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

                                    FORM 20-F/A

(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, 2003

                                       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>

                                EXPLANATORY NOTE

TORM is filing this Amendment to its Report on Form 20-F for its fiscal year
ended December 31, 2003, in order to include the certifications applicable to
foreign private issuers pursuant to Rule 13a-14(a)/15d-14(a) and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. These certifications were inadvertently omitted from the Report, as
previously filed.

<PAGE>

                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----

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                                      13

ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS                    33

ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                      58

ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS               62

ITEM 8.    FINANCIAL INFORMATION                                           63

ITEM 9.    THE OFFER AND LISTING                                           64

ITEM 10.   ADDITIONAL INFORMATION                                          65

ITEM 11.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK      80

ITEM 12.   DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.         83

ITEM 13.   DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                 83

ITEM 14.   MATERIAL MODIFICATIONS TO THE
           RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS                  83

ITEM 15.   CONTROLS AND PROCEDURES                                         83

ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT                                84

ITEM 16B.  CODE OF ETHICS                                                  84

ITEM 16C.  PRINCIPAL ACCOUNTING FEES AND SERVICES                          84

ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY
           THE ISSUER AND AFFILIATED PURCHASES                             85

ITEM 17.   FINANCIAL STATEMENTS                                            85

ITEM 18.   FINANCIAL STATEMENTS                                            85

ITEM 19.   EXHIBITS                                                        88


<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.  When used in this report,  the words
"anticipate,"   "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 Torm's
operating  expenses,  including bunker prices,  dry-docking and insurance costs,
changes in  governmental  rules and  regulations  or actions taken by regulatory
authorities, changes in the price of our capital investments, such as the NORDEN
shares, 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 report,  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 statements and notes thereto, all included elsewhere
within this  document.  The selected  consolidated  financial  data includes the
Liner  activities,  which were sold to A.P.  M0ller-Maersk  A/S on September 16,
2002. The results of the operations attributable to the Liner activities,  which
represent a discontinued  operation,  are presented in two separate lines in the
income statement after net income from continuing operations.  The impact of the
sale of the activities is included herein.  Net profit from the Liner activities
by line item is disclosed in Note 9 to the consolidated financial statements.

     The consolidated financial statements have been prepared in accordance with
Danish generally accepted accounting  principles,  or Danish GAAP, which differs
in certain respects from U.S. generally accepted accounting principles,  or U.S.
GAAP.  The  differences  between  Danish GAAP and U.S. GAAP as applicable to the
historical  financial  statements are summarized in Note 18 to the  consolidated
financial statements included herein.

<TABLE>
                                                                   For the year ended December 31
<CAPTION>
                                                1999             2000             2001             2002           2003
                                                ----             ----             ----             ----           ----
                                            (restated)(1)      (restated)(1)   (restated)(1)    (restated)(1)
                                                                        (in thousands of DKK)
Statement of Operations Data:
<S>                                         <C>               <C>               <C>             <C>             <C>
Net revenue                                     924,331        1,597,221        2,000,713        1,538,618       1,927,996
Port expenses,  bunkers, charter hire and
technical running costs                        (735,405)      (1,012,683)      (1,247,245)      (1,236,612)     (1,280,827)
                                            -----------       -----------      -----------      -----------     -----------
Gross profit (Net  earnings from shipping
activities)                                     188,926          584,538          753,468          302,006         647,169
Profit from sale of vessels and interests             0           11,334           91,790           16,965            (464)
Administrative expenses                         (47,473)         (67,275)        (113,404)        (101,342)       (126,119)
Other operating income                           25,753           45,350           58,689           55,227          51,368
Depreciation and write downs                   (202,952)        (249,038)        (177,993)        (158,400)       (176,872)
                                            -----------       -----------      -----------      -----------     -----------
Profit before financial items                   (35,746)         324,909          612,550          114,456         395,082
Financial items (2)                            (124,858)        (168,820)         (96,519)           5,988         656,637
                                            -----------       -----------      -----------      -----------     -----------
Profit/ (loss) before tax                      (160,604)         156,089          516,031          120,444       1,051,719
Tax on profit on ordinary activities             56,461          (53,298)        (166,018)         360,190            (692)
                                            -----------       -----------      -----------      -----------     -----------

Profit from continuing operations              (104,143)         102,791          350,013          480,634       1,051,027
Profit   before  tax  from   discontinued
operations (6)                                     (750)           5,540           17,417           69,818               0
Tax on discontinued operations                        0                0                0                0               0
                                            -----------       -----------      -----------      -----------     -----------
Net profit for the year                        (104,893)         108,331          367,430          550,452       1,051,027

Balance sheet data (as of end of period):
Total assets (3)                              4,346,475        4,040,007        4,049,353        4,013,588       4,893,657
Long term liabilities                         2,522,346        1,951,288        1,519,743        1,735,464       1,700,704
Shareholders' equity                            931,826        1,051,147        1,354,741        1,623,391       2,464,306
Common shares                                   182,000          182,000          182,000          182,000         182,000
No. of shares outstanding (4)                18,200,000       18,200,000       18,200,000       18,200,000      18,200,000

Other financial data
Dividends declared per share                        0.0              2.0              4.0              2.0            12.0
Dividends declared per share-USD (5)                0.0              0.3              0.6              0.3             1.9
U.S. GAAP financial data
Profit (loss) from continuing
operations before income taxes and
discontinued operations                        (177,121)         139,013          518,079           50,628         338,350
Tax benefit (expense) on profit                  68,359          (34,821)        (160,650)         (34,874)         11,361
                                            -----------       -----------      -----------      -----------     -----------
Profit (loss) from continuing operations       (108,762)         104,192          357,429           15,754         349,711
Profit (loss) from discontinued
operations (6)                                     (750)           5,540           17,417           69,818               0
                                            -----------       -----------      -----------      -----------     -----------
Profit (loss)                                  (109,512)         109,732          374,846           85,572         349,711
Earnings (loss) per share - basic:
Profit (loss) from continuing operations           (6.0)             5.7             20.4              0.9            20.2
Profit    (loss)    from    discontinuing
operations                                         (0.0)             0.3              1.0              4.0             0.0
Profit (loss)                                      (6.0)             6.0             21.4              4.9            20.2
Earnings (loss) per share - diluted:
Profit (loss) from continued operations            (6.0)             5.7             20.4              0.9            19.9
Profit    (loss)    from     discontinued
operations                                         (0.0)             0.3              1.0              4.0             0.0
Profit (loss)                                      (6.0)             6.0             21.4              4.9            19.9
Total assets                                  4,340,133        4,030,941        4,067,887        3,985,551       4,865,250
Long term debt  (including  capital lease
obligations)                                  2,522,346        1,951,288        1,519,743        1,735,464       1,700,704
Shareholders' equity                            866,474        1,032,118        1,351,725        1,196,372       2,024,025
No. of shares outstanding                    18,200,000       18,200,000       18,200,000       18,200,000      18,200,000

</TABLE>


(1)  We  revised  our  accounting  policies  to apply the U.S.  dollar,  or USD,
     instead  of the Danish  Kroner,  or DKK,  as  measurement  currency  in the
     operating  entities,  while DKK  remains  as  measurement  currency  in the
     administrative  entity.  In accordance with Danish GAAP, the revisions have
     been reflected through a restatement of the historical  financial  results.
     Translation from the U.S. dollar to DKK in the operating  entities is based
     on the  principles  outlined  in  IAS  interpretation  SIC  30  ("Reporting
     Currency  -  Translation   from   Measurement   Currency  to   Presentation
     Currency"), which provides that:

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

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

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

(2)  Financial items include in 2003 an unrealized gain on our holding of shares
     in  Dampskibsselskabet  "NORDEN"  A/S of DKK 681 million  compared to DKK 8
     million in 2002.

(3)  Total  assets  for each  period  includes  cash  and  bonds  that  serve as
     collateral for certain of our borrowings. This amount was DKK 52 million as
     of December  31, 2003,  DKK 186 million as of December  31,  2002,  DKK 184
     million as of December  31,  2001,  DKK 207 million as of December 31, 2000
     and DKK 246 million as of December 31, 1999.  See  "Operating and Financial
     Review and Prospects" for further discussion.

(4)  Shares  outstanding as of December 31, 2003 includes 881,368 shares that we
     purchased and hold as own shares,  reflected in shareholders' equity. As of
     December 31, 2002 we held  881,368 own shares,  and as of December 31, 2001
     we held  871,468  own shares  whereas  no own shares  were held in 1999 and
     2000.

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

(6)  Profit (loss) from  discontinued  operations  for 2002 includes the gain of
     DKK 60 million on disposal of the Company's liner activities.

EXCHANGE RATE INFORMATION

     The  following  tables  show,  for the five most  recent  financial  years,
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,
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
2003      ........................   7.1684   5.9150     6.5774       5.9150

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

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

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

Month ended
October 2003      ..............     6.4105                6.2810
November 2003     ..............     6.5135                6.2060
December 2003     ..............     6.2240                5.9150
January 2004      ..............     6.0200                5.7960
February 2004     ..............     5.9970                5.8020
March 2004        ..............     6.1623                5.9925
April 2004        ..............     6.3080                6.0255


On April 30,  2004,  the exchange  rate  between the Danish  Kroner and the U.S.
dollar was 6.2150.

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 charters or vessel leases  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 and bulk
markets.  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 refined oil products such as naphtha and
gas 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    global supply of oil and oil products;

     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    government and industry regulation;

     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.

     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 but
not limited to 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    shipyard capacity;

     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.

     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.  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.

     Terrorist  attacks  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 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.

     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 USD1,200 per gross ton or USD10  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.

     Under OPA, with certain  limited  exceptions,  all newly built or converted
tankers  operating  in United  States  waters  must be built with  double  hulls
conforming to particular  specifications.  Tankers that do not have double hulls
are subject to structural and operational measures to reduce oil spills and will
be  precluded  from  operating  in United  States  waters  between 1995 and 2015
according  to size,  age,  hull  configuration  and  place of  discharge  unless
retrofitted with double hulls. In addition,  OPA specifies  annual  inspections,
vessel  manning,  equipment  and  other  construction  requirements  that are in
various stages of development  by the U.S. Coast Guard,  or USCG,  applicable to
new and to existing vessels.

     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 us and for our  competitors.  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 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  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.

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.

     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 bulk and tanker  industries,  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.  We do not maintain
"key man" life insurance on any of our officers.

     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  vessels  suffer  damage,  they may need to be  repaired  at a
dry-docking  facility  or  other  type of ship  repair  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.  Repairs  may involve  long  periods of  inactivity,  which may have a
negative effect on earnings and our ability to service our debt.

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

     We own both vessels  constructed for us directly by builders and secondhand
vessels purchased from other owners.  While we inspect  secondhand 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 April 30, 2004,  our fleet of owned
and long term  chartered  vessels  included  four tankers and three bulk 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 vessels reach 15 years of age, the majority of charterers and
oil companies may impose  restrictions on vessels that make it more difficult to
trade the vessels with optimal  flexibility.  In addition,  these older  vessels
must meet certain hull  thickness  tests.  Furthermore,  cargo  insurance  rates
increase  for  vessels  over 15 years of age,  making  them  less  desirable  to
charterers.  We, however,  consider a useful lifetime of 25 years to be the best
estimate of the economic lifetime of a vessel.

     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    piracy;

     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 which would adversely affect our revenues.

     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 lien
holder 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 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  attempted  attacks on the Basra Oil  Terminal in April
2004 and the attacks on employees  of Exxon in Yanbu,  Saudi Arabia in early May
2004,  and our  vessels  trading in those  areas may face a higher risk 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

     In 2003,  we  generated  nearly all of our  revenues  in U.S.  dollars  but
incurred  approximately  87% of our expenses in U.S dollars and 10% was incurred
in Danish Kroner.  A change in exchange rates could lead to  fluctuations in our
reported net income.

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

     As of December 31, 2003, 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, 2003,  we had entered into interest swap
agreements  expiring  between  2004 and 2009 for  approximately  69% of the then
outstanding  principal  amounts  of our  loans  that  may  mitigate  some of our
exposure to the risk of rising  interest rates.  However,  increases in interest
rates will increase our payments under loans not covered by caps of the interest
rates of our loans and swap agreements and may negatively affect our earnings.

     Because we are a  non-U.S.  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, or 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 have
also  provided  offshore  marine  service  vessels,  but ceased this  service in
December  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. As of April
30,  2004,  we owned 24  vessels,  including  18 product  tankers and 6 dry bulk
carriers. We also own a 50% interest in an additional product tanker. We charter
in two product  tankers on long-term  time  charters  due to expire in 2009.  We
charter in  tankers  and bulk  vessels as are needed by the pools we manage.  In
addition, we commercially manage approximately 42 vessels for third party owners
and charterers.

     Our primary capital expenditures are in connection with 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 International Maritime Organization,  or the IMO. During the
past three years, we have entered into contracts to purchase thirteen additional
vessels under construction,  or newbuildings and secondhand vessels, for a total
cost of 375 million U.S. dollars or approximately  DKK 2.2 billion and have sold
one vessel for aggregate  proceeds of  approximately  17 million U.S. dollars or
approximately DKK 0.1 billion.

B.   Business Overview

The Fleet

         Our fleet of owned, long term chartered and partially owned vessels
consists of 19 product tankers and 6 dry bulk carriers. The total tonnage of
those vessels is approximately 1,593,000 dwt, of which one vessel of
approximately 84,000 dwt is owned jointly with a partner.

     In 2000 we sold, then chartered back on a long term basis,  the two product
tankers TORM Kristina and TORM Gudrun.

     In 2001, we placed orders for two additional  45,000 dwt tankers,  of which
we took  delivery  in 2003.  In 2002,  we placed  orders  for two LR1 75,000 dwt
tankers,  both of which we expect to take  delivery in 2004.  In 2003, we placed
orders for the  building of four new 100,000  dwt product  tankers,  of which we
expect to take delivery in 2006 and 2007. As of January 20, 2004, we have placed
an order for the building of one new 100,000 dwt product tanker, which we expect
to take delivery of in early 2008.

     The following table lists our entire fleet of owned and long term chartered
in vessels as of December 31, 2003:

Product Tankers   Year Built    Dwt        Ownership                   Flag (1)
---------------   ----------    ---        ---------                   --------
Wholly Owned
TORM Ingeborg        2003       99,990     TORM                        NIS
TORM Valborg         2003       99,990     TORM                        NIS
TORM Helene          1997       99,990     Hermia Shipping             DIS
TORM Freya           2003       45,800     Freya Shipping              DIS
TORM Thyra           2003       46,308     Thyra Shipping              DIS
TORM Gerd            2002       45,800     Gerd Shipping               DIS
TORM Gertrud         2002       45,800     Gertrud Shipping            DIS
TORM Vita            2002       45,800     Ragnhild Shipping           DIS
TORM Mary            2002       45,800     Estrid Shipping             DIS
TORM Anne            1999       45,507     Anne Product Carriers       Singapore
TORM Gunhild         1999       45,457     Gunhild Shipping            DIS
TORM Gotland         1995       47,629     Alice Product Tanker Corp.  DIS
TORM Asia            1994       44,367     Caseros Shipping            Hong Kong
Olga                 1992       44,646     Olga Shipping               Liberia
Partially Owned
Kirsten*             1988       83,660     Hilde Shipping              NIS
Chartered In
TORM Gudrun**        2000       99,990                                 Liberia
TORM Kristina**      1999      105,000                                 Liberia
TORM Hilde***        1990       84,040                                 NIS
TORM Margrethe***    1988       83,955                                 DIS

Bulk Carriers     Year Built      Dwt                                     Flag
-------------     ----------      ---                                     ----
Wholly Owned
TORM Marta           1997       69,638     TORM                        NIS
TORM Tekla           1993       69,268     TORM                        NIS
TORM Herdis          1992       69,618     TORM                        NIS
TORM Marina          1990       69,637     TORM                        NIS
TORM Arawa           1997       27,827     Southern Light Shipping     Liberia
TORM Pacific         1997       27,802     Eastern Light Shipping      Liberia

* 50% ownership.
** On ten-years time charter to TORM.
*** On bareboat charter to TORM. The two vessels were refinanced in January 2004
and ownership of the vessels is thereafter with TORM.

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

     For further information  regarding the encumbrances on above vessels please
refer to Item 10c.

     Our product tanker division is engaged in the transportation of refined oil
products  such as  gasoline,  jet fuel,  naphtha and gas 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,  Europe and the
Caribbean. One of these 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.

     In 1997, we diversified  into the operation of  anchor-handling  tug/supply
vessels and other similar  offshore  craft that service oil rigs but ceased this
activity in December 2003.

     Each of our vessel  categories  generates  Gross profits (net earnings from
shipping activities) by operating owned and chartered in vessels.  Gross profits
(net  earnings  from  shipping  activities)  generated  by the Liner  service is
included in the item "Profit  before tax from  discontinued  operations"  in the
Income  Statement.  Over the last three financial years the  contribution to net
earnings from shipping activities per division has been as follows:

Division                                    2001         2002         2003
--------                                    ----         ----         ----
Product Tankers                              85%          98%          80%
Dry Bulk Vessels                              7%          -5%          20%
Liner Service                                 6%           6%           0%
Offshore Craft                                2%           1%           0%

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 MR Pool,  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.

The LR2 Pool

     The LR2 Pool is  comprised of 16 Aframax  tankers that are all  double-hull
and mainly  trade clean  petroleum  products.  We formed LR2  Management  A/S, a
Danish  corporation to serve as the  commercial  manager of the LR2 Pool. We own
50% of all issued and  outstanding  voting stock of LR2 Management  A/S.  Maersk
Tankers,  one  of  the  pool  participants,   owns  the  other  50%.  The  other
participants in this pool are Primorsk Shipping  Corporation and Reederei "Nord"
Klaus E. Oldendorff Ltd. Three of our owned vessels TORM Valborg,  TORM Ingeborg
and TORM Helene and two of our  chartered  in vessels,  TORM  Kristina  and TORM
Gudrun,  currently  participate in this pool and we have  contracted to add five
newbuildings  to the pool between  2006 and 2008 when the vessels are  delivered
from the shipbuilding  yard. The LR2 pool has also time chartered in one vessel,
the charter of which is expected to end in January 2006. 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. No such notice has
been given from January 1, 2003 to April 30, 2004.

The LR1 Pool

     The LR1  Pool  consists  of 25  Panamax  tankers,  and we serve as the sole
manager of the pool. The other participants in this pool are Nordic Tankers A/S,
Nordan Tankers 3 Inc., Nordan Tankers 4 Inc.,  Nordan Tankers 5 Inc.,  Marinvest
Shipping  AB,  Waterfront  Shipping  AS and Mitsui  OSK.  Currently  four of our
vessels,  TORM Estrid (Hull no 1509),  TORM Hilde,  TORM  Margrethe and Kirsten,
participate in this pool, and we have  contracted to add one  newbuilding to the
pool in 2004 when the  vessel is  delivered  from the  shipbuilding  yard.  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.  No such
notice has been given from January 1, 2003 to April 30, 2004.

The MR Pool

     The MR Pool is a pooling  arrangement  we have entered  into with  Primorsk
Shipping  Corporation,  Sanmar  Shipping  and LGR Di  Navigazione  S.P.  for the
pooling of 22 Handymax product  tankers.  We serve as the sole manager of the MR
Pool. Twelve of our vessels, TORM Mary, TORM Vita, TORM Gertrud, TORM Gerd, TORM
Gunhild,  TORM Asia, TORM Gotland,  TORM Anne, Olga, TORM Thyra,  TORM Freya and
TORM Alice,  which we took delivery of on February 18, 2004 as described in Item
10c, participate in this pool. If a participant wants to sell one of its vessels
in the pool,  it needs to give notice to the pool board three  months in advance
of such sale,  and six months notice is required for a  participant  to withdraw
all of its vessels from the pool.  No such notice has been given from January 1,
2003 to April 30, 2004.

DRY BULK VESSEL POOLING ARRANGEMENTS

     We operate  both Panamax and  Handysize  vessels in our Bulk  Division.  We
operate our Panamax vessels  ourselves while our Handysize  vessels are operated
through our  participation in the IHC Pool.  Similar to the pooling  arrangement
for our product tankers,  the earnings from the Handysize vessels are aggregated
and divided according to the relative performance capabilities of the vessel and
the actual earning days per vessel.  The pool is  administered  by a pool board,
which is comprised of representatives  of each pool participant.  The pool board
set the pools'  policies  and issue  directives  to the pool  manager.  The pool
participants  remain  responsible  for the  financing,  insurance,  manning  and
technical management of their individually owned 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 35 to 40 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  the   outstanding   shares  of
Dampskibsselskabet  "NORDEN" A/S, or NORDEN, excluding own 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  operates  approximately  75 vessels through a mix of owned and chartered
tonnage.

     Upon the  expiration  of our  tender  offer in July,  2002,  the  offer was
neither extended nor increased.

     As of April 30, 2004, we were NORDEN's  single  largest  shareholder,  with
32.96% of NORDEN's  outstanding shares,  excluding own 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.

     Although  our  original  aim - to merge with  NORDEN and  thereby  create a
stronger  entity  within  both the  product  tanker and bulk  segments - did not
succeed at the time, we decided to retain the investment. This was done to leave
the  possibility  open for a merger at a future date, and because our evaluation
that the bulk market,  NORDEN's principal  activity,  improved  throughout 2003,
leading to better financial  results for NORDEN. We intend to hold the shares in
NORDEN at least until July 2005.

     We had an unrealized  gain of DKK 681 million  related to the NORDEN shares
in 2003.

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  622 million tons of refined oil products in
2003  showing  a 3.5%  increase  as  compared  to 2002.  The two  main  types of
operators that provide transportation services in the tanker market are:

     o    major oil companies; and

     o    independent ship owners.

     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 311 million dwt or 3% higher as
of January 1, 2004 as compared to the year before. Oil companies own, or control
through  long-term time charters,  approximately  one third of the current world
tanker  capacity.  Independent  ship owners 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  ship owners to transport oil products for
others.

     We believe 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,
regulations and regulatory organizations such as the OPA, the 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  ship owners 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 110,000 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 product tankers are all
double-hull  and range in size from 44,000 dwt to 105,000 dwt. They 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 secondhand 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 42 months from the time a building contract is entered
into before a newbuilding is delivered.  The average age of tankers removed from
service  currently ranges 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 newbuildings 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  reduce  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 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.  Handymax and Panamax vessels carry  approximately  90% of
          the international  seaborne bulktrade while Capesize vessels transport
          the remainder.

     Our dry bulk vessels transport cargoes 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 the late 1990's 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 above  those
prevailing  prior to the crisis.  Since the middle of the third quarter 2003 the
dry bulk market has reached historically high levels due to a strong demand from
China for iron ore, coupled with a very low level of newbuilding  deliveries and
a low global  newbuilding  order book in the bulk market.  The level of expected
newbuildings  in the dry bulk sector in the  forthcoming  years remains at a low
level due to the  preference by the major  shipyards for building  container and
tanker vessels that in recent years have been more profitable to the shipyards.

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 tanker vessels and Handysize dry bulk 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 charterhire 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 our  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  and  bulk  carriers  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 U.S.  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 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.

     Under the current  regulations,  starting  in 2004,  and  thereafter,  such
vessels will not be in compliance  with the  configuration  requirements  of the
IMO.  As of  December  31,  2003,  we did not  owned  any  single-hull  tankers.

     Effective  September 2002, the IMO  accelerated its existing  timetable for
the  phase-out  of  single-hull  oil  tankers.  These  regulations  require  the
phase-out of most  single-hull oil tankers by 2015 or earlier,  depending on the
age of the tanker and whether it has segregated  ballast tanks.  After 2007, the
maximum  permissible age for single-hull tankers will be 26 years. Under current
regulations,  retrofitting  will enable a vessel to operate until the earlier of
25 years of age and the anniversary date of its delivery in 2017.  However, as a
result  of the oil  spill  in  November  2002  relating  to the loss of the m.t.
Prestige,  which was owned by a company not affiliated with us, in December 2003
the Marine  Environmental  Protection  Committee  of the IMO  adopted a proposed
amendment to the  International  Convention for the Prevention of Pollution from
Ships to  accelerate  the phase  out of  single-hull  tankers  from 2015 to 2010
unless the relevant flag states extend the date to 2015. This proposed amendment
will come into effect in April 2005 unless objected to by a sufficient number of
member states.  Moreover, the IMO may still adopt regulations in the future that
could adversely affect the remaining useful lives of single-hull tankers.

     The IMO has also negotiated international conventions that impose liability
for oil pollution in international waters and a signatory's  territorial waters.
In September 1997, the IMO adopted Annex VI to the International  Convention for
the  Prevention  of Pollution  from Ships to address air  pollution  from ships.
Annex VI was  ratified on April 30, 2004 and is expected to become  effective 12
months after ratification.  Annex VI, when it becomes effective, will set limits
on sulfur oxide and nitrogen  oxide  emissions  from ship  exhausts and prohibit
deliberate emissions of ozone depleting substances, such as chlorofluorocarbons.
Annex VI also includes a global cap on the sulfur content of fuel oil and allows
for  special  areas to be  established  with more  stringent  controls on sulfur
emissions.  Compliance with these  regulations could require the installation of
expensive emission control systems and could have an adverse financial impact on
the operation of our vessels.

     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
EU authorities  have indicated that vessels not in compliance  with the ISM Code
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 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 USD1,200
per gross ton or USD10 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 that 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  USD300  per  gross  ton or USD5  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. We believe that we are in  substantial  compliance
with OPA,  CERCLA and all  applicable  state  regulations in the ports where our
tankers call.

     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 USD1,500 per gross ton for tankers,  coupling the OPA limitation on liability
of USD1,200  per gross ton with the CERCLA  liability  limit of USD300 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 USD1 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,  from  1995 to 2015,  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 U.S.  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 of 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 USD183 per gross registered ton or approximately  USD19.3 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  USD82.7  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 U.S. 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-hull  tanker owned by an entity that is not affiliated  with
us, in November  2002,  the EU proposed new  regulations  in March of 2003 that,
among other things,  places a ban on the  transportation  of heavy oil grades in
all single-hull  tankers loading or discharging at EU ports.  These  regulations
also accelerate the phase-out schedule of all single-hull  tankers. The European
Union Parliament  ratified these new regulations in July 2003 and the IMO joined
the phase-out of single hull tankers later in 2003.  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 an EU 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    All other single-hull tankers will be phased out in 2010.

     Several EU 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 carrying such cargo from entering her ports as of January
1, 2003.  Italy has  implemented  similar  measures  applicable  to  single-hull
tankers  over 15 years of age in the  summer  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 secondhand 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,  personal injuries, 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 USD1 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 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,  property casualty claims and contract disputes.  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.   There  were  no  material
developments regarding this matter in 2003.

C.   Organizational Structure

     The following tables set forth our significant subsidiaries as of April 30,
2004.

     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
Caseros Shipping Limited                               TORM Asia
Thyra Shipping Corporation                             Torm Thyra
Freya Shipping Corporation                             Torm Freya

     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 two tankers,  the TORM
Gudrun and the TORM Kristina,  under time charters from unaffiliated third party
vessel owners.

     Our Dry Bulk  Carriers.  Each  subsidiary  listed  below is a  wholly-owned
Liberian that owns a 100% interest in a dry bulk carrier.

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

Southern Light Shipping Limited                        TORM Arawa
Eastern Light Shipping Limited                         TORM Pacific

     Furthermore,  the following vessels are owned directly by TORM: TORM Hilde,
TORM  Margrethe,  TORM Ingeborg,  TORM Valborg,  TORM Alice,  TORM Herdis,  TORM
Marta, TORM Marina and TORM Tekla.

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 680,000 per
year from an unaffiliated  third party. The lease was terminated  prematurely in
March 2004 triggering a termination fee of DKK 5.2 million, or approximately USD
790,000 because the Copenhagen  office is moving to a new location in Copenhagen
in June 2004. The new premises  comprise  approximately  2,300 square meters and
are leased until June 2014 at a rate of DKK 3.9 million,  or  approximately  USD
590,000,  per year from an unaffiliated  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  54,000  or DKK  353,000,  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 31,000
or DKK 204,000,  per year from an  unaffiliated  third party.  The London office
comprises  approximately  550 square  feet and was leased  until March 2004 at a
rate of pound sterling 21,000, or approximately  USD 34,000 or DKK 226,000,  per
year from an unaffiliated third party.

     The following table lists our entire fleet of owned and long term chartered
in vessels as of April 30, 2004:

Product Tankers   Year Built   Dwt         Ownership                 Flag (1)
---------------   ----------   ---         ---------                 --------
Wholly Owned
TORM Helene          1997       99,990     Hermia Shipping           DIS
TORM Valborg         2003       99,990     D/S TORM                  NIS
TORM Ingeborg        2003       99,990     D/S TORM                  NIS
TORM Hilde           1990       84,040     D/S TORM                  NIS
TORM Margrethe       1988       83,955     D/S TORM                  DIS
TORM Estrid          2004       74,999     D/S TORM                  DIS
TORM Gotland         1995       47,629     Alice Product Tanker      DIS
TORM Alice           1995       47,269     D/S TORM                  DIS
TORM Freya           2003       46,343     Freya Shipping            DIS
TORM Thyra           2003       46,308     Thyra 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
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

Bulk Carriers     Year Built   Dwt                                   Flag
-------------     ----------   ---                                   ----
Wholly Owned
TORM Marta           1997       69,638     D/S TORM                  NIS
TORM Marina          1990       69,637     D/S TORM                  DIS
TORM Herdis          1992       69,618     D/S TORM                  NIS
TORM Tekla           1993       69,268     D/S TORM                  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.

ITEM 5. Operating and financial review and prospects

2003 SUMMARY

     2003 has been a very  eventful  year for TORM with  high,  but  fluctuating
rates for the  Tanker  division,  strongly  increasing  rate  levels in the Bulk
division,  combined with ever increasing demands placed on the vessels,  as well
as the organization behind them, from customers, international organizations and
individual countries.

     The market for our product  tankers began the year at very high levels as a
result of a number of  factors,  in  particular  the  effects of the  sinking in
November 2002 of the single-hull  tanker  "Prestige",  which had no relations to
us, but also  factors such as the war in Iraq,  the general  strike in Venezuela
coupled  with the  impact  of  generally  low  inventories  of  clean  petroleum
products.

     Aside from a short  period of weaker  rates  towards  the end of the second
quarter,  the effect of the  aforementioned  factors was that high  freight rate
levels  were  sustained  throughout  the summer  period - somewhat  longer  than
expected at the beginning of the year.

     Our  newbuilding  program  continued  as planned and we took  delivery of a
total of four newbuildings in 2003. There was new ordering of vessels during the
year and the total contract value of our remaining  newbuilding  program,  which
consists of six vessels  following the delivery of TORM Estrid in early 2004, is
in excess of USD 200 million.  This highlights our commitment to maintaining and
developing a modern,  quality fleet.  Following the delivery of TORM Estrid, the
average age of our product  tanker fleet is 5.1 years - one of the lowest in the
industry. Our owned fleet has almost doubled over the last five years.

     Our tanker pool  strategy was further  cemented  during  2003.  Despite the
departure of one pool  partner,  the number of vessels in our three tanker pools
increased by 13% in 2003. We continue to experience  strong interest from owners
wishing to join our three pools.

     During 2003, new revised rules in respect of the phasing out of single-hull
tankers  were  adopted,  both within the EU and under the auspices of the United
Nations agency responsible for shipping, the IMO. The new rules will result in a
faster  phase-out  of  single-hull  tankers and prohibit the carriage of certain
types of oil in single-hull tankers.

     TORM  considers  the  implementation  of  these  additional   environmental
requirements  as a positive  development.  It is our view that these  rules will
speed up the trend  towards a "two  tier  market",  where  double-hull  vessels
approved by the oil majors will have preference,  as older,  single-hull tonnage
is unable to operate in specific areas such as the EU. As a result, the customer
receives  reduced  trading  flexibility,  since older  vessels may be subject to
geographic  trading  restrictions  that limit their  ability to trade to certain
ports or regions.  These new rules are also expected to accelerate  scrapping of
older tonnage.

     The bulk  market  saw a  dramatic  rise in rates in the middle of the third
quarter  2003,   reaching   historically  high  levels.   These  increases  were
particularly  attributable  to a strong demand from China for iron ore,  coupled
with a very low level of  newbuilding  deliveries  and a low global  newbuilding
orderbook in the bulk market.

     We expected a turn around,  albeit somewhat more moderate,  in bulk charter
rates in 2003,  and more  particularly  2004,  and decided by the end of 2002 to
charter  in a  number  of  bulk  carriers  in  order  to take  advantage  of the
expectedly higher rates. In order to cover part of the risk on the charter rates
associated  with the higher business  volume in the Bulk division,  however,  we
covered the forward part of the exposure.  Accordingly, we were not able to take
full advantage of the high bulk market during 2003.

     In December 2003, we redelivered the last remaining  offshore supply vessel
and have thus continued the focusing on our core business  activities  that took
place with the disposal of our Liner activities in 2002.

     We believe that our  financial  position and  organizational  strength have
never been better.  We continue to evaluate all  possibilities for expanding our
company  through new  investments,  purchase of  secondhand  ships,  fleets,  or
companies with fleets, which would fit our profile.

     We changed our  accounting  policies  in a  significant  area in 2003.  Our
accounts are now prepared with US Dollars as the primary  measurement  currency.
The key effect is that our vessels  (and the loans  secured by our  vessels) are
now included in our balance  sheet at the USD/DKK  exchange  rate at the balance
sheet date,  whereas  previously  our  vessels  were  included  at the  historic
exchange  rate.  We  believe  that this  better  shows our  financial  position,
especially in periods with  volatile  exchange  rates.  Had we kept our previous
accounting policies, our net profit would have decreased by DKK 55.4 million and
our  shareholders'  equity  would have been DKK 619 million or 25% higher at the
end of 2003. For a further discussion of the changes in our accounting  policies
please refer to Note 1.

TRENDS WITHIN THE PRODUCT TANKER AND BULK SEGMENTS

     Some of the key trends affecting the two segments in which we operate are:

     1    Location of refineries

     2    Consolidation among the oil companies

     3    Consolidation made possible by financial markets

     4    Safety, environment and security

     5    IMO and EU regulation

     6    Lower break-even freight rates

     7    Shortage of shipyard capacity in the bulk segment


LOCATION OF REFINERIES

     During the 1970's,  crude oil was  transported to refineries in the Western
Hemisphere to be refined into different oil products.

     Over the  intervening  years,  however,  more and more refineries have been
built in the Middle East, Asia and Russia,  as the oil producing  countries seek
to  take  a  greater  share  of  the   value-added   associated  with  refining.
Furthermore, increasingly stringent environmental requirements have been imposed
by the countries in the Western  Hemisphere,  which were  previously the largest
refining nations.

     Modern oil  refineries  are built closer to crude oil  production  sources.
Accordingly,  92% of  the  growth  in the  world's  refinery  capacity  (source:
Clarksons  Research  Studies) during the period 1998-2002 took place in Asia and
the Middle  East,  and 42% of the growth in the period  2002-2005 is expected to
take  place in this  area.  This  means  that the most  modern  and  specialized
refineries in the world will be located outside the Western Hemisphere.

     However,  the Western  Hemisphere is expected to continue to be the largest
consumer of refined  petroleum  products.  Taken together with growing  refinery
capacity outside these countries, demand for transportation of refined petroleum
products from distant producing countries to consuming countries,  using product
tankers  such as  ours,  is  expected  to  increase.  However,  there  can be no
guarantee of this increase.

CONSOLIDATION AMONG THE OIL COMPANIES

     Throughout the 1990's,  the oil industry  experienced a period of extensive
consolidation,  in which  the  number of  international  oil  companies  and oil
traders reduced,  leaving larger  companies with a proportionally  larger market
share.

     This has  resulted in greater  demand on  ship-owning  companies to provide
increased  transportation  capacity and flexibility such as that provided by the
pools in which our vessels  participate.  We derived an  increasing  part of our
Tanker division's  revenues from its largest customers.  Our Tanker division has
experienced  an  increase  in the share of net  turnover  from its five  largest
customers from 33% in 1997 to 47% in 2003.

CONSOLIDATION MADE POSSIBLE BY FINANCIAL MARKETS

     Throughout the 1990s,  shipowners,  especially in the tanker segment,  have
increasingly  made use of the public equity and debt markets to raise capital to
finance  growth.   Accordingly,  a  significant  number  of  previously  private
companies have been publicly listed.

     This has come about in combination with greater use of private debt markets
and resulted in increasing  opportunities to fund growth.  This growth, in turn,
has resulted in extensive  consolidation within the industry,  creating a number
of very substantial shipowners.  It is expected that this trend will continue in
part to meet the industry's requirements for capacity and flexibility.

SAFETY, ENVIRONMENT AND SECURITY

     The increasing  number of regulations  covering safety,  environmental  and
security requirements has had a significant impact on the shipping industry.

     IMO,  the  flag  states  and the  classification  societies  stipulate  the
requirements  for the safe  operation  of ships.  The  requirements  are a large
spectrum of rules ranging from the  construction  of the vessel,  its equipment,
the  operation  of  the  vessel,  officers'  and  crews'  qualifications  to the
company's qualifications with regard to safe ship management.

     In   addition  to  these   regulations,   customers   increasingly   demand
environmentally  friendly and safe  operation  of vessels and the  organizations
that operate them.

     We expect these  developments  to lead to  significant  consolidation  over
time,  as  participants  with older fleets and lower  maintenance  standards are
gradually  forced out of the market,  as  customers  change  their  criteria for
selection of vessels and shipowners.

IMO AND EU REGULATION

New phase-out rules for single-hull tankers

     In 2003, a number of revised rules and  regulations  were adopted by the EU
and the IMO in relation to the phase-out of single-hull  tankers.  These changes
will result in earlier and faster  phase-out of single-hull  tankers and ban the
carriage of certain types of so-called heavy oils in single-hull tankers.

     We  consider  the  adoption  of these  environmental  requirements  to be a
positive  development  and believe that these rules will accelerate the tendency
towards a 'two-tier' market where double-hull  vessels such as ours, approved by
the major oil companies, will have preference.  Conversely,  single-hull tankers
will lose trading  flexibility,  resulting in fewer  cargoes for these vessels -
leading to earlier demolition.  This is a result of oil companies not being able
to freely trade the vessels in all areas.

Phase-out of single-hull tankers                    IMO             EU
--------------------------------                    ---             --

Single-hull tankers phased-out by                   2010(1)      2003-2010(4)
Single-hull tankers without SBT phased-out by       2005(2)      23 years old(2)
Ban on heavy fuel cargoes in single-hull vessels    Yes          Yes
Vessels above 15 years must pass a CAS-test         Yes(3)       Yes(3)
Rules in force from                                 05-Apr-05    21 Oct. 2003

1    The flag state can allow double sided or double bottomed  vessels  continue
     until 25 years old, or 2015, if they pass a CAS-test.

2    SBT = Segregated ballast tanks.

3    CAS = Conditional  Assessment  Scheme.  A test of the vessel's  maintenance
     standard and seaworthiness.

4    When the vessel reaches 22-26 years, depending on the building year.

     Of the total world tanker fleet, it is expected that 40% will be phased out
by 2010 as a result of the  revised IMO rules,  whereas 13% of the world  tanker
fleet  will be  phased  out by 2005,  when the new IMO rules  come  into  effect
(source:  Jefferies  & Co.,  Inc.).  The  existing  orderbook  of  tankers to be
delivered up to 2006  comprises  approximately  24% of the existing world tanker
fleet.

     The bulk  market does not have  similar  requirements,  although  there are
international  efforts  underway  to  create  demands  for  bulk  vessels  to be
double-hull  design.  However,  we do not expect  this to be  introduced  in the
foreseeable future.

LOWER BREAK-EVEN FREIGHT RATES

     During the past ten years,  newbuilding  prices have  fallen  significantly
albeit  they have firmed for  delivery  in  2006/2007.  When  combined  with the
effects  of lower  interest  rates  over the  period,  this has  meant  that the
cash-flow  break-even  point for  product  tankers  has  dropped  substantially.
Cash-flow  break-even point is defined as debt repayments,  interest and running
cost in the first year of operation for a newbuilding delivered in the year.

     Compared to ten years ago,  it is today  possible  to trade  profitably  at
lower freight rates or to achieve higher  earnings even with  unchanged  freight
rates.  Due to the  increase  in our fleet  size over the last ten years we have
also  benefited  from this  decrease in interest  rates on our own vessels  that
typically are financed by 80% mortgage debt with floating interest rates.

SHORTAGE OF SHIPYARD CAPACITY IN THE BULK SEGMENT

     During 2002,  the global  orderbook  for Panamax  bulk vessels  reached its
lowest point since 1995 (Source: Clarksons Research Studies). Freight rates were
low and many shipowners  chose not to order new tonnage.  Following this period,
container  operators and tanker owners  ordered  extensively  and in the process
utilized a large portion of shipyard  capacity,  which is currently booked until
2006/2007.  As a result the order book of bulk vessels has not reached  previous
levels, even after the recent historically strong increase in freight rates.

     This does not affect our bulk strategy, which to greater extent is based on
chartered-in vessels.

TORM'S STRATEGY

     Tanker division

     Our  specialization in the product tanker segment is based on a belief that
this market offers  inherently  superior growth potential  compared to the crude
oil tanker  market.  This is  primarily  because of the  greater  transportation
requirements for refined products as refinery  capacity growth has moved further
away from the Western Hemisphere, which is still the most significant user.

     It has for a number of years been an integral  part of our strategy for the
Tanker  division to own and operate  modern,  double-hull  vessels given that we
expected a gradual  increase in demand for such vessels.  In 1988, we were among
the first owners to take  delivery of  double-hull  newbuildings  and our tanker
fleet has for a number of years consisted purely of double-hull  tonnage.  As of
December  31, 2003,  the average age of our product  tanker fleet was 5.3 years,
one of the lowest in the world among publicly quoted tanker companies. With ever
increasing  environmental and security  requirements being introduced by the IMO
and the EU, as well as individual nations and customers, we believe that a young
fleet and a tradition for quality will be more important than ever.

     Our strategy in the product tanker segment is based on the pool system,  in
which we cooperate with other owners of similarly high quality tonnage. The goal
is to become  closer to the  customer by being able to offer a secure and timely
delivery, to even out differences between geographical markets by having a fleet
of sufficient size to cover all the key markets,  and better matching customers'
transport  requirements,  as these have  grown,  including  through  mergers and
acquisitions.

     As it is an  aim to  provide  customers  with  reliable  transportation  of
refined products, it is necessary to have available capacity.  Consequently, the
strategy in the product  tanker market is naturally  focused on the spot market.
We will, however,  from time to time counter part of the risk related to freight
rates through contracts of affreightment, or COA's, and time charters and bunker
prices through forward contracts.

     Bulk division

     The strategy of our Bulk Division has been to focus on two segments, namely
Panamax and, to a lesser  extent,  Handysize.  The Panamaxes are operated by our
own Bulk Division,  while the Handysize vessels are operated within the IHC Pool
in Hong Kong.

     Unlike the Tanker  division,  the  strategy  in the Bulk  division  is to a
greater extent based on chartered-in vessels, a number of which include purchase
options. This result in greater flexibility,  especially in terms of investments
and coverage of freight exposure,  which is especially important in the segments
of the bulk  market  where we  operate,  as the market  structure  offers  large
opportunities for asset management.

     During  periods when we believe that freight  rates have the  potential for
further increases in the medium- to long-term, we will charter in tonnage with a
view to take  advantage of the expected  stronger  market.  At the same time, we
will seek to obtain an option to extend the  chartering  period and/or  purchase
the vessel.  This  ensures the  greatest  flexibility  in terms of future  fleet
composition and investment profile.

A.   Operating Results

     The financial  information included in the discussion below is derived from
our  consolidated  financial  statements.  The results of our Liner  activities,
which were disposed of during 2002,  (see Note 9 to the  consolidated  financial
statements) are included under profit before tax from  discontinued  operations.
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 primary  differences  between  Danish GAAP and U.S. GAAP and a
reconciliation  of profit (loss) and  stockholders'  equity to U.S. GAAP, please
see Note 18 to our consolidated financial statements.

<TABLE>
                                       TORM AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF OPERATIONS
                        For The Years Ended December 31, 2001, 2002 and 2003
                                        (in thousands of DKK)
<CAPTION>
                                                         2001            2002           2003
                                                         ----            ----           ----
                                                       (restated)      (restated)
<S>                                                     <C>             <C>            <C>
Net revenue                                             2,000,713       1,538,618      1,927,996
Port expenses and bunkers                                (415,710)       (555,700)      (621,087)
                                                       ------------   ------------    ------------
Time Charter Equivalent Earnings                        1,585,003         982,918      1,306,909

Charter hire                                             (637,985)       (463,510)      (404,960)
Technical running costs                                  (193,550)       (217,402)      (254,780)
                                                       ------------   ------------    ------------
Gross profit (Net earnings
from shipping activities)                                 753,468         302,006        647,169

Profit on sale of vessels and interests                    91,790          16,965           (464)
Administrative expenses                                  (113,404)       (101,342)      (126,119)
Other operating income                                     58,689          55,227         51,368
                                                       ------------   ------------    ------------
Profit before depreciation                                790,543         272,856        571,954

Depreciation                                             (177,993)       (158,400)      (176,872)
                                                       ------------   ------------    ------------
Profit before financial items                             612,550         114,456        395,082
Financial items                                           (96,518)          5,988        656,637
                                                       ------------   ------------    ------------
Profit before tax                                           516,032       120,444      1,051,719

Tax on profit on ordinary activities                      (166,018)       360,190           (692)
                                                       ------------   ------------    ------------
Profit from continuing operations                           350,014       480,634      1,051,027
                                                       ------------   ------------    ------------
Profit before tax from discontinued operations               17,417        69,818              0
Tax on discontinued operations                                    0             0              0
                                                       ------------   ------------    ------------
Net profit for the year                                     367,431       550,452      1,051,027
                                                       ------------   ------------    ------------
</TABLE>

COMPARISON OF THE YEAR ENDED  DECEMBER 31, 2003 AND THE YEAR ENDED  DECEMBER 31,
2002

     Below net earnings from shipping activities are presented on segment level:

<TABLE>
<CAPTION>
DKK million                                                   Not    (Restated)                         Not
                                        Tank     Bulk   Allocated(*)Total 2002      Tank    Bulk  Allocated(*) Total 2003
------------------------------------------------------------------------------      -------------------------------------
<S>                                      <C>      <C>            <C>     <C>       <C>       <C>          <C>     <C>
Net revenue                              904      592            43      1,539     1,115     793          20      1,928
Port expenses and bunkers               -229     -322            -5       -556      -319    -308           6       -621
                                  ---------------------------------------------  ---------------------------------------
Time charter equivalent earnings         675      270            38        983       796     485          26      1,307
Charter hire                            -200     -242           -21       -464       -84    -310         -12       -405
Technical running costs                 -159      -44           -14       -217      -195     -43         -17       -255
                                  ---------------------------------------------  ---------------------------------------
Gross profit/(loss)
(Net earnings from shipping activities)  315      -17             4        302       518     133          -3        647
(*) Primarily offshore vessels
</TABLE>

The lines listed above are further discussed below.

Net revenue

     TORM's net revenue  was DKK 1,928  million in 2003 as compared to DKK 1,539
million in 2002. Of the DKK 389 million increase in net revenue, DKK 211 million
is attributable to the Tanker division,  while DKK 201 million is related to the
Bulk division.  Our gradual withdrawal from offshore  activities during 2003 and
2002 led to a decrease in net revenue of DKK 23 million compared to 2002.

     The increase in the Tanker  division's  net revenue  should be seen against
the background of the substantial drop in the USD/DKK exchange rate during 2003.
The annual  average  USD/DKK  exchange rate for 2003  decreased by more than 16%
from 2002.  Without this decrease in the USD/DKK  exchange rate, the increase in
the Tanker division's net revenue in 2003 would have been  approximately DKK 432
million.  Generally  higher freight  rates,  which on average were 22% higher in
2003 than in 2002,  and a 29% increase in ship earning days were the reasons for
the increase in tanker revenue. Increased focus on quality tonnage following the
sinking of the  single-hull  crude oil tanker  "Prestige"  in November  2002,  a
general  strike in Venezuela,  which resulted in longer  'ton-mile'  voyages for
cargoes  to the  North  American  market,  and  the war in  Iraq  combined  with
generally low inventories of clean petroleum products resulted in an increase in
freight rates and hence in the increased  earnings in the Tanker  division.  For
the year as a  whole,  tanker  freight  rates  peaked  in March  and  April  and
thereafter continued to weaken until the end of the fourth quarter, when freight
rates,  influenced by demand from Asia,  increased again. Towards the end of the
fourth quarter,  import of crude oil and refined products to the U.S.  increased
due to the arrival of the winter  season,  which  further  increased  the market
demand for crude oil and product  tanker  vessels.  The 29%  increase in earning
days is due to the delivery during 2002 and 2003 of six  MR-newbuildings and two
LR2- newbuildings to our fleet.

Increased Tanker Earnings
-------------------------

                                       DKK mill.    USD mill.
22% increase in charter rates                195           25
29% increase in earning days                 153           19
Commissions                                   17            3
Derivatives, other etc.                       66            8
                                              --            -
Increased earnings                           432           55
USD/DKK exch. rate adjustments              (221)
                                           -----
                                             211

     The DKK 201 million  increase in the Bulk  division's  net  revenue,  which
adjusting for the lower USD/DKK exchange rate would have been  approximately DKK
358 million,  is a clear indication of the  strengthening in the Panamax market.
An  increase in market  demand  leading to higher  freight  rates in the Panamax
segment was the primary  reason for the increase in revenue  from Bulk  vessels.
Generally, 2003 was a positive year for bulk vessels, with freight rates peaking
in the fourth  quarter.  Driven by strong  increases in Chinese  imports of bulk
products, especially for iron ore, combined with limited growth in the number of
newbuildings  entering the market,  freight rates, were on average 61% higher in
2003 than in 2002 and ship earning days  increased by 29% due to the addition of
four chartered-in  vessels during the year due to our positive  expectations for
the bulk market.

Increased Bulk Earnings
-----------------------
                                       DKK mill.    USD mill.
61% increase in charter rates                206           26
29% increase in earning days                  86           11
Commissions                                    0            0
Derivatives, other etc.                       66            8
                                             ---          ---
Increased earnings                           358           45
USD/DKK exch. rate adjustments              (157)
                                           -----
                                             201

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

     Charter  hire and port  expenses  each  represented  30 to 40% of our total
operating costs in 2003,  while technical  running costs and bunker  consumption
each  represented  10 to 20% of our  operating  costs  for the  year.  All items
included in operating  costs are directly  influenced  by changes in the USD/DKK
exchange  rate,  although  technical  running  costs,  or TRC,  only account for
approximately 2/3 of the total costs influenced by the USD.

     Our total port expenses and bunkers, or voyage expenses,  increased in 2003
by approximately 12% or DKK 65 million to DKK 621 million (or by DKK 188 million
when  adjusted for the  decrease in the USD/DKK  exchange  rate).  Of the DKK 65
million  increase  the Tanker  division's  voyage  expenses  increased by DKK 90
million whereas the Bulk division's voyage expenses  decreased by DKK 14 million
and voyage expenses on our offshore vessels decreased by DKK 11 million.  Due to
a drop in the time charter out activity of our tanker  vessels,  voyage expenses
increased more than net revenue in the Tanker  division,  while the opposite was
the case for our bulk  vessels.  The  share of bunker  (fuel  and oil)  expenses
increased  slightly in 2003 compared to 2002,  mainly due to  increasing  bunker
prices in 2002 and the first  quarter of 2003,  after  which the prices  leveled
out.

     Total charter hire for vessels on charter to us decreased in 2003 by DKK 59
million to DKK 405 million. The change consists of a DKK 117 million decrease in
charter  hire in our Tanker  division  and a DKK 67 million  increase in charter
hire in our Bulk division.  Charter hire for our offshore  vessels fell by DKK 9
million.

     The DKK 117 million  decrease in charter hire for the Tanker  division from
DKK 200 million to DKK 83 million is primarily attributable to the redelivery of
the two  chartered-in  LR1 vessels and the lower USD/DKK  exchange  rate,  which
accounted for approximately DKK 17 million of the decrease. After the redelivery
of the two LR1 vessels at year-end 2002 we only had two LR2 long-term  chartered
vessels on charter. Both vessels were on charter throughout 2003.

     The increase in the Bulk division's  charter hire was DKK 67 million,  from
DKK 243 million to DKK 310 million,  which when  adjusted for the lower  USD/DKK
exchange  rate was  approximately  DKK 129 million.  This increase is especially
attributable to an increase in  chartering-in of vessels in the Panamax segment.
The average rate paid on  chartered-in  vessels  increased by 7% due to improved
market  conditions  resulting in an increase in charter rate  expenses of DKK 28
million,  while the increase in chartered-in days by 43% resulted in an increase
in charter rate expenses by DKK 101 million.

     Technical  running  costs  comprise the costs we incur in  connection  with
crewing and  maintaining  our own vessels.  The costs are mainly incurred in USD
(approximately 66%) and DKK (approximately 26%). Technical running costs for our
vessels  increased  by DKK 37  million  to DKK 255  million.  The lower  USD/DKK
exchange   rate  offset  the  increase  in  our   technical   running  costs  by
approximately DKK 34 million for our total fleet.

     For the tanker vessels,  the increase in technical running costs was DKK 36
million, which adjusted for the lower USD/DKK exchange rate, was DKK 63 million,
mainly as an effect of the net addition of six vessels to the MR segment and two
vessels to the LR2 segment  during 2002 and 2003.  Average daily running cost of
our tanker vessels  increased by 2.4% in 2003 from 2002 to USD 5,513 per/day due
to the  weakening of the USD. The  addition of new vessels  increased  operating
days by 1,408 days in the MR segment and 157 days in the LR2 segment.

     The  addition  of two owned  Panamax  vessels to the Bulk  division  in the
second  half of 2003  increased  technical  running  costs by DKK 5 million,  as
compared to 2002, but due to a lower USD/DKK  exchange rate, the Bulk division's
total  technical  running  costs  for 2003  were DKK 43  million,  or only DKK 1
million lower than in 2002. Average daily running cost increased by 6.5% in 2003
from 2002 to USD 4,156  per/day due to the weakening of the USD. The addition of
Panamax vessels increased operating days by 113.

     We do not incur  technical  running costs for vessels that we charter,  but
only charter hire payments.

Gross Profit

     Gross profit is net revenue minus the sum of port  expenses,  bunker costs,
charter hire payments for chartered-in  vessels and technical  running costs for
owned vessels.

     Our LR2 tanker vessels  achieved freight rates that were 23% higher in 2003
than in 2002. The addition of two  newbuildings  in the third and fourth quarter
of 2003, which increased  operating days in the tanker segment by 15%, led to an
increase  in the gross  profit.  In the LR1  segment  there was only a  marginal
increase in earnings  compared to 2002,  despite  freight  rates that on average
were 34% higher than in 2002,  because the number of operating days decreased by
255 or 23% following the redelivery of two chartered-in  vessels towards the end
of 2002. In the MR segment,  we had 57% more  operating days in 2003 compared to
2002, as the delivery of four  newbuildings  in 2002 took full effect in 2003 as
well  as  the  impact  of  two  newbuildings  delivered  in  January  2003.  The
significant increase in the number of operating days combined with freight rates
that  were 24%  higher in 2003 than in 2002  were the  primary  reasons  for the
increase in total net revenue for the Tanker division.
<TABLE>
Earnings data for the Tanker division
-------------------------------------
<CAPTION>
USD/Day                                 2002                     2003                            2003      % Change
                                            -----------------------------------------------
                                   Full year         q1            q2         q3        q4  Full year     2002-2003
LR2/Aframax vessels
--------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>           <C>        <C>      <C>        <C>             <C>
Available earning days for: (*)
- Owned vessels                          357         90            90         97       233        510           43%
- Time chartered vessels                 718        180           182        184       175        721            0%
TCE per earning days (**)             22,021     31,237        32,804     27,008    19,559     27,185           23%
TRC per earning days (***)           (5,466)    (5,651)       (5,816)    (5,660)   (5,769)    (5,799)            6%
--------------------------------------------------------------------------------------------------------------------

LR1/Panamax vessels
--------------------------------------------------------------------------------------------------------------------
Available earning days for: (*)
- Owned vessels                          846        210           194        220       223        847            0%
- Time chartered vessels                 166          0             0          0         0          0        (100%)
TCE per earning days (**)             16,738     23,630        26,507     19,670    18,616     22,429           34%
TRC per earning days  (***)           (6,398)    (5,691)       (7,070)    (4,966)   (6,646)    (6,458)            1%
--------------------------------------------------------------------------------------------------------------------

MR vessels
--------------------------------------------------------------------------------------------------------------------
Available earning days for: (*)
- Owned vessels                        2,550      1,004         1,000      1,001     1,011      4,015           57%
- Time chartered vessels                   8          0             0          0         0          0        (100%)
TCE per earning days (**)             13,920     18,355        19,369     15,523    15,188     17,307           24%
TRC per earning days  (***)           (5,036)    (5,701)       (4,575)    (5,030)   (5,450)    (5,257)            4%
--------------------------------------------------------------------------------------------------------------------
(*) Earning days are the total number of days in the period, where the vessel is ready and available to perform a
voyage, i.e. is not in dry-dock etc.
(**) TCE = Time Charter Equivalent Earnings = Gross freight income less bunker and port expenses.
(***) TRC = Technical Running Costs for our owned vessels.
</TABLE>

     Our Panamax  bulk  vessels saw a 60%  increase in freight  rates in 2003 as
compared to 2002,  after taking into account the effect of hedging  transactions
where we incurred a total expense of USD 13.6 million or DKK 89.6 million.  When
combined with a 48% increase in the number of available operating days, or 1,672
days,  our  Panamax  vessels  comprised  by far the  largest  part  of the  Bulk
division's increase in gross profit. The hedging transactions  referred to above
refer to forward  freight  agreements that we entered into in 2002 and 2003. The
increase  in  the  number  of  available  operating  days  in  2003  was  mainly
attributable to an increase in the chartered-in tonnage of our Bulk division, as
the purchase of two  additional  vessels only took place  towards the end of the
year. In our Handysize  segment the total  increase in net turnover was limited,
as the effect of the improved market was  approximately  offset by a decrease in
the  number  of  operating  days,  which  fell by 15% due to the  redelivery  of
tonnage.

<TABLE>

Earnings data for the Bulk division
-----------------------------------
<CAPTION>
USD/Day                                     2002                  2003                           2003     % Change
                                                -----------------------------------------
                                       Full year       q1        q2        q3        q4     Full year    2002-2003
Panamax vessels
-----------------------------------------------------------------------------------------------------------------
<S>                                   <C>        <C>           <C>        <C>       <C>         <C>            <C>
Available earning days for: (*)
- Owned vessels                          727        180           170        184       307         841          16%
- Time chartered vessels               2,748        981         1,116      1,191     1,019       4,287          56%
TCE per earning days (**)              7,318      9,166        11,905     12,965    14,789      11,695          60%
TRC per earning days  (***)           (4,766)    (5,208)       (4,592)    (5,496)   (4,388)     (5,109)           7%
------------------------------------------------------------------------------------------------------------------

Handysize vessels
-----------------------------------------------------------------------------------------------------------------
Available earning days for: (*)
- Owned vessels                          707        180           182        184       184         729           3%
- Time chartered vessels                 768        176           169         92        92         529        (31%)
TCE per earning days (**)              5,875      7,526         7,781      8,419    11,424       8,706          48%
TRC per earning days  (***)           (3,010)    (3,442)       (3,180)    (2,811)   (2,871)     (3,058)           2%
-----------------------------------------------------------------------------------------------------------------
(*) Earning days are the total number of days in the period, where the vessels is ready and available to perform a
voyage, i.e. is not in dry-dock etc.
(**) TCE = Time Charter Equivalent Earnings = Gross freight income less bunker and port expenses.
(***) TRC = Technical Running Costs for own vessels.
</TABLE>

Profit on sale of vessels/interests

     Our profit from sale of vessels and  interests  comprises  the profits from
the sale of vessels, companies, assets and activities as well as the recognition
of  deferred  profits  from  sale/leaseback  transactions.  Profit from sales of
vessels and interests were a loss of DKK 0.5 million in 2003 related to the sale
of the MR product tanker TORM GYDA, as compared to a profit of DKK 17 million in
2002  from  the  recognition  of  deferred  profits  on  certain  sale/leaseback
transactions.

Administrative expenses

     The Company's total administration  expenses increased from 2002 to 2003 by
DKK 25 million to DKK 126 million. Staff costs, including bonuses,  increased by
DKK 15 million,  partly due to an  increased  number of positions in the Company
and a general  increase in salary levels,  and partly due to a bonus paid to the
Company's  employees and  Management.  Salary and wage  increases and additional
positions  comprised  DKK 5 million,  while bonus to  employees  and  Management
increased  by DKK 10  million  compared  to  2002.  Additionally,  office  costs
increased by DKK 2 million,  including  establishing  offices in  Singapore  and
Germany,  which  had full  effect  in 2003.  Furthermore,  the  figure  for 2002
contained  non-recurring  income of DKK 8 million  related  to the  reversal  of
unused provisions.

Other operating income

     Other  operating   income   primarily   comprises  income  from  chartering
commissions  we received in connection  with our  management of the three tanker
pools.  This income is to a large extent offset by the increased  costs we incur
from running the pools, which are recognized as administrative expenses.

Other operating income
DKK million
Other operating income 2002                     55
Asset impairment in 2002                      (12)
22% increase in freight rates                   12
12% increase in pool earning days                6
USD/DKK exchange rate adjustment              (10)
                                              ----
                                                51

     Other  operating  income fell from DKK 55 million in 2002 to DKK 51 million
in 2003, as this item in 2002 included DKK 12 million that was  attributable  to
the reversal of asset impairment in 2002. In addition, the lower average USD/DKK
exchange  rate in 2003 as compared  to 2002 caused a DKK 10 million  decrease in
operating  income.  Adjusting  for the drop in the USD/DKK  exchange  rate,  the
increase  in  other  operating  income  in 2003 as  compared  to 2002 was DKK 18
million or 35%. This increase is primarily attributable to increased commissions
from our three tanker pools and the effect of a 22% increase in freight rates as
compared  to 2002  corresponding  to DKK 12  million.  An increase of 12% in the
number of  earning  days in the pools due to an  increase  in the number of pool
vessels accounted for DKK 6 million.

Depreciation and Write-Downs

     Depreciation mainly consists of depreciation on vessels,  which takes place
over 25 years.  Depreciation  was DKK 177 million in 2003 as compared to DKK 158
million in 2002, or an increase of DKK 19 million.

     In our Tanker  division,  depreciation  increased by DKK 19 million in 2003
compared to 2002,  which  reflects the additions to the fleet that took place in
2002 and 2003. Compared to 2002 the MR segment had a net addition  corresponding
to four vessels  operating  during the entire year whereas the LR2 segment added
what  corresponded to 0.4 vessels that operated during the entire year. The Bulk
division had additions to the Panamax  segment in the second half of 2003 adding
0.3 vessels that operated over the entire year, which increased  depreciation by
DKK 2 million as compared to 2002.

     Depreciation  is  translated  from USD to DKK,  and the fall in the average
USD/DKK  exchange rate from 2002 to 2003 led to reduced  depreciation  of DKK 35
million.

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                              2002          2003
DKK million
Unrealized gain on NORDEN shares                8           681
Gains on other securities                       7             5
Dividends                                       1             8
Interest income                                30            19
Derivatives                                    43            23
Interest expenses                             -76           -74
Other financial expenses                       -7            -5
                                               --            --
                                                6           657

     Financial  items in 2003  totalled  DKK 657  million as  compared  to DKK 6
million in 2002. The most important reason for this increase is the strong share
price  development  in 2003 of the  Company's  holding  of  NORDEN  shares.  The
unrealized  gain on the NORDEN shares was DKK 681 million in 2003 as compared to
DKK 8 million in 2002,  while  other gains on  securities  were DKK 5 million in
2003 as compared to DKK 7 million in 2002. Dividends received increased from DKK
7 million  in 2002 to DKK 8 million  in 2003.  All of our  financial  items were
earned in DKK.

     Our  interest  income  was DKK 19  million  in 2003 as  compared  to DKK 30
million in 2002 as a result of a  decrease  in the amount of cash and bonds held
and reduced yields on our bond holdings.

     Our derivative financial  instruments generated a positive value adjustment
of DKK 23 million in 2003 as compared to DKK 43 million in 2002 primarily due to
adjustments on our cross currency swaps to fair value.

     Our overall financial  expenses were DKK 79 million in 2003 compared to DKK
83 million in 2002 primarily due to a DKK 4 million loss in our bond  portfolio,
which was  offset by a DKK 6  million  lower  exchange  rate  adjustment  on our
accounts payable/receivable.

     Our Tanker  division had  increased  interest  expenses of DKK 4 million in
2003 due to an increased fleet,  including  interest  expenses of DKK 11 million
due to the  falling  USD/DKK  exchange  rates  as  compared  to  2002.  Our Bulk
division's  interest  expenses were reduced by DKK 4 million,  including a DKK 3
million decrease in vessel mortgage debt and a DKK 1 million decrease due to the
lower average USD/DKK exchange rate as compared to 2002.

Tax on Profit on Ordinary Activities

     Our tax  expense  for 2003 was DKK 1 million as compared to a tax income of
DKK 360  million  in 2002.  Our  2002 tax  income  was  specifically  due to the
inclusion  of a  reversal  of  deferred  tax  liability  of DKK 360  million  in
connection  with the  introduction  of the  tonnage  tax scheme in  Denmark.  We
entered the tonnage tax scheme with effect from 2001.  Please  refer to Item 10E
and Notes 1 and 8 where the tonnage tax scheme is further discussed.

Profit after Tax from Discontinued Operations

     Profit after tax from discontinued  operations was DKK 0 million in 2003 as
compared to DKK 70 million in 2002,  which was  related to the Liner  activities
that were sold in September 2002.

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

Net revenue

     TORM's net revenue  was DKK 1,539  million in 2002 as compared to DKK 2,001
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 904 million in
2002 as  compared to DKK 1,326  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 to
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 175 million to DKK 463 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 15 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 31 million of which DKK 14
million was 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 158 million in 2002 as compared to DKK 178 million in
2001 when  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 12 million increase in depreciation in 2002
due to a change in fleet composition. In addition, DKK 8 million of the decrease
in  depreciation  in 2002  was due to the  sale of  offshore  vessels  in  2001.
Furthermore the lower USD/DKK exchange rate led to a DKK 13 million reduction in
2002.

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 6 million in 2002 as compared to
DKK (97 million) in 2001, excluding the Liner activities.

     Interest  income  from  bonds and cash  dropped by DKK 15 million to DKK 30
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 127 million to DKK 83  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 30 million in 2002 as compared to 2001.

     Exchange rate  adjustments and other value  adjustments were DKK 43 million
in 2002 as compared to DKK (15 million) in 2001.  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

     We  received a tax  benefit of DKK 360 million in 2002 as compared to a tax
expense of DKK 166  million in 2001.  This  change is a result of our entry into
the  tonnage  taxation  scheme,  which  changed  the way that TORM we are taxed.
Please  refer to Item 10 E and Notes 1 and 8 where  the  tonnage  tax  scheme is
further discussed.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2003 AND THE YEAR ENDED DECEMBER 31,
2002 ON SIGNIFICANT BALANCE SHEET ITEMS

Vessels and capitalized dry-docking

     The book value of our vessels and dry-docking  assets  increased by DKK 401
million in 2003 to DKK 2,944  million.  The  increase  was  attributable  to the
addition of two Panamax bulk  vessels,  two MR tanker  newbuildings  and two LR2
tanker newbuildings to our fleet and the sale of an 11-year-old MR tanker. Based
on  purchase  prices,  the net  increase  in the book value of our  vessels  and
dry-docking  was DKK 960 million,  but the decline in the USD/DKK  exchange rate
produced a negative valuation adjustment of DKK 393 million, and depreciation on
the vessels of DKK 166 million.

Vessels under construction

     Vessels under construction  decreased by DKK 101 million to DKK 229 million
in 2003.  This  decrease  resulted  from the net  effect of the above  mentioned
vessel deliveries,  the falling USD/DKK exchange rate and additional prepayments
on existing newbuildings as well as newbuildings added in 2003.

     During the second and third quarters of 2003, we increased our  newbuilding
program  through  orders for the  construction  of four LR2 product  tankers for
delivery in 2006 and 2007 from a Chinese yard. The first payment of the purchase
price was made in connection with the closing of the contracts. At year-end 2003
we had a total of 6 vessels under construction.

Other investments

     Other investments,  which increased from DKK 290 million to DKK 976 million
in 2003,  mainly consisted of our investment in approximately  33% of the shares
of NORDEN.

     In June 2002, we purchased  30.8% of NORDEN's  share capital  excluding own
shares, which was 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 April 30, 2004, we were NORDEN's
single  largest  shareholder,   with  32.96%  of  NORDEN's  outstanding  shares,
excluding own 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  and are not accounted on an equity basis, 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 the
closing price on the Copenhagen Stock Exchange, which was DKK 1,305.15 per share
as of  December  30,  2003.  Our total  gross  investment  in the NORDEN  shares
reflects an  unrealized  accumulated  gain of DKK 689 million  from the original
investment, which is included in our consolidated financial statements herein as
a financial item.

Mortgage debt and bank loans

     Mortgage  debt,  bank loans,  repayments on mortgage  debt and  capitalized
lease obligations increased by DKK 143 million to DKK 2,177 million in 2003. Our
mortgage  and  leasing  debt  declined  during the year by DKK 35 million to DKK
1,701  million.  Short-term  mortgage  and leasing  debt,  increased  by DKK 178
million,  to DKK 476 million,  mainly as a result of including  the  obligations
regarding  financially  leased  vessels being  included in this item rather than
primarily in long-term  debt. The same applies to another of our vessels,  which
was previously financed with traditional mortgage debt. Ordinary debt repayments
were DKK 262 million in 2003 as  compared  to DKK 220 million in 2002.  In 2003,
borrowings  for the  new  vessels  delivered  to us  during  this  year  and our
newbuilding   program  were  DKK  778  million.   Additionally,   exchange  rate
adjustments reduced mortgage debt by DKK 373 million in total.

     For a further  discussion of our mortgage debt, bank loans and newbuildings
and purchase of secondhand vessels please refer to Item 10.

B.   Liquidity and capital resources

KEY CASH FLOW ITEMS
DKK million                                                 2002         2003

Net cash inflow from operating activities                     261          494
Net cash outflow from investing activities                 (1.119)      (1.007)
Cash inflow from financing activities                         552          471
                                                            ------        ------
Decrease in cash and cash equivalents                        (305)         (43)
Cash and cash equivalents,
   including bonds, at 1 January                              827          522
                                                            ------        ------
Cash and cash equivalents,
   including bonds, at 31 December                            522          479
Of which used as collateral                                  (186)         (52)
                                                            ------        ------
Unencumbered cash and cash equivalents,
   including bonds, at 31 December                            336          427

     As of December 31, 2003, our cash and  equivalents  including bonds was DKK
479 million as compared to DKK 522 million at year-end 2002. DKK 52 million,  as
compared  to DKK 186  million  in  2002,  of this  amount  was  attributable  to
collateral bond deposits for a USD-loan and DKK 427 million,  as compared to DKK
336  million in 2002,  in  available  cash.  The net  decrease  in cash and cash
equivalents  of DKK 43 million  from  December 31, 2002 to December 31, 2003 was
mainly due to  cash-prepayments  for vessels under construction in the amount of
DKK 150 million,  net cash  investments  for the sale and purchase of secondhand
vessels in the amount of DKK 24 million and  dividend  payments in the amount of
DKK  36  million.  In  addition  to an  ordinary  overdraft  facility  to  cover
day-to-day  fluctuations  in  liquidity,  we have  an  unused  five-year  credit
facility  of DKK 500  million  as well as unused  rights  to draw down  loans in
connection  with  previously  purchased  vessels  and  prepaid  installments  on
newbuildings of DKK 127 million. In 2003, we generated cash flow from operations
of DKK 494 million as compared to DKK 261 million in 2002.

     The increase in cash flow from operations was  attributable to our improved
profits of  approximately  DKK 232  million  taking  into  account  discontinued
operations and other non-cash adjustments including a DKK 20 million increase in
depreciation  expenses.  Furthermore,  the cash flow was offset by a decrease in
working  capital  items from an  increase  in cash  balance of DKK 39 million in
2002, as compared to a decrease in cash of DKK 38 million in 2003  primarily due
to sale  of our  Liner  activity  in 2002  and  changes  in the  fair  value  of
derivatives in 2003.

     Net cash used for  investing  activities  was DKK 1,007  million in 2003 as
compared  to DKK 1,119  million in 2002  consisting  of an  increase  of DKK 167
million  in  installment  payments  to the  shipyards  in  connection  with  our
newbuilding  program  and an  investment  made in 2002 of DKK 248  million  (the
investment in the NORDEN  shares).  The sale of the MR-tanker TORM Gyda resulted
in a net increase of DKK 94 million in cash used for investing activities.

     Cash  received  from  financing  activities  was DKK 471 million in 2003 as
compared to DKK 552  million in 2002.  In 2003,  we received  DKK 778 million in
proceeds on new loans related to our newbuilding program and secondhand vessels,
while DKK 262 million was spent on ordinary  repayments on our mortgage debt and
DKK 48  million in the  repayment  of debt in  connection  with the sale of TORM
Gyda. In addition, DKK 35 million was used for dividend payments. As compared to
2002, borrowings fell by DKK 65 million.

     As of December  31,  2003,  we had DKK 2,177  million of loans and mortgage
debt  outstanding.  These  borrowings  typically  require  that the loan,  which
approximates  80% of the  original  purchase  price,  be  repaid  over 20  equal
semi-annual installments, while the remaining 30% of the original loan amount is
repaid at the end of that period.  DKK 476 million is due on these borrowings in
2004.  Included in these loans is the refinancing  amount of three of our tanker
vessels,  including two bareboat chartered vessels, which all were refinanced in
January  2004 and a credit  facility  of USD 9 million,  which is renewed  every
year. This credit facility requires us to maintain a certain minimum  collateral
level, which as of April 30, 2004 was DKK 34 million.

     We  have a  revolving  credit  agreement  for up to  DKK 42  million  as of
December  31,  2003.  This  agreement  bears  interest  at LIBOR + .625%  and is
renewable annually.

     Servicing of our obligations under the loan agreements,  payment of charter
hire for  chartered-in  vessels and all other  commitments  that we have entered
into are paid out of the cash generated by our operating activities. In 2003, we
generated net cash from our operating  activities of DKK 494 million as compared
to DKK 261 million in 2002.

     As of April 30, 2004, our newbuilding  program  included six vessels - five
LR2  Aframax  product  tankers  and  one  LR1  Panamax  product  tanker.  On our
newbuildings,  the initial 20% of the purchase  price is  generally  funded from
available  cash while the  remaining  80% is financed by mortgage  debt. We have
signed an agreement to finance  approximately  80% of the contract  price of the
LR1-product  tanker  newbuilding  to be  delivered  in July  2004  but  have not
initiated  any  negotiations  regarding  the  financing of the five LR2 vessels.
Between March 2005 and December 2006, remaining self-funded  installments due on
all  five  vessels  total  DKK  116  million  and we  have a  total  contractual
commitment of DKK 1,079 million  concerning our newbuilding  program due between
2004 and 2007.  As of April 30, 2004, we have unused rights to draw up to DKK 40
million from our  existing  loan  agreements.  For a further  disclosure  of our
contractual  obligations  please refer to the table included in this Item 5F and
in Item 10.

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

     We  will  continue  to  consider  strategic  opportunities,  including  the
acquisition of additional  vessels and expansion 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.

     Please refer to Item 11 for information regarding our hedging strategy.

EFFECTS OF INFLATION

     Inflation  generally  affects  us by  increasing  the  interest  expense of
floating  rate  indebtedness  and by increasing  the 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  temporary
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 our  product  tankers in the first  quarter of 2004 were
higher than those in the same period of 2003. The improved  freight rate picture
was due to the combination of satisfactory  economic  growth,  historically  low
inventories for refined oil products,  together with the removal from the market
of a significant number of older, single hulled tankers due for demolition.

     In our Bulk Division,  charter rates for the first quarter 2004 were higher
than those in the same period of 2003.  Due to a slow start to the grain  export
from South America combined with the Chinese  Government's actions to dampen the
rapid growth in the economy by lowering the country's spending on key industries
such as construction, steel and aluminum, charter rates were falling towards the
end of first quarter and into second  quarter 2004.  However,  charter rates are
still at an  attractive  level and we expect these rates to be at  substantially
higher levels in 2004 than in 2003.

     76% of the available earning days of the Company's Panamax bulk vessels in
2004 were covered at an average rate of USD 24,750 per day, as at 30 April 2004.
The Panamax bulk vessels account for the majority of the earning days in our
Bulk Division.

E.   Off-balance sheet arrangements.

     We do not have any off-balance sheet arrangements.

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, 2003 (in DKK million):

<TABLE>
<CAPTION>
                                         2004        2005        2006        2007        2008   Thereafter      Total
<S>                                     <C>           <C>         <C>         <C>         <C>         <C>        <C>
Long-Term Debt (1)                        295.3       256.7       201.0       281.6       107.6       853.8     1,996.0
Capital Lease Obligations (2)             180.8          --          --          --          --          --       180.8
Chartered-in Vessels (Operating
leases)                                   323.1       227.6       205.2       188.5       151.7       208.2     1,304.2
Newbuilding installments
(Purchase Obligations) (3)                253.4       137.0       411.7       277.0          --          --     1,079.1
Other contractual obligations               6.9         6.6         5.4         4.4         4.4         6.6        34.30
                                            ---         ---         ---         ---         ---         ---       -----
Total                                   1,059.5       627.9       823.3       751.5       263.7     1,068.6     4,594.4
                                        =======       =====       =====       =====       =====     =======     =======

</TABLE>

(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 on variable interest rates. As of December 31,
     2003, 28% were hedged by interest rate swaps. A 1% increase on the unhedged
     interest rate portion will increase  Capital Lease  Obligations  by USD 0.1
     million.

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

CRITICAL ACCOUNTING POLICIES

     The  preparation of  consolidated  financial  statements in conformity with
accounting  principles  generally  accepted in Denmark and in the United  States
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and  liabilities,  the  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues  and  expenses  during  the  reporting  period.   These  estimates  and
assumptions  are  affected  by the way we  apply  our  accounting  policies.  An
accounting  estimate is considered critical if: the estimate requires management
to make  assumptions  about  matters that were highly  uncertain at the time the
estimate was made;  different  estimates  reasonably could have been used; or if
changes in the  estimate  that would  have a  material  impact on the  Company's
financial condition or results of operations are reasonably likely to occur from
period to period. Management believes that the accounting estimates employed are
appropriate and resulting balances are reasonable; however, actual results could
differ from the original estimates,  requiring  adjustments to these balances in
future periods.

     We believe these are our critical accounting policies:

     Carrying amounts and useful life of Vessels

     We  evaluate  the  carrying  amounts  and period over which the vessels are
depreciated   to  determine  if  events  have  occurred  that  would  require  a
modification of their carrying amounts or useful lives. The valuation of vessels
is reviewed  based on events and changes in  circumstances  that would  indicate
that the carrying amount of the assets might not be recovered.  In assessing the
recoverability  of the  vessels,  we  review  certain  indicators  of  potential
impairment, such as reported sale and purchase prices, market demand and general
market conditions. Market valuations from independent internationally recognized
ship broking companies are obtained on a semi-annual basis as part of our review
for  potential  impairment  indicatory.  Under U.S.  GAAP,  if an  indication of
impairment is  identified,  the  undiscounted  future cash flows are compared to
carrying  amount of the assets.  If these are less than the carrying,  amount an
impairment  loss is  recorded  based on the  difference  between  the fair value
(generally  based  on  discounted  cashflows)  and the  carrying  amount  of the
vessels.  If, under Danish GAAP, an  indication of impairment is identified  the
need for  recognizing  an impairment  loss is assessed by comparing the carrying
amount of the vessels to the higher of the net selling price and the  discounted
future cash flows.

     The review for potential  impairment  indicators  and  projection of future
undiscounted  and  discounted  cash flows  related to the vessels is complex and
require us to make various  estimates  including future freight rates,  earnings
from the vessels and discount rates.  All of these items have been  historically
volatile.

     The  carrying  amounts of our vessels may not  represent  their fair market
value at any point in time since market prices of secondhand vessels to a degree
tend to fluctuate  with changes in charter  rates and the cost of  newbuildings.
However,  if the estimated future cash flow or related assumptions in the future
experience changes, an impairment of vessels may be required.

     Under Danish GAAP,  in 2002 we reversed a  previously  recorded  impairment
amount  resulting in an income of DKK 12 million.  There were no  impairments of
vessels recorded from 2001 to 2003.

     Tax

     We entered  the then newly  enacted  Danish  tonnage  taxation  scheme with
effect from  January 1, 2001 and have filed tax  returns for 2001 and 2002.  The
assessment of the tax returns by the tax authorities has not yet been completed.
The tax  regulations are highly complex and while we aim to ensure the estimates
of tax  assets  and  liabilities  that we  record  are  accurate,  there  may be
instances  where  the  process  of  agreeing  our tax  liabilities  with the tax
authorities  could  require  adjustments  to be  made  to  estimates  previously
recorded.  It is our  assessment  that there is material  uncertainty  as to our
estimate of taxes  payable as of December 31, 2003 due to the lack of precedents
that have  interpreted the tonnage tax regulation.  This  uncertainty  primarily
relates  to the  division  of the  income and  expense  items of our  activities
between income and expenses from shipping  related  activities,  which are taxed
under the  tonnage  tax scheme and income and  expenses  from other  activities,
which are not taxed under the tonnage tax scheme.  Please refer to Item 10 E for
a description of the Danish tonnage tax scheme.

     Since  entering  the Danish  tonnage  taxation  scheme the  Company has not
accrued  for  deferred  tax in the  balance  sheet in the  financial  statements
prepared in  conformity  with Danish GAAP as the  deferred  tax status only will
become payable if the Company's  participation  in the Danish  tonnage  taxation
scheme is  abandoned or if the  Company's  level of  investment  and activity is
significantly reduced.

     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.
Therefore,  under U.S. GAAP the uncertainty  applies to both the estimate of tax
payable and the provision for deferred tax.

     We estimate that the tax returns filed for 2001 and 2002 and our activities
in 2003 will not  trigger  taxes  payable  under the  tonnage  tax  scheme as of
December 31, 2003, and that the deferred tax liability  recorded under U.S. GAAP
is adequate.

     Our  investment in NORDEN is a strategic  investment  under the tonnage tax
scheme.  No tax  liability is connected  with a sale of the NORDEN  shares after
three years of ownership.  The gain on any shares sold before July 2005, will be
taxed at 30%. To determine our deferred tax liability we are therefore  required
to estimate when this timing difference will  crystallize.  We currently have no
intention to sell the shareholding in NORDEN and have therefore not recognized a
deferred tax liability  related to the unrealized  gain on the investment of DKK
681 million  recognized as of December 31, 2003. If this intention  changes,  it
could result in a significant tax liability.

CHANGE IN ACCOUNTING POLICIES

     In 2003 we revised our  accounting  policies to apply USD as a  measurement
currency  instead  of DKK for our  operating  entities,  while DKK  remains  the
measurement  currency for our  administrative  entity. In accordance with Danish
GAAP, the revisions have been reflected  through a restatement of the historical
financial  results.  Please  refer  to  Note  1 in  the  consolidated  Financial
Statements.

     Our  transactions  are  primarily  in USD because  revenues  from  shipping
activities and shipping related costs, such as port expenses,  bunkers,  charter
hire, etc. are generally settled in USD.  Furthermore,  our material investments
in tangible fixed assets, the vessels, have almost exclusively been purchased in
USD and the  market  values  of the  vessels  depend on the USD  exchange  rate.
Mortgage debts related to the vessels are also entered in USD.

     Our  activities  are  measured  in USD  because we  believe  that it better
reflects the economic realities behind the events and conditions relevant to the
Company  and  provides a more  accurate  view of our  activities  and  financial
position.

     Translation  from  USD to DKK in the  operating  entities  is  based on the
principles  outlined  in  IAS  interpretation  SIC  30  ("Reporting  Currency  -
Translation  from  Measurement  Currency  to  Presentation   Currency"),   which
essentially provides that:

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

     o    assets and  liabilities are translated  based on the USD/DKK  exchange
          rate as of the balance sheet date,

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

     Previously,  currency translation  regarding the Parent Company,  including
integrated  entities,  was done in accordance with the principles for integrated
entities  as  prescribed  in  the  Danish  Accounting   Standard  no.  9,  which
essentially provided that:

     o    depreciation regarding vessels and capitalized  dry-docking recognized
          in the income  statement  was primarily  translated  into DKK based on
          historical USD exchange rates,

     o    non-monetary   items  in  the  balance  sheet,  such  as  vessels  and
          capitalized  dry-docking,  were primarily translated into DKK based on
          historical USD exchange rates,

     o    mortgage debts relating to vessels were  translated  into DKK based on
          the USD exchange rate as of the balance  sheet date,  and that foreign
          exchange  rate  gains  and  losses  arising  upon  translation  of the
          mortgage debts as of the balance sheet date were  recognized  directly
          in  shareholders'  equity,  as they  were  regarded  as  hedges of the
          currency risk relating to the vessels, and

     o    monetary items in the balance sheet were  translated into DKK based on
          the USD exchange rate as of the balance  sheet date,  and that foreign
          exchange  rate  gains  and  losses  were   recognized  in  the  income
          statement.

     After  applying  USD  as  measurement  currency  certain  foreign  currency
derivative  financial  instruments no longer qualify for hedge  accounting under
Danish GAAP.  Consequently,  changes in fair value of these derivative financial
instruments  are  now  recognized  in  the  income  statement  while  previously
recognized directly in shareholders' equity.

ACCOUNTING PRINCIPLES NOT YET ADOPTED

     Danish GAAP

     The Danish  Financial  Statements Act was amended in February  2004.  Under
Danish  GAAP,  financial  statements  may now be  prepared  in  accordance  with
IAS/IFRS,  which is required pursuant to EU regulation no.  1606/2002/EF for all
publicly  listed  companies  in the EU for fiscal  years  beginning  on or after
January 1, 2005.

     Consequently,  we must  render  financial  statements  in  accordance  with
IAS/IFRS by the fiscal year of 2005.

     We are engaged in global  activities with global  participants  and a large
number  of  our  existing  and  potential  shareholders  take  an  international
perspective when formulating their investment  strategy.  We agree with the need
for  internationally  standardized rules when providing  financial  information,
which  enables   investors  and  others  to  compare  and  benchmark   different
participants in the market.  We consider it a positive  development  that the EU
has chosen IAS/IFRS as the standard for financial reporting and that a number of
countries outside the EU have also adopted IAS/IFRS.

     Our American Depositary Receipts, or ADRs, have for the past two years been
listed on NASDAQ,  and during this  period we have been  required to comply with
the financial reporting rules and requirements governing foreign private issuers
having shares registered with the SEC. Accordingly, we have developed skills and
competences to handle the additional  requirements  of reconciling our financial
information to accounting principles generally accepted in the United States and
the  reporting  requirements  of the SEC. We believe  these  skills will also be
useful in our efforts to comply with IAS/IFRS.

     IASB has officially announced a time frame for updating existing accounting
standards  to  IAS/IFRS  as  well  as the  implementation  of  amended  and  new
standards.  We expect a number of changes to the IAS/IFRS reporting requirements
in 2004.  We  therefore  currently  expect to change to  IAS/IFRS as a basis for
financial reporting effective from the first quarter of the fiscal year 2005.

     In 2002 we also made a number of changes to our  accounting  policies  as a
result of the new Danish  Financial  Statements  Act that  helped us become more
familiar with U.S. GAAP. The  application of the USD as measurement  currency is
not in conformity  with the Danish  Financial  Statements Act section 39, no. 1.
The deviation is adopted with reference to the Danish  Financial  Statements Act
section  11,  no 3 to  provide  a more  accurate  view  of our  activities.  The
application  of USD  as  measurement  currency  in the  operating  entities  is,
however, in accordance with IAS/IFRS.

     Given the previous revisions to our accounting policies, we anticipate that
our  transition  to IAS/IFRS  will require only a few  additional  changes.  The
following  are  specific  areas in our  accounting  policies  that we expect may
change:

     o    Unrealized  gains or losses with respect of financial assets available
          for sale are recognized in the income statement under financial items.
          According to IAS 39, updated in December 2003,  these gains and losses
          should in most cases be recognized in shareholders' equity.

     o    In connection with our share option scheme, the difference between the
          exercise  price  and the  market  price of the  shares at the date the
          options  are  granted  is  recognized  as a  compensation  expense  in
          administrative expenses in the income statement. Receipts and payments
          relating to the exercise of the share options are recognized  directly
          in shareholders' equity. IFRS 2 Share-based Payment requires that, for
          shared-based  payments  with cash  alternatives,  any  increase in the
          value of the  share  options  or a part  thereof  up until  the  first
          exercise date shall be recognized in the income  statement as a salary
          expense.

     o    We are examining potential  differences in the accounting treatment of
          deferred tax in relation to the tonnage tax scheme.

     o    IAS/IFRS  disclosure  requirements  exceed  those  governing  publicly
          listed  Danish  companies in a number of areas.  We will  evaluate the
          need for adjustments to the current notes and the possible addition of
          further notes and additional disclosures.

     Our transition to IAS/IFRS is not expected to require  significant  changes
to our accounting systems and recording processes.

     U.S. GAAP

     FIN 46(R) "Consolidation of Variable Interest Entities"

     In January 2003, the FASB issued FASB Interpretation No. 46,  Consolidation
of Variable  Interest  Entities,  and revised it in December 2003 ("FIN 46(R)").
FIN 46(R)  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  support.  An enterprise  shall  consolidate a variable
interest entity if that enterprise is the primary beneficiary.  An enterprise is
considered  the  primary  beneficiary  if it has a variable  interest  that will
absorb a majority of the  entity's  expected  losses,  receive a majority of the
entity's expected residual returns, or both.

     The  provisions of FIN 46(R) are required to be applied  immediately to all
variable  interest  entities  created  after  December  31,  2003.  For variable
interest  entities  that were created  prior to December 31, 2003,  FIN 46(R) is
required to be applied  beginning with the first annual period  beginning  after
December 15, 2004.The  Company is assessing the potential impact of the adoption
of FIN46(R), but does not believe it will have a material impact on consolidated
net income or shareholders' equity.

     EITF  03-01,  "The  Meaning  of  Other-Than-Temporary  Impairment  and  Its
Application to Certain Investments"

     On March 2004,  the EITF reached a consensus on Issue 03-1,  The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments (EITF
03-01).  EITF 03-01 is applicable to (a) debt and equity  securities  within the
scope of  Statement  115,  (b) debt and  equity  securities  within the scope of
Statement  124 and that are  held by an  investor  that  reports  a  performance
indicator,  and (c) equity  securities not within the scope of Statement 115 and
not  accounted  for  under  Opinion  18's  equity  method  (e.g.,   cost  method
investments).  EITF  03-01  provides  a  step  model  to  determine  whether  an
investment  is  impaired  and  if  an  impairment  is  other-than-temporary.  In
addition, it requires that investors provide certain disclosures for cost method
investments and, if applicable,  other information related  specifically to cost
method  investments,  such as the  aggregate  carrying  amount  of  cost  method
investments,  the aggregate amount of cost method  investments that the investor
did not evaluate for impairment because an impairment indicator was not present,
and the situations under which the fair value of a cost method investment is not
estimated.  The  disclosures  related to cost method  investments  should not be
aggregated  with other types of  investments.  The EITF 03-01  impairment  model
shall be applied  prospectively to all current and future investments within the
scope of the Issue,  effective in  reporting  periods  beginning  after June 15,
2004.The guidance for evaluating whether an investment is other-than-temporarily
impaired should be applied in  other-than-temporary  impairment evaluations made
in  reporting  periods  beginning  after  June 15,  2004.  The  disclosures  are
effective in annual financial  statements for fiscal years ending after December
15, 2003, for  investments  accounted for under  Statements 115 and 124. For all
other investments  within the scope of this Issue, the disclosures are effective
in annual financial  statements for fiscal years ending after June 15, 2004. The
additional  disclosures  for cost method  investments  are  effective for fiscal
years ending after June 15, 2004.

ACCOUNTING POLICIES ADOPTED DURING 2003

     U.S. GAAP

     SFAS  No.  150,   "Accounting  for  Certain   Financial   Instruments  with
Characteristics of both Liabilities and Equity"

     In May 2003, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 150,  Accounting for Certain Financial  Instruments with  Characteristics of
both  Liabilities and Equity.  This statement  established  standards for how an
issuer  classifies and measures in its statement of financial  position  certain
financial  instruments with  characteristics  of both liabilities and equity. In
accordance with the standard,  financial instruments that embody obligations for
the  issuer  are  required  to be  classified  as  liabilities.  SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003;
it became  effective  for the  Company  during the second  quarter of 2003.  The
adoption  of SFAS No. 150 did not have an impact on the  Company's  consolidated
balance sheet or results of operations.

     SFAS No.  146,  "Accounting  for Costs  Associated  with  Exit or  Disposal
Activities"

     In June,  2002,  the  FASB  issued  SFAS  No.  146,  Accounting  for  Costs
Associated with Exit or Disposal  Activities.  This statement  requires that the
fair  value of a  liability  associated  with an exit or  disposal  activity  be
recognized  when the  liability is  incurred.  Prior to the adoption of SFAS No.
146,  certain  exit  costs  were  recognized  when a  commitment  was  made to a
restructuring  plan, which may have been before the liability was incurred.  The
adoption  of SFAS No. 146 during  2003 did not  impact the  Company's  financial
position or results of operations.

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

     In November  2002, the FASB issued FASB  Interpretation  No. 45 ("FIN 45"),
Guarantor's  Accounting and Disclosure  Requirements  for Guarantees,  Including
Indirect Guarantees of Indebtedness of Others. FIN 45 clarifies the requirements
for a guarantor's accounting for and disclosure of certain guarantees issued and
outstanding.  The initial recognition and initial measurement  provisions of FIN
45 are applicable to guarantees  issued or modified after December 31, 2002. The
disclosure  requirements  of FIN 45 are effective  for  financial  statements of
interim or annual periods ending after December 15, 2002. The adoption of FIN 45
did not have an impact  on the  Company's  consolidated  financial  position  or
results of operations.

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                56        Chairman of the Board
    Christian Frigast                 52        Deputy Chairman of the Board
    Lennart Arnold Johan Arrias       55        Director
    Ditlev Engel                      40        Director
    Rex Harrington                    70        Director
    Peder Mouridsen                   54        Director
    Gabriel Panayotides               49        Director

    Management:
    Klaus Kjaerulff                   52        Chief Executive Officer
    Klaus Nyborg                      40        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  A/S,  a Danish  investment  company,  and  holds an  M.Sc(Econ)  from the
University  of  Copenhagen.  He also  serves  as the  Chairman  of the Board for
numerous companies including Britannia Invest A/S, and several companies related
to Axcel 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  A/S and has a B(Comm)  degree  from the
Copenhagen Business School. He is a Board member of 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 General Maritime  Corporation (NYSE listed),  and the
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  classification
societies,  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 (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  2003,  we  paid a total  of DKK 1.4  million  in cash to the  Board  of
Directors and DKK 10.8 million in cash to our  executives.  These totals include
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" below.  As of December 31, 2003,  members of our
Board of Directors had exercised 8,140 options.

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:

                               2001          2002          2003
                               ----          ----          ----
Land-based employees
          Denmark               102            90            92
          Other                   1             1             3
          Total                 103            91            95
Seafarers (officers)            132           160           185
                                ---           ---           ---
Total employees                 235           251           280

     In 2001,  approximately 26 of our employees were employed in administrative
positions.  That number  increased  to 30 in 2002 and 2003.  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 April 30, 2004,  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 our common shares.

Option plan

     In 2001, we created a share option based incentive  program for Management,
key  employees  and  the  Board  members.  The  program  currently  includes  23
participants  who from 2001-2003 have been granted options to purchase shares in
the Company,  where the option holder can buy the shares at a specified exercise
price  or  where  the  differential  between  the  share  price as of the day of
exercising the options and the option price may be settled in cash.

     In this respect we acquired  4.39% of our share  capital for DKK 47 million
to cover the risk of share price  movements in connection  with the share option
incentive program.  The value of these shares was DKK 144 million as of December
31, 2003, whereas the value of the exercised options was DKK 10.1 million, which
was settled in cash. As of December 31, 2003, 60% of the options were exercised.

     The exercise price for 2001 was set at DKK 54 per share, DKK 58.50 for 2002
and DKK 62.60 for 2003.  The options may be  exercised  one year at the earliest
and three  years at the latest  from the date the  exercise  price was set.  The
granting of these options was approved at our annual general meeting in 2001. In
the event that the  remainder of the options is exercised  through a purchase of
shares, the options would equate to 1.7% of our share capital.

     Please  refer to Note 3 to the  consolidated  Financial  Statements.  As of
April 30, 2004, a total of 28,890 share options had not yet been exercised.

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,  2003,  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 April 1,  2004.  None of the
shareholders have any special voting rights.

Name                                   Number of Shares     Percentage of Class
----                                   ----------------     -------------------
Beltest Shipping Company Ltd.                 5,608,300                31%
Pacific International Investments Inc.        2,906,000                16%
Menfield Navigation Company Limited           1,820,311                10%
A/S Dampskibsselskabet TORM's                 1,139,220                6%
Underst0ttelsesfond, Denmark
Tung Chiaur (Hong Kong) Limited                 982,800                5%

     Each of the shareholders  above holds 5% or more of the total number of our
outstanding shares, which requires that shareholder to file information with the
Copenhagen Stock Exchange.

     In 2002 and 2003,  Beltest Shipping Company Ltd.  purchased  5,608,300,  or
30.81%, of our outstanding common shares.  Beltest and its parent company, Ryder
Holdings  Inc.,  have  filed a Schedule  13D with the  Securities  and  Exchange
Commission, or the SEC. Pacific International Investments and its parent company
Teekay Shipping  Corporation  have filed a Schedule 13D with the SEC in relation
to the  purchase  of the above  mentioned  shares in 2003.  Menfield  Navigation
Company Limited acquired  1,820,311 shares, or 10.00% of our outstanding  shares
during 2003 and 2004, while Tung Chiaur acquired the 982,800 shares in 2003. A/S
Dampskibsselskabet   TORM's   Underst0ttelsesfond's   shareholding  in  TORM  is
unchanged over the last three years.

     Beltest  Shipping Company Ltd.,  Pacific  International  Investments  Inc.,
Menfield  Navigation  Company  Limited and Tung Chiaur have all given notices of
their shareholdings to the Copenhagen Stock Exchange.

B.   Related party transactions.

     The members of the Company's Board of Directors and Senior Management, near
relatives to these  persons,  and companies  where these persons have control or
exercise   significant   influence  are  considered  as  related   parties  with
significant influence.

     Mr. Niels Erik Nielsen, Chairman of the Board of Directors, is a partner in
the law  firm  Bech-Bruun  Dragsted.  Bech-Bruun  Dragsted  has  rendered  legal
assistance  during 2003.  During the fiscal year ended  December  31, 2003,  the
firm's  fees paid by the  Company  were DKK 0.4  million as  compared to DKK 1.6
million in 2002.

     Mr.  Ditlev  Engel,  a member of the Board of  Directors,  is also Managing
Director of Hempel A/S, a private  company that produces and sells marine paints
and coatings  worldwide.  During the fiscal year ended  December  31, 2003,  the
Company  purchased marine paints and coatings at market rates from Hempel A/S in
the amount of DKK 2.4 million as compared to DKK 0.7 million in 2002.

     Mr. Gabriel Panayotides,  a member of the Board of Directors, has served as
the head of operations of Maryville Maritime Inc. since 1983. Maryville Maritime
Inc.  chartered  one vessel to the TORM  Panamax bulk carrier pool in the period
from 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.

     There were no other transactions  during the fiscal year ended December 31,
2003 with  members of the Board of  Directors,  the Senior  Management  or other
related  parties.  Management  remuneration  is  disclosed  in  Note  3  to  the
Consolidated Financial Statements.

     It is considered that no single person has control over the Company.

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 surplus
capital.  Any decision to distribute  dividends will be at the discretion of the
Board of  Directors  and must be  approved  by the  shareholders  at our  annual
general meeting. Our shareholders approved a dividend of DKK 12 for every DKK 10
share at the annual general meeting in 2004.

     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.  For  example,  our 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 a 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 daily
trading ranges from none to several thousand shares.

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

                      1999           2000          2001          2002          2003

<S>                 <C>            <C>           <C>            <C>            <C>
Low                 18.00           22.47        44.00          46.13          57.32
High                28.87           60.28        62.50          60.41         182.88
Average
Daily Volume        3,781          10,186        9,454         11,175         25,208

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

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

2003            1st quarter    2nd quarter   3rd quarter    4th quarter
Low                 57.32           65.93        85.20         128.66
High                66.95           90.78       141.16         182.88
Average
Daily  Volume      21,402          42,843       20,230         17,756
</TABLE>

For the previous five months:
<TABLE>
<CAPTION>

                   December     January       February      March       April     May
                    2003          2004          2004        2004        2004      2004
<S>                <C>             <C>          <C>        <C>         <C>       <C>
Low                146.74          193.78       280.61     342.83      273.07    143.45
High               182.88          294.46       397.97     383.85      351.48    152.37
Average
Daily  Volume      20,414          60,284       73,575     28,738      17,705     8,021
</TABLE>

B.   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 2003,  the average  daily  trading  volume of our ADSs on the NASDAQ was
2,541 ADSs,  and from January 1, 2004 through April 30, 2004,  the average daily
trading volume was 5,191ADSs.

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

     All  of  our  loan   agreements  are  entered  into  by  our  wholly  owned
subsidiaries  or directly by the Company and we pay a fixed margin  between 0.5%
and 1% on all our loans as described below.

     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 of this loan is variable, based on LIBOR. As security
for our  obligations  under the debt  instrument,  we granted  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 assumed 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. As security for our obligations under
the debt  instrument,  we granted  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 USD 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 variable based on LIBOR.  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 USD 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.  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  USD  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.
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 USD 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.  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 Anne 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 USD 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.
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
A/S,  Copenhagen  covering the total  amount of the loan.  The loan is due to be
repaid in 2007.

     Southern  Light  Shipping  Limited  entered  into a USD 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.
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 A/S,  Copenhagen  covering the total amount of the loan.
The loan is due to be repaid in 2007.

     Hermia  Shipping  Corporation  entered  into two separate  loan  agreements
totaling  USD 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.  The second  agreement,  dated August 29,  2001,  has a
variable  interest  rate  of  LIBOR.  These  loans  are  jointly  and  severally
guaranteed by us and our subsidiary,  Hermia Shipping  Corporation,  in favor of
the lender. These loans are due to be repaid in 2007.

     Hilde Shipping Corp.  entered into a USD 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.  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 2004.

     Estrid Shipping  Corporation entered into a USD 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. 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  USD  22.3  million  loan
agreement with Danish Shipfinance on November 6, 2001 to assist in the financing
of the vessel TORM Vita.  The interest rate is a variable rate based upon LIBOR.
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 USD 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.  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 USD 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.  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 USD 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.  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 USD 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.  We
have issued a guarantee in respect of this loan in favor of the lender. The loan
is due to be repaid in 2013.

     A/S D/S TORM entered into a USD 35.2  million  loan  agreement  with Danish
Shipfinance  on March 19,  2003 to assist in the  financing  of the vessel  TORM
Valborg.  The interest rate is a variable rate based upon LIBOR. As security for
our obligations under the debt instrument, we have granted to Danish Shipfinance
a first priority mortgage, registered over and against TORM Valborg. The loan is
due to be repaid in 2013.

     A/S D/S TORM entered into a USD 35.2  million  loan  agreement  with Danish
Shipfinance  on March 19,  2003 to assist in the  financing  of the vessel  TORM
Ingeborg. The interest rate is a variable rate based upon LIBOR. As security for
our obligations under the debt instrument, we have granted to Danish Shipfinance
a first priority mortgage,  registered over and against TORM Ingeborg.  The loan
is due to be repaid in 2013.

     A/S D/S TORM entered into a USD 22.0 million revolving credit facility with
Danske Bank A/S on December  23, 2003 to assist in the  financing of the vessels
TORM Marta and TORM  Herdis.  The  interest  rate is a variable  rate based upon
LIBOR.  As  security  for our  obligations  under the debt  instrument,  we have
granted to Danske Bank a first priority  mortgage,  registered  over and against
TORM Marta and TORM Herdis. The loan is due to be repaid in 2006.

     A/S D/S TORM entered into a USD 26.9  million  loan  agreement  with Nordea
Bank  Danmark A/S on January 15, 2004 to assist in the  financing  of the vessel
TORM Estrid.  The interest rate is a variable rate based upon LIBOR. As security
for our obligations under the debt instrument, we have granted to Nordea a first
priority  mortgage,  registered over and against TORM Estrid. The loan is due to
be repaid in 2014.

     A/S D/S TORM entered into a USD 12.7  million  loan  agreement  with Nordea
Bank  Danmark A/S on January 15, 2004 to assist in the  financing  of the vessel
TORM  Margrethe.  The  interest  rate is a variable  rate based upon  LIBOR.  As
security  for our  obligations  under the debt  instrument,  we have  granted to
Nordea a first priority  mortgage,  registered  over and against TORM Margrethe.
The loan is due to be repaid in 2008. The vessel was  previously  owned by KS UL
Margrethe and on bareboat charter to us until we bought it in January 2004.

     A/S D/S TORM entered into a USD 13.0  million  loan  agreement  with Nordea
Bank  Danmark A/S on January 15, 2004 to assist in the  financing  of the vessel
TORM Hilde.  The interest rate is a variable rate based upon LIBOR.  As security
for our obligations under the debt instrument, we have granted to Nordea a first
priority mortgage, registered over and against TORM Hilde. The loan is due to be
repaid in 2011.  The vessel was  previously  owned by KS UL Sita and on bareboat
charter to us until we bought it in January 2004.

     Caseros  Shipping  Limited  entered into a USD 15.5 million debt instrument
with Nordea Bank  Danmark A/S on January 15, 2004 to assist in the  financing of
the vessel TORM Asia. The interest rate is a variable rate based upon LIBOR.  In
addition,  Caseros Shipping Limited executed a first preferred Liberian mortgage
over  the  vessel  TORM  Asia.  The loan is  guaranteed  by TORM in favor of the
lender. The loan is due to be repaid in 2013.

     A/S D/S TORM entered into a USD 18.8  million  loan  agreement  with Danish
Shipfinance  on April 19,  2004 to assist in the  financing  of the vessel  TORM
Alice.  The interest rate is a variable  rate based upon LIBOR.  As security for
our obligations under the debt instrument, we have granted to Danish Shipfinance
a first priority  mortgage,  registered over and against TORM Alice. The loan is
due to be repaid in 2014.

NEWBUILDING CONTRACTS

     We entered into a contract with Hyundai Heavy Industries Co., Ltd., for the
construction  of a 75,000 dwt product  tanker.  The contract was executed on May
31,  2002 and  provides  for stage  payments of 10% in  advance,  10%  following
execution of the contract, 20% during construction, and 60% upon delivery of the
vessel. The vessel will be delivered by the end of July 2004.

     We reached an  agreement  with  Nordea to finance  80% of the  construction
price for the vessel.  We have already  paid 20% of the  purchase  price for the
vessel  as  required  by the  shipbuilding  contract.  The terms of the loan are
similar to the loans obtained through Nordea mentioned above.

     We also  entered into five  contracts  with Dalian New  Shipbuilding  Heavy
Industry Co. Ltd.,  each for the  construction  of a 110,000 dwt product tanker.
These contracts were executed on June 20, 2003, October 22, 2003 and January 20,
2004.  The  contracts  provide  for stage  payments  of 10% upon  signing of the
contracts,  30% during  construction,  and 60% upon delivery of the vessel.  The
tankers are scheduled to be delivered between April 2006 and January 2008.

     We still have not initiated any negotiations with providers of financing of
these five  vessels  but expect to obtain  terms  similar to the loan  mentioned
above on the Hyundai vessel with 80% of the construction price to be financed by
one or more banks.  The remaining 10% of the contract  price on all five vessels
to be paid by us is scheduled between March 2005 and December 2006.

SECONDHAND VESSELS

     On February 13, 2004 we entered into a contract to purchase the  1995-built
MR product tanker TORM Alice from Rederi AB Gotland. The vessel was delivered to
TORM on February  18, 2004 and as  mentioned  above we have reached an agreement
with Danish Shipfinance to finance 80% of the contract amount. The remaining 20%
was financed by cash by ourselves.

     On February 27, 2004 we entered into a contract to purchase the  1997-built
Panamax  bulk vessel TORM Marlene from  Milamores  Shipping  S.A. The vessel has
been on time  charter to TORM since its delivery  from the shipyard in 1997.  We
expect to take  delivery  of the vessel in June 2004 and have  finalized  a Term
Sheet with HSBC drafting the general terms for financing of  approximately  100%
of the vessel's purchase price. As of March 18, 2004 we have placed a deposit of
10% of the purchase price to the sellers' bank cash financed by ourselves.

     On January 7, 2004 we entered  into a contract to purchase  the  1997-built
Panamax  bulk vessel TORM  Baltic from ND Shipping  S.A.  The vessel has been on
time charter to TORM since March 2001.  We expect to take delivery of the vessel
in June 2004 and have  finalized  a Term Sheet with HSBC  drafting  the  general
terms for financing of approximately  100% of the vessel's purchase price. As of
April 1,  2004 we have  placed a  deposit  of 10% of the  purchase  price to the
sellers' bank cash financed by ourselves.

D.   Exchange controls.

     None.

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.

     Final  regulations  interpreting  Section 883 were  promulgated by the U.S.
Treasury  Department  in  August  of  2003,  which  we  refer  to as the  "final
regulations."

     The final  regulations  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 only be effective for calendar year
taxpayers like ourselves for the calendar year commencing 2004.

     The final 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 10% 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.

     Under the final regulations, TORM's common stock further provide that stock
will be considered to be "regularly traded" on an established  securities market
if (i) more than 50% of the common  stock is listed on such market and is traded
on such market, other than in de minimis quantities,  on at least 60 days during
the taxable year and (ii) the aggregate number of shares of such stock traded on
such  market is at least  10% of the  average  number  of  shares of such  stock
outstanding during such year.

     For 2003,  TORM's common stock  satisfies these  "regularly-traded"  tests.
Furthermore, 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 final 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 more than half the days 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 "more than half
the days" standard, the final 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  2003,  TORM would be subject to the 5%
override  rule of the final  regulations  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 may not be able to satisfy the ownership  requirement in accordance
with the final regulations.

Since the final  regulations  are not  effective  until the calendar  year 2004,
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 Danish 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 U.S. federal income
tax  rates  (through  2008)  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, trusts or estates.

     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.

     Our ADSs will  qualify as readily  tradable  or an  established  securities
market  because they are listed on the NASDAQ  national  market,  which has been
designated by the IRS as so qualifying.  Alternatively,  as discussed  above, we
are eligible for the benefits of the Treaty and the IRS has issued guidance that
the Treaty is  satisfactory  for this  purpose.  Therefore,  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
adjusted  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 IRS 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, W-8ECI or W-8IMY, as applicable.

     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. IRS.

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.

     It is as yet  uncertain  whether  activities  in relation to  management of
pools of  vessels  owned by other  shipping  companies  can or  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 in  accordance  with  shipping  industry  practice  in
Denmark.  The Company has paid no tonnage tax in 2001,  2002 and 2003 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 and 2002, we made interpretations of the new tonnage
tax legislation  some of which have been challenged by the tax  authorities.  We
agree in part to some of the  alternative  interpretations  presented by the tax
authorities whereas we do not agree to other of the alternative  interpretations
presented. The differences in interpretation primarily relate to whether certain
income and expense  items are taxable under the tonnage  taxation  scheme or the
ordinary Danish  corporate tax  legislation.  We are currently  awaiting the tax
authorities reaction to our reply to their challenge.

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 and
submit  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 until June 6, 2004.  From June 7, 2004 documents  referred
to in this annual report may be inspected at our new  headquarters  at 18 Tuborg
Havnevej, DK-2900 Hellerup, 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.  For an
overview of the fair value of the derivative financial  instruments please refer
to Note 16.

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 Gross Profit
(Net  earnings  from  shipping  activities)  of DKK 8 million for the year ended
December 31, 2003 as compared to DKK 5 million as of December 31, 2002.  We have
DKK 2,346 million of  outstanding  indebtedness  as of December 31, 2003 that is
repayable  in U.S.  dollars as compared to DKK 2,271  million as of December 31,
2002.  The  increase  primarily  derives  from the  increase  in  borrowings  in
connection  with  deliveries of  newbuildings  and  prepayments on vessels under
construction.  A hypothetical 1% uniform weakening of the U.S. dollar would have
resulted  in a  reporting  currency  translation  adjustment  of DKK 23  million
recorded  in  shareholders'  equity as compared to DKK 23 million as of December
31,  2002.  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, 2003,  we had the  following  financial
instruments in place:
<TABLE>
<CAPTION>
                                Nominal Value at
                                the date of entering
Cross Currency Contracts        into the Contract           Date of Maturity         Fair Value

<S>                            <C>                           <C>                     <C>
USD 8 million                   DKK 57.7 million             June 2004                DKK 10.0 million
USD 7 million                   DKK 51.8 million             December 2004            DKK 10.1 million
USD 5 million                   DKK 37.0 million             December 2004            DKK 7.2 million
USD 5 million                   DKK 37.0 million             January 2005             DKK 7.5 million
Total                                                                                 DKK 34.9 million
</TABLE>

     As of  December  31,  2003,  the fair  value of the  above  cross  currency
contracts  totaled  DKK 34.9  million as  compared  to (DKK 9.5  million)  as of
December 31, 2002.

Forward Currency Contracts

     In 2003 we entered into 6 forward contracts agreeing to sell a total of USD
21 million  against DKK at an average  exchange rate of DKK 5.96 for the purpose
of servicing our Danish cash flow  requirements.  The contracts  expire  between
January and July of 2004 and are equally split over the period.  Furthermore, in
2003 we entered  into 4 forward  contracts  buying JPY against USD at an average
exchange  rate of  107.7  JPY/USD  for the  purpose  of  securing  the  required
JPY-amounts on two contracts where we agree to buy two Panamax bulk carriers.

     As of December 31, 2003, the fair value of our forward  currency  contracts
was DKK 2.0 million as compared to DKK 0 million as of December 31, 2002.

Currency Options

     In December 2003 we entered into four USD/DKK option  contracts for a total
amount of USD 54  million.  The  contracts  provides us with a right to sell the
following amounts of USD a rate of 1 USD to 5.91 DKK at the end of March,  June,
September and December  2004:  USD 26 million,  USD 18 million USD 5 million and
USD 5 million.  At the same time the contracts  provide the  counterpart  with a
right to buy USD at the same rate if actual USD/DKK  exchange rate exceeds 6.28;
6.43;  6.57 and 6.69 on the same dates.  As of April 30, 2004 the first contract
totaling USD 26 million  expired and was not  exercised by any of the parties as
the thresholds were not met.

     As of December  31, 2003 the fair values of these  contracts  were (DKK 1.5
million) as compared to DKK 0 million as of December 31, 2002.

Interest Rate Risk

     As of December  31, 2003,  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,  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,  2003,  we were  committed to a series of interest  rate
swap  agreements  whereby 55% of our total  floating  rate debt was swapped with
fixed rate obligations  having an average  remaining term of 2.5 year,  expiring
between 2004 and 2008. These  arrangements  effectively change our interest rate
exposure on the hedged debt from a floating  LIBOR rate to an average fixed rate
of 4.2%. An additional 24% of our floating rate debt was swapped with fixed rate
obligations  using interest swaps containing an option element having an average
remaining term of 4.3 years and expiring between 2007 and 2009. An interest rate
swap 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 our  interest  rate swaps with an option  element
this  threshold is 7%. Below this level,  the swaps act 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  4.3%.  We  have  received
compensation  for selling this option.  This  compensation is reflected in above
average  fixed  rate  of  4.3%.  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 17.2  million of  interest in excess of market
rates. The fair value of these interest rate swaps at December 31, 2003 was (DKK
31.4 million) as compared to (DKK 44.9 million) as of December 31, 2002.

     A 1% increase in interest  rates on the remaining  variable rate debt would
result in DKK 7.1  million of  additional  interest  expense  for the year ended
December  31, 2003 as compared to DKK 9.3 million as of December  31,  2002.  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, 2003, we have investments in certain fixed
interest rate bonds with a carrying amount of DKK 316 million as compared to DKK
354 million as of December 31, 2002.  The bond portfolio was reduced in order to
facilitate a part of our DKK cash flow during the year. The fair values of these
investments could be negatively  impacted by increases in interest rates. If the
average interest rate for 2004 is 1 percentage point greater than the rate as of
December 31, 2003,  the fair values of these  investments  would decrease by DKK
9.5 million as compared to DKK 8.5 million as of December 31, 2002.

Bunker 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  2003,  we  fixed  the  price  on 6% of  our  fuel  usage  through  these
instruments. A hypothetical 1% increase in the December 31, 2003 cost per metric
ton of fuel oil would result in an increase in fuel expense of DKK 2 million for
the year ending December 31, 2004,  based on projected fuel usage as compared to
DKK 2.1 million as of December 31, 2002. As of December 31, 2003, we have hedged
approximately  7% of our 2004 fuel  requirements.  As of December 31, 2003,  the
fair  values of these  contracts  were DKK 0  million  as  compared  to (DKK 1.1
million) as of December 31, 2002.

Freight Rate Risk

     The  majority of our tanker  vessels are  operated on spot voyage  charters
through our pools. To hedge our exposure to fluctuations in the freight rates we
may place certain of the pool's  vessels on time charter or enter into Contracts
of Affreightment  (COA) or freight  derivatives (FFA). Our bulk vessels are also
operated  on spot  voyages  but to a higher  degree  placed on time  charters or
hedged through the use of COA's or FFA's.

     The COA's would meet the  definition of a derivative  financial  instrument
according  to SFAS 133,  but  since we in nearly  all  instances  take  physical
delivery,  our COA's qualify for the normal sales and purchase exemption and are
therefore not accounted for as derivative financial  instruments.  The FFA's are
purely  paper deals that  require no  physical  delivery of either a vessel or a
cargo and as such are treated as a derivative financial instrument.

     As of December 31, 2003,  the fair values of these  contracts  were DKK 1.3
million as compared to DKK 0 million as of December 31, 2002.

                                     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.

     On 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 our 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 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

     The Company will be required to establish  an audit  committee in 2005.  At
that time the Company will make the determination whether to include a financial
expert on that committee.

ITEM 16B.  CODE OF ETHICS

     The Company is considering  adoption of a code of ethics. Under the current
rules of the NASDAQ National  Market,  if not exempt from the  requirement,  the
Company will adopt a code of ethics by 2005.

ITEM 16C.  PRINCIPAL ACCOUNTING FEES AND SERVICES

     Deloitte Statsautoriseret Revisionsaktieselskab, Copenhagen, Denmark is the
independent  accounting firm that audits the financial statements of the Company
and its  subsidiaries  and is the  principal  accountant  for the  audit  of the
Company.

     The aggregate fee for audit and audit services  provided by Deloitte to the
Company in 2003 and 2002 were:

(in DKK million)                            2003             2002

Audit Fees                                   1.3              1.3
Audit-Related Fees                           3.3              4.5
Tax Fees                                     0.4              0.3
All Other Fees                               0.0              0.0
Total                                        5.0              6.1

     The Danish  Annual  Report is audited by  Deloitte  and Ernst & Young.  The
aggregate  fee for  audit and audit  services  provided  by Ernst & Young to the
Company in 2003 is disclosed in note 4 to the consolidated financial statements.

     Audit  Fees  consist  of fees for the  audit of our  financial  statements,
consents,  and review of documents in  connection  with filings with the SEC and
other statutory or regulatory filings. Audit-Related Fees consist of fees, other
than Audit Fees, for assurances and related services that are reasonably related
to the performance of the audit and review of our financial statements. Tax Fees
consist of fees for  services  rendered for tax  compliance,  tax advice and tax
planning.  All Other Fees consist of all other fees for audit and audit  related
services.

     Our Board of Directors pre-approves all audit,  audit-related and non-audit
services not prohibited by law to be performed by our  independent  auditors and
associated fees prior to the engagement of the independent  auditor with respect
to such services.

ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES

     Not  Applicable.  Applies to fiscal  years ended on or after  December  15,
2004.

                                    Part III

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-47.

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, 2001, 2002 and 2003                                F-3
Consolidated Balance Sheets as of December 31, 2002 and 2003         F-4
Consolidated Statements of Total Gains and Losses for the
     years ended December 31, 2001, 2002 and 2003                    F-6
Consolidated Statements of Cash Flow for the years ended
     December 31, 2001 2002 and 2003                                 F-8
Notes to Consolidated Financial Statements                           F-9


<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, 2003
and 2002, 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,  2003.  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 the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion,  such consolidated  financial statements present fairly, in
all   material    respects,    the   financial    position   of   Aktieselskabet
Dampskibsselskabet  TORM and  subsidiaries  as of December 31, 2003 and 2002 and
the results of their operations and their cash flows for each of the three years
in the  period  ended  December  31,  2003 in  conformity  with  the  accounting
provisions  of Danish  legislation  applied on a  consistent  basis after giving
retroactive effect to the change in measurement currency 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,
2003 and the  determination  of  shareholders'  equity at December  31, 2003 and
2002,  to  the  extent  summarized  in  Note  18 to the  consolidated  financial
statements.


Deloitte Statsautoriseret Revisionsaktieselskab
Copenhagen, Denmark


May 19, 2004


<PAGE>
<TABLE>


                                                       TORM AND SUBSIDIARIES
                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                       FOR THE YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003
                                                  (EXPRESSED IN THOUSANDS OF DKK)
<CAPTION>

                                                         Note     2001            2002           2003
                                                               (restated)       (restated) (restated)
<S>                                                      <C>     <C>             <C>            <C>
Net revenue                                                      2,000,713       1,538,618      1,927,996
Port expenses and bunkers                                         (415,710)       (555,700)      (621,087)
                                                                ------------   ------------    ------------
                                                                 1,585,003         982,918      1,306,909

Charter hire                                                      (637,985)       (463,510)      (404,960)
Technical running costs                                           (193,550)       (217,402)      (254,780)
                                                                ------------   ------------    ------------
Gross   profit   (Net  earnings
from  shipping activities)                               2,3       753,468         302,006        647,169

Profit on sale of vessels and interests                             91,790          16,965           (464)
Administrative expenses                                  3,4      (113,404)       (101,342)      (126,119)
Other operating income                                              58,689          55,227         51,368
                                                                ------------   ------------    ------------
Profit before depreciation                                         790,543         272,856        571,954

Depreciation                                             6        (177,993)       (158,400)      (176,872)
                                                                ------------   ------------    ------------
Profit before financial items                                      612,550         114,456        395,082
Financial items                                          7         (96,518)          5,988        656,637
                                                                ------------   ------------    ------------
Profit before tax                                                  516,032         120,444      1,051,719

Tax on profit on ordinary activities                     8        (166,018)        360,190           (692)
                                                                ------------   ------------    ------------
Profit from continuing operations                                  350,014         480,634      1,051,027
                                                                ------------   ------------    ------------
Profit before tax from discontinued operations           9          17,417          69,818              0
Tax on discontinued operations                           9               0               0              0
                                                                ------------   ------------    ------------
Net profit for the year                                            367,431         550,452      1,051,027
                                                                ------------   ------------    ------------
Allocation of profit
The Board of Directors recommends that the year's result of DKK 1,051 million be
allocated as follows:

Proposed  dividend  DKK  12  per  share  of  DKK 10
(2002: DKK 2)                                                                                     218,400
Retained profit                                                                                   832,637
                                                                                               -------------
                                                                                                1,051,027
                                                                                               ------------

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

<TABLE>

                                                       TORM AND SUBSIDIARIES
                                                    CONSOLIDATED BALANCE SHEETS
                                                 AS OF DECEMBER 31, 2002 AND 2003
                                                  (EXPRESSED IN THOUSANDS OF DKK)
<CAPTION>
                                                         Note      2002         2003
                                                                 (restated)
<S>                                                      <C>      <C>            <C>
ASSETS
FIXED ASSETS
Tangible fixed assets
Leasehold improvements                                               4,982           2,233
Land and buildings                                                   2,487           2,420
Vessels and capitalized dry-docking                      14      2,543,418       2,944,164
Prepayment on vessels under construction                           330,229         229,303
Other plant and operating equipment                                 16,854          15,148
                                                                ------------   ------------
                                                         6       2,897,970       3,193,268
                                                                ------------   ------------
Financial fixed assets
Other investments                                        5         290,106         975,988
                                                                ------------   ------------
                                                                   290,106         975,988
                                                                ------------   ------------
Total fixed assets                                               3,188,076       4,169,256
                                                                ------------   ------------
CURRENT ASSETS
Inventories
Inventory of bunkers                                                33,228          26,075
                                                                ------------   ------------
Accounts receivable
Freight receivables, etc.                                          224,425         147,277
Other receivables                                                   24,176          50,295
Prepayments                                                         21,634          21,609
                                                                ------------   ------------
                                                                   270,235         219,181
                                                                ------------   ------------
Securities
Bonds                                                    14        353,767         315,934

Cash at bank and in hand                                 14        168,282         163,211
                                                                ------------   ------------
Total current assets                                               825,512         724,401
                                                                ------------   ------------
Total assets                                                     4,013,588       4,893,657


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


<TABLE>
                                        TORM AND SUBSIDIARIES
                               CONSOLIDATED BALANCE SHEETS (CONTINUED)
                                  AS OF DECEMBER 31, 2002 AND 2003
                                   (EXPRESSED IN THOUSANDS OF DKK)
<CAPTION>
                                                         Note        2002       2003
                                                                  (restated)
<S>                                                      <C>      <C>           <C>
LIABILITIES
SHAREHOLDERS' EQUITY
Common shares                                            10        182,000         182,000
Own shares                                               10        (51,962)        (51,962)
Retained Profit                                                  1,456,953       2,115,868
Proposed dividend                                                   36,400         218,400
                                                                ------------   ------------
Total shareholders' equity                                       1,623,391       2,464,306
                                                                ------------   ------------
LIABILITIES
Long-term liabilities
Mortgage debt and bank loans                             12,14   1,517,696       1,700,704
Capitalized lease obligations                               12     217,768               0
                                                                ------------   ------------
                                                                 1,735,464       1,700,704
                                                                ------------   ------------
Current liabilities
Next year's repayments on mortgage debt and bank loans   12,14     259,595         295,343
Capitalized lease obligations                            12         38,466         180,801
Trade accounts payable                                             164,397          96,094
Other liabilities                                        13        111,097         101,758
Accruals                                                 11         81,178          54,651
                                                                ------------   ------------
                                                                   654,733         728,647
                                                                ------------   ------------
Total liabilities                                                2,390,197       2,429,351
                                                                ------------   ------------
Total liabilities and shareholders' equity                       4,013,588       4,893,657

Collateral security                                      14
Guarantees, contingent and contractual  liabilities      15
Fair value of derivative financial instruments           16
Related party transactions                               17
Reconciliation to United States Generally Accepted
Accounting Principles (U.S. GAAP)                        18

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


                              TORM AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF TOTAL GAINS AND LOSSES
              FOR THE YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003
                         (EXPRESSED IN THOUSANDS OF DKK)

                                       2001            2002            2003
                                       ----            ----            ----
Net profit for the year                 367,431         550,452       1,051,027
Change in fair value of derivatives     (22,877)        (43,078)         14,876
Foreign currency translation             49,993         168,608         180,257

Total gains and losses                  392,547         338,766         885,646


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


<TABLE>
                                           STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                              AS OF DECEMBER 31, 2001, 2002 AND 2003
                                                  (EXPRESSED IN MILLIONS OF DKK)
<CAPTION>

                                              Common     Revaluation   Own       Retained   Proposed
                                              shares     reserves     shares     profit    dividend     Total
<S>                                           <C>        <C>          <C>        <C>       <C>         <C>
SHAREHOLDERS' EQUITY
Balance at 1 January 2001                      182.0      27.7         0.0       355.6       36.4       601.7
Change in accounting policies                                                    449.4                  449.4
                                               --------------------------------------------------------------
Balance at 1 January 2001 as restated          182.0      27.7         0.0       805.0       36.4     1,051.1

Exchange rate adjustment arisen upon
translation from  measurement currency to
presentation currency                                                             48.1                   48.1
Fair  value adjustment of derivative
financial instruments                                                            (22.9)                 (22.9)
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                                                              367.4                  367.4
Dividend for the financial year                                                  (72.8)      72.8         0.0
                                               --------------------------------------------------------------
Balance as of 31  December  2001
(as restated)                                  182.0      22.1       (51.5)    1,129.3       72.8     1,354.7

Exchange   rate   adjustment   arose  upon
translation from  measurement  currency to
presentation currency                                                           (168.6)                (168.6)
Fair  value adjustment of derivative
financial instruments                                                            (43.1)                 (43.1)
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                                                              550.5                  550.5
Dividend for the financial year                                                  (36.4)      36.4         0.0
                                               --------------------------------------------------------------
Balance as of 31 December  2002
(as restated)                                  182.0       0.0       (52.0)    1,457.0       36.4     1,623.4


Exchange   rate   adjustment   arose  upon
translation from  measurement  currency to
presentation currency                                                           (180.3)                (180.3)
Fair  value   adjustment   of   derivative
financial instruments                                                             14.9                   14.9
Exercised share options net settlement                                           (10.1)                 (10.1)
Dividends paid                                                                              (36.4)      (36.4)
Dividends paid on own shares                                                       1.8                    1.8
Profit for the year                                                            1,051.0                1,051.0
Dividend for the financial year                                                 (218.4)     218.4         0.0
                                               --------------------------------------------------------------
Balance as of  31 December 2003                182.0       0.0       (52.0)    2,115.9      218.4     2,464.3
                                              ================================================================

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

</TABLE>


<TABLE>
                                             TORM AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CASH FLOW
                             FOR THE YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003
                                        (EXPRESSED IN THOUSANDS OF DKK)
<CAPTION>
                                                              2001         2002       2003

CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                           <C>          <C>          <C>
Profit before financial items                                  612,550      114,456      395,082
Profit before financial items in discontinuing operations       19,421       61,408            0
Interest  income, exchange rate gains and dividends
received                                                        50,254       69,747       27,246
Interest expenses                                             (123,815)     (76,540)     (73,692)
                                                            -----------  -----------  -----------
                                                               558,410      169,071      348,636
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and impairment losses                             177,993      158,400      176,872
Depreciation in discontinuing operations                        14,474        5,172            0
Gain from sale of discontinuing operations                           0      (63,007)           0
Other non-cash movements                                       (37,110)     (47,750)       6,096
Taxes paid                                                           0          (29)           0
Change in inventories, accounts receivables and payables       (31,540)      39,430      (37,844)
                                                            -----------  -----------  -----------

Net cash inflow from operating activities                      682,227      261,287      493,760
                                                            -----------  -----------  -----------
CASH FLOW FROM INVESTING ACTIVITIES
Investment in tangible fixed assets                           (553,723)    (954,262)  (1,121,612)
Investment in equity interests and securities                  (15,144)    (247,983)        (228)
Sale of fixed assets                                           607,635       20,549      113,928
     including profit on sale of vessels                       (92,960)           0          478
     (included in operating activities)

Sale of discontinuing operations                                     0       63,007            0
                                                            -----------  -----------  -----------
Net cash inflow/(outflow) from investing activities            (54,192)  (1,118,689)  (1,007,434)
                                                            -----------  -----------  -----------
CASH FLOW FROM FINANCING ACTIVITIES
Borrowing, mortgage debt                                       164,825       842,472     777,922
Repayment/redemption, mortgage debt                           (552,201)    (156,709)    (224,005)
Repayment/redemption, lease liabilities                        (43,688)     (63,449)     (38,416)
Increase/(decrease) in bank debt                                  (340)            0           0
Dividends paid                                                 (36,400)     (69,309)     (34,637)
Purchase/disposal of own shares                                (51,482)        (807)          (0)
Net settlement share options                                         0            0      (10,094)
                                                            -----------  -----------  -----------
Cash inflow/(outflow) from financing activities               (519,286)     552,198      470,770
                                                            -----------  -----------  -----------
Net cash inflow/(outflow) from operating,
investing and financing activities                             108,749     (305,204)     (42,904)
Cash and cash equivalents including bonds,
   in companies acquired/divested                               (7,917)           0            0
                                                            -----------  -----------  -----------

Increase/(decrease) in cash and cash equivalents               100,832     (305,204)     (42,904)
                                                            -----------  -----------  -----------
Cash and cash equivalents,
   including bonds, at 1 January                               726,421      827,253      522,049
                                                            -----------  -----------  -----------
Cash and cash equivalents,
   including bonds, at 31 December                             827,253      522,049      479,145
Of which used as collateral                                   (183,466)    (186,056)     (51,647)
                                                            -----------  -----------  -----------
                                                               643,787      335,993      427,498
                                                            -----------  -----------  -----------

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


                              TORM AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003

NOTE 1 - ACCOUNTING POLICIES

Accounting Policies

     The  Annual  Report of A/S  Dampskibsselskabet  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 except that as of
January  1, 2003 the  Company  applies  USD rather  than DKK as the  measurement
currency of the Company's operating entities,  while DKK remains the measurement
currency in the Company's administrative entity.

     Almost all the Company's  transactions are in USD as revenues from shipping
activities as well as shipping  related costs,  such as port expenses,  bunkers,
charter  hire,  etc. are almost  exclusively  settled in USD.  Furthermore,  the
Company's  material  investments  in tangible  fixed assets,  the vessels,  have
almost  exclusively  been purchased in USD, and the market values of the vessels
depend on the USD exchange rate.  Mortgage debts related to the vessels are also
entered in USD.

     The shipping  industry and the Company's  activities are thus USD-based and
the Company  believes that the  application of USD as measurement  currency to a
greater extent reflects the economic  realities behind the events and conditions
relevant to the Company.  Thus, the Company believes that the application of USD
as  measurement  currency  will provide a more  accurate  view of the  Company's
activities and financial position.

     Translation  from  USD to DKK in the  operating  entities  is  based on the
principles in IAS interpretation SIC 30 ("Reporting  Currency - Translation from
Measurement Currency to Presentation Currency"), which provides that:

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

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

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

     Previously,  currency translation  regarding the Parent Company,  including
integrated  entities,  was made in accordance with the principles for integrated
entities  as  prescribed  in  the  Danish  Accounting   Standard  no.  9,  which
essentially provided that:

     o    depreciation regarding vessels and capitalized  dry-docking recognized
          in the income  statement were primarily  translated  into DKK based on
          historical USD exchange rates,

     o    non-monetary   items  in  the  balance  sheet,  such  as  vessels  and
          capitalized  dry-docking,  were primarily translated into DKK based on
          historical USD exchange rates,

     o    mortgage debts relating to vessels were  translated  into DKK based on
          the USD  exchange  rate as at the  balance  sheet  date,  and  foreign
          exchange  rate  gains  and  losses  arising  upon  translation  of the
          mortgage debts at the balance sheet date were  recognized  directly in
          shareholders'  equity, as they were regarded as hedges of the currency
          risk relating to the vessels, and

     o    monetary items in the balance sheet were  translated into DKK based on
          the USD  exchange  rate as at the  balance  sheet  date,  and  foreign
          exchange  rate  gains  and  losses  were   recognized  in  the  income
          statement.

     The application of USD as measurement  currency and the described method of
translation  from measurement  currency to presentation  currency are deviations
from the Danish  Financial  Statements  Act section 39, no. 1. which  prescribes
that  non-monetary  items must be translated into DKK based on the exchange rate
as at the  transaction  date.  The  deviations are adopted with reference to the
Danish  Financial  Statements Act section 11, no. 3 to give a more accurate view
of the Company's activities.

     The change in  accounting  policies  has resulted in an increase in the net
profit for 2003 of DKK 55.4  million as compared to DKK 75.1 million in 2002 and
a decrease in shareholders'  equity as of December 31, 2003 of DKK 618.8 million
as compared to a decrease of DKK 95.7 million in 2002.

     The  Company  has  entered  into  foreign  currency  derivative   financial
instruments,  which were applied to manage its reporting  risk  associated  with
transactions denominated in USD before applying USD as the measurement currency.
These  derivative  financial  instruments no longer qualify for hedge accounting
and accordingly changes in fair value are now recognized in the income statement
which were previously  recognized directly in shareholders'  equity.  Therefore,
the incremental effect of the change in accounting  policies can be divided into
the effect of the change in  recognition  of derivative  financial  instruments,
which was DKK -16.1  million as  compared to DKK 39.8  million in 2002,  and the
effect of the change in the policy for  translating  USD to DKK in the operating
entities, which was DKK 71.5 million as compared to DKK 35.3 million in 2002.

     The comparative figures have been restated.

     The  incremental  effect of the  restatement  in respect  of  shareholders'
equity and line items in the income statement are summarized below (expressed in
DKK million):

                                         Change of measurement currency to USD
                                               in the operating entities

                                          2001              2002         2003
                                          ----              ----         ----
Profit before financial items           (24.9)             (26.1)        12.2
Profit before tax                       (29.1)              99.0         55.4
Tax on profit                               0                  0            0
Profit from continuing operations       (29.1)              99.0         55.4
Profit before tax from discontinuing
operations                                8.9              (23.9)           0
Tax on profit from discontinuing
operations                                  0                  0            0
Net profit for the year                 (20.2)              75.1         55.4
Total assets                            430.1              (95.7)      (618.8)
Deferred taxes                              0                  0            0
Shareholders' equity                    434.4              (95.7)      (618.8)


KEY ACCOUNTING POLICIES

     Key accounting  policies are those policies that require the application of
management's  subjective accounting 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.  Key accounting  policies  involve  judgments and
uncertainties that are sufficiently  sensitive to result in materially different
results under different assumptions and conditions.

Net revenue from pools

     The Company  generates  its revenue from  shipping  activities,  which to a
large  extent are  conducted  through  pools.  Net  revenue is  recognized  upon
delivery of service in accordance  with the terms and  conditions of the charter
parties.

     Total pool revenue is generated from each vessel participating in the pools
in which the Company  participates and is based on either voyage or time charter
parties.  The pool measures net revenues based on the contractual  rates and the
duration of each voyage.  The Company's net revenue from pools is comprised of a
share of the total net revenue in each pool.  The  calculation  of this share is
primarily based on available earning days from the Company's vessels in relation
to total available pool earning days.

     If the scale  applied in the  allocation  of the total pool  revenue to the
participating  pool  partners is changed,  the  Company's net revenue from pools
will  be  affected.  Historically,  the  Company  has not  experienced  material
adjustments to the allocation of revenue.

Demurrage revenues

     Freight contracts contain conditions regarding the amount of time available
for loading and discharging of the vessel. If these conditions are breached, the
Company  is  compensated  for the  additional  time  incurred  in the  form of a
demurrage revenue. Demurrage revenues are recognized upon delivery of service in
accordance with the terms and conditions of the charter parties.

     Upon completion of the voyage,  the Company assesses the time spent in port
and a demurrage claim based on the relevant contractual  conditions is submitted
to the  charterers.  The  claim  will  often  be met by  counter  claims  due to
differences  in the  interpretation  of the  agreement  compared  to the  actual
circumstances of the additional time used. Based on previous experience,  95% of
the demurrage  claim submitted is recognized as demurrage  revenue.  The Company
receives the  demurrage  payment upon  reaching  final  agreement of the amount,
which on average is  approximately  100 days after the original  demurrage claim
was submitted.

     If the Company accepts a reduction of more than 5% of the original claim or
if the charterer is not able to pay, demurrage revenue in future periods will be
affected.  Historically, the Company has not experienced material adjustments to
previously recognized demurrage revenue.

Port and bunker expenses

     Voyage expenses, which comprise port expenses,  commissions and bunker fuel
consumption,  are  recognized  upon delivery of service in  accordance  with the
terms and  conditions  of the  charter  parties.  Invoices  in  relation to port
expenses are received up to 18 months  after the  expenses  have been  incurred.
Recognition  of port expenses is based on port  statistics and reports on actual
expenses  incurred,  which are  received  on a regular  basis  from  agents  and
captains.

     The  Company's  voyage  expenses  from  pools are made up by a share of the
total voyage  expenses in each pool. The  calculation of this share is primarily
based on available earning days from the Company's vessels  participating in the
pool in relation to total available pool earning days for all pool participants.

     If the actual expenses of a voyage differ from the estimated  expenses,  it
will have an impact on voyage  expenses  in future  periods.  Historically,  the
Company has not experienced material changes to the estimated expenses.

Revenues and expenses related to cross over voyages

     For cross over  voyages  (voyages  in  progress  at the end of a  reporting
period) the  uncertainty  and the  dependence  on estimates are greater than for
concluded voyages.

     When  recognizing  net revenue,  there is a risk that the actual  number of
days it takes to complete the voyage will differ from the estimate, and for time
charter parties, a lower day rate may have to be agreed for additional days. The
contract for a single voyage may state several  alternative  destination  ports.
The  destination  port  may  change  during  the  voyage  and the  rate may vary
depending on the destination port.

     Recognition  of  voyage  expenses  is based on the  expected  duration  and
destination  of the voyage,  vessel  statistics  regarding  bunker  consumption,
estimates of port  expenses and previous  experience.  Changes to the  scheduled
voyage will affect the voyage expenses.

     Changing  the basis for  estimates  in relation  to cross over  voyages may
affect the net  earnings in future  periods.  The  calculations  applied for the
estimated duration of the voyage, as well as the effect of changing destinations
and  weather  conditions,   are  constantly  updated  and,   historically,   the
application  of estimates  in relation to cross over voyages has not  materially
affected the Company's net revenues and port and bunker expenses.

Dry-docking costs

     The  Company's  vessels are required to undergo  planned  dry-dockings  for
major repairs and maintenance, which cannot be carried out while the vessels are
operating,  approximately every 30 and 60 months depending on the nature of work
and external requirements.

     In connection  with the  acquisition of a vessel,  the cost is divided into
dry-docking  costs and the cost of the vessel.  The two elements are  recognized
and depreciated separately. The measurement of the dry-docking costs is based on
an assessment of the specific  assets as well as on previous  experience.  Costs
capitalized  as part of the  dry-docking  include  actual costs  incurred at the
dry-docking yard, including marine paint, cost of hiring crews to effect repairs
and the cost of parts used in making such repairs,  cost of travel,  lodging and
supervision of Company  personnel,  and the cost of hiring third party personnel
to oversee a dry-docking.

     The  costs   associated   with  the   dry-docking   are  depreciated  on  a
straight-line  basis  over  the  estimated  period  between   dry-dockings.   As
depreciation  is commenced at the completion of the  dry-docking and invoices to
some extent are received  subsequently,  the total  dry-docking cost is based on
estimates.

     If the actual  expenses of a  dry-docking  differ from the  estimates,  the
depreciation expense recorded in the following period will change. Historically,
the Company has not experienced  material  changes to the dry-docking  estimated
expenses.

Useful life of vessels

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

     The  Company's  vessels are  depreciated  on a  straight-line  basis to the
estimated  salvage value over their  estimated  useful lives,  which the Company
estimates to be 25 years. The Company considers that a 25-year  depreciable life
is consistent  with that used by other ship owners with comparable  tonnage.  In
light of  recent  initiatives  taken by the EU and the IMO  limiting  the use of
tankers older than 23 years,  the Company is considering  whether to shorten the
useful lives of the vessels.

     Depreciation  is based on cost less the estimated  salvage  value.  Salvage
value is estimated as the lightweight tonnage of each vessel multiplied by scrap
value per ton. If the estimate of useful life for vessels is revised or there is
a change in the estimated  salvage value,  the amount of  depreciation  expenses
recorded  in  future  periods  will  change.  If the  useful  lives  for all the
Company's vessels as of December 31, 2003 are reduced from 25 years to 23 years,
the yearly depreciation expenses would increase by an estimated USD 2 million.

Carrying amount of vessels

     The  Company  evaluates  the  carrying  amounts  and period  over which the
vessels are  depreciated to determine if events have occurred that would require
a  modification  of their  carrying  amounts or useful  lives.  The valuation of
vessels is  reviewed  based on events and  changes in  circumstances  that would
indicate  that the  carrying  amount of the assets  might not be  recovered.  In
assessing  the  recoverability  of the  vessels,  the  Company  reviews  certain
indicators of potential  impairment,  such as reported sale and purchase  prices
and general market conditions. In addition,  markets valuations from independent
ship broking  companies are obtained to support the recoverable  amounts for the
vessels on a semi-annual basis.

     The carrying  cost of the Company's  vessels may not  represent  their fair
market value at any point in time since market prices of secondhand vessels to a
degree  tend to  fluctuate  with  changes  in  charter  rates  and  the  cost of
newbuildings.

     If the  estimated  future  cash flow or related  assumptions  in the future
experience  lasting changes,  an impairment of vessels currently recorded may be
required.

Tax

     The Company  entered the Danish  tonnage  taxation  scheme with effect from
January 1, 2001 and has filed tax returns for 2001 and 2002.  The  assessment of
the tax returns by the tax  authorities  has not yet been  completed.  It is the
Company's  assessment  that there is material  uncertainty as to our estimate of
taxes  payable as of December 31, 2003 due to lack of  precedents  that exist in
relation to tonnage tax regulation.

     The Company  estimates that the tax returns filed for 2001 and 2002 and the
Company's  activities  in 2003 will not trigger taxes payable as at December 31,
2003, because estimated taxable income is offset by deductible losses from prior
periods.

     Subsequent to entering the tonnage tax scheme, tax liabilities  relating to
the vessels are  considered  as contingent  liabilities,  which are disclosed in
these Notes.

     The Company's  investment in NORDEN is regarded as a strategic  investment.
At a sale of this investment after three years of ownership, no tax liability is
connected  to the gain on this  asset  as the  enacted  tax rate is 0%.  If this
shareholding  is sold  entirely or in part  before  July 2005,  any gain will be
taxed at 30%.

     There are no  deferred  tax assets or tax  liabilities  connected  with any
other assets or liabilities.

DESCRIPTION OF ACCOUNTING POLICIES

General recognition and measurement criteria

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

     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.

     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.

     Entities  in which the  Group  holds  between  20% and 50% of the votes and
exercises  significant but not controlling  influence are regarded as associated
companies.

     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,  whereby the individual items are included
in proportion to the ownership share.

     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
inter-company  transactions,  balances and shareholdings as well as realized and
unrealized gains and losses on transaction between the consolidated companies.

Foreign currencies

     The measurement  currency of the operating entities including  subsidiaries
and  associated  companies  is USD,  because  the  Group's  vessels  operate  in
international  shipping  markets,  in which revenues and expenses are settled in
USD and the Company's  most  significant  assets and  liabilities in the form of
vessels  an  related  mortgage  debt are in USD.  The books for these  operating
entities are maintained in USD. The measurement  currency of the  administrative
entity is DKK.

     Transactions  in  currencies  other  than  the  measurement   currency  are
translated into the measurement currency 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 monetary items denominated
in  currencies  other than the  measurement  currency  are  translated  into the
measurement  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  under
financial items.

     The  reporting  currency of the  Company is DKK.  Upon  recognition  of the
operating entities the financial statements are translated from USD into DKK.

     Items in the  income  statement  are  translated  into  DKK at the  average
exchange rates for the period, whereas balance sheet items are translated at the
exchange  rates as at the balance sheet date.  Exchange gains and losses arising
upon the  translation  of the income  statements and balance sheets of operating
entities are recognized  directly in  shareholders'  equity.  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.

     Foreign  exchange  rate  gains or  losses  of  intercompany  balances  with
subsidiaries,  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.

     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 that 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  subsidiaries.  Currency  translation  gains or losses related to
such exposure are recognized directly in shareholders' equity.

     Changes in fair value of derivative financial instruments, that are used to
hedge the expected future  transactions are recognized directly in shareholders'
equity under retained  profit.  Upon  realization of the  transactions,  amounts
deferred  under  retained  profit are  transferred  to the income  statement and
included in the same line as the hedged item.

     Changes  in fair  value of  derivative  financial  instruments  that do not
qualify for hedge  accounting are recognized in the income  statement at the end
of each period.

Segment information

     The  Group  consists  of two  business  segments;  Tanker  and  Bulk.  This
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.

     The Group only has one  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.

     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
mortgage debt, trade payables and other liabilities.

     Not allocated  items  primarily  comprise assets and liabilities as well as
revenues and expenses relating to the Group's administrative functions, offshore
activities, termination of Liner activity, investment activities, taxes, etc.

Discontinued operations

     The Group sold the Liner  activity in September  2002,  which was accounted
for as a separate segment. The comparative figures for the income statement have
been restated to include only the continuing operations, whereas the income from
the  discontinued  operation is presented in the two separate lines "Profit from
discontinued  operations" and "Tax on profit from  discontinued  operations".  A
breakdown  of the profit  from  discontinued  operations  on  individual  income
statement components is disclosed in note 9.

Participation in pools

     Torm  acts as pool  manager  for a  number  of  pools,  and  the  Group  is
participating  with a significant  number of vessels in these pools. 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. The Group's share of the revenues in
the pools is primarily  dependent on the number of days the Group's vessels have
been available for the pools during the period.

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. Option commitments under this program are
covered  through  holdings of own shares and are not  recognized  in the balance
sheet or the income statement.

     The  difference  between  the  exercise  price and the market  price of the
shares at the date the  options  are  granted is  recognized  as a  compensation
expense in administrative expenses in the income statement.

     At the time of exercise  the  payments  received for the sale of the issued
shares are recognized directly in shareholders' equity.

     If payment is made as net settlement,  the amount payable by the Company is
recognized  in  shareholders'  equity  under  retained  profit  at the  time  of
settlement.

Leases

     Agreements  to  charter  vessels  and to lease  other  property,  plant and
equipment  where TORM has  substantially  all the risks and rewards of ownership
are recognized in the balance sheet as finance leases. Lease assets are measured
at the lower of fair  value and 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 statement.

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 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.  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  recognized  upon delivery of service in  accordance  with the
charter parties concluded.

Technical running costs

     Technical  running  costs,   which  comprise  crew  expenses,   repair  and
maintenance expenses and tonnage duty, 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.

Profit from discontinued operations

     Profit from discontinued operations comprises the net profit from the Liner
activity.  The comparative  figures for 2002 for this item include the gain from
the sale of the Liner activity.

Equity income from investments in subsidiaries and associated companies

     Equity income from  investments in  subsidiaries  and associated  companies
includes  the  Parent  Company's  proportional  share of the net  income  of the
individual subsidiary.

Depreciation and impairment losses

     Depreciation  and impairment  losses comprise  depreciation of fixed assets
for the period as well as the deduction in the value of vessels 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 income and interest  expense,  financing
costs of finance leases,  realized and unrealized  exchange rate gains or losses
relating to  transactions  in currencies  other than the  measurement  currency,
realized and unrealized  gains or losses from other  investments and securities,
dividends  received on shares and other financial income and expenses  including
value  adjustments  of  financial  instruments  not  accounted  for  as  hedging
instruments.

Balance sheet

Tangible fixed assets

     Land is measured at cost.

     Buildings  are  measured  at  cost  less   accumulated   depreciation   and
accumulated  impairment  losses.  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  (dry-docking costs)
are  capitalized  and  depreciated on a  straight-line  basis over the estimated
period until the next dry-docking.

     Prepayment on vessels under construction is measured at cost incurred.

     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  on  a
straight-line  basis 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.  The cost of
vessels and vessels under  construction also includes interest expenses incurred
during the period of construction.

Financial fixed assets

     Investment in  subsidiaries  and  associated  entities are  recognized  and
measured  in the Annual  Report of the Parent  Company  according  to the equity
method,  which requires that a proportionate share of their annual net income or
loss is reflected  in the income  statement  of the Parent  Company.  Unrealized
intercompany  profits are eliminated when calculating the proportionate share of
income and equity.

     The share of the net income of the  subsidiaries  and associated  companies
that has not been distributed as dividends to the Parent Company is allocated to
a restricted reserve under Shareholders'  equity in the Parent Company's balance
sheet.

     Other  investments  and  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  is  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 and 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.

Prepayments

     Prepayments comprise expenses paid relating to subsequent periods.

Own shares

     Own  (treasury)  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.

Dividend

     Dividend is  recognized  as a liability at the time of  declaration  at the
Annual General  Meeting.  Dividend  proposed for the year is moved from retained
profit and presented as a separate item in shareholders' equity.

Financial liabilities

     Mortgage  debt and bank loans  relating  to the  financing  of vessels  are
initially  measured at nominal  amounts less premiums and costs  incurred in the
loan arrangement and subsequently at amortized cost with the difference  between
the loan proceeds and the nominal value being recognized in the income statement
over the term of the loan.

     Financial   liabilities  also  include  the  capitalized   remaining  lease
obligation on finance leases.

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

Accruals

     Accruals comprise receipts relating to revenue in subsequent periods.

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 period.

     Cash flow from operating activities is presented indirectly and is based on
profit  before  financial  items 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 dividend paid to shareholders.

     Cash and cash  equivalents  comprise  cash in hand and highly liquid bonds.
Shares are not included.

Earnings per share/diluted earnings per share

     Basic earnings per share (EPS) are computed by dividing consolidated profit
or loss  available  to common  shareholders  by the weighted  average  number of
common shares  outstanding during the period. Own shares are not included in the
calculation.  Purchases  and sales of own shares during the periods are weighted
based on the remaining period.

     Diluted EPS are computed by dividing  consolidated profit or loss available
to common  shareholders  by the sum of weighted  average number of common shares
outstanding and the weighted average number of all potentially  dilutive shares.
Such potentially dilutive common shares are excluded when the effect would be to
increase earnings per share or reduce a loss per share.

United States generally accepted accounting principles

     As a consequence of the registration of American  Depository Receipts (ADR)
with the United States Securities and Exchange Commission (SEC), 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  accounting
principles generally accepted in the United States (U.S. GAAP).

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

<TABLE>
<CAPTION>
                                                         For the year ended December 31, 2002
                                                                         Not
                                             Tank          Bulk          allocated     Total
                                            ----------------------------------------------------
<S>                                         <C>           <C>            <C>          <C>
SEGMENT INFORMATION
INCOME STATEMENTS
Net revenue                                      904.1        591.8          42.7       1,538.6
Port expenses and bunkers                       (228.9)      (322.3)         (4.5)       (555.7)
                                             ---------    ---------        ------     ---------
Time Charter Equivalent Earnings                 675.2        269.5          38.2         982.9

Charter hire                                    (200.4)      (242.4)        (20.7)       (463.5)
Technical running costs                         (159.4)       (44.1)        (13.9)       (217.4)
                                              ---------    ---------        ------     ---------
Gross profit (Net earnings from
shipping activities)                             315.4        (17.0)          3.6         302.0
Profit from sale of vessels and
interests                                         12.2          4.8           0.0          17.0
Administrative expenses                          (77.9)       (21.8)         (1.6)       (101.3)
Other operating income                            53.4          1.8           0.0          55.2
                                              ---------    ---------        ------     ---------
Profit before depreciation                       303.1        (32.2)          2.0         272.9
Depreciation                                    (136.0)       (22.2)         (0.2)       (158.4)
                                              ---------     ---------        ------     ---------
Profit before financial items                    167.1        (54.4)          1.8         114.5
Financial items                                  (9.5)         (0.6)         16.0           5.9
                                             ---------     ---------       ------     ---------
Profit/(loss) before tax                         157.6        (55.0)         17.8         120.4
Tax on profit on ordinary activities               0.0          0.0         360.2         360.2
                                             ---------     ---------        ------     ---------
Profit from continuing operations                157.6       (55.0)         378.0         480.6
Profit  before  tax  from   discontinued
operations                                         0.0          0.0          69.8          69.8
Tax on discontinued operations                     0.0          0.0           0.0           0.0
                                             ---------    ---------        ------     ---------
Net profit/(loss) for the year                   157.6        (55.0)        447.8         550.4

BALANCE                                                      As of December 31, 2002

Fixed assets                                   2,574.9        299.6         313.6       3,188.1
Total assets                                   2,741.8        434.5         837.3       4,013.6
Total liabilities                              1,866.6        353.9         169.7       2,390.4
</TABLE>

     With  reference  to the  Departmental  order on  exemption  from the Danish
Financial  Statements Act section 5, no. 4, item 1, no segment  information  for
the Parent Company is provided.

     The  unrealized  gain on the NORDEN  shares,  reversal of deferred tax, the
Company's  Offshore  activities  and the  termination  of the Liner activity are
included in "Not allocated".

<TABLE>
<CAPTION>
                                                    For the year ended December 31, 2003
                                                                         Not
                                            Tank          Bulk           allocated     Total
                                           ---------------------------------------------------
<S>                                        <C>           <C>             <C>           <C>
SEGMENT INFORMATION
INCOME STATEMENTS
Net revenue                                    1,115.1        793.3          19.6      1,928.0
Port expenses and bunkers                       (319.0)      (308.0)          5.9       (621.1)
                                              ---------    ---------       ------     ---------
Time Charter Equivalent Earnings                 796.1        485.3          25.5       1,306.9
Charter hire                                     (83.5)      (309.6)        (11.8)       (404.9)
Technical running costs                         (195.1)       (43.0)        (16.7)       (254.8)
                                              ---------     --------      --------     ---------
Gross Profit (Net earnings from
shipping activities)                             517.5        132.7         (3.0)         647.2
Profit from sale of vessels and interest          (0.)          0.0           0.0          (0.5)
Administrative expenses                          (88.8)       (30.1)         (7.2)       (126.1)
Other operating income                            50.9          0.4           0.1          51.4
                                              --------     --------      --------      --------
Profit before depreciation                       479.1        103.0         (10.1)        572.0
Depreciation                                    (154.6)       (21.7)         (0.6)       (176.9)
                                              --------     --------      --------      --------
Profit before financial items                    324.5         81.3         (10.7)        395.1
Financial items                                  (33.8)         4.5         685.9         656.6
                                              --------     --------      --------      --------
Profit/(loss) before tax                         290.7         85.8         675.2       1,051.7
Tax on profit on ordinary activities               0.0          0.0          (0.7)         (0.7)
                                             ---------    ---------        ------     ---------
Profit from continuing operations                290.7         85.8         674.5       1,051.0
Profit  before tax from discontinued
operations                                         0.0          0.0           0.0           0.0
Tax on discontinued operations                     0.0          0.0           0.0           0.0
                                              --------     --------      --------      --------
Net profit/(loss) for the year                   290.7         85.8         674.5       1,051.0

BALANCE                                                       As of December 31, 2003

Fixed assets                                   2,774.0        400.1         995.2       4,169.3
Total assets                                   3,338.2        542.5       1,013.0       4,893.7
Total liabilities                              1,982.6        382.6          64.1       2,429.3
</TABLE>

     With  reference  to the  Departmental  order about  exemption to the Danish
Financial  Statements Act section 5, no. 4, item 1, no segment  information  for
the Parent Company is provided.

     The unrealized gain on NORDEN shares, the Company's Offshore activities and
the termination of the Liner activity are included in "Not allocated".

NOTE 3  - STAFF COSTS (in DKK million)

                                               For the years ended December 31

                                                 2001         2002        2003
                                                 ----         ----        ----
Total staff costs
Staff costs  included in  technical              29.5         33.2        52.8
running costs
Staff     costs     included     in
administrative  expenses and profit
before   tax   from    discontinued
operations                                       81.3         67.4        71.6
                                             ---------    ---------   ---------
Total                                           110.8        100.6       124.4
                                            ---------    ---------    --------
Staff costs comprise the following
Wages and salaries                              101.1         90.5       112.4
Pension costs                                     8.5          9.7        11.2
Other social security costs                       1.2          0.4         0.8
                                            ---------    ---------   ---------
Total                                           110.8        100.6       124.4
                                            ---------    ---------    --------
Hereof  remuneration  to the  Board
of  Directors  and  salaries to the
Management
Board of Directors                                0.7          1.4         1.4
Management                                        7.6          5.2        10.8
                                            ---------    ---------   ---------
Total                                             8.3          6.6        12.2
                                            ---------    ---------   ---------

Number of employees

     The average number of staff in the Parent Company in the financial year was
277 (the Group 280). The equivalent figure for 2002 was 250 (the Group 251). The
majority of the staff on vessels owned by subsidiaries and associated  companies
are not employed by TORM.

<TABLE>
<CAPTION>
                                                        Total options            Option allocation per year
                                                          2003             2001           2002               2003
<S>                                                       <C>               <C>            <C>                <C>
Share option program - 2001 to 2003

Board of Directors
Allocated                                                52,910            12,210           20,350            20,350
Exercised in 2003                                        (8,140)           (4,070)          (4,070)                0
                                                   ------------      ------------     ------------      ------------
Not exercised at 31 December 2003                        44,770             8,140           16,280            20,350
                                                   ------------      ------------     ------------      ------------
Management
Allocated                                               231,710            53,470           89,120            89,120
Exercised in 2003                                      (142,590)          (53,470)         (89,120)                0
                                                   ------------      ------------     ------------      ------------
Not exercised at 31 December 2003                        89,120                 0                0            89,120
                                                   ------------      ------------     ------------      ------------
Key Employees
Allocated                                               317,320           103,060          107,130           107,130
Exercised in 2003                                      (210,190)         (103,060)        (107,130)                0
                                                   ------------      ------------     ------------      ------------
Not exercised at 31 December 2003                       107,130                 0                0           107,130
                                                   ------------      ------------     ------------      ------------
Resigned persons
Allocated                                               197,310            73,910           61,700            61,700
Exercised in 2003                                      (120,190)          (69,420)         (50,770)                0
                                                   ------------      ------------     ------------      ------------
Not exercised at 31 December 2003                        77,120             4,490           10,930            61,700
                                                   ------------      ------------     ------------      ------------
Total  number of not  exercised at 31 December
2003                                                    318,140            12,630           27,210           278,300
                                                     ----------      ------------     ------------      ------------

Not exercised in per cent of common shares                1.75%             0.07%            0.15%             1.53%

</TABLE>

     The classification has been adjusted to reflect the persons associated with
TORM as of December 31, 2003.

     In 2001,  a share  option  compensation  plan for 20 of our Board  members,
executives and key employees was introduced.  The plan grants 799,250 options to
employees,  which are priced at three different dates,  242,560 in 2001, 278,300
in 2002 and  278,300 in 2003.  Option  holders  may  exercise  their  options in
specified  periods and choose to  purchase  the  Company's  shares at the strike
price or receive a cash payment  equivalent to the difference between the strike
price and the share price.

     The  individual  must be employed at the grant date to receive  that year's
options.

     The share  options  for 2001 were priced on February  20,  2001,  the share
options for 2002 were  priced on March 20,  2002 and the share  options for 2003
were priced on February 27, 2003.  The 2001 share options are  exercisable  at a
price of DKK 54 per  share,  the 2002  share  options at a price of DKK 58.5 per
share and the 2003 share  options  at a price of DKK 62.6 per  share.  The share
options can be  exercised at the earliest in one year and at the latest in three
years  and four  weeks  after the  allocation,  observing  the rules  concerning
insider trading.

     In 2003,  481,110  options have been  exercised as compared to 0 options in
2002,  and the related  cost  amounting to DKK 10.1 million as compared to DKK 0
million in 2002 has been recognized in shareholders' equity. The total number of
options not exercised as of December 31, 2003 is 318,140, which equates 1.75% of
the common shares. The Company has acquired own shares to cover the share option
program.  The  cost of the  shares  has  been  recognized  directly  in (held in
treasury) shareholders' equity.

     According to the Black-Scholes  model, the theoretical  market value of the
unexercised part of the share option program is estimated at DKK 41.1 million as
compared to DKK 7.9 million in 2002 at the balance sheet date.

     The key assumptions of the Black-Scholes model are:

     o    The average dividend equals 3.75% (as compared to 3.48%in 2002) of the
          average share price for the period.

     o    The  volatility  is  estimated  at 112.89%  (as  compared to 33.21% in
          2002).

     o    The risk free interest  rate based upon expiry of the options  applies
          to between 2.24 % and 2.99% (as compared to 2.96% and 3.49% in 2002).

     o    The quoted share price as of December 31, 2003 is 180.49 DKK/share (as
          compared to 56.43 DKK/share in 2002).

NOTE 4 - ADMINISTRATIVE EXPENSES (in DKK million)

                                          For the year ended December 31
                                               2001     2002    2003
                                               ----     ----    ----
Parent company                                102.5     93.7   121.9
Subsidiaries and associated companies          10.9      7.6     4.2
                                            -------   ------   -----
                                              113.4    101.3   126.1
                                            -------   ------   -----

Remuneration  to  the  auditors  appointed
at the annual general meeting

                                               2001     2002    2003
                                               ----     ----    ----

Ernst & Young
Fee statutory audit                                              0.6
Audit-related fees                                               0.9
                                                               -----
Total audit and audit-related fees                               1.5
Tax fees                                                         0.1
All other fees                                                   0.0
                                            -------   ------   -----
Total fees, Ernst & Young                       3.6      3.4     1.6
                                            -------   ------   -----

Deloitte
Fee statutory audit                                              1.3
Audit-related fees                                               3.3
                                                               -----
Total audit and audit-related fees                               4.6
Tax fees                                                         0.4
All other fees                                                   0.0
                                            -------   ------   -----
Total fees, Deloitte                           10.2      6.1     5.0
                                            -------   ------   -----

NOTE 5 - FINANCIAL FIXED ASSETS (in DKK million)

                                                       2002    2003
                                                       ----    ----
Cost:
Balance as of  January 1                                23.3   271.3
Additions                                              248.0     0.2
Disposals                                                  -    (2.9)
                                                      ------   -----
Cost as of December 31                                 271.3   268.6
                                                      ------   -----
Value adjustment:
Balance as of January 1                                 17.1    19.8
Change in market value                                   2.7   688.1
                                                       -----   -----
Balance as of December 31                               19.8   707.9
                                                      ------   -----

Write downs:
Balance as of January 1                                 (2.7)   (1.0)
Write downs for the year                                 1.7     0.5
                                                      ------   -----
Write downs as of December 31                           (1.0)   (0.5)
                                                      ------   -----

Book value as of December 31                           290.1   976.0
                                                      ------   -----

NOTE 6 - TANGIBLE FIXED ASSETS (in DKK million)

<TABLE>
<CAPTION>
                                                                                  Prepayment     Other
                                                                    Vessels and   on vessels     plant and
                                     Leasehold         Land and     capitalized   under con-     operating
                                     improvements     buildings     dry-docking   struction      equipment    Total
                                     ---------------------------------------------------------------------------------
<S>                                  <C>               <C>          <C>           <C>             <C>         <C>
Cost:
Balance as of January 1, 2003                10.4           7.2       3,558.9        388.0          30.8       3,995.3
Change in accounting policies                 0.0           0.0          48.8        (57.7)          0.0          (8.9)
                                         --------      --------      --------     --------      --------      --------
Balance as of January  1, 2003 as
   restated                                  10.4           7.2       3,607.7        330.3          30.8       3,986.4
Exchange rate adjustment                     (0.5)          0.0        (572.8)       (52.5)          0.0       (625.8)
Additions                                     0.0           0.0       1,055.3        816.4          10.7       1,882.4
Disposals                                     0.0           0.0       (212.1)       (864.9)        (11.8)     (1,088.8)
                                         --------      --------      --------     --------      --------      --------
Cost as of December 31, 2003                  9.9           7.2       3,878.1        229.3          29.7       4,154.2
                                         --------      --------      --------     --------      --------      --------
Depreciation and impairment
losses:

Balance as of January 1, 2003                 5.4           4.7         977.5          0.0          14.0       1,001.6

Change in accounting policies                 0.0           0.0          86.7          0.0           0.0          86.7
                                         --------      --------      --------     --------      --------      --------
Balance as of January 1, 2003
   as restated                                5.4           4.7       1,064.2          0.0          14.0       1,088.3
Exchange rate adjustment                     (0.5)          0.0        (179.9)         0.0           0.0        (180.4)
Additions                                     0.0           0.0           0.0          0.0           0.0           0.0
Disposals                                     0.0           0.0        (116.2)         0.0          (7.7)       (123.9)
Depreciation for the year                     2.7           0.1         165.8          0.0           8.3         176.9
                                         --------      --------      --------     --------      --------      --------

Balance as of December 31, 2003               7.6           4.8         933.9          0.0          14.6         960.9
                                         --------      --------      --------     --------      --------      --------
Book value as of December 31, 2003            2.3           2.4       2,944.2        229.3          15.1       3,193.3
                                         --------      --------      --------     --------      --------      --------
Hereof finance leases                         0.0           0.0         189.8          0.0           0.0         189.8
                                         --------      --------      --------     --------      --------      --------
Hereof interest included in cost              0.0           0.0           8.5          0.0           0.0           8.5
                                         --------      --------      --------     --------      --------      --------
Book value as of December 31, 2002            5.0           2.5       2,543.4        330.3          16.8       2,898.0
                                         --------      --------      --------     --------      --------      --------
</TABLE>

     As of January 1, 2003 the value of land and  buildings  assessed for Danish
tax  purposes  amounted  to DKK 2.9  million  (book  value DKK 2.4  million)  as
compared to DKK 2.9 million as of January 1, 2002.

     Included in the book value for vessels are capitalized dry-docking costs in
the amount of DKK 42.6  million as compared  to DKK 44.0  million in 2002 in the
Group.

NOTE 7 - FINANCIAL ITEMS (in DKK million)

                                               For the years ended December 31
                                                    2001        2002       2003
                                                    ----        ----       ----
Financial income
Interest income                                     43.2        30.2       19.2
Gain on other investments and securities*            2.7        14.5      685.7
Dividends                                            2.6         1.3        8.0
Fair value adjustment of
derivative financial instruments                     0.0        42.9       23.3
                                                --------    --------   --------
                                                    48.5        88.9      736.2
                                                --------    --------   --------
Financial expenses
Interest expense on mortgage and bank debt         119.1        75.7       73.7
Loss on other investments and securities             5.7         0.0        4.0
Exchange rate adjustments                            2.6         6.9        1.3
Fair value adjustment of
derivative financial instruments                    17.0         0.0        0.0
Other interest expenses                              0.6         0.3        0.6

                                                --------    --------   --------
                                                   145.0        82.9       79.6
                                                --------    --------   --------
Total financial items                             (96.5)         6.0      656.6
                                                --------    --------   --------


*Includes unrealized gain on the NORDEN shares of DKK 681 million in 2003 as
compared to DKK 8 million in 2002.

NOTE 8 - TAXES (in DKK million)

                                                For the years ended December 31
                                                    2001        2002       2003
                                                    ----        ----       ----
  TAX ON PROFIT FOR THE YEAR AND DEFERRED TAX

  Tax on profit for the year                      (166.0)        0.0       (0.7)
  Adjustment of deferred tax                          0.0      360.1        0.0
                                                --------    --------   --------
  Tax on profit for the year                      (166.0)      360.1       (0.7)
                                                --------    --------   --------

  Changes in deferred tax
  Balance as of 1 January 2003                     194.1       360.1        0.0
                                                --------    --------   --------

  Tax on:
  Profit for the year                              166.0         0.0        0.0
  Adjustment deferred tax due to tonnage tax         0.0      (360.1)       0.0
                                                --------    --------   --------
  Provision for the year                           166.0      (360.1)       0.0
                                                --------    --------   --------
  Balance as of December 31, 2003                  360.1         0.0        0.0
                                                --------    --------   --------
  Effective corporate tax rate
  Group                                             30.0%        0.0%       0.0%

     The Parent Company paid no tax in 2002 and 2003.

     The   Company   participates   in  the   tonnage  tax  scheme  in  Denmark.
Participation in the tonnage tax scheme is binding until December 31, 2010.

     The  deferred  tax  status  December  31,  2003  related  to the assets and
liabilities as of the date for entering the tonnage  taxation  scheme equals DKK
355 million as compared to DKK 367 million in 2002.  The Company has not accrued
for the deferred tax status as of December 31, 2003,  as the deferred tax status
will only  become  payable if the  Company's  participation  in the  tonnage tax
scheme is  abandoned or if the  Company's  level of  investment  and activity is
significantly reduced.

     The Company  expects to  participate  in the  tonnage tax scheme  after the
expiration  of the  binding  period and at a minimum  to  maintain  its  current
investing and activity level.

NOTE 9 - (in DKK million)

                                             For the years ended December 31
                                             2001        2002        2003
                                             ----        ----        ----

DISCONTINUED OPERATIONS

INCOME STATEMENTS
Net revenue                                     580.7       401.0         0.0
Port  expenses,   Bunkers,  Charter
hire  and  Technical running costs             (535.4)     (379.8)        0.0
                                            ---------   ---------   ---------
Gross profit (Net earnings
from shipping activities)                        45.3        21.2         0.0

Profit from sale of vessels and interests         3.2        59.9         0.0
Administrative expenses                        (16.1)      (14.5)         0.0
Other operating income                            1.5         0.0         0.0
                                            ---------   ---------   ---------
Profit before depreciation                       33.9        66.6         0.0
Depreciation                                   (14.5)       (5.2)         0.0
                                            ---------   ---------   ---------
Profit before financial items                    19.4        61.4         0.0
Financial items                                 (2.0)         8.4         0.0
                                            ---------   ---------   ---------
Profit before tax                                17.4        69.8         0.0
Tax on profit on ordinary activities              0.0         0.0         0.0
                                            ---------   ---------   ---------
Net profit for the year                          17.4        69.8         0.0
                                            ---------   ---------   ---------

     The Company sold the Liner  activity in  September  2002.  The  comparative
figures in the Annual Report have been  restated only to reflect the  continuing
operations.  The result in the Liner activity is presented in two separate items
in the income statements.

     The two items are named 'Profit  before tax from  discontinued  operations'
and 'Tax on discontinued operations'.

     The note above specifies the profit on discontinued operations.

NOTE 10 - COMMON SHARES (in DKK million)

                                                          As of December 31
                                                      2002             2003
                                                      ----             ----

The Company's  share  capital,  totaling DKK
182 million,  consists of common
shares in the denomination of DKK 10 per share.      182.0            182.0


         There has been no changes to the Company's share capital in the past
four years.

OWN SHARES

<TABLE>
<CAPTION>
                                  2002          2003          2002          2003             2002          2003
                                 Thousands     Thousands    Nominal value   Nominal value    % of share    % of share
                                 of shares     of shares    DKK million     DKK million      capital       capital
                                 ---------     ---------    -----------     -----------      -------       -------
<S>                              <C>            <C>         <C>             <C>              <C>           <C>
OWN SHARES
Balance as of 1 January            871.5       881.4         8.7            8.8              4.7           4.8
Purchase                           144.1         0.0         1.4            0.0              0.8           0.0
Sale                              (134.2)        0.0        (1.3)           0.0             (0.7)          0.0
                                  ------       -----        ------          -----           -----          -----
Balance as of December 31          881.4       881.4         8.8            8.8              4.8           4.8
</TABLE>

     As of December  31, 2003 the  Company's  holding of own  (treasury)  shares
represented 881,368 shares as compared to 881,368 shares in 2002 at denomination
DKK 10 per share,  with a total  nominal value of DKK 8.8 million as compared to
DKK 8.8  million  in 2002 and a total  market  value  of DKK  159.1  million  as
compared to DKK 49.7  million in 2002.  The  retained  shares  equate to 4.8% as
compared to 4.8% in 2002 of the Company's common shares.

     Total  consideration  in respect of the  purchase of own share was DKK 0 as
compared to DKK 7.5 million in 2002 whereas total  consideration for the sale of
shares was DKK 0 as compared to DKK 6.7 million in 2002. Of this holding 318,140
own  shares  are held as a hedge of the  Company's  share  option  program.  The
remaining shares will be used for further  development of the capital structure,
for  financing  or  execution  of  acquisitions,  for sale or for other types of
transfers.

NOTE 11 -  (in DKK million)

                                                     As of December 31
ACCRUALS                                           2002           2003
                                                   ----           ----

Deferred gain related to sale and
lease back transactions                            73.5          52.9
Other                                               7.7           1.8
                                              ---------      --------
                                                   81.2          54.7
                                              ---------      --------


NOTE 12 - MORTGAGE DEBT,  BANK LOANS AND CAPITALIZED  LEASE  OBLIGATIONS
(in DKK million)

                                                     As of December 31
To be repaid as follows:                           2002           2003
                                                   ----           ----

Next year's repayments                            298.1         476.1
Falling due within 5 years                      1,075.9         846.9
Falling due after 5 years                         659.5         853.8
                                               --------      --------
                                                2,033.5       2,176.8
                                              ---------      --------

                                 Effective       Effective   Book       Book
                        Fixed/   interest        interest     value     value
          Maturity    floating   2002            2003         2002      2003
          --------    --------   ----            ----         ----        ----

LOAN
USD           2003    Floating        3.5%           -         63.7         0.0
USD           2004    Floating        3.4%        3.1%        345.7       299.9
USD           2005    Floating        4.0%        2.2%        187.9       132.2
USD           2006    Floating        3.4%        2.0%         63.7        77.4
USD           2007    Floating        4.1%        4.3%        333.1       252.2
USD           2008    Floating        3.8%        2.7%         76.4        52.5
USD           2009    Floating        5.3%        2.9%        260.8       200.4
USD           2012    Floating        4.0%        4.1%        702.2       742.8
USD           2013    Floating           -        2.4%          0.0       419.4

Weighted average effective
interest rate                         4.0%        3.3%
Book value                                                  2,033.5     2,176.8
                                                          ---------   ---------

NOTE 13 - OTHER LIABILITIES (in DKK million)

                                                  As of December 31
                                                 2002          2003
                                                 ----          ----

Partners and commercial managements              21.1          12.4
Accrued interests                                11.3          12.3
Wages and social expenses                        14.7          17.7
Derivative financial instruments                 35.4          32.9
Miscellaneous, including items related
to shipping activities                           28.6          26.5
                                              -------       -------
                                                111.1         101.8
                                              -------       -------

NOTE 14 - COLLATERAL SECURITY (in DKK million)

Collateral security for mortgage debt, bank loans and bareboat charters:
                                                As of December 31
                                               2002          2003
                                               ----          ----

Vessels                                       1,713.6       1,942.4
Bonds                                           184.6          51.2
Cash and cash equivalents                         1.5           0.4
                                            ---------     ---------
                                              1,899.7       1,994.0
                                            ---------     ---------

NOTE 15 - GUARANTEE AND CONTINGENT LIABILITIES (in DKK million)

                                                As of December 31
                                               2002          2003
                                               ----          ----

Guarantee liabilities                           3.9           3.9
                                            -------       -------


         The guarantee liabilities relate to guarantees to the Danish Ship
Finance and Danish Shipowners' Association.

         The Company has contracted 6 vessels (2002: 6 vessels), an investment
totaling DKK 1.310 million as compared to DKK 1.464 million in 2002.

         The Company is jointly and severally liable with its jointly taxed
subsidiaries for tax on income subject to consolidated taxation.

CONTRACTUAL LIABILITIES
Charterhire for vessels on time charter:
                                                 2002          2003
                                                 ----          ----

Next year's payments                            456.2         323.1
Falling due within 5 years                      568.4         772.9
Falling due after 5 years                       356.1         208.2
                                            ---------     ---------
                                              1,380.7       1,304.2
                                            ---------     ---------
Average period until redelivery (years)           1.5           2.3

     In addition to the above-mentioned  contractual  liabilities for vessels on
time  charter,  the Company has entered into lease  contracts  regarding  office
space  in  Copenhagen   and   Singapore.   The  Copenh  agen  office   comprises
approximately 3,000 square meters and is leased until July 2010 at a rate of DKK
4.4 million per year. The Singapore  office comprises  approximately  120 square
meters and is leased  until May 31,  2005 at a rate of DKK 0.3 million per year.
Furthermore,  the Company has leased an apartment  in  Singapore  until June 21,
2005 at a rate of DKK 0.2 million per year.

     Furthermore the Company has entered into various IT-related  contracts at a
total yearly rate amounting DKK 2.0 million. The greater part of these contracts
typically expires after 1.5 - 2.5 years.

NOTE 16 - FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS (in DKK million)

<TABLE>
<CAPTION>
                                                              Fair value adjustments
                                 Fair                 Income        Income             Shareholders'     Fair value as
                                 value as             statement     statement          equity            of December
                                 of January 1,2003    Net revenue   Financial items    Retained profit   31, 2003
                                 -----------------    -----------   ---------------    ---------------   --------
<S>                              <C>                  <C>           <C>                <C>               <C>
Cross currency swaps                9.5                  0.0          25.4               0.0             34.9
Forward rate contracts              0.0                  0.0          (0.3)              2.3              2.0
Interest rate swaps               (44.9)                 0.0          (0.3)             13.8            (31.4)
Currency options                    0.0                  0.0          (1.5)              0.0             (1.5)
Bunker hedge                        1.2                  0.0           0.0              (1.2)             0.0
Forward Freight Agreement           0.0                  1.3           0.0               0.0              1.3
                                 ------               ------         ------            ------           ------
                                 (34.2)                  1.3           23.3              14.9             5.3
                                 ------               ------         ------            ------           ------
</TABLE>

NOTE 17 - RELATED PARTY TRANSACTIONS

     The members of the Company's Board of Directors and Senior Management, near
relatives to these  persons,  and companies  where these persons have control or
exercise   significant   influence  are  considered  as  related   parties  with
significant influence.

     Mr. Niels Erik Nielsen, Chairman of the Board of Directors, is a partner in
the law  firm  Bech-Bruun  Dragsted.  Bech-Bruun  Dragsted  has  rendered  legal
assistance  during 2003.  During the fiscal year ended  December  31, 2003,  the
firm's  fees paid by the  Company  were DKK 0.4  million as  compared to DKK 1.6
million in 2002.

     Mr.  Ditlev  Engel,  a member of the Board of  Directors,  is also Managing
Director of Hempel A/S, a private  company that produces and sells marine paints
and coatings  worldwide.  During the fiscal year ended  December  31, 2003,  the
Company  purchased marine paints and coatings at market rates from Hempel A/S in
the amount of DKK 2.4 million as compared to DKK 0.7 million in 2002.

     Management remuneration is disclosed in Note 3.

     Mr. Gabriel Panayotides,  a member of the Board of Directors, has served as
the head of operations of Maryville Maritime Inc. since 1983. Maryville Maritime
Inc.  chartered  one vessel to the TORM  Panamax bulk carrier pool in the period
from 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.

     It is considered that no single person has control over the Company.

NOTE  18  -  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
respects from U.S. GAAP.

     The following is a summary of the  adjustments  to net income for the years
ended  December 31,  2001,  2002 and 2003 and  shareholders'  equity as of those
dates,  necessary  to  reconcile  those to net income and  shareholders'  equity
determined in accordance with U.S. GAAP.


Reconciliation  of Net  income  for the  year to U.S.  GAAP Net  income  (in DKK
million)

<TABLE>
<CAPTION>
                                                   Notes          2001       2002         2003
                                                   -----          ----       ----         ----
<S>                                                <C>           <C>         <C>         <C>
Net  income  as  reported   under   Danish  GAAP                 367.4      550.5        1,051.0
(restated)

Dry-docking costs                                   a)           (10.5)     (21.9)          (0.4)
Write-down on vessels                               b)             0.0      (12.3)           1.0
Marketable securities                               c)             5.0       (4.4)        (685.5)
Sale/leaseback transactions                         d)             4.6        1.2            0.0
Derivative financial instruments                    e)             3.0      (32.4)          15.1
Stock options                                       f)             0.0        0.0          (43.6)
Tonnage Taxation (deferred tax)                     g)             0.0     (367.3)          12.1
Tax effect of U.S. GAAP adjustments                 h)             5.3      (27.8)           0.0
                                                              --------     --------       -------
Net income in accordance with U.S. GAAP                          374.8       85.6          349.7
                                                              ========     ========       =======


Reconciliation of Shareholders'  equity for the year to U.S. GAAP  Shareholders'
Equity (in DKK million)


                                                   Notes          2001       2002         2003

Shareholders'  equity as reported  under  Danish               1,354.7    1,623.4        2,464.3
GAAP  (restated)

Dry-docking costs                                   a)           (32.9)     (47.4)         (40.2)
Write-down on vessels                               b)             0.0      (12.3)         (11.3)
Marketable securities                               c)             0.0        0.0            0.0
Sale/leaseback transactions                         d)             0.5        0.0            0.0
Derivative financial instruments                    e)             1.3        0.0            0.0
Stock options                                       f)             0.0        0.0          (33.5)
Tonnage Taxation (deferred tax)                     g)             0.0     (367.3)        (355.3)
Tax effect of U.S. GAAP adjustments                 h)            28.1         0.0           0.0
                                                              --------     --------       -------
Shareholders' equity in accordance with U.S. GAAP              1,351.7      1,196.4      2,024.0
                                                              ========     ========       =======
</TABLE>

     As discussed in Note 1, the Company has restated its Danish GAAP results in
connection with its change in accounting policy regarding  measurement currency.
This has resulted in a change in certain of the U.S. GAAP adjustments.

     The Group's accounting policies under Danish GAAP have been described below
where these differ from U.S. GAAP:

     a) Dry-docking costs

     Under Danish GAAP when a vessel is  delivered,  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-docking  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, 2001,
2002 and 2003:

(in thousands  of DKK)

                                        2001          2002         2003
                                        ----          ----         ----

Beginning Balance                       27,151       41,294      31,663

Charged to expenses                     24,790       29,889      23,807
Utilization                            (10,287)     (33,357)    (27,677)
Exchange rate conversion                  (360)      (6,163)     (4,658)
                                     ----------     ----------  ----------
Ending Balance                          41,294       31,663      23,135

     b) Write-down on vessels

     In 1998 the Company  recognized 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,  impairment losses are reversed
in  subsequent  periods if the fair value  increases.  During 2002,  the Company
recorded a reversal of the impairment  loss of DKK 12.3 million for the increase
in fair value of the assets.

     Under U.S. GAAP,  impairment  losses cannot be reversed.  This results in a
difference in depreciation between U.S. GAAP and Danish GAAP.

     c) Unrealized gain/(losses) 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."  In 2002,  the  Company
classified its investments in equity  securities as  available-for-sale  and its
investments  in bonds as  trading.  From  January  1, 2003 the  bonds  have been
classified as  available-for-sale  due to a decrease in the trading  activities.
Unrealized gains and losses on available-for-sale  investments are recorded as a
component  of  shareholder's  equity  unless  there is an other  than  temporary
impairment of the securities.  There were no other than temporary impairments in
any period presented.

     d) Sale/leaseback 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-docking  costs as  described  under item a) 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 0 at the end
of 2002.

     e) Derivative Financial Instruments

     The U.S. GAAP reconciling  items regarding  derivatives for the years 2001,
2002 and 2003 have been summarized below. The U.S. GAAP adjustments for 2001 and
2002 have changed since the  presentation in the 2002 financial  statements as a
result of the restatement of Danish GAAP results.

<TABLE>
<CAPTION>
(in thousands of DKK)                           2001                             2002                    2003

                                      Income          Shareholders'    Income        Shareholders'   Income      Shareholders'
                                      statement       equity           statement     equity          statement   equity
                                      ---------       ------           ---------     ------          ---------   ------
<S>                                   <C>              <C>             <C>          <C>              <C>         <C>
Foreign currency contracts             10,672            3,951          (3,951)      0                    0      0
Interest rate swaps                   (5,779)          (2,604)         (31,526)      0               16,209      0
Fuel price agreements                 (1,907)                0            3,056      0              (1,121)      0
                                      ----------------------------------------------------------------------------------------
Total U.S. GAAP adjustment              2,986            1,347         (32,421)      0               15,088      0
                                      ----------------------------------------------------------------------------------------
</TABLE>

     Under Danish GAAP,  derivative financial  instruments are recognized in the
balance  sheet at fair value.  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'  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.

     Under  U.S.  GAAP,  the  Company  accounts  for  its  derivative  financial
instruments at fair value with changes  reflected in the income statement except
where the Company  designates  derivative  financial  instruments as hedges. For
derivatives  treated as hedges,  the  treatment  is  consistent  with that under
Danish GAAP.

     Foreign currency contracts

     During the years presented, the Company entered into a variety of contracts
to manage its foreign currency exposure as it reports in DKK in its local market
but  operates  a  substantial  portion  of its  business  in USD.  Prior  to the
Company's  change to a USD  measurement  currency,  this  resulted in U.S.  GAAP
differences as these were  considered  hedges for Danish GAAP but not U.S. GAAP.
This  difference  has  been  eliminated  as a  result  of  the  change  to a USD
measurement currency, and no USD/DKK contracts are treated as hedges.

     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.

     Interest rate swaps

     The Company has entered into interest rate swaps to hedge the interest rate
risk on the long-term loans obtained to finance vessel purchases.

     Under Danish GAAP,  the interest rate swaps 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 interest is paid on the loans.

     Under U.S.  GAAP prior to the  adoption  of SFAS No 133 the  interest  rate
swaps were accounted for in a manner similar to cash flow hedges.  As of 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 as a  component  of income.
However,  beginning  on  October  1, 2003 the  Company  elected  to apply  hedge
accounting  to interest rate swaps  designated  as cash flow hedges.  During the
year ended December 31, 2001 the Company  recorded a loss on interest rate swaps
of DKK 12.2  million  and  reclassified  its DKK 6.4  million of the  transition
adjustment recorded on adoption of SFAS No 133 to income.  During the year ended
December 31,  2002,  the Company  recorded a loss on interest  rate swaps of DKK
32.1 million and  reclassified  the remaining DKK 0.5 million of the  transition
adjustment  to income.  During  the year ended  December  31,  2003 the  Company
recorded  a gain on  interest  rate  swaps of DKK  16.2  million  in the  income
statement  and a loss on interest  rate swaps  designated as cash flow hedges of
DKK 2.4 million was recorded as a component of shareholders' equity.

     Fuel price agreements

     The Company has entered  into fuel price  agreements  to hedge the price of
fuel for the Company's vessels.

     Under Danish GAAP,  the 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 bunkers are purchased.

     Under U.S. GAAP, the Company accounts for changes in fair value of the fuel
price  agreements as a component of income.  During the year ended  December 31,
2001 the Company  recorded a loss on fuel price  agreements  of DKK 1.9 million,
during the year ended  December  31, 2002,  the Company  recorded a gain on fuel
price agreements of DKK 3.1 million, and during the year ended December 31, 2003
the Company recorded a loss on fuel price agreements of DKK 1.1 million.

     f) Stock options and stock grants

     In  accordance  with  the  Company's  Danish  accounting  principles,   the
difference  between the exercise price and the market price of the shares at the
date the options  are granted is  recognized  as a  compensation  expense in the
income statement. At the time of exercise, the amounts paid to the employees for
options that are cash settled are recognized directly in shareholders' equity.

     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  the fixed  plan
accounting  and  stock  options  are  accounted  for  under  the  variable  plan
accounting,  which requires  compensation  expense to be recorded for changes in
the market price of the shares up to the  measurement  date.  For stock  options
that allow the employee to receive cash settlement,  the measurement date is the
date of exercise.

     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
Danish  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 year ended December 31, 2001.  Upon entering
the tonnage taxation  scheme,  it is estimated that all deferred tax assets will
expire  prior  to  utilization  and  as  a  result  a  valuation  allowance  was
established.

     i) Joint Venture Agreements

     The Company has investments in entities that are jointly owned and operated
together  with third  parties,  and in which the  parties  have  joint  dominant
influence.  Under Danish GAAP, the Company accounts for these  investments 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, 2001, 2002 and 2003 in accordance with
Danish GAAP associated with these joint ventures:

(in thousands of DKK)                       2001         2002          2003
                                         (restated)     (restated)

Net turnover                                460,072       393,052      260,067
Operating costs                             230,923       327,098      235,521
                                            -------       -------      -------
Net earning from shipping activities        229,149        65,954       24,546
Gain on sale of vessels/interests            13,747             -            -
Administrative expenses                       7,569         7,483        7,017
Other operating income                        6,095         6,889        8,464
Depreciation                                 48,520        39,728       19,823
                                             ------        ------       ------
Profit before financial items               192,902        25,632        6,170
Financial items                              24,661        68,281        8,373
                                             ------        ------        -----
Profit before tax                           168,241       (42,649)      (2,203)
                                            =======       ========      =======

     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 2003 in accordance with Danish GAAP:

(in thousands of DKK)                                       2002          2003
                                                         (restated)

Fixed assets                                              235,317      194,736
Current assets                                             68,721       31,799

Provisions                                                      -            -
Long term liabilities                                     191,432      122,012
Current liabilities                                        74,356       85,437

     j) 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 the  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 available for sale securities (2001 and 2002:
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, 2001, 2002 and 2003 (in thousands of DKK):

<TABLE>
<CAPTION>
                                                           2001           2002        2003
                                                           ----           ----       ----
<S>                                                       <C>           <C>           <C>
Net cash provided by operating activities                  506,079        478,303        531,593
Net cash provided by (used in) investment activities        30,851     (1,118,689)    (1,007,434)
Net cash provided by (used in) financing activities       (519,286)       552,198        470,770

Net increase in cash and cash equivalents                   17,644        (88,188)        (5,071)
Cash as defined under U.S. GAAP, beginning of year         238,826        256,470        168,282
                                                          --------------------------------------
Cash as defined under U.S. GAAP, end of year               256,470        168,282        163,211
                                                          --------------------------------------
</TABLE>

     k) Earnings Per Share

     Earnings per share is computed consistent with Danish GAAP.

     The following  table sets forth the  computation  of basic and diluted U.S.
GAAP net income per share (in thousands except share and per share data):

<TABLE>
<CAPTION>

                                                           2001        2002         2003
                                                           ----        ----         ----
<S>                                                       <C>          <C>          <C>
Numerator  for basic and diluted  Earnings  Per Share
(in thousands of DKK)
Profit/(loss) from continuing operations                   357,428         15,754        349,711
                                                          --------------------------------------
Profit from discontinuing operations                        17,417         69,818              0
                                                          --------------------------------------
Profit/(loss) for the year                                 374,845         85,572        349,711


                                                          No. of       No. of        No. of
                                                          shares       shares        shares
                                                        ----------------------------------------
Weighted average number of shares:
Basic                                                   17,517,633     17,317,909     17,318,632
Effect of dilutive shares and share options                  4,844         10,449        217,110
                                                        ----------------------------------------
Diluted                                                 17,522,477     17,328,358     17,535,742
                                                        ----------------------------------------
Basic earnings per share
Profit from continuing operations                             20.4            0.9           20.2
Profit from discontinued operations                            1.0            4.0            0.0

Profit (loss) for the year                                    21.4            4.9           20.2
                                                        ----------------------------------------

Diluted earnings per share
Profit from continuing operations                             20.4            0.9           19.9
Profit from discontinued operations                            1.0            4.0           0.0
                                                        ----------------------------------------

Profit (loss) for the year                                    21.4            4.9           19.9
                                                        ----------------------------------------
</TABLE>

     The weighted  average number of shares excludes the shares  reacquired from
the date of repurchase.

     l) New accounting requirements not yet adopted

     FIN 46(R) "Consolidation of Variable Interest Entities"

     In January 2003, the FASB issued FASB Interpretation No. 46,  Consolidation
of Variable  Interest  Entities,  and revised it in December 2003 ("FIN 46(R)").
FIN 46(R)  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  support.  An enterprise  shall  consolidate a variable
interest entity if that enterprise is the primary beneficiary.  An enterprise is
considered  the  primary  beneficiary  if it has a variable  interest  that will
absorb a majority of the  entity's  expected  losses,  receive a majority of the
entity's expected residual returns, or both.

     The  provisions of FIN 46(R) are required to be applied  immediately to all
variable  interest  entities  created  after  December  31,  2003.  For variable
interest  entities  that were created  prior to December 31, 2003,  FIN 46(R) is
required to be applied  beginning with the first annual period  beginning  after
December 15, 2004.The  Company is assessing the potential impact of the adoption
of FIN46(R), but does not believe it will have a material impact on consolidated
net income or shareholders' equity.

     EITF  03-01,  "The  Meaning  of  Other-Than-Temporary  Impairment  and  Its
Application to Certain Investments"

     On March 2004,  the EITF reached a consensus on Issue 03-1,  The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments (EITF
03-01).  EITF 03-01 is applicable to (a) debt and equity  securities  within the
scope of  Statement  115,  (b) debt and  equity  securities  within the scope of
Statement  124 and that are  held by an  investor  that  reports  a  performance
indicator,  and (c) equity  securities not within the scope of Statement 115 and
not  accounted  for  under  Opinion  18's  equity  method  (e.g.,   cost  method
investments).  EITF  03-01  provides  a  step  model  to  determine  whether  an
investment  is  impaired  and  if  an  impairment  is  other-than-temporary.  In
addition, it requires that investors provide certain disclosures for cost method
investments and, if applicable,  other information related  specifically to cost
method  investments,  such as the  aggregate  carrying  amount  of  cost  method
investments,  the aggregate amount of cost method  investments that the investor
did not evaluate for impairment because an impairment indicator was not present,
and the situations under which the fair value of a cost method investment is not
estimated.  The  disclosures  related to cost method  investments  should not be
aggregated  with other types of  investments.  The EITF 03-01  impairment  model
shall be applied  prospectively to all current and future investments within the
scope of the Issue,  effective in  reporting  periods  beginning  after June 15,
2004.    The    guidance   for    evaluating    whether   an    investment    is
other-than-temporarily   impaired  should  be  applied  in  other-than-temporary
impairment  evaluations made in reporting periods beginning after June 15, 2004.
The  disclosures are effective in annual  financial  statements for fiscal years
ending after December 15, 2003, for investments  accounted for under  Statements
115 and 124.  For all other  investments  within  the scope of this  Issue,  the
disclosures are effective in annual financial statements for fiscal years ending
after June 15, 2004. The additional  disclosures for cost method investments are
effective for fiscal years ending after June 15, 2004.

     m) New accounting requirements adopted during 2003

     SFAS  No.  150,   "Accounting  for  Certain   Financial   Instruments  with
Characteristics of both Liabilities and Equity"

     In May 2003, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 150,  Accounting for Certain Financial  Instruments with  Characteristics of
both  Liabilities and Equity.  This statement  established  standards for how an
issuer  classifies and measures in its statement of financial  position  certain
financial  instruments with  characteristics  of both liabilities and equity. In
accordance with the standard,  financial instruments that embody obligations for
the  issuer  are  required  to be  classified  as  liabilities.  SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003;
it became  effective  for the  Company  during the second  quarter of 2003.  The
adoption  of SFAS No. 150 did not have an impact on the  Company's  consolidated
balance sheet or results of operations.

     SFAS No.  146,  "Accounting  for Costs  Associated  with  Exit or  Disposal
Activities"

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. This statement requires that the fair value of
a liability  associated with an exit or disposal activity be recognized when the
liability is incurred. Prior to the adoption of SFAS No. 146, certain exit costs
were recognized when a commitment was made to a  restructuring  plan,  which may
have been before the liability was incurred. The adoption of SFAS No. 146 during
2003 did not impact the Company's financial position or results of operations.

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

     In November  2002, the FASB issued FASB  Interpretation  No. 45 ("FIN 45"),
Guarantor's  Accounting and Disclosure  Requirements  for Guarantees,  Including
Indirect Guarantees of Indebtedness of Others. FIN 45 clarifies the requirements
for a guarantor's accounting for and disclosure of certain guarantees issued and
outstanding.  The initial recognition and initial measurement  provisions of FIN
45 are applicable to guarantees  issued or modified after December 31, 2002. The
disclosure  requirements  of FIN 45 are effective  for  financial  statements of
interim or annual periods ending after December 15, 2002. The adoption of FIN 45
did not have an impact  on the  Company's  consolidated  financial  position  or
results of operations.

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)

12.1 ____ Rule 13a-14(a)/15d-14(a) Certification of the Company's Chief
          Executive Officer.

12.2 ____ Rule 13a-14(a)/15d-14(a) Certification of the Company's Chief
          Financial Officer.

13.1 ____ Certification of the Company's Chief Executive Officer pursuant to 18
          U.S.C. Section 1350, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002.

13.2 ____ Certification of the Company's Chief Financial Officer pursuant to 18
          U.S.C. Section 1350, as adopted pursuant to Section 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 21, 2004