ammonia is transported in EXMAR’s fully refrigerated midsize gas ships with prismatic tanks, enabling the ship’s cargo carrying capacity to be maximized. The cargo is kept at -33 degrees celcius. About 33% of all ships in EXMAR’s eet is dedicated to transporting ammonia. EXMAR has signed a Memorandum of Understanding with the Canadian fertilizer company Nutrien to build and operate one or more ammonia-fuelled ships. This collaboration aims to signicantly reduce NUTRIEN’s emissions in its maritime transportation. Petrochemical gases: Also depicted in the LPG value chain infographic, petrochemical gases are produced at the end of the petrochemical ow and derived from the steam- cracking process of oil and gas. These gases mainly consist of ethylene and propylene which are used to make various polymers and plastics. VCM (Vinyl Chloride Monomer) and Crude C4s are mainly used to produce PVC and rubber products, respectively. EXMAR owns and operates 10 pressurized vessels with a capacity between 3,500 to 5,000 m 3 . These vessels, usually carrying LPG or less complex petrochemical gases, are trading either side of the Suez Canal on long-term basis. AMMONIA VALUE CHAIN Upstream market Midstream market Downstream market Fertilizers Explosives Synthetic bres Synthetic resins Rich natural gas Steam reforming Hydrogen Ammonia Industrial processes 1. PANORAMA I 19 Transported products and ship-to-ship activities EXMAR has safely and reliably performed no less than 782 voyages in 2021 bringing gas products to their clients across the globe in a safe and reliable fashion. The charts show the total amount of car- goes carried and voyages performed for each of the segments EXMAR is active in. About 68% of cargoes taken were LPG, 19% ammonia, 7% petrochemical gases and 6% LNG. EXMAR has established itself as a reliable market player involved in change of grade activities as well as seaborne ship-to-ship transfers. The trading exibility these activities oer EXMAR’s customers often occurs in the Midsize gas segment, which accounts for most of EXMAR’s eet. In addition to vessel size limitations, port or operational restrictions are often factors re- quiring owners to load/discharge cargoes from/into smaller vessels at sea. Safe ship-to-ship transfers require experienced crews, diligent coordination and the use of adequate equipment. In this respect, EXMAR prides itself with its proven track-record and clean safety sheet, having performed as many as 247 STS operations in 2021. Most transfers were done for butane (53%) and propane (29%), while the remainder (18%) constituted LPG mixes. LPG 6,000,000 68% Petrochemical gasses 603,000 7% Ammonia 1,619,000 19% LNG 502,000 6% 8,724,000 mt Total TOTAL CARGO MOVED IN 2021 NBR OF VOYAGES 2021 LPG 71% Petrochemical gasses 19% Ammonia 9% LNG 1% markets at a more competitive cost than ever before. They can be mobilized quickly and without major investment on site next to the pipeline infrastructure. WARIBOKO and NUNCE are both accommodation and work barges which can accommodate up to respectively 300 to 350 people on board, oering cabins of various sizes, catering and leisure activities. Accommodation barges provide essential onsite support for oil and gas exploration and production companies . They provide the necessary exible living quarters infrastructure to operators and contractors in the immediate neigbourhood of oshore oil and gas activities. EXMAR Oshore Company (EOC) is a recognized oil and gas engineering company established in 1997 with more than 75 experts ranging from professional engineers to naval architects. EOC has developed a proprietary hull design OPTI ® for oating oil and gas production platforms in deep water areas such as the Gulf of Mexico. With four OPTI ® production facilities delivered based on the OPTI ® design, EOC has become a recognized and reputable supplier of cost-eective and purpose-built project solutions in this area. DV Oshore is a niche marine expert contractor which belongs to the EXMAR group since 1999 and pro- vides contracted engineering, audits and technical assistance to oil & gas companies with respect to oating terminals, oshore mooring installations and subsea piping. EXMAR INFRASTRUCTURE EXMAR Infrastructure aims at developing innovative and fast track oil and gas infrastructure solutions to support the energy industry in providing communities with clean and aordable energy. EXMAR Infrastructure currently owns four barge- based oating infrastructure units for this purpose: two oating LNG terminals, TANGO FLNG and FSRU S188, and two accommodation barges, NUNCE and WARIBOKO. EXMAR Oshore Company in Houston (EOC) and DV Oshore in Paris (DVO) complete the Infrastructure activities with strong marine and pro- duction engineering capabilities. TANGO FLNG is a oating LNG terminal which liq uees natural gas into LNG, which is then ooaded into LNG carriers laying alongside for export to LNG-importing countries. The FSRU S188 regasies imported LNG and injects the natural gas into the onshore pipeline infrastructure for domestic consumption, power production or other industrial applications. Both units oer fast-track, exible and cost-ecient floating alternatives to land-based terminals traditionally used for LNG import/export. The TANGO FLNG and FSRU S188 allow customers to enter these 1. PANORAMA I 21 Implementing oating oil and gas infrastructure re- quires dedicated and extensive project development eort and time. Each project has specic infrastructure needs for processing the product, mooring, storage as well as regulatory approvals. The in-house availability of turnkey expertise in oil & gas handling and storage, engineering of mooring and other marine infrastructure, combined with operations and maintenance capabilities are the unique added value EXMAR provides its clients in this respect. By taking care of all development aspects, from feasibility studies and moving into ownership, leasing, installation, testing and all-in-one operations and maintenance services, EXMAR oers the customer the assurance and comfort of a fast-track, cost-eective and low-risk solution for his business case. The Infrastructure business unit has now established oces and representatives in Antwerp, Houston, Singapore, Paris, Shanghai, Luanda, Pointe Noire, Nigeria and Livorno. SUPPORTING SERVICES In addition to its core business activities, EXMAR has business interests in a variety of companies in the elds of ship management, specialized travel and components to the marine and oshore industry. EXMAR Shipmanagement BV specializes in exper- tise-based niche segments such as managing oating storage, regasication and liquefaction marine infra- structure, Very Large Gas Carriers (VLGCs), Midsize Gas Carriers, Pressurized gas carriers and oshore accommodation barges. Travel PLUS, located in Antwerp, is specialized in business and leisure travel. EXMAR Yachting is a full-service luxury yachting specialist based in Belgium oering comprehen- sive yacht management, chartering, crewing and brokerage services. BEXCO is a leading European manufacturer of precision-engineered synthetic mooring, towing and lifting ropes for oshore, renewables, marine and industrial applications. LNG VALUE CHAIN Upstream market Midstream market Downstream market Liquefaction Facility Gas eld and processing facility Gas eld and processing facility LNG Storage Tank LNG Carrier LNG Carrier FSRU Barge To Pipeline System End User FLNG Barge LNG Storage Tank Vaporizers Traditional LNG value chain: EXMAR LNG value chain: 2.1 SHIPPING 24 2.2 INFRASTRUCTURE 32 2.3 SUPPORTING SERVICES 36 2 ACTIVITY REPORT 24 I 2. ACTIVITY REPORT 2.1 SHIPPING EXMAR Shipping is a leading shipowner in the transportation of liquefied gas products (LPG, anhydrous ammonia and petrochemical gases). As a prominent midsize LPG operator, EXMAR benefits from long-term contracts with first-class customers. MARKET OVERVIEW During 2021 the global COVID-pandemic continued to distort economic activities worldwide with far reaching consequences for dierent shipping seg- ments. With high consumer demand and seaborne as well as land-based congestion, the container and liner markets reached unprecedented high rates, while tanker markets struggled with reduced de- mand and low rates. Dry bulk and especially smaller vessels benetted from the container market boom as importers, exporters and traders sought alternative seaborne cargo transportation. In the gas markets the LNG shipping rates were exceptionally high due to a combination of geopolitical tensions as well as low storage levels. The LPG market, especially the larger VLGC- segment, was highly volatile with the year starting at record-high freight rates. A few months followed where rates fell close to OPEX levels and then recovered again towards the end of the year. Rates for both midsize and smaller LPG vessels, which account for the majority of the EXMAR eet, remained stable at rewarding levels throughout the year. Focus has been maintained by regulators on how to decarbonize the shipping industry. As of 2023, the International Maritime Organization (IMO) will implement new rules aimed at reducing greenhouse gas emis- sions from shipping. The European Union (EU) is also working on new regulations that will apply to vessels trading within Europe as well as to and from Europe. These regulations are expected to take eect as from 1 January 2023 and will favour newer vessels and incen- tivise investments in new, low and zero-carbon fuels. The legislation will also inuence vessel-speed reductions. In 2021 seaborne LPG volumes totalled 111 million metric tons as compared to 105 million metric tons in 2020. The USA remained the largest exporting country of LPG while Asia and mainly China was the biggest importer. The rise in US export volumes totalled approximately three million tons more compared to 2020, achieving 49 million tons in 2021. The projection for US exports of LPG for 2022 is yet another increase to 51 million tons. However, this reects a much more moderate increase in US exports than in previous years. Exports from the PROPORTIONATE CONSOLIDATION (IN MILLION USD) 2021 2020 Revenue 13 7.7 134.8 EBITDA 65.1 68.1 Adjusted EBITDA 65.1 68.1 Operating result (EBIT) 26.9 -7.8 Consolidated result after tax 10.7 -26.2 Vessels (owned and leased) 570.7 475.6 Financial debts 469.8 389.3 2. ACTIVITY REPORT I 25 Middle East rose from 35.2 million tons in 2020 to 36.2 million tons and are expected to further increase to 40 million tons, mainly out of Saudi Arabia and Kuwait, as OPEC will gradually lift the crude production cuts by the third quarter of 2022. Demand growth for new Propane Dehydrogenation (PDH) Plants is expected to further support propane imports with more than seven million metric tons throughout 2022 and 2023. With the USA remaining the biggest exporter and China the biggest importer, the corresponding increases in ton-miles will benet vessel utilization. Ammonia markets saw an uplift in demand by 2.3 million tons in 2021 to a total shipped volume of approximately 18 million tons after a decrease of the volumes in 2020 as a result of COVID-19. Main export regions are Trinidad, the Black Sea and the Middle-East Gulf. Around 30% of the Midsize Gas Carriers are employed in ammonia trading, which represents a major driver for this segment. Major new applications for ammonia as a future alternative, zero carbon bunker fuel and as a hydro- gen carrier oer an interesting volume and upside potential in the medium long term. US GAS PLANT LPG PRODUCTION AND SEABORNE EXPORTS Propane Butanes LPG Export Source: Poten & Partners MMt/y 2018 2019 2020 2021 2022 100 80 60 40 20 0 MIDDLE EAST LPG EXPORTS Qatar UAE Saudi Arabia Kuwait Iran Other Source: Poten & Partners MMt/year 50 40 30 20 10 0 2019 2020 2021 2022 2023 2024 2025 TOTAL SEABORNE TRADE Ammonia Change year-over-year Source: Ammonia Trade Development, Clarksons Platou MMt/year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 18 20 16 14 12 10 8 PROJECTED MARINE FUEL USE TO 2050 Oil based LNG LPG Methanol Biofuels Ammonia/Hydrogen Source: American Bureau of Shipping 20502025 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 26 I 2. ACTIVITY REPORT VERY LARGE GAS CARRIERS (VLGC) 2021 was a volatile year with VLGC freight markets experiencing both extreme highs and lows during the year which impacted average rates. The US-exports into Asia continued to increase the ton-miles demand and this looks like being the trend going forward. Substantial delays caused by congestion at the Panama Canal tightened the market and pushed rates up for LPG-laden VLGCs heading to Asian ports. The Panama Canal Authorities introduced a booking system which negatively impacted gas carrier transits resulting in waiting times of up to as much as two weeks. In addition the impact of the pandemic on port operations caused heavy delays, especially in the Far East where many ports shut down during certain periods. On the vessel supply side, 21 newbuild VLGC’s were delivered in 2021, which brings the total existing eet to 339 units. Another 78 are expected by 2024 bringing the total number of VLGC’s to 417. The vast majority of these newbuilds are LPG-fuelled and ready to conform to the new IMO emissions regulations entering into force in 2023. This eet growth is required in order to support current global economic growth in Asia. With 13 propane dehydrogenation (PDH) plants expected to come on stream as from 2022, China will import up to seven million tons of additional LPG in the years to come. Depending on when these PDH plants will be operational, it is expected that China will import no less than 27 million tons of LPG in total. EXMAR took delivery of two LPG fuelled 88,000 m 3 VLGC newbuildings, FLANDERS INNOVATION and FLANDERS PIONEER in June and September 2021. Both vessels have entered into a long-term time-charter agreement with Equinor ASA (Norway). These ves- sels were the rst VLGCs ordered globally with dual fuel engines able to burn LPG on the main engine, substantially reducing emissions and underlining EXMAR’s ability to innovate. Since then the world eet has followed suit with over 70 additional LPG-fuelled VLGCs on order, which endorses the claim that LPG is becoming the standard bunker fuel for future seaborne VLGC trading. WEEKLY VLGC SPOT TIME CHARTER EQUIVALENT (THOUSAND USD PCM) 2019 2020 2021 2022 January February 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter March April May June July August September October November December 2,500 3,500 2,000 3,000 1,500 1,000 500 0 2. ACTIVITY REPORT I 27 DIRECTION OF TRADE - VLGC/LGC DEPARTURES, DECEMBER 2021 Source: Poten & Partners Volumes in thousand tons 80 70 550 1040 1040 520 340 340 330 40 210 1850 Latin Amercia Northeast Asia Northeast Asia Northeast Asia Southeast Asia Southeast Asia Southeast Asia India USWC USGC USECUSEC USEC Middle EastMiddle East Middle East West AfricaWest Africa West Africa VLGC FLEET SUPPLY DEVELOPMENT Ships scrapped Delivery End-period Fleet Source: Poten & Partners Delivery & scrapping VLGC eet 2016 20192017 2020 2021 2022 2023 20242018 40 400 50 500 30 300 20 200 10 100 0 0 -10 The jointly-controlled BW TOKYO VLGC performed well in the course of 2021, mainly covered by a time charter with major LPG trader Tragura. At the end of the year the vessel joined the BW VLGC pool on the basis of a revenue sharing system. 28 I 2. ACTIVITY REPORT 2018 2019 2020 2021 Source: EIA NUMBER OF LPG LOADINGS EX-US VLGCMGCSGC LGCHandysize 500 1,000 400 900 300 800 200 700 100 600 0 MIDSIZE GAS CARRIERS (MGC) LPG market demand trends had a benecial eect on the midsize segment during 2021 and prospects look similarly positive ahead for future cargoes. The USA remains the main exporter and have experienced an increase close to 15% in MGC exports in the past few years, year on year. As US exports typically represent longer haul voyages, also on Midsize, they substan- tially underpin vessel utilization. The MGC’s eet growth is sizeable with an expected increase in the period 2022-2024 of 36 ships or about 30% of the total current eet to a total of 138 ships by 2024. Despite the world MGC eet reaching a historic high, the corresponding capacity growth is expected to accommodate increasing LPG transportation needs. This will emerge mainly out of the USA, Gulf and Middle East, combined with a gradual growth in long-haul Ammonia volumes. The majority of the MGC newbuilds have dual fuel LPG propulsion. 2. ACTIVITY REPORT I 29 MGC FLEET Newbuildings Scrapped Total eet (at year end) (right axis) Source: E.A Gibson 20 160 15 140 10 120 5 100 40 0 80 20 -5 -10 60 0 4747 66 77 1313 1616 99 33 44 1010 1818 4411 11 44 55 33 11 -1-1-1-1 -3-3 -1-1 -1-1 -4-4 5454 5454 5555 5858 6363 6565 7878 9494 134134 9999 102102 103103 106106 116116 138138 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 EXMAR, which has a 50/50 Joint Venture with Seapeak (former Teekay LNG Partners) for the Midsize eet, continues to build on its existing loyal customer base with extensions of existing time charter contracts at rewarding levels. At the beginning of 2022, 79% of EXMAR’s Midsize eet has already been committed to these clients. During 2021, 33% of EXMAR’s midsize eet was dedicated to transporting ammonia and 67% to LPG. For 2022 the ammonia share is expected to increase up to 40%. The average age of the MGC eet has decreased with the sale of the semi-refrigerated vessel TEMSE (12,000 m 3 - 1995 built) as well as the fully refrigerated TOURAINE (39,000 m 3 - 1996 built) and BRUSSELS (35,000 m 3 - 1997 built). 30 I 2. ACTIVITY REPORT ARA COASTER RATES AND BUNKER PRICES Jan-18 Jan-19 Jan-20 Jan-21 Jul-18 Jul-19 Jul-20 Jul-21 Oct-21 Apr-18 Apr-19 Apr-20 Apr-21 Oct-18 Oct-19 Oct-20 500 700 50 600 800 60 70 400 40 300 30 200 20 100 10 0 0 Rotterdam LS MGO bunker price 1,800t but Tees-ARA freight rate Source: E.A Gibson EU-16 REFINERY RUNS AND TEES-ARA COASTER RATE 2017 2018 2020 20212019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 50 85 60 90 95 40 80 30 75 20 70 10 65 0 60 1,800 But Tees-ARA in $/t Renery utilisation rate in % (right axis) Source: E.A Gibson PRESSURIZED West of Suez, renery runs increased in 2021 after a market dip in 2020 due to the pandemic impacting demand. This in turn had a positive eect on vessel utilisation and rates in the pressurized segment. Small parcels transported on pressurized ships go hand in hand with renery runs as demonstrated in the chart below. Pre-pandemic market levels have been reached again and going forward, 2022 is expected to oer equally rm prospects. In Asia, increasing demand combined with stringent COVID-19 regulations in various countries motivated charterers to fix forward which tightened the availability of spot pressurized ships. For both spot and time charter markets this resulted in rewarding market conditions. A spot voyage from South China to Philippines, as pictured on the right, reects the improved rates that owners have benetted from throughout 2021. Also here high bunker prices have somewhat tempered the returns. 2. ACTIVITY REPORT I 31 LPG 1,800MT SOUTH CHINA-PHILIPPINES Jan-16 Jan-18Jan-17 Jan-19 Jan-20 Jan-21 50 70 80 40 60 30 20 10 0 PRESSURIZED 3,500-5,000CBM COASTER AGE PROFILE 0-4 years old 5-9 years old 10-14 years old 15-19 years old 20-24 years old 25+ years old 50 70 40 60 30 20 10 0 Thousand USD/month PR_3,500_1yrTC_west PR_5,000_1yrTC_west PR_3,500_1yrTC_east PR_5,000_1yrTC_east Source: Steem1960 and E.A Gibson PRESSURIZED 12 MONTHS TIME CHARTER Jan-21 May-21Mar-21 Jul-21 Sep-21 Nov-21 Jan-22 280 260 300 240 220 200 180 $/pmt A very slim orderbook, with only 16 vessels on order in the 3,500-8,000 m 3 size range for a eet of over 500 units active in the global seagoing pressurized market, signies that long-term market prospects look promising. One major question for any newbuilding decision in this vessel class is which engine propulsion type to go for. Dual-fuelled engines for pressurized vessels have not yet become as commonplace compared with other larger LPG segments due to comparatively higher construction costs and some uncertainty on future emissions regulations for this smaller segment. EXMAR’s pressurized eet of 10 ships remained dedicated to well-established industrial and long- term partners, both in North-West Europe and in Asia. By so doing the Time Charter cover for 2022 already stands at 76% at improved levels compared to last year. PRESSURIZED SHIPS SABRINA owned HELANE owned FATIME owned DEBBIE owned ANNE owned MAGDALENA owned JOAN owned MARIANNE owned ELISABETH owned ANGELA owned 10 3 VLGC - VERY LARGE GAS CARRIERS BW TOKYO time chartered FLANDERS PIONEER owned FLANDERS INNOVATION owned 1 LNG - LIQUIFIED NATURAL GAS CARRIER EXCALIBUR joint venture 19 ANTWERPEN time chartered BASTOGNE joint venture EUPEN joint venture KALLO joint venture KAPELLEN joint venture KAPRIJKE joint venture KNOKKE joint venture KOKSIJDE joint venture KONTICH joint venture KORTRIJK joint venture KRUIBEKE joint venture LIBRAMONT joint venture SOMBEKE joint venture SYLVIE time chartered WAASMUNSTER joint venture WAREG E M joint venture WARINSART joint venture WARISOULX joint venture WEPION joint venture MGC - MIDSIZE GAS CARRIERS $/day HISTORICAL SPOT RATE ASSESSMENT 150 210 270 180 240 120 90 60 30 - 145k ST 160k TFDE 174k 2-Stroke Open West of Suez Open East of Suez Jan-21 Jun-21 Nov-21 LNG EXMAR currently owns one LNG carrier, EXCALIBUR (2002 built) in its eet in joint venture with Seapeak. The vessel successfully continued under her long- term time charter until end of December 2021 when the vessel was redelivered. Various options are being explored in upstream infrastructure projects as an FSU/FSRU, as well as for chartering alternatives. The end of 2021 enjoyed spot and time charter freight markets at historically high levels on the back of substantial LNG imports into China and Japan. Spot levels for steam turbine LNG carriers reached earnings well over $100,000 per day in the last quarter until correcting downwards. It is expected that 2022 will remain a rewarding year for modern large LNG carriers albeit with freight quoted at more moderate levels. 34 I 2. ACTIVITY REPORT 2.2 INFRASTRUCTURE EXMAR Infrastructure provides innovative floating infrastructure solutions to the oil & gas industry by deploying its asset portfolio or developing new assets for nearshore and offshore production, processing, storage or other ancillary services. ACTIVITY REPORT 2021 AND OUTLOOK In 2020 EXMAR Infrastructure’s commercial activities were impacted by the combined eect of the COVID-19 pandemic and the oil and gas price crash. The liquefaction services of TANGO FLNG in Bahia Blanca, Argentina, had been terminated and investment decision delays in oil & gas projects hampered business prospects and targets. In early 2021 market sentiment gained traction again. Oil & gas prices returned to healthy levels, so that energy products and supplies of infrastructure wordwide got interested again in TANGO FLNG which was immediately available as fast-track and cost- ecient solution for the export of LNG. Floating Liquefaction Following the termination of the LNG export project of YPF in Argentina in 2020, EXMAR has been receiving the YPF settlement fees in 2021 fully in line with the agreement concluded back in 2020. TANGO FLNG has been safely and securely laid up in Nueva Palmira, Uruguay. Being promoted as a fast- track solution to develop LNG exports, continued eorts are being made to re-employ the oating LNG liquefaction barge. In the meantime personnel both on board and ashore are keeping the unit on standby and continuously improving its operations and maintenance management systems. LNG SUPPLY-DEMAND GAP 2015 2020 2025 2030 2035 2040 400 600 800 200 0 MPTA Source: Shell LNG Outlook (2022) Demand forecast range LNG supply in operation LNG supply under construction PROPORTIONATE CONSOLIDATION (IN MILLION USD) 2021 2020 Revenue 92.8 213.3 EBITDA 54.4 161.0 Adjusted EBITDA -2.4 11.8 Operating result (EBIT) 17.1 135.8 Consolidated result after tax -8.7 98.0 Vessels (owned and leased) 409.1 443.1 Financial debts 204.8 224.9 2. ACTIVITY REPORT I 35 For decades liqueed natural gas (LNG) has been a low-cost and safe method to move large volumes of energy over long distances and, once regasied again, to be ultimately be used as fuel for power generation, industry and residential use. It is expected that the Asian demand will drive future LNG growth, with LNG needed to replace declining domestic gas and coal-to-gas switching. Much of such incremental gas demand will come from LNG imports. The current outlook, restoration of gas prices in 2021 to a healthy level in the long term and the need to decarbonize the energy supply are sparking renewed market interest in the TANGO FLNG. It puts TANGO FLNG, being readily available as a proven quick-to- market and cost-ecient LNG liquefaction solution, in an excellent position to accelerate export of LNG out of key natural gas source locations. Various parties, including energy infrastructure providers and exploration and production companies, have come up with business opportunities where TANGO FLNG eliminates the need for large and costly terminal infrastructure on land, drastically reduces the implementation schedule and the technical risk during project development, and allows the customer to focus on the sourcing of the feed gas and the trading/ monetization of the LNG-molecule. Supported by its aliates EXMAR Oshore Houston and DV Oshore, EXMAR Infrastructure has been able to move forward various files, with a very concrete business case and prospects, to the commercial negotiation and regulatory approval phase. Discussions during this phase will ensure that a balanced division of responsibilities between cooperating parties is achieved so that EXMAR Infrastructure can focus on the installation of the oating terminal and related operations and maintenance. This will include investment in mooring infrastructure and related engineering, installation, commissioning and project implementation eorts. Floating regasication Following the partial nal award in April 2021 in the arbitration commenced by GUNVOR in September 2019 in relation to the charter party of the FSRU S188 barge, which rejected GUNVOR’s application for declaratory relief, EXMAR received a notice of early termination of the charter party from GUNVOR. Following the eective termination EXMAR received a termination fee of USD 56.8 million in April 2021. The unit has become commercially available at the end of June and has been kept at its layup location in Singapore for the time being. FSRU S188 can compete with ship-based FSRUs, abundantly available in the market, as LNG import terminal. It is also of particular interest to niche- specic LNG-import applications in smaller, shallow draft locations of coal or heavy fuel by natural gas as a cleaner and far more exible energy source for power production facilities is sought. On 18 March 2022 EXMAR reached an agreement with GASUNIE LNG Holdings BV for a ve-year charter of the FSRU S188. With the geopolitical developments currently going on in Europe and the increased emphasis of governments on the security of ener- gy supply, the intention is to use the regasication barge as oating LNG import terminal at Eemshaven in Groningen, the Netherlands. Source: Shell LNG Outlook (2022) LNG imports Domestic production Pipeline imports ASIAN GAS DEMAND BY SUPPLY SOURCE 2020 2040 1,000 1,500 500 0 BCM 7%7% 16%16% 77%77% 36 I 2. ACTIVITY REPORT In addition to both TANGO FLNG and FSRU S188 deployments, the infrastructure team is studying a variety of newbuilding oating LNG infrastructure opportunities that are in dierent stages of devel- opment, oering turnkey projects and investments, an all-in package with a comprehensive range of operations and maintenance services, including crewing, marine and HSEQ management, certica - tions and class approval. Accommodation barges Despite the dicult working circumstances caused by the pandemic, accommodation barges NUNCE and WARIBOKO have conrmed their reputation of high standard services to its customers in the West Africa oshore region. NUNCE has conrmed its reputation of 100% uptime and is contracted with Sonangol until June 2022. WARIBOKO resumed employment in Nigeria in February 2021 which has lasted until end of July, with alternative employment now being sought for the unit. Current oil and gas prices are expected to have a positive impact on project development in exploration and production and the need for oating accommodation and work barges. The demand for oshore/platform supply vessels appears getting stronger in West Africa and the crash of oil and gas prices in 2020 has caused several suppliers of idle and substandard accommodation barges to leave the market. Under these circumstances marketing eorts West Africa oil and gas market are ongoing and encouraging. Engineering EXMAR Offshore Company (EOC) achieved two company milestones in its history in the same year with the delivery of the third OPTI ® design-based oating oil production facility and the award of the engineering contract for a fourth OPTI ® design-based hull. The third semi-submersible oating production system (FPS) based on the OPTI ® design has been delivered to its owners Murphy Oil Corporation for mobilization, installation and use for the King’s Quay project in the Gulf of Mexico. Murphy Oil is one of the top ve producing operators in the Gulf of Mexico and is also the owner of the highly successful DELTA HOUSE production facility. The preliminary engineering work on a fourth OPTI ® based oating production system hull design has paid o and has resulted in the award of the detailed 2. ACTIVITY REPORT I 37 engineering by Hyundai Heavy Industries in South Korea of a FPS hull for further delivery to Beacon Oshore Energy for their Shenandoah Project in the Gulf of Mexico. This Shenandoah FPS will have a larger payload capacity than the King’s Quay FPS. Engineering capacity will see high utilization in the two years to come with this Shenandoah project, early engineering on new prospects for the OPTI ® hull design and engineering support to the EXMAR Infrastructure commercial team. EOC aims this way at maintaining and improving its position in the market by continuing its eorts to provide highly performing, redeployable and hence sustainable newbuilding designs, and extending this expertise into conversion of existing units and oshore renewable energy alternatives. DV Oshore has clearly recovered from the downturn of projects in 2020 due to the pandemic with full utilization of all its personnel and a peak turnover in 2021. In combination with a strict control of costs, the turnaround of the business has been successfully completed with the best result in a number of years. The intention is now to move forward in supporting oil and gas companies and renewable energy pro- viders to develop and install conventional buoy and other mooring applications, oating terminals, and subsea piping in a sustainable and environmentally friendly way. 2 FLOATING LIQUEFACTION AND REGASIFICATION BARGES TANGO FLNG owned FSRU S188 owned 2 OFFSHORE ACCOMMODATION BARGES WARIBOKO joint venture NUNCE joint venture ENGINEERING Engineering oces EXMAR Oshore Company (EOC, Houston) and DV Oshore (DVO, Paris) OPTI TM semisubmersible rig hull design (patented) 38 I 2. ACTIVITY REPORT 2.3 SUPPORTING SERVICES EXMAR Ship Management (ESM) provides high quality shipmanagement and related services to LPG carriers, bulk carriers, FLNGs, FSRUs, FSUs, FSOs and accommodation barges. During the past decade EXMAR Ship Management has matured from an in-house shipmanagement services provider to a known Operations and Maintenance (O&M) services provider in niche segments within oil and gas. HIGHLIGHTS 2021 With the ongoing pandemic making the logistics chain connecting vessels to shore becoming ever more chal- lenging and complex, the high level professionalism of ESM crews on board supported by highly dedicated shore sta managed to successfully maintain eet operations, eectuate crew changes, deliver ship’s supplies and spare parts and carry out inspections and dry docks for owners throughout 2021. Perhaps the nest example of ship-shore cooperation this year was the successful delivery and entry into operation and management of the two EXMAR VLGC newbuildings FLANDERS INNOVATION and FLANDERS PIONEER. Both vessels have been designed as the rst vessels in the world VLGC eet to run on both regular bunker fuel and LPG, making EXMAR Ship Management a front runner in dual-fuel ship operations in what has now become an industry standard for this segment. In 2021, dry dock operations were successfully performed for six MGC’s & one Pressurized vessel. In addition, classication challenging audits were performed on all vessels by the superintendent teams in cooperation with the HSEQ department together with the ocers and crews. Latterly audits have been performed both remotely using live con- nections between ships and the shore as by apply- ing very stringent joining procedures to circumvent restrictions imposed due to the pandemic in various parts of the world. EXMAR Ship Management also continues to perform change of grade operations as well as ship-to-ship transfers for its clients which totalled 247 operations PROPORTIONATE CONSOLIDATION (IN MILLION USD) 2021 2020 Revenue 26.5 46.8 EBITDA -6.0 10.8 Adjusted EBITDA -6.5 -2.2 Operating result (EBIT) -7.0 9.7 Consolidated result after tax 9.7 20.1 Financial debts 2.3 4.7 2. ACTIVITY REPORT I 39 for EXMAR in 2021 representing approximately 1.2 million metric tons transferred. With management of the average age of the EXMAR eet, ESM also supervised and managed handover of the TEMSE, TOURAINE and BRUSSELS to new owners. ESM customer Tragura also sold three of its gas carriers which required the same operational activity. In the oshore segment, ESM teams onshore and on location continue to maintain and manage the two oating LNG barges TANGO FLNG and FSRU S188 in Uruguay and Singapore respectively. ESM provided crewing, operations and maintenance services for NUNCE and WARIBOKO accommodation barges oshore Gulf of Guinea, with the latter ending its contract halfway through 2021. TOTAL has extended the Operations and Maintenance contract with ESM on the FPSO Nkossa 2. OUTLOOK 2022 EXMAR Shipmanagement BV will continue to support its parent company EXMAR with its operational and maintenance requirements both in its Shipping as well as in the infrastructure business units while striving to expand its managed eet with a rst- class ship-owner portfolio, who can benet from the experience and operational excellence of ship crews and sta onshore. The ship management business segment is highly competitive and the required economies of scale has proven to favour large-scale ship management companies in the last few years. Nonetheless new environmental legislation and industry-wide push for greater Environmental, Social and Governance programs (ESG) in eet management will oblige owners and ship managers to cooperate even more closely together with a higher level of transparency. This potentially oers benets to highly specialised and high quality ship managers and the ambition to attract more third party business should be feasible. As a continuation of its business transformation, ESM will focus in 2022 on control of work and management objectives that are quantiable, monitored and ad- justed when necessary on a quarterly basis. ESM will continue to follow the overall ambitions stated in the moving ahead in harmony project. 40 I 2. ACTIVITY REPORT BEXCO BEXCO is a leading European manufacturer of preci- sion-engineered synthetic mooring, towing and lifting ropes for oshore, marine and industrial applications. The company performed with a record result in 2021, driven by a strong demand in the marine and oshore segments, with orders catching up from the much weaker market in 2020, caused by the outbreak of the pandemic. Despite the continued challenges of the pandemic, production capacity in 2021 was less aected than the previous year. Deepwater mooring projects for Shell UK (Shell Pen- guin) and Sofec (ENI Coral South) were successfully delivered as well as completion of a mooring package for the Chevron Anchor project. BEXCO commenced production on Shell Whale project in the third quarter for delivery in 2022. Demand for BEXCO’s high quality marine mooring products remained strong with the supplies to the CMA-CGM series of LNG-powered ultra large container ship newbuilds. The oshore operations business unit also performed strongly with excellent orders from Bexco’s loyal customer base in Europe for its innovative lifting slings for oshore wind farm installation. The co-operation with General Work Products in the USA is working at full speed and other initiatives to extend the geographic scope of he business are in progress. BEXCO’s foray into the oshore oating wind market picked up with the order and production of a rope package for Demosath oating wind project in Spain. The company received the Corporate Blue Innovation Wave Award from the Blue Cluster organization at the World Expo in Dubai for its new Manta-Line Floating Wind mooring rope solution. The company also invested in solar panels on the roof of its main manufacturing facility in Hamme as part of the company’s increasing focus on sustainable energy. BEXCO is proceeding with continuous investments in R&D to prepare for the energy transition and the emergence of oating wind as an incremental business. 2. ACTIVITY REPORT I 41 TRAVEL PLUS Travel PLUS is an independent travel agency, which oers business and leisure customers a suite of per- sonalised travel services. The agency’s strength can be found in developing tailor-made itineraries with exceptional after-sales service. The continued pandemic adversely aected bookings in 2021 in both leisure and business segments. The company also serves the Group’s crew travel require- ments, with special eorts needed to adapt travel itineraries to meet changing local quarantine and clearance requirements. Despite the recent pandemic waves, the enthusiasm to travel by Travel PLUS’ loyal leisure customer base in Belgium has been conrmed by booking enquiries for 2022. The higher vaccination coverage will increasingly smoothen out the COVID peaks and the appetite for travel is returning, also in the business segment. EXMAR YACHTING With a eet of luxury vessels under management, EXMAR Yachting assists both experienced and rst- time owners in retting, maintaining and chartering their luxury yachts. During 2021 despite interruptions to itineraries and operations due to the pandemic, the team of highly professional captains, technical superintendents, crewing managers and operations sta provided owners with support on pre-dry dock inspections in situ, preventive maintenance and ad- ministrative care of their high value assets. The health crisis did impact on leisure travel, with the yachting team adapting charter itineraries by oering luxury alternatives to its customers. Sailing plans were adapted and alternative solutions found in order to cater for quarantine requirements and crew changes. 3.1 ESG 42 3 CARE FOR TODAY, RESPECT FOR TOMORROW Within EXMAR, we continuously expand our efforts to improve Environmental, Social and Governance (ESG) principles by advocating care for today and respect for tomorrow in all of our business activities. 3.1 ESG (ENVIRONMENT, SOCIAL, GOVERNANCE) With ever increasing demanding and changing requirements from society as a whole, regulators and the nance sector, incorporating ESG best practices into our daily business and improving our environ- mental, social and governance eorts is a constant process. EXMAR created a multidisciplinary ESG taskforce consisting of members of management as well as operational, technical and corporate sta to en - hance our Company’s ESG prole and uphold its key principles. This overarching team ensures ESG strategies are embedded in the organisation and drives innovation in all operational aspects. The ESG taskforce advises on new and monitors ongoing projects, closely follows-up regulatory changes and denes ESG targets accordingly for the company as a whole. Necessary changes are communicated by the taskforce through all levels of the company and performance indicators over the dierent company layers followed-up. In addition, the taskforce is an active member of various industry workgroups. ESG partner Input Output EXMAR Board of Directors • Communicate strategic objectives on ESG in its interaction with shareholders • Present Financial Annual Report to the General Meeting of shareholders • Uphold strategies & values of EXMAR in its sustainable value creation • Determine company strategy • Determine Corporate Governance Charter & Statement (including Dealing Code & Code of Business Ethics) • Prepare Press Releases of subjects under nancial regulations • Ensure Company-wide compliance with Corporate Governance Charter & Statement • Compliance with laws & regulations • Establish Financial Annual Report Executive Committee • Day-to-day management & policy of the Group • Implementation of decisions taken by the BoD • Establish internal controls • Prepare annual accounts • Communicate proposals on company strategy to BoD • Prepare Press Releases • Establish Financial Annual Reports • Suggest proposals on company strategy EXMAR • Provide input on Financial Annual Report • Uphold ESG targets in business interaction • Report on ESG KPIs • Compliance Risk Assessment, Model & Manual • Ensure Company-wide compliance with Corporate Governance Charter & Statement ESM Management Committee • Undersign Annual Objectives & ESM Company policies • Verify Quarterly Performance Review • Uphold ESG targets in business interaction • Ensure Company-wide compliance with Corporate Governance Charter & Statement EXMAR Ship Management • Quarterly Performance Review • Report on ESG KPIs • Draft Annual Objectives • Set-up policies & procedures • Regulatory monitoring • Reporting as per regulations • Review policies & procedures • Ensure regulatory compliance • Complete questionnaires on ESG • Provide input on Annual Objectives Supporting services & Engineering • Implement policies & procedures • Uphold ESG targets in business interaction • Report on ESG KPIs • Ensure Company-wide compliance with Corporate Governance Charter & Statement ESG Taskforce consisting of delegates from: Legal Chartering Finance & Administration Human Resources Group Controlling Technical Business Unit Shipping Corporate HSEQ EXMAR Executive Committee Supporting services & BEXCO (DVO, EOC, Bexco, EXMAR oces worldwide, Wah Kwong Ship Management) EXMAR Ship Management ESM Management Committee Board of Directors ESG TASKFORCE INTERACTION 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 45 EXMAR ESG BUSINESS PRINCIPLES EXMAR is a multidisciplinary maritime and oshore solutions provider in the oil and gas industry. We design tailor made solutions for the production, storage, transportation and supply of oil and gas worldwide. A myriad of stakeholders are interwoven in EXMARs business structure. Our stakeholders are continuously mapped and their needs and expectations evaluated to conrm the communication strategy required to ensure an optimal business interaction. EXMAR set up the following interactive communication with its stakeholders: • Business Customers Competitors Legal institutions • Financial bodies Financial institutions Insurers Shareholders • Regulatory bodies Flag/EU/IMO Port state/ Local authorities/ USCG Recognized organizations • Clients Owners Charterers Oil Majors • Logistics chain Logistic partners Transport providers Local agents Warehouses • Crewing & Development Manning agents Training institutions Maritime academies • Engineering & Maintenance Service companies Makers Shipyards Site teams Supporting services & Engineering (DVO, EOC) Software providers • Human relations Seafarers Oce personnel Next of kin Unions Media Non-governmental Organizations Society Stakeholder Interaction with EXMAR Interaction owner Frequency Business Financial bodies Regulatory bodies • Contractual Agreements • Compliance Model & Business Ethics • EXMAR Financial Annual Report & Press Releases • EXMAR Headquarters • Ad hoc follow-up • Ad hoc Press Releases • Financial Annual Report • Meetings & Contact groups • Implementation of regulations • Inspections & Investigations • Certication • Memberships • ISO standards & TMSA • EXMAR Ship Management • Wah Kwong Ship Management • Ad hoc implementation of changes • Ad hoc investigations • Annual internal audits • Annual external audits • Financial Annual Report • Industry workgroups upon invitation Clients • Contractual Agreements • Compliance Model & Business Ethics • EXMAR Financial Annual Report & Press Releases • EXMAR Headquarters • Ad hoc follow-up of contractual agreements • Ad hoc follow-up of instructions • Monthly owners meeting • Quarterly/Annual charterers meetings • Inspections & Investigations • Reporting on KPIs • Implementation of contractual agreements and regulatory adherence • EXMAR Ship Management • Wah Kwong Ship Management • Sharing of internal bulletins to improve standards of eet • Ad hoc investigations • Monthly owners meeting • Quarterly Performance Review • Financial Annual Report • 3-monthly external audits (vetting) 46 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW Each stakeholder has its own needs and expectations in their interaction with EXMAR. These are followed-up and delineated in EXMAR key ESG topics for the future. EXMAR accommodates ESG factors valuable for stakeholders within our own business priorities while jointly protecting and evaluating EXMAR’s core corporate values. The following ESG business principles are anchored in our organization: • We respect the fundamental human rights and freedoms. We do not tolerate discrimination of any kind on grounds of race, color, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. • We commit to use the resources, oceans, land and natural habitat sustainably throughout our supply chain taking account of (local) environmental and societal factors • We grow corporate value through, quality of education, diversity and inclusion, active stakeholder engagement and involvement of local communities and regions • We strive to be at the forefront of transforming or implementing new technologies that minimize the impact on our natural resources, reduce the release of greenhouse gases and have no negative consequences to the environment. We join the industry on the road to decarbonisation. • We insist on maintaining the highest safety standards throughout our operations, our supply chain and in the services provided to us. • We apply a zero-tolerance for modern slavery in our supply chain. This includes but is not limited to child labor, human tracking and forced or bonded labor. Furthermore, we subscribe to fundamental labor rights: This means that we will not tolerate any form of bribery, facilitation payments or fee- based recruitments made in the course of business or services related to EXMAR. Stakeholder Interaction with EXMAR Interaction owner Frequency Human Relations • Human Relation procedures • Contracts of Employment for oce personnel • Performance Evaluation & Code of Conduct for oce personnel • EXMAR Financial Annual Report & Press Releases • EXMAR Headquarters • Ad hoc implementation of changes • Quarterly performance evaluation of oce personnel • Ad hoc Press Releases • Financial Annual Report • Annual conference • CBAs & Contracts of Employment for seafarers • Performance Evaluation & Code of Conduct for seafarers • SMS Crewing Manual procedures • Health and Safety Campaigns & Welfare • Crew Conferences • MTI Network • EXMAR Ship Management • Wah Kwong Ship Management • Ad hoc implementation of changes • Performance evaluation mid- term and at end of contract • Annual SMS review • 2-monthly campaigns • Weekly bulletins • Quarterly crew conferences Logistics Chain Crewing & Development Engineering & Maintenance • Reporting lines & Point of contact • Dealing Code & Cyber Security • Procedures & Policies • EXMAR Headquarters • Regular project meetings • Ad hoc implementation of changes • Contracts • Conferences • Evaluation & Audit • SMS Instructions & procedures • Training matrix • Meetings • Dry-Dock safety ocer • EXMAR Ship Management • Wah Kwong Ship Management • Monthly purchase meetings • Supplier approval, evaluation & audit • Shipyard audits • Annual internal audits • Ad hoc implementation of changes 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 47 UN SUSTAINABLE DEVELOPMENT GOALS (SDGs) EXMAR selected the UN Sustainable Development Goals structure to translate its business priorities into specic key ESG topics. As a shared blueprint for peace and prosperity, the 17 SDGs dened by the United Nations provide a universal framework to guide global actions, from international cooperation and national government policy to corporate strategies and individual behaviour, towards inclusive socioeconomic growth and preservation of the planet. www.un.org/sustainabledevelopment/ Importance to stakeholders Impact on EXMAR MEDIUM HIGH VERY HIGH Societal engagement Instructions Flexibility Transparency Governance & accountability Compliance to legislation & standards Research & Development Cyber security Stakeholder engagement Benchmarking Structure Digitalization Financial health Attract new business Sustainable resources Transport Emissions Waste Maintenance Logistics & Supply chain Marine environment Plastic litter Euents Decarbonisation Energy eciency Trust Privacy Business ethics Competent manning Safety Communication Training & Development Non-discrimination Aordable energy supply Human rights Health Anti-corruption Employee attraction ANALYSING EXMAR ESG MATERIAL TOPICS AND DEFINING KEY ESG TOPICS EXMAR performed a materiality analysis in which ESG factors considered important by its stakeholders are weighed against their (potential) impact on the Company. The ESG factors tabulated in the section ‘Very High’ are elected as the EXMAR key ESG topics which are classed as per the UN Sustainable Development Goals (SDGs). The company ambitions are built upon these key ESG topics. Environment Social Governance 48 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW RISK ASSESSMENT In a changing world with an increasingly more apparent impact of climate change, the industry as a whole including EXMAR is exposed to risk. To properly align its vision for the future, EXMAR carefully analysed the potential impact of climate change risks and their associated, implemented due diligence measures to set targets for risk reduction. Important opportunities are identied to incorporate within the company’s roadmap for the future. Not surprisingly, the ESG factors tabulated in the section ‘Very High’ of the materiality analysis can be found back in this risk assessment as they are a translation of the shifting focus within society and thus the industry. Emissions Waste Euents Natural resources Transition fuel: LPG & LNG Zero-carbon fuel: Ammonia Carbon capture & transport for storage Increase in adverse weather phenomena Pandemics Political changes Accidents / Incidents Changing fossil fuel industry Availability of new technologies 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 49 Type Risk Due Diligence Ambition Timeframe Climate Impact Emissions Contribute to climate change Increase Energy Eciency by subscribing to ISO50001 and optimizing vessel operations (SEEMP & Energy Manual in SMS), comply with MARPOL Annex VI (VOC/ODS), evaluate logistic air freights basis emissions to optimize transport, travel policy for air travel by personnel, ban on incineration of plastic waste by eet, training of personnel on energy eciency, track emissions of eet in digital platform, regulatory reporting of emissions a/p EU MRV, UK MRV and IMO DCS Increase Energy Eciency (and thus minimize fuel consumption) by ecient new vessel design (EEDI) Short term Decarbonisation: As a minimum • Reduce average CO 2 emissions per transport work by 40% by 2030 Mid term (<2030) • Reduce average CO 2 emissions per transport work by 70% by 2050 Long term (<2050) • Reduce total annual GHG emissions of the company by at least 50% by 2050 (reference year 2008); Long term (<2050) • Aim to surpass the IMO targets towards reaching future regulations for shipping that will be set-up under EU Green Deal Long term (<2050) • Implement EEXI standard for existing vessels and follow-up on CII in line with (upcoming) regulations Short term (2023) Increased digitalization and performance monitoring allowing more in depth data analysis of vessel performance and discovery of areas of improvement; streamline digital platform integration throughout the company and expand automatic sensor data monitoring and sharing Short term (2022) Map Scope 1 emissions of the oces and Scope 2 & 3 emissions of the entire company to dene areas of improvements Short term (2023) Waste • Impact on Marine life • Impact on Land degradation • Reputation damage Single Use Plastics ban implemented in supply chain, compliance to MARPOL Annex V, ‘Price Inquiry Messages’ to suppliers include ISO 14001 requirements on packaging, ban on incineration of plastic waste by eet to allow recycling, Inventory of Hazardous Materials (EU SRR), track eet waste in digital platform Implement system of potable water fountains on vessels (on-board production) to replace supply of bottled water Short term (2022) Reduce plastic waste production by 10% compared to 2020 Short term (2023) Implement ag approved electronic garbage record book Short Term (2022) 50 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW Type Risk Due Diligence Ambition Timeframe Climate Impact Euents • Impact on Marine life • Contribute to Invasive species • Breach of regulations • Reputation damage Compliance to MARPOL Annex I, SOPEP-SMPEP & NTVRP, Sewage Treatment Plants, Use of cleaning agents and additives of which euents are not harmful to the marine environment, company requirements w.r.t. euent management (sewage, grey water, bilge water, scrubber euent, deck wash water, ballast water, biofouling waste and sediments, etc.) described in the Environmental Manual in SMS, BWMP for all eet vessels, regular hull & propeller in-water inspections & cleaning, training of personnel, close monitoring of regulatory changes to ensure compliance, track euents of eet in digital platform(s-Insight) Expand eorts to implement non- regulatory environmental standards on eet (for instance one-tab cleaning products) Short term (2022) Implement a Biofouling Management Plan on the eet Short term (2023) Implementation of ballast water treatment systems on board all vessels in the eet Short term (2024) Implement ag approved Electronic ballast water, ozone depleting substances, NO x and scrubber record book Short Term (2022) Natural Resources Deplete natural resources Increase Energy Eciency (and thus minimize fuel consumption) by ecient vessel design (EEDI), ISO50001 and optimize vessel operations (SEEMP & Energy manual in SMS), ISO14001 and Environment manual in SMS, decrease use of paper/hardware via increased digitalization, galley coaching program to optimize consumption and reduce waste, close monitoring of regulatory changes to ensure compliance, track fuel consumption of eet in digital platform Monitor innovations in the shipping industry to increase eorts on sustainability Short term Increase cooperation with local industries and through world supply chain to drive transition to circular economy Long term (<2050) Contribute to aordable energy supply by taking part in market competition Short term Physical Risk Adverse weather • Safety of life • Delays • Damages • Increased consumption of eet Route optimization software (SPOS9) installed and enforced through SMS, vessel routing monitored by headquarters, xed projects certied by Classication Societies under the most stringent environmental conditions at the selected site to ensure safety of the unit and protection of the environment Streamline digital platform integration throughout the company Short term (2022) Pandemics • Crew availability • Crew welfare & health • Compliance with contract duration COVID-19 pandemic is continuously monitored and daily lessons learned used to improve our management system of business during pandemic Increase COVID-19 vaccination rate of personnel Short Term (2022) Use experience gathered under COVID-19 pandemic to develop a generic pandemic response plan script Mid term (<2030) 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 51 Type Risk Due Diligence Ambition Timeframe Transition Risk Political – safety of shipping / sanctions • Attacks • Damages, casualties • Reputation damage Close monitoring of ag state requirements and security of shipping worldwide, ship security plans & ship security ocer, company security ocer, gathering information from authoritative and or industry organizations as well as from specialized consultants, Code of Business Ethics (denouncing trade with sanctioned countries and ensuring anti-corruption) uphold human rights and non-discrimination through Code of Business Etics and standardized contracts of employment Maritime Cyber Risk Management procedures and cyber security response plan Regulatory compliance Evaluate business opportunities in developing nations to aid energy transition and local development Mid term (<2030) Legal – accidents / incidents • Loss of clients • Reputation damage • Lack of regulatory framework of new technologies Safety Management System, Safety campaigns, Close monitoring of regulatory changes, Training and employment of qualied personnel in line with xed matrices, Advocate for and participate in workgroups with industry bodies to set-up clear regulations on new technologies Minimize accidents and incidents as much as reasonably practicable Short term (2022) Implement the Human element of TMSA to increase safety Short term (2022- 2023) Market • Reduction in fossil fuel availability • Market increase in energy ecient ships (EEXI/ EEDI) will reduce demand for less ecient (older) vessels Monitoring of market evolution: expected increase in LNG/LPG overhaul as transition fuel in decarbonisation Invest in research on ammonia and CO 2 transport once transition fuels may no longer be desired under decarbonisation Mid term (<2030) Participate in research and develop solutions for large scale renewable energy transport under the form of hydrogen, e-ammonia, e-methanol, e-LNG or LOHCs. Mid term (<2030) Invest in future-proof sustainably fueled vessels Long term (<2050) 52 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW Type Risk Due Diligence Ambition Timeframe Transition Risk Technology • Availability of technology to support decarbonisa- tion • Safety of new technology Close monitoring of regulatory changes to ensure compliance and safety of new systems Close interaction with long-term suppliers and makers to evaluate new technologies Close monitoring of regulatory changes and technological developments to select the solution with highest potential on carbon emission savings on the road to decarbonisation Mid term (<2030) Work closely together with equipment manufacturers (engine makers/process design) on alternative fueled vessels Mid term (<2030) Reputation • Company based on fossil fuel industry Invest in alternative fuels and new technologies on the road to decarbonisation Highlight the importance of LPG cargo transport for secondary markets (sustain petrochemical and fertilizer markets) and to aid decarbonisation Mid term (<2030) Invest in research and development of green ammonia and green hydrogen (or other alternative fuels) and captured CO 2 to close the gap for transport of these products Long term (<2050) Increase cooperation with local industries and world supply chain to drive transition to circular economy Long term (<2050) 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 53 DECARBONISATION The strategy of decarbonizing society and shipping is clearly set in the regulatory framework introduced both at European and worldwide level. The EU Green Deal to pursue a reduction in CO 2 transport emissions (including shipping) of 55% by 2030 and climate neutral by 2050 compared to 1990 levels was further developed in 2021 by the European Commission: • Once approved by parliament, shipping will become subject to the Emission Trading Scheme (ETS) as of 2023 with a gradual phase-in basis the emission data of a company as reported under the EU MRV regulation. • Develop the Fuel EU Maritime Proposal by 2025 which imposes a Greenhouse Gas life cycle analysis of all energy used on board ships. In addition to CO 2 , the regulation covers methane and NO x from a well-to-wake perspective. • Further line-out the EU Taxonomy Regulation which provides companies, investors and policymakers with appropriate denitions of which economic activities can be considered environmentally sustainable, form a substantial contribution to climate change mitigation and adaptation and can therefore be recognized as a sustainable business activity. Once approved by parliament, the tax exemption for conventional fuels used between EU ports will be lifted as of 1 January 2023. EXMARs eorts with respect to this regulation are detailed in the next chapter. On worldwide level , the IMO is setting standards to reach a reduction in carbon intensity of all ships by at least 40% by 2030 as an average across the international shipping and to reach a 70% reduction of CO 2 emissions per transport work by 2050 (compared to the 2008 baseline) whilst pursuing eorts towards phasing out CO 2 emissions completely. • More stringent EEDI levels for newbuild ships were imposed in 2020 (up to 20% reduction in carbon intensity) which will be further strengthened in 2022 (up to 30% reduction in carbon intensity) for specic vessel classes. • A similar standard as EEDI is finalized for existing ships i.e. the EEXI standard; EEXI survey requirements take eect in November 2022. • A Carbon Intensity Index (CII) is being designed that tracks a vessel’s eective carbon emissions versus its cargo carrying capacity. The CII of each vessel will be evaluated yearly, (as from 2023) and will become increasingly more stringent towards 2050. Companies will need to present improvement plans on their vessel’s CII. In this changing landscape EXMAR actively responds by: Designing its new vessels according the governing regulations (EEDI standards). The latest addition to the eet i.e. the two new VLGCs delivered in 2021 are equipped with innovative designs that improve their environmental performance when compared to their peers. More information can be found in the chapter Innovation below. 54 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW Actively investigating the impact of the future EEXI regulations on its existing eet portfolio to be fully compliant with the upcoming legislation. The CII improvement actions will be incorporated in the current Shipboard Energy Eciency Management Plan (SEEMP), which is currently exceeding regulatory compliance by being subject to ISO 50001 certication. Analysing its activity portfolio in preparation for the EU Taxonomy Regulation and plays an active role on the path towards decarbonisation by supplying the alternative fuels needed in the energy transition. Investing in research and development on the potential of carbon-neutral fuels such as (green) hydrogen and (green) ammonia to aid the industry in reaching its carbon neutrality goal. In addition, the potential of carbon capture for storage calls for means of transportation and therefore EXMAR is actively participating in the development of CO 2 carriers. These topics will be further elaborated upon in the chapter ‘Innovation’ of this ESG report. EU TAXONOMY REGULATION The EU Taxonomy is a classication system that lists environmentally sustainable economic activities. It provides companies, investors and policymakers with appropriate denitions of which economic activities can be considered environmentally sustainable and can aid to reach the EU’s climate and energy targets for 2030 and the objectives of the European green deal. The Taxonomy Regulation sets six environmental objectives: 1. Climate change mitigation 2. Climate change adaptation 3. The sustainable use and protection of water and marine resources 4. The transition to a circular economy 5. Pollution prevention and control 6. The protection and restoration of biodiversity and ecosystems Under the Climate change mitigation objective the Taxonomy Regulation lays out three types of activities: • low-carbon (Article 10(1)) • transitional (Article 10(2)) • enabling (Article 16) On 2 February 2022, the Commission has proposed a Taxonomy Complementary Climate Delegated Act that includes, under strict conditions, specic nuclear and gas energy activities in the list of economic activities covered by the EU Taxonomy. These activities are included in the second type of activities, i.e. transitional, meaning they cannot yet be replaced by technologically and economically feasible low-carbon alternatives, but do contribute to climate change mitigation and have the potential to play a major role in the transition to a climate-neutral economy. A further analysis of EXMAR activities will be conducted once the complementary Climate Delegated Act has been approved. 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 55 Assesment of activities 2021 EXMAR is more than a shipping company and is one of the main players in the maritime and oshore services industry. Aside from transporting LNG and LPG, which are considered transitional fuels under the EU Taxonomy, we are pursuing the development of sustainable solutions dedicated to the energy transition. These projects are further described in the chapter Innovation of this report. The eligibility assessment has been performed by analysing the activities currently described in the Taxonomy Complementary Climate Delegated Act and matching them with economic activities performed by EXMAR. 2 workshops were organized: 1. Evaluating the eligibility on the basis of the Taxonomy Climate Delegated Act through a methodological approach including a detailed analysis of EXMAR’s activities 2. Mapping a correspondence table of business activities and accounting nomenclature as described in the Technical Expert Group (TEG) report and the Taxonomy Climate Delegated Act The workshops lead to following assessment of EXMAR activities under the EU Taxonomy: Activities related to the shipping segment, ship management services and yachting were assessed as being eligible in line with Annex I of the Climate Delegated Act. Other activities were identied as non-eligible because there was no perfect t with the description of the activities in the Delegated Act or because they are a minor activity for the Group and not considered signicant enough to be reported under the EU Taxonomy. Establishing KPIs 2021 The KPIs have been prepared based on the requirements outlined in the Disclosure Delegated Act of 6 July 2021: 1. The proportion of turnover derived from products or services that are associated with environmentally sustainable activities 2. The proportion of capital expenditure (CapEx) and 3. The proportion of operating expenditure (OpEx) related to assets or processes that are associated with environmentally sustainable activities EXMAR is preparing its financial statements in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union. The calculated KPI’s mentioned below are based on the EU Taxonomy Regulation denition. Qualitative information is provided to give clarity to the reader on what is included or excluded from the KPI’s in comparison with the IFRS nancial information. Business Unit Activity description Delegated Act Section, Appendix I Decision on eligibility Shipping Shipping eet involved in transport of LNG & LPG 6.10: Sea and coastal freight transport, vessels for port operations and auxiliary activities. Yes Infrastructure Exploitation of FSRU & FLNG units and accommodation barges Supporting services & Engineering (DVO/EOC) 4.3: Electricity generation from wind power - construction or operation of electricity generation facilities that produce electricity from wind power No (exploitation of units and barges are not an eligible activity + the portion of supporting services & engineering related to possible inclusion in connection with oshore wind are considered insignicant) Supporting Services EXMAR Ship Management (Belgium, India, Singapore and Seavie Caribbean) EXMAR Yachting 6.10: Sea and coastal freight transport, vessels for port operations and auxiliary activities. 6.11: Sea and coastal passenger water transportation Yes (the portion of services by Travel Plus & Bexco are excluded) 56 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW ESG ACHIEVEMENTS 2021 The 2021 ESG report evaluates progress made over the previous years and highlights main trends. EXMAR Shipping statistics relate to our cargo transporting vessels managed by EXMAR Ship Management and by Wah Kwong Ship Management. Where relevant and indicated accordingly, statistics include the ESG considerations for the Infrastructure Business Unit and thus comprise our specialized units and accommodation barges. 100% eligible Shipping Shipping Shipping Infrastructure Infrastructure Infrastructure Supporting Services Supporting Services Supporting Services 100% eligible 99% eligible 84% eligible 19% eligible 30% eligible 0% eligible 0% eligible 0% eligible TURNOVER OPEX CAPEX We refer to Note 4 of the nancial statements for a detail of the turnover, which includes both IFRS 15 Revenues from contracts with customers and IFRS 16 Leases related revenue. Our operating expenses are made up of the following main categories of expenses: • vessel expenses • general and administrative (G&A) expenses • personnel expenses We refer to Notes 5, 6 and 7 of the nancial statements, respectively for additional information. Not all of our operating expenses meet the denition of the Opex KPI as dened in the Taxonomy Regulation. We therefore only included vessel expenses crew and maintenance. All other expenses such as insurance, depreciation and impairment, general and administrative expenses … were excluded. The capital expenditures consist primarily of the acquisition of vessels (IAS 16 – see also Note 10) and to a lesser degree: acquisition of other property, plant and equipment (IAS 16), right-of-use assets (IFRS 16) and capitalized intangible assets (IAS 38). We refer to Notes 10 through 13 of the nancial statements for additional information. Environment To address sustainability, EXMAR has identied the relevant UN Sustainable Development Goals (SDGs) 13 and 14 with respect to ENVIRONMENT which we contribute to. • SDG 13 – Climate action Signicant eorts are made to render our eet more energy ecient by optimizing fuel con- sumption and reducing emissions on the road to decarbonisation. This is in the spirit of SDG 13 to combat climate change and operate in line with eorts to decarbonize the shipping industry. 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 57 EXMAR SHIPPING & INFRASTRUCTURE (EXCLUDING ENGINEERING DVO&EOC) Metric/Materiality Unit 2021 2020 2019 Target Remark Distance travelled NM 1,925,558 1,969,529 2,001,766 N/A Operating days Number 11,623 12,215 12,004 N/A Fleet Dwt 850,035 843,435 843,435 N/A Increase due to VLGCs delivered vs sale of MGCs Number of ships Number 37 38 38 N/A Adding VLGCs, selling MGCs LPG carried Metric ton 6,233,054 6,312,798 5,979,598 N/A Ammonia carried Metric ton 1,618,772 1,914,128 2,217,337 N/A LNG carried Metric ton 502,243 232,863 332,589 N/A Petrochemical gases Metric ton 341,804 353,520 368,362 N/A Number of port calls Number 1,609 1,935 1,944 N/A CO 2 by eet (Scope 1 basis fuel consumed by eet and excluding oces) 1 Metric ton 591,735 593,038 603,689 N/A yet under current legislation Reduction due to departure of older vessels and increased eciency of VLGC design Fuel consumption Metric ton 191,632 193,902 197,219 Optimize Reduction due to eet composition Energy consumed Gigajoules 7,811,895 8,121,591 8,183,859 Optimize Reduction due to eet composition of which HFO Gigajoules 5,321,024 4,247,253 4,871,628 Optimize HFO includes LSFO of which MGO/MDO Gigajoules 1,395,108 1,889,966 1,489,181 Optimize of which LDO Gigajoules 980 3,238 128 Optimize of which LNG 2 Gigajoules 1,058,702 1,981,135 1,822,922 Optimize Reduction due to TFLNG stop of which LPG Gigajoules 36,082 0 0 Optimize Start operation Flanders Oil spills Overboard (Number / M 3 ) 0 0 0 0 Inboard (Number / M 3 ) 1 event 0.3 m 3 2 events 0.6 m 3 3 events 1.1 m 3 0 EXMAR SHIPPING (EXCLUDING INFRASTRUCTURE) AER < required 3 % -27 -30 -30 Regulatory compliance Target trajectory value more stringent EEDI < required 4 % -17.5 -15 -15 Regulatory compliance Increase due to delivery Flanders vessels 2021 AER eet total 5 g/tonne-mile 12.48 11.59 11.83 <40% (2030) Increase since CII is not yet regulatory implemented NO x 11,096 12,622 13,141 N/A eet size reduction SO x 996 1,060 6,770 N/A IMO 2020 regulation (limiting sulphur content in fuel oil) explains signicant reduction as from 01/01/2020 Particulate Matter 779 925 1,023 N/A eet size reduction Ballast water treatment Exchange % 36 50 55 0% More vessels equipped with Ballast Water Treatment System Treatment % 74 50 45 100% Plastic waste landed M 3 922 447 no data as single class -10% (ref 2020 data) Increase due to ban on on-board incineration 1 Scope 1 emissions as per the Greenhouse Gas Protocol 2 Excalibur and TFLNG only for relevance of data evolution; excluding LNGRV eet in 2019 3 Delta of average AER eet compared to Poseidon Principle target trajectory value of the year ref. DNV in % 4 Delta of average EEDI new vessels in eet compared to regulatory required EEDI at newbuilding (applicable for vessels built >2013) in % 5 Sum of the individual AER of all vessels in the eet weighed according to their deadweight Key Performance Indicators Management System that is certied under ISO14001. The Environmental Manual, which is part of the com- pany Safety Management System, sets the company standards on engine room bilge water management, sewage and grey water management, operational waste, garbage management and emissions. Energy eciency To monitor energy eciency, EXMAR Ship Management has an Energy Management System established under ISO 50001 certication of which the core document is the Ship Energy Eciency Management Plan (SEEMP) Part I. This plan is used with the aim of controlling and optimizing ship’s performance over time through tracking the fuel consumption per nautical mile (FOC/ nm). Apart from the destination and arrival time of the ships, which charterers control, there are a vari- ety of measures to improve eciency which can be measured through the FOC/nm. Such measures range from trim optimization to weather routing, speed optimisation, hull coating, hull and propeller cleaning, engine performance monitoring and electrical power management. The link between fuel consumption and air emissions explains why EXMAR spends so much attention to increasing vessel eciency both in operation and during design. EXMAR uses a class-approved data dashboard sys- tem to accurately track the eciency of its vessels and actively monitor deviations. The data of this dashboard system is followed-up both by oce and vessel personnel and plays a crucial role in improving the energy ecient management of the eet. Trends can be reviewed and needed actions identied i.e. comparing sister vessel, dening trends, identifying need for maintenance interventions, adjustment of engine parameters or hull and propeller cleaning. EXMAR is actively working on expanding on-line sensor monitoring systems by which the parameters of equipment installed on board are automatically fed into the data dashboard system. This increased digitalization and direct data link reduces the workload of onboard personnel for data collection and allows for data enhancement and increased data analysing. • SDG 14 – Life below water By accounting for the conservation and sus - tainable use of oceans and their resources our operations adhere to SDG 14. Also by implementing international maritime legislation and applying good practice principles (proper water and waste management, containing oil spills, controlling effluents). In addition, EXMAR is currently equipping it’s vessels with on-board potable water fountains to replace the use of bottled water for human consumption (plastic litter). EXMARs various other due diligences already implemented and its ambitions for the future are extensively described in the chapters above. Improvement actions Sustainability initiatives EXMAR Ship Management supports sustainability initiatives and is part of the Environmental Committee of Intertanko. It voluntarily participates in the Envi- ronmental Ship Index system (ESI) whereby vessel emission data is translated into an ESI score per vessel. Replace bottled water supply In 2022 on-board produced drinking water systems will be installed throughout the EXMAR eet. The reverse-osmosis fresh water units (guaranteeing the highest degree of safety), are currently being tested on two of our vessels and will replace bottled drinking water throughout the eet. Inventory of Hazardous Materials The Inventory of Hazardous Material onboard our shipping eet was further optimized by the implementation of a digital IHM maintenance system which allows all new materials installed on board to be carefully assessed according to their hazard to both health and environment. This exercise ensures that, when a vessel is due to be recycled, all potential health hazards to crew and yard personnel and threats to the environment can be assessed in advance and managed safely. ISO Certication In addition to regulatory compliance, EXMAR Ship Management has implemented an Environmental 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 59 Social To address human interaction in a broader perspec- tive, EXMAR has identied the relevant UN Sustainable Development Goals (SDGs) 3, 4 and 8 with respect to SOCIAL which we contribute to. • SDG 3 – Good health and well-being Diversity and the possibility to work in balanced teams both onboard the vessels and onshore is considered important. The safety mindset on board is very ma- ture and leads to excellent safety performance. This is achieved through EXMAR’s long term Taking the Safety Lead program, running since 2014. Welfare programs are rolled-out to enhance the health and wellbeing of our seafarers. In view of the ongoing COVID-19 pandemic, signicant eorts are spent on properly managing timely crew changes. • SDG 4 – Quality education EXMAR actively works with the Antwerp Maritime Academy and training centers in India, Jamaica and the Philippines. Both seafarers and oce personnel are enrolled in continuous training programs which ensure our clients can rely upon our high quality and safe services. • SDG 8 – Decent work and economic growth EXMAR employs a signicant number of seafarers with high employment retention rates from many dierent cultures and backgrounds. Human rights and non-discrimination is upheld and ensured through- out all levels of the organization. In addition, EXMAR upholds anti-bribery and anti-corruption policies. Key Performance Indicators EXMAR SHIPPING & INFRASTRUCTURE (EXCLUDING ENGINEERING DVO&EOC) Metric/Materiality Unit 2021 2020 2019 Target Remark Health & Safety Absence rate headquarters % hours absent 1.79% 1.40% 2.40% <2% Employee retention rate Ocers (%) 91.8% 92.69% 92.25% >90% Ratings (%) 80.6% 90.84% 94.31% >85% Oce (%) 83.5% 94.78% No data >80% Structural reformation Lost Time Injury Frequency (LTIF) Rate 0.61 0.33 0.67 <0.5 Reduction in eet size increases injury impact rate Total Recordable Cases Frequency (TRCF) Rate 2.32 1.52 1.51 <2.5 Near miss reports Number 370 318 No data >300 Accidents or breakdowns (severity 5) Number 0 1 1 0 Fatalities Number 0 0 0 0 Audits overdue Navigational 1 1 No data 0 1 audit delayed due to travel restrictions under COVID-19 Internal 0 0 No data 0 Conditions of class Number 2 1 2 N/A Port State Control Inspections Number 35 41 54 N/A Reduction in inspections due to reduction in eet size & COVID-19 Flawless inspections % 88 79 74 80 60 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW Health, Wellbeing & Safety Throughout 2021, the COVID-19 pandemic largely impacted the way EXMAR managed its business. We prioritise the proper management of our crew and considered a respectful and humane treatment the crucial base of our organisation. Since our employ- ees are key to our success, EXMAR continues to be an active member of Intermanager (International Association of Ship and Crew Managers). EXMAR is also a signatory to the Neptune Declaration on Seafarer Wellbeing and Crew Change (www.globalmaritime- forum. org/neptune-declaration/). This initiative was initiated by the Global Maritime Forum to deal with the seafarer crisis by enabling crew changes and repatri- ation which have been highly problematic during the pandemic. EXMAR believes that the shipping industry can stabilise by vaccination of seafarers. We encourage our seafarers to accept vaccinations either within their home country or by making vaccination available to all crew on board in ports where these are oered. In the last quarter of 2021 we actively started promoting Booster shots for our crew. At the end of 2021, 53% of our seafarers were fully vaccinated (including the seafarers on-leave) and 73% of the crew actively on board at that moment. Metric/Materiality Unit 2021 2020 2019 Target Remark Detentions Number 0 0 2 0 Maintenance overdue (Non-Critical) % 3.02% 4.19% 3.45% <2.5% Overdue critical maintenance not allowed Monetary losses as a result of legal proceedings associated to bribery and corruption EUR 0 0 0 0 Diversity Personnel Number 1,849 2,094 2,416 N/A of which Seagoing Number 1,615 1,844 2,124 N/A Headquarters (men/women) Number 83/69 (87/79) (101/95) N/A Total share % 45% 48% 48% N/A Nationalities (o/onshore) Number 43 51 53 N/A Reduction due to departure of Excelerate Energy eet VACCINATED CREW PER NATIONALITY Bangladesh Croatia Jamaica Russia Belgium Indonesia Philippines Ukraine Bulgaria India Poland Other 50 70 40 60 30 20 10 0 % Vaccinated 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 61 In these challenging times, we invested in a timely sign-o of our crew (within 14 days of end of contract) improving the well-being of our seafarers. In 2021 EXMAR Ship Management managed to sign-o 84% of its crew in time. With active welfare programs onboard our ships and a well-dened organizational structure, we strive tocreate a sense of belonging and motivation for employees on every level. We promote healthier food habits and sent-out a mental health campaign to improve the health of our employees. Senior management frequently visit our vessels. Where these visits were limited due to trading area under the pandemic (far east, South America and Africa), regular phone calls were held between the senior management and our vessels. We monitor Work & Rest hours and ensure regulatory compliance. In addition, EXMAR implemented a Fatigue Management plan for seafarers, creating awareness that fatigue can also occur while remaining within regulatory re- quirements and providing tools to manage fatigue. By building healthy working conditions we can maximize personnel availability and keep employee retention rates as high as possible. In the course of 2020 and 2021 EXMAR has invested in doubling the data bandwidth packages on board its vessels, jointly with the satellite communication providers, so that the crew can not only work more eciently but has an increased ability to communicate eectively with their loved ones. In order to safeguard the health and well-being of all employees working at the EXMAR headquarters during the pandemic, policies to ensure business continuity and remote working were continuously updated in compliance with Belgian Health & Safety regulations and the Belgian governmental rules and guidance. Health is strongly linked with safety performance. Over the last three years we continuously improved our safety standards and succeeded in creating a safer eet. EXMAR is not only looking into preventive measures for lost time injuries, but also into iden- tifying the root causes of restricted work, medical treatment, rst aid cases or serious near misses. Last year we obtained a signicant increase in amount of Near Miss reports created by our ratings, which shows a maturity in safety mindset under our Taking the Safety Lead program. In 2021, we created a 2-monthly newsletter called ‘Incident Alert Reports’ where we share the lessons learned of near miss reports jointly with the root causes and investigation results of actual incidents in the eet. Examples of other initiatives taken in 2021 are the roll-out of Control of Work over our entire shipping business eet and a complete review of the Safety and Health Manual in our SMS. Besides providing systems and tools, safety aware- ness and communication remains crucial. Started in 2019, the principle of bi-monthly safety campaigns was continued, exemplied by the following cam- paigns in 2021: 1. 04/02/21 - Mooring a hazardous operation: crucial elements for safe mooring operations 2. 02/03/21 - Security is not complete without U: increasing cyber security awareness 3. 08/04/21 - Know your machines: guidance for safe handling of machines 4. 08/06/21 - What is What?: highlight dierences in hazard reporting 5. 13/07/21 - COVID Vaccine Myths and Facts: myths & facts of COVID-19 vaccination 6. 02/08/21 - Self-closing Doors: safe handling of self-closing doors 7. 12/10/21 - Empower Safety: Teach-Coach-Mentor approach to improve safety 8. 24/12/21 - Control of Work: highlighting important elements Enhanced safety program – Control of Work An improved method of risk management called ‘Control of Work’, based on oshore process safety, was developed throughout 2020 and embedded within EXMAR Ship Management SMS in 2021. Signicant changes relate to the following elements: • Daily coordination meetings must be performed during which the planning of the day is established and jobs are identied embodying low, medium or high risk. The emphasis is on cross-departmental communication, sharing lessons learnt and discussing possible simultaneous operations. 62 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW • A simplied approach in assessing and managing medium risks-jobs has been introduced called ‘Job Hazard Analysis’ and is embedded in the cycle of the risk management. • A dierentiation is made between preventive and mitigating safeguards during risk management. Emphasis is put on both managing the risk to a level as low as reasonably possible and on reducing the potential outcome if an incident would occur. • A job debrieng must be performed to capture the lessons learnt albeit negative or positive. Through 2021, this “Control of Work” procedure was rolled out over the entire shipping eet and is now embedded into our day-to-day operations. Quality of Education EXMAR considers both the quality of education and continuous improvement of its employees crucial in providing quality services to its clients. Therefore we spent considerable time and eorts on training both oce personnel and seafarers, many of which took place remotely in 2021 due to the COVID-19 pandemic. Personnel’s training is followed-up using xed training matrixes that vary depending on rank and function. Also through organising conferences on a quarter- ly basis, interaction between seafarers and oce personnel is enhanced and latest changes or improve- ments within the company are actively discussed. There is also the long-standing cooperation between EXMAR and the Antwerp Maritime Academy as well as the established Caribbean Maritime Training Insti- tute (Jamaica) or the Mapua School and Philcamsat training centre (Philippines). For example, students are being guided in terms of Master dissertation- topics so that theory and practice are matched where possible. Social programs EXMAR is a patron for many years of VZW Zachte Kracht, which is a charity that oers young people with special needs the opportunity to sail on a yacht at sea for a day. The organisation is located at the Royal Yacht Club in the Belgian town of Nieuwpoort. EXMAR also supports hockey club Gantoise in Ghent, Belgium. In 2021 EXMAR has donated IT material for several charity projects, of which 30 laptops to two schools in Belgium and 40 laptops jointly with smartphones to two local schools in Africa. The non-prot or - ganisations that activate these donations in Africa are ‘iThemba’ at Baraa Primary School in Arusha Tanzania and ‘Les Amis du Cap Skirring ASBL’ at the aid of Primary School Aissatou Diop in Cap Skirring Senegal. Naturally, this IT material is only distributed after wiping clean the content under the IT data security protocol. Diversity & Decent work Human rights and non-discrimination is ensured through standardized contracts of employment Collective Bargaining Agreements) with both seafar- ers and oce personnel. Both on-board and ashore, EXMAR implements a company controlled evaluation process whereby employees are evaluated three times over the year or during their contract duration on board. Meetings are conducted between the head of department and the employee to ensure feed- back is shared and development is properly guided. Grievances or complaints raised by crew members or by oce personnel are treated condentially under the grievance procedure or whistle-blower policy. Crew manning agents are audited annually by EXMAR headquarters through the internal audit system. Anti-corruption is upheld by standardized purchase ows which demand 3-way verication by several employees and by standard tender processes that involve careful evaluation and nal selection of suppliers for substantial investments. EXMAR spends careful attention to having balanced teams on the work oor and keeps diversity in mind with respect to gender as well as nationality. We employ an approximate equal share of women and men in the oces. With the ongoing pandemic, it is still crucial to allow people to work from home while ensuring proper access to all data and the ability to easily organize web-meetings without compromising the company standards on IT security. The help desk of EXMAR’s IT department continuously assists employees that face connectivity issues. A digital tool called Webex is used for communication with colleagues, for dig- ital meetings and for chat messages and enhances internal communication between employees. By carefully concluding charter party agreements with its clients and by using relevant BIMCO clauses and/or tailor made anti-bribery, anti-corruption and ethics clauses in addition to regular sanction clauses, EXMAR is able to avoid port calls to countries having a low score in the International Corruption Perception Index. The percentage of overdue audits remained low considering the harsh conditions for organizing audits created by the pandemic. By spending a lot of time on planning and carrying out intermediate and special surveys, EXMAR Ship Management succeeds in reducing the number of deciencies and had zero detentions on our ships at each Port State Control inspection. For the rst time, we passed all external oce audits with zero non-conformity. 64 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW EXMAR Ship Management and Wah Kwong Ship Management are equipped with Safety Management Systems. These companies hold ISO 9001 (quality) and ISO 14001 (environmental) certicates. Addition- ally EXMAR Ship Management holds the ISO 50001 (energy eciency) and ISO 45001 (health and safety) standards. EXMAR HSEQ department is continuously looking into ways to optimize processes and improve the company’s safety performance. Quarterly safety steering committee meetings are held to assess and review vessel performance. In addition, regular safety bulletins and quarterly performance reviews are issued to the eet and shore sta. Governance To address governance, EXMAR has identied the relevant UN Sustainable Development Goals (SDGs) 17. • SDG 17 – Partnerships for the goals Compliance is a crucial part of EXMARs business strategy and the operations of the whole organisation. EXMAR operates globally and as such is governed by many diverse and complex regulatory systems. Compliance program EXMAR’s Corporate Governance Charter was approved by the Board of Directors on 31 March 2010. The latest update of the Corporate Governance Charter, pursuant to the entry into force of the new Belgian Code of Com- panies and Associations and the most recent version of the Belgian Corporate Governance Code (the “Code 2020”), was approved by the Board on 3 December 2020. The last update was done on 3 December 2021. More information can be found in the investors area on the company website www.exmar.be > Investors. To ensure optimal compliance with rules and laws and to reduce the risks of infringements and the adverse consequences these could have for EXMAR and all the stakeholders, the Board of Directors decided to imple- ment a compliance program for EXMAR. This program was developed in cooperation with the management and external advisers and is based on the international standard COSO Framework (Committee of Sponsoring Organizations). It aims at reaching a permanent state of compliance by means of procedures and structures that are intended to provide continuous improvement. The compliance program is included in the Compliance Model which describes the structures and procedures used to assess and detect risks, to report and curb violations and nally to make employees aware of the Model, providing them with additional training. The Compliance Model contains a Compliance Risk Universe, detailing all risks for legal, regulatory and business requirements. Risk assessment criteria are applied and Key Risk / Compliance Ocers are appoint- ed. Risks are reported and can be found tabulated in the “Internal control and risk management systems assessment” in Chapter 4 of this report titled ‘Cor- porate Governance Statement’. Compliance training is made available to help understand and promote the awareness of the compliance model among the employees and crew. Supplementing the Dealing code and Code of Business Ethics (annex 3 and 4 to the Corporate Charter) a compliance manual clearly articulates and implements the dierent compliance policies of the company: • Antifraud and anti-corruption policies • Antitrust and competition policy • Anti-money laundering policy • Sanctions policy • Privacy policy • ICT policy • HSEQ policy • Whistleblowing policy • Intellectual Property policy Cyber security EXMAR is increasing its focus on IT cyber security by incorporating Maritime Cyber Risk Management procedures within the Safety Management System and implementing a cyber security response plan. In line with this plan, a vulnerability assessment was conducted in 2021. As a result of this assessment EXMAR has, in cooperation with its suppliers, identied possible improvements in its security landscape. In 2021 a two-step verication method was rolled out within EXMAR to increase the security of interactions across platforms and to prevent possible IT breaches. Due to the continued working from home policies under the ongoing pandemic, EXMAR IT has expanded its data storage capacity in 2021 to allow employees adequate space for saving and sharing digital data. 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 65 EXMAR did not experience a major cyber-attack in 2021 but faced an attack in September 2020 where phishing emails were distributed across employees and vessels. These emails were for the biggest part stopped by our email security solution and no further threats were observed. After the attack, the number of phishing emails resumed normal levels under which about 53% of all emails are intercepted by the company rewall. Interaction towards decarbonization There is a strong push by society to decarbonize shipping activities and align existing legislation ac- cordingly. This asks for a close follow-up of future regulations. The KPI table below gives an indication of the relevant regulatory framework and links these with our company standards. The changing legal framework is crucial for the operations of EXMAR. Aside from the legal desk, our operational, techni- cal and chartering teams are closely involved. The technical and HSEQ departments ascertain that the relevant current and future rules and regulations are correctly translated to both ship management services and ship construction. Worthwhile mentioning is that EXMAR is actively participating in working groups such as the Belgian Shipowner’s Association to provide input and share views on the drafting of new legislation on IMO and EU level. Besides the attention to emission regula- tions, there is the mounting focus to render EU ship recycling greener and safer. EXMAR is also an active SIGTTO member where it promotes LPG shipping and terminal operations, shares experiences and best practices or discusses problems. Board and remuneration The composition of the Board and the Commit - tees of EXMAR conforms with the stipulations of the Belgian Code of Companies and Associations (“BCCA”), the articles of association of EXMAR and the Belgian Corporate Governance Code (“Code 2020”). GOVERNANCE Material topic Company standard (Inter)national reference Risk & Regulatory Environment Compliance Articles of Association, Corporate Governance Charter, Code of Business Ethics Belgian Corporate Governance Code 2020, Belgian Code of Companies and Associations Dealing Code EU Market Abuse Regulation Compliance Model/Manual Committee of Sponsoring Organizations (COSO) 2013 Framework Employees health & Safety HSEQ policy ISM code, Marine Crew Resource management, Modern Slavery Act Climate change HSEQ policy EU Green Deal (ETS), IPCC and IMO framework Air Emissions HSEQ policy IMO Marpol Conventions, EU Sulphur Directives, UNCLOS ICT ICT policy IMO cyber risk in SMS Intellectual Property policy Anti-corruption Antifraud, whistleblowing UN Global Compact, US Foreign Corrupt Practices, UK Bribery Act Anti-money laundry policy Competition Anti-trust and competition policy 66 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW The Board of Directors consists of ten members, a sucient number of directors to ensure proper operations taking into account the specic elds of activity of the company. EXMAR strives to have a diverse Board: directors not only dier in terms of their background, education, age or gender, but also in their independence, experience and professional expertise. This oers a range of perspectives, insights and the critical thinking considered essential to enable ecient decision-making and good governance. As per the Corporate Governance Charter a minimum of four meetings are to be held each year. Additional meetings are organised whenever the interest of the Company requires it. The Nomination and Remuneration Committee ensures that remuneration is in line with mar- ket practice, and complies with the Company’s Remuneration Policy which adopts provisions and new dispositions of the legislation adopted by the Belgian Parliament and published 26 November 2019 and 6 May 2020 for the implementation of the Second Shareholders’ Rights Directive (SRDII), the BCCA and the Code 2020. More information can be found in the Remuneration Report, which describes EXMAR’s executive and non-executive remuneration and how executive compensation levels are set considering individual and company performance. Metric / Materiality Company standard 2021 2020 2019 Board composition Number of Board Meetings Number 5 8 7 Number of Board Members Number 10 10 11 Board Meeting Attendance % 100% 96% 100% Share of other gender % 40% 40% 45% Remuneration Audit fees 1,000 EUR 389 380 457 Non-audit fees 1,000 EUR 140 184 254 Board and Committees remuneration 1,000 EUR 580 600 650 EXCO remuneration 1,000 EUR 1,355 1,530 2,493 CEO remuneration 1,000 EUR 575 1,876 998 Data Protection Endpoint les & IP’s scanned Number 690,170,000 578,320,000 No data Endpoint security compromises Number 121 137 No data INNOVATION With respect to innovation, EXMAR is especially con- cerned with delivering on SDGs 7 and 9 since these strongly correlate with the DNA of the Company. • Being at the forefront of providing LPG, LNG and ammonia shipping solutions, EXMAR has been active in transforming the value chain of these products to oer competitive and more ecient transport to distribute cheaper and cleaner energy and feedstock worldwide in line with SDG 7. • EXMARs innovative approach in developing new ship designs, performing STS-transfers and pioneering FSRU and FLNG solutions demonstrate our contribution to SD 9. In view of reducing the carbon footprint and ghting climate change, EXMAR’s position in the market allows it to play an active part in the global transition to a low-carbon economy. Among other elements, the increased demand for sustainable infrastructure is accelerating the energy transition. Since its foundation, EXMAR has aimed to keep innovating its business. Introducing ship-to-ship transfers, building the rst FSRU and FLNG barges and consistently designing the most innovative Midsize Gas Carriers are testimonies of that vision. Signicant resources and a part of the investment budget are being allocated towards research and development for the development of greener initiatives. VLGC dual fuel LPG design The two new VLGCs constructed at Jiangnan shipyard were successfully delivered in June and September 2021. All tests and trials have proven that the envi- ronmental performance of the VLGCs is outstanding compared to its peers because of the following factors: • A reduction of 15% of GHG emissions thanks to: • The usage of LPG as fuel • Advanced hull line optimization • Application of a premium low-friction anti- fouling coating on the underwater hull • Installation of a propeller with an extremely low surface roughness and a boss cap n • Installation of a full spade rude • Provision of performance monitoring tools including trim optimization software • Lower air pollution thanks to the use of LPG as fuel in combination with an SCR system: • SOx emissions lowered by 95% • NOx emissions lowered by 10% for worldwide trade and compliant with the stringent IMO Tier III regulations in ECA zones • Particulate Matter content in the exhaust gas reduced by 90% • Avoidance of the use of harmful substances and reduced risks of other pollutants such as: • Eco-condenser in the LPG reliquefaction system to avoid hydrocarbon venting from the cargo operations • Non-ozone depleting refrigerant in the cooling systems • UV-type ballast water treatment system, IMO D-2 and USCG compliant • A 5 ppm oily water separator, instead of the standard 15 ppm unit • Use of environmentally acceptable lubricants for grease on open deck • Inventory of Hazardous Materials from newbuilding As per the IMO requirements, the vessels need to comply with the EEDI-2 limit, meaning an overall reduction in direct CO2 emissions of 20% compared to the reference standard. This minimum compliance has been met easily and the Sea Trials have conrmed that the vessel’s carbon footprint is 38.5% lower compared to the benchmark. FLANDERS INNOVATION and FLANDERS PIONEER therefore even outperform the EEDI-3 requirement entering into force for vessels contracted as from 2022. Regarding the social aspect, the vessels are fully compliant with the Maritime Labour Convention. Additional investments have been made to improve the accommodation and enhance the welfare of the crew. The galley equipment was upgraded and the design of the galley was made in consultation with a galley coach. The ships oce has an ‘open oce’ setup, which will contribute to social interaction. Un- der the same reasoning, a common mess room was 68 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW chosen instead of the historical separate mess room for ocers and ratings. A dedicated smoking room with proper extraction fan is foreseen where smoking is allowed; in all other places in the accommodation smoking is forbidden. Site teams EXMAR was active in two shipyards with site supervi- sion teams: one at the Jiangnan Shipyard in Shang- hai, China for the construction of the two newbuild VLGCs and one at Hyundai Heavy Industries in Ulsan, South Korea for the construction of the King’s Quay semi-submersible platform. Both teams consisted of a mix of international expatriates and local supervisors. The ongoing pandemic made it dicult for people to get on site and return back home in time. Neverthe- less, EXMAR has managed to ensure a continuous presence at both locations thanks to the support of local supervisors. EXMAR ascertained that all supervisors could work under optimum conditions following all governing HSEQ standards. The necessary tools, personal pro- tective equipment and oce spaces were foreseen to execute the daily inspection works. Contractually, EXMAR ensured that the shipyard follows the OCIMF guidelines on “Health, Safety and Environment at New Building shipyards” to guarantee a safe working environment for our supervisors in a challenging heavy industrial context. Ammonia-fuelled MGC design In order to reduce the GHG emissions from the world- wide eet in line with the regulatory framework, it will be necessary for at least a part of the shipping eet to achieve zero-carbon emissions to compensate for existing tonnage where such signicant reduction is not always feasible. This is where ammonia as fuel may play a signicant role. The ammonia molecule contains no carbon; it is a combination of hydrogen and nitrogen. Hence when combusting ammonia, no CO 2 is released in the atmosphere. The emissions mainly consist of water vapor and nitrogen gas, the latter which makes up 78% of the air we breathe. Several studies have highlighted the potential of ammonia, which is why EXMAR is committed to study- ing in-depth the prospects of ammonia as fuel. A part of the EXMAR MGC eet is used to transport ammonia. These vessels can be the ideal pilot cases to integrate ammonia as fuel. Together with several partners and suppliers EXMAR obtained an approval in principle (AIP) awarded by Lloyds Register for the design of an am- monia fuelled MGC. This was set out in EXMAR’s press release dated 10 March 2021. Based on the outcome of the AIP, EXMAR continued the development of such a vessel. Regular discussions are taking place with the two 2-stroke engine suppliers MAN-ES in Denmark and WINGD in Switzerland. These companies are currently developing an ammonia fuelled engine which should be ready by 2024 – 2025. 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 69 EXMAR announced earlier in 2021 that it signed a Collaboration Agreement : Memorandum of Under- standing (MOU) with one of its clients NUTRIEN to jointly develop and build a low-carbon, ammonia- fuelled vessel. NUTRIEN, EMXAR’s partner for over three decades, is one of the world’s largest producers of low-carbon ammonia. The new collaboration aims to signicantly reduce the maritime transportation emissions and enable the commercial development of an ammonia-fuelled vessel. NUTRIEN has actively pursued the development of low-carbon ammonia for more than a decade and has approximately 1 million tonnes of production capability through its Redwater and Jore Alberta operations, as well as its Geismar, Louisiana facility which employs carbon capture and sequestration technology to reduce the carbon intensity of its ammonia for use as a maritime fuel. When compared to conventional fuels, it is antici- pated that the use of NUTRIEN’s existing low-carbon ammonia will achieve a reduction of greenhouse gas emissions of up to 40%. Emissions reductions of up to 70% can be achieved with the development of low-carbon ammonia using proven, scalable, best available technology and permanent sequestration of CO 2 . Nutrien and EXMAR are confident that the de - velopment of a vessel powered by low-carbon ammonia can align with IMO’s 2050 goals and expect deep decarbonisation of the maritime industry to be achievable prior to 2030. Under the MOU, Nutrien and EXMAR will, amongst others, collaborate on the following: • Select an ammonia engine and supply system manufacturer • Select a shipyard capable of building an ammonia- powered vessel • Use Nutrien’s existing low-carbon ammonia supply from Geismar as a fuel • Deploy an ammonia-fuelled vessel as early as 2025 CO 2 transport With the EU Green Deal in mind, the incentives for European manufacturing to reduce GHG emissions have risen signicantly. Increasing the eciency of industrial processes to reduce the carbon footprint has its limits. Hence, many companies are investi- gating in ways to capture the CO 2 exhaust from their funnels for subsequent storage (CCS) or reuse (CCU). Reutilizing the CO 2 has a great potential to create a circular economy but the technology readiness is low as well as the scale on which it can be done. A relatively short-term solution to signicantly reduce the CO 2 footprint in line with the EU Green Deal re- quirements will be to capture CO 2 and store it safely and securely underground. The map to the right shows 30 locations where major CCUS projects are being formed, where feasibility studies are ongoing and for some of them where FID already has been taken. Two conclusions, relevant for EXMAR, can be drawn: • The majority of the projects is concentrated around the North Sea • There is a disconnect between the major CO 2 emitting sites (Northwest Europe) and the large CO 2 storage sites (Norway-UK) Since installing pipelines in the North Sea will take a long time and be very costly, shipping will be necessary to enable a large-scale storage of CO 2 . By 2030, it is expected that a CO 2 shipping capacity of more than 10 MTPA will be required to distribute CO 2 from NW-Europe to the North Sea storage locations. An internal study demonstrated that, for shipping volumes in the range of 2-3 MTPA, it makes sense to use larger vessels compared to the two 7,500 ton vessels currently being constructed for the Northern Lights project. 70 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW 1 2 3 1 1 1 1 2 1 2 1 2 1 2 3 1 5 2 4 3 1 3 1 2 3 4 7 6 5 1 2 CCUS PROJECTS IN EUROPE OVERVIEW OF EXISTING AND PLANNED CCUS FACILITIES Belgium 1. Leilac (pilot capture only) 2. Antwerp C (Port of Antwerp) 3. North Sea Ports (Ghent, Terneuzen, Vlissingen) Croatia 1. iCORD 2. CO 2 EOR Project Croatia 3. Bio-Renery Project Denmark 1. Greensand France 1. Lacq 2. DMX Demonstration in Dunkirk Germany 1. H2morrow Iceland 1. Orca 2. Hellisheidi Italy 1. CCS Ravenna Hub The Netherlands 1. Porthos (Port of Rotterdam) 2. Athos (Ijmond) 3. Aramis (Den Helder) 4. Magnum (Eemshaven) 5. North Sea Port Norway 1. Sleipner CO 2 Storage 2. Snøhvit CO 2 Storage 3. Longship (including Northern Lights) Republic of Ireland 1. Ervia Sweden 1. Preem CCS 2. Stockholm Exergi Bio-CCS UK 1. Acorn 2. Caledonia Clean Energy 3. H21 North of England 4. Liverpool-Manchester Hydrogen Cluster 5. Net Zero Teesside 6. Humber Zero Carbon Cluster 7. Liverpool Bay Area CCS Project * Project where IOGP members are involved Projects listed in bold are in operation Source: IOGP 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 71 Transporting liquid CO 2 will have to be done at very specic conditions. Where LNG, LPG or NH 3 can be transported at ambient pressure as long as the cargo is cooled down suciently, liquid CO 2 always requires to be pressurized (above the triple point of 4 barg and -56°C) to avoid solidication (i.e. dry ice formation) of the product. Current CO 2 carriers transport the product at medium pressures of about 15 barg in cylindrical IMO type C tanks. Looking at the potential volumes which will have to be shipped, these smaller vessels with capacities of up to 5,000 m 3 will not be sucient to cover the demand. The development of larger vessels using medium pressure transport conditions will be a technical and economical hurdle. Therefore EXMAR is considering CO 2 transport under low-pressure regimes (i.e. around 7barg). Even at these lower pressures the construction of large cylindrical (or bi-lobe) tanks becomes challenging when it comes to constructability and nding suitable steel to deal with the combination of pressure a cryogenic temperature. To tackle this issue, EXMAR started a cooperation with LATTICE technology. The patented Lattice Pressure Vessel design allows the pressurized tank to be built in a prismatic shape (same as LPG type A tanks, LNG prismatic type B tanks or LNG membrane tanks) which makes it possible to design the vessel with similar dimensions as a standard midsize gas carrier in a very cost ecient way. A feasibility study proved that the tank design provides the best solution for large-scale CO 2 transportation at low and even me- dium pressures. The design and vessel size can be adjusted to meet all required transport volumes to ensure the most optimal logistical solution in the most cost-competitive way. For a similar capacity of ship, the length can be reduced with almost 20%. EXMAR’s initial design is a 210 meters long Panamax beam vessel with a cargo capacity of about 40,000 m 3 . Such a vessel will be tailored to support CCUS projects with capacities ranging from 2 to 10 MTPA. Additionally, a 3,000 m 3 storage capacity for low CO 2 emitting fuels like LPG, LNG or ammonia has been foreseen. The Joint Development will combine LATTICE’s innovative and ecient tank design for CO 2 transport together with EXMAR’s strong knowledge and experience in design and operation of innovative and ecient gas carriers. The basic design of the vessel and cargo system is under development, which will be followed by an application for an approval in principle. Because the majority of the CCUS consortia are for an initial phase looking at medium pressures, EXMAR is also working on a 12,000 m 3 CO 2 carrier design on medium pressures. A study will be performed if LATTICE Technology tanks can also give a competi- tive advantage for this vessel size compared to the traditional cylindrical tanks. 72 I 3. CARE FOR TODAY, RESPECT FOR TOMORROW The hydrogen import coalition EXMAR is part of the Belgian Hydrogen Import Coalition since 2019. This coalition brings together the industrial expertise of EXMAR, DEME, ENGIE, Fluxys, Port of Antwerp, Port of Zeebrugge and Waterstofnet to study importing renewable energy by means of hydrogen carrier molecules. Early 2021 a study was completed analysing all steps of the value chain from renewable energy production, electrolysis and synthesis into a hydrogen carrier molecule, to shipping, terminal management and end-use in Belgium. Renewable electricity produced from solar and wind power will be converted into hydrogen using large scale electrolysis. Because hydrogen is dicult to transport, it can be converted into other molecules such as e-methane or e-methanol by adding CO 2 . It can also be converted into ‘green’ ammonia by adding nitrogen or it can be loaded onto a liquid organic hydrogen carrier (LOHC) such as toluene or dibenzyltoluene. The study demonstrated that large-scale green hydrogen import is both technically feasible and cost-eective. When delivered to Belgium, the cost range of imported renewable energy from low-cost locations is in the range of 65-90 Eur/MWh by 2030- 2035 with a further potential cost reduction to 55-75 Eur/MWh or less by 2050. As several hydrogen-based molecules are feasible and many sourcing regions are capable of providing cost-competitive energy, sound and suciently diversied geopolitical and market dynamics are ascertained. The most promising hydrogen-based energy molecules i.e. ammonia, methanol and synthetic methane are not hindered by technological scale-up hurdles today and could already be deployed in existing transport lines and o-take markets. A diversied portfolio of initial projects and demonstrators for all these molecules and technologies will serve to gain experience and further reduce cost gaps. With the Hydrogen Import Coalition partners, EXMAR keeps on contributing to the major goals which are set: • Development of pilot project within the ecosystem of the coalition • Continuation of the advocacy mission on the policy framework and possible support mechanisms • Building on a roadmap in dialogue with major industrial stakeholders 3. CARE FOR TODAY, RESPECT FOR TOMORROW I 73 4 CORPORATE GOVERNANCE STATEM ENT 4.1 CORPORATE GOVERNANCE STATEMENT 76 Corporate Governance aims to define several rules and behaviours according to which companies are properly managed and controlled, with the objective to increase transparency. It’s a system of checks and balances between the shareholders, the Board of Directors, the Chief Executive Officer and the Executive Committee. GOVERNANCE MODEL EXMAR NV (“EXMAR” or “the Company”) adopted the Belgian Corporate Governance Code 2020 (“Code 2020”) as a reference code. The Code 2020 is structured under 10 principles: 1. The Company shall make an explicit choice regarding its governance structure and clearly communicate it; 2. The Board and the Executive Management shall remain within their respective remits and interact constructively; 3. The Company shall have an eective and balanced Board; 4. Specialized Committees shall assist the Board in the execution of its responsibilities; 5. The Company shall have a transparent procedure for the appointment of board members; 6. All Board members shall demonstrate independence of mind and shall always act in the best interests of the Company; 7. The Company shall remunerate Board members and executives fairly and responsibly; 8. The Company shall treat all shareholders equally and respect their rights; 9. The Company shall have a rigorous and transparent procedure for evaluating its governance regime; 10. The Company shall publicly report on the application of the code. EXMAR’s Corporate Governance Charter was ap- proved by the Board of Directors on 3 December 2020. The Charter is a summary of the rules and principles around which EXMAR’s corporate governance policy is organised, and is based on the provisions of the coordinated articles of association, the Belgian Code of Companies and Associations as adopted by Royal Decree of 12 May 2019 (“BCCA”), and the Code 2020. The Charter was revised by the Board of Directors in 2020 in order to designate the Code as reference code within the meaning of Article 3:6, §2, 1° of the BCCA. Before adopting the Charter, the Board of Directors reected thoroughly on its governance structure, sustainable value creation and focus on long term. EXMAR is aware of the importance of sound gov- ernance, and is convinced that compliance with the highest standards of corporate governance is fundamental to long term growth and is important for all stakeholders of the Company. EXMAR is an institutional member of Guberna, a knowledge cen- tre promoting corporate governance in all its forms oering a platform for the exchange of experiences, knowledge and best practices. 4.1 CORPORATE GOVERNANCE STATEM ENT 76 I 4. CORPORATE GOVERNANCE STATEMENT The key features of the governance model of EXMAR are: • A Board of Directors, which denes EXMAR’s general policy and strategy and supervises the operational management; • An Audit and Risk Committee, a Nomination and Remuneration Committee and an Executive Committee created by the Board of Directors; • A Chief Executive Ocer (CEO) who takes primary responsibility for daily management. EXMAR aims to comply with most provisions of the Code 2020, but the Board of Directors is of the opinion that deviation from provisions may be justied in the light of the Company’s specic situation. If ap- plicable, an explanation is provided in the Corporate Governance Statement (the “Statement”) about such deviations during the past nancial year in accordance with the “comply or explain” principle. EXMAR deviates from provisions 7.6 and 7.9 of the Code 2020. These deviations are described and explained in the remuneration report. CORPORATE GOVERNANCE STATEM E NT This Corporate Governance Statement describes the measures taken by EXMAR to ensure compliance with laws and regulations. To reduce the risks of infringements and the adverse consequences for EXMAR and all the stakeholders a compliance program was implemented. The Charter should be read together with the coor- dinated articles of association of the Company, the annual nancial report (including the Statement) and any other information made available by EXMAR. The elements listed in Article 34 of the Belgian Royal Decree of 14 November 2007 and Article 14 of the Law of 2 May 2007 are disclosed in this Statement and in the report of the Board of Directors to the sharehold- ers and should consequently be read in conjunction. The Charter and Statement of EXMAR can be consulted on the website: http://exmar.be/en/investors/corporate-governance. BOARD OF DIRECTORS One-tier structure The extraordinary general meeting of 11 September 2020 approved the articles of association of the Company revised in order to comply with the BCCA. A one-tier governance structure was adopted. At least once every ve years, the Board of Directors evaluates whether the chosen governance structure is still appropriate, and if not, proposes a new governance structure to the General Meeting. Composition Currently, the Board of Directors consists of 10 mem- bers, of a sucient number of directors to ensure proper operation, taking into account the specicities of the Company. Functions and terms of oce of the directors on the Board as per 31 December 2021: Name – Function Beginning of mandate End of mandate FMO BV represented by Francis MOTTRIE * • Executive director • Chief Executive Ocer (CEO) Appointed at AGM of 18 May 2021 as executive director in replacement of / in continuation of the mandate of Mr. Francis Mottrie 11 September 2020 General Meeting 2022 Nicolas SAVERYS • Executive chairman • Executive director 20 June 2003 General Meeting 2024 Michel DELBAERE • Independent director • Chairman Nomination- and Remuneration Committee * As from 9 September 2021 17 May 2016 General Meeting 2022 JALCOS NV represented by Ludwig CRIEL • Non-executive director • Chairman Nomination- and Remuneration Committee • Chairman Audit and Risk Committee Appointed at AGM of 16 May 2017 as non-executive director in replacement of / in continuation of the mandate of Mr. Ludwig Criel (who was appointed as a director on 20 June 2003) 16 May 2017 1 July 2021 Ariane SAVERYS • Non-executive director 15 May 2012 18 May 2021 Pauline SAVERYS • Non-executive director 15 May 2012 18 May 2021 Baron Philippe VLERICK • Non-executive director • Member Audit and Risk Committee 20 June 2003 General Meeting 2023 Barbara SAVERYS • Non-executive director 19 May 2015 27 July 2021 Isabelle VLEURINCK • Independent director • Member Nomination- and Remuneration Committee • Member Audit and Risk Committee 21 May 2019 General Meeting 2022 Wouter DE GEEST • Independent director • Member Audit and Risk Committee 19 May 2020 General Meeting 2022 78 I 4. CORPORATE GOVERNANCE STATEMENT Powers and responsibilities The Board of Directors is the highest decision-mak- ing body of the Company. The powers and the op- eration of the Board are described extensively in the Charter. The Board is authorised to perform all acts that are necessary or useful for the realisation of the object of the Company, with the exception of those that are reserved for the General Meeting by the BCCA or the coordinated articles of association. The Board of Directors strives for the long-term success of the Company, providing the necessary leadership and ensuring that risks can be identied and managed. The Board of Directors is responsible for the overall strategy and values of EXMAR, based on social, economic and environmental respon- sibility, gender diversity and diversity in general. Activities During 2021, the Board held ve meetings, all of which were held under the chairmanship of Mr. Nicolas Saverys. All directors were present or represented at the meetings. The Board further decided at three occasions by written resolutions dealing with specic matters. In addition to exercising the powers provided by law, the articles of association and the Corporate Governance Charter, the Board of Directors deals with reviewing and deciding on the long-term strat- egy, key policies and structure of the Company and disclosing the accounts and nancial statements of the Group. COMMITTEES Audit and Risk Committee COMPOSITION JALCOS NV represented by Ludwig CRIEL • Non-executive director • Chairman Audit and Risk Committee * Until 1 July 2021 Baron Philippe VLERICK • Non-executive director • Chairman Audit and Risk Committee * As from 9 September 2021 Isabelle VLEURINCK • Independent director Wouter DE GEEST • Independent director ACACIA I BV represented by Els VERBRAECKEN * • Independent director As from 9 September 2021 The Code 2020 provides that the Board of Directors establishes an Audit Committee in accordance with the BCCA. Given its role in risk matters, this Com- mittee may also be referred to as the “Audit and risk Committee”. The Board of Directors decided in 2020 to merge the existing Audit Committee and Risk Committee into one Audit and Risk Committee. Following the resignation of JALCOS NV as of 1 July 2021, Philippe Vlerick was nominated as chairman of the Committee at the meeting of 9 September 2021 and ACACIA I BV represented by Els Verbraecken was appointed by the Board as member of the Committee as from 9 September 2021. Name – Function Beginning of mandate End of mandate Carl-Antoine SAVERYS • Executive director (replacing Ariane Saverys) 18 May 2021 General Meeting 2024 Stephanie SAVERYS • Non-executive director (replacing Pauline Saverys) 18 May 2021 General Meeting 2024 ACACIA I BV represented by Els VERBRAECKEN • Independent director • Member Audit and Risk Committee • Member Nomination- and Remuneration Committee 9 September 2021 by co-optation General Meeting 2022 Maryam AYATI • Independent director 9 September 2021 by co-optation General Meeting 2022 4. CORPORATE GOVERNANCE STATEMENT I 79 Powers and responsibilities The Board of Directors has granted the Audit and Risk Committee the broadest powers of investigation within its area. The Audit and Risk Committee assists the Board of Directors with the fullment of its supervisory task and to ensure monitoring in the broadest sense. It is the main point of liaison for the Internal Auditor and the External Auditor. All the members of the Audit and Risk Committee possess the necessary expertise concerning accounting and auditing, and are familiar with nancial reporting, accounting standards and risks, because of their qualications, their careers in various multinational groups and/or their current professional activities. With the entry into force of the EU General Data Protection Regulation 2016/679 (GDPR) as of 25 May 2018, a Data Protection Committee (DPC) has been appointed. The DPC reports to the Audit and Risk Committee. Activities The specic responsibilities of the Audit and Risk Committee are set out in the Corporate Governance Charter and in an Audit Charter. This Audit Charter was approved by the Board of Directors on 31 March 2011 and is revised from time to time and lastly on 19 March 2021. Four meetings were held in 2021, each in the presence of all members. The Internal Auditor attended all four meetings and the Statutory Auditor attended three meetings. The Audit and Risk Committee deliberated on specic nancial matters, internal control and risk management and matters of compliance that arose during the year and made recommendations to the Board of Directors. Nomination and Remuneration Com- mittee COMPOSITION Michel DELBAERE • Independent director • Chairman Nomination and Remuneration Committee As from 9 September 2021 JALCOS NV represented by Ludwig CRIEL * • Non-executive director • Chairman Nomination and Remuneration Committee Until 1 July 2021 Isabelle VLEURINCK • Independent director ACACIA I BV represented by Els VERBRAECKEN * • Independent director As from 9 September 2021 The Nomination and Remuneration Committee operates in compliance with Article 7:100 BCCA: • Composed out of a majority of independent directors • Chaired by a non-executive director • Other members are non-executive The Nomination and Remuneration Committee was composed of three members on 31 December 2021 and reports to the Board of Directors. Following the resignation of JALCOS NV as of 1 July 2021, the Committee was temporarily reduced to two members until 9 September 2021 when the Board nominated ACACIA I represented by Els Verbraecken as member of the Committee. The Committee members elected Michel Delbaere as chairman of the Committee on 9 September 2021. Powers and responsibilities The Committee has a balanced composition and has the necessary independence, skills, knowledge, ex- perience and capacity to execute its duties eciently. 80 I 4. CORPORATE GOVERNANCE STATEMENT The Committee assists the Board of Directors with carrying out its responsibilities with respect to the determination of the Company’s remuneration policy and the nomination procedures. Activities The specific responsibilities have been set out in EXMAR’s Corporate Governance Charter and a Nomination and Remuneration Committee Charter. The latter was approved by the Board of Directors on 29 November 2011 and is revised from time to time and lastly on 3 December 2021. The Board of Directors also approved a revision of the procedure for the nomination and reappointment of directors and members of the Executive Committee, on 3 De- cember 2021. Four meetings were held in 2021, in the presence of all members except for the meeting on 18 May 2021, which was attended by two of the three members. With respect to remuneration, the following items were discussed: • Remuneration package • Remuneration report With respect to the nominations of the newly appointed directors and members of the Executive Committee, the Committee formulated recommendations in line with the diversity policy of the Company. EVALUATION In order to function eectively, it is required for the Board of Directors to have a transparent means by which it can measure and review its performance with a clear potential path for renewal and improvement. The Code 2020 and the Charter foresee this requirement by periodically requesting Board mem- bers to complete an evaluation. The Board of Directors, under the guidance of its Chairman, rst introduced the evaluation process in 2011 which was repeated from time to time. A new evaluation process was implemented in 2021. The evaluation has the main objective of improving the added value of the Board of Directors. It should reinforce the values of the Company, increase e- ciency also assists in detecting and proactively dealing with any potential problems. Following the evaluation, feedback by the members of the Board of Directors may result in ne-tuning the functioning of the Board of Directors and the committees where required. Secretary Mr. Mathieu Verly, Secretary, was appointed as of 1 July 2015. The Secretary ensures that Board procedures are complied with and that the Board acts in accordance with its statutory obligations and its obligations under the coordinated articles of association. He shall advise the Board on all governance matters and assist the Chairman in fullling his duties as detailed above, as well as in the logistics associated with the aairs of the Board (information, agenda, etc.). Executive Committee – CEO COMPOSITION AS PER 31 DECEMBER 2021 FMO BV represented by Francis MOTTRIE • Executive director • Chief Executive Ocer (CEO) FINMORE BV represented by Christine VERHAERT • Chief Financial Ocer (CFO) Lisann AS represented by Jens ISMAR • Executive Director Shipping FLX Consultancy BV represented by Jonathan RAES • Executive Director Infrastructure On 3 December 2020, the Board of Directors set up an Executive Committee which, under the responsi- bility of the Board of Directors, is responsible for the day-to-day management and policy of the Group, the implementation of decisions taken by the Board of Directors, and the specic tasks delegated to it by the latter. 4. CORPORATE GOVERNANCE STATEMENT I 81 Powers and responsibilities The Board determines the specic powers and tasks entrusted to the Executive Committee, and develops a clear delegation policy in close consultation with the CEO. The Executive Committee is responsible for the day- to-day management and daily policies of EXMAR and the EXMAR group, the execution of the decisions taken by the Board and the specic tasks that the Board has delegated to the Committee, as set out in the Charter and the Executive Committee Charter, which was updated in 2020. The Executive Committee meets on a regular basis. The CEO is the chairman of the Executive Committee. GENERAL INFORMATION ABOUT EXMAR AND ELEMENTS LISTED IN ARTICLE 34 OF THE BELGIAN ROYAL DECREE OF 14 NOVEMBER 2007 Date of establishment and amendments to the articles of association The Company was established by notarial deed on 20 June 2003, published in the appendix to the Belgian Ocial Gazette of 30 June thereafter, reference 03072972, and of 4 July thereafter, refer- ence 03076338. The articles of association were amended several times. New articles of associations were adopted in order to meet the stipulations of the BCCA by deed executed before civil law notary Benoit De Cleene in Antwerp, replacing his colleague notary Patrick Van Ooteghem in Temse, on 11 September 2020, published in the appendix to the Belgian Ocial Gazette of 26 November thereafter, reference 20139984. Registered oce De Gerlachekaai 20, 2000 Antwerp, Belgium. VAT BE0860.409.202 Company Registration Antwerp – section Antwerp. Capital and shares The issued capital amounts to USD 88,811,667, is fully paid-up and is represented by 59,500,000 shares without nominal value. For the application of the provisions of the BCCA, the reference value of the capital is set at EUR 72,777,924.85. All shares have been paid up in full. During the past nancial year, no capital changes have occurred that must be reported in accordance with article 7:203 of the BCCA. Notwithstanding the provisions laid down in article 3:42 of the BCCA, the capital and the accounting are expressed in US dollars. This derogation was granted by the Ministry of Economic Aairs and was conrmed in writing on 2 July 2003. The reasons for which this derogation was requested remain applicable. All EXMAR shares are entitled to the same rights. There are no dierent classes of shares. Each share entitles its holder to one vote at the shareholders’ meetings. Of the 59,500,000 shares 8,565,334 shares are reg- istered and 50,934,656 shares were dematerialized as per 31 December 2021. 82 I 4. CORPORATE GOVERNANCE STATEMENT Authorized capital Pursuant to the BCCA, the Board of Directors may be authorized by the shareholders, during a ve years’ period, to increase the capital up to a dened amount and within certain limits. By decision of the Extraordinary General Meeting of Shareholders held on 11 September 2020, the Board of Directors was authorized to increase the share capital of the Company once or several times, in the manner and at conditions to be determined by the Board of Directors, within a period of ve years with eect from the date of publication of such a decision, by a maximum amount of USD 12,000,000, the refer- ence value of EUR 7,703,665.66 for application of the provisions of BCCA. The special report of the Board of Directors was drawn up in accordance with the provisions of Section 7:199 of the BCCA. In 2021 the Board of Directors did not make use of the right to increase the capital in the framework of the authorized capital. Procedure for changes in EXMAR’s share capital EXMAR NV may increase or decrease its share capital by decision of the extraordinary general meeting of shareholders in accordance with the BCCA. There are no conditions imposed by the articles of association that are more stringent than those required by law. Purchase of own shares The Extraordinary General Meeting of Shareholders of 11 September 2020 decided to authorize the Board of Directors to acquire maximum 20% of the existing shares or prot-sharing certicates for a period of ve years from the date of publication of this decision in the Annexes to the Belgian Ocial Gazette, at a price per share which shall not exceed the maximum price per share acceptable under applicable legislation and shall not be less than 0.01 euro. The number of treasury shares as at 31 December 2021 amounted to 3.82%, which represents 2,273,263 shares. Transfer of shares and shareholders’ arrangements The articles of association impose no restrictions on the transfer of shares. Defensive mechanisms On 11 September 2020 the Extraordinary General Meeting of Shareholders authorised the Board of Directors, subject to the applicable legislation and to prevent an imminent grave disadvantage to the Company, including a public takeover bid on the Company’s securities, to acquire and sell the Company’s shares or prot-sharing certicates for a period of three years from the date of publication of the decision made by the Extraordinary General Meeting of Shareholders on 11 September 2020 in the Annexes to the Belgian Ocial Gazette. Moreover, the Board of Directors was also authorised to increase the Company’s capital within the limits of the authorised capital in the event of a notication from the Financial Services and Markets Authori- ty (FSMA) concerning a public takeover bid on the Company’s securities. Anti-takeover provisions in EXMAR’s articles of association EXMAR NV’s articles of association currently do not contain any anti-takeover provisions. Anti-takeover provisions under Belgian law Under Belgian law, public takeover bids for all out- standing voting securities of the issuer are subject to the supervision of the FSMA. If the latter determines that a takeover violates Belgian law, it may lead to suspension of the exercise of the rights attached to any shares that were acquired in connection with the envisaged takeover. Pursuant to the Belgian Law of 1 April 2007 on public takeovers, a mandatory take- over bid must be made when, as a result of its own acquisition or the acquisition by persons acting in concert with it, a person owns, directly or indirectly, more than 30% of the securities with voting rights in a company with registered oce in Belgium whose securities are admitted to trading on a regulated or recognized market. The acquirer must oer to all other shareholders the opportunity to sell their 4. CORPORATE GOVERNANCE STATEMENT I 83 shares at the higher of (i) the highest price oered by the acquirer for shares of the issuer during the 12 months preceding the announcement of the bid or (ii) the weighted average price of the shares on the most liquid market of the last 30 calendar days prior to the date on which it became mandatory for the acquirer to launch a mandatory takeover bid for the shares of all other shareholders. Control mechanism of any employee share scheme where the control rights are not exercised directly by the employees There is no employee share scheme with such a mechanism. Shareholders’ agreements The Company has no knowledge of any agreements made between shareholders. EXMAR shares and shareholders Shareholding as per 31 December 2021: SAVEREX: 43.79% EXMAR: 3.82% Cobas Asset Management S.G.I.I.C. SA: 5.002% FREEFLOAT: 47.388% The EXMAR share is listed on Euronext BRUSSELS and is part of the Bel Small index (Euronext: EXM). During the course of 2021 and until the date of this report no notications in the context of the Trans- parency Act of 2 May 2007 were received. The latest notications received by the Company as notied to the FSMA are as follows: • On 18 July 2019 EXMAR NV announced that Cobas Asset Management S.G.I.I.C. S.A. crossed a downward threshold (from 5.02% to 4.98%). • On 8 August 2019 EXMAR NV announced that Cobas Asset Management S.G.I.I.C. S.A. crossed a threshold of 5% due to an acquisition of shares. • On 30 October 2019 EXMAR NV announced that SAVEREX NV disclosed that due to the sale of 500,000 voting rights the threshold of 50% was crossed. In accordance with Section 74§6 of the law on public takeover bids of 1 April 2007, SAVEREX NV notied the FSMA on 15 October 2007, updated on 26 August 2021, that it holds more than 30% of the securities with voting rights in EXMAR NV, a listed company. The statutory information is published on the website (www.exmar.be). Articles of association, General Meetings, participation, and exercising of voting rights The Annual General Meeting of Shareholders takes place on the third Tuesday of May at 14h30. The rules governing the convening, the participation, the conducting of the meeting, the exercising of the voting rights, amendments to the articles of association, nomination of the members of the Board of Directors and its committees can be found in the articles of association and the Charter of the Company, both of which are available on the Company’s website under investor relations. http://exmar.be/en/investors/reports-and-downloads/ articles-association Loan Agreement between Export LNG Limited as Borrower and Exmar NV as Guarantor, the banks and financial institutions listed in Schedule 1 as Lenders, Bank of China Limited as Arranger, Facility Agent and Security Agent (the “Loan Agreement”) dd 29 June 2017, as amended from time to time The clause provides that EXMAR NV shall not, without the prior consent of the Facility Agent, cease to be controlled (in the sense of Belgian law) by SAVEREX NV. In case of breach the Facility Agent cancel the Total Commitments, declare that all or part of the loan, together with accrued interest, and all other amounts accrued or outstanding under the finance documents be immediately due and payable, and/or declare that all or part of the loan be payable on demand, and take any action it is entitled to take under any finance document or any applicable law or regulation. Ten Bareboat Charter Agreements entered into by Exmar Small-Scale LPG Hong Kong Limited as charterer, whose obligations are guaranteed by Exmar NV under a charter guarantee of even date as the bareboat charter agreements, five of which are dated 23 October 2018 in respect of the fully- pressurized LPG carriers FATIME, ANNE, DEBBIE, SABRINA and HELANE, one of which is dated 22 November 2018 in respect of MAGDALENA and four of which are dated 4 April 2019, in respect of JOAN, ELISABETH, ANGELA and MARIANNE. The clause, which is identical in each of the ten agreements, provides that the owner may terminate the chartering of the ship and that the charterer will pay to the owner the unpaid rental, costs and moneys due and payable, the amount of any losses excluding loss of profit, that are unpaid and the stipulated loss value, (a) in case SAVEREX NV ceases to hold at least 33.3% of the voting rights in, or share capital of, EXMAR NV or otherwise ceases to have control over EXMAR’s board; or (b) other than in respect of SAVEREX NV, if any person or group of persons acting in concert, obtains at least 33.3% of the voting rights in, or share capital of EXMAR NV or otherwise obtains control over EXMAR’s board. Bond Terms between EXMAR Netherlands BV, as issuer of the bonds, EXMAR NV as guarantor and Nordic Trustee ASA as Bond Trustee for the bondholders, dd 27 May 2019 The clause provides that in case any person or group of persons under the same decisive influence, or two persons acting in concert (other than SAVEREX NV or any indirectly or directly owned subsidiary of SAVEREX NV) obtains decisive influence over EXMAR NV, or a de-listing of EXMAR NV’s shares from NYSE Euronext Brussels or any other recognised stock exchange occurs, each bondholder will have the right to require that the issuer purchases all or some of the bonds held by that bondholder at a price equal to 101 percent of the nominal amount plus accrued interest on the redeemed bonds. Aircraft Loan Agreement between Exmar Marine NV als borrower and GEFA BANK GmbH as Lender dd. 28 januari 2020, amended on 26 February 2021 and 26 May 2021, guaranteed by EXMAR NV The clause provides that the Lender is entitled to terminate the loan agreement, declare the outstanding repayments and other amounts due and payable, if any, and interests, immediately payable and/or to enforce the security given under the loan, in case of a change of control in the shareholding of EXMAR NV without the Lender’s prior written approval. Important Agreements that contain change of control provisions Following important agreements in force in 2021 contain change of control provisions: 4. CORPORATE GOVERNANCE STATEMENT I 85 Revolving Credit Facility Agreement, dd 29 May 2020, amended and restated on 1 February 2022, between Exmar NV and Exmar Marine NV, as Borrower and Guarantor, and KBC BANK NV as Coordinator, Mandated Lead Arranger, Lender, Agent and Security Agent, Belfius Bank SA/NV and BNP Paribas Fortis SA/NV as Mandated Lead Arrangers and Lenders as lenders. The clause provides that when The Company notifies the Agent that Nicolas Saverys or his heirs or any funds controlled by Nicolas Saverys or his heirs cease directly or indirectly to control EXMAR NV, or any person or group of persons acting in concert gains direct or indirect control of EXMAR NV, a Lender shall not be obliged to fund a Utilisation (except for a Rollover Loan), or if a Lender so requires, the Agent shall cancel the commitment of that Lender and declare the participation of that Lender in all outstanding utilisations and all ancillary outstandings owing to that Lender, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable. Term Facility Agreement dd. 10 November 2021 between Exmar Netherlands B.V. as borrower, Exmar NV as parent, Sequoia Investment Management Company Limited as arranger, Sequoia IDF Asset Holdings S.A. as original lender and U.S. Bank Global Corporate Trust Limited as agent The clause provides that when any person or group of persons under the same decisive influence, or two or more persons acting in concert, not including SAVEREX NV or any entity under the decisive influence of Nicolas Saverys or his family up to the second degree, obtains decisive influence over the borrower; or a de-listing of EXMAR NV’s shares from Euronext Brussels (or any other recognized stock exchange), a Lender shall not be obliged to fund a Utilisation and if a Lender so requires, the Agent shall cancel the available commitment of that Lender and declare the participation of that Lender in all loans, together with accrued interest and all other amounts accrued or outstanding under the Finance Documents, immediately due and payable. 86 I 4. CORPORATE GOVERNANCE STATEMENT DIVERSITY POLICY OF EXMAR In accordance with provisions of the Code 2020 and the BCCA EXMAR ensures that each employee is selected on the basis of, among other things, competencies, talents and skills. Overall it is believed that the di- versity of employees (including age, gender, cultural background and professional experience) is added value for an international company. During 2021, EXMAR complied with the Law of 28 July 2011 with respect to gender diversication in the Board of Directors, and in accordance with article 7:106 of the BCCA. Also EXMAR’s Board of Directors reects diversity in its composition: directors dier not only in terms of their background, education, age and gender, but also in their independence, experience and professional expertise. Such diversity will ensure a range of perspectives, insights and the critical thinking that are essential to enable ecient decision-making and good governance. The Nomination and Remuneration Committee reviews and assesses the composition of the Board of Directors and Executive Committee and advises the Board of Directors on the (re-)appointment of new Board members and appointment of members of the Executive Committee. The Nomination and Remuneration Committee considers candidates on merit, without losing sight of the need for diversity including criteria such as background, education, age, gender, independence, professional skills, professional and personal experience. SUPERVISION External audit By decision of the Annual General Meeting of Shareholders of 19 May 2020, Deloitte Belgium was reappointed as Statutory Auditor of the Company for a period of three years, represented by Mr. Rik Neckebroeck and Mr. Ben Vandeweyer. The auditor conducts the external audit of both the consolidated and statutory gures of EXMAR. The Audit Committee in its meeting of 1 September 2017 proposed to the Board of Directors, and the Board agreed, to no longer review the half-year results, in line with other listed companies’ policies. The auditor however was requested to review the updated version of the interim condensed consolidated nancial state- ments to ensure consistency with the adjustments proposed by the Commitee, if any. Internal audit EY has been appointed to assist the Company in the conducting of its internal audit activities. The internal auditor was reappointed for a term of three years until 31 December 2024. Compliance Ocer The Board of Directors appointed FINMORE BV repre- sented by Christine Verhaert as Compliance Ocer of EXMAR, upon recommendation of the Audit and Risk Committee, with eect from 1 July 2021. The Compliance Ocer is responsible for the imple- mentation and the supervision of compliance with the Company’s Dealing Code and the tasks described in the Company’s Compliance Model. The Company’s compliance policies conrm EXMAR’s commitment to comply with applicable laws and rules. To this end, trainings are given to the EXMAR employees. 4. CORPORATE GOVERNANCE STATEMENT I 87 RULES, POLICIES AND PROCEDURES Conicts of Interest Each member of the Board of Directors and of the Executive Committee is encouraged to organize his or her mandate as eciently as possible and personal and business interests in such a way that there is no direct or indirect conict of interest with the Company. Transactions, if any, between EXMAR or an aliated company and a member of the Board will take place at arm’s length. The same applies for transactions between the Company or an Aliate and a person closely related to a member of the Board and the Executive Company. The provisions of the BCCA and the Corporate Gov- ernance Charter will apply in the event of a conict of interest. EXMAR has no knowledge of any potential conicts of interest among the members of the Board of Di- rectors and the members of the Executive Committee in the meaning of articles 7:96 or 7:115 BCCA, except those described in the Annual Report of the Board of Directors to the Shareholders, if any. Related Party Transactions Currently SAVERBEL NV and SAVEREX NV, companies controlled by Mr. Nicolas Saverys, provide adminis- trative services and Saverex NV consultancy services to the EXMAR Group. These services are invoiced and are at arm’s length conditions. A policy has been prepared and adopted by the Board of Directors of EXMAR on 9 September 2021 in accor- dance with article 7:97, §1 of the BCCA in order to set forth the procedures applicable to the assessment by the Company of ordinary course related-party transactions and decisions. Certain transactions or decisions of the Company and its subsidiaries that are Board competences and “concern” related parties within the meaning of the international accounting standard (IAS) 24 must be subject to the prior review of a committee of at least three independent directors, which must then issue a non-binding opinion on such transaction or decision to the Board. The Committee may, but must not, be assisted by one or more independent experts (nancial, legal, technical, etc.). The Company’s statutory auditor must be informed before the Board meeting in order to issue an opinion on the nancial and accounting data used. The Board subsequently deliberates on the proposed transaction or decision. Code of Business Ethics The Code of Business Ethics is a part of the Corporate Governance Charter. Integrity and ethics have always characterized EXMAR’s way of conducting business. Operating with a strong sense of integrity is critical to maintaining trust and credibility with our customers, partners, employees, shareholders and other stake - holders. Our Code of Business Ethics contains rules regarding individual and peer responsibilities, as well as responsibilities to our employees, customers, shareholders and other stakeholders. Political contributions EXMAR did not make contributions or payments or otherwise give any endorsement, directly or indirectly, to political parties or committees or to individual politicians. The employees of EXMAR may not make any political contribution on behalf of EXMAR or through the use of corporate funds or resources. 88 I 4. CORPORATE GOVERNANCE STATEMENT INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS – ASSESSMENT Main characteristics of internal control and risk management systems Internal control can be dened as a system developed and implemented by management, which contributes to managing the activities of the Company, its ecient functioning and the ecient use of its resources, appropriate to the objectives, the size and the complexity of its activities. Risk management can be dened as a structured, consistent and continuous process aimed at identify- ing, assessing, deciding on responses to and reporting on the opportunities and threats that may aect the achievement of the Company’s objectives. Risks, as described in more detail in the ‘Risk Factors’ section below, are all compiled in the risk register and include the key strategic, operational and nancial risks to the Company. The Board of Directors, Audit and Risk Committee, Executive Committee and all employees with managerial responsibilities are re- sponsible to control the risks. The Executive Committee is responsible for the day-to-day management and policies of EXMAR and the EXMAR group. The Executive Committee meets on a regular basis. The CEO is the chairman of the Executive Committee. The Executive Committee develops, maintains and ongoingly improves (with the support of external advisers) adequate internal control and risk manage- ment procedures (i) to oer a reasonable assurance concerning the realization of goals, the reliability of the nancial information and the observance of applicable laws and regulations and (ii) to enable the execution of internal control and risk management procedures. The quality of the internal control and risk manage- ment is assessed during the course of the nancial year and by the execution of internal audits for the identied potential risks. The conclusions are shared and validated with the Audit and Risk Committee. EXMAR has established an internal audit function for the purpose of reviewing and analyzing strategic, operational and nancial risks, to conduct specic assignments in accordance with the annual internal audit plan and to report and discuss the ndings with the Audit and Risk Committee. The scope of internal audit is both on operations and on internal control over nancial reporting. The internal audit function is outsourced to a qualied service provider (EY). The EY Internal Audit Manager reports both to the CFO and to the Audit and Risk Committee. 4. CORPORATE GOVERNANCE STATEMENT I 89 A. Strategic risks Description of risk Potential impact Limiting factors and control MARKET RISKS The overall oil and gas markets and the interlinked worldwide transportation market for these markets are cyclical and volatile. A decline in global oil and gas output could impact the freight rates for transportation of gas and would aect our income and cash ows, thereby aecting the value of our eet and our nancial position. Diversied client base and a signicant coverage with a mix of long-term and short-term charters. The value of our eet is continuously monitored and assessed by using internal and external information. Our position as long-term operator helps to mitigate sudden changes in freight rates or product market output. Lower demand for gas carriers, as well as other oating assets. A lower demand could ceteris paribus impact the freight rates and the number of o-hire days of our eet. This would impact our business and cash ows as well as the value of our eet and our nancial position. A signicant part of our eet is secured on long-term charters. Geographical diversication and a qualitative client portfolio and network through integration in the markets thanks to years of experience. We are a exible shipping Company aiming for structural quality and durability for our clients. With gas recognized as global intermediary fuel towards 2050, there will be continued LPG products generated, hence, safeguarding the supply of the relevant products we carry. Some of our MGCs are on leases with the exibility of purchase options throughout the contract: if market conditions would fundamentally change, we can simply not rebuy the vessel. POLITICAL ENVIRONMENT IN FOREIGN COUNTRIES Deterioration of the economic, legal and political circumstances in countries, including political, civil and military conicts. Such changes can from time to time result in attacks on ships, disruption of waterways, piracy, terrorism and other activities. Changes to economic, legal and or political circumstances could aect the trading patterns of LPG and LNG and could aect our eet and infrastructure assets, our result of operations and our ability to obtain nancing. Instability could result in a reduced demand for our services. It could also expose us to increased, additional or unexpected expenses to comply with changed laws and regulations and could aect our insurance expense or policy. Continuous assessment and monitoring of economic, political and legal circumstances in order to anticipate, limit or avoid any possible impact. Gathering information from authoritative and or industry organisations as well as from specialised consultants. Our insurance policy is regularly updated and includes among others protection and indemnity, hull and machinery and loss of income at insured values deemed to be appropriate to cover anticipated losses. Use of adequate charter contracts with industry charters (e.g. BIMCO) already to a large impact mitigate this risk. Many of our clients are oil/ gas companies with strong balance sheets and strong corporate governance which reduce political risk and possible defaults on charter payments. 90 I 4. CORPORATE GOVERNANCE STATEMENT B. Operational risks Description of risk Potential impact Limiting factors and control COMPETITION Competitors investing in LPG carriers, FSRUs or other oating assets through consolidation, acquisitions of second-hand or newbuildings. The process of obtaining a charter is highly competitive. Increased competition may cause greater price competition for time charter rates and might impact the price of vessels or other oating assets. This could have a material eect on our results and cash ows and the value of our eet and our nancial position. Dening a strategy with a long-term vision and consistent management of ongoing trends in the industry. Experience of our management/ chartering team and our Board of Directors. Investing in a variety of factors such as the quality of our operations, technical abilities and reputation, quality and experience of our crew and relationships within the industry. Long-term standing in the market with strong clientele often extending period charters thanks to our experience and in-house shipmanagement. Price is often determined by market forces so that experience and quality of services oered are key. CAPITAL ALLOCATION Inecient capital allocation and long-term vision and strategy, thereby reducing shareholders’ value. Inecient investment decisions and/or an inappropriate long-term investment strategy will have a direct negative impact on the group’s nancial resources (obtaining nancing, covenant compliance) and overall performance (revenues, EBITDA and impairment). EXMAR’s management and Board of Directors closely monitors this risk and regularly challenges its long-term strategy in view of market and business evolutions. Risk is spread over dierent markets, divisions and clients with dierent risk proles. Description of risk Potential impact Limiting factors and control RISKS ENTAILED IN THE OPERATION OF VESSELS AND OTHER FLOATING ASSETS Environmental accidents, epidemic diseases, work interruptions caused by mechanical defects, human error, war, terrorism, political actions in various countries, strikes and bad weather. Vessels not meeting certain performance standards. Any such event would harm our reputation as reliable shipping company and would result in increased costs and an increase of the number of o-hire days. The cost of urgent repairs are more unpredictable and can be very high. In case performance standards are not met the charterer could withhold a portion of the hire. Our experience within the industry and our policies and procedures such as our maintenance, HSEQ and training program should limit or avoid certain risks inherent in our business. All our vessels and assets are covered by adequate insurance. Demands of HSEQ and risk reporting are further scrutinized by our vessels in partnership (e.g. Seapeak). INCREASED OPERATING EXPENSES Operating expenses and maintenance expenses represent a substantial part of our cost. Operating expenses and drydock capital expenditures depend on a variety of factors which are outside our control and aect the entire shipping industry. Drydocking of vessels can also result in loss of income. Proactive in-house shipmanagement and a continuous internal and external inspection of our assets. Our maintenance policy is updated and improved on a day-to-day basis with the objective to maintain the highest quality levels. 4. CORPORATE GOVERNANCE STATEMENT I 91 Description of risk Potential impact Limiting factors and control FLEET AGE PROFILE As a ship ages class requirements become more stringent and compared to new modern ships the vessel will be less competitive and more expensive to operate. Age restriction can limit deployment opportunities of vessels in certain ports. We must make substantial capital expenditure to maintain the operational capacity of our eet. These expenditures could vary signicantly and can increase as a result of customer requirements, competitive standards and regulations or organizations standards. The average age of our eet is monitored and our strategy includes regular investments in new vessels to keep our eet competitive. Our in-house ship manager and commercial team have many years of experience to assess the operational and commercial performance. All our vessels are certied as “in class” by a classication society which is also a requirement for insurance coverage. Inspections of our eet are carried out on a day-to-day basis at sea or in port. Based on these inspections the continued maintenance plan of each vessel is created, updated and implemented. Especially in gas markets, safety and reliable operations are key so that requirements by our clients (oil/ gas companies) require us to oer vessels in top condition. Risk of age restriction in ports is mitigated by strong charter party terms and impose charterer deployment restrictions. Often, aged shipping units are cheaper in terms of freights and deployed in niche markets with less stringent age limitations. ASSETS UNDER CONSTRUCTION Specic risks apply to our assets under construction and include the solvency of our contractor as well as the timely delivery of the asset in accordance with all specications and securing all required permits. Failure by the shipyard to construct or deliver our assets under construction or bankruptcy by the shipyard would have a substantial impact on our nancial position and our results. In the event the shipyard does not perform and we are not able to enforce the refund guarantee we might lose all or part of our investment. Additionally we might fail to comply with our obligations towards the charterer. Advance payments are made to the shipyards and these payments are secured by refund guarantees and thus backed by strong banks. Progress of the construction and compliance with all technical and regulatory specications is closely monitored by our technical/ supervision teams on site at the shipyards. Charter contracts linked to newbuilding investments are often made back-to-back, meaning that the risk of late delivery of vessel is covered for by e.g. suitable lay-can provisions. EMPLOYMENT Vessels or other oating assets remain o-hire for a substantial period or charters are not renewed or terminated early. In case we cannot enter into protable long- term charters for our existing eet or our assets under construction our result, cash ows and nancial position might be substantially aected. We would be subject to a short-term or spot market or charters based on changing market prices. In addition it might be more dicult to obtain nancing for such assets at reasonable terms. In absence of long term employment of our main assets, our EBITDA and covenants might be substantially aected. Our management team and our commercial team have many years of experience and have an extensive network in the market. Our charter portfolio is very diversied. The commercial strategy is to remain exible in the market by having a good balance between long-term and short-term charters. A sizable eet in especially midsize (MGC LPG carriers) has been able to mitigate this risk almost in full. For the Infrastructure eet, proper termination clauses are negotiated and included in long- term charter agreements so that in case of early termination, the legal and commercial teams have sucient time to nd a new charterer at decent rates. 92 I 4. CORPORATE GOVERNANCE STATEMENT Description of risk Potential impact Limiting factors and control REGULATIONS New regulation could come into force, including the risk of a reversal of existing favorable tax regimes (such as the Belgian tonnage tax regime). Environmental law changes, including the imposition of other forms of taxation such as carbon tax, can also be implemented by public or other authorities. Regulatory changes could impact our ability to charter our vessels or oating assets and might increase expenditure to be made to comply with all requirements and legislation. Compliance with changes in laws, regulations and obligations relating to climate change could increase our costs related to operating and maintaining our vessels and require us to install new emission controls, acquire allowances or pay taxes. Revenue generation and strategic growth opportunities may also be adversely aected. Continuous monitoring and anticipation of changes in legislation and applicable requirements. Our in-house ship manager and our management team have many years of experience and an extensive network within the industry to monitor ongoing trends and changes. Often, regulations have long lead times for implementation oering us ample time to anticipate on these things. A global legal changed framework often aects the entire market eet, so that owners are confronted with same changes. Many of the changes also are the responsibility of the charterer given that mostly in industrial markets period/time charter contracts are used which mean that charterers are responsible for the voyage/fuel/port costs. CLIMATE CHANGE Climate change may adversely impact our operations and markets. Adverse eects of climate change, including growing public concern about the environmental impact of climate change, may aect the value of our eet, demand for our services and/or the public interest for our shares. In addition, the eects of climate change, including changes in weather patterns, extreme weather events, rising sea levels, scarcity of water resources, may negatively impact our cost structure, our operations or operations of service providers upon whom we depend, such as ports infrastructures. Any long-term material adverse eect on the industry could have a signicant nancial and operational adverse impact on our business that we cannot predict with certainty at this time. Our legal, commercial and technical teams are monitoring climate change regulations and related applicable requirements and potential impacts on our eet and overall business. Management has many years of experience and an extensive network within the industry to monitor ongoing changes. INFORMATION TECHNOLOGY SYSTEMS Information technology systems change rapidly and are fundamental for the day-to-day operations. The failure of key information technology systems or processes could adversely aect the operations or lead to data breaches. Cyber- attacks, ransomware or other security breaches could make information technology systems unavailable, interrupt our vessel operations and result in a loss of hire. A dedicated IT team monitors continuously the information technology changes and exposures. Several measures such as rewalls, anti-virus software and separated networks etc. are in place. An information technology risk assessment is performed on a regular basis. Policies and procedures are in place and include a disaster recovery plan, an incident response plan and a business continuity plan. 4. CORPORATE GOVERNANCE STATEMENT I 93 Description of risk Potential impact Limiting factors and control RAPID TECHNOLOGICAL INNOVATION IN VESSEL DESIGN AND EQUIPMENT Specic risks apply to our assets that designs/ equipment become obsolete because of technical/ technological progress and innovation. Assets become obsolete or uncompetitive in view with market practice and evolving standards. EXMAR has a strong position as innovator and has always managed to advance new designs/ size of ships to the market, and being regarded as pioneer in both shipping activities and oating solutions. Roots from shipbuilding, strong technical expertise and a separate technical desk and lots of engineers staed (Houston, Paris, and Antwerp) to make/improve asset designs ascertain that we can continue to be the best/rst in class. Mounting focus on ESG will only reinforce our drive towards innovation and apply high standards taking account of future changes in energy markets. OUTBREAK OF PANDEMIC DISEASE Our seafarers as well as the supplies are crucial for our operations, an outbreak of a pandemic virus (such as the recent COVID-19 pandemic) or contagious disease can complicate operations. An outbreak of a pandemic virus in any region or on a global scale would impact our operations. Local or international measures such as but not limited to travel bans, limited or no port access or quarantine measures following such outbreak, could complicate supplies for our oating assets and complicate embarking or even suspend the possibility for seafarer to embark. Such events could result in the asset to be o-hire and a loss of income for the asset or part of our eet. Specic and strict policies and procedures are in place for an isolated outbreak on board of an asset and our people are specically trained on how to deal with such event. Events and risks are continuously monitored by our operational teams who also participate in local and international associations and industry organizations to align with changes in requirements, ongoing guidelines and measures. Our operations are very diversied and our assets are deployed on a global scale, our seafarer are also sourced globally and neither dependent on one nationality or a specic region. Planning of our seafarer is exible and contracts can be extended if needed in case replacement is not immediately possible or available. A business continuity plan is available to respond to such event and the measures foresee the possibility to have all our shore based teams working remotely or even isolated. In case operations need to be stopped, some of our commercial agreements include clauses covering force majeure and in case of an o-hire event exceeding a specic number of days, our insurance policies cover temporary the loss of income. 94 I 4. CORPORATE GOVERNANCE STATEMENT Description of risk Potential impact Limiting factors and control COUNTERPARTY RISKS Dependency on a limited number of clients, we receive a considerable part of our income from a limited number of clients. Deterioration of the nancial viability of one of our signicant clients would lead to a signicant loss of income and cash ows. Obligations of clients under long-term charters can be secured by guarantees or other securities. Most of our signicant clients have been client of EXMAR for many years, our management team has the necessary experience and knows how to assess the operations and nancial viability of our clients. Furthermore, for the Infrastructure eet, proper termination clauses are negotiated and included in long-term charter agreements so that in case of early termination, the legal and commercial teams have sucient time to nd a new charterer at decent rates. Charterers can be in default or can become bankrupt. In case of the loss of a client our income and cash ows would be impacted. The costs of having to charter out the vessel can be high and the market conditions can be unfavorable. Our customer base is diversied and consists of major companies active in the oil and gas market. Extensive credit checks are performed for new clients and additional securities or guarantees are requested if deemed necessary. Charter hire is in most cases payable in advance as period contracts are the most used employment contract. Dependence on third party service providers. The third-party service providers the Company has selected may not provide a standard of service comparable to that of the Company if it would directly provide such service. The Company relies on its third-party service providers to comply with applicable law, and a failure by such providers to comply with such laws may subject the Company to liability or damage its reputation and could have a material adverse eect on the Company’s reputation and business. EXMAR currently outsources to third party service providers certain management services of its eet as well as its internal audit function. Contractual agreements between all parties involved exist. The contractual agreements are included in the contract management system and monitored on a periodic basis. On a periodic basis, detailed supplier evaluations (including third party service providers) are performed. Risks related to the joint ventures and associated companies may adversely aect the Company’s operations, business and results of operations. Views from the other partner(s) may not be in line with EXMAR’s views, as a result of which specic treatment of the risks may be limited or even prevented. The dierent approaches to these risks may lead to consequences other than those which EXMAR would have incurred or would have wished to incur, which may adversely aect EXMAR’s operations, business and results of operations. Non-alignment on operational, nancial or commercial issues could aect long term cooperation with our joint venture and associate partners. EXMAR provides general, accounting, corporate, site supervision and shipmanagement services to its joint ventures and associated companies. For these services, fees are charged based on contractual agreements between all parties involved. In addition, EXMAR has a long lasting relationship with its main joint venture partner, Seepeak (former Teekay LNG Partners). C. Financial risks 4. CORPORATE GOVERNANCE STATEMENT I 95 Description of risk Potential impact Limiting factors and control FINANCING EXMAR is subject to restrictions on credit agreements, such as nancial covenants and restrictions for EXMAR and its subsidiaries to take on further debts, distribute dividends, undertake certain investments, and sell part of its business without the consent of its lenders. The existing nancing arrangements for our eet are secured by the vessels and parent company guarantees and contain restrictions and other covenants that may restrict our business and nancing activities. Any default could result in the acceleration of the maturity date and lenders could call on the guarantees of these facilities. Our cash ows and our nancial position, including the requirements under the nancing agreements, are continuously monitored. Our nancing strategy aims for a diversication of nancing resources and a spread of maturity dates. A dialogue is maintained with dierent investors and nancial partners in order to build a long-term relationship. On 31 December 2021, all applicable nancial covenants under the nancing arrangements are complied with. Financing to be obtained for assets under construction, operational assets and existing nancing arrangements to be renanced at maturity date. Impossibility to nance or renance our assets under construction and our existing eet would have a substantial impact on our nancial position. The nancing possibilities and the cost of nancing can be volatile and dependent on the overall economic circumstances. Financing is inherent in our activities and investments. Our management team has numerous contacts and support of dierent nancing partners and has many years of experience in obtaining nancing for a variety of activities and investments. In shipping, there are often dierent candidates (e.g. in Japan) willing to oer lease/bareboat schemes. INTEREST AND EXCHANGE RATES A signicant portion of our nancing arrangements has a variable interest rate. The majority of our operations are in USD but certain operating costs are expressed in dierent currencies (primarily in EUR) and a portion of our nancial debt is in NOK. An increase of the interest rates on the international nancial markets would negatively impact our results and cash ows and could negatively impact the fair value of nancial instruments used to hedge the interest rate exposure. A weakening of the USD compared to the EUR would negatively inuence our results. Additional cash guarantees might be required. The interest rate exposure and the foreign currency exposure are actively managed and various instruments will be used to cover an appropriate part of the exposure (e.g. IRS contracts). Fluctuations in the fair value of hedging instruments represent a non-realized non-cash item. IMPAIRMENT Negative variations in the fair market value of our eet and other oating assets. A signicant decline in the fair value of our eet could lead to an impairment loss to be recognized and would have a signicant impact on our nancial position and result. The ratio of the fair value of our eet compared to the outstanding debt is a nancial covenant in our nancing arrangements. Our activities tend to be cyclical resulting in changes in the overall fair value of the eet on the short-term. A signicant decline could trigger an event of default under such arrangements. The value of our eet is continuously monitored using internal and external information and at least on each reporting date our eet is tested for impairment. Testing is done by comparing the carrying amount of our eet to appraisals of independent shipping brokers and to the net present value of the expected operating cash ows. The operating cash ows are based on internal information and a sensitivity analysis is performed on each assumption. Based on the testing performed as of 31 December 2021 it is concluded that the amount after impairment of our eet is recoverable and that all nancial covenants under our nancing arrangements are complied with. Previously recorded impairments on the older vessels and the aircraft were partially reversed during 2021 upon their sale and/or classication as held for sale. 96 I 4. CORPORATE GOVERNANCE STATEMENT Description of risk Potential impact Limiting factors and control LIQUIDITY RISK Financial obligations and working capital requirements can vary depending upon a number of factors. Our cash generating activities can be cyclical/ volatile and dependent upon market circumstances while our outgoing cash ows can relate to operating, investing or nancing activities. Any failure to meet our nancial obligations could have material consequences for our operations and could trigger events of default under certain arrangements. Liquidity is managed on a continuous basis to ensure that sucient funds are available to meet our nancial obligations when due under normal and stressed conditions. Based on our known contractual rights and obligations and using estimates or assumptions if needed, a monthly cash ow forecast is prepared and monitored per segment and for at least the subsequent 12 months. Our sources of operating income as well as our sources of nancing are diversied. Payments relating to investing activities and our maturities of bank and other loans are also spread over dierent years. REMUNERATION REPORT 2021 1. General The Remuneration Report describes the application of the principles applied by EXMAR for the remuner- ation of its directors and executive managers. It has been drafted in compliance with the provisions of the legislation adopted by the Belgian Parliament on 28 April 2020 and published on 6 May 2020 for the implementation of the Second Shareholders’ Rights Directive (SRDII), the Belgian Code of Companies and Associations (BCCA) and the Belgian Corporate Governance Code 2020 (Code 2020). 2. Description of the procedures to develop the remuneration policy as well as to determine the remuneration of individual directors and members of the Executive Committee The remuneration policy is adopted by the Board of Directors, upon recommendation of the Nomi- nation and Remuneration Committee, whose role and responsibilities are described in the Corporate Governance Charter adopted by EXMAR. The policy, aligned to the new dispositions of the SRDII, BCCA and Code 2020, was approved by the Annual General Meeting of Shareholders of 18 May 2021. EXMAR strives for remuneration which will attract, motivate, reward and retain the qualied professionals for the Board of Directors and the Executive Com- mittee needed to obtain the Company’s operational and strategic objectives and to promote long-term sustainable value creation. EXMAR attempts to ensure that the members of the Board of Directors and of the Executive Committee do not act in their own interests, and/or do not take risks that do not t in with the Company’s strategy and risk prole. 3. Remuneration for non-executive directors The remuneration of the non-executive directors is decided by the General Meeting of Shareholders on a proposal from the Board of Directors. This proposal is based on the recommendations of the Nomination and Remuneration Committee. The remuneration of the non-executive directors takes into account their responsibilities, their role as Board member, the workload and specic roles such as chairman of the Board, or chairman or members of Board committees. All non-executive directors receive an annual xed fee of EUR 50.000. No attendance fees are being paid. Members of the Audit and Risk Committee and/or the Nomination and Remuneration Committee receive a supplementary xed fee of EUR 10.000. The annual payments are pro-rated according to the number of months served as an active board member or member of a committee during the calendar year. 98 I 4. CORPORATE GOVERNANCE STATEMENT Because of their roles and responsibilities, the an- nual xed fee for the chairman of the Board and the chairman of each of the Committees is equal to twice the fee of the other members of the Board or the Committees except for the Nomination and Remuner - ation Committee. The Company provides customary insurance policies covering the Board of Directors’ activities in carrying their duties at group level. The non-executive directors do not receive perfor- mance-based remuneration or any benets in kind or benets associated with pension schemes. In deviation of provision 7.6 of the Code 2020 non-ex- ecutive directors do not receive part of their remuner - ation in the form of shares of the Company. EXMAR is of the opinion that granting remuneration in shares (in part or in whole) would not necessarily contribute to enabling the directors to act from the perspective of a long-term shareholder value and risk prole of the Company. The Company will, at regular intervals, reconsider this issue. Directors are appointed by and the length of their terms is approved by the General Meeting of Share - holders for a maximum of three years. They are not entitled to any notice periods or severance indemnities in relation to the termination of their mandates. They are at all times subject to dismissal by the General Meeting of Shareholders. 4. Remuneration for executive directors The executive directors of EXMAR who are a member of the Executive Committee are only remunerated in their capacity as executive and not in their capacity as director/member of the Board. This applies also for board memberships of subsidiaries. If executive direc- tors are remunerated for their role in subsidiaries, this remuneration is part of their agreed global package. 5. Overview of the remuneration of the members of the Board of Directors for 2021 (in EUR) Fixed Remuneration Audit and Risk Commitee Remuneration Nomination and Remuneration Committee Remuneration Total Nicolas Saverys Chairman 100,000 100,000 FMO BV (Francis Mottrie) CEO - 0 JALCOS NV (Ludwig Criel) until 1/7/2021 non-executive Director 25,000 10,000 5,000 40,000 ACACIA I BV (Els Verbraecken) as from 09/09/2021 non-executive Director 15,616 3,123 3,123 21,863 Maryam Ayati as from 09/09/2021 non-executive Director 15,616 15,616 Michel Delbaere non-executive Director 50,000 10,000 60,000 Isabelle Vleurinck non-executive Director 50,000 10,000 10,000 70,000 Wouter De Geest non-executive Director 50,000 10,000 60,000 Baron Philippe Vlerick non-executive Director 50,000 13,164 63,164 Pauline Saverys until 18/05/2021 non-executive Director 18,923 18,923 Stephanie Saverys as from 18/05/2021 non-executive Director 31,077 31,077 Barbara Saverys until 27/07/2021 non-executive Director 28,699 28,699 Carl-Antoine Saverys as from 18/05/2021 executive Director 31,077 31,077 Ariane Saverys until 18/05/2021 non-executive Director 18,923 18,923 Total 484,931 46,288 28,123 559,342 4. CORPORATE GOVERNANCE STATEMENT I 99 6. Remuneration for the members of the Executive Committee and Nicolas Saverys (SAVEREX NV) In line with EXMAR’s total reward principles, the form and level of the Company’s executive remuneration are aligned to company performance and individual skills and performance. The remuneration package is composed of three main elements: • the xed annual remuneration, • the short-term variable remuneration (STI – short term incentive) • the long-term variable remuneration (LTI- long term incentive). The level and structure of the compensation packages are aligned with market practices for similar functions at comparable companies. Overview of the remuneration of the CEO and Nicolas Saverys (SAVEREX NV) for 2021 (in EUR) Overview of the remuneration of the other members of the Executive Committee for 2021 (in EUR) Name Company Fixed Remune- ration STI LT I Pension benet Other insurances Other benets Total NICOLAS SAVERYS (SAVEREX NV) Nicolas Saverys SAVEREX NV 855,535 - - 40,169 2,387 8,877 906,968 94% 0% 0% 4% 0% 1% 100% CEO Francis Mottrie CEO FMO BV 575,000 - - - - - 575,000 100% 0% 0% 0% 0% 0% 100% * hospitalisation insurance, travel insurance ** Car, cell phone Name Company Fixed Remune- ration STI LT I Pension benet Other insurances Other benets** Total OTHER MEMBERS OF THE EXECUTIVE COMMITTEE Patrick De Brabandere CFO until 30/06/2021 Self employed 254,940 - - 25,953 5,720 8,559 295,172 86% 0% 0% 9% 2% 3% 100% Christine Verhaert CFO as from 01/07/2021 FINMORE BV 210,000 - - - - - 210,000 100% 0% 0% 0% 0% 0% 100% Jens Ismar Managing Director Shipping LISANN AS (Norway) 575,040 - - - - - 575,040 100% 0% 0% 0% 0% 0% 100% Jonathan Raes Managing Director Infrastructure FLX Consul- tancy BV 275,000 - - - - - 275,000 100% 0% 0% 0% 0% 0% 100% * hospitalisation insurance, travel insurance ** Car, cell phone 100 I 4. CORPORATE GOVERNANCE STATEMENT Fixed annual remuneration The xed annual remuneration includes a xed annual base remuneration taking into account the responsibilities, skills, experience and performance of the executive manager. Other benets, such as medical care, health insurance plan, death and disability coverage and other benets are also pro- vided according with market practices to executives with a self-employed or employee status. The xed annual remuneration is reviewed annually and may increase or decrease considering several factors, like change of scope and responsibilities, comparable remuneration in other companies. The global package for executives with a self- employed status reects the total cost for the Company, with the executives being responsible for their own tax and social security payments. Short-term variable remuneration (STI) The short-term variable remuneration is a non- deferred cash incentive based on the achievement of specic individual performance (for 25%) and company performance targets (for 75%), nancial targets (such as REBIT, REBITDA, net income,…) and/or non-nancial targets for a reference period of one year. Each of the criteria is developed and calibrated on an annual basis in line with company strategy, budget and targets, with clear performance indicators. Above target performance (100%) results in a short-term variable remuneration. The maximum short-term incentive is capped at 30% of the xed annual remuneration for the CEO and 25% for the other executive managers. In case of a major environmental issue or in case the net result of the Company is negative, all STI amounts are reduced to zero (gateway to STI). Payment of the STI will be conditional of employment up to the payment date. On recommendation of the Nomination and Remuner- ation Committee, the Board of Directors can approve a possible discretionary STI to one or more executive directors or managers in case of extraordinary cir- cumstances or extraordinary performance, over and above the levels mentioned in the previous paragraph. For 2021, no short-term variable remuneration was awarded. Long-term variable remuneration EXMAR works towards creation of sustainable eco- nomic value by means of long-term remuneration (LTI). The LTI consists of a deferred cash or share-based 4. CORPORATE GOVERNANCE STATEMENT I 101 compensation based on the achievement of perfor - mance targets (as dened below) for the upcoming three years (2021-2023). The long-term incentive target is also expressed as a percentage of the annual xed remuneration and is reviewed periodically. At target level long-term incentives represent 20% of xed annual remuneration for the CEO and 15% of xed annual remuneration for the other executive managers. The cumulative long-term variable incen- tive over the three-year reference period is capped at 50% of the xed annual remuneration for the CEO and 40% of xed annual remuneration for the other executive managers. The level of the LTI is based on following nancial criteria: • The difference of the Net Asset Value of the Company calculated on 31 December and • the market capitalization of the Company at the same date, each yearly measurement to be worth 1/3 of the award. The performance between the pre-dened threshold and the target will be measured and awarded on the basis of a linear scale. The amount vested will be nally paid in cash or in shares (at the average share price of the 30 days preceding the vesting date) at the discretion of the Board on the proposal of the Nomination and Remu- neration Committee as of the third anniversary to the beneciary and will be conditional of employment up to the payment date. Minimum threshold of shares to be held by the executive managers In deviation of provision 7.9 of the Code 2020 the Board of Directors does not set an explicit mini- mum threshold for the holding of EXMAR shares for the members of the Executive Committee. EXMAR believes that, through its current remuneration policy, it establishes a clear link with the long-term strategy and performance of the Company. Malus and claw-back clauses The Nomination and Remuneration Committee has considered the feasibility of claw-back and malus conditions in its variable pay plans. Given the uncertainties on the validity and interest of claw-back clauses under Belgian law, EXMAR has currently not introduced claw-back provisions on performance- related payments, except in case of fraud or miscon- duct. In the event that any variable remuneration would be paid based on incorrect nancial data, such miscalculation could be compensated with repay- ment or o-set from the payment of future variable remuneration. Contractual arrangements The members of the Executive Committee and the executive directors have entered into a formal contract with the Company. Such contracts were entered into for an indenite term, with termination arrangements not exceeding 12 months of xed remuneration. Members of the Executive Committee bound by a Management Agreement need to nance their pension plan through their management company. Those who were self-employed are enrolled into a dened contribution plan paid by the Company. The Board of Directors, upon recommendation of the Nomination and Remuneration Committee, and the CFO, Mr. Patrick De Brabandere, agreed in mutual understanding to terminate the collaboration with Mr. De Brabandere with eect from 1 July 2021. Pay ratio The ratio between the highest remuneration (CEO) and the lowest remuneration (in full-time equivalent) is a factor 11.93. Lowest paid employee is dened as a full time employee in Belgium and holds the lowest base salary on the year-end. The actual total remuneration is considered in the calculation of the ratio. The ratio between the highest remuneration (CEO) and the average remuneration is a factor 6.44. The average remuneration of the employees takes 102 I 4. CORPORATE GOVERNANCE STATEMENT Remuneration and Company performance over ve years 2017 % var. 2018 % var. 2019 % var. 2020 % var. 2021 % var. Global remuneration board of directors and executive committee Global remuneration of the Board of Directors (1) (2) (in thousands of EUR) 580 -9% 580 0% 650 12% 600 -8% 580 -3% Global remuneration of the CEO (3) (4) (in thousands of EUR) 1,937 87% 2,097 8% 998 -52% 1,876 88% 575 -69% Global remuneration of the other members of the Executive Committee (4) (in thousands of EUR) 3,409 23% 2,991 -12% 2,493 -17% 1,530 -39% 1,355 -11% Financial performance of the Company Net result for the period (in thousands of USD) 27,952 -31% -16,070 -157% -13,202 -18% 91,960 -797% 11,635 -87% EBITDA for the period (5) (in thousands of USD) 141,393 21% 67, 3 7 1 -52% 100,915 50% 239,855 138% 113,486 -53% Adjusted EBITDA for the period (5) (in thousands of USD) 44,693 -52% 36,471 -18% 80,400 120% 77,655 -3% 56,185 28% EBIT for the period (5) (in thousands of USD) 70,040 0% 22,017 -69% 34,377 56% 137,646 300% 36,975 -73% Net nancial indebtedness/ adjusted EBITDA (5) 11.30 88% 15.32 36% 7.0 1 -54% 6.28 -10% 8,76 39% Average remuneration (6) (in thousands of EUR) 96 5% 99 3% 100 1% 98 -2% 89 -8% (1) including Audit and Risk Committee and Nomination and Remuneration Committee (2) annualised to allow a meaningful comparison (3) including the remuneration of the executive chairman and deputy CEO in 2020 (4) excluding share options granted (5) proportionate consolidation method (6) total cost to the company, taking into account the actual wages at year-end basis full-time equivalent, divided by the number of full-time equivalents at year-end into account the total actual wages at year end basis full-time equivalent, divided by the number of full- time equivalents at year-end. The main dierence in remuneration policy between the executive management and employees in general, is the balance between xed and performance-related remuneration such as STI and LTI. Overall, the impact of performance-related remuneration, in particular longer-term incentives, is of more importance for the executive management. This reects that executive managers have greater freedom to act and the consequences of their decisions are likely to have a broader and more far-reaching time span of eect. 4. CORPORATE GOVERNANCE STATEMENT I 103 Share Options The members of the Executive Committee benet from the share option plans as previously approved by the Board of Directors. On the basis of the recommendations of the Nomination and Remuneration Committee the Board of Directors decided not to award share options for the year 2021. MAIN PLAN CHARACTERISTICS MOVEMENTS OVER 2021 Plan Name Oer date Grant date Vesting date End exercise period Num- ber of options granted Exercise price (in €) Number of SOP start of year For- feited/ expired Exerci- sed Number of SOP end of year Nicolas Saverys - Executive Chairman EXMAR TR8: 3/12/2013 10,54 EUR 2013-2021 03/12/2013 31/01/2014 01/01/2017 02/12/2021 60,000 10.54 60,000 60,000 0 0 EXMAR TR9: 9/12/2014 10,54 EUR 2014-2022 09/12/2014 06/02/2015 01/01/2018 08/12/2022 60,000 10.54 60,000 0 0 60,000 EXMAR TR10: 17/12/2015 9,62 EUR 2015-2023 17/12/2015 15/02/2016 01/01/2019 16/12/2023 60,000 9.62 60,000 0 0 60,000 TOTAL 180,000 60,000 0 120,000 Patrick De Brabandere - CFO until 30/06/2021 EXMAR TR8: 3/12/2013 10,54 EUR 2013-2021 03/12/2013 31/01/2014 01/01/2017 02/12/2021 40,000 10.54 40,000 40,000 0 0 EXMAR TR9: 9/12/2014 10,54 EUR 2014-2022 09/12/2014 06/02/2015 01/01/2018 08/12/2022 40,000 10.54 40,000 0 0 40,000 EXMAR TR10: 17/12/2015 9,62 EUR 2015-2023 17/12/2015 15/02/2016 01/01/2019 16/12/2023 40,000 9.62 40,000 0 0 40,000 TOTAL 120,000 40,000 0 80,000 Jonathan Raes - Executive Director Infrastructure EXMAR TR8: 3/12/2013 10,54 EUR 2013-2021 03/12/2013 31/01/2014 01/01/2017 02/12/2021 2,500 10.54 2,500 2,500 0 0 TOTAL 2,500 2,500 0 0 104 I 4. CORPORATE GOVERNANCE STATEMENT 5 FINANCIAL REPORT 5.1 ANNUAL REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERS 107 5.2 CONSOLIDATED FINANCIAL STATEMENTS 115 5.3 STATUTORY FINANCIAL STATEMENTS 187 108 I 5. FINANCIAL REPORT 5. FINANCIAL REPORT I 108 5.1 ANNUAL REPORT OF THE BOARD OF DIRECTORS TO SHAREHOLDERS 5.2 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF CASH FLOWS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY NOTES 1 Accounting policies 2 Segment reporting 3 Reconciliation segment reporting 4 Revenue 5 Vessel expenses 6 General and administrative expenses 7 Personnel expenses 8 Finance income / expenses 9 Income taxes 10 Vessels and barges 11 Other property, plant and equipment 12 Intangible assets 13 Right- of- use assets 14 Investments in equity accounted investees 15 Financial information equity accounted investees 16 Borrowings to equity accounted investees 17 Assets held for sale 18 Other investments 19 Trade and other receivables 20 Tax assets and liabilities 21 Restricted cash and cash and cash equivalents 22 Share capital and reserves 23 Earnings per share 24 Borrowings 25 Share based payments 26 Employee benets 27 Trade and other payables 28 Financial risks and nancial instruments 29 Leases 30 Capital commitments 31 Contingencies 32 Related parties 33 Group entities 34 Fees statutory auditor 35 Covid-19 36 Subsequent events SIGNIFICANT JUDGEMENTS AND ESTIMATES STATEMENT ON THE TRUE AND FAIR VIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FAIR OVERVIEW OF THE MANAGEMENT REPORT STATUTORY AUDITOR’S REPORT TO THE SHAREHOLDERS’ MEETING OF EXMAR NV FOR THE YEAR ENDED 31 DECEMBER 2021 - CONSOLIDATED FINANCIAL STATEMENTS 5.3 STATUTORY FINANCIAL STATEMENTS 5. FINANCIAL REPORT I 109 ANNUAL REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERS The Board of Directors hereby submits the combined annual report on the individual and consolidated annual accounts of EXMAR NV (the “Company”) dated December 31, 2021 in accordance with articles 3:6 and 3:32 of the Belgian Code of Companies and Associ- ations (“BCCA”). The Company must publish its annual accounts in accordance with the stipulations of the Royal Decree dated November 14, 2007 concerning the obligations of issuers of nancial instruments who are entitled to trade on the Belgian regulated market. Any elements that are applicable to the Company in accordance with the BCCA and the above-mentioned Royal Decree shall be covered in this report and in the Corporate Governance Statement. This annual report should consequently be read in conjunction with EXMAR’s 2021 report. At this time of writing, the escalating conict in Ukraine is already causing great uncertainty to 2022 not only from a human aspect, but also in terms of the stability of global energy markets. In this context, EXMAR remains committed to play its role in the energy value chain with its oating solutions for the export and import of gas. The potential impact on its activities is being monitored on a daily basis. For completeness, we can conrm that none of our vessels are active in risk areas or under contract with parties subject to international sanctions related to this conict. Furthermore, utmost eort is done to manage the logistical challenges in a humane way, both on shore and oshore. COMMENTS ON THE CONSOLIDATED ANNUAL ACCOUNTS The consolidated annual accounts were prepared in accordance with International Financial Reporting Standards (IFRS). Below comments are based on the consolidated annual accounts prepared in accordance with IFRS, whereby the joint ventures are accounted for under the equity method. In 2021, the EXMAR Group achieved a consolidated prot of USD 11.6 million (USD 92.0 million in 2020). Revenue decreased signicantly in 2021, primarily because 2020 included a settlement fee of YPF (USD 149.1 million) on the TANGO FLNG which remained unemployed in 2021 and cancellation fees of USD 13.0 million related to ship management agreements with Excelerate Energy, partially oset by an early termination fee on the cancellation of the FSRU S188 charter agreement by Gunvor in April 2021 and the employment of the two new VLGC’s in the 2 nd half of 2021. In general, operating expenses decreased as a result of the unemployment of the two LNG barges for the largest part of the year and lower depreciation charges (2020 was impacted by a one-time depreciation charge of YPF contract-related costs), except for the impairment losses as 2021 included an impairment loss of USD 19.0 million on the FSRU S188 following its unemployment. 5.1 110 I 5. FINANCIAL REPORT Net nancial result improved thanks to lower inter- est expenses and the favorable evolution of foreign currency gains due to the weakening of the EUR and NOK versus the USD. The share of equity accounted investees increased from a loss of USD -17.8 million to a prot of USD 21.8 million in 2021: 2020 included an impairment loss of USD 30.5 million on several older vessels, while 2021 included USD 3.2 million impairment reversals following the (planned) sale of three vessels. Vessels and barges amounted to USD 648.4 million end 2021, an increase of USD 87.0 million, which is the combined eect of the acquisition of the two new VLGC’s (total investment of USD 162.8 million of which USD 33.2 million was prepaid in 2020) for USD 129.6 million, capitalized dry dock expenses (USD 5.7 million), partially oset by USD 29.3 million depreciations and USD 19.0 million impairment loss recorded on the FSRU S188. The non-current receivables of USD 24.4 million in 2020 contained the portion of the YPF settlement fee due in 2022. Investments in equity accounted investees in- creased by USD 21.4 million up to USD 94.7 million end 2021, primarily as a result of our share in the net result of these joint ventures and associated companies. The borrowings to equity accounted investees (both non-current and current) amounted to USD 32.3 million end 2021 and comprise the shareholder loans to our associated companies and joint ventures. During 2021, EXMAR LPG repaid USD 10.0 million. Per December 31, 2021, USD 15.4 million was presented as short-term of which USD 7.5 million was received early 2022. Assets held for sale contain the aircraft for which a binding sales oer was received and consequently USD 2.5 million previously recorded impairment losses were reversed. The decrease in current trade and other receivables of USD 52.5 million is a result of the payment of USD 85.3 million settlement fee YPF, partially oset by the reclassication of USD 24.4 million from non-current to current, in accordance with the YPF agreed payment schedule. The total outstanding receivable balance thus amounted to USD 55.2 million end 2021. The total cash position on December 31, 2021 amount- ed to USD 147.3 million (2020: USD 103.8 million). Restricted cash relates to the credit facility with Bank of China for the TANGO FLNG (“debt service reserve account”) and amounted to USD 76.1 million (2020: USD 75.6 million). Equity amounted to USD 536.5 million end 2021, or a decrease of USD 9.4 million primarily as a result of the payment of USD 20.8 million dividend, partially compensated by USD 11.6 million prot of the year. End 2021 borrowings (non-current and current) amounted to USD 424.8 million (2020: USD 341.6 million). The increase of USD 83.2 million is mainly explained by the new nancing of the two VLGC’s (USD 144.0 million), partly oset by USD 64.1 million repayments of loans. Trade and other payables amounted to USD 37.2 mil- lion end 2021 and remained stable compared to 2020. 5. FINANCIAL REPORT I 111 COMMENTS ON THE STATUTORY FINANCIAL STATEM E NTS The statutory accounts were prepared in accordance with Belgian GAAP and accounting principles were consistently applied. These accounts will be presented for approval to the General Meeting of Shareholders on May 17, 2022. The below comments cover the main items of the statutory annual accounts: The operational result amounted to USD -4.5 million in 2021 (2020: USD -6.6 million). Financial result improved from USD -77.4 million in 2020 to USD -23.9 million in 2021: 2020 included USD 86.5 million impairment losses on intercompany shareholder’s loans. In 2021, an amount of USD 43.1 million additional impairment losses was recorded on such intercompany loans, of which USD 8.7 million via a provision for nancial guarantees. The statutory result for the nancial year amounts to a loss of USD -28.6 million in 2021, compared to a loss of USD -84.0 million in 2020. At the end of 2021, the total assets amounted to USD 675.1 million (2020: USD 708.1 million), including USD 541.7 million nancial xed assets (2020: USD 608.9 million). Equity amounted USD 564.2 million at the end of 2021 (2020: USD 598.2 million) and decreased by the loss of the year of USD 28.6 million and the proposed dividend distribution of USD 5.4 million. The provisions increased by USD 9.5 million mainly due to a provision for nancial guarantees given to intra-Group companies (USD 8.7 million – see above). Liabilities amount to USD 101.0 million end 2021 compared to USD 109.6 million in 2020. At the General Meeting of Shareholders on 17 May 2022, the Board of Directors will propose to distribute a gross dividend of EUR 0.08 per share and to allocate the result of the year as follows: Prot carried forward: USD 221,081,116.78 Loss of the nancial year: USD -28,633,986.45 Transfer to reserves: USD -3,387,143.69 RESULT TO APPROPRIATE: USD 189,059,987.64 Dividend payable: USD 5,391,176.00 Result to carry forward: USD 183,668,811.64 RISK FACTORS As described in the Corporate Governance Statement. NON-FINANCIAL INFORMATION As described in chapter 3.1 ESG of the EXMAR 2021 report. SUPPLEMENTARY INFORMATION Research and Development As described in chapter 3.1 ESG of the EXMAR 2021 report. Employees On December 31, 2021 EXMAR’s global sta comprised 1,849 employees, including 1,615 crew at sea (2020: 2,094, including 1,844 crew at sea). Many of the crew at sea are employed on assets owned or operated by our equity accounted invest- ees; the corresponding expenses are not included in EXMAR’s consolidated personnel or crew expenses but presented as vessel expenses in EXMAR’s equity accounted investees. 112 I 5. FINANCIAL REPORT Acquisition or sale of treasury shares There were no such transactions in 2021. We refer to the Corporate Governance Statement. On December 31, 2021 EXMAR owned 2,273,263 own shares, representing 3.82% of the total number of shares issued. Justication of the Accounting Principles The accounting principles applied during the closure of the statutory annual accounts do not dier from the accounting principles applied during the previous nancial year. A summary of the accounting princi- ples of valuation is attached to the statutory annual accounts. For the consolidated nancial statements please refer to the section on valuation principles for the consolidated annual accounts. Defensive Mechanisms Described in the Corporate Governance Statement. Branch oces EXMAR NV has no branch oces. Stock Option Plan So far, the Board of Directors has decided on ten occasions (10 plans) to oer a number of employees of the EXMAR Group options on existing shares. As of December 31, 2021 only two plans are still open (we also refer to Note 25 Share based payments of the consolidated annual report): Plan 9 Plan 10 Date of oer: December 2, 2014 December 4, 2015 Number of outstanding options: 336,100 333,250 Exercise period: January 1, 2018 until December 2, 2022 January 1, 2019 until December 3, 2023 Exercise price in EUR: 10.54 9.62 Additional activities carried out by the Statutory Auditor During the past nancial year, the Statutory Auditor or companies or persons related to the Statutory Au- ditor, have been involved in audit related matters and has provided limited tax services for the Group. The non-audit fees did not exceed the Group audit fees. Financial instruments The long-term vision, that is typical of EXMAR’s ac- tivities, is accompanied by long-term nancing and therefore EXMAR’s activities are also exposed to oating interest rates. EXMAR actively manages this exposure and if deemed appropriate could cover itself for rising interest rates for a part of its debt portfolio by means of various instruments. The Group’s cur- rency risk is historically mainly aected by the EUR/ USD ratio for manning its eet, paying salaries and all other personnel related expenses. As per December 31, 2021, the Company had no nancial instruments in place to cover the EUR/USD. EXMAR Netherlands BV completed an unsecured bond issue of NOK 650 million in 2019. In order to monitor the currency risk, the Group uses a range of foreign currency rate hedging instruments if deemed necessary. As per December 31, 2021, the Company purchased NOK 240.0 million forwards to USD 26.3 million, which resulted in a fair value gain of USD 0.9 million (which is recorded o-balance in the Belgian statutory accounts). 5. FINANCIAL REPORT I 113 Application of article 7:96 of the Belgian Code of Companies and Associations There were no conicts of interest at the level of the Board of Directors. Signicant events after balance sheet We refer to Note 36 Subsequent events of the con- solidated annual report. OUTLOOK Shipping: Very Large Gas Carriers (VLGC) The two newbuild dual-fuel VLGC’s, FLANDERS IN- NOVATION and FLANDERS PIONEER were delivered in June and September 2021 respectively and shortly thereafter their long-term charter with Equinor ASA from Norway started. With the large capacity and the dual fuel LPG engine, these vessels represent the best technology available today with respect to reducing greenhouse gas emissions. The jointly controlled VLGC BW TOKYO performed well in the course of 2021, mainly covered by a time charter with major LPG trader Tragura. At the end of the year the vessel joined the BW VLGC pool. Midsize Gas Carriers (MGC) During 2021, 33% of EXMAR’s Midsize eet was ded- icated to transporting ammonia and 67% to LPG. For 2022 the ammonia share is expected to increase up to 40%. EXMAR, which has a 50 / 50 joint venture with Seapeak (previously Teekay LNG Partners) for the Midsize eet, continues to build on its existing loyal customer base with extensions of existing time charter contracts at rewarding levels. At the beginning of 2022, 79% of EXMAR’s Midsize eet has already been committed to these clients for 2022. Pressurized West of Suez, renery runs increased in 2021 after a market dip in 2020 due to the pandemic impacting demand. This in turn had a positive eect on vessel utilisation and rates in the pressurized segment. Pre-pandemic market levels have been reached again and going forward, 2022 is expected to oer equally rm prospects. EXMAR’s pressurized eet of ten ships remained dedicated to well-established industrial and long- term partners, both in North-West Europe and in Asia. Consequently, the time charter cover for 2022 already stands at 76% at improved levels compared to last year. Liqueed Natural Gas (LNG) EXMAR currently owns one LNG carrier, EXCALIBUR (2002 built) in its eet in joint venture with Seapeak. The vessel successfully continued under her long-term time charter until end of December 2021 when she was redelivered. Various options are being explored to deploy the ship in upstream infrastructure projects as an FSU/FSRU, as well as for chartering alternatives. The end of 2021 enjoyed spot and time charter freight markets at historically high levels on the back of substantial LNG imports into China and Japan. Spot levels for steam turbine LNG carriers reached earnings well over USD 100,000 per day in the last quarter until correcting downwards. It is expected that 2022 will remain a rewarding year for modern large LNG carriers albeit with freight quoted at more moderate levels. Infrastructure: Floating LNG barges TANGO FLNG has been safely and securely laid up in Nueva Palmira, Uruguay. Being promoted as a fast track solution to develop LNG exports, continued eorts are being made to re-employ the oating barge. In the meantime, personnel both on board and ashore are keeping the unit on standby and con- tinuously improving its operations and maintenance management systems. For FSRU S188, EXMAR and GASUNIE announced in March 2022 an agreement for a ve-year charter for the employment of the regasication barge, and as such they join forces in enhancing European energy security. GASUNIE will use the regasication barge as oating LNG import terminal at Eemshaven in Groningen, the Netherlands. Accommodation barges Despite the dicult working circumstances caused by the pandemic, the accommodation barges NUNCE and WARIBOKO have conrmed their reputation of high standard services to their customers in the West Africa oshore region. 114 I 5. FINANCIAL REPORT NUNCE has conrmed its reputation of 100% uptime and is contracted with Sonagol until June 2022. WARI- BOKO resumed employment in Nigeria in February 2021 which has lasted until end of July, with alternative employment now being sought for the unit. Current oil and gas prices are expected to have a positive impact on project development in exploration and production and the need for oating accommo- dation and work barges. The demand for oshore/ platform supply vessels appears getting stronger in West Africa and the crash of oil and gas prices in 2020 has caused several suppliers of idle and substandard accommodation barges to leave the market. Under these circumstances, marketing eorts in West Africa Oil and Gas market are ongoing and encouraging. Supporting Services: Ship Management EXMAR Shipmanagement is actively pursuing new business developments for 2022 after the successful delivery and entry into operation and management of the two EXMAR VLGC newbuilds. BEXCO The company achieved a record result in 2021, driv- en by a strong demand in the marine and oshore segments, with orders catching up from the much weaker market in 2020, caused by the outbreak of the pandemic. 2022 looks promising although likely not at the same record-high level of 2021. TRAVEL PLUS The continued pandemic adversely aected book- ings in 2021 in both leisure and business segments. The company also serves the Group’s crew travel requirements, with special eorts needed to adapt travel itineraries to meet changing local quarantine and clearance requirements. Despite the recent pandemic waves, the enthusiasm to travel by TRAVEL PLUS’ loyal leisure customer base in Belgium has been conrmed by booking enquiries for 2022. The higher vaccination coverage will increas- ingly smoothen out the COVID peaks and the appetite for travel is returning, also in the business segment. Approval and discharge of the annual accounts We hereby request the General Meeting of Shareholders to approve this report for the year ending December 31, 2021 in its entirety and to appropriate the results as provided in this report. We also request the sharehold- ers to grant discharge to the directors and Statutory Auditor for the performance of their mandate during the above-mentioned nancial year. Appointments The following mandates will expire at the General Meet- ing of Shareholders: • Wouter DE GEEST, non-executive director • Michel DELBAERE, non-executive director • Isabelle VLEURINCK, non-executive director • FMO BV, represented by Francis MOTTRIE, executive director All directors are available for re-election. The following directors were co-opted on 9 September 2021 by the Board of Directors and the approval of their co-optation is requested at the General Meeting of Shareholders: • Maryam AYATI, non-executive director • ACACIA I BV represented by Els VERBRAECKEN, non- executive director The Board of Directors, 1 April 2022 5. FINANCIAL REPORT I 115 5.2 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION (In thousands of USD) Note 2021 2020 (1) Non-current assets 767,312 694,193 Vessels and barges 10 648,436 561,424 Vessels and barges 648,436 528,261 Assets under construction - advance payments 0 33,163 Other property, plant and equipment 11 1,274 1,680 Intangible assets 12 82 73 Right-of-use assets 13 6,000 3,461 Non-current receivables 19 0 24,444 Investments in equity accounted investees 14 94,678 73,298 Borrowings to equity accounted investees 16 16,841 29,813 Current assets 234,083 237,732 Assets held for sale 17 12,500 10,000 Derivative nancial assets 8 920 0 Other investments 18 1,849 1,354 Trade and other receivables 19 55,154 107,636 Borrowings to equity accounted investees 16 15,407 11,500 Current tax assets 20 1,003 3,472 Restricted cash 21 76,121 75,575 Cash and cash equivalents 21 71,130 28,195 Total assets 1,001,395 931,924 Equity 536,503 545,915 Equity attributable to owners of the Company 536,231 545,659 Share capital 22 88,812 88,812 Share premium 22 209,902 209,902 Reserves 225,918 155,011 Result for the period 11,600 91,934 Non-controlling interest 272 256 Non-current liabilities 315,347 278,304 Borrowings 24 313,816 276,588 Employee benet obligations 26 730 1,715 Provisions 800 0 Current liabilities 149,546 107,706 Borrowings 24 110,995 65,031 Trade and other payables 27 37,241 37,632 Current tax liability 20 1,309 5,043 Total liabilities 464,892 386,009 Total equity and liabilities 1,001,395 931,924 (1) In the comparable data of 2020 USD 24.4 million was reclassed from current to non-current trade receivables to reflect the actual expected payment. We refer to Note 19 Trade and other receivables for further information. 116 I 5. FINANCIAL REPORT CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME (In thousands of USD) CONSOLIDATED STATEMENT OF PROFIT OR LOSS Note 2021 2020 (1) Revenue 4 148,229 285,154 Gain on disposal 52 95 Other operating income 990 1,534 Operating income 149,272 286,783 Vessel expenses 5 -45,068 -48,850 General and administrative expenses 6 -24,536 -29,806 Personnel expenses 7 -27,349 -30,622 Depreciations and amortisations 10-13 -31,364 -37,270 Impairment losses and reversals 10,17,19 -17,585 -1,068 Loss on disposal -100 -4 Other operating expenses -888 0 Result from operating activities 2,382 139,164 Interest income 8 1,537 1,958 Interest expenses 8 -15,526 -17,568 Other nance income 8 10,198 1,508 Other nance expenses 8 -6,785 -14,254 Net nance result -10,577 -28,355 Result before income tax and share of result of equity accounted investees -8,195 110,809 Share of result of equity accounted investees (net of income tax) 14 21,769 -17,830 Result before income tax 13,574 92,980 Income tax expense 9 -1,939 -1,020 Result for the period 11,635 91,960 Attributable to: Non-controlling interest 35 25 Owners of the Company 11,600 91,934 Result for the period 11,635 91,960 Basic earnings per share (in USD) 23 0.20 1.61 Diluted earnings per share (in USD) 23 0.20 1.61 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Result for the period 11,635 91,960 Items that are or may be reclassied subsequently to prot or loss: Equity accounted investees - share in other comprehensive income 14 618 93 Foreign currency translation dierences -1,521 5,125 Items that will never be reclassied to prot and loss: Employee benets - remeasurements of dened benet liability/assets 26 647 -203 Total other comprehensive income for the period (net of tax) -256 5,014 Total comprehensive income for the period 11,378 96,974 Attributable to: Non-controlling interest 15 46 Owners of the Company 11,364 96,928 (1) In the comparable data of 2020 USD 1.6 million was reclassed from general and administrative expenses to vessel expense to better reect the nature of the expense. This presentation change had no impact on the net result. 5. FINANCIAL REPORT I 117 CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands of USD) Note 2021 2020 (1) Result for the period 11,635 91,960 Share of result of equity accounted investees (net of income tax) 14 -21,769 17,830 Depreciations & amortisations 10-13 31,364 37,270 Impairment losses and reversals 10,17,19 17,585 1,068 Net nance result 8 10,577 28,355 Income tax expense/ (income) 9 1,939 1,020 Net (gain)/ loss on sale of assets 48 -91 Realized foreign currency gains (losses) 8 1,310 -2,105 Gross cash ow from operating activities 52,689 175,307 (Increase)/decrease of trade and other receivables 75,394 -88,975 Increase/(decrease) of trade and other payables 1,752 -12,161 Increase/(decrease) in provisions and employee benets 552 -178 Cash generated from operating activities 130,387 73,993 Interest paid -16,412 -19,297 Interest received 351 1,957 Income taxes paid -2,405 -3,211 NET CASH FROM OPERATING ACTIVITIES 111,921 53,443 Acquisition of vessels and vessels under construction 10 -135,302 -19,572 Acquisition of other property plant and equipment 11 -250 -192 Acquisition of intangible assets 12 -79 -17 Proceeds from the sale of vessels and other property, plant and equipment 298 91 Dividends from equity accounted investees 14 379 3,814 Other dividends received 8 16 121 Proceeds from the sale of investments 8 0 1,681 Borrowings to equity accounted investees 16 -590 -575 Repayments from equity accounted investees 16 10,000 10,000 NET CASH FROM INVESTING ACTIVITIES -125,528 -4,651 Dividend paid 22 -20,601 0 Proceeds from new borrowings 24 144,000 12,802 Repayment of borrowings 24 -62,532 -62,036 Repayment of lease liabilities IFRS 16 (principal portion) 24 -1,554 -17,392 Payment of debt transaction costs & banking fees -1,520 0 Increase in restricted cash 21 -546 -48,305 Release restricted cash 21 0 40,000 NET CASH FROM FINANCING ACTIVITIES 57,248 -74,931 NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS 43,641 -26,139 Net cash and cash equivalents at 1 January 28,195 52,626 Net increase/(decrease) in cash and cash equivalents 43,641 -26,139 Exchange rate uctuations on cash and cash equivalents -706 1,708 NET CASH AND CASH EQUIVALENTS AT 31 DECEMBER 21 71,130 28,195 (1) The presentation of the items within the cash from operating activities has been modied but without any impact on the net result or on the other cash ow captions. 118 I 5. FINANCIAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (In thousands of USD) Note Share capital Share premium Retained earnings Reserve for treasury shares Translation reserve Hedging reserve Share- based payments reserve Total Non- controlling interest Total equity Opening equity as previously reported per 1 January 2021 88,812 209,902 289,079 -44,349 -1,086 -298 3,598 545,658 256 545,915 Comprehensive result for the period Result for the period 11,600 11,600 35 11,635 Foreign currency translation dierences 21 -1,501 -1,501 -20 -1,521 Foreign currency translation dierences - share equity accounted investees 14 -441 -441 -441 Employee benets - remeasurement net dened benet obligations 26 647 647 647 Net change in fair value of cash ow hedges - share equity accounted investees 14 1,059 1,059 1,059 Total other comprehensive result 0 0 647 0 -1,942 1,059 0 -236 -20 -256 Total comprehensive result for the period 0 0 12,247 0 -1,942 1,059 0 11,364 15 11,378 Transactions with owners of the Company Dividends declared 21 -20,791 -20,791 -20,791 Share-based payments 25 1,513 -1,513 0 0 Total transactions with owners of the Company 0 0 -19,278 0 0 0 -1,513 -20,791 0 -20,791 Closing equity per 31 December 2021 88,812 209,902 282,048 -44,349 -3,028 761 2,086 536,231 271 536,503 5. FINANCIAL REPORT I 119 (In thousands of USD) Note Share capital Share premium Retained earnings Reserve for treasury shares Translation reserve Hedging reserve Share- based payments reserve Total Non- controlling interest Total equity Opening equity as previously reported per 1 January 2020 88,812 209,902 195,808 -44,349 -6,603 22 5,138 448,730 210 448,940 Comprehensive result for the period Result for the period 91,934 91,934 25 91,960 Foreign currency translation dierences 21 5,104 5,104 21 5,125 Foreign currency translation dierences - share equity accounted investees 14 413 413 413 Employee benets - remeasurement net dened benet obligations 26 -203 -203 -203 Net change in fair value of cash ow hedges - share equity accounted investees 14 -320 -320 -320 Total other comprehensive result 0 0 -203 0 5,517 -320 0 4,993 21 5,014 Total comprehensive result for the period 0 0 91,731 0 5,517 -320 0 96,928 46 96,974 Transactions with owners of the Company Share-based payments 25 1,540 -1,540 0 0 Total transactions with owners of the Company 0 0 1,540 0 0 0 -1,540 0 0 0 Closing equity per 31 December 2020 88,812 209,902 289,079 -44,349 -1,086 -298 3,598 545,658 256 545,915 NOTE 1 - ACCOUNTING POLICIES A. Reporting entity EXMAR NV (“the Company”) is a company domiciled in Belgium whose shares are publicly traded (Euronext – EXM). The consoli- dated nancial statements of the Group comprise the Company, its subsidiaries, and the Group’s interest in associates and joint arrangements (referred to as the “Group”). The Group is active in the industrial shipping business. B. Basis of preparation The consolidated nancial statements have been prepared in ac- cordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by EU on December 31, 2021. The accounting policies adopted in preparing the 2021 consolidated nancial statements are consistent with those applied in the pre- vious nancial year, except for the items below. New and amended standards and interpretations, eective in 2021 The Group applied for the rst time certain standards and amend- ments, which are eective for annual periods beginning on or after January 1, 2021: • Interest Rate Benchmark Reform – phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16); • COVID-19 related rent concessions beyond June 30, 2021 (Amendment to IFRS 16). The Group believes that these have little or no impact on its con- solidated nancial statements. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet eective. Standards issued but not yet eective A number of new standards, amendments to standards and inter- pretations are not yet eective for the year ended December 31, 2021 and have not been applied in preparing these consolidated nancial statements. The following new or amended standards or interpretations are not expected to have a signicant impact on the Group’s consolidated nancial statements: • IFRS 17 Insurance Contracts; • Classification of Liabilities as Current or Non-current (Amendments to IAS 1); • Reference to the Conceptual Framework (Amendments to IFRS 3); • Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16); • Onerous Contracts – Cost of Fullling a Contract (Amendments to IAS 37); • IFRS 9 Financial instruments – Fees in the “10 percent” test for derecognition of nancial liabilities; • IAS 41 Agriculture – Taxation in fair value measurements; • Denition of Accounting Estimates (Amendment to IAS 8); • Disclosure of Accounting Policies (Amendment to IAS 1 and IFRS Practice Statement 2). The consolidated nancial statements were approved and were authorised for issue by the Board of Directors on April 1, 2022. C. Basis of measurement and presentation The consolidated nancial statements are presented in thousands of USD, which is also the functional currency of the parent company. The Financial Services and Markets Authority (FSMA) approved the use of the USD as reporting currency by letter of July 2, 2003 as the majority of the Group’s shipping activities and related nancing are expressed in USD. All values are rounded to the nearest thousand. The nancial statements are prepared on the historical cost basis except for the following material assets and liabilities that have been measured on an alternative basis on each reporting date: derivative nancial instruments, equity securities at FVTPL and the net dened benet liability. Assets held for sale are stated at the lower of carrying amount and fair value less cost to sell. D. Use of judgements and estimates The preparation of the consolidated nancial statements in accor- dance with IFRS requires management to make judgments, esti- mates and assumptions that aect the application of the accounting policies and the reported amounts of assets and liabilities, income and expenses, the accompanying disclosures and the disclosure of contingent liability. The estimates and related assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may dier from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only aects that period, or in the period of the revision and future periods, if the revision aects both current and future periods. 120 I 5. FINANCIAL REPORT Judgements In the process of applying the Group’s accounting policies, manage - ment has made the following judgements, which have a signicant impact on the amounts reported in the consolidated nancial statements: Leases – assessment of lease term & purchase options Determining the lease term required judgment. Elements that are considered include assessing the probability of that early termi- nation options or extension options will be exercised. All facts and circumstances relevant to the assessment are considered. Specically, for the pressurized eet, management has made the assumption that the purchase options for the 10 vessels will be exercised at the end of the respective nancing agreements. Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signicant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next nancial year, are described below. The Group based its assumptions and estimates on param- eters available when the consolidated nancial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond control of the Group. Such changes are reected in the assumptions when they occur. Impairment of vessels and barges The Group reviews the carrying amount of each vessel for poten- tial impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of a specic vessel may not be fully recoverable. The recoverable amount is the highest of the fair value less cost to sell and the value in use. The fair value less cost to sell is determined based upon inde- pendent valuation reports. The Group engages two independent valuation specialists to assess fair values at reporting date. The carrying values of the vessels may not represent the fair market value at any point in time since the market prices of second hand vessels tend to uctuate with changes in charter rates and the cost of new buildings. Historically, both charter rates and vessel values tend to be cyclical. The value in use is based upon future cash ows discounted to their present value. In developing estimates of future cash ows, management makes assumptions about expected operation date (in case of temporarily unemployed vessels), future charter rates, ship operating expenses, the estimated remaining useful lives of the eet and the WACC. These assumptions are based on historical trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. We refer to Note 10 Vessels and barges for additional information on the assumptions applied and sensitivity analysis at year-end. Climate change and sustainability related developments Climate related matters and measures such as the introduction of emission reduction legislation may have a signicant impact on the EXMAR business and its customers. EXMAR is closely monitoring current developments and measures related to climate change and sustainability, and believes these currently do not result in fundamentally changed expectations regarding useful lives or recoverability of our eet. In the sensitivity analysis of the annual impairment test of vessels and barges, the age and emission rating of each particular asset was considered. We refer to Note 10 Vessels and barges for additional information. E. Signicant accounting policies a. Basis of consolidation Business combinations The Group accounts for business combinations using the acquisition method when control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The Group has an option to apply a ‘concentration test’ that permits a simplied assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identiable asset or group of similar identiable assets. Goodwill is initially measured at the acquisition date as the excess of the aggregate of the fair value of the consideration transferred, plus the recognized amount of any non-controlling interests in the acquire, plus – if the business combination is achieved in stages – the fair value of the existing equity interest in the acquire, less the net recognized amount (generally at fair value) of the identied assets and liabilities assumed. When the excess is negative, a bargain purchase gain is immediately recognized in prot or loss. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. 5. FINANCIAL REPORT I 121 The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in prot or loss. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the denition of a nancial instrument is classied as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in fair value are recognised in prot or loss. Subsidiaries Subsidiaries are those entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to aect those returns through its power over the entity. The nancial statements of subsidiaries are included in the con- solidated nancial statements from the date on which control commences until the date on which control ceases. All intra-Group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-Group transactions are eliminated in full. Loss of control Upon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, and non-controlling interests and the other components of equity related to the subsidiary. Any surplus or decit arising on the loss of control is recognized in prot and loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date the control is lost. Interests in equity-accounted investees The Group’s interest in equity accounted investees comprises interests in associates and joint ventures. Associates are those entities in which the Group has signicant inuence, but not control or joint control, over the nancial and operating policies. Signicant inuence is presumed to exist when the Group holds between 20% and 50% of the voting power. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Investments in associates and joint ventures are accounted for using the equity method and are recognised initially at cost. The cost of the investment includes transaction costs. Subsequent to initial recognition, the consolidated nancial statements include the Group’s share of the prot or loss and OCI of equity accounted investees, from the date that signicant inuence or joint control commences until the date that signicant inuence or joint control ceases. When the share of the Group in the losses exceeds its interest in an equity accounted investee, the carrying amount of that interest is reduced to zero, and the recognition of future losses is discon- tinued, except to the extent that the Group has an obligation or has made payments on behalf of the investee. In such case the negative investment in equity accounted investees is deducted from other components of the investor’s interest in the equity accounted investee (borrowings to equity accounted investees). If the negative investment in equity accounted investees exceeds the investor’s interest, a liability is recognized for the net amount. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. b. Foreign currency Functional currency Each entity prepares its individual nancial statements in the currency of the primary economic environment in which the entity operates (i.e. the functional currency). Several European and Hong Kong based entities have the USD as functional currency as the majority of their cash ows are expressed in USD. Transactions and balances In preparing the individual nancial statements, transactions in currencies other than the entities’ functional currency are recorded at the exchange rate applicable at the date of the transaction. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated to the functional currency spot exchange rates at that date. The non-monetary assets and liabilities that are measured in terms of historical cost are translated to the functional currency at the exchange rate at the date of the initial transactions. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date the fair value was determined. 122 I 5. FINANCIAL REPORT Foreign exchange dierences arising on translation are recognised in the prot or loss statement, except for qualied cash ow hedges to the extent that the hedges are eective, which are recognised in other comprehensive income. Consolidation of foreign operations On consolidation, assets and liabilities of foreign operations, includ- ing goodwill and fair value adjustments arising on acquisition, are translated to USD – the group reporting currency - using the closing rate at reporting date. The income and expenses of the foreign oper- ations are converted to USD at the exchange rate at the date of the transaction (the average exchange rate during the relevant period is used in case the date of transaction approximates this average rate). Foreign currency translation dierences are recognized directly in other comprehensive income. These foreign currency dierences are presented within the “Translation reserve” caption. However, if the operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation dierence is allocated to the non-controlling interests. When a foreign operation is disposed of, the cumulative amount in the translation reserve related to that foreign operation is reclassi- ed to prot and loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant pro- portion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining signicant inuence or joint control, the relevant proportion of the cumulative amount is reclassied to prot and loss. The main exchange rates used are: Closing rates Average rates EXCHANGE RATES 31/12/2021 31/12/2020 2021 2020 EUR 0.8829 0.8149 0.8407 0.8784 GBP 0.7419 0.7326 0.7258 0.7777 HKD 7.7992 7.7534 7.7704 7.75 9 1 NOK 8.8194 8.5326 8.5788 9.4272 ARS 102.7327 84.1468 94.1620 69.7301 KRW 1,189.0606 1,089.3246 1,137.6564 1,183.4320 c. Financial instruments Financial assets and nancial liabilities are recognised in the Group’s statement of nancial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and nancial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of nancial assets and nancial liabilities (other than nancial assets and nancial liabilities at fair value through prot or loss) are added to or deducted from the fair value of the nancial assets or nancial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of nancial assets or nancial liabilities at fair value through prot or loss are recognised immediately in prot or loss. Financial assets All regular way purchases or sales of nancial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of nancial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. Debt instruments that meet the following conditions are measured subsequently at amortised cost (see (i) below): • The nancial asset is held within a business model whose objective is to hold nancial assets in order to collect contractual cash ows; and • The contractual terms of the nancial asset give rise on specied dates to cash ows that are solely payments of principal and interest on the principal amount outstanding. 5. FINANCIAL REPORT I 123 Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI) (see (ii) below): • The nancial asset is held within a business model whose objective is achieved by both collecting contractual cash ows and selling the nancial assets; and • The contractual terms of the nancial asset give rise on specied dates to cash ows that are solely payments of principal and interest on the principal amount outstanding. By default, all other nancial assets are measured subsequently at fair value through prot or loss (FVTPL). Despite the foregoing, the Group may make the following irrevo- cable election/designation at initial recognition of a nancial asset: • The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met (see (iii) below); and • The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or signicantly reduces an accounting mismatch (see (iv) below). All recognised nancial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classication of the nancial assets: (i.) Financial assets at amortised costs: These assets are subsequently measured at amortised costs using the eective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in prot or loss. Any gain or loss on derecognition is recognised in prot or loss. (ii.) Debt investments at FVTOCI: These assets are subsequently measured at fair value. Interest income is calculated using the eective interest method, foreign exchange gains and losses and impairment are recognised in prot or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassied to prot or loss. (iii.) Equity investments at FVTOCI: These assets are subsequently measured at fair value. Dividends are recognised as income in prot or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassied to prot or loss. (iv.) Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in prot or loss. However, see section derivative nancial instruments and hedge accounting for derivatives designated as hedging instruments. Derecognition of nancial assets The Group derecognises a nancial asset when the contractual rights to the cash ows from the nancial asset expire, or it transfers the rights to receive the contractual cash ows in a transaction in which substantially all risks and rewards of ownership of the nancial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control over the nancial asset. Financial liabilities Financial liabilities are classied as measured at amortised cost or FVTPL. A nancial liability is classied at FVTPL if it is classied as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in prot or loss. Other nancial liabilities are sub- sequently measured at amortised cost using the eective interest method. Interest expense and foreign exchange gains and losses are recognised in prot or loss. Any gain or loss on derecognition is also recognised in prot or loss. See section “Derivative nancial instruments and hedge accounting” for derivatives designated as hedging instruments. Derecognition of nancial liabilities The Group derecognises a nancial liability when its contractual obligations are discharged or cancelled, or expire. When an existing loan is replaced by another from the same lender on substantially dierent terms, or the terms of the existing loans are substantially modied, such an exchange or modication is treated as a derecog- nition of the original loan and the recognition of a new loan (at fair value). The dierence in the respective carrying value is recognized in the statement of prot and loss. On derecognition of a nancial liability, the dierence between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in prot or loss. Osetting Financial assets and nancial liabilities are oset and the net amount presented in the statement of nancial position when, and only when, the Group currently has a legally enforceable right to set o the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. Share capital Ordinary shares are classied as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of tax eects. When share capital recognised as equity is repurchased, the amount of 124 I 5. FINANCIAL REPORT the consideration paid, including directly attributable costs net of tax, is recognised as a deduction from equity. When treasury shares are sold, the amount received is recognised as an increase in equity and the resulting surplus or decit on the transaction is presented in retained earnings. Derivative nancial instruments & hedge accounting The Group holds derivative nancial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a nancial asset and certain criteria are met. Derivatives are recognised initially at fair value at the date a de- rivative contract is entered into. Subsequent to initial recognition, derivatives are recognized at fair value and changes therein are generally recognized in prot and loss. The Group designates certain derivatives as hedging instruments to hedge the variability in cash ows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates and certain derivatives and non-deriva - tive nancial liabilities as hedges of foreign exchange risk of a net investment in a foreign operation. At inception of designated hedge relationships, the Group docu- ments the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedged instrument, including whether the changes in cash ow of the hedged item and hedging instrument are expected to oset each other. Cash ow hedges When a derivative is designated as a cash ow hedging instrument, the eective portion of changes in the fair value of the derivative is recognized in OCI and accumulated in the hedging reserve. The eective portion of changes in the fair value of the derivative that is recognized in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis. Any ineective portion of changes in the fair value of the derivative is recognized immediately in prot or loss. The amount accumulat- ed in the hedging reserve and the cost of the hedging reserve is reclassied to prot or loss in the same period or periods during which the hedge expected future cash ows aect prot or loss. If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash ow hedges is discontinued, any gain or loss recognised in other comprehensive income and accumulated in the cash ow hedge reserve at that time remains in equity and is reclassied to prot or loss when the forecasted transaction occurs. When a forecasted transaction is no longer expected to occur, the gain or loss accumulated in the cash ow hedge reserve is immediately reclassied to prot or loss. d. Goodwill Goodwill arising upon the acquisition of subsidiaries is included in intangible assets. For the measurement of goodwill at initial recognition, we refer to the accounting policy “Business combination” under a) Basis of consolidation. Subsequently, goodwill is measured at cost less accumulated impairment losses (see accounting policy g Impairment of assets). In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is allocated to the carrying amount of the equity accounted investee as a whole. e. Intangible assets Research and development Expenditure on research activities, undertaken with the prospect of gaining new scientic or technical knowledge and understanding, is recognised in prot or loss as incurred. Development activities involve a plan or design for the production of new or substantially new improved products and processes. Development costs are capitalized only if the development cost can be measured reliably, the product or process is technically and commercially feasible, future economic benets are probable and the Group intends to and has sucient resources to complete development and to use or sell the asset. Otherwise, it is recognised in prot or loss as incurred. Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses. Other intangible assets Other intangible assets (e.g. software,…) acquired by the Group that have nite useful lives are measured at cost less accumulated amortisations and accumulated impairment losses. The amorti- sation is recognized in the prot or loss statement, and is spread over the useful life of the relevant intangible assets following the straight-line depreciation method. The amortization starts from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each nancial year-end and adjusted if appropriate. Intangible assets with an indenite useful life or that are not yet available for use, are subject to an annual impairment test. 5. FINANCIAL REPORT I 125 Subsequent expenditure Subsequent expenditure is capitalized only when it increases the future economic benets embodied in the specic assets to which it relates. All other expenditure is recognized in prot or loss as incurred. f. Property, plant and equipment Owned assets Items of property, plant and equipment are stated at cost, which includes capitalised borrowing costs, less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset and to bringing the asset to the location and condition necessary for its intended use. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use and capitalized borrowing costs. Subsequent expenses associated with items of property, plant and equipment are capitalised only if a future economic advantage will result from this expenditure and its cost can be measured reliably. If a part of an item of property, plant and equipment is replaced, the replacement cost is capitalised and the carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognised in the prot or loss statement as incurred. When parts of an item of property, plant and equipment have dierent useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual value and is recognized in prot or loss. Vessels, barges or units in the construction process are separately classied on the balance sheet as assets under construction. These assets under construction are not depreciated, depreciation starts at the moment that the vessels are delivered. As from the moment of delivery, the vessels are no longer classied as under construc- tion. The business model of the Group aims to rent or operate the constructed assets. The vessels are depreciated on a straight-line basis to their residual value over their estimated useful life (as from construction date) in the Group as follows: Gas vessel LPG pressurized (1) 20 years Gas vessel LPG 30 years Gas vessel VLGC 30 years Gas vessel LNG 35 years LNG units 30 years Accommodation platform, newbuild: - Hull machinery & deck outtting 20 years - Accommodation 10 years Accommodation platform, second hand 10-12 years (1) In June 2016, EXMAR increased its share in the pressurized eet from 50% to 100% and applied IFRS 3 Business combinations to account for this. The vessels were at that date accounted for at fair value and are being depreciated over their remaining useful life, which was 30 years as from construction date, or on average a remaining term of 23 years. In 2020, management re-assessed the useful life and reduced it from 30 to 20 years (as from construction date), or an average remaining useful life of 10 years as from January 1, 2020. Vessels and barges are estimated to have a zero residual value. Dry-docking expenses are capitalised when they occur and depre- ciated over a period until the next dry-dock. Other property, plant and equipment are depreciated over their estimated useful life using the straight-line depreciation method. Land is not depreciated. The estimated useful lives of the various other types of assets are as follows: Buildings 33.3 years Leased real estate 33.3 years Plant and equipment 5 years Furniture 10 years Cars 5 years Airplane 10 years IT equipment 3 years 126 I 5. FINANCIAL REPORT g. Impairment of assets Financial assets Financial assets measured at cost. Financial assets measured at cost are assessed each reporting date to determine whether the credit risk of a nancial asset has increased signicantly since initial recognition. The Group mea- sures loss allowances at an amount equal to lifetime expected credit losses (ECL’s). When determining whether the credit risk of a nancial asset has increased signicantly since initial recognition and when estimating lifetime ECL’s, the Group considers reasonable and supportable information that is relevant and available without undue cost or eort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information. Equity accounted investees After application of the equity method, the entity determines whether it is necessary to recognise an impairment loss with respect to its net investment in the associate or joint venture. An impairment loss in respect of an equity accounted investee is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognised in prot and loss and is reversed when there is a favourable change in the estimates used to determine the recoverable amount. Non-nancial assets The carrying value of non-nancial assets, other than deferred tax assets, are reviewed at each balance sheet date to determine whether there is an indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indenite lives or that are not yet available for use the recoverable amount is estimated on each balance sheet date. The recoverable amount of an asset or cash-generating unit (CGU) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash ows are dis- counted to their present value using a pre-tax discount rate that reects current market assessments of the time value of money and the risks specic to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inows from continuing use that are largely independent of the cash inows of other assets or CGUs. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benet from the synergies of the combination. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recover- able amount. All impairment losses are recognised in the prot or loss statement. Impairment losses recognized in respect of cash-generating units are allocated rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses in prior periods are assessed at each reporting date for indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. h. Assets held for sale Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classied as held for sale. Immediately before classication as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group’s accounting policies. Thereafter the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group is allocated rst to goodwill, and then to the remaining assets and liabilities on a pro rata basis except that no loss is allocated to as- sets not in the measurement scope of IFRS 5, which continue to be measured in accordance with the Group’s other accounting policies. Intangible assets and property, plant and equipment once classied as held for sale or distribution are not amortised or depreciated. In addition, equity accounting of equity accounted investees ceases once classied as held for sale or distribution. i. Employee benets Dened contribution plans Obligations for contributions to dened contribution pension plans are recognised as an expense in the prot or loss statement as the related service is provided. Dened benet plans The Group’s net obligation in respect of dened benet pension plans is calculated separately for each plan by estimating the amount of future benet that employees have earned in return for their service in the current and prior periods; discounting that amount and deducting the fair value of any plan assets. The calculation is performed annually by a qualied actuary using the projected unit 5. FINANCIAL REPORT I 127 credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benets available in the form of a any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benets, consideration is given to any applicable minimum funding requirements. Remeasurements of the net dened benet liability, which comprise actuarial gains and losses, the return on plan assets (excluding in- terest) and the eect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. The Group determines the net interest expense (income) on the net dened benet liability (asset) for the period by applying the discount rate used to measure the dened benet obligation at the beginning of the annual period to the then net dened benet liability (asset), taking into account any changes in the net dened benet liability (asset) during the period as a result of contributions and benet payments. Net interest expense and other expenses related to dened benet plans are recognised in prot or loss. When the benets of a plan are changed or when a plan is curtailed, the resulting change in benet that relates to past service or the gain or loss on curtailment is recognised immediately in prot or loss. The Group recognises gains and losses on the settlement of a dened benet plan when the settlement occurs. Belgian dened contribution plans with return guaranteed by law Belgian dened contribution plans are subject to the Law of April 28, 2003 on occupational pensions (hereafter ‘the WAP’). According to article 24 of this Law, the employer has to guarantee an average minimum return of 3.75% on employee contributions and of 3.25% on employer contributions and this for contributions paid until December 31, 2015. As from January 2016, the employer has to guarantee an average minimum return of 1.75% on both employer and employee contributions (as changed by the Law of December 18, 2015). This guaranteed minimum return generally exceeds the return that is normally guaranteed by the insurer. Because the employer has to guarantee the statutory minimum return on these plans, not all actuarial and investment risks relating to these plans are transferred to the insurance company managing the plans. Therefore, these plans do not meet the denition of a dened contribution plan under IFRS and have to be classied by default as dened benet plans. An actuarial calculation has been performed in accordance with IAS 19 based on the projected unit credit method. Termination benets Termination benets are recognised as an expense when the Group is demonstrably committed, without realistic possibility or withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benets as a result of an oer made to encourage voluntary redundancy. Termination benets for voluntary redundancies are recognised as an expense if the Group has made an oer of voluntary redundancy, it is probable that the oer will be accepted, and the number of acceptances can be estimated reliably. If benets are payable more than 12 months after the reporting date, then they are discounted to their present value. Short-term employee benet Short-term employee benet obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or prot-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 employee, and the obligation can be estimated reliably. Share-based payment transactions The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the options. The amounts recognised as an expense is adjusted to reect the actual number of options for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at vesting date. j. Provisions A provision is recognised in the statement of nancial position when the Group has a legal or constructive obligation as result of a past event, that can be estimated reliably and it is probable that an outow of benets will be required to settle the obligation. If the eect is material, provisions are determined by discounting the expected future cash ows at a pre-tax rate that reects cur- rent market assessments of the time value of money and, where appropriate, the risks specic to the liability. Restructuring provisions Provisions for restructuring are recognised when the Group has approved a detailed and formal restructuring plan, and the re- structuring has either commenced or has been announced publicly. Future operating costs are not provided for. Onerous contracts A provision for onerous contracts is recognised when the expected benets to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is recorded, the Group recognises any impairment loss on the assets associated with that contract. 128 I 5. FINANCIAL REPORT k. Income Charter revenue The company and/ or its joint ventures generate revenues from charterers for the use of its assets. Assets are chartered using voyage/spot, time or bareboat charters and pool revenue: • Voyage/spot charters: Voyage revenue is recognized over time of spot charters on a load-to-discharge basis. Progress is determined on time elapsed. Voyage expenses are expensed as occurred. When our vessels cannot start or continue performing its obligation due to other factors, such as port delays, a demurrage is calculated. The applicable demurrage rate is stipulated in the contract. As demurrage is often a commercial discussion between EXMAR and the charterer, the outcome and total compensation receivable for the delay is not always certain. As such, EXMAR only recognizes the revenue which is highly probable to be received. No revenue is recognized if the collection of the consideration is not highly probable. The amount of revenue recognized is estimated based on historical data. The Group updates its estimate on an annual basis. • Time- and Bareboat charters: As a lessor, the Group leases out some of its vessels under time – and bareboat charters (see also l) Leases). For time or bareboat charters, a contract is entered into for the use of an asset for a specic period of time at a contractual agreed daily or monthly rate. Revenue from time or bareboat charters are accounted for as operating leases and are recognised over the duration as service is performed. • Pool revenue: Aggregated revenue recognized on a daily basis from vessels operating on voyage or time charter and contract of areightment (“COA”) within the pool is converted into an aggregated net revenue amount by extracting aggregated voyage expenses (such as fuel consumption, port charges,..) from gross revenue. This net revenue is used to determine the pool Time Charter Equivalent revenue (“TCE”). Aggregate TCE revenue is used to allocate revenue to the pool partners in accordance with the allocated pool points earned for each vessel. Pool points are determined taking into account the following parameters: intake (= capacity of the vessel), speed, fuel consumption performance and actual on hire days. The TCE revenue earned by our vessels operated in the pool is equal to the pool point rating of each vessel multiplied by time on hire, as reported by the pool manager. Revenue from these oating time charter agreements under which vessels are employed by the pool is accounted for under IFRS 15 Revenue from contracts with customers. Revenue from services rendered Revenue from services such as ship management engineering and technical assistance services are recognised in the prot or loss statement over time as the services are provided. The customer simultaneously receives and consumes the benets provided by the entity’s performance as the entity performs (recurring ser- vices). Invoices and related payment terms depend on individual contractual terms. License income Revenue from the licensing of EXMAR’s intellectual property is in general recognised over time together with the underlying services rendered based on time and material spent. In case the license revenue is considered distinct and distinct within the context of the contract, this revenue will be recognized at the point in time when EXMAR satises the performance obligation and control is transferred to the customer. Gain on sale of assets Gain on the sale of assets is recognised in the prot or loss statement when control of the goods underlying the particular performance obligation is transferred to the customer. For the sale of a vessel, control is transferred to the customer at the moment that the vessel is delivered to the customer. Invoices and related payment terms depend on individual contractual terms. Commissions if the Group acts in the capacity of an agent rather than as a principal in the transaction, then the revenue recognised is the net amount of commission made by the Group. l. Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identied asset for a period of time in exchange for consideration. As a lessee At commencement or on modication of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand- alone prices. The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight- line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reects that the Group will exercise a purchase option. In that 5. FINANCIAL REPORT I 129 case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate by obtaining interest rates from various external nancing sources and makes certain adjustments to reect the terms of the lease and type of the asset leased. Lease payments included in the measurement of the lease liability comprise the following: • Fixed payments, including in-substance xed payments; • Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; • Amounts expected to be payable under a residual value guarantee; and • The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early. The lease liability is measured at amortised cost using the eective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance xed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in prot or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Group presents right-of-use assets separately on the face of the balance sheet and lease liabilities in “Loans and borrowings” in the statement of nancial position. Short-term leases and leases of low-value assets The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. As a lessor At inception or on modication of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. When the Group acts as a lessor, it determines at lease inception whether each lease is a nance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a nance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset. If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract. The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of “Revenue”. m. Government grants Government grants are recognised initially as deferred income at fair value when there is a reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant and are then recognised in prot and loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Group for expenses incurred are recognised in prot or loss on a systematic basis in the periods in which the expenses are recognised. n. Finance income and expenses Finance income consists of interests received, dividend income, gains on the disposal of equity securities at FVTPL, changes in the fair value of nancial assets at fair value through prot or loss, and gains on hedging instruments that are recognised in prot or loss and exchange rate gains. Interest income is recognised in the prot or loss statement as it accrues, taking into account the eective yield on the asset. Dividend income is recognised in the prot or loss statement on the date that the dividend is declared. 130 I 5. FINANCIAL REPORT Finance expenses consist of interest expense on borrowings, un- winding of the discount on provisions, changes in the fair value of nancial assets at fair value through prot or loss, impairment losses recognised on nancial assets, exchange rate losses and losses on hedging instruments that are recognised in prot or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in prot or loss using the eective interest method. Foreign currency gains and losses are reported on a net basis per currency as either other nance income or nance expense. o. Taxes Income tax expense consists of current and deferred taxes. Current and deferred tax is recognised in the prot or loss statement, except to the extent it relates to a business combination, or when they relate to items that are recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss of the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax assets and liabilities are oset only if certain criteria are met. Deferred tax is recognised on all temporary dierences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. The following temporary dierences are not provided for: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that aects neither accounting, nor taxable prot, and dierences relating to investments in sub- sidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of reversal and it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to temporary dierences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary dierences, to the extent that it is probable that future taxable prots will be available against which they can be utilised. Deferred tax assets are reduced when it is no longer probable that the related tax benets will be realized. Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that is has become probable that future taxable prots will be available against which they can be used. Deferred tax assets and liabilities are oset only if certain conditions are met. Tonnage tax is not accounted for as income taxes in accordance with IAS 12 and is not presented as part of income tax expense in the prot or loss statement but is shown under other operating expenses. p. Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to trans- actions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by management to make decisions about resources to be allocated to the segment and assess its performance. The result for each segment includes all income and expenses generated directly by this segment, as well as part of the income and expenses that can reasonably be allocated to this segment. The assets and liabilities allocated to a segment include as a minimum the assets and liabilities which are periodically reported to the Chief operating decision maker, being the Group’s CEO and the Executive Committee. Segment capital expenditure is the total cost incurred during the pe- riod to acquire property, plant and equipment and intangible assets. q. Earnings per share The Group presents basic and diluted earnings per share for its ordinary shares. Basic earnings per share is calculated by dividing the prot or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for treasury shares held. Diluted earnings per share is determined by adjusting the prot and loss attributable to ordinary shareholders and the weighted average of ordinary shares outstanding, adjusted for treasury shares held and for the eects of all dilutive potential ordinary shares such as share options granted to employees. r. Discontinued operations A discontinued operation is a component of the Group’s business, the operations and cash ows of which can be clearly distinguished from the rest of the Group and which represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale; is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations or is a subsidiary acquired exclusively with a view to re-sale. Classication of a discontinued operation occurs upon disposal or when the operation meets the criteria to be classied as held for sale, if earlier. When an operation is classied as a dis- continued operation, the comparative prot or loss statement is restated as if the operation had been discontinued from the start of the comparative period. 5. FINANCIAL REPORT I 131 NOTE 2 - SEGMENT REPORTING In respect of joint ventures, the company continues to manage its operations based on internal management reports applying the prin- ciples of the proportionate consolidation method. The reconciliation of the segment reporting to the consolidated statement of nancial position and the consolidated statement of prot or loss is presented in Note 3 Reconciliation segment reporting. All dierences relate to the application of IFRS 11 Joint arrangements, no other dierences exist. The Group has 3 reportable segments. The Group’s operating segments reect the level at which the Group’s CEO and the Executive Committee review the business and make decisions about the allocation of resources and other operating matters. These segments oer dierent products and services and are managed separately. • The activities in the Shipping segment include the transportation of liqueed gas products such as Liquid Natural Gas (LNG), Liquid Petroleum Gas (LPG), ammonia and petrochemical gases. • The Infrastructure segment provides innovative oating infrastructure solutions to the oil & gas industry both by making use of its asset portfolio and through developing new assets for near-shore and oshore production, processing, storage or other ancillary services. • The segment Supporting services includes the specialised supporting services such as ship management services and travel services. The company’s internal and management structure does not distinguish any geographical information (non-current assets and revenue per major country) as the company’s eet is operated on a worldwide basis. The intra-segment revenue mainly relates to management, supervision and crew services provided between segments. Major shipping client Equinor (ex-Statoil) represented 19.9% (2020: 20.5%) of the revenue of the Shipping segment and 14.3% (2020: 12.1%) of the EXMAR Group revenue in 2021. The remaining part of the Shipping revenue is divided between 14 dierent customers. Gunvor represented 30.6% (2020: 36.7%) of the revenue of the Infrastructure segment and 5.7% (2020: 10.6%) of the EXMAR Group revenue in 2021. In 2020, YPF represented 17.3% of the revenue of the Infrastructure segment and 5.0% of the EXMAR Group revenue, versus 0% in 2021. The percentages mentioned are calculated excluding settlement fees. No other customers represented more than 10.0% of the EXMAR Group revenue in 2021. 132 I 5. FINANCIAL REPORT Segment reporting 2021 (In thousands of USD) CONSOLIDATED STATEMENT OF PROFIT OR LOSS Shipping Infrastucture Supporting services Eliminations Total Revenue third party 136,013 91,986 19,047 0 247,046 Revenue intra-segment 1,667 781 7,503 -9,951 0 Total revenue 137,680 92,767 26,550 -9,951 247,046 Gain on disposal 171 0 33 0 204 Other operating income 747 102 253 -113 990 Operating income 138,598 92,869 26,836 -10,064 248,239 Operating result before depreciations, amortisations & impairment losses (EBITDA) 65,054 54,420 -5,987 0 113,486 Depreciations and amortisations -43,918 -17,225 -984 0 -62,126 Impairment losses and reversals 5,700 -20,063 -23 0 -14,385 Operating result (EBIT) 26,836 17,132 -6,994 0 36,975 Interest income (non-interco) -4 1,179 162 0 1,337 Interest income interco 1 0 13,083 -13,084 0 Interest expenses (non-interco) -15,009 -11,194 -140 0 -26,343 Interest expenses interco -334 -12,749 -1 13,084 0 Other nance income 1,062 4,014 6,350 -1,000 10,426 Other nance expenses -1,709 -4,743 -1,812 1,000 -7,264 Share of result of equity accounted investees (net of income tax) 0 -1,638 138 0 -1,499 Income tax expense -182 -695 -1,119 0 -1,997 Segment result for the period 10,660 -8,694 9,668 0 11,635 Attributable to: Non-controlling interest 35 Owners of the Company 11,600 5. FINANCIAL REPORT I 133 (In thousands of USD) CONSOLIDATED STATEMENT OF FINANCIAL POSITION Shipping Infrastucture Supporting services Eliminations Total Assets Vessels and barges 555,353 409,128 0 0 964,481 Other property, plant and equipment 52 240 982 1,274 Intangible assets 0 14 68 82 Right-of-use assets 16,122 2,969 2,266 21,356 Investments in equity accounted investees 0 2,969 2,400 5,369 Borrowings to equity accounted investees 0 9,848 -1,957 7, 89 0 Assets held for sale 17,709 0 0 17,709 Restricted cash 1,761 76,121 0 77,882 Cash and cash equivalents 35,843 10,869 60,362 107,074 Total segment assets 626,840 512,157 64,121 0 1,203,118 Unallocated other investments 1,849 Unallocated trade and other receivables 70,462 Other unallocated assets 2,684 Total assets 1,278,113 Liabilities Non-current borrowings 413,621 116,216 1,665 531,502 Current borrowings 56,206 88,578 661 145,445 Non-current provisions 2,347 0 800 3,147 Current derivative nancial instruments 0 0 0 0 Total segment liabilities 472,173 204,795 3,126 0 680,094 Unallocated equity 536,502 Unallocated trade and other payables 59,474 Unallocated other liabilities 2,044 Total equity and liabilities 1,278,113 CASH FLOW STATEMENT Cash from operating activities 48,645 26,710 88,766 164,121 Cash from investing activities -135,473 -2,548 255 -1 37,76 5 Cash from nancing activities 94,946 -21,611 -45,645 27,691 Exchange rate uctuations -706 Total cash ow 8,119 2,551 43,376 0 53,340 ADDITIONAL INFORMATION Capital expenditures -141,768 -1,958 -250 -143,976 Proceeds from disposals 6,296 0 189 6,485 134 I 5. FINANCIAL REPORT Segment reporting 2020 (In thousands of USD) CONSOLIDATED STATEMENT OF PROFIT OR LOSS Shipping Infrastucture Supporting services Eliminations Total Revenue third party 130,951 213,126 40,082 0 384,159 Revenue intra-segment 3,849 165 6,718 -10,732 0 Total revenue 134,800 213,291 46,800 -10,732 384,159 Gain on disposal 49 1 45 0 95 Other operating income 345 174 1,051 0 1,570 Operating income 135,194 213,466 47,896 -10,732 385,824 Operating result before depreciations, amortisations & impairment losses (EBITDA) 68,058 161,002 10,795 0 239,855 Depreciations and amortisations -44,429 -25,184 -1,059 0 -70,672 Impairment losses and reversals -31,469 -41 -27 0 -31,537 Operating result (EBIT) -7,8 4 0 135,777 9,709 0 137,646 Interest income (non-interco) 183 1,117 60 0 1,360 Interest income interco 193 191 1 7,75 2 -18,136 0 Interest expenses (non-interco) -14,648 -14,067 -851 0 -29,566 Interest expenses interco -749 -17,177 -210 18,136 0 Other nance income 767 394 527 0 1,688 Other nance expenses -4,049 -5,597 -6,449 0 -16,095 Share of result of equity accounted investees (net of income tax) 0 -2,139 89 0 -2,050 Income tax expense -66 -451 -506 0 -1,023 Segment result for the period -26,209 98,048 20,121 0 91,960 Attributable to: Non-controlling interest 25 Attributable to owners of the Company 91,934 5. FINANCIAL REPORT I 135 (In thousands of USD) CONSOLIDATED STATEMENT OF FINANCIAL POSITION Shipping Infrastucture Supporting services Eliminations Total Assets Vessels and barges 453,124 443,088 0 0 896,212 Other property, plant and equipment 65 328 1,287 1,680 Intangible assets 0 13 60 73 Right-of-use assets 22,784 2,200 953 25,937 Equity accounted investees 0 5,285 1,846 7,1 3 1 Borrowings to equity accounted investees 0 6,360 0 6,360 Assets held for sale 11,619 0 0 11,619 Restricted cash 1,761 75,575 0 77,336 Cash and cash equivalents 27,758 8,433 17,543 53,734 Total segment assets 517,111 541,282 21,689 0 1,080,082 Unallocated other investments 1,354 Unallocated trade and other receivables 144,363 Other unallocated assets 3,487 Total assets 1,229,286 Liabilities Non-current borrowings 300,940 205,907 438 507,285 Current borrowings 88,369 18,999 4,287 111,655 Non-current provisions 1,761 0 0 1,761 Current derivative nancial instruments 1,078 0 0 1,078 Total segment liabilities 392,148 224,906 4,725 0 621,779 Unallocated equity 545,915 Unallocated trade and other payables 54,834 Unallocated other liabilities 6,758 Total equity and liabilities 1,229,286 CASH FLOW STATEMENT Cash from operating activities 54,490 19,870 29,127 103,487 Cash from investing activities -26,729 -1,276 2,028 -25,977 Cash from nancing activities -48,707 -23,751 -30,269 -102,727 Exchange rate uctuations 1,708 Total cash ow -20,946 -5,157 886 0 -23,509 ADDITIONAL INFORMATION Capital expenditures -26,729 -1,060 -192 -27,981 Proceeds from disposals 0 0 91 91 136 I 5. FINANCIAL REPORT NOTE 3 - RECONCILIATION SEGMENT REPORTING The nancial information of each operating segment is reviewed by management using the proportionate consolidation method. The below tables reconcile the nancial information as reported in the consolidated statement of nancial position and the consolidated statement of prot or loss (using the equity consolidation method as required under IFRS 11) with the nancial information disclosed in Note 2 Segment reporting (using the proportionate consolidation method). (In thousands of USD) FOR THE YEAR ENDED 31 DECEMBER 2021 Proportionate consolidation Dierence Equity consolidation Revenue 247,046 -98,816 148,229 Gain on disposal 204 -151 52 Other operating income 990 0 990 Vessel expenses -80,634 35,565 -45,068 General and administrative expenses -25,149 613 -24,536 Personnel expenses -27,355 6 -27,349 Depreciations and amortisations -62,126 30,762 -31,364 Impairment losses and reversals -14,385 -3,200 -17,585 Loss on disposal -143 43 -100 Other operating expenses -1,473 585 -888 Result from operating activities 36,975 -34,593 2,382 Interest income 1,337 200 1,537 Interest expenses -26,343 10,817 -15,526 Other nance income 10,426 -229 10,198 Other nance expenses -7,264 479 -6,785 Result before income tax and share of result of equity accounted investees 15,131 -23,326 -8,195 Share of result of equity accounted investees (net of income tax) -1,499 23,268 21,769 Income tax expense -1,997 58 -1,939 Result for the period 11,635 0 11,635 5. FINANCIAL REPORT I 137 (In thousands of USD) 31 DECEMBER 2021 Proportionate consolidation Dierence Equity consolidation Vessels and barges 964,481 -316,045 648,436 Other property, plant and equipment 1,274 0 1,274 Intangible assets 82 0 82 Right-of-use assets 21,356 -15,356 6,000 Investments in equity accounted investees 5,369 89,309 94,678 Borrowings to equity accounted investees 4 16,838 16,841 Derivative nancial asset 761 -761 0 Non-current assets 993,327 -226,015 767,312 Assets held for sale 17,709 -5,209 12,500 Derivative nancial asset 920 0 920 Other investments 1,849 0 1,849 Trade and other receivables 70,462 -15,308 55,154 Short term borrowings to equity accounted investees 7, 88 7 7,520 15,407 Current tax assets 1,003 0 1,003 Restricted cash 77,882 -1,761 76,121 Cash and cash equivalents 107,074 -35,945 71,130 Current assets 284,787 -50,703 234,083 Total assets 1,278,113 -276,718 1,001,395 Equity 536,502 1 536,503 Borrowings 531,502 -217,686 313,816 Employee benets 730 0 730 Non-current provisions 3,147 -2,347 800 Non-current liabilities 535,379 -220,032 315,347 Borrowings 145,445 -34,450 110,995 Trade and other payables 59,474 -22,233 37,241 Current tax liability 1,314 -5 1,309 Current liabilities 206,233 -56,687 149,546 Total equity and liabilities 1,278,113 -276,718 1,001,395 138 I 5. FINANCIAL REPORT (In thousands of USD) FOR THE YEAR ENDED 31 DECEMBER 2020 Proportionate consolidation Dierence Equity consolidation Revenue 384,159 -99,005 285,154 Gain on disposal 95 0 95 Other operating income 1,570 -36 1,534 Vessel expenses -84,819 35,969 -48,850 General and administrative expenses -30,312 506 -29,806 Personnel expenses -30,807 185 -30,622 Depreciations and amortisations -70,672 33,402 -37,270 Impairment losses and reversals -31,537 30,469 -1,068 Loss on disposal -4 0 -4 Other operating expenses -28 28 0 Result from operating activities 137,646 1,519 139,164 Interest income 1,360 598 1,958 Interest expenses -29,566 11,998 -17,568 Other nance income 1,688 -179 1,508 Other nance expenses -16,095 1,841 -14,254 Result before income tax and share of result of equity accounted investees 95,033 15,776 110,809 Share of result of equity accounted investees (net of income tax) -2,050 -15,780 -17,830 Income tax expense -1,023 3 -1,020 Result for the period 91,960 0 91,960 5. FINANCIAL REPORT I 139 (In thousands of USD) 31 DECEMBER 2020 Proportionate consolidation Dierence Equity consolidation Vessels and barges 896,212 -334,789 561,424 Other property, plant and equipment 1,680 0 1,680 Intangible assets 73 0 73 Right-of-use assets 25,937 -22,476 3,461 Non-current receivables 24,444 0 24,444 Investments in equity accounted investees 7,13 1 66,168 73,298 Borrowings to equity accounted investees 6,360 23,453 29,813 Non-current assets 961,838 -267,645 694,193 Assets held for sale 11,619 -1,619 10,000 Other investments 1,354 0 1,354 Trade and other receivables 118,419 -10,783 107,636 Short term borrowings to equity accounted investees 1,500 10,000 11,500 Current tax assets 3,487 -15 3,472 Restricted cash 77,336 -1,761 75,575 Cash and cash equivalents 53,734 -25,539 28,195 Current assets 267,449 -29,717 237,732 Total assets 1,229,286 -297,362 931,924 Equity 545,915 0 545,915 Borrowings 507,285 -230,697 276,588 Employee benets 1,715 0 1,715 Non-current provisions 1,761 -1,761 0 Non-current liabilities 510,761 -232,458 278,304 Borrowings 111,655 -46,624 65,031 Trade and other payables 54,834 -17,202 37,632 Current tax liability 5,043 0 5,043 Current derivative nancial instruments 1,078 -1,078 0 Current liabilities 172,610 -64,904 107,706 Total equity and liabilities 1,229,286 -297,362 931,924 140 I 5. FINANCIAL REPORT NOTE 4 - REVENUE (In thousands of USD) 2021 2020 Shipping segment 36,414 31,311 Infrastructure segment - ordinary revenue 32,710 61,618 Infrastructure segment - settlement fees 56,840 149,144 Supporting services segment - ordinary revenue 21,768 30,121 Supporting services segment - settlement fees 497 12,960 Revenue 148,229 285,154 The increase in total revenue at the Shipping segment is mainly a result of the new charter agreements for the two new build VLGC’s, FLANDERS INNOVATION since mid-August 2021 and FLANDERS PIONEER since November 2021. Ordinary revenue at the Infrastructure segment decreased signicantly as a result of the unemployment of the TANGO FLNG since April 2020 and FSRU S188 since June 2021. In 2020, YPF S.A. invoked force majeure under the Charter Agreement and Services Agreement for the TANGO FLNG and in October 2020, EXMAR and YPF reached a settlement agreement for a net amount of USD 149.1 million in consideration of the early settlement of the agreements and withdrawing of the arbitration proceedings. In accordance with IFRS 15, the full settlement fee was recognised in the statement of prot or loss of 2020. Per December 31, 2020 an amount of USD 109.8 million was still outstanding in respect of the settlement fee and this in accordance with the agreed payment schedule between both parties (USD 85.3 million in 2021 and USD 24.4 million in 2022, see Note 19 Trade and other receivables). In 2021, Gunvor cancelled the charter agreement of the FSRU S188 and paid an early termination fee of USD 56.8 million. The decrease in revenue at the Supporting services segment is related to the lower number of vessels under ship management, mainly caused by the termination of the ship management contracts of seven vessels of Excelerate Energy in prior year (see below). In 2020, the Supporting services segment recognized in revenue the full cancellation fee of USD 13.0 million received from Excelerate Energy. In February 2019, Excelerate Energy, through the respective owning companies of each vessel, elected to terminate the ship management agreements for their seven vessels managed by EXMAR Shipmanagement NV. In accordance with the contractually agreed termination clauses a notice period up to two years had to be considered and a cancellation fee was due to EXMAR Shipmanagement. A transition schedule, subject to the operations of each vessel, and a payment schedule for the cancellation fee has been agreed between both parties end 2019. Revenue which falls within the scope of IFRS 16 Leasing represented 46.1% (2020: 41.2%) of total revenue and is mainly situated in the Shipping segment. Revenue which falls within the scope of IFRS 15 Revenue from contracts with customers represented 53.9% (2020: 58.8%) of total revenue and is mainly situated in the Infrastructure and Supporting services segment. The percentages mentioned are calculated excluding settlement fees. Major shipping clients Equinor (ex-Statoil) and Nippon Gas Line Co represented 28.2% (2020: 20.7%) and 29.0% (2020: 28.7%) respectively of the revenue of the Shipping segment. Both clients contributed 11.3% (2020: 5.3%) and 11.6% (2020: 7.3%) respectively to the EXMAR Group revenue in 2021. Gunvor represented 32.9% (2020: 38.1%) of the revenue of the Infrastructure segment and 11.8% (2020: 19.1%) of the EXMAR Group revenue in 2021. In 2020, YPF contributed 18.0% of the revenue of the Infrastructure segment and 9.0% of the EXMAR Group revenue, compared to 0% in 2021. The percentages mentioned are also calculated excluding settlement fees. No other customers represent more than 10.0% of the EXMAR Group revenue in 2021. 5. FINANCIAL REPORT I 141 (In thousands of USD) 2021 2020 Trade receivables, included in trade and other receivables (current + non-current) 43,987 121,901 Contract assets, included in trade and other receivables 2,839 2,894 Contract liabilities, included in trade and other payables 6,479 8,818 Contract balances 53,305 133,613 Trade receivables decreased during 2021 as a result of the monthly payment of the settlement fee by YPF (USD 85.3 million during 2021) and for which USD 24.4 million is still to be received in 2022. The contract assets mainly relate to the Group’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. The contract liabilities primarily relate to invoices issued in respect of vessel income (prepaid hire). NOTE 5 - VESSEL EXPENSES (In thousands of USD) 2021 2020 Vessel expenses crew -23,850 -24,564 Vessel expenses maintenance -14,136 -14,066 Vessel expenses insurance -2,693 -3,477 Vessel expenses other -4,389 -6,743 Vessel expenses -45,068 -48,850 Vessel expenses are expenses made to operate a vessel and include primarily crew, maintenance, insurance and other related expenses. In 2021, these expenses decreased primarily due to lower crew and other expenses for the TANGO FLNG and FSRU S188 as a result of their (partial) unemployment during the year, partially oset by additional operating expenses for the two new VLGC’s. NOTE 6 - GENERAL AND ADMINISTRATIVE EXPENSES (In thousands of USD) 2021 2020 Administrative expenses -22,637 -26,637 Oce expenses -2,438 -3,158 Travel expenses -2,085 -1,977 IT & communication expenses -2,073 -1,861 Fees -6,685 -9,883 Other employee benets -8,738 -9,118 Insurance -619 -640 Non-income based taxes -1,256 -2,387 Other expenses -643 -782 General and administrative expenses -24,536 -29,806 General and administrative expenses decreased compared to 2020, mainly as a consequence of lower oce expenses, lower fees and non-income based taxes due to less withholding taxes for TANGO FLNG. 142 I 5. FINANCIAL REPORT NOTE 7 - PERSONNEL EXPENSES (In thousands of USD) 2021 2020 Salaries and wages -22,568 -25,214 Social security charges -3,991 -4,586 Employee benet, dened benet and dened contribution plan -789 -821 Personnel expenses -27,349 -30,622 At year-end 2021 2020 Seagoing 1,615 1,844 Sta 234 250 Number of personnel members 1,849 2,094 The number of personnel members represents the eective number of personnel members in service per period end (including the sea- going employees of our equity accounted investees). Personnel expenses decrease in comparison with 2020, mainly as a consequence of a decreased number of personnel sta. A signicant part of EXMAR’s seagoing personnel is employed on the assets held or operated by EXMAR’s equity accounted investees, the related expense is not included in the personnel expenses or crew expenses disclosed above but presented as vessel expenses in EXMAR’s equity accounted investees. NOTE 8 - FINANCE INCOME / EXPENSES (In thousands of USD) 2021 2020 Interest income on borrowings to equity accounted investees 1,508 1,888 Interest income on cash and cash equivalents 29 70 Interest income 1,537 1,958 Interest expenses on borrowings -15,526 -17,568 Interest expenses -15,526 -17,568 The interest income on borrowings to equity accounted investees relates to interests charged to these equity accounted investees on the borrowings provided by EXMAR and decreased as a result of lower LIBOR rates and lower outstanding balances. We refer in this respect also to Note 16 Borrowings to equity accounted investees. Interest expenses relate to EXMAR’s borrowings as disclosed in Note 24 Borrowings. The evolution in interest expenses is the combined eect of on the one hand higher borrowings (to nance the two new VLGC’s) and on the other hand lower reference rates (LIBOR and NIBOR) and a lower margin on the TANGO FLNG nancing from Bank of China (from 3.0% to 2.2%). 5. FINANCIAL REPORT I 143 (In thousands of USD) 2021 2020 Realised exchange gains 2,237 347 Unrealised exchange gains 6,270 923 Dividend income from non-consolidated companies 16 121 Equity securities measured at FVTPL 662 0 Fair value gain on nancial instruments 920 0 Other 92 116 Other nance income 10,198 1,508 Realised exchange losses -928 -2,452 Unrealised exchange losses -1,933 -6,085 Amortisation transaction costs -2,674 -2,991 Banking fees -922 -1,029 Equity securities measured at FVTPL 0 -757 Loss on sale of investments 0 -607 Other -328 -334 Other nance expenses -6,785 -14,254 In 2021 EXMAR recorded net exchange gains of USD 5.6 million while in 2020 EXMAR had USD -7.3 million of net exchange gain losses. This is primarily the result of the weakening of the EUR and NOK versus the USD in 2021. On the translation of the NOK bond into USD at year-end 2021, EXMAR recorded an unrealized exchange gain of USD 2.4 million, while in 2020, the translation resulted in an unrealized exchange loss of USD 2.2 million. The prot and loss eect in respect of the equity securities measured at FVTPL relates to the equity securities as disclosed in Note 18 Other investments. End 2021, EXMAR purchased NOK 240.0 million forwards for USD 26.3 million, which results in a fair value gain of USD 0.9 million on December 31, 2021 (see also Note 28 Financial risks and nancial instruments). In 2020, EXMAR sold 149,089 shares in Teekay LNG (TGP) for USD 1.7 million, which resulted in a loss of USD 0.6 million. (In thousands of USD) 2021 2020 Equity accounted investees - share of other comprehensive income 618 93 Foreign currency translation dierences -1,521 5,125 Finance income/expense recognised directly in equity -904 5,218 Recognised in: Translation reserve -1,942 5,517 Hedging reserve 1,059 -320 Non-controlling interest -20 21 -904 5,218 The movement of the translation reserve is mainly the consequence of the evolution of the USD/EUR exchange rate. In certain of our equity accounted investees, interest rate swaps (IRS) contracts were signed to cover their exposure on variable interest rates. 144 I 5. FINANCIAL REPORT NOTE 9 - INCOME TAXES (In thousands of USD) 2021 2020 Taxes current period -1,945 -1,218 Prior year adjustments 6 198 Income taxes -1,939 -1,020 Deferred income taxes 0 0 Income taxes -1,939 -1,020 RECONCILIATION Result before income tax 13,574 92,980 Tax at domestic tax rate -25.00% -3,393 -25.00% -23,245 Tax impact on share of prot of equity accounted investees 5,442 -4,457 Increase/decrease resulting from: Eects of tax rates in foreign jurisdictions -4,621 24,470 Non-deductible expenses -244 -488 Other taxes -803 -518 Current year tax losses/ credits for which no deferred tax asset has been recognised -10,225 -7,61 9 Use of tax credits, tax losses carried forward,... for which no DTA was recognised before 15,706 10,672 Unused tax losses under the Belgian tonnage tax regime -3,429 0 Tax exempt income -149 -30 Adjustments in respect of prior years -223 196 Reconciliation of the eective tax rate -14.29% -1,939 -1.10% -1,020 The other taxes mainly relate to local company taxes paid in EXMAR Shipmanagement Congo branch relating to NKOSSA. 5. FINANCIAL REPORT I 145 NOTE 10 - VESSELS AND BARGES (In thousands of USD) COST Shipping Infrastructure Under construction - advance payments Total Balance as per 1 January 2020 121,947 486,113 15,470 623,529 Changes during the nancial year Acquisitions 821 1,060 15,470 17,349 Borrowing costs 0 0 2,222 2,222 Disposals -417 0 0 -417 Balance as per 31 December 2020 122,350 487,173 33,163 642,684 Balance as per 1 January 2021 122,350 487,173 33,163 642,684 Changes during the nancial year Acquisitions 4,188 1,516 128,878 134,582 Borrowing costs 0 0 720 720 Reclassication 1,909 0 0 1,909 Transfers 162,761 0 -162,761 0 Balance as per 31 December 2021 291,209 488,688 0 779,896 DEPRECIATIONS AND IMPAIRMENT LOSSES Balance as per 1 January 2020 18,576 28,348 0 46,925 Changes during the nancial year Depreciations 11,564 23,190 0 34,754 Disposals -417 0 0 -417 Balance as per 31 December 2020 29,723 51,539 0 81,261 Balance as per 1 January 2021 29,723 51,539 0 81,261 Changes during the nancial year Depreciations 13,691 15,600 0 29,291 Impairments 0 19,000 0 19,000 Reclassication 1,908 0 0 1,908 Balance as per 31 December 2021 45,322 86,139 0 131,461 NET BOOK VALUE Net book value as per 31 December 2020 92,627 435,634 33,163 561,424 Net book value as per 31 December 2021 245,887 402,549 0 648,436 The acquisitions in 2021 mainly relate to the two new VLGC’s, FLANDERS INNOVATION and FLANDERS PIONEER for which advances of USD 33.2 million were paid in previous years. These vessels were delivered end June 2021 and September 2021 respectively and at that moment trans- ferred to the Shipping segment (total acquisition cost of USD 162.8 million). Additional acquisitions in 2021 at the Shipping segment related to capitalized rst outtting costs of these two new VLGC’s (USD 2.9 million) and capitalized dry-dock expenses (USD 1.3 million). EXMAR also made USD 1.1 million of capital expenditures for the FSRU S188 (Infrastructure segment). During 2020, additional investments were related to capitalized dry dock expenses (Shipping segment) and TANGO FLNG improvements (Infrastructure segment). The vessels are pledged as a security for the related underlying liabilities. We refer to Note 24 Borrowings for more information in respect of these underlying liabilities. 146 I 5. FINANCIAL REPORT In 2020, the market conditions for the pressurized feet, led management to reassess the useful life of this eet and reduce the useful life from 30 years to 20 years (from construction date) as from 2020 onwards. This change had an impact of USD 5.4 million additional depreciation charges in 2020. Furthermore, the 2020 depreciations included the full depreciation of specic costs incurred and capitalized related to the YPF contract following the settlement of the contract (extra impact of USD 5.8 million). Impairment For the wholly-owned eet, internal and external triggers are evaluated which indicate that the carrying value of the eet should be tested for impairment. The carrying amount of the eet is compared to the recoverable amount, which is the higher of the fair value less cost to sell and the value in use. The fair value less costs to sell is based upon the average fair market value as determined by two independent ship brokers or recent market transactions of comparable assets. This market value is corrected with an average brokerage commission to be paid when a vessel is sold. The value in use is based upon the estimated future cash ows discounted to their present value and reecting current market assess- ments relating to freight rate estimates, employment and operating expenses. The value in use model also includes assumptions taken amongst others with respect to future hire paid, contract duration and number of months interval between two contracts. The operating cash ows are based on internal information and a sensitivity analysis is performed on each assumption. The discounted cash ow model used by management includes estimated cash ows for the remaining lifetime of the wholly-owned eet. Three-year cash ow forecasts are estimated by management based upon the past experience as well as current market expectations regarding volumes and freight rates going forward. Freight rates as well as operating expenses subsequent to this three-year period are expected to change in line with estimated ination afterwards. The discount rate used is a weighted average cost of capital of 5.5% for the Shipping LPG segment, 6.0% for the Shipping LNG segment and 9.2% for the Infrastructure segment. The early termination of the FSRU S188 charter agreement in April 2021 has triggered an impairment test at June 30, 2021. An impairment charge of USD 19.0 million was recorded based on the fair value less cost to sell as determined by two independent brokers, taking into account the wide variety of terms and parties under negotiation at that time. At year-end 2021, management assessed that the fair value less cost to sell is still the most appropriate basis and concluded to maintain the impairment charge of USD 19.0 million recorded as of June 30, 2021. Management also updated the impairment testing of the currently unemployed TANGO FLNG and the fair value less cost to sell as well as the value in use exceed the carrying value. The sensitivity analysis to simulate changes in the WACC (+1%) and future hire income (-10%) shows sucient headroom and management concluded there is no need for impairment. For vessels under joint venture ownership, impairment triggers are evaluated in the same way as for the wholly-owned eet. We refer to Note 14 Investments in equity accounted investees in this respect. 5. FINANCIAL REPORT I 147 NOTE 11 - OTHER PROPERTY, PLANT AND EQUIPMENT (In thousands of USD) COST Land and buildings Machinery and equipment Furniture and movables Total Balance as per 1 January 2020 3,949 1,398 4,633 9,980 Changes during the nancial year Acquisitions 0 30 162 192 Disposals 0 -1 -618 -619 Exchange dierences 365 -15 141 491 Balance as per 31 December 2020 4,314 1,411 4,319 10,044 Balance as per 1 January 2021 4,314 1,411 4,319 10,044 Changes during the nancial year Acquisitions 0 43 207 250 Disposals 0 -509 -937 -1,446 Exchange dierences -332 14 -125 -443 Balance as per 31 December 2021 3,981 959 3,464 8,404 DEPRECIATIONS AND IMPAIRMENT LOSSES Balance as per 1 January 2020 3,244 1,241 3,698 8,183 Changes during the nancial year Depreciations 30 97 281 409 Disposals 0 -1 -618 -619 Exchange dierences 302 -16 106 391 Balance as per 31 December 2020 3,576 1,321 3,466 8,363 Balance as per 1 January 2021 3,576 1,321 3,466 8,363 Changes during the nancial year Depreciations 32 68 238 338 Disposals 0 -509 -687 -1,196 Exchange dierences -277 12 -109 -375 Balance as per 31 December 2021 3,331 892 2,908 7,13 0 NET BOOK VALUE Net book value as per 31 December 2020 738 90 852 1,680 Net book value as per 31 December 2021 651 67 556 1,274 148 I 5. FINANCIAL REPORT NOTE 12 - INTANGIBLE ASSETS (In thousands of USD) COST Concessions, patents, licences Balance as per 1 January 2020 2,685 Changes during the nancial year Acquisitions 17 Disposals -321 Exchange dierences 95 Balance as per 31 December 2020 2,475 Balance as per 1 January 2021 2,475 Changes during the nancial year Acquisitions 79 Disposals -45 Exchange dierences -88 Balance as per 31 December 2021 2,421 DEPRECIATIONS AND IMPAIRMENT LOSSES Balance as per 1 January 2020 2,490 Changes during the nancial year Depreciations 140 Disposals -321 Exchange dierences 95 Balance as per 31 December 2020 2,403 Balance as per 1 January 2021 2,403 Changes during the nancial year Depreciations 67 Disposals -45 Exchange dierences -85 Balance as per 31 December 2021 2,340 NET BOOK VALUE Net book value as per 31 December 2020 73 Net book value as per 31 December 2021 82 5. FINANCIAL REPORT I 149 NOTE 13 - RIGHT -OF- USE ASSETS The Group has initially applied IFRS 16 from January 1, 2019. IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments (we refer to Note 24 Borrowings in respect of right-of-use lease liabilities). (In thousands of USD) COST Property Motor vehicles IT equipment Total Balance as per 1 January 2020 5,702 2,030 625 8,357 Changes during the nancial year Additions 1,021 0 0 1,021 Terminations -153 -2,030 0 -2,184 Contract re-measurement/contract modication 17 0 0 17 Balance as per 31 December 2020 6,586 0 625 7,211 Balance as per 1 January 2021 6,586 0 625 7,211 Changes during the nancial year Additions 2,897 0 92 2,990 Terminations -2,085 0 -267 -2,352 Exchange dierences -64 0 -3 -67 Contract re-measurement/contract modication 1,340 0 0 1,340 Balance as per 31 December 2021 8,675 0 446 9,121 DEPRECIATIONS AND IMPAIRMENT LOSSES Balance as per 1 January 2020 1,721 310 215 2,246 Changes during the nancial year Depreciations 1,818 0 149 1,968 Impairment -153 -310 0 -464 Balance as per 31 December 2020 3,386 0 364 3,750 Balance as per 1 January 2021 3,386 0 364 3,750 Changes during the nancial year Depreciations 1,487 0 181 1,668 Terminations -2,083 0 -267 -2,351 Exchange dierences 59 0 -5 54 Balance as per 31 December 2021 2,848 0 273 3,121 NET BOOK VALUE Net book value as per 31 December 2020 3,201 0 260 3,461 Net book value as per 31 December 2021 5,827 0 173 6,000 The increase in the net book value of the right-of-use assets by USD 2.5 million in 2021 is primarily due to new lease property lease agreements (USD 2.1 million) for the Belgian oces and the contract modication (extension lease term) of the US oce lease (USD 1.3 million), partially oset by the depreciation charge of the year. 150 I 5. FINANCIAL REPORT NOTE 14 – INVESTMENTS IN EQUITY ACCOUNTED INVESTEES The change in investments in equity accounted investees can be detailed as follows: (In thousands of USD) 2021 2020 Balance as per 1 January 73,298 95,557 Changes during the period: Share in prot/(loss) 21,769 -17,830 Entry in consolidation scope 0 50 Dividends -379 -3,814 Allocation of negative net assets (1) -721 -758 Exchange dierences -441 413 Changes in other comprehensive income equity accounted investees 1,059 -320 Other 93 0 Balance as per 31 December 94,678 73,298 (1) The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor’s interest in the equity accounted investee (i.e. primarily deducted from receivables) and if the negative net asset exceeds the investor’s interest, a corresponding liability is recognized only to the extent that the Group has a legal or constructive obligation. In total, an amount of USD 9.9 million (USD 10.6 million at year-end 2020) was netted in respect of negative net assets. EXMAR has analysed the existing joint arrangements and concluded that the existing joint arrangements are all joint ventures in accor- dance with IFRS 11 Joint arrangements. EXMAR has provided guarantees to nancial institutions that granted credit facilities to her equity accounted investees. As of December 31, 2021 an amount of USD 473.8 million (2020: USD 511.1 million) was outstanding under such loan agreements, of which EXMAR has guaranteed USD 236.9 million (2020: USD 255.5 million). We refer in this respect also to Note 28 Financial risks and nancial instruments. EXMAR did not incur material contingent liabilities versus its equity accounted investees. No other commitments than the earlier men- tioned guarantees are provided by EXMAR to its equity accounted investees. Following regulatory requirements or borrowing arrangements, our joint ventures or associates may be restricted to make cash dis- tributions such as dividend payments or repayments of shareholder loans. Under the borrowing arrangements our joint ventures or associates may only make a distribution if no event of default or no breach of any covenant would result from such distribution. Under corporate law, dividend distributions are restricted if the net assets would be less than the amount of paid up capital plus any reserves that cannot be distributed. For the eet under joint-venture ownership, impairment triggers are evaluated in the same way as for the wholly-owned eet. We refer to Note 10 Vessels and barges for more information in this respect. In 2020, EXMAR accounted for a share in the loss of the equity accounted investees, which is mainly explained by impairment charges on older vessels (USD 30.5 million for EXMAR’s share). During 2021, impairment charges were reversed for two vessels sold and one vessel classied as held for sale at year-end (positive impact of USD 3.2 million on EXMAR’s share in prot). 5. FINANCIAL REPORT I 151 NOTE 15 - FINANCIAL INFORMATION EQUITY ACCOUNTED INVESTEES EXMAR has no liabilities towards its equity accounted investees and has the following assets: (In thousands of USD) 2021 2020 Investments in equity accounted investees: Joint ventures 89,308 66,167 Associates 5,370 7,13 1 Borrowings to equity accounted investees: Long-term 16,841 29,813 Short-term (or current portion of long-term) 15,407 11,500 Total 126,926 114,611 Its investments can be detailed as follows: Joint ventures Segment JV partner Description activities AEX LNG management (liquidated in 2021) Supporting services Anglo-Eastern Newbuilding supervision and LNG vessel management for third party owners Estrela Ltd Infrastructure ASS Owner of the accommodation barge NUNCE EXMAR Gas Shipping Ltd Shipping TEEKAY LPG Previously owner of the midsize vessels TOURAINE EXMAR LPG BV Shipping TEEKAY LPG Holding company for EXMAR-Teekay LPG activities EXMAR Shipping BV Shipping TEEKAY LPG Owner of 20 midsize carriers, of which two carriers under nance lease and one held for sale Good Investment Ltd Shipping TEEKAY LPG Time-charter agreement of the VLGC BW TOKYO Monteriggioni Inc Shipping MOL Owner of the LNG carrier EXCEL which was sold during 2017 - dormant since Solaia Shipping Llc Shipping TEEKAY LNG Owner of the LNG carrier EXCALIBUR Associates Segment Ownership% Description activities Bexco NV Supporting services 44.91% Rope manufacturer for marine and oshore industry Marpos NV Supporting services 45.00% Provides waste solutions for maritime industry Electra Oshore Ltd Infrastructure 40.00% Owner of the accommodation barge WARIBOKO Exview Hong Kong Ltd Infrastructure 40.00% Bareboat owner of the accommodation barge WARIBOKO Springmarine Nigeria Ltd Infrastructure 40.00% Time-charter agreement for the accommodation barge WARIBOKO 152 I 5. FINANCIAL REPORT Jointventures Associates JV partner Teekay LPG MOL Teekay LNG ASS Anglo- Eastern Ownership percentage 50% 50% 50% 50% 50% 45% 45% 40% Entity Total Teekay LPG Monte- riggioni Solaia Shipping Estrela Ltd AEX BEXCO Marpos Total Wariboko companies TOTAL Non current assets 621,033 30,127 13,161 6,664 355 7,630 678,970 Current assets 86,195 4,693 4,475 5,659 18,958 1,297 8,569 129,846 of which cash and cash equivalents 54,474 4,693 4,263 5,626 228 942 218 70,444 Non current liabilities 507,258 4,693 7,500 3,478 1,015523,944 of which bank borrowings 253,137 7,500 3,063 263,700 of which nance leases 174,734 174,734 of which other borrowings 49,531 49,531 Current liabilities 99,777 20 11,630 1,520 11,167 676 21,057 145,847 of which bank borrowings 26,233 10,000 894 37,127 of which nance leases 32,071 32,071 of which other borrowings 15,000 9,848 24,848 Revenue 173,777 21,687 10,401 48,424 2,128 5,075 261,492 Depreciation and amortization 56,144 3,705 1,750 889 72 2,293 64,853 Impairment (reversal) -6,400 -72 1,925 -4,547 Interest income 439 -7 432 Interest expense 21,263 1,204 155 10 1,177 23,809 Income tax expense 115 547 112 774 Prot or (loss) from continuing operations 34,434 -1,247 11,460 1,708 182 2,233 307 -6,603 42,474 Other comprehensive income 1,521 596 2,117 Total comprehensive income 35,955 -1,247 12,056 1,708 182 2,233 307 -6,603 44,591 Net assets (100%) 130,049 -20 15,472 17,300 10,977 976 -4,858 169,896 EXMAR share in net assets 65,025 -10 7,736 8,650 4,930 439 -1,943 84,826 Share in net assets of equity accounted investees on January 1, 2021 47,086 614 1,708 7,796 -224 4,605 444 680 62,709 Share in total comprehensive income 17,978 -624 6,028 854 91 1,003 138 -2,641 22,827 Dividends -277 -103 -379 Foreign currency translation dierences -401 -40 -441 Other -39 133 94 Share in net assets of equity accounted investees on December 31, 2021 65,024 -10 7,736 8,650 4,930 439 -1,961 84,809 Netting negative equity 7,908 1,961 9,869 Share in net assets of equity accounted investees on December 31, 2021, after netting negative equity 72,922 7,736 8,650 4,930 439 94,678 5. FINANCIAL REPORT I 153 Jointventures Associates JV partner Teekay LPG MOL Teekay LNG ASS Anglo- Eastern Ownership percentage 50% 50% 50% 50% 50% 45% 45% 40% Entity Total Teekay LPG Monte- riggioni Solaia Shipping Estrela Ltd AEX BEXCO Marpos Total Wariboko companies TOTAL Non current assets 666,655 32,964 14,911 7,545 441 9,168 731,684 Current assets 48,100 4,778 10,087 946 334 33,551 1,212 11,031 110,039 of which cash and cash equivalents 32,226 4,778 9,857 891 196 302 917 147 49,314 Non current liabilities 613,988 3,522 750 4,353 8,208 630,821 of which bank borrowings 259,370 3,859 263,229 of which nance leases 202,023 202,023 of which other borrowings 152,596 750 8,208 161,554 Current liabilities 74,661 28 39,635 266 31 26,489 667 10,833 152,610 of which bank borrowings 26,080 31,723 3,593 61,396 of which nance leases 34,575 34,575 of which other borrowings 1,500 1,500 Revenue 173,341 20,006 10,448 23,395 1,851 2,747 231,788 Depreciation and amortization 60,296 4,754 1,755 917 73 1,897 69,692 Impairment (reversal) 26,939 34,000 111 61,050 Interest income 1,793 56 12 1 1,862 Interest expense 25,286 1,766 225 9 1,106 28,392 Income tax expense or income 6 49 72 127 Prot or loss from continuing operations -6,527 -45 -26,621 2,182 -547 2,053 198 -7,653 -36,960 Other comprehensive income -349 -291 -640 Total comprehensive income -6,876 -45 -26,912 2,182 -547 2,053 198 -7,653 -37,600 Net assets (100%) 26,106 1,228 3,416 15,591 -447 10,254 986 1,158 58,292 EXMAR share in net assets 13,053 614 1,708 7,796 -224 4,605 444 521 28,517 Share in net assets of equity accounted investees on January 1, 2020 50,525 637 15,164 10,191 3,534 419 3,742 84,210 Share in total comprehensive income -3,438 -23 -13,456 1,091 -274 922 89 -3,061 -18,149 Dividends -3,486 -227 -101 -3,814 Foreign currency translation dierences 377 36 413 Other 50 50 Share in net assets of equity accounted investees on December 31, 2020 47,087 614 1,708 7,796 -224 4,605 444 681 62,711 Netting negative equity 8,964 224 1,402 10,589 Share in net assets of equity accounted investees on December 31, 2020, after netting negative equity 56,050 614 1,708 7,796 4,605 444 2,082 73,299 154 I 5. FINANCIAL REPORT Jointventures Associates JV partner Teekay LPG MOL Teekay LNG ASS Anglo- Eastern Ownership percentage 50% 50% 50% 50% 50% 45% 45% 40% Entity Total Teekay LPG Monte- riggioni Solaia Shipping Estrela Ltd AEX BEXCO Marpos Total Wariboko companies TOTAL Non current assets 666,655 32,964 14,911 7,545 441 9,168 731,684 Current assets 48,100 4,778 10,087 946 334 33,551 1,212 11,031 110,039 of which cash and cash equivalents 32,226 4,778 9,857 891 196 302 917 147 49,314 Non current liabilities 613,988 3,522 750 4,353 8,208 630,821 of which bank borrowings 259,370 3,859 263,229 of which nance leases 202,023 202,023 of which other borrowings 152,596 750 8,208 161,554 Current liabilities 74,661 28 39,635 266 31 26,489 667 10,833 152,610 of which bank borrowings 26,080 31,723 3,593 61,396 of which nance leases 34,575 34,575 of which other borrowings 1,500 1,500 Revenue 173,341 20,006 10,448 23,395 1,851 2,747 231,788 Depreciation and amortization 60,296 4,754 1,755 917 73 1,897 69,692 Impairment (reversal) 26,939 34,000 111 61,050 Interest income 1,793 56 12 1 1,862 Interest expense 25,286 1,766 225 9 1,106 28,392 Income tax expense or income 6 49 72 127 Prot or loss from continuing operations -6,527 -45 -26,621 2,182 -547 2,053 198 -7,653 -36,960 Other comprehensive income -349 -291 -640 Total comprehensive income -6,876 -45 -26,912 2,182 -547 2,053 198 -7,653 -37,600 Net assets (100%) 26,106 1,228 3,416 15,591 -447 10,254 986 1,158 58,292 EXMAR share in net assets 13,053 614 1,708 7,796 -224 4,605 444 521 28,517 Share in net assets of equity accounted investees on January 1, 2020 50,525 637 15,164 10,191 3,534 419 3,742 84,210 Share in total comprehensive income -3,438 -23 -13,456 1,091 -274 922 89 -3,061 -18,149 Dividends -3,486 -227 -101 -3,814 Foreign currency translation dierences 377 36 413 Other 50 50 Share in net assets of equity accounted investees on December 31, 2020 47,087 614 1,708 7,796 -224 4,605 444 681 62,711 Netting negative equity 8,964 224 1,402 10,589 Share in net assets of equity accounted investees on December 31, 2020, after netting negative equity 56,050 614 1,708 7,796 4,605 444 2,082 73,299 NOTE 16 - BORROWINGS TO EQUITY ACCOUNTED INVESTEES (In thousands of USD) Shipping Infrastructure Supporting services Total As per 1 January 2020 42,067 7,912 0 49,979 New loans and borrowings 0 200 375 575 Repayments -10,000 0 0 -10,000 Change in allocated negative net assets (1) 1,218 -236 -223 759 As per 31 December 2020 33,285 7, 8 7 6 152 41,313 More than 1 year 23,285 6,376 152 29,813 Less than 1 year 10,000 1,500 0 11,500 As per 1 January 2021 33,285 7, 8 7 6 152 41,313 New loans and borrowings 0 590 0 590 Repayments -10,000 0 0 -10,000 Write-o 0 0 -376 -376 Change in allocated negative net assets (1) 1,056 -559 224 721 As per 31 December 2021 24,341 7, 9 0 7 0 32,249 More than 1 year 16,841 0 0 16,841 Less than 1 year 7,500 7,9 0 7 0 15,407 (1) The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor’s interest in the equity accounted investee (i.e. primarily deducted from receivables) and if the negative net asset exceeds the investor’s interest, a corresponding liability is recognized only to the extent that the Group has a legal or constructive obligation. In total, an amount of USD 9.9 million (USD 10.6 million at year-end 2020) was netted in respect of negative net assets. The activities and assets of certain of our equity accounted investees are nanced through shareholder borrowings made by the Com- pany to the respective equity accounted investees. Such long term borrowings granted are in substance part of the net investment in an associate or joint venture and any expected credit losses are accounted for before allocating negative net assets. The balances mentioned below represent the outstanding balances including netting of negative net assets. EXMAR LPG (Shipping segment) - USD 23.3 million (2020: USD 33.3 million) Both shareholders have granted shareholder loans to EXMAR LPG in 2013. Repayment occurs based on availability of cash and only if such repayment would not result in a breach of the covenants applicable on the bank borrowings to EXMAR LPG. The applicable interest rate on these loans amounts to three-month LIBOR plus 0.5%. During 2021, USD 10.0 million was repaid and USD 7.5 million was received in February 2022. Electra Oshore Ltd (Infrastructure segment) - USD 7.9 million (2020: USD 7.9 million) EXMAR Netherlands BV has granted a loan to Electra Oshore Ltd in 2016. The loan is repaid based on availability of cash but was however presented as short-term due to its maturity end 2021 and both parties are currently negotiating the extension terms. The interest rate applicable on the loan is a xed percentage of 12.0%. 5. FINANCIAL REPORT I 155 NOTE 17 - ASSETS HELD FOR SALE (In thousands of USD) Assets held for sale Balance as per 1 January 2020 11,000 Changes during the nancial year Impairment -1,000 Balance as per 31 December 2020 10,000 Balance as per 1 January 2021 10,000 Changes during the nancial year Reversal of impairment 2,500 Balance as per 31 December 2021 12,500 Per December 31, 2019 the aircraft was presented as asset held for sale because EXMAR intended to sell the aircraft. In 2019 and 2020, impairment losses of respectively USD 4.7 million and USD 1.0 million were recorded to reect the market value of the asset. Due to the COVID-19 pandemic and related world-wide travel restrictions, EXMAR experienced diculties in selling the aircraft but a letter of intent was received end 2021. As a result, an impairment charge of USD 2.5 million was reversed and a nal sales agreement was signed in February 2022. NOTE 18 - OTHER INVESTMENTS (In thousands of USD) 2021 2020 Unquoted shares 911 1,062 Quoted shares 938 292 Equity securities - FVTPL 1,849 1,354 The unquoted shares include 149 shares of Sibelco, acquired during 2014. The quoted shares include 116,338 shares of Frontera Energy Corporation quoted at CAD 10.24 on December 31, 2021 (December 31, 2020: CAD 3.21). 156 I 5. FINANCIAL REPORT NOTE 19 - TRADE AND OTHER RECEIVABLES (In thousands of USD) 2021 2020 Non-current trade receivables 0 24,444 Current trade receivables (including contract assets) 46,826 100,351 Cash guarantees 199 190 Other receivables 3,047 4,058 Deferred charges and accrued income 5,081 3,036 Current trade and other receivables 55,154 107,636 Trade and other receivables 55,154 132,080 Of which nancial assets (Note 28) 48,534 125,865 The decrease in trade receivables and contract assets is mainly explained by the payment of the YPF settlement fee: USD 85.3 million received in 2021 and USD 24.4 million due in 2022 in accordance with the agreed payment schedule (see also Note 4 Revenue). The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in Note 28 Financial risks and nancial instruments. In 2021, an impairment loss of USD 1.1 million was recorded (2020: USD 0.1 million). Deferred charges comprise expenses already invoiced relating to the next accounting year, e.g. hire, insurances, commissions, bunkers, prepaid credit facility costs. Accrued income comprises uninvoiced revenue related to the current accounting period such as interests. NOTE 20 - TAX ASSETS AND LIABILITIES Current tax assets and liabilities (In thousands of USD) 31 December 2021 2020 Current tax assets 1,003 3,472 Current tax liabilities 1,309 5,043 The decrease in current tax assets is the result of a favorable outcome of a tax and related withholding tax dispute, which management had assessed as non-valid and for which a receivable of USD 2.0 million was recorded in previous year. This receivable and related tax payable (USD 1.0 million) were reversed and EUR 1.0 million was received in cash from the Belgian tax authorities. The decrease in current tax liabilities is furthermore explained by the payment of tax assessments related to 2019. 5. FINANCIAL REPORT I 157 Deferred tax assets and liabilities (In thousands of USD) 31 December 2021 31 December 2020 Assets Liabilities Assets Liabilities Vessels 0 0 0 556 Provisions 0 84 0 84 Employee benets 704 0 1,166 0 Financial instruments 0 230 0 0 Other 0 65 0 0 Deferred tax assets / liabilities 704 379 1,166 640 Set o of tax assets/ liabilities -379 0 -640 0 Tax assets not recognised -325 0 -526 0 Deferred tax assets and liabilities (net) 0 0 0 0 Deductible temporary dierences 325 526 Unused tax losses and investment tax credits 65,069 63,894 Deferred tax assets/ liabilities not recognised 65,394 0 64,420 0 Our equity accounted investees have limited temporary dierences. Deferred tax assets on tax losses at our joint ventures and equity accounted investees amounted to USD 0.7 million end 2021 (2020: USD 0.6 million) for their share, but have not been recognized. Amounts have not been included in the above overview. Tax assets are not recognised if it is not probable that future taxable prots will be available against which the group can use the benets therefrom or because the future taxable prots cannot be measured on a reliable basis. The majority of the tax losses and investment tax credits do not expire in time. NOTE 21 - RESTRICTED CASH AND CASH AND CASH EQUIVALENTS (In thousands of USD) 2021 2020 Restricted cash 76,121 75,575 Bank 70,834 27,967 Cash in hand 73 47 Short-term deposits 222 180 Net cash and cash equivalents 71,130 28,195 The restricted cash relates to the credit facility with the Bank of China for the TANGO FLNG and consists of 2 parts: • Debt service reserve account (“DSRA”) which is linked to the employment of the TANGO FLNG and amounting to USD 66.9 million at year-end 2021. On February 26, 2020 the Bank of China released USD 40.0 million of this restricted cash (DSRA). As a consequence of the early termination of the TANGO FLNG agreements, the loan agreement with the Bank of China stipulated a replenishment of the DSRA with USD 40.0 million. Management expects that the TANGO FLNG will be under contract again within the next nancial year and that consequently a large part of the DSRA will be released. • Debt service account (“DSA”) which is used to service the debt repayment. Balance at year-end 2021 amounted to USD 9.2 million. 158 I 5. FINANCIAL REPORT NOTE 22 - SHARE CAPITAL AND RESERVES Share capital and share premium Number of ordinary shares 2021 2020 Issued shares as per 1 January 59,500,000 59,500,000 Issued shares as per 31 December - paid in full 59,500,000 59,500,000 The issued shares have no nominal value. The holders of ordinary shares are entitled to dividends and are entitled to one vote per share during the General Meeting of Shareholders of the Company. As authorized by the Extraordinary General Meeting held on September 11, 2020, the Board of Directors of EXMAR may, for a period of ve years expiring in September 2025, within certain legal limits and conditions, increase the capital of EXMAR NV by a maximum amount of USD 12.0 million. Dividends With respect to nancial year 2021, the Board of Directors proposes a gross dividend of EUR 0.08 per share to be paid to owners of or- dinary shares. This dividend is subject to approval by the General Meeting of Shareholders of May 17, 2022 and has therefore not been included as a liability in EXMAR’s consolidated nancial statements prepared under IFRS. The nancial year 2021 dividend, based on the number of shares issued, is EUR 4.8 million or a total gross dividend of USD 5.4 million. In 2021, the Board of Directors of EXMAR proposed to the General Meeting of Shareholders a gross dividend of EUR 0.15 per share. The Shareholders meeting, held on May 18, 2021, decided to increase the dividend to EUR 0.30 per share resulting in a total dividend payable of EUR 17.9 million or USD 21.9 million. No distribution to owners of the Company occurred during 2020. Treasury shares The reserve for treasury shares comprises the cost of the Company’s shares held by the Group. 2021 2020 Number of treasury shares held as of 31 December 2,273,263 2,273,263 Book value of treasury shares held (in thousands USD) 44,349 44,349 Average cost price per share (in EUR) - historical value 14.1507 14.1507 Translation reserve The translation reserve comprises all foreign exchange dierences arising from the translation of the nancial statements of Group’s subsidiaries which have a functional currency dierent than the USD reporting currency. The balance in the translation reserve is mainly impacted by the appreciation or depreciation of the EUR to the USD. Hedging reserve The hedging reserve comprises the eective portion of the cumulative net change in the fair value of cash ow hedging instruments related to the hedged transactions that have not yet occurred. In certain of our equity accounted investees, interest rate swaps (IRS) contracts have been closed to cover their exposure on variable interest rates. 5. FINANCIAL REPORT I 159 NOTE 23 - EARNINGS PER SHARE 2021 2020 Result for the period, attributable to owners of the Company (in USD) 11,599,651 91,934,362 Issued ordinary shares as per 31 December 59,500,000 59,500,000 Eect of treasury shares -2,273,263 -2,273,263 Weighted average number of ordinary shares as per 31 December 57,226,737 57,226,737 Basic earnings per share in USD 0.20 1.61 2021 2020 Result for the period, attributable to owners of the Company (in USD) 11,599,651 91,934,362 Weighted average number of ordinary shares as per 31 December 57,226,737 57,226,737 Dilution eect of share based compensation 0 0 Weighted average number of ordinary shares including options 57,226,737 57,226,737 Diluted earnings per share in USD 0.20 1.61 As option plans 8, 9 and 10 are anti-dilutive as per December 31, 2021 and 2020 they are not included in the calculation of the diluted earnings per share. 160 I 5. FINANCIAL REPORT 5. FINANCIAL REPORT I 161 NOTE 24 - BORROWINGS (In thousands of USD) Bank loans Other loans Lease liabilities ROU assets Total As of 1 January 2020 264,102 119,666 21,665 405,433 New loans and borrowings 11,581 1,221 1,021 13,823 Repayments -62,036 0 -17,382 -79,418 Disposals right-of-use assets 0 0 -1,729 -1,729 Amortized transaction costs 2,298 693 0 2,991 Exchange dierences 0 2,150 81 2,231 Movement accrued interest payable -1,641 -88 0 -1,729 Contract re-measurement/ contract modication 0 0 17 17 As of 31 December 2020 214,304 123,642 3,673 341,619 More than 1 year 171,739 102,967 1,882 276,589 Less than 1 year 42,565 20,675 1,791 65,031 As of 31 December 2020 214,304 123,642 3,673 341,619 Shipping segment 65,363 46,292 332 111,987 Infrastructure segment 145,247 77,350 2,307 224,904 Supporting services segment 3,694 0 1,034 4,728 As of 31 December 2020 214,304 123,642 3,673 341,619 As of 1 January 2021 214,304 123,642 3,673 341,619 New loans 144,000 0 2,990 146,990 Repayments -39,616 -22,916 -1,554 -64,086 Loan forgiveness 0 -29 0 -29 Amortized transaction costs 1,981 693 0 2,674 Exchange dierences -114 -2,352 -344 -2,810 Accrued interest payable -831 -55 0 -886 Contract re-measurement/ contract modication 0 0 1,340 1,340 As of 31 December 2021 319,724 98,983 6,105 424,812 More than 1 year 281,413 27,659 4,745 313,816 Less than 1 year 38,311 71,324 1,360 110,995 As of 31 December 2021 319,724 98,983 6,105 424,812 Shipping segment 190,456 26,467 769 217,691 Infrastructure segment 129,265 72,517 3,013 204,795 Supporting services segment 3 0 2,323 2,326 As of 31 December 2021 319,724 98,983 6,105 424,812 162 I 5. FINANCIAL REPORT Bank loans The bank loans mainly relate to: FLANDERS INNOVATION & FLANDERS PIONEER – USD 140.9 million The Group obtained nancing of USD 144.0 million for the two new VLGC’s: FLANDERS INNOVATION starting in June 2021 (USD 72.0 million) and FLANDERS PIONEER starting in September 2021 (also USD 72.0 million) and maturing in fteen years. The weighted average interest rate implicit in these loans amounts to 5.62%. LPG pressurized facilities - USD 43.9 million (2020: USD 57.4 million) In the last quarter of 2018, EXMAR renanced its LPG pressurized eet: ve vessels were renanced under this transaction in October 2018, one vessel in December 2018 and four vessels in April 2019. The loans are repayable in quarterly tranches and the applicable interest percentage amounts to three-month LIBOR plus 2.4%. The last repayment is foreseen in December 2025. All obligations of the borrower are guaranteed by EXMAR NV (“guarantor”). TANGO FLNG facility - USD 129.3 million (2020: USD 145.3 million) End of June 2017, EXPORT LNG Limited (a 100% subsidiary of EXMAR NV) signed a nancing agreement of USD 200.0 million with the Bank of China (BoC), Deutsche Bank and Sinosure for the nancing of the TANGO FLNG. This loan has been drawn on July 27, 2017 at the time of the delivery of the TANGO FLNG. The agreement with BoC provides a repayment period of twelve years and the loan bears interest at a rate of six-month LIBOR plus 3.0% (until end June 2021) and 2.2% as from July 2021. The yearly estimated debt service amounts to USD 21.3 million. All obligations of the borrower are guaranteed by EXMAR NV (“guarantor”). There is a requirement for the owner to deposit an amount of USD 66.0 million on an escrow account (debt service reserve account). The dierence with the amount of restricted cash recorded in the statement of nancial position can be explained by the debt service account with Bank of China which is used to service the debt repayments and interest. Aircraft held for sale - USD 5.6 million (2020: USD 7.9 million) For the nancing of the aircraft held for sale, a loan has been secured in February 2020 for a period of one year and an amount of USD 9.5 million at an interest of three-month LIBOR plus a margin of 2.25%. Repayments amounted to USD 300K per quarter with a balloon payment of USD 8.3 million at the end of the loan term. The loan agreement was amended in February and May 2021, whereby the loan was extended until February 2023 and the oating interest was replaced by a xed interest of 3.16%. Payments amount to USD 466K per quarter with a remaining balloon payment of USD 3.5 million upon maturity. Credit facilities Revolving credit facilities – USD 0 million (2020: USD 3.7 million) In May 2020, EXMAR obtained a revolving credit facility of EUR 18.0 million from Belgian nancial institutions with maturity date February 1, 2022 at an interest rate of EURIBOR three-month plus 2.0% margin. This facility was extended until June 2024 and can be increased up to USD 30.0 million, the latter conditional of the employment of at least one of the two barges. EXMAR did not draw upon this facility per end 2021 and used USD 3.7 million end 2020. On November 11, 2021, EXMAR signed a three-year facility agreement of up to USD 50.0 million with Sequoia Economic Infrastructure Income Fund (SEQI). The applicable interest rate is LIBOR plus a margin between 7.0% and 8.75%, depending on net leverage. The facility was not yet used in 2021, but will be used to repay part of the NOK 650.0 million bond, which matures in May 2022 (see below). Other loans NOK 650.0 million bond - USD 71.3 million (2020: USD 75.5 million) The other loans relate mainly to an initial NOK 650.0 million senior unsecured bond issued by EXMAR Netherlands BV and allocated to the Infrastructure segment, with a coupon of three-month NIBOR plus 8.75% and with maturity date in May 2022. During 2021, EXMAR has repurchased a nominal amount of NOK 25.0 million or USD 2.9 million of the bond. The outstanding balance at December 31, 2021 amounts to USD 71.3 million. Additional purchases were done in 2022: see Note 36 Subsequent events. 5. FINANCIAL REPORT I 163 All obligations of the issuer are guaranteed by EXMAR NV (“guarantor”). EXMAR NV has to maintain direct or indirect a 100% ownership in the issuer. The NOK interest rate exposure is not covered by any nancial instrument and since end 2021 the NOK/ USD exposure is partially covered by forward contracts: EXMAR purchased NOK 240.0 million forwards for USD 26.3 million in December 2021, which results in a fair value gain of USD 0.9 million on December 31, 2021 (see also Note 8 Finance income/expenses and Note 28 Financial risks and nancial instruments). VLGC’s pre-nancing - USD 0 million (2020: USD 20.0 million) During 2021, EXMAR repaid its pre-delivery nancing for the two VLGC’s (see above) of USD 20.0 million to Maritime Asset Partners. Pressurized eet - USD 26.5 million (2020: USD 26.3 million) The other loans comprise the outstanding equity part of the JOLCO (Japanese Operating Lease with Call Option) nancing, concluded at the same time as the bank loans of the pressurized eet mentioned above and with the same end dates. Management assumes to exercise the purchase options at the end of the leases, which will then result in an additional cash out of USD 15.8 million. Other information In general, the borrowings held by EXMAR and its equity accounted investees are secured by a mortgage on the underlying assets owned by EXMAR and its equity accounted investees. Furthermore, dierent pledges and other types of guarantees exist to secure the borrowings. In addition, dividend restrictions are included as a special covenant in the terms of the bond. EXMAR shall not declare or make any dividend payment or distribution, whether in cash or in kind, that in aggregate exceed 50% of the consolidated net prot after tax (proportionate consolidation) based on the audited consolidated nancial statements for the previous nancial year. EXMAR has pledged nancial assets as collateral for liabilities. We refer to Note 21 Restricted cash and cash and cash equivalents where the amount of restricted cash in respect of nancing agreements is disclosed. Covenants Dierent debt covenants exist that require compliance with certain nancial ratio’s. These ratio’s are calculated semi-annually based on EXMAR’s consolidated gures in which equity accounted investees are not accounted for under IFRS 11 but still on a proportionate basis (similar to accounting policies used for segment reporting purposes). We refer to the table below for an overview of the applicable covenants. APPLICABLE COVENANTS Ratio Pressurized facility TANGO FLNG facility Bond Credit facilities (1) Other (2) Actual 31 December 2021 (3) Actual 31 December 2020 (3) Minimum Book equity ≥ USD 300 million ≥ USD 300 million ≥ USD 300 million ≥ USD 300 million ≥ $300m + 50% of net positive income USD 536.5 million USD 545.9 million Minimum free cash ≥ USD 25 million ≥ USD 25 million ≥ USD 20 million ≥ USD 20 million ≥ USD 40 million USD 107.1 million USD 53.7 million Equity ratio (Equity/Total assets) ≥ 25% ≥ 25% NA NA NA (4) 45.39% 44.43% Net Interest Bearing Debt or NIBD/equity NA NA Max. 2.50 Max. 2.50 NA 0.97 0.95 Interest Coverage ratio NA min 2:1 min 2:1 min 2:1 NA 3.84 7. 24 Working capital min positive min positive min positive min positive min positive USD 146.1 million USD 129.2 million Net nancial indebtedness ratio NA NA NA < 70% NA 49.56% 48.93% Outstanding loan amount 70,354 129,265 71,324 - - (1) Related to the new Sequoia USD facility (2021) as well as the EUR credit facility. (2) Other included the pre-delivery nancing obtained from Maritime Asset Partners (see above) and to loan amounts which are included in the proportionate consolidation but not in the equity consolidation and consequently the outstanding balance for this covenant is not included in the outstanding loan amount above. The outstanding loan amount for this covenant in our proportionate consolidation amounts to USD 8.8 million. (3) The actual amounts presented are based on the most restrictive denitions. (4) No longer applicable in 2021 as this covenant was related to the pre-delivery nancing obtained from Maritime Asset Partners. 164 I 5. FINANCIAL REPORT Explanation of the major denitions applied in the covenant calculations: • Free cash: cash in hand (excluding pledged or blocked cash), time deposits and, in certain covenants, including undrawn credit facilities with minimum six months to maturity; • Interest coverage ratio: EBITDA divided by net interest expense of the nancial period; • Book equity: equity excluding treasury shares and the eect of any impairment of intangible assets and the eect of fair value changes of any nancial derivative; • Net interest-bearing debt: consolidated interest-bearing nancial indebtness less free cash (and in one covenant also less restricted cash used as debt collateral) • Net interest expense interest cost (and including banking fees in certain covenants) of the Group’s interest-bearing debt less interest income of the Group including dividend received from nancial assets held for sale; • Working capital: current assets less current liabilities. As of December 31, 2021 EXMAR was compliant with all covenants with sucient headroom. EXMAR is continuously monitoring compliance with all applicable covenants in order to meet all covenants per June 2022 and December 2022. A potential risk exist that EXMAR could not meet all of its covenants in 2022. Management is currently exploring several possibilities, such as sale of assets, debt restructuring or obtaining a waiver, to timely remedy, such as sale of assets, debt restructuring or obtaining a waiver, if needed. Management is however condent that EXMAR will meet its covenant commitments and has therefore applied the going concern as- sumption. We refer to section Signicant judgments and estimates for additional information. In case of non-compliance with these covenants, early repayment of related borrowings might be required and should therefore be accounted for as short term debt. Following steps are to be taken in accordance with applicable agreements if a breach of covenants would occur: • Each borrower shall notify the Facility Agent of any Defaults (and the steps, if any, taken to remedy it) promptly upon becoming aware of its occurrence. • Promptly, upon the request by the Facility Agent, the Borrower shall supply a certicate signed by two of its directors certifying that no Default is continuing, specifying the Default and the steps, if any, being taken to remedy it. NOTE 25 - SHARE BASED PAYMENTS The Group established a share option plan program that entitles certain employees to register for a number of shares. The share options are only exercisable after a period of three years and for employees still in service after this three year period. Each share option entitles the holder of the option to one EXMAR share. The fair value of services received in return for share options granted are measured by reference to the exercise price of the granted share options. The estimated fair value of the services received is measured based on a binomial lattice model. The contractual life of the option is used as an input into this model. GRANT DATE FAIR VALUE OF SHARE OPTION AND ASSUMPTIONS AT INCEPTION Plan 10 Plan 9 Plan 8 Number of options outstanding at year-end 333,250 336,100 391,500 Fair value at grant date (in EUR) 3.21 2.32 3.36 Share price at grant date (in EUR) 9.62 10.00 11.33 Exercise price at inception (in EUR) 9.62 10.54 10.54 Expected volatility (1) 40.70% 30.60% 31.40% Option life at inception 8 years 8 years 8 years Maturity date 2023 2022 2021 Expected dividends 0.3 eur/y 0.3 eur/y 0.4 eur/y Risk-free interest rate 0.53% 0.62% 1.87% (1) The expected volatility is based on the historical volatility (calculated based on the weighted average remaining life of the share options), adjusted for any expected changes to future volatility due to publicly available information. Plan 8 matured at the end of 2021 and the remaining 391,500 options forfeited. During 2021 and 2020 no options were exercised, nor were any new plans granted. RECONCILIATION OF OUTSTANDING SHARE OPTIONS 2021 2020 Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding share options at 1 January 1,060,850 10.25 1,396,158 10.92 New options granted 0 0.00 0 0.00 Changes during the year Options exercised 0 0.00 0 0.00 Options forfeited -409,000 10.52 -335,308 13.04 Outstanding share options at 31 December 651,850 10.25 1,060,850 10.25 Exercisable share options at 31 December 651,850 10.08 1,060,850 10.25 The weighted average remaining contractual life of the outstanding options at the end of December 2021, amounts to 0.89 years (2020: 1.95 years). All plans have been fully expensed since 2018. 5. FINANCIAL REPORT I 165 NOTE 26 - EMPLOYEE BENEFITS Dened benet plan and similar liabilities The Group provides pension benets for most of its employees, either directly or through a contribution to an independent fund. The pension benets for management sta employed before January 1, 2008 are provided under a dened benet plan. This plan is orga- nized as a nal pay program. For the management sta employed as from January 1, 2008 the management sta promoted to management as from January 1, 2008 and the management sta who reached the age of 60, the pension benets are provided under a dened contribution plan. Belgian dened contribution plans are subject to the Law of April 28, 2003 on supplementary pensions (WAP). According to article 24 of this law, the employer has to guarantee a xed minimum return of 3.25% on employer contributions and of 3.75% on employee contributions and this for contributions paid until December 31, 2015. As from January 2016, the employer has to guarantee an average minimum return of 1.75% on both employer and employee contributions (as changed by the Law of December 18, 2015). This guaranteed minimum return generally exceeds the return that is normally guaranteed by the insurer. Because the employer has to guarantee the statutory minimum return on these plans, not all actuarial and investment risks relating to these plans are transferred to the insurance company managing the plans. Therefore, these plans do not meet the denition of dened contribution plan under IFRS and have to be classied by default as dened benet plans. An actuarial calculation has been performed in accordance with IAS 19 based on the projected unit credit method. Employee benets (In thousands of USD) 2021 2020 2019 2018 2017 DEFINED BENEFIT PLANS Present value of funded obligations -9,631 -10,969 -11,535 -11,697 -12,072 Fair value of the dened plan assets 9,017 9,408 8,839 7,626 7, 3 6 1 Present value of net obligations -614 -1,561 -2,696 -4,072 -4,711 BELGIAN DEFINED CONTRIBUTION PLAN WITH GUARANTEED RETURN Present value of funded obligations -8,102 -9,559 -5,340 -4,703 -3,313 Fair value of the dened plan assets 7, 9 86 9,405 6,438 4,609 3,198 Present value of net (obligations) assets -116 -154 1,099 -94 -115 Total employee benets -730 -1,715 -1,597 -4,166 -4,826 166 I 5. FINANCIAL REPORT Dened benet plan (In thousands of USD) 2021 2020 CHANGES IN LIABILITIES DURING THE PERIOD (1) Liability as per 1 January 20,528 18,065 Distributions -1,623 -1,812 Actual employee's contributions 195 208 Interest expense 76 85 Current service cost 719 750 Actual taxes on contributions paid (excluding interest) -128 -131 Actuarial gains/losses -513 221 Correction paragraph 115 0 -200 Exchange dierences -1,521 3,342 Liability as per 31 December 17,733 20,528 CHANGES OF FAIR VALUE OF PLAN ASSETS (1) Plan assets as per 1 January 18,813 15,277 Contributions 1,232 1,261 Distributions -1,623 -1,812 Interest income 74 83 Actual taxes on contributions paid (excluding interest) -128 -131 Actual administration costs -68 -69 Actuarial gain/loss 134 605 Correction paragraph 115 0 410 Exchange dierences -1,431 3,189 Plan assets as per 31 December (2) 17,003 18,813 Net dened liability as per 31 December 730 1,715 (1) The changes in pension liabilities and plan assets include both the dened benet plans as the Belgian dened contribution plans which qualify as a dened benet plan. (2) The plan assets do not include any shares issued by EXMAR or property occupied by EXMAR. (In thousands of USD) 2021 2020 EXPENSE RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS Current service expenses -719 -750 Interest expense -76 -85 Expected return on plan assets 74 83 Administration cost -68 -69 Total pension cost recognised in the income statement (see note 7) -789 -821 EXPENSE RECOGNISED IN OTHER COMPREHENSIVE INCOME Recognition of actuarial gains and losses 647 384 Total pension cost recognised in other comprehensive income 647 384 5. FINANCIAL REPORT I 167 The expected employer contributions to be paid for the next nancial year amount to: (In thousands of USD) 2021 2020 EXPECTED NEXT YEAR CONTRIBUTIONS Best estimate of contributions expected to be paid during next year 1,142 1,285 The actuarial assumptions and average duration of the plans are detailed below: (In weighted averages) 2021 2020 MOST SIGNIFICANT ASSUMPTIONS Discount rate at 31 December 0.70% 0.15% Expected return on assets at 31 December 0.70% 0.15% Ination 1.90% 1.75% Duration of dened benet plans (in years) 9 6 Duration of the Belgian dened contribution plans (in years) 18 16 The plan assets are composed as follows: (In thousands of USD) 2021 2020 DETAIL PLAN ASSETS INVESTMENTS Shares 4.0% 2.5% Bonds & loans 89.0% 88.5% Property investments 6.0% 8.0% Cash 1.0% 1.0% NOTE 27 - TRADE AND OTHER PAYABLES (In thousands of USD) 2021 2020 Trade payables 22,990 20,868 Other payables 7,74 9 7,925 Deferred income 6,501 8,839 Trade and other payables 37,241 37,632 Of which nancial liabilities (Note 28) 30,681 28,070 Deferred income comprises already invoiced revenue, related to the next accounting year, e.g. freight, hire,... 168 I 5. FINANCIAL REPORT NOTE 28 - FINANCIAL RISKS AND FINANCIAL INSTRUMENTS During the normal course of its business, EXMAR is exposed to various risks as described in more detail in the Corporate Governance Statement. EXMAR is exposed to credit, interest, currency and liquidity risks and in order to hedge this exposure, EXMAR uses dierent nancial instruments, mainly interest rate hedges situated within our equity accounted investees as well as foreign currency forward contracts. EXMAR applies hedge accounting for all hedging relations which meet the conditions to apply hedge accounting (formal documentation and high eectiveness at inception and on an ongoing basis). Financial instruments are recognised initially at fair value. Subsequent to initial recognition, the eective portion of changes in fair value of the nancial instruments qualifying for hedge accounting, is recognised in other comprehensive income. Any ineective portion of changes in fair value and changes in fair value of nancial instruments not qualifying for hedge accounting are recognised immediately in prot or loss. Fair value & fair value hierarchy The following table shows nancial assets and nancial liabilities measured at fair value, including their level in the fair value hierarchy. (In thousands of USD) 31 DECEMBER 2021 Level 1 Level 2 Level 3 Total Derivative nancial asset 0 920 0 920 Equity securities - FVTPL 938 911 0 1,849 Total nancial assets carried at fair value 938 1,831 0 2,769 Total nancial liabilities carried at fair value 0 0 0 0 (In thousands of USD) 31 DECEMBER 2020 Level 1 Level 2 Level 3 Total Equity securities - FVTPL 292 1,062 0 1,354 Total nancial assets carried at fair value 292 1,062 0 1,354 Total nancial liabilities carried at fair value 0 0 0 0 Financial instruments other than those listed above are all measured at amortized cost. Credit risk Credit risk policy Credit risk is monitored closely on an ongoing basis by the Group and creditworthiness controls are carried out if deemed necessary. At year-end no signicant creditworthiness problems were noted. The largest balance in trade receivables and other receivables relates to the outstanding amount of the YPF settlement fee: USD 24.4 million end 2021 and USD 109.8 million end 2020. We refer to Note 4 Rev - enue for additional information. The balance of this settlement amount is payable by YPF in monthly instalments backed by a nancial security issued by an investment grade counterparty. The borrowings to equity accounted investees consist of shareholder loans to our equity accounted investees that own or operate an LPG vessel or Oshore platform. As all vessels are operational and generate income or are pledged as a security for the underlying borrow- ing, we do not anticipate any recoverability issues for the outstanding borrowings to equity accounted investees. The equity accounted investees for whom the share in the net assets is negative, are allocated to other components (mainly deducted from receivables) of the investor’s interest in the equity accounted investee and if the negative net asset exceeds the investor’s interest, a corresponding liability is recognized to the extent that the Group has a legal or constructive obligation. The term of the shareholder loans is discussed in Note 16 Borrowings to equity accounted investees of this annual report. Early 2022, USD 7.5 million was repaid. 5. FINANCIAL REPORT I 169 Exposure to risk (In thousands of USD) 2021 2020 Borrowings to equity accounted investees 32,249 41,313 Derivative nancial assets 920 0 Other investments - equity instruments at FVTPL 1,849 1,354 Trade and other receivables (see Note 19) 48,534 125,865 Restricted cash 76,121 75,575 Cash and cash equivalents 71,130 28,195 Carrying amount of nancial assets 230,803 272,301 The carrying amounts of the nancial assets represent the maximum credit exposure. Impairment losses As past due outstanding receivable balances are immaterial, no ageing analysis is disclosed. During 2021, an impairment loss of USD 1.1 million was recorded (2020: USD 0.1 million) related to other receivables. Interest risk Interest risk policy The interest-bearing loans are mainly negotiated with variable interest rates. In order to monitor this interest risk, the Group makes use of interest hedging instruments available on the market when management is of the opinion that it is favorable to do so. For the moment, no interest rate swaps exist within our subsidiaries. On the other hand, dierent interest rate swaps exist within our equity accounted investees. The Group applies hedge accounting when the conditions to apply hedge accounting are met. In case no hedge accounting is applied, the changes in fair value are recorded in the statement of prot or loss. Exposure to risk (In thousands of USD) 2021 2020 Total borrowings (excluding lease liabilities) 418,707 337,946 with xed interest rate 173,079 46,346 with variable interest rate 245,628 291,599 Interest rate nancial instruments (nominal amount) 0 0 Net exposure 245,628 291,599 Sensitivity analysis In case the interest rate would increase/decrease with 50 basis points, the nancial statements would be impacted with the following amounts (assuming that all other variables remain unchanged): (In thousands of USD) 2021 2020 + 50 bp - 50 bp + 50 bp - 50 bp Variable interest rate borrowings 1,228 -1,228 1,458 -1,458 Interest rate swaps and cross-currency rate swaps 0 0 0 0 Sensitivity (net), of which 1,228 -1,228 1,458 -1,458 Impact in prot and loss 1,228 -1,228 1,458 -1,458 Impact in equity 0 0 0 0 The amount of xed interest rate borrowings increased signicantly during 2021 as a result of the new nancing for the two new VLGC’s (see Note 24 Borrowings). A signicant portion of EXMAR’s interest income is derived from borrowings to equity accounted investees with variable interest rates. Any increase/decrease in the interest rate would result in an increase/decrease of interest income but would mainly be oset by an increase/ decrease in the interest expense recognized by the equity accounted investee for a corresponding amount. Accordingly, any increase/decrease in the variable interest rate applied on the borrowings to equity accounted investees would have no impact on the net result of the Group. Therefore, borrowings to equity accounted investees have not been included in the above sensitivity analysis. 170 I 5. FINANCIAL REPORT Currency risk The Group’s currency risk is historically mainly aected by the EUR/USD ratio for manning its eet, paying salaries and all other per- sonnel related expenses. Furthermore, the NOK/USD evolution is also monitored closely as EXMAR Netherlands BV has an unsecured bond of NOK 650.0 million. In order to monitor the currency risk, the Group uses a range of foreign currency rate hedging instruments and forward contracts if deemed necessary. As per December 31, 2021 and 2020, no nancial instrument contracts were outstanding to cover the EUR/USD. End 2021, EXMAR purchased NOK 240.0 million forwards for USD 26.3 million, which resulted in a fair value gain of USD 0.9 million (see Note 8 Finance income/expenses) No such instruments were outstanding end 2020 to cover the NOK/ USD exposure. Exposure to risk Exposure to currency risk, based on notional amounts in thousands of foreign currency: (In thousands of local currency) 2021 2020 EUR NOK SGD ARS EUR NOK SGD ARS Receivables 5,845 55 27 199,458 6,558 0 1 235,374 Payables -10,453 -7,636 -106 -30,640 -15,589 0 -2,424 -101,419 Interest-bearing loans 0 -625,391 0 0 -3,000 -650,000 0 0 Balance sheet exposure -4,608 -632,972 -79 168,818 -12,031 -650,000 -2,423 133,955 Forward contracts 240,000 Net exposure -4,608 -392,972 -79 168,818 -12,031 -650,000 -2,423 133,955 In thousands of USD -5,219 -44,558 -59 1,643 -14,763 -76,179 -1,833 1,592 Sensitivity analysis As per December 31, 2021 an increase in the year-end EUR/USD rate of 10.0% would aect the statement of prot or loss with USD -0.5 million (2020: USD -1.5 million). A 10.0% decrease of the EUR/USD rate would impact the prot or loss statement with the same amount (opposite sign). As mentioned above, the NOK/USD exposure on the outstanding NOK bond is partially covered by nancial instrument contracts at December 31, 2021. An increase in the year-end NOK/ USD rate of 10% would aect the statement of prot or loss with USD -4.5 million for the uncovered NOK balance (at year-end 2020 no coverage and impact of USD -7.6 million). A 10.0% decrease of the NOK/ USD rate would impact the prot or loss statement with the same amount (opposite sign). Liquidity risk Liquidity risk policy The Group manages the liquidity risk in order to meet nancial obligations as they fall due. The risk is managed through a continuous cash ow projection follow-up, monitoring balance sheet liquidity ratio’s against internal and regulatory requirements and maintaining a diverse range of funding sources with adequate back-up facilities. Dierent debt covenants exist that require compliance with certain nancial ratio’s. As of December 31, 2021, EXMAR was compliant with all covenants. We also refer in this respect to Note 24 Borrowings. Maturity analysis of nancial liabilities, borrowings to equity accounted investees and nancial guarantees Our current nancial liabilities such as trade and other payables are expected to be paid within the next twelve months and are therefore not included in below tables. The contractual maturities of our nancial liabilities and our borrowings to equity accounted investees, including estimated interest payments, are detailed in the tables below. The contractual maturities of our nancial liabilities are based on the contractual amortization tables of the facilities. The undrawn parts of our credit facilities are not included in the tables below. The contractual maturities of our borrowings to equity accounted investees are based on the cash ow projections for future years for the EXMAR LPG shareholder’s loan and the expected repayment of the loan for the Electra Oshore Ltd facility (extension and terms still under negotiation), excluding netting of negative net assets (see Note 16 Borrowings to equity accounted investees). EXMAR has also provided guarantees to nancial institutions that have provided credit facilities to her equity accounted investees. The amount that EXMAR could have to pay if the guarantee is called on, is disclosed below under nancial guarantees. 5. FINANCIAL REPORT I 171 (In thousands of USD) 31 DECEMBER 2021 Curr. Interest rate Matur. Carrying amount Contractual cash ows Total < 1 year 1-2 years 2-5 years > 5 years Bank/other loans - pressurized eet USD LIBOR+ 2.4% 2023 - 2025 -70,339 -74,827 -16,384 -19,334 -39,109 0 Bank loan - TANGO FLNG USD LIBOR+ 2.2% 2029 -129,265 -158,464 -21,079 -21,880 -61,334 -54,171 Bank loans VLGC's USD 5.62% 2036 -140,927 -217,650 -13,323 -13,323 -39,465 -151,540 Bank loan - aircraft USD 3.16% 2023 -5,658 -5,675 -1,864 -3,811 0 0 Bond NOK NIBOR+ 8.75% 2022 -71,324 -73,966 -73,966 0 0 0 Other loans USD 1.0% 2022 -1,194 -1,194 -1,194 0 0 0 Lease liabilities USD -2,550 -2,969 -581 -507 -1,399 -481 Lease liabilities EUR -3,422 -3,578 -858 -833 -1,667 -220 Lease liabilities SGD -66 -67 -66 -1 0 0 Lease liabilities INR -67 -72 -48 -25 0 0 -424,812 -538,463 -129,364 -59,712 -142,975 -206,412 Borrowings to equity accounted investees USD 32,249 43,774 18,683 7,609 17,483 0 Financial guarantees USD 0 -236,918 -37,828 -124,860 -20,495 -53,734 (In thousands of USD) 31 DECEMBER 2020 Curr. Interest rate Matur. Carrying amount Contractual cash ows Total < 1 year 1-2 years 2-5 years > 5 years Bank/other loans - pressurized eet USD LIBOR+ 2.4% 2023 - 2025 -83,735 -91,594 -16,529 -16,617 -58,448 0 Bank loan - TANGO FLNG USD LIBOR+ 3.0% 2029 -145,247 -187,967 -23,681 -23,340 -65,903 -75,043 Bank loan - aircraft USD LIBOR+ 2.25% 2021 -7,927 -7,9 59 -7,9 5 9 0 0 0 Credit facility USD LIBOR+ 2.0% 2022 -3,686 -3,760 -3,760 0 0 0 Bond NOK NIBOR+ 8.75% 2022 -76,129 -88,368 -8,148 -80,220 0 0 Other loans USD 10.75% 2021 -20,000 -21,266 -21,266 0 0 0 Other loans USD 1.00% 2025 -1,222 -1,283 -12 -12 -1,259 0 Lease liabilities USD -2,110 -2,188 -998 -940 -250 0 Lease liabilities EUR -1,222 -1,323 -633 -123 -368 -199 Lease liabilities SGD -201 -210 -134 -68 -8 0 Lease liabilities INR -67 -75 -29 -30 -16 0 Lease liabilities ROU assets CNY -73 -76 -51 -25 0 0 -341,619 -406,069 -83,200 -121,376 -126,252 -75,242 Borrowings to equity accounted investees USD 41,313 57,927 13,882 11,415 32,630 0 Financial guarantees USD 0 -255,534 -37,803 -20,203 -137,222 -60,306 Fair values Carrying amounts versus fair values (In thousands of USD) 2021 2020 FV hierarchy Carrying amount Fair value FV hierarchy Carrying amount Fair value Borrowings to equity accounted investees 2 32,249 32,069 2 41,313 40,857 Other investments - equity instruments at FVTLP 1/2 1,849 1,849 1/2 1,354 1,354 Derivative nancial asset 2 920 920 0 0 Borrowings (excluding lease liabilities) 2 -418,707 -418,720 2 -337,946 -344,785 -383,689 -383,882 -295,279 -302,574 172 I 5. FINANCIAL REPORT The nancial assets and liabilities carried at fair value are analysed and a hierarchy in valuation method has been dened: • Level 1 being quoted bid prices in active markets for identical assets or liabilities; • Level 2 being inputs in other than quoted prices included in level 1 that are observable for the related assets and liabilities, either directly (as prices) or indirectly (derived from prices); • Level 3 being inputs for the asset or liability that are not based on observable market data. The breakdown between level 1 and 2 of the equity instruments at FVTPL is shown in the beginning of this note. Basis for determining fair values: • Borrowings to equity accounted investees: present value of future cash ows, discounted at the market rate of interest at reporting date • Equity instruments at FVTPL: • Quoted closing bid price at reporting date for Frontera shares • Non-quoted closing xing price at reporting date through a public auction via Euronext for Sibelco shares • Forward contracts: present value of the dierence between the forward price at reporting date and the forward price paid • Interest bearing loans: present value of future cash ows, discounted at the market rate of interest at reporting date For certain nancial assets and liabilities (trade and other receivables, cash and cash equivalents, trade and other payables and lease liabilities) not carried at fair value, no fair value is disclosed because the carrying amounts are a reasonable approximation of the fair values. NOTE 29 - LEASES Leases as a lessee The Group leases properties, motor vehicles and IT equipment. (In thousands of USD) RIGHT-OF-USE ASSETS Property Motor vehicles IT equipment Total Balance at 31 December 2020 3,201 0 260 3,461 Balance at 31 December 2021 5,827 0 173 6,000 For the full roll forward schedule in respect of the right-of-use assets including the depreciation charge for the year, we refer to Note 13 Right-of-use assets of this annual report. The Group has several lease contracts that include extension or termination options. These options are negotiated by management to provide exibility in managing its lease portfolio. Judgement is applied in determining whether these extension and options are rea- sonably certain to be exercised (see Note 1 Accounting policies). For the maturity analysis in respect of related lease liabilities, we refer to Note 28 Financial risks and nancial instruments. Amounts recognised in prot or loss (In thousands of USD) LEASES UNDER IFRS 16 2021 2020 Interest on lease liability 166 159 Expenses related to short-term leases and low value assets 522 454 5. FINANCIAL REPORT I 173 Leases as a lessor The Group entered into long-term time charter agreements for certain assets in its eet. In respect of lease classication, it was judged that substantially all risks and rewards remain with the Group. As a consequence, these agreements qualify as operating leases. Rental income recognised by the Group during 2021 was USD 41.9 million (2020: USD 50.3 million). The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date. No variable lease payments are included. The decrease in total lease payments (at the subsidiaries) compared to 2020 can be explained by the cancellation of the FSRU S188 (10-year) contract, which was terminated in April 2021 (see also Note 4 Revenue). A new ve-year charter agreement for the FSRU S188 was signed in March 2022 with GASUNIE (see Note 36 Subsequent events) and included in the 2021 table as from the expected operability at the end of the third quarter 2022. Both years include the operating lease income from the two new VLGC’s: FLANDERS INNOVATION and FLANDERS PIONEER as from their (expected) start date. The table below related to the equity accounted investees only include EXMAR’s share in the expected operating lease payments. (In thousands of USD) 2021 2020 Less than one year 50,398 44,363 One to two years 46,078 44,135 Two to three years 44,460 44,135 Three to four years 44,396 44,135 Four to ve years 36,797 44,135 More than ve years 17,472 91,896 Total operating leases under IFRS 16 (Subsidiaries) 239,601 312,799 Less than one year 67,335 79,138 One to two years 21,554 28,848 Two to three years 17,415 12,930 Three to four years 12,553 12,930 Four to ve years 5,425 12,930 More than ve years 1,750 8,050 Total operating leases under IFRS 16 (equity accounted investees) 126,031 154,826 NOTE 30 - CAPITAL COMMITMENTS As per December 31, 2021, the Group has no material outstanding capital commitments. Per December 31, 2020 the capital commitments amounted to USD 125.3 million and related to shipbuilding contracts with Jiangnan Shipyard for two VLGC’s with LPG as fuel in order to full its long-term commitments towards Equinor ASA of Norway. These vessels were delivered and nanced during 2021. NOTE 31 - CONTINGENCIES During 2021 the contingencies disclosed in the 2020 annual report evolved positively: • As part of the arbitration commenced by Gunvor in relation to the FRSU S188 barge, EXMAR has received an interim reward. The tribunal has issued a partial nal award on two preliminary issues rejecting Gunvor’s application for declaratory relief. A few days after this judgment, EXMAR received a notice of early termination from Gunvor, who paid a termination fee of USD 56.8 million (see also Note 4 Revenue); • The tax dispute of EXMAR NV related to the tax treatment of remunerations paid and amounting to USD 2.0 million has been concluded in favor of EXMAR. As management assessed this tax claim to be invalid, this has no impact on the prot and loss but EXMAR received a tax refund of approximately USD 1.1 million (see also Note 20 Tax assets and liabilities). Several of the Group’s companies are involved in a number of minor legal disputes arising from their day-to-day operations. The manage- ment does not expect the outcome of these procedures to have any material eect on the Group’s nancial position. 174 I 5. FINANCIAL REPORT NOTE 32 - RELATED PARTIES Ultimate controlling party Saverex NV, the major shareholder of EXMAR NV prepares IFRS consolidated nancial statements which are publicly available. Saverex NV is controlled by Mr. Nicolas Saverys (Executive chairman of the Board of Directors of EXMAR). Transactions with controlling shareholder and with controlling shareholder related parties Saverbel NV, controlled by Mr. Nicolas Saverys, recharged administrative expenses for KEUR 76 to the Group (2020: KEUR 73). The out- standing amount at year end amounted to KEUR 27 (2020: KEUR 26). Saverex NV, also controlled by Mr. Nicolas Saverys, charged KEUR 750 consulting fees to the Group (2020: KEUR 0). Since March 2021, EXMAR entered into a consultancy agreement with Saverex NV for which a monthly fee of KEUR 75 is charged to EXMAR. Furthermore, Saverex charged KEUR 24 administrative expenses (2020: KEUR 0) and KEUR 235 time-charter revenue for the yacht “Douce France” to EXMAR Yachting (in 2020: KEUR 146). The amount outstanding at year-end 2021 amounted to KEUR 112 (2020: KEUR 0). EXMAR Shipmanagement charged KEUR 26 to Saverex for ship management services in respect of the yacht “Douce France” (2020: KEUR 22). The outstanding amount at year end in respect of these services amounts to KEUR 0 (2020: KEUR 0). EXMAR Yachting charged KEUR 11 commission to Saverex in respect of this yacht (2020: KEUR 6). The outstanding amount at year end in respect of these services amounts to KEUR 0 (2020: KEUR 0). Travel Plus invoiced KEUR 80 to Saverex and Nicolas Saverys in respect of travel services provided during 2021 (2020: KEUR 87). The outstanding amount is respect of these services amounts to KEUR 0 (2020: KEUR 1). During 2021, an amount of KEUR 30 (2020: KEUR 54) was invoiced to Mr. Nicolas Saverys as a consequence of private expenses to be recharged. The relating outstanding amount per December 31, 2021 in respect of these services is KEUR 0 (2020: KEUR 5). An amount of KEUR 60 was invoiced to the Group regarding expenses of Nicolas Saverys. The relating outstanding amount per December 31, 2021 in respect to these services is KEUR 0. Transactions with joint ventures and associated companies EXMAR provides general, accounting, corporate, site supervision and ship management services to its joint ventures and associates. For these services, fees are charged based on contractual agreements between all parties involved. Below table gives an overview of the signicant receivables, signicant payables and the related P&L amount of services provided and received. (In thousands of USD) 31 December 2021 31 December 2020 Receivables Payables Receivables Payables Ship management services 6,373 105 3,612 56 General, accounting and corporate services 0 0 0 0 Site supervision & plan approval services 0 0 0 0 Rental services 0 0 0 0 (In thousands of USD) 2021 2020 Services provided P&L Services received P&L Services provided P&L Services received P&L Ship management services 16,247 0 15,521 0 General, accounting and corporate services 817 0 841 0 Site supervision & plan approval services 0 0 0 0 Rental & other services 0 0 0 0 EXMAR also provides borrowings to its joint ventures and associates for which an interest income is recognised in the nancial state- ments. We refer to Note 16 Borrowings to equity accounted investees for an overview of these borrowings and to Note 8 Finance income/ expenses for the total amount of interest income. 5. FINANCIAL REPORT I 175 Transactions with key management personnel In respect of the transactions with key management personnel, we refer to the Remuneration report of 2021 which is included in this nancial report (see Corporate Governance Statement). For information relating to conicts of interests, we refer to the report Board of Directors. Key management personnel recharged KEUR 27 expenses. The relating outstanding amount per December 31, 2021 in respect of these services is KEUR 0. Board of Directors (In thousands of EUR) 2021 2020 Chairman 100 26 Other members (individual amount) 50 50 Total paid 485 422 The total amount paid to the members of the Board of Directors represents the total payments to all non-executive and independent directors for the activities as members of the Board of Directors. The executive directors of EXMAR are only remunerated in their capacity as executive and not in their capacity as executive director/member of the Board. No loans were granted to the members of the Board in 2021 nor 2020. The outstanding amount in respect of recharged private expenses to Mr. Nicolas Saverys was zero per December 31, 2021 (2020: KEUR 5). Audit and Risk Committee (In thousands of EUR) 2021 2020 Chairman 0 23 Other members (individual amount) 10 10 Total paid 46 49 Nomination and Remuneration Committee (In thousands of EUR) 2021 2020 Members (individual amount) 10 10 Total paid 28 29 Executive Committee In line with EXMAR’s total reward principles, the form and level of the Company’s executive remuneration are aligned to company per- formance and individual skills and performance. The remuneration package is composed of three main elements: • The xed annual remuneration; • The short-term variable remuneration (STI – short term incentive); • The long-term variable remuneration (LTI- long term incentive). The level and structure of the compensation packages are aligned with market practices for similar functions at comparable companies. End 2021, the Executive Committee consisted of four members. Customary notice periods and severance pay are provided in the agree- ments with the members of the Executive Committee, taking into account factors such as the position and experience of the executive manager in question, and always within the applicable legal framework. The Board of Directors and the former CFO, Mr. Patrick De Brabandere, agreed in mutual understanding to terminate the collaboration with eective date July 1, 2021. Christine Verhaert, representing FINMORE BV, replaced him. 176 I 5. FINANCIAL REPORT In February 2020, the Board of Directors and the former CFO, Mr. Miguel De Potter, agreed in mutual understanding to terminate the management agreement with Chirmont NV, represented by Mr. De Potter, under a severance payment of KEUR 300. (In thousands of EUR) EXECUTIVE COMMITTEE, EXCLUDING CEO 2021 2020 Total xed remuneration 1,355 1,438 of which for insurance and pension plan 32 64 of which value of share options 0 0 Total variable remuneration 0 92 (in thousands of EUR) NICOLAS SAVERYS/SAVEREX 2021 2020 Total xed remuneration 907 734 of which for insurance and pension plan 43 145 of which value of share options 0 0 Total variable remuneration 0 196 (in thousands of EUR) CEO 2021 2020 Total xed remuneration (1) 575 867 of which for insurance and pension plan 0 50 of which value of share options 0 0 Total variable remuneration 0 78 No loans were granted to the members of the executive committee in 2021 or 2020. The total number of options (plan 8 to 10) granted to key management are as follows: NUMBER OF SHARES GRANTED 2021 2020 Nicolas Saverys 120,000 180,000 Patrick De Brabandere 0 120,000 Jonathan Raes 0 2,500 120,000 302,500 A number of key management personnel, or their close family members, hold positions in other companies that result in them having control or joint control over these companies. None of these companies transacted with the Group during the year. (1) 2020 includes the remuneration of the CEO (Nicolas Saverys until April 2020) and deputy CEO. 5. FINANCIAL REPORT I 177 NOTE 33 - GROUP ENTITIES CONSOLIDATED COMPANIES Country of incorporation Consolidation method Ownership 2021 2020 Joint ventures AEX LNG Management (1) Singapore Equity 0.00% 50.00% Estrela Ltd Hong Kong Equity 50.00% 50.00% EXMAR Gas Shipping Ltd Hong Kong Equity 50.00% 50.00% EXMAR LPG BV Belgium Equity 50.00% 50.00% EXMAR Shipping BV Belgium Equity 50.00% 50.00% Good Investment Ltd Hong Kong Equity 50.00% 50.00% Monteriggioni Inc Liberia Equity 50.00% 50.00% Solaia Shipping Llc Liberia Equity 50.00% 50.00% Associates Bexco NV Belgium Equity 44.91% 44.91% Electra Oshore Ltd Hong Kong Equity 40.00% 40.00% Exview Hong Kong Ltd Hong Kong Equity 40.00% 40.00% Marpos NV Belgium Equity 45.00% 45.00% Springmarine Nigeria Ltd Nigeria Equity 40.00% 40.00% Subsidiaries Ahlmar Germany GmbH Germany Full 100.00% 100.00% Ahlmar Shipmanagement NV (1) Belgium Full 0.00% 100.00% Croxford Ltd (1) Hong Kong Full 0.00% 100.00% DV Oshore SAS France Full 100.00% 100.00% ECOS SRL Italy Full 60.00% 60.00% EXMAR Argentina Argentina Full 100.00% 100.00% EXMAR Energy Hong Kong Ltd Hong Kong Full 100.00% 100.00% EXMAR Energy Netherlands BV Netherlands Full 100.00% 100.00% EXMAR Energy Services BV Netherlands Full 100.00% 100.00% EXMAR Export Netherlands Netherlands Full 100.00% 100.00% EXMAR FSRU Hong Kong Ltd Hong Kong Full 100.00% 100.00% EXMAR Holdings Ltd Liberia Full 100.00% 100.00% EXMAR Hong Kong Ltd Hong Kong Full 100.00% 100.00% EXMAR LPG Holding BV Belgium Full 100.00% 100.00% EXMAR LNG Investments Ltd Liberia Full 100.00% 100.00% EXMAR Lux SA Luxembourg Full 100.00% 100.00% EXMAR Marine NV Belgium Full 100.00% 100.00% EXMAR Netherlands BV Netherlands Full 100.00% 100.00% 178 I 5. FINANCIAL REPORT CONSOLIDATED COMPANIES Country of incorporation Consolidation method Ownership 2021 2020 EXMAR Oshore Company USA Full 100.00% 100.00% EXMAR Oshore Ltd Bermuda Full 100.00% 100.00% EXMAR Oshore Services SA Luxembourg Full 100.00% 100.00% EXMAR Oshore BV Belgium Full 100.00% 100.00% EXMAR Singapore Pte Ltd Singapore Full 100.00% 100.00% EXMAR Shipmanagement BV Belgium Full 100.00% 100.00% EXMAR Shipmanagement India Private Ltd India Full 100.00% 100.00% EXMAR Shipping USA Inc USA Full 100.00% 100.00% EXMAR Small Scale LPG NL BV Netherlands Full 100.00% 100.00% EXMAR Small Scale LPG HK Ltd Hong Kong Full 100.00% 100.00% EXMAR Small Scale LPG BE BV Belgium Full 100.00% 100.00% EXMAR (UK) Shipping Company Ltd Great-Britain Full 100.00% 100.00% EXMAR VLGC BV Belgium Full 100.00% 100.00% EXMAR VLGC Netherlands BV (2) Netherlands Full 100.00% 0.00% EXMAR Yachting BV Belgium Full 100.00% 100.00% Export LNG Ltd Hong Kong Full 100.00% 100.00% Franship Oshore Lux SA Luxembourg Full 100.00% 100.00% Fertility Development Co. Ltd (1) Hong Kong Full 0.00% 100.00% Hallsworth Marine Co. (1) Liberia Full 0.00% 100.00% Internationaal Maritiem Agentschap NV Belgium Full 99.03% 99.03% Laurels Carriers Inc (1) Liberia Full 0.00% 100.00% Seavie Caribean Ltd Jamaica Jamaica Full 100.00% 100.00% Seavie Private Ltd India Full 100.00% 100.00% Tecto Cyprus Ltd Cyprus Full 100.00% 100.00% Tecto Luxembourg SA Luxembourg Full 100.00% 100.00% Travel Plus BV Belgium Full 100.00% 100.00% Universal Crown Ltd (1) Hong Kong Full 0.00% 100.00% (1) Liquidated. (2) Incorporated. 5. FINANCIAL REPORT I 179 NOTE 34 - FEES STATUTORY AUDITOR The worldwide audit and other fees in respect of services provided by the statutory auditor or companies or persons related to the auditors, can be detailed as follows: (In thousands of EUR) 2021 2020 Audit services 389 380 Audit related services 109 115 Tax services 31 69 Fees statutory auditor 529 564 For 2021 and 2020, the non-audit fees do not exceed the audit fees. 180 I 5. FINANCIAL REPORT NOTE 35 - COVID-19 Since the rst quarter of 2020, the COVID-19 pandemic signicantly impacted the world economy and may continue to do so in the years to come. Many countries imposed travel bans, quarantine measures and even imposed lockdowns. The pandemic also resulted in signicant volatility in the nancial and commodity markets worldwide. One of the main operational challenges was to conduct crew changes due to travel and quarantine restrictions in almost all the countries we operate. Several operational measures onshore and onboard were taken by EXMAR to ensure the safety and wellbeing of its personnel and continuity of our business operations. The effect of the COVID-19 pandemic on the financial statements is limited with exception of the settlement of the YPF contract on TANGO FLNG in 2020 and resulting unemployment and the decreased revenue for Travel Plus in both 2020 and 2021. EXMAR continues to closely monitor the situation. NOTE 36 - SUBSEQUENT EVENTS End March 2022, EXMAR sold its aircraft, which was classied as held for sale. On March 18, 2022, EXMAR announced it reached an agreement for a ve-year charter for the employment of its oating storage and re-gasication barge FSRU S188 with GASUNIE LNG Holdings BV (“GASUNIE”). GASUNIE will use the FSRU S188 as oating LNG import terminal at Eemshaven in Groningen, the Netherlands, in view of the geopolitical developments currently going on in Europe and the increased emphasis of governments on the security of energy supply. The objective is to deploy the FSRU S188 and have the terminal up and running by end of the third quarter 2022. In 2022, EXMAR Netherlands BV, bought back in total a nominal value of NOK 112.0 million of the NOK bond (ISIN NO 0 010852767) with maturity date May 27, 2022. In total, EXMAR already bought back a nominal value of NOK 137.0 million (see also Note 24 Borrowings). The escalating conict in Ukraine is already causing great uncertainty to 2022 not only from a human aspect, but also in terms of the stability of global energy markets. In this context, EXMAR recently signed a charter agreement with GASUNIE (see above) and remains committed to play its role in the energy value chain with its oating solutions for the export and import of gas. The potential impact of the war in Ukraine on EXMAR’s activities is being monitored on a daily basis. We can conrm that none of our vessels are active in risk areas or under contract with parties’ subject to international sanctions related to this conict. Furthermore, utmost eort is done to manage the logistical challenges in a humane way, both on shore and oshore and, so far, no signicant oper- ational issues were noted. 5. FINANCIAL REPORT I 181 SIGNIFICANT JUDGEMENTS AND ESTIMATES The signicant judgements and estimates that might have a risk of causing a material adjustment to the carrying amount of assets and liabilities within the next nancial year relate to: Update liquidity position The liquidity position has evolved positively during 2021 amongst others because of the receipt of an early termination fee from Gunvor for the FSRU S188, the contractual monthly payments of YPF, the 2 new VLGC’s put in operation under a ve-year charter agreement and the sale of two older vessels (held by equity accounted investees). The Group expects a further strengthening of its liquidity position in the next months thanks to: • Sale of the aircraft; • Sale of the LPG carrier BRUSSELS early January 2022; • Monthly YPF settlement instalments with a remaining receivable balance of USD 24.4 million; • New three-year facility agreement of up to USD 50.0 million; • Extension of the existing revolving credit facility from EUR 18.0 million until June 2024 and increase up to EUR 30.0 million, the latter conditional upon employment of one of the barges; • The agreement on a ve-year charter with GASUNIE for the FSRU S188; • Employment opportunities for the TANGO FLNG. The company is of the opinion that, taking into account various management actions, its available cash and cash equivalents, its undrawn committed facilities and its projected cash ows, it has sucient liquidity to meet its obligations for a period of at least 12 months from the authorization date of the annual report. Going concern The consolidated nancial statements for the year ended December 31, 2021 have been prepared on a going concern basis. The main assumptions and uncertainties for EXMAR underpinning the going concern assessment relate to the liquidity position as disclosed above and to the covenant compliance after 2021. Although EXMAR met all its nancial covenants as at December 31, 2021 with sucient headroom, compliance in the short term needs to be closely monitored. Management is currently exploring several specic possibilities such as sale of assets, debt restructuring or obtaining a waiver, to timely remedy, if necessary. The uncertainties mentioned in the 2020 annual report have been resolved: • The arbitration initiated by Gunvor has been resolved as a favourable outcome was received end of April 2021; • The unsecured NOK 650.0 million bond which will expire in May 2022, will be repaid by a new three-year credit facility of up to USD 50.0 million and the remainder in cash. Considering the elements described above the Board is condent that the Company will be able to maintain sucient liquidities and respect its covenants and therefore it has an appropriate basis for the use of the going concern assumption. In the event the above assumptions are not timely met, there is a material uncertainty whether the Company will have sucient liquidities for the Company to full its obligations of at least twelve months from the date of authorising these nancial statements. Impairment Management performs an impairment analysis for its eet. We also refer to Note 10 Vessels and barges and Note 14 Equity accounted investees as disclosed in this report. 182 I 5. FINANCIAL REPORT Provisions The LNG EXCEL, owned by one of our joint ventures, was party to a lease arrangement in the UK whereby the Lessor could claim depre- ciation on the capital expenditures it incurred to acquire the vessel (Capital Allowances). As it is typical in these leasing arrangements, tax and change of law risks are assumed by the Lessee. Our joint venture terminated this lease arrangement in August 2013. The UK tax authorities (HMRC) have made inquiries in respect of the right to receive the Capital Allowances. Based on commercial, legal and nancial considerations, our position is that the allowances were validly claimed and we have informed HMRC accordingly. However, in case of a successful challenge by the UK tax authorities of the tax treatment of the lease, we could be required to compensate the Lessor for any tax amount to be reimbursed to the tax authorities. The amount held on the joint venture company’s escrow account (USD 1.7 million for EXMAR’s share) had therefore been provisioned in previous years. In 2021, an additional provision was recorded for EXMAR’s share of the joint venture cash balance as well as a provision for related tax and legal fees. STATEMENT ON THE TRUE AND FAIR VIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FAIR OVERVIEW OF THE MANAGEMENT REPORT The Board of Directors, represented by Nicolas Saverys (Chairman) and Carl-Antoine Saverys, and the Executive Committee, represented by Francis Mottrie, CEO (representing FMO BV) and Christine Verhaert, CFO (representing FINMORE BV), hereby conrm that, to the best of their knowledge, • the consolidated nancial statements for the year ended 31 December 2021, which have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the European Union, give a true and fair view of the assets, liabilities, nancial position and prot or loss of the Company and the entities included in the consolidation as a whole, and • the management report includes a fair overview of the important events that have occurred during the nancial year and of the major transactions with the related parties, and their impact on the consolidated nancial statements, together with a description of the principal risks and uncertainties they are exposed to. 5. FINANCIAL REPORT I 183 STATUTORY AUDITOR’S REPORT TO THE SHAREHOLDERS’ MEETING OF EXMAR NV FOR THE YEAR ENDED 31 DECEMBER 2021 CONSOLIDATED FINANCIAL STATE MENTS In the context of the statutory audit of the consolidated nancial statements of EXMAR NV (“the company”) and its subsidiaries (jointly “the group”), we hereby submit our statutory audit report. This report includes our report on the consolidated nancial statements and the other legal and regulatory requirements. These parts should be considered as integral to the report. We were appointed in our capacity as statutory auditor by the shareholders’ meeting of 19May2020, in accordance with the proposal of the board of directors (“bestuursorgaan” / “organe d’administration”) issued upon recommendation of the audit committee. Our mandate will expire on the date of the shareholders’ meeting deliberating on the nancial statements for the year ending 31December2022. We have performed the statutory audit of the consolidated nancial statements of EXMAR NV for 5 consecutive periods. Report on the consolidated nancial statements Unqualied opinion We have audited the consolidated nancial statements of the group, which comprise the consolidated statement of nancial position as at 31December 2021, the consolidated statement of prot or loss and consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash ows for the year then ended, as well as the sum- mary of signicant accounting policies and other explanatory notes. The consolidated statement of nancial position shows total assets of 1 001 395(000)USD and the consolidated statement of prot or loss shows a prot for the year then ended of 11 635(000) USD. In our opinion, the consolidated nancial statements give a true and fair view of the group’s net equity and nancial position as of 31De- cember2021 and of its consolidated results and its consolidated cash ow for the year then ended, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Basis for the unqualied opinion We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in Belgium. In addition, we have applied the International Standards on Auditing approved by the IAASB applicable to the current nancial year, but not yet approved at national level. Our responsibilities under those standards are further described in the “Responsibilities of the statutory auditor for the audit of the consolidated nancial statements” section of our report. We have complied with all ethical requirements relevant to the statutory audit of consolidated nancial statements in Belgium, including those regarding independence. We have obtained from the board of directors and the company’s ocials the explanations and information necessary for performing our audit. We believe that the audit evidence obtained is sucient and appropriate to provide a basis for our opinion. Material uncertainty relating to going concern We draw attention to Note “Signicant judgements and estimates” in the nancial statements, which states that the main assumptions and uncertainties underpinning the going concern assessment relate to the liquidity position and covenant compliance after 2021. In preparing the nancial statements, and as disclosed in this note, the board is currently exploring several specic actions in view of cov- enant compliance to timely remedy if necessary. As stated in Note “Signicant judgements and estimates” these matters indicate that a material uncertainty exists that may cast signicant doubt on the Company’s ability to continue as a going concern. Our opinion is not modied in respect of this matter. 184 I 5. FINANCIAL REPORT Key audit matters Key audit matters are those matters that, in our professional judgment, were of most signicance in our audit of the consolidated nancial statements of the current period. These matters were addressed in the context of our audit of the consolidated nancial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in section “Materiality uncertainty relating to going concern”, we have determined the following Key audit matter in our audit. Key audit matters How our audit addressed the key audit matters Impairment of property, plant and equipment – vessels and barges • Property, plant and equipment – vessels and barges with a carrying amount of 648 436 (000) USD represent 65% of the consolidated balance sheet total as at 31 December 2021. Management’s assessment of the valuation of property, plant and equipment is signicant to our audit because this process is complex and requires signicant management judgement. • Both the continued unemployment of Tango FLNG and the notice of early termination received for FSRU S188 in the course of 2021, represent specic indicators for potential impairment on the LNG barges. We remark that FSRU S188 and Tango FLNG represent a signicant portion (around 60%) of the total carrying amount of vessels and barges as reported in the consolidated balance sheet of Exmar NV. Reference to disclosures We refer to the consolidated nancial statements, including notes to the consolidated nancial statements: note 10 – Vessels & barges. We draw specic attention to the disclosure provided in this note regarding the impairment testing for FSRU S188 and Tango FLNG. Explanation is provided around the determination of recoverable amount, being the higher of fair value less cost to sell and value in use, taking into account, amongst other, information from the ongoing negotiations to contract a new employment for Tango FLNG and FSRU S188. • We considered the process and the internal controls implemented by management and we carried out testing relating to the design and implementation of management’s controls to assess impairment indicators and perform impairment testing. • We validated for each cash generating unit if impairment indicators, as determined by IAS 36, were considered in the impairment assessment of management. • We obtained the appraisal reports from external brokers which are used by management to test for impairment indicators and to determe the fair value less costs to sell (“FVLCTS”) of the vessels. • We tested management’s assumptions used in the value in use (“VIU”) calculations especially the most critical assumptions such as the post contract charter rates and discount rates. In challenging these assumptions, we took into account actual results, negotiated contract terms, external data, independent market reports, market conditions and potential climate change related impacts. • For Tango FLNG and FSRU S188 we have inquired management, as well as other Exmar responsible persons, on the status of the ongoing negotiations regarding future charter of the barge and inspected supporting documentation available. We furthermore involved our valuation experts in challenging the discount rate applied in the value in use calculation. • We evaluated the adequacy of the disclosures regarding the impairments of property, plant and equipment. Responsibilities of the board of directors for the preparation of the consolidated nancial statements The board of directors is responsible for the preparation and fair presentation of the consolidated nancial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory require- ments applicable in Belgium and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated nancial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated nancial statements, the board of directors is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters to be considered for going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the group or to cease operations, or has no other realistic alternative but to do so. Responsibilities of the statutory auditor for the audit of the consolidated nancial statements Our objectives are to obtain reasonable assurance about whether the consolidated nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstate- ment when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inuence the economic decisions of users taken on the basis of these consolidated nancial statements. During the performance of our audit, we comply with the legal, regulatory and normative framework as applicable to the audit of con- solidated nancial statements in Belgium. The scope of the audit does not comprise any assurance regarding the future viability of the company nor regarding the eciency or eectiveness demonstrated by the board of directors in the way that the company’s business has been conducted or will be conducted. 5. FINANCIAL REPORT I 185 As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the consolidated nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sucient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from an error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eectiveness of the group’s internal control; • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors; • conclude on the appropriateness of the use of the going concern basis of accounting by the board of directors and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signicant doubt on the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor’s report. However, future events or conditions may cause the group to cease to continue as a going concern; • evaluate the overall presentation, structure and content of the consolidated nancial statements, and whether the consolidated nancial statements represent the underlying transactions and events in a manner that achieves fair presentation. • obtain sucient appropriate audit evidence regarding the nancial information of the entities and business activities within the group to express an opinion on the consolidated nancial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of the audit and signicant audit ndings, including any signicant deciencies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and we communicate with them about all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated to the audit committee, we determine those matters that were of most signicance in the audit of the consolidated nancial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes any public disclosure about the matter. Other legal and regulatory requirements Responsibilities of the board of directors The board of directors is responsible for the preparation and the content of the directors’ report on the consolidated nancial statements, the statement of non-nancial information attached to the directors’ report on the consolidated nancial statements and other matters disclosed in the annual report on the consolidated nancial statements. Responsibilities of the statutory auditor As part of our mandate and in accordance with the Belgian standard complementary to the International Standards on Auditing (ISA) as applicable in Belgium, our responsibility is to verify, in all material respects, the director’s report on the consolidated nancial statements, the statement of non-nancial information attached to the directors’ report on the consolidated nancial statements and other matters disclosed in the annual report on the consolidated nancial statements, as well as to report on these matters. Aspects regarding the directors’ report on the consolidated nancial statements In our opinion, after performing the specic procedures on the directors’ report on the consolidated nancial statements, this report is consistent with the consolidated nancial statements for that same year and has been established in accordance with the requirements of article 3:32 of the Code of companies and associations. 186 I 5. FINANCIAL REPORT In the context of our statutory audit of the consolidated nancial statements we are also responsible to consider, in particular based on information that we became aware of during the audit, if the directors’ report on the consolidated nancial statements is free of material misstatement, either by information that is incorrectly stated or otherwise misleading. In the context of the procedures performed, we are not aware of such material misstatement. The non-nancial information as required by article 3:32, §2 of the Code of companies and associations, has been disclosed in the directors’ report on the consolidated nancial statements. This non-nancial information has been established by the company in accordance with the internationally recognised framework. In accordance with article 3:80 §1, 5° of the Code of companies and associ- ations we do not express any opinion on the question whether this non-nancial information has been established in accordance with this internationally recognised framework. Statements regarding independence • Our audit rm and our network have not performed any prohibited services and our audit rm has remained independent from the group during the performance of our mandate. • The fees for the additional non-audit services compatible with the statutory audit, as dened in article 3:65 of the Code of companies and associations, have been properly disclosed and disaggregated in the notes to the consolidated nancial statements. Single European Electronic Format (ESEF) In accordance with the draft standard on the audit of the compliance of the nancial statements with the Single European Electronic Format ("ESEF"), we have also performed the audit of the compliance of the ESEF format and of the tagging with the technical regulatory standards as dened by the European Delegated Regulation No. 2019/815 of 17 December 2018 ("Delegated Regulation"). The board of directors is responsible for the preparation, in accordance with the ESEF requirements, of the consolidated nancial state- ments in the form of an electronic le in ESEF format (“digital consolidated nancial statements”) included in the annual nancial report. Our responsibility is to obtain sucient and appropriate evidence to conclude that the format and the tagging of the digital consolidated nancial statements comply, in all material respects, with the ESEF requirements as stipulated by the Delegated Regulation. Based on our work, in our opinion, the format and the tagging of information in the digital consolidated nancial statements included in the annual nancial report of EXMAR NV as of 31 December 2021 are, in all material respects, prepared in accordance with the ESEF requirements as stipulated by the Delegated Regulation. Other statements • This report is consistent with our additional report to the audit committee referred to in article 11 of Regulation (EU) No 537/2014. Signed at Zaventem. The statutory auditor Deloitte Bedrijfsrevisoren/ Deloitte Bedrijfsrevisoren/ Réviseurs d’Entreprises BV/SRL Réviseurs d’Entreprises BV/SRL Represented by Rik Neckebroeck Represented by Ben Vandeweyer 5. FINANCIAL REPORT I 187 STATUTORY FINANCIAL STATEMENTS 5.3 The statutory accounts of EXMAR NV are disclosed hereafter in a summarised version. The full version will be led with the National Bank of Belgium. The full version is available on the Company’s website (www.exmar.be) and a copy can be obtained free of charge on request. An unqualied audit opinion has been expressed by the statutory auditor. (In thousands of USD) BALANCE SHEET 31/12/2021 31/12/2020 Fixed assets 541,853 609,154 (In-)tangible assets 125 205 Financial assets 541,728 608,949 Current assets 133,227 98,985 Amounts receivable within one year 67,2 46 79,950 Investments 12,907 9,025 Cash and cash equivalents 52,634 9,335 Accrued income and deferred charges 440 675 Total assets 675,080 708,139 Equity 564,214 598,239 Capital 88,812 88,812 Share premium 209,902 209,902 Reserves 81,831 78,444 Accumulated prots 183,669 221,081 Provisions and deferred taxes 9,840 337 Provisions 9,840 337 Liabilities 101,026 109,563 Short-term borrowings 18,528 0 Amounts payable within one year 82,498 109,563 Total equity and liabilities 675,080 708,139 (In thousands of EUR) STATEMENT OF PROFIT OR LOSS 01/01/2021 31/12/2021 01/01/2020 31/12/2020 Operating income 7,8 6 5 3,295 Operating expenses -12,371 -9,886 Operating result -4,506 -6,591 Financial income 15,534 21,124 Financial expenses -39,462 -98,492 Result for the year before tax -28,434 -83,959 Income tax -200 -13 Result for the year -28,634 -83,972 APPROPRIATION OF RESULT Result to be appropriated 192,447 237,325 Transfer from/(to) capital and reserves -3,387 5,660 Result to be carried forward -183,669 -232,033 Distribution of result -5,391 -21,904 6 GLOSSARY 190 I 6. GLOSSARY 6.1 GLOSSARY AER Annual Eciency Ratio ASBL Association Sans But Lucratif BCCA Belgian Code of Companies and Associations BOD Board of Directors BTX Mixtures of benzene, toluene, and the three xylene isomers BWMP Ballast Water Management Plan CBA Collective Bargaining Agreement cbm Cubic meters (m 3 ) CCS Carbon capture and storage CCU Carbon Capture and Utilisation CCUS Carbon Capture, Utilisation and Storage CDI Chemical Distribution Institute CII Carbon Intensity Index CEO Chief Executive Ocer CFO Chief Financial Ocer CO2 Carbon dioxide COO Chief Operating Ocer COSO Committee of Sponsoring Organizations DCS IMO Fuel Oil Data Collection System DVO DV Oshore EBIT Earnings before interest and taxes EBITDA Earnings before interest, taxes, depreciation, and amortization ECA Emission Control Area EEDI Energy Eciency Design Index EEXI Energy Eciency Existing Ship Index EOC Exmar Oshore Company ESG Environment, Social, Governance ESI Environmental Ship Index ESM Exmar Ship Management ETS Emission Trading Scheme EU European Union FID Final Investment Decision FLNG Floating Liquefaction of Natural Gas FOC Fuel Oil Consumption FPS Floating Production System FPSO Floating Production Storage and Ooading-unit FSO Floating Storage and Ooading FSU Floating Storage Unit FSPO Floating Storage Production and Ooading FSRP Floating Storage Regasication and Power generation FSRU Floating Storage and Regasication Unit GDPR General Data Protection Regulation GHG Greenhouse gas HFO Heavy Fuel Oil HSEQ Health Safety Environment and Quality HSEEQ Health Safety Environmental Energy and Quality HSSEQ Health, Safety, Security, Environment and Quality HyMethShip Hydrogen Methanol Ship IAS International Accounting Standards IFRS International Financial Reporting Standards IHM Inventory of Hazardous Materials IMO International Maritime Organization IPCC Intergovernmental Panel on Climate Change ISO International Organization for Standardization JV Joint venture KPI Key Performance Indicator 6. GLOSSARY I 191 LDO Light Diesel Oil LGC Large Gas Carrier LNG Liqueed Natural Gas LNG/C Liqueed Natural Gas Carrier LNGRV Liqueed Natural Gas Regasication Vessel LOHC Liquid Organic Hydrogen Carrier LPG Liqueed Petroleum Gas LSFO Low Sulphur Fuel Oil LTI Lost Time Injurie M 3 Cubic metres MAN-ES MAN Energy Solutions SE MARPOL International Convention for the Prevention of Pollution from Ships MDO Marine Diesel Oil MGC Midsize Gas Carrier MGO Marine Gas Oil Midsize 20,000 m 3 to 40,000 m 3 Mio Million MRV Measurement, Reporting and Verication - EU Regulation No. 757/2015 MT Metric tons MTI MTI Network, risk management and crisis response company MTPA Metric Tonnes Per Annum MWh Megawatt hour NH3 Ammonia NM Nautical Miles NTVRP US Nontank Vessel Response Plan O&M Operations & Maintenance OB Order book OCIMF Oil Companies Marine International Forum ODS Ozone Depleting Substances OPEX Operating Expenditures PDH Propane DeHydrogenation Petchems Petrochemicals PPM Parts per million PVC Polyvinyl chloride REBITDA Recurring earnings before interests, taxes, depreciations and amortizations SCR Selective Catalytic Reduction SEEMP Ship Energy Eciency Management Plan SDG Sustainable Development Goals Semi-ref. Semi-refrigerated LPG carrier SIGTTO Society of International Gas Tanker and Terminal Operators SMPEP Shipboard Marine Pollution Emergency Plan SMS Safety Management System SOPEP Shipboard Oil Pollution Emergency Plan SRDII Second Shareholders’ Rights Directive SRR EU Ship Recycling Regulation No. 1257/2013 STS Ship-to-ship cargo transfer TC Time charter TCE Time charter equivalent TMSA Tanker Manager and Self-Assesment U/C Under Construction ULCV Ultra Large Container Vessel ULGC Ultra Large Gas Carrier UN United Nations UNCLOS United Nations Convention on the Law of the Sea USCG United States Coast Guard USD United States Dollar UV Ultra Violet VCM Vinyl Chloride Monomer VLGC Very Large Gas Carrier VOC Volatile Organic Compoundsw
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