UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 20-F

(Mark One)

[_]                  REPORT PURSUANT TO SECTION 12(b) OR (g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

[X]               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2002

                                       OR

[_]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
                              --------------------------------------------------

Commission file number 000-49650

                     AKTIESELSKABET DAMPSKIBSSELSKABET TORM
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

                           A/S STEAMSHIP COMPANY TORM
--------------------------------------------------------------------------------
                 (Translation of Registrant's name into English)

                               Kingdom of Denmark
--------------------------------------------------------------------------------
                 (Jurisdiction of incorporation or organization)

          Marina Park, 10 Sundkrogsgade, DK-2100 Copenhagen 0, Denmark
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to section 12(b) of the Act.

      Title of each class                            Name of each exchange
                                                      on which registered

                                      NONE
--------------------------------------------------------------------------------

Securities registered or to be registered pursuant to section 12(g) of the Act.

Common Shares, par value 10 Danish Kroner per share,*
American Depositary Shares (as evidenced
by American Depositary Receipts),
each representing one (1) common share.

--------------------------------------------------------------------------------
                                (Title of class)

* Not for trading,  but only in  connection  with the  registration  of American
Depositary  Shares,  pursuant to the requirements of the Securities and Exchange
Commission.

Securities for which there is a reporting  obligation  pursuant to Section 15(d)
of the Act.

                                      NONE
--------------------------------------------------------------------------------
                                (Title of class)

Indicate the number of  outstanding  shares of each of the  issuer's  classes of
capital  or common  stock as of the close of the  period  covered  by the annual
report.

18,200,000 common shares, par value 10 Danish Kroner per share.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                    Yes |X|                No |_|

Indicate by check mark which financial statement item the registrant has elected
to follow.

                    Item 17 |X|            Item 18 |_|

The Company "Aktieselskabet Dampskibsselskabet Torm" is referred to as "TORM" in
this Annual Report.
<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS.....................IV

ITEM 1.   IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS...............1

ITEM 2.   OFFER STATISTICS AND EXPECTED TIMETABLE.............................1

ITEM 3.   KEY INFORMATION.....................................................1

ITEM 4.   INFORMATION ON THE COMPANY.........................................12

ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS.......................31

ITEM 6.   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.........................47

ITEM 7.   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS..................51

ITEM 8.   FINANCIAL INFORMATION..............................................52

ITEM 9.   THE OFFER AND LISTING..............................................52

ITEM 10.  ADDITIONAL INFORMATION.............................................53

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.........68

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.............70

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES....................70

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
          HOLDERS AND USE OF PROCEEDS........................................70

ITEM 15.  CONTROLS AND PROCEDURES............................................71

ITEM 16.  RESERVED...........................................................71

ITEM 17.  FINANCIAL STATEMENTS...............................................71

ITEM 18.  FINANCIAL STATEMENTS...............................................71

ITEM 19.  EXHIBITS.........................................................F-46

<PAGE>

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     Matters discussed in this report may constitute forward-looking statements.
The  Private  Securities  Litigation  Reform Act of 1995  provides  safe  harbor
protections for  forward-looking  statements in order to encourage  companies to
provide prospective information about their business. Forward-looking statements
include  statements  concerning plans,  objectives,  goals,  strategies,  future
events or performance,  and underlying  assumptions and other statements,  which
are other than statements of historical facts. Torm desires to take advantage of
the safe harbor  provisions of the Private  Securities  Litigation Reform Act of
1995 and is including  this  cautionary  statement in connection  with this safe
harbor legislation. This report and any other written or oral statements made by
us or on our behalf may include  forward-looking  statements,  which reflect our
current views with respect to future events and financial performance. The words
"believe," "expect,"  "anticipate," "intend," "estimate," "forecast," "project,"
"plan,"  "potential,"  "will," "may," "should," and similar expressions identify
forward-looking statements.

     The  forward-looking  statements  in this  report  are based  upon  various
assumptions,  many of which  are  based,  in  turn,  upon  further  assumptions,
including without limitation,  management's  examination of historical operating
trends,  data  contained  in our  records  and other data  available  from third
parties.  Although we believe that these  assumptions were reasonable when made,
because these  assumptions are inherently  subject to significant  uncertainties
and  contingencies  which are  difficult or impossible to predict and are beyond
our  control,  we cannot  assure you that we will  achieve or  accomplish  these
expectations, beliefs or projections.

     In addition to these assumptions and matters discussed elsewhere herein and
in the documents  incorporated by reference  herein,  important factors that, in
our view,  could cause actual results to differ  materially from those discussed
in the  forward-looking  statements  include the strength of world economies and
currencies,  general market  conditions,  including  fluctuations in charterhire
rates and vessel values, changes in demand in the shipping market, including the
effect of changes  in OPEC's  petroleum  production  levels  and  worldwide  oil
consumption and storage,  changes in regulatory  requirements  affecting  vessel
operating including requirements for double hull tankers,  changes in the Torm's
operating  expenses,  including bunker prices,  dry-docking and insurance costs,
changes in  governmental  rules and  regulations  or actions taken by regulatory
authorities,  potential  liability  from pending or future  litigation,  general
domestic  and  international  political  conditions,   potential  disruption  of
shipping routes due to accidents,  political  events or acts by terrorists,  and
other important  factors  described from time to time in the reports filed by us
with the Securities and Exchange Commission, or SEC.

<PAGE>

                                     PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

     Not Applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

     Not Applicable.

ITEM 3. KEY INFORMATION

     Please note: Throughout this document, the "Company",  "we", "us" and "our"
all refer to TORM and its subsidiaries.  We use the term deadweight ton, or dwt,
in describing the size of vessels.  Dwt, expressed in metric tons, each of which
is  equivalent  to 1000  kilograms,  refers to the  maximum  weight of cargo and
supplies that a vessel can carry.

A.   Selected Financial Data

     The following table sets forth our selected consolidated financial data for
each of the periods indicated.  The selected consolidated  financial data should
be read in conjunction  with "Operating and Financial  Review and Prospects" and
the consolidated  financial statement and notes thereto,  all included elsewhere
within this  document.  The selected  consolidated  financial  data includes the
Liner  activities,  which  was sold to  companies  in the A.P.  M0ller  Group on
September  16, 2002.  The results of the  operations  attributable  to the Liner
activities,  which represent a discontinued  operation,  are described in Note 1
and  the  impact  of  this  sale is  summarized  in Note 16 to our  consolidated
financial statements included herein.

     The consolidated financial statements have been prepared in accordance with
Danish  generally  accepted  accounting  principles,  or GAAP,  which differs in
certain  respects from U.S. GAAP. The  differences  between Danish GAAP and U.S.
GAAP applicable to the historical financial statements are summarized in Note 17
to the consolidated financial statements included herein.

<TABLE>
<CAPTION>
                                                            For the year ended December 31
                                             -----------------------------------------------------------------------------
                                                1998             1999             2000             2001          2002
                                                ----             ----             ----             ----          ----
                                            (restated)(1)   (restated)(1)   (restated)(1)     (restated)(1)
                                                                          (in thousands of DKK)
<S>                                          <C>              <C>              <C>              <C>              <C>
Statement of Operations Data:
Net revenue                                   1,654,301        1,440,683        2,158,671        2,583,351       1,948,036
Port expenses, Bunkers, Charter Hire and
Technical Running costs                      (1,377,851)      (1,220,373)      (1,545,801)      (1,792,776)     (1,616,391)
                                             ----------       ----------       ----------       ----------      ----------
Net earnings from shipping activities
(Gross profit)                                  276,450          220,310          612,870          790,575         331,645
Profit on sale of vessels and interests            (934)               -           12,263           92,960          81,164
Administrative expenses                         (65,984)         (64,002)         (84,418)        (129,535)       (115,890)
Other operating income                           20,266           29,913           45,305           60,197          55,228
Depreciation and write downs (2)               (471,893)        (205,202)        (220,727)        (159,160)       (145,357)
                                             ----------       ----------       ----------       ----------      ----------
Profit (loss) before financial items           (242,095)         (18,981)         365,293          655,037         206,790
Financial items                                 (87,421)        (125,788)        (156,737)        (101,444)        (91,655)
                                             ----------       ----------       ----------       ----------      ----------
Profit (loss) before tax                       (329,516)        (144,769)         208,556          553,593         115,135
Tax on profit                                   111,919           56,461          (53,298)        (166,018)        360,190
                                             ----------       ----------       ----------       ----------      ----------
Profit (loss) after tax                        (217,597)         (88,308)         155,258          387,575         475,325
Extraordinary items (3)                          68,633                -                -                -               -
                                             ----------       ----------       ----------       ----------      ----------
Net profit (loss) for the year                 (148,964)         (88,308)         155,258          387,575         475,325
                                             ----------       ----------       ----------       ----------      ----------

Balance sheet data (as of end of period):
Total assets (4)                              3,606,507        3,929,699        3,592,900        3,619,267       4,109,294
Long term liabilities                         2,088,509        2,522,346        1,951,288        1,519,743       1,735,464
Shareholders' equity                            886,767          515,050          601,735          920,354       1,719,097
Common shares                                   182,000          182,000          182,000          182,000         182,000
No. of shares outstanding (5)                18,200,000       18,200,000       18,200,000       18,200,000      18,200,000
                                             ----------       ----------       ----------       ----------      ----------

Other financial data
Dividends declared per share                       0.6               0.0              2.0              4.0             2.0
Dividends declared per share-USD (6)               0.1               0.0              0.3              0.6             0.3

U.S. GAAP financial data
Profit (loss) from continuing
operations before income taxes and
discontinued operations                          (8)            (176,548)         140,587          526,983          19,591
Tax benefit (expense) on profit                  (8)              67,786          (34,710)        (160,616)        (27,745)
Profit (loss) from continuing operations         (8)            (108,762)         105,877          366,367          (8,154)
Profit (loss) from discontinued
operations (7)                                   (8)                (750)           3,855            8,477          93,726

Profit (loss)                                    (8)            (109,512)         109,732          374,844          85,572
Earnings (loss) per share - basic:
Profit (loss) from continuing operations         (8)                (6.0)             5.8             20.9            (0.5)
Profit (loss) from discontinuing
operations                                       (8)                (0.0)             0.2              0.5             5.4
Profit (loss)                                    (8)                (6.0)             6.0             21.4             4.9
Earnings (loss) per share - diluted:
Profit (loss) from continued operations          (8)                (6.0)             5.8             20.9            (0.5)
Profit (loss) from discontinued
operations                                       (8)                (0.0)             0.2              0.5             5.4
Profit (loss)                                    (8)                (6.0)             6.0             21.4             4.9
Total assets                                     (8)           4,340,133        4,030,941        4,067,887       3,985,551
Long term debt (including capital lease
obligations)                                     (8)           2,522,346        1,951,288        1,519,743       1,735,464
Shareholders' equity                             (8)             866,474        1,032,118        1,351,725       1,196,372
No. of shares outstanding                        (8)          18,200,000       18,200,000       18,200,000      18,200,000

(1)  We changed our accounting  policies on January 1, 2002 through  restatement due to enactment of the new Danish Financial
     Statements  Accounts  Act as per January 1, 2002.  The  following  changes have taken place:  (1)  financial  leases are
     measured at their present value at inception and  depreciated  over their  estimated  lives,  (2) lease  obligations are
     recognized as a liability in the balance sheet,  (3) gains related to sale and lease back  transactions are deferred and
     amortized, (4) gains related to swaps of ownership in vessels are recognized in the income statement, except for similar
     vessels,  (5) dividends are  recognized at the time of declaration  at the Annual  General  Meeting,  (6) own shares are
     recognized directly as a part of shareholders' equity,  derivative financial instruments are recognized at fair value in
     the balance  sheet,  and (7)  financial  liabilities  related to the  financing  of vessels  are stated in U.S.  dollars
     translated  to DKK at the  balance  sheet  date,  the  unrealised  exchange  gain/loss  is  recognized  directly  in the
     shareholders' equity.

(2)  The write down to fair market value  represents an impairment of certain  vessels in 1998.  There were no write-downs in
     the other periods presented.

(3)  The  extraordinary  items  represents a distribution of previously  paid insurance  premiums from the liquidation of the
     Danish War Risk Insurance Fund of approximately  DKK 68.7 million and the costs of shutting down our Hong Kong office of
     DKK 3.8 million for the year ended December 31, 1998.

(4)  Total assets for each period  includes  cash and bonds that are  designated  to serve as  collateral  for certain of our
     borrowings.  This was DKK 186 million as of December 31, 2002,  DKK 184 million as of December 31, 2001, DKK 207 million
     as of December  31,  2000,  DKK 246 million as of December  31, 1999 and DKK 243 million as of December  31,  1998.  See
     "Operating and Financial Review and Prospects" for further discussion.

(5)  Shares outstanding as of December 31, 2002 include 881,368 shares that we purchased and hold as own shares, reflected in
     shareholders'  equity.  As of December 31, 2001 we held 871,468 own shares whereas no shares were held in 1998, 1999 and
     2000.

(6)  The dividends in U.S. dollars are converted to U.S. dollars based on the exchange rate in place at the date of payment.

(7)  Profit (loss) from  discontinued  operations  for 2002  includes the gain on disposal of the Liner  activities of DKK 63
     million.

(8)  U.S. GAAP information is not available for any period prior to January 1, 1999.
</TABLE>

EXCHANGE RATE INFORMATION

         The  following  tables  show,  for  the  periods   indicated,   certain
information  regarding  the exchange rate between the Danish Kroner and the U.S.
dollar,  based on the noon buying rate in New York City for cable  transfers  of
DKK as certified for customs  purposes by the Federal  Reserve Bank of New York,
expressed in DKK per U.S.  dollar.  These rates may differ from the actual rates
used  in the  preparation  of  our  financial  statements  and  other  financial
information appearing in this report.

                                                DKK per U.S. dollar
                                     High        Low      Average(1)  Period End
     Year ended December 31,

1998 ..........................     7.0705      6.1195      6.7030      6.3625
1999 ..........................     7.4310      6.3070      6.9900      7.3950
2000 ..........................     9.0050      7.2080      8.0953      7.9442
2001 ..........................     8.8900      7.8260      8.3710      8.3529
2002 ..........................     8.6470      7.0850      7.8862      7.0850

----------
(1)  The average of the  exchange  rates on the last  business  day of each full
     month during the relevant period.

                                                         DKK per U.S. dollar
                                                         -------------------
                                                          High         Low
                                                         ------       ------
Month ended

January 2002 ........................................    8.6470       8.2330
February 2002 .......................................    8.6275       8.4675
March 2002 ..........................................    8.5875       8.4130
April 2002 ..........................................    8.4870       8.2375
May 2002 ............................................    8.2410       7.9290
June 2002 ...........................................    7.9140       7.5170
July 2002 ...........................................    7.6350       7.3190
August 2002 .........................................    7.7040       7.5160
September 2002 ......................................    7.6720       7.4570
October 2002 ........................................    7.6540       7.5225
November 2002 .......................................    7.5050       7.3313
December 2002 .......................................    7.4795       7.0850
January 2003 ........................................    7.1684       6.8450
February 2003 .......................................    6.9375       6.8345
March 2003 ..........................................    7.0480       6.7140
April 2003 ..........................................    6.9975       6.6400
May 2003 ............................................    6.6022       6.2625

On June 24,  2003,  the  exchange  rate  between the Danish  Kroner and the U.S.
dollar was 6.4580.

B. Capitalization and Indebtedness

     Not Applicable.

C. Reason for the Offer and Use of Proceeds

     Not Applicable.

D. Risk Factors

     Some of the following risks relate  principally to the industry in which we
operate and our  business in general.  Other  risks  relate  principally  to the
securities  market and ownership of our American  Depositary Shares or ADSs. Any
of the  risk  factors  could  materially  and  adversely  affect  our  business,
financial condition or operating results and the trading price of our ADSs.

     Additional  risks  and  uncertainties  that we are not  aware of or that we
currently  believe  are  immaterial  may also  adversely  affect  our  business,
financial condition, liquidity or results of operation.

INDUSTRY SPECIFIC RISK FACTORS

     The cyclical nature of the shipping  industry may lead to volatile  changes
in charter rates and vessel values, which may adversely affect our earnings

     If the shipping  industry,  which has been and should remain  cyclical,  is
depressed when our vessels' leases, or charters, expire, or when we want to sell
a vessel,  our earnings and  available  cash flow may  decrease.  Our ability to
re-charter  our  vessels  on the  expiration  or  termination  of their  current
charters and the charter rates payable under any renewal or replacement charters
will depend upon, among other things,  economic conditions in the tanker market.
Fluctuations  in charter  rates and vessel  values  result  from  changes in the
supply and demand for vessel  capacity  and changes in the supply and demand for
the cargo that we carry,  including  oil and dry bulk products such as grain and
coal.

     In  addition,  our ability to sell a vessel and the amount of the  proceeds
from such a sale will depend on economic  conditions  in the shipping  industry.
The shipping  industry has experienced  fluctuations in charter rates and vessel
values resulting from changes in the demand for cargoes and in vessel capacity.

     The  factors  affecting  the supply and demand for  vessels  are beyond our
control, and the nature, timing and degree of changes in industry conditions are
unpredictable.  The factors that  influence  demand for tanker and bulk capacity
include:

     o    demand for the products that our vessels carry;

     o    global and regional economic conditions;

     o    the distance oil and oil products are to be moved by sea;

     o    changes in seaborne and other transportation patterns;

     o    efficiency of the world fleet;

     o    government and industry regulation;

     o    alternative energy sources; and

     o    environmental concerns.


     The factors that influence the supply of tanker and bulk capacity include:

     o    the number of newbuilding deliveries;

     o    the scrapping rate of older vessels and single hull vessels;

     o    the number of vessels that are out of service;

     o    the demand for oil and oil products;

     o    political changes and armed conflicts;

     o    developments in international trade;

     o    changes in seaborne and other transportation patterns; and

     o    market expectations.

     Our revenues  experience  seasonal  variations that may affect our earnings
and financial performance

     We operate our tankers in markets that have historically exhibited seasonal
variations in demand and, therefore, charter rates. Tanker markets are typically
stronger in the winter  months in the northern  hemisphere  due to increased oil
consumption.  In addition,  unpredictable  weather patterns in the winter months
tend to disrupt vessel scheduling. The oil price volatility resulting from these
factors has historically led to increased oil trading activities.

     If we violate  environmental laws or regulations,  the resulting  liability
may significantly and adversely affect our earnings and financial condition

     Our  operations  are subject to  extensive  regulation  designed to promote
tanker  safety,  prevent  cargo and bunker  spills  and  generally  protect  the
environment. Local, national and foreign laws, as well as international treaties
and  conventions,  can subject us to material  liabilities in the event that our
vessels release oil and oil products or other hazardous substances. For example,
the United  States Oil  Pollution  Act of 1990,  or OPA,  provides  that owners,
operators and bareboat  charterers are strictly  liable for the discharge of oil
in U.S. waters,  including the 200 nautical mile zone off each coast of the U.S.
OPA provides for  unlimited  liability in some  circumstances,  such as a vessel
operator's gross negligence or willful  misconduct.  However, in most cases, OPA
limits  liability  to the  greater  of $1,200 per gross ton or $10  million  per
vessel.  OPA also  permits  states to set their own  penalty  limits.  Most U.S.
states bordering  navigable  waterways impose unlimited liability for discharges
of oil in their waters.  The International  Maritime  Organization,  or IMO, has
adopted a similar  liability  scheme that may impose  strict  liability  for oil
spills,  subject  to limits  that do not apply if the  release  is caused by the
vessel owner's intentional or reckless conduct.

     U.S.  law,  the  law in  many  of the  nations  in  which  we  operate  and
international treaties and conventions that impact our operations also establish
strict rules  governing  vessel  safety and  structure,  training,  inspections,
financial  assurance for potential  cleanup  liability and other matters.  These
requirements  can limit our ability to operate  our  vessels  and  substantially
increase our operating costs.

     We believe that  regulation of the tanker  industry will continue to become
more  stringent  and more  expensive  for our  competitors  and us.  Substantial
violations of applicable  requirements or a catastrophic release from one of our
vessels  could have a material  adverse  impact on our  financial  condition and
results of operations. More stringent maritime safety rules are also more likely
to be imposed  worldwide  as a result of the recent oil spill in  November  2002
relating  to the loss of the M.T.  Prestige,  a 26-year old  single-hull  tanker
owned by a company not affiliated  with us.  Additional laws and regulations may
also be adopted that could limit our ability to do business or increase the cost
of our doing  business  and that  could have a  material  adverse  effect on our
operations.  Government  regulation  of  tankers,  particularly  in the areas of
safety and environmental impact may change in the future and require us to incur
significant capital expenditure on our vessels to keep them in compliance.

     Because the market value of our vessels may fluctuate significantly, we may
incur losses when we sell vessels, which may adversely affect our earnings

     The fair market value of vessels may increase and decrease depending on the
following factors:

     o    general  economic  and  market   conditions   affecting  the  shipping
          industry;

     o    competition from other shipping companies;

     o    types and sizes of vessels;

     o    other modes of transportation;

     o    cost of newbuildings;

     o    governmental or other regulations;

     o    age of vessels;

     o    prevailing level of charter rates; and

     o    technological advances.

     If we sell a vessel for less than its  carrying  value,  we will  realize a
loss that will affect our results of operations.

COMPANY SPECIFIC RISK FACTORS

     Servicing  our debt limits  funds  available  for other  purposes and if we
cannot service our debt, we may lose some or all of our vessels

     We must  dedicate a large part of our cash flow from  operations  to paying
principal and interest on our indebtedness. These payments limit funds available
for working capital,  capital  expenditures  and other purposes.  Our debt level
also makes us vulnerable to economic  downturns and adverse  developments in our
business. If we expand our fleet, we will need to take on additional debt, which
would increase our ratio of debt to equity.  Our inability to service debt could
also lead to acceleration of our debt and the foreclosure of all or a portion of
our fleet.

     Certain of our loan agreements  contain  restrictive  covenants,  which may
limit our liquidity and corporate activities and prevent proper service of debt,
which could result in the loss of our vessels

     Some loan agreements  impose operating and financial  restrictions upon us.
These restrictions may limit our ability to:

     o    incur additional indebtedness;

     o    create liens on our assets;

     o    sell our subsidiaries;

     o    make investments;

     o    engage in mergers or acquisitions;

     o    pay dividends and make capital expenditures;

     o    change the management of our vessels or terminate or materially  amend
          the management agreement relating to each vessel; and

     o    sell our vessels.

     We may need  permission  from our lenders in order for us to engage in some
corporate  actions.  Our lenders'  interests  may be different  from ours and we
cannot  guarantee  that we will be able to obtain our lenders'  permission  when
needed. This may prevent us from taking actions that are in our best interest.

     Terrorist  attacks,  such as the attacks on the United  States on September
11, 2001, and other acts of violence or war may affect the financial markets and
our business, results of operations and financial condition.

     Terrorist attacks such as the attacks on the United States on September 11,
2001 and the United States' continuing response to these attacks, as well as the
threat of future terrorist attacks,  continues to cause uncertainty in the world
financial  markets.  The recent  conflict in Iraq may lead to additional acts of
terrorism and armed conflict  around the world,  which may contribute to further
economic  instability  in the global  financial  markets,  including  the energy
markets.  These  uncertainties could also adversely affect our ability to obtain
additional financing on terms acceptable to us or at all.

     Future terrorist attacks, such as the attack on the m.t. Limburg in October
2002, may also  negatively  affect our  operations  and financial  condition and
directly  impact our vessels or our customers.  Future  terrorist  attacks could
result in increased volatility of the financial markets in the United States and
globally and could result in an economic  recession in the United  States or the
world.  Any of these  occurrences  could have a material  adverse  impact on our
operating results, revenue, and costs.

     Our earnings may be adversely affected if we do not successfully employ our
vessels on time charters, in pools or take advantage of the current spot market

     We employ the majority of our vessels on spot voyage charters or short term
time charters.  Our operating  results will  therefore  depend on the prevailing
charter rates in a given time period.  Charter rates are based in part on supply
and demand and are extremely  competitive.  Significant  fluctuations in charter
rates will result in significant  fluctuations in the utilization of our vessels
and our profitability.  Although we charter out some of our vessels on long term
time  charters  when we want to lock in  favorable  charter  rates and  generate
predictable revenue streams, our vessels that are committed to time charters may
not be available  for spot voyages  during an upswing in the shipping  industry,
when spot voyages might be more  profitable.  We are impacted by any increase or
decrease in market rates.  If rates were to decrease  significantly,  we may not
utilize our fleet fully and our earnings could be adversely impacted.

     We may be unable to attract and retain key  management  personnel and other
employees in the tanker industry,  which may negatively affect the effectiveness
of our management and our results of operations

     Our  management  personnel  make key  decisions to maximize our revenue and
earnings in this highly volatile and cyclical industry. Our success will depend,
in part, on our ability to hire and retain key members of our  management  team.
The  loss of any of  these  individuals  could  adversely  affect  our  business
prospects and financial condition.  Difficulty in hiring and retaining qualified
personnel could adversely affect our results of operations.

     Our vessels may suffer damage and we may face unexpected  dry-dock  repairs
that could affect our cash flow and financial condition

     If our owned or bareboat chartered in vessels suffer damage,  they may need
to be  repaired at a  dry-docking  facility.  The costs of dry-dock  repairs are
unpredictable and can be substantial.  We may have to pay dry-docking costs that
are not covered by our insurance, which would decrease earnings.

     Purchasing  and  operating  second-hand  vessels  may  result in  increased
operating costs, which could adversely affect our earnings

     We own both vessels constructed for us directly by builders and second-hand
vessels purchased from other owners.  While we inspect second-hand vessels prior
to purchase,  this does not normally  provide us with the same  knowledge  about
their  condition  that we would have had if these vessels had been built for and
operated  exclusively  by  us.  Generally,  we do not  receive  the  benefit  of
warranties from the builders if we buy vessels older than one year.

     In  general,  the costs to  maintain a vessel in good  operating  condition
increase with the age of the vessel. As of June 15, 2003, our fleet of owned and
long term  chartered  vessels  included  six vessels  more than 10 years of age.
Older vessels are typically less fuel  efficient than more recently  constructed
vessels due to improvements in engine and hull  technology.  After 15 years, the
majority of charterers and oil companies impose  restrictions on vessels,  which
makes it more  difficult  to trade the  vessels  with  optimal  flexibility.  In
addition,  these older vessels must meet certain hull thickness tests,  however,
we still  consider a useful  lifetime of 25 years to be the best estimate of the
economic lifetime of a vessel.  Furthermore,  cargo insurance rates increase for
vessels over 15 years of age, making them less desirable to charterers.

     Governmental  regulations,  safety or other equipment  standards related to
the age of a vessel may require expenditures for alterations, or the addition of
new  equipment,  to our vessels and may restrict the type of activities in which
the vessels may engage.  We cannot assure you that,  as our vessels age,  market
conditions  will  justify  such  expenditures  or  enable  us  to  operate  them
profitably for the remainder of their useful life.

     Risks involved with operating ocean-going vessels could affect our business
and reputation, which would adversely affect our revenues

     The operation of an ocean-going  vessel carries inherent risks. These risks
include the possibility of:

     o    marine disaster;

     o    environmental accidents;

     o    cargo and property losses or damage; and

     o    business interruptions caused by mechanical failure, human error, war,
          terrorism,  piracy,  political  action  in  various  countries,  labor
          strikes, or adverse weather conditions.

     Any of these  circumstances or events could increase our costs or lower our
revenues. The involvement of one or more of our vessels in an oil spill or other
environmental  disaster may harm our  reputation  as a safe and reliable  vessel
operator.

     We may not have  adequate  insurance to compensate us if one of our vessels
is involved in an accident

     We procure  insurance for our fleet against those risks that we believe the
shipping  industry commonly insures against.  These insurances  include hull and
machinery insurance, protection and indemnity insurance, including environmental
damage  and  pollution  insurance  coverage,  and war risk  insurance.  We carry
insurance  against loss of hire as well.  We can give no  assurance  that we are
adequately  insured  against  all risks.  We may not be able to obtain  adequate
insurance coverage at reasonable rates for our fleet in the future. The insurers
may not pay particular claims.  Our insurance  policies contain  deductibles for
which we will be  responsible,  limitations  and  exclusions,  which although we
believe are standard in the shipping  industry,  may  nevertheless  increase our
costs or lower our revenue.

     Maritime claimants could arrest our vessels, which could interrupt our cash
flow

     Crew  members,  suppliers  of goods and  services to a vessel,  shippers of
cargo and other  parties may be entitled to a maritime  lien against that vessel
for  unsatisfied  debts,  claims or damages.  In many  jurisdictions  a maritime
lienholder may enforce its lien by arresting a vessel and commencing foreclosure
proceedings.  The  arrest  or  attachment  of one or more of our  vessels  could
interrupt our cash flow and require us to pay a substantial sum of money to have
the arrest lifted.

     In addition, in some jurisdictions, such as South Africa, under the "sister
ship"  theory of  liability,  a  claimant  may arrest  both the vessel  which is
subject to the claimant's  maritime lien and any "associated"  vessel,  which is
any vessel owned or controlled by the same owner.  Claimants could try to assert
"sister ship"  liability  against one vessel in our fleet for claims relating to
another of our vessels.

     Governments could requisition one or more of our vessels during a period of
war or emergency, resulting in loss of earnings

     A government could requisition for title or seize our vessels.  Requisition
for title  occurs when a  government  takes  control of a vessel and becomes her
owner. Also, a government could requisition one or more of our vessels for hire.
Requisition  for hire occurs  when a  government  takes  control of a vessel and
effectively  becomes  her  charterer  at  dictated  charter  rates.   Generally,
requisitions occur during a period of war or emergency.  Government  requisition
of one or more of our vessels could negatively impact our revenues.

     Our  operations  expose  us to global  risks  that may  interfere  with the
operation of our vessels

     We are an  international  company  and  conduct  our  operations  globally.
Changing economic,  political and governmental conditions in the countries where
we are engaged in business or where our vessels are registered affect us. In the
past, political conflicts, particularly in the Arabian Gulf, resulted in attacks
on vessels,  mining of waterways  and other  efforts to disrupt  shipping in the
area. Acts of terrorism and piracy have also affected vessels trading in regions
such as the South China Sea and West Africa.  Following the terrorist attacks in
New York City on  September  11,  2001 and the  military  response by the United
States,  the  likelihood  of acts of  terrorism  in the Middle  East  region and
Southeast Asia may increase as shown by the attack on the m.t.  Limburg in Yemen
in October 2002, and our vessels trading in those areas may face higher risks of
being attacked.  Future  hostilities or other  political  instability in regions
where our vessels trade could affect our trade patterns and adversely affect our
operations and performance.

     Because we generate nearly all of our revenues in U.S.  dollars,  but incur
some of our  expenses  in Danish  Kroner  and other  currencies,  exchange  rate
fluctuations could hurt our results of operations

     As of 2002,  we generated  nearly all of our  revenues in U.S.  dollars but
incurred approximately 9% of our expenses in currencies other than U.S. dollars,
including  Danish Kroner.  A change in exchange rates could lead to fluctuations
in reported net income due to changes in the value of the Danish Kroner relative
to the U.S. dollar.

     Interest rate  fluctuations  may  significantly  affect our loan  payments,
which could adversely affect our financial condition

     As of December 31, 2002, all of our loans bore interest at floating  rates.
Increases in prevailing  rates could  increase the amounts that we would have to
pay to our lenders.  As of December 31, 2002,  we had entered into interest swap
agreements  expiring  between  2003 and 2007 for  approximately  64% of the then
outstanding  principal  amounts  of our  loans  that may  mitigate  some of this
exposure.  However, increases in interest rates will increase our payments under
loans not covered by the cap and swap  agreements and may negatively  affect our
earnings.

     Because we are a foreign corporation, you may not have the same rights that
a creditor of a U.S. corporation may have

     Our investors may have more difficulty in protecting their interests in the
face of actions by the management,  directors or controlling  stockholders  than
would   stockholders   of  a  corporation   incorporated   in  a  United  States
jurisdiction.  In addition, the executive officers and administrative activities
and assets of the Company are located outside the United States. As a result, it
may be more  difficult  for  investors to effect  service of process  within the
United  States upon the  Company,  or to enforce  both in the United  States and
outside the United States judgments against the Company in any action, including
actions predicated upon the civil liability provisions of the federal securities
laws of the United States.

     It may be difficult to serve process on or enforce a United States judgment
against our officers, our directors and us

     We are a Danish  company and our executive  offices are located  outside of
the United  States.  Our officers and directors and some of the experts named in
this  registration  statement reside outside of the United States.  In addition,
substantially  all of our assets and the assets of our  officers,  directors and
experts  are located  outside of the United  States.  As a result,  you may have
difficulty  serving  legal  process  within the United  States upon us or any of
these persons or enforcing any judgments  obtained in U.S.  courts to the extent
assets located in the United States are  insufficient  to satisfy the judgments.
In addition,  there is uncertainty as to whether the courts of Denmark would (1)
enforce  judgments of United States courts  obtained  against us or our officers
and directors  predicated on the civil liability provisions of the United States
federal or state securities  laws, or (2) entertain  original actions brought in
Danish  courts  against us or our officers and  directors  predicated  on United
States federal or state  securities  laws. As a result,  it may be difficult for
you to enforce judgments obtained in United States courts against our directors,
officers and non-U.S. experts.

     There may be no active public market for you to resell our ADSs

     The price of our ADSs may be  volatile,  and may  fluctuate  due to factors
such as:

     o    actual or anticipated fluctuations in our financial results;

     o    mergers and strategic alliances in the shipping industry;

     o    market conditions in the industry;

     o    changes in government regulation;

     o    fluctuations  in our quarterly  revenues and earnings and those of our
          publicly held competitors;

     o    shortfalls in our operating results from levels forecast by securities
          analysts;

     o    announcements concerning us or our competitors; and

     o    the general state of the securities market.

     Historically,  the  shipping  industry  has been highly  unpredictable  and
volatile.  The market for ADSs in the shipping industry may be equally volatile.
The  Copenhagen  Stock  Exchange  is  smaller  and less  liquid  than the  major
securities  exchanges or markets in the United States. The trading volume of our
shares on the Copenhagen Stock Exchange has been volatile. ADSs representing our
common  shares have been traded in the United  States only since April 16, 2002,
and it may be hard to predict future trading levels or volatility. Consequently,
you may not be able to sell ADSs at the time and at the price you desire.

     Holders  of  ADSs  may  experience  delays  in  receiving  information  and
materials that holders of our common shares may not

     The ADSs are securities  that have been issued by a depositary with whom we
have deposited our common shares. The depositary is responsible for distributing
notices and voting  materials  to holders of the ADSs.  If there is any delay in
such  distributions  on the part of the  depositary,  you may not  receive  such
dividends  or  materials  concurrently  with  holders  of our  common  shares in
Denmark,  and may not receive  such  materials  in time for you to instruct  the
depositary to vote.

     You may receive a smaller  dividend  than what you expected to receive when
the dividend was approved

     Under  Danish  law,  the  board of  directors  proposes  dividends  and the
shareholders  vote whether to accept the proposal or to lower the  dividend.  We
will pay any  dividends in Danish Kroner to our  depository  agent for the ADSs,
and our  depository  agent will  convert  the amounts  into U.S.  dollars at the
relevant  exchange rate and distribute the dividend to you. If the Danish Kroner
depreciates  against the U.S. dollar before our depository agent distributes the
dividend,  you may receive a smaller  dividend than what you expected to receive
at the time the dividend was approved by shareholders.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

     We are  Aktieselskabet  Dampskibsselskabet  Torm, a Danish shipping company
founded in 1889 under the Danish Companies Act that is engaged  primarily in the
ownership and operation of product  tankers and bulk  carriers.  We also provide
offshore  marine  service  vessels,  but intend to cease this  service  upon the
expiration of the  chartered in vessel in 2003.  Our product  tankers  primarily
carry refined products such as naphtha,  gasoline, gas oil, jet fuel, and diesel
oil. Our dry bulk vessels carry  commodities  such as coal,  iron ore and grain.
Our vessels  trade  worldwide.  Our  registered  office and  principal  place of
business is at Marina Park, 10  Sundkrogsgade,  DK-2100,  Copenhagen 0, Denmark.
Our telephone number is +45 39179200. All the financial information presented in
Item 4 is in accordance with Danish GAAP.

     We provide transportation  services by utilizing a fleet of vessels that we
own, charter in on short and long term time charters,  or commercially manage as
the manager of a pool or through  contracts  with third party owners.  We own 14
vessels, including ten product tankers and four dry bulk carriers. We also own a
50% interest in an additional product tanker. We charter in four product tankers
on long term time  charters due to expire  between 2004 and 2009.  We charter in
one platform  supply  vessel on short term time charter that expire in 2003.  We
also  charter in tankers and bulk  vessels as are needed by the pools we manage.
In addition,  we commercially  manage  approximately  44 vessels for other third
party owners and charterers.

     Our primary capital  expenditures are the acquisitions of vessels.  For the
past several  years,  we have been  acquiring new vessels and disposing of older
vessels in our fleet to ensure  compliance  with the safety  requirements of the
IMO. During the past three years, we have entered into contracts to purchase ten
additional vessels under construction, or newbuildings, for a total cost of U.S.
dollars 309 million or approximately DKK 2.6 billion and have sold eight vessels
for  aggregate   proceeds  of   approximately   U.S.   dollars  186  million  or
approximately DKK 1.5 billion.

B. Business Overview

THE FLEET

     Our  fleet of owned or  partially  owned  vessels  consists  of 11  product
tankers  and 4 dry  bulk  carriers.  The  total  tonnage  of  those  vessels  is
approximately  789,000  dwt, of which one vessel of 84,000 dwt is owned  jointly
with a partner.

During 2000 we sold,  then  chartered  back on a long term basis,  the following
vessels:

     o    The product tanker TORM Kristina.

     o    The product tanker TORM Gudrun.

     In 2000,  we placed  orders for the building of two new 100,000 dwt product
tankers,  of which we expect to take delivery in 2003. In 2001, we placed orders
for two additional 45,000 dwt tankers,  of which we took delivery in early 2003.
In 2002, we placed orders for two LR1 75,000 dwt tankers,  of which we expect to
take delivery in 2004.

     The following table lists our entire fleet of owned and long term chartered
in vessels:

Product Tankers     Year Built     Dwt           Ownership          Flag (1)
---------------     ----------     ---           ---------          --------

Wholly Owned
TORM Helene            1997      99,990     Hermia Shipping            DIS
TORM Gotland           1995      47,629     Alice Shipping             DIS
TORM Mary              2002      45,800     Estrid Shipping            DIS
TORM Vita              2002      45,800     Ragnhild Shipping          DIS
TORM Gertrud           2003      45,800     Gertrud Shipping           DIS
TORM Gerd              2002      45,800     Gerd Shipping              DIS
TORM Anne              1999      45,507     Anne Product Carriers      Singapore
TORM Gunhild           1999      45,457     Gunhild Shipping           DIS
TORM Gyda              1992      44,646     Skagerak Tankers           DIS
Olga                   1992      44,646     Olga Shipping              Liberia
TORM Asia              1994      44,367     Caseros Shipping           Hong Kong
Partially Owned
Kirsten                1988      83,660     Hilde Shipping             NIS
Chartered In
TORM Kristina          1999     105,000     DS-Rendite-Fonds nr. 78    Liberia
TORM Gudrun            2000      99,990     DS-Rendite-Fonds nr. 77    Liberia
TORM Hilde
  (ex.Sitamona)        1990      84,040     Rask Shipping              NIS
TORM Margrethe         1988      83,955     KS UL Margrethe            DIS
                                            ---------------

Bulk Carriers       Year Built     Dwt                                    Flag
-------------       ----------     ---                                    ----
TORM Marina            1990      69,637     Bothnia Shipping           DIS
TORM Tekla             1993      69,268     Tekla Shipping             DIS
TORM Arawa             1997      27,827     Southern Light Shipping    Liberia
TORM Pacific           1997      27,802     Eastern Light Shipping     Liberia

     (1) DIS stands  for the  Danish  International  Shipping  Registry  and NIS
stands for the Norwegian International Shipping Registry.

     In our product tanker  division,  we are engaged in the  transportation  of
refined oil products such as gasoline,  jet fuel, naphtha and diesel oil. We own
and operate  three sizes of product  carriers.  The largest  vessels are Aframax
tankers of  approximately  100,000  to 105,000  dwt,  that  primarily  transport
naphtha between the Arabian Gulf and Japan and other East Asiatic countries. The
other two sizes of product tankers,  Panamax, which are tankers of approximately
80,000 to 85,000 dwt, and Handymax, which are tankers of approximately 40,000 to
50,000 dwt,  operate in the above  mentioned areas and in the U.S.,  Africa,  in
Europe and the  Caribbean.  One of the vessels is owned in joint  venture with a
partner.

     Our dry bulk vessels  transport  products such as grain, coal and iron ore.
We operate dry bulk vessels of two sizes: Panamax and Handysize. The Panamax dry
bulk vessels, which range between 60,000 and 80,000 dwt, carry iron ore and coal
as well as  commodities  such as grain,  bauxite and  fertilizer.  The Handysize
vessels are approximately 20,000 to 30,000 dwt and are fitted to carry logs, but
can also carry commodities such as grain, fertilizer and steel.

     The liner  division  was sold to  companies  in the A. P.  M0ller  Group in
September 2002, as a part of our strategy to focus on two segments.  Through the
liner service,  we were engaged in the transportation of containers,  break bulk
cargoes,  specialized  cargoes and oil drilling equipment servicing the Gulf and
East Coast of the United  States and West  Africa.  The  service was carried out
through chartering in multipurpose/semi-containerized  vessels that were capable
of carrying containers and general cargo.

     In 1997, we diversified  into the operation of  anchor-handling  tug/supply
vessels and other similar  offshore craft that service oil rigs.  Currently,  we
have bareboat chartered a platform supply vessel, TORM Kestrel, and we intend to
cease our offshore vessel activity upon the termination of the remaining charter
in 2003.

     Each  of  our  vessel  categories  generates  net  earnings  from  shipping
activities  by operating  owned and  chartered  in vessels.  Over the last three
financial years the  contribution  to net earnings from shipping  activities per
division has been as follows:

Division                 2000                 2001                 2002
--------                 ----                 ----                 ----

Product Tankers           79%                  85%                  98%
Dry Bulk Vessels          10%                   7%                  -5%
Liner Service              7%                   5%                   6%
Offshore Craft             4%                   3%                   1%

PRODUCT TANKER POOLING ARRANGEMENTS

     We employ all of our owned and long term chartered product tankers in three
pooling  arrangements,  the LR2 Pool, the LR1 Pool and the TPP Pool (MR),  along
with vessels from several other shipping companies. The manager of each pool has
the responsibility for the commercial  management of the participating  vessels,
including the marketing, chartering, operation and bunker (fuel oil) purchase of
the vessels.  Each pool is administered  by a pool board,  which is comprised of
representatives  of each  pool  participant.  The  pool  boards  set the  pools'
policies and issue directives to the pool managers. The pool participants remain
responsible for all other costs including the financing,  insurance, manning and
technical  management of their  vessels.  The earnings of all of the vessels are
aggregated and divided according to the relative performance capabilities of the
vessel and the actual earning days each vessel is available.

LR2 Pool

     The LR2 Pool is  comprised  of 13 Aframax  tankers  with double  hulls that
mainly trade clean  petroleum  products.  We formed LR2 Management A/S, a Danish
corporation that serves as the commercial manager of the LR2 Pool. We own 50% of
all issued and outstanding  voting stock of LR2 Management A/S. The other 50% is
owned by A.P. M0ller,  one of the pool  participants.  The other participants in
this  pool are  Primorsk  Shipping  Corporation  and  Reederei  "Nord"  Klaus E.
Oldendorff  Ltd. One of our owned  vessels and two of our  chartered in vessels,
TORM Helene, TORM Kristina and TORM Gudrun,  currently  participate in this pool
and we have  contracted  to add two  newbuildings  to the pool in 2003  when the
vessels are delivered from the  shipbuilding  yards.  The LR2 pool has also time
chartered in on a short term basis one vessel,  the charter of which is expected
to end in January 2004. If a participant wants to sell one of its vessels in the
pool,  it needs to give  notice to the pool  board two months in advance of such
sale, and six months notice is required for a participant to withdraw all of its
vessels from the pool.

LR1 Pool

     The LR1  Pool  consists  of 23  Panamax  tankers,  and we serve as the sole
manager of the pool. The other participants in this pool are Nordic Tankers I/S,
Nordan Tankers 3 Inc., Nordan Tankers 4 Inc.,  Nordan Tankers 5 Inc.,  Marinvest
Shipping AB and Waterfront  Shipping AS.  Currently  three of our vessels,  TORM
Hilde (ex. Sitamona), TORM Margrethe and Kirsten,  participate in this pool, and
we have contracted to add two new buildings to the pool in 2004 when the vessels
are delivered from the shipbuilding yards. If a participant wants to sell one of
its vessels or withdraw all of them from the pool, it needs to give three months
advance notice to the pool board.

TPP Pool (MR)

     The TPP Pool is a pooling  arrangement  we have entered into with  Primorsk
Shipping Corporation, Sanmar Shipping and LGR Di Navigazone S.P. for the pooling
of 21 Handymax  product  tankers.  We serve as the sole manager of the TPP Pool.
Nine of our  vessels,  Torm  Mary,  Torm Vita,  Torm  Gertrud,  Torm Gerd,  Torm
Gunhild, Torm Asia, Torm Gotland, Torm Anne and Olga,  participate in this pool.
If a  participant  wants to sell one of its vessels or withdraw all of them from
the pool, it needs to give three months advance notice to the pool manager.  Our
two Handymax new  buildings  were entered into this pool upon their  delivery in
early 2003.

DRY BULK VESSEL POOLING ARRANGEMENTS

     We operate our dry bulk  vessels in two pooling  arrangements  based on the
size of the vessel.  Similar to the pooling arrangement for our product tankers,
the earnings of all of the vessels are aggregated  and divided  according to the
relative performance  capabilities of the vessel and the actual earning days per
vessel.  Each  pool is  administered  by a pool  board,  which is  comprised  of
representatives  of each  pool  participant.  The  pool  boards  set the  pools'
policies and issue directives to the pool managers. The pool participants remain
responsible for the financing,  insurance,  manning and technical  management of
their individually owned vessels.

Panamax Pool

     We  operate  a pool  with Wah  Kwong  Shipping  Agency  Co.  consisting  of
approximately 15 to 25 Panamax vessels.  Two of our owned vessels participate in
this pool, TORM Marina and TORM Tekla, but we also time charter approximately 13
additional  vessels on time charters ranging from 60 days to three years to suit
the needs of the pool.  We serve as the  commercial  manager of the pool and our
responsibilities include marketing,  chartering, operation and bunker fixing and
chartering of the vessels.

Handysize Pool

     We established a new pool called the International  Handybulk Carriers,  or
IHC Pool, on October 1, 2001,  together with Pacific Basin Shipping  Investments
Limited and Wah Kwong  Shipping  Holdings  Limited.  This pool is  comprised  of
approximately 30 to 35 vessels.  Pacific Basin serves as commercial  manager for
the pool. We have entered two of our owned vessels into the pool, TORM Arawa and
TORM Pacific, as well as two chartered in vessels.

OUR INVESTMENT IN DAMPSKIBSSELSKABET "NORDEN" A/S

     In June 2002, we purchased 30.8% of  Dampskibsselskabet  "NORDEN" A/S's, or
NORDEN's, share capital excluding treasury shares, followed by a public offer to
NORDEN's shareholders at DKK 360 per share.

     NORDEN,  founded in 1871, is a Danish based shipping  company listed on the
Copenhagen  Stock  Exchange.  NORDEN's  focus is on tankers  and bulk  carriers.
NORDEN runs a worldwide  operation of  approximately 75 vessels through a mix of
owned and chartered tonnage.

     Upon the  expiration  of our tender offer on July 29,  2002,  the offer was
neither  extended nor  increased.  As of June 15, 2003, we were NORDEN's  single
largest  shareholder,  with 33.35% of  NORDEN's  outstanding  shares,  excluding
treasury shares.  It is our goal to achieve a successful  combination of the two
companies,  which would  provide a platform  for further  growth,  and give us a
genuine competitive advantage in the international shipping market place.

THE INDUSTRY - TANKERS

     The international product tanker industry provides seaborne  transportation
of refined petroleum products for the oil market. According to industry sources,
tankers  transported  approximately  518 million tons of refined oil products in
2002.  The two main types of operators that provide  transportation  services in
the tanker market are:

     o    major oil companies; and

     o    independent shipowners.

     They provide transportation services for end users such as:

     o    oil companies;

     o    oil traders;

     o    petrochemical companies;

     o    government agencies; and

     o    power plants.


     According  to industry  sources,  the world  tanker  fleet above 10,000 dwt
consists of  approximately  3,450 vessels totaling 295 million dwt as of January
1,  2003.  Oil  companies  own,  or control  through  long-term  time  charters,
approximately  one  third of the  current  world  tanker  capacity.  Independent
shipowners  own or control the other two thirds.  Oil companies use their fleets
not only to  transport  their own oil  products,  but also to  compete  with the
independent shipowners to transport oil products for others.

     The quality of tanker  vessels and  operations  has improved  over the past
several years,  as charterers and  regulators  increasingly  focus on safety and
protection  of  the   environment.   National   authorities  and   international
conventions have historically regulated the oil transportation  industry.  Since
1990, the emphasis on  environmental  protection has increased.  Legislation and
regulations  such as the U.S. Oil Pollution Act of 1990, or OPA, IMO,  protocols
and classification society procedures demand higher-quality tanker construction,
maintenance,  repair and  operations.  Charterers  of all types,  including  oil
companies,  terminal operators, shippers and receivers are becoming increasingly
selective in their  acceptance  of tankers and are  inspecting  and vetting both
vessels and companies on a periodic  basis.  As these changes have imposed costs
and potential liabilities on tanker owners and operators,  they have also raised
barriers to entry and favored  shipowners  with quality  fleets and  operations.
Limitations  imposed by port states and the IMO on trading of older  single hull
vessels should  accelerate the commercial  obsolescence  of older,  poor-quality
tankers.

     The  industry  identifies  tankers as either  product  tankers or crude oil
tankers on the basis of various factors including  technical  specifications and
trading  histories.  Crude oil  tankers  carry crude oil and  so-called  "dirty"
products such as fuel oils.  Product  tankers carry refined  petroleum  products
such as  gasoline,  jet fuel,  kerosene,  naphtha  and gas oil,  which are often
referred to as "clean" products.

     Product tankers are tankers that typically have cargo handling systems that
are designed to transport  several  different  refined products  simultaneously,
such as gasoline,  jet fuel, kerosene,  naphtha and heating oil, from refineries
to the ultimate consumer. Product tankers generally have coated cargo tanks that
make it easier to clean the tanks between voyages involving  different  cargoes.
This  coating  also  protects  the steel in the tanks  from  corrosive  cargoes.
Product tankers generally range in size from 10,000 dwt to 100,000 dwt.

     Although  product  tankers  are  designed  to carry  dirty as well as clean
products, they generally do not switch between clean and dirty cargoes. A vessel
carrying  dirty cargo must  undergo a cleaning  process  prior to loading  clean
cargo  and many  charterers  want to  eliminate  any risk of  contamination.  In
addition,  specified design,  outfitting and technical factors tend to make some
vessels better suited to handling the physical properties of distinct cargoes.

     Our vessels primarily transport clean products.  Our double-hulled  product
tankers,  which  range in size from  45,000 dwt to  105,000  dwt,  compete  with
tankers of similar  size and  quality.  The rates that we are able to obtain for
our vessels are subject to the supply and demand dynamics described below.

Supply and Demand for Tankers

     The supply of, and demand for, tanker capacity  strongly  influences tanker
charter  rates  and  vessel  values  for all  tankers.  Supply  and  demand  has
historically caused fluctuations in tanker charter rates and second hand values.

     Demand for oil  tankers  is related to the demand for oil and oil  products
and the distance between points of production and points of consumption.  Demand
for refined petroleum products is, in turn, affected by, among other things:

     o    general economic conditions,  which include increases and decreases in
          industrial production and transportation;

     o    oil prices;

     o    environmental issues or concerns;

     o    climate;

     o    competition from alternative energy sources; and

     o    regulatory environment.

     The  supply of tanker  capacity  is a  function  of the  number of  tankers
delivered to the fleet relative to the number of tankers  permanently taken from
service when they become  technically or economically  obsolete.  Currently,  it
takes approximately 24 to 36 months from the time a building contract is entered
into before a newbuilding is delivered.  Over the past three years,  the average
age of tankers  removed from service has mainly ranged  between 21 and 25 years.
Other factors affecting the supply of tankers include:

     o    the number of combined carriers, or vessels capable of carrying oil or
          dry bulk cargoes, carrying oil cargoes;

     o    the number of new buildings on order and being delivered;

     o    the number of tankers in lay-up,  which  refers to vessels that are in
          storage,  dry-docked,  awaiting  repairs or otherwise not available or
          out of commission; and

     o    the  number  of  tankers  scrapped  for  obsolescence  or  subject  to
          casualties;

     o    prevailing and expected future charterhire rates;

     o    costs of bunkers, fuel oil, and other operating costs;

     o    the efficiency and age of the world tanker fleet;

     o    current shipyard capacity; and

     o    government   and  industry   regulation  of  maritime   transportation
          practices, particularly environmental protection laws and regulations.

     Environmental  laws and  regulations  are imposing  requirements on vessels
when they  reach 25 years of age that  lessen the amount of cargo they can carry
or require that the vessel be configured in a different way. These  requirements
tend to  impose  costs on those  older  vessels  and make  operating  them  less
economical.

THE INDUSTRY - DRY BULK FLEET

Overview

     The dry bulk  carrier  industry is highly  fragmented  with many owners and
operators of vessels, including proprietary owners who are large shippers of dry
bulk cargo, state-controlled shipping companies and independent operators.

     Dry bulk cargo consists of the major bulk commodities, which are coal, iron
ore and grain and the minor  bulk  commodities  which  include  steel  products,
forest  products,   agricultural  products,  bauxite  and  alumina,  phosphates,
petcoke,  cement,  sugar,  salt,  minerals,  scrap metal and pig iron.  Dry bulk
carriers are generally single deck ships,  which transport unpacked cargo, which
is poured, tipped or placed through hatchways into the hold of the ships.

     Historically,  charter rates for dry bulk carriers have been  influenced by
the demand for, and the supply of, vessel tonnage. The demand for vessel tonnage
is  largely a  function  of the level of  worldwide  economic  activity  and the
distance  between major trade areas.  Supply is primarily  driven by the size of
the  existing  worldwide  dry bulk  carrier  fleet,  scrapping  and  newbuilding
activity. Charter rates and vessel values are determined in a highly competitive
global market and have been characterized by fluctuations since the mid-1980s.

Vessel Types

     Vessels  utilized  in the  carriage  of major bulk  cargoes  are  generally
classified into three categories, based on carrying capacity:

     o    Handysize dry bulk carriers (20,000 to 30,000 dwt). Unlike most larger
          dry bulk carriers, Handysize dry bulk carriers are equipped with cargo
          gear  such  as  cranes.   This  type  of  vessel  is  well-suited  for
          transporting both major and minor bulk commodities to ports around the
          world that may have draft  restrictions  or are not equipped with gear
          for loading or discharging of cargo.

     o    Panamax dry bulk  carriers  (60,000 to 80,000  dwt).  Panamax dry bulk
          carriers vessels are designed with the maximum width, length and draft
          that will allow them to transit  fully laden through the Panama Canal.
          Panamax  vessels are  primarily  used in the  transport of major bulks
          such as grain and coal,  along with some minor  bulks like  phosphate,
          petcoke and salt.

     o    Capesize dry bulk carriers  (100,000 dwt or above).  Capesize dry bulk
          carriers  primarily transit from the Atlantic to the Pacific Ocean via
          Cape Horn or the Cape of Good Hope, hence their name. Capesize vessels
          are typically used for long voyages in the coal and iron ore trades.

     In addition to the three  standard  vessel  types,  the world bulk  carrier
fleet also includes  combination  carriers.  These vessels are typically  large,
capable of carrying  either  crude oil or dry bulk cargoes and compete with both
Capesize and Panamax bulk carriers.  The role of  combination  carriers has been
decreasing  since 1990 because such vessels,  which were not built primarily for
the dry cargo  market  but rather  for the oil  tanker  market,  have come to be
considered less desirable by charterers of oil tankers, since their oil carrying
capacity may be limited and they are not strictly  specialized  for the carriage
of oil.

     Set forth below are some of the  characteristics  of the principal  cargoes
carried by dry bulk carriers.

     o    Coal.  The two  categories  comprising  this  segment  are  steam  (or
          thermal)  coal,  which  is used by power  utilities,  and  coking  (or
          metallurgical)  coal,  which  is used by  steelmakers.  Steam  coal is
          primarily  transported  from  Australia,  South  Africa and the United
          States to Europe and Japan. Coking coal is primarily  transported from
          Australia, the United States and Canada to Europe and Japan.

     o    Iron Ore. Iron ore is primarily  transported from Brazil and Australia
          to Europe and Japan.  The majority of iron ore shipments is carried by
          Capesize dry bulk carriers.

     o    Grain.  The grain trade  includes  wheat,  wheat flour,  coarse grains
          (corn and  barley),  soybeans  and soybean  meal.  Although the annual
          volume of the grain trade is subject to political  factors and weather
          conditions,  shipments have remained  relatively  stable over the past
          five years.  Grain is primarily  transported  from the United  States,
          Canada, Europe, Australia and Argentina to the Far East, Latin America
          and Africa.  Approximately 90% of the international  seaborne trade is
          carried by  Handysize  and  Panamax  vessels  while the  remainder  is
          transported by Capesize vessels.

     Our dry bulk vessels  transport cargo such as grain,  coal and iron ore. We
operate both  Handysize and Panamax dry bulk vessels.  Most of the coal and iron
ore we transport are carried on our Panamax vessels, while both types of vessels
carry grain and fertilizer. The rates that we can achieve for our vessels depend
on the supply and demand dynamics described below.

Demand for Dry Bulk Vessels

     Due to the variety of cargo carried by dry bulk  carriers,  demand for such
vessels  is  dependent  on a number of  factors,  including  world and  regional
economic and political conditions,  developments in international trade, changes
in seaborne and other transportation  patterns,  weather patterns,  crop yields,
armed conflicts, port congestion,  canal closures and other diversions of trade.
Generally,  since larger  ships carry fewer types of cargoes,  demand for larger
vessels is affected by trade patterns in a small number of  commodities.  Demand
for smaller  vessels is more  diversified and is determined by trade in a larger
number of commodities. As a result, charter rates for smaller dry bulk carriers,
such as Handysize dry bulk  carriers,  have tended to be relatively  more stable
than charter rates for larger dry bulk carriers.

Supply of Dry Bulk Carriers

     The size of the  world's  dry bulk  carrier  fleet  changes  as a result of
newbuildings  and  scrapping  or loss  of  vessels.  The  general  trend  in the
development  of the bulk market has always been  closely  linked to the state of
the world economy.  The economic  downturn in Asia in 1998 led to sharp falls in
cargo volumes, and therefore rates, whereas the subsequent recovery has likewise
acted to boost the sector with rates recovering to those prevailing prior to the
crisis.

CHARTERING OF THE FLEET

     Vessels can be chartered by customers in a variety of ways.

     The spot market  provides the most frequent  source of  employment  for our
vessels.  In the spot market, the charterer hires the vessel to carry cargo on a
specific  voyage.  The owner  provides  the crew and bears all vessel  operating
costs and voyage costs, including fuel and port costs.

     A charterer and owner can also enter into a time charter for a vessel. Time
charters involve a charterer hiring a vessel for a fixed period, which may range
from a short  number of days to several  years.  Typical  time  charters are for
periods  of  between  six to 36  months.  In a time  charter,  the  owner  bears
operating  costs,  while the  charterer  is  responsible  for the voyage  costs,
including fuel oil.

     A demise  charter,  also  referred to as a bareboat  charter,  involves the
chartering  of a  vessel  for a fixed  period  of time.  However,  unlike a time
charter, a bareboat charter requires the user to pay for all operating expenses,
maintenance of the vessel and voyage costs.

     All of our vessels operate in pools. Within each pool, a vessel may be time
chartered out by the pool manager,  but the  charterhire is divided among all of
the vessels in the pool and therefore does not provide us with the steady income
normally  associated  with time  charters.  Each pool manager will determine the
number of vessels to be time chartered  depending on charter hire rates and pool
board strategy. Vessels in our pools that are not time chartered generally trade
in the spot market. However, the pools do enter into contracts of affreightment,
which provide a guaranteed fixed income over a period of time.

MANAGEMENT OF THE FLEET

     We  provide  the  operations,   chartering,   technical  support,  shipyard
supervision,  insurance and financing  management  services necessary to support
our fleet. Our chartering staff, as well as our fleet's management personnel, is
located  in the  head  office  in  Copenhagen.  Our  staff in  Copenhagen  makes
recommendations  to  our  senior  management  regarding  the  chartering  of our
vessels,  as well  as  identifying  when  opportunities  arise  to buy or sell a
vessel.  We have  offices  worldwide  in London,  Singapore  and Tokyo,  but all
decisions  relating  to the vessels we manage are made or approved in our office
in Copenhagen.

SEASONALITY

     The demand  for  product  tankers,  bulk  carriers  and liner  vessels  has
historically  fluctuated  depending  on the time of  year.  Demand  for  product
tankers is influenced by many factors,  including  general economic  conditions,
but it is  primarily  related to demand for  petroleum  products in the areas of
greatest  consumption.  Accordingly,  demand for product tankers generally rises
during the  winter  months and falls  during the summer  months in the  Northern
hemisphere. Demand for bulk carriers is not as volatile as that for tankers, but
demand does  generally  increase in the spring months in North America as demand
for grain  increases and  generally  falls back during the winter  months.  More
consistent commodities such as coal, however, provide some stability to the bulk
vessel trade.  Moreover,  these are generalized  trading patterns that vary from
year to year and there is no guarantee  that similar  patterns  will continue in
the future.

ENVIRONMENTAL AND OTHER REGULATIONS

     Government regulation  significantly affects the ownership and operation of
our  vessels.  The  various  types of  governmental  regulation  that affect our
vessels include international  conventions,  national,  state and local laws and
regulations  in force in the countries in which our vessels may operate or where
our vessels are  registered.  We cannot  predict the ultimate  cost of complying
with these requirements, or the impact of these requirements on the resale value
or useful  lives of our vessels.  Various  governmental  and  quasi-governmental
agencies  require  us to  obtain  permits,  licenses  and  certificates  for the
operation  of our  vessels.  Although we believe  that we are  substantially  in
compliance  with  applicable  environmental  and  regulatory  laws  and have all
permits,  licenses and certificates necessary for the conduct of our operations,
future  non-compliance  or failure to maintain  necessary  permits or  approvals
could require us to incur substantial costs or temporarily  suspend operation of
one or more of our vessels.

     We believe  that the  heightened  environmental  and  quality  concerns  of
insurance  underwriters,  regulators  and  charterers  are  leading  to  greater
inspection  and  safety  requirements  on all  vessels  and may  accelerate  the
scrapping of older vessels  throughout  the industry.  Increasing  environmental
concerns  have  created a demand for modern  vessels that are able to conform to
the stricter environmental  standards.  We maintain high operating standards for
all of our vessels  that  emphasize  operational  safety,  quality  maintenance,
continuous  training of our crews and officers and compliance with United States
and international and other national regulations.

     Our vessels are subject to both scheduled and unscheduled  inspections by a
variety of  governmental  and  private  entities,  each of which may have unique
requirements. These entities include the local port authorities such as the U.S.
Coast Guard, harbor master or equivalent,  classification  societies, flag state
administration  or country of registry,  and charterers,  particularly  terminal
operators and major oil companies which conduct frequent vessel inspections.

Environmental Regulation -- IMO

         The International Maritime Organization, or IMO, an agency organized in
1959 by the United Nations, has adopted  regulations,  which set forth pollution
prevention  requirements  applicable to tankers.  These regulations,  which have
been implemented in many jurisdictions in which our vessels operate, provide, in
part, that:

     o    25-year  old  tankers  must  be of  double-hull  construction  or of a
          mid-deck design with double-sided construction, unless:

          o    they have side,  or wing,  tanks or  double-bottoms  that include
               spaces not used for the  carriage of oil covering at least 30% of
               the length of the cargo tank section of the hull or bottom; or

          o    they  are  capable  of   hydrostatically   balanced  loading,   a
               specialized  loading  technique used to minimize  spillage in the
               event of a hull rupture.

          o    30-year-old  tankers  must  be  of  double-hull  construction  or
               mid-deck design with double-sided construction; and

     o    all tankers will be subject to enhanced inspections.

     Also, under IMO regulations,  a tanker must be of double-hull  construction
or a mid-deck design with  double-sided  construction or be of another  approved
design  ensuring  the same level of  protection  against  oil  pollution  if the
tanker:

     o    is the  subject  of a  contract  for a major  conversion  or  original
          construction on or after July 6, 1993;

     o    commences a major  conversion  or has its keel,  which is a continuous
          plate  running  the  length of the  vessel at the  middle  part of the
          bottom plating, attached on or after January 6, 1994; or

     o    completes a major conversion or is a newbuilding delivered on or after
          July 6, 1996.

     The requirements  contained in the International Safety Management Code, or
ISM Code,  promulgated  by the IMO,  also  effect our  operations.  The ISM Code
requires the party with operational  control of a vessel to develop an extensive
safety  management system that includes,  among other things,  the adoption of a
safety and  environmental  protection  policy  setting  forth  instructions  and
procedures  for  operating  its vessels  safely and  describing  procedures  for
responding  to  emergencies.  We are certified as an approved ship manager under
the ISM Code.

     The ISM Code  requires  that vessel  operators  obtain a safety  management
certificate for each vessel they operate.  This certificate evidences compliance
by a vessel's  management with code requirements for a safety management system.
No vessel  can  obtain a  certificate  unless  its  manager  has been  awarded a
Document  of  Compliance,   issued  by  each  flag  state  or  by  an  appointed
classification  society,  under the ISM Code.  All of our vessels have  obtained
safety management certificates.

     Noncompliance  with the ISM Code and other IMO  regulations may subject the
ship owner or a bareboat charterer to increased liability, may lead to decreases
in  available  insurance  coverage  for  affected  vessels and may result in the
denial of access to, or detention in, some ports.  Both the U.S. Coast Guard and
European Union  authorities  have indicated that vessels not in compliance  with
the ISM Code by the applicable deadlines will be prohibited from trading in U.S.
and European Union ports, as the case may be.

         The IMO has negotiated international  conventions that impose liability
for oil pollution in international waters and a signatory's  territorial waters.
Additional or new  conventions,  laws and regulations may be adopted which could
limit our ability to do business and which could have a material  adverse effect
on our business and results of operations.

Environmental Regulation--OPA/CERCLA

     The U.S.  Oil  Pollution  Act of 1990,  or OPA,  established  an  extensive
regulatory and liability regime for environmental  protection and cleanup of oil
spills.  OPA affects all owners and operators  whose vessels trade with the U.S.
or its territories or possessions, or whose vessels operate in the waters of the
U.S.,  which include the U.S.  territorial  waters and the two hundred  nautical
mile  exclusive  economic  zone  of the  U.S.  The  Comprehensive  Environmental
Response, Compensation and Liability Act, or CERCLA, applies to the discharge of
hazardous  substances  (other than oil) whether on land or at sea.  Both OPA and
CERCLA impact our operations.

     Under OPA, vessel owners, operators and bareboat or "demise" charterers are
"responsible  parties" who are all liable regardless of fault,  individually and
as a group,  for all  containment  and clean-up costs and other damages  arising
from oil spills from their  vessels.  These  "responsible  parties" would not be
liable if the spill results solely from the act or omission of a third party, an
act  of God or an  act  of  war.  The  other  damages  aside  from  cleanup  and
containment costs are defined broadly to include:

     o    natural resource damages and related assessment costs;

     o    real and personal property damages;

     o    net loss of taxes, royalties, rents, profits or earnings capacity;

     o    net cost of public services necessitated by a spill response,  such as
          protection from fire, safety or health hazards; and

     o    loss of subsistence use of natural resources.

     OPA limits the  liability of  responsible  parties to the greater of $1,200
per gross ton or $10 million  per tanker that is over 3,000 gross tons.  This is
subject  to  possible  adjustment  for  inflation.   OPA  specifically   permits
individual  states to impose  their own  liability  regimes  with  regard to oil
pollution  incidents  occurring  within their  boundaries,  and some states have
enacted   legislation   providing  for  unlimited  liability  for  discharge  of
pollutants within their waters. In some cases,  states, which have enacted their
own legislation  have not yet issued  implementing  regulations  defining tanker
owners' responsibilities under these laws.

     CERCLA,  which  applies  to owners and  operators  of  vessels,  contains a
similar liability regime and provides for cleanup,  removal and natural resource
damages.  Liability under CERCLA is limited to the greater of $300 per gross ton
or $5  million.  These  limits of  liability  do not apply,  however,  where the
incident is caused by violation of applicable U.S. federal safety,  construction
or operating  regulations,  or by the  responsible  party's gross  negligence or
willful misconduct.  These limits do not apply if the responsible party fails or
refuses to report the incident or to cooperate and assist in connection with the
substance removal activities.  OPA and CERCLA each preserve the right to recover
damages under existing law, including maritime tort law.

     OPA requires owners and operators of vessels to establish and maintain with
the U.S. Coast Guard evidence of financial responsibility sufficient to meet the
limit of their  potential  strict  liability under OPA. The U.S. Coast Guard has
enacted regulations requiring evidence of financial responsibility in the amount
of $1,500 per gross ton for tankers, coupling the OPA limitation on liability of
$1,200  per gross ton with the  CERCLA  liability  limit of $300 per gross  ton.
Under the regulations,  evidence of financial responsibility may be demonstrated
by insurance, surety bond, self-insurance or guaranty. Under OPA regulations, an
owner or  operator  of more than one  tanker  will be  required  to  demonstrate
evidence of  financial  responsibility  for the entire  fleet in an amount equal
only to the  financial  responsibility  requirement  of the  tanker  having  the
greatest  maximum  liability  under OPA and CERCLA.  We have provided  requisite
guarantees and received  certificates of financial  responsibility from the U.S.
Coast Guard for each of our vessels required to have one.

     We insure each of our vessels  with  pollution  liability  insurance in the
maximum commercially  available amount of $1 billion. A catastrophic spill could
exceed  the  insurance  coverage  available,  in which  event  there  could be a
material adverse effect on our business.

     Under OPA, with certain  limited  exceptions,  all newly-built or converted
tankers  operating  in U.S.  waters  must be built with  double-hulls.  Existing
vessels that do not comply with the double-hull  requirement  must be phased out
over a  20-year  period  beginning  in 1995  based  on  size,  age and  place of
discharge,  unless retrofitted with double-hulls.  Notwithstanding the phase-out
period, OPA currently permits existing  single-hull tankers to operate until the
year 2015 if their operations within U.S. waters are limited to:

     o    discharging  at the  Louisiana  Offshore  Oil Port,  also known as the
          LOOP; or

     o    unloading with the aid of another vessel, a process referred to in the
          industry as "lightering," within authorized lightering zones more than
          60 miles off-shore.

     Owners or  operators of tankers  operating  in the waters of the U.S.  must
file vessel  response  plans with the U.S.  Coast Guard,  and their  tankers are
required to operate in compliance  with their U.S. Coast Guard  approved  plans.
These response plans must, among other things:

     o    address a "worst  case"  scenario  and  identify  and ensure,  through
          contract  or other  approved  means,  the  availability  of  necessary
          private response resources to respond to a "worst case discharge";

     o    describe crew training and drills; and

     o    identify a  qualified  individual  with full  authority  to  implement
          cleanup actions.

     We have obtained vessel response plans approved by the U.S. Coast Guard for
our vessels operating in United States waters. In addition, the U.S. Coast Guard
has announced it intends to propose similar regulations requiring certain tanker
vessels to prepare response plans for the release of hazardous substances.

Environmental Regulation--Other

     Although the U.S. is not a party to these conventions,  many countries have
ratified and follow the liability  scheme  adopted by the IMO and set out in the
International  Convention on Civil Liability for Oil Pollution Damage,  1969, or
CLC. Under this convention,  a vessel's  registered owner is strictly liable for
pollution  damage caused in the  territorial  waters of a  contracting  state by
discharge of oil,  subject to some  complete  defenses.  Liability is limited to
approximately  $183 per gross  registered  ton or  approximately  $19.3 million,
whichever is less.  If,  however,  the country in which the damage  results is a
party  to  the  1992  Protocol  to the  CLC,  the  maximum  liability  rises  to
approximately  $82.7  million.  The  limit  of  liability  is  tied to a unit of
account,  which varies  according to a basket of currencies.  The right to limit
liability  is  forfeited  under the CLC where the spill is caused by the owner's
actual  fault  and  under  the 1992  Protocol,  where the spill is caused by the
owner's  intentional or reckless conduct.  Vessels trading to states,  which are
party to this convention must provide evidence of insurance covering the limited
liability of the owner.  In  jurisdictions  where the CLC has not been  adopted,
various  legislative  schemes or common law  govern,  and  liability  is imposed
either on the basis of fault or in a manner similar to the CLC.

     In addition, most U.S. states that border a navigable waterway have enacted
environmental  pollution  laws that  impose  strict  liability  on a person  for
removal  costs and damages  resulting  from a discharge of oil or a release of a
hazardous substance. These laws may be more stringent than U.S. federal law.

     Several of our vessels  currently  carry  cargoes to United  States  waters
regularly  and we  believe  that all of our  vessels  are  suitable  to meet OPA
requirements  and that they would also  qualify for trade if  chartered to serve
U.S. ports.

European Union and IMO Regulations

     The  IMO has  approved  a  timetable  for the  accelerated  phasing-out  of
single-hull oil tankers. Oil tankers delivered in 1976 and 1977 and which do not
comply with the requirements for protectively  located  segregated ballast tanks
will be phased out by January 1, 2005.

     The total loss of the oil tanker  Erika off the coast of France on December
12,  1999  polluted  more than 250 miles of French  coastline  with  heavy  oil.
Following the spill, the European  Commission  adopted a  "communication  on the
safety of oil transport by sea," also named the "Erika Communication."

     As a part of this,  the  European  Commission  has adopted a proposal for a
general ban on single-hull oil tankers.  The timetable for the ban is similar to
that set by the United  States under OPA in order to prevent oil tankers  banned
from U.S.  waters  from  shifting  their  trades to Europe.  The ban plans for a
gradual phase-out of tankers depending on vessel type:

     o    Single-hull  oil tankers  larger  than  20,000 dwt without  protective
          ballast tanks around the cargo tanks.  This category is proposed to be
          phased out by 2005.

     o    Single-hull oil tankers larger than 20,000 dwt in which the cargo tank
          area is partly protected by segregated  ballast tank. This category is
          proposed to be phased out by 2010.

     o    Single-hull  tankers below 20,000 dwt. This category is proposed to be
          phased out by 2015.

     Partly in  response  to the oil spill  caused by the  sinking of the tanker
Prestige,  a single hulled tanker owned by an entity that is not affiliated with
us, in November 2002,  the European  Union proposed new  regulations in March of
2003 that would, among other things,  place a ban on the transportation of heavy
oil grades in all  single-hull  tankers loading or discharging at European Union
ports.  These  regulations also accelerate the phase-out  schedule of all single
hull tankers.  The European Union  Parliament is scheduled to meet in July 2003,
to ratify these new regulations. The details of the proposal are as follows:

     o    Single hull tankers built on or before 1980 will immediately be barred
          from entering  into ports,  offshore  terminals,  or anchor in an area
          under the jurisdiction of a Member state.

     o    Heavy crude oils (API grade < 25.7,  heavy fuel oils  (viscosity  >180
          mm2/s),  bitumen and tar and their  emulsion  may be carried in double
          hull tankers only.

     o    Single hull  non-segregated  ballast  tankers  built on or before 1981
          will be phased out in 2004.

     o    Single hull  non-segregated  ballast  tankers  built on or before 1982
          will be phased out in 2005.

     o    Otherwise, the proposed phase out schedule is the same as that of with
          OPA.

     Several European Union nations have already  implemented an absolute ban on
single hull  tankers  carrying  fuel oil and heavy oil grades.  Spain has banned
single hull  tankers over 5,000 dwt and  carrying  such cargo from  entering her
ports  as of  January  1,  2003.  Italy  has  announced  that  similar  measures
applicable  to  single  hull  tankers  over 15 years of age will be  implemented
during the first half of 2003,  and Spain,  France and Portugal have  prohibited
single hull tankers  carrying such cargoes from passing  through their  200-mile
economic exclusion zones since December, 2002.

INSPECTION BY CLASSIFICATION SOCIETIES

     Every seagoing vessel must be "classed" by a  classification  society.  The
classification  society certifies that the vessel is "in class," signifying that
the vessel has been built and  maintained  in  accordance  with the rules of the
classification society and complies with applicable rules and regulations of the
vessel's  country of registry and the  international  conventions  of which that
country is a member.  In addition,  where surveys are required by  international
conventions  and  corresponding  laws  and  ordinances  of  a  flag  state,  the
classification  society will undertake them on application or by official order,
acting on behalf of the authorities concerned.

     The  classification  society also  undertakes  on request other surveys and
checks that are  required by  regulations  and  requirements  of the flag state.
These surveys are subject to agreements  made between the vessels' class and the
flag state concerned.

     For maintenance of the class,  regular and  extraordinary  surveys of hull,
machinery, including the electrical plant, and any special equipment classed are
required to be performed as follows:

     Annual Surveys:  For seagoing  ships,  annual surveys are conducted for the
hull and the machinery, including the electrical plant, and where applicable for
special  equipment  classed,  at  intervals  of  12  months  from  the  date  of
commencement of the class period indicated in the certificate.

     Intermediate   Surveys:   Extended   annual  surveys  are  referred  to  as
intermediate  surveys and typically  are conducted two and one-half  years after
commissioning and each class renewal. Intermediate surveys may be carried out on
the occasion of the second or third annual survey.

     Class  Renewal  Surveys:  Class  renewal  surveys,  also  known as  special
surveys,  are  carried  out  for  the  ship's  hull,  machinery,  including  the
electrical  plant,  and for any  special  equipment  classed,  at the  intervals
indicated  by the  character  of  classification  for the hull.  At the  special
survey, the vessel is thoroughly examined,  including audio-gauging to determine
the thickness of the steel structures.  Should the thickness be found to be less
than class  requirements,  the  classification  society  would  prescribe  steel
renewals.  The  classification  society  may grant a one-year  grace  period for
completion of the special  survey.  Substantial  amounts of money may have to be
spent for steel  renewals  to pass a special  survey if the  vessel  experiences
excessive wear and tear. In lieu of the special survey every four or five years,
depending on whether a grace period was granted,  a shipowner  has the option of
arranging with the classification  society for the vessel's hull or machinery to
be on a  continuous  survey  cycle,  in which every part of the vessel  would be
surveyed within a five-year cycle.

     At an owner's  application,  the surveys  required for class renewal may be
split according to an agreed schedule to extend over the entire period of class.
This process is referred to as continuous class renewal.

     All areas  subject to survey as defined by the  classification  society are
required to be surveyed at least once per class period, unless shorter intervals
between  surveys are  prescribed  elsewhere.  The period  between two subsequent
surveys of each area must not exceed five years.

     Most vessels are also  dry-docked  every 30 to 36 months for  inspection of
the underwater parts and for repairs related to inspections.  If any defects are
found, the  classification  surveyor will issue a condition of class, known as a
"recommendation" which must be rectified by the shipowner within prescribed time
limits.

     Most insurance underwriters make it a condition for insurance coverage that
a vessel be  certified  as "in class" by a  classification  society,  which is a
member of the  International  Association of Classification  Societies.  All our
vessels  are  certified  as being "in class" by Lloyd's  Register  or Det Norske
Veritas.  All new and second hand  vessels  that we purchase  must be  certified
prior  to  their  delivery  under  our  standard  contracts  and  memorandum  of
agreement.  If the vessel is not  certified  on the date of closing,  we have no
obligation to take delivery of the vessel.

RISK OF LOSS AND LIABILITY INSURANCE

General

     The  operation  of any  cargo  vessel  includes  risks  such as  mechanical
failure,   collision,   property  loss,   cargo  loss  or  damage  and  business
interruption due to political  circumstances in foreign  countries,  hostilities
and labor  strikes.  In  addition,  there is always an inherent  possibility  of
marine disaster,  including oil spills and other environmental  mishaps, and the
liabilities  arising from owning and operating  vessels in international  trade.
OPA, which imposes  virtually  unlimited  liability  upon owners,  operators and
demise charterers of any vessel trading in the United States exclusive  economic
zone  for  certain  oil  pollution  accidents  in the  United  States,  has made
liability  insurance more expensive for ship owners and operators trading in the
U.S.  market.  We carry insurance  against loss of hire,  which protects against
business interruption following a loss under our hull and machinery policy. This
policy  does not  protect  us from  business  interruptions  caused by any other
losses.  While we believe that our present insurance  coverage is adequate,  not
all risks can be insured,  and there can be no guarantee that any specific claim
will be  paid,  or that we will  always  be able to  obtain  adequate  insurance
coverage at reasonable rates.

Hull and Machinery Insurance

     We have obtained  marine hull and machinery and war risk  insurance,  which
include  damage to a vessel's  hull and  machinery,  collisions  and the risk of
actual or constructive total loss, for all of our vessels.  The vessels are each
covered up to at least fair market value. Under some circumstances,  salvage and
towing  expenses may be covered.  We also arranged  increased value coverage for
each vessel. Under this increased value coverage,  in the event of total loss of
a vessel,  we will be able to recover for amounts not recoverable under the hull
and machinery policy by reason of any under-insurance.

Protection and Indemnity Insurance

     Protection  and Indemnity  insurance is provided by mutual  protection  and
indemnity  associations,  which cover our third party  liabilities in connection
with our shipping activities including other related expenses of injury or death
of crew,  passengers and other third parties, loss or damage to cargo, damage to
other third-party property,  pollution arising from oil or other substances, and
in some circumstances,  salvage, towing and other related costs, including wreck
removal.  Our current protection and indemnity  insurance coverage for pollution
is $1 billion.

COMPETITION

     We operate in markets that are highly  competitive  and based  primarily on
supply  and  demand.  We  compete  for  charters  on the basis of price,  vessel
location, size, age and condition of the vessel, as well as on our reputation as
an  operator.  We conclude  our time  charters  and voyage  charters in the spot
market  through the use of brokers,  through whom we negotiate  the terms of the
charters based on market  conditions and experience.  We compete  primarily with
owners of tankers in the Handymax, Panamax and Aframax class sizes in our tanker
division.  Ownership of tankers is highly  fragmented and is divided among major
oil companies and independent  tanker owners. Our bulk vessels and liner service
also compete with other vessels of the same type and size.

LEGAL PROCEEDINGS

     We are party,  as  plaintiff  or  defendant,  to a variety of lawsuits  for
damages arising  principally from personal injury and property  casualty claims.
Most claims are  covered by  insurance,  subject to  customary  deductibles.  We
believe that these claims will not,  either  individually  or in the  aggregate,
have a material  adverse  effect on us, our  financial  condition  or results of
operations.  From  time  to  time  in the  future  we may be  subject  to  legal
proceedings and claims in the ordinary course of business,  principally personal
injury and property casualty claims.  Those claims, even if lacking merit, could
result in the expenditure of significant financial and managerial resources.  We
have not been involved in any legal  proceedings,  which may have, or have had a
significant  effect  on  our  financial  position,  nor  are  we  aware  of  any
proceedings that are pending or threatened  which may have a significant  effect
on our financial position, results of operations or cash flows.

     We time chartered a container vessel, the TORM Alexandra,  which suffered a
casualty  at the port of  Monrovia,  Liberia  in July  2001.  Subsequently,  the
vessel's  underwriters  declared the vessel a  constructive  total loss, and the
time charter was terminated.  The port  authorities have notified both the owner
of the vessel and us that they  intend to pursue  claims  related to damage to a
quay,  a spillage  of fuel oil,  and loss of life of persons  who later tried to
loot cargo from the vessel.  Owners have pursued a claim  against us for loss of
the vessel.  We believe  that the owner of the vessel is liable for all of these
claims and that the owner has insurance coverage for these claims. To the extent
claims are  brought  against  us, we believe  that those  claims are  covered by
insurance,  and  that  this  casualty  will not have a  material  effect  on our
financial condition or results of operations.

C. Organizational Structure

     The following tables set forth our significant  subsidiaries as of June 15,
2003.

     Our Wholly-Owned  Tankers.  Each subsidiary  listed below is a wholly-owned
Liberian  corporation  (with the exception of Anne Product  Carriers (PTE) Ltd.,
which is a Singapore corporation) that owns a 100% interest in a tanker.

Subsidiary                                             Vessel
----------                                             ------

Hermia Shipping Corporation                            TORM Helene
Alice Product Tanker Corporation                       TORM Gotland
Estrid Shipping Corporation                            TORM Mary
Ragnhild Shipping Corporation                          TORM Vita
Gertrud Shipping Corporation                           TORM Gertrud
Gerd Shipping Corporation                              TORM Gerd
Anne Product Carriers (PTE) Ltd.                       TORM Anne
Gunhild Shipping Corporation                           TORM Gunhild
Olga Shipping Corporation                              Olga
Skagerak Tankers Limited                               TORM Gyda
Caseros Shipping Limited                               TORM Asia

     Our  50%-owned  Tanker.  The  subsidiary  listed  below  is a  wholly-owned
Liberian  corporation that owns 50% of the ownership  interests in a tanker.  An
unaffiliated third party owns the remaining 50%.

Subsidiary                                             Vessel
----------                                             ------

Hilde Shipping Corporation                             Kirsten

Our Chartered-In  Tankers. We directly charter-in four tankers from unaffiliated
third party vessel  owners:  the TORM  Margrethe  and TORM Hilde under  bareboat
charters and the TORM Gudrun and TORM Kristina under time charters.

     Our Dry Bulk  Carriers.  Each  subsidiary  listed  below is a  wholly-owned
Liberian  corporation  (with the exception of Tekla Shipping Company Ltd., which
is a Bahamas corporation) that owns a 100% interest in a dry bulk carrier.

Subsidiary                                             Vessel
----------                                             ------

Bothnia Shipping Corporation                           TORM Marina
Tekla Shipping Company Ltd.                            TORM Tekla
Southern Light Shipping Limited                        TORM Arawa
Eastern Light Shipping Limited                         TORM Pacific

D. Property, Plant and Equipment

     We do not  own  any  real  property  other  than  three  small  residential
properties.  We lease  office space in  Copenhagen,  Singapore  and London.  The
Copenhagen  office  comprises  approximately  3,000 square  meters and is leased
until July 2010 at a rate of DKK 4.5 million,  or approximately  USD 570,000 per
year  from  an  unaffiliated   third  party.   The  Singapore  office  comprises
approximately  120 square  meters and is leased  until May 31, 2005 at a rate of
SGD  93,306,  or  approximately  USD  52,069  (DKK  410,817)  per  year  from an
unaffiliated third party. Furthermore, we have an apartment in Singapore that is
leased until June 21, 2005 at a rate of SGD 54,000,  or approximately USD 30,135
(DKK  237,757)  per year from an  unaffiliated  third party.  The London  office
comprises approximately 550 square feet and is leased until March 2004 at a rate
of (pound)21,000,  or approximately  USD 30,000 (DKK 237,000),  per year from an
unaffiliated third party.

     The following table lists our entire fleet of owned and long term chartered
in vessels:

Product Tankers    Year Built     Dwt          Ownership             Flag (1)
---------------    ----------     ---          ---------             --------

Wholly Owned
TORM Helene           1997      99,990     Hermia Shipping             DIS
TORM Gotland          1995      47,629     Alice Shipping              DIS
TORM Mary             2002      45,800     Estrid Shipping             DIS
TORM Vita             2002      45,800     Ragnhild Shipping           DIS
TORM Gertrud          2003      45,800     Gertrud Shipping            DIS
TORM Gerd             2002      45,800     Gerd Shipping               DIS
TORM Anne             1999      45,507     Anne Product Carriers       Singapore
TORM Gunhild          1999      45,457     Gunhild Shipping            DIS
TORM Gyda             1992      44,646     Skagerak Tankers            DIS
Olga                  1992      44,646     Olga Shipping               Liberia
TORM Asia             1994      44,367     Caseros Shipping            Hong Kong
Partially Owned
Kirsten               1988      83,660     Hilde Shipping              NIS
Chartered In
TORM Kristina         1999     105,000                                 Liberia
TORM Gudrun           2000      99,990                                 Liberia
TORM Hilde
  (ex.Sitamona)       1990      84,040     Rask Shipping               NIS
TORM Margrethe        1988      83,955     D/S TORM                    DIS
                                           --------

Bulk Carriers      Year Built     Dwt                                Flag
-------------      ----------     ---                                ----
TORM Marina           1990      69,637     Bothnia Shipping            DIS
TORM Tekla            1993      69,268     Tekla Shipping              DIS
TORM Arawa            1997      27,827     Southern Light Shipping     Liberia
TORM Pacific          1997      27,802     Eastern Light Shipping      Liberia

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

     The financial  information included in the discussion below is derived from
our consolidated  financial statements.  The consolidated  financial information
includes the results of our Liner activities, which were disposed of during 2002
(see  Note  16 to  the  consolidated  financial  statements).  The  consolidated
financial  statements have been prepared in accordance  with Danish GAAP,  which
differs in certain significant  respects from U.S. GAAP. For a discussion of the
differences  between  Danish GAAP and U.S. GAAP and a  reconciliation  of profit
(loss) and  stockholders'  equity to U.S. GAAP, see Note 17 to our  consolidated
financial statements.

A. Operating Results

                                             For the year ended December 31
                                         --------------------------------------
                                            2000          2001          2002
                                         ----------    ----------    ----------
                                        (restated)     (restated)
                                                  (in thousands of DKK)
Statement of Operations Data:

Net revenue                               2,158,671     2,583,351     1,948,036
Port expenses, Bunkers, Charter
Hire and Technical Running costs         (1,545,801)   (1,792,776)   (1,616,391)
                                         ----------    ----------    ----------

Net earnings from shipping activities       612,870       790,575       331,645
Profit on sale of vessels/interests          12,263        92,960        81,164
Administrative expenses                     (84,418)     (129,535)     (115,890)
Other operating income                       45,305        60,197        55,228
Depreciation and write downs               (220,727)     (159,160)     (145,357)
                                         ----------    ----------    ----------

Profit/(loss) before financial items        365,293       655,037       206,790
Financial items                            (156,737)     (101,444)      (91,655)
                                         ----------    ----------    ----------

Profit (loss) before tax                    208,556       553,593       115,135
Tax on profit on ordinary activities        (53,298)     (166,018)      360,190
                                         ----------    ----------    ----------

Profit (loss) for the year                  155,258       387,575       475,325
                                         ----------    ----------    ----------

     The above consolidated financial data includes the Liner activities,  which
was sold to companies  in the A.P.  M0ller  Group on  September  16,  2002.  The
results of the operations attributable to the Liner activities,  which represent
a  discontinued  operation,  are described in Note 1. The impact of this sale is
summarized in Note 16 to our consolidated financial statements included herein.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2002 AND THE YEAR ENDED DECEMBER 31,
2001

Net revenue

     TORM's net revenue  was DKK 1,948  million in 2002 as compared to DKK 2,583
million in 2001,  or DKK 1,547  million in 2002 as compared to DKK 2,003 million
in 2001 excluding the Liner activities.  The decrease in net revenue in 2002 was
primarily a result of lower revenue in the product tanker segment and a decrease
in the average USD/DKK exchange rate between 2001 and 2002.

     The decrease in the average USD/DKK  exchange rate between 2001 and 2002 of
5.2% negatively  affected the total reported revenue by DKK 100 million of which
approximately DKK 50 million can be attributed to tanker revenues, approximately
DKK  30  million  to  bulk  activities  and  DKK  20  million  to  discontinuing
operations.

     The  decrease  in the tanker  division's  net revenue to DKK 913 million in
2002 as  compared to DKK 1,328  million in 2001 was  primarily  attributable  to
lower  freight  rates in 2002 as compared to 2001 and the exchange rate decrease
of 5.2% in 2002.  The  decline in freight  rates in 2002 as  compared to 2001 of
approximately  33% was a  consequence  of a  significant  increase  in the world
fleet, a worsening  world economy and the fact that 2001 freight rates were very
high.  Despite  taking  delivery  of four  product  tankers in 2002,  the tanker
division  operated  approximately  the same number of vessel days as in 2001, as
two vessels that were chartered in were redelivered in 2002.  Towards the end of
2002,  freight  rates in the  product  tanker  segment  increased  considerably,
leading to higher earnings, particularly in December 2002.

     For the bulk division, the revenue was DKK 592 million for 2002 as compared
to  DKK  590  million  for  2001.   Despite  a  decrease  in  freight  rates  of
approximately  18% in 2002 as compared to 2001 and the effect of a lower average
USD/DKK  exchange rate, bulk division  revenue  increased  marginally.  This was
attributable  to the  increase in TORM's bulk tonnage in the second half of 2002
through  time-chartering  in additional  vessels at low levels.  The  additional
vessels  were  primarily  in the Panamax  segment,  where TORM  chartered-in  13
vessels.  Net revenue in the Liner  activities  was DKK 401 million  through the
September 16, 2002 as compared to DKK 581 million in 2001.

Port  Expenses,  Bunkers,  Charter Hire and Technical  Running costs  (Operating
costs)

     Charter  hire and  port  expenses  each  represent  35 to 45% of the  total
operating costs, while technical running costs and bunker consumption  represent
a combined 10 to 15% of operating  costs.  All items included in operating costs
are directly influenced by changes in the USD/DKK exchange rate.

     Port  expenses  and bunkers were DKK 835 million in 2002 as compared to DKK
808  million in 2001,  or DKK 556 million in 2002 as compared to DKK 416 million
in 2001  excluding  the Liner  activities.  This change is  primarily  due to an
increased  level of  activity in the bulk  division in second half of 2002.  The
lower  USD/DKK  exchange  rate  decreased  port and  bunker  expenses  by DKK 43
million.

     Charter  hire fell by DKK 225  million  to DKK 565  million  in 2002,  or a
decrease of DKK 181 million, excluding the Liner activities. The charter hire in
the bulk division  decreased by DKK 153 million from 2001 to 2002.  Chartered in
days were  reduced by 24%, or DKK 78 million,  and average  charter hire fell by
some 15%, or DKK 63 million,  as the time charter market generally was weaker in
2002. By the end of 2002, the bulk division increased the chartering in activity
due to an expected increase in freight rates in 2003 and 2004. The lower USD/DKK
exchange rate decreased bulk charter hire by DKK 12 million. The tanker division
had on average one less vessel chartered-in in 2002 because of a lack of tonnage
at  competitive  prices,  resulting  in reduced  charter  hire expense of DKK 21
million,  while one  offshore  vessel was  redelivered  to its owners due to the
management's decision to cease this operation.  The reduced charter hire was DKK
7 million.  The lower USD/DKK  exchange rate decreased total charter hire by DKK
24 million included in the above figures.

     Technical  running costs  increased by DKK 23 million to DKK 217 million in
2002 from DKK 194 million in 2001.  The increase was primarily  attributable  to
the tanker division, where costs increased by DKK 14 million due the delivery of
four MR  newbuildings  during  the year.  Extensive  repair  work on four of the
Company's  tankers  and one  bulk  carrier  led to  additional  costs  of DKK 17
million,  while the reduced  involvement in the offshore segment led to a DKK 10
million  reduction  in  2002,  and a lower  USD/DKK  exchange  rate led to DKK 6
million  less costs.  General  cost  increases  added DKK 8 million to technical
running costs.

         The time-chartered  vessels in 2002 did not incur any technical running
costs but only time charter hire payments.

Profit on sale of vessels/interest

     Profit from sales of vessels and interests  comprise the profits from sales
of  vessel,  companies,  assets and  activities  as well as the  recognition  of
deferred profits from sale/leaseback transactions.  Profit from sales of vessels
and interests were DKK 81 million in 2002 as compared to DKK 93 million in 2001,
or DKK 17 million in 2002 as compared to DKK 92 million in 2001,  excluding  the
Liner  activities.  Our profit  from the sales of vessels  and  interest in 2002
includes  DKK 17  million  from  the  recognition  of  deferred  profits  on the
sale/leaseback transactions. The profit in 2001 consisted of DKK 74 million from
the sale of two  offshore  vessels and one MR product  tanker and DKK 19 million
related to recognition of deferred profits on the sale/leaseback of vessels.

Administrative expenses

     Administration  expenses was DKK 116 million in 2002 as compared to DKK 130
million in 2001,  or DKK 101 million as compared to DKK 113  million,  excluding
the Liner activities.  The additional expenses in 2001 were primarily associated
with  offering  shares to the  employees  at a discount  to market  value and an
employee option program totaling DKK 10 million.  Furthermore,  the expenses for
2001 contained items related to a branding  campaign for TORM and other external
consultant fees of DKK 4 million. Additional insurance expenses increased by DKK
2 million in 2002.

Other operating income

     Other  operating   income   primarily   comprised  income  from  chartering
commissions  in connection  with the  management of the product  tanker and bulk
pools.  Other  operating  income  decreased  by DKK 5 million  in 2002 to DKK 55
million  from DKK 60 million in 2001,  of which DKK 1.5 million  was  associated
with the Liner activities. The lower level of other operating income in 2002 was
attributable  to lower  freight  rates for tank and bulk vessels in 2002, as the
fees are calculated as a percentage of freight  income in the pools.  This had a
negative  effect of DKK 20  million  in 2002.  In  addition,  the lower  USD/DKK
exchange rate led to a DKK 3 million  reduction in 2002 other operating  income.
Increased  activity due to a larger  number of pool  partners and vessels in the
three pools in 2002 increased other operating  income by DKK 6 million  compared
to  2001.  Furthermore  in  2002  the  item  was  affected  by a  provision  for
bareboat-chartered vessels of DKK 12 million.

Depreciation and Write-Downs

     Depreciation  was DKK 145 million in 2002 as compared to DKK 159 million in
2001,  or DKK 140  million  compared  to DKK 148  million,  excluding  the Liner
activities. The decrease in 2002 was primarily attributable to the change in the
depreciation  period from 20 to 25 years in the  beginning of the second half of
2001, which lead to a DKK 11 million lower depreciation charge,  offset by a DKK
6 million increase in depreciation in 2002 due to a change in fleet composition.
In addition,  DKK 3 million of the decrease in  depreciation  in 2002 was due to
the sale of offshore vessels in 2001.

Financial Items

     Financial  items  consist  of  interest  receivables,  exchange  gains  and
dividends,  interest  expenses  on  mortgage  and  bank  debt and  realized  and
unrealized value  adjustments.  Financial items were DKK (92 million) in 2002 as
compared to DKK (101  million) in 2001, or DKK (119 million) in 2002 as compared
to DKK (92 million) in 2001, excluding the Liner activities.

     Interest  income  from  bonds and cash  dropped by DKK 14 million to DKK 31
million in 2002 due to the falling  interest rates in 2002 and the sale of bonds
in the summer of 2002 in order to finance an investment in NORDEN.

     Interest  expenses on the Company's  mortgage debt and other bank debt fell
from DKK 122 million to DKK 76  million.  Changes in the  composition  of TORM's
fleet in 2001, including the sale of the offshore vessels, led to a reduction in
expenses of DKK 18 million in 2002, while the addition of newbuildings increased
interest  expenses  by DKK 9 million  as  compared  to 2001.  The lower  USD/DKK
exchange rate reduced interest  expenses by DKK 5 million,  while lower interest
rates reduced interest expenses by DKK 33 million in 2002 as compared to 2001.

     Exchange rate adjustments and other value adjustments were DKK (45 million)
in 2002 as compared to DKK (24 million) in 2001, or DKK (73 million) in 2002 and
DKK (15 million) in 2001,  excluding the Liner activities.  The additional costs
in 2002 were  primarily  attributable  to a significant  decrease in the USD/DKK
exchange  rate.  The net  change of DKK (58)  million  includes  a DKK 8 million
unrealized gain on our shares of NORDEN.

Tax on profit on ordinary activities

     TORM  recorded a tax  benefit of DKK 360 million in 2002 as compared to tax
expense of DKK 166 million in 2001. This change is a result of TORM's entry into
the tonnage  taxation scheme,  which changes the way that TORM is taxed.  Please
refer to Item 10 E and Note 1 where the tonnage tax scheme is further discussed.

COMPARISON OF YEAR ENDED DECEMBER 31, 2001 TO THE YEAR ENDED DECEMBER 31, 2000

Net revenue

     Net revenue  increased by DKK 424 million,  or 20%,  from DKK 2,159 million
for the year ended  December  31,  2000 to DKK 2,583  million for the year ended
December  31, 2001.  This  increase  was  primarily  the result of a rise in the
freight  rates,  an  increase  in our  available  tonnage  and a higher  USD/DKK
exchange rate.

     The freight rates increased  substantially for both our product tankers and
dry bulk  carriers  during the first half of 2001 as compared to rates earned in
the first half of 2000.  While these prices have decreased in the second half of
the year they are still higher than early 2000.  Increasing growth in the global
economy but especially in the United States throughout 2000 and the beginning of
2001 was the main  reason  for the  increasing  freight  rates  for the  product
tankers in the same period.  This increased growth lead to a drastic increase in
global oil demand with a firming tendency  throughout 2000 and the first half of
2001.  The general  slowdown in the world  economy and in the demand for oil has
resulted in the decreased prices in the second half of 2001.

     Our bulk vessels benefited from essentially the same positive trends in the
first half of 2001  combined with a higher level of activity in the transport of
coal to the Far East and corn export from South America.

     The increased  revenues  resulting  from the  increasing  freight rates and
shortage of  available  tonnage  were  further  impacted by the change in Danish
Kroner to U.S.  dollar  exchange rate from 8.02 for the year ended  December 31,
2000 to 8.41 for the year ended December 31, 2001.

Port Expenses, Bunkers, Charter Hire and Technical Running costs (Operating
costs)

     Operating  costs  increased by DKK 247 million from the year ended December
31,  2000 and the year ended  December  31,  2001.  The  average  exchange  rate
increased by 7% in this period resulting in increased  operating costs of nearly
DKK 110 million or 44% of the change.

     The charter  hire costs  increased  approximately  DKK 372 million from the
year ended  December 31, 2000 and the  corresponding  period in 2001. Out of the
total  increase of DKK 372 million,  DKK 60 million was caused by the  increased
USD/DKK  exchange rate while DKK 120 million was a direct result of the decision
at the end of 2000 to sell two tanker  vessels and charter  them back and DKK 53
million was caused by increased  chartering-in  activity. The remaining increase
of DKK 139 million was a result of an increased activity in bulk operations.

     Bunker  consumption and port expenses decreased by DKK 36 million due to an
increase in the chartering  out activity where the charterer  covers such costs.
Technical  running costs decreased by DKK 89 million despite the  abovementioned
increase in the USD/DKK  exchange rate that increased  expenses by approximately
DKK 6 million.  The  decrease was related to the sale of two tankers and sale of
our two offshore  vessels  during 2001 and the sale of two liner vessels and two
bulk carriers during 2000. On average,  we employed 4 1/2 fewer units in 2001 as
compared to 2000.

Profit on sale of vessels/interest

     During the year ended December 31, 2001, we sold two owned anchor  handling
vessels as well as our  ownership  in two product  tankers.  These  transactions
resulted in a profit of approximately DKK 93 million compared to a profit of DKK
12 million for the year ended December 31, 2000,  during which we sold two liner
vessels and our ownership in two bulk carriers.

Administrative expenses

     Our administrative  expenses have increased to DKK 130 million for the year
ended  December  31,  2001 from DKK 84 million for the year ended  December  31,
2000,  an increase of 55% or DKK 46 million  primarily the result of a number of
non-recurring  expenses. The Company's decision to list its shares on the NASDAQ
resulted in direct costs in the amount of DKK 13 million.  In association with a
stock option plan and a stock purchase plan introduced in 2001 expenses of DKK 9
million were incurred to purchase the Company's own shares. Furthermore, we paid
a bonus to our  employees  in December  2001.  This bonus  together  with salary
increases and extra costs  associated with  additional  staff amounted to DKK 12
million,  while the  implementation  of a branding  campaign and other  external
consultant fees amounted to DKK 4 million.

Other operating income

     Other operating income increased by DKK 15 million or 33% to DKK 60 million
for the year ended  December  31,  2001 from DKK 45  million  for the year ended
December 31, 2000. This income is primarily related to chartering commissions we
receive  for the  services we perform for our pool  arrangements.  The  improved
tanker market,  the rising USD/DKK exchange rate and the continued  expansion of
the pool concept were the primary reasons for the increase.

Depreciation and write-downs

     For the year ended  December  31, 2001,  depreciation  decreased to DKK 159
million from DKK 221 million for the year ended  December 31, 2000. The decrease
in  depreciation  is directly  related to a change in the estimated  life of our
vessels from 20 to 25 years on July 1, 2001 and a change in the  composition  of
our  fleet.  The  change  in  estimated  lifetime  resulted  in a  reduction  in
depreciation  of DKK 21 million for the year,  while the effect of the change in
the composition of the fleet during 2000 and 2001 was DKK 41 million.

Financial items

     Total  financial  items  decreased  from DKK 157 million for the year ended
December  31, 2000 to DKK 101 million for the year ended  December  31,  2001, a
decrease of  approximately  DKK 55 million.  The  improvement  resulted  from an
increase  in  interest  income of DKK 9 million  from DKK 36  million  to DKK 45
million  resulting from the large cash  reserves,  while the sale of the vessels
discussed above resulted in decreased  interest expense of approximately  DKK 70
million to DKK 122 million. A change in the value adjustments of DKK (3 million)
was  partially  a result of the sale of our  anchor  handlers.

Tax on Profit on Ordinary Activities

     The tax provision for the year ended  December 31, 2001 was DKK 166 million
as compared to a tax provision of DKK 53 million for the year ended December 31,
2000.  The effective tax rate was 30% in 2001 and 26% in 2000 due to a change in
the enacted statutory tax rate.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2002 AND THE YEAR ENDED DECEMBER 31,
2001 ON SIGNIFICANT BALANCE SHEET ITEMS

Vessels and capitalized dry-docking

     Vessels and capitalized  dry-docking increased by DKK 838 million, from DKK
1.743 million in 2001 to DKK 2.581 million in 2002. The Company took delivery of
four MR tankers  during the year  resulting  in an increase of DKK 948  million,
while capitalized dry-docking expenses increased by DKK 20 million primarily due
to an increase in the fleet. Ordinary depreciations were DKK 130 million.

Vessels under construction

     Vessels under  construction  decreased by DKK 55 million to DKK 388 million
in 2002.  Abovementioned deliveries decreased the item by DKK 922 million, while
prepayments  in the Company's  six other  tankers  caused an increase of DKK 867
million.

Other investments

     Other investments  increased from DKK 38 million to DKK 290 million, or DKK
252 million,  due to the Company's  decision to acquire  33.35% of the shares of
NORDEN.

     In June 2002,  we  purchased  30.8% of  NORDEN's  share  capital  excluding
treasury shares,  followed by a public tender offer to NORDEN's  shareholders at
DKK 360 per share. Upon the expiration of our tender offer on July 29, 2002, the
offer was neither extended nor increased.  As of June 15, 2003, we were NORDEN's
single  largest  shareholder,   with  33.35%  of  NORDEN's  outstanding  shares,
excluding treasury shares. It is our goal to achieve a successful combination of
the two companies,  which would provide a platform for further growth,  and give
us a genuine competitive advantage in the international shipping market place.

     Our  shares of NORDEN  are  currently  treated  in our  accounts  as "other
investments",  as we are not represented on NORDEN's board of directors,  do not
have any  influence on  significant  decisions of NORDEN and have access only to
financial information available to all other investors. Our investment in NORDEN
is valued on the basis of a share price of DKK 369.43,  the closing price on the
Copenhagen  Stock Exchange on December 30, 2002.  The total gross  investment in
NORDEN shares was DKK 263 million as of December 31, 2002,  reflecting a gain of
DKK 8 million from the original  investment.  The gain has been  included in our
consolidated financial statements included herein.

Mortgage debt and bank loans

     Mortgage debt and bank loans and next years  installments  on mortgage debt
increased  by DKK 226  million  to DKK  2,033  million  in 2002.  Ordinary  debt
repayments were DKK 220 million and borrowings for the vessels delivered in 2002
and the current newbuilding program was DKK 842 million. Due to the enactment of
the new Danish Financial  Statements Accounts Act on January 1, 2002 an exchange
rate adjustment of the mortgage debt decreased borrowings by DKK 396 million.

B. Liquidity and capital resources

     TORM's total cash and equivalents including bonds was DKK 522 million as of
December 31, 2002.  This amount  represented  DKK 186 million in collateral bond
deposits for vessels on bareboat charters and DKK 336 million in available cash.
As of January 1, 2002,  cash and cash  equivalents  including  bonds was DKK 827
million.  The net  decrease  in cash  and cash  equivalents  in 2002 was DKK 305
million  from  December  31,  2001 mainly due to the  acquisition  of the NORDEN
shares in  mid-2002  of DKK 252  million,  cash-prepayments  for  vessels  under
construction of DKK 46 million and dividend  payments of DKK 69 million.  Of the
cash and cash  equivalents  of DKK 522 million as of December 31, 2002,  DKK 186
million was collateralized in connection with a USD-loan and bareboat agreements
for two of the Company's tankers.  In addition to an ordinary overdraft facility
to cover  day-to-day  fluctuations  in  liquidity,  the  Company  has an  unused
six-year credit facility of DKK 500 million.

     During 2002, we generated  cash flow from  operations of DKK 261 million as
compared to DKK 682 million in 2001.  Cash flow from  operations was impacted by
the  decrease in profits of  approximately  DKK 380 million and was  impacted by
other  non-cash  adjustments  including  the decrease in  depreciation  expense.
Furthermore, the cash flow was offset by an improvement in working capital items
from a cash outflow of DKK 32 million in 2001 to a cash inflow of DKK 39 million
in 2002.

     Net cash used for  investing  activities  was DKK 1,119  million in 2002 as
compared  to DKK 54 million  in 2001.  The  increase  consisted  of  installment
payments to the shipyards in  connection  with the  newbuilding  program and the
investment in the NORDEN shares. This was partly offset by the proceeds from the
sale of the Liner activities.

     Cash  inflow  from  financing  activities  was DKK 552  million  in 2002 as
compared  to a cash  outflow of DKK 519  million in 2001.  In 2002,  we received
proceeds on new loans  related to the  newbuilding  program of DKK 842  million,
while DKK 220 million was spent on ordinary  repayments on the mortgage debt and
DKK 69 million was used for dividend payments.  As compared to 2001,  borrowings
increased by DKK 678 million.

     As of December  31,  2002,  we had DKK 2,033  million of loans and mortgage
debt outstanding. These borrowings require that 80 percent of the loan be repaid
over 20 equal semi-annual installments with the remaining 30 percent of the loan
being  repaid  at the  end of  that  period.  DKK 298  million  is due on  these
borrowings  in 2003.  Included  in these  loans  is a credit  facility  of USD 9
million,  which is renewed  every  year.  This  credit  facility  requires us to
maintain a certain minimum collateral level.

     Certain of our leases require us to maintain as collateral a minimum amount
of cash and bonds on hand.  The amount of  collateral  is  assessed  each period
dependent on the outstanding  debt and the value of the vessels.  We are able to
release  collateral  based  on  market  increases  and we are not  obligated  to
increase the collateral based on market value decreases.

     We have a  revolving  credit  agreement  for DKK 42  million  in  place  at
December 31, 2002. This agreement bears interest at LIBOR + .625% and is renewed
annually.

     Servicing of our obligations under the loan agreements,  payment of charter
hire for  chartered-in  vessels and all other  commitments that TORM has entered
into will be paid out of the cash  generated  by our  operating  activities.  In
2002,  we  generated  a net  inflow of DKK 261  million as  compared  to DKK 682
million in 2001.

     As of June 15, 2003 the Company has a  newbuilding  program  totaling  four
vessels - two LR2 Aframax product  tankers and two LR1 Panamax product  tankers.
On  newbuildings,  the initial 20% of the total  contract  amount are  generally
self-financed  by us while the remaining 80% are financed by mortgage debt. TORM
has signed an agreement about the financing of approximately 80% of the contract
amount of the two LR2-product tanker newbuildings to be delivered in 2003 and is
in the  process of  finalizing  the  documentation  for the loans on the two LR1
vessels. All self-financings have been finalized on all four vessels.

     We have significant cash outflow requirements associated with our long term
debt, time charters and financial leases. These payments are impacted by changes
in  interest  rates.  In order to manage  this  risk,  we enter  into  financial
instruments  to swap the variable  interest rate on a portion of the  borrowings
for fixed rate debt. We believe that based our available  cash and  investments,
projected operating cash flows and financing  capacity,  we have sufficient cash
flow to meet  our  operating  requirements  and  cash  flow  obligations,  while
continuing  to pursue  other  strategic  initiatives.  We also  believe that our
current fleet  structure,  based on time  charters,  financial  leases and owned
vessels, allows us flexibility to react to change in market conditions.

     We  will  continue  to  consider  strategic  opportunities,  including  the
acquisition of additional vessels and expansions into new markets.  We may chose
to pursue such opportunities through internal growth, joint ventures, attracting
pool partners or business acquisitions.

FOREIGN CURRENCY EFFECTS

     We are exposed to market risk from changes in foreign exchange rates, which
can affect  results from  operations  and financial  condition.  To minimize the
risk,  we manage our exposure to changes in foreign  currency  rates through our
regular operating and financing activities and, when deemed appropriate, through
the use of derivative financial instruments,  primarily cross currency contracts
and forward exchange contracts.

EFFECTS OF INFLATION

     Inflation  generally  affects  us by  increasing  the  interest  expense of
floating rate  indebtedness and by increasing cost of labor,  dry-docking  costs
and other operating expenses. We do not believe inflation has had or will have a
material  impact on our operations.  Inflationary  pressures on bunker costs are
not expected to have a material effect on our future operations  because freight
rates for voyage charters are generally sensitive to the price of a ship's fuel.
A sharp rise in bunker  prices  tend to have only a  negative  effect on results
since freights generally adjust after prices settle at a higher level.

C. Research and development, patents and licenses, etc.

     Not applicable.

D. Trend information.

EXPECTATIONS FOR THE REMAINDER OF THE YEAR

     Charter  rates for the product  tankers for the first  quarter and into the
second quarter of 2003 have been at higher levels than that of 2002. This is the
result of a number of  factors,  the effects of which are now  diminishing.  The
limited  growth of the world economy,  coupled with a substantial  growth in the
world fleet is expected to negatively impact charter rates in the second half of
2003,  although relatively low inventories of refined products and an increasing
focus on environmental  aspects are expected to provide a floor for charter rate
levels. Consequently, we expect significantly lower product tanker freight rates
in the second half of 2003.

     Bulk rates have,  as expected,  been firm during the first  quarter of 2003
and are expected to remain at  reasonable  levels for the remainder of the year,
given a relatively modest growth in the world fleet. Accordingly,  charter rates
for 2003 are expected at a somewhat higher level than those seen in 2002.  Lower
economic  growth  globally,  coupled  with the  effects of the SARS virus on the
Chinese  economy  could,  however,  negatively  impact  the bulk  market for the
remainder of the year.

E. Off-balance sheet arrangements.

     We do  not  have  any  off-balance  sheet  arrangements  that  will  have a
reasonable likelihood of affecting our current or future financial condition.

F. Tabular disclosure of contractual obligations.

     We have various contractual  obligations and commercial commitments to make
future  payments  including  debt  agreements,  lease  obligations  and purchase
commitments.  The following table summarizes our future  obligations under these
contracts due by period as of December 31, 2002 (in millions of DKK):

                                                               There-
                          2003     2004   2005   2006   2007    after    Total
                       -------  -------  -----  -----  -----  -------  -------

Long-Term Debt (1)       259.6    283.7  285.9  150.7  137.9    659.5  1,777.3

Capital Lease
Obligations (2)           38.5    217.8     --     --     --       --    256.3

Chartered-in Vessels
(Operating leases)       456.2    230.7  110.0  113.4  114.4    356.1  1,380.8

New building
installments
(Purchase
Obligations) (3)         973.8    333.2     --     --     --       --  1,307.0
                       -------  -------  -----  -----  -----  -------  -------
Total                  1,728.1  1,065.4  395.9  264.1  252.3  1,015.6  4,721.4
                       =======  =======  =====  =====  =====  =======  =======

     (1)  Debt payments could be accelerated  upon violation of debt  covenants.
          We believe the likelihood of a debt covenant violation is remote.

     (2)  The capital leases are based variable  interest  rates. As of December
          31, 2002, 53% were hedged by interest rate swaps. A 1% increase on the
          unhedged interest rate portion will increase Capital Lease Obligations
          by USD 0.2 million.

     (3)  Debt  financing  will  provide an  estimated  80% of the new  building
          installments.

CRITICAL ACCOUNTING POLICIES

     Critical   accounting   policies  are  those   policies  that  require  the
application of management's most challenging,  subjective or complex  judgments,
often as a result of the need to make estimates about the effect of matters that
are  inherently  uncertain  and  may  change  in  subsequent  periods.  Critical
accounting  policies involve judgments and  uncertainties  that are sufficiently
sensitive to result in materially different results under different  assumptions
and conditions.  We believe that our most critical accounting policies are those
described  below.  For a  detailed  discussion  of these  and  other  accounting
policies see our consolidated financial statements.

     Revenue recognition

     We generate our revenue through  shipping  activities,  which are conducted
primarily through pools.  Revenue is generated from each vessel participating in
the pools that we join and is based on either  voyage or time  charter  parties.
The  pools  determine   revenue  based  on  contractually   agreed  daily  rates
concurrently with the duration of the voyage.

     We recognize revenue based our distribution from the pools,  which is based
on available  earning days from each pool partners' vessels in relation to total
available pool earning days and total revenues recognized by the pool.

     For cross  over  voyages  (voyage  in  progress  at the end of a  reporting
period) there is a risk that the voyage may take longer than estimated. Based on
the  contract  terms,  there may be a lower  daily rate for excess days and this
could result in a decreased daily revenue for future periods.  The customer will
pay the  normally  contracted  rates  for  any  changes  that  are a  result  of
modifications  that they  request  in voyage.  Historically,  this has not had a
material impact on our revenue.

     Port and Bunker Expenses

     Voyage expenses,  which comprise port expenses and bunker fuel consumption,
are expensed as incurred. The total voyage expense incurred based on an estimate
of at  actual  expenses.  The  estimate  of actual  expenses  is based on vessel
statistics  regarding bunker  consumption,  port statistics,  captain reports of
payments made and prior experience. Invoices may be received over a period up to
18 months after  expenses have been incurred.  In the past, we have  experienced
immaterial changes in our original estimates.

     Dry-dock costs

     Our  vessels  are  required  to  be   dry-docked   for  major  repairs  and
maintenance,  which  cannot  be  performed  while  the  vessels  are  operating,
approximately  every  30 and 60  months  depending  on the  nature  of work  and
external  requirements.  The costs associated with the dry-docks are capitalized
upon the  completion of the dry-dock and  depreciated on a  straight-line  basis
over the  estimated  period  between  docks.  Costs  capitalized  as part of the
dry-dock  include actual costs incurred at the dry-dock yard,  including  marine
paint,  cost of hiring  crews to effect  repairs  and parts used in making  such
repairs,  cost of travel,  lodging and supervision of our own personnel and cost
of hiring  third  party  personnel  to oversee a dry-dock.  As the  depreciation
commences on the first day after the vessels has  completed  the  dry-dock,  and
invoices are received  after that, the total expense of the dry-dock is based on
estimates.

     If the actual  expenses of a dry-dock  differ from the estimated  expenses,
the depreciation  expense recorded in the following period would change. We have
not historically incurred any material changes in the estimated costs.

     Useful Life of Vessels

     The useful  life of the vessels is  assessed  periodically  based on market
conditions,  regulatory  requirements  and business plans.  The estimated useful
life, and any associated  estimated  salvage value, is the basis for determining
depreciation expense.

     Our vessels are depreciated on a  straight-line  basis over their estimated
useful  lives,  which we have  estimated to 25 years.  We believe that a 25-year
depreciable  life is consistent with that used by other  comparable  shipowners.
Depreciation is based on cost less the estimated residual scrap value.  Residual
scrap value is estimated as the lightweight tonnage of each vessel multiplied by
its scrap value per ton.

     If the  estimate of useful life for vessels is revised or there is a change
in the estimated scrap value, the amount of depreciation  expenses recorded each
in future periods will change. In 2001, we changed from an estimated useful life
of our vessels of 20 years to 25 years,  resulting in a decrease in depreciation
expense in 2002 of DKK 11 million.

     Carrying Values of Vessels

     We evaluate  the  carrying  values and  periods  over which our vessels are
depreciated  to determine if events have occurred  requiring a  modification  to
their  carrying  values or useful  lives.  The  valuation of vessels is reviewed
based on events  and  changes in  circumstances  that  would  indicate  that the
carrying  value  of  the  assets  might  not  be  recovered.  In  assessing  the
recoverability  of the  vessels,  we  review  certain  indicators  of  potential
impairment,  such as sale and  purchase  prices and general  market  conditions.
Markets  valuations  from  independent  shipbroking  companies  are  obtained to
support the recoverable amounts for the vessels on a semi-annual basis.

     The  carrying  values of our  vessels may not  represent  their fair market
value at any point in time since  market  prices of second hand  vessels tend to
fluctuate  with  changes in  charter  rates and the cost of  newbuildings.  If a
vessel is sold for less than its carrying value, the Company will realize a loss
on that transaction.

     If the estimated future cash flows or their related  assumptions  change in
the future,  an impairment  of vessels  currently  recorded may be required.  In
2002,  we  reversed  a  previously  recorded  impairment  based  on the  factors
discussed  above,  which  resulted  in income of DKK 12  million.  There were no
impairments of vessels recorded in 2000 or 2001.

CHANGE IN ACCOUNTING PRINCIPLES

     We revised our accounting  policies as described below due to the enactment
of the new Danish  Financial  Statements  Accounts  Act as of January 1, 2002 or
where a change in accounting  policy  increases the  consistency  between Danish
GAAP and U.S. GAAP reporting. In accordance with Danish GAAP, the revisions have
been reflected through a restatement of the historical financial results.

     Finance leases

     Agreements  to  charter  vessels  and to lease  other  property,  plant and
equipment,  where the  Company  has  substantially  all the risks and rewards of
ownership,  are recognized in the balance sheet as finance leases.  Lease assets
are measured at the present value of future leasing  payments at their inception
determined in the agreements  including any purchase  options.  The lease assets
are depreciated and written down under the same accounting policy as the vessels
owned by the Company or over the lease period  depending on the lease terms. The
capitalized  lease obligation is recognized as a liability in the balance sheet.
Previously,  the Company  accounted for these  agreements as operating leases as
was permitted under the former Danish Annual Accounts Act.

     Sale and leaseback transactions

     Gains  related  to  sale  and  lease/back  transactions  are  deferred  and
amortized in proportion to the gross rental on the time charter over the life of
the charter party.  Previously all such gains were recognized at the date of the
transaction.

     Swaps of vessels

     Gains  related to a swap of  ownership  in vessels  are  recognized  in the
income statement at the date of the swap  transaction,  except when the acquired
vessels are similar to the vessels exchanged.  Previously,  any gain on the swap
of  vessels  was  recorded  in the  income  statement  at the  date of the  swap
transaction,  except when the vessels were identical  vessels of equivalent age.
The Danish Financial  Accounts  Statements Act does not specify the treatment of
such  transactions  and  accordingly  the  Company  has  chosen  to  define  its
accounting policy so as to be consistent with U.S. GAAP.

     Dividends

     Dividends are  recognized as a liability at the time of  declaration at the
annual  general  meeting.  Previously,  proposed  dividends  were  recognized in
current liabilities in the fiscal year to which they related.

     Own shares

     Own shares are recognized directly as part of shareholders' equity at cost.
Upon subsequent  disposal of own shares,  any  consideration  is also recognized
directly in shareholders' equity.

     Previously,  own shares were  reflected  as an asset and adjusted at market
value through the income statement.

     Derivative financial instruments

     We use derivative  financial  instruments to hedge  interest,  currency and
other risks.  Derivative  financial  instruments are recognized at fair value in
the balance sheet.

     For fair value hedges the change in fair value is offset against the change
in fair value of the hedged item.  For cash flow hedges the change in fair value
on the contract is recorded as part of shareholders' equity and then transferred
to the income  statement  concurrently  with the hedged item being recognized in
the income statement.  The change in fair value on contracts that do not qualify
for hedge  accounting  is  recorded in the income  statement  at the end of each
period.

     Previously,  derivative  financial  instruments  were not recognized in the
balance sheet.  For fair value hedges,  exchange rate adjustments were reflected
in the income statement. For cash flow hedges, no exchange rate adjustments were
reflected until the contract expired.

     Financial liabilities

     Mortgage  debt and bank loans  relating  to the  financing  of vessels  are
stated in U.S. dollars and translated to DKK at the balance sheet date. As these
are  considered  hedges  of the  currency  risk  relating  to the  vessels,  any
unrealized  foreign  exchange  gains or losses  at the  balance  sheet  date are
recognized  directly in the  shareholders'  equity and then  transferred  to the
income statement when the loan is repaid.

     Previously,  the mortgage debt and bank loans  relating to the financing of
vessels in integrated entities were recorded at the historical exchange rate.

ACCOUNTING PRINCIPLES NOT YET ADOPTED

     Danish GAAP

     Under Danish GAAP and the Danish  Financial  Statements  Accounts  Act, the
U.S.  dollar  may be  used  as the  measurement  currency  of  Danish  financial
statements.

     As the shipping  industry is based on the U.S. dollar,  our use of the U.S.
dollar as the measurement  currency will reflect the economic  conditions of the
Company more  accurately  and provide a more true and fair view of the Company's
activities.

     Thus, we meet the criteria for applying the U.S.  dollar as the measurement
currency  in  accordance  with SIC 19  ("Reporting  Currency -  Measurement  and
Presentation of Financial Statements under IAS 21 and IAS 29").

     After  January  1,  2003,  translation  from U.S.  dollar to DKK is made in
accordance with SIC 30's  ("Reporting  Currency - Translation  from  Measurement
Currency  to  Presentation  Currency")  directions  regarding  translation  from
measurement currency to presentation currency, which provide:

     o    that all  transactions in the income statement are translated based on
          the average DKK exchange rate for the period,

     o    that assets and liabilities  are translated  based on the DKK exchange
          rate as at the balance sheet date, and

     o    that  all  foreign   exchange  rate  gains  or  losses   arising  upon
          translation  from  measurement  currency to presentation  currency are
          recognized directly to shareholders' equity

     U.S. GAAP

     SFAS 143 "Accounting for Asset Retirement Obligations"

     In June 2001,  the FASB issued SFAS 143,  Accounting  for Asset  Retirement
Obligations.  SFAS 143 requires  that the fair value of a liability for an asset
retirement  obligation  be recognized in the period in which it is incurred if a
reasonable  estimate of fair value can be made. The associated  asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset. An
entity shall measure changes in the liability for an asset retirement obligation
due to passage of time by  applying  an  interest  method of  allocation  to the
amount of the liability at the  beginning of the period.  The interest rate used
to measure that change shall be the credit adjusted  risk-free rate that existed
when the liability was initially measured. That amount shall be recognized as an
increase in the carrying amount of the liability as an expense  classified as an
operating  item in the  statement of income.  SFAS 143 is  effective  for fiscal
years  beginning  after June 15,  2002.  The Company  does not  anticipate  that
adoption of SFAS 143 will have a material impact on its results of operations or
its financial position.

     SFAS 145  "Rescission of SFAS Nos. 4, 44 and 64,  Amendment of SFAS 13, and
Technical Corrections as of April 2002"

     In April 2002, the FASB issued Statements of Accounting  Standards No. 145,
SFAS 145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of
Debt," SFAS 44,  "Accounting for Intangible  Assets of Motor Carriers," and SFAS
64,  "Extinguishments of Debt made to satisfy  Sinking-Fund  requirements." As a
result,  gains  and  losses  from  extinguishment  of  debt  will no  longer  be
classified  as  extraordinary  items unless they meet the criteria of unusual or
infrequent as described in Accounting  Principles  Boards Opinion 30, "Reporting
the Results of  Operations - Reporting the Effects of Disposal of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions." In addition, SFAS 145 amends SFAS 13, "Accounting for Leases," to
eliminate an inconsistency  between the required  accounting for  sale-leaseback
transactions and the required  accounting for certain lease  modifications  that
have economic effects that are similar to sale-leaseback transactions.  SFAS 145
also  amends  other  existing  authoritative   pronouncements  to  make  various
technical  corrections,  clarify meanings, or describe their applicability under
changed  conditions.  SFAS 145 is effective for fiscal years beginning after May
15, 2002. The Company does not believe that the adoption of SFAS 145 will have a
material impact on its results of operations and financial position.

     SFAS 146 "Accounting for Costs Associated with Exit or Disposal Activities"

     In June 2002,  the FASB issued  Statement of Accounting  Standards No. 146,
"Accounting  for  Costs  Associated  with  Exit or  Disposal  Activities".  This
Statement addresses financial accounting and reporting for costs associated with
exit or disposal  activities and nullifies  Emerging Issues Task Force Issue No.
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other
Costs  to  Exit  an   Activity   (including   Certain   Costs   Incurred   in  a
Restructuring)".  SFAS  146  eliminates  the  definition  and  requirements  for
recognition of exit costs in EITF 94-3. SFAS 146 requires that a liability for a
cost  associated  with an exit or  disposal  activity  be  recognized  when  the
liability is incurred.  Under EITF 94-3, a liability for an exit cost as defined
in EITF 94-3 was  recognized  at the date of an entity's  commitment  to an exit
plan. SFAS 146 also concluded that an entity's  commitment to a plan, by itself,
does not create a present  obligation  to others that meets the  definition of a
liability.  SFAS 146 also  establishes  that  fair  value is the  objective  for
initial  measurement  of the  liability.  The Company  does not believe that the
adoption of SFAS 146 will have a material  impact on its  results of  operations
and financial position.

     SFAS  148  "Accounting  for  Stock-Based   Compensation  -  Transition  and
Disclosure - an amendment of SFAS 123"

     In  December  2002,  FASB  issued  SFAS 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure - an amendment of SFAS 123. SFAS 148
amends SFAS 123 and provides  alternative methods for accounting for a change by
registrants to the fair value method of accounting for stock-based compensation.
Additionally, SFAS 148 amends the disclosure requirements of SFAS 123 to require
disclosure  in the  significant  accounting  policy  footnote of both annual and
interim  financial  statements  of the  method  of  accounting  for  stock-based
compensation  and the related  pro-forma  disclosures  when the intrinsic  value
method  continues  to be used.  The  statement  is  effective  for fiscal  years
beginning  after December 15, 2002, and  disclosures are effective for the first
fiscal quarter beginning after December 15, 2002. The Company does not intend to
adopt  the fair  value  method  of  accounting  for  stock  based  compensation.
Consequently  SFAS 148 will not have an impact on its results of  operation  and
financial position.

     SFAS 149,  "Amendment  of SFAS 133 on  Derivative  Instruments  and Hedging
Activities

     In April 2003,  the  Financial  Accounting  Standards  Board (FASB)  issued
Statement  No.  149 (SFAS No.  149),  Amendment  of SFAS No.  133 on  Derivative
Instruments  and  Hedging   Activities.   The  Statement  amends  and  clarifies
accounting for derivative instruments,  including certain derivative instruments
embedded in other contracts,  and for hedging  activities under SFAS No. 133. In
particular, it (1) clarifies under what circumstances a contract with an initial
net investment meets the characteristic of a derivative as discussed in SFAS No.
133, (2) clarifies when a derivative contains a financing component,  (3) amends
the  definition  of an  underlying  to conform it to the  language  used in FASB
Interpretation  No. 45,  Guarantor  Accounting and Disclosure  Requirements  for
Guarantees,  Including  Indirect  Guarantees of  Indebtedness  of Others and (4)
amends  certain  other  existing  pronouncements.  SFAS No. 149 is effective for
contracts  entered into or modified after June 30, 2003,  except as stated below
and for hedging relationships designated after June 30, 2003.

     The  provisions of SFAS No. 149 that relate to SFAS No. 133  Implementation
Issues that have been effective for fiscal quarters that began prior to June 15,
2003,  should  continue  to be  applied  in  accordance  with  their  respective
effective dates. In addition,  certain provisions  relating to forward purchases
or sales of when-issued  securities or other  securities  that do not yet exist,
should be applied to existing  contracts as well as new  contracts  entered into
after June 30, 2003. SFAS No. 149 should be applied prospectively.

     The Company will adopt the provisions of SFAS No. 149 on December 31, 2003.
However,  it does not expect  that the  adoption of this  Statement  will have a
material impact on its results of operations and financial position.

     SFAS   150,   "Accounting   for   Certain   Financial    Instruments   with
Characteristics of both Liabilities and Equity"

     In May  2003,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial Accounting Standards No. 150 ("SFAS 150"), Accounting for
Certain  Financial  Instruments  with  Characteristics  of both  Liabilities and
Equity. SFAS 150 modifies the accounting for certain financial instruments that,
under  previous  guidance,  issuers could  account for as equity.  The Statement
requires that those  instruments  be classified as  liabilities in statements of
financial  position.  SFAS 150 affects an issuer's accounting for three types of
freestanding financial instruments, namely:

     o    mandatorily  redeemable shares, which the issuing company is obligated
          to buy back in exchange for cash or other assets.

     o    Instruments, other than outstanding shares, that do or may require the
          issuer to buy back some of its  shares in  exchange  for cash or other
          assets.  These  instruments  include put options and forward  purchase
          contracts.

     o    obligations  that can be settled  with shares,  the monetary  value of
          which is fixed,  tied solely or  predominantly to a variable such as a
          market  index,  or varies  inversely  with the  value of the  issuers'
          shares.

     SFAS 150 does not apply to features embedded in financial  instruments that
are not derivatives in their entirety.

     In addition to its requirements for the  classification  and measurement of
financial instruments within its scope, SFAS 150 also requires disclosures about
alternative  ways of settling  those  instruments  and the capital  structure of
entities, all of whose shares are mandatorily redeemable.

     SFAS 150 is effective  for financial  instruments  entered into or modified
after May 31, 2003,  and  otherwise  is effective at the  beginning of the first
interim  period  beginning  after  June 15,  2003.  It is to be  implemented  by
reporting  the  cumulative  effect of a change in an  accounting  principle  for
financial  instruments  created  before the issuance  date of the  Statement and
still existing at the beginning of the interim  period of adoption.  Restatement
is not permitted.

     The  Company  does not  expect  that the  adoption  of SFAS 150 will have a
material impact on its results of operations and financial position.

     FIN 45 "Guarantor's  Accounting and Disclosure Requirements for Guarantees,
including Indirect Guarantees of Indebtedness of Others"

     In November 2002, FASB issued  Interpretation 45,  "Guarantor's  Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness of Others". This interpretation  requires certain disclosures to be
made by a guarantor  in its interim and annual  financial  statements  about its
obligations  under  certain  guarantees  that is has issued.  It also requires a
guarantor to  recognize,  at the  inception of a guarantee,  a liability for the
fair value of the obligation undertaken in issuing the guarantee. The Company is
assessing,  but at this point do not believe the adoption of the recognition and
initial  measurement  requirements  of FIN 45 will have a material impact on its
financial position, cash flows or results of operations.

     FIN 46 "Consolidation of Variable Interest Entities"

     In January 2003, the FASB issued FASB Interpretation No. 46 - Consolidation
of Variable  Interest Entities - an interpretation of ARB No. 51 ("FIN 46"). FIN
46  clarifies  the   application  of  Accounting   Research   Bulletin  No.  51,
Consolidated Financial Statements, to certain entities in which equity investors
do not have the  characteristics  of a controlling  financial interest or do not
have sufficient equity at risk for the entity to finance its activities  without
additional  subordinated  financial support from other parties.  FIN 46 explains
how to identify variable interests  entities and how an enterprise  assesses its
interests in a variable  interest  entity to decide whether to consolidate  that
entity.  It requires  existing  unconsolidated  variable interest entities to be
consolidated by their primary  beneficiaries  if the entities do not effectively
disperse risks among parties involved.  It also requires certain  disclosures by
the primary  beneficiary of a variable interest entity and by an enterprise that
holds  significant  variable  interests in a variable  interest entity where the
enterprise is not the primary  beneficiary.  FIN 46 is effective  immediately to
variable  interest  entities  created  after  January  31,  2003 and to variable
interest  entities in which an enterprise  obtains an interest  after that date,
and effective for the first fiscal year or interim period  beginning  after June
15, 2003 to variable  interest  entities in which an enterprise holds a variable
interest that it acquired  before February 1, 2003. FIN 46 requires an entity to
disclose certain  information  regarding a variable interest entity, if when the
Interpretation  becomes effective,  it is reasonably possible that an enterprise
will consolidate or have to disclose  information  about that variable  interest
entity,  regardless  of the date on  which  the  variable  entity  interest  was
created.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and senior management

     Set forth below are the names,  ages and  positions  of our  directors  and
executive officers.

     Name                             Age           Position
     ----                             ---           --------

     Board of Directors:

     Niels Erik Nielsen               55            Chairman of the Board
     Christian Frigast                51            Deputy Chairman of the Board
     Lennart Arnold Johan Arrias      54            Director
     Ditlev Engel                     39            Director
     Rex Harrington                   69            Director
     Peder Mouridsen                  53            Director
     Gabriel Panayotides              48            Director

     Management:

     Klaus Kjaerulff                  51            Chief Executive Officer
     Klaus Nyborg                     39            Chief Financial Officer

     Biographical  information  with  respect  to  each  of  our  directors  and
executives is set forth below.

     Niels Erik  Nielsen  was Deputy  Chairman  of our Board of  Directors  from
September 26, 2000 and has been  Chairman of our Board of Directors  since April
25, 2002.  Mr.  Nielsen is also a partner  with the Danish law firm,  Bech-Bruun
Dragsted,  which provides  certain legal services to us. He is also the chairman
of the board of directors of several Danish companies,  including the following:
Amagerbanken  Aktieselskab,  Ambu  International A/S, Audio Holding A/S, Charles
Christensen   A/S,  Cimber  Air  A/S,   Danica-Elektronik   A/S,  Danish  Supply
Corporation  A/S,  Gammelrand  Skaervefabrik  A/S, GPV Industri A/S,  Kongskilde
Industries  A/S,  Mezzanin  Kapital A/S,  National  Industri  A/S,  Preben Olsen
Automobiler A/S, Satair A/S and Weibel Scientific A/S. He holds a Masters of Law
degree from the University of Copenhagen.

     Christian  Frigast has been a director of the Company  since  September 26,
2000 and Deputy  Chairman  since April 25, 2002. He is the managing  director of
Axcel  IndustriInvestor  A/S and  holds an  M.Sc(Econ)  from the  University  of
Copenhagen.  He also serves as the Chairman of the Board for numerous  companies
including the following:  Britannia  Invest A/S,  Icopal A/S, Kansas Wenaas A/S,
Kilroy Travels  International  A/S,  Laundry Systems Group A/S, L0gst0r R0r A/S,
NetTest A/S, Rationel Vinduer A/S, Royal Scandinavia A/S, Thygesen Textile Group
A/S, Tvilum-Scanbirk A/S and Vest-Wood A/S.

     Lennart  Arnold Johan Arrias has been a director of the Company since 2003.
Mr.  Arrias is employed by TORM as a Captain and has been with the Company since
1992. He is elected by the employees of TORM to the Board.

     Ditlev Engel has been a director of the Company  since April 25, 2002.  Mr.
Engel is Managing  Director of Hempel  Marine  Paints and has a BSc(Econ)  and a
B(Comm) degree from the Copenhagen  Business School. He is a Board member of the
following other public limited Danish companies and subsidiaries:  HSA (Danmark)
A/S and Hempel Contractors A/S.

     Rex  Harrington,  a director of the Company since April 2003, is the former
Director  of  Shipping  at  The  Royal  Bank  of  Scotland  (RBS)  where  he had
responsibility for its extensive shipping  portfolio.  He has wide experience in
the shipping industry and in marine finance,  starting his career at the Bank of
England after graduating from Oxford University with a Masters degree. He is now
an independent  shipping advisor. Mr. Harrington is the Chairman of the Advisory
Board  of  the  Liberian   International  Ship  and  Corporate  Registry  and  a
non-executive director of the following companies:  General Maritime Corporation
(NYSE listed), Royal Olympic Cruise Line (NASDAQ quoted),  Eurofin International
Limited,  International  Chamber of Commerce  Commercial  Crime Services,  which
incorporates  the  International  Maritime  Bureau.  In  addition he is a Deputy
Chairman  of the  International  Maritime  Industries  Forum and a member of the
following  organizations:  InterCargo London Advisory Panel,  Lloyds Register of
Shipping General  Committee,  London Shipping Law Centre Steering  Committee and
The Baltic Exchange. He was a Director of Clarksons (international  shipbrokers)
from 1995 to 1998 and Lloyds Register of Shipping from 1994 to 1999.

     Peder  Mouridsen  has  been a  director  of the  Company  since  2003.  Mr.
Mouridsen is employed by TORM as a Chief  Engineer and has been with the Company
since 1970. He is elected by the employees of TORM to the Board.

     Gabriel  Panayotides has been a director of the Company since September 26,
2000. He is Chairman  (since 1998),  President  and Chief  Executive  Officer of
Excel  Maritime  Carriers  Ltd.,  listed on the American  Stock  Exchange  since
October 1997. Mr. Panayotides has been engaged in the ownership and operation of
ships since 1978 and sits on the Greek  Committee  of the French  classification
society,  Bureau  Veritas and Lloyds  Register of  Shipping.  He has a Bachelors
degree from the Pireaus University of Economics.

     Klaus Kjaerulff has been our Chief Executive  Officer and Managing Director
since September 2000. Mr. Kjaerulff has worked for TORM since 1976. From 1997 to
2000, he served as Executive Vice President  responsible for our tanker and bulk
divisions.  From 1981 to 1997,  Mr.  Kjaerulff was Vice  President of our tanker
division.  He is a member  of the board of  Gram-Agentur  A/S,  a Danish  listed
public limited company.

     Klaus Nyborg has been our Chief  Financial  Officer  since  February  2002.
Prior to working for us, Mr.  Nyborg was employed in various  capacities  at the
A.P.  M0ller Group,  most recently as Chief  Financial  Officer,  or CFO, of the
Maersk  Logistics  division.  From 1998 to 2001, he served as Vice President and
Regional CFO at Maersk for the Asia-Mid-East  Region.  From 1997 to 1998, he was
the Regional CFO for the  Europe-Africa  Region.  From 1992 to 1997,  Mr. Nyborg
served as General Manager and Corporate  Secretary in the A.P. M0ller Group. Mr.
Nyborg holds a masters degree in Law and Business  Economics from the Copenhagen
Business School.

B. Compensation.

     In  2002,  we  paid a total  of DKK 1.4  million  in cash to the  Board  of
Directors and DKK 5.2 million in cash to our  executives.  These totals  include
salary payments to our former Chief Financial Officer,  Lars Pedersen of DKK 0.6
million,  and DKK 0.2 million to resigned members of the Board of Directors.  We
have not set aside  any  amounts  to  provide  pension,  retirement  or  similar
benefits to our directors and executive officers. For a description of our stock
option plan please refer to "option  plan." As of December 31, 2002,  no options
had been exercised by members of our Board of Directors.

C. Board Practices.

     The members of our Board of Directors are elected for four-year  terms.  At
the end of each term,  they are  eligible  for  re-election.  All current  Board
members were elected at the annual general  meeting in 2003 and will be eligible
for re-election in 2007.  There are no service  contracts  between us and any of
our directors providing for benefits upon termination of a director's election.

     We do not have  separate  audit or  compensation  committees,  and the full
Board of Directors currently fulfills the function of an audit committee.

D. Employees.

     The numbers of employees we employed,  on average,  for the previous  three
financial years, are as follows:

                                                    2000        2001        2002
                                                     ---         ---         ---
Land-based employees

     Denmark                                          91         102          90

     United Kingdom                                    2           1           1

     Total                                            93         103          91

Seafarers (officers)                                 133         132         160

Total employees                                      226         235         251

     In 2000,  approximately 24 of our employees were employed in administrative
positions.  That number  increased to 26 in 2001 and to 30 in 2002. The majority
of the staff on vessels owned by our subsidiaries  and associated  companies are
not employed by us.

E. Share ownership

     The following table sets forth  information as of June 15, 2003,  regarding
the total  amount of capital  stock owned by our  officers  and  directors on an
individual basis:

                                                                    Shares
Name                               Position                         (Nom. Hold.)
----                               --------                         ------------

Niels Erik Nielsen                 Chairman of the Board            *
Christian Frigast                  Deputy Chairman of the Board     *
Lennart Arnold Johan Arrias        Director                         *
Ditlev Engel                       Director                         *
Rex Harrington                     Director                         *
Peder Mouridsen                    Director                         *
Gabriel Panayotides                Director                         *
Klaus Kjaerulff                    Chief Executive Officer          *
Klaus Nyborg                       Chief Financial Officer          *

*  The person beneficially owns less than one percent of the shares.

Option plan

     In 2001,  we introduced a share option  compensation  package for twenty of
our Board  members,  executives  and key  employees.  The plan  granted  799,250
options to employees,  which will be priced at three different dates, 242,560 in
2001,  278,300 in 2002 and 278,300 in 2003.  Option  holders may exercise  their
options on specified dates and choose to purchase our shares at the strike price
or receive a cash payment consisting of the difference between the option strike
price and the share  price,  whereas  previously,  each option gave the right to
acquire  one share at the option  strike  price  only.  The  individual  must be
employed  at the date of issue to  receive  that  year's  options.  Each  option
carries the right to receive  the  difference  between the strike  price and the
price of one common share, par value DKK 10 per share.

     The share  options for 2001 were priced on February  20, 2001 and the share
options for 2002 were priced on March 20, 2002. For 2003, the share options were
priced on February 27, 2003. The 2001 share options were  exercisable at a price
of DKK 54 per share.  The 2002 share options are  exercisable  at a price of DKK
58.50. The 2003 share options are exercisable at a price of DKK 62.31. The share
options may be exercised after a period of one year following the pricing of the
option and expire three years later.

     The total number of share options is 799,250,  which equals 4% of the share
capital.

Employee shares

     During  April  2001,  the  Board of  Directors  also  decided  to offer our
employees  200,000 common shares for the price of DKK 10.5 per share. In October
2001,  employees  exercised the right to purchase  194,235 of these shares.  The
market  price at the date of the grant  was DKK 54.3 per  share.  The  remaining
stock purchase rights expired.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.

A. Major shareholders.

     Our  capital  stock is  comprised  of common  shares,  par value DKK 10 per
share.  As of December 31,  2002,  there were 18.2  million  outstanding  common
shares. The following table sets forth information  regarding the owners of five
(5)  percent  or more of our  common  shares  as of June 15,  2003.  None of the
shareholders have any special voting rights.

Name                                      Number of Shares   Percentage of Class
----                                      ----------------   -------------------

Beltest Shipping Company Ltd.                5,608,300                31%

Exploinvest Ltd. Cyprus                      2,906,730                16%

A/S Dampskibsselskabet TORM's
Underst0ttelsesfond, Denmark                 1,139,220                 6%

Tung Chiaur (Hong Kong) Limited                982,800                 5%

Palmerston Associates Inc.                     911,820                 5%

     In 2002 and 2003,  Beltest Shipping Company Ltd.  purchased  5,608,300,  or
30.81%, of our outstanding  common shares, of which 28.14% were held by American
Investors Co. Liberia. The holdings exceed 5% of the total number of outstanding
shares,  which  required each company to file  information  with the  Copenhagen
Stock  Exchange.  Beltest  and its  parent,  Ryder  Holdings  Inc,  have filed a
Schedule  13D  with  the  Securities  and  Exchange  Commission,   or  the  SEC.
Exploinvest  has filed a Schedule 13G with the SEC.  Tung Chiaur and  Palmerston
Associates have both given notices to the Copenhagen Stock Exchange.

B. Related party transactions.

     Niels Erik Nielsen, our Chairman of the Board of Directors, is a partner in
the law firm  Bech-Bruun  Dragsted,  a Danish  counsel.  We hired  that  firm in
connection  with the listing of our ADSs on the NASDAQ and our tender  offer for
NORDEN.  The law firm's fee in 2002 of DKK 1.6  million is based upon the amount
of time spent by the firm on these matters (DKK 1.5 million in 2001).

     Gabriel  Panayotides,  one of our  Directors,  has  served  as the  head of
operations of Maryville  Maritime Inc. since 1983.  Maryville  Maritime Inc. had
chartered one vessel to the TORM Panamax bulk carrier pool in the period January
1 to February  22, 2002,  after which the vessel was  redelivered.  In 2001,  we
entered  into a pooling  and  commercial  management  agreement  with  Maryville
Maritime Inc. in connection with our Panamax bulk carrier vessels.

C. Interests of experts and counsel.

     Not applicable.

ITEM 8. FINANCIAL INFORMATION.

A. Consolidated Statements and Other Financial Information.

     See Item 17.

DIVIDEND DISTRIBUTION POLICY

     Under  Danish  law,  we are  permitted  to  distribute  dividends  from our
unrestricted  capital. Any determinations to distribute dividends will be at the
discretion  of the Board of  Directors,  which  decision must be approved by the
shareholders at our annual general meeting.  For the year 2002, the shareholders
approved  a  dividend  of DKK 2 for  every  DKK 10 share at the  annual  general
meeting in 2003.

     There are no  restrictions  in our existing  financing  arrangements on our
ability to pay dividends to our shareholders.  Two of our financing arrangements
may have an effect on our  dividend  policy,  even though  they do not  directly
impose restrictions on our ability to declare dividends. In the event of certain
substantial  changes and subject to fulfillment of other conditions  relating to
our financial  position,  the provisions of some of our loan agreements  trigger
the automatic inclusion of additional financial covenants in the form of minimum
value clauses and increases in the interest  margin.  The loan  agreements  with
Danish Ship  Finance  include in their  definition  of  "substantial  changes" a
dividend distribution  exceeding 40% for two vessels and 25% for four vessels of
our  consolidated  annual  results  after  extraordinary  items  and  taxes  and
distribution  of a  dividend  at a  dividend  percentage  in  excess of 12% in a
financial year where we have a loss in our profit and loss account.

B. Significant Changes.

     Not Applicable.

ITEM 9. THE OFFER AND LISTING.

A. Listing Details.

     Our common shares  currently trade on the Copenhagen  Stock  Exchange.  The
tables  below sets forth,  for the periods  indicated,  the high and low closing
sale price in Danish Kroner and the average daily trading  volume for our shares
on the Copenhagen  Stock  Exchange.  Although we have provided the average daily
trading  volume of our shares for the periods  indicated,  the trading volume of
our shares on the Copenhagen  Stock  Exchange is extremely  volatile and trading
ranges from a none to several thousand shares.

     The average  daily trading  volume may not be indicative of actual  trading
volumes and liquidity.  Please see "Risk Factors - There may be no active public
market for you to resell our ADSs." For the previous five full years:

                                          1998    1999     2000    2001     2002

Low                                      20.00   18.00    22.47   44.00    46.13
High                                     52.50   28.87    60.28   62.50    60.41
Average Daily Volume                     2,313   3,781   10,186   9,454   11,175

For the previous two full years and subsequent periods, by quarter:

2001                  1st quarter     2nd quarter    3rd quarter     4th quarter
----                  -----------     -----------    -----------     -----------
Low                   52.56           59.04          49.80           44.00
High                  59.45           62.50          61.16           50.13
Average Daily Volume  5,807           7,175          11,324          14,072

2002                  1st quarter     2nd quarter    3rd quarter     4th quarter
----                  -----------     -----------    -----------     -----------
Low                   46.13           47.70          46.84           49.10
High                  60.41           59.40          59.28           57.61
Average Daily Volume  17,380          16,261         7,685           3,528

For the previous six months:

                       December   January   February   March    April    May
                       2002       2003      2003       2003     2003     2003
                       ----       ----      ----       ----     ----     ----
Low                    54.33      57.32     61.00      60.95    65.93    80.03
High                   56.53      66.95     64.24      66.82    79.77    90.78
Average Daily Volume   3,010      22,113    8,270      33,095   29,456   33,482


C. Markets.

     Our common shares are currently  trading on the Copenhagen  Stock Exchange.
Our ADSs, each representing one common share, are quoted on the NASDAQ under the
abbreviation "TRMD".

     In 2002, the average daily trading volume of our ADSs on the NASDAQ was 227
ADSs,  and from Jan 1, 2003  through May 31,  2003,  the average  daily  trading
volume was 4,470 ADSs.
<PAGE>

ITEM 10. ADDITIONAL INFORMATION

     This section  summarizes  our share capital and the material  provisions of
our  Articles of  Association,  including  rights of holders of our shares.  The
description is only a summary and does not describe everything that our Articles
of Association contain. A copy of our Articles of Association was filed with the
Securities  and  Exchange  Commission  on June 28,  2002,  as Exhibit 1.1 to our
annual  report on Form 20-F for the year ended  December 31, 2001.  As a foreign
private  issuer,  we are not  subject to the proxy rules  applicable  to issuers
under  Section 14 of the Exchange  Act of 1934,  as amended,  and our  officers,
directors and principal  shareholders are not subject to the short-swing  profit
disclosure  and  recovery  provisions  of Section  16 of that act.  We intend to
provide  quarterly  reports for the first three  quarters of each fiscal year to
the  Securities  and  Exchange  Commission  on  Form  6-K  containing  unaudited
financial and other information that we file with the Copenhagen Stock Exchange.

A. Share capital.

     Not Applicable

B. Memorandum and articles of association.

     Our Articles of Association provide that our principal objectives are

     o    to carry out business within shipping,  chartering and other transport
          services;

     o    to make investments, including in real estate; and

     o    to  carry  on such  other  business  as  determined  by the  Board  of
          Directors to be consistent with such objectives.

     The Rules of  Procedure  that  govern  our Board of  Directors  prohibit  a
director  from   participating  in  the  consideration  of  business   regarding
agreements in which the director is a participant or in which the director has a
material interest.  Any agreements between us and a director or between us and a
third party in which a director has an interest must be approved by the Board of
Directors.  The Rules of Procedure  also provide that a director shall retire at
the first general meeting following the director's 70th birthday.

     Our Articles of Association also contain the following provisions:

     o    our Board of Directors  shall receive a fixed stipend,  which shall be
          set by the Board of Directors and approved by the shareholders  during
          the annual general meeting;

     o    any dividend  payable to a shareholder  which remains  unclaimed after
          five years shall accrue to us;

     o    each common share shall have the right to one vote;

     o    directors  are  elected  for four year  terms,  after  which  they are
          entitled to be re-elected;

     o    there are no redemption rights; and

     o    generally,  proposals  to amend  our  Articles  of  Association  or to
          dissolve or merge with  another  company  require  the  approval of at
          least  2/3  of  all  votes  cast  at a  meeting  at  which  3/5 of the
          outstanding  share  capital  is  present,  unless the  resolution  was
          proposed by the Board of Directors, in which case a simple majority of
          the votes cast at a meeting at which a quorum consisting of 1/3 of the
          outstanding shares is present is required.

     With regard to general and special  meetings,  the Articles of  Association
provide that:

     o    special  meetings  can be convened by the Board of  Directors  and the
          auditors  at any time on at least eight days notice but cannot be more
          than four weeks in advance;

     o    holders  of at least  10% of our share  capital  can  request  special
          meetings by  submitting a written  request to the Board of  Directors,
          which then has 14 days to convene a meeting;

     o    shareholders  desiring  to attend the general  meeting  must obtain an
          admission card from us at least four days prior to the meeting;

     o    admission cards will be issued to registered  holders,  and holders of
          unregistered  shares who have obtained a deposit receipt issued by the
          depositary   bank  (or  Danish   Securities   Center)  and  a  written
          declaration  that the shares will not be  transferred  until after the
          general meeting;

     o    shares  acquired  from  another  shareholder  will not have any voting
          rights unless the shares are registered or unless the holder has filed
          and  provided  proof  of  ownership  at  least  one day  prior  to the
          announcement of the general meeting; and

     o    proposals by shareholders must be submitted in writing to the Board of
          Directors before February 15th in order to be considered at the annual
          general meeting.

DANISH LAW CONSIDERATIONS

     Under  Danish law,  shareholders  are not  permitted  to approve  corporate
matters  by  written  consent  in lieu  of  general  or  special  meetings.  All
shareholders  have access to  corporate  records  filed by each company with the
Danish  Commerce and  Companies  Agency.  These  corporate  records  include the
articles  of  association  and the annual  accounts/financial  statements.  Each
company is also required to keep a share register,  but shareholders do not have
access to it.

     Danish law permits  companies to adopt  cumulative  voting  provisions  and
staggered  terms  for our  board  of  directors,  but we have not  adopted  such
provisions.  Danish law also  prohibits  companies  from adopting  "poison pill"
measures  that could  prevent a takeover  attempt  by  discriminating  against a
shareholder or a group of shareholders.

C. Material contracts.

     The  following  is a summary of our  material  contracts.  This  summary is
qualified in its entirety by reference to the full text of the actual documents,
which govern the transactions we describe.

CREDIT FACILITY

     We have a DKK 42 million  revolving  credit facility with Danske Bank dated
December 11, 1998. The agreement provides for an interest rate based upon market
rates plus a margin of 0.625% per year on drawdowns.

LOAN AGREEMENTS

     The loan  agreements are entered into by our wholly owned  subsidiaries  or
directly by the TORM.

     On May 9, 2003,  we  purchased  the vessel TORM Marina from our  subsidiary
Bothnia  Shipping   Corporation  and  assumed  Bothnia  Shipping   Corporation's
obligations  under a certain USD 20 million debt instrument with Danske Bank A/S
as lenders.  The  outstanding  loan was, upon our taking over the debt,  USD 2.7
million. The interest rate is variable, based on LIBOR, and a margin of 0.5%. As
security  for our  obligations  under the debt  instrument,  we have  granted to
Danske Bank A/S a first  priority  mortgage,  registered  over and against  TORM
Marina. The loan is repayable in installments and is due to be repaid in 2005.

     On April 9, 2003,  we purchased  the vessel TORM Tekla from our  subsidiary
Tekla Shipping Co. Ltd. and assume Tekla Shipping Co. Ltd's  obligations under a
certain USD 9.8 million  debt  instrument  with Danske Bank A/S as lenders.  The
outstanding  loan  was,  upon us  taking  over the debt,  USD 9.8  million.  The
interest rate is variable,  based on LIBOR,  and a margin of 1%. As security for
our obligations under the debt instrument,  we have granted to Danske Bank A/S a
first priority  mortgage,  registered  over and against TORM Tekla.  The loan is
payable in installments and is due to be repaid in 2008.

     Alice  Product  Tanker  Corporation  entered  into  a  $26.4  million  debt
instrument  with Danske Bank A/S on November 8, 1994 to assist in the  financing
of the vessel TORM Gotland.  The interest rate is a variable rate based on LIBOR
and a margin of 1%. This loan is jointly and severally  guaranteed by us and our
subsidiary,  Alice  Product  Tankers  Corporation,  in respect  of the  original
guarantee by Danske Bank  International S.A. in favor of the lender. The loan is
due to be repaid in 2005.

     Olga Shipping  Corporation  entered into a $18.75  million debt  instrument
with  Danske  Bank A/S on October  27,  1995 to assist in the  financing  of the
vessel Olga. The interest rate is a variable rate based on LIBOR and a margin of
..75%.  This loan is jointly and severally  guaranteed by us and our  subsidiary,
Olga Shipping  Corporation,  in respect of the original guarantee by Danske Bank
International  S.A.  in  favor  of  the  lender.  In  addition,   Olga  Shipping
Corporation  issued a first  priority  mortgage  on the vessel  Olga in favor of
Danske Bank  International  S.A. covering the counter guarantee  liability.  The
loan is due to be repaid in October, 2005.

     Gunhild Shipping  Corporation  entered into a $22.4 million debt instrument
with  Danske  Bank A/S on  November  6, 1998 to assist in the  financing  of the
vessel TORM  Gunhild.  The interest rate is a variable rate based on LIBOR and a
margin of .5%.  This loan is  jointly  and  severally  guaranteed  by us and our
subsidiary,  Gunhild Shipping Corporation,  in respect of the original guarantee
by Danske Bank International  S.A. in favor of the lender. In addition,  Gunhild
Shipping Corporation issued a first priority mortgage on the vessel TORM Gunhild
in favor of Danske  Bank  International  S.A.  covering  the  counter  guarantee
liability. The loan is due to be repaid in 2009.

     Anne  Product  Carriers  (PTE)  Ltd.  entered  into a  $25.6  million  debt
instrument with Danske Bank A/S on August 25, 1998 to assist in the financing of
the vessel TORM Anne.  The interest rate is a variable rate based on LIBOR and a
margin of .5%.  This loan is  jointly  and  severally  guaranteed  by us and our
subsidiary,  Anne  Product  Carriers  (PTE)  Ltd.,  in respect  of the  original
guarantee by Danske Bank International S.A. in favor of the lender. In addition,
Anne Product Carriers (PTE) Ltd. issued a first priority  mortgage on the vessel
TORM  Gunhild in favor of Danske Bank  International  S.A.  covering the counter
guarantee liability. The loan is due to be repaid in 2009.

     Eastern  Light  Shipping   Limited  entered  into  a  $16.08  million  debt
instrument  with Danske Bank A/S on November 17, 1995 to assist in the financing
of the vessel TORM Pacific.  The interest rate is a variable rate based on LIBOR
and a margin of .75%.  This loan is jointly and  severally  guaranteed by us and
our  subsidiary,  Eastern Light  Shipping  Limited,  in favor of the lender.  In
addition,  Eastern  Light  Shipping  Limited,  at or about payment of the fourth
advance of the loan, issued a first priority mortgage on the vessel TORM Pacific
in favor of Danske Bank, Hong Kong Branch covering the total amount of the loan.
The loan is due to be repaid in 2007.

     Southern  Light  Shipping  Limited  entered  into  a  $16.08  million  debt
instrument  with Danske Bank A/S on November 17, 1995 to assist in the financing
of the vessel TORM Arawa.  The interest  rate is a variable  rate based on LIBOR
and a margin of .75%. This loan is jointly and severally  guaranteed by us, TORM
Asia Limited,  and our subsidiary,  Southern Light Shipping Limited, in favor of
the lender. In addition, Southern Light Shipping Limited, at or about payment of
the fourth advance of the loan,  issued a first priority  mortgage on the vessel
TORM Arawa in favor of Danske Bank,  Copenhagen covering the total amount of the
loan. The loan is due to be repaid in 2007.

     Caseros  Shipping Limited entered into a $22.0 million debt instrument with
Christiania  Bank og  Kreditkasse on June 19, 1994 to assist in the financing of
the vessel TORM Asia.  The interest  rate is a variable  rate based on the prime
rate in the Singapore  interbank  eurocurrency  market and a margin of 1.25%. In
addition,  Caseros Shipping Limited executed a first preferred Liberian mortgage
over the vessel  TORM Asia as well as a  collateral  deed of  assignment  of the
Earnings and the Insurances of the vessel. The loan is due to be repaid in 2004.

     Hermia  Shipping  Corporation  entered  into two separate  loan  agreements
totaling  $28.2  million  with Danske  Bank A/S to finance  the  purchase of the
vessel TORM Helene.  The first  agreement,  dated June 14, 1996,  has a variable
interest rate of LIBOR and a margin of .75%. The second agreement,  dated August
29,  2001,  has a variable  interest  rate of LIBOR and a margin of .75%.  These
loans are jointly and  severally  guaranteed  by us and our  subsidiary,  Hermia
Shipping Corporation, in favor of the lender. These loan are due to be repaid in
2007.

     Hilde Shipping Corp.  entered into a $5.985  million debt  instrument  with
Danske  Bank  A/S on July 3,  2000 to  assist  in the  financing  of the  vessel
Kirsten. The interest rate is a variable rate based on LIBOR and a margin of 1%.
We have  issued a  guarantee  in  respect  of this loan in favor of Danske  Bank
Aktieselskab  and remain  primarily  liable as  guarantor.  In  addition,  Hilde
Shipping Corp.  issued a first priority ship mortgage and a Deed of Covenants in
respect of Kirsten. The loan is due to be repaid in 2007.

     Estrid  Shipping  Corporation  entered into a $22.3 million loan  agreement
with Danish  Shipfinance  on November 6, 2001 to assist in the  financing of the
vessel TORM Mary.  The interest  rate is a variable  rate based upon LIBOR and a
margin of .7%. We have  issued a  guarantee  in respect of this loan in favor of
the lender. The loan is due to be repaid in 2012.

     Ragnhild Shipping  Corporation  entered into a $22.3 million loan agreement
with Danish  Shipfinance  on November 6, 2001 to assist in the  financing of the
vessel TORM Mary.  The interest  rate is a variable  rate based upon LIBOR and a
margin of .7%. We have  issued a  guarantee  in respect of this loan in favor of
the lender. The loan is due to be repaid in 2012.

     Gerd Shipping  Corporation entered into a $22.6 million loan agreement with
Commerzbank Aktiengesellschaft on December 3, 2002 to assist in the financing of
the vessel TORM Gerd.  The interest rate is a variable rate based upon LIBOR and
a margin of .95%. We have issued a guarantee in respect of this loan in favor of
the lender. The loan is due to be repaid in 2012.

     Gertrud  Shipping  Corporation  entered into a $22.6 million loan agreement
with  Commerzbank  Aktiengesellschaft  on  December  3,  2002 to  assist  in the
financing of the vessel TORM Gertrud. The interest rate is a variable rate based
upon LIBOR and a margin of .95%.  We have issued a guarantee  in respect of this
loan in favor of the lender. The loan is due to be repaid in 2012.

     Thyra Shipping Corporation entered into a $22.8 million loan agreement with
Danish  Shipfinance  on August 30, 2002 to assist in the financing of the vessel
TORM Thyra.  The interest  rate is a variable rate based upon LIBOR and a margin
of .8%.  We have  issued a  guarantee  in  respect  of this loan in favor of the
lender. The loan is due to be repaid in 2013.

     Freya Shipping Corporation entered into a $22.8 million loan agreement with
Danish  Shipfinance  on August 30, 2002 to assist in the financing of the vessel
TORM Freya.  The interest  rate is a variable rate based upon LIBOR and a margin
of .8%.  We have  issued a  guarantee  in  respect  of this loan in favor of the
lender. The loan is due to be repaid in 2013.

     Valborg  Shipping  Corporation  entered into a $35.2 million loan agreement
with Danish Shipfinance on March 19, 2003 to assist in the financing of a 99,900
dwt product tanker currently under construction. The interest rate is a variable
rate based upon LIBOR and a margin of .8%. We have issued a guarantee in respect
of this loan in favor of the lender. The loan is due to be repaid in 2013.

     Ingeborg Shipping  Corporation  entered into a $35.2 million loan agreement
with Danish Shipfinance on March 19, 2003 to assist in the financing of a 99,900
dwt product tanker currently under construction. The interest rate is a variable
rate based upon LIBOR and a margin of .8%. We have issued a guarantee in respect
of this loan in favor of the lender. The loan is due to be repaid in 2013.

NEWBUILDING CONTRACTS

     We entered into two contracts with Samho Heavy  Industries  Co., Ltd., each
for the  construction  of a 99,000 dwt  product  tanker.  These  contracts  were
executed on November 24, 2000.  The contracts  provide for stage payments of 10%
in  advance,   10%  following   the  execution  of  the  contract,   20%  during
construction,  and 60% upon delivery of the vessel. The tankers are scheduled to
be delivered at the end of October and November 2003.

     We  reached  agreements  with  Danish  Shipfinance  to  finance  80% of the
construction  price for the two Samho  vessels.  We have already paid 30% of the
purchase price for each of the vessels as required by the shipbuilding contracts
of which 20% is self financed and 10% are financed through Danish Shipfinance.

     We also entered into two contracts with Hyundai Heavy Industries Co., Ltd.,
each for the  construction of a 75,000 dwt product tanker.  These contracts were
executed on May 23 and May 31, 2002. The contracts provide for stage payments of
10%  in  advance,   10%  following   execution  of  the  contract,   20%  during
construction,  and 60% upon  delivery of the  vessel.  The tankers are set to be
delivered at the end of January and July 2004.

     On the two Hyundai vessels we have already paid 20% and 30% respectively of
the  purchase  price for each of the  vessels as  required  by the  shipbuilding
contracts.  We are in the process of finalizing the  documentation for the loans
on these vessels. The terms of the loans are expected to be generally similar to
the loans obtained on the previous 10 newbuildings  contracted  between 2000 and
2001 and the two Samho vessels mentioned above.

D. Exchange controls.

     Under Danish law, dividends paid in respect of shares are subject to Danish
withholding  tax at the rate of 28%.  This tax applies to both Danish  residents
and non-residents.

E. Taxation.

     The  following  discussion  is a summary  of the  material  Danish and U.S.
federal income tax considerations  relevant to an investment  decision by a U.S.
Holder and a Non-U.S.  Holder,  as defined  below,  in our  American  Depositary
Shares,  or ADSs, as evidenced by American  Depositary  Receipts,  or ADRs. This
discussion does not purport to deal with the tax  consequences of owning ADSs to
all  categories of investors,  some of which,  such as dealers in securities and
investors whose functional  currency is not the U.S.  dollar,  may be subject to
special rules.  You should consult your own tax advisors  concerning the overall
tax consequences  arising in your own particular  situation under U.S.  federal,
state, local or foreign law of the ownership of ADSs.

DANISH TAX CONSIDERATIONS

     Under Danish law, dividends paid in respect of shares are subject to Danish
withholding  tax at the rate of 28%,  without  regard  to the  residency  of the
shareholders.  Non-residents  of  Denmark do not have to pay  additional  Danish
income tax on the dividends,  unless their shares are held in connection  with a
trade or business conducted from a permanent establishment in Denmark.

     Non-resident  shareholders  may be  eligible  for a  refund  of part of the
withholding  tax where  the  shareholders  are  entitled  to,  and  comply  with
procedures  for  claiming  benefits  under an income  tax  convention.  Eligible
shareholders who comply with certain certification procedures may claim a refund
from the Danish tax authorities, which will reduce the effective withholding tax
rate,  normally to 15%. The claim for a refund must be certified by the holder's
local tax authorities on forms prepared by the Danish tax authorities, which are
then submitted to the Danish tax authorities.

     No withholding tax is levied on dividends paid to a corporation which holds
at least 20% of a company's  shares,  provided that the shareholder  company (i)
has held those  shares  for a minimum  of one year  during the time in which the
dividends were paid and (ii) is a resident in another  European Union country or
in a country  with  which  Denmark  has  entered  into a taxation  treaty  which
eliminates or reduces the withholding tax on dividends.

     Under the  current  income tax  convention  between  Denmark and the United
States, dividends on shares  beneficially-owned by U.S. holders who are eligible
for treaty  benefits are subject to an effective  Danish  withholding tax at the
rate of 15%. The withholding  tax rate is reduced to 5% if the beneficial  owner
of the  dividends is a U.S.  company,  which holds  directly at least 10% of the
share capital of the company paying the dividends.

     Denmark has entered into tax  conventions  reducing the  withholding tax to
the applicable  convention  rate for individual  residents of the United States,
Canada, Germany,  Belgium,  Luxembourg,  Norway, Sweden,  Ireland,  Switzerland,
Greece and the United  Kingdom.  The regime does not  entitle the  investor to a
lower  withholding  tax rate than the rate  applicable  according  to the double
taxation  treaty,  but reduces the  withholding tax rate from the normal rate of
28% to the  withholding  tax rate that applies  according to the relevant double
taxation treaty.

     In order to receive  benefits  under the regime  mentioned in the preceding
paragraph,  a U.S.  investor  must  deposit  his shares with a Danish  bank.  An
agreement  on the  deposit  of  shares  must be made  with  the  Danish  bank in
question.

     Further, the U.S. investor must obtain a certificate of residential address
and tax  liability  from the tax  authorities  in the U.S.  and file it with the
Danish account holding bank through which the U.S. investor holds his shares.

U.S. FEDERAL INCOME TAX CONSIDERATIONS

     In the opinion of Seward & Kissel LLP, our U.S. counsel,  the following are
the material U.S.  federal income tax consequences to us and to U.S. Holders and
Non-U.S. Holders, as defined below, regarding our ADSs. The following discussion
of U.S.  federal  income tax matters is based on the  Internal  Revenue  Code of
1986,  as  amended,  which  we  refer  to as  the  "Code",  judicial  decisions,
administrative  pronouncements,  and existing and proposed regulations issued by
the U.S.  Department of the  Treasury,  all as they exist on the date hereof and
all of which are  subject  to  change,  possibly  with  retroactive  effect.  In
addition,  the discussion is based,  in part, on the description of our business
as described above and assumes that we conduct our business as described in that
section.

     References in the following  discussion to "we",  "us" and "our" are to A/S
Dampskibsselskabet  Torm ("TORM") and its subsidiaries on a consolidated  basis.
For purposes of the discussion  below, the U.S. Holders and Non-U.S.  Holders of
ADSs  generally  will be  treated  as the  owners  of the  common  stock of TORM
represented by the ADSs. In the following discussion, the United States Internal
Revenue Service is referred to as the "IRS".

United States Taxation Of Our Company

     We anticipate  that  substantially  all of our gross income will be derived
from the use and  operation of vessels in  international  commerce and that this
income will principally  consist of freights from the transportation of cargoes,
hire or lease income from voyage,  time or bareboat charters and the performance
of services  directly related thereto,  which we refer to as "shipping  income".
Unless exempt from U.S.  taxation under Section 883 of the Code or under Article
8 of the United  States-Denmark  Income Tax  Treaty,  we will be subject to U.S.
federal  income  taxation,  in the  manner  discussed  below,  to the extent our
shipping income is considered for U.S. federal income tax purposes to be derived
from sources within the United States.

     Shipping income that is attributable to transportation that begins or ends,
but that does not both begin and end, in the United  States  will be  considered
for such tax purposes to be 50% derived from sources  within the United  States.
Shipping income  attributable to transportation that both begins and ends in the
United  States will be  considered  to be 100% derived  from sources  within the
United States. We do not engage in  transportation  that gives rise to 100% U.S.
source income.

     Shipping income attributable to transportation exclusively between non-U.S.
ports will be  considered  to be 100% derived  from  sources  outside the United
States.  Shipping income derived from sources outside the United States will not
be subject to any U.S. federal income tax.

Code Section 883 Exemption

     TORM and each  subsidiary  that derives U.S.  source  shipping  income will
qualify for exemption from U.S.  federal income tax under Section 883 in respect
of such shipping income if, in relevant part:

     o    TORM and each  subsidiary is organized in a qualified  foreign country
          which  is  one  that  grants  an  equivalent  exemption  from  tax  to
          corporations organized in the United States in respect of the shipping
          income for which  exemption is being claimed under Section 883,  which
          we refer to as the "country of organization requirement"; and

     o    more than 50% of the value of the stock of TORM and each subsidiary is
          treated as owned,  directly  or  indirectly,  by  individuals  who are
          "residents" of qualified foreign  countries,  which we refer to as the
          "ownership requirement".

     Since the U.S. Treasury Department has recognized  Denmark,  the country of
incorporation  of TORM,  and each of the  countries of  incorporation  of TORM's
subsidiaries  as a qualified  foreign  country in respect of the shipping income
for which exemption is being claimed under Section 883, TORM and each subsidiary
satisfy the country of organization requirement.

     In respect of the  ownership  requirement,  Section 883  provides a special
publicly-traded  rule applicable to both TORM and its subsidiaries.  In the case
of TORM, it will be exempted from having to satisfy the ownership requirement if
its stock is considered to be "primarily and regularly  traded on an established
securities market" located in its country of organization,  Denmark,  in another
qualified  foreign  country  or in the United  States,  which we refer to as the
"publicly-traded test". Furthermore, if TORM satisfies the publicly-traded test,
the  stock of  TORM's  subsidiaries  will be  deemed  to be owned by  individual
residents of Denmark and each of the  subsidiaries  will  satisfy the  ownership
requirement.

     Proposed regulations  interpreting Section 883 were promulgated by the U.S.
Treasury  Department  in  August  of 2002,  which  we refer to as the  "proposed
regulations."  These  regulations  superseded and replaced in their entirety the
regulations interpreting Section 883 as initially proposed that were promulgated
by the U.S. Treasury Department in February of 2000.

     The proposed  regulations will apply to taxable years ending thirty days or
more after the date the  regulations  are published as final  regulations in the
Federal  Register.  As a result,  such  regulations  will not be  effective  for
calendar  year  taxpayers  like  ourselves  until that calendar year 2004 at the
earliest.  At this time,  it is unclear  when the proposed  regulations  will be
finalized and whether they will be finalized in their present form.

     The  proposed  regulations  provide,  in  pertinent  part,  that stock of a
foreign   corporation  will  be  considered  to  be  "primarily  traded"  on  an
established securities market if the number of shares that are traded during any
taxable year on that market exceeds the number of shares traded during that year
on any other established securities market.

     At present,  the sole class of TORM's stock that is issued and  outstanding
is its  common  stock,  which is listed on the  Copenhagen  Stock  Exchange,  an
established securities market in Denmark.  TORM's common stock as represented by
its ADSs (each  representing  one share of common  stock) is also  listed on the
NASDAQ National Market (NASDAQ),  which is an established  securities  market in
the United  States.  However,  since TORM's common stock as  represented by ADSs
began  trading  on the  NASDAQ on April  17,  2002,  the  trading  activity  has
represented  less than 1% of the common  shares traded on the  Copenhagen  Stock
Exchange.  For the  foreseeable  future,  TORM has no reason to expect that more
common shares will not continue to be traded on the  Copenhagen  Stock  Exchange
than on the NASDAQ and  therefore,  the analysis  below  proceeds on the premise
that its common shares are "primarily traded" on the Copenhagen Stock Exchange.

     The proposed  regulations  further provide that stock will be considered to
be "regularly traded" on a securities market if:

     o    stock representing more than 50% of the issuer's  outstanding  shares,
          by voting power and value, is listed on such market, which we refer to
          as the "50% listing threshold";

     o    with  respect  to the  class of stock  relied  on to  satisfy  the 50%
          listing threshold:

               o    such class of stock is traded on such market,  other than in
                    de  minimis  quantities,  on at  least  60 days  during  the
                    taxable  year,  which we refer to as the "trading  frequency
                    threshold"; and

               o    the aggregate number of shares of such class of stock traded
                    on such  market  is at least  10% of the  average  number of
                    shares of such class of stock outstanding  during such year,
                    which we refer to as the "trading volume threshold".

     TORM  currently  satisfies  the 50%  listing  threshold  in  respect of the
Copenhagen Stock Exchange.

     TORM's common stock is currently  traded with such  frequency and volume on
the  Copenhagen  Stock  Exchange  that it satisfies  the trading  frequency  and
trading  volume  thresholds.  TORM has no reason to  believe  that this will not
continue to be the case notwithstanding the ADS listing on the NASDAQ.

     Notwithstanding  the  foregoing,   the  proposed  regulations  provide,  in
pertinent  part, that TORM's common stock will not be considered to be regularly
traded on an established  securities market for any taxable year in which 50% or
more of the  outstanding  shares of such stock are owned,  within the meaning of
the regulations, on any time during such taxable year by persons who each own 5%
or more of the value of the outstanding  shares of such stock, which we refer to
as the "5% override rule".

     In the event the 5% override  rule is  triggered  based on its "at any time
during the year" standard, the proposed regulations provide that the 5% override
rule  will  not  apply  for  such  year  if we  can  establish  that  among  the
closely-held group of 5% shareholders, which we refer to as the "5% Closely-Held
Group", there are sufficient 5% shareholders that are considered to be qualified
shareholders   for  purposes  of  Section  883  to  preclude   non-qualified  5%
shareholders in the 5%  closely-held  group from owning 50% or more of our stock
for more than half the number of days during such year, which we refer to as the
"5% Closely-Held Group Exception".

     Based on its shareholdings during 2002, TORM would not be subject to the 5%
override  rule and  thus,  both  TORM and its  subsidiaries  would  qualify  for
exemption   under  Section  883  for  2002.   However,   based  on  its  current
shareholdings,  TORM would be subject to the 5% override rule and TORM's ability
to satisfy the 5% Closely-Held Group Exception could prove to be problematic. If
TORM were denied the benefit of the special  publicly  traded  rule,  we believe
that TORM and its subsidiaries  satisfy the ownership  requirement in accordance
with the proposed regulations as currently drafted.

     Until final regulations  interpreting  Section 883 are promulgated and come
into force,  however,  we intend to take the position  that TORM  satisfies  the
publicly-traded  test and as  such,  we and our  subsidiaries  are  entitled  to
exemption from U.S.  federal income tax under Section 883 in respect of our U.S.
source shipping income.

The United States-Denmark Income Tax Treaty Exemption

     Without  regard  to  Section  883,  we  believe  that  TORM and its  Danish
subsidiaries  would qualify for  exemption  from U.S.  federal  income tax under
Article 8 of the United  States-Denmark  Income Tax Treaty, which we refer to as
the "Treaty".

     Article 8 exempts  from U.S.  federal  income  tax the  profits of a Danish
corporation  derived from the operation of ships in  international  traffic.  As
defined,  profits from the "operation of ships" include profits derived from (i)
time or voyage charters, (ii) the inland transport of property within the United
States undertaken as part of international  traffic,  (iii) bareboat charters if
the  lessee  operates  the  vessel in  international  traffic  and (iv) the use,
maintenance or rental of containers used in  international  traffic.  All of the
U.S. source shipping income of TORM and its subsidiaries  falls within the scope
of the exemption provided by Article 8.

     The Treaty  conditions the eligibility of TORM and its Danish  subsidiaries
to claim exemption under Article 8 upon TORM and its subsidiaries satisfying one
or more of the  "treaty  shopping"  provisions  of  Article  22  (Limitation  Of
Benefits) of the Treaty which  includes,  inter alia, a special  publicly-traded
rule.

     The  publicly-traded  rule provides that a Danish corporation such as TORM,
as  well as its  wholly-owned  Danish  subsidiaries,  will  be  entitled  to the
benefits of the Treaty if all of TORM's  shares in the class or classes of stock
representing  more than 50 percent of the vote and value of its stock,  which we
refer to as the  "50%  vote/value  test",  are  listed  on a  "recognized  stock
exchange" and are "substantially and regularly traded" on one or more recognized
stock exchanges,  which we refer to as the  "substantially  and regularly traded
test".  The term  "recognized  stock  exchange"  includes the  Copenhagen  Stock
Exchange  and the NASDAQ.  The shares in a class of stock are  considered  to be
"substantially and regularly traded" if (i) trades in such class are effected on
one or more  recognized  stock  exchanges  other than in de  minimis  quantities
during  every  quarter,  and (ii) the  aggregate  number of shares of that class
traded  during  the  previous  taxable  year is at least six (6)  percent of the
average number of shares outstanding in that class during that taxable year.

     TORM's  common stock is currently  listed on a  recognized  stock  exchange
within the  meaning of the Treaty (the  Copenhagen  Stock  Exchange).  Since the
common  stock  is  TORM's  sole  class  of  stock,  the 50%  vote/value  test is
satisfied.  Based  on their  recent  trading  history  on the  Copenhagen  Stock
Exchange  over the past two years,  the common  shares of TORM also  satisfy the
substantially  and regularly traded test of the Treaty.  Although we cannot give
any assurances,  we have every  expectation  that the trading volume and trading
frequency of TORM's common shares on the Copenhagen Stock Exchange will continue
to match or exceed the recent  trading  history of TORM's  common  shares on the
Copenhagen Stock Exchange.

Taxation in Absence of Internal Revenue Code Section 883 Exemption or Treaty
Exemption

     4% Gross Basis Tax Regime. To the extent the benefits of Section 883 or the
Treaty  are  unavailable,  the  U.S.  source  shipping  income  of TORM  and its
subsidiaries  which is not  considered to be  "effectively  connected"  with the
conduct of a U.S. trade or business as discussed below, would be subject to a 4%
tax  imposed by Section  887 of the Code on a gross  basis,  without  benefit of
deductions.  Since under the sourcing rules described above, no more than 50% of
our shipping income would be treated as derived from U.S.  sources,  the maximum
effective  rate of U.S.  federal  income tax on our shipping  income would never
exceed 2% under the 4% gross basis tax regime.

     Net Basis and Branch Tax Regime.  To the extent the benefits of the Section
883 exemption or the Treaty are  unavailable and the U.S. source shipping income
of TORM and its subsidiaries  are considered to be "effectively  connected" with
the  conduct  of a  U.S.  trade  or  business,  as  discussed  below,  any  such
"effectively   connected"  U.S.  source  shipping  income,   net  of  applicable
deductions,  would be subject to the U.S. federal corporate income tax currently
imposed at graduated rates of up to 35%. In addition,  TORM and its subsidiaries
may be subject to the 30%  "branch-level"  taxes (or such lesser tax as provided
by an applicable income tax treaty) on earnings  effectively  connected with the
conduct of such trade or business,  as  determined  after  allowance for certain
adjustments,  and on certain  interest paid or deemed paid  attributable  to the
conduct of their U.S. trade or business.

     The  U.S.  source  shipping  income  of  TORM  or any  subsidiary  will  be
considered  "effectively connected" with the conduct of a U.S. trade or business
only if:

     o    TORM or such  subsidiary  has, or is considered to have, a fixed place
          of business in the United  States  involved in the earning of shipping
          income; and

     o    substantially  all of the U.S.  source shipping income of TORM or such
          subsidiary is attributable to regularly scheduled transportation, such
          as the  operation of a vessel that follows a published  schedule  with
          repeated  sailings  at regular  intervals  between the same points for
          voyages that begin or end in the United States.

     We do not intend to have,  or permit  circumstances  that  would  result in
having,  substantially  all of the U.S.  source  shipping  income of TORM or its
subsidiaries  attributable to regularly scheduled  transportation.  Based on the
foregoing and on the expected mode of our shipping  operations,  we believe that
none of the  U.S.  source  shipping  income  of TORM or any  subsidiary  will be
"effectively connected" with the conduct of a U.S. trade or business.

     Gain on Sale of Vessels.  To the extent any of our vessels  makes more than
an occasional  voyage to U.S. ports,  TORM or its subsidiaries may be considered
for United States  federal income tax purposes to be engaged in the conduct of a
United States trade or business.  As a result,  except to the extent the gain on
the  sale of a  vessel  is  incidental  to the  Shipping  Income  of TORM or its
subsidiaries  that is exempt  under either  Section 883 or the Treaty,  any U.S.
source gain derived by TORM or its  subsidiaries  on the sale of a vessel may be
partly or wholly  subject to United States  federal  income tax as  "effectively
connected" income  (determined under rules different from those discussed above)
under the net basis and branch tax regime described above. However, we intend to
structure  sales of our vessels in such a manner,  including  effecting the sale
and  delivery of vessels  outside of the United  States,  as to not give rise to
U.S. source gain.

Taxation of U.S. Holders

     As used herein,  the term "U.S.  Holder" means a beneficial owner of an ADS
that (i) is a U.S.  citizen or resident,  a United States  corporation  or other
United States entity taxable as a corporation, an estate, the income of which is
subject to United States federal income taxation  regardless of its source, or a
trust  if a  court  within  the  United  States  is  able  to  exercise  primary
jurisdiction  over the  administration of the trust and one or more U.S. persons
have the  authority to control all  substantial  decisions of the trust and (ii)
owns the ADSs as a capital asset, generally, for investment purposes.

     If a  partnership  holds  our ADSs,  the tax  treatment  of a partner  will
generally  depend upon the status of the partner and upon the  activities of the
partnership.  If you are a partner in a partnership holding our ADSs, you should
consult your own tax advisor on this issue.

     Distributions.  Any  distributions  made by the ADS  depositary  agent,  or
depositary,  with respect to our ADSs to a U.S. Holder will generally constitute
dividends to the extent of our current or accumulated  earnings and profits,  as
determined under U.S. federal income tax principles.

     Dividends paid with respect to our ADSs to a  non-corporate  U.S. Holder (a
"U.S.  Individual  Holder") may be eligible for  preferential tax rates (through
2008) under recently enacted  legislation  provided that (1) we are a "qualified
foreign  corporation" and (2) the U.S. Individual Holder has owned our stock for
more than 60 days in the  120-day  period  beginning  60 days before the date on
which our stock becomes ex-dividend.  The preferential tax rates do not apply to
U.S. Holders that are not individuals.

     We will be treated as a "qualified  foreign  corporation" if either (1) our
ADSs are readily  tradable  on an  established  securities  market in the United
States  or (2) we are  eligible  for  the  benefits  of a  satisfactory  (in the
judgment of the U.S. Treasury Secretary) comprehensive income tax treaty between
the  United  States  and  a  foreign  country  which  includes  an  exchange  of
information program.

     Although no guidance has been issued by the IRS defining when the ADSs of a
foreign  corporation  will be  treated  as readily  tradable  on an  established
securities  market in the United  States for this  purpose,  we believe that our
ADSs should so qualify.  Alternatively,  as discussed above, we are eligible for
the  benefits  of the Treaty and  believe  that the Treaty  should  qualify as a
satisfactory  for this purpose  although there is no assurance that the Treasury
Secretary will agree. Therefore, although it is not entirely free from doubt, we
believe that any  dividends  paid by us on our ADSs should be eligible for these
preferential rates in the hands of a U.S.  Individual Holder.  However,  certain
limitations may apply to any "extraordinary dividends" paid by us. Any dividends
paid by us which are not eligible for these  preferential rates will be taxed as
ordinary income to a U.S. Holder.

     Distributions  in excess of our earnings and profits will be treated  first
as a non-taxable  return of capital to the extent of the U.S. Holder's tax basis
in his ADSs on a dollar for dollar basis and thereafter as capital gain. Because
we are not a U.S.  corporation,  U.S. Holders that are corporations  will not be
entitled  to  claim  a  dividend   received   deduction   with  respect  to  any
distributions  they  receive  from  us.  Dividends  paid  with  respect  to  the
underlying  common  stock of each ADS will  generally  be  treated  as  "passive
income" or, in the case of certain types of U.S.  Holders,  "financial  services
income",  for  purposes  of  computing  allowable  foreign  tax credits for U.S.
foreign tax credit purposes.

     Sale,  Exchange or other  Disposition of ADSs. A U.S. Holder generally will
recognize taxable gain or loss upon a sale, exchange or other disposition of our
ADSs in an amount  equal to the  difference  between the amount  realized by the
U.S. Holder from such sale,  exchange or other disposition and the U.S. Holder's
tax basis in the ADSs.  Such gain or loss will be treated as  long-term  capital
gain or loss if the U.S. Holder's holding period in the ADSs is greater than one
year at the time of the sale,  exchange or other disposition.  Such capital gain
or loss will generally be treated as U.S.-source  income or loss, as applicable,
for U.S. foreign tax credit purposes.  A U.S. Holder's ability to deduct capital
losses is subject to certain limitations.

U.S. Taxation of "Non-U.S. holders"

     A  beneficial  owner of an ADS that is not a U.S.  Holder  is  referred  to
herein as a "Non-U.S. Holder."

     Distributions.  Non-U.S.  Holders  generally  will not be  subject  to U.S.
federal income tax or withholding tax on dividends received from us with respect
to our common stock,  unless the dividends are  effectively  connected  with the
Non-U.S. Holder's conduct of a trade or business in the United States or, if the
Non-U.S. Holder is entitled to the benefits of an income tax treaty with respect
to  those   dividends,   those   dividends  are   attributable  to  a  permanent
establishment maintained by the Non-U.S. Holder in the United States.

     Sale,  Exchange or Other  Disposition of ADSs.  Non-U.S.  Holders generally
will not be subject to U.S.  federal income tax or  withholding  tax on any gain
realized upon the sale,  exchange or other  disposition of our ADSs unless:  (i)
the gain is effectively connected with the Non-U.S.  Holder's conduct of a trade
or business in the United  States or, if the Non-U.S.  Holder is entitled to the
benefits  of an income  tax  treaty  with  respect  to that  gain,  that gain is
attributable to a permanent  establishment  maintained by the Non-U.S. Holder in
the United States;  or (ii) the Non-U.S.  Holder is an individual who is present
in the United States for 183 days or more during the taxable year of disposition
and other conditions are met.

     If the  Non-U.S.  Holder is engaged in a U.S.  trade or  business  for U.S.
federal income tax purposes,  the income from the ADSs,  including  dividends on
the  underlying  common  stock  and the gain from the  sale,  exchange  or other
disposition of such stock that is effectively connected with the conduct of that
trade or business,  will generally be subject to regular U.S. federal income tax
in the same manner as discussed in the previous section relating to the taxation
of U.S.  Holders.  In addition,  if you are a corporate  Non-U.S.  Holder,  your
earnings and profits that are attributable to the effectively  connected income,
which are subject to certain adjustments, may be subject to an additional branch
profits  tax at a rate of 30%,  or at a lower rate  specified  by an  applicable
income tax treaty.

Backup Withholding and Information Reporting

     In general, dividend payments, or other taxable distributions,  made within
the United States to you will be subject to information  reporting  requirements
and "backup withholding" if you are a non-corporate U.S. Holder and you:

     o    fail to provide an accurate taxpayer identification number;

     o    are notified by the Internal  Revenue  Service that you have failed to
          report all interest or dividends  required to be shown on your federal
          income tax returns; or

     o    in certain circumstances, fail to comply with applicable certification
          requirements.

     Non-U.S.  Holders  may  be  required  to  establish  their  exemption  from
information  reporting and backup  withholding by certifying their status on IRS
Form W-8BEN.

     If you sell your ADSs to or through a U.S. office or broker, the payment of
the  proceeds  is  subject  to both  U.S.  backup  withholding  and  information
reporting unless you certify that you are a non-U.S.  person, under penalties of
perjury, or you otherwise establish an exemption.  If you sell your ADSs through
a non-U.S.  office of a non-U.S.  broker and the sales  proceeds are paid to you
outside the United  States then  information  reporting  and backup  withholding
generally will not apply to that payment.  However,  U.S. information  reporting
requirements,  but not  backup  withholding,  will  apply to a payment  of sales
proceeds, including a payment made to you outside the United States, if you sell
your ADSs  through a non-U.S.  office of a broker  that is a U.S.  person or has
some other contacts with the United States.

     Backup  withholding  is not an additional  tax.  Rather,  you generally may
obtain a refund of any amounts  withheld  under  backup  withholding  rules that
exceed your income tax liability by filing a refund claim with the U.S. Internal
Revenue Service.

Danish Tonnage Taxation Scheme

     On  February  6, 2002,  the  Danish  Government  proposed a bill  regarding
Tonnage  Taxation,  which was enacted on April 18,  2002.  According  to the new
Tonnage  Taxation  Act,  taxable  income  will no  longer be  calculated  as the
difference  between  taxable income and deductible  expenses as under the normal
corporate taxation.  Instead, taxable income is calculated with reference to the
tonnage used by the Company during the year.  The  legislation  was  implemented
retroactively  from January 1, 2001 and in connection with the submission of tax
return for 2001 the Company  decided to enter the tonnage  taxation  scheme with
effect from January 1, 2001.

     The election is binding for a ten-year period and,  accordingly,  TORM will
be covered by the tonnage tax system until 2010.

     Taxable income under the tonnage tax system is calculated using fixed rates
per 100 net  tons  per day for the  vessels.  When  calculating  taxable  income
according to the tonnage tax system,  no deductions or depreciation  charges are
allowed.

     Activities  in relation to  management  of pools of vessels  owned by other
shipping companies cannot be taxed according to the tonnage tax system, but will
be taxed in  accordance  with the ordinary  Danish  corporate  tax  legislation.
Special rules apply in relation to the treatment of financial income/expenses.

     The taxable  income for a Company for a given period is  calculated  as the
sum of the taxable  income  under the tonnage tax system and the taxable  income
made up in accordance  with to the ordinary  Danish  corporate  tax system.  The
taxable income is taxed at the normal  corporate tax rate  (presently 30 %). The
taxable income may be offset by tax losses carried forward  following the normal
Danish Tax rules.

     Capital gains in connection  with the sale of vessels - calculated for each
vessel as the difference  between the sales price and the acquisition price plus
expenses  incurred for  improvement of the vessel - are taxed in accordance with
the normal tax legislation.

     Generally,  recaptured  depreciation should be taken into income.  However,
such taxation may be deferred if new vessels are contracted  within certain time
limits.

     In this respect,  when  converting to the tonnage tax system,  the existing
vessels are  transferred to a transition  account at their tax value.  Any costs
relating to  improvements  of these vessels are added to this  account.  Vessels
acquired  after  transferring  (January  1, 2001) to the  tonnage tax system are
booked on a special  netting  account.  Costs  relating to  improvement of these
vessels  are added to the  netting  account.  If a vessel is sold,  the  smaller
amount of the sales price and the actual  acquisition  price plus  expenses  for
improvements  shall reduce the  transition  account (if the ships were  acquired
prior to entering the tonnage tax system) or netting  account (if the ships were
acquired  after  entering the tonnage tax system).

     The transition and netting  accounts are reduced annually by a depreciation
rate of 12 %. If the  transition  account is  negative  and at the same time the
netting  account  is  positive,  the  reduction  is made on the basis of the net
amount.

     If the shipping company's transition account becomes negative, the negative
amount shall be included in the taxable  income  unless the  negative  amount is
fully or partially  neutralized by a positive amount on the netting account plus
contracted newbuild tonnage which shall be delivered within maximum three years.

     In accordance with Danish accounting principles, the provision for deferred
tax that existed at the date of enactment, DKK 360 million, has been released to
income in 2002, which is also in accordance with shipping  industry  practice in
Denmark.  The Company has paid no tonnage tax in 2001 and 2002 due to tax losses
carried forward.

     The tonnage tax  legislation is new, and the guidance from the  authorities
is not detailed in every aspect. Accordingly, in connection with the preparation
of our tax  returns  for 2001,  we made  interpretations  of the new tonnage tax
legislation  that we believe are  defensible,  but may be  challenged by the tax
authorities.

F. Dividends and paying agents.

     Not Applicable.

G. Statement by experts.

     Not Applicable.

H. Documents on display.

     We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended.  In accordance with these  requirements we file reports
and  other  information  with the  Securities  and  Exchange  Commission.  These
materials,  including this annual report and the accompanying  exhibits,  may be
inspected  and  copied at the  public  reference  facilities  maintained  by the
Securities  and  Exchange  Commission  at 450 Fifth  Street,  N.W.,  Room  1024,
Washington,  D.C.  20549.  You may obtain  information  on the  operation of the
public reference room by calling 1 (800) SEC-0330,  and you may obtain copies at
prescribed  rates  from the  Public  Reference  Section  of the  Securities  and
Exchange  Commission at its principal  office in  Washington,  D.C.  20549.  The
Securities and Exchange Commission maintains a website (http://www.sec.gov) that
contains reports, proxy and information statements and other information that we
and other registrants have filed electronically with the Securities and Exchange
Commission.  In  addition,  documents  referred to in this annual  report may be
inspected  at  our  headquarters  at  Marina  Park,  10  Sundkrogsgade,  DK-2100
Copenhagen 0, Denmark.

I. Subsidiary Information

     Not Applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to market risk from foreign currency  fluctuations,  changes
in interest rates and changes in the prices of fuel oil. We enter into financial
instruments  to manage these risks,  but do not use  financial  instruments  for
trading or  speculative  purposes.  The  sensitivity  analyses  presented do not
consider  the  effects  that such  adverse  change may have on overall  economic
activity,  nor do  they  consider  additional  actions  management  may  take to
mitigate its exposure to such changes. Actual results may differ.

Foreign Exchange Rate Risk.

     Our  operations  are  primarily  denominated  in  U.S.  dollars  while  our
reporting currency is the Danish Kroner.  Virtually all of our revenues and most
of our operating  costs are  denominated  in U.S.  dollars.  A  hypothetical  1%
weakening of the U.S.  dollar would have resulted in a decrease in earnings from
shipping activities of DKK 5 million for the year ended December 31, 2002 (DKK 7
million as of  December  31,  2001).  We have DKK 2,345  million of  outstanding
indebtedness  at December 31, 2002 that is repayable in U.S.  dollars (DKK 1,432
million as of December  31,  2001).  The  increase  primarily  derives  from the
deliveries of  newbuildings  and  prepayments on vessels under  construction.  A
hypothetical  1% uniform  weakening of the U.S.  dollar would have resulted in a
translation  adjustment of DKK 23 million recorded in shareholders'  equity (DKK
10 million as of December 31, 2001).  Such a change in exchange  rates would not
have impacted our cash flows.  We maintain the necessary U.S. dollar balances to
repay our outstanding U.S. dollar  obligations and these borrowings are directly
related to U.S. dollar based assets.

     In order to manage this risk,  we enter into  forward  contracts  and cross
currency  contracts.  As of December 31, 2002,  we had the  following  financial
instruments in place:

                  Actual Value at the
Cross Currency    date of entering into
Contracts         the Contract             Date of Maturity      Fair Value
---------         ------------             ----------------      ----------

USD 8 million     DKK 57.7 million         June 2004             DKK 1.0 million
USD 10 million    DKK 72.2 million         June 2004             DKK 1.3 million
USD 5 million     DKK 36.4 million         July 2004             DKK 1.2 million
USD 7 million     DKK 51.8 million         December 2004         DKK 2.2 million
USD 5 million     DKK 37.0 million         December 2004         DKK 1.6 million
USD 5 million     DKK 37.0 million         January 2005          DKK 2.2 million
Total                                                            DKK 9.5 million

     As of  December  31,  2002,  the fair  value of the  above  cross  currency
contracts  totaled  DKK 9.5  million as  compared  to (DKK 44.0  million)  as of
December 31, 2001.

Forward Currency Contracts

     As of December 31, 2002, the fair value of our forward  currency  contracts
was DKK 0 million as compared to DKK 3.2 million as of December 31, 2001.

Interest Rate Risk.

     As of December  31, 2002,  all of our debts have  variable  interest  rates
based on LIBOR plus a margin.

     In certain  cases,  we utilize  derivative  financial  instruments  to take
advantage  of  interest  rate  fluctuations  on  earnings  and  cash  resources.
Typically,  we use forward rate  agreements  (FRA) for short term  requirements,
whereas interest rate swaps are entered into for periods up to 5 years, normally
2-3  years,  if  satisfactory   interest  rate  levels  can  be  achieved.   The
instrument's  profile always matches the loan profile of the particular  loan in
question.  The  differential to be paid or received under the swap agreements is
accrued as interest  rates change and is recognized as an adjustment to interest
expense.

     As of December 31,  2002,  we were  committed to a series of interest  rate
swap  agreements  whereby 28% of our total  floating  rate debt was swapped with
fixed rate obligations  having an average  remaining term of 0.8 year,  expiring
between 2003 and 2004. These  arrangements  effectively change our interest rate
exposure on the hedged debt from a floating  LIBOR rate to an average fixed rate
of 3.6%. An additional 36% of our floating rate debt was swapped with fixed rate
obligations  using interest swaps containing an option element having an average
remaining  term of 4.9  years and  expiring  in 2007.  An  interest  rate  swaps
containing an option  element is an agreement  where the seller has an option to
ask the buyer to pay actual  LIBOR rate if this is above a certain  threshold on
the fixing day. On three of four interest rate swaps with an option element this
threshold is 7%. Below this level the swaps acts as normal  interest  rate swaps
and thereby change our interest rate exposure on the hedged debt from a floating
LIBOR rate to an average fixed rate of 4.4%. We have received  compensation  for
selling this option.  This compensation is reflected in above average fixed rate
of 4.4%. If market interest rates were to decrease approximately 1% the interest
rate swap agreements in place at the end of the year would require us to pay DKK
16.5  million of  interest  in excess of market  rates.  The fair value of these
interest  rate swaps at December 31, 2002 was (DKK 44.9  million) as compared to
(DKK 9.7 million) as of December 31, 2001.

     An  increase  in  interest  rates of 1  percentage  point on the  remaining
variable  rate debt  would  result in DKK 9.3  million  of  additional  interest
expense for the year ended  December 31, 2002 as compared to DKK 6 million as of
December 31, 2001. We assess each debt instrument,  the level of debt to fix and
the timing of entering into such agreements based on the market conditions.

     Additionally, as of December 31, 2002, we have investments in certain fixed
interest rate bonds with a carrying amount of DKK 354 million as compared to DKK
570 million as of December 31, 2001.  The bond portfolio was reduced in order to
facilitate  the  acquisition  of the shares of NORDEN.  The fair values of these
investments could be negatively  impacted by increases in interest rates. If the
average interest rate for 2003 is 1 percentage point greater than the rate as of
December 31, 2002,  the fair values of these  investments  would decrease by DKK
8.5 million as compared to DKK 22.8 million as of December 31, 2001.

Fuel Price Risk.

     Our results of operations could be negatively  impacted by increases in the
price of fuel oil. To hedge our exposure to this risk,  we enter into fuel price
swap agreements, which effectively fix the price to be paid for a portion of our
fuel  requirements  for a  specified  period of time,  usually one year or less.
During  2002,  we  fixed  the  price  on 18% of our  fuel  usage  through  these
instruments. A hypothetical 1% increase in the December 31, 2002 cost per metric
ton of fuel oil would  result in an increase in fuel expense of DKK 2.1 million,
for the year ending December 31, 2003, based on projected fuel usage as compared
to DKK 2.2 million as of December  31, 2001.  As of December  31, 2002,  we have
hedged  approximately 3% of our 2003 fuel requirements.  As of December 31, 2002
the fair values of these  contracts were DKK 1.1 million as compared to (DKK 1.9
million) as of December 31, 2001.

                                     Part II

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not Applicable.

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Neither  we nor any of our  subsidiaries  have been  subject  to a material
default in the payment of principal,  interest,  a sinking fund or purchase fund
installment or any other material  default that was not cured within 30 days. In
addition,  the payment of our dividends are not, and have not been in arrears or
have not been  subject to a material  delinquency  that was not cured  within 30
days.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS.

     Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

     Within the 90 days prior to the date of this  report,  the Company  carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's management,  including the Company's Chief Executive Officer and Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of the
Company's  disclosure  controls  and  procedures  pursuant to Rule 13a-14 of the
Securities  Exchange Act of 1934, as amended.  Based upon that  evaluation,  the
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure  controls and  procedures  are  effective in alerting  them timely to
material  information  relating  to the  Company  required to be included in the
Company's periodic Securities and Exchange Commission filings.

Changes in internal controls.

     There have been no significant  changes in the Company's  internal controls
or in other  factors  that  could have  significantly  affected  those  controls
subsequent  to the date of the  Company's  most  recent  evaluation  of internal
controls,   including  any   corrective   actions  with  regard  to  significant
deficiencies and material weaknesses.

ITEM 16. RESERVED

ITEM 17. FINANCIAL STATEMENTS

     We  specifically  incorporate  by  reference  in  response to this item the
report  of  the  independent   auditors,   the  consolidated  audited  financial
statements and the accompanying notes, appearing on pages F-1 through F-45.

ITEM 18. FINANCIAL STATEMENTS

     Not Applicable.
<PAGE>

                              TORM AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Auditors ..............................................F-2
Consolidated Statements of Operations for the years ended
     December 31, 2000, 2001 and 2002 .......................................F-3
Consolidated Balance Sheets as of December 31, 2001 and 2002 ................F-5
Consolidated Statements of Total Gains and Losses for the years ended
    December 31, 2000, 2001 and 2002 ........................................F-7
Consolidated Statements of Cash Flow for the years ended
     December 31, 2000 2001 and 2002 ........................................F-9
Notes to Consolidated Financial Statements .................................F-10
<PAGE>

INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF AKTIESELSKABET
DAMPSKIBSSELSKABET TORM

     We  have  audited  the   accompanying   consolidated   balance   sheets  of
Aktieselskabet  Dampskibsselskabet TORM and subsidiaries as of December 31, 2002
and 2001, and the related consolidated statements of operations, total gains and
losses,  statement of changes in shareholders' equity and cash flows for each of
the  three  years  in the  period  ended  December  31,  2002.  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 of America.  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,  such consolidated  financial statements present fairly, in
all   material    respects,    the   financial    position   of   Aktieselskabet
Dampskibsselskabet  TORM and  subsidiaries  as of December 31, 2002 and 2001 and
the results of their operations and their cash flows for each of the three years
in the  period  ended  December  31,  2002 in  conformity  with  the  accounting
provisions  of Danish  legislation  applied on a  consistent  basis after giving
retroactive  effect to the change in accounting for financial leases,  sales and
leaseback  transactions,  swaps of vessels,  dividends,  own shares,  derivative
financial instruments and financial liabilities as described in Note 1.

     Accounting  principles used by Aktieselskabet  Dampskibsselskabet  TORM and
subsidiaries  in  preparing  the  accompanying   financial   statements  are  in
conformity with the accounting  provisions of Danish legislation,  which vary in
certain  respects from accounting  principles  generally  accepted in the United
States of  America.  The  application  of the  latter  would have  affected  the
determination  of net income for the each of the three years ended  December 31,
2002 and the  determination  of  shareholders'  equity at December  31, 2002 and
2001,  to the extent  summarised  in the  restated  Note 17 to the  consolidated
financial statements.


Deloitte & Touche Chartered Accountants
Copenhagen, Denmark

June 24, 2003
<PAGE>

                              TORM AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For The Years Ended December 31, 2000, 2001 and 2002
                         (Expressed in thousands of DKK)

<TABLE>
<CAPTION>
                                                  Note      2000          2001          2002
                                                            ----          ----          ----
<S>                                                       <C>           <C>           <C>
Net revenue                                               2,158,671     2,583,351     1,948,036
Port expenses and bunkers                                  (844,700)     (808,210)     (834,504)
                                                          ---------     ---------     ---------
Time Charter Equivalent Earnings                          1,313,971     1,775,141     1,113,532

Charter hire                                               (418,019)     (790,204)     (564,555)
Technical running costs                                    (283,082)     (194,362)     (217,332)
                                                          ---------     ---------     ---------
Net earnings from shipping activities              2,3      612,870       790,575       331,645

Profit on sale of vessels and interests                      12,263        92,960        81,164
Administrative expenses                            3,4      (84,418)     (129,535)     (115,890)
Other operating income                                       45,305        60,197        55,228
                                                          ---------     ---------     ---------
Profit/(loss) before depreciation                           586,020       814,197       352,147

Depreciation                                         6     (220,727)     (159,160)     (145,357)
                                                          ---------     ---------     ---------
Profit/(loss) before financial items                        365,293       655,037       206,790

Financial items                                      7     (156,737)     (101,444)      (91,655)
                                                          ---------     ---------     ---------
Profit/(loss) before tax and extraordinary items            208,556       553,593       115,135

Tax on profit on ordinary activities                 8      (53,298)     (166,018)      360,190
                                                          ---------     ---------     ---------
Profit/(loss) for the year                                  155,258       387,575       475,325
                                                          ---------     ---------     ---------
Allocation of profit
The Board of Directors recommends that the
year's result of DKK 475 million be
allocated as follows:

Proposed dividend DKK 2 per share of DKK 10
(2001: DKK 4)                                                                            36,400
Transfer to reserve for net revaluation according
to the equity method of accounting                                                            0

Retained earnings carried forward                                                       438,925
                                                                                      ---------
                                                                                        475,325
                                                                                      ---------
</TABLE>

  The accompanying notes are an integrated part of these financial statements.
<PAGE>

                              TORM AND SUBSIDIARIES
                           CONSOLIDATED balance sheets
                        As of December 31, 2001 and 2002
                         (Expressed in thousands of DKK)

                                           Note            2001          2002
                                                           ----          ----
ASSETS
FIXED ASSETS

Tangible fixed assets
Leasehold improvements                                       7,161         4,982
Land and buildings                                           1,920         2,487
Vessels and capitalized dry-docking          12          1,743,327     2,581,375
Prepayment on vessels under construction                   442,539       387,978
Other plant and operating equipment                         41,631        16,854
                                                         ---------     ---------
                                              6          2,236,578     2,993,676
                                                         ---------     ---------
Financial fixed assets

Other investments                             5             37,700       290,106
                                                         ---------     ---------
                                                            37,700       290,106
                                                         ---------     ---------
Total fixed assets                                       2,274,278     3,283,782
                                                         ---------     ---------
CURRENT ASSETS

Inventories
Inventory of bunkers                                        33,789        33,228
                                                         ---------     ---------
Accounts receivables
Freight receivables, etc                                   387,014       224,425
Other receivables                                           75,633        24,176
Prepayments                                                 21,300        21,634
                                                         ---------     ---------
                                                           483,947       270,235
                                                         ---------     ---------
Securities
Bonds                                        12            570,783       353,767
                                                         ---------     ---------
Cash at bank and in hand                     12            256,470       168,282
                                                         ---------     ---------
Total current assets                                     1,344,989       825,512
                                                         ---------     ---------
Total assets                                             3,619,267     4,109,294
                                                         ---------     ---------

  The accompanying notes are an integrated part of these financial statements.
<PAGE>

                              TORM AND SUBSIDIARIES
                     CONSOLIDATED balance sheets (continued)
                        As of December 31, 2001 and 2002
                         (Expressed in thousands of DKK)

                                              Note        2001          2002
                                                       ----------    ----------
LIABILITIES
SHAREHOLDERS' EQUITY

Common shares                                    9        182,000       182,000
Revaluation reserve                                        22,128             0
Own shares                                       9        (51,482)      (51,962)
Retained Profit                                           694,908     1,552,659
Proposed dividend                                          72,800        36,400
                                                       ----------    ----------
Total capital and reserves                                920,354     1,719,097
                                                       ----------    ----------

PROVISIONS

Deferred tax                                     8        360,077             0
                                                       ----------    ----------
Total shareholders equity                                 360,077             0
                                                       ----------    ----------
LIABILITIES

Long-term liabilities
Mortgage debt and bank loans                10, 12      1,519,743     1,735,464
                                                       ----------    ----------

Current liabilities
Next year's installments on mortgage
  debt and bank loans                       10, 12        287,577       298,061
Trade accounts payables                                   237,094       164,397
Other liabilities                               11        158,417       111,097
Accruals                                                  136,005        81,178
                                                       ----------    ----------
                                                          819,093       654,733
                                                       ----------    ----------
Total liabilities                                       2,338,836     2,390,197
                                                       ----------    ----------
Total liabilities, shareholders equity                  3,619,267     4,109,294
                                                       ----------    ----------

Collateral security                             12
Guarantees and contingent liabilities           13
Currency, interest rate, fuel price
  and credit risks                              14
Related party transactions                      15
Discontinuing operations                        16
Reconciliation to United States
  Generally Accepted
Accounting Principles (U.S. GAAP)               17

  The accompanying notes are an integrated part of these financial statements.
<PAGE>

                              TORM AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF TOTAL GAINS AND LOSSES
              For The Years Ended December 31, 2000, 2001 and 2002
                         (Expressed in thousands of DKK)

                                                2000         2001         2002
                                              --------     --------     --------

Profit (loss)                                  155,258      387,575      475,325

Change in fair value of derivatives            (39,500)     (24,200)      10,900

Foreign currency translation                   (28,500)      44,200      382,700
                                              --------     --------     --------

Total gains and losses                          87,258      407,575      865,925
                                              --------     --------     --------

  The accompanying notes are an integrated part of these financial statements.

                  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                     As of December 31, 2000, 2001 and 2002
                         (Expressed in millions of DKK)

<TABLE>
<CAPTION>
                                              Common  Revaluation        Own   Retained   Proposed      Total
                                              shares     reserves     shares   earnings   dividend
<S>                                           <C>           <C>        <C>       <C>         <C>      <C>
SHAREHOLDERS' EQUITY
Balance at 1 January 2000                     182.0          13.1        0.0      672.8        0.0      867.9
Change in accounting policies                                                    (352.8)               (352.8)
Balance at 1 January 2000 as restated         182.0          13.1        0.0      320.0        0.0      515.1

Exchange rate adjustment of shareholders'
equity in subsidiaries and associated
companies                                                                          (4.1)                 (4.1)
Exchange rate adjustment of loans to
independent units                                                                   5.5                   5.5
Exchange rate adjustment of mortgage debt
and bank loans                                                                    (27.1)                (27.1)
Exchange rate adjustment of derivative
financial instruments                                                             (39.5)                (39.5)
Reversal of revaluation of shares                             9.7                  (9.7)                  0.0
Reversal of revaluation of bonds                              4.9                  (4.9)                  0.0
Dividends paid
Profit for the year                                                               151.7                 151.7
Dividend for the financial year                                                   (36.4)      36.4        0.0
Balance at 1 January 2001 as restated         182.0          27.7        0.0      355.6       36.4      601.7

Exchange rate adjustment of shareholders'
equity in subsidiaries and associated
companies                                                                           9.8                   9.8
Exchange rate adjustment of loans to
independent units                                                                  (0.7)                 (0.7)
Exchange rate adjustment of mortgage debt
and bank loans                                                                     35.1                  35.1
Fair value adjustment of derivative
financial instruments                                                             (24.2)                (24.2)
Reversal of revaluation of shares                            (3.2)                  3.2                   0.0
Reversal of revaluation of bonds                             (2.4)                  2.4                   0.0
Purchase of own shares                                                 (63.0)                           (63.0)
Disposal of own shares                                                  11.5       (1.1)                 10.4
Dividends paid                                                                               (36.4)     (36.4)
Profit for the year                                                               387.6                 387.6
Dividend for the financial year                                                   (72.8)      72.8        0.0
Balance at 1 January 2002 as restated         182.0          22.1      (51.5)     694.9       72.8      920.3

Exchange rate adjustment of shareholders'
equity in subsidiaries and associated
companies                                                                          (7.3)                 (7.3)
Exchange rate adjustment of loans to
independent units                                                                  (6.1)                 (6.1)
Exchange rate adjustment of mortgage debt
and bank loans                                                                    396.1                 396.1
Exchange rate adjustment of derivative
financial instruments                                                              10.9                  10.9
Reversal of revaluation of shares                           (19.5)                 19.5                   0.0
Reversal of revaluation of bonds                             (2.6)                  2.6                   0.0
Purchase of own shares                                                  (7.6)                            (7.6)
Disposal of own shares                                                   7.1                              7.1
Proceeds from sale of own shares                                                   (0.3)                 (0.3)
Dividends paid                                                                               (72.8)     (72.8)
Dividends paid on own shares                                                        3.5                   3.5
Profit for the year                                                               475.3                 475.3
Dividend for the financial year                                                   (36.4)      36.4        0.0

Shareholders' equity at 31 December
2002                                          182.0           0.0      (52.0)   1,552.7       36.4    1,719.1
</TABLE>

  The accompanying notes are an integrated part of these financial statements.
<PAGE>

                              TORM AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOW
              For The Years Ended December 31, 2000, 2001 and 2002
                         (Expressed in thousands of DKK)

                                                 2000        2001          2002
                                                 ----        ----          ----
CASH FLOW FROM OPERATING ACTIVITIES
Profit before financial items                 365,293     655,037       206,790
Interest received                              37,151      50,254        69,747
Interest paid                                (224,388)   (123,815)      (76,540)
                                             --------    --------    ----------
                                              178,056     581,476       199,997
Adjustments:
Reversal of depreciation                      220,726     159,160       145,357
Reversal of sale of liner activity                  0           0       (63,007)
Reversal of other non-cash movements         (192,429)    (26,869)      (60,461)
Taxes paid                                          0           0           (29)
Change in inventories, accounts
receivables and payables                       81,087     (31,540)       39,430
                                             --------    --------    ----------

Net cash inflow from operating activities     287,440     682,227       261,287
                                             --------    --------    ----------
CASH FLOW FROM INVESTING ACTIVITIES
Investment in tangible fixed assets          (350,940)   (553,723)     (954,262)
Investment in equity interests and
securities                                          0     (15,144)     (247,983)
Sale of fixed assets                          954,182     607,635        20,549
     including profit on sale of vessels
     (included in operating activities)       (12,263)    (92,960)            0

Sale of liner activity                              0           0        63,007
                                             --------    --------    ----------
Net cash inflow/(outflow) from investing
activities                                    590,979     (54,192)   (1,118,689)
                                             --------    --------    ----------
CASH FLOW FROM FINANCING ACTIVITIES
Borrowing, mortgage debt                      131,855     164,825       842,472
Repayment/redemption, mortgage debt          (827,456)   (552,201)     (156,709)
Repayment/redemption, lease liabilities       (42,059)    (43,688)      (63,449)
Increase/(decrease) in bank debt              (18,654)       (340)            0
Dividends paid                                      0     (36,400)      (69,309)
Purchase/disposal of own shares                     0     (51,482)         (807)
                                             --------    --------    ----------
Cash inflow/(outflow) from financing
activities                                   (756,314)   (519,286)      552,198
                                             --------    --------    ----------
Net cash inflow/(outflow) from operating,
investing and financing activities            122,104     108,749      (305,204)
Cash and cash equivalents including bonds,
   in companies acquired/divested                   0      (7,917)            0
                                             --------    --------    ----------

Increase/(decrease) in cash and cash
equivalents                                   122,104     100,832      (305,204)
                                             --------    --------    ----------

Cash and cash equivalents,
   including bonds, at 1 January              604,316     726,420       827,252
                                             --------    --------    ----------
Cash and cash equivalents,
   including bonds, at 31 December            726,420     827,252       522,048
Of which used as collateral                  (206,608)   (183,466)     (186,056)
                                             --------    --------    ----------
                                              519,812     643,786       335,992
                                             --------    --------    ----------

  The accompanying notes are an integrated part of these financial statements.
<PAGE>

                              TORM AND SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
              For The Years Ended December 31, 2000, 2001 and 2002

NOTE 1 - ACCOUNTING POLICIES

BASIS OF PREPARATION

     The Annual Report of A/S Dampskibsselskabet TORM ("TORM") has been prepared
in  accordance  with the  provisions  of the  Danish  Financial  Statements  Act
applicable  for  listed  companies  in  Accounting  Class D,  Danish  Accounting
Standards and the requirements of the Copenhagen Stock Exchange  relating to the
presentation of financial statements by listed companies.

CHANGE IN ACCOUNTING POLICIES

     The  accounting  policies  are  unchanged  from  last  year and  have  been
consistently  applied,  except for the following changes in accounting  policies
due to the enactment of the new Danish Financial  Statements Accounts Act as per
January 1, 2002 or where a change in accounting policy increases the consistency
between Danish reporting and the U.S. GAAP reporting.  Reporting under U.S. GAAP
is required as a  consequence  of the Company's  listing on the NASDAQ  national
market in April 2002.

FINANCE LEASES

     Agreements  to  charter  vessels  and to lease  other  property,  plant and
equipment,  where a Group company has substantially all the risks and rewards of
ownership are  recognized in the balance sheet as finance  leases.  Lease assets
are measured at the present value of future leasing  payments at their inception
determined in the agreements  including any purchase  options.  The lease assets
are depreciated and written down under the same accounting policy as the vessels
owned by the Group or over the lease period  depending  on the lease terms.  The
capitalized  lease obligation is recognized as a liability in the balance sheet.
Previously the Group  accounted for these  agreements as operating  leases as it
was an allowed option under the Danish Annual Accounts Act.

     The change in policy has  resulted in an increase in net income for 2002 of
DKK  19.0  million  (2001:  DKK  0.7  million),  net of tax and an  increase  in
shareholders' equity as of December 31, 2002 of DKK 3.8 million (2001:  Decrease
of DKK 15.3 million).

SALE AND LEASEBACK TRANSACTIONS

     Gains  related  to sale  and  lease  back  transactions  are  deferred  and
amortized in proportion to the gross rental on the time charter over the life of
the charter party.  Previously all such gains were recognized at the date of the
transaction.

     The change in policy has  resulted in an increase in net income for 2002 of
DKK  44.2  million  (2001:  DKK  8.9  million),  net of tax  and a  decrease  in
shareholders' equity as of December 31, 2002 of DKK 38.8 million (2001: DKK 83.3
million).

SWAPS OF VESSELS

     Gains  related to a swap of  ownership  in vessels  are  recognized  in the
income statement at the date of the swap  transaction,  except when the acquired
vessels are similar to the vessels exchanged. Previously any gain on the swap of
vessels  was  recorded  in  the  income  statement  at  the  date  of  the  swap
transaction,  except when the vessels were identical  vessels of equivalent age.
The Danish  Financial  Statements  Act does not  specify the  treatment  of such
transactions  and  accordingly  the Group has  chosen to define  its  accounting
policy to be consistent to U.S. GAAP.

     The change in policy has  resulted in an increase of net income for 2002 of
DKK 0.5 million  (2001:  Decrease of DKK 7.0 million),  net of related tax and a
decrease  in  shareholders'  equity as of  December  31, 2002 of DKK 6.5 million
(2001: DKK 7.0 million).

DIVIDENDS

     Dividends are  recognized as a liability at the time of  declaration at the
Annual General Meeting.

     Previously,  proposed  dividends were recognized in current  liabilities in
the fiscal year to which they  related.  The change in policy has resulted in an
increase in shareholders' equity at December 31, 2002 of DKK 36.4 million (2001:
DKK 72.8 million) and a corresponding reduction of current liabilities.

OWN SHARES

     Own shares are recognized directly as part of shareholders' equity at cost.
Upon subsequent  disposal of own shares,  any  consideration  is also recognized
directly in shareholders' equity.

     Previously,  own shares were  reflected  as an asset and adjusted at market
value through the income statement.

     The change in policy has  resulted  in a decrease in net income for 2002 of
DKK 6.1 million  (2001:  Increase of DKK 8.8  million)  net of related tax and a
reduction  to  shareholders'  equity as of December 31, 2002 of DKK 50.7 million
(2001: DKK 43.8 million).

DERIVATIVE FINANCIAL INSTRUMENTS

     The  Company  uses  derivative  financial  instruments  to hedge  interest,
currency and other risks.  Derivative  financial  instruments  are recognized at
fair value in the balance sheet.

     For fair value hedges the change in fair value is offset against the change
in fair value of the hedged item.  For cash flow hedges the change in fair value
on the contract is recorded as part of shareholders' equity and then transferred
to the income  statement  concurrently  with the hedged item being recognized in
the income statement.  The change in fair value on contracts that do not qualify
for hedge  accounting  is  recorded in the income  statement  at the end of each
period.

     Previously,  derivative  financial  instruments  were not recognized in the
balance sheet.  For fair value hedges,  exchange rate adjustments were reflected
in the income statement. For cash flow hedges, no exchange rate adjustments were
reflected until the contract expired.

     The change in policy has  resulted  in a decrease in net income for 2002 of
DKK 7.5 million (2001:  Increase of DKK 0.2 million),  net of tax and a decrease
of  shareholders'  equity as of December 31, 2002 of DKK 36.7 million (2001: DKK
26.7 million).

FINANCIAL LIABILITIES

     Mortgage  debt and bank loans  relating  to the  financing  of vessels  are
stated in U.S. dollars and translated to DKK at the balance sheet date. As these
are  considered  hedges  of the  currency  risk  relating  to the  vessels,  any
unrealized  foreign  exchange  gains or  losses  at the  balance  sheet  date is
recognized  directly in the  shareholders'  equity and then  transferred  to the
income statement when the loan is repaid.

     Previously,  the mortgage debt and bank loans  relating to the financing of
vessels in integrated entities were recorded at the historical exchange rate.

     The change in policy did not affect the income for the year. The change has
resulted in an increase of  shareholders'  equity as of December 31, 2002 of DKK
27.5 million (2001: Decrease of DKK 368.7 million).

     The impact of the above  changes in  accounting  policies  as of January 1,
2002 has been  reflected  through a restatement  of all periods  presented and a
cumulative adjustment to opening shareholders' equity.

     The  incremental  effects  of the  restatement  in  respect  of each of the
previously  reported line items in the income statement are summarized below (in
DKK million):

<PAGE>

<TABLE>
<CAPTION>
Year 2000
                 Finance  Sale and     Swap  Divi-      Own  Deriva-    Finan-    Total
                  leases     lease       of  dends   shares     tive      cial
                              back  vessels                   finan-  liabili-
                            trans-                              cial      ties
                           actions                           instru-
                                                               ments
                 -----------------------------------------------------------------------
<S>               <C>      <C>          <C>    <C>       <C>    <C>     <C>      <C>
Profit before      28.0    (141.3)      --       --      --     (3.6)      --    (116.9)
financial items

Profit before
taxes              (2.0)   (131.9)      --       --      --      3.6       --    (130.3)

Income Taxes       (0.2)   (39.6)       --       --      --       --       --    (39.8)

Profit for the
year               (1.8)   (92.3)       --       --      --      3.6       --    (90.5)

Total assets      316.9       --        --       --      --     26.7       --    343.6

Deferred taxes     (5.9)   (39.6)       --       --      --       --       --    (45.5)

Shareholder's     (15.5)   (91.7)       --     36.4      --     (2.7)   (403.8)  (477.3)
equity
<CAPTION>
Year 2001
                 Finance  Sale and     Swap  Divi-      Own  Deriva-    Finan-    Total
                  leases     lease       of  dends   shares     tive      cial
                              back  vessels                   finan-  liabili-
                            trans-                              cial      ties
                           actions                           instru-
                                                               ments
                 -----------------------------------------------------------------------
<S>               <C>      <C>       <C>       <C>    <C>      <C>      <C>      <C>
Profit before      26.6     19.0     (10.6)      --     4.1      1.9       --     41.0
financial items

Profit before
taxes               1.0     12.7     (10.0)      --    12.5      0.2       --     16.4

Income Taxes       (0.3)    (3.8)      3.0       --    (3.7)      --       --     (4.8)

Profit for the
year                0.7      8.9      (7.0)      --     8.8      0.2       --     11.6

Total assets      286.1       --     (10.0)      --   (40.1)    24.5       --    260.5

Deferred taxes     (5.6)   (35.7)     (3.0)      --     3.7       --       --    (40.6)

Shareholder's     (15.3)   (83.3)     (7.0)    72.8   (43.8)   (26.7)   (368.7)  (472.0)
equity
<CAPTION>
Year 2002
                 Finance  Sale and     Swap  Divi-      Own  Deriva-    Finan-    Total
                  leases     lease       of  dends   shares     tive      cial
                              back  vessels                   finan-  liabili-
                            trans-                              cial      ties
                           actions                           instru-
                                                               ments
                 -----------------------------------------------------------------------
<S>               <C>      <C>        <C>      <C>    <C>      <C>       <C>     <C>
Profit before      31.0     29.8       0.6       --      --      8.4       --     69.8
financial items

Profit before
taxes              19.3     45.3       0.6       --    (8.9)    (7.5)      --     48.8

Income Taxes       (0.3)    (1.1)     (0.1)      --     2.8       --       --      1.3

Profit for the
year               19.0     44.2       0.5       --    (6.1)    (7.5)      --     50.1

Total assets      223.6       --      (9.5)      --   (49.7)    (1.3)      --    163.1

Deferred taxes     (5.3)   (34.7)     (3.0)      --     1.0       --       --    (42.0)

Shareholder's       3.8    (38.8)     (6.5)    36.4   (50.7)   (36.7)    27.5    (65.0)
equity
</TABLE>

Entering the Tonnage Taxation Scheme

     On  February  6, 2002,  the  Danish  Government  proposed a bill  regarding
Tonnage  Taxation,  which was enacted on April 18,  2002.  According  to the new
Tonnage  Taxation Act,  taxable income is not to be calculated as the difference
between  taxable  income and deductible  expenses as under the normal  corporate
taxation.  Instead  taxable  income is to be  calculated  with  reference to the
tonnage used by the Company during the year.  The  legislation  was  implemented
retroactively  from January 1, 2001 and in connection with the submission of the
tax return for 2001 the  Company  decided to enter the tonnage  taxation  scheme
with effect from January 1, 2001.

     In accordance with Danish accounting principles, the provision for deferred
tax that existed at the date of enactment, DKK 360 million, has been released to
income in 2002, which is also in accordance with shipping  industry  practice in
Denmark.

Description of accounting policies

General Recognition And Measurement Criteria

     Income,  including net revenue,  is  recognized in the income  statement as
earned,  including value adjustments of financial assets and liabilities,  which
are measured at fair value or amortized cost. Furthermore, all costs incurred in
order to  achieve  the  earnings  for the period  are  recognized  in the income
statement, including depreciation and provisions as well as the income statement
will be affected by revisions to accounting estimates made in prior periods.

     Assets are  recognized  in the balance  sheet when it is probable  that the
future economic  benefits  attributable to the asset will flow to the Group, and
the value of the asset can be measured reliably.
<PAGE>

     Liabilities  are  recognized  in the balance sheet when it is probable that
there will be an outflow of future  economic  benefits  from the Group,  and the
value of the liability can be measured reliably.

     Upon  initial  recognition,  assets and  liabilities  are measured at cost.
Subsequently,  assets and  liabilities  are measured as described in  accounting
policies related to the balance sheet.

     Certain  financial  assets and  liabilities are measured at amortized cost,
whereby a constant effective yield to maturity is recognized.  Amortized cost is
calculated as original cost less  repayment and with  addition/deduction  of the
accumulated  amortization  of the  difference  between  the cost and the nominal
amount.

     Recognition and measurement take into account all circumstances,  including
predictable  risks and losses,  occurring  before the  preparation of the Annual
Report, which confirm or disconfirm  circumstances existing at the balance sheet
date.

Consolidation Principles

     The Annual Report  comprises the Parent Company,  TORM and its subsidiaries
i.e. the entities in which the Parent Company, directly or indirectly, holds the
majority of the votes or otherwise has a controlling interest  (collectively the
Group).

     Associated  companies  which are by agreement  managed  jointly with one or
more other companies (joint  ventures),  and therefore subject to joint control,
are consolidated on a pro rata basis.

     The  Consolidated  Financial  Statements  are  prepared on the basis of the
financial  statements  of the  Parent  Company,  its  subsidiaries  and pro rata
consolidated  companies,  by combining items of a uniform nature and eliminating
intercompany transactions and balances.

Foreign currencies

     The functional  currency of the subsidiaries is the U.S. dollar because the
vessels operate in international shipping markets, which utilize the U.S. dollar
as  the  functional   currency,   and  accordingly  revenues  and  expenses  are
denominated  in USD. The books for these  subsidiaries  are  maintained  in U.S.
dollars. The reporting currency of the Company is Danish Kroner (DKK).

     Transactions  in  currencies   other  than  the  functional   currency  are
translated into the functional  currency at the exchange rates prevailing at the
date of the  transactions.  Gains or losses arising between the exchange rate at
the transaction date and the exchange rate at the settlement date are recognized
in the income statement.

     Cash, accounts receivable and payable and other liabilities  denominated in
foreign  currencies are translated into the functional  currency at the exchange
rate prevailing at the balance sheet date. Differences between the exchange rate
at the  transaction  date and the  exchange  rate at the balance  sheet date are
recognized in the income statement.

     Mortgage debt and bank loans are  denominated in U.S.  dollar to achieve an
effective  hedge of the Group's  future  revenues in U.S.  dollar in the form of
proceeds from sale of vessels.

     The method used to translate the financial  statements of a foreign  entity
from its functional  currency of the U.S. dollar into the reporting  currency of
the DKK depends on how it operates in relation to the Parent Company.  These are
as follows:

     The income statement of integrated foreign entities are translated into DKK
at the  average  exchange  rates for the period;  however,  items  derived  from
non-monetary items, such as depreciation  expense,  are translated at historical
exchange  rates.  Monetary  balance  sheet items are  translated at the exchange
rates as at the balance sheet date and non-monetary  items, such as the vessels,
are  translated at historical  exchange  rates at the time of  acquisition.  The
unrealized  exchange  gains or  losses  on  mortgage  debt and  bank  loans  are
recognized  directly in the  shareholders'  equity and then  transferred  to the
income statement when the loan is repaid. Exchange gains and losses arising upon
translation of the income  statements  and balance sheets of integrated  foreign
entities are recognized in financial items in the income statement.

     The financial  statements of foreign  subsidiaries and associated companies
classified  as  independent  foreign  entities  are  translated  into DKK at the
average  exchange  rates for the  period  for the  income  statement  and at the
exchange  rates as at the  balance  sheet date for the balance  sheet.  Exchange
gains and losses  arising upon the  translation of  shareholders'  equity at the
beginning  of the year into DKK at the exchange  rate at the balance  sheet date
are  recognized  directly to  shareholders'  equity.  Exchange  gains and losses
arising upon the  translation  of the income  statements  and balance  sheets of
independent  foreign entities are recognized  directly in shareholders'  equity.
Accordingly, foreign exchange gains and losses on loans and derivative financial
instruments  entered into to hedge the foreign  exchange  risk  relating to such
entities are recorded directly in shareholders' equity.

     Foreign  exchange  rate  gains or  losses  of  intercompany  balances  with
independent  foreign entities,  which are considered a part of the investment in
the entity, are recognized directly in shareholders' equity.

Derivative Financial Instruments

     Derivative financial instruments are entered into to hedge future committed
or anticipated  transactions  and are considered to meet the hedging criteria of
the regulation.

     Derivative  financial  instruments are initially  recognized in the balance
sheet at cost and are subsequently measured at their fair value. The instruments
are recognized as other receivables or other liabilities respectively.

     Changes in fair value of derivative financial instruments which are used to
hedge  the  fair  value of a  recognized  asset or a  recognized  liability  are
recognized  in the  income  statement  under  the same  item as  changes  to the
carrying  amount of the hedged item,  except for currency  translation  gains or
losses arising from the hedging of exposures relating to long-term  intercompany
receivables in foreign entities. Currency translation gains or losses related to
such exposure are recorded directly to shareholders' equity.

     Change in fair value of derivative financial instruments, which are used to
hedge the expected future transactions are recognized in Retained Earnings. When
the expected future transaction results in an income or a cost, amounts deferred
under Retained  Earnings are transferred to the income statement and included in
the same line as the hedged item.

     Change in fair  value of  derivative  financial  instruments  that does not
qualify for hedge accounting is recognized in the income statement at the end of
each period.

Segment Information

     The  Group  consists  of  two  business  segments;  tanker  and  bulk.  The
segmentation  is  based  on the  Company's  internal  management  and  reporting
structure in addition to evaluation of risk and earnings.  Transactions  between
segments are based on market-related prices and are eliminated at Group level.

     Information  is not  provided  by  geographical  segment  because the Group
considers  the  global  market as a whole  and the  individual  vessels  are not
limited to specific parts of the world.

     Segment  non-current assets consist of the non-current assets used directly
for  segment  operations   including  vessels  and  other  plant  and  operating
equipment.

     Current  assets are  allocated  to  segments  to the  extent  that they are
directly attributable to segment operations including  inventories,  outstanding
freight, other receivables, prepayments and cash and bank balances.

     Segment liabilities comprise segment-operating liabilities, including trade
payables and other liabilities.

Discontinuing operations

     The Group has sold the Liner  activities in September 2002, which have been
accounted for as a separate segment.  The discontinuing  business has been shown
as a separate part of the segment information.

Participation in Pools

     TORM  acts as pool  manager  for a number  of  pools,  as such the Group is
participating  with a significant  number of vessels in these. The Group's share
of the income  statement and balance sheet in the respective pools are accounted
for by entering a proportional  share,  based on  participation  in the pool, by
combining items of uniform nature.

Accounting for pension plans

     The Company has entered into defined contribution plans only. Pension costs
related to defined  contribution  plans are recorded in the income  statement in
the year to which they relate.

Stock based compensation

     The  Board of  Directors,  the  Management  and a number  of key  employees
participate  in a share option  program.  The portfolio of own shares is used to
cover share options granted under this program.

     The  difference  between  the  exercise  price and the market  price of the
shares at the date of the  grant is  recorded  as  compensation  expense  and is
reflected in  administrative  expenses in the income  statement.  At the time of
exercise  the payments  received  for the purchase of own shares are  recognized
directly in shareholders' equity.

Leases

     Agreements  to  charter  vessels  and to lease  other  property,  plant and
equipment where a Group company has  substantially  all the risks and rewards of
ownership are  recognized in the balance sheet as finance  leases.  Lease assets
are measured at the present value of future leasing  payments  determined in the
agreements  including any purchase  options.  For the purpose of calculating the
present value,  the interest rate implicit in the lease or an approximate  value
is used as discount  factor.  The lease assets are  depreciated and written down
under the same  accounting  policy as the vessels owned by the Group or over the
lease period depending on the lease terms.

     The  capitalized  lease  obligation  is  recognized  as a liability  in the
balance sheet,  and the interest  element of the lease payment is charged to the
income statement as incurred.

     Other leases and charter  agreements  concerning  vessels are classified as
operational  leases, and lease payments are charged to the income statement on a
straight-line  basis over the lease term. The obligation for the remaining lease
period is disclosed in the notes to the financial statements.

Sale and leaseback transactions

     Gains related to sale and leaseback transactions are deferred and amortized
in  proportion  to the  gross  rental on the time  charter  over the life of the
charter party.

Swap agreements

     Gains  on swap  of  ownership  in  vessels  are  recognized  in the  income
statement at the date of the swap transaction,  except when the acquired vessels
are  similar to the  vessels  exchanged.  If the swap is an  exchange of similar
vessels,  the vessels are accounted for based on carryover  value and no gain is
recognized.

Income statement

Net revenues

     Net revenues comprise freight and demurrage revenues from the vessels.  Net
revenues  are  recognized  if they meet the general  criteria  mentioned  above.
Accordingly,  freight and  demurrage  revenues are  recognized  upon delivery of
service in accordance with the charter parties concluded.

Port expenses and bunkers

     Port  expenses and bunkers,  which  comprise  port expenses and bunker fuel
consumption, are expensed as incurred.

Technical running costs

     Technical  running  costs,   which  comprise  crew  expenses,   repair  and
maintenance expenses and tonnage tax, are expensed as incurred.

Profit on sale of vessels/interests

     Profit  or loss  from  sale of  vessels  and  interests  are  stated as the
difference  between the sales price less sales costs and the carrying  amount of
the  asset at the time of the  sale.  Furthermore,  any  gains  or  losses  upon
repayment of related loans are included in the gain or loss on disposal.

Administrative expenses

     Administrative   expenses,   which  comprise  administrative  staff  costs,
management costs, office expenses and other expenses relating to administration,
are expensed as incurred.

Other operating income

     Other operating  income  comprises  chartering  commissions and profits and
losses deriving from the disposal of other plant and operating equipment.

Impairment losses

     Impairment  losses represent the deduction in the value of vessels or other
long-term assets by the amount by which the carrying amount of the asset exceeds
its recoverable  amount.  In the event of indication of impairment of value, the
carrying  amount  is  assessed  and the  value of the  asset is  reduced  to its
recoverable  amount  equal to the  higher of value in use  based on net  present
value of future earnings from the assets and its net selling price.

Financial items

     Financial  items  comprise   interest   receivable  and  interest  payable,
financing costs of finance leases,  realized and unrealized  exchange rate gains
or losses, realized and unrealized gains or losses from securities and dividends
received on shares and other  financial  income and  expenses.  Interest for the
period is included in the income statement irrespective of payment terms.

Balance sheet

Tangible fixed assets

     Land is measured at cost.

     Buildings are measured at cost based on the  historical  exchange rate less
accumulated  depreciation.  Buildings are depreciated on a  straight-line  basis
over fifty years.

     Vessels are measured at cost less accumulated  depreciation and accumulated
impairment  losses. All major components of vessels are depreciated less salvage
value on a straight-line  basis based on an anticipated useful life of 25 years.
Costs incurred in replacing or renewing the separate  assets (docking costs) are
capitalized and depreciated on a straight-line  basis over the estimated  period
until the next dry dock.

     Vessels under  construction  are measured at costs  incurred.  The costs of
vessels and vessels under construction include interest cost on the financing in
the period of construction.

     Operating  equipment  is  measured at cost less  accumulated  depreciation.
Computer equipment is depreciated on a straight-line basis over three years, and
other  operating  equipment is  depreciated on a  straight-line  basis over five
years.  Operating  equipment  with a cost price of less than DKK 25,000 is fully
depreciated in the year of acquisition.

     Leasehold  improvements are measured at cost less accumulated  amortization
and impairment losses and leasehold  improvements are amortized over the shorter
of the term of the lease and the estimated useful life.

     Cost  comprises   acquisition  cost  and  costs  directly  related  to  the
acquisition up until the time when the asset is ready for use.

Financial fixed assets

     Other  investments  comprise shares in other  companies.  Listed shares are
measured at the market  value at the balance  sheet  date.  Unlisted  shares are
measured at estimated market value.

     Realized and unrealized  gains and losses resulting from valuation or sales
of shares are recognized as financial items in the income statement.

     Dividends  on shares in other  companies  are  recognized  as income in the
period in which they are declared.

Joint ventures

     Participation  in  joint  ventures  are  recorded  using  the  proportional
consolidation  method in the Group accounts.  The consolidated  income statement
includes  the  Group's  share of income  and  losses of joint  ventures  and the
consolidated  balance sheet includes the Groups' share of assets and liabilities
in joint ventures.

Inventories

     Inventories  consist of bunkers,  lubricants and spare parts and are stated
at the lower of cost or net  realizable  value.  The cost is  determined  by the
FIFO-method.

Receivables

     Outstanding  freight  receivables  and  other  receivables  which  are of a
current nature (expected  realized within 12 months from the balance sheet date)
are measured at the lower of amortized  cost and net  realizable  values,  which
corresponds to nominal value less provisions for bad debts.

Securities

     Bonds are measured at market value at the balance sheet date.  Realized and
unrealized gains and losses resulting from valuation or realization of bonds are
recognized as financial items in the income statement.

Own shares

     Own shares are recognized directly as part of shareholders' equity at cost.
Upon  subsequent  disposal of own shares any  consideration  is also  recognized
directly in shareholders' equity.

Dividends

     Dividends are  recognized as a liability at the time of  declaration at the
Annual General Meeting.  Dividends proposed for the year are moved from retained
earnings and shown as part of shareholders' equity.

Financial Liabilities

     Mortgage  debt and bank loans  relating  to the  financing  of vessels  are
stated in U.S.  dollar and translated to DKK at the balance sheet date. As these
are  considered  hedges  of the  currency  risk  relating  to the  vessels,  any
unrealized  foreign  exchange  gains or  losses  at the  balance  sheet  date is
recognized  directly in the  shareholders'  equity and then  transferred  to the
income statement when the loan is repaid.

     Financial liabilities also include lease obligations on finance leases.

     Other  liabilities  comprising  trade  payables and other  liabilities  are
measured at amortized cost corresponding substantially to nominal value.

Statement of cash flows

     The  statement of cash flows shows the Group's cash flows and cash and cash
equivalents at the beginning and the end of the year.

     Cash flow from operating activities is presented indirectly and is based on
net  income for the year  adjusted  for  non-cash  operating  items,  changes in
working capital, income tax paid and interest paid/received.

     Cash flow from  investing  activities  comprises  the  purchase and sale of
tangible fixed assets and financial fixed assets, except for profit/loss on sale
of vessels, which is included in the cash flows from operating activities.

     Cash flow from financing  activities  comprises  changes in long-term debt,
bank loans, purchase or sales of own shares and dividends paid to shareholders.

     Cash and  cash  equivalents  comprises  cash in hand,  call  deposits,  and
short-term,  highly liquid investments that are readily  convertible to cash and
only  subject  to an  insignificant  risk of change in value.  Cash  equivalents
include marketable securities (bonds). Equity instruments are not included.

United States Generally Accepted Accounting Principles

     As a consequence of the  registration of American  Depository  Shares (ADS)
with the United  States  Securities  and  Exchange  Commission,  the Company has
prepared a summary of the  effect on net income and  shareholders'  equity as if
the Financial  Statements  had been  prepared in  accordance  with the Generally
Accepted Accounting Principles in the United States.
<PAGE>

NOTE 2 - NET EARNINGS FROM SHIPPING ACTIVITIES (in DKK million)

<TABLE>
<CAPTION>
                                           Tankers    Bulkers        Not      Discon-      Total
                                                               allocated      tinuing       2001
                                                                           operations
                                           -------    -------    -------      -------    -------
<S>                                        <C>         <C>        <C>          <C>       <C>
SEGMENT INFORMATION
INCOME STATEMENTS
Net revenue                                1,327.6      590.1       84.9        580.7    2,583.3
Port expenses and bunkers                   (302.5)    (107.1)      (6.1)      (392.5)    (808.2)
                                           -------    -------    -------      -------    -------
Time Charter Equivalent Earnings           1,025.1      483.0       78.8        188.2    1,775.1
Charter hire                                (221.8)    (395.4)     (27.6)      (145.4)    (790.2)
Technical running costs                     (128.3)     (34.8)     (30.4)        (0.8)    (194.3)
                                           -------    -------    -------      -------    -------
Net earnings from shipping activities        675.0       52.8       20.8         42.0      790.6
(Gross profit)
Profit from sale of vessels and interest      15.9        5.2       70.7          1.2       93.0
Administrative expenses                      (30.0)      (9.6)     (73.8)       (16.1)    (129.5)
Other operating income                        52.8        5.3        0.5          1.5       60.1
                                           -------    -------    -------      -------    -------
Profit before depreciation                   713.7       53.7       18.2         28.6      814.2
Depreciation                                (113.9)     (21.3)     (13.0)       (11.0)    (159.2)
                                           -------    -------    -------      -------    -------
Profit before financial items                599.8       32.4        5.2         17.6      655.0
Financial items                              (95.9)     (31.6)      35.2         (9.1)    (101.4)
                                           -------    -------    -------      -------    -------
Profit/(loss) before tax                     503.9        0.8     (125.6)         8.5      553.6
Tax                                             --         --     (166.0)          --     (166.0)
                                           -------    -------    -------      -------    -------
Net profit/(loss) for the year               503.9        0.8     (125.6)         8.5      387.6

BALANCE
Fixed assets                               1,919.1      268.3       62.7         24.2    2,274.3
Total assets                               2,099.2      363.6      957.9        198.6    3,619.3
Provisions                                      --         --      360.1           --      360.1
Total liabilities                          1,601.4      409.1      179.3        149.0    2,338.8
                                           -------    -------    -------      -------    -------
</TABLE>

     With reference to the Departmental  order about exemption to the new Danish
Financial Statements Accounts Act ss.5, stk. 4, nr.1, no segment information for
the Parent Company is provided.  The Company's offshore  activities are included
in `Not allocated'.
<PAGE>

<TABLE>
<CAPTION>
                                           Tankers    Bulkers        Not      Discon-      Total
                                                               allocated      tinuing       2002
                                                                           operations
                                           -------    -------    -------      -------    -------
<S>                                        <C>         <C>        <C>          <C>       <C>
SEGMENT INFORMATION
INCOME STATEMENTS
Net revenue                                  912.5      591.8       42.7        401.0    1,948.0
Port expenses and bunkers                   (228.8)    (322.3)      (4.5)      (278.8)    (834.4)
                                           -------    -------    -------      -------    -------
Time Charter Equivalent Earnings             683.7      269.5       38.2        122.2    1,113.6
Charter hire                                (200.5)    (242.4)     (20.7)      (101.0)    (564.6)
Technical running costs                     (159.4)     (44.1)     (13.9)         0.1     (217.3)
                                           -------    -------    -------      -------    -------
Net earnings  from  shipping  activities     323.8      (17.0)       3.6         21.3      331.7
(Gross Profit)
Profit from sale of vessels and interest      12.1        4.8         --         64.2       81.1
Administrative expenses                      (25.8)      (7.2)     (68.3)       (14.5)    (115.8)
Other operating income                        53.2        1.7        0.3           --       55.2
                                           -------    -------    -------      -------    -------
Profit before depreciation                   363.3      (17.7)     (64.4)        71.0      352.2
Depreciation                                (114.8)     (16.2)      (9.6)        (4.8)    (145.4)
                                           -------    -------    -------      -------    -------
Profit before financial items                248.5      (33.9)     (74.0)        66.2      206.8
Financial items                              (98.6)     (14.1)      (6.5)        27.5      (91.7)
                                           -------    -------    -------      -------    -------
Profit/(loss) before tax                     149.9      (48.0)     (80.5)        93.7      115.1
Tax on profit on ordinary activities            --         --      360.2           --      360.2
                                           -------    -------    -------      -------    -------
Net profit/(loss) for the year               149.9      (48.0)     279.7         93.7      475.3


BALANCE
Fixed assets                               2,713.4      256.8      313.6           --    3,283.8
Total assets                               2,880.3      391.7      837.3           --    4,109.3
Provisions                                      --         --         --           --         --
Total liabilities                          1,866.6      353.9      169.7           --    2,390.2
                                           -------    -------    -------      -------    -------
</TABLE>

     With reference to the Departmental  order about exemption to the new Danish
Financial Statements Accounts Act ss.5, stk. 4, nr.1, no segment information for
the Parent Company is provided.  The Company's offshore  activities are included
in `Not allocated'.
<PAGE>

NOTE 3  - STAFF COSTS (in DKK million)

                                                        2000      2001      2002
                                                      ------    ------    ------
Total staff costs
Staff costs included in operating                       33.5      29.5      33.2
costs
Staff costs included in                                 55.9      80.6      66.0
administrative expenses
                                                      ------    ------    ------
Total                                                   89.4     110.1      99.2
                                                      ------    ------    ------
Staff costs comprise the following
Wages and salaries                                      80.0     100.4      89.1
Pension costs                                            8.4       8.5       9.7
Other social security costs                              1.0       1.2       0.4
                                                      ------    ------    ------
Total                                                   89.4     110.1      99.2
                                                      ------    ------    ------
Remuneration to the Board of
Directors and salaries to the
Management
Board of Directors                                       1.1       0.7       1.4
Management                                               4.4       7.6       5.2
                                                      ------    ------    ------
Total                                                    5.5       8.3       6.6
                                                      ------    ------    ------

     Salaries to the  Company's  management  include DKK 0.6 million to resigned
members of management.  Remuneration to the Board of Directors for 2002 includes
DKK 0.2 million to resigned members of the Board of Directors.

Number of employees

     The average  number of staff in the financial  year was 251. The equivalent
figure for 2000 and 2001 was 226 and 235  respectively.  The  average  number of
staff is  calculated  based on ATP paid.  The  majority  of the staff on vessels
owned by subsidiaries and associated companies are not employed by TORM.

                                 Total options      Option allocation per year
                                          2002       2001       2002       2003
                                          ----       ----       ----       ----
Share option program - 2001 to 2003
Total at 31 December, 2001             727,950    242,650    242,650    242,650

Board of Directors                      73,260     16,280     28,490     28,490
Management                             231,710     53,470     89,120     89,120
Key Employees                          328,230    109,410    109,410    109,410
Resigned persons                       166,050     63,490     51,280     51,280
                                       -------    -------    -------    -------
Total at 31 December, 2002             799,250    242,650    278,300    278,300
                                       -------    -------    -------    -------

Percentage of common shares               4.39%      1.33%      1.53%      1.53%

     The share  option  program was issued in 2001 and may be  exercised  at the
earliest one year after  pricing and at the latest 3 years after the  allotment.
No options have been  exercised at December 31, 2002.  The strike price for 2001
was  fixed at DKK 54 and for 2002 at DKK  58.5.  The  options  for 2003  will be
allotted  at the Board  Meeting in 2003 when the  Financial  Statements  for the
financial year 2002 are adopted. The strike price for the share option scheme in
respect of 2003 will be fixed at the  average  price at which the  shares  trade
during the ten days of trading  immediately  after the annual  results have been
announced.  The  Company  has  acquired  own  shares to cover  the share  option
program.  The cost of own shares has been recognized  directly in  shareholders'
equity.  According to the Black-Scholes  model, the theoretical  market value of
the share option  program is  estimated at DKK 7.9 million at the balance  sheet
date.

     The key assumptions using the Black-Scholes model are:

          o    The average dividend equals 3.48 % of the average share price for
               the period.

          o    The volatility is estimated at 33.21 %.

          o    The risk free  interest  rate  based upon  expiry of the  options
               applies to between 2.96 % and 3.49 %.

          o    The quoted share price as of December 31, 2002 is 56.43.

NOTE 4 - ADMINISTRATIVE EXPENSES (in DKK million)

                                                  For the year ended December 31
                                                  ------------------------------
                                                          2000     2001     2002
                                                        ------   ------   ------
Parent company                                            80.0    118.7    108.2
Subsidiaries and associated companies                      4.4     10.9      7.6
                                                        ------   ------   ------
                                                          84.4    129.6    115.8
                                                        ------   ------   ------

Remuneration to the auditors appointed at the             2000     2001     2002
annual general meeting                                    ----     ----     ----
Total fee, Ernst & Young                                   1.2      3.6      3.4
Total fee, Arthur Andersen                                 0.7     10.2      4.1
Total fee, Jesper Jarlbaek/Kirsten Aaskov                   --       --      2.0
Mikkelsen
                                                        ------   ------   ------
                                                           1.9     13.8      9.5
                                                        ------   ------   ------

Fees, other services than audit, Ernst & Young              --       --      2.8
Fees, other services than audit, Arthur Andersen            --       --      4.1
Fees, other services than audit, Jesper
Jarlbaek/Kirsten Aaskov Mikkelsen                           --       --      1.5

     Fees  related to the  Company's  listing on the NASDAQ  amounted to DKK 5.4
million in 2002.

NOTE 5 - FINANCIAL FIXED ASSETS (in DKK million)

                                                               2001        2002
                                                               ----        ----
Cost:
Balance at January 1                                            7.8        23.3
Additions                                                      15.5       248.0
Disposals                                                        --          --
                                                             ------      ------
Cost at December 31                                            23.3       271.3
                                                             ------      ------
Revaluation:
Balance at January 1                                           20.3        17.1
Exchange difference                                              --          --
Change in market value                                         (3.2)        2.7
                                                             ------      ------
Revaluation at December 31                                     17.1        19.8
                                                             ------      ------

Write downs:
Balance at January 1                                             --        (2.7)
Write downs for the year                                       (2.7)        1.7
                                                             ------      ------
Write downs at December 31                                     (2.7)       (1.0)
                                                             ------      ------

Book value at December 31                                      37.7       290.1
                                                             ------      ------
<PAGE>

NOTE 6 - TANGIBLE FIXED ASSETS (in DKK million)

<TABLE>
<CAPTION>
                                                                            Prepayment   Other plant
                                    Leasehold                Vessels and    on vessels           and
                                     improve-      Land and  capitalized         under     operating
                                        ments     buildings  dry-docking  construction     equipment         Total
                                   ----------    ----------   ----------    ----------    ----------    ----------
<S>                                      <C>            <C>      <C>            <C>            <C>        <C>
Cost:
Balance at January 1, 2002               11.9           6.6      2,286.1         442.5          42.5       2,789.6
Change in accounting policies              --            --        424.9            --          23.9         448.8
                                      -------       -------      -------       -------       -------       -------
Balance at January 1, 2002 as
   restated                              11.9           6.6      2,711.0         442.5          66.4       3,238.4
Exchange rate adjustment                 (1.2)           --        (52.4)           --          (1.1)        (54.7)
Additions                                  --           0.6      1,152.6         867.5         (11.7)      2,032.4
Disposals                                (0.3)           --       (252.3)       (922.0)        (46.2)     (1,220.8)
                                      -------       -------      -------       -------       -------       -------
Cost at December 31, 2002                10.4           7.2      3,558.9         388.0          30.8       3,995.3
                                      -------       -------      -------       -------       -------       -------
Depreciation and impairment
losses:

Balance at January 1, 2002                4.7           4.7        804.5            --          15.2         829.1

Change in accounting policies              --            --        163.1            --           9.6         172.7
                                      -------       -------      -------       -------       -------       -------
Balance at January 1, 2002
   as restated                            4.7           4.7        967.6            --          24.8       1,001.8
Exchange rate adjustment                 (1.0)           --        (21.1)           --            --         (22.1)
Additions                                  --            --           --            --            --            --
Disposals                                (0.2)           --        (99.0)           --         (24.3)       (123.5)
Depreciation for the year                 1.9           0.0        130.0            --          13.5         145.4
                                      -------       -------      -------       -------       -------       -------

Balance at December 31, 2002              5.4           4.7        977.5            --          14.0       1.001.6
                                      -------       -------      -------       -------       -------       -------
Book value at December 31, 2002           5.0           2.5      2,581.4         388.0          16.8       2,993.7
                                      -------       -------      -------       -------       -------       -------
Hereof finance leases                      --            --        223.6            --            --         223.6
                                      -------       -------      -------       -------       -------       -------
Hereof included interest in cost           --            --          9.3           0.6            --           9.9
                                      -------       -------      -------       -------       -------       -------
Book value at December 31, 2001           7.2           1.9      1,743.3         442.5          41.6       2,236.5
                                      -------       -------      -------       -------       -------       -------
</TABLE>

     At January 1, 2002 the value of land and  building  assessed for Danish tax
purposes  amounted to DKK 2.9 million (book value DKK 2.5 million) compared with
DKK 2.4  million at January 1, 2001.  Included in the book value for vessels are
dry-docking assets in the amount of DKK 44.0 million (2001: DKK 10.5 million).
<PAGE>

NOTE 7 - FINANCIAL ITEMS (in DKK million)

                                                 For the year ended December 31
                                                 ------------------------------
                                                       2000      2001      2002
                                                       ----      ----      ----
Financial income
Interest receivable, exchange gains
and dividends etc                                      37.2      50.3      69.7

Unrealised gains on investments in
equity interests, bonds and bank debt                  16.3       0.7      12.5
                                                     ------    ------    ------
                                                       53.5      51.0      82.2
                                                     ------    ------    ------
Financial expenses
Interest payable on mortgage and bank debt            181.3     121.5      76.2
Other interest payable and realised losses             26.4       2.3       0.3
Unrealised gains on investments in equity
interests, bonds and bank debt                          2.5      28.6      97.4
                                                     ------    ------    ------
                                                      210.2     152.4     173.9
                                                     ------    ------    ------
Total financial items                                (156.7)   (101.4)    (91.7)
                                                     ------    ------    ------
Net foreign exchange adjustments included
in financial items                                    (20.4)    (22.1)    (53.6)

NOTE 8 - TAXES (in DKK million)

                                                    2000       2001       2002
                                                    ----       ----       ----
TAX ON PROFIT BEFORE TAX AND DEFERRED TAX
Changes in deferred tax
Balance at 1 January                                70.2      239.7      360.1
Change in accounting policies                       76.6      (45.6)       0.0
                                                  ------     ------     ------

Balance at 1 January as restated                   146.8      194.1      360.1
                                                  ------     ------     ------

Tax on:
Profit for the year                                 92.9      161.0        0.0
Change in accounting policies                      (39.6)       5.0        0.0
Adjustment deferred tax due to tonnage tax           0.0        0.0     (360.1)
                                                  ------     ------     ------

Provision for the year                              53.3      166.0     (360.1)
                                                  ------     ------     ------

Balance at 31 December                             239.7      360.1       (0.0)
                                                  ------     ------     ------

Deferred tax can be itemized as follows:
Vessels                                            402.5      424.9        0.0
Loans                                                7.9      (12.1)       0.0
Finance lease assets                                 0.0       85.8        0.0
Finance lease obligations                            0.0      (94.9)       0.0
Accruals                                             0.0      (37.2)       0.0
Tax-related deficit                               (153.3)       0.0        0.0
Others                                             (17.4)      (6.4)       0.0
                                                  ------     ------     ------

Total deferred tax                                 239.7      360.1        0.0
                                                  ------     ------     ------
Effective corporate tax rate
Group                                               26.0%      30.0%       0.0%

     The Parent Company paid no tax in 2000, 2001 and 2002.

     The Company has entered into the tonnage tax scheme resulting in release of
deferred  tax in the amount of DKK 360  million.  The tonnage tax  agreement  is
binding for 10 years.  The deferred tax status at December 31, 2002,  related to
the assets and  liabilities  as of the date for  entering  the tonnage  taxation
scheme equals DKK 367 million.

NOTE 9 - COMMON SHARES (in DKK million)

                                                            As of December 31
                                                            -----------------
                                                          2001             2002
                                                          ----             ----

The Company's share capital, totalling DKK               182.0            182.0
182 million, consists of shares
in the denomination of DKK 10 per share

OWN SHARES (in DKK million)

<TABLE>
<CAPTION>
                               2001         2002         2001         2002         2001         2002
                          Number of    Number of      Nominal      Nominal
                             Shares       shares        value        value   % of share   % of share
                            (1,000)      (1,000)    DKK Mill.    DKK Mill.      capital      capital
                            -------      -------    ---------    ---------      -------      -------
<S>                         <C>           <C>            <C>          <C>          <C>          <C>
OWN SHARES
Balance at 1 January            0.0        871.5          0.0          8.7          0.0          4.7
Purchase                    1,066.0        144.1         10.7          1.4          5.9          0.8
Sale                         (194.5)      (134.2)        (2.0)        (1.3)        (1.1)        (0.7)
                          ---------    ---------    ---------    ---------    ---------    ---------
Balance at 31 December        871.5        881.4          8.7          8.8          4.8          4.8
                          ---------    ---------    ---------    ---------    ---------    ---------
</TABLE>

     To hedge the Company's share option program the following investment in own
shares has been made:

     At  December  31,  2002 the  Company's  holding of own  shares  represented
881,368  shares at  denomination  DKK 10 per share with a total nominal value of
DKK 8.8 million.  The retained  shares  equate to 4.8% of the  Company's  common
shares.  The Company's purchase of own shares during the year was 144,100 shares
of  denomination  DKK 10,  equal to a  nominal  value of DKK 1.4  million.  This
represented 0.8% of the share capital.  Total sale of own shares totaled 134,200
shares of  denomination  DKK 10,  equating to a total  nominal  value of DKK 1.3
million.   This  disposal   represented   0.7%  of  the  common  shares.   Total
consideration  in respect of the  purchase of own shares was DKK 7.5 million for
the year whereas for the sale of shares it was DKK 6.7 million.

<PAGE>

NOTE 10 - MORTGAGE DEBT AND BANK LOANS (in DKK million)

                                                              As of December 31
                                                              -----------------
To be repaid as follows:                                         2001       2002
                                                                 ----       ----

Next year's repayments                                          287.6      298.1
Falling due within 5 years                                    1,063.2    1,075.9
Falling due after 5 years                                       456.5      659.5
                                                              -------    -------
                                                              1,807.3    2,033.5
                                                              -------    -------
Hereof liabilities relating to finance leases                   373.9      256.2

                                       Effective  Effective      Book      Book
                               Fixed/   interest   interest     value     value
                   Maturity  floating       2001       2002      2001      2002
                   --------  --------       ----       ----      ----      ----

LOAN
USD                    2002  Floating       5.3%         --      80.0        --
USD                    2003  Floating       5.5%       3.5%     107.1      63.7
USD                    2004  Floating       5.1%       3.4%     476.9     345.7
USD                    2005  Floating       6.5%       4.0%     279.3     187.9
USD                    2006  Floating       5.1%       3.4%      92.4      63.7
USD                    2007  Floating       5.2%       4.1%     435.1     333.1
USD                    2008  Floating         --       3.8%        --      76.4
USD                    2009  Floating       6.2%       5.3%     336.5     260.8
USD                    2012  Floating         --       4.0%        --     702.2

Weighted average                            5.6%       4.0%
effective interest
rate
Book value                                                    1,807.3   2,033.5
                                                              -------   -------

NOTE 11 - OTHER LIABILITIES (in DKK million)

                                                               As of December 31
                                                               -----------------
                                                                 2001       2002
                                                               ------     ------
Partners and commercial managements/agreements                   17.1       11.8
Wages and social expenses                                        23.4       14.7
Derivative financial instruments                                 51.2       35.4
Miscellaneous, including items related to shipping activities    66.7       49.2
                                                               ------     ------
                                                                158.4      111.1
                                                               ------     ------

NOTE 12 - COLLATERAL SECURITY (in DKK million)

Collateral security for mortgage debt, bank loans and bareboat charters:

                                                              As of December 31
                                                              -----------------
                                                                2001        2002
                                                                ----        ----
Vessels                                                      1,063.5     1,713.6
Bonds                                                          183.3       184.6
Cash and cash equivalents                                        0.2         1.5
                                                             -------     -------
                                                             1,247.0     1,899.7
                                                             -------     -------

NOTE 13 - GUARANTEE AND CONTINGENT LIABILITIES (in DKK million)

                                                               As of December 31
                                                               -----------------
                                                                 2001       2002
                                                                 ----       ----
Guarantee liabilities                                             3.8        3.9
                                                                -----      -----


Charterhire for vessels on time charter:
                                                                 2001       2002
                                                                 ----       ----
Next year's payments                                            526.6      456.2
Falling due within 5 years                                      676.2      568.4
Falling due after 5 years                                       558.2      356.1
                                                              -------    -------
                                                              1,761.0    1,380.7
                                                              -------    -------
Average remaining life                                            1.2        1.5

     The guarantee  liabilities  consist  primarily of a guarantee to the Danish
Ship Finance,  which provides ship financing.  The guarantee will only be called
in if the Danish Ship Finance enters into bankruptcy. As mentioned in the report
from the Board of  Directors,  the Company has  contracted  6 vessels  (2001:  8
vessels),  an investment  totaling DKK 1,732 million (2001:  DKK 2,057 million).
The Company is jointly and severally liable with its jointly taxed  subsidiaries
for tax on income subject to consolidated taxation.
<PAGE>

NOTE 14 - CURRENCY, INTEREST RATE, FUEL PRICE AND CREDIT RISKS (in DKK million)

Contracts entered into as of December 31, 2002:

                              Assets   Liabilities   Hedge       Net position
                              ------   -----------   -----       ------------
Currency risks
USD              < 1 year      432.8         609.3      --            (176.5)
                 > 1 year    2,974.9       1,735.5      --            1.239.4

DKK              < 1 year      378.3          52.4                      325.9
                 > 1 year      313.6            --                      313.6

Others           < 1 year        9.6           0.6                        9.0
                 > 1 year         --            --      --                 --
                            --------     ---------   -----          ---------
Total                        4,109.2       2,397.8      --            1,711.4
                            --------     ---------   -----          ---------

<TABLE>
<CAPTION>
                                   Fair     Fair       Change in
                                  value    value       fair value
                       Maturity    2002     2001     2002      2001   Effect           Hedge
                       --------    ----     ----     ----      ----   ------           -----
<S>                     <C>         <C>   <C>      <C>          <C>  <C>        <C>
Cross currency swaps
                                                                      Income
USD 8 million              2004     1.0    (9.7)        0         0  statement   Receivables


                                                                                   Long-term
USD 10 million             2004     1.3   (12.0)   (13.3)       3.8   Equity    intercompany
                                                                                 receivables
USD 22 million          2004-05     7.2   (22.3)   (29.5)       7.9   Equity         Vessels
                                  -----   ------   ------     -----
Total                               9.5   (44.0)   (42.8)      11.7
                                  -----   ------   ------     -----
</TABLE>
<PAGE>

Currency risks

     In order to hedge the Company's  exposure to currency exchange risks in the
balance sheet, the above cross currency swap agreements have been entered into.

     Forward  contracts  are entered  into by the Company on a regular  basis in
respect of the ongoing cash flow. In 2001 and 2002, forward contracts  amounting
to USD 31 million were entered into at an average rate of USD 8.33 against DKK.

Interest rate risks

     Regarding the Company's  financial  assets and  commitments,  the following
information is provided in relation to actual interest  levels  prevailing as at
end of 2002:

     The bond  portfolio,  with an average  duration  of 2.4 years  produced  an
effective  yield of 7.88% in 2002.  The portion of the  variable  rate  mortgage
debts and bank loans with maturity within one year was USD 9 million and USD 278
million  after one year but within 5 years.  The effective  interest  rates were
between 1.4% and 3.8%.

     The  portion of the  interest  swaps  hedging  the USD  mortgage  debt with
maturity  within one year was USD 27 million and USD 166 million  after one year
but within 5 years.

     The effective interest rates were between 2.9% and 4.0%.

     The fair value of the Company's interest rate swaps were DKK (44.9) million
at year end (2001: DKK (9.7) million).

Fuel Price risks

     In 2002, the Company hedged 18% of its bunker requirements, and at year-end
had hedged 3% of the 2003  requirement.  The market value of these contracts was
DKK 1.1 million at year-end (2001: DKK (1.9) million).

Credit risks

     The Company's credit risk is considered minimal since it is normal shipping
practice  that freight is paid prior to the discharge of a vessel's  cargo.  The
amounts  receivable are therefore  primarily made up of cross-over voyages and a
small amount of demurrage.

NOTE 15 - RELATED PARTY TRANSACTIONS

     TORM considers the Company's Board of Directors as related  parties.  Niels
Erik Nielsen, the Company's Chairman of the Board of Directors,  is a partner in
the law firm Bech-Bruun  Dragsted.  Bech-Bruun Dragsted has rendered services in
connection  with the listing of TORM's ADSs in the U.S.  and the  investment  in
NORDEN.  The law firm's fee of DKK 1.6 million (2001:  DKK 1.5 million) is based
upon the amount of time spent by the firm on the matter.

     Gabriel Panayotides, one of the Company's Directors, has served as the head
of operations of Maryville Maritime Inc. since 1983. Maryville Maritime Inc. has
chartered one vessel to the TORM Panamax bulk carrier pool in the period January
1 to February 22, 2002 after which the vessel was redelivered.
<PAGE>

NOTE 16 - DISCONTINUING OPERATIONS

<TABLE>
<CAPTION>
                                                1998        1999        2000        2001        2002
                                            Restated    Restated    Restated    Restated
                                            --------    --------    --------    --------     -------
<S>                                           <C>         <C>         <C>         <C>         <C>
INCOME STATEMENTS
Net revenue                                    520.1       520.5       565.1       580.7       401.0
Port expenses, Bunkers, Charter
  hire and Operating costs                    (454.5)     (479.8)     (527.2)     (538.7)     (379.7)
Net earnings from shipping activities
  (Gross profit)                                65.6        40.7        37.9        42.0        21.3
Provision for vessels on B/B charter           (46.1)        0.0         0.0         0.0         0.0
Profit from sale of vessels and interests        2.8         0.0         0.9         1.2        64.2
Administrative expenses                        (14.8)      (16.5)      (17.1)      (16.1)      (14.5)
Other operating income                           2.2         4.1         0.0         1.5         0.0
Profit before depreciation                       9.7        28.3        21.7        28.6        71.0
Depreciation                                   (19.8)      (20.1)      (14.6)      (11.0)       (4.8)
Profit before financial items                  (10.1)        8.2         7.1        17.6        66.2
Financial items                                 (6.7)       (9.0)       (3.2)       (9.1)       27.5
Profit/(loss) before tax                       (16.8)       (0.8)        3.9         8.5        93.7
Tax                                              0.0         0.0         0.0         0.0         0.0
Profit/(loss) after tax                        (16.8)       (0.8)        3.9         8.5        93.7
Extraordinary items                             (6.3)        0.0         0.0         0.0         0.0
Net profit for the year                        (23.1)       (0.8)        3.9         8.5        93.7

BALANCE SHEET
Fixed assets                                   117.0       102.7        29.6        24.2         0.0
Total assets                                   297.7       293.7       231.1       198.6         0.0
Provisions                                      23.7        26.3         0.0         0.0         0.0
Total liabilities                              274.2       262.0       194.3       149.0         0.0
</TABLE>

     The sale of the Liner  activities  on  September  16, 2002  generated a net
profit amounting to DKK 63 million TORM retained  working capital  (receivables)
in the order of DKK 25-30  million Net  earnings  from voyages  performed  until
September 16, 2002 have been taken into the income statement.

NOTE 17 - RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (U.S. GAAP)

     The Company's Annual Report has been prepared in accordance with accounting
principles generally accepted in Denmark (Danish GAAP), which differs in certain
material respects from accounting  principles  generally  accepted in the United
States (U.S. GAAP).

     The following is a summary of the material adjustments to net income (loss)
for the years ended December 31, 2000, 2001 and 2002 and shareholders' equity as
of  those  dates,  necessary  to  reconcile  those  to  net  income  (loss)  and
shareholders' equity determined in accordance with U.S. GAAP.
<PAGE>

Reconciliation of Net income for the year to U.S. GAAP Net income (in thousands
of DKK)

<TABLE>
<CAPTION>
                                                 Notes       2000        2001        2002
                                                 -----   --------    --------    --------
<S>                                                 <C>   <C>         <C>        <C>
Net income as reported under Danish GAAP
(restated)                                                155,258     387,575     475,325

Dry dock costs and provision for repairs            a)     (3,680)    (10,832)    (21,888)
Impairment of vessels                               b)         --          --     (12,313)
Unrealized losses on marketable securities          c)     (9,700)      4,974      (4,423)
Foreign currency translation                        d)    (33,781)      8,820      33,629
Derivatives                                         e)    (22,314)    (27,610)      7,384
Sale and leaseback transaction                      f)      5,361       6,516       2,922
Tonnage taxation                                    g)         --          --    (367,319)
Tax effect of U.S. GAAP adjustments                 h)     18,588       5,402     (27,745)
                                                         --------------------------------

Net income in accordance with U.S. GAAP                   109,732     374,845      85,572
                                                         ========    ========    ========
</TABLE>

Reconciliation of Shareholders' equity for the year to U.S. GAAP Shareholders'
Equity (in thousands of DKK)

<TABLE>
<CAPTION>
                                                     2000         2001
                                           Notes  (restated)    (restated)       2002
                                           -----   ---------     ---------     ---------
<S>                                          <C>   <C>           <C>           <C>
Shareholders' equity as reported under
Danish GAAP (restated)                               601,735       920,354     1,719,097

Dry dock costs and provision for repairs     a)      (17,655)      (28,487)      (50,375)
Impairment of vessels                        b)           --            --       (12,313)
Foreign currency translation                 d)      428,854       433,688       (92,718)
Derivatives                                  e)        6,279         1,347            --
Sale and leaseback transaction               f)       (9,438)       (2,922)           --
Tonnage Taxation                             g)           --            --      (367,319)
Tax effect of U.S. GAAP adjustments          h)       22,343        27,745            --
                                                   ---------     ---------     ---------

Shareholders' equity in accordance
with U.S. GAAP (restated)                          1,032,118     1,351,725     1,196,372
                                                  ==========    ==========    ==========
</TABLE>

             Restatement of Shareholders' equity for the year ended
                           December 31, 2000 and 2001

     In  connection  with the change in Danish GAAP to apply USD as  measurement
currency  implemented  with effect from January 1 2003,  the Company has refined
its method of computing the adjustment from Danish GAAP to US GAAP in respect of
the method of translating  the entities with USD as measurement  currency to the
reporting  currency of DKK (see  Footnote d below).  Accordingly,  shareholders'
equity  on a US GAAP  basis  has been  restated  for 2000 and 2001 as set  forth
below:

                                                          2000            2001
                                                       -------------------------
Shareholders' equity in accordance
with U.S. GAAP as previously reported                  1,020,346       1,313,571

Restatement adjustment                                    11,772          38,154
                                                       -------------------------

Shareholders' equity in accordance
with U.S. GAAP as restated                             1,032,118       1,351,725
                                                       =========================

     There was no impact on U.S. GAAP net income as  previously  reported as the
impact was on the  cumulative  translation  adjustment  that under U.S.  GAAP is
reported within Shareholders' equity.

     Once the Company has adopted the change in Danish GAAP as described  above,
there  will no longer be any  reconciling  item  between  Danish  and U.S.  GAAP
regarding translation of USD entities.

     The Group's accounting policies under Danish GAAP have been described below
where these differ from  accounting  principles  applicable in the United States
(U.S. GAAP):

     a) Accounting for dry dock costs and provision for repairs

     Under  Danish  GAAP,  the  Company  estimates  the useful life of the major
components of its vessels,  which are usually  replaced or renewed in connection
with a docking,  and depreciates  these  components over the period to the first
docking.  The Company  subsequently  capitalizes  dry-dock costs as incurred and
depreciates these over the period until the next docking.

     Under U.S. GAAP, the Company  accounts for the docking costs (provision for
repairs)  by  accruing  for the  estimated  dry dock costs  involved in the next
docking  over the  period to the next  docking.  The  following  represents  the
movement in the provision for repairs  during the year ended  December 31, 2000,
2001 and 2002 (in thousands of DKK):

                                            2000          2001
                                         (restated)    (restated)        2002
                                         ----------    ----------    ----------
Beginning Balance                            37,915        27,151        41,654

Charged to expenses                          22,960        24,790        29,889
Utilization                                 (33,724)      (10,287)      (33,357)
Exchange rate conversion                      2,153         1,693        (6,163)
                                         --------------------------------------

Ending Balance                               27,151        41,654        38,186
                                         ==========    ==========    ==========

     b) Impairment of vessels

     In 1998 the  Company  recorded an  impairment  charge of DKK 80 million for
certain vessels on capital leases as the carrying value at the time exceeded the
fair value of these  vessels.  Under Danish GAAP,  an  impairment is reversed in
subsequent  periods  if the fair  value  increases.  During  2002,  the  Company
recorded a reversal of the  impairment  of DKK 12.3  million for the increase in
fair value of the assets.

     Under U.S. GAAP an impairment loss cannot be reversed.

     c) Unrealized gains on marketable securities

     Under Danish GAAP,  the Company's  marketable  securities are classified as
available-for-sale,  which  under  Danish GAAP means that  unrealized  gains and
losses on these are recorded as financial items in the income statement

     Under U.S.  GAAP,  the Company must classify its  investments in marketable
securities  as  either  trading,  available-for-sale  or  held to  maturity,  as
required by Statement of Financial  Accounting  Standards No 115 "Accounting for
Certain Investments in Debt and Equity Securities." For U.S. GAAP purposes,  the
Company  classifies its investments in equity  securities as  available-for-sale
and accordingly  the unrealized  gains and losses are recorded as a component of
shareholder's  equity unless there is another than  temporary  impairment of the
securities.

     During  2002,  the  Company  acquired  shares of a publicly  traded  Danish
company,  NORDEN,  and at  December  31,  2002  holds  approximately  33% of the
outstanding  voting  shares.  The Company has  accounted  for the  investment as
available-for-sale,  as management is unable to exercise  significant  influence
over operating and financial  policies of the investee.  This is attributable to
the Company's inability to obtain financial  information not otherwise available
to  the  general   public  and  the   Company's   inability   to  obtain   Board
representation.

     d) Foreign Currency Translation

     The Company's  reporting  currency is the Danish  Kroner,  but  significant
portions of its operations have the U.S. dollar as the functional currency.

     Under Danish GAAP, the method used to translate the financial statements of
a foreign  operation  from its functional  currency of the U.S.  dollar into the
reporting  currency  of the  Danish  Kroner  depends  on the way in  which it is
financed  and  operates  in relation to the  reporting  enterprise.  For certain
entities  (integrated  entities)  translation  differences  are  recorded in the
income  statement and non-monetary  assets and liabilities,  such as the vessels
and related  loans,  are  translated  at their  historical  rates on the date of
purchase.  Profit and loss  components  that are derived  from the  non-monetary
assets, such as depreciation  expense, are translated at their historical rates.
The remaining  balance sheet components are translated at year-end rates whereas
the remaining income statement components are translated using average rates for
the period. For all other entities  (independent  entities) the translation into
the reporting  currency is reflected as a component of equity.  This translation
is based on year-end rates for the balance sheet components and based on average
rates for the income statement.

     Under U.S.  GAAP, the  translation of entities with a different  functional
currency than the Danish  Kroner into the  reporting  currency is reflected as a
component of equity.  The translation is based on year-end rates for the balance
sheet components and based on average rates for the income statement.

     e) Derivatives

     Below the U.S. GAAP reconciling  items regarding  derivatives for the years
2000, 2001 and 2002 have been summarized.

<TABLE>
<CAPTION>
DKK'000                                 2000                       2001                         2002
                                               Share-                      Share-                      Share-
                                 Income      holders'        Income      holders'        Income      holders'
                              statement        equity     statement        equity     statement        equity
                             ----------    ----------    ----------    ----------    ----------    ----------
<S>                             <C>            <C>          <C>            <C>          <C>                 <C>
Foreign currency contracts      (22,314)       13,031       (19,924)        3,951        35,854             0
Interest rate swaps                   0        (6,906)       (5,779)       (2,604)      (31,526)            0
Fuel price agreements                 0           154        (1,907)            0         3,056             0
                             ----------    ----------    ----------    ----------    ----------    ----------

Total U.S. GAAP adjustment      (22,314)        6,279       (27,610)        1,347         7,384             0
                             ----------    ----------    ----------    ----------    ----------    ----------
</TABLE>

     During 2000, 2001 and 2002, the Company entered into a variety of contracts
to manage its foreign  currency  exposure as it reports in Danish  Kroner to its
local  markets  but  operates  a  substantial  portion of its  business  in U.S.
dollars.

     Under Danish GAAP,  derivative financial  instruments are recognized in the
balance  sheet at fair value.  The  treatment  of the  contracts is dependent on
whether or not each contract qualifies for hedge accounting as defined by Danish
GAAP.  For fair value  hedges the  change in fair value is set-off  against  the
change in fair value of the hedged balance item. For cash-flow hedges the change
in fair value on the  contract is recorded as a component  of  shareholders<180>
equity and then  transferred  to the income  statement  when the hedged  item is
realized.  The change in fair value on  contracts  that do not qualify for hedge
accounting is recorded in the income statement at the end of each period.

     The Company has  entered  into  foreign  currency  contracts  to manage its
reporting risk  associated  with  transactions  denominated in the U.S.  dollar,
which,  under U.S.  GAAP,  do not  qualify  for hedge  accounting  as defined by
Statement of Financial  Accounting  Standards No. 133 "Accounting for Derivative
Instruments and Hedging  Activities".  Accordingly,  the change in fair value on
all contracts is recorded in the income statement for each period.

     The  following  represents  a summary  of the  foreign  currency  contracts
outstanding as of December 31, 2000, 2001 and 2002:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
Type                    Notional amount             Treatment under Danish   U.S. GAAP adjustment
                                                    GAAP
--------------------------------------------------------------------------------------------------
<S>                     <C>                         <C>                      <C>
Foreign currency swap   USD 8 million at 2000,      Gains and losses are     No adjustment
                        2001 and 2002               recorded in the income
                                                    statements each period.
--------------------------------------------------------------------------------------------------
Foreign currency swap   USD 10 million at           Gains and losses are     A loss of DKK 7.9
                        2000, 2001 and 2002         recorded as a            million in 2000, a
                                                    component of             loss of DKK 2.1 million
                                                    shareholders' equity     in 2001 and a gain of
                                                    each period as the       DKK 13.3 million in
                                                    contract is designated   2002.
                                                    as a hedge of long
                                                    term foreign currency
                                                    receivables, where the
                                                    foreign currency
                                                    adjustments also are
                                                    recorded as a
                                                    component of
                                                    shareholders' equity.
                                                    The gains or losses
                                                    are released from
                                                    shareholders' equity
                                                    when the receivables
                                                    are repaid.
--------------------------------------------------------------------------------------------------
Foreign currency swap   USD 22 million at           Gains and losses are     A loss of DKK 14.4
                        2000, 2001 and 2002         recorded as a            million in 2000, a
                                                    component of             loss of DKK 6.4
                                                    shareholders' equity     million in 2001 and a
                                                    each period as the       gain of DKK 29.6
                                                    contract is designated   million in 2002.
                                                    as a hedge of the
                                                    future sale of
                                                    vessels. The gains or
                                                    losses are released
                                                    from shareholders'
                                                    equity when the
                                                    vessels are sold.
--------------------------------------------------------------------------------------------------
Forward foreign         USD 8 million at 2000,      Gains and losses are     A gain of DKK 5.4
currency contracts      USD 20 million at 2001      recorded as a            million in 2000, a
                        and USD NIL at 2002         component of             loss of DKK 2.3
                                                    shareholders' equity     million in 2001 and a
                                                    each period as the       loss of DKK 3.1
                                                    contracts are            million in 2002.
                                                    designated as hedges
                                                    of long term foreign
                                                    currency receivables,
                                                    where the foreign
                                                    currency adjustments
                                                    also are recorded as a
                                                    component of
                                                    shareholders' equity.
                                                    The gains or losses
                                                    are released from
                                                    shareholders' equity
                                                    when the receivables
                                                    are repaid.
--------------------------------------------------------------------------------------------------
</TABLE>

     During  the year ended  December  31,  1999,  the  Company  settled an open
currency  contract  associated  with  a  purchase  option  included  in a  lease
agreement.  Under Danish GAAP, the gain of DKK 19.4 million on this  transaction
was deferred and is being  amortized into income over the life of the associated
lease  agreement.  There  was  DKK 6.4  million  and  DKK  9.1  million  of gain
recognized  during the years  ended  December  31,  2000 and  December  31, 2001
respectively,  whereas  the  remaining  DKK 3.9  million of gain was  recognized
during the year ended December 31, 2002.

     Under U.S. GAAP, the gain on this  transaction was recorded at the time the
contract was settled.

     The Company has also entered into interest rate swaps to hedge the interest
rate  risk  on  the  long-term  loans  obtained  to  finance  vessel  purchases.
Furthermore,  the Company has entered  into fuel price  agreements  to hedge the
price on fuel for the Company's vessels.

     Under Danish GAAP,  both the interest rate swaps and fuel price  agreements
qualify as cash flow hedges and are recorded at fair value in the balance  sheet
and as a component of  shareholders'  equity.  The fair values of the hedges are
released from shareholders'  equity when the loans are repaid or the bunkers are
purchased.

     Under U.S.  GAAP prior to the  adoption  of SFAS No 133 the  interest  rate
swaps and fuel price  agreements  were  accounted for in manner  similar to cash
flow hedges.  At January 1, 2001, the Company adopted the provisions for SFAS No
133 and did elect not to account  for the  instruments  as hedges.  The  Company
recorded a transition  adjustment  in the amount of the fair value at January 1,
2001 for all material derivatives.  The transition adjustment of DKK 6.9 million
has  been  recorded  as  a  derivative   asset  and  as  a  component  of  other
comprehensive  income.  The Company  reverses the amount based on the  effective
interest method over the remaining contract period.

     Subsequent  to the adoption of SFAS No 133, the Company has  accounted  for
changes in fair value of the interest  rate swaps and the fuel price  agreements
as a component  of income.  During the year ended  December 31, 2001 the Company
recorded a loss on  interest  rate swaps of DKK 12.2  million and a loss on fuel
price  agreements  of DKK 1.9  million and  reclassified  DKK 6.4 million of the
transition  adjustment to income.  During the year ended  December 31, 2002, the
Company recorded a loss on interest rate swaps of DKK 32.1 million and a gain on
fuel price  agreements of DKK 3.1 million and reclassified the remaining DKK 0.5
million of the transition adjustment to income.

     f) Sale lease/back transactions

     During the year ended  December  31,  2000,  the  Company  sold five of its
vessels and chartered (leased) them back under time charter agreements.

     Under Danish GAAP,  the Company has calculated a gain of DKK 147.1 million,
which has been  deferred and  amortized in proportion to the gross rental on the
time charters over the life of the related agreements.

     Under U.S. GAAP, the gain has been deferred and amortized in a similar way,
but the gain on disposal is different  under U.S.  GAAP due to the  treatment of
dry dock costs as described under item b) above. The initial  difference between
the gain under  Danish GAAP and U.S.  GAAP is DKK 14.8  million,  which  through
amortization  in 2000,  2001 and 2002 has been  reduced to DKK nil at the end of
2002.

     g) Tonnage taxation

     On  February  6, 2002,  the  Danish  government  proposed a bill  regarding
Tonnage  Taxation,  which was enacted on April 17,  2002.  According  to the new
Tonnage  Taxation Act, tax payments in the future will not be based on a taxable
income,  but  rather  the  tonnage  of the  Company.  The  legislation  has been
implemented with retroactive date effective from January 1, 2001 and the Company
has chosen to enter the tonnage taxation scheme for a 10-year period with effect
from January 1, 2001.  Income taxation will only occur if the total fleet of the
Company at the time of entering the tonnage taxation scheme is reduced in size.

     Under Danish GAAP,  the provision for deferred tax that existed at the date
of enactment has been released to income.

     Under U.S.  GAAP,  the  provision  for deferred tax is still carried in the
balance  sheet,  as the  recognition  of a provision  for  deferred tax does not
depend on the likelihood of the provision  resulting in taxable amounts.  At the
end of each period,  the provision  for deferred tax is calculated  based on the
carrying  values and tax values of the shipping  related assets and  liabilities
that were owned by the company at the date for  entering  the  tonnage  taxation
scheme.

     h) Tax effect of U.S. GAAP adjustments

     The tax effects of the U.S. GAAP  adjustments have been calculated based on
the enacted tax rate of 30% for the years ended December 31, 2000 and 2001. Upon
entering the tonnage taxation scheme, all deferred tax assets were lost and as a
result these amounts were reversed during 2002.

     i) Stock options and stock grants

     In accordance  with the Company's  accounting  principles,  the  difference
between the exercise price and the market price of the shares at the date of the
grant is recorded as compensation expense in the income statement.

     Under U.S. GAAP,  stock-based  compensation  is accounted for in accordance
with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." Under APB No. 25, the Company  recognizes  compensation  expense for
the difference  between the exercise  price and market price at the  measurement
date. The Company's  stock grants are accounted for under fixed plan  accounting
and the stock options are accounted for under the variable plan accounting. This
resulted  in the same  compensation  expense  for the 2001  and 2002  grants  as
accounted for under Danish GAAP.

     j) Joint Venture Agreements

     The Company has investments in 50/50 joint ventures. The primary purpose of
these joint ventures is to jointly operate a vessel that is owned by each party.
The joint  ventures  then charter  these  vessels from the owners.  Under Danish
GAAP,  the Company  accounts  for entities  that are jointly  owned and operated
together  with third  parties,  and in which the  parties  have  joint  dominant
influence, under the proportional consolidation method.

     Under U.S.  GAAP,  these  entities  would be accounted for using the equity
method,  which will not result in a difference in net income between Danish GAAP
and U.S. GAAP.

     The following  represents the results reflected in the consolidated  income
statement for the year ended December 31, 2000, 2001 and 2002 in accordance with
Danish GAAP associated with these joint ventures (in thousands of DKK):

                                                       2000      2001      2002
                                                     -------   -------   -------

Net turnover                                         561,832   460,072   393,052
Operating costs                                      320,212   230,923   327,098
                                                     -------   -------   -------
Net earning from shipping activities                 241,620   229,149    65,954
Gain on sale of vessels/interests (2000: Loss)         5,946    13,747        --
Administrative expenses                                3,447     7,569     7,483
Other operating income                                    --     6,095     6,889
Depreciation                                          78,452    45,902    37,817
                                                     -------   -------   -------
Profit before financial items                        153,775   195,520    27,543
Financial items                                       56,947    24,661    68,281
                                                     -------   -------   -------
Profit before tax                                     96,828   170,859    40,738
                                                     =======   =======   =======

     The following represents summarized balance sheet data that is reflected in
the  consolidated  balance  sheet  associated  with these  joint  ventures as of
December 31, 2002 and 2001 in accordance with Danish GAAP (in thousands of DKK):

                                             2000           2001           2002
                                           -------         ------         ------

Fixed assets                               614,055        503,855        232,007
Current assets                             182,219        101,395         68,721

Provisions                                      --             --             --
Long term liabilities                      513,153        475,741        191,432
Current liabilities                        312,114         80,420         74,356

     k) Discontinued operations

     During 2002, the Company sold its Liner  activities to a company within the
A.P.  M0ller  group,  which under both Danish GAAP and U.S.  GAAP  represents  a
discontinued operation.

     Under Danish GAAP the results of the  discontinued  operations are included
in the income statement on a line-by-line  basis. Under U.S. GAAP the results of
the discontinued  operations are required presented in one line after net income
from continuing operations.

     The Danish GAAP impact of the  discontinued  operations on each line in the
income statement and the main captions in the balance sheet is presented in Note
16 to the consolidated financial statements.

     l) Statement of cash flows

     The cash flow  statement  prepared in accordance  with Danish GAAP presents
substantially  the same information as required under U.S. GAAP. Under U.S. GAAP
however,  there are certain  differences with regard to  classification of items
within the cash flow  statement  and with regard to the  definition  of cash and
cash equivalents.

     Under Danish GAAP,  the Company's  cash is comprised of cash at bank and in
hand and bonds. For U.S. GAAP purposes, the Company classified only cash at bank
and in hand as cash and cash equivalents. Therefore under U.S. GAAP, investments
in and sales of bonds,  treated as trading  securities  under SFAS 115, would be
classified  in  the  statement  of  cash  flows  as  operating   activities  and
investments  and sales of equity  securities  classified  as available  for sale
would be classified as investing activities.  Additionally,  the unrealized gain
and loss on the bonds would be reflected as a component of operating activities.

     Under Danish GAAP, the profit on the sale of fixed assets is reflected as a
component  of  investing  activities,  whereas  under U.S.  GAAP this  amount is
reflected as a component of operating activities.

     The  presentation of cash flows provided by (used in) operating,  investing
and financing activities, classified in accordance with U.S. GAAP, utilizing the
amounts  shown in the Company's  Danish GAAP cash flow  statement are as follows
for the years ended December 31, 2000, 2001 and 2002 (in thousands of DKK):

<TABLE>
<CAPTION>
                                                          2000          2001          2002
                                                       ----------    ----------    ----------
<S>                                                      <C>           <C>         <C>
Net cash provided by operating activities                 303,490       506,079       478,303
Net cash provided by (used in) investment activities      603,242        38,768    (1,118,689)
Net cash provided by (used in) financing activities      (756,314)     (519,286)      552,198

Net increase in cash and cash equivalents                 150,418        25,561       (88,188)
Cash under U.S. GAAP, beginning of year                    88,408       238,826       264,387
                                                       --------------------------------------
Cash under U.S. GAAP, end of year                         238,826       264,387       176,199
                                                       --------------------------------------
</TABLE>

     m) Earnings Per Share

     Danish GAAP does not require Earnings Per Share information.

     Under U.S.  GAAP,  basic  earnings  per share are based  upon the  earnings
available  to common  stockholders  divided by the  weighted  average  number of
common shares  outstanding  during the period and adjusted for the effect of all
dilutive potential common shares that were outstanding during the period.

     The  following  table sets forth the  computation  of basic and diluted net
income per share (in thousands except share and per share data):

                                                       2000      2001      2002
                                                    -------   -------   -------

Numerator for basic and diluted Earnings Per Share
                                                    -------   -------   -------
Profit/(loss) from continuing operations            105,877   366,368    (8,154)
                                                    -------   -------   -------
Profit from discontinuing operations                  3,855     8,477    93,726
                                                    -------   -------   -------
Profit/(loss) for the year                          109,732   374,845    85,572

                                         No. of         No. of        No. of
                                         shares         shares        shares
                                      ------------   ------------  ------------
Weighted average number of shares:
Basic                                   18,200,000     17,517,633    17,317,909
Effect of dilutive shares, options
and stock purchase rights                       --          4,844        10,449
                                      ------------   ------------  ------------
Diluted                                 18,200,000     17,522,477    17,328,358
                                      ------------   ------------  ------------

Basic earnings per share
Profit from continuing operations              5.8           20.9          (0.5)
                                      ------------   ------------  ------------
Profit from discontinued operations            0.2            0.5           5.4
                                      ------------   ------------  ------------
Profit (loss) for the year                     6.0           21.4           4.9
                                      ------------   ------------  ------------

Diluted earnings per share
Profit from continuing operations              5.8           20.9          (0.5)
                                      ------------   ------------  ------------
Profit from discontinued operations            0.2            0.5           5.4
                                      ------------   ------------  ------------
Profit (loss) for the year                     6.0           21.4           4.9

     The weighted  average number of shares excludes the shares  reacquired from
the date of repurchase.

     n) New accounting requirements

     SFAS 143 "Accounting for Asset Retirement Obligations"

     In June 2001,  the FASB issued SFAS 143,  Accounting  for Asset  Retirement
Obligations.  SFAS 143 requires  that the fair value of a liability for an asset
retirement  obligation  be recognized in the period in which it is incurred if a
reasonable  estimate of fair value can be made. The associated  asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset. An
entity shall measure changes in the liability for an asset retirement obligation
due to passage of time by  applying  an  interest  method of  allocation  to the
amount of the liability at the  beginning of the period.  The interest rate used
to measure that change shall be the credit adjusted  risk-free rate that existed
when the liability was initially measured. That amount shall be recognized as an
increase in the carrying amount of the liability as an expense  classified as an
operating  item in the  statement of income.  SFAS 143 is  effective  for fiscal
years  beginning  after June 15,  2002.  The Company  does not  anticipate  that
adoption of SFAS 143 will have a material impact on its results of operations or
its financial position.

     SFAS 145  "Rescission of SFAS Nos. 4, 44 and 64,  Amendment of SFAS 13, and
Technical Corrections as of April 2002"

     In April 2002, the FASB issued Statements of Accounting  Standards No. 145,
SFAS 145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of
Debt," SFAS 44,  "Accounting for Intangible  Assets of Motor Carriers," and SFAS
64,  "Extinguishments of Debt made to satisfy  Sinking-Fund  requirements." As a
result,  gains  and  losses  from  extinguishment  of  debt  will no  longer  be
classified  as  extraordinary  items unless they meet the criteria of unusual or
infrequent as described in Accounting  Principles  Boards Opinion 30, "Reporting
the Results of  Operations - Reporting the Effects of Disposal of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions." In addition, SFAS 145 amends SFAS 13, "Accounting for Leases," to
eliminate an inconsistency  between the required  accounting for  sale-leaseback
transactions and the required  accounting for certain lease  modifications  that
have economic effects that are similar to sale-leaseback transactions.  SFAS 145
also  amends  other  existing  authoritative   pronouncements  to  make  various
technical  corrections,  clarify meanings, or describe their applicability under
changed  conditions.  SFAS 145 is effective for fiscal years beginning after May
15, 2002. The Company does not believe that the adoption of SFAS 145 will have a
material impact on its results of operations and financial position.

     SFAS 146 "Accounting for Costs Associated with Exit or Disposal Activities"

     In June 2002,  the FASB issued  Statement of Accounting  Standards No. 146,
"Accounting  for  Costs  Associated  with  Exit or  Disposal  Activities".  This
Statement addresses financial accounting and reporting for costs associated with
exit or disposal  activities and nullifies  Emerging Issues Task Force Issue No.
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other
Costs  to  Exit  an   Activity   (including   Certain   Costs   Incurred   in  a
Restructuring)".  SFAS  146  eliminates  the  definition  and  requirements  for
recognition of exit costs in EITF 94-3. SFAS 146 requires that a liability for a
cost  associated  with an exit or  disposal  activity  be  recognized  when  the
liability is incurred.  Under EITF 94-3, a liability for an exit cost as defined
in EITF 94-3 was  recognized  at the date of an entity's  commitment  to an exit
plan. SFAS 146 also concluded that an entity's  commitment to a plan, by itself,
does not create a present  obligation  to others that meets the  definition of a
liability.  SFAS 146 also  establishes  that  fair  value is the  objective  for
initial  measurement  of the  liability.  The Company  does not believe that the
adoption of SFAS 146 will have a material  impact on its  results of  operations
and financial position.

     SFAS  148  "Accounting  for  Stock-Based   Compensation  -  Transition  and
Disclosure - an amendment of SFAS 123"

     In  December  2002,  FASB  issued  SFAS 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure - an amendment of SFAS 123. SFAS 148
amends SFAS 123 and provides  alternative methods for accounting for a change by
registrants to the fair value method of accounting for stock-based compensation.
Additionally, SFAS 148 amends the disclosure requirements of SFAS 123 to require
disclosure  in the  significant  accounting  policy  footnote of both annual and
interim  financial  statements  of the  method  of  accounting  for  stock-based
compensation  and the related  pro-forma  disclosures  when the intrinsic  value
method  continues  to be used.  The  statement  is  effective  for fiscal  years
beginning  after December 15, 2002, and  disclosures are effective for the first
fiscal quarter beginning after December 15, 2002. The Company does not intend to
adopt  the fair  value  method  of  accounting  for  stock  based  compensation.
Consequently  SFAS 148 will not have an impact on its results of  operation  and
financial position.

     SFAS 149,  "Amendment  of SFAS 133 on  Derivative  Instruments  and Hedging
Activities

In April 2003, the Financial  Accounting Standards Board (FASB) issued Statement
No. 149 (SFAS No. 149), Amendment of SFAS No. 133 on Derivative  Instruments and
Hedging Activities. The Statement amends and clarifies accounting for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts, and for hedging activities under SFAS No. 133. In particular,  it (1)
clarifies  under what  circumstances  a contract with an initial net  investment
meets the  characteristic  of a  derivative  as  discussed  in SFAS No. 133, (2)
clarifies  when a  derivative  contains a  financing  component,  (3) amends the
definition  of an  underlying  to  conform  it to  the  language  used  in  FASB
Interpretation  No. 45,  Guarantor  Accounting and Disclosure  Requirements  for
Guarantees,  Including  Indirect  Guarantees of  Indebtedness  of Others and (4)
amends  certain  other  existing  pronouncements.  SFAS No. 149 is effective for
contracts  entered into or modified after June 30, 2003,  except as stated below
and for hedging relationships designated after June 30, 2003.

     The  provisions of SFAS No. 149 that relate to SFAS No. 133  Implementation
Issues that have been effective for fiscal quarters that began prior to June 15,
2003,  should  continue  to be  applied  in  accordance  with  their  respective
effective dates. In addition,  certain provisions  relating to forward purchases
or sales of when-issued  securities or other  securities  that do not yet exist,
should be applied to existing  contracts as well as new  contracts  entered into
after June 30, 2003. SFAS No. 149 should be applied prospectively.

     The Company will adopt the provisions of SFAS No. 149 on December 31, 2003.
However,  it does not expect  that the  adoption of this  Statement  will have a
material impact on its results of operations and financial position.

     SFAS   150,   "Accounting   for   Certain   Financial    Instruments   with
Characteristics of both Liabilities and Equity"

     In  May  2003  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial Accounting Standards No. 150 ("SFAS 150"), Accounting for
Certain  Financial  Instruments  with  Characteristics  of both  Liabilities and
Equity. SFAS 150 modifies the accounting for certain financial instruments that,
under  previous  guidance,  issuers could  account for as equity.  The Statement
requires that those  instruments  be classified as  liabilities in statements of
financial  position.  SFAS 150 affects an issuer's accounting for three types of
freestanding financial instruments, namely:

     o    mandatorily  redeemable shares, which the issuing company is obligated
          to buy back in exchange for cash or other assets.

     o    Instruments, other than outstanding shares, that do or may require the
          issuer to buy back some of its  shares in  exchange  for cash or other
          assets.  These  instruments  include put options and forward  purchase
          contracts.

     o    obligations  that can be settled  with shares,  the monetary  value of
          which is fixed,  tied solely or  predominantly to a variable such as a
          market  index,  or varies  inversely  with the  value of the  issuers'
          shares.

     SFAS 150 does not apply to features embedded in financial  instruments that
are not derivatives in their entirety.

     In addition to its requirements for the  classification  and measurement of
financial instruments within its scope, SFAS 150 also requires disclosures about
alternative  ways of settling  those  instruments  and the capital  structure of
entities, all of whose shares are mandatorily redeemable.

     SFAS 150 is effective  for financial  instruments  entered into or modified
after May 31, 2003,  and  otherwise  is effective at the  beginning of the first
interim  period  beginning  after  June 15,  2003.  It is to be  implemented  by
reporting  the  cumulative  effect of a change in an  accounting  principle  for
financial  instruments  created  before the issuance  date of the  Statement and
still existing at the beginning of the interim  period of adoption.  Restatement
is not permitted.

     The  Company  does not  expect  that the  adoption  of SFAS 150 will have a
material impact on its results of operations and financial position.

     FIN 45 "Guarantor's  Accounting and Disclosure Requirements for Guarantees,
including Indirect Guarantees of Indebtedness of Others"

     In November 2002, FASB issued  Interpretation 45,  "Guarantor's  Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness of Others". This interpretation  requires certain disclosures to be
made by a guarantor  in its interim and annual  financial  statements  about its
obligations  under  certain  guarantees  that is has issued.  It also requires a
guarantor to  recognize,  at the  inception of a guarantee,  a liability for the
fair value of the obligation undertaken in issuing the guarantee. The Company is
assessing,  but at this point do not believe the adoption of the recognition and
initial  measurement  requirements  of FIN 45 will have a material impact on its
financial position, cash flows or results of operations.

     FIN 46 "Consolidation of Variable Interest Entities"

     In January 2003, the FASB issued FASB Interpretation No. 46 - Consolidation
of Variable  Interest Entities - an interpretation of ARB No. 51 ("FIN 46"). FIN
46  clarifies  the   application  of  Accounting   Research   Bulletin  No.  51,
Consolidated Financial Statements, to certain entities in which equity investors
do not have the  characteristics  of a controlling  financial interest or do not
have sufficient equity at risk for the entity to finance its activities  without
additional  subordinated  financial support from other parties.  FIN 46 explains
how to identify variable interests  entities and how an enterprise  assesses its
interests in a variable  interest  entity to decide whether to consolidate  that
entity.  It requires  existing  unconsolidated  variable interest entities to be
consolidated by their primary  beneficiaries  if the entities do not effectively
disperse risks among parties involved.  It also requires certain  disclosures by
the primary  beneficiary of a variable interest entity and by an enterprise that
holds  significant  variable  interests in a variable  interest entity where the
enterprise is not the primary  beneficiary.  FIN 46 is effective  immediately to
variable  interest  entities  created  after  January  31,  2003 and to variable
interest  entities in which an enterprise  obtains an interest  after that date,
and effective for the first fiscal year or interim period  beginning  after June
15, 2003 to variable  interest  entities in which an enterprise holds a variable
interest that it acquired  before February 1, 2003. FIN 46 requires an entity to
disclose certain  information  regarding a variable interest entity, if when the
Interpretation  becomes effective,  it is reasonably possible that an enterprise
will consolidate or have to disclose  information  about that variable  interest
entity,  regardless  of the date on  which  the  variable  entity  interest  was
created.
<PAGE>

ITEM 19. EXHIBITS.

    Number                                 Description of Exhibits
    ------                                 -----------------------

     1.1       _____  Articles of Association  for A/S  Dampskibsselskabet  TORM
                      and English Translation (the "Company") (1)

     1.2       _____  Rules  of  Procedure  for the  Board of  Directors  of the
                      Company and English Translation (1)

     2.2       _____  Form of Depositary Agreement between Deutsche Bank and the
                      Company (1)

     4.1       _____  The Company's Employee Stock Purchase Plan (1)

     4.2       _____  Office  lease  between  PFA Pension II and the Company and
                      English Translation (1)

     4.3       _____  Engagement  letter  of  Bech-Bruun  Dragsted  and  English
                      Translation (1)

     4.4       _____  DKK 42  million  revolving  credit  facility  letter  from
                      Danske Bank to the  Company  dated  December  11, 1998 and
                      English translation (1)

     4.5       _____  Debt Instrument from Agnete Shipping Corporation to Danske
                      Bank Aktieselskab,  Singapore Branch, dated August 9, 1995
                      (1)

     4.6       _____  Debt  Instrument  from Eastern Light  Shipping  Limited to
                      Danske Bank Aktieselskab, Hong Kong Branch, dated November
                      17, 1995 (1)

     4.7       _____  Debt  Instrument  from Southern Light Shipping  Limited to
                      Danske Bank Aktieselskab, Hong Kong Branch (1)

     4.8       _____  Debt Instrument from Hermia Shipping Corporation to Danske
                      Bank Aktieselskab,  Singapore Branch, dated June, 14, 1996
                      and to Danske Bank A/S dated August 29, 2001 (1)

     4.9       _____  Debt  Instrument  from Hilde Shipping Corp. to Danske Bank
                      Aktieselskab, dated July 3, 2000 (1)

     4.10      _____  Debt  Instrument  from Skagerak  Tankers Limited to Danske
                      Bank Aktieselskab, Singapore Branch, dated May 9, 1996 (1)

     4.11      _____  Debt Instrument  from Anne Product  Carriers (PTE) Ltd. To
                      Danske Bank  Aktieselskab,  Singapore  Branch,  August 28,
                      1998 (1)

     4.12      _____  Debt  Instrument  from  Gunhild  Shipping  Corporation  to
                      Danske Bank Aktieselskab, Singapore Branch, dated November
                      6, 1998 (1)

     4.13      _____  Debt  Instrument  from  Tekla  Shipping  Co. Ltd to Danske
                      Bank, Singapore Branch, dated March 23, 1992 (1)

     4.14      _____  Debt Instrument  from Alice Product Tanker  Corporation to
                      Danske Bank Aktieselskab, Singapore Branch, dated November
                      8, 1994 (1)

     4.15      _____  Debt  Instrument  from  Bothnia  Shipping  Corporation  to
                      Danske Bank,  Singapore  Branch,  dated September 20, 1989
                      (1)

     4.16      _____  Debt Instrument  from Olga Shipping  Corporation to Danske
                      Bank  Aktieselskab,  Singapore  Branch,  dated October 27,
                      1995 (1)

     4.17      _____  Secured Loan Agreement,  between Caseros  Shipping Limited
                      and Nordea Bank, dated June 15, 1994 (1)

     4.18      _____  Loan Agreement  between Estrid  Shipping  Corporation  and
                      Danmarks Skibskreditfond, dated November 6, 2001 (1)

     4.19      _____  Loan Agreement between Ragnhild  Shipping  Corporation and
                      Danmarks Skibskreditfond, dated November 6, 2001 (1)

     4.20      _____  Shipbuilding  Contract  for the  Construction  of Hull No.
                      S161,  between the Company and Samho Heavy Industries Co.,
                      Ltd.  and  Hyundai  Heavy   Industries  Co.,  Ltd.,  dated
                      November 24, 2000 (1)

     4.21      _____  Shipbuilding  Contract  for the  Construction  of Hull No.
                      S162,  between the Company and Samho Heavy Industries Co.,
                      Ltd.  and  Hyundai  Heavy   Industries  Co.,  Ltd.,  dated
                      November 24, 2000 (1)

     4.22      _____  Contract  for  Construction  and Sale of Hull No.  S-1089,
                      between   Thyra   Shipping    Corporation    and   Daedong
                      Shipbuilding Co., Ltd., dated March 2, 2001 (1)

     4.23      _____  Contract  for  Construction  and Sale of Hull No.  S-1090,
                      between   Freya   Shipping    Corporation    and   Daedong
                      Shipbuilding Co., Ltd., dated March 2, 2001 (1)

     4.24      _____  Contract  for  Construction  and Sale of Hull No.  S-1086,
                      between   Gertrud   Shipping   Corporation   and   Daedong
                      Shipbuilding Co., Ltd., dated November 3, 2000 (1)

     4.25      _____  Contract  for  Construction  and Sale of Hull No.  S-1087,
                      between Gerd Shipping Corporation and Daedong Shipbuilding
                      Co., Ltd., dated November 3, 2000 (1)

     4.26      _____  Contract  for  Construction  and Sale of Hull No.  S-1079,
                      between the Company and Daedong  Shipbuilding  Co.,  Ltd.,
                      dated August 25, 2000 (1)

     4.27      _____  Contract  for  Construction  and Sale of Hull No.  S-1080,
                      between the Company and Daedong  Shipbuilding  Co.,  Ltd.,
                      dated August 25, 2000 (1)

     8.1       _____  List of the Company's subsidiaries (1)

     99.1      _____  Certification of the Company's Principal Executive Officer
                      pursuant toss.302 of the Sarbanes-Oxley Act of 2002.

     99.2      _____  Certification of the Company's Principal Financial Officer
                      pursuant toss.302 of the Sarbanes-Oxley Act of 2002.

     99.3      _____  Certification of the Company's Principal Executive Officer
                      pursuant toss.906 of the Sarbanes-Oxley Act of 2002.

     99.4      _____  Certification of the Company's Principal Financial Officer
                      pursuant toss.906 of the Sarbanes-Oxley Act of 2002.

----------
(1)  Incorporated  by  reference  from  exhibit of same  number to  Registration
     Statement on Form 20-F, filed February 27, 2002 (File No. 000-49650)
<PAGE>

                                   SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the  undersigned to sign
this registration statement on its behalf.

                                        Aktieselskabet Dampskibsselskabet Torm


                                        By: /s/ Klaus Kjaerulff
                                            ------------------------------------
                                            Name:  Klaus Kjaerulff
                                            Title: Chief Executive Officer
Date: June 30, 2003

03810.0001 #413057v3