Ardmore Shipping Progress Report 2020

PROGRESS REPORT 2020 Ardmore Shipping Corporation

PROGRESS REPORT 2020

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REPRESENTATIVE ENERGY EFFICIENCY TECHNOLOGIES ADOPTED

BY OR BEING CONSIDERED BY ARDMORE SHIPPING Aerodynamic Superstructure p. 4

Reduces air resistance of the accommodation block by deploying an aerodynamic slant, decreasing wind resistance increases the efficiency of the vessel.

High Performance Anti-Fouling Coating p. 7

Plumb Bow p. 33

A modern, efficient bow design that optimises the effect of the vessel moving through the water, in addition it allows for increased cargo carrying capacity making the vessel more economically productive.

By deploying environmentally sensitive and safe technology, paint systems keep the underwater hull as smooth as possible thoughtout painting periods (5 years) and ensures that no marine life or slime adheres to the hull which can significantly reduce efficiency by up to 20%

Variable Speed Pump & Fans p. 33

Wind Power Generation p. 8

Constant Power Control System (Lean Marine) p. 33

Supplements the development of electrical power onboard which reduces generator fuel consumption by deploying wind turbines to generate electricity.

Generator Waste Heat Boiler p. 21

By capturing waste heat released from the generator exhausts and converting this energy into steam production used for heating purposes, there is less need to operate the boiler which saves fuel and reduces emissions.

Propeller Boss Cap Fin (“PBCF”) p. 21

A device that increases the propeller efficiency by 3-5% by reducing drag from the water vortex that is created when water spins after it leaves the propeller.

Rudder Bulb & Saver Fin p. 21

Positioned behind the propeller, this unit reduces propeller energy losses by smoothing the flow of water as it spins and leaves the propeller hub, reducing the vortex which increases the efficiency of the propeller. The saver fin converts the rotational energy of water leaving the propeller into thrust.

The speed of electrical motors can be adjusted to match a required output which reduces the electrical load demand and improves generator fuel consumption, reducing emissions.

Reduces fuel consumption by ensuring that the propulsive power is maintained at a constant level. This allows the vessel speed to vary based on environmental factors (wind, current etc). This optimises the fuel consumption against the range of variables that environmental factors influence the ship whilst moving through the water.

Battery Bank p. 33

Rechargable battery banks can be used in conjunction with renewable energy sources to store energy thereby servicing the electrical load demand. This reduces the load on the diesel driven electrical generators effectively providing a “hybrid power supply” option.

Air Lubrication p. 33

By trapping a cushion of air bubbles beneath the flat bottom of a ship, it creates a soft air separation between the water and the steel. This significantly reduces friction losses as the ship moves through the water due to the air bubbles providing a smoother interface between the steel hull relative to the water passing by.

Pre-Swirl Duct p. 25

Vessel Performance Measurement System (Skysails) p.38

High Efficiency Solar Power System p. 25

Wind Assist Propulsion p. 38

A circular duct positioned in front of the propeller with radiating fins. The duct straightens and accelerates water flow into the propeller whilst the fins create a pre-swirl effect in the water as it flows onto the propeller blades.

The device reduces friction and energy losses providing an increase in propeller performance and efficiency, thereby enhancing the thrust generated by the propeller.

Supplements the development of electrical power onboard which reduces generator fuel consumption by deploying solar energy to generate electricity.

See page 12 for Ship Diagram

Measures wind speed and direction, roll and pitch, and precise fuel consumption. Data is displayed on bridge control panel, which allows watch-standers to effect changes as required to optimise voyage performance at all times. Data is also sent to office and utilised for post-voyage analysis, hull cleaning periodicity, machinery maintenance timing, and fleet statistics.

Assists the main engine by providing propulsive power which reduces fuel consumption and emissions through the use of sails or other wind devices.

CONTENTS 5

Why Progress?

6

Our Sense Of Purpose

7

Our Performance Focus

8

How We Think About Sustainability

11

Ardmore’s Energy Transition Plan

12

Ship Diagram - Energy Efficiency Technologies

16

Environmental: Highlights, Metrics & Initiatives

26

Social: Highlights, Metrics & Initiatives

34

Governance: Highlights, Metrics & Initiatives

39

Forward-Looking Statements

Inside Front Cover Glossary - Energy Efficiency Technologies Inside Back Cover List Of Liquid Bulk Cargoes Transported

By Ardmore Shipping In 2020

Front Cover The four-winged species of flying fish: an evolved species with superior performance to its two-winged cousins is emblematic of Ardmore’s approach to the energy transition challenge.

Exocoetidae, commonly called Flying Fish, is a species of fish aptly named for their ability to emerge out of the water and glide long distances with their outstretched pectoral fins. Their streamlined torpedo shape helps them gather enough underwater speed to break the surface, and their large, wing like fins get them airborne.

Ardmore Shipping Corporation

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Aerodynamic Superstructure

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Ardmore Shipping Corporation PROGRESS REPORT 2020

WHY PROGRESS? ‘We could have called this a sustainability or corporate social responsibility report, but we have chosen to be purposefully different and call this a progress report. The concept of progress is central to Ardmore’s ethos, and we intend to use this format in future years to report on our ongoing progress toward true sustainability.’

Welcome to Ardmore Shipping’s first annual Progress Report, in which we present what we have accomplished over the past year on matters relating to the environment, social progress, and governance. We also discuss the philosophy and rationale behind our efforts in these areas, and importantly, lay out our approach to support the global energy transition and the decarbonization of the shipping industry.

From the inception of Ardmore in 2010, we have set a high bar for ourselves in the three areas that have come to be known as “ESG”, namely environment, social progress, and governance.

We have always just thought of this as progress and doing the right thing.

ENVIRONMENTAL When it comes to the environment, from day-one we acquired high-quality, fuel-efficient vessels and built an organization around professionalism, safety and environmental protection; we pioneered the concept of “eco-mod” by experimenting with ways to further reduce fuel consumption and emissions, by upgrading our initial second-hand tanker acquisitions with energy saving devices and adopting innovative operational measures.

We were also among the first companies to embrace purpose-built “eco-design” vessels, which were a big leap forward in fuel efficiency, and which substantially out-perform their conventional predecessors still today.

SOCIAL In terms of social progress, from the start we have also had a notable degree of gender balance and diversity across the organization, for the simple reason that we hire the best, not just in terms of experience and ability, but also professional development potential; we have also made Ardmore an inclusive and rewarding place to work, and we provide exceptional career development opportunities, all of which have contributed to Ardmore’s high-performance, collaborative culture.

GOVERNANCE As for governance, we decided from day-one with our initial equity sponsor Greenbriar Equity Group that we would run an ethical, fully-aligned organization; this has resulted in consistently high regard among investors and other stakeholders.

The Webber Corporate Governance scorecard consistently ranks us in the top quartile; in 2020 we were ranked third out of 52 public shipping companies.

We also want to acknowledge that we are a relatively small company in the context of our industry, and certainly as compared to businesses more generally. While we do wish to continue growing as opportunities arise to improve our performance, we take pride in “punching above our weight” and believe there are real benefits in being a small company in terms of being nimble, dexterous, and quick to identify and act on opportunities. We approach each day not with presumption or entitlement, but with humility - and a keen sense of purpose.

Anthony Gurnee, President, Chief Executive Officer Ardmore Shipping Corporation

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OUR SENSE OF PURPOSE All of us, as individuals and in groups, have a purpose, whether stated clearly or understood implicitly. That purpose may vary widely by individual and group, but purpose is always there, and Ardmore and its people are no exception.

If we were to try and distill Ardmore’s purpose into one phrase, it would do an injustice to both the company and to our people; rather, we feel that communicating our purpose through action and example is a better approach.

Let’s also acknowledge that companies are at their best when their employees’ sense of purpose aligns with that of the company they work for, and that together the company and its employees are energized by a larger sense of purpose.

WHERE DOES ARDMORE’S SENSE OF PURPOSE COME FROM? Firstly, from the appreciation we feel toward stakeholders who have placed their trust in us, and the sense of obligation to repay that trust by upholding our part of the bargain.

Secondly, from a genuine desire to do the right thing, for to quote Mark Twain, “…it will gratify some and astonish the rest.” It is a point of pride for us, particularly in an industry with a reputation, unfortunately among some circles, for not always doing the right thing, most particularly in the ESG arena.

And thirdly, from our desire to make a difference, to remain relevant in a rapidly changing world, to contribute to a greater cause… and to be recognized for it. This is what Simon Sinek explores in his book “The Infinite Game,” which captures our beliefs well.

Which begs the question, what is the larger purpose for shipping companies in general, and for Ardmore in particular? At the moment it is many things, and it is truly hard to express simply, but as time goes by, it is becoming more and more about one big thing: the energy transition.

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Ardmore Shipping Corporation PROGRESS REPORT 2020

OUR PERFORMANCE FOCUS For Ardmore, performance is an imperative: without performance we have no justification for existing.

We are not one for excuses when it comes to performance; we know we must constantly strive to do better, and we will, but we also know that we have done well compared to some of our larger peers, and we acknowledge that we could enhance our returns with greater scale if we can at the same time remain focused and agile.

However, claims of relative performance ring hollow. As the saying goes, “you can’t feed your family on relative returns.” So how can a shipping company earn at least its cost of capital over the long run?

and total management alignment. If shipping companies can achieve these along with scale, we believe that they can deliver returns well in excess of their cost of capital, and as an industry we will be much better off.

At Ardmore, we have always taken a long-term approach, and our experience tells us that by focusing on the points noted above, good growth opportunities will arise as they always have for us. As we look ahead to the energy transition and related market opportunities in particular, we believe that our strategic focus, performance culture, agility, and approach to innovation, will allow us to further enhance returns to our shareholders.

We believe that the answer is not just scale, but also: innovativeness and the ability to adapt to changing market conditions; strategic and operational focus; cost efficiency; financial strength;

High Performance Anti-Fouling Coating Ardmore Shipping Corporation

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HOW WE THINK ABOUT SUSTAINABILITY LET’S ADDRESS THE ELEPHANT IN THE ROOM: CAN TANKERS BE SUSTAINABLE? Sustainability is a much-used term, perhaps even over-used, but one we believe in whole-heartedly.

We view sustainability as mostly and more immediately about the environment, and in particular the need to decarbonize, but also other means to reduce or eliminate our negative impact on the environment, such as sulfur dioxide or nitrous oxide.

There are also social and financial aspects to sustainability, which we believe are vitally important.

We believe the shipping industry can and must do better in all areas of sustainability, not least financial sustainability: profitability, financial strength, risk management, access to capital, and operational efficiency.

The question around sustainability is simple: are you conducting yourself in a manner that will leave the world in a better condition for your grandchildren? This is a question we must face head-on, and we must continue to work on it until we can honestly and unreservedly answer in the affirmative.

SO: CAN TANKERS BE SUSTAINABLE?

But tankers have an additional challenge: the cargoes they carry.

A large majority of cargoes shipped by tankers are fossil fuels: crude oil, fuel oil, diesel, gasoline, and jet fuel; however, this is not all. There is also a very long list of non-fossil fuel cargoes that tankers transport.

These “non-fossil fuel” cargoes include chemicals, food stuffs, and other materials that are integral to daily life and which will rightfully grow with the global economy. They also include various forms of renewable fuels which may enjoy exceptionally high rates of growth in the energy transition.

Already within Ardmore these non-fossil fuel cargoes make up approximately 25% of our revenue base. We have listed all the cargoes carried in 2020 on the inside back cover of this report to make the point.

At Ardmore, we consider ourselves to be in the business of liquid bulk shipping, not oil transportation. At the moment fossil-fuels may make up the large majority of what we carry, but this will change over time as the needs and preferences of global society change.

So yes, tankers can and must become sustainable, along with the rest of shipping.

For Ardmore the answer is yes – it is a matter of the cargoes you carry, the way you care for them, and the environmental impact you have in transporting those cargoes.

Just like the rest of shipping, tankers will have to find ways to become carbon neutral. Just like other ship-types, this means improved overall efficiency and the use of zero carbon fuels.

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Ardmore Shipping Corporation PROGRESS REPORT 2020

Wind Power Generation

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Ardmore Shipping Corporation PROGRESS REPORT 2020

ARDMORE’S ENERGY TRANSITION PLAN Over the past year we have worked on developing Ardmore’s response to the shipping industry’s need for decarbonization and sustainability, which we call the Ardmore Energy Transition Plan (“ETP”).

It is important to state up-front that we acknowledge that every shipping company will find its own way to address the energy transition, all of which would of course be appropriate in meeting their own specific preferences, circumstances and needs.

In contrast, there are some elements of the ETP which we expect will unfold over a matter of months, and we will disclose these activities as and when progress is made and is reportable.

Otherwise, we intend to work privately on our initiatives because only results count. We don’t need superfluous headlines.

THE BASIC FRAMEWORK OF THE ARDMORE ETP IS AS FOLLOWS:

•

We are in the business of liquid bulk transportation, and over time our activity will migrate more toward non-fossil fuel cargoes for which demand will grow along with the global economy. At this point already 25% of our business is non-fossil fuel cargo

•

When it comes to the energy transition, we have a clear and admittedly audacious sense of purpose: to play a pivotal role by the leading the way toward true sustainability as a tanker company.

In keeping with our “eco-mod” philosophy, we believe that there is significant opportunity for continued improvement in fuel efficiency as well as early adoption of transition and zero carbon fuels, and that Ardmore can play a role in assisting others through partnerships

•

Just as with the energy transition itself, our energy transition plan will unfold over years not months.

For example, the world still needs fossil fuels to function and will for some time to come, and so product tankers will continue to be required for fossil fuel transportation (gasoline, diesel, jet fuel) for the time being. That said, we believe fossil fuels will continue to become less important to the world over time, while non-fossil fuel liquid bulk cargo markets will grow.

We believe that many of our customers have similar incentives to decarbonize their supply chains and will approach this through closer collaboration with shipping companies possessing the mindset and expertise to assist them in achieving their aims

The Ardmore ETP is a progressive initiative but at the same time, it is intensely focused on performance, in keeping with our philosophy on the inter-connectedness of performance and progress.

We also readily acknowledge that we will have plenty of company in being progressive both in terms of other shipping companies as well as in industry-wide efforts, and we look forward to finding ways of collaborating and contributing to the greater good.

The Ardmore ETP is consistent with, and is an extension of, our existing strategy; it builds on our core strengths, and it fits in perfectly with our sense of purpose discussed earlier.

Ardmore Shipping Corporation

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3

4

5

6

2

1

16

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14

13

7

8

9

ENERGY EFFICIENCY TECHNOLOGIES ADOPTED BY OR BEING CONSIDERED

BY ARDMORE SHIPPING

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11

10

1

High Efficiency Solar Power System

2

Variable Speed Fans

3

Battery Bank

4

Generator Waste Heat Boiler

5

Vessel Performance Measurement System (Skysails)

6

Aerodynamic Superstructure

7

Wind Power Generation

8

Wind Assist Propulsion

9

Plumb Bow

10

Air Lubrication

11

High Performance Anti-Fouling Coating

12

Variable Speed Pumps

13

Constant Power Control System (Lean Marine)

14

Pre-Swirl Duct

15

Rudder Bulb & Saver Fin

16

Propeller Boss Cap Fin (“PBCF”) For more information see glossary on page 2

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Ardmore Shipping Corporation PROGRESS REPORT 2020

PROGRESS IN 2020

Ardmore Shipping Corporation

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ENVIRONMENTAL HIGHLIGHTS 2020

2020 saw Ardmore reduce its metric tonnes of CO2 emissions generated from 422,984 in 2019 to 389,721. This is a result of our ongoing performance improvement initiatives, which include: •

•

The development of hull coating assessment platform, which not only has allowed us to closely monitor the hull fouling but also enables us to assess the overall coating performance The installation and commissioning of a constant power control system, which reduces fuel consumption, ensuring the propulsive power is optimised by way of removing the overconsumption in adverse conditions

8%

Reduction in CO2 Emissions

4,606

MT CO2 Emissions saved through weather routing

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Ardmore Shipping Corporation PROGRESS REPORT 2020

100% COMPLIANCE With regulations of IMO 2020 low sulphur fuel regulations and all applicable international regulations

Zero MARPOL pollution incidents

ESG: MILESTONES, FACTS & FIGURES This is a progress report, so it is important to highlight our milestones over the past year as well as set out the facts and figures around ESG needed by some of our stakeholders to evaluate that progress.

Our Board of Directors continues to be closely advised of our activities relating to ESG. The Ardmore Board has been integrally involved in the formulation of the Ardmore ETP, and has already approved a number of key initiatives in this plan.

CARBON EMISSIONS(1) FULL YEAR 2019

FULL YEAR 2020

25

27

6.40

7.66

422,984

389,721

Fleet

6.41

6.04

MR eco-dDesign

6.11

5.71

MR eco-mod

6.30

6.36

Chemical

8.14

7.40

Fleet

12.84

12.37

MR Eco-Design

12.54

12.01

MR Eco-Mod

12.98

12.82

Chemical

13.66

13.20

Number of Vessels in operation at year end Fleet Average Age CO2 Emissions Generated in Metric Tonnes ANNUAL EFFICIENCY RATIO (“AER”) (GCO2/DWT-NM)(2)

ENERGY EFFICIENCY OPERATIONAL INDICATOR (“EEOI”) (G/CTM)(3)

(1) Ardmore’s emissions data is based on the reporting tools and information reasonably available to Ardmore and its applicable third-party technical managers. Management assesses such data and may adjust and restate the data to reflect latest information. The data represented is for 26 owned vessels and 1 time charter-in vessel (2) AER is a measure of carbon efficiency using the parameters of fuel consumption, distance travelled, and design deadweight tonnage (“DWT”).

AER is reported in unit grams of CO2 per tonne-mile (gCO2/dwt-nm).

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Ardmore Shipping Corporation PROGRESS REPORT 2020

It is calculated by dividing (i) mass of fuel consumed by fuel type converted to grams of CO2 by (ii) the product of DWT multiplied by distance travelled in nautical miles (3) EEOI is a tool for measuring the CO2 gas emissions in a given time period per unit of transport work performed. It is calculated by dividing (i) mass of fuel consumed by fuel type converted to grams of CO2 by (ii) the product of cargo volume carried in tonnes multiplied by laden voyage distance in nautical miles.

This calculation is performed as per IMO MEPC.1/Circ684

GENERAL METRICS 2018

2019

2020

28

25

26

Number of vessel months

326.3

299.2

311.1

Distance sailed (million nautical miles)

1.60

1.47

1.45

Cargo volume carried (million metric tonnes)

9.65

8.48

8.50

$210.2

$230.0

$220.1

Number of vessels owned and in operation at year end

Revenue (US$ million)

1Q20

2Q20

3Q02

4Q20

25

25

27

27

6.70

6.95

7.40

7.66

96,940

96,825

96,476

99,479

Fleet

6.07

5.89

6.10

6.18

MR eco-dDesign

5.51

5.67

5.81

5.87

MR eco-mod

6.56

6.00

6.31

6.58

Chemical

8.25

6.95

7.37

7.22

Fleet

12.03

10.82

12.63

14.53

MR Eco-Design

11.15

10.73

12.17

14.90

MR Eco-Mod

12.28

10.08

13.36

16.46

Chemical

16.26

11.91

13.55

12.12

Number of Vessels in Operation (at period end) Fleet Average Age CO2 Emissions Generated in Metric Tonnes ANNUAL EFFICIENCY RATIO (“AER”) (GCO2/DWT-NM)(2)

ENERGY EFFICIENCY OPERATIONAL INDICATOR (“EEOI”) (G/CTM)(3)

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ENVIRONMENTAL 2018

2019

2020

HFO

102,768

101,373

0

MGO

20,654

16,972

51,505

n/a

9,837

76,655

HFO

109,085

123,591

0

MGO

22,286

18,229

49,073

n/a

n/a

73,748

Bilge Water Disposal

19.27

14.78

12.77

Sludge Disposal

1.63

1.37

1.63

Sludge Incinerated

3.08

3.40

3.17

2.62

2.84

2.66

Production

14.89

14.31

12.63

Consumption

6.99

6.76

6.41

0

0

0

Gold

Gold

Gold

Electricity used (kWh)

79,900

74,550

62,000

Generated CO2 emissions (metric tonnes)

27.17

25.35

21.08

35

38

38

0.78

0.67

0.55

*Flight emissions per shore-based employee (kg)(8)

n/a

5,607

1,443

Air travel (km)

n/a

1,235,898

358,037

Number of flights

n/a

369

89

CO2 emissions (kg)

n/a

213,049

54,839

BUNKERS PURCHASED (METRIC TONNES)(4)

VLSFO BUNKERS CONSUMED (METRIC TONNES)(4)

VLSFO WASTE (M3/MONTH/SHIP)

Garbage Landed FRESH WATER (M /DAY/SHIP)

(5)

3

MARPOL POLLUTION INCIDENTS OF FLEET *OFFICE EMISSIONS

(6)

Office LEED rating(7)

Number of office employees(8) CO2 emissions per employee (metric tonnes) FLIGHTS

(4) Environmental fleet data is based on the vessels operating in the Ardmore MR pool. Ardmore had eight ships operating in a third-party pool in 2017 and 2018, which are not included in the numbers presented here. The first four were redelivered to Ardmore MR Pool in March 2018, while the final four were redelivered in August 2018

(6) Data only for Head Office in Cork, Ireland

(5) Fresh water produced and consumed on board our vessels

(8) Ardmore Shipping employees for Head Office only

(7) “LEED” (Leadership in Energy & Environmental Design) is the US Green Building Council’s building rating certification program that recognizes best-inclass Green building strategies and practices

*2020 numbers impacted by COVID-19

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Ardmore Shipping Corporation PROGRESS REPORT 2020

Generator Waste Heat Boiler

Propeller Boss Cap Fin (“PBCF”)

Rudder Bulb & Saver Fin

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POLICIES & ALLIANCES

•

• •

•

Sustainable and green technology projects are being worked on with partners to create a pathway to carbon negative shipping

•

Ardmore has an energy efficiency management policy in place since 2012; includes initiatives on energy saving and carbon reduction

We hold all suppliers and service partners to environmental standards that support our values and initiatives

•

Ardmore ensures that operating policies and procedures are in place with the primary objective of zero oil pollution incidents

Volatile Organic Compound (“VOC”) control plan or Vapor Emission Control System (“VECS”) in place for all vessels

•

We support the IMO adopted ‘Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships’

•

International Parcel Tankers Association (“IPTA”); a focal point through which regulatory authorities, charterers and trade organisations may liaise with IMO classified and product tanker owners

•

Intertanko; a trade association that serves as a voice for independent tanker owners

•

Lloyd’s Register (“LR”) Marine & Shipping Committee; a classification organization

•

American Bureau of Shipping (“ABS”) Council; a classification organization

•

DNV West European Technical Committee; a classification organization

Unified commitment to efficiency improvements and emission reduction which are strongly aligned to the UN Sustainable Goals and the IMO climate agreement on the reduction of emissions

MEMBER OF:

•

Getting to Zero Coalition; a program established by the Global Maritime Forum focused on accelerating maritime shipping’s decarbonization

•

The steering committee for DecarbonICE technology; an innovative carbon capture and storage solution for reducing GHG emissions from shipping

• •

•

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The Trident Alliance; focused on effective enforcement of marine sulfur regulations International Chamber of Shipping (“ICS”); represents shipowners and operators, it’s concerned with all technical, legal, employment affairs and policy issues that may affect international shipping Irish Chamber of Shipping; represents ship-owners and operators in all sectors and trades in Ireland

Ardmore Shipping Corporation PROGRESS REPORT 2020

KEY DISCLOSURES & AWARDS

•

All our environmental metrics are tracked and monitored and those metrics are disclosed in our Progress Report and on our website

•

Transparent reporting of carbon emissions for the fleet on a quarterly basis since the first quarter of 2019

•

•

We participate in the ‘Right Whale Corporate Responsibility Programme’ (as recognised by US Dept. of Commerce), where companies agree to speed restrictions when traversing the migration paths of whales

•

Voluntary speed reduction in local waters in line with the Korean initiative to improve air quality at its ports

All of our ships built 2014 onwards are compliant with IMO EEDI requirements and Ship Energy Efficiency Plan (“SEEMP”); which enforces fuel efficiency and consequently emission reductions (both GHG and non-GHG)

•

We comply with the requirements of the IMO Ballast Water Management Convention

•

All of our vessels hold a valid and certified Inventory of Hazardous Materials

We are compliant with the requirements of IMO 2020 (Marpol Annex VI) and with the mandatory reporting of CO2 emissions per EU MRV and IMO regulatory requirements (Marpol Annex VI DCS)

•

We follow the international guidelines for disposal of electronic waste, including the EU directive on Waste Electrical and Electronic Equipment (“WEEE”)

The Ardmore fleet received the Port of Long Beach Green Environmental Achievement Award in recognition of the fleet’s excellent performance with the voluntary speed reduction program

COMPLIANCE

•

•

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ENVIRONMENTAL ENHANCEMENT PROGRAMMES

•

We operate a fleet of modern, highly fuelefficient fleet of product and chemical tankers with an average age of 7.6 years(9)

•

We deploy variable speed frequency controls on large engine room pumps to reduce energy output

•

We demonstrate and promote environmental awareness leadership and are at the forefront of fuel efficiency improvements. We have implemented a variety of eco-modifications to our fleet, including energy saving devices outlined in the Glossary on the inside cover

•

The utilization of a dedicated weather routing service allows for maximized route optimization and safe passage of our vessels during heavy weather

•

Proactive monitoring of hull and propeller condition allowing for cleaning regimes which results in lower fuel consumption and consequently emissions

•

We have developed a hull coating assessment platform which not only has allowed us to closely monitor the hull fouling but also enables us to assess the overall coating performance

•

We apply a five year anti-fouling hull coating as standard, reducing the energy requirement for re-coating every three years

•

All paint suppliers are certified to ISO 14001 Environmental Management

•

•

We are focused on reducing shipping’s impact on the planet by continually striving to reduce emissions and seeking to develop and invest in progressive and innovative sustainability projects The utilization of vessel performance measurement systems and the implementation of trim optimization allows for proactive monitoring and control by ship staff of engine power leading to reduced fuel consumption and emissions

•

We have a super slow steaming strategy in place, which leads to reduced fuel consumption and emission levels

•

Installed and commissioned a constant power control system which reduces fuel consumption by ensuring the propulsive power is optimised by removing the overconsumption in adverse conditions

(9) Average age of fleet calculated as at January 1, 2021

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Ardmore Shipping Corporation PROGRESS REPORT 2020

•

All Ardmore tank cleaning chemical providers are IMO approved

•

Emphasis on utilization of web conferencing to minimize travel related emissions

- Chemicals are bio-degradable and non-toxic to human health and the marine environment

•

Garbage management plan in place for segregation and disposal of waste on our vessels and in our offices

•

Our Head Office building has Gold “LEED” (Leadership in Energy & Environmental Design) certification; a certification program that recognizes best-in-class ‘Green’ building strategies and practices

•

Our technical managers are ISO compliant with all management, environmental and safety requirements

•

We are currently developing an ‘Anglo Ardmore Arboretum’ at the Anglo Eastern Maritime Academy in Karjat, Mumbai. The arboretum, which is over 3 acres, will consist of 70 indigenous species of trees planted around the periphery. Not only will these trees soak up harmful CO2 and produce oxygen, they will also create a peaceful area for all those studying and working at the training academy

- The tank cleaning equipment and chemicals in use are designed to minimize the use of freshwater - Effective tank cleaning chemicals reduce tank cleaning time leading to reduced fuel consumption and emissions

•

We are currently transitioning to LED lighting both ashore and on our vessels, which is 90% complete

•

We have onboard water filtration systems installed on our vessels to discourage the use of single use plastic

•

Our offices have filtered water. Furthermore, plastic water bottles are no longer used for meetings

Pre-Swirl Duct

High Efficiency Solar Power System Ardmore Shipping Corporation

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SOCIAL

HIGHLIGHTS 2020

2020 was a challenging year for Ardmore but particularly for our seafarers, who in difficult conditions, continued to drive efficiency, performance and results on board our ships.

A result of these conditions was the successful interdepartmental collaboration and co-operation on the ‘Bring ‘em Home’ project to repatriate crew in parallel to effectively managing the commercial operations of our vessels. Additionally, with a focus on supporting education and succession planning, we established the Anglo Ardmore bursary framework to support cadet officer training and developed a Safety Rating app to improve our overall safety performance.

54% Of our shore staff are female

12%

Of our Officer Cadets are female 26

Ardmore Shipping Corporation PROGRESS REPORT 2020

43%

MANAGERIAL POSITIONS ASHORE ARE HELD BY WOMEN

54

Shore based staff

From 9 different countries

SOCIAL 2018

2019

2020

SHORE-BASED STAFF(10)

51

53

54

SHORE STAFF NATIONALITIES

10

10

9

Irish

41%

53%

50%

Singaporean

22%

21%

24%

American

8%

6%

6%

United Kingdom

10%

6%

6%

Indian

4%

4%

4%

Romanian

4%

4%

4%

German

2%

2%

2%

Spanish

4%

2%

2%

6%

4%

2%

Europe

75%

70%

69%

America

2%

4%

4%

24%

26%

27%

84%

92%

92%

55%

55%

54%

Europe

53%

50%

47%

America

100%

50%

50%

58%

69%

71%

1,106

1,054

1,046

SHORE STAFF BY NATIONALITY (%)(10)

Other SHORE STAFF BY GEOGRAPHICAL LOCATION (%)

(10)

Asia SHORE STAFF RETENTION (%)

10)

WOMEN IN WORKFORCE (%)

(10)

Asia NUMBER SEAFARERS

(11)

(10) This relates to Ardmore Shipping worldwide shore staff (excludes employees of Anglo Ardmore joint venture). Regional view highlights female representation of each office.

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Ardmore Shipping Corporation PROGRESS REPORT 2020

(11) Our seafarer’s are employed by our technical managers (12) Retention rate relates to permanent full-time staff that are retained

2018

2019

2020

Indian

70.6%

71.2%

73.5%

Filipino

20.6%

20.1%

19.3%

European

5.3%

5.2%

4.8%

Chinese

3.2%

3.1%

2.4%

0.4%

0.3%

0.0%

Officers

95.6%

96.3%

88.2%

Overall

95.7%

96.3%

84.0%

SEAFARERS WHO RECEIVED A PERFORMANCE ASSESSMENT (%)

96.8%

98.9%

99.2%

*TOTAL TRAINING HOURS FOR SEAGOING PERSONNEL

25,689

19,971

15,103

SEAFARERS BY NATIONALITY (%)

Other *SEAFARER RETENTION (%)

(12)

*2020 numbers impacted by COVID-19

Ardmore Shipping Corporation

PROGRESS REPORT 2020

29

LABOUR & EMPLOYEE PROGRAMS

•

In partnership with our technical managers, we comply with all aspects of the Maritime Labour Convention (“MLC”). We maintain high standards in relation to every aspect of this convention which sets out minimum requirements for working and living conditions for seafarers including recruitment and placement practices, conditions of employment and hours of work and rest, repatriation, annual leave, payment of wages, accommodation, recreational facilities, food and catering, health protection, occupational safety and health, medical care, onshore welfare services and social protection

•

Employee emotional wellbeing support for shore-staff and sea-staff, a 24/7 confidential support line including counselling, information, guidance and referrals on any work, personal or family issues. This service has been crucial in supporting and offering guidance through the many challenges faced during the global pandemic

•

Proactive seafarer wellness campaigns and ongoing review and renewal of recreational facilities on board

•

Quarterly feedback from sea-staff on our food supplier to ensure that our supplies are of a high standard. During the global pandemic, we restocked on a more regular basis to prevent our vessels from running low on fresh produce. On top of which, we also ensure that vessel has sufficient safety personal protective equipment, keeping them safe during this period

•

We actively and openly communicate with our seafarers on a regular basis. This is done via a number of communication platforms; Microsoft Teams meetings, seafarers conferences, the Ardmore Standard (our internal newsletter), social media platforms, our WhatsApp safety groups and internal commercial bulletins

•

Ardmore fosters active leadership, open communication, innovation and continuous improvement among both shore and sea-staff

•

All of our vessels have VSAT on board so that all seafarers have direct connectivity with their families

•

In 2020 we held our first online crew conference, which was well attended by senior and junior officers, cadets and shore-staff

•

•

Successful interdepartmental collaboration and co-operation on the ‘Bring ‘em Home’ project to repatriate crew during the global pandemic without impacting the commercial operations of our vessels

Direct support and intervention during regional disasters affecting our seafarers or office employees globally and repatriation on compassionate grounds when required

•

•

Progressive remuneration package

Personal performance management initiatives for all seafarers and shore employees, including structured formal promotion process and rewards program for outstanding performance

•

We are a signatory to the ‘Neptune Declaration on Seafarer Wellbeing and Crew Change’,

30

Ardmore Shipping Corporation PROGRESS REPORT 2020

•

a task force which was developed by the Global Maritime Forum to push for the global recognition of seafarers as key workers, allowing them early access to coronavirus vaccinations, and for governments to implement gold standard health protocols for crew changes

•

Regular employee feedback via formal and informal anonymous surveys to facilitate company improvements

•

Ardmore places great emphasis on work/life balance, often facilitating work from home and flexible work hour arrangements

We have an active mentorship programme available to shore-based employees and our seafarers are mentored in an informal basis by superiors

•

Progressive maternity and paternity leave policy in place for shore-staff

•

Regionally appropriate pension scheme with a company contribution

•

We have informal and formal procedures in place, should any seafarer or employee experience or observe any unwanted conduct

•

A philosophy and practice of ‘Giving Back’ in the communities which we live, work and employ

•

Association of Chartered Certified Accountants (“ACCA”) approved employer - Gold Certificate(13)

•

12% of our officer cadets are female. This is a dramatic and positive contrast to the industry norm where in 2020 just 2% of all seafarers were female(14)

•

Founder member of the ‘Maritime Diversity Study Group’; champions diversity and inclusion in all forms in shipping

•

Professional Development Programs (“PDP’s”) are in place for all shore based staff together with a study leave policy

•

With a focus on supporting education and succession planning, we established the Anglo Ardmore bursary framework to support cadet officer training

•

Ardmore facilitates internship programmes with colleges worldwide

•

Continuity of senior officers through back-toback rotations

DIVERSITY

•

Diversified board; cross industry experience with mix of male and female members

•

Equal opportunities employer with multinational employee base

•

The ratio of men to women among our shorestaff is 46:54

•

20% of our Senior Management Team are female

•

We complete a company wide diversity study on an annual basis

•

43% of the managerial positions at our offices are held by women

•

Speaker at the 2020 Women in Shipping conference

(13) As an approved employer we have the option to allow our ACCA students exemption from completion of the nine Performance Objectives required for membership, which gives the student more time to concentrate on their work and helps them to achieve ACCA membership more quickly and easily (14) Reference BIMCO data 2020

Ardmore Shipping Corporation

PROGRESS REPORT 2020

31

HEALTH & SAFETY

•

Ardmore complies with requirements of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”), which describes minimum standards relating to training, certification and watchkeeping for seafarers

•

We are compliant with all aspects of the International Convention for the Safety of Life at Sea (“SOLAS”)

•

A culture of a safety mindset is promoted from all levels of organization, between all employees. We hold every employee accountable for the safety of themselves and their fellow workers and for the quality of their own work

•

We are continually exploring new technology and initiatives to enhance safety of our operations and the protection of our seafarers

•

Proactive renewal of personal protective equipment with a particular focus on ensuring adequate supplies during the global pandemic

•

Ardmore actively solicits input from our commercial and technical partners on the development, implementation, and improvement of our health, safety and quality programmes

•

We adopt best practice standards in relation to safety and security and exceeds the most demanding criteria set by our customers and industry regulators

•

Ardmore quarterly safety champion award recognises seafarers who implement enhanced safety initiatives and practices

•

We developed a Safety Rating app to improve our overall safety performance. This app allows for 360° feedback on safety performance of individuals on our vessels, raise the level of safety awareness and contribute to a safer working environment

32

Ardmore Shipping Corporation PROGRESS REPORT 2020

•

Current high risk areas are monitored on a daily basis, to ensure safety of our employees remains a top priority at all times

•

Near miss reporting ensure that hazards are properly and proactively identified, analyzed and controlled

•

24/7 medical assistance available to all seastaff

•

Our vessels are inspected regularly by the Oil Companies International Marine Forum (“OCIMF”), which focuses exclusively on promoting safety and preventing harm to people and the environment by promoting best practice in the design, construction and operation of tankers. In 2020 we had the best inspection performance on record for the fleet with an average of 1.8 observations against a KPI of 2.5

•

Through our chosen vessel flag state (Marshall Islands), we are Qualship 21 recipients; US Coast Guard award for commitment to safety and quality

•

Travel Insurance policy in place for all employees who are obliged to travel for work

•

Group personal accident policy insurance in place for all employees

•

For emergency situations, Ardmore has an emergency response protocol

•

Our technical managers are ISO 18001 compliant; the international standards that specifies requirements for health and safety management system

•

We have implemented measures to prevent injuries from mooring ropes parting with a phased transition to snap back arrestor mooring ropes

•

We had no security incidents in 2020

Plumb Bow

Variable Speed Pump & Fans

Constant Power Control System (Lean Marine) Trim

Battery Bank

Air Lubrication Ardmore Shipping Corporation

PROGRESS REPORT 2020

33

GOVERNANCE HIGHLIGHTS 2020

Ardmore prides itself on its strong track-record with regard to governance and our approach to this was again acknowledged in the 2020 ESG Scorecard from Webber Research, which recognised us as the #1 ranked product tanker and foreign private issuer in shipping.

Prominent in this is our board independence (independent board leader, only the CEO as a non-independent director), no related party transactions and our diversity at board level.

0.61 LOST TIME ACCIDENT FREQUENCY (50% REDUCTION)

34

Ardmore Shipping Corporation PROGRESS REPORT 2020

66%

reduction in TRCF in 2020

Zero Cases of Corruption

95%

Zero deficiency rate in Port State Inspections in 2020

GOVERNANCE 2018

2019

2020

INJURY FREQUENCY (TRCF) (PER MILLION MAN HOURS)(15)

2.23

3.02

1.02

INJURY FREQUENCY (LTIF) (PER MILLION MAN HOURS)(15)

0.93

1.21

0.61

Work related

0

0

0

Non-work related

2

0

0

DEFICIENCIES PER PSC INSPECTION

0.39

0.19

0.08

ZERO DEFICIENCY RATE IN PSC (%)

84%

88%

95%

NUMBER OF NEAR MISS REPORTS

2,334

947

804

NAVIGATIONAL ACCIDENTS

0

2

1

*SEAFARER/OFFICER TRAINING SEMINARS(19)

2

2

1

SHIPS PER SAFETY/TRAINING MANAGER

9.5

8.5

8.5

OFFICER CADETS PER SHIP

0.96

1.08

1.04

BUNKER SUPPLIERS

40

40

51

BUNKER BROKERS

2

3

3

PROVEN CASES OF CORRUPTION

0

0

0

CREW FATALITIES(16)

(17)

(18)

(15) TRCF = Total Recordable Case Frequency; LTIF = Lost Time Injury Frequency (16) Regretfully two crew members died from non-work related activities while on board our vessels in 2018 (17) Reduction in number of near misses in 2019 is primarily due to a change in reporting procedures adopted by our technical managers, which is in line with recommendations of oil majors

36

Ardmore Shipping Corporation PROGRESS REPORT 2020

(18) We had one navigational accident in 2020 where one of our vessels was involved in an collision in Chittagong. This collision did not result in a hull breach, injury or pollution’.

(19) In 2020 we held our first virtual seafarer’s seminar

BOARD INDEPENDENCE, COMPOSITION & POLICIES

•

Independent board leader (i.e. separate Chairman & CEO)

•

Majority independent directors; CEO the only non-independent director

•

Each board member is elected for a three year term; there is no term limit

•

Board members participate in executive sessions

•

Board is currently made up of four males and two females

•

Board age varies from 53 - 65 years of age

•

Directors on average hold seats on three boards

•

Every common share has one vote

•

In addition to the Board of Directors, there are a number of sub-committees in place: (i) Audit Committee (ii) Remuneration Committee and

(iii) Nominations and Corporate Governance Committee and (iv) Investment Committee.

Compensation for senior management is reviewed and approved by the Renumeration Committee

•

Audit committee responsibilities include overseeing the hiring of the external auditor, quality of financial reporting and disclosures, management’s assessment of any significant matters, considering the potential impact on financial reporting and need for corrective action

•

We have maintained our ranking in the top tier of US listed public shipping companies for corporate governance by Webber Research and Advisory LLC(20)

•

Ardmore has no related party transactions; including no such commercial management or sale and purchase transactions; it does have a 50/50 joint venture in place with Anglo Eastern for technical ship management services

(20) Ranked number one for both product tanker companies and foreign private issuers

Brian Dunne

Curtis Mc Williams

Helen Tveitan

Kirsi Tikka

Mats Berglund

BOARD OF DIRECTORS

Anthony Gurnee

Ardmore Shipping Corporation

PROGRESS REPORT 2020

37

POLICIES & COMPLIANCE

•

Our ethics and corporate governance are fully aligned with our values

•

Long standing member of Member of Maritime Anti-Corruption Network (MACN)

•

Code of conduct in place; it emphasizes that every individual is responsible for maintaining an ethical environment and reporting any ethical breaches to the CEO, COO or CFO. In the event that a reportable incident involves the CEO, COO or CFO, or if is referred to make a confidential report, communication will be sent directly to the email address of the Chairman of the Audit Committee

•

Ardmore maintains compliance with all applicable sanctions, embargo laws and regulations

•

Ardmore has adopted and implemented an Insider Trading Policy with respect to the trading of the securities within the Ardmore Group, as well as the securities of publicly traded companies with whom we have a business relationship

•

DA Desk manage our port disbursements in compliance with industry best practises

•

IT security infrastructure and protocols in place (i.e. SOX controls, cyber security, encryption)

•

Our technical managers are ISO 9001 compliant; international standards on quality management and quality assurance

•

Bullying and harassment policy is included in our employee handbook

•

At a minimum, annual cyber security awareness training courses are completed by all shore based staff and all officers on board our ships

•

Whistle-blower policy communicated to all employees through our employee handbook; it outlines that employees should report any incidents to the CEO, COO, CFO or Audit Committee Chairman

Vessel Performance Measurement System (Skysails)

38

Ardmore Shipping Corporation PROGRESS REPORT 2020

Wind Assist Propulsion

FORWARD-LOOKING STATEMENTS This Progress Report and the information herein are for informational purposes only and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of the Company.

This presentation contains certain statements that may be deemed to be “forwardlooking statements” within the meaning of applicable U.S. federal securities laws.

All statements, other than statements of historical facts, that address activities, events or developments that Ardmore Shipping Corporation (“Ardmore” or the “Company”) expects, projects, believes or anticipates will, or may occur in the future, are among these forward-looking statements including, without limitation, statements about: the Company’s business strategy, including its energy transition initiatives; and the Company’s prospects. Although the Company believes that its expectations stated in this presentation are based on reasonable assumptions, actual results may differ materially from those projected in the forward-looking statements.

Factors that might cause or contribute to such a discrepancy include, but are not limited to, the risk factors described in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 20-F for the year ended December 31, 2019. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. These materials do not constitute an offer or solicitation to sell or purchase any securities.

Ardmore Shipping Corporation

PROGRESS REPORT 2020

39

LIST OF LIQUID BULK CARGOES TRANSPORTED BY ARDMORE SHIPPING IN 2020

40

Aviation Gasoline

Transportation industry - fuel

Base Oil

Fundamental oil used for various types of lubricants

Benzene

Petrochemical industry - plastics, resins, nylon and synthetic fibers

Biodiesel

Transportation industry - fuel

Canola Oil

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Caustic Soda

Industrial and household application; mainly as a cleaning agent

Clean Condensate

Petrochemical industry as a dilutant for heavy oils

Condensate

Petrochemical industry as a dilutant for heavy oils

Corn Oil

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Crude Palm Kernel Oil

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Crude Palm Oil

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Crude Palm Olein

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Crude Sunflower Oil

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Ethanol

Petrochemical industry; food and beverage industry - mainly as a solvent and intoxicating ingredient

Gasoil

Transportation industry - fuel

Gasoline

Transportation industry - fuel

Jet Fuel

Transportation industry - fuel

Kersosene

Transportation industry - fuel

Light Cycle Oil

Petrochemical industry - used as diesel blendstock

Lubricants

Various industries - as a lubricant for mechanical equipment

Ardmore Shipping Corporation PROGRESS REPORT 2020

Mixed Aromatics

Petrochemical industry - solvents, paints, adhesives

Molasses

Food and beverage industry as well as animal feedstock

Naphtha

Petrochemical industry - solvents, paints, adhesives

Neste Renewable Diesel

Transportation industry - fuel

Neste Renewable Naphtha

Petrochemical industry - feedstock for bioplastics

Orthoxylene

Petrochemical industry - coatings and plastics

Palm Fatty Acids

Food compatible product also used for biofuels, candles and soaps

Palm Kernel Stearin

Food compatible product used for chewing candies and chocolate caramels

Paraxylene

Petrochemical industry - plastics, fibers for clothing

Raffinate

Petrochemical industry - alcohol and solvents

Rbd Palm Kernel Oil

Food and beverage industry; confectionary coatings and frying applications

Rbd Palm Kernel Olein

Food and beverage industry; confectionary coatings and frying applications

Rbd Palm Stearin

Food and beverage industry - vegetable fat for food applications

Refined Palm Oil

Food and beverage industry; Pharmaceutical; Biofuel and energy

Reformate

Petrochemical industry - as a gasoline blendstock

Renewable Biodiesel

Transportation industry - fuel

Soybean Oil

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Sunflower Seed Oil

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Tallow

Food and beverage industry; Pharmaceutical; Biofuel and energy - mainly used as cooking oil

Tert-Amyl Methyl Ether

Petrochemical industry - as an oxygenate for gasoline

Ultra Low Sulphur Diesel

Transportation industry - fuel

Ultra Low Sulphur Heating Oil

Industrial and house hold heating agent

Urea Ammonium Nitrate

Agriculture - used as fertilizer

Used Cooking Oil

Chemical industry - biofuel, soap, cosmetics

Used Cooking Oil Methyl Ester

Chemical industry - biofuel

ARDMORE SHIPPING CORPORATION Belvedere Building 69 Pitts Bay Road, Ground Floor, Pembroke, HM08, Bermuda Tel: +1 441 405 7800 info@ardmoreshipping.com www.ardmoreshipping.com

Blue Communications 2nd Floor, Mayfield House, 256 Banbury Road, Oxford, OX2 7DE UK Tel: +44 (0) 7760 787 030 simon.phillips@blue-comms.com

Mr. Leon Berman, The IGB Group, 45 Broadway, Suite 1150, New York, NY 10006, USA Tel: +1 212 477 8438 lberman@igbir.com

A special thanks to John Russell, Meadhbh Ní Chrualaoi, Susanne Deane, and Kate Kelly for creating this report.

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Ardmore Shipping Corporation PROGRESS REPORT 2020