<PAGE>
                                                                    EXHIBIT 10.3

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

COMPANY DESCRIPTION

    Stolt-Nielsen S.A. ("SNSA"), a Luxembourg company, and subsidiaries
(together, the "Company") is engaged in three businesses: Transportation, Subsea
and Seafood. The Transportation business is carried out through Stolt-Nielsen
Transportation Group Ltd. ("SNTG"); the Subsea business is carried out through
Stolt Offshore S.A. ("Stolt Offshore"), a subsidiary in which the Company held a
53% economic interest and a 61% voting interest as of November 30, 2000; and the
Seafood business is carried out through Stolt Sea Farm Holdings plc ("SSF").

    In addition, in early 2000 the Company decided to commercialize its
expertise in logistics and procurement. Optimum Logistics Ltd. ("OLL") was
established to provide internet-based logistics software for the chemical and
other bulk materials industries. Prime Supplier Ltd. ("PSL") was established to
provide an internet-based total marine procurement system which will make
available all products and services needed for marine operations.

    In 2000, the Company had consolidated net operating revenue of
$2.3 billion, compared to $1.8 billion in 1999 and 1998. The following table
summarizes the Company's results, adjusted for non-recurring items, which are
described in more detail in the "Results of Operations" section which follows.

<TABLE>
<CAPTION>
(U.S. DOLLARS IN MILLIONS)                                      2000       1999       1998
--------------------------                                    --------   --------   --------
<S>                                                           <C>        <C>        <C>
NET INCOME..................................................   $ 20.1     $46.9      $96.3
Non-recurring items:
Gain on dilution of interest in Stolt Offshore..............    (32.5)       --         --
Recognition of tax benefits of net operating loss
  carryforwards by SSF......................................     (2.6)    (11.0)        --
Change in drydock accounting policy in Stolt Offshore after
  minority interest.........................................       --        --       (1.3)
Gain on disposal of assets, net.............................     (2.2)     (5.0)      (6.2)
Gain on insurance settlement................................       --        --      (10.2)
Restructuring charges
    SNTG....................................................       --       2.8         --
    Stolt Offshore..........................................      3.3       1.6         --
                                                               ------     -----      -----
    Income (loss) before non-recurring items................   $(13.9)    $35.3      $78.6
                                                               ======     =====      =====
</TABLE>

GENERAL BUSINESS ENVIRONMENT

STOLT-NIELSEN TRANSPORTATION GROUP LTD.

    SNTG is engaged in the worldwide transportation, storage and distribution of
bulk liquid chemicals, edible oils, acids and other specialty liquids, providing
its customers with integrated logistics solutions.

    SNTG is one of the largest operators of parcel tankers in the world, and is
also the largest operator in the tank container market. Parcel tankers and tank
containers carry similar products with parcel tankers typically used to
transport lots greater than 150 metric tons, while tank containers are typically
more economical for transportation of smaller lots.

    SNTG's parcel tanker operations compete with operators based primarily in
Europe and the Asia Pacific region. The parcel tanker market is divided into two
segments, deep-sea and regional trade.

                                       1
<PAGE>
Although SNTG faces significant regional competition in the market, few
competitors offer the same worldwide service and are of comparable size.

    SNTG's terminals act as regional hubs to improve the operational efficiency
of SNTG's parcel tankers and offer storage and distribution services to the same
customers and for the same products as the tanker and tank container operations.
SNTG currently owns and operates three tank storage terminals in the U.S. and
one in Santos, Brazil, with a combined capacity of approximately 5.0 million
barrels of liquid storage. SNTG's terminal operations also have interests in
three ventures, with a combined storage capacity of 3.3 million barrels: (i) a
40% interest in Stolthaven Westport, a joint venture with the Bolton Group in
Malaysia; (ii) a 34% interest in Dovechem Terminal Holdings Ltd., a
publicly-traded company listed on the Singapore stock exchange, with terminals
and drum manufacturing interests in China, Singapore, Indonesia and Malaysia;
and (iii) a 50% interest in Jeong Il Tank Terminal ("JTT") which has a terminal
facility in Ulsan, South Korea. The results of the joint ventures are accounted
for under the equity method of accounting.

    SNTG is now progressing with the construction of the first phase of a
public, bulk liquid storage terminal at Braithwaite in Louisiana, containing 38
tanks with 850,000 barrels of storage capacity and associated ship, rail and
trucking facilities at a total cost in excess of $40 million. The terminal is
expected to become operational during May 2001.

    Demand for SNTG's services is dependent on the condition and growth of the
worldwide economy and trade patterns for the products shipped and stored.
Factors impacting this include overall demand for the products SNTG carries and
stores, location of the production of the products carried and stored in
relation to location of demand, currency fluctuations, import/export tariffs and
other trade restrictions, and current spot and future prices of the products.
Any general economic slowdown could also have an adverse effect on the demand
for those services and therefore, upon SNTG.

    The supply of parcel tankers is influenced by the number of new ships
delivered into the market, scrappings, and industry regulation. For certain
products carried (usually larger commodity type products rather than specialty
chemicals), parcel tankers may face competition from some of the more
sophisticated of the product tankers. The world order book for new-buildings, to
be delivered over the next three years, stands today at 8% of the total
competitive fleet of deep-sea and regional parcel tankers with 53% scheduled for
delivery in 2001. Adjusting for expected scrappings and downgradings, the
Company expects the world net supply of tonnage to grow by approximately 2% per
year over this period.

    SNTG's tank container operations compete with other tank container
operators, shipper-owned tank containers, barrel drums, liquid bags, and, on
land, with truck and rail tank cars. The supply of tank containers is influenced
by the number of tank containers constructed and industry regulations.

    After a period of strong growth in chemical shipments in the mid 1990's, the
economic crisis in the Asia Pacific region and other developing areas resulted
in a decrease in parcel tanker and tank container volumes into and within Asia
Pacific. This situation, combined with an increase in the supply of parcel
tankers and tank containers, resulted in both contracts and spot rates declining
in 1998 and into 1999. As the Asia Pacific economies began to slowly recover,
volumes began to improve in most areas beginning in the second half of 1999 and
throughout 2000. Margins also showed improvement in late 2000, as parcel tanker
rates began to show significant improvement. The supply of parcel tankers still
exceeds demand but the gap appears to be shrinking as the newbuilding programs
of SNTG and its competitors near an end in 2001.

STOLT OFFSHORE S.A.

    Stolt Offshore is one of the world's leading offshore contractors to the oil
and gas industry, specializing in technologically sophisticated offshore and
subsea engineering, flowline, trunkline and

                                       2
<PAGE>
pipeline lay, construction, inspection and maintenance services. Stolt Offshore
operates in more than 60 countries worldwide and maintains offices in Europe,
the Middle East, West Africa, Asia Pacific, and the Americas.

    On December 7, 1999, Stolt Offshore completed a transaction to form a joint
venture entity, NKT Flexibles I/S ("NKT"), a manufacturer of flexible flowlines
and dynamic flexible risers for the offshore oil and gas industry. NKT is owned
51% by NKT Holdings A/S, and 49% by Stolt Offshore. This transaction was
effected by the acquisition of Danco A/S, a wholly-owned Norwegian company,
which holds the investment in the joint venture entity. Stolt Offshore issued
1.8 million Stolt Offshore Class A shares with an average guaranteed value of
$14.475 per share and paid $10.5 million in cash for its 49% interest in NKT,
for a total consideration of $36 million.

    On December 16, 1999, Stolt Offshore acquired approximately 55% of the
French offshore construction and engineering company ETPM S.A. ("ETPM"), a
wholly-owned subsidiary of Groupe GTM S.A. ("GTM"), the construction affiliate
of Suez Lyonnaise des Eaux S.A. The remaining 45% was acquired on February 4,
2000. The purchase price was comprised of $111.6 million in cash; the issuance
of 6.1 million Stolt Offshore Class A shares at a maximum guaranteed price of
$18.50 per share, giving a value of $113.6 million; and acquisition costs of
$3.4 million. Stolt Offshore also entered into a hire purchase arrangement for
two ships owned by GTM, the Seaway Polaris and the DLB 801, with an early
purchase option after two years. The net present value of this arrangement at
the date of acquisition was $32.0 million. In addition, Stolt Offshore assumed
debt of $18.4 million that was due from ETPM to GTM and assumed debt of
$71.0 million that was due to third parties. The total purchase price was
$350.0 million.

    On August 18, 1998, Stolt Offshore acquired the Ceanic Corporation for a
cash purchase price of approximately $218.9 million, including transaction
costs. The transaction has been accounted for under the purchase method of
accounting. The purchase price generated goodwill of approximately
$114.8 million at November 30, 1998. This was adjusted during 1999 to
$122.1 million. The adjustment reflects a reassessment of the value of certain
intangible assets within Ceanic and their related deferred tax liabilities. The
goodwill is being amortized on a straight-line basis over 25 years.

    The Company realized, in the first quarter of 2000, a nonrecurring,
non-operating gain of $32.5 million from the dilution of its interest in Stolt
Offshore as a result of the Stolt Offshore Class A shares issued as
consideration to GTM and NKT Holdings A/S.

    In order to facilitate the funding of the cash portion of the Stolt Offshore
investments in 2000, Stolt Offshore issued 10.3 million Class A shares, which
were purchased by the Company in February 2000 for $100 million. As a result of
the increased debt burden assumed pursuant to the acquisition, Stolt Offshore
decided to reduce its financial leverage by offering a further 9.4 million
Class A shares for subscription, which were taken up by the Company in
May 2000, for $100 million. On February 4, 2000, 6.1 million Stolt Offshore
Class A shares were issued to GTM as partial consideration for the acquisition
of ETPM and on December 7, 1999 1.8 million Stolt Offshore Class A shares were
issued to NKT Holdings A/S for the acquisition of Danco A/S. After the above
transactions, SNSA holds a 61% voting interest and a 53% economic interest in
Stolt Offshore.

    The market for Stolt Offshore's services is dependent upon the demand and
supply of oil and the level of investment in offshore exploration and production
by the major oil companies. Such investment is cyclical in nature.

    Following a period of high oil prices over the last two years, there has
been a progressive increase in investment in offshore exploration and production
by the major oil companies. It takes time for the benefits of this investment to
work through to the offshore construction sector. The outlook for Stolt Offshore
is encouraging as there is now clear evidence that the increased investment in
exploration and

                                       3
<PAGE>
production by its customers is working through to the demand in its markets,
which the Company expects to see grow by about 40% in 2001.

STOLT SEA FARM HOLDINGS PLC

    SSF produces, processes, and markets high quality seafood with salmon
production sites in Norway, North America, Chile, and Scotland; salmon trout
production sites in Norway; tilapia production sites in Canada; turbot
production sites in Spain, Portugal, Norway, and France; halibut production
sites in Norway; a tuna production site in Australia; and sturgeon and caviar
production sites in the U.S. SSF has worldwide marketing operations with sales
organizations covering North America, Europe, and Asia Pacific.

    The aquaculture industry is the fastest growing segment of the food industry
with an average annual growth rate of 12% between 1984 and 2000, and overall
growth of 39% over the last 3 years. As the world population grows and
individuals increasingly seek healthier products like fish, and the supply of
wild catch seems to have reached its peak level, the demand for farmed fish is
expected to increase. Approximately 85% of SSF's revenue is derived from the
sale of Atlantic salmon. The remaining 15% of SSF's revenue is from the other
species mentioned above and other seafood products.

    Of the main competitors in the industry, SSF is one of three currently with
a presence in all the big four farming regions--Norway, Chile, Canada and the
U.K. SSF is the only one with an in-market sales organization in all main
markets. SSF's position in the industry is strengthened by the fact that SSF is
one of the main salmon producing companies that has further diversified into
farming various new species.

    In August 1999, SSF acquired International Aqua Foods Ltd. ("IAF"), a
publicly-listed company, for approximately $11.0 million and the assumption of
$9.2 million in debt. IAF was involved in salmon and tilapia hatchery operations
in Canada and the U.S., and salmon and trout farming in Chile. In June 2000, SSF
purchased the remaining 49% of Ocean Horizons SA that it did not own. Ocean
Horizons is a producer of Atlantic salmon in Chile, and SSF acquired its initial
51% interest in the company when it acquired IAF in 1999.

    In September 2000, SSF purchased Rokerij La Couronne NV, a smoker and
processor of salmon and other seafood products.

    In September 2000, SSF purchased the remaining 49% of Pacific Aqua Salmon
Farmers Ltd. ("PASFL") that it did not own. PASFL is a producer of Atlantic
salmon in British Columbia, and SSF acquired its initial 51% interest in the
company when it acquired International Aqua Foods Ltd. in 1999. The seller of
the 49% interest in PASFL was EWOS Canada Ltd., a subsidiary of Statkorn Holding
A/S. The agreement involved SSF acquiring the remaining 49% of the company,
while Statkorn acquired the assets and inventory owned by SSF at the Tofino,
British Columbia sites.

    The total consideration for the three aforementioned SSF acquisitions in
2000 was approximately $9 million.

    In December 2000, SSF purchased Australian Bluefin Pty Ltd., a company
involved in the ranching of Southern Bluefin tuna, for a total consideration of
approximately $30 million.

MULTICURRENCY ACTIVITIES

    The functional and the reporting currency of the Company, as well as that of
a majority of SNTG's activities, is the U.S. dollar. In Stolt Offshore, the
majority of net operating expenses are denominated in the functional currency of
the individual operating subsidiaries. The functional currencies of the
subsidiaries that operate in the Norway and U.K. regions are the Norwegian
kroner and the British pound, respectively. The functional currency of other
significant Stolt Offshore subsidiaries is primarily

                                       4
<PAGE>
the U.S. dollar. In SSF, the functional currencies of significant subsidiaries
include the U.S. dollar, the Norwegian kroner, the British pound, the Euro and
the Japanese yen.

    Because revenues and expenses are not always denominated in the same
currency, the Company enters into forward exchange and options contracts to
hedge capital expenditure and operational non-functional currency exposures on a
continuing basis for periods consistent with the committed exposures. The
Company does not engage in foreign currency speculation.

RESULTS OF OPERATIONS

    Results of operations are discussed below by business down to gross profit
level for SNTG and SSF, and to net income for Stolt Offshore, and then on a
consolidated basis for the remaining captions in the statements of income.

STOLT-NIELSEN TRANSPORTATION GROUP LTD.

    TANKERS

    The total number of ships owned and/or operated by SNTG as of November 30,
2000, was 142, representing 2.7 million deadweight tons ("dwt"). Of this total,
76 ships participated in the Stolt Tankers Joint Service (the "Joint Service"),
an arrangement for the coordinated marketing, operation, and administration of
tankers owned or chartered by the Joint Service participants in the deep sea
inter-continental market. The remainder of the ships provide regional services.
The composition of the fleet at November 30, 2000 was as follows:

<TABLE>
<CAPTION>
                                                                     % OF THE JOINT
                                                                   SERVICE NET REVENUE
                                              NUMBER    MILLIONS   FOR THE YEAR ENDED
                                             OF SHIPS    OF DWT     NOVEMBER 30, 2000
                                             --------   --------   -------------------
<S>                                          <C>        <C>        <C>
Joint Service:
Stolt-Nielsen Transportation Group
  Limited..................................     43        1.41             69.8
NYK Stolt Tanker S.A. ("NYK Stolt")........      7        0.17             10.8
Rederi AB Sunship..........................      5        0.20              6.8
Barton Partner Limited.....................      2        0.03              3.3
Bibby Pool Partner Limited.................      5        0.08              6.6
Unicorn Lines (Pty) Limited................      2        0.03              2.7
                                               ---        ----            -----
                                                64        1.92            100.0
                                               ---        ----            -----
Time-chartered ships.......................     12        0.46
                                               ---        ----
Total Joint Service........................     76        2.38
Ships in regional services.................     66        0.31
                                               ---        ----
    Total..................................    142        2.69
                                               ===        ====
</TABLE>

    Net revenue available for distribution to the participants is defined in the
Joint Service agreement as the combined operating revenue of the ships which
participate in the Joint Service, less combined voyage expenses, overhead costs,
and commission to outside brokers. The net revenue is distributed
proportionately to each participant according to a formula which takes into
account each ship's cargo capacity, number of operating days during the period,
and an earnings factor.

    In its results of operations, SNTG includes 100% of the net operating
revenue of the Joint Service, and then shows, as tanker operating costs, all the
voyage costs associated with the ships and the earnings distributed to the other
participants in the Joint Service. SNTG's share of the net income in NYK Stolt
and Chemical Transporter Limited, an affiliate of Rederi AB Sunship, are
included in

                                       5
<PAGE>
"equity in net income of non-consolidated joint ventures," in the Company's
consolidated statements of income.

    Net operating revenue in 2000 increased 12% to $691.8 million, from
$618.0 million in 1999 which was a 6% decrease from $657.8 mil- lion in 1998.
The changes in revenue can be explained as follows:

        (i) Freight rates improved slightly over this period as a result of
    stronger demand, particularly from the improvement in the Asia Pacific
    economies. In the latter half of 2000, a very strong product tanker market
    resulted in a tightening of supply and upward pressure on rates in the
    chemical tanker market. Freight rates declined during 1999 as a result of
    weaker demand, particularly from the Asia Pacific economies, and increased
    competition due to an increase in parcel tanker supply.

        (ii) SNTG's fleet in 2000 averaged 2.51 million dwt, an increase of 14%
    from 2.21 million dwt in 1999, which was a decrease of 1% from 2.24 million
    dwt in 1998.

        (iii) Cargo carried in 2000 was 25.3 million tons, an increase of 14%
    from 22.1 million tons in 1999, which was an increase of 6% from
    20.9 million tons in 1998.

    In 2000, 56% of tanker revenue was under Contracts of Affreightment ("COA"),
typically one year in duration. The remaining 44% were based on spot rates. The
percentage of COA's at 59% to contracts fixed on spot rates at 41% remained
broadly similar in 1999 and 1998.

    SNTG's tanker operation had gross profit of $109.9 million, $88.6 million,
and $118.1 million in 2000, 1999, and 1998, respectively, and gross margins of
16%, 14%, and 18%, respectively. Gross profit and margins improved from 1999 to
2000 as a result of improvements in the Asia Pacific economies and a diminishing
supply of over-tonnage as the industry's newbuilding programs near completion.
Gross profit and margins declined from 1998 to 1999 due to weaker demand,
particularly from the Asia Pacific economies, combined with a more competitive
market due to the over-tonnage situation.

    In 2000, ship bunker fuel for SNTG's tanker operation constituted
approximately 19% of the total operating expenses for tankers. The average price
of bunker fuel purchased by SNTG during 2000 was approximately $161 per ton.
This compares to the average bunker fuel price for 1999 of approximately $99 per
ton. The Company attempts to pass fuel price fluctuations through to its
customers under COA's. During 2000, approximately 56% of tanker revenue was
carried under COA's, with the majority of this revenue covered by contract
provisions intended to pass through fluctuations in fuel prices. The remaining
revenue was carried under spot rates which are affected by the prevailing fuel
prices.

    The sailed-in time-charter index for the Joint Service, which is a measure
of the relative average daily fleet revenue, less voyage costs (commissions,
port expenses, and bunkers), per ship operating day increased approximately 3%
in 2000, after declining 10% and 13% in 1999 and 1998, respectively. During the
same three year period, the operating cost per day of SNTG's fleet in the Joint
Service decreased by 7% in 2000, 9% in 1999, and 10% in 1998. The decreases in
tanker owning operating costs are due to a newer more efficient fleet, improved
purchasing practices and a strong U.S. dollar.

    In 1994, SNTG embarked on a newbuilding program to construct 25 new parcel
tankers (of which one ship was canceled) designed to meet increasing demand for
its transportation services and replace the first generation of purpose-built
parcel tankers built in the early to mid-1970's. The ships in the newbuilding
program have greater capacity than the units they are replacing and introduce a
series of features to increase the operational efficiency, reduce operating
costs, and be environmentally safer

                                       6
<PAGE>
than previous generations of parcel tankers. The newbuilding program is
summarized in the following table:

<TABLE>
<CAPTION>
                                                                        ESTIMATED
                                                    DELIVERED          DELIVERIES
DWT                                 SHIPYARD    AS OF NOV. 30.00          2001
PER SHIP                            LOCATION    (NUMBER OF SHIPS)   (NUMBER OF SHIPS)
--------                            ---------   -----------------   -----------------
<S>                                 <C>         <C>                 <C>
37,000 (a)........................  Denmark              9                    0
37,000 (b)........................   France              1                    1
22,450 (a) (d)....................   Spain               5                    1
11,500 (c)........................   Japan               4                    0
5,200.............................   Italy               3                    0
                                                      ----                 ----
                                                        22                    2
                                                      ====                 ====
</TABLE>

------------------------

(a) Ship numbers 5 and 7 of the Danish series and ship number 2 of the Spanish
    series have been delivered to NYK Stolt.

(b) Ship number 3 of the French series has been rescinded. Ship number 2 has
    been moved to Uljanik shipyard in Croatia with expected completion in
    December 2001.

(c) All ships owned and operated by Stolt NYK Asia Pacific Services Inc., a
    50/50% joint venture between NYK and SNTG.

(d) Ship number 6 of the Spanish series was delivered in December 2000.

    Over the last three years, SNTG sold one ship and scrapped three. The ship
was sold to a third party and remains marketed by the Joint Service.

    In October 1999, SNTG and Marine Transport Corporation Inc. ("MTC")
announced the formation of a joint venture company which has purchased two
chemical parcel tankers that will be operated by SNTG in the international
market and by MTC in the U.S. market. MTC, with a 75% interest, and SNTG, with a
25% interest, have concluded a Network Alliance to focus on providing chemical
marine transport services within the U.S. to their mutual customers.

    During 2000, SNTG entered into co-service agreements with two parcel tanker
companies, Tokyo Marine and Seatrans, to improve the scheduling of SNTG's
fleets, and increase operational efficiency and customer service.

    In 2000, the parcel tanker industry has also seen increased consolidation
with the merger of two major competitors, Odfjell and Seachem.

    For the next few years management expects that ton/mile demand will grow at
about 5% per annum. With the newbuilding programs winding down, management
expects net supply growth of only 2% per annum through the end of 2003.
Management anticipates this should lead to significant rate increases, with
these rate increases progressively improving financial results during 2001.
Exactly how much and how quickly rates will rise is still somewhat difficult to
predict, given the current uncertainty in the global economic picture.

    TANK CONTAINERS

    Net operating revenue in 2000 was $223.7 million, a 9% increase from
$206.1 million in 1999, which was a 6% decrease from $218.8 million in 1998. The
increase in 2000 was attributable to a higher activity level and a larger fleet
for tank containers. A portion of the decrease in 1999 from 1998 was
attributable to the loss in revenue associated with the sale, in February 1999,
to TransAmerica Leasing Inc. of 2,830 tank containers, which had been leased out
previously to third parties. Tank container shipments in 2000 totaled 58,624, an
11% increase from shipments of 52,922 in 1999, which reflected a similar
increase of 11% from shipments of 47,607 in 1998. Shipments increased in all
major

                                       7
<PAGE>
regions in 2000. Similar growth is anticipated in 2001. Shipments from Europe,
North America, and intra-Asia were particularly strong during 2000, continuing
the trend established in late 1999.

    As of November 30, 2000, SNTG controlled a fleet of 15,923 tank containers,
a 14% increase over the 14,000 tank containers controlled at the end of 1999
which was a 2% increase over the 13,751 tank containers controlled at the end of
1998. This increase is primarily due to the purchase of approximately 1,800 new
tank containers and on-hire of new tanks. SNTG currently has commitments for the
future delivery of 648 tank containers, of which 248 will be delivered in 2001.

    SNTG's tank container operation had gross profit of $44.1 million,
$42.6 million, and $55.0 million in 2000, 1999, and 1998, respectively, and
gross margins of 20% in 2000, 21% in 1999 and 25% in 1998. Margins declined in
2000 due to reduced freight rates caused by increased competition in regional
markets. This was offset in part by cost savings and increased utilization.
Margins declined in 1999 from 1998 due to continued pricing pressure and weak
demand for shipments into and within Asia Pacific.

    TERMINALS

    Net operating revenue in 2000 increased 7% to $59.3 million from
$55.4 million in 1999, which was a 3% increase from $53.8 million in 1998. Total
marketable capacity in North and South America remained at 5.0 million barrels
(816,000 cubic meters) at the end of 2000, compared to 5.0 million barrels and
4.9 million barrels at the end of 1999 and 1998, respectively. The storage
capacity available with our joint venture terminals in Asia Pacific, by the end
of 2000, stood at 3.3 million barrels (550,000 cubic meters) as compared to
3.1 million barrels at the end of 1999 and 1.0 million barrels at the end of
1998. Average capacity utilization at the Company's wholly-owned North and South
American terminals was 92% in 2000, 90% in 1999, and 91% in 1998. The average
capacity utilization increase in 2000 was attributed to increased activity at
the Houston, Perth Amboy and Santos facilities. The slight decrease in average
capacity utilization in 1999, as compared to 1998, was attributable to the
non-renewal of two customer contracts at the Chicago facility.

    Gross profit of SNTG's terminal operation was $24.0 million, $20.4 million,
and $16.6 million in 2000, 1999, and 1998, respectively, and gross margins were
41%, 37% and 31%, respectively. Margins improved in 2000 from 1999 as a result
of an increase in operating revenue due primarily to new customer contracts and
increased capacity and utilization at Stolthaven Houston. Margins improved in
1999 from 1998 as a result of reduced operating costs in Brazil, due to currency
devaluation against the U.S. dollar, and lower expenses at Perth Amboy.

STOLT OFFSHORE S.A.

    Net operating revenue increased to $983.4 million in 2000, from
$640.7 million in 1999, largely as a result of the acquisition of ETPM, with the
majority of this increase in West Africa. There were poor market conditions in
the U.K., North America, and Asia Pacific and severe project delays in the North
Sea in quarter one due to adverse weather conditions. Poor project performance
in the North Sea and Asia Pacific had a significant negative impact on earnings.
The poor market conditions together with the interest expense incurred on
borrowings, which increased as a result of the ETPM acquisition, also
contributed to a decrease in net income before tax from $7.7 million in 1999 to
a net loss before tax of $38.2 million in 2000.

    Revenues improved $342.7 million in 2000, mainly due to the acquisition of
ETPM which has the majority of its activities in the Southern Europe, Africa and
the Middle East ("SEAME") region where revenues rose $387.8 million. Revenues in
the U.K. region declined $38.4 million due to the continued poor market
conditions in this region. Income (loss) before tax decreased $45.9 million in
2000, mainly due to the very poor market conditions in the Gulf of Mexico,
resulting in additional losses in the North America region of $15.1 million.
Income for the Norway region declined $12.8 million, largely the result of
project delays caused by adverse weather conditions early in the year.
Additional losses in the Asia Pacific region of $9.9 million resulted from poor
project performance on two projects in Indonesia, while losses in the U.K.
region increased $9.7 million due to reduced market activity.

                                       8
<PAGE>
    Net operating revenue decreased to $640.7 million in 1999 from
$649.8 million in 1998, largely as a result of poor market conditions in the
U.K. and North America. The increase in revenue of $91.7 million in North
America was entirely due to the full year impact of the acquisition of Ceanic.
The poor market conditions together with the interest expense incurred on
borrowings, which increased as a result of the Ceanic acquisition, resulted in a
decrease in net income before tax from $71.8 million in 1998 to $7.7 million in
1999. Poor project performance in Asia Pacific also contributed to the reduction
in net income before tax.

    Stolt Offshore's fleet is comprised of deepwater heavy construction ships,
light construction and survey ships and barges and anchor ships. The utilization
of the deepwater heavy construction fleet was 78% in 2000, compared to 90% in
1999 and 92% in 1998. This was due in part to the unavailability of the Seaway
Condor in 2000 and the poor market conditions in the U.K. and North America in
both 1999 and 2000.

    Stolt Offshore had a gross profit of $53.4 million, $72.4 million, and
$108.9 million in 2000, 1999, and 1998, respectively, with gross margins of 5%,
11%, and 17%, respectively. The decrease in gross profit and margins in 2000 and
1999 was largely the result of those factors mentioned above.

    Stolt Offshore's backlog at January 31, 2001 stood at $1.2 billion, of which
$877 million is for 2001. This compares to a backlog at January 31, 2000 of
$1.1 billion, of which $760 million was for 2000. Included in the figure for
1999 is $478 million for the acquired business of ETPM. The level of bids
outstanding is now at a record level of $3.6 billion compared to $2.2 billion at
this time last year. The outlook for Stolt Offshore is encouraging as there is
now clear evidence that the increased investment in exploration and production
by its customers is working through to the demand in its markets, which the
Company expects to see grow by about 40% in 2001.

STOLT SEA FARM HOLDINGS PLC

    Net operating revenue in 2000 increased 19% to $310.4 million from
$260.7 million in 1999, which was a 20% increase from $216.5 million in 1998.
The increase in net operating revenue was primarily due to higher volumes in the
North America markets, as well as stronger prices in the U.S. and European
markets due to increased demand not being adequately met by increases in supply.
Also, in the Asia Pacific region volumes continue to grow, as does the
proportion of higher priced value added products. Total Atlantic salmon and
salmon trout volumes sold, in gutted whole fish equivalent tons assuming an
average 60% yield on processed products sold and excluding volumes sold
intercompany into Asia Pacific, were 60,100 tons in 2000, 52,600 tons in 1999,
and 46,000 tons in 1998. Of the tons sold, 37,500 tons, 35,700 tons and 32,900
tons, respectively, were from SSF's own production, the remainder being sourced
from other producers. The increase in the volume of SSF's own production in 2000
reflects the contributions of acquisitions in Canada and the U.S., increased
capacity utilization of the farms in Canada, expansion in the U.K. and increased
feed quotas available to farmers in Norway.

    In 1996, the Norwegian government imposed feed quotas and production
regulations on Norwegian fish farmers in an attempt to reduce the supply of
Norwegian farmed salmon, and hence the amount of Norwegian farmed salmon
available for sale in the EU market. In order to avoid further threats of duties
against Norwegian salmon, the Norwegian government, in July 1997, reached an
agreement with the EU for a five year period to regulate supplies of Norwegian
salmon into the EU market. This agreement, among other things, restricts the
increase in supply of Norwegian salmon into the EU market to 10% per year;
requires the average sales price to be at or above an agreed minimum price; and
increases the export levy payable by Norwegian producers. The Norwegian
government still maintains the feed quota and production regulations that it
introduced in 1996. The quotas and regulations have had an adverse effect on the
cost structure of the Norwegian operation, as they have limited the capacity
utilization of farmed concessions. However, the Norwegian government has
permitted annual increases of varying amounts (ranging from 2% to 10%) in the
feed quotas, which

                                       9
<PAGE>
progressively reduce the negative impact of the feed quota regime. The
demand/supply balance in the EU market during the last three years has been more
favorable to the salmon farming industry in Europe, due in some part to the more
restricted supply from Norway, but also due to the high incidence of disease in
the Scottish salmon farming industry which has resulted in reduced supply from
Scotland, and increasing exports of Norwegian farmed salmon to the Asia Pacific
market.

    SSF had a gross profit of $52.5 million, $46.7 million and $31.5 million in
2000, 1999, and 1998, respectively. Gross margins were 17% in 2000, 18% in 1999,
and 15% in 1998. The reduction in gross profit in 2000 reflects reduced
profitability in the Americas region, after a very strong 1999, due to a good
growing season and high prices in that year, and reduced gross margins in the
turbot business where sharply increased volumes in the industry had to be
absorbed by the market. In Norway, profitability improved markedly due both to
the higher market prices in Europe prevailing for most of the year and decreased
production costs due to efficiencies and farming improvements. The increase in
gross profit in 1999 was due mainly to continuing improvements in profitability
in the North America markets, slightly stronger market prices and lower
production costs in Western Canada, and continued improvements in Norway due to
the benefits of the reorganization effected by management in 1997.

    Although management expects salmon prices to be lower than in 2000, it is
anticipated that SSF can achieve top line growth of up to 30% in 2001 with
slightly improved margins as a result of increased volumes, lower unit
production costs, increased sales of value added products, and the addition of
the Australian Bluefin tuna business.

OPTIMUM LOGISTICS LTD. AND PRIME SUPPLIER LTD.

    Both OLL and PSL made considerable progress in 2000 in adapting the
Company's systems for internet-based commercial use. Cash operating and capital
expenditures, or "the burn rate," for OLL and PSL was $14 million and
$4 million, respectively, in 2000. The Company expects both OLL and PSL to begin
to contribute to operating revenue in 2001.

RESTRUCTURING CHARGES

    In 2000, Stolt Offshore recorded restructuring charges of $3.3 million,
before minority interest impact, related to the integration of ETPM. The
reorganization plan has removed duplicate capacity in the U.K. and SEAME
regions. Stolt Offshore recorded redundancy costs of $0.9 million to eliminate
duplicate functions in the U.K., and $1.7 million to close the Marseilles,
France office, while transferring all operational and administrative functions
for the SEAME region to Paris, France. Additionally, integration costs of
$0.7 million were incurred in relation to the change of the company name to
Stolt Offshore S.A., the introduction of common information and reporting
systems and standardization of processes across the enlarged Stolt Offshore
organization. In 1999, SNTG and Stolt Offshore recorded restructuring charges of
$2.8 million and $1.6 million, before minority interest impact, respectively. In
order to streamline operations, SNTG relocated its Haugesund, Norway office to
Rotterdam, Holland and its Somerset, New Jersey operations to Houston, Texas.
Stolt Offshore reorganized its North Sea operations and closed certain offices
in the U.K. and Norway. Stolt Offshore incurred costs of $1.3 million for
redundancy and relocation, and $0.3 million related to other administrative
costs. Substantially all of the charges were expensed and paid in the years
ended November 30, 2000 and 1999.

EQUITY IN NET INCOME OF NON-CONSOLIDATED JOINT VENTURES

    The Company's equity in the net income (loss) of non-consolidated joint
ventures was a loss of $3.1 million in 2000, compared to an income of
$4.7 million and $17.3 million in 1999 and 1998, respectively. The reduction in
2000 was primarily due to lower results from the SNTG tanker joint ventures,
partially offset by income from the SNTG terminal joint ventures. The reduction
in 1999 was

                                       10
<PAGE>
primarily due to the completion of a project specific Stolt Offshore joint
venture in the North Sea, reduced activity of Stolt Offshore's Seaway Heavy
Lifting Limited ("SHL") and generally lower results from the SNTG tanker joint
ventures partly offset by increased profits from SNTG's terminal joint ventures.

ADMINISTRATIVE AND GENERAL EXPENSES

    Administrative and general expenses increased to $186.1 million in 2000 from
$158.7 million in 1999 and $157.1 million in 1998. The 17% increase in 2000 is
mainly due to the full year effect of the ETPM acquisition combined with the
initial period of costs associated with the establishment of OLL and PSL in
early 2000. The slight increase in 1999 over 1998 is largely due to the full
year effect of the Ceanic acquisition for Stolt Offshore, partly offset by lower
costs for SNTG. The percentage relationship of administrative and general
expenses to net operating revenue remained relatively constant over the last
three years at 8.2%, 8.9% and 8.7% in 2000, 1999, and 1998, respectively.

NON-OPERATING (EXPENSE) INCOME

    INTEREST EXPENSE, NET  Interest expense, net increased to $105.5 million in
2000 from $65.4 million and $53.3 million in 1999 and 1998, respectively. The
$40.2 million in additional interest expense in 2000 was due to the higher level
of debt in 2000 resulting from the Company's acquisitions and capital
expenditure program, and a reduction of $8.4 million in capitalized interest.
The increase in 1999 was a result of the higher debt level in 1999 as a result
of the Company's capital expenditure program.

    GAIN ON DISPOSAL OF ASSETS, NET  In 2000, the Company sold various assets
for a net gain of $2.2 million. In 1999, the Company sold 2,830 of SNTG's tank
containers, which were leased out to a third party, to TransAmerica
Leasing Inc., and recognized a gain of $3.8 million on these sales. The Company
also sold other assets with a net gain of $1.2 million. In 1998, the Company
recognized a gain of $10.2 million from an insurance settlement for the total
loss of the Stolt Spirit. The Company also recognized a gain of $5.2 mil-lion on
the sale of fish farming concessions in Norway. The Company also sold other
assets with a net gain of $1.0 million.

    GAIN ON DILUTION OF INTEREST IN STOLT OFFSHORE  In two separate acquisition
transactions during 2000, the Company recognized total gains amounting to
$32.5 million, net of expenses, on the issuance of Class A shares of Stolt
Offshore and the resulting dilution of the Company's interest in Stolt Offshore.

    OTHER, NET  In 1998, Stolt Offshore changed its accounting policy for
drydocking from an accrual basis to a deferral basis. The effect of this change
was a gain of $3.1 million, net of taxes, before minority interest.

INCOME TAX PROVISION

    The 2000 results include a tax provision of $15.4 million compared to
$0.5 million in 1999, and $26.5 million in 1998. The 2000 and 1999 provisions
reflect the recognition of $2.6 million and $11.0 million, respectively, in tax
benefits of net operating loss carryforwards by SSF.

LIQUIDITY AND CAPITAL RESOURCES

    Liquidity for the Company is derived from a combination of cash generated
from operations and funds from commercial bank borrowing facilities and private
placements. The Company's borrowing facilities include revolving credit
agreements and other credit lines which cover short-term needs for funds, and
longer- term borrowings principally to finance capital expenditures and
acquisitions.

    SNTG generally operates with negative working capital, which reflects the
collection/payment cycle. Invoicing, for the tanker business, usually takes
place at or shortly after loading, while expenses that

                                       11
<PAGE>
are invoiced and paid within normal business terms are typically paid near or
subsequent to the end of a voyage or move. Stolt Offshore requires working
capital, as expenditures are often incurred on an ongoing basis throughout a
project while customers are typically billed when a specified level of progress
is achieved on a project. In SSF, the production cycle for Atlantic salmon takes
two to four years, and for various other farmed fish species many more years;
therefore, SSF requires working capital to finance inventory.

    In 2000, the Company generated cash from operating activities of
$140.8 million. This compares with the $194.3 million and $212.0 million in 1999
and 1998, respectively. The movements between years are mainly due to the
relative operational performances and working capital requirements in those
years.

    Net investing activities utilized $355.6 million in 2000. Significant
investing activities during the year were (i) capital expenditures of
$285.8 million, as described in further detail below, (ii) Stolt Offshore's
acquisitions of ETPM and Danco A/S, for $350 million and $36 million,
respectively, included payments of $111.2 million, net of cash acquired, and SSF
made payments of $9.2 million for the acquisitions of Rokerij La Couronne NV and
the remaining interests of Ocean Horizons SA and PASFL that it did not
previously own, (iii) payments of $12.4 million for investments in affiliates
and others and, (iv) $2.6 million for the increase of restricted cash deposits.
Offsetting these expenditures were (i) $72.0 million of proceeds from sale of
assets, ($49.6 million for tank containers that were subsequently leased back)
and (ii) $2.7 million of dividends received from non-consolidated joint
ventures. Capital expenditures for the year include (i) progress-payments on
newbuildings under construction and final payment on the delivery of six
newbuildings for SNTG, (ii) the purchase of new tank containers, and (iii) land
purchase and progress payments on the construction of a terminal at Braithwaite,
Louisiana.

    Net investing activities utilized $248.2 million in 1999. Significant
investing activities during the year were (i) capital expenditures of
$303.3 million, as described in further detail below, (ii) payments of
$21.8 million including $11.0 million to acquire IAF, net of cash acquired,
$3.8 million to acquire D.E. Salmon, and $6.9 million to purchase additional
shares of Stolt Offshore, (iii) payments of $38.2 million for investments in
affiliates and others and, (iv) $1.0 million for the increase of restricted cash
deposits. Offsetting these expenditures were (i) $117.8 million of proceeds from
sale of ships ($56 million), tank containers ($52 million) and other assets, and
(ii) $13.2 million of dividends received from non-consolidated joint ventures.
Capital expenditures for the year include (i) progress-payments on newbuildings
under construction and final payment on the delivery of five newbuildings for
SNTG, (ii) the purchase of new tank containers, (iii) progress payments on
terminal capacity expansion at the Houston terminal, and (iv) Stolt Offshore's
purchase of remotely operated vehicles ("ROVs").

    Net investing activities utilized $555.8 million in 1998. Significant
investing activities during the year were (i) capital expenditures of
$378.8 million as described in further detail below, (ii) payments of
$217.6 million to acquire Ceanic and Gaelic Seafoods (Scotland) Limited, net of
cash acquired, and (iii) payments of $31.8 million for investments in
affiliates, including the acquisition of a 25% interest in Dovechem. Offsetting
these expenditures were (i) $57.6 million of proceeds from the sale of ships and
other assets, (ii) $18.4 million of dividends received from non-consolidated
joint ventures, and (iii) $5.8 million for the reduction of restricted cash
deposits. Capital expenditures for the year include (i) progress-payments on
newbuildings under construction and final payment on the delivery of two
newbuildings for SNTG (the STOLT EFFICIENCY and the STOLT SHEARWATER), (ii) the
purchase of new tank containers, (iii) progress payments on terminal capacity
expansion at the Houston and Santos terminals, and (iv) Stolt Offshore's
purchase of the SEAWAY LEGEND and investments in ROVs.

    Net cash provided by financing activities totaled $224.8 million in 2000.
The principal uses of cash were the repayment of long-term debt of
$243.2 million and payment of dividends of $13.7 million. The

                                       12
<PAGE>
significant sources of 2000 funding include: (i) the issuance of $473.5 million
of new long-term debt, consisting of a $340 million obligation of Stolt Offshore
secured by first mortgages on certain ships with a negative pledge on other
existing Stolt Offshore assets, a $21.7 million unsecured loan to an SNTG
wholly-owned subsidiary with a negative pledge on the assets of that subsidiary,
and $111.8 million in loans secured by first mortgages on certain ships, and
(ii) $5.5 million in proceeds from the exercise of stock options for the shares
of the Company and of Stolt Offshore.

    Net cash provided by financing activities totaled $36.5 million in 1999. The
principal uses of cash were the repayment of long-term debt of $74.4 million and
payment of dividends of $20.5 million. The significant sources of 1999 funding
include: (i) the issuance of $117.4 million of new long-term debt, consisting of
secured debt with negative pledge covenants related to certain ship assets, and
(ii) $1.3 million in proceeds from the exercise of stock options for the shares
of the Company and of Stolt Offshore.

    Net cash provided by financing activities totaled $312.3 million in 1998.
The principal uses of cash were: (i) the repayment of long-term debt of
$82.7 million, (ii) payment of dividends of $27.5 million, and (iii) the
purchase of treasury stock of $8.5 million. The significant sources of 1998
funding include:(i) the issuance of $435.1 million of new long-term debt,
consisting of unsecured debt in the form of private placement notes, and secured
debt or debt with negative pledge covenants related to certain ship assets, and
(ii) $1.0 million in proceeds from the exercise of stock options for the shares
of the Company and of Stolt Offshore.

    On February 4, 2000, 6.1 million Stolt Offshore Class A shares were issued
to Groupe GTM as partial consideration for the acquisition of ETPM S.A. and on
December 7, 1999, 1.8 million Stolt Offshore Class A shares were issued for the
acquisition of NKT Flexibles I/S. The shares issued to GTM have a guaranteed
minimum share price that may require a future settlement in cash.

    As of November 30, 2000, the Company had total capital expenditure purchase
commitments outstanding of approximately $158 million for 2001 and future years.
These commitments are for a variety of capital projects, primarily newbuilding
purchases in Spain and Croatia; the acquisition of Australian Bluefin Pty Ltd.
for approximately $30 million; the purchase and refurbishment of tank
containers; expenditures for expansion of terminal capacity and the modification
of a construction ship and the purchase of ROVs.

    The Company's current plans are expected to result in capital expenditures
of $330 million in 2001. The Company has scheduled principal and interest
payments of approximately $195 million and anticipated dividends of
$14 million. After an estimated $415 million of cash received from operating
activities before interest, the Company will have a net funding requirement of
$124 million which will be funded by existing cash, drawdowns on existing
long-term revolving credit lines, and new long-term debt.

    At November 30, 2000, the Company's cash and cash equivalents totaled
$28.8 million. The Company had corporate facilities and other short-term lines
of credit of $825.1 million, of which $429.6 million is available for future
use. Total bank loans and short-term and long-term debt and capital lease
obligations amounted to $1,546.3 million, of which $1,000.0 million is secured
by ships and other assets and $546.3 million is unsecured. The Company, through
its subsidiaries, has debt agreements which include various financial covenants.
Most of the Company's debt agreements provide for a cross default in the event
of a material default in another agreement. In the event of a default that
extends beyond the applicable remedy or cure period, lenders may accelerate
repayment of amounts due to them.

    On November 9, 2000, the Board of Directors of the Company approved an
interim dividend of $0.125 per Common share and Class B share which was paid on
December 20, 2000 to all shareholders

                                       13
<PAGE>
of record as of December 6, 2000. The Company anticipates, subject to approval
at the Annual General Meeting, that a final dividend for 2000 of $0.125 per
share will be paid in May 2001.

    The Company will hold an extraordinary general meeting of shareholders on
March 6, 2001 to approve a share restructuring plan. The objective of the
reclassification proposal is to create a simplified and more transparent share
capital structure that gives all shareholders a vote on all matters, and will
result in only one class of publicly traded shares. The proposed
reclassification plan would reclassify the currently outstanding non-voting SNSA
Class B shares to Common shares on a one-for-one basis. The existing class of
Founder's shares will remain outstanding and continue to constitute 20% of the
issued voting shares (Common shares and Founder's shares) of SNSA. The holders
of the Founder's shares have agreed to abandon certain special voting rights
currently enjoyed by the Founder's shares including, for example, a separate
class vote for merger transactions. The Founder's shares have only nominal
economic rights and are not considered part of the share capital of the Company.
The reclassified Common shares will be listed in Norway on the Oslo Stock
Exchange and trade as ADRs in the United States on Nasdaq.

    If shareholders approve this reclassification, SNSA will have outstanding
54.8 million Common shares (which exclude 7.7 million Treasury Common shares)
and 15.6 million Founder's shares. The share restructuring plan does not change
the underlying economic interests of existing shareholders and will require the
approval of the respective shareholders at a general vote of all shares, as well
as the separate approval of the holders of each class of shares voting as a
separate class.

MARKET RISK

    The Company is exposed to market risk, including changes in interest rates
and currency exchange rates. To manage the volatility relating to these
exposures on a consolidated basis, the Company enters into derivative
transactions for currency exposures in accordance with the Company's policies.
The financial impact of these instruments is offset by corresponding changes in
the underlying exposures being hedged. The Company does not hold or issue
derivative instruments for trading purposes.

CURRENCY RATE EXPOSURE

    The primary purpose of the Company's foreign currency hedging activities is
to protect against the volatility associated with foreign currency liabilities
arising in the normal course of business. The Company's policy prescribes the
range of allowable hedging activity. The Company primarily utilizes forward
exchange contracts negotiated with major banks.

INTEREST RATE EXPOSURE

    Based on the Company's overall interest rate exposure as of November 30,
2000, a near-term change in interest rates would not materially affect the
Company's consolidated financial position, results of operations, or cash flows.
As of November 30, 2000, the large majority of the consolidated debt, after
consideration of interest rate swap agreements, was fixed-rate debt
(approximately 60%).

    The Company uses a value-at-risk ("VAR") model to assess the market risk of
its derivative financial instruments. The model utilizes a variance/covariance
modeling technique. VAR models are intended to measure the maximum potential
loss for an instrument or portfolio, assuming adverse changes in market
conditions for a specific time period and confidence level. As of November 30,
2000, the Company's estimated maximum potential one-day loss in fair value of
foreign exchange rate instruments, calculated using the VAR model given a 95%
confidence level, would approximate $1.3 million and $2.6 million from adverse
changes in foreign exchange rates and interest rates, respectively. Actual
experience has shown that gains and losses tend to offset each other over time,
and it is highly unlikely that the Company could experience losses such as these
over an extended period of time. These amounts should not be considered
projections of future losses, since actual results may differ significantly
depending upon activity in the global financial markets.

                                       14
<PAGE>
    A discussion of the Company's accounting policies for financial instruments
is included in Note 2 to the consolidated financial statements, and disclosure
relating to the financial instruments is included in Note 20 to the consolidated
financial statements.

ENVIRONMENTAL AND REGULATORY COMPLIANCE

    The results of the Company may be impacted by changing environmental
protection laws and regulations enacted by international, national, and local
regulators. The operation of the Company's ships carries the risk of
catastrophic accident and property loss caused by adverse weather conditions,
mechanical failures, human error, war, terrorism, piracy, labor stoppages and
other circumstances or events. The transportation of oil and chemicals is
subject to the risk of business interruptions and additional costs in the event
of spills or casualties befalling Company ships. Such an event may result in
loss of revenue or increased costs or both.

    The Company's businesses are subject to various international, national and
local governmental laws, which apply to various aspects of the Company's
operations, and provide severe penalties for non-compliance. One such law is the
U.S. Oil Pollution Act of 1990 ("OPA "90"), which imposes various requirements
on shipowners and ship operators in U.S. waters including, among other things,
restricting access to U.S. ports to only those tankers with double hulls,
stringent financial responsibility requirements and extensive contingency
planning requirements, as well as a liability scheme that provides for, under
certain circumstances, unlimited liability for pollution accidents occurring in
U.S. waters. The Company believes it is currently in compliance with such laws
and regulations.

    The terminal operation in the U.S. is subject to the Clean Water Act, the
Clean Air Act, OPA "90, and the U.S. Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), which regulate liability for the
discharge of pollutants into waterways and noxious emissions into the air;
MARPOL Annex II regarding the disposal of by-products from ship cleaning done
pursuant to such regulations; the Resource Conservation and Recovery Act
regarding the reporting, record keeping and handling of hazardous waste; the
Occupational Safety and Health Act regulating the working conditions at U.S.
terminals as well as other business facilities; and regulations of the U.S.
Department of Transportation pursuant to the Hazardous Materials Transportation
Act regarding the packaging, labeling and handling of hazardous materials in the
U.S. Terminals located outside of the U.S. are governed by the comparable
national and local governmental agencies.

    The Company maintains insurance against physical loss and damage to its
assets as well as coverage against liabilities to third parties it may incur in
the course of its operations. Assets are insured at replacement cost, market
value, or assessed earning power. The owned fleet is currently covered by hull
and machinery insurance in the amount of $3.4 billion. Other marine liabilities
are insured under marine protection and indemnity insurance policies. These
policies have a ceiling of $4.25 billion per incident for all claims other than
marine oil pollution. Cover for such incidents is limited to $1 billion per
occurrence for ships when calling for ports in the U.S. and other parts of the
world. Non-marine liabilities are insured up to $125 million. The Company
believes its insurance coverage to be in such form, against such risks, for such
amounts and subject to such deductibles as are prudent and normal to those
industries in which the Company operates.

FUTURE ADOPTION OF NEW ACCOUNTING STANDARDS

    In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," and in
June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities," an amendment to Statement 133.
These Statements establish accounting and reporting standards in the U.S.
requiring that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value. The

                                       15
<PAGE>
Statements require that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the statement of income, and
requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting.

    The Company has adopted SFAS No. 133 and SFAS No. 138 as of December 1,
2000, and has identified and designated all derivatives within the scope of SFAS
No. 133 and SFAS No. 138. Changes in the fair value of the contracts within the
scope of SFAS No. 133 and SFAS No. 138 on December 1, 2000 would increase
liabilities and assets by approximately $8.5 million and $3.7 million
respectively, with an offsetting amount recorded in accumulated comprehensive
income.

EURO

    The Company carried out a review of the potential impact of carrying out
business in an additional currency. The financial systems required to provide
Euro compliance were successfully upgraded to meet commercial requirements
during the year. Any foreign exchange risks will be assessed and managed as part
of the Company's foreign exchange program.

FORWARD-LOOKING STATEMENTS

    Certain statements in this Annual Report, including the message from the
Chairman, describe plans or expectations for the future and constitute
"forward-looking statements" as defined in the U.S. Private Securities
Litigation Reform Act of 1995. Actual and future results and trends could differ
materially from those set forth in such statements due to various factors. Such
factors include, among others: general economic and business conditions;
industry capacity; industry trends; competition; asset operational performance;
raw material costs and availability; currency fluctuations; disease and other
natural causes; immaturity of aquaculture technology; the loss of any
significant customers; changes in business strategy or development plans;
availability, terms and deployment of capital; availability of qualified
personnel; changes in, or the failure or inability to comply with, government
regulations; and adverse weather conditions. Additional information concerning
these, as well as other factors, is contained from time to time in the Company's
U.S. Securities and Exchange Commission ("SEC") filings, including, but not
limited to, the Company's report on Form 20-F for the year ended November 30,
1999. Copies of these filings may be obtained by contacting the Company or the
SEC.

                                       16
<PAGE>
                      SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
FOR THE YEARS ENDED NOVEMBER 30,
(IN MILLIONS, EXCEPT PER SHARE DATA)             2000       1999       1998       1997       1996
------------------------------------           --------   --------   --------   --------   --------
<S>                                            <C>        <C>        <C>        <C>        <C>
Net operating revenue........................  $2,268.6   $1,780.9   $1,796.6   $1,526.1   $1,350.5
Income from operations.......................  $   91.3   $  112.2   $  190.3   $  165.6   $  136.1
Net income...................................  $   20.1   $   46.9   $   96.3   $  237.1   $   91.9
                                               --------   --------   --------   --------   --------
Earnings per share
  Basic......................................  $   0.37   $   0.86   $   1.76   $   4.34   $   1.73
  Diluted....................................  $   0.36   $   0.86   $   1.75   $   4.28   $   1.72
Weighted average number of Common and
  Class B shares and equivalents outstanding
  Basic......................................      54.7       54.5       54.7       54.7       53.2
  Diluted....................................      55.3       54.8       55.0       55.4       53.4
Cash dividends paid per share................  $   0.25   $  0.375   $   0.50   $   0.50   $   0.25
Other data:
Non-recurring income items, net (a)..........  $   34.0   $   11.6   $   17.7   $  134.6   $    2.9
                                               ========   ========   ========   ========   ========

AS OF NOVEMBER 30, (IN MILLIONS, EXCEPT PER
  SHARE DATA)
---------------------------------------------
Current assets less current liabilities
  (including current portion of long-term
  debt)......................................  $  (46.9)  $  111.3   $  132.4   $  112.0   $   41.8
Total assets.................................  $3,727.3   $3,058.4   $3,008.1   $2,402.8   $1,978.5
Long-term debt and capital lease obligations
  (including current portion)................  $1,415.0   $1,179.4   $1,128.9   $  776.6   $  719.7
Shareholders' equity.........................  $1,095.8   $1,141.6   $1,132.4   $1,062.6   $  884.8
Book value per share.........................  $  20.00   $  20.91   $  20.78   $  19.35   $  16.26
Total number of Common and Class B shares
  outstanding................................      54.8       54.6       54.5       54.9       54.4
                                               ========   ========   ========   ========   ========
</TABLE>

------------------------

(a) Non-recurring items, net, comprise the items set out below. It should not be
    interpreted that all unique or one-time items have been identified as
    non-recurring items nor should it be interpreted that items similar in
    nature to the non-recurring items described below, will not recur in future
    periods. 2000--gain on dilution of interest in Stolt Offshore
    ($32.5 million), recognition of tax benefits of net operating loss
    carryforwards ($2.6 million), gain on disposal of assets ($2.2 million) and
    restructuring charges ($3.3 million); 1999--recognition of tax benefits of
    net operating loss carryforwards ($11.0 million), restructuring charges
    ($4.4 million), and gain on disposal of assets ($5.0 million); 1998--benefit
    arising from the change in the drydock accounting policy in Stolt Offshore
    after minority interest ($1.3 million), gain on insurance settlement
    ($10.2 million), and gain on disposal of assets ($6.2 million);
    1997--cumulative charge (to December 1, 1996) of implementing SFAS 121
    ($22.9 millions, net of taxes), gain on sale of common stock of subsidiary,
    net ($139.5 million), extraordinary gain on early repayment of debt
    ($7.4 million), and gain on disposal of assets ($10.6 million);
    1996--restructuring charges ($3.9 million) and gain on disposal of assets
    ($6.8 million).

                                       17
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the shareholders of Stolt-Nielsen S.A.:

    We have audited the accompanying consolidated balance sheets of
Stolt-Nielsen S.A. (a Luxembourg company) and subsidiaries (the "Company") as of
November 30, 2000 and 1999, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended November 30, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Stolt-Nielsen S.A. and
subsidiaries as of November 30, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
November 30, 2000, in conformity with accounting principles generally accepted
in the United States.

                                          /s/ Arthur Andersen LLP

New York, New York
January 31, 2001

                                       18
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

                       CONSOLIDATED STATEMENTS OF INCOME

                        FOR THE YEARS ENDED NOVEMBER 30,
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                 2000         1999         1998
                                                              ----------   ----------   ----------
<S>                                                           <C>          <C>          <C>
NET OPERATING REVENUE:
Stolt-Nielsen Transportation Group:
  Tankers...................................................  $  691,775   $  618,038   $  657,821
  Tank Containers...........................................     223,708      206,116      218,789
  Terminals.................................................      59,298       55,350       53,768
                                                              ----------   ----------   ----------
                                                                 974,781      879,504      930,378
                                                              ----------   ----------   ----------
Stolt Offshore..............................................     983,420      640,726      649,764
Stolt Sea Farm..............................................     310,429      260,707      216,483
                                                              ----------   ----------   ----------
                                                               2,268,630    1,780,937    1,796,625
                                                              ----------   ----------   ----------
OPERATING EXPENSES:
Stolt-Nielsen Transportation Group:
  Tankers...................................................     581,874      529,475      539,696
  Tank Containers...........................................     179,586      163,562      163,787
  Terminals.................................................      35,328       34,926       37,204
                                                              ----------   ----------   ----------
                                                                 796,788      727,963      740,687
                                                              ----------   ----------   ----------
Stolt Offshore..............................................     930,046      568,304      540,891
Stolt Sea Farm..............................................     257,902      214,020      184,964
                                                              ----------   ----------   ----------
                                                               1,984,736    1,510,287    1,466,542
                                                              ----------   ----------   ----------
  GROSS PROFIT..............................................     283,894      270,650      330,083
Equity in net income (loss) of non-consolidated joint
  ventures (Note 4).........................................      (3,127)       4,690       17,250
Administrative and general expenses.........................    (186,125)    (158,746)    (157,061)
Restructuring charges (Note 6)..............................      (3,320)      (4,414)          --
                                                              ----------   ----------   ----------
  INCOME FROM OPERATIONS....................................      91,322      112,180      190,272
                                                              ----------   ----------   ----------
NON-OPERATING (EXPENSE) INCOME:
Interest expense............................................    (111,681)     (71,467)     (60,657)
Interest income.............................................       6,147        6,104        7,342
Foreign currency exchange gain (loss), net..................      (2,039)       2,449         (288)
Gain on disposal of assets, net (Note 7)....................       2,172        5,013       16,384
Gain on dilution of interest in Stolt Offshore (Note 6).....      32,509           --           --
Other, net..................................................         744        1,932        2,365
                                                              ----------   ----------   ----------
                                                                 (72,148)     (55,969)     (34,854)
                                                              ----------   ----------   ----------
  INCOME BEFORE INCOME TAX PROVISION AND MINORITY
    INTEREST................................................      19,174       56,211      155,418
Income tax provision (Note 9)...............................     (15,374)        (481)     (26,530)
                                                              ----------   ----------   ----------
  INCOME BEFORE MINORITY INTEREST...........................       3,800       55,730      128,888
                                                              ----------   ----------   ----------
Minority interest (Note 8)..................................      16,314       (8,822)     (32,613)
                                                              ----------   ----------   ----------
  NET INCOME................................................  $   20,114   $   46,908   $   96,275
                                                              ==========   ==========   ==========
EARNINGS PER COMMON AND CLASS B SHARE AND EQUIVALENTS (NOTE
  2):
  Basic.....................................................  $     0.37   $     0.86   $     1.76
  Diluted...................................................        0.36         0.86         1.75
                                                              ==========   ==========   ==========
WEIGHTED AVERAGE NUMBER OF COMMON AND CLASS B SHARES AND
  EQUIVALENTS OUTSTANDING:
  Basic.....................................................      54,684       54,526       54,732
  Diluted...................................................      55,256       54,806       54,998
                                                              ==========   ==========   ==========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
                              of these statements.

                                       19
<PAGE>
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
AS OF NOVEMBER 30, (IN THOUSANDS EXCEPT SHARE NUMBERS)           2000         1999
------------------------------------------------------        ----------   ----------
<S>                                                           <C>          <C>
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................  $   28,770   $   20,372
  Trade receivables, net of allowance for doubtful accounts
    of $12,455 in 2000 and $10,713 in 1999..................     396,757      317,032
  Inventories (Note 10).....................................     165,655      141,061
  Receivables from related parties (Note 4).................      33,094       16,007
  Restricted cash deposits (Note 11)........................       4,526        2,271
  Prepaid expenses and other current assets (Note 9)........     127,577       88,886
                                                              ----------   ----------
    TOTAL CURRENT ASSETS....................................     756,379      585,629
                                                              ----------   ----------
FIXED ASSETS, AT COST:
  Tankers...................................................   1,946,881    1,669,710
  Tankers under construction................................      68,017      234,808
  Tank containers...........................................     126,439      163,570
  Terminal facilities.......................................     301,094      270,463
  Subsea ships and facilities...............................   1,042,972      614,295
  Seafood facilities........................................     133,062      119,448
  Other.....................................................      44,145       32,627
                                                              ----------   ----------
                                                               3,662,610    3,104,921
Less--accumulated depreciation and amortization.............  (1,111,955)    (988,501)
                                                              ----------   ----------
                                                               2,550,655    2,116,420
                                                              ----------   ----------
Investments in non-consolidated joint ventures and other
  assets (Note 4)...........................................     217,955      177,065
Deferred income tax asset (Note 9)..........................      27,199       22,515
Goodwill and other intangible assets, net of accumulated
  amortization of $38,285 in 2000 and $26,273 in 1999 (Note
  5)........................................................     175,115      156,759
                                                              ----------   ----------
    TOTAL ASSETS............................................  $3,727,303   $3,058,388
                                                              ==========   ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Short-term bank loans (Note 12)...........................  $  131,337   $   34,103
  Current maturities of long-term debt and capital lease
    obligations (Note 13)...................................      67,506       62,395
  Accounts payable..........................................     315,133      140,096
  Accrued voyage expenses...................................      56,184       69,233
  Other accrued and current liabilities (Note 9)............     233,145      168,454
                                                              ----------   ----------
    TOTAL CURRENT LIABILITIES...............................     803,305      474,281
                                                              ----------   ----------
Long-term debt and capital lease obligations (Note 13)......   1,347,469    1,117,008
Minority interest (Note 8)..................................     317,943      232,630
Deferred income tax liability (Note 9)......................      38,952       21,539
Other non-current liabilities...............................     123,802       71,304
Commitments and contingencies (Note 15).....................
SHAREHOLDERS' EQUITY:
  Founder's shares: no par value--15,000,000 shares
    authorized, 7,970,864 shares issued and outstanding in
    2000, and 7,820,109 shares issued and outstanding in
    1999, at stated value...................................          --           --
  Capital stock:
    Common shares: no par value--60,000,000 authorized,
     31,883,456 shares issued in 2000 and 31,280,438 shares
     issued in 1999, at stated value........................      31,884       31,280
    Class B shares: no par value--60,000,000 authorized,
     30,648,690 shares issued in 2000 and 30,974,974 shares
     issued in 1999, at stated value........................      30,649       30,975
    Paid-in surplus.........................................     350,844      347,654
    Retained earnings.......................................     917,468      911,040
    Accumulated other comprehensive loss....................    (100,989)     (45,299)
                                                              ----------   ----------
                                                               1,229,856    1,275,650
                                                              ----------   ----------
Less--Treasury stock-at cost, 7,688,810 Common shares in
  2000, and 1,921,905 Common shares and 5,766,905 Class B
  shares in 1999............................................    (134,024)    (134,024)
                                                              ----------   ----------
    TOTAL SHAREHOLDERS' EQUITY..............................   1,095,832    1,141,626
                                                              ----------   ----------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............  $3,727,303   $3,058,388
                                                              ==========   ==========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
                            of these balance sheets.

                                       20
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                ACCUMULATED
                                                                                   OTHER
                                  CAPITAL    PAID-IN    TREASURY    RETAINED   COMPREHENSIVE   COMPREHENSIVE
                                   STOCK     SURPLUS      STOCK     EARNINGS   INCOME (LOSS)   INCOME (LOSS)
                                  --------   --------   ---------   --------   -------------   -------------
<S>                               <C>        <C>        <C>         <C>        <C>             <C>
BALANCE, NOVEMBER 30, 1997......  $62,131    $346,437   $(125,540)  $815,795     $ (36,266)
Exercise of stock options for
  39,863 Common shares and
  20,166 Class B shares.........       60         582          --         --            --
Issuance of 9,966 Founder's
  shares........................       --          --          --         --            --
Purchase of treasury
  stock--320,000 Common shares
  and 159,300 Class B shares....       --          --      (8,484)        --            --
Cash dividends paid--$0.50 per
  Common and Class B share......       --          --          --    (27,416)           --
Cash dividends paid--$0.005 per
  Founder's share...............       --          --          --        (39)           --
Net income......................       --          --          --     96,275            --       $ 96,275
Translation adjustments, net....       --          --          --         --         8,832          8,832
                                                                                                 --------
Comprehensive income............                                                                  105,107
                                  -------    --------   ---------   --------     ---------       --------
BALANCE, NOVEMBER 30, 1998......   62,191     347,019    (134,024)   884,615       (27,434)
Exercise of stock options for
  43,125 Common shares and
  21,562 Class B shares.........       64         635          --         --            --
Issuance of 10,781 Founder's
  shares........................       --          --          --         --            --
Cash dividends paid--$0.375 per
  Common and Class B share......       --          --          --    (20,444)           --
Cash dividends paid--$0.005 per
  Founder's share...............       --          --          --        (39)           --
Net income......................       --          --          --     46,908                       46,908
Other comprehensive income
  (loss):
  Translation adjustments,
    net.........................       --          --          --         --       (21,767)       (21,767)
  Unrealized gains on
    securities..................       --          --          --         --         3,902          3,902
                                                                                                 --------
Other comprehensive loss........                                                                  (17,865)
                                                                                                 --------
Comprehensive income............                                                                   29,043
                                  -------    --------   ---------   --------     ---------       --------
BALANCE, NOVEMBER 30, 1999......   62,255     347,654    (134,024)   911,040       (45,299)
Exercise of stock options for
  172,512 Common shares and
  104,226 Class B shares........      278       3,190          --         --            --
Issuance of 150,755 Founder's
  shares........................       --          --          --         --            --
Cash dividends paid--$0.25 per
  Common and Class B share......       --          --          --    (13,647)           --
Cash dividends paid--$0.005 per
  Founder's share...............       --          --          --        (39)           --
Net income......................       --          --          --     20,114            --         20,114
Other Comprehensive income
  (loss):
  Translation adjustments,
    net.........................       --          --          --         --       (48,611)       (48,611)
  Unrealized loss on
    securities..................       --          --          --         --        (7,079)        (7,079)
                                                                                                 --------
Other comprehensive loss........                                                                  (55,690)
                                                                                                 --------
Comprehensive loss..............                                                                 $(35,576)
                                  -------    --------   ---------   --------     ---------       --------
BALANCE, NOVEMBER 30, 2000......  $62,533    $350,844   $(134,024)  $917,468     $(100,989)
                                  =======    ========   =========   ========     =========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
                              of these statements.

                                       21
<PAGE>
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                              FOR THE YEARS ENDED NOVEMBER 30,
                                                              ---------------------------------
(IN THOUSANDS)                                                  2000        1999        1998
--------------                                                ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income..................................................  $  20,114   $  46,908   $  96,275
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
  OPERATING ACTIVITIES:
    Depreciation of fixed assets............................    184,224     148,238     128,589
    Amortization of intangible assets.......................      8,658       7,963       4,225
    Amortization of drydock costs...........................     16,161      17,296      18,303
    Provisions for reserves and taxes.......................      4,013     (15,372)     26,283
    Equity in net loss (income) of non-consolidated joint
      ventures..............................................      3,127      (4,690)    (17,250)
    Minority interest.......................................    (16,314)      8,822      32,613
    Gain on disposal of assets, net.........................     (2,172)     (5,013)    (16,384)
    Gain on dilution of interest in Stolt Offshore..........    (32,509)         --          --
CHANGES IN ASSETS AND LIABILITIES, NET OF EFFECT OF
  ACQUISITIONS AND DIVESTITURES:
    Decrease (increase) in trade receivables................     21,106      18,341     (21,413)
    (Increase) decrease in inventories......................    (33,716)     12,936      14,685
    (Increase) decrease in prepaid expenses and other
      current assets........................................    (32,075)      3,430     (19,979)
    Increase (decrease) in accounts payable and accrued
      liabilities...........................................     20,342     (30,134)    (14,746)
Payments of drydock costs...................................    (12,048)    (11,400)    (15,632)
Other, net..................................................     (8,110)     (3,039)     (3,607)
                                                              ---------   ---------   ---------
    NET CASH PROVIDED BY OPERATING ACTIVITIES...............    140,801     194,286     211,962
                                                              =========   =========   =========
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures......................................   (285,787)   (303,296)   (378,809)
  Proceeds from sales of ships and other assets.............     71,975     117,800      57,627
  Acquisition of subsidiaries, net of cash acquired.........   (120,374)    (21,790)   (217,584)
  Investment in and advances to affiliates and others,
    net.....................................................    (12,380)    (38,249)    (31,758)
  Dividends from non-consolidated joint ventures............      2,691      13,154      18,384
  (Increase) decrease in restricted cash deposits...........     (2,583)       (982)      5,756
  Other, net................................................     (9,110)    (14,858)     (9,379)
                                                              ---------   ---------   ---------
    NET CASH USED IN INVESTING ACTIVITIES...................   (355,568)   (248,221)   (555,763)
                                                              =========   =========   =========
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase (decrease) in loans payable to banks, net........     14,266      16,042      (2,455)
  Repayment of long-term debt...............................   (243,240)    (74,414)    (82,731)
  Principal payments under capital lease obligations........    (11,478)     (3,248)     (2,731)
  Proceeds from issuance of long-term debt--Private
    Placement...............................................         --          --     216,000
  Proceeds from issuance of long-term debt--ship
    financing/other.........................................    473,496     117,370     219,074
  Proceeds from exercise of stock options in the Company and
    Stolt Offshore..........................................      5,464       1,282       1,033
  Purchases of treasury stock...............................         --          --      (8,484)
  Dividends paid............................................    (13,686)    (20,483)    (27,455)
                                                              ---------   ---------   ---------
    NET CASH PROVIDED BY FINANCING ACTIVITIES...............    224,822      36,549     312,251
                                                              =========   =========   =========
Effect of exchange rate changes on cash.....................     (1,657)        (18)        755
                                                              ---------   ---------   ---------
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....      8,398     (17,404)    (30,795)
Cash and cash equivalents at beginning of year..............     20,372      37,776      68,571
                                                              ---------   ---------   ---------
    CASH AND CASH EQUIVALENTS AT END OF YEAR................  $  28,770   $  20,372   $  37,776
                                                              =========   =========   =========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
                              of these statements.

                                       22
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY

    Stolt-Nielsen S.A. ("SNSA"), a Luxembourg company, and subsidiaries
(together, the "Company") are engaged in three businesses: Transportation,
Subsea, and Seafood.

    The Transportation business, which is carried out through Stolt-Nielsen
Transportation Group Ltd. ("SNTG"), is engaged in the worldwide transportation,
storage, and distribution of bulk liquid chemicals, edible oils, acids, and
other specialty liquids providing its customers with integrated logistics
solutions.

    The Subsea business is carried out through Stolt Offshore S.A. ("Stolt
Offshore"), a subsidiary in which the Company held a 53% economic interest and a
61% voting interest as of November 30, 2000. Stolt Offshore is one of the
world's leading offshore contractors to the oil and gas industry, specializing
in technologically sophisticated offshore and subsea engineering, flowline,
trunkline and pipeline lay, construction, inspection and maintenance services.

    The Seafood business, wholly-owned by the Company and carried out through
Stolt Sea Farm Holdings plc ("SSF"), produces, processes, and markets high
quality seafood products, including Atlantic salmon, salmon trout, turbot,
halibut, tuna, sturgeon, and caviar.

    In addition, in early 2000 the Company decided to commercialize its
expertise in logistics and procurement. Optimum Logistics Ltd. ("OLL") was
established to provide internet-based logistics software for the chemical and
other bulk materials industries. Prime Supplier Ltd. ("PSL") was established to
provide an internet-based total marine procurement system which will make
available all products and services needed for marine operations.

2. SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements include the financial statements of
all majority-owned companies after the elimination of all significant
intercompany transactions and balances. The results of Stolt Offshore are
included in the consolidated results of the Company, net of minority interests,
because the Company holds a 61% voting interest in Stolt Offshore. The Company
has equity investments of 50% or less in various affiliated companies which are
accounted for using the equity method.

    SNTG operates the Stolt Tankers Joint Service (the "Joint Service"), an
arrangement for the coordinated marketing, operation, and administration of
tankers owned or chartered by the Joint Service, participants in the deep sea
intercontinental market. Net revenue available for distribution to the
participants is defined in the Joint Service Agreement as the combined operating
revenue of the ships which participate in the Joint Service, less combined
voyage expenses, overhead costs, and commission to outside brokers. The net
revenue is distributed proportionately to each participant according to a
formula which takes into account each ship's cargo capacity, its number of
operating days during the period, and an earnings factor assigned. For the years
ended November 30, 2000, 1999, and 1998, SNTG received approximately 70%, 66%
and 72%, respectively, of the net revenues of the Joint Service. The financial
statements of the Joint Service have been included in the accompanying
consolidated financial statements, with a provision included in tanker operating
expenses for the amount of net revenues distributed to the minority
participants. These provisions were approximately $102.6 million,
$105.1 million, and $92.8 million for the years ended November 30, 2000, 1999,
and 1998, respectively, and include amounts distributed to non-consolidated
joint ventures of SNTG of

                                       23
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
$37.1 million, $35.9 million, and $34.2 million. The amounts distributed are net
of commissions to SNTG of $2.3 million for each of the three years ended
November 30, 2000. As of November 30, 2000 and 1999, the net amounts payable to
participants in which the Company holds an equity interest for amounts to be
distributed by the Joint Service were $4.2 million and $1.5 million
respectively. These amounts are included in "Other accrued and current
liabilities" in the accompanying consolidated balance sheets as of November 30,
2000 and 1999.

REVENUE RECOGNITION

    SNTG--TANKERS  Consistent with shipping industry practice, revenues from
tanker operations are shown in the consolidated statements of income net of
commissions, sublet costs, transshipment, and barging expenses.

    The operating results of voyages in progress at the end of each reporting
period are estimated and pro-rated on a per day basis for inclusion in the
consolidated statements of income. The consolidated balance sheets reflect the
deferred portion of revenues and expenses on voyages in progress at the end of
each reporting period as applicable to the subsequent period. As of
November 30, 2000 and 1999, deferred revenues of $19.3 million and
$36.9 million, respectively, are included in "Other accrued and current
liabilities" in the accompanying consolidated balance sheets.

    SNTG--TANK CONTAINERS  Revenues for tank containers relate primarily to
short-term shipments, with the freight revenue and estimated expenses recognized
when the tanks are shipped, based upon contract rates. Additional miscellaneous
revenues earned from other sources are recognized after completion of the
shipment.

    SNTG--TERMINALS  Revenues for terminal operations consist of rental income
for the utilization of storage tanks by its customers, with the majority of
rental income earned under long-term contracts. These contracts generally
provide for fixed rates for the use of the storage tanks and/or the throughput
of commodities pumped through the facility. Revenues can also be earned under
short-term agreements contracted at spot rates. Revenue is recognized over the
time period of usage, or upon completion of specific throughput measures, as
specified in the contracts.

    STOLT OFFSHORE  Long-term contracts of Stolt Offshore are accounted for
using the percentage-of-completion method. Revenue and gross profit are
recognized each period based upon the advancement of the work-in-progress unless
the stage of completion is insufficient to enable a reasonably certain forecast
of gross profit to be established. In such cases, no gross profit is recognized
during the period. Provisions for anticipated losses are made in the period in
which they become known. A major portion of Stolt Offshore's revenue is billed
under fixed-price contracts. However, due to the nature of the services
performed, variation orders are commonly billed to the customers in the normal
course of business and are recognized as contract revenue only after agreement
with the customers has been reached on the scope of the work and the fees to be
charged.

    SSF  SSF recognizes revenues on dispatch of product to customers net of a
provision for returns and allowances.

                                       24
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES

    The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent gains and losses at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

FOREIGN CURRENCY TRANSLATION

    The Company translates the financial statements of its non-U.S. subsidiaries
into U.S. dollars from their functional currencies (usually local currencies) in
accordance with the provisions of Statement of Financial Accounting Standards
("SFAS") No. 52. Under SFAS No. 52, assets and liabilities denominated in
foreign currencies are generally translated at the exchange rates in effect at
the balance sheet date. Revenues and expenses are translated at exchange rates
which approximate the average rate prevailing during the period. The resulting
translation adjustments are recorded in a separate component of accumulated
other comprehensive income (loss) as "Translation adjustments, net" in the
accompanying consolidated statements of shareholders' equity. Exchange gains and
losses resulting from transactions denominated in a currency other than the
functional currency are included in "Foreign currency exchange gain (loss), net"
in the accompanying consolidated statements of income.

CAPITALIZED INTEREST

    Interest costs during the construction period of significant assets are
capitalized and charged to expense over the lives of the related assets. The
Company capitalized $8.0 million, $16.4 million, and $16.2 million of interest
expense in fiscal years 2000, 1999, and 1998, respectively.

EARNINGS PER SHARE

    Basic earnings per share ("EPS") is computed by dividing net income by the
weighted average number of shares outstanding during the period. Diluted EPS is
computed by adjusting the weighted average number of shares outstanding during
the period for all potentially dilutive shares and equivalents outstanding
during the period using the treasury stock method. As further discussed in
Note 17, Founder's shares, which provide the holder thereof with certain control
features, only participate in earnings to the extent of $0.005 per share for
years in which dividends are declared, and are limited to $0.05 per share upon
liquidation. For purposes of computing EPS, dividends paid on Founder's shares
are deducted from earnings to arrive at earnings available to Common and
Class B shareholders.

    The outstanding stock options under the Company's 1987 Stock Option Plan and
1997 Stock Option Plan (Note 18) are included in the diluted EPS calculation to
the extent they are dilutive. Outstanding options to purchase 1,987,065,
2,115,022, and 1,859,851 shares were not included in the computation of diluted
earnings per share at November 30, 2000, 1999, and 1998, respectively, because
to do so would have been antidilutive. The following is a reconciliation of the
numerator and denominator of the basic and diluted EPS computations.

                                       25
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

<TABLE>
<CAPTION>
                                                                   FOR THE YEARS ENDED
                                                                       NOVEMBER 30,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Net Income..................................................  $20,114    $46,908    $96,275
Less: Dividends on Founder's shares.........................      (39)       (39)       (39)
                                                              -------    -------    -------
Net income attributable to Common and Class B
  shareholders..............................................  $20,075    $46,869    $96,236
                                                              =======    =======    =======
Basic weighted average shares outstanding...................   54,684     54,526     54,732
Options issued to executives (Note 18)......................      572        280        266
                                                              -------    -------    -------
Diluted weighted average shares outstanding.................   55,256     54,806     54,998
                                                              =======    =======    =======
Basic EPS...................................................  $  0.37    $  0.86    $  1.76
Diluted EPS.................................................     0.36       0.86       1.75
                                                              =======    =======    =======
</TABLE>

CASH AND CASH EQUIVALENTS

    Cash and cash equivalents include time deposits and certificates of deposit
with an original maturity of three months or less.

INVENTORY

    Stolt Offshore inventories are stated at the lower of cost or market value.
Cost is generally determined using the weighted average cost method.
Mobilization costs (costs, principally labor and materials, of fitting out and
preparing equipment for specific contracts) are amortized over the shorter of
the expected duration of the related contracts or the estimated useful life of
the equipment.

    SSF's raw materials, biomass, and finished goods are valued at average
production cost or market price, whichever is lower. Finished goods consist of
frozen and processed fish products.

DEPRECIATION OF FIXED ASSETS

    SNTG's tankers are depreciated on a straight-line basis to a residual value
of 10% of cost over management's estimate of the ships' useful lives from
acquisition, which range up to 25 years.

    SNTG's tank containers are depreciated on a straight-line basis over their
estimated useful lives of 20 years.

    SNTG's terminal facility assets are depreciated substantially on a
straight-line basis over their estimated useful lives, which primarily range
from five to 40 years. The most significant assets, storage tanks, are
depreciated over 30 years.

    Stolt Offshore assets are depreciated on a straight-line basis over their
estimated useful lives which range from seven to 10 years for operating
equipment, six to 25 years for construction support ships, and five to 33 years
for buildings and other assets.

    SSF facilities are depreciated substantially on a straight-line basis over
their estimated useful lives, which range from four to 20 years.

    Other fixed assets consist primarily of furniture and fixtures, and computer
hardware and software which are depreciated on a straight-line basis over their
estimated useful lives of three to 10 years.

                                       26
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    Depreciation expense, which excludes amortization of capitalized drydock
costs, for the years ended November 30, 2000, 1999, and 1998, was
$184.2 million, $148.2 million, and $128.6 million, respectively.

    Drydock costs are capitalized under the deferral method, whereby the Company
capitalizes its drydock costs and amortizes them over the period until the next
drydock. Amortization of capitalized drydock costs was $16.2 million,
$17.3 million, and $18.3 million for the years ended November 30, 2000, 1999,
and 1998, respectively. The unamortized portion of capitalized drydock costs of
$36.0 million and $36.4 million is included in "Investments in non-consolidated
joint ventures and other assets" in the accompanying consolidated balance sheets
at November 30, 2000 and 1999, respectively.

    Maintenance and repair costs, which exclude amortization of the costs of
ship surveys, drydock, and renewals of tank coatings, for the years ended
November 30, 2000, 1999, and 1998, were $76.2 million, $65.6 million, and
$56.6 million, respectively, and are included in "Operating Expenses" in the
accompanying consolidated statements of income.

SOFTWARE AND WEBSITE DEVELOPMENT COSTS

    The Company accounts for costs of developing internal use software and its
websites in accordance with AICPA Statement of Position 98-1, "ACCOUNTING FOR
THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE," and
Emerging Issues Task Force Issue No. 00-2, "ACCOUNTING FOR WEBSITE DEVELOPMENT
COSTS." Accordingly, the Company expenses all costs incurred that relate to the
planning and post implementation phases of development. Costs incurred in the
development phase are capitalized and amortized over the expected useful life of
the software, generally between 3 and 5 years. Such costs capitalized in 2000
amounted to $6.8 million. Costs associated with the repair or maintenance of the
existing site or the development of website content are expensed as incurred.

FINANCIAL INSTRUMENTS

    The Company enters into forward exchange and options contracts to hedge
foreign currency transactions on a continuing basis for periods consistent with
its committed exposures. This hedging minimizes the impact of foreign exchange
rate movement on the Company's U.S. dollar results. The Company's foreign
exchange contracts do not subject the Company's results of operations to risk
due to exchange rate movements because gains and losses on these contracts
generally offset gains and losses on the assets and liabilities being hedged.
Contracts are generally held to their maturity date, which matches that of the
assets or liabilities hedged.

    Gains and losses on these foreign exchange contracts are deferred and
included in the basis of the transaction when it is completed. Losses are not
deferred if it is estimated that deferral would lead to recognizing losses in
later periods.

    The Company also uses interest rate swaps to hedge certain underlying debt
obligations. For qualifying hedges, the interest rate differential is reflected
as an adjustment to interest expense over the life of the swap.

    The Company does not engage in foreign currency speculation.

    Cash flows resulting from hedge contracts which are accounted for as hedges
of identifiable transactions or events are classified in the consolidated
statements of cash flows in the same category

                                       27
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
as the cash flows from the items being hedged. Net cash flows from such
contracts in 2000, 1999, and 1998 were not significant.

CONSOLIDATED STATEMENTS OF CASH FLOWS

    Cash paid for interest and income taxes was as follows:

<TABLE>
<CAPTION>
                                                              FOR THE YEARS ENDED NOVEMBER 30,
                                                              ---------------------------------
                                                                2000        1999        1998
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
(IN THOUSANDS)
Interest, net of amounts capitalized........................  $102,279     $71,145     $58,353
Income taxes................................................    35,165      13,074       8,534
                                                              ========     =======     =======
</TABLE>

    Stolt Offshore Class A shares issued in connection with the acquisitions of
ETPM and Danco A/S in 2000 amounted to $139.1 million. Debt assumed in the Stolt
Offshore acquisition of ETPM S.A. amounted to $89.4 million in 2000, and capital
lease obligations assumed in 2000 amounted to $32.0 million.

    Debt assumed in SSF acquisitions in 2000 amounted to $4.2 million. Debt
assumed in the SSF acquisition of International Aqua Foods Ltd. amounted to
$9.2 million in 1999.

INVESTMENT SECURITIES

    The Company determines the appropriate classification of equity securities
at the time of purchase. Equity securities classified as available for sale are
measured at fair value. Material unrealized gains and losses, net of tax, are
recorded as a separate component of other comprehensive income (loss) until
realized. As of November 30, 2000 and 1999, available-for-sale investments of
$21.2 million and $29.3 million are included in "Investments in non-consolidated
joint ventures and other assets" in the accompanying consolidated balance
sheets.

GOODWILL AND OTHER INTANGIBLE ASSETS

    Goodwill represents the excess of the purchase price over the fair value of
certain assets acquired. Goodwill and other intangible assets, which include
patents and trademarks, are being amortized on a straight-line basis, over
periods of five to 40 years. The Company continuously monitors the realizable
value of goodwill and other intangible assets using expected related future
undiscounted cash flows. Total amortization of goodwill and other intangibles
was $8.7 million, $8.0 million, and $4.2 million in 2000, 1999, and 1998,
respectively.

STOCK-BASED COMPENSATION

    In October 1995, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123, "ACCOUNTING FOR STOCK-BASED COMPENSATION." This statement
establishes a fair value method of accounting for an employee stock option or
similar equity instrument but allows companies to continue to measure
compensation cost for those plans using the intrinsic value based method of
accounting prescribed by Accounting Principles Board ("APB") Opinion No. 25,
"ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES." The Company has elected to continue
accounting for its stock-based compensation awards

                                       28
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
to employees and directors under the accounting prescribed by APB Opinion
No. 25 and to provide the disclosures required by SFAS No. 123 (Note 18).

COMPREHENSIVE INCOME

    In 1999, the Company adopted SFAS No. 130, "REPORTING COMPREHENSIVE INCOME."
The Statement establishes rules for the reporting of comprehensive income and
its components. Comprehensive income consists of net income, foreign currency
translation adjustments, and unrealized gains on securities and is presented in
the consolidated statements of shareholders' equity. The adoption of SFAS
No. 130 had no impact on the Company's financial position, results of operations
or cash flows.

FUTURE ADOPTION OF NEW ACCOUNTING STANDARDS

    In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," and in June 2000, the FASB issued SFAS
No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities," an amendment to Statement 133. These Statements establish
accounting and reporting standards in the U.S. requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value. The Statements require that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the statement of income, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that receive
hedge accounting.

    The Company has adopted SFAS No. 133 and SFAS No. 138 as of December 1,
2000, and has identified and designated all derivatives within the scope of SFAS
No. 133 and SFAS No. 138. Changes in the fair value of the contracts within the
scope of SFAS No. 133 and SFAS No. 138 on December 1, 2000 would increase
liabilities and assets by approximately $8.5 million and $3.7 million
respectively, with an offsetting amount recorded in accumulated comprehensive
income.

RECLASSIFICATION

    Certain prior year amounts in the consolidated financial statements have
been reclassified to conform with the current year presentation.

3. BUSINESS AND GEOGRAPHIC SEGMENT INFORMATION

    In 1999, the Company adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information," which changed the way the Company reports
information about its operating segments.

    The Company has three reportable segments from which it derives its
revenues: SNTG, Stolt Offshore, and SSF. The reportable segments reflect the
internal organization of the Company and are strategic businesses that offer
different products and services. The SNTG business provides worldwide logistic
solutions for the transportation, storage, and distribution of bulk liquid
chemicals, edible oils, acids, and other specialty liquids. Additional
information is provided below that may contribute to a greater understanding of
the SNTG business. Stolt Offshore provides engineering, flowline lay,
construction, inspection, and maintenance services to the offshore oil and gas
industry. SSF produces

                                       29
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. BUSINESS AND GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)
and markets seafood products. The "Corporate and Other" category includes
corporate-related items, the minority interest in Stolt Offshore, and the
results of OLL, PSL and all other insignificant operations not reportable under
the other segments.

    The basis of measurement and accounting policies of the reportable segments
are the same as those described in Note 2. The Company measures segment
performance based on net income. Inter-segment sales and transfers are not
significant and have been eliminated and are not included in the following
table. Indirect costs and assets have been apportioned within SNTG on the basis
of corresponding direct costs and assets. Interest and income taxes are not
allocated.

                                       30
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. BUSINESS AND GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)

    Summarized financial information concerning each of the Company's reportable
segments is as follows:

<TABLE>
<CAPTION>
                                                   FOR THE YEAR ENDED NOVEMBER 30, 2000
                             --------------------------------------------------------------------------------
                                STOLT-NIELSEN TRANSPORTATION GROUP
                             ----------------------------------------              STOLT
                                          TANK                           STOLT      SEA    CORPORATE
(IN MILLIONS)                TANKERS   CONTAINERS   TERMINALS   TOTAL   OFFSHORE   FARM    AND OTHER   TOTAL
-------------                -------   ----------   ---------   -----   --------   -----   ---------   ------
<S>                          <C>       <C>          <C>         <C>     <C>        <C>     <C>         <C>
Net operating revenue......   $ 692       $224         $59      $ 975    $ 983     $311      $ --      $2,269
Depreciation and
  amortization including
  drydocking...............     (94)        (9)        (10)      (113)     (86)     (10)                 (209)
Equity in net (loss) income
  of non-consolidated joint
  ventures.................     (13)        --           3        (10)       6        1        --          (3)
Restructuring Charges......      --         --          --         --       (3)      --        --          (3)
Income (loss) from
  operations...............      40         20          19         79       (5)      31       (14)         91
Interest expense, net......      --         --          --        (69)     (30)      (7)       --        (106)
Income tax (expense)
  benefit..................      --         --          --        (12)       4       (7)       --         (15)
Net income (loss)..........      --         --          --          1      (34)      18        35          20
Capital expenditures.......     150         27          29        206       62       12         6         286
Investments in non-
  consolidated joint
  ventures.................      15          2          46         63       35        4        --         102
Segment assets.............   1,612        157         262      2,031    1,403      284         9       3,727
</TABLE>

<TABLE>
<CAPTION>
                                                               FOR THE YEAR ENDED NOVEMBER 30, 1999
                                     -----------------------------------------------------------------------------------------
                                          STOLT-NIELSEN TRANSPORTATION GROUP
                                     --------------------------------------------               STOLT     CORPORATE
                                                   TANK                              STOLT       SEA         AND
(IN MILLIONS)                        TANKERS    CONTAINERS   TERMINALS    TOTAL     OFFSHORE     FARM       OTHER      TOTAL
-------------                        --------   ----------   ---------   --------   --------   --------   ---------   --------
<S>                                  <C>        <C>          <C>         <C>        <C>        <C>        <C>         <C>
Net operating revenue..............   $ 618        $206         $55       $ 879       $641       $261     $    --      $1,781
Depreciation and amortization
  including drydocking.............     (84)        (11)        (10)       (105)       (60)        (9)         --        (174)
Equity in net (loss) income of non-
  consolidated joint ventures......      (2)                      2          --          5         --          --           5
Restructuring charges..............      (2)         --          --          (2)        (2)        --          --          (4)
Income from operations.............      27          18          15          60         24         28          --         112
Interest expense, net..............      --          --          --         (42)       (17)        (6)         --         (65)
Income tax (expense) benefit.......      --          --          --          (9)         9         --          --          --
Net income (loss)..................      --          --          --          18         16         22          (9)         47
Capital expenditures...............     175           9           7         191         91         21          --         303
Investments in non-consolidated
  joint ventures...................      16           2          40          58          4          4          --          66
Segment assets.....................   1,551         173         233       1,957        843        258          --       3,058
</TABLE>

                                       31
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. BUSINESS AND GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)

<TABLE>
<CAPTION>
                                                               FOR THE YEAR ENDED NOVEMBER 30, 1998
                                     -----------------------------------------------------------------------------------------
                                          STOLT-NIELSEN TRANSPORTATION GROUP
                                     --------------------------------------------               STOLT     CORPORATE
                                                   TANK                              STOLT       SEA         AND
(IN MILLIONS)                        TANKERS    CONTAINERS   TERMINALS    TOTAL     OFFSHORE     FARM       OTHER      TOTAL
-------------                        --------   ----------   ---------   --------   --------   --------   ---------   --------
<S>                                  <C>        <C>          <C>         <C>        <C>        <C>        <C>         <C>
Net operating revenue..............   $ 658        $219         $54       $ 931       $650       $216     $    --      $1,797
Depreciation and amortization
  including drydocking.............     (81)        (13)        (10)       (104)       (39)        (8)         --        (151)
Equity in net income of non-
  consolidated joint ventures......       2          --          --           2         15         --          --          17
Income from operations.............      61          29           8          98         78         14          --         190
Interest expense, net..............      --          --          --         (40)        (5)        (8)         --         (53)
Income tax expense.................      --          --          --          (4)       (18)        (5)         --         (27)
Net income (loss)..................      --          --          --          64         57          7         (32)         96
Capital expenditures...............     206          20          16         242        123         14          --         379
Investments in non-consolidated
  joint ventures...................      18           2          25          45         10          3          --          58
Segment assets.....................   1,485         220         217       1,922        877        209          --       3,008
</TABLE>

    The following table sets out net operating revenue by country for the
Company's reportable segments. SNTG net operating revenue is allocated on the
basis of the country in which it is loaded. Tankers and Tank Containers operate
in a significant number of countries. Revenues from specific foreign countries
which contribute over 10% of total net operating revenue are disclosed
separately. SSF net operating revenue is primarily allocated on the basis of the
country in which the sale is generated. Stolt Offshore net operating revenue is
primarily allocated based on the geographic distribution of its activities.
SEAME represents Southern Europe, Africa and the Middle East.

<TABLE>
<CAPTION>
                                                               FOR THE YEARS ENDED
                                                                  NOVEMBER 30,
                                                              ---------------------
(IN MILLIONS)                                                 2000    1999    1998
-------------                                                 -----   -----   -----
<S>                                                           <C>     <C>     <C>
NET OPERATING REVENUE:
Stolt-Nielsen Transportation Group--
  Tankers:
    United States...........................................  $278    $272    $294
    South America...........................................    58      48      46
    Netherlands.............................................    47      43      40
    Other Europe............................................   105     100     110
    Malaysia................................................    54      44      47
    Other Asia..............................................   118     110     138
    Other...................................................    85      54      41
  Less commissions, sublet costs, transshipment and barging
    expenses................................................   (53)    (53)    (58)
                                                              ----    ----    ----
                                                              $692    $618    $658
                                                              ====    ====    ====
</TABLE>

                                       32
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. BUSINESS AND GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)

<TABLE>
<CAPTION>
                                                               FOR THE YEARS ENDED
                                                                  NOVEMBER 30,
                                                              ---------------------
(IN MILLIONS)                                                 2000    1999    1998
-------------                                                 -----   -----   -----
<S>                                                           <C>     <C>     <C>
Stolt-Nielsen Transportation Group--
  Tank Containers:
    United States...........................................  $ 80    $ 73    $ 76
    South America...........................................     9       7       8
    France..................................................    23      24      22
    Other Europe............................................    55      46      54
    Japan...................................................    16      25      26
    Other Asia..............................................    39      30      28
    Other...................................................     2       1       5
                                                              ----    ----    ----
                                                              $224    $206    $219
                                                              ====    ====    ====
Stolt-Nielsen Transportation Group--
  Terminals:
    United States...........................................  $ 52    $ 49    $ 48
    Brazil..................................................     7       6       6
                                                              ----    ----    ----
                                                              $ 59    $ 55    $ 54
                                                              ====    ====    ====
Stolt Offshore:
  Asia Pacific..............................................  $ 40    $ 43    $ 38
  North America.............................................   122     156      65
  Norway....................................................   199     165      98
  SEAME.....................................................   445      57      56
  South America.............................................    53      56      57
  United Kingdom............................................   124     162     335
  Other Corporate...........................................    --       2       1
                                                              ----    ----    ----
                                                              $983    $641    $650
                                                              ====    ====    ====
Stolt Sea Farm:
  United States.............................................  $118    $104    $ 79
  Canada....................................................    16      14       9
  United Kingdom............................................    13      21      12
  Norway....................................................    52      11      10
  Spain.....................................................    10      12      12
  Japan.....................................................    70      48      41
  Others, net...............................................    32      51      53
                                                              ----    ----    ----
                                                              $311    $261    $216
                                                              ====    ====    ====
</TABLE>

    During 2000, 1999, and 1998, no one customer accounted for more than 10% of
the Company's revenues.

    The following table sets out long-lived assets by country for the Company's
reportable segments. For SNTG, long-lived assets by country is only reportable
for the terminals operations. SNTG's tanker and tank container operations
operate on a worldwide basis and are not restricted to specific locations.
Accordingly, it is not possible to allocate the assets of these operations to
specific countries. The total

                                       33
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. BUSINESS AND GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)
net book value of long-lived assets for tankers amounted to $1,461 million and
$1,423 million, and for tank containers amounted to $102 million and
$128 million, at November 30, 2000 and 1999, respectively. A large proportion of
Stolt Offshore long-term assets are mobile assets that are utilized globally,
and therefore cannot be directly attributed to any one geographical region.
These long-term assets are represented as Other Corporate in the table below.

<TABLE>
<CAPTION>
                                                                  AS OF
                                                              NOVEMBER 30,
                                                              -------------
(IN MILLIONS)                                                 2000    1999
-------------                                                 -----   -----
<S>                                                           <C>     <C>
LONG-LIVED ASSETS:
Stolt-Nielsen Transportation Group--
  Terminals:
  United States.............................................  $162    $142
  Brazil....................................................    33      34
  Singapore.................................................    31      27
  Korea.....................................................    14      12
  Others....................................................     5       4
                                                              ----    ----
                                                              $245    $219
                                                              ====    ====
Stolt Offshore:
  United Kingdom............................................  $ 27    $ 15
  Norway....................................................     7       8
  Asia Pacific..............................................    16      21
  SEAME.....................................................    73       7
  South America.............................................    66      35
  North America.............................................    89     115
  Other Corporate...........................................   587     247
                                                              ----    ----
                                                              $865    $448
                                                              ====    ====
Stolt Sea Farm:
  United States.............................................  $ 11    $  5
  Canada....................................................    18      24
  United Kingdom............................................     4       4
  Norway....................................................    16      12
  Spain.....................................................     7      10
  Others....................................................     6       5
                                                              ----    ----
                                                              $ 62    $ 60
                                                              ====    ====
</TABLE>

    Long-lived assets exclude long-term restricted cash deposits, long-term
deferred tax assets, long-term pension assets, goodwill, and intangibles.

                                       34
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. EQUITY INVESTMENTS

    Summarized financial information for the Company's non-consolidated joint
ventures, representing 100% of the respective amounts included in the joint
ventures' financial statements, is as follows:

    Income statement data:

<TABLE>
<CAPTION>
                                                           FOR THE YEARS ENDED
                                                              NOVEMBER 30,
                                                          ---------------------
(IN MILLIONS)                                             2000    1999    1998
-------------                                             -----   -----   -----
<S>                                                       <C>     <C>     <C>
Net operating revenue...................................  $552    $486    $331
Gross profit............................................    50      67      63
Net income..............................................    10      24      39
</TABLE>

    Balance sheet data:

<TABLE>
<CAPTION>
                                                                   AS OF
                                                               NOVEMBER 30,
                                                              ---------------
(IN MILLIONS)                                                 2000       1999
-------------                                                 ----       ----
<S>                                                           <C>        <C>
Current assets..............................................  $266       $198
Non-current assets..........................................   312        332
Current liabilities.........................................   298        184
Non-current liabilities.....................................   213        240
</TABLE>

    The income statement data for the joint ventures presented above includes
the following expenses related to transactions with the Company:

<TABLE>
<CAPTION>
                                                          FOR THE YEARS ENDED
                                                             NOVEMBER 30,
                                                         ---------------------
(IN MILLIONS)                                            2000    1999    1998
-------------                                            -----   -----   -----
<S>                                                      <C>     <C>     <C>
Charter hire expense...................................  $56.3   $59.6   $48.4
Management and other fees..............................   41.1    34.8    22.2
Freight and Joint Service Commission...................    3.8     1.0     1.2
Interest expense.......................................    1.3     0.7     1.8
</TABLE>

    The joint ventures also recorded the following revenues related to
transactions with the Company:

<TABLE>
<CAPTION>
                                                          FOR THE YEARS ENDED
                                                             NOVEMBER 30,
                                                         ---------------------
(IN MILLIONS)                                            2000    1999    1998
-------------                                            -----   -----   -----
<S>                                                      <C>     <C>     <C>
Charter hire revenue...................................  $72.0   $37.0   $29.6
Tank container cleaning station revenue................    2.0     5.1     4.5
Rental income (from office building leased to the
  Company).............................................    2.3     2.3     2.3
</TABLE>

    The balance sheet data includes:

<TABLE>
<CAPTION>
                                                                   AS OF
                                                               NOVEMBER 30,
                                                              ---------------
(IN MILLIONS)                                                 2000       1999
-------------                                                 ----       ----
<S>                                                           <C>        <C>
Amounts due from the Company................................  $5.1       $3.3
Amounts due to the Company..................................  54.2       30.9
</TABLE>

    Included within "Amounts due to the Company" is $33.1 million and
$16.0 million at November 30, 2000 and 1999, respectively, for trading balances.
These amounts are reflected in the consolidated balance sheets as "Receivables
from related parties."

                                       35
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. BUSINESS ACQUISITIONS

    On December 7, 1999, Stolt Offshore completed a transaction to form a joint
venture entity, NKT Flexibles I/S ("NKT"), a manufacturer of flexible flowlines
and dynamic flexible risers for the offshore oil and gas industry. NKT is owned
51% by NKT Holdings A/S, and 49% by Stolt Offshore. This transaction was
effected by the acquisition of Danco A/S, a wholly-owned Norwegian company,
which holds the investment in the joint venture entity. Stolt Offshore issued
1,758,242 Stolt Offshore Class A shares with an average guaranteed value of
$14.475 per share and paid $10.5 million in cash for its 49% interest in NKT,
for a total consideration of $36.0 million. The Company realized a non-operating
gain on the reduction of its economic interest in Stolt Offshore, at the time of
the transaction, from 45% to 43%.

    The acquisition of Danco A/S has been accounted for by the purchase method
of accounting and, accordingly, the operating results have been included in the
Company's consolidated results of operations from the date of acquisition. The
excess of cash paid over the fair value of net assets acquired has been recorded
as goodwill of $2.1 million at the date of acquisition.The goodwill is being
amortized over 20 years. The Company accounts for the investment in NKT as a
non-consolidated joint venture under the equity method.

    On December 16, 1999, Stolt Offshore acquired approximately 55% of the
French offshore construction and engineering company ETPM S.A. ("ETPM"), a
wholly owned subsidiary of Groupe GTM S.A. ("GTM"), the construction affiliate
of Suez Lyonnaise des Eaux S.A. The remaining 45% was acquired on February 4,
2000. The purchase price was comprised of $111.6 million in cash; the issuance
of 6,142,857 Stolt Offshore Class A shares at a maximum guaranteed price of
$18.50 per share, giving a value of $113.6 million; and acquisition costs of
$3.4 million. Stolt Offshore also entered into a hire purchase arrangement for
two ships owned by GTM, the Seaway Polaris and the DLB 801, with an early
purchase option after two years. The net present value of this arrangement at
the date of acquisition was approximately $32.0 million. In addition, Stolt
Offshore assumed debt of $18.4 million that was due from ETPM to GTM and assumed
debt of $71.0 million that was due to third parties. The total purchase price
was $350.0 million. This acquisition was initially funded by cash provided by
SNSA, which have been replaced by a bridging finance facility with Den norske
Bank ASA for $150.0 million, that has now been repaid. The Company realized a
non-operating gain on the reduction of its economic interest in Stolt Offshore,
at the time of the transaction, from 43% to 40%.

    The acquisition has been accounted for by the purchase method of accounting
and, accordingly, the operating results have been included in the Company's
consolidated results of operations from the date of acquisition. The acquisition
generated negative goodwill of $7.1 million and acquired non-current assets have
been reduced by this amount.

    The guaranteed minimum share price of the Stolt Offshore Class A shares
issued to GTM is $17.50 per share for the first six months after closing and
increases by $0.25 every six months up to a maximum of $18.50 per share after
24 months. For the first 24 months after closing, GTM is free to sell all or
part of their Stolt Offshore Class A shares at any time. Stolt Offshore will
only be obliged to honor its minimum price guarantee in the event Stolt Offshore
elects to arrange such sale. From the period of 24 to 30 months after the
closing, Stolt Offshore may force GTM to sell its shares in Stolt Offshore. From
the period of 24 to 30 months after the closing, GTM may request that Stolt
Offshore arrange to sell GTM's shares in Stolt Offshore. In each case, the
minimum price guarantee will apply. From the period of 24 to 30 months after the
closing, GTM continues to have the right to sell all or part of its shares in
Stolt Offshore. For those shares that GTM has not sold by month 30 after the

                                       36
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. BUSINESS ACQUISITIONS (CONTINUED)
closing, GTM can require Stolt Offshore to sell GTM's shares in Stolt Offshore
and the minimum price guarantee will apply. After 30 months after closing, the
guarantee lapses. Any settlement due to the minimum share price guarantee will
be made in cash.

    On August 18, 1998, Stolt Offshore acquired the Ceanic Corporation for a
cash purchase price of approximately $218.9 million, including transaction
costs. The transaction has been accounted for under the purchase method of
accounting. The purchase price generated goodwill of approximately
$114.8 million at November 30, 1998. This was adjusted during 1999 to
$122.1 million. The adjustment reflects a reassessment of the value of certain
intangible assets within Ceanic and their related deferred tax liabilities. The
goodwill is being amortized on a straight-line basis over 25 years.

    The Company's share in the results of the former ETPM and Danco A/S have
been included in the consolidated statements of income from the date of
acquisition. The following unaudited pro forma information for 1999 presents a
summary of the consolidated results of operations of the Company, and the former
ETPM entities and Danco A/S as if the acquisitions occurred at the beginning of
1999. The pro forma consolidated results shown for 2000 exclude the
$32.5 million gain on dilution of interest in Stolt Offshore that resulted from
the issuance of Stolt Offshore Class A shares in connection with the
acquisitions of ETPM and Danco A/S during 2000. Since the acquisitions of ETPM
and Danco A/S occurred close to the start of the 2000 financial year, actual
results would not differ materially from pro forma results for these entities.
Accordingly, the pro forma information was not adjusted for that difference. The
pro forma consolidated results do not purport to be indicative of results that
would have occurred had the acquisitions been in effect for the periods
presented, nor do they purport to be indicative of the results that will be
obtained in the future. Pro forma adjustments for 1999 include depreciation and
amortization, interest charges on debt and lines of credit, alignment of
drydocking accounting policies, elimination of deferred gains, adjustments to
operating lease expense, pension adjustment, elimination of related party
transactions and the tax adjustments associated with the above, and minority
interests:

<TABLE>
<CAPTION>
                                                                FOR THE YEAR ENDED
                                                                   NOVEMBER 30,
                                                              -----------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)                            2000         1999
-------------------------------------                         ----------   ----------
                                                                    (UNAUDITED)
<S>                                                           <C>          <C>
Net operating revenue.......................................  $2,268,630   $2,500,889
Net income..................................................  $  (12,395)  $   50,648
Basic EPS...................................................  $    (0.23)  $     0.93
Diluted EPS.................................................  $    (0.23)  $     0.92
</TABLE>

6. RESTRUCTING CHARGES AND NON-OPERATING (EXPENSE) INCOME

RESTRUCTURING CHARGES

    In 2000, Stolt Offshore recorded restructuring charges of $3.3 million
related to the integration of ETPM. The reorganization plan has removed
duplicate capacity in the U.K. and SEAME regions. Stolt Offshore recorded
redundancy costs of $0.9 million to eliminate duplicate functions in the U.K.,
and $1.7 million to close the Marseilles, France office, while transferring all
operational and administrative functions for the SEAME region to Paris, France.
Additionally, integration costs of $0.7 million were incurred in relation to the
change of the company name to Stolt Offshore S.A., the introduction of common
information and reporting systems and standardization of processes across the
enlarged Stolt

                                       37
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. RESTRUCTING CHARGES AND NON-OPERATING (EXPENSE) INCOME (CONTINUED)
Offshore organization. In 1999, SNTG and Stolt Offshore recorded restructuring
charges of $2.8 million and $1.6 million, respectively. In order to streamline
operations, SNTG relocated its Haugesund, Norway office to Rotterdam, Holland
and its Somerset, New Jersey operations to Houston, Texas. Stolt Offshore
reorganized its North Sea operations and closed offices in the U.K. and Norway.
Stolt Offshore incurred costs of $1.3 million for redundancy and relocation, and
$0.3 million related to other administrative costs. Substantially all of the
charges were expensed and paid in the years ended November 30, 2000 and 1999.

GAIN ON DILUTION OF INTEREST IN STOLT OFFSHORE

    As a result of the two separate acquisition transactions by Stolt Offshore
during 2000 (Please refer to Note 5--Business Acquisitions, which describes the
acquisitions of Danco A/S and ETPM in further detail.), the Company recognized
total gains amounting to $32.5 million, net of expenses, on the issuance of
Class A shares of Stolt Offshore and the resulting dilution of the Company's
interest in Stolt Offshore.

EFFECT OF ACCOUNTING POLICY CHANGE IN STOLT OFFSHORE

    In August 1998, Stolt Offshore changed its method of accounting for drydock
costs from an accrual basis to a deferral basis. The effect of this change is a
gain of $3.1 million before minority interest which has been included in "Other
non-operating income" for the year ended November 30, 1998.

7. GAIN ON DISPOSAL OF ASSETS, NET

    Gain on disposal of assets is comprised of the following:

<TABLE>
<CAPTION>
                                                              FOR THE YEARS ENDED
                                                                  NOVEMBER 30,
                                                         ------------------------------
(IN THOUSANDS)                                             2000       1999       1998
--------------                                           --------   --------   --------
<S>                                                      <C>        <C>        <C>
Insurance settlement for total loss of SNTG ship.......   $   --     $   --    $10,208
Sale of SNTG ships.....................................      438        748        466
Sale of SNTG tank containers...........................       --      3,783         --
Sale of Stolt Offshore assets..........................      572        290       (342)
Sale of SSF fish farm concessions......................       --         --      5,243
Sale of other assets...................................    1,162        192        809
                                                          ------     ------    -------
                                                          $2,172     $5,013    $16,384
                                                          ======     ======    =======
</TABLE>

8. MINORITY INTEREST

    The minority interest in the consolidated balance sheets and statements of
income of the Company primarily reflects the minority interest in Stolt
Offshore. The Company's economic ownership in Stolt Offshore increased from 45%
to 53% in the year ended November 30, 2000, and from 43% to 45% in the year
ended November 30, 1999.

                                       38
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES

    The 2000, 1999, and 1998, income tax provision consists of the following by
business segment:

<TABLE>
<CAPTION>
                                                     FOR THE YEAR ENDED NOVEMBER 30, 2000
                                                   -----------------------------------------
                                                               STOLT
(IN THOUSANDS)                                       SNTG     OFFSHORE     SSF       TOTAL
--------------                                     --------   --------   --------   --------
<S>                                                <C>        <C>        <C>        <C>
CURRENT:
  U.S............................................  $ 6,036    $    13     $  303    $ 6,352
  Non-U.S........................................    1,227     12,940      4,748     18,915

DEFERRED:
  U.S............................................       --     (5,953)        --     (5,953)
  Non-U.S........................................    4,500    (10,778)     2,338     (3,940)
                                                   -------    -------     ------    -------
Income tax provision (benefit)...................  $11,763    $(3,778)    $7,389    $15,374
                                                   =======    =======     ======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                       FOR THE YEAR ENDED NOVEMBER 30, 1999
                                                     -----------------------------------------
                                                                 STOLT
(IN THOUSANDS)                                         SNTG     OFFSHORE     SSF       TOTAL
--------------                                       --------   --------   --------   --------
<S>                                                  <C>        <C>        <C>        <C>
CURRENT:
  U.S..............................................   $1,065    $    --     $1,239    $ 2,304
  Non-U.S..........................................    5,745      7,159      7,504     20,408

DEFERRED:
  U.S..............................................    2,517    (14,939)        90    (12,332)
  Non-U.S..........................................       --       (729)    (9,170)    (9,899)
                                                      ------    -------     ------    -------
Income tax provision (benefit).....................   $9,327    $(8,509)    $ (337)   $   481
                                                      ======    =======     ======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                      FOR THE YEAR ENDED NOVEMBER 30, 1998
                                                    -----------------------------------------
                                                                STOLT
(IN THOUSANDS)                                        SNTG     OFFSHORE     SSF       TOTAL
--------------                                      --------   --------   --------   --------
<S>                                                 <C>        <C>        <C>        <C>
CURRENT:
  U.S.............................................   $  716    $ 1,361     $   64    $ 2,141
  Non-U.S.........................................    2,244      7,074      1,403     10,721

DEFERRED:
  U.S.............................................      886         --        730      1,616
  Non-U.S.........................................       71      9,102      2,879     12,052
                                                     ------    -------     ------    -------
Income tax provision..............................   $3,917    $17,537     $5,076    $26,530
                                                     ======    =======     ======    =======
</TABLE>

    Substantially all of SNTG's shipowning and ship operating subsidiaries are
incorporated in countries which do not impose an income tax on shipping
operations. Pursuant to the Internal Revenue Code of the U.S., effective for the
Company's fiscal years beginning on or after December 1, 1987, U.S. source
income from the international operation of ships is generally exempt from U.S.
tax if the company operating the ships meets certain requirements. Among other
things, in order to qualify for this exemption, the company operating the ships
must be incorporated in a country which grants an equivalent exemption to U.S.
citizens and corporations and whose shareholders meet certain residency

                                       39
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
requirements. The Internal Revenue Service has agreed that the Company qualifies
for this exemption for years up to and including fiscal 1992, but may review the
Company's qualification for fiscal 1993 onwards.

    The Company believes that substantially all of SNTG's shipowning and ship
operating subsidiaries meet the requirements to qualify for this exemption from
U.S. taxation. For these reasons, no provision for U.S. income taxes has been
made with respect to SNTG's U.S. source shipping income.

    An analysis of the Company's deferred tax assets and liabilities as at
November 30, 2000 and 1999 is set out below. A valuation allowance has been
recorded to reduce the deferred tax asset to an amount that management believes
is more likely than not to be realized:

<TABLE>
<CAPTION>
                                                                    FOR THE YEAR ENDED
                                                                    NOVEMBER 30, 2000
                                                              ------------------------------
                                                                          STOLT
(IN THOUSANDS)                                                  SNTG     OFFSHORE     SSF
--------------                                                --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net operating loss carryforwards............................  $  5,638   $ 61,788   $16,920
Valuation allowances........................................    (4,983)   (20,956)   (1,274)
                                                              --------   --------   -------
Net operating loss carryforwards after valuation
  allowances................................................       655     40,832    15,646
Differences between book and tax depreciation...............   (20,229)   (72,822)    7,930
U.S. State deferred taxes...................................    (2,970)        --        --
Other timing differences--net...............................    10,402     18,952   (22,536)
                                                              --------   --------   -------
Net deferred tax (liability)/asset..........................  $(12,142)  $(13,038)  $ 1,040
                                                              --------   --------   -------
Current deferred tax asset..................................  $     67   $     --   $ 1,509
Non-current deferred tax asset..............................        --     13,705    13,494
Current deferred tax liability..............................        --         --   (13,963)
                                                              --------   --------   -------
Non-current deferred tax liability..........................   (12,209)   (26,743)       --
                                                              --------   --------   -------
                                                              $(12,142)  $(13,038)  $ 1,040
                                                              ========   ========   =======
</TABLE>

                                       40
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
    The current deferred tax asset is included within "Prepaid expenses and
other current assets." The current deferred tax liability is included within
"Other accrued and current liabilities."

<TABLE>
<CAPTION>
                                                                 AS OF NOVEMBER 30, 1999
                                                              ------------------------------
                                                                          STOLT
(IN THOUSANDS)                                                  SNTG     OFFSHORE     SSF
--------------                                                --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net operating loss carryforwards............................  $ 4,696    $33,319    $18,967
Valuation allowances........................................   (3,046)    (4,316)    (5,180)
                                                              -------    -------    -------
Net operating loss carry-forwards after valuation
  allowances................................................    1,650     29,003     13,787
Differences between book and tax depreciation...............  (18,277)   (43,874)     9,867
U.S. State deferred taxes...................................   (2,371)        --
Other timing differences--net...............................    9,031     11,922    (22,774)
                                                              -------    -------    -------
Net deferred tax (liability)/asset..........................  $(9,967)   $(2,949)   $   880
                                                              -------    -------    -------
Current deferred tax asset..................................  $    95    $    --    $ 1,657
Non-current deferred tax asset..............................        6      8,522     13,987
Current deferred tax liability..............................       --         --    (14,764)
Non-current deferred tax liability..........................  (10,068)   (11,471)        --
                                                              -------    -------    -------
                                                              $(9,967)   $(2,949)   $   880
                                                              =======    =======    =======
</TABLE>

    Management believes that net operating losses ("NOLs") carried forward, to
the extent that valuation allowances have not been provided, result in a
realizable tax asset as a result of expected future profitability.

    In 2000 and 1999, SSF recognized $2.6 million and $11.0 million,
respectively, in tax benefits arising from NOLs against which a valuation
allowance previously had been provided. These NOLs now are expected to be
realized in future years.

    Included within the SSF deferred tax liability for 2000 and 1999 are amounts
of $14.0 million and $14.8 million, respectively, arising from the Canadian
operations. These amounts arise primarily from provisions under Canadian tax law
which permit operators of sea farming facilities to report income for tax
purposes using cash-basis accounting, effectively deducting investments in
working capital for tax purposes.

    For SNTG, approximately $12.8 million of NOLs were available at
November 30, 2000 to offset future taxable income in their particular tax
jurisdiction. NOLs of $12.1 million for Brazil can be carried forward
indefinitely, while the remaining NOLs of $0.7 million expire in 2001 and 2002.
For Stolt Offshore, approximately $188.2 million of NOLs were available at
November 30, 2000 to offset future taxable income. These NOLs expire at various
dates through 2019, except those in the United Kingdom, the Netherlands,
Australia and Norway amounting to $109.9 million which can be carried forward
indefinitely. SSF had approximately $51.9 million of NOLs at November 30, 2000
of which

                                       41
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
$4.1 million in the United Kingdom can be carried forward indefinitely. These
NOLs expire at various dates through 2007. The group NOLs expire as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S>                                                           <C>
2001........................................................   $1,976
2002........................................................    7,432
2003........................................................   11,202
2004........................................................   19,027
2005........................................................   16,443
Thereafter..................................................   70,686
</TABLE>

    A reconciliation of income taxes at the U.S. federal tax rate applied to
pre-tax income and the actual income tax provision is shown below:

<TABLE>
<CAPTION>
                                                              FOR THE YEARS ENDED NOVEMBER 30,
                                                              ---------------------------------
(IN THOUSANDS)                                                  2000        1999        1998
--------------                                                ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Income before income tax provision and minority interest....   $19,174     $56,211    $155,418
Non-U.S. source shipping and other income not subject to
  income tax................................................   (65,986)    (22,980)    (48,526)
U.S. source shipping income not subject to income tax.......     6,362          --     (22,993)
Utilization of loss carryforwards...........................   (13,402)    (15,827)    (20,594)
Losses for which no tax benefit is recognized...............    52,654      11,434      10,428
                                                               -------     -------    --------
                                                               $(1,198)    $28,838    $ 73,733
                                                               -------     -------    --------
Tax at U.S. federal rate (35%)..............................   $  (419)    $10,093    $ 25,806
Differences between U.S. and non-U.S. tax rates.............     4,322       1,844      (3,568)
Non-taxable dividend income from non-consolidated joint
  ventures..................................................        --        (751)     (1,758)
Exchange gain...............................................      (593)     (2,526)        (49)
Change in management's estimates of valuation and other
  allowances................................................     2,480      (5,784)      2,266
Imputed interest deduction..................................    (5,142)     (4,030)         --
Differences between book and tax bases......................      (313)        588       2,322
Tax credits from foreign jurisdictions......................        83        (267)        (61)
State and local taxes, net of federal benefit...............     9,067        (148)        311
Non-deductible amortization of goodwill and other
  intangibles...............................................     3,424         926       1,556
Other non-deductible costs, principally travel and
  entertainment expenditures................................       744       1,020         647
Adjustments in respect of prior years.......................     2,286         750          --
Other, net..................................................      (565)     (1,234)       (942)
                                                               -------     -------    --------
Income tax provision........................................   $15,374     $   481    $ 26,530
                                                               =======     =======    ========
</TABLE>

    Withholding and remittance taxes have not been recorded on the undistributed
earnings of SNSA's subsidiaries, which represent substantially all of the
Company's consolidated retained earnings, primarily because, under the current
tax laws of Luxembourg and the countries in which substantially all of SNSA's
subsidiaries are incorporated, no taxes would be assessed upon the payment or
receipt of dividends. Earnings retained by subsidiaries incorporated in those
countries which impose withholding

                                       42
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
or remittance taxes are considered by management to be permanently reinvested in
such subsidiaries. The undistributed earnings of these subsidiaries as of
November 30, 2000 were not significant.

10. INVENTORIES

    Inventories at November 30, 2000 and 1999 consisted of the following:

<TABLE>
<CAPTION>
                                                              STOLT
(IN THOUSANDS)                                      SNTG     OFFSHORE     SSF       TOTAL
--------------                                    --------   --------   --------   --------
<S>                                               <C>        <C>        <C>        <C>
2000
Raw materials...................................    $107     $    --    $  3,397   $  3,504
Consumables.....................................     474      19,260         906     15,821
Work-in-progress................................      44      14,441          --     19,304
Seafood biomass.................................      --          --     111,045    111,045
Finished goods..................................      --          --      15,981     15,981
                                                    ----     -------    --------   --------
                                                    $625     $33,701    $131,329   $165,655
                                                    ====     =======    ========   ========
</TABLE>

<TABLE>
<CAPTION>
                                                              STOLT
(IN THOUSANDS)                                      SNTG     OFFSHORE     SSF       TOTAL
--------------                                    --------   --------   --------   --------
<S>                                               <C>        <C>        <C>        <C>
1999
Raw materials...................................    $ 79     $    --    $ 13,309   $ 13,388
Consumables.....................................     210      14,567       4,065     18,842
Work-in-progress................................      41       6,876          --      6,917
Seafood biomass.................................      --          --      93,312     93,312
Finished goods..................................      64          --       8,538      8,602
                                                    ----     -------    --------   --------
                                                    $394     $21,443    $119,224   $141,061
                                                    ====     =======    ========   ========
</TABLE>

11. RESTRICTED CASH DEPOSITS

    Restricted cash deposits comprise both funds held in a separate Company bank
account, which will be used to settle accrued taxation liabilities, and deposits
made by the Company as security for certain third-party obligations. There are
no significant conditions on the restricted cash balances.

12. SHORT-TERM BANK LOANS AND LINES OF CREDIT

    Loans payable to banks, which amounted to $131.3 million, and $34.1 million
at November 30, 2000 and 1999, respectively, consist principally of drawdowns
under bid facilities, lines of credit and bank overdraft facilities. Amounts
borrowed pursuant to these facilities bear interest at rates ranging from 1.5%
to 9.0% for 2000, and from 5.9% to 8.1% for 1999. The weighted average interest
rate was 7.1% and 7.0% for the years ended November 30, 2000 and 1999,
respectively.

    As of November 30, 2000, the Company had various credit lines, including
committed lines ranging through 2005 totalling $825.1 million, of which
$429.6 million was available for future use. Several of the credit facilities
contain various financial covenants, the effect of which, could limit the
ability to draw funds from time to time. Of the amounts drawn down under these
facilities, $265 million has been classified as long-term debt in connection
with a revolving credit agreement expiring in 2005. The Company has the ability
and the intent to classify the amount drawn under this agreement as long-term
debt.

                                       43
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

    Long-term debt and capital lease obligations, as of November 30, 2000 and
1999, consisted of the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                   2000         1999
--------------                                                ----------   ----------
<S>                                                           <C>          <C>
Senior unsecured notes
  On 11/30/00 interest rates ranged from 6.96% to 10.07%,
    maturities vary through 2013............................  $  521,286   $  538,571
Preferred ship fixed rate mortgages
  On 11/30/00 fixed interest rates ranged from 4.50% to
    8.74%, maturities vary through 2013.....................     291,191      330,572
Preferred ship variable rate mortgages
  On 11/30/00 interest rates ranged from 7.21% to 7.75%,
    maturities vary through 2007............................     180,521       63,321
Economic development and other bonds
  On 11/30/00 interest rates ranged from 4.10% to 4.15%,
    maturing in 2014 and 2018...............................      34,600       34,600
Bank and other notes payable
  On 11/30/00 interest rates ranged from 6.5% to 9.25%,
    maturities vary through 2008............................     359,528      211,403
Capital lease obligations
  On 11/30/00 maturities vary through 2003..................      27,849          936
                                                              ----------   ----------
                                                               1,414,975    1,179,403
Less--current maturities....................................     (67,506)     (62,395)
                                                              ----------   ----------
                                                              $1,347,469   $1,117,008
                                                              ==========   ==========
</TABLE>

    On November 30, 1999, the Company's senior unsecured notes carried fixed
interest rates ranging from 6.96% to 10.07%, preferred ship fixed rate mortgages
had interest rates ranging from 5.42% to 8.69%, preferred ship variable rate
mortgages had interest rates ranging from 4.88% to 6.59%, the economic
development and other bonds had interest rates ranging from 4.40% to 4.70%, and
the bank and other notes payable had interest rates ranging from 6.01% to
12.50%.

    Long-term debt is denominated primarily in U.S. dollars, with $35.5 million
and $8.2 million denominated in other currencies as of November 30, 2000 and
1999, respectively. The Company has hedged a significant portion of the foreign
currency denominated debt exposure with interest rate and foreign exchange
swaps.

                                       44
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS (CONTINUED)
    Annual principal repayments of long-term debt for the five years subsequent
to November 30, 2000 and thereafter are as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S>                                                           <C>
2001........................................................  $   63,584
2002........................................................     138,054
2003........................................................     193,940
2004........................................................     135,382
2005........................................................     396,736
Thereafter..................................................     459,430
                                                              ----------
                                                              $1,387,126
                                                              ==========
</TABLE>

    Agreements executed in connection with certain debt obligations require that
the Company maintains defined financial ratios and also impose certain
restrictions relating, among other things, to payment of cash dividends (see
Note 19), and purchases, redemptions, etc., of capital. The Company, through its
subsidiaries, has debt agreements which include various financial covenants.
Most of the Company's debt agreements provide for a cross default in the event
of a material default in another agreement. In the event of a default that
extends beyond the applicable remedy or cure period, lenders may accelerate
repayment of amounts due to them. Certain of the debt is secured by mortgages on
vessels, tank containers, terminals, and seafood facilities with a net book
value of $1,810.3 million as of November 30, 2000.

    At November 30, 2000, property under capital leases, comprising operating
and other equipment, amounts to $32.8 million at cost. Accumulated amortization
of these leases is $1.9 million.

    Minimum payments under capital lease obligations at November 30, 2000, which
are due primarily in U.S. dollars, are as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S>                                                           <C>
2001........................................................  $ 5,540
2002........................................................   25,339
2003........................................................        3
                                                              -------
Total minimum lease payments................................   30,882
Less: Amount representing interest and executory costs......   (3,033)
                                                              -------
Present value of net minimum lease payments.................  $27,849
                                                              =======
</TABLE>

14. LEASES

OPERATING LEASES

    As of November 30, 2000, the Company was obligated to make payments under
long-term operating lease agreements for tankers, land, terminal facilities,
tank containers, barges, construction support, diving support, survey and
inspection ships, equipment and offices. Certain of the leases contain clauses
requiring payments in excess of the base amounts to cover operating expenses
related

                                       45
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. LEASES (CONTINUED)
to the leased assets. Minimum annual lease commitments and sub-lease income
under agreements which expire at various dates through 2026, and which are
payable in various currencies are as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S>                                                           <C>
2001........................................................  $110,094
2002........................................................    52,675
2003........................................................    25,467
2004........................................................    17,232
2005........................................................    14,425
Thereafter..................................................    30,854
                                                              --------
                                                               250,747
                                                              --------
Less--sub-lease income......................................   (13,348)
                                                              --------
                                                              $237,399
                                                              ========
</TABLE>

    Rental and charter hire expenses under operating lease agreements for the
years ended November 30, 2000, 1999, and 1998 were $117.9 million,
$115.5 million, and $121.1 million, respectively, net of sub-lease income of
$2.9 million, $1.5 million, and $4.0 million, respectively.

15. COMMITMENTS AND CONTINGENCIES

    The Company entered into an agreement with a Spanish shipyard to purchase
six new 22,450 dwt parcel tankers at an approximate cost of $46 million each. As
of November 30, 2000, five of the ships in the Spanish series had been
delivered. The sixth ship in the Spanish series was delivered in December 2000.

    In April 2000, the Company entered into an agreement with Uljanik Shipyard
to complete construction on one new 37,000 dwt parcel tanker at an approximate
cost of $23 million. The ship is scheduled to be delivered in December 2001.

    As of November 30, 2000, the Company had total capital expenditure purchase
commitments outstanding of approximately $158 million for 2001 and future years.

    The French government has investigated Stolt Comex Seaway S.A. of France
alleging violations of French labor and social security legislation, which
resulted during 1998 in a condemnation by the French Supreme Court of Stolt
Comex Seaway S.A. of France and two of its former directors. In addition, a
number of former and present employees have started civil proceedings against
certain subsidiaries of the Company alleging loss of employment and social
security benefits. Some of the proceedings have resulted in judgements. Some of
the judgements have been appealed. While the Company believes that its
subsidiaries have meritorious defenses in the unresolved cases, there can be no
certainty as to the number of claims which may be brought or the amount for
which the Company may eventually be liable with respect thereto. Comex S.A., a
former shareholder of Comex Services S.A. ("Comex"), in an agreement with SNSA
executed on June 5, 1992 for the sale of Comex, agreed to indemnify the Company
with respect to certain aspects of the foregoing. There can be no assurance,
however, as to the amount which the Company may ultimately recover from Comex
S.A. pursuant to such indemnity.

                                       46
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. COMMITMENTS AND CONTINGENCIES (CONTINUED)
    Coflexip S.A. has commenced legal proceedings against three subsidiaries of
Stolt Offshore claiming infringement of a certain patent relating to flexible
flowline laying technology in the U.K. Judgement was given on January 22, 1999
and January 29, 1999. The disputed patent was held valid. The Company appealed
and the Appeal Court maintained the validity of the patent and broadened its
application compared to the High Court decision. The Company has applied for
leave to appeal the Appeal Court decision to the House of Lords. Coflexip S.A.
has claimed damages of approximately $14.4 million. Whether or not Coflexip S.A.
will increase its claim is unknown. The Company has provided in the financial
statements an amount to cover its best estimate of the liability for damages.
The amount of damages is nevertheless uncertain and no assurances can be given
that the provided amount is sufficient.

    In September 1999, Stolt Offshore terminated its charter of the ship, TOISA
PUMA, for default. The Company is currently in arbitration with the owners who
are contesting that the termination was wrongful. The arbitration court has held
that the termination was wrongful. The Company has applied for leave to appeal
the decision to the High Court, which has been denied. Additional appeal
proceedings are now being considered. The charterhire which would have been due
for the terminated charter period is approximately $9.3 million. The owners have
an obligation to mitigate losses. Any charterhire the owners have or should have
received for the vessel during the period and any reduction in costs which they
have or should have realized as a consequence of the termination will reduce the
Company's liability. The Company has provided in the financial statements an
amount to cover liability for damages. The amount of such liability is
nevertheless uncertain and no assurances can be given that the provided amount
is sufficient.

    The Company is a party to various other legal proceedings arising in the
ordinary course of business. The Company believes that none of the matters
covered by such legal proceedings will have a material adverse effect on the
Company's business or financial condition.

    The Company's operations are affected by U.S. and foreign environmental
protection laws and regulations. Compliance with such laws and regulations
entails considerable expense, including ship modifications and changes in
operating procedures. The Company believes that compliance with applicable laws
and regulations has not had, nor is such compliance expected to have, a material
adverse effect upon its competitive position, financial condition or results of
operations.

16. PENSION AND BENEFIT PLANS

    Certain of the U.S. and non-U.S. subsidiaries of the Company have
non-contributory pension plans covering substantially all of their shore-based
employees. The most significant plans are defined benefit plans. Benefits are
based on each participant's length of service and compensation. The Company's
policy is to fully fund its liability.

    The Company provides pension benefits to ship officers employed by the
Company. Group single premium retirement contracts were purchased whereby all
accrued pension liability through June 30, 1986 was fully funded. It is the
Company's intention to fund its liability under this plan and it is considering
various investment alternatives to do this.

                                       47
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. PENSION AND BENEFIT PLANS (CONTINUED)
    Net periodic benefit costs for the Company's defined benefit retirement
plans (including a retirement arrangement for one of the Company's directors)
and other post-retirement benefit plans for the years ended November 30, 2000,
1999, and 1998, consist of the following:

<TABLE>
<CAPTION>
                                                                                                  OTHER POST-
                                                               PENSION BENEFITS                RETIREMENT BENFITS
                                                        ------------------------------   ------------------------------
(IN THOUSANDS)                                            2000       1999       1998       2000       1999       1998
--------------                                          --------   --------   --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>        <C>        <C>
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost..........................................   $6,500     $6,411     $6,300      $272       $268       $293
Interest cost.........................................    7,301      6,845      6,494       513        424        439
Expected return on plan assets........................   (5,824)    (5,870)    (5,608)       --         --         --
Amortization of unrecognized net transition
  liability...........................................      101        211        158       178        178        178
Amortization of prior service cost....................      300        391        347        14         14         14
Recognized net actuarial loss (gain)..................       65        130         14       (24)       (25)        --
Gain recognized due to curtailment....................     (160)       (20)        --        --         --         --
                                                         ------     ------     ------      ----       ----       ----
Net periodic benefit cost.............................   $8,283     $8,098     $7,705      $953       $859       $924
                                                         ======     ======     ======      ====       ====       ====
</TABLE>

    U.S. based employees retiring from the Company after attaining age 55 with
at least ten years of service with the Company are eligible to receive
post-retirement health care coverage for themselves and their eligible
dependents. These benefits are subject to deductibles, co-payment provisions,
and other limitations. The Company reserves the right to change or terminate the
benefits at any time.

    The following tables set forth the change in benefit obligations for the
Company's defined benefit retirement plans and other post-retirement plans and
the change in plan assets for the defined benefit retirement plans. There are no
plan assets associated with the other post-retirement plans.

<TABLE>
<CAPTION>
                                                              FOR THE YEARS ENDED NOVEMBER 30,
                                                          -----------------------------------------
                                                                                    OTHER POST-
                                                                                    RETIREMENT
                                                           PENSION BENEFITS          BENEFITS
                                                          -------------------   -------------------
(IN THOUSANDS)                                              2000       1999       2000       1999
--------------                                            --------   --------   --------   --------
<S>                                                       <C>        <C>        <C>        <C>
CHANGE IN BENEFIT OBLIGATION:
Benefit obligations at beginning of year................  $102,725   $101,635    $6,199     $7,036
Service cost............................................     6,500      6,411       272        268
Interest cost...........................................     7,300      6,845       513        424
Benefits paid...........................................    (3,790)    (3,066)      (48)       (38)
Plan participant contributions..........................       241        266        --         --
Foreign exchange rate changes...........................    (3,382)    (1,257)       --         --
Plan amendments.........................................       926      2,109        --         --
Curtailments and settlements............................      (113)    (2,258)       --         --
Actuarial (gains) and losses............................    (1,876)    (7,960)      410     (1,491)
                                                          --------   --------    ------     ------
Benefits obligation at end of year......................  $108,531   $102,725    $7,346     $6,199
                                                          ========   ========    ======     ======
</TABLE>

                                       48
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. PENSION AND BENEFIT PLANS (CONTINUED)

<TABLE>
<CAPTION>
                                                              FOR THE YEARS ENDED
                                                                 NOVEMBER 30,
                                                              -------------------
                                                               PENSION BENEFITS
                                                              -------------------
(IN THOUSANDS)                                                  2000       1999
--------------                                                --------   --------
<S>                                                           <C>        <C>
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning of year..............  $69,367    $66,697
Actual return on plan assets................................    2,826      3,199
Company contributions.......................................    3,184      4,679
Plan participant contributions..............................      398        266
Foreign exchange rate changes...............................   (2,545)    (1,234)
Curtailments and settlements................................     (659)    (1,174)
Benefits paid...............................................   (3,791)    (3,066)
                                                              -------    -------
Fair value of plan assets at end of year....................  $68,780    $69,367
                                                              =======    =======
</TABLE>

    Amounts recognized in the Company's consolidated balance sheet consist of
the following:

<TABLE>
<CAPTION>
                                                                               AS OF NOVEMBER 30,
                                                                               -------------------
                                                                                   OTHER POST-
                                                          PENSION BENEFITS     RETIREMENT BENEFITS
                                                         -------------------   -------------------
(IN THOUSANDS)                                             2000       1999       2000       1999
--------------                                           --------   --------   --------   --------
<S>                                                      <C>        <C>        <C>        <C>
Funded status of the plan..............................  $(39,552)  $(33,358)  $(7,346)   $(6,199)
Unrecognized net actuarial loss (gain).................     2,974        872    (1,106)    (1,537)
Unrecognized prior service cost........................     2,130      3,166        56         70
Unrecognized net transition liability..................      (159)     1,486     2,135      2,310
                                                         --------   --------   -------    -------
Net amount recognized..................................  $(34,607)  $(27,834)  $(6,261)   $(5,356)
                                                         --------   --------   -------    -------
Prepaid benefit cost...................................  $    606   $  1,377   $    --    $    --
Accrued benefit liability..............................   (39,175)   (33,832)   (6,261)    (5,356)
Intangible asset.......................................     3,962      4,621        --         --
                                                         --------   --------   -------    -------
Net amount recognized..................................  $(34,607)  $(27,834)  $(6,261)   $(5,356)
                                                         ========   ========   =======    =======
</TABLE>

    The projected benefit obligation, accumulated benefit obligation, and fair
value of plan assets of pension plans with accumulated benefit obligations in
excess of plan assets were $42.8 million, $39.1 million, and $46.6 million,
respectively, as of November 30, 2000 and $42.7 million, $37.5 million, and
$41.9 million respectively, as of November 30, 1999.

<TABLE>
<CAPTION>
                                                               FOR THE YEARS ENDED NOVEMBER 30,
                                                ---------------------------------------------------------------
                                                                                     OTHER POST-RETIREMENT
                                                       PENSION BENEFITS                     BENEFITS
                                                ------------------------------   ------------------------------
                                                  2000       1999       1998       2000       1999       1998
                                                --------   --------   --------   --------   --------   --------
<S>                                             <C>        <C>        <C>        <C>        <C>        <C>
WEIGHTED-AVERAGE ASSUMPTIONS
Discount rate.................................   7.22%      7.20%      6.97%      7.75%      7.75%      7.00%
Expected long-term rate of return on assets...   8.95%      8.85%      8.90%        --%        --%        --%
Rate of increase in compensation levels.......   4.18%      4.15%      4.30%      5.00%      5.00%      5.00%
</TABLE>

                                       49
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. PENSION AND BENEFIT PLANS (CONTINUED)
    Health care cost trends assume a 8.5% annual rate of increase in the per
capita cost of covered health care benefits for 2001. The rate is assumed to
decrease gradually to 7.5% for 2002 and remain at that level thereafter. The
effect of a 1% change in these assumed cost trends on the accumulated
post-retirement benefit obligation at the end of 2000 would be an approximate
$0.8 million increase or an approximate $0.7 million decrease and the effect on
the aggregate of the service cost and interest cost of the net periodic benefit
cost for 2000 would be an approximate $0.1 million increase or an approximate
$0.1 million decrease.

                                       50
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

17. CAPITAL STOCK, FOUNDER'S SHARES AND DIVIDENDS DECLARED

    Founder's shares vote on an equal basis with Common shares, and as a
separate class of stock when voting on certain matters requiring a majority of
both classes of stock. The Class B shares are not entitled to vote in matters
requiring shareholder action except where required by Luxembourg law.

    Under the Articles, holders of Common shares, Class B shares and Founder's
shares participate in annual dividends, if any are declared by the Company, in
the following order of priority: (i) ten percent of the stated value thereof
(i.e., $0.10 per share) to Class B shares as the preferred dividend;
(ii) $0.005 per share to Founder's shares and Common shares equally;
(iii) $0.095 per share to Common shares; and (iv) thereafter, Common shares and
Class B shares participate equally in all further amounts.

    Under the Articles, in the event of a liquidation, all debts and obligations
of the Company must first be paid and thereafter all remaining assets of the
Company are paid to the holders of Common shares, Class B shares, and Founder's
shares in the following order of priority: (i) Class B shares to the extent, if
any, of declared but unpaid dividends on such shares, and thereafter rateably to
the full aggregate issuance price thereof; (ii) Common shares rateably to the
extent of the stated value thereof (i.e. $1.00 per share); (iii) Common shares
and Founder's shares participate equally up to $0.05 per share; (iv) Common
shares rateably to the full aggregate issue price thereof; and (v) thereafter,
Common shares and Class B shares participate equally in all remaining assets.

    Class B shares, being non-voting shares, shall also be entitled to such
other priorities and preferences concerning unpaid dividends for past years as
shall be provided by applicable law.

    In January 2000, SNSA announced an offer to Common shareholders providing
the opportunity to exchange Common shares for an equal number of the Company's
Class B shares. The Company also offered to holders of options to purchase
Common shares, the opportunity to elect to receive, immediately following
exercise, a Class B share in exchange for each Common share issuable upon the
exercise of such common option.

    As of November 30, 2000, 7,970,864 Founder's shares had been issued to
Mr. Stolt-Nielsen. Additional Founder's shares are issuable to holders of
outstanding Founder's shares without consideration, in quantities sufficient to
maintain a ratio of Common shares to Founder's shares of 4 to 1. Pursuant to
Luxembourg law, Founder's shares are not considered to represent capital of
SNSA. Accordingly, no stated values for these shares are included in the
accompanying consolidated balance sheets.

    On November 9, 2000, the Board of Directors approved an interim dividend of
$0.125 per Common and Class B share and $0.005 per Founder's share which was
paid on December 20, 2000 to all shareholders of record as of December 6, 2000.

    The Company anticipates, subject to approval at the Annual General Meeting,
that a final dividend for 2000 of $0.125 per share will be paid in May 2001.

    Dividends are recognized in the accompanying financial statements upon final
approval from the Company's shareholders or, in the case of interim dividends,
as paid. The interim dividend declared on November 9, 2000 will be recognized in
fiscal 2001.

18. STOCK OPTION PLAN

    During 1987, the Company adopted the 1987 Stock Option Plan (the "1987
Plan"), under which 2,660,000 Common shares and 1,330,000 Class B shares were
reserved for future issuance. No further

                                       51
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. STOCK OPTION PLAN (CONTINUED)
grants will be issued under the 1987 Plan. During 1997, the Company adopted the
1997 Stock Option Plan (the "1997 Plan"), under which 5,180,000 Common shares,
5,180,000 Class B shares, or any combination thereof not exceeding 5,180,000
shares, were reserved for future issuance.

    Options granted under both Plans may be exercisable for periods of up to ten
years at an exercise price not less than the fair market value per share at the
date of the grant. Options vest 25% on the first anniversary of the grant date,
with an additional 25% vesting on each subsequent anniversary. The Company
accounts for the Plans under APB Opinion No. 25, under which no compensation
cost has been recognized. Had compensation cost for all stock option grants
between 1996 and 2000, including the Plans of the Company and the stock options
of Stolt Offshore, been determined consistent with SFAS No. 123, the Company's
net income and earnings per share would be reduced to the following pro forma
amounts:

<TABLE>
<CAPTION>
                                                              FOR THE YEARS ENDED NOVEMBER 30,
                                                              ---------------------------------
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)                       2000        1999        1998
-----------------------------------------                     ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
NET INCOME:
  As Reported...............................................   $20,114     $46,908     $96,275
  Pro Forma.................................................    15,856      42,833      93,181
BASIC EPS:
  As Reported...............................................   $  0.37     $  0.86     $  1.76
  Pro Forma.................................................      0.29        0.79        1.70
DILUTED EPS:
  As Reported...............................................   $  0.36     $  0.86     $  1.75
  Pro Forma.................................................      0.29        0.78        1.69
</TABLE>

    The effects of applying SFAS No. 123 in this pro forma disclosure are not
indicative of future amounts. SFAS No. 123 does not apply to awards prior to
fiscal year 1996, and additional awards in future years are anticipated.

    The following table reflects activity under the Plans for the years ended
November 30, 2000, 1999, and 1998:

<TABLE>
<CAPTION>
                                                   2000                   1999                   1998
                                           --------------------   --------------------   --------------------
                                                       WEIGHTED               WEIGHTED               WEIGHTED
                                                       AVERAGE                AVERAGE                AVERAGE
                                                       EXERCISE               EXERCISE               EXERCISE
COMMON SHARES                               SHARES      PRICE      SHARES      PRICE      SHARES      PRICE
-------------                              ---------   --------   ---------   --------   ---------   --------
<S>                                        <C>         <C>        <C>         <C>        <C>         <C>
Outstanding at beginning of year.........  1,393,825    $16.15    1,514,775    $16.02    1,164,563    $14.43
Granted..................................         --        --           --        --      419,200     20.13
Exercised................................   (172,512)    12.57      (43,125)    10.83      (39,863)    11.48
Canceled.................................    (31,650)    17.60      (77,825)    16.52      (29,125)    17.63
                                           ---------    ------    ---------    ------    ---------    ------
Outstanding at end of year...............  1,189,663    $16.63    1,393,825    $16.15    1,514,775    $16.02
                                           ---------    ------    ---------    ------    ---------    ------
Exercisable at end of year...............    952,518    $15.90      936,575    $14.57      761,005    $13.26
                                           ---------    ------    ---------    ------    ---------    ------
Weighted average fair value of options
  granted................................               $   --                 $   --                 $ 6.82
                                                        ======                 ======                 ======
</TABLE>

                                       52
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. STOCK OPTION PLAN (CONTINUED)

<TABLE>
<CAPTION>
                                                      2000                  1999                  1998
                                              --------------------   -------------------   -------------------
                                                          WEIGHTED              WEIGHTED              WEIGHTED
                                                          AVERAGE               AVERAGE               AVERAGE
                                                          EXERCISE              EXERCISE              EXERCISE
CLASS B SHARES                                 SHARES      PRICE      SHARES     PRICE      SHARES     PRICE
--------------                                ---------   --------   --------   --------   --------   --------
<S>                                           <C>         <C>        <C>        <C>        <C>        <C>
Outstanding at beginning of year............    992,507    $12.87    633,383     $14.93    670,430     $14.89
Granted.....................................    451,100     14.65    421,500       9.88         --         --
Exercised...................................   (104,226)    12.27    (21,562)     10.83    (20,166)     11.60
Canceled....................................    (27,900)    13.04    (40,814)     15.00    (16,881)     17.23
                                              ---------    ------    -------     ------    -------     ------
Outstanding at end of year..................  1,311,481    $13.48    992,507     $12.87    633,383     $14.93
                                              ---------    ------    -------     ------    -------     ------
Exercisable at end of year..................    523,686    $14.24    456,832     $14.25    400,013     $13.49
                                              ---------    ------    -------     ------    -------     ------
Weighted average fair value of options
  granted...................................               $ 6.05                $ 3.93                $   --
                                                           ======                ======                ======
</TABLE>

    The fair value of each stock option grant is estimated as of the date of
grant using the Black-Scholes option pricing model with the following weighted
average assumptions:

<TABLE>
<CAPTION>
                                                           2000                  1999                  1998
                                                    -------------------   -------------------   -------------------
                                                     COMMON    CLASS B     COMMON    CLASS B     COMMON    CLASS B
                                                    --------   --------   --------   --------   --------   --------
<S>                                                 <C>        <C>        <C>        <C>        <C>        <C>
Risk-free interest rates..........................      --        6.2%        --        4.9%       5.7%          --
Expected lives (years)............................      --        6.5         --        6.5        6.0           --
Expected volatility...............................      --       39.2%        --       38.1%      31.6%          --
Expected dividend yields..........................      --        1.9%        --        1.6%       2.0%          --
</TABLE>

    The following table summarizes information about stock options outstanding
as of November 30, 2000:

<TABLE>
<CAPTION>
                                                      OPTIONS OUTSTANDING             OPTIONS EXERCISABLE
                                             -------------------------------------   ----------------------
                                                             WEIGHTED
                                                             AVERAGE      WEIGHTED                 WEIGHTED
                                                            REMAINING     AVERAGE                  AVERAGE
                                               NUMBER      CONTRACTUAL    EXERCISE     NUMBER      EXERCISE
RANGE OF EXERCISE PRICES                     OUTSTANDING   LIFE (YEARS)    PRICE     EXERCISABLE    PRICE
------------------------                     -----------   ------------   --------   -----------   --------
<S>                                          <C>           <C>            <C>        <C>           <C>
COMMON SHARES:
  $20.125-22.500...........................     383,400         7.06       $20.14      190,075      $20.15
  $16.875-19.083...........................     420,963         5.44        18.26      377,143       18.39
  $8.500-13.167............................     385,300         3.20        11.37      385,300       11.37
                                              ---------         ----       ------      -------      ------
                                              1,189,663         5.23       $16.63      952,518      $15.90
                                              ---------         ----       ------      -------      ------
CLASS B SHARES:
  $17.125-22.500...........................     284,501         5.64       $18.03      239,956      $18.15
  $10.500-16.917...........................     605,018         7.51        13.92      162,243       12.02
  $8.500-9.875.............................     421,962         7.58         9.77      121,487        9.49
                                              ---------         ----       ------      -------      ------
                                              1,311,481         7.13       $13.48      523,686      $14.24
                                              ---------         ----       ------      -------      ------
</TABLE>

                                       53
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. RESTRICTIONS ON PAYMENT OF DIVIDENDS

    On an annual basis, Luxembourg law requires an appropriation of an amount
equal to at least 5% of SNSA's unconsolidated net profits, if any, to a "legal
reserve" within shareholders' equity, until such reserve equals 10% of the
issued share capital mf SNSA. This reserve is not available for dividend
distribution. SNSA's Capital stock and Founder's shares have no par value.
Accordingly, SNSA has assigned a stated value per Common and Class B share of
$1.00. At November 30, 2000, this legal reserve amounted to approximately
$6.3 million based on Common and Class B shares issued on that date. Advance
dividends can be declared, up to three times in any fiscal year (at the end of
the second, third and fourth quarters), by the Board of Directors; however, they
can only be paid after the prior year's financial statements have been approved
by SNSA's shareholders, and after a determination as to the adequacy of amounts
available to pay such dividends has been made by its independent statutory
auditors in Luxembourg. Final dividends are declared by the shareholders once
per year at the Annual General Meeting; both advance and final dividends can be
paid out of any SNSA earnings, retained or current, as well as paid-in surplus,
subject to shareholder approval. Luxembourg law also limits the payment of stock
dividends to the extent sufficient surplus exists to provide for the related
increase in stated capital.

    As of November 30, 2000, the most restrictive covenant within the Company's
loan agreements provides for cumulative limitations on certain payments
including dividend payments, share repurchases, and investments and advances to
non-consolidated joint ventures and other entities if any.

20. FOREIGN EXCHANGE CONTRACTS AND SWAP AGREEMENTS

    All of the Company's derivative activities are over the counter instruments
entered into with major financial institutions for hedging the Company's
committed exposures or firm commitments with major financial credit
institutions. All of the Company's derivative instruments are straightforward
foreign exchange forward contracts, and commodity and interest rate swaps, which
subject the Company to a minimum level of exposure risk. The Company does not
consider that it has a material exposure to credit risk from third parties
failing to perform according to the terms of hedge instruments.

    The following foreign exchange contracts, maturing through November 2003,
were outstanding as of November 30, 2000:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                              PURCHASE      SELL
--------------                                              ---------   --------
<S>                                                         <C>         <C>
Japanese yen..............................................  2,170,133
Norwegian kroner..........................................    674,802
Euro......................................................    151,861
Canadian dollars..........................................     57,296
Australian dollars........................................     54,200
Singapore dollars.........................................     15,016
British pounds sterling...................................               5,602
German marks..............................................               3,646
</TABLE>

    The U.S. dollar equivalent of the currencies which the Company had
contracted to purchase was $308.6 million, and to sell was $9.6 million, as of
November 30, 2000.

                                       54
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20. FOREIGN EXCHANGE CONTRACTS AND SWAP AGREEMENTS (CONTINUED)
    The Company utilizes foreign currency swap contracts to hedge foreign
currency debt into U.S. dollars. During 2000, the Company also entered into oil
futures contracts to hedge a portion of its future bunker purchases.

    The following estimated fair value amounts of the Company's financial
instruments have been determined by the Company, using appropriate market
information and valuation methodologies. Considerable judgement is required to
develop these estimates of fair value, thus the estimates provided herein are
not necessarily indicative of the amounts that could be realized in a current
market exchange:

<TABLE>
<CAPTION>
                                                                       AS OF NOVEMBER 30,
                                                            -----------------------------------------
                                                                   2000                  1999
                                                            -------------------   -------------------
                                                            CARRYING     FAIR     CARRYING     FAIR
(IN MILLIONS)                                                AMOUNT     VALUE      AMOUNT     VALUE
-------------                                               --------   --------   --------   --------
<S>                                                         <C>        <C>        <C>        <C>
FINANCIAL ASSETS:
  Cash and cash equivalents...............................  $  28.8    $  28.8    $  20.4    $  20.4
FINANCIAL LIABILITIES:
  Loans payable to banks..................................    131.3      131.3       34.1       34.1
  Long-term debt and related currency and interest rate
    swaps.................................................  1,403.8    1,387.3    1,178.5    1,155.5
OFF BALANCE SHEET FINANCIAL INSTRUMENTS:
  Foreign exchange forward contracts......................       --       (5.1)        --       (2.3)
  Bunker hedge contracts..................................       --         --         --        0.8
</TABLE>

    The carrying amount of cash and cash equivalents and loans payable to banks
are a reasonable estimate of their fair value. The estimated value of the
Company's long-term debt is based on interest rates as of November 30, 2000 and
1999, using debt instruments of similar risk. The fair values of the Company's
foreign exchange contracts are based on their estimated termination values as of
November 30, 2000 and 1999.

21. SUBSEQUENT EVENTS

SNSA SHARE RESTRUCTURING PLAN

    The Company will hold an extraordinary general meeting of shareholders on
March 6, 2001 to approve a share restructuring plan. The objective of the
reclassification proposal is to create a simplified and more transparent share
capital structure that gives all shareholders a vote on all matters, and will
result in only one class of publicly traded shares. The proposed
reclassification plan would reclassify the currently outstanding non-voting SNSA
Class B shares to Common shares on a one-for-one basis. The existing class of
Founder's shares will remain outstanding and continue to constitute 20% of the
issued voting shares (Common shares and Founder's shares) of SNSA. The holders
of the Founder's shares have agreed to abandon certain special voting rights
currently enjoyed by the Founder's shares including, for example, a separate
class vote for merger transactions. The Founder's shares have only nominal
economic rights and are not considered part of the share capital of the Company.
The reclassified Common shares will be listed in Norway on the Oslo Stock
Exchange and trade as ADRs in the U.S. on Nasdaq.

                                       55
<PAGE>
                     STOLT-NIELSEN S.A. 2000 ANNUAL REPORT

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

21. SUBSEQUENT EVENTS (CONTINUED)
    If shareholders approve this reclassification, SNSA will have outstanding
54.8 million Common shares (which exclude 7.7 million Treasury Common shares)
and 15.6 million Founder's shares. The share restructuring plan does not change
the underlying economic interests of existing shareholders.

STOLT OFFSHORE SHARE RESTRUCTURING PLAN

    On January 23, 2001, Stolt Offshore announced that an extraordinary general
meeting of shareholders will be held on March 6, 2001 to approve a share
restructuring plan. The objective of the share restructuring plan is to create a
simplified and more transparent share capital structure that gives all
shareholders a vote on all matters and to increase the liquidity of the Common
share public float by some 50%. The proposed plan will reclassify the currently
outstanding non-voting Stolt Offshore Class A shares to Common shares on a
one-for-one basis. The reclassified Common shares will be listed in Norway on
the Oslo Stock Exchange and trade as ADRs in the U.S. on Nasdaq.

    If shareholders approve this reclassification, Stolt Offshore will have
outstanding 70.2 million Common shares and 34.0 million Class B shares (which
are economically equivalent to 17.0 million Common shares and are all owned by
SNSA) for a total of 87.2 million Common share equivalents. The share
restructuring plan does not change the underlying economic interests of existing
shareholders.

    If shareholders approve this reclassification, SNSA will maintain its 53%
economic interest and 61% voting interest in Stolt Offshore.

ACQUISITION OF AUSTRALIAN BLUEFIN PTY LTD.

    In December 2000, SSF purchased Australian Bluefin Pty Ltd., a company
involved in the ranching of Southern Bluefin tuna, for a total consideration of
approximately $30 million.

ACQUISITION OF PARAGON ENGINEERING SERVICES INC.

    On January 1, 2001, Stolt Offshore signed a letter of intent to acquire a
majority ownership of Paragon Engineering Services Inc. of Houston from the
current controlling shareholder. This acquisition will further broaden Stolt
Offshore's range of engineering skills and enable Stolt Offshore to undertake
all of the engineering required on many of the large engineering, procurement,
installation and commission type contracts that are expected to come into the
market in the next few years.

                                       56