Prospectus - Investor Relations - d'Amico International Shipping

d’Amico International Shipping S.A.(a société anonyme incorporated in the Grand Duchy of Luxembourg)Offering of up to 59,979,963 SharesThis Prospectus relates to the initial global offering (the “Offering”) of up to 59,979,963 of our shares, each such sharewith no nominal value, or the Shares. We are offering 20,992,987 Shares in the Offering and the Selling Shareholdernamed herein is offering 38,986,976 Shares in the Offering. We will not receive any proceeds from the sale of Shares bythe Selling Shareholder. The Offering includes a public offering to retail investors in Italy and private placements in Italyand certain other jurisdictions.No public market currently exists for our Shares. We have applied to list our Shares on the STAR segment of theMercato Telematico Azionario (the “MTA”), the Italian screen-based trading system managed by Borsa Italiana S.p.A.Trading in our Shares on the MTA is expected to commence on or about 3 May 2007.The offer price for the Shares is expected to be fixed on or about 26 April 2007. We, together with the SellingShareholder and the Joint Global Coordinators, have set a range for the offer price of between 33.00 and 34.50 perShare, which is also the maximum price of our Shares in the Offering.The Selling Shareholder has granted J.P. Morgan Securities Ltd., on behalf of the institutional managers, an option topurchase up to an additional 8,996,994 Shares at the offer price to cover over-allotments, if any, in connection withthe Offering. The option is exercisable for 30 calendar days following the commencement of trading of our Shares onthe MTA.See “Risk Factors” beginning on page 17 of this Prospectus for a discussion of certain risks youshould consider in connection with an investment in our Shares.This Prospectus has been prepared in accordance with Directive 2003/71/EC of the European Parliament and of theCouncil of 4 November 2003 on the prospectus to be published when securities are offered to the public or admittedto trading and amending Directive 2001/34/EC, or the Prospectus Directive, and the Commission Regulation (EC)809/2004 of 29 April 2004 implementing the Prospectus Directive, as amended.This Prospectus has been approved by the Luxembourg Commission for the Supervision of the Financial Sector(Commission de Surveillance du Secteur Financier), or CSSF, which is the competent authority in Luxembourg for thepurposes of the Prospectus Directive and relevant implementing measures in Luxembourg, in particular theLuxembourg Law on Securities Prospectuses of 10 July 2005 (loi du 10 juillet 2005 relative aux prospectus pour valeursmobilières) and the notification provided by article 18 of the Prospectus Directive has been provided by the CSSF tothe Italian Companies and Stock Exchange Commission (Commissione Nazionale per le Società e la Borsa), or CONSOB.The Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “SecuritiesAct”) and may not be offered or sold in the United States of America or to, or for the account or benefit of, U.S. persons(as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subjectto, the registration requirements of the Securities Act. In the United States of America, the Shares will be offered for saleonly to qualified institutional buyers, as defined in and pursuant to Rule 144A under the Securities Act. Outside the UnitedStates of America, the Shares will be offered in reliance on Regulation S under the Securities Act. You should refer to thesections “Plan of Distribution—Selling Restrictions” and “Transfer Restrictions” for a description of certain restrictions onresale and transfer of the Shares being offered.The Shares have been accepted for settlement through Monte Titoli S.p.A., Clearstream Banking, société anonyme,and Euroclear Bank S.A./N.V., as operator of the Euroclear System. Delivery of the Shares is to be made through thefacilities of these clearing systems and is expected to occur on or about 3 May 2007.The Shares are expected to trade under the Common Code: 029069751 and ISIN Code: LU0290697514.Joint Global CoordinatorsSponsor, Specialist and Lead Manager of the Retail OfferingFinancial Advisor to the CompanyThe date of this Prospectus is 5 April 2007.

d’Amico International Shipping S.A. is a société anonyme incorporated in the Grand Duchy ofLuxembourg and registered with the Luxembourg Register of Commerce and Companies undernumber B-124790. Our registered and principal executive office is located at 12, rue Ste Zithe,L-2763 Luxembourg, Grand Duchy of Luxembourg and our telephone number at that address is+352 2626 2929.In this Prospectus, references to the “EU” are to the European Union and references to “Euro”or “3” are to the currency introduced on January 1, 1999 pursuant to the Treaty on EuropeanUnion signed in 1992. References herein to the “United States” or “U.S.” are to the UnitedStates of America and references to “U.S. dollars” or “$” are to the lawful currency of theUnited States. References to “Yen” or “¥” are to the lawful currency of Japan. References to“Singapore dollars” or “SG$” are to the lawful currency of Singapore.Unless the context requires otherwise all references herein to the “Group”, “we”, “our” or “us”mean d’Amico International Shipping S.A., a company incorporated in the Grand Duchy ofLuxembourg, and its consolidated subsidiaries, and references to the “Company” are to d’AmicoInternational Shipping S.A. only. Additionally, unless the context requires otherwise all referencesherein to the “d’Amico Group” mean d’Amico Società di Navigazione S.p.A., a companyincorporated under the law of the Republic of Italy, and its subsidiaries, and all referencesherein to the “Selling Shareholder” mean d’Amico International S.A., a company incorporatedin the Grand Duchy of Luxembourg and registered with the Luxembourg Register of Commerceand Companies under number B-29027, which is 99.9% owned by d’Amico Società di NavigazioneS.p.A. References to “our fleet” and “our vessels” include owned and chartered in vessels,as well as partial charters, unless otherwise specified or the context requires otherwise.Except where indicated, references to International Financial Reporting Standards in thisProspectus are to IFRS as adopted by the European Commission for use in the European Union(“IFRS”).Certain terms used in this Prospectus, including certain terms used in the shipping industry, aredefined in “Annex B—Glossary of Selected Terms”.In making your investment decision, you should rely only on the information contained in thisProspectus. We, the Selling Shareholder and the institutional managers have not authorisedanyone to provide you with any other information. If you receive any other information, youshould not rely on it.The Shares are being offered for sale only in jurisdictions in which such offer and sale ispermitted.You should not assume that the information contained in this Prospectus is accurate as of anydate other than the date on the front cover of this Prospectus.IN CONNECTION WITH THIS OFFERING, J.P. MORGAN SECURITIES LTD., AS STABILIZINGMANAGER (OR ANY PERSON ACTING FOR THE STABILIZING MANAGER) MAY OVER-ALLOTSHARES PROVIDED THAT THE AGGREGATE NUMBER OF SHARES ALLOTTED DOES NOT EXCEED120 PER CENT OF THE ORIGINAL NUMBER OF SHARES OFFERED PURSUANT TO THE GLOBALOFFERING OR EFFECT TRANSACTIONS FOR A LIMITED TIME WITH A VIEW TO SUPPORTING THEMARKET PRICE OF THE SHARES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISEPREVAIL IN THE OPEN MARKET. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILIZINGMANAGER (OR ANY AGENT OF THE STABILIZING MANAGER) WILL UNDERTAKE STABILIZATIONACTION. SUCH STABILIZING, IF COMMENCED, MAY BEGIN ON OR AFTER THE DAY ON WHICHTRADING IN THE SHARES BEGINS ON THE MTA, MAY BE DISCONTINUED AT ANY TIME ANDMUST BE BROUGHT TO AN END AFTER A LIMITED PERIOD AND WILL BE CONDUCTED INACCORDANCE WITH APPLICABLE LAWS.i

Notice to Investors in the European Economic AreaThis Prospectus has been prepared on the basis that all offers of Shares (other than offerscontemplated in Italy once the Prospectus has been approved by the Luxembourg Commissionfor the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier), orthe CSSF, and notified to the Italian Companies and Stock Exchange Commission (CommissioneNazionale per le Società e la Borsa), or CONSOB, in accordance with Directive 2003/71/EC, or theProspectus Directive as implemented in, respectively, the Grand Duchy of Luxembourg and Italy)will be made pursuant to an exemption under the Prospectus Directive, as implemented inmember states of the European Economic Area, or EEA, from the requirement to produce anapproved prospectus for offers of shares. Accordingly, any person making or intending to makeany offer, resale or other transfer within the EEA, other than in Italy, of Shares subject to theplacement contemplated in this Prospectus may only do so in circumstances under which noobligation arises for us, the Selling Shareholder or any of the managers to produce an approvedprospectus for such offer. None of the Company, the Selling Shareholder or the Joint GlobalCoordinators have authorised, nor do any of us authorise, the making of any offer of Sharesthrough any financial intermediary, other than offers made by the institutional managers whichconstitute the final placement of Shares contemplated in this Prospectus. In relation to eachMember State of the EEA, or Relevant Member State, which has implemented the ProspectusDirective an offer to the public of any Shares which are the subject of the offering contemplatedby this Prospectus may not be made in that Relevant Member State, other than the offerscontemplated in the Prospectus in Italy once the Prospectus has been (a) approved by the CSSF,(b) published in accordance with Luxembourg statutory rules and (c) notified to CONSOB, exceptthat an offer to the public in that Relevant Member State of any offered Shares may be made atany time under the following exemptions under the Prospectus Directive, if they have beenimplemented in that Relevant Member State:(a)(b)(c)(d)to legal entities which are authorised or regulated to operate in the financial marketsor, if not so authorised or regulated, whose corporate purpose is solely invest insecurities;to any legal entity which has two or more of (1) an average of at least 250 employeesduring the last financial year; (2) a total balance sheet of more than 343,000,000 and(3) an annual net turnover or more than 350,000,000, as shown in its last annual orconsolidated accounts;by the institutional managers to fewer than 100 natural or legal persons (other thanqualified investors as defined in the Prospectus Directive) subject to obtaining the priorconsent of the Joint Global Coordinators for any such offer; orin any other circumstances falling within Article 3(2) of the Prospectus Directive,provided that no such offer of Shares shall result in a requirement for the publicationby the Company, the Selling Shareholder or any institutional manager of a prospectuspursuant to Article 3 of the Prospectus Directive.For the purposes of this provision, the expression an “offer to the public” in relation to anyshares in any Relevant Member State means the communication in any form and by any meansof sufficient information on the terms of the offer and any shares to be offered so as to enablean investor to decide to purchase any shares, as the same may be varied in that Member Stateby any measure implementing the Prospectus Directive in that Member State and the expression“Prospectus Directive” includes any relevant implementing measure in each Relevant MemberState.ii

NOTICE TO NEW HAMPSHIRE RESIDENTSNEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HASBEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THESTATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR APERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THESECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B ISTRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT ANEXEMPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARYOF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOM-MENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFULTO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENTANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.Notice to United Kingdom InvestorsThis communication and any other document issued in connection with the Offering of theShares is directed only at those persons having professional experience in matters relating toinvestments who fall within the definition of “investment professionals” in Article 19(5) of theFinancial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”) and/orhigh net worth entities falling within Article 49(2)(a) to (d) of the FPO (all such persons togetherbeing referred to as “relevant persons”). Any investment or investment activity to which thiscommunication relates is only available to, and will only be engaged in with, relevant persons.This communication (or any other document issued in connection with the Offering) must notbe acted on or relied on by persons who are not relevant persons. All applicable provisions ofthe Financial Services and Markets Act 2000 must be complied with in respect of anything donein relation to the Shares in, from or otherwise involving the United Kingdom. The Shares arenot being offered to the public in the United Kingdom.Notice to Investors in the United Arab EmiratesThis Prospectus is not intended to constitute an offer, sale or delivery of the Shares or othersecurities under the laws of the United Arab Emirates, or UAE. The Shares have not been andwill not be registered under Federal Law No. 4 of 2000 concerning the Emirates Securities andCommodities Authority and the Emirates Security and Commodity Exchange, or with the UAECentral Bank, the Dubai Financial Market, the Abu Dhabi Securities market or any other UAEexchange. The Offering, the Shares and interests therein have not been approved or licensed bythe UAE Central Bank or any other relevant licensing authorities in the UAE, and do notconstitute a public offer of securities in the UAE in accordance with the Commercial CompaniesLaw, Federal Law No. 8 of 1984 (as amended) or otherwise. This Prospectus is being distributedto a limited number of investors and must not be provided to any person other than theoriginal recipient, and may not be reproduced or used for any other purpose. The interests inthe Shares may not be offered or sold directly to the public in the UAE.Notice to Investors in Hong KongThe contents of this document have not been reviewed by any regulatory authority in HongKong. You are advised to exercise caution in relation the Offering. If you are in any doubt aboutany of the contents of this document, you should obtain independent professional advice.Each institutional manager has represented and agreed that:1. it has not offered or sold and will not offer or sell in Hong Kong, by means of anydocument, any Shares other than (a) to “professional investors” as defined in theSecurities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made underthat Ordinance; or (b) in other circumstances which do not result in the document beingiii

a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or whichdo not constitute an offer to the public within the meaning of that Ordinance; and2. it has not issued or had in its possession for the purposes of issue, and will not issue orhave in its possession for the purposes of issue, whether in Hong Kong or elsewhere,any advertisement, invitation or document relating to the Shares, which is directed at,or the contents of which are likely to be accessed or read by, the public of Hong Kong(except if permitted to do so under the securities laws of Hong Kong) other than withrespect to Shares which are or are intended to be disposed of only to persons outsideHong Kong or only to “professional investors” as defined in the Securities and FuturesOrdinance and any rules made under that Ordinance.Notice to Investors in SingaporeThis Prospectus has not been and will not be lodged with or registered as a prospectus by theMonetary Authority of Singapore under the Securities and Futures Act (Chapter 289) of Singapore,or the SFA. Accordingly, neither this Prospectus nor any other document or material inconnection with the offer or sale, or invitation for subscription or purchase, of the Shares maybe issued, circulated or distributed, nor may any of the Shares (or any one of them) be offeredor sold, or be made the subject of an invitation for subscription or purchase, whether directly orindirectly, in Singapore other than: (i) to an institutional investor specified in Section 274 of theSFA; (ii) to an accredited investor or other person, in accordance with the conditions specified inSection 275 of the SFA; or (iii) otherwise pursuant to, and in accordance with the conditions of,any other applicable provision of the SFA. Section 276 of the SFA will have to be complied withupon the subsequent sale of shares acquired pursuant to an exemption under Section 274 orSection 275 of the SFA.Other JurisdictionsThis Prospectus does not constitute an offer to sell or the solicitation of an offer to buy anyShares in any jurisdiction to any person to whom it is unlawful to make the offer or solicitationin such jurisdiction. The distribution of this Prospectus and the offer or sale of Shares may berestricted by law in certain jurisdictions. The Company, the Selling Shareholder and the institutionalmanagers do not represent that this Prospectus may be lawfully distributed, or that anyShares may be lawfully offered, in compliance with any applicable registration or other requirementsin any such jurisdiction, or pursuant to any exemption available thereunder, or assumeany responsibility for facilitating any such distribution or offering. In particular, no action hasbeen taken by the Company, the Selling Shareholder and the institutional managers whichwould permit a public offering of any Shares outside the EEA or distribution of this Prospectusin any jurisdiction where action for those purposes is required. Accordingly, no Shares may beoffered or sold, directly or indirectly, and neither this Prospectus nor any advertisement or otheroffering material may be distributed or published in any jurisdiction, except under circumstancesthat will result in compliance with any applicable laws and regulations. Persons into whosepossessions this Prospectus or any Shares may come must inform themselves about, and observeany such restrictions on the distribution of this Prospectus and the offering and sale of theShares. See also “Plan of Distribution—Selling Restrictions” for a description of certain restrictionson the offer and sale of Shares in the Offering.Enforcement of Liabilities and Service of ProcessThe Company and the Selling Shareholder are public limited companies (Societé Anonyme)organised under the laws of the Grand Duchy of Luxembourg. All of their directors andexecutive officers reside outside the United States. All or a significant portion of the assets ofthe Company, the Selling Shareholders and these individuals are located outside the UnitedStates. As a result, it may be difficult for you to effect service of process within the United Statesupon the Company, the Selling Shareholder or any of their directors and officers, or to enforceiv

judgments obtained in the United States against any of the Company, the Selling Shareholderand their directors and officers, including judgments based on the civil liability provisions of theU.S. federal securities laws. As a result, to pursue a claim against the Company, the SellingShareholder or any of their directors and officers based upon U.S. federal securities laws, youmay have to commence an action in a Luxembourg court for an original judgment. Consequently,it could prove difficult to enforce civil liabilities based on U.S. federal securities laws inthe Grand Duchy of Luxembourg. Even if U.S. law were to be applied, it is unlikely that aLuxembourg court would adjudicate awards against public policy or order in the Grand Duchyof Luxembourg, including awards of punitive damages.Forward-Looking StatementsThis Prospectus includes “forward-looking statements”, which include all statements other thanstatements of historical facts, including, without limitation, any statements preceded by, followedby or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “plans”,“will”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof.Such forward-looking statements involve known and unknown risks, uncertainties and otherimportant factors beyond the Company’s control that could cause the Company’s actual results,performance or achievements to be materially different from future results, performance orachievements expressed or implied by such forward-looking statements. Such forward-lookingstatements are based on numerous assumptions regarding the Company’s present and futurebusiness strategies and the environment in which the Company will operate in the future.Among the important factors that could cause the Company’s actual results, performance orachievements to differ materially from those expressed in such forward-looking statements arethose under the headings “Summary”, “Risk Factors”, “Management’s Discussion and Analysis ofResults of Operations and Financial Condition”, “Business” and elsewhere in this Prospectus.These forward-looking statements speak only as at the date of this Prospectus. The Companyexpressly disclaims any obligation or undertaking to disseminate any updates or revisions to anyforward-looking statements contained herein to reflect any change in the Company’s expectationswith regard thereto or any change in events, conditions or circumstances on which any ofsuch statements are based unless required to do so by applicable laws.Presentation of Financial and Other InformationPrior to 2007, High Pool Tankers Limited, Glenda International Management Limited and GlendaInternational Shipping Limited were wholly-owned by d’Amico International S.A., a subsidiary ofd’Amico Società di Navigazione S.p.A. See also “Principal and Selling Shareholder”. In addition,d’Amico International S.A. held a 51% interest in DM Shipping Limited.In early 2007, d’Amico International S.A. transferred its interests in High Pool Tankers Limited,Glenda International Management Limited, Glenda International Shipping Limited and DMShipping Limited to d’Amico Tankers Limited, an Irish company, which was wholly-owned byd’Amico International S.A. prior to March 2007. On 9 February 2007, d’Amico InternationalShipping S.A. was incorporated under the laws of Luxembourg as a wholly owned subsidiary ofd’Amico International S.A. and in early March 2007, d’Amico International S.A. transferred itsinterest in d’Amico Tankers Limited to d’Amico International Shipping S.A.During the last quarter of 2006 and the first quarter of 2007, d’Amico Tankers Limitedincorporated the following wholly-owned subsidiaries: d’Amico Tankers Monaco S.A.M., d’AmicoTankers UK Limited and d’Amico Tankers Singapore Pte. Ltd. In addition, d’Amico InternationalS.A. transferred its 33.3% interest in Handytankers K/S to d’Amico Tankers Limited at that time.The combined financial information included in this Prospectus for each of the years ended31 December 2004 and 2005 has been derived from the audited financial statements of d’AmicoTankers Limited, High Pool Tankers Limited, Glenda International Management Limited and theformer vessel owning companies, Aniston Maritime Limited, Hampton Navigation Limited,Loyalty Maritime Navigation Limited, High Endurance Limited, High Endeavour Limited, HighCourage Limited, High Valor Limited, High Monarch Limited, High Emperor Limited, each ofv

which was operated separately and was liquidated in 2005. The combined financial informationincluded in this Prospectus for the year ended 31 December 2006 has been derived from theaudited financial statements of d’Amico Tankers Limited, High Pool Tankers Limited, GlendaInternational Management Limited and DM Shipping Limited and the opening position of thenewly formed companies, d’Amico Tankers UK Limited and d’Amico Tankers Singapore Pte. Ltd.As a result, the combined financial information included in this Prospectus for the years ended31 December 2004, 2005 and 2006 does not necessarily reflect the results of operations, financialposition and cash flow that we would have had if we had been operating as a group duringsuch periods.This Prospectus includes the audited combined financial statements of d’Amico Tankers Limitedand its combining entities as of and for the years ended 31 December 2004, 2005 and 2006,which were prepared in accordance with the International Financial Reporting Standards(“IFRS”) issued by the International Accounting Standards Board (“IASB”), as adopted by theEuropean Commission for use in the European Union, including the notes thereto.The work of our independent accountants has been conducted in accordance with InternationalStandards on Auditing. It has not been carried out in accordance with auditing standardsgenerally accepted in the United States and accordingly should not be relied upon as if it hadbeen carried out in accordance with those standards or any other standards besides thestandards mentioned above. IFRS differ in certain respects from generally accepted accountingprinciples in the United States (“U.S. GAAP”). In making an investment decision, investors mustrely upon their own examination of us, the terms of the Prospectus and the financial informationprovided herein. Potential investors should consult their own professional advisors for anunderstanding of the differences between IFRS and U.S. GAAP. For descriptions of certaindifferences between IFRS and U.S. GAAP, see “Annex A—Summary of Certain DifferencesBetween IFRS and U.S. GAAP”.This Prospectus also includes certain other data relating to our fleet which we consider inassessing our operating performance. Such operating data are not measurements of performanceunder IFRS or U.S. GAAP, and you should not consider any of them as an alternative to(a) the financial information included in this Prospectus (as determined in accordance withgenerally accepted accounting principles) or (b) any other measures of performance undergenerally accepted accounting principles. We believe that such measurements are measurescommonly reported and widely used by investors in evaluating the performance of companiesoperating in the shipping industry, which can vary significantly depending upon accountingmethods or non-operating factors. Accordingly, such measurements have been disclosed in thisProspectus to permit a more complete and comprehensive analysis of our operating performance.Because companies do not calculate such measurements identically, our presentation ofthem may not be comparable to similarly titled measures used by other companies. Accordingly,undue reliance should not be placed on such operating data contained in this Prospectus.The financial information in this Prospectus has been disclosed in accordance with IFRS. Therecan be no assurance that such disclosure requirements and accounting rules are equivalent to,or sufficient for the purposes of, those currently in force in other jurisdictions, or that theapplication of the financial information disclosure requirements and accounting rules of otherjurisdictions to us would not have resulted in the disclosure of financial information or data thatis materially different from that contained in this Prospectus.Industry and Market DataMarket information and industry statistics used throughout this Prospectus have been obtainedfrom internal surveys, reports and studies, as well as market research, publicly available informationand industry publications. The information contained under the “The Oil Products TankerIndustry” section, apart where stated otherwise, has been supplied by Clarkson Research ServicesLtd., or Clarkson, a U.K.-based company providing research and statistics to the shippingindustry. We believe that the information and data supplied by Clarkson is accurate in allmaterial respects and we have relied upon such information for the purposes of this Prospectus.Industry publications generally state that the information they contain has been obtained fromsources believed to be reliable, but that the accuracy and completeness of such information isvi

not guaranteed. Similarly, while we believe our internal surveys, estimates and market researchto be reliable, we have not independently verified this information.Exchange RatesWe manage our business and report our results of operations using U.S. dollars. The U.S. dollaris also the reporting currency selected by the Group for purposes of financial reporting inaccordance with IFRS. The following table indicates (i) for the period from 1 January 2004through 31 December 2006, the annual period end, period average, high and low noon buyingrates (the “Noon Buying Rate”) in New York City for cable transfers in foreign currencies ascertified for customs purposes by the Federal Reserve Bank of New York and (ii) for the periodfrom 1 January 2007 to 3 April 2007, the monthly period end, period average, high and lowNoon Buying Rates in each case, expressed in U.S. dollars per 31.00. The rates below may differfrom the actual rates used in the preparation of the combined financial statements and otherfinancial information which appear elsewhere in this Prospectus. Our inclusion of theseexchange rates is for illustrative purposes only, and does not mean that the Euro amountsactually represent such dollar amounts, or that such Euro amounts could have been convertedinto U.S. dollars at any particular rate, if at all. The Noon Buying Rate of the Euro on 3 April2007 was $1.3363 = 31.00.HighLowPeriodAverage (1) Period EndU.S. dollars per 51.00Year ended 31 December2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05 0.86 0.95 1.052003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.26 1.04 1.13 1.262004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.36 1.18 1.25 1.352005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35 1.17 1.24 1.182006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33 1.19 1.26 1.32Month in 2007January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33 1.29 1.30 1.30February. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.32 1.29 1.31 1.32March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34 1.31 1.32 1.33April (through 3 April 2007) . . . . . . . . . . . . . . . . . . . . . . . . 1.34 1.34 1.34 1.34(1) The average of the Noon Buying Rates on the last business day of each month (or portionthereof) during the relevant period for yearly averages; on each business day of the month(or portion thereof) for monthly averages.Fluctuations in the exchange rate between the Euro and the U.S. dollar may affect our businessand the price at which our shares, which are denominated in U.S. dollar, are traded. Fluctuationsbetween the Euro and the U.S. dollar will affect the Euro equivalent of our results of operation,which are reported in U.S. dollar, and the U.S. dollar equivalent of the Euro price of the Sharestraded on the MTA. Such fluctuations also will affect the amounts received by shareholdersupon conversion of cash dividends, if any, paid in U.S. dollar with respect to the Shares. See“Dividends and Dividend Policy”.Available InformationNeither the Company nor any of its subsidiaries is required to file periodic reports underSection 13 or Section 15(d) of the U.S. Exchange Act or is exempt from reporting pursuant toRule 12g3-2(b) under the U.S. Exchange Act. For as long as this remains the case, the Companywill provide, upon written request, to holders of Shares, any owner of any beneficial interest inShares or to any prospective purchaser designated by such holder or owner, the informationrequired to be delivered pursuant to Rule 144A(d)(4) under the U.S. Securities Act if, at the timeof such request, any of the Company’s Shares remain outstanding as “restricted securities”within the meaning of Rule 144(a)(3) under the U.S. Securities Act. The Company does notcurrently intend to make an application for an exemption under Rule 12g3-2(b) under theU.S. Exchange Act.vii

Table of ContentsSummary ......................... 1Risk Factors . . . . . . . . . . . . . . . . . . . . . . . 17Use of Proceeds . . . . . . . . . . . . . . . . . . . . 34Dividends and Dividend Policy . . . . . . . . 35Capitalisation. . . . . . . . . . . . . . . . . . . . . . 36Selected Combined Financial andOperating Data . . . . . . . . . . . . . . . . . . 38Management’s Discussion and Analysisof Results of Operations andFinancial Condition . . . . . . . . . . . . . . . 41The Oil Products Tanker Industry . . . . . . 75Business . . . . . . . . . . . . . . . . . . . . . . . . . . 96Regulatory . . . . . . . . . . . . . . . . . . . . . . . . 116Management . . . . . . . . . . . . . . . . . . . . . . 122Principal and Selling Shareholder . . . . . . 135Related Party Transactions . . . . . . . . . . . 136Description of the Company, theShares and the Share Capital . . . . . . . 145The Italian Securities Market . . . . . . . . . 162Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . 164Transfer Restrictions . . . . . . . . . . . . . . . . 175Plan of Distribution . . . . . . . . . . . . . . . . . 176The Italian Public Offering—Terms andConditions . . . . . . . . . . . . . . . . . . . . . . 180Additional Information . . . . . . . . . . . . . . 191Independent Auditor. . . . . . . . . . . . . . . . 191Documents on Display . . . . . . . . . . . . . . . 191Information on Participations . . . . . . . . . 191Share Codes . . . . . . . . . . . . . . . . . . . . . . . 191Annex A—Summary of CertainSignificant Differences Between IFRSand U.S. GAAP . . . . . . . . . . . . . . . . . . . A-1Annex B—Glossary of Selected Terms . . . B-1Combined Financial Statements Index . . F-1viii

SummaryThis Prospectus has been prepared in accordance with Directive 2003/71/EC of the EuropeanParliament and of the Council of 4 November 2003 on the prospectus to be published whensecurities are offered to the public or admitted to trading and amending Directive 2001/34/EC,or the Prospectus Directive, and the Commission Regulation (EC) 809/2004 of 29 April 2004implementing the Prospectus Directive, as amended.This Prospectus has been approved by the Luxembourg Commission for the Supervision of theFinancial Sector (Commission de Surveillance du Secteur Financier), or CSSF, which is thecompetent authority in Luxembourg for the purposes of the Prospectus Directive and relevantimplementing measures in Luxembourg, in particular the Luxembourg Law on Securities Prospectusesof 10 July 2005 (loi du 10 juillet 2005 relative aux prospectus pour valeurs mobilières)and the notification provided by article 18 of the Prospectus Directive has been provided by theCSSF to the Italian Companies and Stock Exchange Commission (Commissione Nazionale per leSocietà e la Borsa), or CONSOB.This summary does not contain all of the information that you should consider before makingan investment in the Company’s Shares and should be read as an introduction to this Prospectus.Any decision to invest in the Shares should be based on this Prospectus as a whole. You shouldread this entire Prospectus carefully, including “Risk Factors” and the financial statements,including the notes thereto, which are included herein beginning on page F-1, before makingan investment decision. Certain terms used in this summary are defined elsewhere in thisProspectus. In particular, certain terms used in the shipping industry are defined in “Annex B—Glossary of Selected Terms”. Where a claim relating to the information contained in thisProspectus is brought before a court, the plaintiff investor might, under the respective nationallegislation of the Relevant Member State of the European Economic Area, need to bear thecosts of translating this Prospectus before legal proceedings are initiated. With regard to thecontent of this summary, no civil liability will attach to the Company solely on the basis of thethis summary including any translation thereof, unless it is misleading, inaccurate or inconsistentwhen read together with the other parts of this Prospectus.1

handysize product tankers of our fleet and the seven chartered in handysize product tankers inwhich we have a partial interest. Under the service agreement we have entered into with thepool manager, A.P. Moller—Maersk, we are actively involved in the pool’s commercial management,in particular chartering and vessel operations, but not administration.In 2003, we established High Pool Tankers Limited with Nissho Shipping Co. Limited (Japan). Thispool operated eight MR product tankers as at 31 December 2006, including seven of ourchartered in MRs. Under the pool arrangements we are exclusively responsible for the pool’scommercial management, in particular chartering, vessel operations and administration.In May 2005, we entered into a commercial arrangement with Glencore—ST Shipping, to jointlymanage eight MR product tankers. We and Glencore—ST Shipping each contributed four MRs.In August 2006, we incorporated the commercial arrangement as Glenda International ManagementLimited to allow us to trade the vessels under a single brand name, Glenda InternationalManagement. As of 31 December 2006, Glenda International Management Limited operated 19MR product tankers, including five of our owned MRs and six MRs which we chartered in aspart of this commercial arrangement.We employ all of our vessels through our partnerships, except for eight MRs, which we operatedirectly through long-term time charter contracts, two of which will terminate in 2007, withExxon, Total and Glencore. For the year ended 31 December 2006, we generated approximately12% of our earnings from the employment of these eight MRs.For each of the years ended 31 December 2004, 2005 and 2006, our time charter equivalentearnings (revenue net of voyage costs) were $140.0 million, $221.8 million and $243.3 million,respectively, increasing at a compound annual growth rate (“CAGR”) of 31.8% between 2004and 2006. For the same periods, our operating profit was $31.2 million, $82.8 million and$111.9 million, increasing at a CAGR of 89.5%, and our net profit was $18.2 million, $58.4 millionand $85.4 million, increasing at a CAGR of 116.6%, respectively.We are a wholly-owned subsidiary of the d’Amico Group. The d’Amico Group is one of theworld’s leading privately-owned marine transportation companies with over 70 years of experiencein the shipping business. Today, the d’Amico Group manages and controls over 65 ownedand chartered in vessels, including the vessels of our fleet. Following the Offering, the d’AmicoGroup’s ownership will be reduced to approximately 60%, assuming all of the Shares offeredare sold, and may be further reduced if the over-allotment option is exercised. See “Plan ofDistribution—Over-Allotment Option”.We believe that we benefit from a strong brand name and an established reputation in theinternational market due to the long operating history of the d’Amico Group. In addition, webenefit from the expertise of the d’Amico Group, which provides, through d’Amico IrelandLimited, technical management services, as well as all safety, quality and technical products andservices to our owned vessels, including crewing and insurance arrangements.We have offices in Dublin, London, Monte Carlo and Singapore. In addition, we are alsorepresented through the offices of our partnerships in New York, Copenhagen, Venice andTokyo.As at 31 March 2007, we employed 332 seagoing personnel and 43 onshore personnel.3

Group StructureWe are a wholly owned subsidiary of d’Amico International S.A., Luxembourg (the SellingShareholder), which is held 99.99% by d’Amico Società di Navigazione S.p.A. and 0.01% byPaolo and Cesare d’Amico. To streamline our organisational structure in view of the Offering,during the last quarter of 2006 and the first quarter of 2007, d’Amico Tankers S.A.M. (Monaco),d’Amico Tankers UK Limited (England) and d’Amico Tankers Singapore Pte. Ltd. were establishedas subsidiaries of our subsidiary, d’Amico Tankers Limited, our principal tanker operatingcompany, incorporated in Ireland. In addition, in 2007, d’Amico International S.A., Luxembourg(the Selling Shareholder), transferred its shareholdings in High Pool Tankers Limited, GlendaInternational Management Limited, DM Shipping Limited and Handytankers K/S to our subsidiary,d’Amico Tankers Limited. With effect from 2 March 2007, we acquired in a share for sharetransaction the entire issued share capital of d’Amico Tankers Limited from d’Amico InternationalS.A. For more information on these transactions, see “Related Party Transactions”. Thefollowing diagram sets forth our current group and shareholder ownership structures, includingour material subsidiaries (the percentage figures refer to equity participation and votingcontrol).d’Amico Family100%d’AmicoSocietà di Navigazione S.p.A.(Italy)Paolo and Cesare d’Amico99.99% 0.01%d’Amico InternationalS.A. (Luxembourg)other d’Amicobusinesses100%d’Amico International Shipping S.A.(Luxembourg)100%d’AmicoTankers Ltd(Ireland)99.9% 100% 100% 100%100% 51% 33.3%d’Amico Tankers MonacoS.A.M. (Monaco)d’Amico Tankers UKLimited(England)d’Amico Tankers SingaporePte. Ltd.High Pool Tankers Limited(Ireland)Glenda InternationalManagement Limited(Ireland)DM Shipping Limited(Ireland)Handytankers K/S(Denmark)The CompanyThe SellingShareholderThe following diagram sets forth the general group structure of the Selling Shareholder.d’Amico International S.A.(Luxembourg)100%100%100%100%100%d’Amico Dry Limited(Ireland)Medbulk Maritime Limited(Ireland)d’Amico InternationalShipping S.A.(Luxembourg)Other service companiesOther owned companiesThe SellingShareholderThe Company4

Competitive StrengthsWe believe that we have a number of competitive strengths in the shipping industry, including:Proven ability to acquire and employ product tankers. Within the five-year period from theyear ended 31 December 2002 until the year ended 31 December 2006, we expanded our fleet,at a CAGR of 36.1%, from 7.4 to 34.5 vessels (based on the average number of available vesselsfor each year), compared with, according to Clarkson, as of March 2007, a CAGR of 4.8% for theworldwide product tankers market sector ranging between 25,000 to 55,000 dwt. We believethat the growth of our fleet during this relatively short period of time demonstrates our abilityto identify, acquire and employ product tankers and that such ability, is a key advantage in ourindustry.Modern, high quality fleet. We operate a young fleet of high-quality tankers with an averageage of approximately four years. In comparison, according to Clarkson, average vessel age in theproduct tanker industry is 11.2 years. Different international regulations prescribe the phasingout of single-hulled vessels between 2010 and 2015. According to Clarkson, 73% of the world’svessels operating in the 25,000 to 55,000 dwt sector was double-hulled as of March 2007. Otherthan two short-term chartered in double-sided MRs that are leaving our fleet in May 2007, ourfleet is comprised exclusively of double-hulled vessels. In addition, all vessels of our fleet arebuilt in accordance with international industry standards, including IMO and MARPOL regulations.See “Regulatory”. With approximately 60% of the vessels of our fleet being IMOClassified, we believe that we have the competitive advantage of being able to penetrate newmarkets of products that can only be transported by IMO classified vessels, such as palm andvegetable oils. We also passed the qualification and screening processes and now qualify toprovide long-term charters to ExxonMobil and Total. We strive to maintain the quality of ourfleet through scheduled maintenance programmes and by mandating exacting standards on ourowned vessels and, as to our chartered in vessels, by chartering in from owners who meet highquality standards. We believe that operating a fleet comprised of young and well-maintainedvessels enables us to secure profitable employment for our fleet with reputable charterers aswell as to obtain favourable debt financing terms.Strong time charter equivalent growth and consistent high margins. We have a track record ofprofitable growth. We have increased our time charter equivalent earnings (revenue net ofvoyage costs) from $140.0 million in 2004 to $243.3 million in 2006, at a compound annualgrowth rate of 31.8%. Our operating profit increased from $31.2 million in 2004 to $111.9 millionin 2006, at a compound annual growth rate of 89.4%. Our operating profit margins, as apercentage of time charter equivalent earnings, for the years ended 31 December 2004, 2005and 2006 were 22.3%, 37.3% and 46.0% respectively. Our net profit increased from $18.2 millionin 2004 to $85.4 million in 2006, at a compound annual growth rate of 116.6%. We believe thatour ability to produce such time charter equivalent earnings growth with consistent positivemargins demonstrates the strength of our business model.A flexible and diversified business model, which benefits from the expertise of our partnerships.In order to maximise the utilisation of our fleet and earnings opportunities, we operate in thespot and charter market, through our three partnerships (the Handytankers Pool, High PoolTankers Limited and Glenda International Management Limited), as well as through ourindependent operations. We believe that our partnerships provide broad access to globalbusiness opportunities and allow us to operate on a global basis, to benefit from economies ofscale and our partners’ expertise, as well as to meet the needs of our clients across differentproduct lines.International company with worldwide presence in key maritime centres. We operate from ourown offices in Dublin, London, Monte Carlo and Singapore, and are also represented throughthe offices of our partnerships in New York, Copenhagen, Venice and Tokyo. These offices arelocated in what we believe to be the key maritime centres around the world. Each of our officesprovides our customers with access to the full range of services, promoting our business in therelevant geographic area. We believe that our international presence allows us to meet theneeds of our international clients in different geographical areas, while our own offices alsostrengthen the recognition of our brand name worldwide. In addition, given the opening hoursof the offices located in different time zones, we are able to continuously monitor ouroperations and are able to assist our customers 24 hours per day.5

A large fleet deployed globally to service our clients’ international requirements. We believethat operating a large fleet enhances earnings generation and operating efficiencies. A largefleet strengthens our ability to advantageously position vessels and improves fleet availabilityand scheduling flexibility. We believe this strength provides a competitive advantage in securingspot voyages and contracts of affreightment (COAs). In particular, the scale of our operationsprovides us with the flexibility necessary to enable us to capitalise on favourable spot marketconditions in order to maximise earnings and negotiate favourable contracts with suppliers.Leverage our relationship with the d’Amico Group. We believe that we have an establishedreputation in the international market due to the successful operating history of the d’AmicoGroup. In addition, we benefit from the d’Amico Group’s economies of scale, expertise, highquality standards and technical services. d’Amico Ireland Limited, a member of the d’AmicoGroup, procures high quality technical management services for our owned vessels. We believethat the international presence of the d’Amico Group further fosters our business and allows usto consolidate our reputation worldwide.Established reputation and strong industry relationships. We believe that we benefit from astrong brand name and have an established reputation in the shipping industry for providingefficient, safe and reliable service; and that such a reputation is important in maintaining ourlong-term relationships with our partners and existing customers and developing relationshipswith new customers. We believe that our partners and customers appreciate the transparencyand accountability which have characterised the d’Amico brand name and the way in which ourbusiness has been operated by the d’Amico Group from its early stages. We believe that thisaccountability and transparency coupled with our high quality services are interwoven with ouroperations and are key to our success.Proven management team. Our management team consists of experienced executives whohave demonstrated their abilities in managing the commercial and financial areas of ourbusiness. These executives have on average over 10 years of experience in the various areas ofour business. See “Management”.StrategyOur current strategy is designed to consolidate and expand our business in the MR andhandysize product tanker markets, while creating value for our shareholders through profitablegrowth. We seek to achieve this objective by leveraging on our competitive strengths and byimplementing the following strategies:Develop new business. We believe that we have established a strong reputation in theshipping market for providing efficient, safe and reliable service. We intend to focus on ourreputation to maintain and develop our relationships with major international charterers. Wealso intend to build on our customer relationships and our network of business connections topenetrate new markets.Expand in alternative markets. We have a long history of working with a variety of commoditiesand dealing with regulatory changes. We plan to capitalise on our experience to expandinto new markets, including cargoes, such as palm oil, vegetable oil and other chemicals, whichcan only be transported by vessels that are IMO classified. With approximately 60% of thevessels of our fleet being IMO classified, we believe that we are well-positioned to penetratethese markets.Continue to operate a high-quality fleet. We believe that our ability to maximise our vesselutilisation and earnings depends in part upon the quality of our fleet. We intend to continue tomaintain the high quality of our owned vessels by continuing the stringent maintenance andinspection programmes that we currently employ. With regard to vessels that we charter in, weendeavour to charter in from owners who maintain equally high standards. We intend tomaintain the operating and safety standards of internationally recognised classification societiesas well as of our most demanding customers. We are working to deliver the highest level of therecently introduced Tanker Management Self Assessment Scheme, or TMSA.Expand our fleet through well-timed transactions. We actively monitor the market in order totake advantage of opportunities to expand our fleet. Such opportunities include purchasingsecond-hand vessels directly and/or chartering in vessels with or without purchase options. In6

addition, we also plan to expand our fleet through well-timed orders for newbuildings. Inaccordance with this expansion strategy, we have secured contracts to increase our fleet bychartering in seven additional MR newbuildings and, through our joint venture DM ShippingLimited, in which we hold a 51% interest, two MR newbuildings. For the handysize producttankers, we have secured contracts to charter in one additional handysize newbuilding and,through one of our partnerships, partial interests in the charters of three handysize newbuildings.All of these vessels are due for delivery between 2008 and 2009. In addition, we haveoptions to purchase 15 of our chartered in and to be chartered in vessels, including those inwhich we have partial interests. These options can be exercised between 2007 and 2020.7

Summary of the OfferingThe information presented in the following summary of the Offering and throughout thisProspectus assumes, unless otherwise specified, that the institutional managers’ Over-AllotmentOption is not exercised.Shares outstandingbefore the Offering. . . .Shares outstandingafter the Offering . . . . .Global Offering . . . . . . .Selling Shareholder . . . .Italian Public Offeringor Public Offer . . . . . . . .Institutional Offering . .128,956,920 Shares.149,949,907 Shares. See “Description of the Company, the Shares andthe Share Capital”.59,979,963 Shares, or approximately 40% of our share capital, withoutnominal value. The Offering is comprised of 38,986,976 existingShares being offered by the Selling Shareholder and 20,992,987 Sharesthat will be newly issued by us. Assuming the full exercise of theOver-Allotment Option, the Shares offered in the Offering would representapproximately 46% of our share capital following theOffering.d’Amico International S.A. is offering 38,986,976 of our Shares.5,998,500 Shares, or approximately 10% of the Shares offered in theOffering have been allocated to retail investors in Italy (excluding“professional investors”, as defined by applicable Italian regulations).The Italian Public Offering is being underwritten by the Italian managers.For detailed information regarding the Italian Public Offering,see “The Italian Public Offering—Terms and Conditions—TheOffering”.53,981,463 Shares have been allocated to (i) institutional investorsoutside the United States in compliance with Regulation S under theSecurities Act, including “professional investors” in Italy and (ii) qualifiedinstitutional buyers in the U.S., in reliance on and as defined inRule 144A under the Securities Act. The Institutional Offering is beingunderwritten by the institutional managers. See “Plan ofDistribution”.Offer price . . . . . . . . . . . The offer price is currently expected to be between 33.00 and 34.50per Share. The offer price will be determined in part by way of abookbuilding exercise, which is expected to end no later than 26 April2007, after which, no later than 30 April 2007, such price will be communicatedto the public. The offer price for the Italian Public Offeringis the same as the offer price for the Institutional Offering. Forinformation regarding the determination of the offer price and informationregarding the maximum price of the Shares, see “The ItalianPublic Offering—Terms and Conditions—The Offering”.Joint GlobalCoordinators . . . . . . . . .Lead manager . . . . . . . .Specialist . . . . . . . . . . . .Sponsor . . . . . . . . . . . . .JPMorgan and Capitalia are acting as Joint Global Coordinators ofthe Global Offering.Capitalia is acting as retail lead manager of the Italian PublicOffering.In connection with the listing of our Shares on the STAR Segment ofthe MTA we appointed Capitalia as Specialist in accordance with theItalian securities market regulations.In connection with the listing of our Shares on the MTA, weappointed Capitalia as Sponsor in accordance with the Italian securitiesmarkets regulations.8

Share capital . . . . . . . . .Over-AllotmentOption . . . . . . . . . . . . . .Use of proceeds . . . . . . .Dividends . . . . . . . . . . . .Withholding tax . . . . . .Voting rights andlimitations . . . . . . . . . . .Lock-up agreements . . .Market for and listingof our Shares . . . . . . . . .Our share capital is $128,956,920 fully paid-in and divided into128,956,920 Shares without nominal value. Following the Offering,our share capital will be $149,949,907 fully paid-in and divided into149,949,907 Shares without nominal value. Immediately following theOffering our existing shareholders will retain approximately 60% ofour share capital. The remaining approximately 40% of our share capitalwill be held by retail and institutional investors (or 46% assumingfull exercise of the Over-Allotment Option). See “Description of theCompany, the Shares and the Share Capital”.The Selling Shareholder has granted JPMorgan, on behalf of the institutionalmanagers, an option to purchase up to an additional8,996,994 Shares, equal to approximately 15% of the Shares offeredin the Offering, at the offering price, less applicable commissions, tocover any over-allotments or for stabilisation activities. This Over-Allotment Option may be exercised, in whole or in part, for 30 calendardays following the commencement of trading of our Shares onthe MTA. See “Plan of Distribution”.We intend to use the net proceeds we receive from the Offering tosustain the future growth of our Group and for general corporatepurposes, including repayment of indebtedness. See “Use of Proceeds”.We will not receive any of the proceeds from the sale of theShares offered for sale by the Selling Shareholder, which will be paidto the Selling Shareholder only.Holders of Shares purchased in the Offering will be entitled to all dividends,if any, declared following the date of this Prospectus. Our bylawspermit our Board of Directors to distribute interim dividends.See “Dividends land Dividend Policy” and “Description of the Company,the Shares and the Share Capital”. Dividends on the Shares maybe subject to Italian withholding or substitute tax. See “Taxation ofShares”.See “Taxation”.Under Luxembourg law and our by-laws, each holder of Shares isentitled to cast one vote for each Share held. Holders of Shares areentitled to vote at and attend our ordinary and extraordinary shareholders’meetings. See “Description of the Company, the Shares andthe Share Capital”.We and the Selling Shareholder have each agreed to certain restrictions,subject to certain exceptions, on the issuance, sale or other disposalof our Shares (and other securities convertible into orexercisable or exchangeable for such Shares), without the prior writtenconsent of the Joint Global Coordinators, not to be unreasonablywithheld, for a period commencing on the day of the lock-up agreementsand ending 180 days after the date our Shares commence tradingon the MTA. In addition, we and the Selling Shareholder haveeach agreed not to approve any increase of share capital or issuanceof bonds or other instruments convertible into or exchangeable forour Shares for 180 days from the commencement of the trading ofour Shares on the MTA, without the prior written consent of theJoint Global Coordinators, which consent shall not be unreasonablywithheld.Application has been made to Borsa Italiana for the admission to listingof our Shares on the STAR Segment of the MTA. Trading is9

Our dealings in ourShares . . . . . . . . . . . . . .Payment, delivery andsettlement . . . . . . . . . . .Share codes . . . . . . . . . .expected to commence on or about 3 May 2007, provided that adequatedistribution of the Shares among the public is reached, as perassessment to be carried out by Borsa Italiana. See “The Italian SecuritiesMarket—Securities Trading in Italy”.Subject to limits established by Luxembourg law, we may purchaseour Shares at any time. See “Description of the Company, the Sharesand the Share Capital—Purchase by the Company of its own Shares”.Payment for and delivery of the Shares are expected to be made onor about 3 May 2007. The Shares will settle against payment in Eurothrough the facilities of Monte Titoli S.p.A. (a centralised securitiesdepositary system), Clearstream Banking, société anonyme (“Clearstream,Luxembourg”), and Euroclear Bank S.A./N.V., as operator ofthe Euroclear System (“Euroclear”). See “The Italian Securities Market—Clearanceand Settlement in Italy”.ISIN: LU0290697514Common Code: 02906975110

Summary Combined Financial and Operating DataThe following tables set forth summary financial and operating data relating to the Group for theperiods indicated.The summary financial information presented in this section has been derived from our auditedcombined financial statements as of 31 December 2004, 2005 and 2006 prepared in accordancewith IFRS.The summary financial and operating data in the tables below should be read together with“Risk Factors”, “Selected Combined Financial Data”, “Management’s Discussion and Analysis ofResults of Operations and Financial Condition” and our historical audited combined financialstatements, including the notes thereto contained elsewhere in this Prospectus. For moreinformation on our combined financial statements and the preparation thereof, see, “Presentationof Financial and Other Information”. IFRS differ in certain respects from U.S. GAAP. For adescription of certain differences between IFRS and U.S. GAAP, see “Annex A—Summary ofCertain Significant Differences Between IFRS and U.S. GAAP”.Year ended 31 DecemberCombined income statement data 2004 2005 2006($ in millions)Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.9 253.4 299.6Voyage costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13.9) (31.7) (56.3)Time charter equivalent earnings ............................... 140.0 221.8 243.3Other direct operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (94.7) (111.6) (133.5)Gross Profit ................................................ 45.3 110.2 109.8Profit on disposal of vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 30.0Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.0) (21.3) (22.1)Reversal of impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0.1Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.0) (6.0) (5.9)Operating Profit ............................................ 31.2 82.8 111.9Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.5) (16.9) (17.6)Profit on Ordinary Activities Before Taxation ..................... 23.7 65.9 94.3Taxation charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.5) (7.5) (8.9)Net Profit. ................................................. 18.2 58.4 85.4As of 31 DecemberCombined balance sheet data 2004 2005 2006($ in millions)Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206.8 317.9 365.5Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.1 44.0 58.3of whichCash and cash equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7 10.5 13.9Total assets ................................................. 252.9 361.9 423.8Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131.7 141.0 84.0of whichShort-term financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.2 126.0 53.0Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114.6 167.3 197.9of whichLong-term financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.7 161.5 187.7Total liabilities ............................................... 246.3 308.3 281.9Capital and reserves .......................................... 6.6 53.6 141.911

The following table provides certain information relating to our fleet which we consider inassessing our operating performance. The following operating data are not measurements ofperformance under IFRS or U.S. GAAP, and you should not consider any of them as analternative to (a) the financial information included in this Prospectus (as determined inaccordance with generally accepted accounting principles), or (b) any other measures of performanceunder generally accepted accounting principles. We believe that the following measurementsare measures commonly reported and widely used by investors in evaluating theperformance of companies operating in the shipping industry, which can vary significantlydepending upon accounting methods or non-operating factors. Accordingly, the followingmeasurements have been disclosed in this Prospectus to permit a more complete and comprehensiveanalysis of our operating performance. Because companies do not calculate suchmeasurements identically, our presentation of them may not be comparable to similarly titledmeasures used by other companies. Accordingly, undue reliance should not be placed on thefollowing operating data.Year ended 31 DecemberOther operating data 2004 2005 2006TotalTC equivalent earnings per employment day (net ofcommissions)($) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,776 20,458 20,885TC equivalent earnings per employment day excluding B-Types (2)(net of commissions)($) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,681 21,070 21,071Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,539 5,486 5,707Fixed Rate Contract days/available vessel days(%) (4) . . . . . . . . . . . . . 49.8% 51.3% 45.7%Off-hire days/available vessel days(%) (5) . . . . . . . . . . . . . . . . . . . . . . 4.3% 2.0% 2.2%Off-hire excluding dry-dock and exceptional events/availablevessel days(%) (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3% 0.6% 0.3%MRTC equivalent earnings per employment day (net ofcommissions)($) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,421 21,197 21,088Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,727 5,490 5,731Fixed Rate Contract days/available vessel days(%) (4) . . . . . . . . . . . . . 61.5% 56.3% 47.3%HandysizeTC equivalent earnings (net of commissions)($) (1) . . . . . . . . . . . . . . 18,143 19,010 20,264TC equivalent earnings per employment day excluding B-Types (2)(net of commissions)($) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,125 20,657 21,011Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,351 5,480 5,642Fixed Rate Contract days/available vessel days(%) (4) . . . . . . . . . . . . . 38.8% 42.7% 42.1%(1) TC equivalent earnings per employment day net of commissions. This figure representstime charter (“TC”) equivalent earnings for vessels employed on the spot market and timecharter contracts, divided by the number of on-hire days, less commissions charged bycommercial managers and external brokers. Calculations for handysize vessels also excludechartered vessels in which we have a partial interest, since distributions paid by the pool onthese vessels are net of charter expenses, and would therefore require pro-forma adjustmentsto make it comparable to the remaining vessels. We believe that excluding vessels inwhich we have a partial interest from our calculation does not significantly alter theaverage daily TC equivalent earnings of our handysize fleet, which we employ through theHandytankers Pool. In particular, vessel earnings for the Handytankers Pool depend primarilyon pool points and the average pool points of the vessels excluded from our calculationwas 103.1, compared to the average pool points of vessels included in our calculation, whichwas 103.9. TC equivalent earnings per employment day is a measure of how well wemanage our fleet strategically, by choosing the right timing to fix vessels on term contractsand commercially, by finding the most attractive employment opportunities for vessels onthe spot market.12

(2) TC equivalent earnings per employment day excluding B-Types. This figure represents TCequivalent earnings, divided by the number of on-hire days, for all handysize vessels exceptB-Type vessels. B-Type vessels were substantially smaller and of an older age than theremainder of our fleet, and were sold in 2006. Excluding them from the calculations allowsus to see how vessels similar to those we currently operate, performed.(3) Daily OPEX. This represents the cost of operating owned and bareboat chartered vessels. Itincludes technical expenses, the cost of lube oils, crewing, insurance, technical managementand other sundry operating expenses directly incurred in relation to the ownership of thevessel. This figure excludes the cost and depreciation of dry-docks. Since expenses arisingfrom equipping a ship for delivery are capitalised, reducing a vessel’s technical expenses inthe year of delivery, we have excluded ships during their first year of operations from ouraverage daily costs.(4) Fixed Rate Contract Days/available vessel days (coverage ratio). This figure represents howmany vessel days were employed on time charter contracts and COAs, inclusive of off-hiredays, divided by the number of available vessel days, defined as the number of daysbetween delivery and redelivery for all of our vessels, for the fiscal year being considered.To calculate TC days for vessels employed within the High Pool, we first had to calculate theratio of TC days/available vessel days (the pool coverage ratio) for all vessels employedwithin the pool, from each of our vessels’ pool entry dates. The number of TC days for avessel was then determined as the product of the pool’s coverage ratio since that vessel’spool entry and the number of days that vessel was operated within the pool. For vesselsemployed within Glenda International Management, the results from vessels are not pooled;we therefore used contractual commitments of each individual vessel to determine itscoverage ratio. For vessels employed within the Handytankers Pool, we are not responsiblefor administrative functions and therefore have access to less detailed operating data,compared to the High Pool. TC days for these vessels was therefore determined using theaverage pool coverage ratio for the fiscal year being considered, rather than the ratio fromthe entry date of each of our vessels.(5) Off-hire days/available vessel days. This figure is equal to the ratio of the total off-hiredays—inclusive of dry-docks and off-hires due to exceptional events such as a collision or aship’s seizure—and the total number of available vessel days, which is defined as thenumber of vessel days between delivery and redelivery for the fiscal year being considered.(6) Off-hire excluding dry-dock and exceptional events/available vessel days. This figure isequal to the ratio of the off-hire days—exclusive of dry-docks and exceptional events suchas a collision or the seizure of a ship and the total number of vessel days, which is definedas the number of vessel days between delivery and redelivery for the fiscal year beingconsidered. This figure serves as an indicator of the quality of the technical managementservice provided by d’Amico Società di Navigazione S.p.A. and of our management’s abilityto select vessels from first class operators.13

Summary of Risk FactorsBefore deciding to purchase shares, you should carefully consider certain risks. The following isa summary of these risks:Risks Relating to Our Industry• The cyclical nature of the product tanker industry may lead to volatility in freight andcharter rates.• Fluctuations in the supply of and demand for refined petroleum products may lead tovolatility in the demand for product tanker capacity and, consequently, in freight rates.• Vessel values may fluctuate which may result in the incurrence of a loss upon disposal ofa vessel or increase the cost of acquiring additional vessels.• Compliance with strict regulatory requirements, including environmental laws and regulationsand inspection and vetting procedures, may have an adverse effect on ourbusiness.• Changes in economic and market conditions may affect our ability to charter in newvessels and the costs associated with the charter in of new vessels.• Bunker fuel prices, port charges, canal passages and other voyage expenses may significantlyincrease.• Operational risks inherent in the shipping industry could have a negative impact on ourresults of operations.• Maritime claimants could arrest our vessels or government or other authorities coulddetain our vessels.• Governments could requisition our vessels during a period of war or emergency.• Terrorist attacks and international or local hostilities may affect the shipping industry.• Anticipated amendments in EC competition regulation may adversely affect the shippingindustry.Risks Relating to the Group• We are a newly formed company with no separate operating history.• We adopt a portfolio approach to vessel employment which carries inherent risks.• Our membership in the Handytankers and High Pools and our commercial managementarrangement with Glencore are dependant on the continuing performance of theobligations of the other parties to these relationships.• Our commitment to pooling and other commercial management arrangements relatingto certain vessels in our fleet may reduce our ability to respond to market developmentsand to independently adopt strategies for these vessels.• We depend upon a limited number of customers for a significant part of our revenues.• In the event that any security over our chartered-in vessels is enforced, we may lose ourrights and interests under the relevant time charter contract, the ability to operate suchvessels within our fleet, and we may become liable to parties we charter our vessels to.• Our charterers may terminate or default on their charters or may, at the time forrenewal, not recharter or recharter at lower rates.• We may not be able to recharter chartered in vessels or the costs associated withchartering in may increase.• We face intense competition in the product tanker market.• We may not be able to grow or effectively manage our growth.14

• We may be required to make substantial capital expenditures in order to maintain andexpand the size of our fleet and to maintain the high quality of the vessels which weown.• We may not have a sufficient number of available vessels to service our CoAs.• Our business may be affected by the performance and the supply of various productsand services by third parties.• Good health and safety practices are essential for the maintenance of our business.• Our inability to choose the technical managers and crew of our chartered in vessels mayaffect the employment of these vessels.• Our vessels may suffer damage or be involved in accidents and we may face unexpecteddrydocking and other costs.• Purchasing and managing previously owned or second hand vessels may result inunforeseen operating costs and vessels off-hire.• Delays in deliveries or non-delivery of newbuildings or committed long term chartervessels could harm our operations.• The ageing of our fleet may result in increased operating costs in the future and aninability to employ all of our vessels profitably.• We rely on the “d’Amico Tankers” trademark and brand name.• We have a strong brand and established reputation in the product tanker market. Anydamage to our brand or reputation may have an adverse effect on our business.• Labour interruptions and problems could disrupt our business.• We may be unable to attract and retain key management personnel and otheremployees.• If we default on any of the loan agreements entered into under our new credit facility,we could forfeit our rights in our vessels and their charters.• Our new credit facility contains various restrictive covenants.• We are a holding company and we depend on the ability of our subsidiaries to distributefunds to us in order to satisfy our financial and other obligations.• Currency exchange rate and interest rate fluctuations may adversely affect our profitabilityor your investment in our Shares.• Our insurance may not be adequate to cover our losses.• We have and may enter into agreements with related parties on terms which may be lessfavourable than otherwise available from third parties.• Our owned vessels are registered in Liberia. Any requirement to move the registration ofthese vessels may increase our costs.• We cannot assure you that we will pay dividends.• Our incorporation under the laws of Luxembourg may limit the ability of our shareholdersto protect their interests and our ability to return value to shareholders.• U.S. tax authorities could treat us as a “passive foreign investment company” whichcould have adverse U.S. federal income tax consequences to U.S. shareholders.• There is a risk that Irish stamp duty may be payable by us in respect of the transfer ofthe entire issued share capital of d’Amico Tankers Limited from the Selling Shareholderto us.• There is a risk that capital duty may be payable by us in Luxembourg in respect of theallotment by us of shares to the Selling Shareholder in consideration for the transfer ofthe entire issued share capital of d’Amico Tankers Limited.15

• There is a risk that, under the tax provisions of certain territories with which or in whichwe conduct business, a taxable permanent establishment or a foreign tax liability mayarise.• We may have to pay tax on U.S. source income, which would reduce our earnings.• Our principal trading subsidiary, d’Amico Tankers Limited, as an Irish tax residentcompany, benefits from a favourable tax regime. Should its tax residence or the Irish taxregime change, this could result in a significant increase in its annual tax liabilities.• If each of the Irish companies in our Group is not successful in registering with the Irishtax authorities for value added tax (VAT), this could increase our tax liabilities.Risks Relating to the Offering• There may not be an active and liquid market for our Shares, which may cause ourShares to trade at a discount and make it difficult to sell the Shares you purchase.• Future sales of our Shares could cause the market price for our Shares to decline.• The product tanker sector has been unpredictable and volatile. The market price of ourShares may be similarly unpredictable and volatile.• Following this Offering, the Selling Shareholder will be able to control our Company,including the outcome of shareholder votes.• Investors may be subject to exchange rate fluctuations.• Your ability to bring a claim in relation to the audit of our combined financialstatements may be limited.• The rights of holders of our Shares are governed by Luxembourg law and U.S. holdersmay be unable to exercise pre-emptive rights.• As a Luxembourg incorporated and registered company with an Italian listing, we will besubject to regulation in both Luxembourg and Italy.16

Risk FactorsYou should carefully consider the following risk factors in addition to the other information inthis Prospectus before deciding whether to make an investment in the Shares. Any of these riskscould have a material adverse effect on our business, results of operations, cash flow, financialcondition and ability to pay dividends and, as a result, the value and trading price of our Sharesmay decline, which could, in turn, result in a loss of all or part of any investment in our Shares.Furthermore, the risks and uncertainties described below may not be the only ones we face.Additional risks and uncertainties not presently known to us or that we currently deemimmaterial may also impair our business operations. The order in which the risks are presenteddoes not necessarily reflect the likelihood of their occurrence or the magnitude of theirpotential impact on our business, results of operations, cash flow, financial condition or shareprice.Risks Relating to Our IndustryThe cyclical nature of the product tanker industry may lead to volatility in freight andcharter rates.We generate the majority of our revenues from the operation of our product tanker fleet.Factors beyond our control will have a significant impact on the freight and charter rates whichcan be charged for shipping the products which our product tankers carry. Fluctuations infreight and charter rates result from changes in the market for product tanker capacity, which,in the past, has been cyclical and volatile.Some of the factors that influence the demand for product tanker capacity and, in turn, freightand charter rates, include: levels of demand for the products which we transport; the globalisationof manufacturing; changes in laws and regulations affecting the product tanker industry;global and regional economic and political conditions; terrorist attacks; international and localhostilities; developments in international trade; changes in seaborne and other transportationpatterns, including changes in the distances over which cargoes are transported; currencyexchange rates; natural disasters; and weather conditions.Some of the factors that influence the supply of product tanker capacity and, in turn, freightand charter rates, include: the number of newbuilding deliveries; the scrapping rate of oldervessels; vessel casualties; the price of steel; the number of vessels which are off-hire; the numberof vessels which are out of service; changes in environmental and other regulations which maylimit the useful life of vessels; technological developments which affect the efficiency of vessels;and port or canal congestion.Freight and charter rates may also be adversely affected by downturns in general economic andmarket conditions. Our business success depends in part on our ability to anticipate andeffectively manage the economic and other risks inherent in international business. We may notbe able to effectively manage these risks which could have a material adverse effect on ourbusiness, results of operations, cash flow and financial condition.The factors affecting the supply of and demand for product tanker capacity are outside ourcontrol, and the nature, timing and degree of changes in industry conditions can be unpredictable.If the supply of vessel capacity continues to increase and the demand for vessel capacitydoes not increase correspondingly, freight rates could materially decline and this could negativelyimpact our business, results of operations, cash flow and financial condition. A failure torecharter our vessels on the expiration or termination of our current charters or a failure torecharter them at favourable charter rates may have a similar impact.Fluctuations in the supply of and demand for refined petroleum products may lead tovolatility in the demand for product tanker capacity and, consequently, in freightrates.A significant proportion of the revenues from the operation of our product tanker fleet isgenerated from the shipping of refined petroleum products. Changes in the supply of anddemand for refined petroleum products will have an impact on the demand for product tankercapacity. The market for refined petroleum products is affected by various factors beyond ourcontrol and has, in recent years, been cyclical and volatile.17

The following factors may influence the supply of and demand for refined petroleum productsand, consequently, will influence freight rates for these products: competition from alternativesources of energy; changes in petroleum production and refining capacity; global and regionaleconomic and political conditions; terrorist attacks; international and local hostilities; environmentalconcerns and regulations which could have an impact on the supply and price of refinedpetroleum as well as the demand for our vessels; natural disasters; weather conditions; andclimate change.Any decline in freight rates as a result of significant changes in the levels of the supply of anddemand for these products could negatively impact our business, results of operations, cash flowand financial condition.Vessel values may fluctuate which may result in the incurrence of a loss upon disposalof a vessel or increase the cost of acquiring additional vessels.Vessel values may fluctuate due to a number of different factors, including: general economicand market conditions affecting the shipping industry; competition from other shipping companies;the types and sizes of available vessels; the availability of other modes of transportation;increases in the supply of vessel capacity; the cost of newbuildings; governmental or otherregulations; prevailing freight rates; and the need to upgrade second hand and previouslyowned vessels as a result of charterer requirements, technological advances in vessel design orequipment or otherwise. In addition, as vessels grow older, they generally decline in value. Dueto the cyclical nature of the product tanker market, if for any reason we sell any of our ownedvessels at a time when prices are depressed, we could incur a loss and our business, results ofoperations, cash flow and financial condition could be adversely affected.Conversely, if vessel values are elevated at a time when we wish to acquire additional vessels,the cost of acquisition may increase and this could adversely affect our business, results ofoperations, cash flow and financial condition.Compliance with strict regulatory requirements, including environmental laws and regulationsand inspection and vetting procedures, may have an adverse effect on ourbusiness.The shipping industry is affected by numerous regulations in the form of international conventions,national, state and local laws as well as national and international regulations enforced inthe jurisdictions in which our vessels operate and are registered. Current regulation of vessels,particularly in the areas of safety and environmental impact, may change in the future andrequire us to incur significant capital expenditures and/or additional operating costs in order tokeep our vessels in compliance. In addition, in the event of any breach of environmental laws orregulations, including as a result of environmental discharges, we may be subject to severe finesand penalties.International shipping is also subject to increasingly rigorous security and customs inspectionand related procedures in countries of origin and destination and trans-shipment points. Theseprocedures can result in cargo seizure, delays in the loading, offloading, trans-shipment ordelivery of cargo and the levying of customs duties, fines or other penalties against exporters orimporters and, in some cases, carriers.We are required by various governmental and regulatory agencies to obtain certain permits,licences and certificates in order to operate our fleet. We are also subject to stringent vettingprocedures, carried out by our customers. Failure to hold valid permits, licences and certificatesor to secure and maintain sufficient vetting approvals from our customers could negativelyaffect our ability to employ our vessels, including as a result of our charterers cancelling or notrenewing existing charters or a failure to attract new customers. In addition, a failure to hold anecessary permit, licence, certificate or approval in respect of one vessel could have an adverseimpact on other vessels under our control.Each of these factors may adversely affect our business, results of operations, cash flow andfinancial condition.18

Changes in economic and market conditions may affect our ability to charter in newvessels and the costs associated with the charter in of new vessels.The shipping industry is cyclical in nature. Our ability to charter in our vessels on the expirationor termination of the current charters and the charter rates payable under any renewed orreplacement charters will depend on, among other things, economic conditions in the producttanker market at the time and changes in the supply of and demand for product tankercapacity. In addition, increases in costs incurred by the charterers from which we charter invessels, including as a consequence of exchange rate fluctuations and increases in crewing costsmay cause those charterers to seek corresponding increases in the rates charged to us. We havetwo vessels going off charter this year. Any increase in the rates payable to charter in vesselscould result in a corresponding increase in our costs.If we cannot charter in vessels or cannot charter them in at favourable rates, this may have anegative impact on our business, financial condition, cash flow and results of operations.Bunker fuel prices, port charges, canal passages and other voyage expenses may significantlyincrease.Increases in the cost of bunker fuel, port charges, canal passages and other voyage expenses aresubject to a number of economic, natural and political factors which are beyond our control. Inaccordance with industry practice, we are responsible for voyage expenses when operating ourvessels on the spot market or under COAs. Accordingly, a significant increase in these expensesover an extended period could significantly reduce our profitability which could have an adverseeffect on our business, results of operations, cash flow and financial condition.Operational risks inherent in the shipping industry could have a negative impact onour results of operations.Our vessels and their cargoes are at risk of being damaged or lost due to events such as marinedisasters, bad weather, human error, war, terrorism, piracy, stowaways and other circumstancesor events. In addition, increased operational risks arise as a consequence of the complex natureof the product tanker industry, the nature of the services required to support the industry,including maintenance and repair services and the mechanical complexity of the product tankersthemselves. Damage and loss could arise as a consequence of a failure in the services required tosupport the industry, for example, due to inadequate fuel being supplied to a vessel orinadequate dredging. Inherent risks also arise due to the nature of the products transported byour vessels. Any damage to, or accident involving, our vessels while carrying these productscould give rise to environmental damage or lead to other adverse consequences. Each of theseinherent risks may also result in death or injury to persons, loss of revenues or property, higherinsurance rates, damage to our customer relationships, delay or rerouting.Some of these inherent risks could result in significant damages, such as marine disaster orenvironmental accidents and any resulting legal proceedings may be complex, lengthy, costlyand, if decided against us, any of these proceedings or other proceedings involving similarclaims or claims for substantial damages may harm our reputation and have a material adverseeffect on our business, results of operations, cash flow and financial position. In addition, wemay be required to devote substantial time to these proceedings, time which we couldotherwise devote to our business.Our worldwide operations expose us to a variety of additional risks, including the risk ofbusiness interruptions due to political circumstances, hostilities, labour strikes and boycotts,potential changes in tax rates or policies and potential government expropriation of our vessels.In addition, inadequacies in the legal systems and law enforcement mechanisms in certaincountries in which we operate may expose us to risk and uncertainty.Any of these factors may have a material adverse effect on our business, results of operations,cash flow and financial condition.19

Maritime claimants could arrest our vessels or government or other authorities coulddetain our vessels.Crew members, suppliers of goods and services to a vessel, shippers of cargo and other partiesmay 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 throughforeclosure proceedings. For example, one of our vessels was arrested in Dar Es Salaam, Tanzaniain connection with damage to under-water piping which occurred while we were in the processof securing the vessel in the tsunami of 26 December 2004. The vessel in question was detainedfor four months. Claimants may also be entitled to assert “sister ship” liability against one vesselin our fleet for claims relating to another vessel in our fleet. The arrest or attachment of one ormore of our vessels could interrupt our cash flow and require significant expenditures to havethe arrest lifted.Government or other authorities may also detain vessels for the purposes of investigating theiractivities or those of their crew members.Any arrest, detention or investigation could prevent or delay a vessel from completing a voyageand from being available for subsequent voyages which could result in financial loss andadversely affect our business, results of operations, cash flow and financial condition.Governments could requisition our vessels during a period of war or emergency.A government could requisition for title or seize one or more of our vessels. Requisition for titleoccurs when a government takes control of a vessel and becomes her owner. Also, a governmentcould requisition our vessels for hire. Requisition for hire occurs when a government takescontrol 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 moreof our vessels would have a negative impact on our business, results of operations, cash flowand financial condition.Terrorist attacks and international or local hostilities may affect the shipping industry.Terrorist attacks or war or international or local hostilities could adversely affect the worldeconomy, the supply of and demand for refined petroleum and other products and freight andcharter rates in the product tanker market. In addition, tanker facilities, shipyards, vessels,pipelines, oil fields and refining facilities could be targets of future terrorist attacks. Any suchattacks could lead to, among other things, death or injury to persons, vessels or other propertydamage and could lead to increased vessel operating costs (including insurance costs) and theinability to transport refined petroleum and other products to or from certain locations.Terrorist attacks, war or other events beyond our control that have an adverse effect on thedistribution, production or transportation of refined petroleum and other products shipped byus could entitle our customers to terminate our charter contracts, which could have an adverseeffect on our business, results of operations, cash flow and financial condition.Anticipated amendments in EC competition regulation may adversely affect the shippingindustry.Historically, the international maritime transport sector has been subject to various blockexemptions which allowed categories of shipping companies to fix rates and capacity jointly. In2006, however, the European Council revoked certain of these exemptions bringing linerconferences, tramp and cabotage shipping fully within the scope of EC competition law from2008. While this does not directly affect our pooling arrangements, it is an indication ofheightened scrutiny of commercial practices in the maritime sector.We cannot at present estimate the extent to which we may have to change our current practicesof operating our vessels in pools and managing the pools in light of competition lawrequirements. The European Commission has indicated that it will provide guidance in thecourse of this year for the industry on the application of competition law to the maritime sector,but when such guidance will be available is uncertain. Should such guidance or heightenedscrutiny impact our current practices, we could be required to make changes to the way we20

operate our vessels, which could lead to business interruptions and could have an adverse effecton our business, results of operations, cash flow and financial condition.Risks Relating to the GroupWe are a newly formed company with no separate operating history.We were formed in February 2007 during the reorganisation of the d’Amico Group. Wetherefore have no operating history. Our historical financial performance is connected to theresults of operations, financial position and cash flow of the Group’s product tanker operations.Our combined financial information included in this Prospectus does not necessarily reflect theactual results of operations, financial position and cash flow that we would have had if we hadbeen an operating company during such periods. Similarly, they are not indicative of our futureresults of operations, cash flow and financial position.We adopt a portfolio approach to vessel employment which carries inherent risks.We seek to deploy our vessels both on time charters and in the COA and spot markets in amanner that will optimise our earnings. Although present time charters provide relatively steadystreams of revenue, our vessels committed to time charters may not be available for spot orCOA voyages during an upturn in the product tanker market at a time when these voyages maybe more profitable. Similarly, vessels employed in the spot or COA markets may, at certain times,be more profitably employed on time charters. In addition, our ability to determine theemployment of some of our vessels is restricted by our involvement in the Handytankers andHigh Pools and our commercial management arrangement with Glencore. If we cannot employour vessels on time charters or employ them profitably in the spot or COA market, our business,results of operations, cash flow and financial condition may suffer.Our membership in the Handytankers and High Pools and our commercial managementarrangement with Glencore are dependant on the continuing performance of theobligations of the other parties to these relationships.We are a member in the Handytankers and High Pools. In addition, a number of our vessels areoperated pursuant to our arrangement with Glencore for the provision of commercial managementservices. A significant proportion of our revenues is derived from these arrangements andis contingent on the continuing performance of our pool partners and Glencore of theirobligations. Failure by any such parties to maintain their vessels properly or to abide by theterms of our commercial arrangements could affect the profits to be allocated under thesearrangements. In addition, any termination of, or failure to successfully renegotiate the termsof, the contractual relationships underpinning these arrangements or a withdrawal by any ofour pool partners or Glencore from the arrangements could have a significant adverse affect onour business, results of operations, cash flow and financial condition.Our commitment to pooling and other commercial management arrangements relatingto certain vessels in our fleet may reduce our ability to respond to market developmentsand to independently adopt strategies for these vessels.We cede operational control of a number of our vessels to the Handytankers and High Poolsand our commercial management arrangement with Glencore. This impacts on our independentability to respond to market requirements and to independently develop and implement ourown strategy for the relevant vessels. This may result in these vessels being employed lessprofitably than would otherwise be the case which could negatively impact on our business,results of operations, cash flow and financial condition.We depend upon a limited number of customers for a significant part of our revenues.We have historically derived a significant part of our revenue from a small number of customers,both directly and through our pool and other commercial management arrangements and thenature of the industry dictates that there is a limited number of potential alternative customers.The loss of one or more of our principal customers or any such customer undergoing insolvencyproceedings or experiencing financial difficulty could therefore have a material adverse effecton our business, results of operations, cash flow and financial condition.21

In the event that any security over our chartered-in vessels is enforced, we may loseour rights and interests under the relevant time charter contract, the ability to operatesuch vessels within our fleet, and we may become liable to parties we charter our vesselsto.Owners of the vessels that we charter-in may have entered into agreements whereby theygranted security over these vessels. In the event that a beneficiary of the relevant securityenforces it, we might lose our interests under the relevant time charter contract, the ability tooperate such vessels within our fleet, and we may become liable to parties that we charter outthe relevant vessels to. The occurrence of any of these circumstances may adversely affect ourbusiness, financial condition and results of operations.Our charterers may terminate or default on their charters or may, at the time forrenewal, not recharter or recharter at lower rates.Our charterers may, under the terms of the arrangements under which we charter out vessels orotherwise, terminate earlier than the dates indicated in this Prospectus. The terms of ourcharters vary as to the circumstances under which a charter may be terminated but thesegenerally include the requisition for hire of the relevant vessel, the failure of the relevant vesselto meet specified performance criteria or a total or constructive total loss of the relevant vessel.In addition, the ability of each of our charterers to perform its obligations under a charter willdepend on a number of factors beyond our control. If a charterer defaults, the associated costsand delays may be considerable and may adversely affect our business, results of operations,cash flow and financial condition.In addition, we cannot predict whether our charterers will, upon the expiration of their charters,recharter the relevant vessels on favourable terms, or at all. If our charterers decide not torecharter these vessels, we may not be able to employ them on terms similar to those of ourcurrent charters, or at all or otherwise profitably employ these vessels. Our charterers may haveoptions to renew their charters at rates lower than the then prevailing market charter rates. Ifwe receive lower charter rates under replacement charters or are unable to recharter orotherwise profitably employ all of the relevant vessels, our business, results of operations, cashflow and financial condition may be adversely affected.We may not be able to recharter chartered in vessels or the costs associated with charteringin may increase.We may not to be able to recharter our chartered in vessels when our current charters expire orterminate. In addition, the rates payable for chartering in these or replacement vessels may notbe the same as those we currently pay. In the event that these rates increase or we are unableto charter in these or replacement vessels in the future, our business, results of operations, cashflow and financial condition may be adversely affected.We face intense competition in the product tanker market.Competition in the product tanker shipping market is intense. We expect increased competitionfrom existing competitors some of which may have greater financial resources or product tankercapacity than we do. In addition, an increasing number of other entities, including many withstrong reputations and extensive resources and experience, may enter the product tanker sector.Competitors with sufficient resources could enter the product tanker market through acquisitions,consolidations or newbuildings and may be able to offer a more competitive service thanwe do.As a result of increased competition, we may be unable to expand our relationships withexisting customers or to obtain new customers on a profitable basis, if at all, which could have amaterial adverse effect on our business, results of operations, cash flow and financial condition.We may not be able to grow or effectively manage our growth.A principal focus of our strategy is to grow by expanding our business and, in particular, thesize of our fleet, including by capitalising on existing business relationships and developing newbusiness relationships. Our future growth will depend on a number of factors. These factors22

include our ability to: maintain or develop new and existing customer relationships; identify andconsummate desirable acquisitions, joint ventures or strategic alliances; identify and capitaliseon opportunities in new markets; locate and acquire suitable vessels; integrate acquired vesselssuccessfully with our existing operations; successfully manage our liquidity and obtain therequired financing for our existing and new operations; secure necessary third party serviceproviders; and attract, hire and retain qualified personnel to manage and operate our fleet.A deficiency in any of these factors could adversely affect our ability to achieve anticipatedgrowth in cash flow or realise other anticipated benefits. In addition, competition from otherbuyers could reduce our acquisition opportunities or cause us to pay a higher price for vesselsthan we might otherwise pay.The process of integrating acquired vessels into our operations may result in unforeseenoperating difficulties, may absorb significant management attention and require significantfinancial resources that would otherwise be available for the ongoing development andexpansion of our existing operations. Future acquisitions could result in our incurring additionalindebtedness and liabilities that could have a material adverse effect on our profitability.In addition, our current operating and financial systems may not be adequate as to support ourgrowth and our attempts to improve those systems may be ineffective. If we are unable tooperate our financial and operating systems effectively as we expand our fleet, our performancemay be adversely affected.Our failure to execute our business strategy or to manage our growth effectively could adverselyaffect our business, results of operations, cash flow and financial condition. In addition, even ifwe successfully implement our business strategy, it may not improve our results of operations.Furthermore, we may decide to alter or discontinue aspects of our business strategy and mayadopt alternative or additional strategies in response to our operating environment or competitivesituation or factors or events beyond our control.We may be required to make substantial capital expenditures in order to maintain andexpand the size of our fleet and to maintain the high quality of the vessels which weown.Our business strategy is based in part upon the expansion of our fleet. In connection with thepurchase of new vessels, we are required to expend substantial sums in the form of downpaymentsand progress payments during the construction of these vessels but we will not deriveany revenue from the vessels until after their delivery. We typically make instalment paymentson newbuildings during the construction period, with the final payment due upon delivery.Second hand and previously owned vessels are generally purchased on the basis of a lump sumpayment. If we are unable to complete payments or are otherwise unable to fulfil ourobligations under any of our purchase contracts, we may forfeit all or a portion of thedownpayments and progress payments we have made under that contract.In addition, we may be required to make capital expenditures to maintain, over the long-term,the high quality of our owned vessels. These maintenance capital expenditures include capitalexpenditures associated with drydocking a vessel or modifying an existing vessel. Our ownedvessels are drydocked periodically for repairs and renewals and, in addition, may have to bedrydocked in the event of accidents or other damage.Our maintenance capital expenditures could increase as a result of: increases in the cost oflabour and materials; changes in customer requirements; increases in the size of our fleet;changes in technical developments in vessels; changes in governmental regulations and regulatorystandards relating to safety; changes in security; changes in environmental standards orrequirements; and changes in competitive standards.Any requirement to increase capital expenditure could adversely affect our business, results ofoperations, cash flow and financial condition.We may not have a sufficient number of available vessels to service our COAs.Under COAs, whether entered into directly or through pool or other commercial managementarrangements, we may be committed to providing vessels to transport a certain minimum23

number of cargoes. We may not be able to service these contracts due to various reasons,including the positioning of our vessels at that time, unscheduled drydocking or the unavailabilityof any vessels as a result of prior chartering commitments, in which case we may need tocharter in additional vessels. We cannot assure you that we would be able to charter inadditional vessels on commercially reasonable terms, or at all. If we cannot charter in additionalvessels to meet our obligations under our COAs, we would need to compensate our COAcustomers for the differential between the freight rate provided for in the COA and the actualfreight rate paid by the COA customer for another vessel and may also be required tocompensate the COA customers for any consequential losses incurred. This could have anadverse effect on our business, results of operations, cash flow and financial condition as well asour reputation in the shipping industry.Our business may be affected by the performance and the supply of various productsand services by third parties.As a shipping company, we depend upon the continued availability and satisfactory performanceof third parties, including d’Amico Group companies, our pooling partners, relatedparties, subcontractors, brokers and suppliers for many aspects of our business.We rely on third parties to supply us with various products and services. Using third parties tomanufacture, assemble and test vessels and operating systems reduces our control over qualityassurance and delivery schedules and costs. If the third parties we work with fail to comply withthe timing or quality provisions of the agreements governing our relationships, the performanceof certain of our operations could be adversely affected. Although we work closely with oursuppliers to avoid supply-related problems, we cannot assure you that we will not encountersupply problems in the future. Any delays, defects or failures could materially harm our businessby causing delays in the completion of voyages (if, for example, spare parts could not besourced) and increases in our costs. Also, if the prices for such products or services were toincrease and we were unable to pass on such increase to our customers, our profit marginswould decreaseThe ability of d’Amico Group companies and other third party service providers and pool andcommercial partners to continue providing services and supplying products for our benefit willdepend in part on their own financial strength. Circumstances beyond our control could impairthis financial strength. Because these providers may be privately held entities, it is unlikely thatinformation about their financial strength would become public prior to any default by themunder the relevant agreements. As a result, an investor in our Shares might have little advancewarning of problems even though those problems could have a material adverse effect on us.If our commercial relationships with our third party service providers come to an end, we mayhave difficulty identifying third party service providers of equal standing. In addition, the costsof securing alternative service providers could be high which could adversely affect ourprofitability.Each of these factors may impact on our business, results of operations, cash flow and financialcondition.Good health and safety practices are essential for the maintenance of our business.Our vessel crews carry out difficult and specialised tasks 24 hours a day, 365 days a year. A majorincident affecting the health and safety of crew would disrupt our operations. There is a risk offines or litigation if a health and safety incident occurs. Furthermore, a major incident coulddisrupt or delay operations and could have a negative effect on the confidence of our customersand on our business, results of operations, cash flow and financial condition.Our inability to choose the technical managers and crew of our chartered in vesselsmay affect the employment of these vessels.The owners of vessels chartered in by us determine who the technical manager of such vesselswill be. They are also directly responsible for crewing requirements. As a consequence, we maynot have access to the same high level of technical management and crew which would be thecase if we had discretion to choose the technical manager. Certain of our customers may not be24

willing to charter these vessels as the vessels may not meet the customers’ specific requirements.This could adversely affect our ability to employ these vessels profitably and therefore ourbusiness, results of operations, cash flow and financial condition.Our vessels may suffer damage or be involved in accidents and we may face unexpecteddrydocking and other costs.If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs ofdrydock repairs, which will be payable by us in respect of our owned vessels and the availabilityof drydocking services can be unpredictable and the costs can be substantial. We may have topay drydocking costs that our insurance does not cover in full. The loss of earnings while thesevessels are being positioned for drydocking, repaired and repositioned, as well as the actual costof the positioning, repairs and repositioning would decrease our earnings. An accident involvingany of our vessels could result in loss of revenue, fines or penalties, higher insurance rates anddamage to our reputation. In addition, if such an accident carries the potential risk of environmentalcontamination, substantial clean up costs, penalties and fines could be incurred. Each ofthese factors could have a material adverse effect on our business, results of operations, cashflow and financial condition.Purchasing and managing previously owned or second hand vessels may result inunforeseen operating costs and vessels off-hire.Previously owned or second hand, vessels are typically acquired on an “as is” basis without thebenefit of warranty cover. Any inspections carried out prior to purchase do not normally provideus with the same knowledge about their condition or the cost of any required (or anticipated)repairs that we would have had if these vessels had been built for and managed exclusively byus. We may, as a consequence, be obliged to pay increased and unforeseen maintenance andrepair, insurance and other operating costs in respect of these previously owned or second handvessels. We may also have to commit to greater expenditure to ensure that these vessels complywith all applicable regulations and standards. In general, the costs associated with maintaininga vessel in good operating condition increase with the age of the vessel. Older vessels aretypically less fuel efficient and more costly to maintain than more recently constructed vesselsdue to improvements in engine technology.We cannot assure you that market conditions will justify those expenditures or enable us tooperate our tankers profitably during the remainder of their useful lives. In addition, we maynot be able to sell these vessels profitably.Each of these factors may negatively impact on our business, results of operations, cash flowand financial condition.Delays in deliveries or non-delivery of newbuildings or committed long term chartervessels could harm our operations.The delivery of any newbuildings or committed long term charter vessels could be delayed,cancelled or otherwise not completed as a result of, among other things: quality or engineeringproblems or delays in the receipt of construction materials such as steel; changes in governmentalregulations or maritime organisation standards; labour disturbances or catastrophic events ata shipyard or financial crisis of a shipbuilder or charterer; a backlog of orders at the relevantshipyards; political or economic disturbances which adversely affect the relevant shipyards orcharterers; changes we need to make to the vessel specifications; our inability to obtainnecessary permits or approvals or to receive the required classifications for the vessels; ourinability to finance the purchase or charter of the vessels; weather interference or a catastrophicevent, such as a major earthquake or fire or any other force majeure; or a shipbuilder’s orcharterer’s failure to otherwise meet the scheduled delivery dates for the vessels or failure todeliver the vessels at all.If the delivery of a vessel is delayed or cancelled in circumstances where we have committed thevessel to a charter, we may be obliged to source an alternative vessel for our customer and paythe differential between the rate agreed with us and the rate for the substitute vessel. The costsinvolved could be significant.25

In addition, in some cases, if the delivery of a vessel to our customer is delayed, the customermay not be obliged to honour the relevant time charter.If therefore delivery of a vessel is delayed or cancelled, it could have are adverse effect on ourbusiness, results of operations, cash flow and financial condition.The ageing of our fleet may result in increased operating costs in the future and aninability to employ all of our vessels profitably.Our owned fleet has an average age of approximately four years. In general, the cost ofmaintaining a vessel in good operating condition increases with the age of the vessel. Oldervessels are typically less fuel efficient and more costly to maintain than more recently constructedvessels due to improvements in engine technology. Cargo insurance rates may increasewith the age of a vessel, making older vessels more costly to operate and therefore lessattractive to charterers. In addition, some of our customers set their own age restrictions forvessels they will agree to charter. Governmental regulations and safety and/or other equipmentstandards related to the age of vessels may also require expenditures on alterations or newequipment for our vessels and may restrict the type of activities in which our vessels mayengage. Each of these factors may negatively impact on our business, results of operations, cashflow and financial condition.We rely on the “d’Amico Tankers” trademark and brand name.We rely on the “d’Amico Tankers” trademark and brand name and d’Amico flag logo todistinguish our services from those of our competitors. On 2 January 2007, we entered into alicence agreement with d’Amico Società di Navigazione S.p.A. pursuant to which we weregranted a non-exclusive right to use the “d’Amico Tankers” trademark and d’Amico flag logofor 5 years with regard to the product tanker sector in which we currently operate. In the eventthat d’Amico Società di Navigazione S.p.A. elects to terminate the licence agreement, we couldbe forced to rebrand our business and services which could result in a loss of brand recognitionand customers and could require us to devote significant resources to advertising and marketinga new brand which could have a negative impact on our business, results of operations, cashflow and financial condition.We have a strong brand and established reputation in the product tanker market. Anydamage to our brand or reputation may have an adverse effect on our business.We believe that we have a strong brand and established reputation in the product tankermarket. As we license the “d’Amico Tankers” trademark and d’Amico flag logo from d’AmicoSocietà di Navigazione S.p.A. and the d’Amico brand name and logo is used by a number ofcompanies within the d’Amico Group, we will not have exclusive control over the use of thetrademark or name. Any adverse publicity which might arise as a consequence of a number offactors, such as accidents involving vessels, environmental contamination or litigation (whichmay involve other companies in the d’Amico Group), may have a negative impact on our brandand reputation. This could result in the loss of customers or a failure to attract new customers. Itcould also cause the parties with whom we have pool and other commercial managementarrangements to terminate their relationships with us. Any of these events could have a materialadverse effect on our business, results of operations, cash flow and financial condition.Labour interruptions and problems could disrupt our business.Our owned vessels are manned by masters, officers and crews that are employed by d’AmicoTankers Limited, our principal trading subsidiary. If not resolved in a timely and cost-effectivemanner, industrial action or other labour unrest could prevent or hinder our operations frombeing carried out normally and could have a material adverse effect on our business, results ofoperations, cash flow and financial condition. In addition, as the crew of our chartered in vesselsare not employed directly by a company in our Group, the management of labour issues is outof our control. Consequently, the risk of labour difficulties, such as disciplinary problems, maybe increased and this could also have a similar material adverse effect.26

We may be unable to attract and retain key management personnel and otheremployees.Our success depends to a significant extent on the abilities and efforts of our managementteam. Our ability to retain key members of our management team and to hire new members asmay be necessary is central to our strategy. The loss of any of these individuals could have anadverse effect on our business. Difficulty in hiring and retaining replacement personnel couldhave a similar effect.We also rely on the availability of qualified and technically proficient crew to staff our vessels.In recent years, the rate of growth of vessel capacity has outstripped the rate of growth in theavailability of qualified crew. If qualified crew is not readily available, we may not be in aposition to profitably employ our vessels through spot voyages, COAs or otherwise. In addition,the shortfall in available crew may result in crewing cost increases.Failure to attract and retain key management personnel or qualified crew may thereforenegatively impact on our business, results of operations, cash flow and financial condition.If we default on any of the loan agreements entered into under our new credit facility,we could forfeit our rights in our vessels and their charters.We have mortgaged all of our owned vessels as security to the lenders under our loanagreements. Default under any of these loan agreements, if not waived or modified, wouldpermit the lenders to foreclose on the mortgages over the vessels and we could lose our rightsin the vessels and their charters. In addition, our lenders are entitled to the assignment of ourtime charter agreements in the event of a breach by us of any of the main terms of the loanagreements.Our new credit facility contains various restrictive covenants.Our new credit facility imposes certain covenants on us. These covenants include requirementsto maintain minimum levels of available cash, capital and reserves and an equity to asset ratioof not less than 35%. These restrictions may limit our ability to: incur additional indebtedness;dispose of or create liens on our assets; sell capital stock; make investments; engage in mergersor acquisitions; make capital expenditures; and sell the vessels owned by us.We may therefore need to seek permission from our lenders in order to engage in certaincorporate actions. Our lenders’ interests may be different from ours and we cannot guaranteethat we will be able to obtain our lenders’ permission when needed. This may prevent us fromtaking actions that are in our best interest.In addition, we may not be able to comply with each of these covenants, including therequirement to maintain an equity to asset ratio of not less than 35%. Our only significant assetis our fleet. The appraised value of a vessel fluctuates depending on a variety of factors,including the age of the vessel, prevailing charter market conditions and new and pendingregulations. We cannot guarantee that a deterioration of our asset values will not result indefaults under our new credit facility in the future, nor can we guarantee that we will be ableto negotiate a waiver in the event of a default. A default under the facility may result in all or asubstantial amount of our debt becoming due at a time when we might not be able to satisfyour obligations. In addition, if there is a decline in vessel values, we may not be in compliancewith certain provisions of our new credit facility and we may not be able to refinance our debtor obtain additional financing. If we are unable to pledge additional collateral, our lenderscould accelerate our debt and foreclose on our fleet.We are a holding company and we depend on the ability of our subsidiaries to distributefunds to us in order to satisfy our financial and other obligations and to paydividends.We are a holding company and have no significant assets other than the equity interests in oursubsidiaries. Our subsidiaries conduct all operations relating to vessels we own or charter in andpayments in respect of the employment of our vessels will be made to our subsidiaries. As aresult, we are wholly dependent on receiving distributions from our subsidiaries and ourfunding arrangements with, and the performance of, our subsidiaries, to meet our cash27

obligations and pay dividends. The ability of our subsidiaries to make these distributions couldbe affected by a claim or other action by a third party, including a creditor and by applicablelegal and capital requirements. If we are unable to obtain funds from our subsidiaries, we maynot be able to meet our financial obligations or distribute dividends.Currency exchange rate and interest rate fluctuations may adversely affect our profitabilityor your investment in our Shares.While we generate most of our revenues and expenses in U.S. dollars, certain of our operatingexpenses are incurred in currencies other than U.S. dollars, particularly the Euro. From time totime we enter into financing arrangements or material contracts that are denominated incurrencies other than U.S. dollars. For example, we currently have contracts through ourcommercial management arrangement with Glencore to acquire interests in two new vessels,the purchase price for which is denominated in Japanese yen. As a result we may be adverselyaffected by fluctuations in exchange rates.In addition, our financial statements are prepared in U.S. dollars. As a result, the fluctuations ofthe exchange rate used to convert our subsidiaries’ financial information from foreign currenciesinto U.S. dollars may have a positive or negative effect on our consolidated financial conditionand consolidated assets, which are expressed in U.S. dollars in our consolidated financialstatements.The value of your investment in our shares may be affected by prevailing rates of exchangebetween the U.S. dollar and the Euro because our share capital, as set forth in this Prospectus, isdenominated in U.S. dollars, while our shares will be traded in Euros. We have set forth anindicative capitalisation table which reflects our capitalisation based on the Euro to U.S. dollarexchange rate at the time of pricing of the shares. Changes in the Euro to U.S. dollar exchangerate between the time of pricing and the consummation of the Offering could reduce theU.S. dollar proceeds we receive from the Offering and result in a decline in our share capital forreasons unrelated to the performance of our business.Finally, the majority of our financing is at variable interest rates. As a result we are subject tothe effects of interest rate fluctuations on such indebtedness.There can be no assurance that future exchange rate and interest rate fluctuations may nothave an adverse effect on our results of operations. As of the date hereof, we do not have anyspecific hedging arrangements in place to cover exchange rate or interest rate fluctuations andthere can be no assurance that we will enter into such arrangements in the future. We do notalways hedge the above risks. When we do, this may result in us paying higher than marketrates. If we do enter into hedging arrangements, we cannot assure you that our hedgingarrangements will not result in additional losses or that further shifts in exchange rates orinterest rates will not have a material effect on us.Adverse exchange and interest rate fluctuations, if not hedged, may negatively impact on ourbusiness, result of operations, cash flow and financial condition.Our insurance may not be adequate to cover our losses.We may not be adequately insured to cover losses from our operational and other risks whichcould have a material adverse effect on us. Certain risks, for example, those associated withterrorist attacks, cannot generally be insured against. Our insurers may refuse to pay particularclaims and our insurance may be voidable by the insurers if we take, or fail to take, certainactions, such as failing to maintain certification of our vessels with applicable maritime regulatoryorganisations. In addition, in the future, we may be unable to procure similar adequateinsurance cover on the terms and conditions equal to those we currently have, particularly inadverse market conditions. Any significant uninsured or under-insured loss or liability, anyincrease in our insurance costs or any failure by our insurers to pay on claims (due to aninsolvency on their part, their financial condition or otherwise) could have a material adverseeffect on our business, results of operations, cash flow and financial condition.Because we obtain some of our insurance through protection and indemnity associations, wemay be subject to calls in amounts based not only on our claim records but also the claimrecords of other members of the protection and indemnity associations through which we28

eceive insurance coverage. Our payment of these calls could result in significant expense to uswhich could have a material adverse effect on our business, results of operations, cash flow andfinancial condition.We have and may enter into agreements with related parties on terms which may beless favourable than otherwise available from third parties.We have entered into a number of agreements with entities within the d’Amico Group toprovide support and services to us. In particular, through d’Amico Ireland Limited, we havecontracted the technical and crew management of certain vessels, including the recruitment,training and management of crew and the maintenance and repair of the vessels to d’AmicoSocietà di Navigazione S.p.A. Through d’Amico Tankers Limited we have also entered into alicence agreement with d’Amico Società di Navigazione S.p.A. entitling us to use the “d’AmicoTankers” trademark and d’Amico flag logo subject to certain conditions. We may also enter intofurther agreements with such related parties in the future. Although we believe that thesetransactions with related parties are on arm’s length terms, we cannot assure you that we wouldnot have been able to secure more favourable terms from third parties. In addition, we cannotassure you that conflicts of interest may not arise in the future, including in relation to, or as aresult of, new business opportunities.Our owned vessels are registered in Liberia. Any requirement to move the registrationof these vessels may increase our costs.The costs associated with the registration of our owned vessels in Liberia are less than may bethe case in other countries. If we are required by law or otherwise to change the country ofregistration, our costs may increase and this could adversely impact on our business, results ofoperations, cash flow and financial condition.We cannot assure you that we will pay dividends.We will make dividend payments to our shareholders only if our board of directors, acting in itssole discretion, determines that such payments would be in our best interest and in compliancewith any relevant legal and contractual requirements. The principal business factors that ourboard of directors expects to consider when determining the timing and amount of dividendpayments will be our earnings, financial condition and cash requirements at the time.We may enter into new agreements or new legal provisions that will restrict our ability to paydividends. In addition, because we are a holding company, our ability to make dividendpayments may also depend on our subsidiaries’ ability to distribute funds to us. Their ability todistribute funds to us will be affected by any legal and capital requirements to which they aresubject. As a result, we cannot assure you that dividends will be paid with any particularfrequency or at all.Following this Offering, the Selling Shareholder will be able to control our Company,including the outcome of shareholder votes.The Selling Shareholder is expected to own approximately 60% of our Shares followingcompletion of this Offering, assuming no exercise of the underwriters’ over-allotment option. Asa result of this share ownership and for so long as the Selling Shareholder owns a significantpercentage of our Shares, the Selling Shareholder will be able to control or influence theoutcome of any shareholder vote requiring the casting of a simple majority of votes, includingthe election and removal of directors and other significant corporate transactions. It may also beable to block certain other shareholder votes, such as the adoption or amendment of provisionsin our articles of incorporation. This concentration of ownership may have the effect ofdelaying, deferring or preventing a change in control, merger, amalgamation, consolidation,takeover or other business combination. It could also discourage a potential acquirer frommaking a tender offer or otherwise attempting to obtain control of us, which could in turn havean adverse effect on the market price of our Shares.29

Our incorporation under the laws of Luxembourg may limit the ability of our shareholdersto protect their interests and our ability to return value to shareholders.Our shareholders may be adversely affected by the provisions of Luxembourg law which limitshareholders’ right to seek direct recourse to our assets. According to our articles of incorporation,shareholders have no right to have their Shares repurchased or redeemed. Returns ofcapital can be effected only by means of a share capital reduction approved by the shareholdersin an extraordinary general meeting or upon a liquidation.U.S. tax authorities could treat us as a “passive foreign investment company” whichcould have adverse U.S. federal income tax consequences to U.S. shareholders.A foreign corporation will be treated as a “passive foreign investment company”, or PFIC, forU.S. federal income tax purposes if it meets either of two tests relating to the nature orcomposition of its income and assets as “passive” under the PFIC rules. U.S. shareholders of aPFIC are subject to a disadvantageous U.S. federal income tax regime applicable to the certaindistributions they receive from the PFIC and the gain, if any, they derive from the sale or otherdisposition of their Shares in the PFIC.Based on certain information and estimates relating to our gross income and gross assets andthe nature of our business and upon our proposed method of operation, we do not anticipatethat we will be classified as a PFIC for our current taxable year. In this regard, we intend to treatthe gross income we derive or are deemed to derive from our time chartering spot market andCOA activities as income from the performance of services or income from an active leasingbusiness. Accordingly, we believe that for purposes of the PFIC rules our income from our timechartering activities does not constitute “passive income” and the assets that we own andoperate in connection with the production of that income do not constitute passive assets.No assurance can be given, however, that the U.S. Internal Revenue Service, or IRS will not takea contrary position, or that a court of law will accept our position, and accordingly there is arisk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurancecan be given that we would not constitute a PFIC for the current or any future taxable year ifthere were to be changes in the nature and extent of our income, assets, or operations.If it were to be determined that we are a PFIC for our current taxable year or we become a PFICfor any future taxable year, our U.S. shareholders will face adverse U.S. tax consequences. Underthe PFIC rules, unless those shareholders make an election available under the United StatesInternal Revenue Code of 1986, or the Code, such shareholders would be liable to payU.S. federal income tax on certain excess distributions we make on our Shares, or on any gainsupon a disposition of Shares, at the highest applicable income tax rates on ordinary income forthe taxable year to which such distributions, or gains, are attributed under the PFIC rules, plusan interest charge thereon, as if the excess distribution or gain had been recognised rateablyover the shareholder’s holding period of our Shares. Please read “Taxation—United StatesFederal Income Tax Considerations” for a discussion of the U.S. federal income tax consequencesfor U.S. shareholders if we are treated as a PFIC.There is a risk that Irish stamp duty may be payable by us in respect of the transfer ofthe entire issued share capital of d’Amico Tankers Limited from the Selling Shareholderto us.As part of the reorganisation of the Group, the Selling Shareholder transferred its 100%shareholding in d’Amico Tankers Limited to us. This transfer should qualify for stamp duty reliefin Ireland, however it may take up to two or three months for the stamp duty adjudicationprocess to be completed by the Irish tax authorities. If the Irish tax authorities rule that thetransfer does not qualify for stamp duty relief in Ireland stamp duty equal to 1% of the higherof the value of the consideration or the market value of the shares of d’Amico Tankers Limitedat the time of their transfer to us will be payable by us.30

There is a risk that capital duty may be payable in Luxembourg by us in respect of theallotment by us of shares to the Selling Shareholder in consideration for the transferof the entire issued share capital of d’Amico Tankers Limited.The increase of our share capital and the corresponding issue of new shares by us to the SellingShareholder was exempt from ad valorem capital duty in Luxembourg, however, this exemptionis subject to a five year claw-back period that runs from the date of the capital increase. We aretherefore required to retain all of the d’Amico Tankers Limited shares received from the SellingShareholder for a minimum period of five years. In addition, the participation held by us ind’Amico Tankers Limited during this five year period should never represent less than 65% ofthe share capital of d’Amico Tankers Limited. If either of these conditions is not complied withbefore the five year period has elapsed, the 1% ad valorem capital duty would (subject tocertain exceptions) become retroactively due. If due, ad valorem capital duty equal to 1% of thehigher of the value of the consideration or the market value of the shares of d’Amico TankersLimited at the time of their transfer to us will be payable by us.We may have to pay tax on U.S. source income, which would reduce our earnings.Under the Code, 50% of the gross shipping income of a vessel owning or chartering corporation,such as our company and our subsidiaries, that is attributable to transportation that beginsor ends but that does not both begin and end, in the United States is characterised as U.S. sourceshipping income and will be subject to a 4% United States federal income tax withoutallowance for deduction, unless that corporation qualifies for exemption from tax underSection 883 of the Code and the related Treasury Regulations which the IRS has adopted andwhich have been effective since 1 January 2005 for calendar year taxpayers such as ourselvesand our subsidiaries.After this Offering, we expect that we and each of our subsidiaries will qualify for this statutorytax exemption, and we will take this position for United States federal income tax reportingpurposes. However, there are factual circumstances beyond our control that could cause us tolose the benefit of this tax exemption after this Offering and thereby become subject to UnitedStates federal income tax on our United States source income.We will be ineligible to qualify for exemption under Section 883 for any taxable year in whichthe Selling Shareholder alone or together with other shareholders with a 5% or greater interestin our Shares, or the 5% shareholder group, were to own 50% or more of our outstandingShares on more than half of the days during such taxable year and we were unable to establishin accordance with the Treasury Regulations that within the 5% shareholder group there weresufficient qualified shareholders for the purposes of Section 883 to preclude non-qualifiedshareholders within such group from owning 50% or more of our common stock for more thanhalf of the number of days during the taxable year. In order to establish this, qualifiedshareholders within the 5% shareholder group would have to provide us with certain informationin order to substantiate their identity as qualified shareholders. We may be unable toestablish in conformity with the Treasury Regulations that there are sufficient qualified shareholderswithin the 5% shareholder group to allow us to qualify for exemption under Section 883.Due to the factual nature of the issues involved, we can give no assurances regarding our taxexemptstatus or that of any of our subsidiaries.If we or our subsidiaries are not entitled to exemption under Section 883 of the Code for anytaxable year, the imposition of a 4% U.S. federal income tax on our U.S. source shipping incomeand that of our subsidiaries could have a negative effect on our business and would result indecreased earnings available for distribution to our shareholders.Our principal trading subsidiary, d’Amico Tankers Limited, as an Irish tax resident company,benefits from a favourable tax regime. Should its tax residence or the tax regimeapplicable to us change, this could result in a significant increase in its annual tax liabilitiesand could impact its profitability. In addition, under the tax provisions of certainterritories with which or in which we conduct business, a taxable permanentestablishment or a foreign tax liability may arise.As an Irish tax resident company, d’Amico Tankers Limited currently pays corporation tax on itsprofits at a rate of 12.5%. If d’Amico Tankers Limited’s tax residence were to change to a31

country other than Ireland it may be subject to an increased tax rate. A change in tax residencecould arise from changes to the location of its overall management and control, its board andsenior management composition and governance and other corporate matters. In addition,there is a risk that, under the tax provisions of territories in which the vessels operate, additionalpermanent establishment or branch profits tax, freight tax or other taxes may arise. Any increasein our tax liabilities would adversely affect our profitability.Currently there is no proposal that the tax residence of d’Amico Tankers Limited would bechanged to a country other than Ireland. If the residence were to change, there are certain Irishcapital gains tax exit charges which would apply, under which d’Amico Tankers Limited wouldbe deemed to sell (and re-acquire) its assets at market value, crystallising a tax liability on capitalgains. Currently the Irish capital gains tax rate is 20%. An exclusion may apply where at least90% of the issued share capital is held by a company which is not Irish tax resident and iscontrolled by non-Irish resident persons who are resident in a country with which Ireland hasconcluded a Double Taxation Agreement. In the context of a publicly traded company it is bestto assume that the exit charge may arise if the residence of its Irish resident subsidiaries movesfrom Ireland.In addition, the Irish government may impose a higher rate of corporation tax or otherwisechange the corporation tax regime or the tonnage tax regime. Any increase in our tax liabilitieswill impact on our profitability.If each of the Irish companies in our Group is not successful in registering with theIrish tax authorities for value added tax (VAT), this could increase our tax liabilities.To date only d’Amico Tankers Limited is registered with the Irish tax authorities for VAT. Whilewe are actively seeking to register each of the other Irish companies in our Group for VAT, wehave been unsuccessful to date in our applications. If we fail to register, we will not be able torecover VAT on vessels acquired by us. This will have an adverse effect on our business, results ofoperations, cash flow and financial condition.Risks Relating to the OfferingThere may not be an active and liquid market for our Shares, which may cause ourShares to trade at a discount and make it difficult to sell the Shares you purchase.Prior to this Offering, there has been no public market for our Shares. We cannot assure youthat an active trading market for our Shares will develop or be sustained after this Offering. Theinitial public offering price for our Shares was determined by negotiations between theunderwriters and us. We cannot assure you that the initial public offering price will correspondto the price at which our Shares will trade in the public market subsequent to this Offering orthat the price of our Shares in the public market will reflect our actual financial performance.You may not be able to sell your Shares at or above the initial public offering price. Additionally,a lack of liquidity may result in wide bid-ask spreads, contribute to significant fluctuations inthe market price of our Shares and limit the number of investors who are able to buy theShares.Future sales of our Shares could cause the market price for our Shares to decline.The market price of our Shares could decline due to sales of a large number of Shares in themarket after this Offering, including sales of Shares by the Selling Shareholder or the perceptionthat these sales could occur.The Selling Shareholder will own approximately 60% of our Shares immediately followingcompletion of this Offering assuming no exercise of the underwriters’ over-allotment option.The Selling Shareholder will not be eligible to sell any of our Shares, directly or indirectly, in thepublic market until the lock-up agreements expire at least 180 days after the date of thisProspectus.32

The product tanker sector has been unpredictable and volatile. The market price of ourShares may be similarly unpredictable and volatile.The market price of our Shares may be unpredictable and volatile and may fluctuate due tofactors such as: actual or anticipated fluctuations in quarterly and annual results; mergers andstrategic alliances in the tanker industry; market conditions in the industry; changes in governmentregulation; fluctuations in our quarterly revenues and earnings and those of our publiclyheld competitors; shortfalls in our operating results from levels forecast by securities analysts;announcements concerning us or our competitors; and the general state of the securitiesmarket.Investors may be subject to exchange rate fluctuations.The Shares will be denominated in U.S. dollars and traded on Borsa Italiana in Euro. Anydividends on the Shares will be declared and paid in U.S. dollars. Fluctuations between the Euroand the U.S. dollar will affect the Euro equivalent of our results of operations which arereported in U.S. dollars and the U.S. dollar equivalent of the Euro price of our Shares traded onBorsa Italiana. Consequently, any investor in our Shares may be affected by exchange ratefluctuations.Your ability to bring a claim in relation to the audit of our combined financial statementsmay be limited.The accountants who have audited the financial statements included in this Prospectus issuedreports, copies of which are included on pages F-2 and F25 of this Prospectus, which areaddressed only to the boards of directors of the Company and the Selling Shareholder andcontain a disclaimer of any assumption of responsibility to any other person. Consequently, yourability to bring a claim against the accountants in relation to their audit may be limited.The rights of holders of our Shares are governed by Luxembourg law and U.S. holdersmay be unable to exercise pre-emptive rights.Our constitutional documents provide for pre-emptive rights to be granted for future shareissues for cash, although our Board may in certain circumstances waive or limit such rights. Tothe extent that pre-emptive rights are granted, U.S. holders may not be entitled to exercisethese rights unless a registration statement under the Securities Act of the United States iseffective in respect of such rights or an exemption from the registration requirements of suchact is available. We are unlikely to file any such registration statement and we cannot assureyou that an exemption from the registration requirements of the Securities Act will be availableto enable you to as holders to exercise such pre-emptive rights or, if available, that we willutilise any such exemption.As a Luxembourg incorporated and registered company with an Italian listing, we willbe subject to regulation in both Luxembourg and Italy.We are a Luxembourg incorporated and registered public limited company (“Société Anonyme”)and, as such, are subject to the requirements of the Law of 10 August 1915 concerningCommercial Companies in Luxembourg and other applicable Luxembourg legislation, such asthe Law of 19 May 2006 concerning Takeover bids, the Law of 10 July 2005 on prospectuses forsecurities and the Law of 9 May 2006 on Market Abuse. In addition, as our Shares are listed onBorsa Italiana, we will be subject to the continuing requirements of the Borsa Italiana regulationas well as to certain ongoing information duties established by Italian Legislative Decree No. 58of 24 February 1998, as amended and supplemented (the “United Financial Act”) and to certainprovisions of CONSOB regulation, the Italian financial regulator, in particular insofar as it relatesto Takeover Bid rules which are partially subject to Italian laws and CONSOB regulation to theextent provided for by the European Directive 2004/25/CE of 21 April 2004, article 4.33

Use of ProceedsWe estimate our net proceeds of this Offering to be between approximately 358.8 million and389.4 million, after deducting underwriting commissions and estimated offering expensespayable by us between 34.1 million and 35.1 million. We intend to use the net proceeds tosustain our future growth and for general corporate purposes, including the repayment of$85 million of our existing debt, assuming the offer price will be 33.75 per Share, the mid-pointof the offering price range.We will not receive any proceeds from the sale of shares by the Selling Shareholder.34

Dividends and Dividend PolicyDue to our limited operating history, we have not previously declared or paid dividends. Subjectto applicable law, all Shares are entitled to participate equally in dividends when, as and ifdeclared by the shareholders at the Company’s general shareholders’ meeting and/or the Boardof Directors out of funds legally available for such purposes. Pursuant to Luxembourg law,dividends are payable out of the Company’s statutory reported profits and free reserves.Dividend payments may not exceed the total of the results carried forward plus the free reservesless the total of carried forward losses plus the legal and statutory reserves. Luxembourg lawprovides that claims for dividends will lapse five years after the date such dividends have beendeclared. Dividends declared by us will be authorised and determined by our Board of Directorsout of funds legally available for such purposes and must be approved by the shareholders. Ifthe directors have declared and paid an interim dividend, the next following shareholdersmeeting must ratify such declaration and payment. For a description of the Luxembourgstatutory framework within which the Company is able to declare dividends, see “Description ofShares and Share Capital—Share Capital and Shares—Dividends”.We currently intend to pay dividends to holders of our Shares. In particular, we intend to payannual dividends amounting to between 30% and 50% of our recurring net income. Followingthis Offering, we expect that the first dividend distribution may occur during the first half of2008 with regard to our results for the year 2007.We cannot assure you that dividend payments will be made or sustained in accordance with thispolicy or that our Board of Directors will not change our dividend policy in the future. Ourability to make future dividend payments will depend, among others, on the financial results ofour subsidiaries and their ability to distribute funds to us. Their ability to distribute funds to usmay be limited by the legal and capital requirements to which they are subject. See “RiskFactors—We cannot assure you that we will pay dividends”.Any dividends on the Shares will be declared and paid in U.S. dollars. If your reference currencyis a currency other than the U.S. dollar, you may be adversely affected by any reduction in thevalue of the U.S. dollar relative to your reference currency. See “Risk Factors—Currencyexchange rate and interest rate fluctuations may adversely affect our profitability or yourinvestment in our Shares”.On 30 January 2007 one of our subsidiaries, d’Amico Tankers Limited, paid out $25.0 million individends to the Selling Shareholder. On 5 April 2007, d’Amico Tankers Limited paid out$25.0 million in dividends to the Company.35

CapitalisationThe table below sets out our cash and cash equivalents and capitalisation as at 31 December2006 on an actual basis and as adjusted to give effect to: (i) the reorganisation of our Groupthat occurred during the last quarter of 2006 and the first quarter of 2007 (see “Presentation ofFinancial and Other Information”), (ii) the payment of $25.0 million in dividends by d’AmicoTankers Limited to the Selling Shareholder on 30 January 2007, (iii) receipt of our estimatedproceeds from the Offering (after deducting underwriting commissions and estimated offeringexpenses payable by us, totalling 34.6 million), at an assumed offer price of 33.75 per Share, themid-point of the offering price range (see “Use of Proceeds”) (iv) the repayment of $85.0 millionof our outstanding debt following this Offering and (v) the other events mentioned in thefootnotes thereto. Our net proceeds expected from the Offering will translate into between$78.6 million and $119.5 million, based on the Noon Buying Rate of the Euro in effect as of 3April 2007. The actual amount of net proceeds we receive may differ due to exchange ratefluctuations between the date of pricing and the date we receive and exchange funds fromEuros to U.S. dollars following closing.You should read this table in conjunction with “Use of Proceeds”, “Management’s Discussionand Analysis of Results of Operations and Financial Condition” and our consolidated financialstatements included elsewhere in this Prospectus. There have been no material changes to theinformation set out in the table below since 31 December 2006, except as reflected in the dataprovided in the column headed “As adjusted” and the footnotes to the table.As of 31 December 2006Actual As Adjusted (1)(Audited) (Unaudited)($ in millions)Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.9 12.2 (2)Short-term financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.0 —Long-term financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187.7 165.0Total financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240.8 165.0 (3)Issued and additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2 228.0Retained earnings and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141.7 —Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141.9 228.0 (4)Total capitalisation (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368.7 380.8(1) Based on the sale of 20,992,987 newly issued Shares at the assumed offer price of 33.75 perShare, the mid-point of the offering price range and the occurrence of the other eventsindicated in the following footnotes. Data presented in U.S. dollars was translated fromEuros to U.S. dollars at the Noon Buying Rate of the Euro on 3 April 2007 for $1.3363 =31.00.(2) Cash and cash equivalents, as adjusted, accounts for; (i) a dividend payment of $25.0 millionmade on 30 January 2007 from d’Amico Tankers Limited to the Selling Shareholder (see also“Dividends and Dividend Policy”), (ii) the reimbursement of $201.4 million in existing bankindebtedness outstanding as of 31 December 2006; (iii) the drawdown of $250.0 millionunder our new facility agreement, outstanding as of the date of this Prospectus (see also“Management’s Discussion and Analysis of Results of Operations and Financial Condition—Indebtedness—New credit facility”); (iv) the settlement of interest rate swaps, recordedunder our short term financial debt for $0.5 million as of 31 December 2006; and (v) repaymentof inter-company loans amounting to $38.8 million as of 31 December 2006, (vi) repaymentof $85.0 million of our outstanding debt under the new facility. Based on the rangefor the offer price for Shares in the Offering (which is between 33.00 and 34.50 per Share),this amount, as adjusted, would be between $8.2 million and $32.7 million. Data presentedin U.S. dollars was translated from Euros to U.S. dollars at the Noon Buying Rate of the Euroon 3 April 2007 for $1.3363 = 1.00.36

3 Total financial debt, as adjusted, reflects; (i) the reimbursement of $201.4 million in existingbank indebtedness outstanding as of 31 December 2006; (ii) the drawdown of $250.0 millionunder our new facility agreement, outstanding as of the date of this Prospectus (see also“Management’s Discussion and Analysis of Results of Operations and Financial Condition—Indebtedness—New credit facility“); (iii) the settlement of interest rate swaps, recorded underour short term financial debt for $0.5 million as of 31 December 2006; (iv) repayment ofinter-company loans amounting to $38.8 million as of 31 December 2006; and (v) repaymentof $85.0 million of our outstanding debt under the new facility. As of 31 December 2006,$201.4 million or 83.7% of our total financial debt was guaranteed by the Selling Shareholderand secured by, among others, mortgages on our owned vessels. In connection with therefinancing of our debt in March 2007, we replaced the security and guarantee referencedabove as described under “Management’s Discussion and Analysis of Results of Operationsand Financial Condition—Indebtedness—New credit facility”.(4) Shareholders equity, as adjusted, accounts for: (i) a dividend payment of $25.0 million madeon 30 January 2007 from d’Amico Tankers Limited to the Selling Shareholder (see also“Dividends and Dividend Policy”); (ii) an increase of $12.1 million to eliminate the effect ofadjustments made in the combined accounts; (iii) an increase of $35,000 representing theinitial paid up share capital of the Company, and the difference between the shareholder’sequity of d’Amico Tankers Limited and the consolidated equity of the Company, followingthe acquisition of d’Amico Tankers Limited by the Company; and (iv) estimated net proceedsfrom the Offering of $99.0 million, at an assumed offer price of 33.75 per Share, the midpointof the offering price range. Based on the range for the offer price for Shares in theOffering (which is between 33.00 and 34.50 per Share), this amount, as adjusted, would bebetween $207.6 million and $248.4 million. Data presented in U.S. dollars was translatedfrom Euros to U.S. dollars at the Noon Buying Rate of the Euro on 3 April 2007 for $1.3363 =31.00.(5) Capitalisation represents total financial debt plus total shareholders’ equity.37

Selected Combined Financial and Operating DataThe following tables set forth financial and operating data relating to the Group for the periodsindicated.The selected financial information presented in this section has been derived from our auditedcombined financial statements as of 31 December 2004, 2005 and 2006 prepared in accordancewith IFRS. The selected financial information in the tables below should be read together with“Risk Factors”, “Selected Combined Financial Data”, “Management’s Discussion and Analysis ofResults of Operations and Financial Condition” and our historical audited combined financialstatements, including the notes thereto contained elsewhere in this Prospectus. For moreinformation on our combined financial statements and the preparation thereof, see, “Presentationof Financial and Other Information”.IFRS differ in certain respects from U.S. GAAP. For a description of certain differences betweenIFRS and U.S. GAAP, see “Annex A—Summary of Certain Significant Differences Between IFRSand U.S. GAAP”.Year ended 31 DecemberCombined Income Statement Data 2004 2005 2006($ in millions)Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.9 253.4 299.6Voyage costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13.9) (31.7) (56.3)Time charter equivalent earnings ............................... 140.0 221.8 243.3Other direct operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (94.7) (111.6) (133.5)Gross Profit ................................................ 45.3 110.2 109.8Profit on disposal of vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 30.0Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.0) (21.3) (22.1)Reversal of impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0.1Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.0) (6.0) (5.9)Operating Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.2 82.8 111.9Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.5) (16.9) (17.6)Profit on Ordinary Activities Before Taxation ..................... 23.7 65.9 94.3Taxation charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.5) (7.5) (8.9)Net Profit. ................................................. 18.2 58.4 85.4As of 31 DecemberCombined Balance Sheet Data 2004 2005 2006($ in millions)Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206.8 317.9 365.5Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.1 44.0 58.3of whichCash and cash equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7 10.5 13.9Total assets ................................................. 252.9 361.9 423.8Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131.7 141.0 84.0of whichShort-term financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.2 126.0 53.0Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114.6 167.3 197.9of whichLong-term financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.7 161.5 187.7Total liabilities ............................................... 246.3 308.3 281.9Capital and reserves .......................................... 6.6 53.6 141.938

The following table provides certain information relating to our fleet which we consider inassessing our operating performance. The following operating data are not measurements ofperformance under IFRS or U.S. GAAP, and you should not consider any of them as analternative to (a) the financial information included in this Prospectus (as determined inaccordance with generally accepted accounting principles), or (b) any other measures of performanceunder generally accepted accounting principles. We believe that the following measurementsare measures commonly reported and widely used by investors in evaluating theperformance of companies operating in the shipping industry, which can vary significantlydepending upon accounting methods or non-operating factors. Accordingly, the followingmeasurements have been disclosed in this Prospectus to permit a more complete and comprehensiveanalysis of our operating performance. Because companies do not calculate suchmeasurements identically, our presentation of them may not be comparable to similarly titledmeasures used by other companies. Accordingly, undue reliance should not be placed on thefollowing operating data.Year ended 31 DecemberOther operating data 2004 2005 2006TotalTC equivalent earnings per employment day (net ofcommissions)($) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,776 20,458 20,885TC equivalent earnings per employment day excluding B-Types (2)(net of commissions)($) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,681 21,070 21,071Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,539 5,486 5,707TC days/available vessel days(%) (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.8% 51.3% 45.7%Off-hire days/available vessel days(%) (5) . . . . . . . . . . . . . . . . . . . . . . . . 4.3% 2.0% 2.2%Off-hire excluding dry-dock and exceptional events/available vesseldays(%) (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3% 0.6% 0.3%MRTC equivalent earnings per employment day (net ofcommissions)($) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,421 21,197 21,088Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,727 5,490 5,731TC days/available vessel days(%) (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.5% 56.3% 47.3%HandysizeTC equivalent earnings (net of commissions)($) (1) . . . . . . . . . . . . . . . . 18,143 19,010 20,264TC equivalent earnings per employment day excluding B-Types (2)(net of commissions)($) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,125 20,657 21,011Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,351 5,480 5,642TC days/available vessel days(%) (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.8% 42.7% 42.1%(1) TC equivalent earnings per employment day net of commissions. This figure representstime charter (“TC”) equivalent earnings for vessels employed on the spot market and timecharter contracts, divided by the number of on-hire days, less commissions charged bycommercial managers and external brokers. Calculations for handysize vessels also excludechartered vessels in which we have a partial interest, since distributions paid by the pool onthese vessels are net of charter expenses, and would therefore require pro-forma adjustmentsto make it comparable to the remaining vessels. We believe that excluding vessels inwhich we have a partial interest from our calculation does not significantly alter theaverage daily TC equivalent earnings of our handysize fleet, which we employ through theHandytankers Pool. In particular, vessel earnings for the Handytankers Pool depend primarilyon pool points and the average pool points of the vessels excluded from our calculationwas 103.1, compared to the average pool points of vessels included in our calculation, whichwas 103.9. TC equivalent earnings per employment day is a measure of how well wemanage our fleet strategically, by choosing the right timing to fix vessels on term contractsand commercially, by finding the most attractive employment opportunities for vessels onthe spot market.39

(2) TC equivalent earnings per employment day excluding B-Types. This figure represents TCequivalent earnings, divided by the number of on-hire days, for all handysize vessels exceptB-Type vessels. B-Type vessels were substantially smaller and of an older age than theremainder of our fleet, and were sold in 2006. Excluding them from the calculations allowsus to see how vessels similar to those we currently operate, performed.(3) Daily OPEX. This represents the cost of operating owned and bareboat chartered vessels. Itincludes technical expenses, the cost of lube oils, crewing, insurance, technical managementand other sundry operating expenses directly incurred in relation to the ownership of thevessel. This figure excludes the cost and depreciation of dry-docks. Since expenses arisingfrom equipping a ship for delivery are capitalised, reducing a vessel’s technical expenses inthe year of delivery, we have excluded ships during their first year of operations from ouraverage daily costs.(4) TC days/available vessel days (coverage ratio). This figure represents how many vessel dayswere employed on time charter contracts, inclusive of off-hire days, divided by the numberof available vessel days, defined as the number of days between delivery and redelivery forall of our vessels, for the fiscal year being considered. To calculate TC days for vesselsemployed within the High Pool, we first had to calculate the ratio of TC days/availablevessel days (the pool coverage ratio) for all vessels employed within the pool, from each ofour vessels’ pool entry dates. The number of TC days for a vessel was then determined asthe product of the pool’s coverage ratio since that vessel’s pool entry and the number ofdays that vessel was operated within the pool. For vessels employed within Glenda InternationalManagement, the results from vessels are not pooled; we therefore used contractualcommitments of each individual vessel to determine its coverage ratio. For vessels employedwithin the Handytankers Pool, we are not responsible for administrative functions andtherefore have access to less detailed operating data, compared to the High Pool. TC daysfor these vessels was therefore determined using the average pool coverage ratio for thefiscal year being considered, rather than the ratio from the entry date of each of ourvessels.(5) Off-hire days/available vessel days. This figure is equal to the ratio of the total off-hiredays—inclusive of dry-docks and off-hires due to exceptional events such as a collision or aship’s seizure—and the total number of available vessel days, which is defined as thenumber of vessel days between delivery and redelivery for the fiscal year being considered.(6) Off-hire excluding dry-dock and exceptional events/available vessel days. This figure isequal to the ratio of the off-hire days—exclusive of dry-docks and exceptional events suchas a collision or the seizure of a ship and the total number of vessel days, which is definedas the number of vessel days between delivery and redelivery for the fiscal year beingconsidered. This figure serves as an indicator of the quality of the technical managementservice provided by d’Amico Società di Navigazione S.p.A. and of our management’s abilityto select vessels from first class operators.40

Management’s Discussion and Analysis of Results ofOperations and Financial ConditionThe following discussion of our financial condition and results of operations and of the materialfactors that we believe are likely to affect our financial condition and results of operations as ofand for the years ended 31 December 2004, 2005 and 2006 should be read in conjunction withour audited combined financial statements including the notes thereto and the informationincluded elsewhere in this Prospectus. See also the section entitled “Selected Combined Financialand Operating Financial Data” and “Presentation of Financial and Other Information”.This section contains forward-looking statements that involve risks and uncertainties. Our actualresults may differ materially from those discussed in such forward-looking statements as a resultof various factors, including those described under “Risk Factors” and “General Information—Forward Looking Statements”.OverviewWe are a fast growing independent provider of international marine transportation services forrefined petroleum products. Our financial results primarily rely on the development in freightrate levels and available earning days within the product tanker industry. For the year ended31 December 2006, we operated a modern fleet of an average of 34.5 product tankers with anaverage age of approximately 4 years. The product tankers that we operate are medium range(“MR”), ranging from 45,000 to 51,000 dwt, and handysize, ranging from 35,000 to 40,000 dwt.For additional information relating to our fleet see “Business”.The market for shipping refined petroleum products is generally highly cyclical and volatile, andthis affects the supply and demand for product tanker capacity. However, during the past threeyears, the product tanker shipping market has experienced overall increasing freight ratesresulting in improved earnings and market growth. Other factors that affect the supply anddemand of product tanker capacity and as such, freight and charter rates, include global andregional economic and political conditions, changes in seaborne and other transportationpatterns, including changes in the distances over which cargoes are transported, currencyexchange rates, the number of newbuilding deliveries. For a discussion of certain factors thataffect supply and demand for product tankers, see “Risk Factors—Risks Relating to our Industry”and “The Oil Products Tanker Industry”.Recent TrendsSince 31 December 2006, our revenue and time charter equivalent earnings have been in linewith targeted levels. The outlook for our trading for the second quarter of 2007 remains in linewith our expectations. Since 31 December 2006, no significant change has occurred in thefinancial or trading position of the Group.Principal Factors Affecting Our Results of OperationsOur results of operations have been, and will continue to be, affected by a number of eventsand actions, some of which are beyond our control. However, there are some specific items thatwe believe have impacted our results of operations and that we expect may impact on ourfuture results. In this section, we discuss some of those factors that we believe have had, or mayin the future have, a material impact on our results. See also “Risk Factors”.Spot Contracts, Time Charters and COAsOur revenue is mainly generated from the employment, either directly or through our partnerships,of the vessels of our fleet under spot contracts, time charters and COAs, for the marinetransportation of refined petroleum products. The rates applicable under these contracts aredetermined by various market factors, including the supply and demand for products wetransport, the number of vessels available in the market, the cost of bunker fuel and othervoyage and operating costs and the distance that cargoes must be transported. In particular,time charter and COA rates generally reflect the prevailing spot market rates and expectationsof future market rates at the time of entry into the relevant agreement.41

Vessels operating under fixed rate contracts, including time charters and COAs, usually providemore steady and predictable cash flow than vessels operating in the spot market. In particular,time charter contracts may be negotiated for relatively long periods, ranging from six monthsup to a significant number of years, while COAs provide for a number of voyages or amount ofcargo to be transported over a specified time period. However, spot contracts offer theopportunity to maximise our revenue during periods of increasing market rates, although theymay yield lower profit margins than charter times and COAs during periods of decreasing rates.In deciding how to employ our vessels in the market, we consider a number of factors whichmainly relate to our expectations of future market rates. We aim to employ between 40% and60% of our vessels under fixed rate contracts and the remaining under spot market contracts.This mix will vary according to prevailing market trends and we expect that spot rates willincrease, so we will try to take advantage of such increase by employing vessels in the spotmarket, instead of entering into fixed rate contracts, which may bind us to rates that are lowerthan those which we could earn in the spot market. We will try to lock in longer fixed ratecontracts when long-term rates are attractive or when we expect that spot rates will decrease,so as to secure stable income under long-term charter arrangements. We constantly evaluateour position compared to our expectation of the market trend in order to take advantage ofthe opportunities that arise. We believe that a mix of the three employment possibilities willalways be the appropriate strategy, providing some stability to revenues, while enabling us tobenefit from rising markets. A broadly similar strategy of vessel employment is followed by thepools we participate in.For each of the three years ended 31 December 2006, the average employment of our fleetunder fixed rate contracts ranged from 46% to 51% of the total available vessel days, which wedefine as the number of days between delivery and redelivery for all of our vessels for the fiscalyear being considered.When we time charter out our vessels we do not incur any voyage costs. However, when weemploy our vessels in the spot market or under COAs, voyage costs may represent a significantpercentage of our operating expenses. Voyage costs are generally reflected in the rates wecharge to our customers and, therefore, an increased exposure to the spot market of our fleetwill likely result in increased voyage costs and proportionate increase in our revenue. For thisreason, we often refer to our time charter equivalent earnings as a key indicator of ourperformance in the market.For a more information on the historical trends of freight and charter hire rates, see “The OilProducts Tanker Industry” and “Risk Factors—Risks Relating to our Industry”.Evolution of the FleetDuring the period from 31 December 2004 to the date of this Prospectus, we increased our fleetfrom an average number of 22.1 vessels to 34.5 vessels for the year ended 31 December 2006.For a description of our current fleet and expansion programme, see “Business—Our Fleet”. Thenumber of vessels in our fleet is one of the main factors affecting our results of operations sincethe employment of our fleet in the market represents our main source of revenue. Thefollowing table provides information on the average number of vessels representing our fleetfor each of the periods indicated.Year ended 31 December2004 2005 2006MR Handysize Total MR Handysize Total MR Handysize TotalTotal AverageNumber (1) . . . . . . 10.7 11.5 22.1 19.9 11.5 31.4 24.0 10.4 34.5of whichOwned . . . . . . . . 1.6 2.3 3.9 6.2 5.1 11.3 8.7 2.1 10.8Chartered in (2) . . 9.0 8.3 17.4 13.7 4.9 18.6 15.3 6.0 21.3PartialCharter (3) . . . . — 0.8 0.8 — 1.5 1.5 — 2.3 2.342

(1) Numbers are calculated by dividing total available vessel days by 365. Available vessel daysis defined as the number of days between delivery and redelivery for all of our vessels forthe fiscal year being considered.(2) The contracts for two of our chartered in vessels, High Seas and High Tide, expire in May2007. Chartered in vessels in the year ended 31 December 2004 include two bareboatvessels, being High Spirit and High Challenge, the charters of which expired in July 2004.We acquired these vessels upon expiry of their charters. Our chartered in vessels in the yearended 31 December 2006 include one bareboat vessel, being Cielo di Guangzhou, thecharter of which commenced in January 2006.(3) For chartered vessels in which we have a partial interest, we include only our share of theavailable vessel days. For example, if we had a 50% share in a vessel, which was part of ourfleet for 365 days, we would only show 50% of a vessel in the calculation.The following table provides information on the number of vessels representing our fleet as of31 March 2007.As of 31 March 2007MR (1) Handysize TotalTotal Number of vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.0 9.9 35.9of whichOwned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.0 3.0 13.0Chartered in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.0 4.0 20.0Partial Charter (2) ........................................... — 2.9 2.9(1) Includes two chartered in MRs that we expect to be redelivered in May 2007.(2) For chartered vessels in which we have a partial interest, we include only our share of theavailable vessel days.Historically, we increased the number of our vessels by chartering in vessels under long-termcontracts of between three and ten years, often renewable at our option for periods generallyranging from one to three years, and also by acquiring vessels. We expect that in the future wewill continue to expand our fleet mainly through a combination of these two strategies.Prior to purchasing any vessel, we assess the effect that any subsequent increase or decrease inmarket prices may have on our financial condition and results of operations. For instance, wemay record an impairment charge in the event that the market value of our owned vesselsdecreases, or we may record a profit if we sell a vessel at a price higher than the value recordedon our balance sheet. Vessel values can fluctuate substantially over time due to a variety offactors, including: general economic and market conditions affecting the shipping industry;increases in the supply of vessel capacity; steel value (scrap value of the vessels); the availabilityof other modes of transportation; and the costs associated with building new vessels. In relationto the disposal of vessels, we recognise gains or losses in our income statement. This is calculatedwith reference to sale price less costs relating to the sale and the carrying amount of therelevant vessel. The disposal of vessels may affect our results of operation, as the sale of anyvessel can increase or decrease our operating profit. For instance, during the year ended31 December 2006, we would have recorded a slight decrease in our operating profit, comparedto the year ended 31 December 2005, if we had not recorded a profit of $30 million, as we did,on the disposal of our B-Type vessels in January 2006, as indicated in the table below.43

The following table sets forth information on the owned MR and handysize vessels that wehave acquired or sold since 1 January 2004.Name of vesselSize(dwt)YearBuiltMonth and Yearof AcquisitionMonth and Yearof DisposalHandysizeCielo di Biscaglia (3) . . . . . . . . . . . . . . . . . . . 27,350 1986 September 2004 January 2006Cielo del Baltico (3) . . . . . . . . . . . . . . . . . . . . 27,350 1986 March 2005 January 2006Cielo di Bothnia (3) . . . . . . . . . . . . . . . . . . . . 27,350 1986 April 2005 January 2006Cielo di Baffin (3) . . . . . . . . . . . . . . . . . . . . . 27,350 1986 May 2005 January 2006Cielo di Parigi (2) . . . . . . . . . . . . . . . . . . . . . . 35,700 2001 December 2006MRHigh Spirit (2) . . . . . . . . . . . . . . . . . . . . . . . . 46,400 1999 July 2004High Challenge (2) . . . . . . . . . . . . . . . . . . . . . 46,000 1999 July 2004High Endeavour (1) . . . . . . . . . . . . . . . . . . . . 47,000 2004 September 2004High Endurance (1) . . . . . . . . . . . . . . . . . . . . 47,000 2004 August 2004High Valor (1) . . . . . . . . . . . . . . . . . . . . . . . . 47,000 2005 February 2005High Courage (1) . . . . . . . . . . . . . . . . . . . . . . 47,000 2005 March 2005High Progress (1) . . . . . . . . . . . . . . . . . . . . . . 51,000 2005 August 2005High Venture (1) . . . . . . . . . . . . . . . . . . . . . . 46,000 2006 April 2006High Performance (1) . . . . . . . . . . . . . . . . . . 51,000 2005 September 2005High Wind (2) . . . . . . . . . . . . . . . . . . . . . . . . 46,000 1999 December 2006(1) These vessels were newbuildings.(2) These vessels, acquired as secondhand vessels, were all built for the d’Amico Group.(3) These were secondhand vessels.In each of the years ended 31 December 2004, 2005 and 2006, we spent a total of $144.8 million,$130.6 million and $109.6 million, respectively, to purchase the vessels indicated in the tableabove. Historically, our decision to acquire any vessel has been based on our view of how thecharter market will perform in future periods. Our strategy has been to purchase vessels whenwe have deemed their purchase price attractive, considering, among others, our estimates oftheir future earnings potential, operational and financial costs, and maintenance investments,required to operate them.In addition to the voyage expenses that we incur in respect of any vessel in our fleet, we alsoincur specific operating costs relating to the operation of our owned vessels. These include,among other expenses, crewing, technical expenses and insurance. For more information onthese costs, see below under “—Description of Key Operating and Financial Items—Other directoperating costs”. Additionally, in relation to our owned vessels we record depreciation expensesand may record impairment losses in our income statement account in accordance with theaccounting policy described below under “—Critical Accounting Estimates and Policies”. As aconsequence of the increase in our interest in owned vessels from 3.9 for the year ended31 December 2004 to 11.3 for the year ended 31 December 2005, we recorded a significantincrease in our depreciation which increased by 112.6% to $21.3 million for the year ended31 December 2005 in comparison to $10.0 million for the year ended 31 December 2004. Inaddition, because we have historically financed the purchase of our owned vessels by using ouroperating cash flow, as well as finance from bank loans, we have also recorded the financingcosts in connection with the outstanding amount of such debt. In particular, we recorded anincrease of 126.0% in financing costs from $7.6 million for the year ended 31 December 2004 to$17.1 million for the year ended 31 December 2005.In accordance with the arrangements under which we charter in vessels, we pay a fixed rateduring the period of the relevant time charters. The charter hire rates that we pay for charteringin vessels are a significant component of our other direct operational costs. For the years ended31 December 2004, 2005 and 2006 we chartered in 17.4, 18.6 and 21.3 vessels and spent44

$80.9 million, $87.8 million and $105.9 million, respectively, to charter in vessels, such expendituresrepresenting 57.8%, 39.6% and 43.5%, respectively, of our time charter equivalentearnings and 85.4%, 78.7% and 79.4%, respectively, of our other direct operating costs.Historically our strategy has been to charter in vessels on long-term charters during periods inwhich we had a favourable view of future market developments and expected that the revenuegenerated from these vessels, either under fixed rate contracts or under spot contracts, wouldbe higher than the aggregate costs of time chartering and operating the vessels. Our futureexpectations about market trends may be wrong and a significant decrease in charter hire ratesmay have an adverse effect on our results of operations. In particular, this may occur if the ratesat which we employ our chartered in vessels in the market fall below the rates at which wecharter in those vessels or a significant part of them. Contracts relating to the vessels that wecharter in were entered into when rates were lower than market rates prevailing at the end of2006.Employment of our fleet, independently and through partnershipsWe operate independently as well as through three commercial partnerships. By operatingindependently, as well as through our partnerships we aim to increase our business opportunities,benefiting from the greater bargaining power and economies of scale of our partnerships.In particular, our partnership arrangements allow us the flexibility to employ through them anyone of our vessels or to withdraw them from the partnership, after giving notice and fulfillingthe contractual obligations, so that they can be utilised independently. This enables us to takeadvantage of business opportunities that we believe are most profitable to us. We also receivemanagement fees and, in certain cases, commission income in connection with our roles in themanagement of our partnership arrangements.Currently, we employ all of our vessels through our partnerships, except for seven MRs, whichwe employ directly under long-term contracts with our direct customers. The following tablesets forth the commencement and expiry dates of the time charter contracts under which wehave chartered out these vessels.Name of VesselCommencement Dateof Time Charter ContractExpiry Date of TimeCharter ContractExpiry Date of TimeCharter Contract’sOption PeriodHigh Endeavour September 2004 September 2009 September 2014High Endurance August 2004 August 2009 August 2014High Trader June 2004 June 2009 —High Trust May 2004 May 2009 —High Valor February 2005 February 2008 February 2010High Wind December 2005 August 2007 —High Courage March 2005 March 2008 —In addition to revenues generated by chartering our ships, we also generate revenue throughour service companies, which provide chartering and operations’ management services to thirdparties, including our three partnerships. For more information on our partnership arrangementsand direct operations, see also “Business—Operations”.Seasonality and oil demand fluctuationsOur vessels predominantly transport refined petroleum products, demand for which is historicallyseasonal. This seasonality may result in volatility in our operating results between quarters.The marine oil transportation market is typically stronger in the fall and winter months in thenorthern hemisphere in anticipation of increased consumption during those periods. As a resultour revenues have historically been weaker during the quarters ended 30 June and 30 Septemberand have been stronger during the quarters ended 31 March and 31 December. For moreinformation on the demand for refined petroleum products and certain factors that affect it,see “The Oil Products Tanker Industry” and “Risk Factors”.45

Voyage CostsVoyage costs represent a significant proportion of our operating costs and an important factorin determining our revenue as well as our time charter equivalent earnings. In particular for theyears ended 31 December 2004, 2005 and 2006, voyage costs amounted to $13.9 million,$31.7 million and $56.3 million, respectively, representing 9.9%, 14.3% and 23.1%, respectively,of our time charter equivalent earnings and 9.0%, 12.5% and 18.8%, respectively, of our totalrevenues. Generally, we incur voyage costs when we employ our vessels, either directly orthrough our partnerships, under spot contracts or COAs. We receive revenue from theHandytankers Pool net of voyage costs and therefore we do not show such costs in ourcombined accounts. Voyage costs include bunker fuel expenses, port charges, and commissionspayable. For further details see “—Description of Key Operating and Financial Items—Voyagecosts”. The increase in voyage costs during the year ended 31 December 2006 was mainlyattributable to the increased exposure of our fleet to the spot market. In particular, our voyagecosts increased because of the increase in the average price of bunker fuel, which for the yearsended 31 December 2004, 2005 and 2006, we purchased at an average price per metric tonne(“MT”) of $166.9, $250.3 and $317.1, respectively, as well as an increase in the market price forport and canal charges. We expect that the price of bunker fuel and port charges may continueto increase in the future.Bunker fuel expenses and port charges have historically represented the majority of our voyagecosts and we expect that they will continue to represent the majority of these costs in thefuture. In particular, for the years ended 31 December 2004, 2005 and 2006, costs relating tobunker fuel amounted to $6.8 million, $16.2 million and $30.6 million, respectively, representing48.9%, 51.1% and 54.4%, respectively, of total voyage costs, and costs relating to port chargesamounted to $4.6 million, $10.1 million and $17.1 million respectively, representing 33.1%,31.9% and 30.4% respectively of our total voyage costs.CrewFor the years ended 31 December 2004, 2005 and 2006, we incurred crew costs of $4.4 million,$10.4 million and $11.7 million, respectively. Crew costs represent costs we incur for the staffingand management of the vessels that we own and charter in under bareboat arrangements. Forthe years ended 31 December 2004, 2005 and 2006, our total average direct employees on boardvessels amounted to 150, 258 and 255, respectively. For the years ended 31 December 2004, 2005and 2006, as a percentage of our time charter equivalent earnings, crew costs amounted to3.2%, 4.7% and 4.7%, respectively, and as a percentage of other direct operating costsamounted to 4.7%, 9.3% and 8.8%, respectively. The increase in our crew costs between 2004and 2005 was mainly attributable to an increased number of owned vessels from 2004 to 2005and increased demand in the market, recorded in the last three years, for skilled and competentpersonnel. We expect that our crew costs will continue to increase in the future as we purchaseadditional vessels and demand for skilled and competent personnel continues to increase in themarket.Tonnage TaxIn 2004 and 2005, through d’Amico Tankers Limited, our main operating subsidiary incorporatedin Ireland, we paid income tax at the standard Irish corporate tax rate of 12.5% of our profit onordinary activities before taxation (as that profit is adjusted for tax purposes). Capital gains weresubject to tax at a rate of 20%. In 2006, we applied to join the tonnage tax regime in Irelandeffective as of 1 January 2006 and paid taxes with respect to fiscal year 2006 in accordance withthat regime. Our application followed a proposed amendment to the regime—currently underreview by the European Union—which, if approved and implemented by the Irish Government,would entitle us to qualify in respect of ships that are managed from Ireland, subject to ourcompliance with applicable Irish tax law. In particular, we will have to demonstrate that, amongothers, an appropriate level of “strategic and commercial management of the vessels” isperformed in Ireland. See also “Business—Irish tax regime and tonnage tax” for further detailson the amendments. Under the Irish tonnage tax regime, the corporate tax rate of 12.5% isapplied to notional shipping income, rather than to the profit or loss as adjusted for taxpurposes. Notional shipping income is calculated annually at a fixed amount per ship, based onthe size of the ship.46

Under the Irish tonnage tax regime, our liability for tonnage tax for the year ended 31 December2006 would have been approximately 30.1 million. To date we have paid this amount, however,to the extent retroactive application of the tonnage tax regime, as currently proposed, is notavailable to us, we will be required to pay additional taxes of approximately $8.7 million,representing the difference between the amount paid and taxes of approximately $8.9 millionpayable in accordance with the regular corporation tax regime, as accounted for in our financialstatements, of which $4.5 million was tax due for the year, and $4.4 million was deferred tax forthe same period. We would also be required to pay interest on such taxes, which would arise atan annual rate of approximately 10% (computed on a daily basis) from the due date of21 November 2006.Our entry into the tonnage tax regime, if amended as currently proposed, and if effective as of1 January 2006, would also result in a one-time benefit of approximately $5.7 million. Thisbenefit results from the reduction in deferred taxes payable by us and the subsequent negativetax charge to account for the adjustment. For each ship owned by us prior to the date ofeffective entry into the tonnage tax regime, the potential claw-back of tax depreciation alreadyclaimed (as represented by deferred tax liability for that ship) is reduced by 20% for each fullyear that a particular ship is in the tonnage tax regime prior to its sale. This reduction in theliability is recognised as a reduction in deferred tax liability at each balance sheet date over fiveyears with the effect of increasing earnings over that period.Going forward, the tonnage tax regime would also affect our calculations of capital gains taxon the sale of ships. To the extent that a ship is both purchased and sold while within thetonnage tax regime, no capital gains tax will be payable on any gain on the sale of that ship.Where the ownership of a ship occurs partly within the period when the owner company waswithin the Irish tonnage tax regime in respect of that ship, and partly outside this period, thecapital gains tax liability is firstly calculated in the normal way, but the portion of the gainapplicable to the time when the ship was within the tonnage tax regime is exempt from Irishtax (the portion is calculated on a time apportionment basis).If we enter the tonnage tax regime, we will be required to remain within it for a minimumperiod of ten years. At any time within the ten year period, d’Amico Tankers Limited may makea further tonnage tax election, which will supersede the original election and have the effect ofcommencing a new ten year election period. Because taxes are payable under the tonnage taxregime based on the tonnage of vessels in our fleet regardless of profit or loss, if tonnage taxapplies, it would not permit us to benefit from write-offs or other tax savings typically availableduring periods when we may experience tax losses. We could also be subject to a tax liability asa result of the disposal of a vessel owned for less than five years (claw-back of some taxdepreciation already claimed) or indefinitely on a time-apportioned amount of capital gainscalculated on vessels that were owned at a time when d’Amico Tankers Limited was not withinthe tonnage tax regime. Failure to comply with the requirements of the tonnage tax regimecould result in significant tax liabilities.Costs Related to the Reorganisation of Our GroupFollowing the Group reorganisation, we expect our administrative expenses to increase. Themain component comprising our administrative expenses during the years ended 31 December2004, 2005 and 2006 was the management fees relating to the provision of management andother services, paid to the d’Amico Group. Following the reorganisation of our Group duringthe first quarter of 2007, we expect management fees to decrease with a significant increase inthe costs relating to personnel and office related costs, which are currently included in administrativeexpenses. During the first quarter of 2007, we increased the number of our onshorepersonnel to allow us to implement the direct management of our own activities and reduceour reliance on the d’Amico Group with regard to management services. In accordance with ourbusiness plan, we expect to expand our operations and activities. If this occurs, we expect thatthe cost related to offices and personnel may increase accordingly.Other Operating MeasuresThe following table shows certain operating information relating to our fleet that we considerin assessing our operating performance. The following operating data are not measurements of47

performance under IFRS or U.S. GAAP, and you should not consider any of them as analternative to (a) the financial information included in this Prospectus (as determined inaccordance with generally accepted accounting principles), or (b) any other measures of performanceunder generally accepted accounting principles. We believe that the following measurementsare measures commonly reported and widely used by investors in evaluating theperformance of companies operating in the shipping industry, which can vary significantlydepending upon accounting methods or non-operating factors. Accordingly, the followingmeasurements have been disclosed in this Prospectus to permit a more complete and comprehensiveanalysis of our operating performance. Because companies do not calculate suchmeasurements identically, our presentation of them may not be comparable to similarly titledmeasures used by other companies. Accordingly, undue reliance should not be placed on thefollowing operating data.Year ended 31 December2004 2005 2006TotalTC equivalent earnings per employment day (net ofcommissions)($) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,776 20,458 20,885TC equivalent earnings per employment day excluding B-Types (2)(net of commissions)($) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,681 21,070 21,071Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,539 5,486 5,707Fixed Rate Contract days/available vessel days(%) (4) . . . . . . . . . . . . . 49.8% 51.3% 45.7%Off-hire days/available vessel days(%) (5) . . . . . . . . . . . . . . . . . . . . . . 4.3% 2.0% 2.2%Off-hire excluding dry-dock and exceptional events/availablevessel days (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3% 0.6% 0.3%MRTC equivalent earnings per employment day (net ofcommissions)($) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,421 21,197 21,088Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,727 5,490 5,731Fixed Rate Contract days/available vessel days(%) (4) . . . . . . . . . . . . . 61.5% 56.3% 47.3%HandysizeTC equivalent earnings (net of commissions)($) (1) . . . . . . . . . . . . . . 18,143 19,010 20,264TC equivalent earnings per employment day excluding B-Types (2)(net of commissions)($) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,125 20,657 21,011Daily OPEX($) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,351 5,480 5,642Fixed Rate Contract days/available vessel days(%) (4) . . . . . . . . . . . . . 38.8% 42.7% 42.1%(1) TC equivalent earnings per employment day net of commissions. This figure representstime charter (“TC”) equivalent earnings for vessels employed on the spot market and timecharter contracts, divided by the number of on-hire days, less commissions charged bycommercial managers and external brokers. Calculations for handysize vessels also excludechartered vessels in which we have a partial interest, since distributions paid by the pool onthese vessels are net of charter expenses, and would therefore require pro-forma adjustmentsto make it comparable to the remaining vessels. We believe that excluding vessels inwhich we have a partial interest from our calculation does not significantly alter theaverage daily TC equivalent earnings of our handysize fleet, which we employ through theHandytankers Pool. In particular, vessel earnings for the Handytankers Pool depend primarilyon pool points and the average pool points of the vessels excluded from our calculationwas 103.1, compared to the average pool points of vessels included in our calculation, whichwas 103.9. TC equivalent earnings per employment day is a measure of how well wemanage our fleet strategically, by choosing the right timing to fix vessels on term contractsand commercially, by finding the most attractive employment opportunities for vessels onthe spot market.(2) TC equivalent earnings per employment day excluding B-Types. This figure represents TCequivalent earnings, divided by the number of on-hire days, for all handysize vessels except48

B-Type vessels. B-Type vessels were substantially smaller and of an older age than theremainder of our fleet, and were sold in 2006. Excluding them from the calculations allowsus to see how vessels similar to those we currently operate, performed.(3) Daily OPEX. This represents the cost of operating owned and bareboat chartered vessels. Itincludes technical expenses, the cost of lube oils, crewing, insurance, technical managementand other sundry operating expenses directly incurred in relation to the ownership of thevessel. This figure excludes the cost and depreciation of dry-docks. Since expenses arisingfrom equipping a ship for delivery are capitalised, reducing a vessel’s technical expenses inthe year of delivery, we have excluded ships during their first year of operations from ouraverage daily costs.(4) Fixed Rate Contract days/available vessel days (coverage ratio). This figure represents howmany vessel days were employed on time charter contracts and COAs, inclusive of off-hiredays, divided by the number of available vessel days, defined as the number of daysbetween delivery and redelivery for all of our vessels, for the fiscal year being considered.To calculate TC days for vessels employed within the High Pool, we first had to calculate theratio of TC days/available vessel days (the pool coverage ratio) for all vessels employedwithin the pool, from each of our vessels’ pool entry dates. The number of TC days for avessel was then determined as the product of the pool’s coverage ratio since that vessel’spool entry and the number of days that vessel was operated within the pool. For vesselsemployed within Glenda International Management, the results from vessels are not pooled;we therefore used contractual commitments of each individual vessel to determine itscoverage ratio. For vessels employed within the Handytankers Pool, we are not responsiblefor administrative functions and therefore have access to less detailed operating data,compared to the High Pool. TC days for these vessels was therefore determined using theaverage pool coverage ratio for the fiscal year being considered, rather than the ratio fromthe entry date of each of our vessels.(5) Off-hire days/available vessel days. This figure is equal to the ratio of the total off-hiredays—inclusive of dry-docks and off-hires due to exceptional events such as a collision or aship’s seizure—and the total number of available vessel days, which is defined as thenumber of vessel days between delivery and redelivery for the fiscal year being considered.(6) Off-hire excluding dry-dock and exceptional events/available vessel days. This figure isequal to the ratio of the off-hire days—exclusive of dry-docks and exceptional events suchas a collision or the seizure of a ship and the total number of vessel days, which is definedas the number of vessel days between delivery and redelivery for the fiscal year beingconsidered. This figure serves as an indicator of the quality of the technical managementservice provided by d’Amico Società di Navigazione S.p.A. and of our management’s abilityto select vessels from first class operators.49

Results of OperationsThe following table sets forth a summary of our results of operations for the periods indicated,and presents such items as a percentage of our time charter equivalent earnings.Year Ended 31 December2004 2005 2006($ in millions, except for percentages)Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.9 109.9% 253.4 114.3% 299.6 123.1%Voyage costs. . . . . . . . . . . . . . . . . . . . . . . . . . . (13.9) 9.9% (31.7) 14.3% (56.3) 23.1%Time charter equivalent earnings .......... 140.0 100.0% 221.8 100.0% 243.3 100.0%Other direct operating costs . . . . . . . . . . . . . . (94.7) 67.7% (111.6) 50.3% (133.5) 54.9%Gross Profit ........................... 45.3 32.3% 110.2 49.7% 109.8 45.1%Profit on disposal of vessels . . . . . . . . . . . . . . . — — — — 30.0 12.3%Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . (10.0) 7.2% (21.3) 9.6% (22.1) 9.1%Reversal of impairment . . . . . . . . . . . . . . . . . . — — 0.1 —Administrative expenses . . . . . . . . . . . . . . . . . (4.0) 2.9% (6.0) 2.7% (5.9) 2.4%Operating Profit ........................ 31.2 22.3% 82.8 37.3% 111.9 46.0%Net financing costs. . . . . . . . . . . . . . . . . . . . . . (7.5) 5.4% (16.9) 7.6% (17.6) 7.3%of whichFinancing costs . . . . . . . . . . . . . . . . . . . . . . . (7.6) 5.4% (17.1) 7.7% (18.1) 7.4%Interest income . . . . . . . . . . . . . . . . . . . . . . 0.1 — 0.2 0.1% 0.4 0.2%Profit on Ordinary Activities BeforeTaxation ............................ 23.7 16.9% 65.9 29.7% 94.3 38.8%Taxation charge . . . . . . . . . . . . . . . . . . . . . . . . (5.5) 4.0% (7.5) 3.4% (8.9) 3.7%of whichTaxation on profit . . . . . . . . . . . . . . . . . . . . (2.6) 1.9% (4.9) 2.2% (4.5) 1.8%Deferred taxation . . . . . . . . . . . . . . . . . . . . (2.9) 2.1% (2.6) 1.2% (4.4) 1.8%Net Profit ............................. 18.2 13.0% 58.4 26.3% 85.4 35.1%Description of Key Operating and Financial ItemsThe following is a description of our key operating and financial line items. For more informationon the accounting policies on the basis of which our financial statements are prepared, see“Critical Accounting Estimates and Policies” and the notes to our financial statements includedelsewhere in this Prospectus.RevenueOur revenue is mainly generated from the employment, directly or through our partnerships, ofthe vessels of our fleet under spot contracts, COAs or time charters. In particular, our revenueprimarily includes:• voyage income, representing revenue received for freight, demurrage and participationin our commercial partnerships. Freight represents the revenue we generate for thecarriage of cargoes, through either the partnerships that we participate in or our directarrangements, under spot contracts and COAs; demurrage represents the compensationpayable by charterers to whom we charter out our vessels, usually payable at an agreedrate per day or pro rata where the time allowed for loading and/or discharging anycargo has been exceeded; we recognise demurrage on completion of the voyage inaccordance with the terms and conditions of the relevant charter party; and50

• vessel hire, which represents the majority of our revenue and is recognised, in accordancewith the time charter agreements under which we, directly or through one of ourpartnerships, charter out the vessels of our fleet, and net of off-hire expenses, whichaccount for the period of time during which a charterer is not required to pay vessel hirebecause a vessel which we have chartered out is unable to meet the requirementsagreed between us and the charterer, due to situations resulting in machinery breakdownor other similar events which falls within the area of those risks usually assumedby the party which is chartering out a vessel.Freight revenues and voyage expenses attributable to our partnerships are pooled and allocatedto each pool participant on a time charter equivalent basis in accordance with the pool pointssystem. However, in our combined consolidated accounts we account for our portion of voyageexpenses and commission from High Pool and Glenda International Management based on thedistributions we received from each pool as a proportion of each pool’s total distributions.During the years ended 31 December 2004 and 2005, through the Handytankers Pool weentered into freight forward agreements, or FFAs, to hedge our risks on a limited portion ofrevenues received from such Pool.Voyage costsVoyage costs are operating costs resulting from the employment, direct or through our partnerships,of the vessels of our fleet, in voyages undertaken in the spot market and under COAs.Time charter contracts are net of voyage costs. We receive revenue from the Handytankers Poolnet of voyage costs and as such we do not show such costs in our combined accounts. Voyagecosts include:• bunker fuel, which represents the amount of expense we incur for the fuel we use forthe propelling and auxiliary machinery used for our vessels;• commissions payable, which represents commission we pay to commercial managers andbrokers for finding employment for the vessels of our fleet;• port charges, which include port and canal dues, fees and charges for pilotage services,towage, mooring and unmooring, and agency fees; and• other expenses, including insurance for our charter in vessels, employed through GlendaInternational Management.Time charter equivalent earningsTime charter equivalent earnings represents revenue less voyage costs.Other direct operating costs• Other direct operating costs include costs which we incur in connection with thearrangements under which we charter in vessels, and directly originating from theperformance of these arrangements, and from the ownership of our vessels. Other directoperating costs include:• time charter costs, representing the costs we incur for chartering in vessels from a thirdparty;• crew costs, representing the costs we incur for the staffing and crew management of ourowned and bareboat chartered vessels;• technical expenses, representing repairs, spares and lube oil expenses incurred in connectionwith the maintenance of owned and bareboat chartered vessels;• technical and quality management representing the fees we pay for the technicalmanagement services provided by the d’Amico Group with regard to our owned andbareboat chartered vessels and technical quality services provided by the d’Amico Groupto our fleet;• insurance costs include premiums paid to insure against the risk of major marine lossesand liabilities in respect of our owned, bareboat chartered and chartered vessels (formore information on our insurance coverage, see “Business—Insurance”);51

• sundry, including costs incurred in connection with the registration of vessels (“flag registration”),inspections carried out on our owned and bareboat chartered vessels and fees paidto classification societies; and• insurance claims, including insurance deductibles and reimbursements.Gross profitGross profit represents revenue less voyage costs and other direct operating costs.Operating profitOperating profit represents our gross profit plus profit or loss on disposal of vessels, lessdepreciation and administrative expenses. Administrative expenses represent mainly theamounts paid to third parties for the provision of management and other services, as well asother sundry office expenses and foreign exchange gains or losses relating to the Group’soperating activities.Financing costsFinancing costs includes interest expense on bank loans, fees paid to banks relating to bankloans, expense relating to swap arrangements, and the mark to market of foreign exchangederivative instruments.Profit on ordinary activities before taxationProfit on ordinary activities before taxation represents our operating profit less net financingcosts, which are equal to financing costs less interest income.Net profitNet profit represents profit on ordinary activities before taxation less taxation charge, which isequal to taxation on profit plus deferred taxation.Comparison of the Years ended 31 December 2006 and 2005RevenueOur revenue increased by 18.2% to $299.6 million for the year ended 31 December 2006,compared to $253.4 million for the year ended 31 December 2005. This was mainly attributableto an increase in the number of employment days in the year ended 31 December 2006,compared with the year ended 31 December 2005, as a result of an overall expansion of ourfleet, which reached an average number of 34.5 vessels during 2006, compared to 31.4 during2005. In addition, the increase in revenue was also attributable to an increased number ofemployment days pursuant to spot contracts during the year ended 31 December 2006, a periodof high demand for product tanker capacity and, consequently, higher freight rates for spotvoyages. In particular, we incurred higher voyage costs, which were reflected in the rates wecharged to our customers.Voyage CostsOur voyage costs increased by 77.7% to $56.3 million for the year ended 31 December 2006,compared with $31.7 million for the year ended 31 December 2005. As a percentage of timecharter equivalent earnings, voyage costs increased from 14.3% in the year ended 31 December2005 to 23.1% in the year ended 31 December 2006. The increase in voyage costs was mainlydue to an increase in the number of MR vessels operating on spot voyages and COAs, wheresuch costs are payable by us, which also reflected the expansion of our fleet, as well as increasesin the average price at which we purchased bunker fuel and paid for port charges andcommissions. In particular, for the years ended 31 December 2005 and 2006, we purchasedbunker fuel at an average price per MT of $250.3 and $317.1, respectively. The table below setsforth a breakdown of our voyage costs for the periods indicated.52

Year ended 31 December2005 2006 Change($ in millions except forpercentages)Bunker fuel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16.2) (30.6) 88.8%Commissions payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.9) (8.5) 72.0%Port charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.1) (17.1) 69.7%Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.5) (0.1) (79.6%)Voyage costs ............................................... (31.7) (56.3) 77.7%Time Charter Equivalent EarningsOur time charter equivalent earnings increased by 9.7% to $243.3 million for the year ended31 December 2006, compared with $221.8 million for the year ended 31 December 2005. Theincrease was mainly attributable to an expansion of our fleet of 9.9%, and an increase inaverage daily time charter equivalent earnings per employment day of 2.1% (excluding charteredvessels in which we have a partial interest) for the year ended 31 December 2006, over theprevious financial year. In particular, this improvement in average daily earnings, was mainlyattributable to the 6.6% increase in time charter equivalent daily earnings achieved byhandysize vessels (excluding chartered vessels in which we have a partial interest) for the yearended 31 December 2006, over the previous year, mainly as a result of a reduction in theaverage age and increase in the daily earnings potential of our handyzise fleet, following thesale of its four oldest vessels, the B-type vessels.As a percentage of our revenue, time charter equivalent earnings decreased from 87.5% in theyear ended 31 December 2005 to 81.2% in the year ended 31 December 2006. This decrease ismainly attributable to an increase in the proportion of MR vessels employed on spot voyages,and therefore an increase in the costs incurred in relation to such voyages. The increase is alsopartially attributable to the general increase in the average price we paid for bunker fuel, portcharges and commissions.Other Direct Operating CostsOur other direct operating costs increased by 19.6% to $133.5 million for the year ended31 December 2006, compared with $111.6 million for the year ended 31 December 2005. As apercentage of time charter equivalent earnings, other direct operating costs increased slightlyfrom 50.3% in 2005 to 54.9% in 2006. The following table sets forth a breakdown of our otherdirect operating costs for the periods indicated.Year ended 31 December2005 2006 Change($ in millions except percentages)Time charter costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (87.8) (105.9) 20.6%Crew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.4) (11.7) 13.0%Technical expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6.0) (6.2) 3.9%Technical Management and Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.4) (4.6) 4.9%Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.2) (3.4) 7.5%Sundry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.7) (1.6) (9.1%)Insurance claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 — (100.0%)Other direct operating costs ................................ (111.6) (133.5) 19.6%The increase in other direct operating costs was mainly attributable to an increase in timecharter costs and, to a lesser extent, a slight increase in the costs associated with the ownershipof vessels, as well as to an insurance claims reimbursement recorded only for the year ended31 December 2005.53

Time charter costs increased by 20.6% to $105.9 million in the year ended 31 December 2006,compared with $87.8 million in the year ended 31 December 2005. This increase was mainlyattributable to an increase of 14.4% in the number of vessels chartered in, from an average of18.6 vessels in the year ended 31 December 2005 to an average of 21.3 vessels in the year ended31 December 2006, and to a slight increase in the average daily time charter cost of thesevessels. In addition, even though the average number of owned vessels fell slightly to 10.8vessels in the year ended 31 December 2006, from 11.3 vessels in the year ended 31 December2005, we recorded an increase in almost all of the costs deriving from vessel ownership, exceptsundries, which decreased. In particular, we recorded an increase in crew costs, mainly as a resultof increased market competition to secure suitably qualified and skilled personnel, and a slightincrease in technical expenses, mainly attributable to the general increase in the market pricesfor repairs, spares, lubricants and lube oil.Another factor contributing to the increase in other direct operating costs was an insuranceclaim reimbursement of $1.9 million, which we recorded for the year ended 31 December 2005,reducing other direct operating costs for that year. We did not record similar reimbursementduring the following year.Gross ProfitOur gross profit decreased by 0.3% to $109.8 million for the year ended 31 December 2006,compared with $110.2 million for the year ended 31 December 2005. This decrease in grossprofit was attributable to a higher increase in our direct operating costs, compared to theincrease in time charter equivalent earnings. As a percentage of time charter equivalentearnings, gross profit decreased from 49.7% during the year ended 31 December 2005 to 45.1%in the year ended 31 December 2006. This decrease in margin was the result of a slight increasein our fleet’s time charter equivalent average daily earnings, which was, however, more thanoff-set by the increase in the average direct daily operating costs of our vessels. The increase inaverage daily costs was mainly due to a slight increase in the average daily cost of our timecharters and in the average daily cost of operating owned vessels, as well as to a change in themix of time chartered vessels to total controlled vessels, which rose from 62.2% in the yearended 31 December 2005, to 67.4% in the year ended 31 December 2006 (excluding charteredvessels in which we have a partial interest). In particular, since the cost of time chartering avessel is usually substantially higher than the direct operating cost of owning a vessel, anincrease in fleet size which raises the proportion of time chartered vessels in the fleet generallyhas the effect of increasing the fleet’s average daily direct operating costs. The following tablesets forth a reconciliation of our time charter equivalent earnings to gross profit for the periodsindicated.Year ended 31 December2005 2006 Change($ in millions, except forpercentages)Time charter equivalent earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221.8 243.3 9.7%Other direct operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (111.6) (133.5) 19.6%Gross profit ............................................... 110.2 109.8 (0.3%)Profit on Disposal of VesselsDuring the year ended 31 December 2006, we recorded a profit of $30.0 million as a result ofour disposal of four B-Type vessels.DepreciationOur depreciation charges increased by 3.5% to $22.1 million for the year ended 31 December2006 compared to $21.3 million for the year ended 31 December 2005. The increase was mainlyattributable to the higher depreciable amounts of the three vessels that we acquired during theyear ended 31 December 2006, compared to the depreciable amounts of the four vessels soldduring the same period.54

Administrative ExpensesAdministrative expenses decreased by 2.9% to $5.9 million for the year ended 31 December2006, compared to $6.0 million for the year ended 31 December 2005. This decrease wasprimarily due to a decrease in foreign exchange losses relating to our operating activities, from$0.9 million in the year ended 31 December 2005 to $0.4 million in the year ended 31 December2006, and was partially offset by a slight increase in management fees paid to d’Amico Groupentities not included in the combined financial statements, and similarly a slight increase inother sundry office expenses.Operating ProfitOur operating profit increased by 35.2% to $111.9 million for the year ended 31 December2006, compared to $82.8 million for the year ended 31 December 2005. As a percentage of timecharter equivalent earnings, operating profit increased to 46.0% in 2006 from 37.3% in 2005.The following table sets forth a reconciliation of our gross profit to operating profit for theperiods indicated.Year ended 31 December2005 2006 Change($ in millions, except forpercentages)Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110.2 109.8 (0.3%)Profit on disposal of vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 30.0Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21.3) (22.1) 3.5%Reversal of impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.1Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6.0) (5.9) (2.9%)Operating profit. ............................................ 82.8 111.9 35.2%The increase in operating profit between 2005 and 2006 was primarily attributable to the profitof $30.0 million realised on the disposal of four vessels. To a lesser extent, it was alsoattributable to a slight decrease in administrative expenses. However these were offset by aslight decrease in gross profit as well as an increase in depreciation.Financing CostsFinancing costs increased by 5.7% to $18.1 million for the year ended 31 December 2006compared to $17.1 million for the year ended 31 December 2005. The increase in financing costsis mainly attributable to an increase in interest expense on bank loans, fees paid to banks forthese loans, and to losses on forward currency contracts, partially offset by lower swap interestexpense. The following table provides a breakdown of our financing costs.Year ended 31 December2005 2006 Change($ in millions, except forpercentages)Interest expense on bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.9) (10.2) 29.7%Fees on bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.0) (1.4) 40.7%Swap interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.0) (1.3) (57.3%)Interest expense on inter-company loans . . . . . . . . . . . . . . . . . . . . . . . . . (5.2) (2.8) (47.1%)Losses on forward currency contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (2.4) —Financing costs .............................................. (17.1) (18.1) 5.7%The increase in interest expense on bank loans of 29.7% to $10.2 million for the year ended31 December 2006, compared to $7.9 million for the year ended 31 December 2005, is duemainly to an increase in the average indebtedness and U.S. dollar LIBOR rates for the yearended 31 December 2006. The increase in average indebtedness is the result of the seven vesselsacquired during the year ended 31 December 2005, some of which we acquired at the end of55

that year, and the higher value of vessels acquired relative to those sold, for the year ended31 December 2006.The increase in fees, which are mostly one-off items immediately expensed and incurred atdraw-down to compensate banks for arranging loans, of 40.7% to $1.4 million for the yearended 31 December 2006, compared to $1.0 million for the year ended 31 December 2005,resulted from a new $172 million facility obtained in May 2006.The decrease in interest expense in inter-company loans of 47.1% to $2.8 million for the yearended 31 December 2006, from $5.2 million for the year ended 31 December 2005, was due tothe substantial cash generated from operating and bank financing activities, which was partiallyoffset by the acquisitions made, for the year ended 31 December 2006. The resulting excessliquidity was used to repay $66.2 million in loans with other d’Amico Group companies duringthe year ended 31 December 2006.The reduction in swap interest expense of 57.3% to $1.3 million, for the year ended 31 December2006, from $3.0 million for the year ended 31 December 2005, was due to the increase in U.S.dollar LIBOR rates and the termination in October 2006 of two swap arrangements with anaverage aggregate nominal amount outstanding of $20.0 million.The losses on the forward currency contracts of $2.4 million for the year ended 31 December2006 were due to the realised and unrealised losses on forward currency contracts, used tohedge the purchase price in Yen of a vessel, on which we have a purchase option.Profit on Ordinary Activities Before TaxationOur profit on ordinary activities before taxation increased by 43.1% to $94.3 million for the yearended 31 December 2006 compared to $65.9 million for the year ended 31 December 2005. Thisresulted mainly from the increase of 35.2% in operating profit, partially offset by a slightincrease in net financing costs. The following table sets forth a reconciliation of our operatingprofit to profit on ordinary activities before taxation for the periods indicated.Year ended 31 December2005 2006 Change($ in millions except forpercentages)Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.8 111.9 35.2%Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16.9) (17.6) 4.2%of whichFinancing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17.1) (18.1) 5.8%Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2 0.4 106.6%Profit on ordinary activities before taxation ...................... 65.9 94.3 43.1%Taxation ChargeOur taxation charge increased by 18.5% to $8.9 million for the year ended 31 December 2006,compared to $7.5 million for the year ended 31 December 2005. Our effective average tax ratedecreased from 11.4% for the year ended 31 December 2005 to 9.4% for the year ended31 December 2006, a decrease of 2.0%.The decrease in the effective tax rate for the year ended 31 December 2006, and its largedifference from the 12.5% corporate income tax rate is attributable to the disposal of the fourB-type vessels, to another company within the d’Amico Group, which was not part of thecombined accounts. This company was responsible for the majority of the tax charge relating tothe profit realised on this transaction. Taxes paid in connection with the $30.0 million profitsgenerated from the sale of these vessels relate to the claw-back of tax allowances on the vesselssold, and amounted to $0.8 million. Our adjusted effective tax rate for the year ended31 December 2006, excluding profits we generated and taxes we were charged from thistransaction was of 12.6%. The small variations for the effective tax rate and adjusted effectivetax rate for the years ended 31 December 2005 and 2006, respectively, from the corporateincome tax rate of 12.5%, are attributable to adjustments to tax estimates made the previous56

year, minor permanent differences between accounting and taxable profit before tax, and someminor income items that were taxed at a different corporate income rate.Net profitOur net profit increased by 46.3% to $85.4 million for the year ended 31 December 2006,compared to $58.4 million for the year ended 31 December 2005. The following table sets fortha reconciliation of our profit on ordinary activities before taxation to net profit for the periodsindicated.Year ended 31 December2005 2006 Change($ in millions, except forpercentages)Profit on ordinary activities before taxation. . . . . . . . . . . . . . . . . . . . . . . . . 65.9 94.3 43.1%Taxation charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.5) (8.9) 18.5%of whichTaxation on profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.9) (4.5) (8.0%)Deferred taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.6) (4.4) 66.7%Net profit .................................................... 58.4 85.4 46.3%The increase in net profit was primarily attributable to an increase of 43.1% in our profit onordinary activities before taxation during the year ended 31 December 2006. However, thisincrease was partly offset by the increase of 18.5% in our taxation charge for the same period.Comparison of the Years Ended 31 December 2005 and 2004RevenueOur revenue increased by 64.7% to $253.4 million for the year ended 31 December 2005,compared to $153.9 million for the year ended 31 December 2004. This was mainly attributableto an increase in the number of employment days in the year ended 31 December 2005,compared with the year ended 31 December 2004, as a result of an overall expansion of ourfleet, which reached an average number of 31.4 vessels during 2005, compared to 22.1 during2004. In addition, the increase in revenue was also attributable to an increased number ofemployment days pursuant to spot contracts during the year ended 31 December 2005, a periodof high demand for product tanker capacity and, consequently, higher freight rates for spotvoyages. In particular, we incurred higher voyage costs, which were reflected in the rates wecharged to our customers.57

Voyage CostsOur voyage costs increased by 127.5% to $31.7 million for the year ended 31 December 2005,compared with $13.9 million for the year ended 31 December 2004. As a percentage of timecharter equivalent earnings, voyage costs increased from 9.9% in the year ended 31 December2004 to 14.3% in the year ended 31 December 2005. The increase in voyage costs was mainlydue to an increase in the number of MR vessels operating on spot voyages and COAs, wheresuch costs were payable by us, which also reflected the expansion of our fleet, as well as toincreases in the average price at which we purchased bunker fuel and paid for port charges andcommissions. In particular, for the years ended 31 December 2004 and 2005, we purchasedbunker fuel at an average price per MT of $250.3 and $166.9, respectively. The table below setsforth a breakdown of our voyage costs for the periods indicated.Year ended 31 December2004 2005 Change($ in millions)Bunker fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6.8) (16.2) 139.5%Commissions payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.6) (4.9) 91.7%Port charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.6) (10.1) 120.5%Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.5) —Voyage costs ............................................... (13.9) (31.7) 127.5%Time Charter Equivalent EarningsOur time charter equivalent earnings increased by 58.4% to $221.8 million for the year ended31 December 2005, compared with $140.0 million for the year ended 31 December 2004. Theincrease was mainly attributable to an expansion of our fleet by 42.0%, and an increase inaverage daily time charter equivalent earnings per employment day of 9.0% (excluding charteredvessels in which we have a partial interest) for the year ended 31 December 2005, over theprevious financial year. In particular, the increase in our fleet, and the favourable marketconditions, allowed us to employ more vessels on the spot market, and on new time charters,where we could obtain higher earnings than on time charter contracts entered into whenmarket rates were less attractive.As a percentage of our revenue, time charter equivalent earnings decreased from 91.0% in theyear ended 31 December 2004 to 87.5% in the year ended 31 December 2005. This decrease ismainly attributable to an increase in proportion of MR vessels employed on spot voyages, andtherefore an increase in the costs incurred in relation to such voyages. The increase is alsopartially attributable to the general increase in the average price we paid for bunker fuel, portcharges and commissions.58

Other Direct Operating CostsOur other direct operating costs increased by 17.8% to $111.6 million for the year ended31 December 2005, compared with $94.7 million for the year ended 31 December 2004. As apercentage of time charter equivalent earnings, other direct operating expenses decreased from67.7% in 2004 to 50.3% in 2005. The following table sets forth a breakdown of our other directoperating costs for the periods indicated.Year ended 31 December2004 2005 Change($ in millions exceptpercentages)Time charter costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (80.9) (87.8) 8.5%Crew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.5) (10.4) 133.5%Technical expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.6) (6.0) 65.6%Technical management and quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.4) (4.4) 85.3%Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.6) (3.2) 105.2%Sundry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.6) (1.7) 206.2%Insurance claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.3) 1.9 (253.1%)Other direct operating costs ................................. (94.7) (111.6) 17.8%The increase in other direct operating costs was mainly attributable to an overall increase incosts related to owned vessels and, to a lesser extent, to an increase in time charter costs,partially offset by an insurance claim reimbursement.Time charter costs increased by 8.5% to $87.8 million in the year ended 31 December 2005,compared with $80.9 million in the year ended 31 December 2004. This increase was mainlyattributable to an increase of 6.9% in the number of vessels chartered, to an average of 18.6vessels in the year ended 31 December 2006, from an average of 17.4 vessels in the year ended31 December 2005.All of the other direct operating costs arising from vessel ownership rose sharply, due to anincrease of 127.9% in the average number of owned vessels from 5.0 vessels (including twovessels on bareboat charter up to July 2004) for the year ended 31 December 2004, to 11.3vessels for the year ended 31 December 2005. If we exclude the smallest cost items in absoluteU.S. dollar terms, such as sundry and insurance claims, the largest increase occurred for crew,which rose by 133.5%, also as a result of inflation and increased market competition to securesuitably qualified and skilled personnel. Insurance, technical and quality management, andtechnical expense increased by 105.2%, 85.3% and 65.6%, respectively; these costs items rose bya lower percentage than the number of owned vessels because insurance and quality managementcosts are paid also on chartered vessels, and the chartered fleet rose only by 6.9%, if weconsider the bareboat chartered vessels as chartered vessels, or 1.0%, if we consider these vesselsas owned vessels. The increase in technical expenses, which are paid only on owned vessels,grew at a rate lower than the rate at which the number of owned vessels grew because costsfor equipping a vessel to be delivered are capitalised, substantially reducing these expenses in avessel’s first year of operations.The insurance claim reimbursement of $1.9 million for the year ended 31 December 2005 andthe expense from an insurance deductible of $1.6 million for the year ended 31 December 2004,had the effect of off-setting, although only to a small extent, the increase in all of the otherdirect operating costs. The insurance deductible represents the initial sum of a claim that wasborne by us, before the remainder of the claim was borne by the insurer.59

Gross ProfitOur gross profit increased by 143.4% to $110.2 million for the year ended 31 December 2005,compared with $45.3 million for the year ended 31 December 2004. This increase in gross profitis attributable to a higher increase in our time charter equivalent earnings, compared to theincrease in our direct operating costs. As a percentage of time charter equivalent earnings, grossprofit increased to 49.7% in 2005 from 32.3% in 2004. This increase in margin is the result of anincrease in our fleet’s time charter equivalent average daily earnings and of a decrease in itsaverage direct daily operating costs. The decrease in the average daily costs was the result of adecrease in the average daily cost of operating owned vessels, and of a change in the mix ofowned vessels to total controlled vessels (excluding chartered vessels in which we have a partialinterest), which rose from 17.7% in the year ended 31 December 2004, to 35.9% in the yearended 31 December 2005. In particular, since the cost of time chartering vessels is usuallysubstantially higher than the direct operating cost of owning a vessel, the increase in theproportion of owned vessels in the fleet generally has the effect of reducing the fleet’s averagedaily direct operating costs. The following table sets forth a reconciliation of our time charterequivalent earnings to gross profit for the periods indicated.Year ended 31 December2004 2005 Change($ in millions, except forpercentages)Time charter equivalent earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140.0 221.8 58.4%Other direct operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (94.7) (111.6) 17.8%Gross profit ............................................... 45.3 110.2 143.4%DepreciationOur depreciation charges increased by 112.6% to $21.3 million for the year ended 31 December2005 compared to $10.0 million for the year ended 31 December 2004. The increase was mainlyattributable to an increase in the average number of owned vessels to 11.3 for the year ended31 December 2005 from 3.9 in the previous year. In addition, during the year ended 31 December2005, we reduced our expectation of the useful economic life of our newly delivered vesselsfrom 25 years to 17 years, which contributed to an increase in depreciation charges.Administrative ExpensesAdministrative expenses increased by 51.0% to $6.0 million for the year ended 31 December2005, compared to $4.0 million for the year ended 31 December 2004. This increase was mainlyattributable to an increase in management fees paid to d’Amico Group entities not included inthe combined financial statements, and to a lesser extent to an increase in other sundry officeexpenses.60

Operating ProfitOur operating profit increased by 165.2% to $82.8 million for the year ended 31 December2005, compared to $31.2 million for the year ended 31 December 2004. As a percentage of timecharter equivalent earnings, there was an increase to 37.3% in 2005 from 22.3% in 2004. Thefollowing table sets forth a reconciliation of our gross profit to operating profit for the periodsindicated.Year ended 31 December2004 2005 Change($ in millions, except forpercentages)Gross profit ................................................ 45.3 110.2 143.4%Profit on disposal of vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.0) (21.3) 112.6%Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.0) (6.0) 51.0%Operating profit ............................................ 31.2 82.8 165.2%The increase was primarily attributable to the increase in gross profit of 143.4% for the yearended 31 December 2005. The increase was partly offset by the increase in depreciation andadministrative expenses during the year ended 31 December 2005.Financing CostsFinancing costs increased by 126.0% to $17.1 million for the year ended 31 December 2005,compared to $7.6 million, for the year ended 31 December 2004. The increase in financing costsis mainly attributable to an increase in interest expense on bank loans and on inter-companyloans.Year ended 31 December2004 2005 Change($ in millions, except forpercentages)Interest expense on bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.9) (7.9) 304.3%Fees on bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.3) (1.0) (20.5%)Swap interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.1) (3.0) (2.1%)Interest expense on inter-company loans . . . . . . . . . . . . . . . . . . . . . . . . . . (1.3) (5.2) 300.1%Losses on forward currency contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Financing costs .............................................. (7.6) (17.1) 126.0%The increase in interest expense on bank loans was mainly attributable to an increase in theaverage indebtedness and U.S. dollar LIBOR rates for the year ended 31 December 2005. Theincrease in average indebtedness is attributable to the seven vessels acquired during the yearended 31 December 2005, raising the average number of vessels owned to 11.3, from 3.9 for theprevious year. The increase in interest expense on inter-company loans was mainly attributableto the increase in U.S. dollar LIBOR rates and the substantial draw-downs from other d’AmicoGroup companies, which occurred during the years ended 31 December 2004 and 2005 to fundthe equity portion of our investment in the several vessels acquired during those years.61

Profit on Ordinary Activities Before TaxationOur profit on ordinary activities before taxation increased by 177.9% to $65.9 million for theyear ended 31 December 2005 compared to $23.7 million for the year ended 31 December 2004.This increase is mainly attributable to the increase in operating profit and was partly offset bythe increase in net financing costs for the year ended 31 December 2005. The following tablesets forth a reconciliation of our operating profit to profit on ordinary activities before taxationfor the periods indicated.Year ended 31 December2004 2005 Change($ in millions, exceptpercentages)Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.2 82.8 165.2%Net financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.5) (16.9) 124.8%of whichFinancing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.6) (17.1) 126.1%Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.2 300.0%Profit on ordinary activities before taxation ....................... 23.7 65.9 177.9%Taxation ChargeOur taxation charge increased by 35.2% to $7.5 million for the year ended 31 December 2005,compared to $5.5 million for the year ended 31 December 2004. Our effective average tax ratedecreased significantly from 23.4% for the year ended 31 December 2004 to 11.4% for the yearended 31 December 2005. For the year ended 31 December 2004, the difference between theeffective tax rate of 23.4% and the corporate income tax rate of 12.5%, arose because corporateincome tax for the combined entity is equal to the sum of the corporate income taxes of theentities being combined, while profits before tax for the combined entities, is lower than theaggregate profits before tax of the entities being combined, due to accounting adjustmentsmade to the combined accounts.Net ProfitOur net profit increased by 221.6% to $58.4 million for the year ended 31 December 2005,compared to $18.2 million for the year ended 31 December 2004. The following table sets fortha reconciliation of our profit on ordinary activities before taxation to net profit for the periodsindicated.Year ended 31 December2004 2005 Change($ in millions, exceptpercentages)Profit on Ordinary Activities Before Taxation . . . . . . . . . . . . . . . . . . . . . . . 23.7 65.9 177.9%Taxation charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.5) (7.5) 35.2%of whichTaxation on profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.6) (4.9) 86.0%Deferred taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.9) (2.6) (10.2%)Net Profit ................................................... 18.2 58.4 221.6%The increase in net profit was primarily attributable to the increase in our profit on ordinaryactivities before taxation during the year ended 31 December 2005, however this was partlyoffset by the increase in our tax charge for the same period.62

Liquidity and Capital ResourcesWorking Capital RequirementsWe have historically financed our capital requirements with cash flow from operations, loansfrom a d’Amico Group finance company and long term bank debt. Our main uses of funds havebeen capital expenditures for the acquisition of new and secondhand vessels, maintenance andperiodic dry-docking, voyage expenses, vessel operating expenses, repayment of bank loans andpayment of dividends. We will require capital to fund ongoing operations, the construction ofnew vessels, potential new vessel acquisitions and debt. We expect that, for at least twelvemonths from the completion of this Offering and taking into account generally expected marketconditions, internally generated cash flow and borrowings under our secured revolving creditfacility will provide sufficient capital to adequately fund our operations and meet our contractualobligations in a timely fashion.We expect that in the future we may fund the acquisition of additional vessels through acombination of long term bank debt, operating cash flow and the temporary use of our shortterm revolving credit facility. The latter will be repaid from time to time with funds fromoperations.Through DM Shipping Limited, in which we own a 51% interest, we are committed topurchasing two MR newbuildings. The purchase of these vessels will be mainly financed throughlong term bank debt and shareholder loans from us and the other shareholder.We believe that funds from operations and those available under our revolving credit facilityand long term bank loans will be sufficient to support our growth strategy which may involvethe acquisition of additional new buildings and secondhand vessels, which may be acquiredunder purchase options. Depending on market conditions in the industry for shipping petroleumproducts, and acquisition opportunities that may arise, we may be required to obtain additionaldebt or equity financing.Capital ExpendituresOur main capital expenditures are connected to our fleet expansion programme, upgrading ofour vessels and capitalised dry-dock expenses.During the year ended 31 December 2004, capital expenditures amounted to $144.8 million, ofwhich $66.0 million was invested in purchasing secondhand vessels and $76.8 million was usedto make payments to shipyards for new vessels. The remaining $2.0 million represented capitaliseddry-dockexpenses.During the year ended 31 December 2005, capital expenditures amounted to $132.6 million, ofwhich $96.5 million was paid to shipyards for new vessels, $33.4 million was invested inpurchasing secondhand vessels, $0.7 million was capitalised as dry-dock expenses and $2.0 millionwas used in connection with the acquisition of a share in an aircraft.During the year ended 31 December 2006, capital expenditures amounted to $109.6 million, ofwhich $69.5 million was invested in purchasing secondhand vessels, $37.8 million was paid toshipyards for new vessels and $2.3 million capitalisedas dry-dock expenses.The following table sets forth information on our capital expenditures for the periods indicated.Years ended 31 December2004 2005 2006($ in millions)Acquisition of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.8 131.9 107.3Dry dock capitalisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 0.7 2.3Total capital expenditure ...................................... 144.8 132.6 109.663

The following table sets forth information on our capital expenditure commitments as of31 December 2006 relating to our two MR newbuildings for the periods indicated.InstalmentsPaidAs of 31To Be Paid TotalDecember 2006 2007 2008 2009 Cost price (1)MR product tanker dwt. 46,200 Hull n 724. . . . . (1.0) (1.0) — (17.2) (19.2)MR product tanker dwt. 46,200 Hull n 725. . . . . (1.0) (1.0) — (17.2) (19.2)(1) The figures represent 51% of our commitments. Investments already made were convertedat the actual $/¥ exchange rate at the time of payment, of ¥116.96 per $1. Future paymentswere converted at the exchange rate of ¥119.1572 per $1 as of 31 December 2006. This representscontractual obligations to pay the purchase price of two MR newbuildings to bedelivered in 2008 and 2009. The aggregate amount to be paid for these two MR newbuildingsis ¥4.55 billion.In addition, we expect our future capital expenditure for upgrading and maintenance will beapproximately $3.3 million in 2007, approximately $3.1 million in 2008 and approximately$3.1 million in 2009.Cash FlowThe following table sets forth our cash flow for the periods indicated.Year ended 31 December2004 2005 2006($ in millions)Cash generated from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.6 95.2 102.0Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.6) (15.8) (16.6)Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.0) (4.9) (0.5)Cash flow from operating activities ............................ 20.0 74.5 84.8Investing activitiesAcquisition of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (142.8) (131.9) (107.2)Payment for dry dock activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.0) (0.7) (2.0)Proceeds on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 70.0Interest received. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.2 0.4Cash flow from investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (144.7) (132.4) (38.8)Financing activitiesBank loans increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91.0 48.1 23.6d’Amico Group Inter-company funding . . . . . . . . . . . . . . . . . . . . . . . 42.3 27.0 (66.2)Change in ordinary share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1) (0.1) 0.1Dividends paid: by d’Amico Tankers Limited. . . . . . . . . . . . . . . . . . . . (5.0) (5.0) —Dividends paid: by other combining entities . . . . . . . . . . . . . . . . . . . — (9.4) —Cash flow from (for) financing activities ........................ 128.3 60.7 (42.6)Net increase in cash and cash equivalents ....................... 3.6 2.8 3.4Cash and cash equivalents at 1 January. . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 7.7 10.5Cash and cash equivalents at 31 December ...................... 7.7 10.5 13.9Cash flow from operating activities. Our cash flow from operating activities increased by13.8% to $84.8 million in the year ended 31 December 2006, compared to $74.5 million in theyear ended 31 December 2005. This result was mainly due to an increase in average time charterequivalent earnings for our vessels, an expansion of our fleet from an average number of 31.4vessels in 2005 to an average number of 34.5 vessels in 2006, and a reduction in taxes paid,partly offset by an increased amount of interest paid. The increase in the amount of interest64

paid is the result of higher interest payments on bank loans, and on fees paid to banks for theseloans, partly off-set by lower swap interest payments and by lower interest payments on intercompanyloans. Higher interest payments on bank-loans are attributable to an increase in theU.S. dollar LIBOR rates and to higher average bank loan balances outstanding for the yearended 31 December 2006 in comparison to the year ended 31 December 2005. Despite a slightdecrease in the average number of vessels owned from 11.3 for the year ended 31 December2005, to 10.8 for the year ended 31 December 2006, there was an increase in average loanbalances which is attributable to the higher value of vessels acquired relative to those soldduring the period. In particular, we sold our four B-Type vessels in January 2006. These B-Typevessels carried little debt and were replaced with newer vessels that had a higher purchase priceand were more heavily leveraged between the years ended 31 December 2005 and 2006.Additionally, although the refinancing of our loans in May 2006 reduced our U.S. dollar LIBORspreads, it lengthened the period before our bank loans would reach maturity thereby reducingannual debt amortization. Higher bank fees, which are mostly one-off items immediatelyexpensed and incurred at draw-down to compensate banks for arranging loans, also resultedfrom the refinancing that took place in May 2006. Lower swap interest payments are attributableto the repayment in October 2006 of two swap arrangements with an aggregate nominalamount outstanding of $20.0 million, and to the increase in U.S. dollar LIBOR rates. Lowerinterest payments on inter-company loans are attributable to the repayments of $66.2 million ininter-company funds for the year ended 31 December 2006.During the year ended 31 December 2005, our cash flow from operating activities increased by271.7% to $74.5 million compared to $20.0 million in the year ended 31 December 2004. Thisresult was mainly due to an increase in the average time charter equivalent earnings for ourvessels, and an increase in our fleet, from an average number of 22.1 in 2004 to an averagenumber of 31.4 in 2005, partly offset by an increase in interest and income taxes paid. Inparticular, there was an increase in the number of owned vessels from an average of 3.9 in theyear ended 31 December 2004 to an average of 11.3 in the year ended 31 December 2005. Cashoperating expenses for our owned vessels are lower than those for our chartered in vessels. Assuch, the increase in the number of owned vessels significantly contributed to the increase incash from operating activities. The increase in our cash flow generated from operations waspartly offset by an increase in interest, attributable to higher interest payments on bank andinter-company loans, partly off-set by slightly lower fees on bank loans and swap interestpayments. High interest payments on bank loans and inter-company loans are the result of anincrease in the U.S. dollar LIBOR rates and of higher average bank and inter-company loanbalances, following the significant increase in the average number of owned vessels for the yearended 31 December 2005, over the previous year.Cash flow from investing activities. Our cash flow for investing activities decreased by 70.7% to$38.8 million in the year ended 31 December 2006, compared with $132.4 million in the yearended 31 December 2005. This decrease mainly resulted from the proceeds on the sale of ourfour B-Type vessels for a total amount of $70.0 million. In addition, we spent $107.2 million onthe acquisition of fixed assets during the year ended 31 December 2006, compared with$131.9 million for the year ended 31 December 2005. We used less cash for investments in theyear ended 31 December 2006 than we did in the year ended 31 December 2005 as wepurchased fewer ships than in the prior year. During the year ended 31 December 2006, wepurchased three vessels compared to seven during the year ended 31 December 2005, howevervessels purchased in the year ended 31 December 2006 had higher average prices than thoseacquired during the year ended 31 December 2005, due to both higher valuations in theshipping market during the year ended 31 December 2006 and the higher average age of vesselsacquired during the year ended 31 December 2005, which included three B-Type vessels. Inaddition, during the year ended 31 December 2005, we acquired a larger number of newbuildings,for which only a proportion of the purchase price was paid at the time of acquisition,in comparison with the year ended 31 December 2006.During the year ended 31 December 2005, our cash outflows from investing activities decreasedby 8.5% to $132.4 million, compared to $144.7 million during the year ended 31 December2004. Although we acquired seven vessels in the year ended 31 December 2005 in comparison tofive in the year ended 31 December 2004, the decrease occurred as a result of a lower averageprice for vessels acquired during the year ended 31 December 2005. In particular, we acquired65

three B-Type vessels during the year ended 31 December 2005 in comparison to only one duringthe year ended 31 December 2004. Further, instalments were paid during the year ended31 December 2004 for vessels that were delivered during the year ended 31 December 2005.Cash flow from financing activities. During the year 31 December 2006 our cash outflow fromfinancing activities amounted to $42.6 million, a decrease of $103.3 million, compared with acash inflow of $60.7 million during the year ended 31 December 2005. This was partly due to adecrease in our payments for vessels during the year ended 31 December 2006, resulting in alower cash inflow from bank loans of $23.6 million during the year ended 31 December 2006,compared with $48.1 million during the year ended 31 December 2005. The increase in bankloans during the year ended 31 December 2006 resulted from loan draw-downs in connectionwith the acquisition of three vessels, and was partly offset by contractual debt amortization,and the repayment of loans existing in connection with the four B-Type vessels that we soldduring the year ended 31 December 2006. Further, the increase of $48.1 million in bank loansduring the year ended 31 December 2005 resulted from the draw-downs used to finance theremaining instalments relating to the four newbuildings delivered during that year, as well asfrom the acquisition of three secondhand vessels, and was party offset by contractual debtamortizations. The refinancing that we carried out in May 2006 reduced the amount of ourbank loans by $1.0 million and therefore had a minor effect on our indebtedness.The factor most significantly affecting the difference in cash flow from financing activitiesduring the years ended 31 December 2005 and 2006 was the movement in funds with otherd’Amico Group companies, resulting in repayments of $66.2 million for the year ended31 December 2006, compared with draw-downs of $27.0 million for the year ended 31 December2005. During the years ended 31 December 2005 and 2006, our policy was to finance our cashrequirements mainly through inter-company loans from d’Amico Finance Limited rather thanthrough equity contributions. Any excess liquidity was passed back to d’Amico Finance Limited,so that we would be able to operate with the minimum cash requirements. Hence the increasein the number of vessels operating in pools that we control and the increase in the number ofour vessels in operation, particularly the increase in the number of vessels operating in the spotmarket, increased our minimum cash requirement from $10.5 million during the year ended31 December 2005 to $13.9 million during the year ended 31 December 2006. Anotherimportant factor contributing to the difference in cash flow from financing activities during theyears ended 31 December 2005 and 2006 was the difference in dividends paid between the twoyears. In the year ended 31 December 2005, we paid a dividend of $5.0 million, and thecombined entities, whose vessels we acquired, paid dividends of $9.4 million prior to theirliquidation. In the year ended 31 December 2006, a $25.0 million dividend was declared but onlypaid on 30 January 2007.During the year ended 31 December 2005 our cash inflow from financing activities amounted to$60.7 million, compared to an inflow of $128.3 million during the year ended 31 December2004. This difference is partly due to the decrease in the acquisition of vessels during the yearended 31 December 2005 compared with the year ended 31 December 2004, resulting in a cashinflow from bank loans which amounted to $48.1 million for the year ended 31 December 2005,compared to $91.0 million for the year ended 31 December 2004. The bank loans increase of$91.0 million during the year ended 31 December 2004 was the result of our draw-downs usedto finance the remaining instalments due in respect of two newbuildings delivered during thatyear and of another two newbuildings delivered the following year, as well as from new loansneeded to fund our acquisitions of three secondhand vessels, partly offset by contractual debtamortisations for that year. Another important factor explaining the difference in cash flowfrom financing activities during the years ended 31 December 2004 and 2005, relates to thehigher net funding amounting to $42.3 million obtained from other d’Amico Group companiesduring the year ended 31 December 2004, compared to $27.0 million during the year ended31 December 2005. This increase in inter-company funding was the result of our higherfinancing requirements for the acquisition of new vessels during the year ended 31 December2004 in comparison with the year ended 31 December 2005.66

IndebtednessThe following table sets forth our total debt obligations for the periods indicated.Year ended 31 December2004 2005 2006($ in millions)Bank loans falling due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.6 16.9 16.0Bank loans falling due after more than one year. . . . . . . . . . . . . . . . . . . . 108.1 161.0 185.4Total bank loans ............................................. 129.7 177.8 201.4Loans from other d’Amico Group Companies. . . . . . . . . . . . . . . . . . . . . . . 90.8 106.5 38.8Total Debt .................................................. 220.5 284.3 240.2As of 31 December 2006, our debt obligations consisted of $240.7 million, of which $201.4 millionwas guaranteed by the Selling Shareholder and secured by mortgages on our ownedvessels, as well as other collateral provided by the d’Amico Group and by other means. As of thesame date, $165.4 million of our total debt was outstanding under a financing agreement withCalyon to which another company of the d’Amico Group was also a party. In accordance withthe terms of this agreement, the security that we provided was available to the lender as crosscollateralwith regard to defaults by this other d’Amico Group company. In connection with therefinancing of our debt in March 2007, we terminated the above agreement and replaced thesecurity and guarantee referenced above as described below under “—New credit facility”. Thefollowing table summarises our debt obligations as of 31 December 2006. For additionalinformation, please refer to the following discussion, as well as to the notes to our auditedcombined financial statements.Vessel/Tranche Lender BorrowerAmountoutstandingas of 31December2006 Maturity Balloon($ in millions)CALYON Facility (U.S. dollar LIBOR (1) + 0.65% per annum, if Advance Ratio (2) 50%, otherwise1.00%)High Spirit/A. . . . . . . . . . . . . . . . . . . Calyon DTL 10.45 Q12016 0High Challenge/B . . . . . . . . . . . . . . . Calyon DTL 10.45 Q12016 0Cielo di Londra/C . . . . . . . . . . . . . . . Calyon DTL 12.35 Q12016 0Cielo di Salerno/D . . . . . . . . . . . . . . Calyon DTL 12.35 Q12016 0High Endurance/E. . . . . . . . . . . . . . . Calyon DTL 16.40 Q12016 5.00High Endeavour/F . . . . . . . . . . . . . . . Calyon DTL 16.40 Q12016 5.00High Valor/G. . . . . . . . . . . . . . . . . . . Calyon DTL 17.40 Q12016 6.00High Courage/H . . . . . . . . . . . . . . . . Calyon DTL 17.40 Q12016 6.00High Progress/I . . . . . . . . . . . . . . . . . Calyon DTL 17.40 Q12016 6.00High Performance/J . . . . . . . . . . . . . Calyon DTL 17.40 Q12016 6.00High Venture/L . . . . . . . . . . . . . . . . . Calyon DTL 17.40 Q12016 6.00Bank of Ireland Facility (U.S. dollar LIBOR (3) + 0.58% per annum, if Advance Ratio (4) 50%,otherwise 0.75%)High Wind . . . . . . . . . . . . . . . . . . . . Bank of Ireland DTL 18.00 Q42016 4.00Banca Intesa (U.S. dollar LIBOR (5) + 0.45% per annum, if Advance Ratio (4) 50%, otherwise0.80%)Cielo di Parigi. . . . . . . . . . . . . . . . . . B. INTESA DTL 18.00 Q42016 4.00Total ......................... 201.4(1) U.S. dollar LIBOR for 3, 6 or 9 months, agreed from time to time with the lenders.(2) Advance Ratio is equal to the Aggregate of the Facility Amount Outstanding to the AggregateVessel Fair Market value.67

(3) U.S. dollar LIBOR for 1, 3 or 6 months, agreed from time to time with the lenders.(4) Advance Ratio is equal to the Facility amount Outstanding to the Fair Market value of thevessel.(5) U.S. dollar LIBOR for 6 months.New Credit FacilityIn March 2007, through d’Amico Tankers Limited, we entered into a secured ten-year $350.0 millionrevolving credit facility, with Calyon S.A. and Intesa Sanpaolo S.p.A., part of and leading asyndicate consisting of four other banks. The facility is secured by a guarantee by the Company.As of the date of this Prospectus, our outstanding debt under this facility is $250.0 million.One of the main purposes of the facility was to refinance all of our prior debt. Under the newcredit facility, we repaid approximately $52.3 million of debt owed to other entities of thed’Amico Group which were outside our consolidated Group and $197.4 million of debt incurredby us under certain financing arrangements entered into by the d’Amico Group. By repayingthis part of our debt, we also removed cross collateralisation and other guarantees which weprovided jointly with other entities of the d’Amico Group. We may also use funds from thefacility for our working capital requirements and/or investments in future vessels, as well as forgeneral corporate purposes.The principal amount available through the facility at any given time, is reduced by $15.5 millionevery six months down to a final payment of $40.0 million at maturity. We may draw down on arevolving basis such that the aggregate outstanding amount due does not exceed the maximumavailable amount at any given time, subject to the requirements relating to facility reductions.However, the amount outstanding at any given time must not be higher than 66.6% of the fairmarket value of the 13 vessels owned by the Group and subject to mortgages pursuant to thefacility. In addition, the maximum amount that we will be able to draw down will also bedetermined on the basis of our EBITDA to financial costs ratio. In particular, we define EBITDAas gross profit plus profit on disposal of vessels, less administrative expenses, and financial costsas interest and principal repayments due plus commitment fees. We calculate EBITDA tofinancial costs ratio dividing EBITDA by financial costs. This ratio is calculated on the estimatedtotal amount of our interest payable in the six months following any draw down date, and maynot be lower than 1.65:1.In accordance with the terms of the facility we must comply at all times with the followingfinancial covenants, which are calculated on the basis of the consolidated financial statementsof the Company, as guarantor:• our available cash, including undrawn credit lines committed for more than 12 months,must be at least $40.0 million;• our net worth, which is defined as our book equity plus subordinated shareholder loans,as recorded on our balance sheet, must not be less than $100 million; and• our equity to asset ratio, calculated by dividing our book equity by our total assets, mustnot be lower than 35.0%.The facility is secured by:• a guarantee by the Company;• mortgages on each of the 13 vessels owned by the Group;• an assignment in favour of the lenders of the time-charter agreements entered into byus; and• a pledge over an account opened with Calyon S.A. into which we undertake to pay theproceeds of our operating activities.Under the terms of the facility the lenders have a right of first refusal relating to the financingof any future vessel acquired at least in part using funds from the facility.Interest on any amount outstanding under the facility will be payable at a rate of LIBOR plus0.65% if the asset cover ratio of d’Amico Tankers Limited and its consolidated subsidiaries is68

elow 50% and LIBOR plus 0.95% if such ratio is equal to or higher than 50%. We calculate thisratio by dividing the total bank debt outstanding by the fair market value of the vessels. Thefacility contains a change of control restriction and the Selling Shareholder is to remain thecontrolling shareholder of the Company.Contractual ObligationsThe following table sets forth our material contractual obligations and their maturity as of31 December 2006.TotalLess than1 year 1-3 years 3-5 years($ in millions)More than5 yearsContractual obligations:Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 201.4 16.0 32.0 32.0 121.4Minimum non-cancellable charterexpenses (1) . . . . . . . . . . . . . . . . . . . . . . . . . 1,029.0 103.5 242.6 257.9 425.0Newbuildings (2) . . . . . . . . . . . . . . . . . . . . . . . 36.4 2.0 34.4 — —Total Contractual Obligations ............ 1,266.8 121.5 309 289.9 546.4(1) Does not include optional periods. Includes our proportion of charter expenses of vesselstime chartered by the Handytankers Pool. Includes 100% of time charter costs for vesselshired from DM Shipping. After 31 December 2006, we acquired 50% of another vessel totime charter through the Handytankers Pool. Our share in the minimum non cancellabletime charter commitments for this vessel is not included in the table above and amounts to$16.1 million. In particular, starting on 31 December 2006, our share in the commitments ofthis vessel amount to $1.6 million within one year, $6.4 million from one to three years,$6.4 million from three to five years and $1.6 million beyond five years.(2) The amounts shown above account for only 51% of the total amount due with regard tothe purchase of two MR newbuildings, reflecting our interest in the entity of our Groupthrough which we committed to such purchase. These two MR newbuildings will be deliveredin 2008 and 2009. The aggregate amount to be paid for them is ¥4.55 billion, of whichwe accounted for in the above table at the exchange rate of ¥119.1572 per $1 as of31 December 2006. Investments already made were converted at the actual $/¥ exchangerate at the time of payment, of ¥116.96 per $1.Off-Balance Sheet LiabilitiesWe do not currently have any material off-balance sheet liabilities, except for the charterexpenses referenced above under “—Contractual Obligations” and currency hedging agreementsentered into in connection with the purchase of an MR newbuilding to hedge the risk offluctuations in the exchange rate of the U.S. Dollar against the Japanese Yen.Qualitative and Quantitative Market RiskOur overall risk management programme focuses on the unpredictability of financial marketsand seeks to minimise potential adverse effects on our financial performance by entering intohedging instruments designed to mitigate interest rate and currency risk. Our hedging strategyconsists of identifying the risks that are associated with our industry and that we are exposedto, evaluating the hedging strategies that are available to us, and selecting the instrument wehave assessed to best suit our needs. We constantly monitor and evaluate our hedging positionsto ensure that they are carried out effectively.Interest RatesHistorically, we have been subject to interest rate risk, because we have had significant amountsof floating rate bank debt outstanding. In our combined financial statements for the year ended31 December 2006, our interest expense on this debt was an average spread of 98 basis pointsto the U.S. dollar LIBOR rate (most of our facilities grant us the option to choose in advanceupon payment of the last instalment between the 3, 6, 9 or 12 month rate). This spread for 200669

is, however, of only 64 basis points if we look at the period following the previous refinancingof our loans, which occurred on 5 May 2006. In addition, the average spread in 2006 relating tothe last two loans taken in connection with the acquisitions of the vessels “Cielo di Parigi” and“High Wind” was a lower value of 51 basis points. A one per cent increase in the U.S dollarLIBOR rate would have increased interest rate expenses on our bank loans for the year ended31 December 2006 by $1.74 million.In 2006, d’Amico Tankers Limited financed a significant part of its investments through intercompanyloans provided by d’Amico Finance Limited. Such loans were provided using the U.Sdollar LIBOR rate plus 200 basis points, and we received U.S. dollar LIBOR rate less 50 basispoints on funds we lent to d’Amico Finance. In addition, from 1 April 2006 to 30 November2006, we received and provided funds, at U.S. dollar LIBOR less 150 basis points, from otheroperating companies in the d’Amico Group. A one per cent increase in the U.S. dollar LIBOR ratewould have increased net interest expense on these inter-company loans by $0.33 million.We have a number of interest rate swap contracts taken out to hedge variable rate interestpayable on bank loans. Our exposure under the swap contracts as of 31 December 2006, 2005and 2004 amounted to $45.1 million with an average fixed rate of 6.97%, $75.3 million with anaverage fixed rate of 6.37%, and $84.7 million with an average fixed rate of 6.44%, respectively.A one per cent increase in the U.S. dollar LIBOR rate would have reduced our payments on theswap contracts for the year ended 31 December 2006 by $0.66 million. Our mark to market forthe years ending 31 December 2006, 2005 and 2004 resulted in gains on reserves amounting to$3.3 million, $3.1 million and $2.8 million, which were recognised in the revaluation reservewhich is part of our shareholders equity.The following table summarises our exposure under our outstanding interest rate swap agreementsas of 31 December 2006CounterpartyNotionalprincipalamount Trade date Expiry date Fair value Swap rates($ in millions) ($ in millions)Calyon . . . . . . . . . . . . . . . . . . 21.2 5 July 2001 4 May 2007 (0.27) 7.015%Calyon . . . . . . . . . . . . . . . . . . 21.2 5 July 2001 4 May 2007 (0.26) 6.925%Notional principal amounts represent the amounts to which both floating and swap interestrates are applied to calculate periodic interest payment obligations. In addition to interestpayments, with regard to each of the two swap arrangements listed in the above table, we pay$47,950 at settlement at the end of each quarter. The fair value represents the present value offuture swap payments to be made or received under the swap arrangement. In the table above,the fair value is the amount payable by us to our counterparty in order to exit the swaparrangement. See also “Risk Factors—Risks relating to the Group—Currency exchange rate andinterest rate fluctuations may adversely affect our profitability or your investment in ourShares”.Foreign Exchange RatesWe generate substantially all of our revenue and the majority of our costs in U.S. dollars.However, historically, we have incurred a significant part of our total costs, comprising voyagecosts, mostly originating from port dues and other operating costs, in currencies other than theU.S. dollar. We also incur a significant part of our other vessel operating costs, including thoserelating to crewing, victualling, vetting, management fees, lubricants, classification societies andtelecommunications, in currencies other than the U.S. dollar, including the Euro, representingthe largest proportion, the Singaporean dollar, UK sterling and the Canadian dollar. A proportionof maintenance expenditures arising from dry-docks are also incurred in foreign currencies.For the year ended 31 December 2006, operating costs in Euros represented 11.8% of totaloperating costs. The second most important currency, the Singaporean dollar, accounted for0.6% of total operating expenses for the year ended 31 December 2006. Costs relating to drydockingin currencies other than the U.S. dollar were incurred in Euros during the year ended31 December 2006, and accounted for 19.0% of the total expenditure relating to dry-docks.70

Following the Group’s restructuring, our foreign currency exposure could increase significantly.In particular, as of 31 December 2006 we had no onshore employees, but outsourced substantiallyall of our management functions to other subsidiaries of the d’Amico Group. See “RelatedParty Transactions”. As of 31 March 2007, we employed 43 onshore personnel, which are mainlybased in Dublin and in the newly established companies in London, Monte Carlo and Singaporeand expect that the numbers of our onshore employees will increase in the future as aconsequence of the future expansion of our operations. As such, we expect that an increase inthe number of our employees in those countries where salaries are paid in currencies other thanthe U.S. dollar will increase our exposure to the risks relating to fluctuations in U.S. dollarexchange rates, calculated with regard to these other currencies. In addition, a large majority ofthe other administrative expenses of these new entities will be in currencies other than the U.S.dollar. However following the Group’s reorganisation, any possible increase in our exposure tocurrencies other than the U.S. dollar is likely to be partly offset by the elimination of some ofour management fees incurred in Euros as well as the conversion of some of our other fees intoU.S. dollars. Our management service contracts in respect of which we incur costs in currenciesother than the U.S. dollar accounted for 4.7% of our total operating expenses for the yearended 31 December 2006 and have since been terminated or converted into U.S. dollars.In addition, during the year ended 31 December 2006 we committed ourselves to purchasingtwo MR newbuildings through DM Shipping Limited, a 51% owned joint venture company. Our51% share of the aggregate cost of these two vessels amounts to ¥4.55 billion, of which¥4.32 billion was outstanding as of 31 March 2007. With regard to the option to purchase avessel that we currently charter in, we have purchased forward ¥3.72 billion in order to hedgethe currency fluctuation risk to which we are exposed. As of 31 December 2006, we had forwardexchange contracts at an average cost of ¥115.455 per $1.00, or an aggregate cost of $32.2 million.This forward contract for the acquisition of Japanese yen was marked to market as of31 December 2006, leading to the recognition of a loss of $2.4 million in our accounts for theyear ending 31 December 2006.In our combined financial statements we translated transactions during the year in currenciesother than U.S. dollars to U.S. dollars at the appropriate rate prevailing at the time of thetransactions. Assets and liabilities denominated in foreign currencies have been translated intoU.S. dollars at the rate prevailing at the balance sheet date. Consequently, even if the value ofthese items remains unchanged in the original currency, changes in the foreign currencyexchange rates will cause changes in the value of such items in our financial statements both interms of revenue and in operating margins. See “Risk Factors—Risks relating to the Group—currency exchange rate and interest rate fluctuations may adversely affect our profitability oryour investment in our Shares”.Credit RiskOur assessment of a customer’s financial condition and reliability is an important factor innegotiating employment for our vessels. We have some long term charters, through our poolarrangements and through direct arrangements, with several key customers (in particular majoroil companies and energy related companies). In 2006, our top ten customers were Shell,ExxonMobil, Total, Glencore, Vitol, BP, KPC, Petrobras, Trafigura and Vela.Forward Freight Agreements (“FFAs”) and other derivative instrumentsIn the past, through the Handytankers Pool, and as part of Handytankers hedging policy, besideshedging via fixed rate contracts, we took positions from time to time in derivative instruments,including FFAs. FFAs and other derivative instruments may be used to hedge a vessel owner’sexposure to the charter market by providing for the sale of a contracted charter rate along aspecified route and period of time. Upon settlement, if the contracted charter rate is less thanthe average of the rates, as reported by an identified index, for the specified route and period,the seller of the FFA is required to pay the buyer an amount equal to the difference betweenthe contracted rate and the settlement rate, multiplied by the number of days in the specifiedperiod. Conversely, if the contracted rate is greater than the settlement rate, the buyer isrequired to pay the seller the settlement sum. Taking positions in FFAs or other derivativeinstruments, without correctly anticipating charter rate movements over the relevant route and71

time period, could result in significant losses in connection with the settling or termination ofthe FFA.During the years ended 31 December 2004 and 2005, through the Handytankers Pool, weentered into FFAs with regard to a limited portion of the revenue generated from this Pool, tocover against volatility risk in the freight markets, by hedging freight forward at a fixed price.The effect of these FFAs was reflected in our share of pool earnings for each relevant period.Critical Accounting Estimates and PoliciesThe preparation of the combined financial statements included herein for the years ended31 December 2004, 2005 and 2006, requires management to apply accounting methods andpolicies that are based on difficult or subjective judgments, estimates based on past experienceand assumptions determined to be reasonable and realistic based on the related circumstances.The application of these estimates and assumptions affects the reported amounts of assets andliabilities and the disclosure of our contingent assets and liabilities at the balance sheet dateand the reported amounts of income and expenses during the reporting period. Actual resultsmay differ from these estimates given the uncertainty surrounding the assumptions and conditionsupon which the estimates are based. We have summarised below our accounting estimatesand policies that require the more subjective judgement of our management in makingassumptions or estimates regarding the effects of matters that are inherently uncertain and forwhich changes in conditions may significantly affect the results reported in the combinedfinancial statements.RevenueAll freight revenues and voyage expenses are recognised on a percentage completion basis. Weuse a discharge to discharge basis in determining percentage of completion for all spot voyagesand voyages servicing COAs. Under this method, the freight revenue is recognised evenly overthe period from the departure of a vessel from its original discharge port to departure from thenext discharge port. Revenues from time charters accounted for as operating leases arerecognised rateably over the rental periods of such charters, as service is performed.Revenue received from partnership arrangements that form part of our group after therestructuring are regarded as jointly controlled operations, and our share of the combinedincome statement and balance sheet is accounted for proportionately on a line by line basis.Revenue received from our participation in the Handytankers Pool is accounted for on a timecharter equivalent basis and is net of voyage costs and fees associated with the pool. Our shareof pool revenue is based on our participation in the pools, which is calculated using availablevessel days as adjusted by our share of pool points.Revenue received from demurrage is recognised at the completion of the voyage. It representsthe compensation estimated as a result of exceeding the permitted time for discharging a vessel.Provision is made in respect of demurrage claims where full recovery is not anticipated.Voyage Costs and Other Direct Operating CostsIn connection with the employment of our fleet in the spot market and under COAs, we incurvoyage costs that represent a significant part of our operating costs.Hire rates paid for chartering in vessels are charged to the income statement account on anaccrual basis. Vessel operating costs such as crew, repairs, spares, stores, insurance, commercialfees and technical fees are charged to the income statement as incurred. The cost of lubricantsis based on the consumption in the period. Inventories of fuel and lubricants on board thevessels are shown at cost calculated using the first in first out method.For a description of our voyage costs and other direct operating costs, see “Description of KeyOperating and Financial Items—Voyage costs” and “Description of Key Operating and FinancialItems—Other direct operating costs”.72

Fixed Assets, Depreciation and ImpairmentThe value of our owned vessels is shown on our balance sheet at cost less accumulateddepreciation and any impairment loss. Cost represents the acquisition cost of the vessels as wellas other costs which are directly attributable to the acquisition or construction of the vessel.When a vessel is acquired, the cost is analysed between its various components being vessel cost,tank coatings and estimated dry dock element.Depreciation is provided on the vessels on a straight line basis over their expected usefuleconomic life from the date the vessels were constructed, after allowing for a residual valuebased on current prevailing market scrap rates. The vessel tank coatings are depreciated overten years and the estimated dry dock element is depreciated over the period to the expectedfirst dry dock. Provision is made for any impairment of vessels. The remaining useful economiclife is estimated at the date of acquisition or delivery from the shipyard and is reassessed yearly.The new vessels contracted by us are estimated to have a useful economic life of 17 years.Newbuildings are shown at cost less any impairment loss. Costs relating to newbuildings includeinstalment payments made to date, financing costs and other vessel costs incurred during theconstruction period. Depreciation commences upon vessel delivery.To comply with industry certification or governmental requirements, our vessels are required toundergo planned major inspections or classification (dry-docking) for major repairs and maintenance,which cannot be carried out while the vessels are operating. The costs of dry-docking arecapitalised and amortised over the period to the next dry-docking, estimated at 30 months. Ifthe next dry-docking of a vessel is performed in less than 30 months from the last dry-dockingdate, the balance on the original dry-dock is written off.Impairment ChargesAt each reporting date, we assess whether there is any indication that an asset may be impaired.Impairment charges are recognised whenever the carrying amount of an asset or equipmentexceeds its recoverable amount. Recoverable amount is normally defined as the higher of anasset’s fair value less costs to sell and its value in use, that is, the net present value of the cashflow from its remaining useful life. In assessing value in use the estimated future cash flow fromits remaining useful life are discounted to their present value. An impairment loss recognised inprior years is reversed if the current estimated value in use is higher than at the time theimpairment loss was recognised.Management judgment is critical in assessing whether events have occurred that may impact thecarrying value of our vessels. In developing estimates of our future cash flow, we estimatefuture charter rates, ship-operating expenses, and the estimated remaining useful lives andresidual values of the vessels. These estimates are based on historical trends as well as futureexpectations. Although we believe that the estimates used to evaluate potential impairment arereasonable and appropriate, such estimates are highly subjective and may prove incorrect, whichcould result in significant impairment charges taken in the future.Disposal of VesselsWe recognise any profits or losses incurred on the disposal of vessels when the significant risksand rewards of ownership of the vessel have been transferred to the buyer, and these aremeasured as the sale price net of costs relating to the disposal and the carrying amount of thevessel.TaxationThe income tax expense represents the sum of our current tax and deferred tax. Current taxrepresents that charge based on the result for the year adjusted for items, which are nonassessableor disallowed. It is calculated using tax rates enacted or substantially enacted as atthe balance sheet date.Deferred tax represents the tax we expect to pay or recover on differences between the carryingamounts of assets and liabilities in the combined financial statements and the corresponding taxbases used in the calculation of taxable profit. It is accounted for using the balance sheet73

liability method. Liabilities relating to deferred tax are generally recognised for all taxabletemporary differences. Assets relating to deferred tax are recognised to the extent that it isprobable that taxable profits will be available against which deductible temporary differencescan be utilised. The carrying amounts of deferred tax assets are reviewed at each balance sheetdate and reduced in the event that it is not considered probable that sufficient taxable profitswill be available to allow all or part of the assets to be recovered. Deferred tax is calculated atthe applicable tax rates during the period when liability is settled or the asset realised. It ischarged or credited in the combined income statement, unless it relates to items charged orcredited directly to equity, in which case the deferred tax is also accounted for in equity.Deferred tax assets and liabilities are offset if they relate to income taxes levied by the same taxauthority and we intend to settle our current tax assets and liabilities on a net basis.Foreign Exchange RatesMost of our revenues and costs are denominated in U.S. dollars. Transactions during the year incurrencies other than U.S. dollars have been translated at the appropriate rate ruling at the timeof the transactions. Assets and liabilities denominated in currencies other than the U.S. dollarhave been translated into U.S. dollars at the rate ruling at the balance sheet date. All exchangedifferences have been accounted for in the retained earnings account. For further informationrelating to foreign exchange rates, see “Qualitative and Quantitative Market Risk—Foreignexchange rates”.Financial InstrumentsDerivative financial instruments are used to hedge our exposure to interest rate risks, futurefreight rates and currency fluctuations. They are initially recognised at cost and subsequentlystated at fair value.Freight forward agreements used in trading are recorded in the balance sheet at fair value.Unrealised gains or losses are accounted for in the income statement, as part of revenue.Interest rate swaps representing cash flow hedges are stated at fair value. Unrealised gains orlosses on the effective part of the hedge are accounted for directly in equity. The unrealisedgain or loss on any ineffective parts of the hedge or any other interest rate swaps not qualifyingfor hedge accounting are dealt with in the income statement as part of the net finance costs.Forward currency contracts used to partially hedge exposure on the vessel purchase optionsdenominated in Japanese yen are recorded in the balance sheet at fair value. The gains or lossesare dealt with in the income statement as part of net finance costs.Critical Accounting Judgements and Key EstimatesCritical accounting estimates and judgements are exercised in all areas of our business. The keyareas where this applies are listed below.Vessel carrying values. The carrying value of vessels may significantly differ from their fairmarket value. It is affected by the management’s assessment of the remaining useful lives of thevessels, their residual value and indicators of impairment. It the carrying value of vessels exceedsthe recoverable amount then an impairment charge is recognised.Provision for tax liabilities. Our tax liabilities are calculated based on our tax situation asaffected by the regulatory frameworks of the jurisdiction in which we operate. Our liability fortax may be affected by changes in the treatment or assessment of trading income, freight tax,tonnage tax and value added tax.74

The Oil Products Tanker IndustryThe statistical and graphical information contained in this section, is drawn from the ClarksonResearch Services Limited (“Clarkson’s”) database and other sources, except for informationunder the sub-headings “—Additional Information” and “—The Company”. Clarkson based itsanalysis on information drawn from published and private industry sources. These includeClarkson’s databases, the BP Statistical Review of World Energy, IEA Monthly Oil MarketReports, the U.S. Department of Agriculture (Foreign Agricultural Section), the Shipping IntelligenceNetwork and the Oil & Tanker Trades Outlook. Data is taken from the most recentlyavailable published sources and these sources do revise figures and forecasts over time.Clarkson has advised that (i) some information in Clarkson’s database is derived from estimatesor subjective judgements, (ii) the information in the databases of other maritime data collectionagencies may differ from the information in Clarkson’s database, (iii) whilst Clarkson has takenreasonable care in the compilation of the statistical and graphical information and believes itto be accurate and correct, data compilation is subject to limited audit and validationprocedures and may accordingly contain errors, (iv) Clarkson’s agents, officers and employeescannot accept liability for any loss suffered in consequence of reliance on such information orin any other manner, and (v) the provision of such information does not obviate any need tomake appropriate further enquiries.The International Tanker IndustryOverviewFor a number of decades oil has been one of the world’s most important energy sources. In2005, the consumption of oil accounted for approximately 36% of world energy consumption.Oil demand has grown by a CAGR of 1.7% per year between 1999 and 2007, from approximately75.4 million barrels per day (“bpd”) to an expected 86.0 million bpd. This has primarily been theresult of global economic growth.Some of the fastest demand growth in recent years has been recorded in China, India and theUnited States. However, an economic downturn may sharply reduce the demand for oil andrefined petroleum products, and also potentially affect tanker demand. Long-term growth in oildemand may also be reduced by a switching away from oil and/or a drive for increasedefficiency in the use of refined petroleum products as a result of environmental concerns and/orhigh oil prices.The chart below illustrates the growth in oil demand in recent years, and the seasonality ofchanges:Global Oil Demand88(million bpd)8684828078767472Source: IEA Oil Market Report70Q1 01 Q3 01 Q1 02 Q3 02 Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07Current proven oil reserves were approximately 41 times larger than 2005 production levels,according to the BP Statistical Review of World Energy June 2006, and tend to be located inregions far from major consuming countries, which contributes to tanker demand. Crude oiltankers transport crude oil cargoes from points of production to points of consumption, typically75

oil refineries. Customers include oil companies, oil traders, large oil consumers, refiners,petroleum product producers, government agencies and storage facility operators. Producttankers normally move refined petroleum products, typically gasoline, jet fuel, kerosene, fueloil, naphtha and other soft chemicals and edible oils. Trading patterns are sensitive both tomajor geographical events and to small shifts, imbalances and disruptions at all stages fromwellhead production through refining to end use. Seaborne trading distances are also influencedby infrastructural factors, such as the availability of pipelines and canal “shortcuts”.The seaborne movement of refined petroleum products between regions addresses demand andsupply imbalances for such products caused by the lack of resources or refining capacity inconsuming countries. An additional “arbitrage” trade also occurs, taking advantage of differencesin price between refining centers. Owners of product tankers seek to utilise trade patternsto optimise the revenue and profit-generating potential of their product tanker fleets bymaximizing vessel employment and minimizing waiting time and ballast days.Although these commodities can also be delivered by pipeline or rail, the vast majority ofworldwide crude and refined petroleum products transportation has been conducted by tankersbecause transport by sea is typically the most cost-effective method.In addition to the volume of oil cargo, tanker demand is affected by the distance required totransport oil from oil-producing locations to oil-consuming (or refining) destinations. Tankerdemand is usually expressed in “tonne-miles”, defined as the product of the amount of oiltransported in tankers and the distance over which such oil is transported. Over the past fiveyears, seaborne trade in refined petroleum products has grown at a rate in excess of general oildemand, driven principally by the growth in overall oil demand and the increasing relianceupon limited numbers of high volume producers. Unusual disruptions, such as those caused byHurricane Katrina, have also contributed to the high growth.The seaborne transportation of crude oil and refined petroleum products is a mature industry.The two main types of oil tanker operators are independent operators who charter out theirvessels for voyage or time charter use and major oil companies (including state owned companies)that generally operate captive fleets. At present, the majority of independent operatorshire their tankers for one voyage at a time in the form of a spot charter at fluctuating ratesbased on existing tanker supply and demand. A number of vessel owners often undertakecollaborative operations, by pooling all or parts of their fleet into larger vessel groups.Supply and demand in the tanker market have been closely matched over the past five years. Asa result of this tight supply and demand balance and increasing tonne-miles, charter rates fortankers have been volatile and have reached historically high levels, with geopolitical eventsthat influence seaborne trading patterns, congestion and climatic events each having a visibleinfluence on the freight markets.The seaborne transportation of crude oil, refined petroleum products and edible oils is subjectto regulatory measures focused on increasing safety and providing greater protection for themarine environment at global and local levels. Recent international regulations ratified orawaiting approval include the United Nations’ IMO amended regulations in 2003 to acceleratethe phase-out of tankers without double-hulls, limiting the transportation of fuel oil to doublehullvessels, and a limitation of the vessels that can be used for transportation of vegetable andother edible oils following a reclassification of chemical cargoes. As a result, oil companiesacting as charterers, terminal operators, shippers and receivers are becoming increasinglyselective with respect to the vessels they charter, inspecting and vetting both vessels andshipping companies on a periodic basis. Since 1 January, 2007, for example, only higherspecification/IMO classed tankers have been permitted to transport vegetable oils and animalfats (see “—Regulatory Environment” for more details). This could have an impact on the supplyand demand balance in the wider product tanker market, as ships with the required specificationsenter the vegetable oil market. The USDA Foreign Agricultural Service has reported that,in 2005/2006, global imports of major vegetable oils amounted to approximately 43.5 milliontonnes, compared with 706 million tonnes for refined petroleum products in 2006. Publishedfigures for total seaborne products trade vary due to different definitions and coverage.76

The Global Tanker FleetAs of 1 March, 2007, the global oil tanker fleet (above 10,000 dwt) comprised 4,296 vessels (of366.8 million dwt), with an orderbook of 1,708 vessels (of 145.5 million dwt), which is ahistorical high. In order to benefit from economies of scale, tanker charterers will typicallycharter the largest possible vessel, taking into consideration port and canal size restrictions andoptimal cargo sizes. The fleet is generally divided into the following categories of vessels, basedupon carrying capacity:Class ofTankersVessel Size(dwt)WorldFleet (#Vessels)Orderbook(# Vessels)% of Current Fleetin Parentheses(by dwt)Typical UseVery Large CrudeCarriers (VLCC)Suezmax 120,000199,999Long-range (LR) 55,000119,999Medium-range(MR/Handysize) 200,000 490 177(38%)25,00054,999Short-range (SR) 10,00024,999353 125(37%)712 385(39%)1,532 626(46%)875 378(42%)Long-haul crude transportation from theMiddle East Gulf and West Africa to NorthernEurope (via the Cape of Good Hope), to theFar East and to the U.S. Gulf.Medium-haul of crude oil from the Med,Middle East and West Africa to the U.S. andEurope.Short- to medium-haul of crude oil and oilproducts from the North Sea or Med toEurope or the U.S. East Coast, from theMiddle East Gulf to the Pacific Rim/Europeand on regional trade routes in the NorthSea, Caribbean, the Mediterranean and theIndo-Pacific Basin. Smaller LRs also transportpetroleum products worldwide, mostly onregional trade trades.Short- to medium-haul of mostly refinedpetroleum products worldwide, usually onlocal or regional trade routes but sometimeson longer-haul voyages.Short-haul of mostly refined petroleumproducts worldwide, usually on local orregional trade routes.Includes all tankers 710,000 dwtSource: Clarkson, 1 March 2007.The world product tanker fleet is mainly comprised of SR, MR/handysize vessels and some LRvessels that generally carry small quantities (10,000 to 75,000 metric tonnes) of refined petroleumproducts over short- to medium-haul distances (although some products are carried inlarger cargoes and over longer distances). Product tankers mostly have cargo handling systemsthat are designed to transport at least four different refined products simultaneously and havecoated (e.g., epoxy) cargo tanks which assist in tank cleaning between voyages involvingdifferent cargoes and protect the steel from corrosive cargoes. Some vessels are also fitted withstainless steel heating coils.The majority of refined petroleum products transported at sea is carried in MR and handysizevessels. Usually, their smaller size permits the greatest flexibility in trade routes and access toports which may have restrictions on vessel drafts, vessel displacement, vessel length-overall ormanoeuvrability. The most common cargo size for refined petroleum products is 30,000—40,000tonnes. Some product tankers are designed with relatively high cubic capacities in order toefficiently transport cargoes with relatively low specific gravities.Unlike the transportation of large volumes of crude oil, which is typically transported from afew centers of oil production to many regions of consumption, the transportation of refinedpetroleum products involves multiple areas of production and consumption. As a result, ownersof product tankers seek to utilise trade patterns to optimise the revenue and profit-generatingpotential of their product tanker fleets by maximizing vessel employment and minimizingwaiting time and ballast days (when the vessel is repositioning for new cargoes).77

Although the crude and refined products sectors have displayed some independent rate behaviorfrom time to time, typically there has been a strong correlation between crude tanker andproduct tanker charter hire rates. The following reasons help explain some of this correlation:• for a number of key routes, there is a proportion of interchangeability between largerand smaller vessels, which tends to bind those markets closer together;• some vessels are able to carry both crude oil and refined petroleum products, whichtends to bring both sectors closer together; and• owners and charterers operate in both product and crude markets, which are oftenaffected by similar factors of sentiment.Products and Chemicals MarketIMO IIIMO IIIMO IIIIMO II orIMO IIIdoublehulledtankers(fromJan 07)Coatedvessels(epoxy)UncoatedtankersCrude OilEasyChemicalsLuboilsCaustic SodaSolutionMTBEMethanolVegoilsNaphthasCleanCondensatesJet FuelsKerosenesGasolinesGasoilsDieselsCycle OilsFuel OilsNewer ChemicalTankers:some IMO II vessels areequipped with SS tanksand/or SS lines formore sophisticatedcargoes as they areeasiest to clean.Previous cargorequirements are alsoessential for thesetypes of cargoes.Most product tankerscan switch between dirtyand clean productswhen the tanks arecarefully cleaned.Gasoil is a good cleanup cargo when switchingfrom dirty to clean.IMO regulations preventsingle-hulled tankersfrom carrying fuel oil.The Products Tanker MarketProducts Tanker DemandGlobal demand for products tankers is determined primarily by the volume of refined petroleumproducts requiring transportation and the distances over which these products have to betransported. These factors are influenced by:• international economic activity;• geographic changes in oil production and consumption patterns;• the long-term impact of oil prices on the location and volume of oil production;• inventory policies of the major oil companies and other major oil trading companies;and• areas of refinery shortfall and surplus.Trading in refined products is also influenced by the availability of transportation alternatives(such as pipelines or rail) and the output of refineries. Seaborne trading patterns are also78

periodically influenced by geopolitical or climatic events that divert tankers from normal tradingpatterns and by inter-regional oil supply and demand imbalances. Recent examples of eventswhich have affected products tanker demand include the loss of U.S. Gulf crude productionfollowing Hurricanes Katrina and Rita, port and arterial congestion, volatile Chinese oil demandgrowth (which has required large amounts of products tanker imports) and standard arbitrageopportunities between different markets. Economic slowdown may slow or reverse growth inproducts tanker demand. Long-term environmental concerns and/or high oil prices may alsoreduce demand.The following table details the growth of global products consumption between 1999 and 2005by type of product:Refined Petroleum Products Consumption by Product Group, 1999 - 2005Thousand bpd 1999 2000 2001 2002 2003 2004 20051999 - 2005Annual Growth RateLight distillates . . . . 23,405 23,400 23,588 24,192 24,536 25,178 25,319 1.32%Middle distillates . . . 26,160 26,593 27,130 27,153 27,804 28,966 29,584 2.07%Fuel oil . . . . . . . . . . 10,613 10,381 10,014 9,696 9,807 9,956 10,150 -0.74%Others . . . . . . . . . . . 14,908 15,405 15,648 16,239 16,508 17,344 17,406 2.62%Total . . . . . . . . . . . . 75,087 75,779 76,379 77,280 78,655 81,444 82,459 1.57%Annual Growth . . . . 2.0% 0.9% 0.8% 1.2% 1.8% 3.5% 1.2%Source: BP Statistical Review of World Energy, June 2006From 2001 to 2006, seaborne transportation of crude oil has grown at an average rate of 2.7%per year, while seaborne transportation of refined petroleum products has grown at 4.8% peryear. The combined growth of seaborne crude and products is 3.2%. This exceeds the rate ofgrowth in overall crude oil and refined petroleum products consumption. These figures indicatethat demand for world tanker tonnage is growing at a faster rate than global demand for oil,which implies that a larger proportion of global oil demand is being transported by sea.On a longer term perspective, total seaborne imports of crude oil and refined petroleumproducts have expanded from around 37.6 million bpd in 1995 to 51.6 million bpd in 2005,representing a CAGR of 3.2%. In 2005, seaborne transportation of refined petroleum productsaccounted for around one-third of total seaborne oil imports.The following graph illustrates the development of tanker tonne miles since 1986:Oil Product: Tonne Mile Development (1986 - 2006e)300025002000150010005000-500-1000year-over-year % changeTonne Miles (billion tonne miles)12%10%8%6%4%2%0%-2%-4%-15001986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006-6%79

Source: Fearnleys Review 2006 The above chart shows tonne mile development. Please notethat due to coverage and definitional issues, Fearnleys estimate of the growth in products tradefrom 2001-06 in tons alone is lower than Clarksons.Estimated tonne miles grew by 5.0% between 2005 and 2006. Over the last three years, tonnemiles have grown by 6.4%, with a 5-year average growth of 4.6%.The graph below indicates the annual percentage change in the world seaborne crude oil andrefined products trades since 1995. It is estimated that the seaborne transportation of crude oilhas grown in all but one year since 1995, while the seaborne transportation of refined productshas grown in all but two years. However, during periods of economic slowdown, seaborne oildemand can fall.Growth in world Seaborne Oil Trade10.00%(year-over-year% change)8.00%6.00%4.00%2.00%0.00%-2.00%-4.00%-6.00%-8.00%Crude OilRefined Petroleum Products1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006Source: Clarkson, March 2007The following table shows the growth in global seaborne transportation of refined petroleumproducts by region:Global Refined Petroleum Products Imports (million bpd)Product Imports1995 2005 Change %ChangeUSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.59 3.47 1.88 119.1%Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.73 2.72 0.99 57.2%Other Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.98 2.09 0.10 5.1%Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.98 1.00 0.02 1.9%China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.30 0.83 0.53 176.4%South and Central America . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.28 0.40 0.12 44.6%Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.13 0.33 0.19 144.8%Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01.7 0.28 0.11 61.4%Australiasia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.06 0.23 0.17 271.4%West Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.12 0.19 0.07 59.0%North Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10 0.17 0.07 65.7%Middle Ease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.07 0.13 0.07 94.2%Eastern & Southern Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.08 0.12 0.04 51.9%Former Soviet Union (FSU) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.21 0.09 (0.12) (55.6)%Unidentified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25 0.00 (0.25) N/ATotal World ......................................... 8.06 12.05 3.99 49.5%80

Please note that direct comparison of Europe and FSU to difficult as definitions changed between 1996 and 2005 reports Data also includes some landborne trade.Source: BP Statical Review of World Energy June 1996 amd June 2006Regional Oil Products DemandAccording to the BP Statistical Review of World Energy June 2006, the global oil products trade(both land and seaborne) constituted 12.1 million bpd in 2005. The larger importing areas arethe United States, Europe and the Asia-Pacific region. The largest exporting areas are the MiddleEast, Europe and South and Central America.The following map shows the estimated trade in refined petroleum products between majorregions in 2005:The Major Seaborne Refined Petroleum Products Trades, 2005Source: Clarkson Research Services Ltd, BP Statistical Review of World Energy, June 200681

Global refinery capacity expanded by 4.8% between 2000 and 2005, the majority of it (1.75 millionbpd of a net total 3.88 million bpd) in the United States, Europe and Australasia. Through2010, industry sources have indicated that an additional 5.5 million bpd of capacity could bebrought online, resulting in 6.5% growth between 2005 and 2010. There are additional refineryprojects at various stages of development around the world, many of which must be consideredspeculative. The vast majority of this additional growth is expected in Asia, the Middle East,Africa, South and Central America and the Caribbean. The table below shows the expansion ofrefinery capacity since 2000:Refinery Capacity Expansion (million bpd)2000 2005 2010 (e) 2005 - 2010% increaseEurope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.05 17.95 18.03 0.4%Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.21 21.37 23.49 9.9%Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.27 3.23 3.53 9.3%Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.38 6.48 7.49 15.5%FSU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.40 6.55 6.72 2.5%North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.44 19.14 19.98 4.3%South and Central America & Caribbean . . . . . . . . . . . . . . . . 8.26 8.33 9.32 11.9%Australasia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.95 0.81 0.84 4.7%Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.28 1.26 1.26 0.0%Total ............................................. 81.25 85.13 90.66 6.5%Source: Clarkson based on industry sources, January 2007The seaborne movement of refined petroleum products between regions addresses demand andsupply imbalances for such products caused by the lack of resources or refining capacity inconsuming countries. Additionally, demand may also be fuelled by refineries in certain regionsbeing generally locked into a specific product yield, meaning that insufficient quantities of someproducts are produced in that region.No new refineries have been built in the United States since 1976, which has led to a growingdisparity between U.S. demand for refined petroleum products and U.S. domestic refinerycapacity. However, U.S. refinery capacity has expanded through refinery creep. For example,between 1995 and 2005, U.S. consumption of refined petroleum products rose by an averagerate of 2.0% per year. By contrast, U.S. refinery capacity only expanded by an average of 1.3%per year. This has generated increased demand for imports of refined petroleum products.Between 2000 and 2006, product imports expanded from approximately 2.4 million bpd to3.5 million bpd, an average increase of over 6.7% per year (although a proportion of this is theresult of the 2005 hurricane season). Historically oil demand in the United States has beenaffected by drives for increased efficiency as a result of high oil prices or political decisions.82

The annual percentage growth in seaborne import of refined petroleum products into theUnited States is indicated in the graph below.Growth in U.S. Imports of Refined Petroleum Products20%(year-over-year% growth)15%10%5%0%-5%-10%1999 2000 2001 2002 2003 2004 2005 2006eSource: Clarkson, Energy Information Administration February 2007China leads developing countries in terms of both economic growth and industrial energyconsumption. Chinese oil products consumption increased by an average of approximately 8%per year between 1995 and 2005. By contrast, Chinese refinery capacity only expanded by anaverage of 5% per year in the same period. As a result, Chinese demand for refined productsimports increased significantly. Between 1995 and 2005, refined products imports into Chinagrew from 0.30 million bpd to 0.83 million bpd, representing a CAGR of 10.7%. China hasindicated plans to increase refinery capacity over the next few years, which may limit growth in,or even cause a reduction in, its oil products imports.The graph below shows the growth in imports of refined petroleum products into Chinabetween 1999 and 2006.Chinese Refined Products Imports50%40%(year-over-year% growth)30%20%10%0%-10%-20%1999 2000 2001 2002 2003 2004 2005 2006Source: Clarkson, China Intelligence Monthly, March 2007A growing sector of the products and chemical seaborne transportation market is edible oils.According to the U.S. Department of Agriculture, major vegetable oils imports have grown fromapproximately 30.1 million tonnes in 2000/2001 to an estimated 43.5 million tonnes in 2005/2006, representing a growth rate of approximately 7.6% per year. Just over 25 million tonnes ofthis trade in 2005/2006 was attributable to palm oil. Chinese imports of major vegetable oilshave been around 7 million tonnes each year since 2003/2004. Indian imports have variedbetween 4.5 and 6 million tonnes in the last four years from 2002/2003 to 2005/2006. The mainexporters of major vegetable oils are Malaysia and Indonesia, which exported almost 27 milliontonnes in 2005/2006, with Argentina and Brazil exporting almost 9 million tonnes in the sameyear. Growth in this market is expected to continue over the next few years.83

The graph below illustrates the growth in vegetable oil imports into China since 1995:Chinese Vegetable Oil Imports80%(year-over-year% growth)60%40%20%0%-20%-40%1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006Source: Clarkson, China Intelligence Monthly, March 2007There is also a substantial trade in ethanol, a corn-based additive which is increasingly beingused to replace methyl tert-butyl ether (MTBE) as an oxygenate in petrol. The United States is aparticular growth area, following sustained legislative pressure in recent years. U.S. productionof ethanol has increased from approximately 0.5 million tonnes in 1994 to 1.2 million tonnes in2004, with increasing evidence of insufficient supply (corn prices in rural parts of the U.S. havemore than doubled since September 2006). Imports have also increased in recent years, withimports growing from around 60,000 tonnes in 1995 to 80,000 tonnes in 2005 (the last full yearfor which data is available). Annualised data for January through November 2006 shows anincrease in U.S. imports to around 275,000 tonnes. It remains unclear if the increasing use ofethanol as an additive will have any long-term effect on the tanker market, with muchdepending upon wider political decisions.Products Tanker SupplyThe supply of tankers is a function of the size of the existing fleet, the rate of deliveries ofnewbuildings and, to a lesser extent, casualties, the number of combination carriers carrying oil,the number used as storage vessels and the amount of tonnage in lay-up. Other factors caninfluence available supply, including delays caused by congestion at ports and in shippingchannels, and extreme weather. The products tanker market is highly fragmented, with asignificant number of small and medium-sized active owner groups. For example, in the MR/handysize (25,000—54,999 dwt) tanker sector, at least 315 owners are active. The ten largestowners control 20% of the world fleet as measured by dwt capacity; the twenty-five largestowners control 36%. In addition, there are 223 owners with ownership of one or two vessels.The table below shows that as of 1 March, 2007, the world tanker fleet had a total capacity ofapproximately 366.8 million dwt. The large number of tanker newbuildings delivered into themarket over the past few years has reduced the average age of the world tanker fleet asmodern, double-hull vessels replaced older single-hull tankers. As of 1 March 2007, the averageage of the world tanker fleet over 10,000 dwt was 11.0 years. In the MR/handysize sector, theaverage age of vessels is 11.2 years. The average age of the fleet tends to be lowest in largertanker sectors, with the average age of SR vessels being significantly higher (14.0 years).84

The graph below highlights the current age profile for MR/handysize tankers, along with thelarge orderbook due for delivery going forward:MR (25,000 - 55,000 dwt) Fleet Age Profile30m dwt252015105020+ 15 - 19 10 - 14 5 - 9 0 - 4 OrderbookSource: ClarksonThe MR/handysize tanker fleet (25,000—54,999 dwt) (excluding vessels with stainless steel tanks)has grown strongly in recent years, from 40.3 million dwt in 2002 to 55.8 million dwt on 1 March2007. However, the growth can almost entirely be attributed to the growth of larger MR vessels.Since 2002, the size of the handysize fleet (25,000—39,999 dwt) has grown by only 0.3 milliondwt, to 22.6 million dwt. By contrast, the size of the MR fleet (40,000 —54,999 dwt) hasexpanded from 18.1 million dwt to 33.3 million dwt. The graph on the next page highlights thisfleet development:MR/Handysize Fleet: Fleet Development (1)(2)6050million dwt40,000 - 54,999 dwt25,000 - 39,999 dwt2.1% 1.5%5.0%10.0%8.5%9.0%40302010-2002 2003 2004 2005 2006 2007(1) Data based upon 1 January of each year.(2) Percentage totals refer to fleet growth over previous year.Source: Clarkson, 1 March 2007.85

As of 1 March 2007, the tanker orderbook was equivalent to approximately 40% of the currenttanker fleet which, in historical terms, is high. This will result in high levels of deliveries over thenext few years, and the fleet is expected to grow strongly, which may have a negative impacton rates.World Tanker Fleet Overview by Vessel SizeVessel ClassCapacity %of Total Fleet(million dwt)(by dwt)Avg Age % of Fleet on Order for Delivery (by dwt):(Years) 2007 2008 2009 2010 2011+ Total% Over 20Years (by Dwt)NDH (1)(By dwt)%VLCC . . . . . . . . . . . . . 143.5 39% 9.1 6% 8% 14% 8% 1% 38% 3% 31%Suezmax . . . . . . . . . . 53.2 15% 9.1 6% 6% 16% 8% 1% 37% 5% 19%LR (55—120k dwt) . . . 95.3 26% 9.7 9% 11% 14% 5% 0% 39% 13% 21%MR/Handy (25-55kdwt) . . . . . . . . . . . 60.7 17% 11.2 12% 15% 13% 6% 0% 46% 21% 27%SR (10-25k dwt) . . . . . 14.0 4% 14.0 19% 14% 7% 1% 0% 42% 37% 41%Total ............. 366.8 100% 11.0 8% 10% 14% 7% 1% 40% 10% 26%(1) “Non Double-Hulled vessels.Source: Clarkson, 1 March 2007.The level of tanker newbuilding orders is primarily a function of newbuilding prices in relationto current and anticipated charter market conditions and yard space or delivery date. Today,delivery of a tanker typically occurs within approximately 30 to 36 months after ordering,although historically the lag has been less. The high level of newbuilding activity experiencedover the past few years means that many shipyards, particularly the larger yards, are fullybooked several years in advance. As of 1 March 2007, the world tanker orderbook for vesselsabove 10,000 dwt was approximately 145.5 million dwt, 144% more than five years earlier inMarch 2002. Since the mid-1970s, shipbuilding has been concentrated in Japan, South Koreaand, more recently, China, primarily due to economies of scale, construction techniques and theprohibitive costs of building in most areas of Europe. Shipbuilding capacity has increased inrecent years and is expected to make further expansion over the rest of the decade. This mayreduce newbuild prices in the long-term.At any point in time, the level of scrapping activity is a function primarily of environmentalregulations, the age profile of the fleet as well as scrapping prices in relation to current andprospective charter market conditions. Operating, repair and survey costs, steel prices and thechanging regulatory environment also exert an influence on scrapping levels.Insurance companies and customers rely on the survey and classification regime to providereasonable assurance of a tanker’s seaworthiness and tankers must be certified as “in-class” inorder to continue to trade. Because the costs of maintaining a tanker in-class rise as the age ofthe tanker increases, tanker owners often conclude that it is more economical to scrap a tankerthat has exhausted its anticipated useful life than to upgrade it to maintain it in-class. However,in a strong freight rate environment owners are more likely to continue to keep a vesseltrading.Tanker scrapping averaged approximately 17.7 million dwt per year between 2001 and 2003 butfell to 7.9 million dwt in 2004 and to only 4.0 million dwt in 2005. In 2006, total tankerdemolition was estimated at only 3.0 million dwt. Approximately 1.24 million dwt was scrappedbetween January and 1 March 2007. Approximately 26% of the world tanker fleet by dwt iscurrently not double-hulled and may be subject to phase-out. This proportion is higher in thesmall tanker fleet, where 41% of vessels between 10,000 and 25,000 dwt are not double-hulled.86

The table below lists the largest owners of MR/handysize tankers:Top 20 MR/Handy (25,000—54,999 dwt) Tanker OwnersOwner Number of Vessels Average Vessel Age Dwt tonnes1 Mitsui O.S.K. Lines. . . . . . . . . . . . . . . . . . . . . 38 6.1 1.622 Overseas Shipholding . . . . . . . . . . . . . . . . . . 32 13.5 1.383 OMI Marine Services . . . . . . . . . . . . . . . . . . . 28 3.5 1.184 U.S. Govt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 24.7 1.165 China Shipping Group. . . . . . . . . . . . . . . . . . 29 13.9 1.086 Novorossiysk Shpg. . . . . . . . . . . . . . . . . . . . . 27 10.2 1.057 Sovcomflot JSC . . . . . . . . . . . . . . . . . . . . . . . 19 4.8 0.908 Interorient Nav. Co. . . . . . . . . . . . . . . . . . . . 22 2.3 0.869 Torm, Dampskibss . . . . . . . . . . . . . . . . . . . . . 18 5.5 0.8310 A.P. Moller . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 2.8 0.7911 Brostrom AB . . . . . . . . . . . . . . . . . . . . . . . . . . 19 7.0 0.7812 Zodiac Maritime Agy. . . . . . . . . . . . . . . . . . . . 17 13.8 0.7413 BP PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 2.4 0.7114 Vardinoyannis Group . . . . . . . . . . . . . . . . . . . 15 16.1 0.6915 IMC Shpg. Co. . . . . . . . . . . . . . . . . . . . . . . . . 15 5.8 0.6716 Petrobras. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 15.2 0.6317 Latvian Shpg. . . . . . . . . . . . . . . . . . . . . . . . . . 18 12.7 0.6218 D’Amico Soc. di Nav. ................... 13 4.3 0.6019 Schoeller Holdings . . . . . . . . . . . . . . . . . . . . . 16 5.5 0.5720 Capital Ship Mngt. . . . . . . . . . . . . . . . . . . . . . 15 10.6 0.55Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959 38.44TOTAL .................................. 1392 11.1 55.85Data as of March 1, 2007. Excludes vessels with stainless steel tanks. Ownership is not alwaystransparent and the above figures are estimates.Source: Clarkson Research Services/Company websites/D’Amico87

Although the ownership structure is fragmented and there has been no significant trend inconsolidation, a feature of the past five years has been the development of pools, describedbelow, which have consolidated commercial control to a degree. The top 20 owners control17.6 million dwt of the MR/handysize product tanker fleet, excluding vessels with stainless steeltanks. The top 20 owners and pools control 20.3m dwt. There are also other commercialarrangements outside of pools and ownership, such as timecharters, bareboat timecharters, jointventures or consortia, space charters and alliances.Major Pools in the Handysize/MR SectorHandysize (25-40,000 dwt)MR (40-55,000dwt)Fleet OnlyTotalOwner/Pool No. Dwt No. Dwt No. Dwt1 Handytankers KS . . . . . . . . . . . . . . . . . . . . . . . . . . 73 2.54 6 0.24 79 2.782 Norient Product Pool A/S . . . . . . . . . . . . . . . . . . . 30 1.12 9 0.42 39 1.543 MR Tanker Pool (TORM) . . . . . . . . . . . . . . . . . . . . 0.00 24 1.11 24 1.114 UPT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 0.48 9 0.37 23 0.855 Dorado Tankers Inc. Pool. . . . . . . . . . . . . . . . . . . . 2 0.08 15 0.69 17 0.766 High Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 0.38 8 0.38Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543 18 659 30 1202 48.43Total ..................................... 662 22.54 730 33.31 1392 55.85Ownership in shipping is not always transparent. The above are estimates based on the ClarksonResearch fleet database and company websites at 24th March 2007. Please note it has not beenpossible to fully reconcile these different sources and the above mSource: Clarkson Research, Company Websites, D’Amico. Excludes stainless steel tank vessels.One of the most common arrangements for working together in the shipping industry is the“pool”. The vessel is part of a fleet of similar vessels, brought together by their owners in orderto exploit efficiencies and benefit from a profit-sharing mechanism. The operator of the poolsources different cargo shipments contracts and directs the vessels in an efficient way to servicethese contractual obligations. Pools can benefit from profit and loss sharing effects and thebenefits of potentially less idle time through coordination of vessel movements, but vesselssailing in a pool will also be vulnerable to adverse market conditions.88

Regulatory EnvironmentGovernmental authorities and international conventions have historically regulated the oil andrefined petroleum products transportation industry. Since 1990, the emphasis on environmentalprotection has increased. Legislation and regulations such as the United States Oil Pollution Actof 1990 (OPA 90), IMO protocols and classification society procedures demand higher-qualityvessel construction, maintenance, repair and operations. This development has accelerated inrecent years in the wake of several high-profile accidents involving 1970s-built ships of singlehullconstruction, including the “Erika” in 1999 and the “Prestige” in November 2002. Asummary of selected regulations pertaining to the operation of tankers is shown in the tablebelow.RegulationSummary of Selected ShippingRegulationsIntroduced/ModifiedFeaturesOPA 90 1989 Single-hull tankers banned in the United States by 2010. Doublesided and double bottom tankers banned by 2015.IMO MARPOLRegulation 13G1992 Single-hull tankers banned from trading by their 25 thanniversary.All single-hull tankers fitted with segregated ballast tanks maycontinue trading to their 30 th anniversary, provided they havehad selected inspections.IMO MARPOLRegulation 13GIMO MARPOLRegulation13G & 13HNew buildings must be double-hull.2001 Phase-out of pre-MARPOL tankers by 2007. Remaining singlehulltankers phased-out by 2015.2003 Phase-out of pre-MARPOL tankers by 2005. Remaining singlehulltankers phased-out by 2010 or 2015, depending on portand flag states.Single-hull tankers over 15 years of age subject to ConditionalAssessment Scheme.Single-hull tankers banned from carrying heavy oil grades by2005, or 2008 for tankers between 600—5,000 dwt.EU 417/2002 1999 25 year old single-hull tankers to cease trading by 2007 unlessthey apply hydrostatic balance methods or segregated ballasttanks.Single-hull tankers fitted with segregated ballast tanks phasedoutby 2015.EU 1723/2003 2003 Pre-MARPOL single-hull tankers banned after 2005. Remainingsingle-hull tankers banned after 2010.MARPOL Annex II,InternationalBulk ChemicalCode (IBC)Single-hull tankers banned from carrying heavy oil grades by2003.2004 Since 1 January 2007, vegetable oils which were previouslyCategorised as being unrestricted will now be required to becarried in IMO II chemical tankers, or certain IMO III tankersthat meet the environmental protection requirements of anIMO II tanker with regard to hull type (double hull) and cargotank location.The increasing focus on safety and protection of the environment has led oil companies, whichcomprise charterers, terminal operators, flag states, shippers and receivers, to become increasinglyselective with respect to the vessels they charter, vetting both vessels and shippingcompanies on a periodic basis or not allowing these vessels into port. This vetting can include,but is not limited to, hull type, crewing, age and owner. Although these vetting procedures andincreased regulations raise the operating cost and potential liabilities for tanker vessel ownersand operators, they strengthen the relative competitive position of shipowners with higher89

quality tanker fleets and operations. Analysis of chartering in the entire market, shows that thelevel of single-hulled tonnage chartered by major oil companies has dropped significantly inrecent years.The following table shows estimates, as of 1 March 2007, of the number of tankers below55,000 dwt due to be phased out under IMO Regulation 13G through 2010, alongside thecurrent orderbook for delivery through 2010. The analysis assumes that the IMO phase-outprogram will be followed and that flag and port states will not allow extensions for single-hullvessels beyond 2010.10,000—55,000 dwt Tanker Phase-Out (1) and Orderbook (assuming 2010 phase out)10,000 - 25,000 dwt 25,000 - 55,000 dwtPhase-Out Orderbook Phase-Out OrderbookNo m dwt No m dwt No m dwt No m dwtPre 07/2007 . . . . . . . . . . . . . . . . 127 2.08 158 2.29 114 4.10 160 7.042008. . . . . . . . . . . . . . . . . . 27 0.45 88 1.31 46 1.66 191 8.612009. . . . . . . . . . . . . . . . . . 14 0.24 48 0.72 40 1.46 169 7.812010. . . . . . . . . . . . . . . . . . 61 1.03 6 0.10 142 5.12 76 3.612011. . . . . . . . . . . . . . . . . . 14 0.24 0 0.00 9 0.38 5 0.21Total Phase-Out . . . . . . . . . . . . . 243 4.03 300 4.42 351 12.73 601 27.28Total Fleet . . . . . . . . . . . . . . . . . 9.18 1,321 55.85% of Fleet (2) . . . . . . . . . . . . . . . . 43.9% 48.2% 22.8% 48.8%(1) Phase-out figures based on Clarkson estimates of IMO Reg 13G Phase-Out, February 1 2007.It assumes phase-out of all single- hull vessels at the 2010 deadline (although some vesselswill benefit from possible extensions granted by flag and port states). Assumes double bottomedand double sided vessels will trade to 25 years. Assumes average demolition ages of30 years (10- 30,000 dwt) and 27 years (30-55,000 dwt) for double hull and IMO II vessels.Vessels may continue to trade coastally.(2) Not including phase-out of stainless steel tank vessels.Source: ClarksonA number of countries or regions have announced that they will not allow the extended tradingof non-double hull ships beyond 2010. These include the United States, European Union andAustralia. Other countries, such as Japan, China and Singapore have indicated they will adopt amore flexible policy towards extensions. It is therefore possible that a significant proportion ofsingle-hull ships will continue to trade beyond 2010, increasing the global supply of tankercapacity and putting downward pressure on rates. In addition, tankers may continue to trade incoastal domestic waters.In addition to the accelerated phase-out of single-hull tankers, in October 2004, the MarineEnvironment Protection Committee (MEPC) of the IMO revised Annex II of the MARPOLconvention and amendments to the IBC Code. Since 1 January 2007, vegetable oils and animalfats can only be transported in IMO II chemical tonnage or IMO III double-hull tonnage whichmeet the minimum dimension requirements for an IMO II chemical carrier. There is evidence of afirming of the market in some trades (for example South America to China), however otherroutes have been softer.Currently, approximately 346 IMO II capable vessels have been identified in the MR/handysizeproduct tanker fleet, representing 22% of the fleet, in dwt terms, with approximately 433double-hulled IMO III-only capable vessels, representing 28% of the fleet.It is unclear what implications this regulatory change will have on the freight rate market, butsome owners and analysts feel this may have a positive impact on freight rates in the productstanker sector. However, there is a large IMO III orderbook in the 35,000—40,000 dwt range anda large IMO II orderbook in the 10,000—15,000 dwt range, both of which may potentially helpto absorb this increase.90

Charter MarketThe charter market is highly competitive. Competition is based primarily on the offered charterrate, the location and technical specification of the vessel and the reputation of the vessel andits manager. Typically, the agreed terms are based on standard industry charter parties preparedto streamline the negotiation and documentation processes. The most common types of employmentstructures for a tanker are:• Spot market: The vessel earns income for each individual voyage and owner pays forbunkers and port charges. Earnings are dependent on prevailing market conditions,which can be highly volatile. Idle time between voyages is possible depending on theavailability of cargo and position of the vessel.• Contract of affreightment: Contracts of affreightment are agreements by vessel ownersto carry quantities of a specific cargo on a particular route or routes over a given periodof time using ships chosen by the vessel owners within specified restrictions. Contracts ofaffreightment function as a long-term series of spot charters, except that the owner isnot required to use a specific vessel to transport the cargo, but instead may use anyvessel in its fleet.• Time charter: A time charter is a contract for the hire of a vessel for a certain period oftime, with the vessel owner being responsible for providing the crew and payingoperating costs, while the charterer is responsible for fuel and other voyage costs. A timecharter is comparable to an operating lease. Some time charters also have profit sharingarrangements, the details of which vary from charter to charter.• Bareboat charter: The ship owner charters the vessel to another company (the charterer)for a pre-agreed period and daily rate. The charterer is responsible for operating thevessel and for payment of the charter rates, irrespective of the condition of the vessel. Abareboat charter is comparable to a finance lease.• Pool employment: The vessel is part of a fleet of similar vessels, brought together bytheir owners in order to exploit efficiencies and benefit from a profit sharing mechanism.The operator of the pool sources different cargo shipment contracts and directs thevessels in an efficient way to service these contractual obligations. Pools can benefit fromprofit and loss sharing effects and the benefits of potentially less idle time throughcoordination of vessel movements, but vessels sailing in a pool will also be vulnerable toadverse market conditions.The type of employment arrangement is determined by customer requirements for operationalinvolvement and range of services, along with current market conditions.91

The table and graph on the next page show the movements in various time charter rates forMR/Handy tankers:Estimated Owners 1 year, 3 year and 5 year time charter rateProduct TankerRates35,000/36,000 dwt 45,000/47,000 dwt1-Year$/Day3-Year$/Day5-Year$/Day1-Year$/Day3-Year$/Day5-Year$/DayAv 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,866 17,116Av 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,056 13,149 13,339 13,439Av 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,206 13,449 14,718 13,764 13,470Av 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,325 15,717 18,897 16,540 15,426Av 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,627 19,578 26,027 21,794 19,686Av 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,675 20,704 18,833 27,006 22,294 21,304Feb-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000 21,500 18,000 28,000 23,500 21,000Mar-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,800 20,700 18,000 26,200 22,100 23,200Apr-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000 19,250 18,500 23,250 20,500 20,000May-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,000 20,375 19,000 25,000 21,500 20,000Jun-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,800 20,500 19,000 26,200 21,500 20,600July-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 20,500 19,000 28,000 21,750 20,400Aug-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,250 20,875 19,500 29,250 22,000 20,500Sep-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,000 21,000 19,500 29,800 22,800 21,500Oct-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 20,625 19,500 27,875 23,250 22,500Nov-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,750 21,000 19,500 26,000 23,000 22,500Dec-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,500 21,000 19,500 25,500 23,000 22,500Jan-07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,500 21,000 19,500 25,250 22,750 22,375Feb-07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,500 21,000 19,500 25,000 23,000 22,000The vessels used in these timecharter estimates are the two standard modern vessels in thismarket sector. Clarkson brokers estimate timecharter rates each week for these standard vessels,which is informed by transactions and ongoing negotiations associated with vessels of a similarsize.Source: Clarkson, 1 March 200792

Products Tanker Timecharter Rates (1)35000($/day)300002500045,000-dwt 1-year rates45,000-dwt 3-year rates45,000-dwt 5-year rates200001500010000Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07(1) Average timecharter equivalent earnings as calculated by CRS using the assumptions forproducts tankers described in Clarkson’s Shipping Intelligence Weekly Sources & Methods.Data to March 1, 2007. There is no guarantee that rates are sustainable. Rates move up anddown significantly. The vessels used in these timecharter estimates are the two standardmodern vessels in this market sector. Clarkson brokers estimate timecharter rates each weekfor these standard vessels, which is informed by transactions associated with vessels of similarsize.Source: ClarksonThe Clarkson tanker fixture database has also noted an increasing number of MR/handysizevessels being taken on timecharter for longer-terms. The graph below highlights the growth inthis phenomenon in recent years:Length of MR Tanker Timercahrters32.52(dwt in millions)Timecharters of length greater than 5 yearsTimecharters of length 3 - 5 yearsTimecharters of length 1 - 3 years1.510.501993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 (1)(1) Year to date (publicly reported fixtures only).Source: ClarksonThere is a relationship between changes in asset values and the tanker charter market. Areduction in charter rates caused by a decrease in demand for and/or an increase in the supplyof tanker vessels would reduce vessel prices, although there can be a lag in vessel prices.Newbuilding prices increased significantly between 2003 and 2006, primarily as a result ofsignificantly increased tanker demand for new tonnage in response to increased demand for oil,higher charter rates, regulations requiring the phase-out of single-hull tankers, constrained93

shipyard capacity and rising steel prices (which contributed to a strong increase in shipyardcosts). In addition, as a result of strong demand for other types of vessels, shipyard capacity,especially for large vessels, has been booked several years in advance, further contributing tothe increased prices of newbuildings.Recent developments in the newbuilding and secondhand prices of standard product tankersare shown below. Since January 2006, six vessels sales have been publicly reported in the‘modern’ (2000-built or younger) 40,000—47,000 dwt range. Prices have varied between$48.3 million (in February 2007 for a 2007-built vessel) and $54 million (in June and July 2006 fora resale and 2006-built vessel). Although this is not typical, the market is currently prepared topay a significant premium over newbuild prices for prompt delivery.Estimated Tanker Newbuilding and Secondhand Prices (1)(2) ($ in millions)Start Year (3) 2002 2003 2004 2005 2006 2007 01/03/0747,000 dwt newbuilding . . . . . . . . . . . . . . . . 26.0 28.0 34.0 41.0 43.5 47.0 46.545,000 dwt 5-year-old vessel . . . . . . . . . . . . . 21.0 23.0 30.0 40.0 47.0 47.0 47.0Source: Clarkson(1) Based on broker estimates and actual sales assuming charter free, willing buyer/willing sellerat the point in time indicated in the table. There is no guarantee that the prices are sustainableand readers should be aware that prices may move up and down significantly. Longerterm trends are shown in the graph below.(2) Prices relate to a theoretically ‘standard’ vessel which assumes “European spec”, 10/10/10/70% payments and “first class competitive yards” quotations.(3) Refers to contracting date. Vessel typically would not be delivered for another 30—36 months.Product Tanker Asset Values($ in millions)50.0045.0047,000 dwt newbuilding (1)(2)45,000 dwt 5-year-old secondhand (3)40.0035.0030.0025.0020.0015.0010.00Jan-95Jan-96Jan-97Jan-98Jan-99Jan-00Jan-01Jan-02Jan-03Jan-04Jan-05Jan-06Jan-07(1) Newbuilding prices assume “European spec.”, 10/10/10/70% payments and “first class competitiveyards” quotations.(2) MR/Handysize Newbuilding: 40,000 dwt until October 1999, 47,000 dwt thereafter.(3) Secondhand: 40,000 dwt until October 1999, 45,000 dwt thereafter.Source: ClarksonAdditional InformationThe charts below, based on information from the BP Statistical Review of World Energy and theEIA International Energy Outlook, illustrate worldwide projected annual growth in GDP, oilconsumption and product trade for the periods indicated.94

Projected annual GDP growth(2005-2015)3.1%2.3%2.3%4.9%6.6%-Mature marketsEmerging economies5.5%4.9%4.8%4.4%3.8%Projected annual oil consumption growth(2005 – 2015)-6.5%Mature marketsEmerging economies4.0%3.6% 3.1%2.4%1.9%2.0%1.4%0.2% 0.6%North Western Mature Former China India OtherAmerica Europe Asia USSR &E. EuropeAsiaAfrica South & MiddleCentral EastAmericaNorth Western Mature Former China India Other Africa South & MiddleAmerica Europe Asia USSR &AsiaCentral EastE. EuropeAmerica28.5 15.9 9.4 6.0 10.0 3.3 7.7 4.0 6.8 6.6Product trade (inc. pipeline): 200552.2166.026.713.2Canada66.2130.381.44.4Former Soviet Union39.85.147.8Europe119.214.0USA29.18.1China5.2 15.7 North Africa66.4Japan99.8Mexico63.519.1Central & South America8.0 8.9 6.4Middle EastOther Asia PacificWest Africa 5.611.20.83.7East & SouthernAfricaAustralasiaSource: BP Statistical Review of World Energy June 2006; EIAInternational Energy Outlook 2006The CompanyThe Company operates worldwide without making a distinction among geographic or principalmarkets. The Company considers its business as pertaining to one activity and does not presentits revenues on a segmented basis.95

BusinessOverviewWe are a fast-growing international marine transportation company, historically part of thed’Amico Group that traces its origins to 1936. We control, either through ownership or charterarrangements, a modern fleet of 33 product tanker vessels, aggregating approximately 1.49 milliondeadweight tonnes (dwt). The product tanker vessels of the Group range fromapproximately 35,000 to 51,000 dwt. Our fleet includes ten owned and sixteen chartered inmedium range product tankers (MRs), ranging from 46,000 to 51,000 dwt, and three owned andfour chartered in handysize product tankers, ranging from 35,000 to 40,000 dwt. We employmost of our fleet through three commercial partnership arrangements. Through one of thesearrangements we have partial interests in seven additional chartered in handysize producttankers. As of 31 December 2006, the 20 chartered in vessels of our 33 controlled vessel fleetwere under charter in contracts which have an average remaining contract term of 5.8 years,with the longest charter in contract spanning until 2015. Furthermore, 17 of these 20 charteredin vessels have either a vessel purchase option, a charter in extension option or a combinationof both, during or at the end of the contract term. All of our vessels are double-hulled, exceptfor two short-term chartered in double-sided MRs. Our fleet is primarily engaged in thetransportation of refined petroleum products, providing worldwide shipping services to majoroil companies and trading houses, such as ExxonMobil, Shell, Glencore and Vitol.We operate a young fleet, with an average age of approximately four years, compared to anaverage in the product tanker industry of 11.2 years, according to Clarkson. In accordance withour expansion programme we have contracts in place to increase our fleet in 2008 and 2009. Forthe MRs, we have secured contracts to charter in seven additional MR newbuildings and,through our joint venture with Mitsubishi (DM Shipping Limited), in which we hold a 51%interest, two other MR newbuildings. For the handysize product tankers, we have securedcontracts to charter in one additional handysize newbuilding and, through one of our partnerships,partial interests in the charters of three handysize newbuildings. All of these vessels aredue for delivery between 2008 and 2009. On 15 of our chartered in and to be chartered invessels, including partial interest vessels, we hold purchase options which can be exercisedbetween 2007 and 2020. As part of our fleet expansion strategy, we regularly explore opportunitiesto acquire additional vessels.All of our vessels are built in accordance with international industry standards and are compliantwith IMO (International Maritime Organisation) regulations and MARPOL (the InternationalConvention for the Prevention of Pollution from Ships, 1973 as modified by the Protocol of1978) as well as other international standards. In addition, we comply with the stringentrequirements of major oil and energy-related companies, such as ExxonMobil, Shell, Total,Glencore, Petrobras, Vitol and Vela, who are some of our established customers. Based on recentrevisions to Annexes I and II to MARPOL, adopted by the IMO and effective as of 1 January2007, cargoes, such as palm oil, vegetable oil, and a range of other chemicals can only betransported by vessels that meet the requirements stated in these revised annexes (hereinafterreferred to as IMO Classified). Approximately 60% of our present fleet, calculated by number ofvessels, is IMO Classified and we believe that this, together with our access to clients, both directand through our partnerships, provides us with a competitive advantage for penetrating thesemarkets and expanding the range of products we transport.We operate and employ almost all of our vessels through three partnership arrangements (theHandytankers Pool, High Pool Tankers Limited and Glenda International Management Limited),two of which are pool arrangements. These commercial partnerships enable us to deploy,collectively with our partners, a fleet of vessels with significant scale and geographic coverage.As a result, we believe these partnerships allow us to provide a comprehensive service to ourcustomers and to enhance our geographic exposure to advantageous business opportunities,which in turn results in greater flexibility in deploying our fleet.In particular, since 2001, we have been a member of the Handytankers Pool, together with A.P.Moller-Maersk, Seaarland Shipping Management and Motia Compagnia di Navigazione S.p.A.This is currently the largest handysize product tanker pool in the world, operating approximately79 vessels as at 1 March 2007, according to Clarkson. This pool includes the seven96

handysize product tankers of our fleet and the seven chartered in handysize product tankers inwhich we have a partial interest. Under the service agreement we have entered into with thepool manager, A.P. Moller—Maersk, we are actively involved in the pool’s commercial management,in particular chartering and vessel operations, but not administration.In 2003, we established High Pool Tankers Limited with Nissho Shipping Co. Limited (Japan). Thispool operated eight MR product tankers as at 31 December 2006, including seven of ourchartered in MRs. Under the pool arrangements we are exclusively responsible for the pool’scommercial management, in particular chartering, vessel operations and administration.In May 2005, we entered into a commercial arrangement with Glencore—ST Shipping, to jointlymanage eight MR product tankers. We and Glencore—ST Shipping each contributed four MRs.In August 2006, we incorporated the commercial arrangement as Glenda International ManagementLimited to allow us to trade the vessels under a single brand name, Glenda InternationalManagement. As of 31 December 2006, Glenda International Management Limited operated 19MR product tankers, including five of our owned MRs and six MRs which we chartered in aspart of this commercial arrangement.We employ all of our vessels through our partnerships, except for eight MRs, which we operatedirectly through long-term time charter contracts, two of which will terminate in 2007, withExxon, Total and Glencore. For the year ended 31 December 2006, we generated approximately12% of our earnings from the employment of these eight MRs.For each of the years ended 31 December 2004, 2005 and 2006, our time charter equivalentearnings (revenue net of voyage costs) were $140.0 million, $221.8 million and $243.3 million,respectively, increasing at a CAGR of 31.8% between 2004 and 2006. For the same periods, ouroperating profit was $31.2 million, $82.8 million and $111.9 million, increasing at a CAGR of89.5%, and our net profit was $18.2 million, $58.4 million and $85.4 million, increasing at aCAGR of 116.6%, respectively.We are a wholly-owned subsidiary of the d’Amico Group. The d’Amico Group is one of theworld’s leading privately-owned marine transportation companies with over 70 years of experiencein the shipping business. Today, the d’Amico Group manages and controls over 65 ownedand chartered in vessels, including the vessels of our fleet. Following the Offering, the d’AmicoGroup’s ownership will be reduced to approximately 60%, assuming all of the Shares offeredare sold, and may be further reduced if the over-allotment option is exercised. See “Plan ofDistribution—Over-Allotment Option”.We believe that we benefit from a strong brand name and an established reputation in theinternational market due to the long operating history of the d’Amico Group. In addition, webenefit from the expertise of the d’Amico Group, which provides, through d’Amico IrelandLimited, technical management services, as well as all safety, quality and technical products andservices to our owned vessels, including crewing and insurance arrangements.We have offices in Dublin, London, Monte Carlo and Singapore. In addition, we are alsorepresented through the offices of our partnerships in New York, Copenhagen, Venice andTokyo.As at 31 March 2007, we employed 332 seagoing personnel and 43 onshore personnel.Historyd’Amico Tankers Limited, our principal operating company and one of d’Amico Group’s mainoperating subsidiaries, was incorporated in Ireland in 2001 to manage the d’Amico Group’stanker business. However, we trace the origins of our business back to 1936, when the d’Amicofamily founded a shipping company in Salerno, Italy. In 1952, d’Amico Società di NavigazioneS.p.A., the holding company of the d’Amico Group, was established in Rome.The d’Amico Group acquired its first tanker vessel in 1952. Between 1958 and the early 1960s, itopened regular liner services between the Mediterranean and the U.S. West Coast as well asbetween the Mediterranean and Central and South America. During the 1960s the d’AmicoGroup expanded its tanker business to include chemical and product tankers. Throughout thefollowing decades the d’Amico Group continued to develop and expand its product tankerbusiness. In 1987, it ordered its first two MR newbuildings, and in 1997 it ordered three97

additional MR newbuildings. In 2000, the d’Amico Group formulated a plan to further expandits product tanker fleet, focusing on MRs and handysize product tankers. In accordance with thisexpansion plan, we increased our fleet from 11 to 33 vessels within the five-year period2002-2006.In order to expand our worldwide operations, we entered into strategic alliances with othermajor international companies involved in the shipping business. In particular, in 2001 we joinedthe Handytankers Pool, today the largest handysize product tanker pool in the world, and in2003 we established High Pool Tankers Limited, an MR pool. During this period, we alsodeveloped and increased our commercial and marketing potential by opening new offices inSingapore in 2001 and in London in 2002. In 2005, we established a strategic alliance withGlencore—ST Shipping, that now operates as Glenda International Management Limited.Group StructureWe are a wholly owned subsidiary of d’Amico International S.A., Luxembourg (the SellingShareholder), which is held 99.99% by d’Amico Società di Navigazione S.p.A. and 0.01% byPaolo and Cesare d’Amico. To streamline our organisational structure in view of the Offering,during the last quarter of 2006 and the first quarter of 2007, d’Amico Tankers S.A.M. (Monaco),d’Amico Tankers UK Limited (England) and d’Amico Tankers Singapore Pte. Ltd. were establishedas subsidiaries of our subsidiary, d’Amico Tankers Limited, our principal tanker operatingcompany, incorporated in Ireland. In addition, in 2007, d’Amico International S.A., Luxembourg(the Selling Shareholder), transferred its shareholdings in High Pool Tankers Limited, GlendaInternational Management Limited, DM Shipping Limited and Handytankers K/S to our subsidiary,d’Amico Tankers Limited. With effect from 2 March 2007, we acquired in a share for sharetransaction the entire issued share capital of d’Amico Tankers Limited from d’Amico InternationalS.A. For more information on these transactions, see “Related Party Transactions”. Thefollowing diagram sets forth our current group and shareholder ownership structures, includingour material subsidiaries (the percentage figures refer to equity participation and votingcontrol).d’Amico Family100%d’AmicoSocietà di Navigazione S.p.A.(Italy)Paolo and Cesare d’Amico99.99% 0.01%d’Amico InternationalS.A. (Luxembourg)other d’Amicobusinesses100%d’Amico International Shipping S.A.(Luxembourg)100%d’AmicoTankers Ltd(Ireland)d’Amico Tankers MonacoS.A.M. (Monaco)99.9% 100% 100% 100%100% 51% 33.3%d’Amico Tankers UKLimited(England)d’Amico Tankers SingaporePte. Ltd.High Pool Tankers Limited(Ireland)Glenda InternationalManagement Limited(Ireland)DM Shipping Limited(Ireland)Handytankers K/S(Denmark)The CompanyThe SellingShareholder98

The following diagram sets forth the general group structure of the Selling Shareholder.d’Amico International S.A.(Luxembourg)100%100%100%100%100%d’Amico Dry Limited(Ireland)Medbulk Maritime Limited(Ireland)d’Amico InternationalShipping S.A.(Luxembourg)Other service companiesOther owned companiesThe SellingShareholderThe CompanyCompetitive StrengthsWe believe that we have a number of competitive strengths in the shipping industry, including:Proven ability to acquire and employ product tankers. Within the five-year period from theyear ended 31 December 2002 until the year ended 31 December 2006, we expanded our fleet,at a CAGR of 36.1%, from 7.4 to 34.5 vessels (based on the average number of available vesselsfor each year), compared with, according to Clarkson, as of March 2007, a CAGR of 4.8% for theworldwide product tankers market sector ranging between 25,000 to 55,000 dwt. We believethat the growth of our fleet during this relatively short period of time demonstrates our abilityto identify, acquire and employ product tankers and that such ability, is a key advantage in ourindustry.Modern, high quality fleet. We operate a young fleet of high-quality tankers with an averageage of approximately four years. In comparison, according to Clarkson, average vessel age in theproduct tanker industry is 11.2 years. Different international regulations prescribe the phasingout of single-hulled vessels between 2010 and 2015. According to Clarkson, 73% of the world’svessels operating in the 25,000 to 55,000 dwt sector was double-hulled as of March 2007. Otherthan two short-term chartered in double-sided MRs that are leaving our fleet in May 2007, ourfleet is comprised exclusively of double-hulled vessels. In addition, all vessels of our fleet arebuilt in accordance with international industry standards, including IMO and MARPOL regulations.See “Regulatory”. With approximately 60% of the vessels of our fleet being IMOClassified, we believe that we have the competitive advantage of being able to penetrate newmarkets of products that can only be transported by IMO classified vessels, such as palm andvegetable oils. We also passed the qualification and screening processes and now qualify toprovide long-term charters to ExxonMobil and Total. We strive to maintain the quality of ourfleet through scheduled maintenance programmes and by mandating exacting standards on ourowned vessels and, as to our chartered in vessels, by chartering in from owners who meet highquality standards. We believe that operating a fleet comprised of young and well-maintainedvessels enables us to secure profitable employment for our fleet with reputable charterers aswell as to obtain favourable debt financing terms.Strong time charter equivalent growth and consistent high margins. We have a track record ofprofitable growth. We have increased our time charter equivalent earnings (revenue net ofvoyage costs) from $140.0 million in 2004 to $243.3 million in 2006, at a compound annualgrowth rate of 31.8%. Our operating profit increased from $31.2 million in 2004 to $111.9 millionin 2006, at a compound annual growth rate of 89.4%. Our operating profit margins, as apercentage of time charter equivalent earnings, for the years ended 31 December 2004, 2005and 2006 were 22.3%, 37.3% and 46.0% respectively. Our net profit increased from $18.2 millionin 2004 to $85.4 million in 2006, at a compound annual growth rate of 116.6%. We believe thatour ability to produce such time charter equivalent earnings growth with consistent positivemargins demonstrates the strength of our business model.99

A flexible and diversified business model, which benefits from the expertise of our partnerships.In order to maximise the utilisation of our fleet and earnings opportunities, we operate in thespot and charter market, through our three partnerships (the Handytankers Pool, High PoolTankers Limited and Glenda International Management Limited), as well as through ourindependent operations. We believe that our partnerships provide broad access to globalbusiness opportunities and allow us to operate on a global basis, to benefit from economies ofscale and our partners’ expertise, as well as to meet the needs of our clients across differentproduct lines.International company with worldwide presence in key maritime centres. We operate from ourown offices in Dublin, London, Monte Carlo and Singapore, and are also represented throughthe offices of our partnerships in New York, Copenhagen, Venice and Tokyo. These offices arelocated in what we believe to be the key maritime centres around the world. Each of our officesprovides our customers with access to the full range of services, promoting our business in therelevant geographic area. We believe that our international presence allows us to meet theneeds of our international clients in different geographical areas, while our own offices alsostrengthen the recognition of our brand name worldwide. In addition, given the opening hoursof the offices located in different time zones, we are able to continuously monitor ouroperations and are able to assist our customers 24 hours per day.A large fleet deployed globally to service our clients’ international requirements. We believethat operating a large fleet enhances earnings generation and operating efficiencies. A largefleet strengthens our ability to advantageously position vessels and improves fleet availabilityand scheduling flexibility. We believe this strength provides a competitive advantage in securingspot voyages and contracts of affreightment (COAs). In particular, the scale of our operationsprovides us with the flexibility necessary to enable us to capitalise on favourable spot marketconditions in order to maximise earnings and negotiate favourable contracts with suppliers.Leverage our relationship with the d’Amico Group. We believe that we have an establishedreputation in the international market due to the successful operating history of the d’AmicoGroup. In addition, we benefit from the d’Amico Group’s economies of scale, expertise, highquality standards and technical services. d’Amico Ireland Limited, a member of the d’AmicoGroup, procures high quality technical management services for our owned vessels. We believethat the international presence of the d’Amico Group further fosters our business and allows usto consolidate our reputation worldwide.Established reputation and strong industry relationships. We believe that we benefit from astrong brand name and have an established reputation in the shipping industry for providingefficient, safe and reliable service; and that such a reputation is important in maintaining ourlong-term relationships with our partners and existing customers and developing relationshipswith new customers. We believe that our partners and customers appreciate the transparencyand accountability which have characterised the d’Amico brand name and the way in which ourbusiness has been operated by the d’Amico Group from its early stages. We believe that thisaccountability and transparency coupled with our high quality services are interwoven with ouroperations and are key to our success.Proven management team. Our management team consists of experienced executives whohave demonstrated their abilities in managing the commercial and financial areas of ourbusiness. These executives have on average over 10 years of experience in the various areas ofour business. See “Management”.StrategyOur current strategy is designed to consolidate and expand our business in the MR andhandysize product tanker markets, while creating value for our shareholders through profitablegrowth. We seek to achieve this objective by leveraging on our competitive strengths and byimplementing the following strategies:Develop new business. We believe that we have established a strong reputation in theshipping market for providing efficient, safe and reliable service. We intend to focus on ourreputation to maintain and develop our relationships with major international charterers. We100

also intend to build on our customer relationships and our network of business connections topenetrate new markets.Expand in alternative markets. We have a long history of working with a variety of commoditiesand dealing with regulatory changes. We plan to capitalise on our experience to expandinto new markets, including cargoes, such as palm oil, vegetable oil and other chemicals, whichcan only be transported by vessels that are IMO classified. With approximately 60% of thevessels of our fleet being IMO classified, we believe that we are well-positioned to penetratethese markets.Continue to operate a high-quality fleet. We believe that our ability to maximise our vesselutilisation and earnings depends in part upon the quality of our fleet. We intend to continue tomaintain the high quality of our owned vessels by continuing the stringent maintenance andinspection programmes that we currently employ. With regard to vessels that we charter in, weendeavour to charter in from owners who maintain equally high standards. We intend tomaintain the operating and safety standards of internationally recognised classification societiesas well as of our most demanding customers. We are working to deliver the highest level of therecently introduced Tanker Management Self Assessment Scheme, or TMSA.Expand our fleet through well-timed transactions. We actively monitor the market in order totake advantage of opportunities to expand our fleet. Such opportunities include purchasingsecond-hand vessels directly and/or chartering in vessels with or without purchase options. Inaddition, we also plan to expand our fleet through well-timed orders for newbuildings. Inaccordance with this expansion strategy, we have secured contracts to increase our fleet bychartering in seven additional MR newbuildings and, through our joint venture DM ShippingLimited, in which we hold a 51% interest, two MR newbuildings. For the handysize producttankers, we have secured contracts to charter in one additional handysize newbuilding and,through one of our partnerships, partial interests in the charters of three handysize newbuildings.All of these vessels are due for delivery between 2008 and 2009. In addition, we haveoptions to purchase 15 of our chartered in and to be chartered in vessels, including those inwhich we have partial interests. These options can be exercised between 2007 and 2020.101

Our FleetWe currently have 33 product tanker vessels in our fleet. In particular, our fleet includes tenowned and sixteen chartered in MR product tankers, ranging from 45,000 to 51,000 dwt,including nine MRs with purchase options. It also includes three owned and four chartered inhandysize product tankers, ranging from 35,000 to 40,000 dwt, including one bareboat andthree time charters. In addition, through one of our partnerships, we have partial interests inthe charters of seven handysize product tankers. The vessels of our fleet transport predominantlyrefined petroleum products. As of 31 December 2006 the average age of our vessels wasapproximately four years, whereas the average in the product tanker industry, as reported byClarkson, was 11.2 years. The international product tanker industry ranges between 25,000 and55,000. The following tables set forth information about our current fleet as of 31 December2006:MR Current Fleet:Name of vesselTonnage(dwt)YearBuilt Builder, Country FlagClassificationSocietyIMOClassifiedOwnedHighVenture.......... 51,087 2006 STX, South Korea Liberia RINA and ABS IMO II / IIIHighProgress.......... 51,303 2005 STX, South Korea Liberia RINA and ABS IMO II / IIIHigh Performance ...... 51,303 2005 STX, South Korea Liberia RINA and ABS IMO II / IIIHighValor............ 46,975 2005 STX, South Korea Liberia RINA and ABS IMO II / IIIHighCourage.......... 46,975 2005 STX, South Korea Liberia RINA and ABS IMO II / IIIHigh Endurance ........ 46,992 2004 STX, South Korea Liberia RINA and ABS IMO II / IIIHigh Endeavour ........ 46,992 2004 STX, South Korea Liberia RINA and ABS IMO II / IIIHigh Challenge ........ 46,475 1999 STX, South Korea Liberia RINA and ABS IMO II / IIIHigh Spirit . . . ......... 46,473 1999 STX, South Korea Liberia RINA and ABS IMO II / IIIHighWind............ 46,471 1999 STX, South Korea Liberia RINA and ABS IMO II / IIITime chartered withpurchase optionHigh Century . . ........ 48,676 2006 Imabari, Japan Hong Kong NKK —High Prosperity. ........ 48,711 2006 Imabari, Japan Singapore NKK —HighPresence ......... 48,700 2005 Imabari, Japan Singapore NKK —High Harmony . ........ 45,913 2005 Shin Kurushima, Japan Panama NKK —HighConsensus ........ 45,896 2005 Shin Kurushima, Japan Panama NKK —High Priority. . . ........ 46,847 2005 Nakai Zosen, Japan Singapore NKK —HighTrust ............ 45,937 2004 Shin Kurushima, Japan Philippines BV —High Peace. . . ......... 45,888 2004 Shin Kurushima, Japan Singapore NKK —HighNefeli ........... 45,976 2003 STX, South Korea Greece ABS IMO IIITime chartered withoutpurchase optionHighGlory............ 45,700 2006 Minami Nippon, Japan Panama NKK —HighGlow............ 46,846 2006 Nakai Zosen, Japan Panama NKK —High Trader ........... 45,879 2004 Shin Kurushima, Japan Philippines BV —HighEnergy........... 46,874 2004 Nakai Zosen, Japan Panama NKK —High Power ........... 46,874 2004 Nakai Zosen, Japan Panama NKK —HighTide............. 45,018 1989 Daewoo, South Korea Liberia ABS —HighSeas............. 45,018 1989 Daewoo, South Korea Liberia ABS —102

Handysize Current Fleet:Name of vesselTonnage(dwt)Yearbuilt Builder, Country FlagClassificationSocietyIMOClassifiedOwnedCielo di Salerno . . . . . . . . . . . 36,032 2002 STX, South Korea Liberia RINA and ABS IMO IIICielo di Parigi . . . . . . . . . . . . 36,032 2001 STX, South Korea Liberia RINA and ABS IMO IIICielo di Londra . . . . . . . . . . . 35,985 2001 STX, South Korea Liberia RINA and ABS IMO IIIBare Boat withoutpurchase optionCielo di Guangzhou . . . . . . . . 38,877 2006 Guangzhou, China Liberia RINA and ABS —Time chartered withoutpurchase optionCielo di Milano . . . . . . . . . . . 40,083 2003 Shina, South Korea Italy RINA and ABS IMO IIICielo di Roma . . . . . . . . . . . . 40,096 2003 Shina, South Korea Italy RINA and ABS IMO IIICielo di Napoli . . . . . . . . . . . . 40,081 2002 Shina, South Korea Italy RINA and ABS IMO IIIThe following table gives an overview of our partial interests in seven chartered in doublehulledhandysize product tankers:Name of vesselTonnage(dwt)Yearbuilt Builder, Country FlagClassificationSocietyInterestIMOClassifiedHandytanker Unity . . . . . 34,620 2006 Dalian, China Marshall Islands LLOYDS 33% IMO IIIHandytanker Liberty . . . . 34,620 2006 Dalian, China Marshall Islands LLOYDS 33% IMO IIITevere . . . . . . . . . . . . . . 37,178 2005 Hyundai, South Korea Marshall Islands DNV 50% IMO IIIFox . . . . . . . . . . . . . . . . 37,025 2005 Hyundai, South Korea Marshall Islands DNV 50% IMO IIIOcean Quest . . . . . . . . . . 34,999 2005 Dalian, China Isle of Man LLOYDS 25% IMO IIIOrontes . . . . . . . . . . . . . 37,274 2002 Hyuandai, South Korea Marshall Islands DNV 50% IMO IIIOhio . . . . . . . . . . . . . . . 37,999 2001 Hyuandai, South Korea Marshall Islands DNV 50% IMO IIIIn connection with our application for a financing in January 2007 we requested a desktopvaluation of our 13 owned vessels from an independent third party. The valuation, which didnot involve a physical inspection, estimated the aggregate value of the vessels to be approximately$613.3 million. The valuation contained a series of qualifications and assumptions,including as to the condition of the vessels and known information available to such independentthird party from the international shipping market as of the date of the valuation. Otherassumptions were that (a) the vessels could give delivery free of all registered encumbrances,maritime liens, all debts and any restraints of governments and (b) the vessels would be in aposition to give early delivery within an acceptable area, free of cargo, free of chartercommitments or any contract of employment, for cash payment, on normal sale terms. Ourowned vessels are, however, subject to mortgages (see “Management’s Discussion and Analysisof Results of Operations and Financial Condition—Indebtedness—New Credit Facility”) and inmost cases charter arrangements and , as such, the valuation does not reflect the actual value ofour owned vessels. Finally, this asset valuation, which was limited to our owned vessels, does nottake into consideration our purchase option contracts, charter in contracts and partnership andpool agreements.103

Fleet Newbuilding Programme:According to our expansion plan, we have secured contracts to increase our fleet in both theMR and handysize product tanker sectors with double-hulled newbuildings that are due fordelivery between 2008 and 2009. In particular, we have contracts for chartering in sevenadditional MR newbuildings and, through our joint venture DM Shipping Limited, in which wehold a 51% interest, two additional MR newbuildings. For the handysize product tankers, wehave secured contracts to charter in one additional handysize newbuilding and, through one ofour partnerships, partial interests in the charters of three handysize newbuildings. The followingtable provides an overview of our newbuilding programme:Name ofVessel/HullNumber(Estimated)Tonnage(dwt)MR/Handysize(Estimated)Year to beDelivered,IncludingMonthWhereAlreadyDeterminedBuilder,CountryFlagClassificationSocietyInterestIMOClassifiedTime charter withpurchase optionGSI 05130004 . . . . . . . . . . 38,500 Handysize March 2008 Guangzhou, China Marshall Islands Most likely LLOYDS 100% IMO II / IIIImabari SZ268 . . . . . . . . . . 46,000 MR 2009 Imabari, Japan Most likely Singapore Most likely NKK 100% —Shin Kurushima S442 . . . . . . 45,800 MR 2009 Shin Kurushima, Japan Most likely Singapore Most likely NKK 100% —Time charter withoutpurchase optionHigh Saturn . . . . . . . . . . . 51,000 MR April 2008 STX, South Korea Liberia NK or ABS 100% IMO IIIHigh Mars . . . . . . . . . . . . 51,000 MR May 2008 STX, South Korea Liberia NK or ABS 100% IMO IIIHigh Mercury . . . . . . . . . . 51,000 MR July 2008 STX, South Korea Liberia NK or ABS 100% IMO IIIHigh Jupiter . . . . . . . . . . . 51,000 MR October 2008 STX, South Korea Liberia NK or ABS 100% IMO IIITBN Shin Kurushima S5552 . . 52,000 MR 2009 Shin Kurushima, Japan Most likely Singapore Most likely NKK 100% —Partial interest withpurchase optionGSI 06130003 . . . . . . . . . . 38,500 Handysize May 2008 Guangzhou, China Marshall Islands Not determined yet 25% IMO II and IIIGSI 06131014 . . . . . . . . . . 38,500 Handysize June 2008 Guangzhou, China Marshall Islands Not determined yet 25% IMO II and IIIGSI 06130004 . . . . . . . . . . 38,500 Handysize May 2009 Guangzhou, China Marshall Islands Not determined yet 25% IMO II and IIIPartial interest withoutpurchase optionTBN Nakai 724 . . . . . . . . . 46,000 MR 2009 Nakai Zosen, Japan Most likely Panama Most likely NKK 51% —TBN Nakai 725 . . . . . . . . . 46,000 MR 2009 Nakai Zosen, Japan Most likely Panama Most likely NKK 51% —Handytankers TBN (1) . . . . . . 35,000 Handysize July 2007 Dalian, China Singapore LLOYDS 50% IMO III(1) This vessel was delivered from yards in May 2006, and among our future vessel deliveries isthe only one that is not a newbuilding.Purchase Options:We have options to purchase 15 of our chartered in and to be chartered in vessels, includingvessels in which we only have a partial interest. These options can be exercised between 2007and 2020. The exercise price of ten of these options is in Yen and we usually do not hedge ourforeign exchange exposure to the cost of these options. The following table provides details ofour purchase options. Yen exercise prices were converted to U.S. dollars at the March 2 2006closing exchange rate of Yen 116.8 to 1 U.S. dollar.FirstExerciseDateNumberofVesselsExercisePrice(In millions) (3)Acquisition Options on MR Vessels (1)Vessel 1 Vessel 2 Vessel 3Age at FirstExerciseDate (3)ExercisePeriodExercisePrice(In millions)Age at FirstExerciseDateExercisePeriodExercisePrice(In millions) (3)Age at FirstExerciseDate (3)ExercisePeriodFirst half 2007 (2) . . . . . . 2 $31.8 3.0 4 years $30.3 4.0 1 year NA NA NASecond half 2009 . . . . . 1 $21.0 5.0 3 years NA NA NA NA NA NAFirst half 2010 . . . . . . . 3 $21.0 5.0 3 years $21.0 5.0 3 years $23.1 5.0 4 yearsSecond half 2010 . . . . . 1 $22.9 5.0 4 years NA NA NA NA NA NASecond half 2011 . . . . . 2 $22.9 5.0 4 years $22.9 5.0 4 years NA NA NA2014 . . . . . . . . . . . . . 1 $31.7 5.0 6 years NA NA NA NA NA NA2017 . . . . . . . . . . . . . 1 $25.7 8.0 NA NA NA NA NA NA NA104

(1) Of the 11 MR vessels on which we have an acqiuisition option, all have exercise prices inJapanese yen except Vessel 2 among the vessels first exercisable during the first half of2007. The Japanese yen exercise prices were converted to U.S. dollars at the closingexchange rate of ¥116.8 to $1 on 2 March.(2) Among the vessels first exercisable during the first half of 2007, we only have a 30%interest in the acquisition option of Vessel 2.(3) Exercise price and vessel age at first exercise date. When option has an exercise period,exercise price falls throughout such period.Acquisition Options on Handysize VesselsVessel 1 Vessel 2FirstExerciseDateNumberofVesselsExercisePrice(In millions) (4)Age atFirst ExerciseDate (4)ExercisePeriodExercisePrice(In millions) (4)Age atFirst ExerciseDate (4)ExercisePeriod2014 (1) . . . . . . 2 $38.5 6.0 NA $42.5 6.0 NA2015 (2) . . . . . . 1 $42.5 6.0 NA NA NA NA2016 (3) . . . . . . 1 $40.5 8.0 NA NA NA NA(1) We only have a 25% interest on the acquisition option of Vessel 2.(2) We only have a 25% interest on the acquisition option of Vessel 1.(3) We only have a 25% interest on the acquisition option of Vessel 1.(4) Exercise price and vessel age at first exercise date. When option has an exercise period,exercise price falls throughout such period.OperationsOverviewThe following table provides information on the number of vessels, including the vessels inwhich we have partial interests, as of 31 March 2007.MR (1) Handysize TotalTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.0 9.9 35.9of whichOwned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.0 3.0 13.0Chartered in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.0 4.0 20.0Partially chartered (2) ...................................... — 2.9 2.9(1) Includes two chartered in MRs that we expect to be redelivered in May 2007.(2) For chartered vessels in which we have partial interest, calculated as a weighted average,we include only our share of the available vessel days.Our fleet is primarily engaged in the transportation of refined petroleum products, such as butnot limited to, gasoline, gas oil, diesel, jet-fuel and naphtha. At the same time, we areexpanding our presence in the area of cargoes with respect to which the IMO has imposed newrequirements which became effective on 1 January 2007, including but not limited to, vegetableoil, palm oil and other chemicals. Those cargoes can only be transported by vessels that meetthose requirements, which is the case for approximately 60% of our present fleet, calculated bynumber of vessels.We operate through our offices in Dublin, London, Monte Carlo and Singapore. In addition, weare also represented in New York, Copenhagen and Venice through offices of the HandytankersPool and in Tokyo through the office of Nissho Shipping Co. Limited (Japan), our partner in theHigh Pool.Our operational headquarters are in Dublin, Ireland where we carry out the general administrationand management of the business. Technical management and crewing are also theresponsibility of our Dublin office, as is oversight of our service contracts, particularly thoserelating to the technical management of our fleet. Our Singapore and London offices are105

esponsible for day-to-day chartering services, which include marketing, collection of marketdata, identification of suitable cargo contracts and matching with available vessels, negotiationwith customers and their respective brokers, conclusion of spot voyage contracts and assessmentof voyage results. The Singapore and the Monte Carlo offices are responsible for vesseloperations, with the Singapore office in charge of the vessels employed east of the Suez Canal,and the Monte Carlo office having responsibility for the vessels employed west of the SuezCanal. Vessel operation services include providing instructions to a vessel’s master as to theitinerary and contract terms, appointing agents in the loading and discharge ports, monitoringcargo documentation and closing voyage details in the Shipnet IT system.Employment of Our Fleet in the MarketExcept for eight MRs, that we operate directly through long-term charters, two of which willterminate in 2007, with ExxonMobil, Total, and Glencore, we employ all of our vessels throughour three commercial partnerships: the Handytankers Pool, High Pool Tankers Limited and thecommercial arrangement Glenda International Management Limited. These vessels are employedunder spot voyage contracts, COAs and time charters. The following table presents an overviewof the employment structure for each of the 33 vessels of our fleet as of 31 December 2006:Handytankers PoolHigh PoolTankers LimitedGlendaInternationalManagement LimitedDirectEmploymentCielo di Guangzhou . . . . . . . . . . . . . . . High Century High GloryCielo di Milano . . . . . . . . . . . . . . . . . . . High Glow High Venture High ValorCielo di Roma . . . . . . . . . . . . . . . . . . . . High Prosperity High Performance High CourageCielo di Salerno . . . . . . . . . . . . . . . . . . . High Harmony High Consensus High EndeavourCielo di Napoli. . . . . . . . . . . . . . . . . . . . High Priority High Progress High EnduranceCielo di Londra . . . . . . . . . . . . . . . . . . . High Power High Presence High TraderCielo di Parigi . . . . . . . . . . . . . . . . . . . . High Energy High Peace High TrustHigh ChallengeHigh SpiritHigh Seas High Wind (1)High Tide High Nefeli (2)(1) The time charter of High Wind will terminate in August 2007.(2) The time charter of High Nefeli is expected to terminate in March 2007.In addition to the vessels listed above, as of 31 December 2006 we had partial interests in sevenhandysize vessels that are operated through the Handytankers Pool: Handytanker Unity,Handytanker Liberty, Ocean Quest, Tevere, Fox, Orontes and Ohio.106

The following table gives an overview of the charter out periods of our directly employedvessels as of 31 December 2006:Name of VesselChartered toBeginning ofcharter periodEnd ofcharter periodOption to renew charterHigh Nefeli . . . . . . . ExxonMobil January 2004 March 2007 —High Wind . . . . . . . . Total December 2005 August 2007 —High Valor . . . . . . . . ExxonMobil February 2005 February 2008 Option to renew foran additional periodof 2 yearsHigh Courage . . . . . ExxonMobil March 2005 March 2008 —High Trader . . . . . . . Glencore June 2004 June 2009 —High Endurance . . . . Total August 2004 August 2009 Option to renew foran additional periodof 5 yearsHigh Trust . . . . . . . . Glencore May 2004 May 2009 —High Endeavour . . . . Total September 2004 September 2009 Option to renew foran additional periodof 5 yearsThe following table provides an overview of the remaining charter in periods of our charteredvessels as of 31 December 2006:VesselMR/HandysizeExpectedFutureDeliveryEarliestRedelivery*LatestRedeliveryIncludingOptional PeriodWithoutOptionalPeriodMonths/YearsRemainingIncludingOptionalPeriodHigh Prosperity . . . . MR — October 2013 October 2015 6 years,8 monthsHigh Century . . . . . . MR — July 2013 July 2015 6 years,5 monthsHigh Glow . . . . . . . . MR — July 2013 July 2015 6 years,6 monthsHigh Consensus . . . . MR — February 2013 — 6 years,2 monthsHigh Harmony . . . . . MR — January 2013 — 6 years,1 monthHigh Peace . . . . . . . MR — December 2012 — 5 years,9 monthsHigh Presence . . . . . MR — November 2012 November 2014 5 years,9 monthsHigh Priority . . . . . . MR — March 2012 March 2014 5 years,2 monthsHigh Power . . . . . . . MR — September 2011 September 2013 4 years,8 monthsHigh Energy. . . . . . . MR — June 2011 June 2013 4 years,5 monthsHigh Glory . . . . . . . . MR — May 2011 May 2013 4 years,4 monthsHigh Trader . . . . . . . MR — June 2009 June 2011 2 years,5 monthsHigh Trust . . . . . . . . MR — May 2009 May 2011 2 years,4 months8 years,8 months8 years,5 months8 years,6 months6 years,2 months6 years,1 month5 years,9 months7 years,9 months7 years,2 months6 years,8 months6 years,5 months6 years,4 months4 years,5 months4 years,4 months107

VesselMR/HandysizeExpectedFutureDeliveryEarliestRedelivery*LatestRedeliveryIncludingOptional PeriodWithoutOptionalPeriodMonths/YearsRemainingIncludingOptionalPeriodHigh Nefeli . . . . . . . MR — March 2008 — 1 year,2 monthsHigh Seas . . . . . . . . MR — May 2007 — 0 years,4 monthsHigh Tide . . . . . . . . MR — May 2007 — 0 years,4 monthsCielo diGuanghzou . . . . .Handysize — January 2018 — 11 years,0 monthsLiberty . . . . . . . . . . . Handysize — November 2011 November 2013 4 years,9 monthsUnity . . . . . . . . . . . . Handysize — February 2011 February 2013 4 years,1 monthCielo di Milano . . . . Handysize — January 2011 January 2012 4 years,0 monthsCielo di Napoli. . . . . Handysize — January 2011 January 2012 4 years,0 monthsCielo di Roma . . . . . Handysize — January 2011 January 2012 4 years,0 monthsTevere . . . . . . . . . . . Handysize — July 2010 — 3 years,6 monthsOrontes . . . . . . . . . . Handysize — June 2010 — 3 years,4 monthsFox . . . . . . . . . . . . . Handysize — May 2010 — 3 years,4 monthsOhio . . . . . . . . . . . . Handysize — January 2010 — 3 years,4 monthsOcean Quest . . . . . . Handysize — April 2009 — 2 years,3 months1 year,2 months0 years,4 months0 years,4 months11 years,0 months6 years,9 months6 years,1 month5 years,0 months5 years,0 months5 years,0 months3 years,6 months3 years,4 months3 years,4 months3 years,4 months2 years,3 months108

The following table provides an overview of the charter in periods of our to be chartered vesselsas of 31 December 2006:Months/YearsRemainingVesselMR/HandysizeExpectedFuture DeliveryEarliestRedelivery*Latest RedeliveryIncluding OptionalPeriodWithoutOptionalPeriodIncludingOptionalPeriodImabariSZ268....... MR December 2009 December 2018 December 2020 9 years,0 monthsNakai725.......... MR November 2009 November 2019 — 10 years,0 monthsShin Kurushima S5552. . MR October 2009 October 2016 October 2018 7 years,0 monthsNakai724.......... MR September 2009 September 2019 — 10 years,0 monthsShin Kurushima S442 . . MR February 2009 February 2017 February 2019 8 years,0 monthsHigh Jupiter ........ MR October 2008 October 2015 October 2018 7 years,0 monthsHigh Mercury ....... MR July2008 July2015 July2018 7years,0 monthsHighMars ......... MR May2008 May 2015 May 2018 7 years,0 monthsHighSaturn........ MR April2008 April2015 April2018 7years,0 monthsGSI 06130004 ....... Handysize May 2009 May 2015 — 6 years,0 monthsGSI 06131014 ....... Handysize June 2008 June 2016 — 8 years,0 monthsGSI 0613003 ........ Handysize May 2008 May 2014 — 6 years,0 monthsGSI 05130004 ....... Handysize March 2008 March 2014 — 6 years,0 monthsHandytankers TBN . . . Handysize July 2007 July 2012 July 2015 5 years,0 months11 years,0 months10 years,0 months9 years,0 months10 years,0 months10 years,0 months10 years,0 months10 years,0 months10 years,0 months10 years,0 months6 years,0 months8 years,0 months6 years,0 months6 years,0 months8 years,0 months* The latest redelivery date may vary as a result of the following two factors: (i) we as the chartererexercise the option to add off-hire days incurred during the charter in period, or (ii) weas the charterer exercise our option for the final date to vary, as per our charter in agreements,the final redelivery window will be plus/minus 30 to 90 days at the charterer’s option.We operate our fleet, directly or through one of our partnerships, under spot charters, COAsand time charters. A spot voyage is typically a single trip from the load port to the dischargeport. It is priced on the prevailing market conditions and negotiated rates. Under a spotcontract, customers are typically charged based upon an agreed freight rate expressed on a percargo tonne basis paid upon completion of the voyage. Under time charters, we charter outvessels to customers for fixed periods of time at daily rates that are based on prevailing marketconditions and on the length of the charter. Time charter payments are typically paid monthly inadvance. Our vessels may also be employed under COAs. Under a COA, our vessels providecapacity to transport a certain amount of cargo within a specified period from the load port tothe discharge port. The freight rate normally is agreed on a per cargo tonne basis and it can befixed or floating in relation to the market, or a combination of both.Voyage-related costs include bunker fuel, port and canal dues and agency costs. Under a timecharter, it is the party that charters in a vessel that is responsible for such costs. The capital costsassociated with a vessel are the responsibility of the ship owner.109

Our Pool PartnershipsThe two pools in which we participate, the Handytankers Pool and the High Pool, are arrangementspursuant to which the vessels of the pool members are pooled together, so that the poolmanager may market them as a single fleet, and employ them under spot contracts, COAs ortime charters. Operating through a pool provides several advantages, including giving us accessto local knowledge through the pool offices and enabling us to capitalise on opportunitiesstemming from the participation in a bigger network. In addition, we believe that participatingin pools allows us to maximise the utilisation of our vessels, whilst spreading the risks inherentin our business across all pool participants.Profit generated from the employment of pooled vessels is distributed to the pool membersaccording to the number of on-hire days of the relevant vessels during a certain period of timeand an agreed upon point system whereby each member receives its share of the pool’s earningsaccording to the pool points allocated to each individual vessel. Such allocations are negotiatedyearly between the pool participants and are generally determined based on the vessel’s cargocarrying capacity. Payments made to pool members are net of the pool’s voyage-relatedexpenses, including any commissions and commercial management fees. The pool manager isresponsible for all voyage-related expenses for any vessel employed in the pool. Each poolparticipant remains responsible for all other costs incurred by the vessels that it charters out tothe pool. Before a pool member may withdraw a vessel chartered to one of the pools, it mustgenerally provide six-months notice and have completed all contractual commitments enteredinto for such vessel.The following is a brief description of the two pools in which we participate and of ourcommercial arrangement with Glencore—ST Shipping.Handytankers Pool. The Handytankers Pool is the largest handysize product tanker pool in theworld by number of vessels according to Clarkson. It was established in 1999, and we became amember in 2001. According to Clarkson, as of 1 March 2007, the pool managed approximately79 vessels, including the seven handysize product tankers of our fleet and the seven chartered inhandysize product tankers in which we have partial interests. The Handytankers Pool is apooling arrangement among us, A.P. Moller-Maersk, Seaarland Shipping Management andMotia Compagnia di Navigazione S.p.A. The pool vehicle is Handytankers K/S, a Danishunlimited partnership in which we hold a 33.3% interest. Handytankers K/S has signed acommercial management agreement with A.P. Moeller—Maersk, which, in turn, has sub-contractedvarious elements of its commercial management functions, including chartering andvessel operation, to our Monaco, Singapore and London offices. Under our agreement with A.P.Moller-Maersk our Monaco office provides operational and administrative assistance, ourSingapore office manages all of the pool’s business from east of the Suez Canal to the U.S. WestCoast, and our London office coordinates worldwide the pool’s chartering activities of palm andvegetable oils and other cargoes that can only be transported by IMO Classified vessels. A.P.Moller-Maersk, as the pool manager, has authority to employ the vessels entered into the poolfor a duration of up to six months. The pool members meet several times per year. The internalstructure of the pool includes a steering committee with two representatives from each poolmember.High Pool. The High Pool is a pooling arrangement that we established with Nissho ShippingCo. Limited (Japan) in 2003. The pool vehicle is High Pool Tankers Limited, a limited liabilitycompany incorporated in Ireland. As at 31 March 2007, the pool operated eight MR producttankers, including seven of our chartered in MRs. The pool is expected to receive four additionalMRs in 2009. Under the pool arrangements we are responsible on an exclusive basis for themanagement of the pool’s business. Our partner does not have any management or administrativefunctions within the partnership, except for the representation of the High Pool in Tokyo.We generally hold three to four pool meetings each year in which we determine the strategy topursue in employing the pool vessels.Glenda International Management Limited. In May 2005, we entered into a commercial arrangementwith Glencore—ST Shipping to jointly manage eight MR product tankers. Both we andGlencore—ST Shipping each contributed four MRs. In August 2006, we incorporated the commercialarrangement as Glenda International Management Limited to allow us to trade the vesselsunder a single brand name, Glenda International Management. As of 31 March 2007, Glenda110

International Management Limited operated 19 MR product tankers, including five of our ownedand six of our chartered in MRs that we entered into this commercial arrangement. Under theterms of our agreement, Glencore—ST Shipping is the worldwide commercial manager. We are,however, actively involved in the management of Glenda International Management’s business, inparticular in the area of vessel operations and administration. Glenda International ManagementLimited markets the vessels as a single fleet but each of the vessels chartered to GlendaInternational Management retains its own income, i.e. the income is not pooled together.Consequently, we receive directly the income generated by the vessels that we employ throughthe commercial arrangement. We are currently in discussions with Glencore—ST Shipping in orderto formalise our commercial arrangement as a joint venture. It is contemplated that the jointventure entity will be Glenda International Shipping Limited.Services Provided by Our Service CompaniesOur service companies, d’Amico Tankers Monaco S.A.M., d’Amico Tankers UK Limited andd’Amico Tankers Singapore Pte. Ltd., provide management services, such as chartering, operationsand broker services to the Group and third parties, including our three partnerships.Operating StructureThe technical management and crewing of our owned vessels are the responsibility of ourDublin office which works in close cooperation with our sub-contractors for these services.Technical management involves the supervision of repairs, monitoring of vessels’ performanceand arranging insurance cover. Crewing is managed by d’Amico Ireland Limited which outsourcessuch services to the manning agents, Sirius Ship Management s.r.l. and d’Amico Societádi Navigazione S.p.A. Sirius Ship Management s.r.l. is 60% owned by d’Amico Società diNavigazione S.p.A., while d’Amico Shipping India is 99% owned by Sirius Ship Management s.r.l.and 1% by d’Amico International S.A.Pursuant to a ship management agreement, d’Amico Ireland Limited is the technical manager ofour owned vessels. Our ship manager is responsible for performing general vessel maintenance,ensuring regulatory and classification society compliance, oil majors vetting procedures, supervisingthe maintenance and general efficiency of vessels, arranging our hire of qualified officersand crew, arranging and supervising drydocking and repairs, purchasing supplies, spare partsand new equipment for vessels, appointing supervisors and technical consultants and providingtechnical support. d’Amico Ireland Limited, through d’Amico Società di Navigazione S.p.A., alsoacquires and maintains the insurance for our fleet. The management fee is subject to an annualreview on the anniversary date of the agreement and the ship manager will provide us with theestimated annual budget for each vessel.Under a service agreement dated 2 January 2007 between d’Amico Tankers Limited and d’AmicoSocietà di Navigazione S.P.A. through d’Amico Ireland Limited, we have outsourced some of ourlegal functions to d’Amico Società di Navigazione. Such functions include those that relate tocrew claims; marine casualty such as pollution, salvage charges or physical damages; marineclaims and other claims; and the provision of any guarantee, bond or other security.d’Amico Società di Navigazione S.p.A. has operated the Tanker Management and Self-Assessmentprogramme (TMSA), that was launched in 2004, since August 2005. This programme is atool created by the OCIMF (Oil Companies International Marine Forum) to help ship operatorsevaluate and improve their management systems. The programme, although not compulsory, isrecommended by major oil companies as a means of encouraging ship operators to measuretheir safety management systems against listed key performance indicators and determine thebest practice to solve problems and optimise performance in crucial areas, such as safety andenvironmental excellence. d’Amico Società di Navigazione S.p.A. implemented electronic toolsto control and measure key performance indicators for different areas of the managementsystem and conducts the TMSA review every six months. The assessment results are the startingpoint for a continuous improvement plan aimed at achieving and guaranteeing high standardsin safety and environmental performance.We actively manage the risks inherent in our business and are committed to eliminatingincidents that threaten safety, such as groundings, fires, collisions, and petroleum spills. Oursafety, quality and environment management system (SQE system) has been fully operated111

onboard all vessels for four years. It is integrated into the system of the d’Amico Group. Thed’Amico Group’s SQE system’s conformity with the quality standards ISO 9001:2000 and ISO14001:2004 established by the International Organisation for Standardisation, was certified bythe international classification society RINA S.p.A. (Registro Italiano Navale) respectively, in Julyand in June 2003. The certification, together with internal audits performed at regular intervals,indicates the policies adopted and procedures followed for the different managementprocesses.Our CustomersOur customer base is represented by the customers of our pools and by our own customers. It iscomprised primarily of oil companies (such as Total, Shell, Petrobras, KPC, BP and ExxonMobil),vegetable oil, palm oil and chemical products companies (such as Dow, Dreyfus, Burge andCargill) and traders (such as Glencore, Vitol and Trafigura). Our assessment of a customer’sfinancial condition and reliability is an important factor in negotiating employment for ourvessels.Information TechnologyWe have a modern information technology infrastructure connecting and integrating all of ourinformation management applications both onshore and onboard our own vessels. We obtainthe applications that we use from well-known industry participants, such as Microsoft, ComputerAssociates and IBM, and from suppliers specialised in providing applications for the shippingindustry, such as ShipNet and InfoShip. Our portfolio covers various applications used forfinancial and operational management.The information technology for our fleet management is provided by d’Amico Società diNavigazione S.p.A. which supports through its services our fleet management activities, includingthe purchasing, technical and SQE functions. The information technology for our commercial,financial, operations and invoicing functions is provided by COGEMA S.A.M. (Monte Carlo)which supports our team in charge of those functions. COGEMA S.A.M. provides such services tous under a general service agreement. See also “Related Party Transactions—Communicationand Information Technology Services”.InsuranceThe operation of any ocean-going vessel represents a potential risk of major marine losses andliabilities, death or injury of persons as well as property damage, cargo damage or loss, collision,mechanical failures, human error, war, terrorism, business interruptions due to political unrest,hostilities, labor strikes, boycotts, piracy and other circumstances or events. In addition, there isalways an inherent possibility of marine disaster, including pollution and other environmentalmishaps, and the liabilities arising from owning and operating vessels in international trade.We carry hull and machinery insurance, war risks insurance, protection and indemnity (P&I)insurance, increased value insurance, strike and delay coverage and freight, demurrage anddefense coverage. Through these insurance policies we are protected against the majority ofaccident-related risks that might occur in the course of our business operations. With the hulland machinery insurance and increased value insurance, each of the vessels of our fleet iscovered against total loss and in the case of constructive total loss situations for up to anaverage of 110% of the market value of the vessel as well as against damage with deductiblesof $100,000 per vessel per event.The P&I insurance is provided by mutual protection and indemnity associations, or P&I clubs,which insure our third party liabilities in connection with our shipping activities. This includesthird-party liabilities and other related expenses resulting from the injury or death of crewmembers, passengers and other third parties, the loss or damage to cargo, claims arising fromcollisions with other vessels, damage to other third-party property, pollution arising from oil orother substances and towing as well as other related costs, including wreck removal. Our currentP&I insurance coverage for pollution is $1.0 billion per vessel per incident.We also carry insurance covering war risks, including piracy and terrorism, and loss suffered inrespect of the delay caused by strike or other work action.112

We believe that our current insurance coverage is adequate to protect us against the majority ofthe accident-related risks involved in the conduct of our business and that we maintain anappropriate level of P&I coverage against pollution liability and environmental damage. However,there can be no assurance that the range of risks we are exposed to is adequately insured against,that any particular claim will be paid or that in the future we will be able to procure similaradequate insurance coverage at the terms and conditions equal to those we currently have. Morestringent environmental liability regulations have resulted in increased exposures and insurancecosts and may in certain circumstances be difficult to insure or become uninsurable. Our goal is tomaintain an adequate insurance coverage required by our marine operations and to activelymonitor any regulations and threats that may require us to revise our coverage.PersonnelAs of 31 December 2004, 2005 and 2006 we employed 148, 332 and 332 seagoing personnelrespectively, including officers and ratings, who serve on our owned vessels. For the years ended31 December 2004, 2005 and 2006, our total average direct employees on board vesselsamounted to 150, 258 and 255, respectively.Crewing for all of our owned vessels is provided to us, through d’Amico Ireland Limited andd’Amico Société di Navigazione S.p.A. by the manning agents Sirius Ship Management s.r.l. andd’Amico Ship India PVT Limited which are responsible for the recruiting and ultimately thetraining of our crew. Sirius Ship Management s.r.l. is responsible for the Italian seagoingpersonnel and d’Amico Ship India PVT Limited is in charge of all other crew. d’Amico ShippingIndia is also responsible for the Preventive Maintenance System (P.M.S.) training for all of thecrew. Employment agreements are entered into directly between us and the seagoing personnel.Generally, the employment agreements with the crew members have a duration of three to fourmonths. Our vessels are primarily crewed with Italian officers, including masters and chiefengineers, and junior officers and crews from India and Eastern Europe, including chiefengineers and electricians.The following table sets forth a breakdown of our seagoing personnel on the basis of theirorigin as of 31 December 2006, 2005 and 2004:As of 31 December 2006 As of 31 December 2005 As of 31 December 2004IndiaEasternEurope Italy IndiaEasternEurope Italy IndiaEasternEuropeSeagoing personnel . . . . . . . 297 13 22 278 30 24 133 1 14As of 31 March 2007, we employed 43 onshore personnel, including eight senior management,11 commercial personnel (which include three senior managers referred to above) and 13operations personnel (which include two senior managers referred to above).We believe our relationships with our employees and the labour unions are good. We have notexperienced strikes in any jurisdiction in which we operate.ItalyCompetitionThe economic performance of our business fluctuates in line with the main patterns of trade ofpetroleum products, chemicals and similar products cargoes and varies according to changes insupply of these cargoes. Both the MR and handysize product tanker markets are competitiveand based primarily on supply of cargoes and vessels. We compete in the spot market on thebasis of price, vessel location, size, age and condition of the vessel, as well as on our reputation.Our main competitors in both the MR and handysize product tanker markets are Torm, Norden,Tsakos, Navigazione Montanari, Mitsui OSK, Tanker Pacific, OMI and OSG. For additionalinformation on our competitors, see “Industry”.PropertyThe Company sub-leases offices in Monaco, Dublin, London, Singapore and Luxembourg realproperty of approximately 1,000 square meters. The Company has no owned real estate.113

Irish Tax Regime and Tonnage TaxIn 2006 we applied to join the tonnage tax regime in Ireland effective as of 1 January 2006. Ourapplication followed a proposed amendment to the regime—currently under review by theEuropean Union—which, if approved and implemented, would entitle us to qualify to pay taxeson the basis of tonnage of our fleet as opposed to corporate profits or loss. Under the Irishtonnage tax regime, the corporate tax rate of 12.5% is applied to notional shipping income,and not actual taxable profit or loss. Notional shipping income is calculated annually at a fixedamount per ship, based on its tonnage.The current tonnage tax regime in Ireland imposes an obligation on us to demonstrate anappropriate level of “strategic and commercial management of the vessels” in accordance withIrish tax law, and a minimum vessel ownership (ships on bareboat charter to us are regarded forthis purpose as owned by us) requirement of 25%. It is more commonly referred to as a 75%limit on the tonnage of ships that shipping companies are permitted to charter in. The lawpassed on 1 April 2006 would, among other things, remove this limit. This law is under reviewby the European Union and discussions between the European Union regulators and Irishgovernment officials are ongoing. The proposed change in law may be approved and implementedin its current form or in an amended form or not at all. Any change to the currenttonnage tax regime is likely to take several months, however, to the extent the proposedchange in law is implemented, it is hoped that it will have retroactive effect from 1 January2006, although this implementation date cannot be guaranteed.If we enter the tonnage tax regime, we will be required to remain within it for a minimumperiod of ten years. At any time within the ten year period, we, through d’Amico TankersLimited, may make a further tonnage tax election, which will supercede the original electionand have the effect of commencing a new ten year election period. Failure to comply with therequirements of the tonnage tax regime may result in the withdrawal of our vessels from theregime or the incurrence of significant tax liabilities or both. See “Management’s Discussion andAnalysis of Results of Operations and Financial Condition—Tonnage Tax” for further details onthe effect of the applicability of tonnage tax on our results of operations.Legal ProceedingsFrom time to time we are involved in various legal proceedings. A summary of material actualand threatened legal proceedings in which we were involved in the period starting 12 monthsprior to the date of this Prospectus, for in which we are currently involved, in each case orwhich the claim exceeds $500,000, is set out below.There is a potential claim for indemnity in the amount of $909,586 against the HandytankersPool, which under our pool agreement sub-charters our Cielo di Barents vessel. The originalcargo contamination claim arose in May 2002. The ship owners are currently defending theseproceedings, however should they not succeed, they have reserved their right to claim anindemnity from us. In such an event we may be able to bring a counter-claim to theHandytankers Pool, however this would be subject to interpretation of the relevant charterprovisions.In connection with the performance on a voyage from Yanbou to Djibouti by our vessel under atime charter, Cielo di Milano, in November 2006, we received a letter of claim for allegedcontamination to a parcel of gas oil. The discharge port samples have revealed a reduction inthe flashpoint. Analysis by charterer of custody transfer samples from Yangbo have reachedsimilar conclusion. The ship’s own samples are yet to be analysed. The cause of reduction in theflashpoint, which appears to be likely subjects to verification of the analysis of the ship’ssamples, has not yet been investigated. We are not aware of any claim having been lodged withany court. Although we are not aware of the exact value of any claim, we estimate that thedepreciation of cargo value could be between $1.0 million and $1.5 million. We expect the claimto covered by our insurance.The charterers of the vessel Cielo di Milano have reserved their right to bring a claim against usfor depreciation in the value of a the cargo in addition to its discharge and storage costs fortheir cargo resulting from damage caused by overpressure that occurred during loading at114

Yanbu on 21 May 2006. The value of this claim has not yet been determined. The claim costs arecovered by our P&I insurance.In connection with an alleged cargo contamination of jet A1 cargo on board the vessel HighPeace at Port Hedland in May 2005, the cargo owners brought a claim against us which wepassed onto our charterers. Legal proceedings brought by cargo interests against the shipowners are currently taking place in Singapore under the bill of loading regime. We expect ourexposure to be limited to costs and these are covered by our P&I insurance.The Handytankers Pool has brought a claim against us in connection with Cielo di Baffin, avessel which we charter in. We chartered this vessel out to the Handytankers Pool. TheHandytankers Pool sub-chartered this vessel to carry ethylene dichloride (“EDC”) cargo. The shipowners refused to load the cargo and the voyage charterers terminated the fixture. A claim wassubsequently brought against the Handytankers Pool for loss of profit. The charterers won thearbitration proceedings and the Handytankers Pool is currently seeking an indemnity from usfor $1.3 million, which we are passing onto the ship owners. Our P&I insurance only covers legalcosts and not the costs of the claim.In connection with the chartering out of High Prosperity whereby cargo interest brought a claimagainst us relating to alleged contamination of various cargoes of vegetable oil carried by thevessel by various solvents originating from tank coatings. The value of the claim has not yetbeen established. We expect our exposure to such claims to be limited only to costs, which arecovered by our P&I insurance.Following a collision between our vessel Cielo di Salerno and a vessel known as Pokatfinn 1 offLagos in October 2006, the owners of Pokatfinn brought a claim against us in the amount of$1.6 million. We have been advised that we should not expect our costs to exceed $1.0 millionand in any event such costs should be covered by our P&I insurance.Following the completion of a laden voyage to Yanbu—Dijbouti in November 2006 involvingour vessel Cielo di Milano, our charterers have reserved the right to bring a claim against us forthe alleged contamination of a gas oil cargo. To date we have not received such a claim and it islikely that the incident has been resolved between the charterers and the refinery directly. Weshould be covered by our P&I insurance should a claim arise.Apart from these disputes, we are not involved in any legal proceedings which are likely to havea significant effect on our business, financial condition and results of operations, nor are weaware of any proceedings that are pending or threatened which could have a significant effecton our business, financial condition and results of operations or liquidity. From time to time, wemay be subject to legal proceedings and claims in the ordinary course of business, principallypersonal injury and property casualty claims. We expect that these claims would be covered byinsurance, subject to customary deductibles. Such claims, even if lacking merit, could howeverresult in the expenditure of significant financial and managerial resources.RegulatoryOur shipping operations and product tankers are subject to a range of environmental and otherregulations. For a detailed description of such regulations, see “Regulatory”.115

RegulatoryGovernment regulation significantly affects the ownership and operation of our vessels. We aresubject to international conventions, national, state and local laws and regulations in force inthe countries in which our vessels may operate or are registered. We cannot predict the ultimatecost of complying with these requirements, or the impact of these requirements on the resalevalue or useful lives of our vessels.A variety of government and private entities subject our vessels to both scheduled and unscheduledinspections. These entities include local port authorities (e.g. local coast guard, port statecontrol, harbour master or equivalent), classification societies, flag state administrations (countryof registry), charterers and terminal operators. Certain of these entities require us to obtainpermits, licenses and certificates for the operation of our vessels. Although we believe that weare substantially in compliance with applicable environmental and regulatory laws and have allpermits, licenses and certificates necessary for the conduct of our operations, future noncomplianceor failure to maintain necessary permits or approvals could require us to incursubstantial costs or temporarily suspend operation of one or more of our vessels.We believe that the heightened level of environmental and quality concerns among insuranceunderwriters, regulators and charterers is leading to enhanced inspection and safety requirementson all vessels. Increasing environmental concerns have created a demand for vessels thatconform to the stricter environmental standards. We are required to maintain operatingstandards for all of our vessels that emphasize operational safety, quality maintenance, continuoustraining of our officers and crews and compliance with all laws that apply where thevessels are registered and where they trade as well as with international regulations. We believethat the operation of our vessels is in substantial compliance with applicable environmental lawsand regulations applicable to us as of the date of this Prospectus. The following represents ageneral, not exhaustive, overview of the international legal framework in which we operate.Environmental Initiatives—Convention on Civil Liability for Oil Pollution DamageThe European Union is considering amended legislation that will affect the operation of vesselsand the liability of owners for oil pollution. It is difficult to predict what legislation, if any, maybe promulgated by the European Union or any other country or authority.Many countries have ratified and follow the liability scheme adopted by the InternationalMaritime Organisation (IMO) and set out in the International Convention on Civil Liability forOil Pollution Damage, 1969, as amended (the CLC), and the Convention for the Establishment ofan International Fund for Oil Pollution of 1971, as amended (the 1971 Fund Convention). The1971 Fund Convention was replaced by the 1992 Fund Convention on 24 May 2002. Under the1992 Fund Convention, as was the case with the 1971 Fund Convention, oil receivers in countriesthat are party to the 1992 Fund Convention are liable for the payment of supplementarycompensation. Under these conventions, a vessel’s registered owner is strictly liable for pollutiondamage caused in the territorial waters of a contracting state by discharge of persistent oil,subject to certain complete defences. Many of the countries that have ratified these conventionsand the 1992 Protocol to the CLC have increased the liability limits. In October 2000, amendmentswere adopted and came into force on 1 November 2003 which further increased theliability limits. The liability limits in the countries that have ratified these changes are tied to aunit of account (Special Drawing Rights, or SDRs), which varies according to a basket ofcurrencies. On 2 February 2007 it was 1 SDR = $1.49586. The right to limit liability is forfeitedunder the CLC where the spill is caused by the owner’s actual fault or privity and, under the1992 Protocol, where the spill is caused by the owner’s intentional or reckless conduct. Vesselstrading to contracting states must provide evidence of insurance covering the limited liability ofthe owner. In jurisdictions where the CLC has not been adopted, various legislative schemes orcommon law govern, and liability is imposed either on the basis of fault or in a manner similarto the CLC.In May 2003, the IMO adopted a Protocol to the 1992 Fund Convention (the SupplementaryProtocol). The Supplementary Protocol provides for the establishment of a fund to supplementthe compensation available under the 1992 Fund Convention and as the case with the 1992Fund Convention, will be funded by oil receivers. The Supplementary Protocol is optional andparticipation is open to all states that are parties to the 1992 Fund Convention. The total116

amount of compensation payable for any one incident will be limited to a combined total of750 million SDRs ($1.122 billion as at 2 February 2007) including the amount of compensationpaid under the existing CLC/Fund Convention. The Supplementary Protocol entered into forceon 3 March 2005.To ease the burden on oil receivers under the Supplementary Protocol, voluntary agreementshave been reached among tanker owners indemnified through members of the InternationalGroup of P&I Clubs. The d’Amico Group is a member of one of the P&I Clubs that itself is part ofthe International Group. For tankers up to 29,548 GT, under the Small Tanker Oil PollutionIndemnification Agreement 2006 (STOPIA), the liability being assumed has the effect of substitutingthe limit under the CLC 1992 has effectively been voluntarily increased to SDR 20 million.STOPIA operates by indemnifying the 1992 Fund for the difference between a tanker’s limit ofliability under CLC 92 and SDR 20 million. Under the Tanker Oil Pollution IndemnificationAgreement 2006 (TOPIA) ship owners of larger tankers indemnify the Supplementary Fund for50% of the compensation it pays under the Protocol for Pollution Damage caused by tankers inProtocol States. The Scheme is established by a legally binding agreement between the ownersof tankers which are insured against oil pollution risks by P&I Clubs in the International Group.In all but a relatively small number of cases, ships of this description will automatically beentered into STOPIA and TOPIA as a condition of club cover.The International Convention on Liability and Compensation for Damage in Connection withthe Carriage of Hazardous and Noxious substances by Sea (“HNS Convention”) was adopted bythe IMO in 1996. It aims to ensure adequate, prompt and effective compensation for damagethat may result from shipping accidents involving hazardous and noxious substances. Theliability regime mirrors that contained in CLC 1992. The HNS Convention has not yet enteredinto force.Bunker Spills Convention 2001This IMO Convention seeks to ensure that adequate compensation is promptly available topersons who are required to clean up or who suffer damage as a result of spills of ships’ bunkeroil, who would not otherwise be compensated under CLC 1992. Although strict liability underthe Bunker Spills Convention extends beyond the registered owner to the bareboat charterer,manager and operator of the ship, the Convention only requires the registered owner of shipsgreater than 1,000 GT to maintain insurance or other financial security. The level of cover mustbe equal to the to the limites pf liability under the applicable national or internationallimitation regime, but in no case exceeding the amount calculated in accordance with theConvention on Limitation of Liability for Maritime Claims, 1976, as amended.The Bunker Spills Convention will come into force 12 months after it has been ratified by 18states, including five states with ships whose combined gross tonnage is not less than onemillion GT. As at November 30, 2006, 12 states had ratified the Convention.Prevention of Pollution from Ships—MARPOLThe IMO has negotiated the international conventions for the prevention of pollution fromships that impose liability for oil pollution of the marine environment (MARPOL 73/78). Annex Ito V of the convention concerns pollution to the sea by oil, noxious/harmful substances, sewageand garbage from ships. In September 1997, the IMO adopted Annex VI to address air pollutionfrom ships. Annex VI was ratified in May 2004, and became effective in May 2005. Annex VI setsa global cap on the sulfur content of fuel oil to limit sulfur oxide emission from ship exhaustsand stipulates an upper limit to nitrogen oxide emissions from engines and prohibits deliberateemissions of ozone depleting substances, such as chlorofluorocarbons. Annex VI also providesfor the establishment of special sulfur emission control areas (SECAs) with more stringentcontrols requirements on sulfur emissions. The IMO adopted various to Annexes I and II inOctober 2004 which became effective as of 1 January 2007. The revisions affect the vessels andthe carriage of what are termed noxious liquid substances carried in bulk.The U.S. Oil Pollution Act of 1990The U.S. Oil Pollution Act of 1990 (“OPA”), established an extensive regulatory and liabilityregime for the protection and cleanup of the environment from oil spills. OPA affects all owners117

and operators whose vessels trade in the United States, its territories and possessions or whosevessels operate in United States waters, which includes the United States’ territorial sea and its200 nautical mile exclusive economic zone.Under OPA, vessel owners, operators and bareboat charterers are “responsible parties” and arejointly, severally and strictly liable (unless the spill results solely from the act or omission of athird party, an act of God or an act of war) for all containment and clean up costs and otherdamages arising from discharges or threatened discharges of oil from their vessels. OPA definesthese other damages broadly to include:• natural resources damage and the costs of assessment thereof;• real and personal property damage;• net loss of taxes, royalties, rents, fees and other lost earnings;• lost profits or impairment of earning capacity due to property or natural resourcesdamage; and• net cost of public services necessitated by a spill response, such as protection from fire,safety or health hazards, and loss of subsistence use of natural resources.OPA limits the liability of responsible parties to $1,200 per gross tonne. This limit applies to tankvessels and does not apply if an incident was directly caused by violation of applicable UnitedStates federal safety, construction or operating regulations or by a responsible party’s grossnegligence or wilful misconduct, or if the responsible party fails or refuses to report the incidentor to cooperate and assist in connection with oil removal activities. A tank vessel under OPA isone constructed or adapted to carry, or that carries oil or hazardous material in bulk as cargo orcargo residue.OPA requires owners and operators of vessels to establish and maintain with the U.S. CoastGuard evidence of financial responsibility sufficient to meet their potential liabilities under theOPA. In December 1994, the U.S. Coast Guard implemented regulations requiring evidence offinancial responsibility in the amount of $1,500 per gross tonne, which includes the OPAlimitation on liability of $1,200 per gross tonne and the U.S. Comprehensive EnvironmentalResponse, Compensation, and Liability Act liability limit of $300 per gross tonne. Under theregulations, vessel owners and operators may evidence their financial responsibility by showingproof of insurance, surety bond, self insurance or guaranty. Under OPA, an owner or operatorof a fleet of vessels is required only to demonstrate evidence of financial responsibility in anamount sufficient to cover the vessel in the fleet having the greatest maximum liability underOPA.The U.S. Coast Guard’s regulations concerning certificates of financial responsibility provide, inaccordance with OPA, that claimants may bring suit directly against the insurer or guarantorthat furnishes certificates of financial responsibility. In the event that such insurer or guarantoris sued directly, it is prohibited from asserting any contractual defence that it may have hadagainst the responsible party and is limited to asserting those defences available to theresponsible party and the defence that the incident was caused by the wilful misconduct of theresponsible party. Certain organisations, which had typically provided certificates of financialresponsibility under pre OPA laws, including the major protection and indemnity organisations,have declined to furnish evidence of insurance for vessel owners and operators if they aresubject to direct actions or are required to waive insurance policy defences.The U.S. Coast Guard’s financial responsibility regulations may also be satisfied by evidence ofsurety bond, guaranty or by self insurance. Under the self insurance provisions, the ship owneror operator must have a net worth and working capital measured in assets located in the UnitedStates against liabilities located anywhere in the world that exceeds the applicable amount offinancial responsibility.OPA specifically permits individual states to impose their own liability regimes with regard to oilpollution incidents occurring within their boundaries, and some states have enacted legislationproviding for unlimited liability for oil spills. In some cases, states that have enacted suchlegislation, have not yet issued implementing regulations defining vessels owners’ responsibilitiesunder these laws.118

Vessel Security RegulationsSince the terrorist attacks of 11 September 2001, there have been a variety of initiativesintended to enhance vessel security. On 25 November 2002, the Maritime Transportation SecurityAct of 2002 (the “MTSA”) came into effect in the United States. To implement certain portionsof the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementationof certain security requirements aboard vessels operating in waters subject to the jurisdiction ofthe United States. Similarly, in December 2002, amendments to the IMO’s International Conventionfor the Safety of Life at Sea (“SOLAS”) created a new chapter of the convention dealingspecifically with maritime security. The new chapter came into effect in July 2004 and imposesvarious detailed security obligations on vessels and port authorities, most of which are containedin the newly created IMO’s International Ship and Port Facilities Security Code (“ISPSCode”). Among the various requirements are:• on board installation of automatice information systems to enhance vessel to vessel andvessel to shore communications;• on board installation of ship security alert systems;• the development of vessel security plans; and• compliance with flag state security certification requirements.The U.S. Coast Guard regulations, intended to align with international maritime securitystandards, exempt non-U.S. vessels from MTSA vessel security measures provided such vesselshave on board a valid International Ship Security Certificate (“ISSC”) that attests to the vessel’scompliance with SOLAS security requirements and the ISPS Code.In full compliance with the IMO ISPS Code and its comprehensive provisions, d’Amico Società diNavigazione S.p.A., for and on behalf of d’Amico Tankers has adopted and put into effect oneach vessel a “Ship Security Plan”. The Ship Security Plan includes both the mandatory and therecommended provisions of the ISPS Code.International Safety Management (ISM) CodeThe operation of our vessels is also affected by the requirements set forth in the IMO’sManagement Code for the Safe Operation of Ships and Pollution Prevention (the “ISM Code”).The ISM Code requires ship owners or the entity who has assumed the responsibility foroperation of a ship such as the manager or bareboat charterer to develop, implement andmaintain a “Safety Management System”, which includes the following functional requirements:• A safety and environmental-protection policy;• Instructions and procedures to ensure safe operation of ships and protection of theenvironment in compliance with relevant international and flag state legislation;• Defined levels of authority and lines of communication between, and amongst, shoreand shipboard personnel;• Procedures for reporting accidents and non-conformities;• Procedures to prepare for and respond to emergency situations; and• Procedures for internal audits and management reviews.Failure to comply with the ISM Code may subject the ship owner or the person responsible forthe operation of a vessel to increased liability, may prejudice insurance coverage for the affectedvessels and may result in detention or denial of access to ports.Inspection by Classification SocietiesEvery seagoing vessel must be “classed” by a classification society. The classification societycertifies that the vessel is “in class”, signifying that the vessel has been built and maintained inaccordance with the rules of the classification society. In most cases, the classification society isauthorised by the flag state to certify that the vessel also complies with applicable rules andregulations of the vessel’s country of registry and the international conventions of which that119

country is a member. In addition, where surveys are required by international conventions andcorresponding laws and ordinances of a flag state, the classification society may undertake themon 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 requiredby regulations and requirements of the flag state such as SOLAS. These surveys are subject toagreements made in each individual case and/or to the regulations of the country concerned.For an overview of the classification societies of the vessels of our fleet, see “Business—OurFleet”.For maintenance of the class, regular and extraordinary surveys of hull, machinery, including theelectrical plant, and any special equipment classed are required to be performed as follows:• Annual Surveys. For seagoing vessels, annual surveys are conducted for the hull and themachinery, including the electrical plant and where applicable for special equipmentclassed, at intervals of 12 months from the date of commencement of the class periodindicated in the certificate.• Intermediate Surveys. Extended annual surveys are referred to as intermediate surveysand typically are conducted two and one-half years after commissioning and each classrenewal. Intermediate surveys may be carried out on the occasion of the second or thirdannual survey.• Class Renewal Surveys. Class renewal surveys, also known as special surveys, are carriedout for the ship’s hull, machinery, including the electrical plant and for any specialequipment classed, at the intervals indicated by the character of classification for thehull. At the special survey, the vessel is thoroughly examined, including ultrasonicgauging, in order to determine the thickness of the steel structures. Should the thicknessbe found to be less than class requirements, the classification society would require steelrenewals. Substantial amounts of money may have to be spent for steel renewals to passa special survey if the vessel experiences excessive wear and tear. In lieu of the specialsurvey every five years, a ship owner has the option of arranging with the classificationsociety for the vessel’s hull or machinery to be on a continuous survey cycle, in whichevery part of the vessel would be surveyed within a five-year cycle. At an owner’sapplication, the surveys required for class renewal may be split according to an agreedschedule to extend over the entire period of class. This process is referred to ascontinuous class renewal.All areas subject to survey as defined by the classification society are required to be surveyed atleast 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.A vessel’s underwater parts are required to be inspected every 24 to 36 months by the classificationsociety. Dry docking of vessels is required at intervals not exceeding 60 months. If any defects arefound, the classification surveyor will issue a condition of class that must be rectified by the shipowner prior to the date stated in the condition.Most insurance underwriters make it a condition for insurance coverage that a vessel be certifiedas “in class” by a classification society that is a member of the International Association ofClassification Societies.Competition LawHistorically, the international maritime transport sector has been subject to various block exemptionswhich allowed categories of shipping companies to fix rates and capacity jointly. In 2006,however, the European Council revoked certain of these exemptions bringing liner conferences,tramp and cabotage shipping fully within the scope of EC competition law from 2008. While thisdoes not directly affect our pooling arrangements, it is an indication of heightened scrutiny ofcommercial practices in the maritime sector. We cannot at present estimate the extent to whichwe may have to change our current practices of operating our vessels in pools and managing thepools in light of competition law requirements. The European Commission has indicated that itwill provide guidance in the course of this year for the industry on the application of competitionlaw to the maritime sector, but when such guidance will be available is uncertain. Should such120

guidance or heightened scrutiny impact our current practices, we believe that any resultingchanges can be made without material costs and interruption of our business.Permits and Regulatory ApprovalsWe are required by various governmental and quasi-governmental agencies to obtain certainpermits, licenses and certificates for our vessels. The kinds of permits, licenses and certificatesrequired depend upon several factors, including the commodity transported, the waters inwhich the vessel operates, the nationality of the vessel’s crew and the age of the vessel. Wehave been able to obtain all permits, licenses and certificates currently required to permit ourvessels to operate. Additional laws and regulations, environmental or otherwise, may beadopted which could limit our ability to do business or increase the cost of us doing business.Port State Control (PSC)PSC is the inspection of foreign ships in national ports to verify that the condition of the shipand its equipment comply with the requirements of international regulations and that it ismanned and operated in compliance with these rules. Primary responsibility for ship standardsrests with the flag state, but the IMO has encouraged PSC organisations to form regional groupsto coordinate those inspections to help ensure that inspections are conducted and at the sametime avoid unnecessary inspections within and between regions. A number of regional memorandumsof understanding (MOUs) have been signed, for example the Paris MOU covers Europeand the North Atlantic and the Tokyo MOU covers Asia and the Pacific. Non-compliance can leadto the vessel’s detention in the port in question.121

Board of DirectorsManagementThe management of the Company is vested in a board of directors, composed of at least threemembers, who need not be shareholders (the “Board of Directors”).The Company’s articles of association (“Articles of Association”) provide that the generalmeeting of shareholders will determine the number of members of the Board of Directors andelect members for a period not exceeding six years. Members are eligible for re-election andmay be removed at any time, with or without cause, by a resolution adopted by the generalmeeting of shareholders. In case of a vacancy on the Board of Directors, the Board of Directorsmay appoint a new director, provided that the next following general shareholders’ meetingmust confirm such appointment.The Board of Directors assesses the maximum number of positions directors may hold on theboards of directors of other companies deemed compatible with the diligent and effectiveperformance of their duties, taking account of, the purpose and the dimension of said companiesand their potential introduction into the d’Amico Group.The Board of Directors is vested with broad powers to perform any action necessary or usefulfor accomplishing the Company’s object. All powers not expressly reserved by the Articles ofAssociation or by the laws to the general meeting of shareholders are within the competence ofthe Board of Directors.The directors’ fees (tantièmes) payable to the members of the Board of Directors shall bedetermined by the shareholders’ meeting and will be effective until the shareholders’ meetingresolves otherwise. The compensation of the directors vested with particular functions shall bedetermined by the Board of Directors, upon proposal by the Remuneration Committee. Nevertheless,the shareholders’ meeting shall determine an aggregate amount for compensation of allthe directors, including those vested with particular functions.No member of the Board of Directors commits itself, by reason of its functions, to any personalobligation in relation to the commitments taken on behalf of the Company. Any such member isonly liable for the performance of its duties.The Board of Directors may delegate the daily management of the Company and the representationof the Company within such daily management to one or more persons or committees ofits choice specifying the limits to such delegated powers and the manner of exercising them.The Board of Directors may also delegate other special powers or proxies or entrust determinedpermanent or temporary functions to persons or committees of its choice.Persons and corporate bodies with delegated powers shall report to the Board of Directors andthe Statutory Auditors, at least once in each quarter, on the occasion of the meetings of theBoard of Directors and the Executive Committee, if established, or in a written memorandum.They shall report in regard to the activities carried out, the general performance of operationsand their foreseeable development, and the transactions of greatest economic, financial andequity-related significance entered into by the Company or its subsidiaries. In particular, saidcorporate bodies with delegated powers shall report in regard to transactions in which theyhave an interest, directly or on behalf of third parties, or that are influenced by the party thatperforms management and coordination activities, if any.The Board of Directors may set up committees from among its members vested with givingadvice and making proposals and shall establish their composition, powers, duties and operatingprocedures.The Board of Directors may also approve the regulations governing its internal functioning,including any relevant provisions regarding the handling of confidential information.The Company’s Articles of Association provide that the Company will be bound towards thirdparties by the single signature of the Chairman of the Board of Directors or the joint signatureof any two members of the Board of Directors. The Company will further be bound towardsthird parties by the joint signatures or single signature of any person to whom the dailymanagement of the Company has been delegated, within such daily management, or by the122

joint signatures or single signature of any person to whom special signatory power has beendelegated by the Board of Directors, within the limits of such special power.Except in cases of urgency or with the prior consent of all those entitled to attend, at least oneweek’s notice of meetings of the Board of Directors shall be given in writing and transmitted byany means of communication allowing for the transmission of written text. Any such notice shallspecify the time and place of the meeting as well as the agenda and the nature of the businessto be transacted. The notice may be waived by written consent, transmitted by any means ofcommunication allowing for the transmission of a written text, by each member of the Board ofDirectors. No separate notice is required for meetings held at times and places specified in aschedule previously adopted by resolution of the Board of Directors.Pursuant to the Company’s Articles of Association, every meeting of the Board of Directors shallbe held in Luxembourg or such other place as the Board of Directors may from time to timedetermine. Any member of the Board of Directors may act at any meeting of the Board ofDirectors by appointing in writing another member of the Board of Directors as his proxy. Thepresence or the representation of a majority of the members of the Board of Directors holdingoffice shall constitute a quorum. Decisions will be taken by a majority of the votes of themembers of the Board of Directors present or represented at such meeting.In case of urgency, a written decision, signed by all the members of the Board of Directors, isproper and valid as though it had been adopted at a meeting of the Board of Directors whichwas duly convened and held. Such a decision can be documented in a single document or inseveral separate documents having the same content and each of them signed by one or severalmembers of the Board of Directors.The members of the Board of Directors as well as any other person attending the meeting ofthe Board of Directors, must keep confidential, even after the end of their directorship, theinformation they possess on the Company, except in cases where disclosure thereof is requiredor permissible under legal or regulatory requirements or if it is in the public interest.The business address of the members of the Board of Directors is that of the Company’sheadquarters at 12, rue Ste. Zithe, L-2763 Luxembourg, Grand Duchy of Luxembourg.123

The Board of Directors, as of the date of this Prospectus, is comprised of the following directors:Name Position Date of BirthExecutive DirectorsPaolo d’Amico . . . . . .Chairman of theBoard of DirectorsDate of FirstAppointmentExpiry of CurrentAppointment29 October 1954 23 February 2007 Date of the generalshareholders’ meetingapproving theCompany’s accountsfor financial year 2008Cesare d’Amico. . . . . . Board Member 6 March 1957 23 February 2007 Date of the generalshareholders’ meetingapproving theCompany’s accountsfor financial year 2008Marco Fiori. . . . . . . . .Non-ExecutiveDirectorsMassimoCastrogiovanni* . . .Stas AndrzejJozwiak** . . . . . . .Board Member andChief Executive Officer24 March 1956 9 February 2007 Date of the generalshareholders’ meetingapproving theCompany’s accountsfor financial year 2008Board Member 2 August 1939 23 February 2007 Date of the generalshareholders’ meetingapproving theCompany’s accountsfor financial year 2008Board Member12 December 1938 23 February 2007 Date of the generalshareholders’ meetingapproving theCompany’s accountsfor financial year 2008Gianni Nunziante . . . . Board Member 25 April 1930 23 February 2007 Date of the generalshareholders’ meetingapproving theCompany’s accountsfor financial year 2008* Independent director** Lead independent directorCesare d’Amico. Cesare d’Amico joined d’Amico Società di Navigazione in 1977. Mr. d’Amico iscurrently a member of the Board of Directors of the Company, as well as a director of a numberof other d’Amico Group companies. He is also involved in a number of non-group companies,including as director of COGEMA S.A.M.; sole director of SAEMAR; director of Anglo Canadian;director of N.137 Sea Bright Holding Ltd; director of Ishima Pte Ltd; director of CompagniaGenerale Telemar S.p.A.; director of Marexport Casa di Spedizioni Srl; director of The Baltic andInternational Maritime Council; director of The Standard Steamship Owners’ Protection andIndemnity Association (Bermuda) Limited; director of Sealog Steamship Agency Srl; director ofMilano Finanziaria Immobiliare S.p.A.; director of ICOMI Srl; director of Societa LazialeInvestimenti e Partecipazioni S.p.A.; and director of Casle Srl. Mr. d’Amico obtained a degree inEconomics from the University of La Sapienza, Rome in 1982. He lives in Rome, Italy.Paolo d’Amico. Paolo d’Amico joined d’Amico Società di Navigazione in 1971. In 1981 he wasappointed a director of the same company, with particular focus on the product tanker aspectsof the business. Mr. d’Amico is currently vice-president of the company, as well as a director of anumber of other d’Amico Group companies. He is also involved in a number of non-groupcompanies, including as director of Milano Finanziaria Immobiliare S.p.A., member of the124

council of Intertanko, chairman of the environmental committee of Intertanko, director of theStrike Club and member of the board of Confederazione Italiana Armatori—National ShipownersAssociation (Confitarma). Mr. d’Amico obtained a degree in Economics and Finance fromRome University in 1978. He lives in Rome, Italy.Marco Fiori. Marco Fiori joined COGEMA S.A.M. in 1996 as managing director and since thattime has held many other executive positions in d’Amico Group companies. Prior to joining thed’Amico Group, Mr. Fiori was employed in the New York branch of Banca Nazionale dell’Agricoltura.He was initially responsible for the loan portfolio and business development of Fortune100 companies based on the U.S. West Coast and later, for overseeing and managing the entireU.S. business development market. From 1990 to 1994, he held the position of head of creditand in 1994 was promoted to the position of senior vice-president and deputy general managerof the New York branch with direct responsibilities for business development, treasury andtrading. Mr. Fiori obtained a Bachelor of Science in Economics and Finance from Rome Universityin 1979 and an MBA from American University in Washington D.C. in 1984. He lives in MonteCarlo, Monaco.Massimo Castrogiovanni. Massimo Castrogiovanni joined d’Amico International Shipping S.A.in 2007 as director. Prior to joining, Mr. Castrogiovanni was vice president and head of theshipping department at Ebifbanca S.p.A. where he was responsible for the shipping financeactivity for new oil tankers, dry bulk, ro-pax, chemicals and product carriers. In 2004 becameshipping finance consultant of that same institution. In 1965 Mr. Castrogiovanni graduated inNaval Architecture in Naples, and in 1972 he obtained a Masters degree in Nuclear Engineeringin Pisa. He lives in Rome, Italy.Stas Andrzej Jozwiak. Stas Andrzej Jozwiak joined d’Amico International Shipping S.A. in 2007as lead independent director. Prior to joining, Mr. Jozwiak founded S.A. Jozwiak Shipbrokers in1987, specialising in the sale and purchase of tonnage and the contracting out of newbuildings.After qualifying as a Fellow of the Institute of Chartered Shipbrokers in 1970, Mr. Jozwiaktrained as a Shipbroker with Eggar Forrester Ltd. and became a director in 1975. In 1983 hebecame a director of sale and purchase at Maton Grant Sutcliffe and at J.E. Hyde of London. Hehas practical port experience, gained with the Associated Steamships, in Fremanile, WesternAustralia. Mr. Jozwiak was educated at the Oratory School and then the London School ofForeign Trade, where he specialised in the economics of sea transport. He lives in Oxford, UnitedKingdom.Gianni Nunziante. Gianni Nunziante joined d’Amico International Shipping S.A. in 2007 asdirector. Mr. Nunziante qualified as a lawyer in 1954, and has been entitled to practice law inItaly before the high courts since 1971. Mr. Nunziante was a foreign associate at the New Yorkoffice of Cleary Gottlieb Steen & Hamilton. He founded the law firm Ughi e Nunziante in 1969.At present, Mr. Nunziante holds positions as director (chairman of the board of directors) ofEEMS S.p.A. and chairman of the Board of Statutory Auditors of Moody’s Italia Srl. Mr. Nunziantegraduated in law from the University of Naples in 1952 and also studied at Columbia UniversitySchool of Law in New York, obtaining a M.C.L. in 1962. He lives in Rome, Italy.Terms of AppointmentUnless otherwise determined by the general shareholders’ meeting, the terms of all members ofour Board of Directors expire on the date of the general shareholders’ meeting approving theCompany’s accounts for the financial year 2008.125

Directorships Held by Board MembersExcept as set forth below, no director has held any directorship of any company (other thancompanies in our Group and companies which are subsidiaries of companies of which thedirector is or was a member) or partnerships within the past five years:Director Current Directorships/Partnerships Former Directorships/PartnershipsCesare d’Amico . . . . . . . . .• Member of the Board ofDirectors of d’Amico Societadi Navigazione S.p.A.;• Member of the Board ofDirectors of d’Amico ShippingItalia S.p.A.;• Member of the Board ofDirectors of COGEMA S.A.M.;• Sole director of SAEMAR;• Member of the Board ofDirectors of d’Amico DryLimited;• Member of the Board ofDirectors of Anglo Canadian;• Member of the Board ofDirectors of N.137 Sea BrightHolding Ltd;• Member of the Board ofDirectors of Ishima Pte Ltd;• Member of the Board ofDirectors of CompagniaGenerale Telemar S.p.A.;• Member of the Board ofDirectors of Marexport Casa diSpedizioni Srl;• Member of the Board ofDirectors of The Baltic andInternational MaritimeCouncil;• Member of the Board ofDirectors of The StandardSteamship Owners’ Protectionand Indemnity Association(Bermuda) Limited;• Member of the Board ofDirectors of Sealog SteamshipAgency Srl;• Member of the Board ofDirectors of MilanoFinanziaria Immobiliare S.p.A.;• Member of the Board ofDirectors of ICOMI Srl;• Member of the Board ofDirectors of Societa LazialeInvestimenti e PartecipazioniS.p.A.;• Member of the Board ofDirectors of Casle Srl.• Member of the Board ofDirectors of Italia diNavigazione S.p.A.;• Member of the Board ofDirectors of C&F Agent126

Director Current Directorships/Partnerships Former Directorships/PartnershipsPaolo d’Amico . . . . . . . . .Marco Fiori . . . . . . . . . . . .Massimo Castrogiovanni. .• Member of the Board ofDirectors of d’Amico Societadi Navigazione S.p.A.;• Member of the Board ofDirectors of d’Amico ShippingItalia S.p.A.;• Member of the Board ofDirectors of COGEMA S.A.M.;• Member of the Board ofDirectors of CompagniaGenerale Telemar S.p.A.;• Member of the Board ofDirectors of The Shipowners’Mutual Strike ReinsuranceAssociation (Bermuda) Ltd;• Member of the Board ofDirectors of MilanoFinanziaria Immobiliare S.p.A.;• Member of the Council of TheInternational Association ofIndependent Tankers Owners(Intertanko);• Member of the Board ofDirectors of CONFITARMA.• Chief Executive Officer ofCOGEMA S.A.M.;• Chief Executive Officer ofCOMARFIN S.A.M.;• Director of d’Amico DryLimited;• Glenda International ShippingLimited• Director of d’Amico ShippingU.K. Ltd;• Director of d’Amico ShippingSingapore Ltd;• Director of HandfordInvestments Inc;• Director of Ishima Pte Ltd;• Executive Director of ClaridenAsset Management S.A.M.• Director of d’Amico FinanceLimited• Director of d’Amico TankersU.K. Ltd• Director of d’Amico TankersSingapore Pte. Ltd.• Member of the Board ofDirectors of Italia diNavigazione S.p.A.;• Member of the Board ofDirectors of C&F Agent;• Member of the Board ofDirectors of Sealog SteamshipAgency Srl.• Member of the Board ofDirectors of Aurora ShippingS.p.A.127

Director Current Directorships/Partnerships Former Directorships/PartnershipsStas Jozwiak . . . . . . . . . . .Gianni Nunziante . . . . . . .• Chair of the Board ofDirectors of EEMS S.p.A;• Chairman of the Board ofDirectors of Moody’s Italia Srl;• Castello di Spaltenna S.p.A.;• Director of Vignamaggio Srl;• Director of S.L.I.P. Srl• Director of S.A.Jozwiak(Shipbrokers) Ltd.• Director of Texas InstrumentsItalia S.p.A.Corporate GovernanceThe Company complies with the legal corporate governance regime of the Grand Duchy ofLuxembourg and the corporate governance requirements of Borsa Italiana. Borsa Italiana hasadopted a set of recommended disciplinary rules for listed Italian public companies (the “Codeof Conduct”) that has been drafted by its corporate governance committee. The Company bymeans of the resolution of the Board of Directors of 23 February 2007 has taken a number ofsteps to ensure compliance with the Code of Conduct.The Company’s Articles of Association are not subject to the Legislative Decree No. 58 of24 February 1998 because the relevant provisions only apply to Italian companies with shareslisted on regulated markets in an EU country.According to Article 17 of the Law of 9 May 2006 on Market Abuse, persons dischargingmanagerial responsibilities within an issuer that has its registered office in Luxembourg and, asapplicable, persons who have a close link with such persons have to notify the CSSF and theissuer of all transactions effectuated in their name and relating to shares admitted to trading ona regulated market, derivatives or other financial instruments relating to the issuer’s shares. Thedisclosure should be made to the CSSF within five business days following the conclusion ofeach individual operation. The information must be accessible to the public.The following provides an overview of certain principles of corporate governance under Italianlaw as applicable to the Company.Composition of the Board of DirectorsThe Board of Directors comprises six members. Three of the Directors, including the Chairman,are executive and the remaining three are non-executive Directors, including two independentDirectors, in accordance with the rules issued by Borsa Italiana (the “Italian Stock ExchangeRules”). In accordance with the Italian Stock Exchange Rules, one non-executive and independentdirector must have adequate and recent experience in accounting and finance. Such nonexecutiveand independent director shall be appointed as a member of the Audit Committee.In accordance with the Code of Conduct and the Italian Stock Exchange Rules, directors’independence shall be periodically assessed by the Board of Directors. The results of theassessment shall be communicated to the market and reported in the corporate governancereport. In assessing the independence of directors, the Company shall ascertain that they:1) do not have, directly, indirectly or on behalf of third parties, significant businessdealings with the Company, its subsidiaries, the executive directors or the shareholderor group of shareholders that controls the Company such as could influence theirjudgement;2) do not own, directly or indirectly or on behalf of third parties, a quantity of sharesenabling them to control or exercise a significant influence over the Company;3) do not participate in shareholders’ agreements to control the Company; and4) are not the spouse or cohabitant or a relative by blood or affinity up to the seconddegree of kinship of an executive director of the Company or of a shareholder who128

controls the company, or the spouse or cohabitant or a relative by blood up to the firstdegree of kinship of a person in one of the situations described above.For the purpose of evaluating the materiality of any significant business dealing, the Companyshall refer to:a) dealings of a commercial nature in the year under way or the previous year;b) professional services provided in the year under way or the previous year, on anindividual or associated basis; andc) an employment relationship or a position of executive director in the three precedingyears.The business dealings referred to in paragraphs a) and b) shall not be considered significant ifthey are carried out at market conditions and are not such as could influence the directors’judgement. Such business dealings shall be considered significant where: (i) those of a commercialnature exceed 5% of the sales revenues of the supplying or beneficiary firm; or (ii) theprofessional services provided exceed 5% of the director’s income or 200,000 Euro.In accordance with the Code of Conduct, the Board of Directors shall, among others:• examine and approve the strategic, operational and financial plans, corporate governancestructures of both the Company and the Group; assess the adequacy of thegeneral organisational, administrative and accounting structure, with special regards tothe internal auditing structure, to be adequate with respect to the Company’s specifications,and the procedures to manage conflicts of interests;• evaluate the general performance of the Company, with special reference to situationsof conflict of interest, paying particular attention to the information received from theExecutive Committee and Chief Executive Officer;• determine, after examining the proposal of the Remuneration Committee, the remunerationof the managing directors and of those directors who are appointed to particularpositions within the Company and, where the shareholders’ meeting has not alreadydone so, allocate the total amount to which the members of the Board of Directors andof the Executive Committee are entitled;• examine and approve transactions of the Company and its subsidiaries having a significantstrategic, economical, financial, patrimonial impact on the Company itself, assetsand liabilities or financial position, with special reference to transactions involving oneor more directors having a personal interest on its own behalf or for third parties or, ingeneral, with related parties; to this purpose the Board of Directors shall fix generalprinciples to detect the material transactions; and• prepare the corporate governance report attesting the implementation of the corporategovernance rules set out by the Code of Conduct describing, in particular, the internalcontrol system.The meetings of the Board of Directors shall be held at regular intervals, approximately everytwo months.Chairman of the Board of DirectorsOn 23 February 2007 the Board of Directors appointed Mr. Paolo d’Amico as its Chairman.Certain managing powers were delegated from the Board of Directors. The Chairman is notindependent, given his indirect interest in the Company. For more information, see also“Principal and Selling Shareholder”. The Company shall disclose adequate information in itsannual corporate governance report on the powers delegated to the Chairman. The Chairmanshall not have a vote in case of a tie of votes at meetings of the Board of Directors.Chief Executive Officer (CEO) and Executive CommitteeOn 23 February 2007 the Board of Directors appointed Mr. Marco Fiori as CEO, delegating himbroad powers with regard to the day-to-day management of the Company, specifying the limitsof such delegated powers, the manner in which they may be exercised and the frequency,129

generally not less than once every three months, with which he must report to the Board ofDirectors on the activity performed in the exercise of the powers delegated to him. Theexamination and approval of the strategic, operational and financial plans, corporate governancestructures of both the Company and the relevant Group may not be delegated to theCEO or the Chairman.On 23 February 2007 the Board of Directors appointed an Executive Committee, includingMr. Paolo d’Amico, Mr. Marco Fiori and Mr. Cesare d’Amico. The Board of Directors delegated tothe Executive Committee the following powers: to review and evaluate all strategic andfinancial documents, papers, plans and proposals concerning the Company and its subsidiaries,to check their content and to report thereon to the Board of Directors.Lead Independent DirectorIn accordance with the Code of Conduct, since the Chairman of the Board of Directors is anexecutive director, as well as one of the controlling shareholders, the Board of Directors hasappointed a “Lead Independent Director” to coordinate the activity and the requests of thenon-executive directors with special regard to independent directors. On 23 February 2007 theBoard of Directors appointed Mr. Stas Jozwiak as Lead Independent Director.Nomination CommitteeThe Company’s Nomination Committee is composed of three non-executive members two ofwhich are independent directors.The Nomination Committee is entitled to:a) propose candidates for election to the office of director;b) propose candidates for election to the office of independent director, taking intoaccount the indication received by the shareholders (especially where the Board ofDirectors sees that it is difficult for shareholders to make proposals, as may be the casein listed companies with a broad shareholder base); andc) advise the Board of Directors with respect to the size and composition of the Board ofDirectors and the professional expertise of the relevant members.On 23 February 2007 the Board of Directors appointed the following directors as members of itsNomination Committee: Mr. Gianni Nunziante, Mr. Massimo Castrogiovanni and Mr. StasJozwiak.Remuneration CommitteeThe Company’s Remuneration Committee is composed of three non-executive members, two ofwhich are independent directors.The Committee shall submit proposals to the Board of Directors, in the absence of the personsdirectly concerned, regarding remuneration, including any stock option or Shares allotment, ofthe Executive Directors and of those directors who are appointed to particular positions and,acting on a proposal from the Executive Directors, for the criteria to be used in determining theremuneration of the Company’s top management. On 23 February 2007, the Board of Directorsappointed Mr. Gianni Nunziante, Mr. Massimo Castrogiovanni and Mr. Stas Jozwiak as membersof the Remuneration Committee.The Company intends to implement a stock option plan within three months of its listing onBorsa Italiana.Audit CommitteeThe Company’s Audit Committee is composed of three non-executive members of which two areindependent directors. In accordance with the Code of Conduct, at least one of the members ofthe internal control committee has adequate and recent experience in accounting and financeas assessed by the Board of Directors resolving upon the relevant appointment.130

The Board of Directors shall:i) establish, with the assistance of the Audit Committee, the guidelines for the internalcontrol system, periodically check that it is adequate and effective, and verify that themain risks to the Company are identified and managed appropriately;ii)iii)iv)adopt, upon consultation with the Audit Committee, rules which assure the transparencyand the appropriateness, both substantively and procedurally, of any transactionin which directors have an interest, for their own account or on behalf of third partiesor with related parties;delegate an executive director (usually a managing director) to supervise the operationof the internal control system; andappoint, upon proposal of such executive director and the consultation of the internalcontrol committee, one or more persons to manage the internal control system withrespect to remuneration.In particular, the Audit Committee shall provide advice and submit proposals to the Board ofDirectors on the following matters:a) establishing the guidelines for the internal control system and verifying its adequacyand effectiveness;b) assessing the work programme prepared by the persons charged with internal controland receiving the latter’s periodic reports;c) assessing, together with the persons responsible for the management of the Companyand the external auditors, the adequacy of the accounting standards adopted and, inthe case of the companies of the Group, their uniformity for the purpose of preparingthe consolidated financial statements; andd) assessing proposals by auditing firms to obtain the audit engagement and assessing thework programme for the audit and the results thereof set out in the external auditor’sreport and letter of suggestions.The Audit Committee shall report to the Board of Directors at least twice a year, when theannual and half-yearly reports are approved. On 23 February 2007 the Board of Directorsappointed the following directors as members of its Audit Committee: Mr. Gianni Nunziante,Mr. Massimo Castrogiovanni and Mr. Stas Jozwiak and acknowledged that Mr. MassimoCastrogiovanni has adequate and recent experience in accounting and finance.Statutory AuditorThe supervision of the Company is entrusted to one statutory auditor (commissaire auxcomptes), who is independent from shareholders and Directors. On 3 April 2007, an extraordinarygeneral meeting of the shareholders appointed Lux-Fiduciaire S.à.r.l. as statutoryauditor. The statutory auditor shall have adequate experience in accounting and finance. Thestatutory auditor shall have unlimited power of supervision and control over all of theoperations of the Company and may inspect, but not remove, the books, correspondence,minutes and, in general, all the records of the Company. The statutory auditor shall report tothe Audit Committee.External AuditorsOn 23 February 2007 the Board of Directors appointed Moore Stephens S.à.r.l., Luxembourg, asthe external auditor (réviseur d’entreprises) of its consolidated accounts.Investor RelationsOn 23 February 2007 the Board of Directors appointed Mr. Alberto Mussini, in his capacity asCFO, as head of investor relations, in accordance with the Code of Conduct.131

Senior Management of the GroupMembers of the senior management of the Company’s subsidiaries are integral to the managementof the Company’s subsidiaries. With the exception of Marco Fiori, members of the Boardof Directors are not members of the senior management of the Company’s subsidiaries. As aresult, of the members of the Board of Directors, only Marco Fiori is active in the day-to-daymanagement of the Company’s subsidiaries.The following individuals are members of the senior management of the Company’s respectivesubsidiaries:Name Principal Activity Business AddressMarie Anne di Giovanni . . . . . . . .Antonio Carlos Balestra diMottola . . . . . . . . . . . . . . . . . .Alberto Mussini . . . . . . . . . . . . . .Michael Obling . . . . . . . . . . . . . .William Henry Nicolas ReardonSmith. . . . . . . . . . . . . . . . . . . .Tine April (Prille) Thuesen . . . . . .Michael Valentin . . . . . . . . . . . . .Head of Operations, d’AmicoTankers SAMFinancial Controller, d’AmicoTankers LimitedChief Financial Officer, d’AmicoTankers LimitedVice-President and Head of thetanker activities of d’Amico,Tankers Singapore Pte. Ltd.Director, d’Amico Tankers UKLimitedGeneral Manager for Operations,d’Amico Tankers Singapore Pte.Ltd.Chief Operating Officer andExecutive Vice-President, d’AmicoTankers Limitedd’ Amico Tankers SAM 20 bd deSuisse 98000 Monacod’Amico Tankers Limited25 Fitzwilliam Square, Dublin 2,Irelandd’Amico Tankers Limited25 Fitzwilliam Square, Dublin 2,Irelandd’Amico Tankers Singapore PteLtd. 6 Battery Road, #14-06/07—Singapore 049909d’Amico Tankers UK Limited,Queen Anne’s Gate Buildings, 6 thfloor, 2 Dartmouth Street,London SW1GH 9BP (UnitedKingdom)d’Amico Tankers Singapore PteLtd., 6 Battery Road, #14-06/07—Singapore 049909d’Amico Tankers Limited25 Fitzwilliam Square, Dublin 2,IrelandMarie Anne di Giovanni. Marie Anne di Giovanni has been involved with the d’Amico Groupsince 1988. She was employed in the liner department of d’Amico Società di Navigazione S.p.A.in Rome until 1995 when she moved to the tanker department as an assistant in tankerchartering and operations management. Between 1996 and 2000 Ms. di Giovanni was employedby COGEMA S.A.M. in the tanker department and was supervising the chartering of tonnage onthe spot market. In 2000 she was appointed as vice-president of the same institution, withresponsibility for operations management for dry cargo and tankers. Ms. di Giovanni graduatedfrom the Sorbonne University in Paris with a degree in Foreign Languages and Economics in1988. She lives in Beausoleil, France.Antonio Carlos Balestra di Mottola. Antonio Carlos Balestra di Mottola has worked for d’AmicoGroup companies since 2003 in capacity as financial controller, with the responsibility forpreparing budgets and financial forecasts for the d’Amico Group companies. He was alsoresponsible for evaluating new investments and business ventures, and represented the d’AmicoGroup in one such venture. Prior to his employment with the d’Amico Group, Mr. Balestra diMottola was involved in the capital and mergers and acquisitions markets through LehmanBrothers in London and New York, and through Banco Brascan in Sao Paulo, Brazil. Hegraduated from the London School of Economics with a BSc. in Economics in 1996 and from theColumbia Business School with an MBA in Finance in 2003. Mr. Balestra di Mottola lives inMonte Carlo, Monaco.Alberto Mussini. Alberto Mussini has recently joined d’Amico International Shipping S.A.,acting as Chief Financial Officer of the Company and of its subsidiary d’Amico Tankers Limited.132

Prior to joining, Mr. Mussini worked as senior manager at Deloitte & Touche in Rome and Milan,and was responsible for auditing large and multinational manufacturing groups. From 2004 toearly 2006 Mr. Mussini held the position of group administration, reporting and controlmanager at Tiscali S.p.A. and in 2006 he was appointed as chief financial officer of Tiscali ItaliaS.p.A. Mr. Mussini obtained a degree in Economics from Parma University in 1987. He is alsoqualified as a certified public accountant (dottore commercialista) as well as a certified auditorin Italy (revisore contabile). Mr. Mussini lives in Pianoro, Italy.Michael Obling. Michael Obling has been vice-president and head of the tanker activities ofd’Amico Tankers Singapore Pte. Ltd. (previously d’Amico Shipping Singapore Pte. Ltd.) since May2005. He has 14 years of experience in chemical and edible oil and tanker chartering, working asa broker and agency trainee with Bay Shipping from 1992 to 1994, as a competitive tankerbroker in Hamburg, Germany with Frachtcontor Junge & Co from 1994 until 1997, and as atanker chartering assistant with A/S Dampskibsselskabet TORM from 1997 until 1998. He was acompetitive tanker broker with Maersk Broker from 1998 until 2000 and the general managerof tanker chartering at Copenhagen Tankers, both in Singapore and Copenhagen, from 2000until 2005. He has a degree in Business from Randers Business College, obtained in 1991, adiploma in Marketing from 1992 and a diploma in Maritime Law. He has also participated inworkshops and seminars conducted by Maersk- A.P. Moller, Marstal Navigations School Denmarkand BIMCO. Mr. Obling lives in Singapore.William Nicolas Henry Reardon Smith. Nicolas Reardon Smith has been a director with thed’Amico Group since 2002 when the Group set up their UK company, d’Amico Tankers UKLimited. He is also a director of d’Amico Ireland Limited. Before joining the d’Amico Group hiscareer spanned some 20 years in shipping with the A.P. Moller Group as well as Stolt NielsenTransportation Group Limited. From 1982 to 1987 he was employed by Maersk in the UK as ashipbroker before taking the position of deputy manager of the Panamax and LR Producttankers with Maersk Tankers in Copenhagen, where he resided for five years between 1987 and1992. In 1992 he took the position of tanker chartering manager at Stolt Nielsen in London tocharter their Large Chemical Tankers within the clean petroleum and vegetable and palm oilmarkets. From 1976 to 1979 he was educated at Milton Abbey Public School and at StrodesCollege Egham from 1979 to 1982. He also obtained a shipping certificate from the City ofLondon Business School. Mr. Reardon Smith lives in London, UK.Tine April (Prille) Thuesen. Prille Thuesen has been general manager for tanker operations ind’Amico Tankers Singapore Pte. Ltd. since August 2005 and is now general manager ofoperations in d’Amico Shipping Singapore Pte. Ltd. She has 10 years experience in chemical andproduct tanker operation working for KIL Shipping, Copenhagen Tankers and A/S DampskibsselskabetTORM. She was stationed in Singapore to start up TORM’s tanker operation in theFar East and in 2005 she was appointed deputy general manager and head of TORM’s MRoperations. In 1996 Ms. Thuesen obtained a degree in Business from Niels Brock CopenhagenBusiness College. She subsequently obtained a Diploma in Maritime Law and she has participatedin workshops and seminars at Lloyds Maritime Academy, Skuld School Oslo, MarstalNavigations School Denmark and BIMCO. Ms. Thuesen lives in Singapore.Michael Valentin. Michael Valentin has acted as the chief operating officer and executive vicepresidentof the d’Amico Group’s tanker operations since March 2000. He also serves as adirector of d’Amico Tankers Limited and various other Group companies. Before joining thed’Amico Group, his earlier career spanned approximately 19 years with Maersk Tankers/A.P.Moller, and included playing a key role in the development of Maersk’s product tankersdivision. He was appointed general manager of this division in 1995 and a director in 1997.Mr. Valentin has a bachelor’s degree from Rungsted Gymnasium, Denmark, and he alsocompleted the Maersk—A.P.Moller Shipping Academy course between 1981 and 1985, and theMaersk—A.P.Moller management programme in 1996. Mr. Valentin lives in Monte Carlo,Monaco.Compensation and Shareholdings of Board Members and other Senior ManagementAll board members receive compensation for their services as members of the Board of Directorsand are reimbursed for their expenses. Such compensation consists of an annual global amountof up to $750,000. Such annual global compensation will be allocated among the members of133

the Board of Directors according to the decision of the Board of Directors. We also provide allmembers of the Board of Directors with directors’ and officers’ insurance.Each of Mr. Cesare d’Amico and Mr. Paolo d’Amico indirectly hold a significant investment inthe Selling Shareholder. See “Principal and Selling Shareholder”.We have no prior compensation figures as we are a newly incorporated company, formed inFebruary 2007 during the reorganisation of the d’Amico Group. Various members of our seniormanagement were working prior to the reorganisation within the d’Amico Group, renderingservices to companies that are now our subsidiairies.We expect that Marco Fiori’s total cash compensation as member of the senior management,excluding his compensation as member of the Board of Directors, will consist of a gross salary of3298,000 in 2007. In addition, Marco Fiori is entitled to payment of a discretionary bonus andwill receive additional compensation through participation in the Company’s stock option plan.The total compensation of the senior management of the Group (Marco Fiori, Michael Valentinand Alberto Mussini) for the year 2007 will be 31,550,000. Marco Fiori, Michael Valentin andAlberto Mussini, as members of the senior management of the Group, will also be grantedoptions to purchase Shares in the Company. This stock option plan will be executed shortlyfollowing this Offering.In addition, each member of the senior management of the Group is entitled to payment of adiscretionary bonus and some members of the senior management will receive additionalcompensation through participation in the Company’s planned stock option plan that will bedetermined shortly after the Offering. In terms of number of shares to be issued, the stockoption plan will not exceed 2,631,774 Shares.Certain Information on the Members of the Board of Directors, Audit Committee,Compensation Committee and Senior Management of the Company’s SubsidiariesNo member of the Board or the senior management of the Company’s subsidiaries has, withinthe past five years, been convicted of any fraudulent offences, publicly incriminated and/orsanctioned by statutory or regulatory authorities (including professional associations) or, actingin the capacity of a member of the administrative, management or supervisory entity or as afounder of an issuer, been associated with any bankruptcies and/or insolvencies, receiverships orliquidations except as indicated with respect to certain companies under “Directorships Held byBoard Members”. No member of the Board or the senior management of the Company’ssubsidiaries has, within the past five years, been deemed by a court to be unfit for membershipin an administrative, management or supervisory entity of a company or to be unfit to exercisemanagement duties or to manage the business of an issuer.None of the members of the Board of Directors or the senior management of the Group isrelated to one another by blood or marriage, except for Mr. Cesare d’Amico and Mr. Paolod’Amico, members of our Board of Directors, who are cousins and descendants of the foundersof the d’Amico Group.Conflicts of InterestAs of the date of this Prospectus, none of our directors, statutory auditor, independent auditoror managers believes to be in conflict of interest (or to have a potential conflict of interest) withcarrying out his or her responsibilities to us, except that Mr. Cesare d’Amico and Mr. Paolod’Amico as a result of their ownership of a significant percentage of the Company’s Sharesmight potentially have a conflict of interest between their duties to the Company and theirinterests as controlling shareholders. See also “Risk Factors—Risks relating to the Offering—Following this Offering, the Selling Shareholder will be able to control our Company, includingthe outcome of shareholder votes” and “Principal and Selling Shareholder”. In addition, noneof the foregoing persons are involved or have been involved in any transactions with theCompany or any member of the Group, except that some of our directors and managers haveacted as representatives of certain related parties, indicated above, in connection with transactionssummarised under the section “Related Party Transactions”.134

Principal and Selling ShareholderThe following table sets forth information regarding the ownership of the Company’s shares asof the date hereof and as adjusted to reflect the Offering and the exercise of the Over-Allotment Option in full:Shares OwnedBefore the OfferingShares Owned After theOffering, Assuming theOver-AllotmentOption isNot Exercised (1)Shares Owned After theOffering, AssumingExercise of the Over-Allotment Option inFull (2)Owner Number Percent Number Percent Number Percentd’Amico International S.A. . . . 128,956,920 100% 89,969,944 60% 80,972,950 54%Public float . . . . . . . . . . . . . . . . — — 59,979,963 40% 68,976,957 46%Total ..................... 128,956,920 100% 149,949,907 (3) 100% 149,949,907 (3) 100%(1) Assumes the sale of 59,979,963 Shares in the Offering without regard to the Over-AllotmentOption.(2) Assumes the sale of 68,976,957 Shares in the Offering, including all Shares subject to theOver-Allotment Option.(3) Includes 20,992,987 newly issued Shares.None of the Company’s shareholders has voting rights different from any other holders of theCompany’s Shares.The Selling Shareholder was incorporated in the Grand Duchy of Luxembourg on 17 October1988 with registered number B-29027, as a joint stock company under the name of d’AmicoInternational S.A. The registered office and principal place of business of the Selling Shareholderis at 12, rue Ste Zithe, L-2763 Luxembourg. The Selling Shareholder is ultimately controlled byMr. Paolo d’Amico and Mr. Cesare d’Amico, entrepreneurs belonging to a family which hasoperated in the shipping industry for over 70 years. Mr. Paolo d’Amico holds 3,000,000 votingshares constituting 50.0% of the share capital of d’Amico Società di Navigazione S.p.A. andMr. Cesare d’Amico holds 1,076,010 voting shares and, through controlling shareholdings inFi.Pa. Finanziara di Participazione S.p.A., a company owned by Mr. Cesare d’Amico, Mrs. MariaCristina d’Amico and Mrs. Giovanna d’Amico (his sisters), Mr. Cesare d’Amico indirectly holds afurther 1,923,990 voting shares, constituting 17.93% and 32.07%, respectively, of the sharecapital of Società di Navigazione S.p.A. Società di Navigazione S.p.A. holds 99.99% of the sharecapital of the Selling Shareholder. As a result, Mr. Paolo d’Amico and Mr. Cesare d’Amicoindirectly beneficially own 100% of the Company’s Shares.To the Company’s knowledge, there are no arrangements in place, the operation of which mayat a subsequent date result in a change in control of the Company or the Selling Shareholder.See also “Risk factors—Risks relating to the Offering—Following this Offering, the SellingShareholder will be able to control our Company, including the outcome of shareholder votes”.For a description of the ownership interests of the Company’s directors and senior managementin the Company, see “Management—Compensation and Shareholdings of Board Members” and“Management—Compensation and Shareholdings of other Senior Management of the Group”.135

Related Party TransactionsWe are a wholly owned subsidiary of the Selling Shareholder and, as such, various entities inour Group have, in the past, entered into, and we expect to enter into in the future, contractualarrangements with the Selling Shareholder, entities controlled by the Selling Shareholder andother entities in the d’Amico Group. We believe that the prior and existing transactions andarrangements have been negotiated on an arm’s length basis on market terms and conditions.However, there can be no assurance that better terms could not have been obtained from thirdparties. See “Risk Factors—Risks relating to the Group—We have and may enter into agreementswith related parties on terms which may be less favourable than otherwise available from thirdparties”. We expect that any arrangements entered into in the future with the SellingShareholder, entities controlled by the Selling Shareholder and other entities in the d’AmicoGroup will be entered into on an arm’s length basis.The following is a summary of the material terms of the significant agreements, arrangementsand transactions among us, the Selling Shareholder, entities controlled by the Selling Shareholderand companies within the d’Amico Group for the three year period ended 31 December2006 and for the subsequent period up to and including the date of this Prospectus.ReorganisationWith effect from 2 March 2007, we acquired in a share for share transaction the entire issuedshare capital of d’Amico Tankers Limited from d’Amico International S.A. in consideration forthe allotment by us of 128,956,920 shares with no nominal value to d’Amico International S.A.The total value of the transaction was $128,956,920. In addition, d’Amico Tankers Limitedacquired the interests listed below from d’Amico International S.A. The acquisition price paid byd’Amico Tankers Limited is also set out below.Company Name % Interest Transfer ValueHigh Pool Tankers Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 3 2Glenda International Shipping Limited . . . . . . . . . . . . . . . . . . . . . . . . . 100 3 100Glenda International Management Limited . . . . . . . . . . . . . . . . . . . . . 100 $ 4,888DM Shipping Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 $70,121d’Amico Tankers Limited also acquired 33.3% of the issued share capital of Handytankers K/Sfrom COGEMA S.A.M. The consideration was 25,000 Danish Kroner.Commercial RelationshipsPooling ArrangementsThrough d’Amico Tankers Limited, we participate in the High Pool and Handytankers Pool,which are operated by High Pool Tankers Limited and Handytankers K/S respectively. d’AmicoTankers Limited also has a commercial management arrangement with Glencore which isoperated through Glenda International Management Limited. Various d’Amico Group Companieshave provided services to these pools and to Glenda International Management Limited. Inparticular, d’Amico Ireland Limited provides certain management and operational services toHigh Pool Tankers Limited pursuant to an agreement dated 9 August 2004. d’Amico FinanceLimited has an agreement with High Pool Tankers Limited of the same date pursuant to whicheach of the parties can make loans to the other. No loans have been made to date. COGEMAS.A.M. provides operational management services to the vessels of the Glenda InternationalManagement Limited fleet on a commission basis. For further details of these arrangements, see“Business”.On 14 May 2004, Solar Shipping Inc., the Export-Import Bank of China, and certain other Banksand Financial Institutions entered into a Facility Agreement pursuant to which Solar ShippingInc. borrowed funds for the acquisition of a vessel, the Cielo di Guangzhan. d’Amico TankersLimited is the bareboat charterer of that vessel. As part of the security package, d’Amico TankersLimited agreed to assign to Calyon all of its rights and interests in its earnings, proceeds ofinsurance, any sub-charter of the relevant vessel and any requisition, compensation arising inrespect of the vessel by way of floating charge.136

Vessel PurchasesThe following table sets forth the amount paid by the Group for each of the periods indicatedto purchase at historic cost six existing vessels and four vessels in the course of construction fromother entities in the d’Amico Group:2004 2005 2006Existing vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $178,100,000 — —Vessels in the course of construction . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,601,000 — —The existing vessels were acquired from the following companies: Aniston Maritime Limited(vessel: High Spirit; High Challenge), Hampton Navigation Limited (Cielo di Londra), LoyaltyMaritime Navigation Limited (Cielo di Salerno), High Endeavour Limited (High Endeavour) andHigh Endurance Limited (High Endurance). d’Amico Società di Navigazione S.p.A. both supervisedthe construction of, and assisted in obtaining financing for, the vessels High Enduranceand High Endeavour. It received total payments of $673,000 for these services.The vessels in the course of construction were acquired from four group companies, HighCourage Limited, High Emperor Limited, High Monarch Limited and High Valor Limited by wayof a novation of existing contracts with the Korean shipbuilder, STX Shipbuilding Co. Limited. Atthe same time, agreements between these companies and d’Amico Società di NavigazioneS.p.A., pursuant to which d’Amico Società di Navigazione S.p.A. agreed to supervise theshipbuilding contracts, were also novated to d’Amico Tankers Limited.In addition, during the year ended 31 December 2006, we committed to purchasing two MRnewbuildings through DM Shipping Limited.Vessel DisposalsThe sale of four vessels, Cielo di Baffin, Cielo di Biscaglia, Cielo di Baltico and Cielo di Bothnia,to a group company, Paul Maritime Co. Limited, by d’Amico Tankers Limited was completed inJanuary 2006 for a total of $70.0 million.Time ChartersIn 2002 and 2003 we entered into agreements, through d’Amico Tankers Limited, to charterthree vessels (Cielo di Napoli, Cielo di Milano and Cielo di Roma) from d’Amico Società diNavigazione S.p.A. These vessels are chartered on terms similar to those agreed by us in respectof vessels chartered from unrelated third party entities. Pursuant to the charter agreements forthese vessels, we made payments to d’Amico Società di Navigazione S.p.A. of, in aggregate,$14.8 million in each of 2004 and 2005 and $18.2 million in 2006. While these time chartersexpire in January and February 2011, d’Amico Tankers Limited has an option to renew.In 2006, d’Amico Tankers Limited chartered in four vessels (Cielo di Baffin, Cielo di Biscaglia,Cielo di Baltico and Cielo di Bothnia) which it had sold to Paul Maritime Co. Limited, a company100% owned by the Selling Shareholder, at a rate of $19,000 per day per vessel. In 2006, wepaid a total of $1.4 million to Paul Maritime Co. Limited for the charter of these vessels. Thesetime charters expired upon the re-sale of these vessels to third parties in 2006.Bareboat Chartersd’Amico Tankers Limited has in the past entered into bareboat charters with d’Amico Groupcompanies. The amounts charged under such agreements were as follows:2004 2005 2006Aniston Maritime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,809,000 — —Hampton Navigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,462,000 — —Loyalty Maritime Navigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,527,000 — —High Endurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,436,000 — —High Endeavour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,118,000 — —137

Commercial and Operational Managementd’Amico Ireland Limited and COGEMA S.A.M. have provided commercial, administrative andoperational services to d’Amico Tankers Limited pursuant to several management agreements.COGEMA S.A.M. outsourced part of the services to d’Amico Tankers Singapore Pte. Ltd. andd’Amico Shipping U.K. Limited. The following fees and commissions were paid by d’AmicoTankers Limited in respect of these services during the last 3 financial years:2004 2005 2006COGEMA S.A.M. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,839,760 $2,713,310 —d’Amico Ireland Limited . . . . . . . . . . . . . . . . . . . . . . . . . . $ 97,005 $ 243,520 $3,286,955On 9 August 2004, d’Amico Tankers Limited entered into an agreement with COGEMA S.A.M.for the provision by COGEMA S.A.M. of commercial management, operations and accountingservices, assistance in bunker and lubes supply services and certain other services effective as of1 January 2004. Initially, an annual fee of 31.45 million was payable for the services. This feewas increased to 32.3 million on 9 August 2005. The agreement expired on 31 December 2005.On 2 January 2006, d’Amico Tankers Limited entered into an agreement with d’Amico IrelandLimited for the provision of commercial management, operations and accounting services,assistance in bunker and lubes supply services and certain other services (i.e. technical, SQE andquality management, insurance and claims management) to d’Amico Tankers Limited. An annualpro-rated fee of 32.5 million was payable in respect of these services. This agreement expired on31 December 2006. d’Amico Ireland Limited outsourced these functions to COGEMA S.A.M.d’Amico Ireland Limited also provided administrative services to d’Amico Tankers Limited during2004 and 2005.On 5 March 2007, d’Amico Tankers Limited entered into a service agreement with d’AmicoTankers Monaco S.A.M. for the provision of commercial management, operations, administrativeand accounting services and assistance in bunker and lubes supply services. Under this agreement,d’Amico Tankers Limited undertook to pay a fee of 1.25% for fixture of vessels and$100,000 per year for administration and operations assistance, d’Amico Tankers Monaco S.A.M.entered into an agreement with d’Amico Tankers Singapore Pte. Ltd. and d’Amico Tankers UKLimited for the provision of the above services on similar terms. Under these agreements,d’Amico Tankers Singapore Pte. Ltd. and d’Amico Tankers UK Limited receive respectively fees of$400,000 and $150,000 per year for administration and operations assistance and a fee of 1.25%for the fixture of vessels.COGEMA S.A.M., d’Amico Singapore Pte. Ltd. and d’Amico Shipping U.K. Limited also receivedbrokerage commissions, expressed as a percentage of freight, for finding employment for vesselsoperated directly by d’Amico Tankers Limited and through High Pool Tankers Limited and thecommercial arrangement with Glencore. The commissions paid during the last three financialyears by d’Amico Tankers Limited were:2004 2005 2006COGEMA S.A.M. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 64,000 $499,000 $1,949,000d’Amico Singapore Pte Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . $1,058,000 $465,000 $ 162,000d’Amico Shipping U.K. Limited . . . . . . . . . . . . . . . . . . . . . . $ 260,000 $281,000 $ 748,000Technical ManagementIn the years ended 31 December 2004 and 2005, d’Amico Tankers Limited contracted directlywith d’Amico Società di Navigazione S.p.A. and, for the year ended 31 December 2006, throughd’Amico Ireland Limited for the provision of technical, insurance as well as safety, quality andenvironmental (SQE) management services for all owned and bareboat charter vessels ofd’Amico Tankers Limited, excluding Cielo di Guanghzou, which was managed by Ishima PteLimited, a subsidiary of the Selling Shareholder. The tables below set forth the amounts receivedby d’Amico Società di Navigazione S.p.A. and d’Amico Ireland Limited in respect of theseservices.138

Technical Management2004 2005 2006d’Amico Società di Navigazione S.p.A. . . . . . . . . . . . . . . . . $945,017 $2,481,249 —d’Amico Ireland Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — $2,213,534SQE2004 2005 2006d’Amico Società di Navigazione S.p.A. . . . . . . . . . . . . . . . $1,427,630 $1,915,458 —d’Amico Ireland Limited . . . . . . . . . . . . . . . . . . . . . . . . . . — — $2,396,414On 9 August 2004 d’Amico Tankers Limited entered into an agreement with d’Amico Società diNavigazione S.p.A. which replaced an earlier agreement dated 15 January 2003. The agreement,which expired on 31 December 2005, related to the provision of SQE services, technicalmanagement, maritime insurance management and vetting management services by d’AmicoSocietà di Navigazione S.p.A. A fee of 350,000 per vessel per annum was payable in respect ofthe SQE, maritime insurance management and vetting services. A fee of 3150,000 per annumper owned and/or bareboat chartered in vessel was payable in respect of the technical managementservices.d’Amico Tankers Limited entered into an agreement on 2 January 2006 with Ishima Pte Limitedin respect of the technical management of the vessel Cielo di Guangzhou. The agreed managementfee is US$9,500 per month.On 2 January 2006 d’Amico Tankers Limited and d’Amico Ireland Limited entered into anagreement for the provision of SQE, technical management, maritime insurance management,vetting management and other services, described above under “Commercial and OperationalManagement” by d’Amico Ireland Limited. Under this agreement, d’Amico Ireland Limited alsoagreed to supervise the performance of any crewing agreement which d’Amico Tankers Limitedhad with any other parties. Under the agreement, d’Amico Tankers Limited undertook to paythe following fees:• 355,000 per vessel on an annual pro-rated basis in respect of SQE, insurance managementand vetting management services;• 3155,000 per vessel on an annual pro-rated basis in respect of technical managementservices; and• 32.5 million on an annual pro-rated basis in respect of certain commercial managementservices, as described above under “Commercial and Operational Management”.The agreement expired on 31 December 2006. This agreement (excluding certain commercialservices and some services related to crewing) was sub-contracted to d’Amico Società diNavigazione S.p.A.On 2 January 2007 d’Amico Tankers Limited and d’Amico Ireland Limited entered into a newmanagement agreement, with effect from 1 January 2007 and due to expire on 31 December2009. A management fee of $200,000 is payable per owned and/or bareboat chartered in vesselon an annual pro-rated basis. Crew management, insurance and planned maintenance systemservices are provided pursuant to this agreement. The management fees are negotiableannually. An additional fee of $15,000 per vessel per annum on an annual pro-rated basis ispayable in respect of certain other services provided, including SQE and insurance management.The agreement is automatically renewable for a further three-year period on expiry of the initialterm. d’Amico Ireland Limited has, in turn, entered into an agreement with d’Amico Società diNavigazione S.p.A. dated 2 January 2007 in respect of the provision of these services, on similarterms. An annual management fee of $185,000 per owned and/or bareboat chartered in vessel ispayable. The management fee is negotiable annually. An additional fee of $12,000 per vesselper annum is payable in respect of certain services.139

CrewingFor each of the years 2005 and 2006, crewing services were provided to d’Amico Tankers Limitedin respect of our owned vessels by Sirius Ship Management S.r.l., a company which is 60%owned by d’Amico Società di Navigazione S.p.A., pursuant to a crew management agreementdated 3 January 2005. Under this agreement, a standard management fee of 32,000 per vesselper month was payable. An additional fee of $1,000 per vessel per month in respect ofrecruiting was also payable. This agreement replaced an earlier crew management agreementon similar terms with Ocean Crew Management Limited, a company outside the d’Amico Group.The agreement with Sirius Ship Management S.r.l. expired on 31 December 2006. A similararrangement remains in place in respect of the vessel Cielo di Guanghzou. This will expire at theend of the second quarter of 2007.d’Amico Tankers Limited made payments in aggregate of $487,122 and $476,369 in 2005 and2006 respectively, for the services proviced pursuant to such agreements.Pursuant to the management agreement dated 2 January 2007, referred to above, crewingservices will be provided by d’Amico Ireland Limited to d’Amico Tankers Limited.d’Amico Ireland Limited has outsourced part of the crew management function to Sirius ShipManagement S.r.l. and d’Amico Shipping India, through d’Amico Società di Navigazione S.p.A.pursuant to the service agreement dated 2 January 2007, referred to above.In addition, on 2 January 2007, d’Amico Ireland Limited and Sirius Ship Management S.r.l.entered into an agreement, with effect from 1 January 2007 in respect of crew payroll, pensionadministration, tax and social security arrangements services to be provided in respect of thecrew of our vessels. An annual pro—rated management fee of $5,000 per owned vessel ispayable. This agreement is to remain in force until 31 December 2007 and is thereafterrenewable on an annual basis.Bunker FuelIn 2006 d’Amico Tankers Limited, High Pool Tankers Limited and Glenda International ManagementLimited purchased bunker fuel from Rudder S.A.M., a Monaco based bunker tradingcompany which is 85% owned by the Selling Shareholder. While no written contract has beenentered into in respect of the provision of bunker fuel, we believe that all such transactionswere conducted on arm’s length terms. In 2006, d’Amico Tankers Limited paid a total of$14.2 million, High Pool Tankers Limited paid $3.8 million and Glenda International ManagementLimited a total of $9.0 million to Rudder S.A.M. for bunker fuel. d’Amico Tankers Limitedwill continue to purchase bunker fuel from Rudder S.A.M. on the basis set forth above.Communication and Information Technology ServicesIn 2004, 2005 and 2006, communication and certain other services were provided to d’AmicoTankers Limited’s fleet by Compagnia Generale Telemar S.p.A., an Italian company which is58,0164% owned by d’Amico Società di Navigazione S.p.A. pursuant to individual agreementsentered into in respect of each owned vessel in our fleet. d’Amico Tankers Limited paid totalfees of $413,674, $558,238 and $1.2 million to Compagnia Generale Telemar S.p.A. in 2004, 2005and 2006, respectively, for the provision of communication services and certain spare parts inrespect of the services.An agreement per each owned and/ bareboat chartered in vessel in respect of these services wasentered into in 2006 and Compagnia Generale Telemar S.p.A. will continue to provide theseservices to d’Amico Tankers Limited.d’Amico Società di Navigazione S.p.A. provided information technology services for our fleet foreach of the years 2004, 2005 and 2006. No formal agreement was entered into. d’Amico Societàdi Navigazione S.p.A. will provide these services pursuant to an information system managementagreement to d’Amico Tankers Limited and each of the other companies in the Group throughd’Amico Ireland Limited. The main terms of the information system management are containedin the new ship management agreements which were entered into between d’Amico TankersLimited and d’Amico Ireland Limited and between d’Amico Ireland Limited and d’Amico Societàdi Navigazione S.p.A. on 2 January 2007. Under these agreements, d’Amico Società di140

Navigazione S.p.A. will provide information system software, of which the following are themain features: a ship to shore and shore to ship e-mail package with itemised billing providingcost efficient communications, and a computerised maintenance system including inventorycontrol and automated purchase order handling.COGEMA S.A.M. provided information technology services in respect of commercial, financial,operations and invoicing functions to d’Amico Tankers Limited for each of the years 2004, 2005and 2006. No formal agreement was entered into. COGEMA S.A.M. will provide these servicespursuant to an information management agreement to d’Amico Tankers Limited and each ofthe other companies in the Group through d’Amico Ireland Limited. The main terms of theagreement which was effective from 1 January 2007 are as follows: d’Amico Tankes Limited willbe supplied with services which include the technical management of their technical system, themaintenance of their telecommunication network, the maintenance of basic hardware andsoftware, training, development of human resources and professional development of staff.d’Amico Ireland Limited (who has a subcontract with COGEMA S.A.M.) is to provide such servicesvia its own means, equipment and consultants or trusted service providers. The annual licencefee to be paid by d’Amico Tankers Limited is 3200,000 plus VAT, which is to be paid in advancein quarterly instalments of 350,000 plus VAT.OtherOn 20 September 2004, d’Amico Società di Navigazione S.p.A. entered into an agreement toprovide technical support to d’Amico Tankers Limited in relation to the supervision of repairs tothe vessel “High Endurance”. Total fees of $400,000 were paid in connection with thisagreement. The agreement terminated on the completion of the repairs.Financial RelationshipsLoansd’Amico Tankers Limited was, during the years 2004, 2005 and 2006, partially financed by intragrouploans from d’Amico Finance Limited, a wholly owned Irish subsidiary of the SellingShareholder. These loans were made pursuant to an agreement dated 9 August 2004 andeffective from 12 February 2004. Interest at a rate of U.S. LIBOR plus 2% was payable on anyloan made to d’Amico Tankers Limited. Interest at a rate of U.S. LIBOR minus 0.5% was payableon any loan made to d’Amico Finance Limited. The agreement is automatically renewed on anannual basis unless either party terminates by giving one month’s notice.d’Amico Tankers Limited also made loans to Medbulk Maritime Limited, a d’Amico Groupcompany, under a Netting Agreement between these two entities and d’Amico Dry Limited,effective as of 1 April 2006. The average outstanding balance of such loan to Medbulk MaritimeLimited was $17.0 million and it was totally repaid on 30 November 2006. Interest at a rate ofU.S. dollar LIBOR minus 1.5% was payable on any loan between these three entities. Details ofthe loans outstanding at year end to and from d’Amico Tankers Limited are set out below.Amount Outstanding As of31 DecemberLender 2004 2005 2006d’Amico Finance Limited . . . . . . . . . . . . . . . . . . . . . . $90,773,698 $106,338,587 $36,496,203Medbulk Maritime Limited . . . . . . . . . . . . . . . . . . . . — — —d’Amico Dry Limited . . . . . . . . . . . . . . . . . . . . . . . . . — —d’Amico International S.A. . . . . . . . . . . . . . . . . . . . . $16,548 $149,150 $2,323,702Net interest paid by d’Amico Tankers Limited was as follows:2004 2005 2006d’Amico Finance Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . $238,000 $5,238,000 $1,914,763d’Amico Dry Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — $1,082,126In addition, in 2004, other companies of the Group paid net interest of $691,000 to d’AmicoFinance Limited and High Endeavour Limited and High Endurance Limited paid $199,000 and$181,000, respectively, to the Selling Shareholder.141

Net interest received by d’Amico Tankers Limited was as follows:2004 2005 2006Medbulk Maritime Limited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — $226,328In aggregate, loans of $2.3 million were made by the Selling Shareholder to DM ShippingLimited for the purposes of financing vessel acquisitions pursuant to two agreements, bothdated 2 November 2006. These loans remain outstanding and there will be a novation tod’Amico Tankers Limited in April 2007. Interest at a rate of Japanese TIBOR plus 1% is payableon these loans.Hedgingd’Amico Tankers Limited and d’Amico Finance Limited are party to an agency agreement dated9 August 2004 pursuant to which d’Amico Finance Limited has undertaken to provide certainfinancial markets services, principally freight hedging. A commission of 0.25% on the value ofeach contract concluded by d’Amico Finance Limited on behalf of d’Amico Tankers Limited waspayable. No transactions have been carried out under the terms of this agreement. Theagreement was terminated on 29 December 2006.Based on instructions dated 31 March 2006, d’Amico Finance Limited has provided certaincurrency hedging services to d’Amico Tankers Limited. The agreement provides for a $10,000 feeper vessel and a 0.25% commission should the hedging strategy produce an improvementcompared to the market. There is one outstanding transaction for a total of JPY 3,720,000,000.Guarantees/Letters of Comfortd’Amico Tankers Limited has procured financing from Calyon, Banca Intesa and Bank of Irelandon the basis of guarantees from the Selling Shareholder and letters of comfort from d’AmicoSocietà di Navigazione S.p.A. There is no written agreement governing the provision ofguarantees by d’Amico International S.A.The letters of comfort were provided on the basis of a service agreement dated 5 January 2006between d’Amico Tankers Limited and d’Amico Società di Navigazione S.p.A. and effective from1 January 2006:d’Amico Tankers Limited pays fees of 0.25% per annum on amounts guaranteed, $5,000 perannum per vessel in connection with each performance bond and a lump sum of $5,000 inconnection with each letter of patronage or comfort.d’Amico Tankers Limited was requested from time to time to provide performance guaranteesfrom d’Amico Società di Navigazione S.p.A. or d’Amico International S.A. on long-term charterin contracts it negotiated.The agreement with d’Amico Società di Navigazione S.p.A. is of indefinite duration and is still ineffect.Finance AgreementsA senior loan facility of $217 million and a junior revolving credit facility of $25 million weregranted to d’Amico Tankers Limited and two other companies in the d’Amico Group, d’AmicoFinance Limited and Medbulk Maritime Limited, in order to facilitate the partial refinancing ofexisting indebtedness and the financing of part of the purchase price of certain ships and toprovide working capital facilities. d’Amico Tankers Limited, d’Amico Finance Limited andMedbulk Maritime Limited were joint and several borrowers under the financing of agreements.This loan was repaid on 30 March 2007.A finance agreement dated 2 January 2007 between the Selling Shareholder and d’AmicoTankers Limited relates to loans which may be provided between the parties. A fee of threemonth LIBOR plus 2% is payable on loan to d’Amico Tankers Limited. A fee of three monthLIBOR minus 0.5% is payable on any loan to the Selling Shareholder. This agreement wasterminated. No loans or fees have been paid to date in 2007.142

Otherd’Amico Tankers Limited entered into a funding agreement dated 21 October 2004 with a groupcompany, Comarfin S.A.M. Under this agreement, Comarfin S.A.M. agreed to seek financing ofup to $35.7 million for the purchase of four vessels on behalf of d’Amico Tankers Limited. Acommission of 0.5% was payable pursuant to the agreement. d’Amico Tankers Limited agreednot to apply for financing from Scotia Bank, for a period of three years from date of thisagreement without involving Comarfin S.A.M. on the same terms. Arrangement fees of $45,000and $89,000 were subsequently paid to Comarfin S.A.M. in 2004 and 2005 respectively forassistance in obtaining vessel financing. This agreement has now been terminated.d’Amico Tankers Limited, d’Amico Dry Limited and d’Amico Finance Limited entered into anagreement with Cargill International S.A. dated 4 February 2005 for the purpose of permittingset-off in respect of amounts owed by Cargill International S.A. to the d’Amico Group companiesand vice versa in respect of commercial agreements entered into between the parties, includingcharter parties and freight swaps. This agreement is currently being renegotiated and d’AmicoTankers Limited will no longer be party to this agreement.Other TransactionsIntellectual PropertyOn 2 January 2007 d’Amico Tankers Limited entered into a licence agreement with d’AmicoSocietà di Navigazione S.p.A. pursuant to which d’Amico Tankers Limited was granted a nonexclusiveright to use the “d’Amico Tankers” trademark and flag logo with regard to theproduct tanker sector. A fee of 3200,000 per annum is payable by d’Amico Tankers Limitedunder this agreement. The agreement will automatically renew for a further five-year period atthe end of the current term unless otherwise terminated.Real Estated’Amico International S.A. is currently in the process of negotiating a lease for 100 squaremeters of office space at 25/C Boulevard Royal, L-2449 Luxembourg. d’Amico InternationalShipping S.A. will sub-lease from d’Amico International S.A. at terms similar to those of themain lease.d’Amico Tankers Limited has sublet approximately 140 square metres of the office building at itsregistered office, at 25 Fitzwilliam Square, Dublin 2, from d’Amico Ireland Limited. d’AmicoIreland Limited has a leasehold interest in the building under a lease for four years and ninemonths ending on 4 February 2011. The total floor area of the buildings subject to this lease isapproximately 348 square metres. The other Irish companies in the Group will also occupy thisbuilding and the address will serve as their registered office. Rent of 340,000 per annum ispayable pursuant to this sublease.d’Amico Tankers Monaco S.A.M. has signed a lease agreement with St. Andrews Estates Limited,a d’Amico Group company for the second floor of the office building previously occupied byCOGEMA S.A.M. at 20 Boulevard de Suisse, MC-98000 Monaco for a period of three years,commencing on 1 January 2007. The total floor area of the buildings subject to this lease isapproximately 544 square metres. Rent of 3265,000, excluding taxes and a service charge ofapproximately 313,000 per annum is payable pursuant to this lease agreement.d’Amico Tankers UK Limited has sublet part (approximately 75% of the 1,230 square footpremises) of the office building currently occupied by d’Amico Shipping U.K. Limited, a companyin the d’Amico Group, at Queen Anne’s Gate Building, 2 Dartmouth Street, London, SW1H 9BP.The contract runs from 1 January 2007 to 16 June 2009. The total floor area of the buildingssubject to this lease is approximately 100 square metres. Rent of approximately £31,000 perannum is payable pursuant to this sublease. In addition, there are service charges of approximately£6,200 and rates of £10,650.d’Amico Tankers Singapore Pte. Ltd. has sublet part of the office building currently occupied byd’Amico Shipping Singapore Pte. Ltd., a company in the d’Amico Group, at 6 Battery Road, #14-07, Singapore, 049909 Singapore, for a period of 2 years, 7 months ending 31 July 2009. This isalso its registered office. The total floor area of the buildings subject to this sub-lease is143

approximately 168 square metres. Rent of SG$149,728 per annum is payable pursuant to thissublease.MiscellaneousBy agreement dated 9 August 2004, d’Amico Ireland Limited agreed to monitor and review theprovision of services by various third parties to d’Amico Tankers Limited, to monitor and reporton the activities of d’Amico Tankers Limited itself, to monitor insurance management and toprovide certain operating and management accounting services. Fees of 375,000, 3200,000 and32,500,000 were paid in 2004, 2005 and 2006 respectively. This agreement has now beenterminated.On 30 September 2005, d’Amico Tankers Limited purchased a fractional ownership (18.75%) inan aircraft (Citation Excel) from Netjets together with the entitlement to use the aircraft for 150hours per year for five years, expiring 29 September 2010 for $2.5 million per year. Maintenancefees and management fees also applied. The aircraft is used mainly within the d’Amico Groupand the time is billed to the relevant entity based on cost.In 2005 and 2006 the following amounts were billed to group companies in connection with theuse of the aircraft:2005 2006d’Amico Dry Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339,019 3293,496Medbulk Maritime Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3 19,183d’Amico International S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343,008 —d’Amico Finance Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,891 3 62,506On 16 February 2007, the board of d’Amico Tankers Limited agreed to ratify the sale of thefractional ownership in the aircraft to COGEMA S.A.M. for $1,912,500. COGEMA S.A.M. willmaintain the contract with the entitlement to 150 hours of airtime per year. Companies of thed’Amico Group will continue to have access to the aircraft and be billed based on cost.Pooling AgreementsNo cash pooling agreement or arrangement has been or is in place between us and any entityin the d’Amico Group nor is it intended that any such agreement or arrangement be put inplace.144

Description of the Company, the Shares andthe Share CapitalThe following is a summary of certain information concerning the Company’s shares and certainprovisions of its By-laws and of Luxembourg and Italian law in effect at the date hereof. At theshareholders’ meetings held on 2 March 2007, the Selling Shareholder approved (i) the currentBy-laws which were amended following the increase of capital and (ii) the By-laws whichconform to the Code of Conduct and the Unified Financial Act and which will take effect on theListing Date. Unless otherwise stated, references to the By-laws herein refer to the By-laws ofthe Company which will take effect on the Listing Date. The information included herein maynot contain all of the information which may be relevant to you in deciding whether to investin the Shares. This summary is qualified in its entirety by reference to the By-laws.GeneralThe Company was incorporated under Luxembourg law on 9 February 2007, as a joint stockcompany (Societé Anonyme). Its share capital is $128,956,920 represented by 128,956,920 shareswith no nominal value. All of the issued and outstanding shares have been validly issued andare fully paid. All Shares issued and outstanding are governed by Luxembourg law.Our articles of association permit the Board of Directors to issue new shares within the limits ofthe authorised share capital of the Company ($200,000,000) in one of several tranches, for anyreason whatsoever including for defensive reasons following, as the case may be, the exercise ofsubscription and/or conversion rights granted by the Board of Directors under the terms andconditions of warrants (which may be separate or attached to shares, bonds, notes or similarinstruments), convertible bonds, notes or similar instruments issued from time to time by theCompany. The new shares may be issued with or without share premium, against payment incash or in kind, by conversion of claims on the Company or in any other manner. The Board ofDirectors is authorised to remove or limit the preferential subscription rights of the shareholdersin case of issue of shares against payment in cash.The authorised unissued share capital of our Company is set at $200,000,000 represented by200,000,000 shares with no nominal value, out of which 71,078,080 shares are not issued.The Company’s registered office is situated at 12, rue Ste. Zithe, L-2763 Luxembourg, GrandDuchy of Luxembourg. The Company is registered with the Luxembourg Register of Commerceand Companies under number B-124.790. The articles of association of the Company arepublished in the Luxembourg Official Gazette—Recueil Spécial des Sociétés et Associations,Mémorial C on 30 March 2007. The articles of association of the Company, have been amendedon 2 March 2007 and the amendments are published in the Mémorial C on 2 April 2007.The business of the Company as described in the corporate object of the Company’s articles ofassociation (article 3) is to carry out all transactions pertaining directly or indirectly to the takingof participating interests in any enterprises in whatever form, operating in the shipping industryincluding the relevant services and facilities, as well as the administration, the management, thecontrol and the development of such participating interests. The Company may in particular useits funds for the setting-up, the management, the development and the disposal of a portfolioconsisting of any securities and patents of whatever origin, participate in the creation, thedevelopment and the control of any enterprise, acquire by way of contribution, subscription,underwriting or by option to purchase and, any other way whatever, any type of securities andpatents, realise them by way of sale, transfer, exchange or, otherwise, have developed thesesecurities and patents. The Company may borrow in any form whatever. The Company maygrant to companies of the Group or to its shareholders any support, loans, advances orguarantees within the limits of the law of 10 August 1915. The Company may take any measureto safeguard its rights and make any transactions whatsoever which are directly or indirectlyconnected with its purposes and which are liable to promote their development or extension.By resolutions adopted on 3 April 2007 the Board of Directors of the Company approved thelisting of up to 149,949,907 shares of the Company on the MTA of the Borsa Italiana. Byresolutions adopted on 23 February 2007 the Board of Directors of the Company approved thepublication of this Prospectus and, by resolution adopted on 3 April 2007, the Offering by theCompany of up to 20,992,987 shares.145

We expect the Board of Directors of the Company to adopt on or around 26 April 2007resolutions approving the issue and allotment on or around 3 May 2007 (such date correspondingto the expected issue date of the new Shares) by the Company of up to 20,992,987 Sharesand the entering into by the Company of the Italian Underwriting Agreement, the InstitutionalUnderwriting Agreement and the Lock-Up Agreement (see “Plan of Distribution”).Each Share confers on its holder the right to vote at ordinary and extraordinary shareholders’meetings of the Company, as well as other proprietary and administrative rights in accordancewith applicable Italian laws and the By-laws. The Company has no other classes of sharesoutstanding. The Shares offered in this Offering including the Shares held by the SellingShareholder on completion of the Offering have been admitted to listing on the MTA.Limitations on ShareholdingsThe transfer of the Company’s shares is not subject to any restrictions other than thosecontemplated by the terms of this Offering. See “Underwriting”. If a shareholder votes its sharesin violation of the By-laws or Luxembourg Laws, the relevant resolutions of the shareholders’meeting may be disputed both on the validity of resolutions passed and for purposes ofdetermining any applicable quorum requirements.Form and Transfer of SharesThe shares will be in the form of registered shares. The Shares are freely transferable. Withrespect to the registered shares, a shareholders’ register which may be examined by anyshareholder will be kept at the registered office. The register will contain the precise designationof each shareholder and the indication of the number and class of shares held, theindication of the payments made on the Shares as well as the transfers of shares and the datesthereof. Ownership of the registered shares will result from the recordings in the shareholders’register. Certificates reflecting the recordings in the shareholders register may be delivered tothe shareholders upon request. The Company may issue multiple registered share certificates.Any transfer of registered Shares will be registered in the shareholders register by a declarationof transfer entered into the shareholders’ register, dated and signed by the transferor and thetransferee or by their representative(s) as well as in accordance with the rules on the transfer ofclaims laid down in article 1690 of the Luxembourg Civil Code. Furthermore, the Company mayaccept and enter into the shareholders’ register any transfer referred to in any correspondenceor other document recording the consent of the transferor and the transferee.Shares may be held directly or with a broker, bank, custodian, dealer or other qualifiedintermediary, which will hold them through a securities settlement system either directly as aparticipant of such system or indirectly through such a participant.Ownership of a share carries implicit acceptance of the Articles of Association and the resolutionsadopted by the general meeting of shareholders.The rights and obligations attached to the shares shall be identical except to the extentotherwise provided by the articles of association or by the Laws.The issued and/or authorised capital of the Company may be increased or reduced one orseveral times by a resolution of the general meeting of shareholders adopted in compliancewith the quorum and majority rules set by these articles of association or, as the case may be, bythe Luxembourg Laws for any amendment of these articles of association.Any new Shares to be subscribed for by contribution in cash will be offered by preference tothe existing shareholders in proportion to the part of the capital which those shareholders areholding. The Board of Directors shall determine the period within which the preferred subscriptionright shall be exercised. This period may not be less than thirty days.Notwithstanding the above, the general meeting, voting in compliance with the quorum andmajority rules set by these articles of association or, as the case may be, by the Luxembourg Lawsfor any amendment of these articles of association may limit or withdraw the preferentialsubscription right or authorise the Board of Directors to do so.146

Existing Registered SharesShares shall be in a dematerialised form and accounted for in deposit accounts held with MonteTitoli and may be settled through Monte Titoli S.p.A., Clearstream Banking, société anonyme(“Clearstream, Luxembourg”), and Euroclear Bank S.A./N.V., as operator of the Euroclear System(“Euroclear”).Pursuant to the agreements made between Monte Titoli S.p.A., Clearstream Banking, sociétéanonyme (“Clearstream, Luxembourg”), and Euroclear Bank S.A./N.V., as operator of theEuroclear System (“Euroclear”), (i) Shares may be transferred through the relevant registrationin the deposit accounts held with the intermediaries joining with Monte Titoli without anyfurther formalities including the entry in the Company’s shareholders’ register; ii) shareholdershaving deposited the Shares at the intermediaries joining with Monte Titoli shall be entitled toexercise their shareholders’ rights through Monte Titoli.The modalities for the trading of the Shares shall be set forth by Borsa Italiana S.p.A.Shareholders’ MeetingsThe annual general meeting of shareholders will be held at the registered office of theCompany or at such other place as may be specified in the notice convening the meeting, onthe last Tuesday of April each year at 11.00 a.m. The convening notice must be made in theform and periods prescribed by the applicable law.The Board of Directors or the statutory and/ or independent auditor may convene generalmeetings of shareholders (in addition to the annual general meeting of shareholders). Suchmeetings must be convened if shareholders representing at least 10% of the Company’s capitalso require.Shareholders’ meetings, including the annual general meeting of shareholders, may be heldabroad if, in the judgement of the Board of Directors, which is final, circumstances of forcemajeure so require.Shareholders will meet upon issuance (including, if appropriate, its publication) of a conveningnotice in compliance with these articles of association or the Luxembourg Laws. The conveningnotice will specify the time and place of the meeting as well as the agenda and the nature ofthe business to be transacted at the relevant general meeting of shareholders. The agenda foran extraordinary general meeting shall also, where appropriate, describe any proposed changesto the articles of association and, if applicable, set out the text of those changes affecting theobject or form of the Company.If all the shareholders are present or represented at a general meeting of shareholders and ifthey state that they have been informed of the agenda of the meeting, the meeting may beheld without prior notice.All shareholders are entitled to attend and speak at any general meeting of shareholders.A shareholder may act at any general meeting of shareholders by appointing in writing, to betransmitted by any means of communication allowing for the transmission of a written text,another person who need not be a shareholder himself. The Board of Directors may determinethe form of proxy and may request that the proxies be deposited at the place indicated by theBoard of Directors at least five days prior to the date set for the meeting. Any legal entity, beinga shareholder, may execute a form of proxy under the hand of a duly authorised officer, or mayauthorise such person as it thinks fit to act as its representative at any general meeting ofshareholders, subject to the production of such evidence of authority as the Board of Directorsmay require. The Board of Directors may determine any other conditions that must be fulfilledin order to take part in a general meeting of shareholders.Persons holding their shares through a securities settlement system may attend and vote at ageneral meeting of shareholders by presenting at the place indicated by the Board of Directorsat least five days prior to the date set for the meeting a certificate indicating, inter alia, thenumber of shares held and delivered by the broker, bank, custodian, dealer or other qualifiedintermediary, with which the shares are held.147

The shares which are the object of such a certificate, must be blocked until after the holding ofthe general meeting of shareholders and may be transferred only after the holding of suchmeeting; such blocking will result from the certificate.Subject to the internal rules of the relevant securities settlement system, shareholders may alsogive instructions as to how to exercise their vote at the general meeting of shareholders to thebroker, bank, custodian, dealer or other qualified intermediary, with which their shares are held.In such case, the Shares shall also be blocked until after, and may only be transferred after, theholding of such meeting.The Board of Directors will adopt any other regulations and procedures concerning theprovision of access cards and proxy forms so as to allow shareholders to exercise their votingrights.Each Share is indivisible as far as the Company is concerned. The co-proprietors, the usufructuariesand bare-owners of shares, the creditors and debtors of pledged shares must appoint onesole person to represent them at any general meeting of shareholders.Shareholders participating in a shareholders’ meeting by visioconference or any other telecommunicationmethods allowing for their identification shall be deemed present for the purposeof quorum and majority computation. Such telecommunication methods shall satisfy suchtechnical requirements that will enable the effective participation in the meeting and thedeliberations of the meeting shall be retransmitted on a continuous basis.Any general meeting of shareholders shall be presided by the Chairman or by a persondesignated by the Board of Directors. The chairman of the general meeting of shareholders shallappoint a secretary. The general meeting of shareholders shall elect one scrutineer to be chosenfrom the shareholders present or represented. The chairman, the secretary and the scrutineerthus appointed together form the board of the general meeting. Rules of proceeding governingthe shareholders’ meetings may be approved by a resolution of the general meeting ofshareholders.The Board of Directors may forthwith adjourn any general meeting of shareholders by fourweeks. The Board of Directors must adjourn it if so required by shareholders representing atleast one fifth of the Company’s issued capital. Such adjournment automatically cancels anyresolution already adopted prior thereto. The adjourned general meeting of shareholders hasthe same agenda as the first one. Shares and proxies regularly deposited in view of the firstmeeting remain validly deposited for the second one.An attendance list indicating the name of the shareholders and the number of shares for whichthey vote is signed by each one of them or by their proxy prior to the opening of theproceedings of the general meeting of shareholders.The general meeting of shareholders may deliberate and vote only on the items comprised inthe agenda.Voting takes place by a show of hands or by a roll call, unless the general meeting ofshareholders resolves to adopt another voting procedure.At any general meeting of shareholders other than an extraordinary general meeting convenedfor the purpose of amending the Company’s articles of association or voting on resolutionswhose adoption is subject to the quorum and majority requirements of an amendment to theArticles of Association, resolutions shall be adopted, irrespective of the number of sharesrepresented, by a simple majority of votes cast.At any extraordinary general meeting of shareholders, convened in accordance with the articlesof association or the Laws, for the purpose of amending the Company’s articles of association orvoting on resolutions whose adoption is subject to the quorum and majority requirements of anamendment to the articles of association, the quorum shall be at least one half of all the sharesissued and outstanding. If the said quorum is not present, a second meeting may be convenedat which there shall be no quorum requirement.148

In order for the proposed resolutions to be adopted, and save as otherwise provided by theLaws, a 2 ⁄3rds majority of the votes cast by the shareholders present or represented is required atany such general meeting.The shareholders are authorised to cast their vote by ballot papers (“formulaires”) expressed inthe English language.Any ballot paper (“formulaire”) shall be delivered by hand with acknowledgment of receipt, byregistered post, by special courier service using an internationally recognised courier company atthe registered office of the Company or by fax at the fax number of the registered office of theCompany.Any ballot paper (“formulaire”) which does not bear any of the following mentions orindications is to be considered void and shall be disregarded for quorum purposes:• name and registered office of the relevant shareholder;• total number of shares held by the relevant shareholder in the share capital of theCompany and, if applicable, number of shares of each class held by the relevantshareholder in the share capital of the Company;• agenda of the general meeting;• indication by the relevant shareholder, with respect to each of the proposed resolutions,of the number of shares for which the relevant shareholder is abstaining, voting infavour of or against such proposed resolution; and• name, title and signature of the duly authorised representative of the relevantshareholder.Any ballot paper (“formulaire”) shall be received by the Company no later than 5 p.m.,Luxembourg time on the Luxembourg Business Day immediately preceding the day of thegeneral meeting of shareholders. Any ballot paper (“formulaire”) received by the Companyafter such dead line shall be disregarded for quorum purposes.For purposes of this article, a “Luxembourg Business Day” shall mean any day on which banksare open for business in Luxembourg.A ballot paper (“formulaire”) shall be deemed to have been received:(a)if delivered by hand with acknowledgment of receipt, by registered post or by specialcourier service using an internationally recognised courier company; at the time ofdelivery; or(b) if delivered by fax, at the time recorded together with the fax number of the receivingfax machine on the transmission receipt.Persons holding their shares through a securities settlement system may vote by ballot paper(“formulaire”), subject to the internal rules of the relevant securities settlement system, bygiving relevant instructions as to how to exercise their vote to the broker, bank, custodian,dealer or other qualified intermediary, with which their shares are held.In such case, the shares shall be blocked until after, and may only be transferred after, theholding of such meeting.Shareholders’ RightsVoting RightsEach share entitles the owner thereof to the casting of one vote, subject to any limitationsimposed by the Luxembourg Laws.Dividend RightsEach year, at least 5% of any net profit has to be allocated to a legal reserve account. Suchcontribution will cease to be compulsory when the legal reserve reaches 10% of the subscribedcapital. The remaining balance of the profit is at the disposal of the general meeting fordistribution or allocation to a reserve account. Dividends are payable to shareholders holding149

shares through an intermediary on the dividend payment date declared at the shareholders’meeting. Dividend payments are distributed through Monte Titoli or Euroclear, as the case maybe, on behalf of each shareholder by the relevant intermediary participating to the centralisedsecurities clearing system managed by Monte Titoli. See also above under “—Form and Transferof Shares” and “—Existing Registered Shares”.Liquidation ProceedsThe Company may be dissolved by a resolution of the general meeting of shareholders adoptedin compliance with the quorum and majority rules set by the articles of association or, as thecase may be, by the Luxembourg Laws for any amendment of the articles of association.Should the Company be dissolved, the liquidation will be carried out by the Board of Directorsor such other person or persons (who may be physical persons or legal entities) appointed by ageneral meeting of shareholders, who will determine their powers and their compensation.Change of Shareholder RightsThe conditions for the change of the rights of holders of the Shares must comply with therequirements of the Luxembourg Laws. Any amendment to the articles of association shall bemade by resolutions adopted at a general meeting of shareholders where 50% of the shares inissue are represented (no quorum applies at a second, reconvened meeting if the quorum hasnot been reached in the first meeting) and any resolution must be adopted by a majority twothirdsof the votes cast at the relevant meeting.Purchase by the Company of its Own SharesThe Company may acquire its own shares. The acquisition and holding of its own shares will bein compliance with the conditions and limits established by the Luxembourg Laws.Disclosure ObligationsThe law of 4 December 1992 (as amended), relating to the information to be published when amajor holding in a listed company is acquired or disposed of, implements EC directive 88/627 (OJ1988 L 348/62). It provides that if a natural person or legal entity acquires or disposes of aholding in a listed company and if, as a consequence of this acquisition or disposal, thepercentage of the voting rights held by that person reaches or exceeds 10%, 20%, 33.33%, 50%or 66.66% of the total voting rights existing at the time the situation giving rise to thedeclaration occurs, or falls below the said thresholds, such person must notify the Commissionde Surveillance du Secteur Financier (“CSSF”) and the company whose shares or securitiesrepresenting such shares are listed on stock exchanges situated or operating within one or moreEU member states, of the proportion of such person’s or legal entity’s voting rights followingthat acquisition or disposal.In Luxembourg, this declaration has to be notified in the French, German or English language tosuch listed company and to the CSSF within seven calendar days from the date the naturalperson or legal entity learned or, in view of the circumstances, should have learned, of itsacquisition or disposal of such a major holding.The listed company which has received the above declaration must in turn disclose it to thepublic in each of the member states in which its shares are officially listed on a stock exchangeno later than 9 calendar days after the receipt of such declaration. In particular, a companylisted in the Italian stock exchange market shall make available to Borsa Italiana S.p.A. therelevant information.For the purposes of determining whether a natural person or legal entity shall be regarded asholding a certain percentage of voting rights, the voting rights held by third parties which arecontrolled by that person or entity or with which that person or entity has concluded a writtenagreement which obliges them to adopt by concerted exercise of the voting rights they hold alasting common policy towards the management of the listed company are also taken intoconsideration. In case of a group of undertakings, the required disclosure may under certaincircumstances be made by the parent undertaking on behalf of the group member actuallyacquiring or disposing of the shares.150

The disclosure requirements do not apply to the acquisition or disposal of a major holding by aprofessional dealer in securities insofar as the acquisition or disposal is effected in his capacity asa professional dealer in securities and insofar as the acquisition is not used by the dealer tointervene in the management of the company concerned.Furthermore, according to Article 17 of the Law of 9 May 2006 on Market Abuse, personsdischarging managerial responsibilities within an issuer that has its registered office in Luxembourgand, as applicable, persons who have a close link with such persons have to notify theCSSF and the issuer of all transactions effectuated in their name and relating to shares admittedto trading on a regulated market, derivatives or other financial instruments relating to theissuer’s shares. The disclosure should be made to the CSSF within five business days followingthe conclusion of each individual operation. The information must be accessible to the public.As to disclosure obligations under Italian law, the Company will be subject to articles 114 and115 of the Legislative decree of 24 February 1998, No. 58 as well as to article 113 (which entailsthe application of articles 66, 67, 68 and 69), 114 and 115 of the CONSOB Regulation enteredinto force by resolution n. 11971 of 14 May 1999 (CONSOB Regulation) and subsequentmodifications.In particular, articles 66 and 113 of the CONSOB Regulation provide that companies listed onthe Italian Stock Exchange and persons controlling them shall disclose the information referredto in article 114.1 of the Consolidated Law by sending a press release in Italian language:a) to Borsa Italiana S.p.A. which shall immediately make it available to the public;b) to at least two news agencies.Such press releases shall be sent to CONSOB at the same time. Where a press release is to beissued during trading hours, it shall be sent to CONSOB and Borsa Italiana at least 15 minutesbefore it is issued.Issuers of financial instruments shall publish such press releases on their websites, whereavailable, not later than the opening of the market on the day following their issuance. Theyshall remain available on the website for at least two years.Articles 68 and 113 of the CONSOB Regulation provide that the company may disseminateforecasts and quantitative objectives for their operations and periodic accounting data providedsuch information is made available to the public in the manner provided for in article 66. Thecompany shall also verify the consistency of the actual performance of operations with theforecasts and quantitative objectives disseminated and promptly inform the public of anysignificant deviation.Articles 69 to 69-novies, except for 69-octies, and article 113 of the CONSOB Regulation providethat the Company, an authorised person and a person in a control relationship with them shallpublish recommendations in a fair manner disclosing any interest or conflict of interests.Pursuant to article 114 of the CONSOB Regulation, the Company shall comply with the CONSOBrequirements regarding the information and documents to be published and the language inwhich they are to be published.Information Relating to General Shareholders’ MeetingsA company not having issued bearer shares and not being listed on the Luxembourg stockexchange is not required under Luxembourg Laws to publish the notice of the shareholders’meeting in a Luxembourg newspaper or in the Luxembourg official gazette. Luxembourg Lawsrequire the company to send the notice to the shareholders recorded in the share register heldby the company at its registered office.The notice of the shareholders’ meeting should be published at least 8 days before the date ofthe meeting in a daily newspaper, having a national circulation in Italy. At the same time, suchnotice shall be sent to Borsa Italiana S.p.A. and specify that shareholders may obtain a copythereof at their expense.151

Such notice must contain information regarding the availability of the documentation indicatedat the registered office of the Company and at Borsa Italiana S.p.A and specify that shareholdersmay obtain a copy thereof at their expense.The directors of the Company shall prepare a report on the proposals contained in the agenda.Such report will be deposited with the registered office of the Company and with Borsa Italianaat least 15 days before the date of the scheduled shareholders’ meeting or within the timeprescribed by the applicable laws as indicated below.The Company shall send to Borsa Italiana S.p.A. copy of the notice not later than the day beforethat scheduled for their publication in the press.The notices calling shareholders’ meetings shall indicate the articles of association’ and bylaws’rules governing attendance at meetings.Ongoing InformationAt the beginning of each financial year, the Company will communicate to Borsa Italiana S.p.A.(i) the date of the call of the Board of Directors for the approval of the quarterly or half-yearlyreports or the draft of the financial statements; (ii) the date of the call of the shareholders’meeting for the approval of the financial statements; and (iii) the date on which the approvedquarterly or half-yearly reports or financial statements will be made available to the public. TheCompany will communicate to Borsa Italiana S.p.A. any modifications of such dates.The draft financial statements and the relevant prescribed annexes—which must contain theinformation set forth under article 78 and 79 of the CONSOB regulation—will be made availableto the shareholders at the registered office of the Company and at Borsa Italiana S.p.A., 15 daysbefore the date scheduled for the annual shareholders’ general meeting for the approval of thefinancial statements.The approved financial statements—in the English language—and the relevant minutes of theshareholders’ meeting will be made available to the public by deposit of the same with theregistered office of the Company and Borsa Italiana S.p.A. and delivered to CONSOB withinthree days of the approval, together with the consolidated financial statements—drawn-up inthe English language and pursuant to International Financial Reporting Standards (IFRS),together with the prescribed attachments and the audit report. An integral copy of the financialstatements of subsidiary companies or the summary document provided for in Article 2429 ofthe Italian Civil Code and the summary document showing the essential data of the latestfinancial statements of associate companies will be made available to the public by deposit ofthe same with the registered office of the Company.Where the company annual financial statements are not approved, the minutes of the shareholders’meeting that did not approve them shall be made available to the public within fifteendays of the meeting.A notice in the Italian language regarding the approval of the financial statements and of thedeposit thereof shall be published in a daily newspaper having a national circulation in Italywithin two days from approval.The half-year report shall be drawn up in the English language, it will be made available to thepublic, together with the prescribed attachments and, if prepared, the auditors’ report, throughdeposit of the same with the registered office of the Company and Borsa Italiana S.p.A anddelivered to CONSOB within four months from the end of the first semester of the financialyear. A notice in the Italian language regarding the approval of the half-year report and of thedeposit thereof shall be published in a daily newspaper having a national circulation in Italywithin two days from approval.The Company will prepare a quarterly report in the English language that will be madeavailable to the public through deposit of the same with the registered office of the Companyand Borsa Italiana S.p.A. and delivered to CONSOB within 45 days after the end of each quarterof the financial year. A notice in the Italian language regarding the approval of the quarterlyreports and of the deposit thereof shall be published in a daily newspaper having a nationalcirculation in Italy within two days from approval. The Company intends to rely on the152

exemption from the obligation to draw up the quarterly report for the second and fourthquarter pursuant to article 82, paragraph 2, of the CONSOB Regulation.Dividends PaymentPursuant to article 84 of the CONSOB regulation, the Company will publish in a daily newspaperhaving a national circulation in Italy a notice containing information relating to the date andthe method of the payment of dividends. Such notice—in the Italian language—must bepublished timely in order to allow the shareholders to exercise their rights.The Company shall provide CONSOB with the resolutions to distribute interim dividends withinthirty days of the meeting of the board of directors.Information Relating to the Authorisation to Purchase Own SharesAt least 15 days before the shareholders’ meeting convened for the approval of the purchaseand sale of own shares, the Company will deposit with Borsa Italiana S.p.A. and with itsregistered office, as well as communicate to CONSOB a report prepared by the Board ofDirectors, drawn up in the English language, which will be deposited in the mentioned officesand will be made available to the shareholders that may obtain a copy at their expense.Within 30 days from the shareholders’ meeting approving the transaction, the Company willprovide CONSOB with a copy of the shareholders’ meeting resolution, drawn up in the Englishlanguage, which will also be deposited with Borsa Italiana and the Company at its registeredoffice.Information Relating to Merger And demergerAccording to the Luxembourg Laws, in the case of a merger by absorption or in a case of amerger by incorporation of a new company the draft terms of merger shall be published foreach of the merging companies at least one month before the date of the general shareholders’meeting convened to decide on the draft terms of the merger. The shareholders resolutionsapproving the merger shall be published in the Luxembourg Official Gazette.At least thirty days before the extraordinary meeting convened to a merger or demerger, or ifearlier, not later than the day on which the decision is taken to convene the extraordinarymeeting, the Company will provide CONSOB with a copy of the draft terms of merger ordemerger, the report of the Board of Directors, the report of the independent experts, theaccounting statements of the relevant companies as well as the report of the independentauditor as provided for by the applicable Luxembourg Laws. Such documentation must bedeposited with Borsa Italiana S.p.A. and registered office of the Company within 30 days beforethe date of the general meeting and be made available to the public.The Company will provide CONSOB with: (i) the shareholders’ resolution approving the transactionwithin the following thirty days; (ii) the merger or demerger act within ten days fromexecution; (iii) the articles of association as amended as a consequence of the transaction, withinthirty days from the deposit of the same articles of association with the Luxembourg Registry ofCommerce and Companies. Such documentation will be drawn up in the English and Frenchlanguage.Information Relating to Capital Increase with Contribution in KindA capital increase by way of contribution in kind shall be decided either by an extraordinarygeneral meeting of shareholders or by the board of directors if capital increase is effectedwithin the limits of the authorized share capital and on the basis of the authority granted bythe articles of association to the board of directors to issue further shares. In addition, accordingto the Luxembourg laws any change of the subscribed share capital so decided shall, onceapproved, be published in the Luxembourg Official Gazette.Pre-emption rights do not apply in the case of a share capital increase by means of acontribution in kind.Within 15 days before the shareholders’ or Board of Directors’ meeting convened to resolveupon a capital increase to be subscribed with a contribution in kind, the Company shall deposit153

with Borsa Italiana S.p.A. and with the registered office of the Company and provide CONSOBwith the report of the Board of Directors as well as the report of the independent auditor. Suchdocumentation—drawn up in the English language—shall remain at disposal of theshareholders.The Company will provide CONSOB with: (i) the shareholders’ or Board of Directors’ resolution,as applicable, approving the transaction within the following thirty days; (ii) the articles ofassociation as amended as a consequence of the transaction, within thirty days from the depositof the same articles of association with the Luxembourg Registry of Commerce and Companies.Such documentation will be drawn up in the English and French language.Information Relating to Measures to be Approved in Presence of Material LossesWhere the subscribed share capital plus retained earnings decreased by more than one-third asa result for losses, the Company, at least eight days before the shareholders’ meeting convenedto approve the relevant actions, shall make the information report of the board of directors onthe financial conditions of the Company and the observations of the internal control bodyavailable to the public at its registered office and Borsa Italiana S.p.A. and sent to CONSOB.Within 30 days from the shareholders’ meeting, the Company will provide CONSOB with a copyof the relevant minutes, drawn up in the English language.In addition according to the Luxembourg Laws in the event of a loss of half the subscribed sharecapital, the board of directors shall convene a general shareholders’ meeting so that it is heldwithin a period not exceeding two months from the time at which the loss was or should havebeen ascertained and such meeting shall resolve on the possible dissolution of the company. Theresolution to dissolve the company shall be passed by a resolution adopted where 50% of theshares in issue are represented (no quorum applies at a second, reconvened meeting if thequorum has not been reached in the first meeting) and the resolution must be adopted by amajority two-thirds of the votes cast at the relevant meeting The same rule applies where theloss equals or exceeds three quarters of the subscribed share capital provided that in such case,the dissolution of the company shall take place if approved by one fourth of the votes cast atthe meeting. In the event of any non-compliance with these rules, the members of board ofdirectors may be declared personally, jointly and severally liable vis-à-vis the company for all orpart of the increase of the loss In such cases, the Company, at least eight days before thegeneral shareholders’ meeting convened to approve the relevant actions, shall make theinformation report of the board of directors on the financial conditions of the Companyavailable to the public at their registered office and the Borsa Italiana S.p.A. and sent toCONSOB. Within 30 days from the shareholders’ meeting, the Company will provide CONSOBwith a copy of the relevant minutes, drawn up in the English language.Information Relating to Changes in Share CapitalThe Company in case of any change in its share capital, shall notify such change (amount of theshare capital and number and classes of shares) to CONSOB and the Borsa Italiana S.p.A., whichshall make the information available to the public not later than the following day.The notification shall be made within five days of the entry in the company register:a) of a resolution to increase the capital by applying to capital reserves and/or specialfunds or to reduce the capital to cover losses;b) of resolutions passed by shareholders’ meetings to carry out the mandatory conversionof shares of one class into shares of another class.In addition, according to the Luxembourg laws any such changes shall, once approved, bepublished in the Luxembourg Official Gazette.Information relating to significant mergers, spin-offs or increases in capital by way ofcontributions in kindIn the event of significant mergers, spin-offs or increases in capital by way of contributions inkind, identified on the basis of general criteria laid down in advance by CONSOB, or at thelatter’s request, in relation to the characteristics of the operation, the Company shall make an154

information document available to the public at their registered office and Borsa Italiana S.p.A.at least ten days before the day set for the shareholders’ meeting.The Company shall send the information document to Consob contemporaneously with itsdissemination to the public.Information Relating to Significant Acquisitions and DisposalsIn the event of significant acquisitions or disposals, identified on the basis of general criterialaid down in advance by CONSOB, or at the latter ’s request, and in relation to the characteristicsof the operation, the Company shall make an information document available to the publicat their registered office and Borsa Italiana S.p.A. within fifteen days of the conclusion of theoperation. The fact that the document has been deposited shall be announced immediately bymeans of a notice published in at least one daily newspaper having a national circulation inItaly.The Company shall send the information document to CONSOB contemporaneously with itsdissemination to the public.According to the Luxembourg Laws, there are no disclosure requirements with respect to thedisclosure of significant transactions.Information Relating to Other Amendments to the Articles of Association and Issues ofBonds1. The Company, at least fifteen days before the shareholders’ meeting convened to approveamendments to the articles of association different from those referred to above, shall make aninformation report of the board of directors available to the public at their registered officeand Borsa Italiana S.p.A.;The Luxembourg Laws and the articles of association of the company permit the board ofdirectors of the company to issue without need of prior shareholder approval straight orconvertible bonds or other debt instruments and to determine the terms and conditions of suchbonds or other debt instruments;2. Where the increase of the subscribed share capital is approved by the board of directors anotarial deed recording the board of directors decision to increase the share capital must bedrawn up under a mandatory rule of the Company Act. The notarial deed recording the sharecapital must be drawn up within 3 months of the date of the board of directors decision. Inaddition the notarial deed shall be published in the Luxembourg Mémorial and filed with theLuxembourg Register of Commerce and Companies and at the same time shall be madeavailable to the public at the registered office of the Company and Borsa Italiana S.p.A.; and3. On the occasion of optional conversions of shares of one class into shares of another class,the Company shall make available to the public at their registered office, at Borsa Italiana S.p.Aand, via the central securities depository in the manner it shall establish, at the depositories, notlater than the trading day preceding the start of the conversion period, the report of the boardof directors supplemented by the information needed for the conversion. The fact that thereport has been deposited shall be announced immediately by means of a notice published in atleast one daily newspaper having a national circulation in Italy. The depositories, via the centralsecurities depository, shall communicate the requests for conversion daily to the marketmanagement company, which shall make them public on the following trading day. Within tendays of the end of the conversion period, the issuer shall announce the results of the conversionby means of a notice published in at least one daily newspaper having a national circulation inItaly.4. On the occasion of mandatory conversions of shares of one class into shares of another class,the Company shall announce the date on which the conversion will take place not later thanthe trading day preceding such date by means of a notice published in at least one dailynewspaper having a national circulation in Italy.155

5. The Company shall send to CONSOB:a) the report of the board of directors at least thirty days before the day set for theshareholders’ meeting convened to approve amendments to the articles of associationor the issue of bonds or, if earlier, not later than the day on which the decision is takento convene the shareholders’ meeting;b) the minutes of the resolutions passed within thirty days of the day on which theshareholders’ meeting voted or the minutes of resolutions within thirty days of the daythe board of directors passed the resolutions, as applicable;c) the amended articles of association within thirty days of its being filed with theLuxembourg Register of Commerce and Companies; andd) the documentation referred to in par. 3) above contemporaneously with its disseminationto the public.Information Relating to Cross-HoldingsThe Luxembourg Laws regulate the holding of cross-participations where the effect of the crossparticipationis that the company can directly or indirectly exercise the majority of the votingrights or over which the company can exercise directly or indirectly a dominant influence. Thegeneral rule in such case is that the holding of such participation is subjected to the sameconditions imposed by the Luxembourg laws in respect of the holding of company own shares.If however the company can only indirectly exercise the majority of the voting rights or exerciseindirectly a dominant influence in a company holding shares in the company, such holding ispermitted but such company’s voting right over the shares in the company are suspended.The relevant information shall be disclosed in the Notes to the Financial Statements and madeavailable to the public through deposit of the same with registered office Company and BorsaItaliana S.p.A. In this event, the Company shall also send the information document to BorsaItaliana S.p.A and to CONSOB.Information Relating to Offerings of Pre-Emption RightsThe Company shall publish, in at least one daily newspaper having a national circulation in Italyand not later than the day before the start of the offering, a notice specifying the number ofunexercised pre-emption rights to be offered on the stock exchange and the dates of thesessions in which the offering will be made.The Company shall send to Borsa Italiana S.p.A. copy of the notice not later than the day beforethat scheduled for their publication in the press.In addition, in accordance with the Luxembourg laws, the exercise of the pre-emption rightsmust be permitted during a minimum period of 30 calendar days. The start of the exerciseperiod must be announced by notices sent to all shareholders recorded in the company’s shareregister and set out the exercise period. The unexercised pre-emption rights shall be publiclysold by the Luxembourg stock exchange on the Luxembourg stock exchange. The proceeds fromsuch public sale shall be made available to the shareholders not having exercised their preemptionrights and forfeit in favour of the company after period of 5 years from the date ofthe sale.The Luxembourg Laws do not permit the exclusion of the pre-emption rights of shareholders incase of a share capital increase by means of a contribution in cash. Nevertheless i) the articles ofassociation may authorise the board of directors to withdraw or restrict these pre-emptive rightsin relation to an increase of capital made within the authorised capital. Such authorisation shallbe valid for only five years from publication of the constitutive instrument or the amendment ofthe articles. It may be renewed on one or more occasions by the general meeting deliberatingin accordance with the requirements for amendments to the articles, for a period which, foreach renewal, may not exceed five years; ii) a general meeting called upon to resolve, at theconditions prescribed for amendments to the articles, either upon an increase of capital or uponthe authorisation to increase the capital in accordance, may limit or withdraw pre-emptivesubscription rights or authorise the board to do so. Any proposal to that effect must bespecifically announced in the convening notice.156

Detailed reasons therefore must be set out in a report prepared by the board of directors andpresented to the meeting, dealing in particular with the proposed issue price available to thepublic at their registered office and Borsa Italiana S.p.A. and CONSOB within fifteen days beforethe shareholders’ meeting convened for the relevant resolutionsThe pre-emptive subscription rights are not excluded where, in accordance with the decisionrelating to the increase of the subscribed capital, the shares are issued to banks or otherfinancial institutions with a view to their being offered to the shareholders of the company.In the case of a share capital increase by means of a contribution in kind a Luxembourgindependent auditor is required to issue a valuation report on the value of the contribution inkind made by comparison to the value of the new share the company will issue, such reportthough not taking the form of a fairness opinion. The valuation report must contain a commenton the adequacy of the valuation methodology adopted by the directors to value the contributionin kind and a confirmation that the value of the contribution equals at least in value and innumber the new shares to be issued.Information Relating to Transactions with Related PartiesShould the Company enter into a transaction, including those concluded via subsidiaries, with arelated party (as defined by CONSOB communication n. 2064231 and article 11 of the Codice diAutodisciplina per la Corporate Governance delle società quotate issued by Borsa Italiana S.p.A.)which may have a significant impact on the soundness of the companies assets or on thecompleteness and correctness of the information, including that of an accounting nature of theCompany, the Company shall make an information document available to the public. Theinformation document shall be deposited with Borsa Italiana S.p.A. and with the registeredoffice of the Company and sent to CONSOB within 15 days from the completion of thetransaction. The fact that the document has been deposited shall be announced immediately bymeans of a notice published in at least one daily newspaper having a national circulation inItaly. This obligation shall not apply where the information has been included in the pricesensitive press release, if any, issued pursuant to article 66 of CONSOB Regulation or in theinformation document prepared in the event of mergers, spin-offs and increases in capital byway of contributions in kind or in case of acquisitions and disposals.All the corporate documentation will be drawn up in the English language, as the languagecustomary in the sphere of international finance and the official language adopted by thecompany in accordance with the Luxembourg Laws by and, where legally required, in theFrench language.All the notices to the public will be drawn up in the Italian and English language.The documents deposited with the Company at its registered office as well as the notices, andany other information available to the public, will also be available on the website of theCompany http://www.damicointernationalshipping.com.The notice convening the shareholders’ meeting shall contain the information that the documentationrelating to mergers, spin-offs and increases in capital by way of contributions in kind,to other amendments to the articles of association and issue of bonds, to the purchase of ownshares and to material losses, will be deposited within the time limits provided for in sucharticles and specify that shareholders may obtain a copy at their expense.Legislation on Public OfferingsPursuant to article 4(b) and (e) of the Directive 2004/25/EC of the European Parliament and ofthe Council of 21 April 2004 on takeover bids (the “Directive”)—providing for the rulesapplicable to takeover bids on companies not listed in the Member State of the European Unionin which they have their registered office, the authority competent to supervise any takeover onit shall be the public authority responsible for regulating the Italian securities market (CONSOB).With reference to applicable law, please note that:(i)matters relating to the consideration offered in the context of a takeover bid (inparticular the price) and to the takeover bid procedure (in particular, the informationon the offeror’s decision, the content of the offer document and the disclosure of the157

(ii)bid) shall be dealt with in accordance with Italian Law and Regulations, in particularthe Legislative Decree No. 58 of February 24, 1998, CONSOB NO. 11971/1999 (the“Resolution 11971); andmatters relating to the information to be provided to the employees of the Companyand matters relating to company law (in particular the percentage of voting rightswhich confers control over the Company, any derogation from the obligation to launchan offer, and the conditions under which the board of the Company may undertakeany action which may result in the frustration of the bid) shall be dealt with inaccordance with Luxembourg rules, in particular with the Loi du 19 mai 2006 portanttransposition de la directive 2004/25/EC du Parlement européen et du Conseil du 21 avril2004 concernant les offres publiques d’acquisition (the “Luxembourg Takeover Law”)and supervised by the CSSF.As of the date of this Prospectus, the Directive has not be implemented in Italy but, notwithstandingthis, pursuant to article 4, paragraph 2, lett (b) and (e) shall be considered as selfexecutive and fully applicable. Therefore takeover bids shall be regulated by the abovementioned Italian Law to the extent that they are not repealed by self-executive provisions ofthe Directive.Below is a description of applicable takeover rules (Italian and Luxembourg, depending on thematter). It shall be however reminded that the rules set forth in the Directive should beconsidered applicable (i) if considered self executives or (ii) in case of implementation withLegislative Decree.Due to the current uncertainty of the interprepative and application process of the Directive notyet implemented in Italy as of the date of this Prospectus, we cannot exclude possible conflictsbetween Italian and Luxembourg law on some matters relating to takeover bid. See also “RiskFactors—Risk relating to the Offering. As a Luxembourg incorporated and registered companywith an Italian listing, we will be subject to regulation in both Luxembourg and Italy”.Mandatory BidObligation to file a Takeover BidPursuant to Luxemburg law, should a person hold securities of the Company which, added toany existing holdings of such person’s securities and the holdings of such securities of personsacting in concert with such person, directly or indirectly give such person control of theCompany, such person will be required to make, as soon as possible and at an equitable price, abid to all the other holders of such securities for their entire holdings of such securities. UnderLuxembourg law, a controlling stake is deemed to be acquired, if a voting power of 33.33% isreached (excluding non voting shares).A mandatory bid would not have to be launched under Luxembourg law, should the acquisitionof the control over the Company be the result of a voluntary takeover bid on all the shares ofthe Company.Principles Applicable to the Price with Respect to a Mandatory Takeover BidPursuant to Italian law, the offer for each class of shares shall be made within 30 days at a priceno lower than the arithmetic mean of the weighted average market price in the last 12 monthsand the highest price agreed in the same period by the offeror for the purchase of shares of thesame class; if no purchases have been made, the offer shall be made at the weighted averagemarket price in the last 12 months or the shorter period for which market prices are available.The consideration may consist of financial instruments listed on a regulated market of an EUcountry, if the consideration in the transactions carried out in the 12 months prior to theexceeding of the threshold consisted, in equal proportion, of the same financial instruments.The financial instruments shall be valued at a price not exceeding the weighted average marketprice of the last 12 months.In the case of a voluntary takeover bid on all the shares of the Company the consideration mayconsist of financial instruments admitted to listing on regulated EU markets.158

Squeeze-OutPursuant to Luxembourg law, should any offeror hold the Company’s securities representing notless than 95% of the capital carrying voting rights and 95% of the voting rights of the Companyas a result of a takeover bid, such offeror would be entitled to squeeze-out minorityshareholders.Pursuant to Italian law, the offeror should have declared his intention to exercise its squeezeout right in the offer document and the remaining shares shall be acquired within four monthsof the close of the offer.Pursuant to Italian law, the purchase price shall be set by an expert appointed by the presidentof the tribunal of the place where the Company has its registered office, with account alsobeing taken of the offer price and the market price in the last six months. The transfer shall beeffective from the moment notice of the deposit of the consideration with a bank is given tothe issuing company, which shall make the consequent entries in the shareholders’ register.Sell-OutPursuant to Luxembourg law, should a bidder hold securities representing more than 90% ofthe Company’s capital carrying voting rights following a bid made to all the holders of theCompany’s securities for all of their securities, a minority shareholder would be entitled torequire the offeror to buy his/her securities from him/her at a fair price.Pursuant to Italian law, the purchase price shall be set by CONSOB, taking into account takeaccount the consideration of any preceding public offer, the average weighted market price ofthe last six months, the Company’s shareholders’ equity adjusted to current value and theCompany’s earnings results and prospects.Takeover Bid ProcedureThe takeover bid procedure, to be respected in case of mandatory bid, squeeze-out and sell-out,shall be fully regulated by Italian law. See “ Mandatory Bid“,”—Squeeze-out” and ”—Sell-out”.Pursuant to Italian law, the offeror shall give advanced notice thereof to CONSOB, attaching theoffer document to be published and the acceptance form. Such notice shall state that: a) applicationshave been submitted at the same time to the competent authorities for the Authorisationsneeded to acquire the shareholdings in question; and b) the decision has been taken toconvene the body competent to approve the issue of financial instruments to be offered inexchange where applicable.Notices of offers shall be disclosed without delay (i) to the market in a press release, by sendingit to at least two news agencies and to the market management company, Borsa Italiana S.p.A.(“Borsa”), which shall be responsible for its dissemination; and, at the same time (ii) to theCompany.CONSOB may, within 15 days of the notification, require offerors to include supplementaryinformation in the offer document, lay down specific procedures for its publication and establishspecial guarantees to be provided.At the expiry of such time limit, the offer document shall be disseminated by means of integralpublication in newspapers with adequate circulation or by means of delivery to intermediariesand simultaneous publication in newspapers with adequate circulation of the notice of delivery,or by other means agreed with CONSOB, according to procedures that must ensure that theessential elements of the offer and of the document are accessible to all interested parties. Acopy of the document shall be sent to CONSOB in electronic of the offer and of the documentare accessible to all interested parties.The offer documents shall be sent to the Company without delay.Any revision of offer shall be notified and published in the same manner as the original offerup to 3 days before the date set for the close of the acceptance period. Reductions in thequantity requested shall not be permitted.159

Offers shall be irrevocable and shall be made at the same conditions to all the holders of thefinancial products that are the object thereof. The effectiveness of an offer may not be madesubject to conditions whose occurrence depends solely on the will of the offeror. The acceptanceperiod shall be not less than 15 and not more than 25 days and shall be agreed with Borsa.After consulting the offeror and Borsa, CONSOB may, with a measure motivated by the needs ofcorrect implementation of an offer and the protection of investors, extend the offer’s durationup to a maximum of 55 days. The acceptance period may not start until the requirements setforth by the Resolution 11971 are satisfied. Offers shall be accepted at the office of the offeror,the appointed intermediaries or the depositories authorised to provide investment services, bysigning the acceptance form. Acceptances of offers may be collected in the regulated market inthe manner indicated by Borsa. The duration of the acceptance period may be affected bycompeting offers, which shall be published up to 5 days before the date set for the close of thepreceding acceptance period and, in the event of extension, within 50 days of the publicationof the first offer. Competing and increased offers shall be admitted if the total consideration foreach class of financial instrument involved is higher than that of the last competing offer orincreased offer or if they involve the elimination of a condition for the offer to be effective. Inthe case of increased offers, the quantity requested may not be reduced. The competing andincreased offers shall be carried out in compliance with the rules and procedure set forth by theResolution 11971.The Company shall publish a statement containing all the information specified in the Resolution11971, serving to evaluate the offer, together with its own evaluation thereof. Thestatement shall be sent to CONSOB at least 2 days before the date set for its dissemination andshall be made known to the market (in the same manner explained above under letter (i) withregard to the disclosure of notices of offers) not later than the first day of the acceptanceperiod. Changes in the information published shall be the subject of a press release.During the period between the date of the initial notice and the date set for payment of theconsideration, any interested party (i.e. the offeror, the Company, persons linked to them byrelationships of control, companies subject to common control and related companies, membersof their boards of directors and internal control bodies and their general managers, and theshareholders of the offeror or the Company who are parties to a shareholder agreement) shallcomply with correctness and transparency rules provided for in Resolution 11971.From the date of publication of the offer document until the close of the offer, CONSOB mayrequire to the offeror, to persons controlling offerors and the Company, to their subsidiarycompanies and to the persons appointed to collect acceptances, to publish information anddocuments that are necessary for the public to be informed.From the date of the initial notice of the offeror to CONSOB until 1 year from the close of theoffer, for the purposes of monitoring the accuracy of information provided to the public,CONSOB may: a) carry out inspections to the offices of the offeror, of persons controllingofferors and the Company, and to the persons appointed to collect acceptances; and b) requirethe same persons (and to members of their boards of directors and internal control bodies, theirindependent auditors and their managers too) to provide information and documents.Board OpinionThe board of the Company shall publish a motivated opinion on the takeover bid and its impacton the Company’s interests, analysing, in particular, the bid’s impact on employment and thebidder’s proposed strategy for the Company.Employees’ InformationThe Luxembourg Takeover Law involves employee representatives into the takeover process byproviding for the duty of the Company’s board to inform the employees of the Company aboutthe takeover bid.Breakthrough RuleThe Company may, by means of a shareholder vote, elect, by special shareholders vote to benotified to the CSSF, to apply the breakthrough rules. If such breakthrough rules apply, any160

share transfer restrictions contained in certain shareholders agreements shall not be binding onthe offeror.Defensive MeasuresThe shareholders of the Company may elect, by special shareholders vote to be notified to theCSSF, to prohibit its Board of Directors from taking defensive measures, other than seeking acompeting bid, during a takeover bid, without being authorised to do so by a separateresolution passed at a shareholders’ meeting.161

The Italian Securities MarketSecurities Trading in ItalyEquity and convertible securities in the Italian market are traded on the MTA, the Italianautomated screen-based trading market.The MTA is organised and administered by Borsa Italiana and is subject to the supervision andcontrol of CONSOB, which is responsible, among other things, for regulating investmentcompanies, securities markets and public offerings of securities in Italy to ensure the transparencyand regularity of dealings and to protect investors.Borsa Italiana is a joint stock corporation that is responsible for the organisation and managementof the Italian-regulated financial markets (including the MTA). Since January 2, 1998, BorsaItaliana, which was founded in 1997, has been responsible for, inter alia:• defining and organizing the functioning of the Italian-regulated financial markets;• defining the rules and procedures for admission and listing on the market for issuingcompanies and brokers;• managing and overseeing the markets; and• supervising the disclosure of listed companies.Borsa Italiana’s primary objective is to ensure the development of organised markets, maximizingtheir liquidity, transparency and competitiveness while at the same time pursuing high levelsof efficiency and profitability. The shareholders of Borsa Italiana are primarily issuing companiesas well as domestic and international intermediaries, including the most important Italian banks.Borsa Italiana is a market regulatory institution with operational autonomy and flexibility.Please note that, pursuant to Article 64, par. 1-bis of the legislative Decree No. 58 of 24 February1998 (the “Unified Financial Act”), CONSOB may prohibit the implementation of admission andexclusion decisions or order the revocation of a decision to suspend financial instruments orintermediaries from trading within five days of receiving the relevant notification by BorsaItaliana, if on the basis of the information, other than information considered by Borsa Italianaduring its investigation, it considers the decision to be contrary to the aim of ensuring thetransparency of the market, the orderly conduct of trading and the protection of investorsreferred to in Article 74, par. 1 of the Unified Financial Act. CONSOB may request Borsa Italiana(i) to provide all the information it considers necessary for such purposes, and (ii) to suspendfinancial instruments or intermediaries from trading.The Unified Financial Act consolidates the regulation of the Italian financial markets, primarilyby restating the provisions of the EC Investment Services Directive, implemented in Italy byLegislative Decree No. 415 of 23 July 1996, (the “Eurosim Decree”). The Unified Financial Acttook effect on 1 July 1998.The Unified Financial Act provides (with minor exceptions) that only registered securities dealersand banks may trade equity securities, as well as engage in any other investment services withthe public. Banks and investment services firms incorporated in an EU member state arepermitted to operate in Italy provided that the intent of the bank or investment services firm tooperate in Italy is communicated to, respectively, CONSOB and the Bank of Italy by thecompetent authority of the member state in which they are established. Non-EU banks and non-EU investment services firms may operate in Italy after receiving the approval of CONSOB andthe Bank of Italy, respectively.Clearance and Settlement in ItalyThe settlement of stock exchange transactions is made through Monte Titoli, a centralisedsecurities clearing system owned by Borsa Italiana. Almost all Italian banks and certain Italiansecurities dealers have securities accounts with Monte Titoli. Beneficial owners of shares holdtheir interests through specific deposit accounts with any depository having an account withMonte Titoli.162

Under Italian law, shareholders are unable to obtain physical delivery of share certificatesrepresenting their shares in Italian-listed companies. However, the beneficial owners of sharesheld with Monte Titoli may transfer their shares, collect dividends, create liens and exerciseother rights with respect to those shares through these accounts.Participants in Euroclear and Clearstream may hold their share interests, transfer their shares,collect dividends, create liens and exercise other rights with respect to the shares throughEuroclear and Clearstream, respectively.Market RegulationsThe clearing and settlement platform of Borsa Italiana (Express II) integrates net settlementservice with gross settlement service for transactions in non-derivative securities traded onmarkets or over the counter. Both settlement services provide for simultaneous settlement ofsecurities and cash. Settlement of securities takes place within Monte Titoli’s centralised administrationsystem, while settlement of cash takes place in central bank money by way of a realtimeconnection with Banca d’Italia’s BI-REL system.The net settlement services provides for two settlement cycles: (i) night cycle that allows to bringforward the settlement finality of transactions at the first hours of the morning of thesettlement date, and (ii) daytime cycle to which are routed transactions that are not settled atthe end of the night cycle. Such system is integrated with the gross settlement service to whichtransactions not settled at the end of the daytime are routed. The gross settlement service is areal time system which allows a queue management of transactions to be settled or not settledfor lack of securities or cash.Any person, through an authorised intermediary, may purchase or sell listed securities on theMTA. However, if the opening price of a security (established each trading day prior to thecommencement of trading based on bids received) differs by more than 10% (or such otheramount established by Borsa Italiana) from the previous day’s reference price, trading in thatsecurity will not be permitted until Borsa Italiana authorises it. If in the course of a trading daythe price of a security fluctuates by more than 5% from the last reported sale price (or 10%from the previous day’s reference price), an automatic five minute suspension in the trading ofthat security will be declared. In the event of such a suspension, orders already placed may; notbe modified or cancelled and new orders may not be processed. Borsa Italiana has the authorityto suspend trading in any security, among other things, in response to extreme price fluctuations.In urgent circumstances, CONSOB may, where necessary, adopt measures required toensure the transparency of the market, orderly trading and protection of investors.Disclosure of Ownership InterestBeneficial owners of the ordinary shares may hold their interests through custody accounts withintermediaries. For a description of requirements concerning the disclosure of beneficial ownershipof securities, see “Description of the Company, the Shares and the Share Capital”.163

TaxationThe statements of Luxembourg, Italian, United States and United Kingdom tax laws set outbelow are based on existing Luxembourg, Italian, United States and United Kingdom tax laws,including relevant regulations, administrative rulings and practices in effect on the date of thisProspectus and which may apply to investors who are the beneficial owners of shares. Legislative,administrative or judicial changes may modify the tax consequences described below.The statements do not constitute tax advice and are intended only as a general summary.Furthermore, this information only applies to Shares held as capital assets and does not apply toall categories of shareholders, such as dealers in securities, trustees, insurance companies,collective investment schemes and shareholders who have, or who are deemed to have, acquiredtheir Shares by virtue of an office or employment. This summary is not exhaustive andprospective purchasers should consult their own tax advisers as to the tax consequences inIreland, the United States or other relevant jurisdictions of the purchase, ownership anddisposition of the Shares.LuxembourgWithholding TaxThe Company is fully subject to Luxembourg income taxes. The Company is considered to be aLuxembourg resident company for tax purposes and as such benefits from double taxationtreaties concluded by Luxembourg.Under current Luxembourg tax law, dividends distributed by the Company to its shareholdersare subject to a 15% withholding tax computed on the gross amount of the dividenddistributed.This rate could be reduced pursuant to double taxation treaties concluded between Luxembourgand the country of residence of the shareholders. Under most of the double taxation treatiesconcluded by Luxembourg, dividend withholding tax is reduced on dividends distributed toshareholders who are resident in the country with which Luxembourg has entered into the doubletaxation treaty. Withholding tax is usually reduced by refunding to the shareholder the excess ofthe total amount withheld over the withholding tax actually owed under the pertinent doubletaxation treaty upon the shareholder’s application for a refund to the Luxembourg tax authorities(Administration des Contributions Directes, Division 5—Relations Internationales, 18 rue duFort Wedell, L-2982 Luxembourg). Forms for the refund request can be obtained from theLuxembourg tax authorities.No withholding tax is levied if the dividends are paid to a limited liability company which is afully taxable Luxembourg resident company, or to a company resident in a Member State of theEuropean Union as defined in article 2 of EU Directive 90/435/EEC of 23 July 1990 as amended orto its permanent establishment located in Luxembourg, or to the Luxembourg permanentestablishment of a company resident in a country which has concluded a double taxation treatywith Luxembourg, provided that at the date of the payment, the shareholder holds or commitsitself to hold, directly or through a tax transparent vehicle, during an uninterrupted period ofat least 12 months, a participation of at least 10% in the capital of the Company or aparticipation with an acquisition price of at least 31.2 million.Income Tax and Corporate Income TaxTaxation of DividendsDividends received from the Company by Luxembourg resident individuals are subject toLuxembourg individual income tax, at progressive rates. Luxembourg resident individuals receivingdividends will be exempt from tax on 50% of these dividends.Dividends distributed by the Company to a Luxembourg resident company, or to a permanentestablishment located in Luxembourg, which does not fall within the scope of the Luxembourgparticipation exemption regime are subject to Luxembourg corporate income tax (including thecontribution to the employment fund and the municipal business tax). Half of the dividendsreceived from the Company are however excluded from the taxable basis of the shareholder.164

According to the Luxembourg participation exemption regime, dividends distributed by theCompany to a Luxembourg limited liability company or to a permanent establishment located inLuxembourg of a company resident in a member state of the European Union as defined inarticle 2 of the EU Directive 90/435/EEC of 23 July 1990, or to a permanent establishment locatedin Luxembourg of a company resident in a country which has concluded a double taxationtreaty with Luxembourg, are exempt from corporate income tax in Luxembourg provided that,at the date of the distribution, the shareholder holds or commits itself to hold, directly orthrough a tax transparent vehicle, during an uninterrupted period of at least 12 months, aparticipation of at least 10% in the capital of the Company or a participation with an acquisitionprice of at least 31.2 million.Dividends distributed to holding companies subject to the Law of 31 July 1929 as amended andincorporated before 31 July 2006 and to undertakings for collective investments subject to theLaw of 30 March 1988 or to the Law of 20 December 2002 are not subject to any Luxembourgincome tax.For a shareholder resident in Luxembourg and for a non-resident shareholder that holds theShares as part of the assets of a permanent establishment (including a permanent representative)or fixed base in Luxembourg, withholding tax will be credited against the income orcorporate tax liability upon the shareholder’s income tax assessment.Dividends distributed to non-resident individuals or non-resident companies which do not havea permanent establishment in Luxembourg are not taxable in Luxembourg, apart from thedividend withholding tax, if applicable.Taxation of Capital GainsCapital gains realised upon the disposal of Shares by a Luxembourg resident individualshareholder are not subject to taxation in Luxembourg, unless the disposal occurs less than sixmonths after the acquisition of the Shares or precedes the acquisition, or the disposal occursmore than six months after the acquisition of the Shares and the shareholder, together withfamily members, has held more than 10% of the share capital of the Company at any timeduring the five preceding years.Capital gains realised upon the disposal of the Shares by a Luxembourg resident company, or bya permanent establishment located in Luxembourg, are fully subject to corporate income tax inLuxembourg, except if the Luxembourg participation exemption regime is applicable.According to the Luxembourg participation exemption regime, capital gains realised upon thedisposal of the Shares by a Luxembourg limited liability company or by a permanent establishmentlocated in Luxembourg of a company resident in a member state of the European Unionas defined in article 2 of the EU Directive 90/435/EEC of 23 July 1990, or by a permanentestablishment located in Luxembourg of a company resident in a country which has concluded adouble taxation treaty with Luxembourg, are exempt from corporate income tax in Luxembourgprovided that, at the date of the disposal, the shareholder holds or commits itself to hold,directly or through a tax transparent vehicle, during an uninterrupted period of at least12 months, a participation of at least 10% in the capital of the Company or a participation withan acquisition price of at least 36 million.Capital gains realised upon the disposal of the Shares by holding companies subject to theformer Law of 31 July 1929 as amended and incorporated before 31 July 2006 (now subject tothe Law of 22 December 2006) and by undertakings for collective investments subject to theLaw of 30 March 1988 or to the Law of 20 December 2002 are not subject to any Luxembourgincome tax.No Luxembourg income tax will be payable, as a result of a disposal of the Shares by anindividual or corporate shareholder that is a non-resident of Luxembourg, unless the participationheld by the shareholder represents more than 10% of the share capital of the Company,and the relevant shareholder was a Luxembourg resident taxpayer during more than 15 yearsand has become a non-resident taxpayer less than five years before the sale of the Shares, orthe participation held by the shareholder represents more than 10% of the share capital of theCompany and the Shares have been held less than six months at the time of the sale. These165

conditions could be relaxed by double taxation treaties concluded between Luxembourg andthe country of residence of the shareholder.Inheritance and Gift TaxNo inheritance tax is levied on the transfer of Shares upon the death of a shareholder in caseswhere the deceased was not a resident of Luxembourg for inheritance tax purposes. No gift taxis levied in Luxembourg if the deed is not executed before a Luxembourg notary public.Net Wealth TaxLuxembourg resident companies are subject to net wealth tax on their net assets. For fullytaxable Luxembourg resident corporate entities, Shares whose dividends qualify for the participationexemption regime are excluded from the taxable basis for net wealth tax purposes. Nonresidentcompanies are subject to net wealth tax on their assets which are attributable to anenterprise or part thereof which is carried on in Luxembourg through a permanent establishment,except otherwise provided for by a tax treaty concluded by Luxembourg and the countryof residence of the non-resident company.Other Luxembourg TaxesThere is no Luxembourg registration tax, stamp duty or any other similar tax or duty payable inLuxembourg by the shareholders of the Company as a consequence of the purchase, holding ordisposal of the Shares. There is no Luxembourg value added tax payable in respect of paymentsin consideration for the issuance or disposal of the Shares or in respect of payment of dividends.ItalyThe following is a summary of the tax regime applicable to the purchase, holding and transferof the Shares, pursuant to the Italian tax legislation in force at the date of this document.The following does not amount to an exhaustive analysis of all tax implications concerning thepurchase, holding and transfer of the Shares and does not address all of the Italian income taxconsequences to the holders of the Shares (“Italy Holders”). Each prospective Italy Holder isadvised to consult its own tax counsel as to the income tax consequences of an investment inthe Shares and in relation to any applicable local and foreign taxes. The effect of existingincome tax laws and treaties, the tax laws of other jurisdictions to which an investor may besubject, and possible changes in such laws and treaties (including proposed changes, which havenot yet been adopted) will vary with the particular circumstances of each investor.Except as otherwise described, the summary only discusses certain Italian tax consequences ofholding the Shares for the absolute beneficial owners of the Shares, who are resident in Italyfor tax purposes or who carry on an activity through a permanent establishment (in the case ofcompanies) or a branch or agency (in the case of individuals) in Italy with which the holding ofthe Shares is connected.Withholding TaxIn principle, dividend payments in respect of the Shares will not be subject to Italian withholdingtax. However, as specified below, if the shareholder opts for the “administered saving”regime subsequently described, a withholding tax equal to 12.5% shall be applied.Taxation of Italian Corporate InvestorsCapital gains/Share buy-backsAny capital gains realised by either Italian corporate holders or Italian resident corporate holdersand commercial entities (including permanent establishments in Italy of foreign entites to whichthe shares are effectively connected) on the disposal or redemption of the shares will form partof their aggregate business income, subject to Italian Income Consolidated Tax Act (IITCA) at therate applicable to the relevant investor (i.e. Italian corporate income tax, “IRES”, is currentlyapplying at the general rate of 33%).166

However, pursuant to section 87 of the IITCA, capital gains realised by Italian resident corporateentities (including permanent establishments in Italy of foreign entities to which the shares areeffectively connected) on a disposal of participation do not contribute to determine theirtaxable income for IRES purposes but are exempt from taxation for 84% of their total amount,provided that the following conditions are met:a) the beneficial company has held a participation in the paying company for at leasteighteen months at the date of the sale of the shares. A LIFO principle (Last In FirstOut) is applied;b) the Participated Company must be classified as a financial “fixed asset” (immobilizzazionifinanziarie) in the first statutory financial statement closed after the date ofpurchase;c) the Participated Company must not be resident in a tax haven country in the last threeyears; andd) the Participated Company must have exercised a commercial activity for at least threeyears before the sale.The participation regime should also apply to the sale of a company which exercises the holdingactivity (the Holding), upon condition that requirements c) and d) above are met by theparticipated companies of the Holding which represent the majority of the net equity of theHolding company.DividendsDividends distributed to Italian resident corporate holders or similar commercial entities (includingpermanent establishments in Italy of foreign entities to which the shares are effectivelyconnected) are subject to IRES and, thus, taxed at the applicable rate (No local tax is due).However, according to section 89 of the IICTA, the dividends distributed by foreign entities notresident in a tax haven country are 95% tax exempted, provided that the amount distributed isnon-deductible from the computation of the taxable income of the paying company.Withholding tax creditIf the dividends distributed are subject to Luxembourg withholding tax, the amount of taxwithheld could be offset against the IRES within the limits provided by section 165 of the IICTA.However, if the 95% tax exemption should apply, the withholding tax could be offset within thelimits of the taxable income (5% of the withholding tax can be credit).According to section 165, the foreign withholding tax could be offset within the limits of thecorresponding Italian tax deriving from the ratio between the foreign taxable income and thetotal income gross of the losses carried forward.Taxation of Italian Individuals and Non-Commercial EntitiesCapital gains/share buy-backsWith regards to the capital gain arising from negotiation of the purchased Shares by:• Italian resident individuals (for transactions that do not amount to business activity);noncommercialresident entities which do not own the shares or rights in the conduct ofbusiness activity possibly carried out;they originate “different earnings” pursuant to section 67 and followings of IITCA.According to such income categories, the tax regime depends on whether the securities whichare transferred may be classified as “not qualified” or “qualified” participations. With regard tosecurities traded on regulated markets, a participation is deemed to be “qualified” when, takinginto account the rights or securities, through which such participation may be acquired, thisparticipation represents a percentage of voting rights exceeding 2% of the total voting rights,which may be exercised at the ordinary shareholders’ meeting, or a participation to thecorporate capital representing more than 5% of it. In all other cases, the participation would beregarded as “not qualified”.167

In addition, Legislative Decree No. 461 dated November 21, 1997, as amended (“LD 461/97”)provides that such capital gains:(i)(ii)if realised upon the disposal ofa “non qualified” interests:• be declared by the taxpayer operating under the “tax returns regime” in his tax returnsand taxed applying the substitute tax of 12.50% (section 5 of the LD 461/97);• be taxed by the intermediaries with whom the transferable securities have been depositedfor the administration and custody, applying the 12.50% substitute tax at the timeof sale, with regard to taxpayers choosing the “administered saving regime” (section 6of the LD 461/1997); and• in respect of taxpayers choosing the “managed saving regime”, they contribute to theformation of the annual performance obtained from the personalised portfolio management,subject to the 12.50% substitute tax applied to the managing entity (section 7 ofLD 461/1997).if arising from the transfer of “qualified” participation:• They contribute to the formation of the shareholder’s taxable income for 40% of theirtotal amount. If 40% of the amount of the capital realised by Italian resident individualsfrom the disposal of a qualified shareholding, not held in connection with a businessactivity, exceeds 40% of the amount of similar capital losses sustained in the same year,the excess amount is included in the shareholder’s taxable income, If the amount equalto 40% of capital losses exceeds the amount equal to 40% of capital gains, the excessamount, if reported on the Individual’s income tax return for the year in which the lossesare sustained, can be carried forward and deducted from the amount equal to 40% ofsimilar gains relised in the four years following those in which the losses was generated.Within the same percentage and time limits, the carry forward is granted for excesscapital losses realised prior to 2004; and• Capital gains realised through the sale of disposal of a qualified shareholding must bereported on the Indivudual’s income tax return in the section of income with progressivetax rate applicable to the holders.DividendsThe tax regime applied to dividends distributed by a non-resident entity, and received byresident individuals with regard to participation not related to the undertaking, is determinedwith regard to the percentage of participation held, and in particular, if the participation can beconsidered as “non-qualified” or “qualified”. With regard to securities negotiated in regulatedmarkets, the participations are considered “qualified” if, taking into account the rights orsecurities through which such participations may be acquired, the aforesaid participationsrepresent, in the whole, more than 2% of the voting rights which may be exercised in theordinary shareholders’ meeting, or participation to the corporate capital exceeding 5%In all other situations, the regime for “non qualified” participations applies.With regard to “non qualified” participation, the dividends distributed by a non resident entityand received by resident individuals are subject to a tax applied at a final rate of 12.50%according to the following rules:• with regards to taxpayers who have opted for a “tax return” regime, the taxation occursby the resident intermediary who undertakes the transaction; however, should thedividends not have been cashed through resident intermediaries, the beneficiary willhave to indicate such dividends in his annual income tax return according to which hewill be subject to a substitute tax with a rate of 12.5%;• with regards to taxpayers who have opted for the “administered savings” regime, thedividends deriving from non qualified participations are subject to a 12.5% withholdingtax to be paid by the beneficiary;• with regards to taxpayers who have opted for the “managed savings regime”, thedividends received from the participations are not subject to any withholding tax butthey will contribute to the formation of the annual net accrued result of individual168

portfolio management which is subject to an ad hoc substitute tax of 12.50% applied tothe managing entity; and• the withholding/substitute tax is applied on the total amount received net of taxes (socalled, “netto frontiera”) which have already been applied by the foreign State at thetime of distribution. Taxes paid abroad on dividends from “non qualified” participationscannot be deducted from taxes due.With regard to the “qualified” participations, the dividends which are distributed by a nonresident entity and received by resident individuals are subject to the tax return system andcontribute to determine the total taxable income of the receipts for personal income taxpurposes, limited to 40% of the total amount distributed. In the event that the dividends havebeen cashed through a resident intermediary, the latter applies a withholding tax of 12.50% onthe taxable rate (40%) of the amount received which is offset against the total tax due by theindividual. The tax is calculated on the total net of any taxation/withholding which may beapplied by the foreign State. Any taxation applied by the foreign State may be subtracted fromthe Italian tax with the limits of section 165 of IITCA.With regard to dividends distributed by a non resident entity and received by non-commercialentities, dividends contribute to the formation of their income for 5% of their total amount andare subject to a 33% tax rate. The intermediary taking part in the transaction applies thewithholding tax of 12.5% on the taxable income (5%) of the dividends received net of anyeventual tax applied by the foreign State.Taxation of Italian Investment Funds (UCITS)Capital gainsIn respect of the Italian UCITS and the equivalent, capital gains on shares sold or disposed byUCITS contribute to the computation of their annual net accrued result subject to a substitutetax of 12.5% applied by the manager company. In respect of Italian closed-end funds andassimilated, with fewer than 100 members, the part of the annual net accrued results pertainingto investments in “non qualified” participations is subject to a substitute tax of 12.50%. Thesubstitute tax concerning that part of the results obtained in each year and pertaining toinvestments in “qualified” participations is due at the rate of 27% on the portion of theirannual net accrued results attributable to such qualified participations, except for the casewhere the quotas or shares of such entities, owned by “Qualified Investors”, other thanindividuals, exceed 50%. The expression “Qualified Investors” refers to the persons listed in theapplicable regulation approved by Ministerial Decree No. 228 of 24 May 1999, pursuant tosection 37 of Legislative Decree No. 58 of 24 February 1998. For these purposes, participations inthe capital or the equity with voting rights of companies negotiated on regulated marketsexceeding 10% (the percentage includes rights, consisting or non consisting of securities thatallow to purchase interests in capital or equity with voting rights) are considered to be“qualified”.DividendsWith regard to Italian investment funds (UCITS) and the equivalent thereof, dividends are notsubject to any Italian withholding tax and contribute to the computation of their annual netaccrued result subject to a substitute tax of 12.50% which is applied by the manager company.Stamp DutyNo Italy stamp duty should be payable on the issue of Shares. Assuming that any documenteffecting a transfer of, or containing an agreement to transfer an interest in, one or more ofthe Shares out of a regulated market, is executed out of Italy, no Italian stamp duty should bepayable on such a document.United KingdomThe comments below are of a general nature and are based on current UK law and publishedHM Revenue & Customs practice at the date of this document. Except as otherwise stated, thesummary only discusses certain UK tax consequences of holding the Shares for the absolutebeneficial owners of the Shares who are resident (or, in the case of individuals only, ordinarily169

esident) in the UK for tax and who are not tax resident in Luxembourg and do not have apermanent establishment or fixed base in Luxembourg with which the holding of Shares isconnected (“UK Holders”). In addition, the summary (1) only addresses the tax consequences forUK Holders who hold the Shares as capital assets, and does not address the tax consequenceswhich may be relevant to certain other categories of UK Holders, for example, dealers;(2) assumes that the UK Holder, either alone or together with one or more associated orconnected persons, does not directly or indirectly control or hold 10% or more of the sharesand/or voting power of the Company; (3) assumes that a holder of Shares is beneficially entitledto the Shares and to the dividends on those Shares ; (4) assumes that there will be no register inthe UK in respect of the Shares; and (5) assumes that the Shares will not be paired with sharesissued by a company incorporated in the UK.The following is intended only as a general guide and is not intended to be, nor should it beconsidered to be, legal or tax advice to any particular UK Holder. Accordingly, potential investorsshould satisfy themselves as to the overall tax consequences, including, specifically, the consequencesunder UK law and HM Revenue & Customs practice, of the acquisition, ownership anddisposal of the Shares in their own particular circumstances, by consulting their own taxadvisers.Withholding TaxIn principle, dividend payments in respect of the Shares will not be subject to UK withholdingtax. As discussed in “Taxation—Luxembourg—Withholding tax”, such dividends will be subjectto Luxembourg withholding taxes. Any Luxembourg withholding tax is generally allowed as acredit against the UK income tax or corporation tax liability of a UK Holder, but any excess ofsuch Luxembourg withholding tax over the UK tax payable on the aggregate amount of thedividend is not generally refundable. The amount of credit for Luxembourg tax cannot exceedthe credit that would have been allowed had all reasonable steps been taken under Luxembourgdomestic law and under the 1967 Income and Capital Gains Tax Convention between theUnited Kingdom and Luxembourg to minimise the amount of tax payable in Luxembourg,including obtaining relief at source and any available refunds.Taxation of DividendsFor an individual holder who is liable to UK tax on the dividend at the dividend ordinary rate(currently 10%), the credit for Luxembourg tax deducted at source may equal or exceed his UKincome tax liability in respect of the dividend, in which case he will have no further UK tax topay. For an individual holder who is liable to UK tax on the dividend at the dividend upper rate(currently 32.5%), the UK tax will be chargeable on the gross dividend, with credit (as discussedabove) for Luxembourg tax deducted at source.An individual holder of Shares who is resident but not domiciled in the UK for tax purposes, orwho is resident but not ordinarily resident in the UK for tax purposes, will generally be liable toUK income tax only to the extent that dividends paid by the Company are remitted or deemedto be remitted to the UK.A holder within the charge to UK corporation tax will be liable for UK corporation tax on thereceipt of the gross dividend, with credit (as discussed above) for the Luxembourg tax deductedat source.Provision of InformationIt should be noted that persons in the United Kingdom paying “foreign dividends” to, orreceiving “foreign dividends” on behalf of, another person may be required to provide certaininformation to HM Revenue & Customs regarding the identity of the payee or the personentitled to the “foreign dividend” and, in certain circumstances, such information may beexchanged with tax authorities in other countries. Certain payments on or under the Shares mayconstitute “foreign dividends” for this purpose.170

Taxation of Capital GainsThe disposal by a UK Holder of interests in the Shares may give rise to a chargeable gain orallowable loss for the purposes of UK taxation of chargeable gains (“CGT”), depending on theUK Holder’s circumstances and subject to any available exemption or relief.An individual UK Holder who is domiciled in the UK, will generally be liable to UK CGT onchargeable gains made on the disposal of an interest in the Shares. An individual UK Holderwho is not domiciled in the UK will generally be liable to UK capital gains tax to the extent thatthe chargeable gains made on the disposal of an interest in the Shares are remitted or treatedas remitted to the UK.An individual holder of the Shares who is neither resident nor ordinarily resident in the UK forUK tax purposes for a period of less than five years, but who was previously resident orordinarily resident in the UK, and who disposes of such Shares during the period of nonresidencemay also be liable on returning to the UK for UK CGT despite the fact that theindividual was not resident or ordinarily resident in the UK for UK tax purposes at the time ofthe disposal.A corporate UK Holder will generally be subject to UK corporation tax on any chargeable gainarising from a disposal of the Shares.Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)No UK stamp duty should be payable on the issue of Shares. Assuming that any documenteffecting a transfer of, or containing an agreement to transfer an interest in, one or more ofthe Shares is neither (i) executed in the UK nor (ii) relates to any property situated, or to anymatter or thing done or to be done, in the UK, then no UK ad valorem stamp duty should bepayable on such a document.No SDRT should be payable in respect of the issue of, or any agreement to transfer, the Sharesprovided the Company does not retain a UK share register of the Shares.United States Federal Income Tax ConsiderationsTO ENSURE COMPLIANCE WITH U.S. TREASURY DEPARTMENT CIRCULAR 230, HOLDERS AREHEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF UNITED STATES FEDERAL TAX ISSUES IN THISPROSPECTUS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIEDUPON, BY HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ONHOLDERS UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS INCLUDED HEREIN BYTHE ISSUER IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OFCIRCULAR 230) BY THE ISSUER OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND(C) HOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM ANINDEPENDENT TAX ADVISOR.The following is a description of the principal U.S. federal income tax consequences that may berelevant to a U.S. Holder (as defined below) of Shares with respect to the acquisition, ownershipand disposition of Shares. This description addresses only the U.S. federal income tax considerationsof holders that are initial purchasers of the Shares pursuant to the Offering and that willhold the Shares as capital assets. This description is for general information only, and does notpurport to be a comprehensive description of all tax consequences of the acquisition, ownershipand disposition of Shares nor does it purport to address all aspects of U.S. federal incometaxation that may be important to a particular investor in light of such investor’s investment ortax circumstances, or to holders of the Shares that may be subject to special tax rules, such as:• dealers or traders in securities or currencies;• tax-exempt entities;• banks, financial institutions or insurance companies;• real estate investment trusts, regulated investment companies or grantor trusts;• persons that received the Shares as compensation for the performance of services;171

• holders who own, or are deemed to own, at least 10%, by voting power or value, of theCompany’s shares;• persons that have a functional currency other than the U.S. dollar;• holders who hold the Shares as part of a position in a straddle or as part of a hedging,conversion or other risk reduction transaction for U.S. federal income tax purposes; or• certain former citizens or long-term residents of the United States.Moreover, this description does not address the U.S. federal estate and gift or alternativeminimum tax consequences, or any state, local, or foreign tax consequences relating to theownership and disposition of the Shares.This description is based on the Internal Revenue Code of 1986, as amended (the “Code”), itslegislative history, existing and proposed United States Treasury Regulations promulgated thereunder,and judicial and administrative interpretations thereof, in each case as in effect and availableon the date hereof.The United States tax laws and the interpretation thereof are subject to change. These changescould apply retroactively and could affect the tax consequences described below.For purposes of this description, a “U.S. Holder” is a beneficial owner of the Shares that, for U.S.federal income tax purposes, is:• a citizen or resident of the United States;• a corporation or other entity treated as a corporation for federal income tax purposes,created or organised in or under the laws of the United States or any state thereof,including the District of Columbia;• an estate the income of which is subject to U.S. federal income taxation regardless of itssource; or• a trust, if such trust validly elects to be treated as a U.S. person for U.S. federal incometax purposes or if (1) a court within the United States is able to exercise primarysupervision over its administration and (2) one or more U.S. persons have the authorityto control all of the substantial decisions of such trust.If a partnership (or any other entity treated as a partnership for U.S. federal income taxpurposes) holds our Shares, the tax treatment of a partner in such partnership will generallydepend on the status of the partner and the activities of the partnership. Such a partner orpartnership should consult its tax adviser as to the tax considerations relevant to its particularcircumstances.Prospective holders should consult their own tax advisers with respect to the U.S. federal, state,local and foreign tax consequences of acquiring, owning or disposing of the Shares in light oftheir particular circumstances.Taxation of DistributionsSubject to the discussion under “Passive Foreign Investment Company Considerations” below,cash distributions received by a U.S. Holder on Shares, including the amount of any Luxembourgtaxes withheld, will constitute foreign-source dividend income to the extent paid out of ourcurrent or accumulated earnings and profits (as determined for U.S. federal income taxpurposes). Corporate U.S. Holders will not be entitled to claim the dividends-received deductionwith respect to dividends paid by us. Subject to applicable limitations, including the requirementthat we not be a PFIC, as described below, in the taxable year we pay a dividend or in the priortaxable year, dividends received by certain non-corporate U.S. Holders in taxable years beginningbefore 1 January 2011 will be taxable at favourable rates, up to a maximum rate of 15%. NoncorporateU.S. Holders should consult their own tax advisers to determine whether they aresubject to any special rules that limit their ability to be taxed at these favourable rates.To the extent such amounts paid as distributions on Shares exceed our current and accumulatedearnings and profits, these amounts will not be dividends, but instead will be treated first as atax-free reduction of capital to the extent of the U.S. Holder’s basis in the Shares, and thereafter172

as capital gain. We do not intend to compute (or to provide U.S. Holders with the informationnecessary to compute) earnings and profits under U.S. federal income tax principles. Accordingly,U.S. Holders should expect to treat distributions as dividends.Luxembourg taxes withheld from dividends on Shares generally will be creditable against a U.S.Holder’s U.S. federal income tax liability, subject to applicable restrictions and limitations thatmay vary depending upon the holder’s circumstances. Instead of claiming a credit, a U.S. Holdermay elect to deduct such Luxembourg taxes in computing its taxable income, subject togenerally applicable limitations. The limitation on foreign taxes eligible for credit is calculatedseparately with respect to specific classes of income. The rules governing foreign tax credits arecomplex. Therefore, U.S. Holders should consult their own tax advisers regarding the availabilityof foreign tax credits in their particular circumstances.Taxation of Capital GainsSubject to the discussion under “Passive Foreign Investment Company Considerations” below, aU.S. Holder will generally recognise U.S.-source capital gain or loss on the sale or otherdisposition of Shares, which will be long-term capital gain or loss if the holder has held suchShares for more than one year. The amount of the U.S. Holder’s gain or loss will be equal to thedifference between the amount realised on the sale or other disposition and such holder’s taxbasis in the Shares, as determined in U.S. dollars. The deductibility of capital losses is subject tolimitations.Passive Foreign Investment Company ConsiderationsIn general, a non-U.S. corporation will be considered a passive foreign investment company (a“PFIC”) for U.S. federal income tax purposes for any taxable year in which (i) 75% or more of itsgross income consists of passive income or (ii) 50% or more of the average quarterly value of itsassets consists of assets that produce, or are held for the production of, passive income. Incomputing the above calculations, a non-U.S. corporation that directly or indirectly owns at least25% by value of the stock of another corporation is treated as if it held its proportionate shareof the assets of such other corporation and received directly its proportionate share of theincome of such other corporation. Passive income generally includes dividends, interest, rents,royalties and gains from the sale of assets that produce such income.Based on certain information and estimates relating to our gross income and gross assets andthe nature of our business and upon our proposed method of operation, we do not anticipatethat we will be classified as a PFIC for our current taxable year. In this regard, we intend to treatthe gross income we derive or are deemed to derive from our time chartering, spot market andCOA activities as income from the performance of services or income from an active leasingbusiness. Accordingly, we believe that for purposes of the PFIC rules our income from our timechartering, spot market and COA activities does not constitute “passive income” and the assetsthat we own and operate in connection with the production of that income do not constitutepassive assets. Our status in our current and future years will depend on our assets and activitiesin those years. We have no reason to believe that our assets or activities will change in a mannerthat would cause us to be classified as a PFIC for our current or any future year, but we cannotassure you that we will not be classified as a PFIC for any taxable year.If we were classified as a PFIC during a U.S. Holder’s holding period with respect to our Shares,under the PFIC rules, unless the U.S. Holder makes an election available under the Code, suchholder would be liable to pay U.S. federal income tax on certain excess distributions we makeon our Shares, or on any gains upon a disposition of Shares, at the highest applicable incometax rates on ordinary income for the taxable year to which such distributions, or gains, areattributed under the PFIC rules, plus an interest charge thereon, as if the excess distribution orgain had been recognised rateably over the U.S. Holder’s holding period in our Shares. Inaddition, under certain attribution rules, if we were classified as a PFIC, U.S. Holders will bedeemed to own their proportionate share of any of our direct or indirect subsidiaries that arealso PFICs (“subsidiary PFICs”), and will generally be subject to U.S. federal income tax as if suchholders directly held the shares of such subsidiary PFICs. Moreover, if we were classified as a PFICfor a taxable year in which we pay a dividend or for the prior taxable year, the favourable173

dividend rates discussed above with respect to dividends paid to certain non-corporate U.S.Holders will not apply.If we were a PFIC, a U.S. Holder of Shares could make a variety of elections that may alleviatecertain of the tax consequences referred to above, and one of these elections may be maderetroactively. However, it is expected that the conditions necessary for making certain of suchelections will not apply in the case of the Shares.We do not intend to monitor our PFIC status. Therefore, U.S. Holders should consult their owntax advisers concerning our PFIC status and that of our subsidiaries and the tax considerationsrelevant to an investment in a PFIC, including the availability and advisability of making anysuch election discussed above.Information Reporting and Backup WithholdingPayments of dividends and sales proceeds that are made within the United States or throughcertain U.S.-related financial intermediaries may be subject to information reporting and tobackup withholding unless the U.S. Holder is a corporation or other exempt recipient or, in thecase of backup withholding, the holder provides a correct taxpayer identification number andcertifies that no loss of exemption from backup withholding has occurred. The amount of anybackup withholding from a payment to a U.S. Holder will be allowed as a credit against theholder’s U.S. federal income tax liability and may entitle the holder to a refund, provided thatthe required information is timely furnished to the U.S. Internal Revenue Service.174

Transfer RestrictionsYou are advised to consult legal counsel prior to making any offer for resale, pledge or othertransfer of our Shares on account of the following restrictions.If you purchase our Shares offered hereby in the United States pursuant to Rule 144A you willbe deemed to have represented and agreed as follows (terms used in this “Transfer Restrictions”section that are defined in Rule 144A or Regulation S under the Securities Act are used herein asdefined therein):(i) You (a) are a qualified institutional buyer, (b) are aware that the sale of our Shares toyou is being made in reliance on Rule 144A, and (c) are acquiring our Shares for yourown account or for the account of another qualified institutional buyer, as the casemay be;(ii) You understand that our Shares have not been and will not be registered under theSecurities Act and are being offered in the United States in reliance on Rule 144A onlyin a transaction not involving a public offering in the United States within the meaningof the Securities Act, and may not be reoffered, resold, pledged or otherwise transferredexcept (a) to a person whom the beneficial owner and/or any person acting onits behalf reasonably believes is a qualified institutional buyer, (b) in an offshoretransaction in accordance with Rule 903 or 904 under Regulation S or (c) pursuant to anexemption from registration under the Securities Act provided by Rule 144 thereunder(if available), in each case in accordance with any applicable securities laws of any stateof the United States or any other jurisdiction. No representation may be made as to theavailability of the exemption provided by Rule 144 under the Securities Act for resale ofour Shares; and(iii) Any offer, sale, pledge or other transfer made other than in compliance with theabove-stated restrictions shall not be recognised by us.If you purchase our Shares outside the United States pursuant to Regulation S you will bedeemed to have represented and agreed as follows:(i) You (a) are, and the person for whose account you are acquiring our Shares, if any, isoutside the United States and is not a U.S. person, (b) are not an affiliate of theCompany or a person acting on behalf of an affiliate of the Company and (c) are not inthe business of buying or selling securities or, if you are in such business, did notacquire our Shares in the initial distribution of our Shares;(ii) You are aware that our Shares have not and will not be registered under the SecuritiesAct and are being offered outside the United States in reliance on Regulation S;(iii) If in the future you decide to offer, resell, pledge or otherwise transfer your Shares,until 40 days after the later of the date of the commencement of the Offering and theclosing date, such Shares may only be offered, sold or delivered (a) in the United Statesto qualified institutional buyers within the meaning of Rule 144A under the SecuritiesAct and (b) in offshore transactions outside the United States, in compliance with, andin reliance on, Regulation S, and in each case in accordance with any other applicablelaw;(iv) You confirm that you are aware of the restrictions on the offer and sale of our Sharespursuant to Regulation S described in this Prospectus; and(v) Any offer, sale, pledge or other transfer made other than in compliance with theabove-stated restrictions shall not be recognised by us.175

Plan of DistributionItalian Public OfferingThe Italian Public Offering comprises the offer of 5,998,500 Shares to retail investors in Italy(representing approximately 10% of the offered Shares) (excluding professional investors, asdefined by the applicable Italian regulations). The Italian Public Offering will be underwrittenby Capitalia, on its behalf and on behalf of the other Italian managers.Capitalia is acting as the lead manager of the Italian Public Offering and is acting as sponsor forthe listing. Capitalia is also acting as specialist in accordance with the Italian securities marketsregulations.Each of the Italian managers shall agree with us and the Selling Shareholder, pursuant to anItalian underwriting agreement (the “Italian Underwriting Agreement”), that it will, severallyand not jointly, subject to certain conditions, procure subscribers and purchasers for or, failingwhich, subscribe or purchase for itself, a number of shares in connection with the Italian PublicOffering amounting in the aggregate to 5,998,500 shares.The Italian Underwriting Agreement provides that the Italian Public Offering may be withdrawnby us and the Selling Shareholder in certain circumstances prior to payment being made to usand the Selling Shareholder. In addition, it provides that the obligations of the Italian managersmay be terminated by them in certain circumstances prior to payment being made to us and theSelling Shareholder. See “The Italian Public Offering—Terms and Conditions of the Offering”.The result of the Italian Public Offering will be published in Italy in a daily newspaper withnation-wide circulation and on the website of the Company (www.damicointernationalshipping.com).The Prospectus will be published in Luxembourg via the website of the LuxembourgStock Exchange (www.bourse.lu).Institutional OfferingWe, the Selling Shareholder and the institutional managers named in the following table willenter into an institutional underwriting agreement (the “Institutional Underwriting Agreement”),pursuant to which the institutional managers shall agree, severally and not jointly,subject to certain conditions, to procure subscribers or purchasers for or, failing which, tosubscribe for and purchase from us and the Selling Shareholder the total number of Shares setout in the table below at the offer price in connection with the Institutional Offering.Institutional managersNumber of SharesJ.P. Morgan Securities Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *Capitalia S.p.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *Fortis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *Banca Caboto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,981,463* Share allocation between the institutional managers shall be determined following the roadshow and prior to enteringinto the Institutional Underwriting Agreement in connection with the Institutional Offering.JPMorgan and Capitalia are the lead managers of the Institutional Offering and Joint GlobalCoordinators of the Offering.The Institutional Underwriting Agreement provides that the obligations of the institutionalmanagers are subject to certain conditions precedent, and the Institutional UnderwritingAgreement may be terminated in certain circumstances prior to payment for the sale of theShares being made to us and the Selling Shareholder. The closing of the Institutional Offering isalso conditional upon the closing of the Italian Public Offering. We and the Selling Shareholderhave given certain representations and warranties to the institutional managers and haveagreed to indemnify the institutional managers against certain liabilities in connection with theoffer and sale of the Shares.176

Over-Allotment OptionThe Selling Shareholder has granted to JPMorgan, on behalf of the institutional managers, anoption to purchase up to an additional 8,996,994 Shares, equal to approximately 15% of theShares offered in the Offering (excluding the Shares included in the Over-Allotment Option), atthe offering price, less applicable commissions, to cover any over-allotments or for stabilisationactivities. This over-allotment option may be exercised, in whole or in part, for 30 calendar daysfollowing the commencement of trading of our Shares on the MTA.Lock-Up AgreementWe and the Selling Shareholder have agreed not to issue, sell or otherwise dispose of our Shares(or any other securities exchangeable or convertible into such Shares), without the prior writtenconsent of the Joint Global Coordinators, not to be unreasonably withheld, during the periodcommencing on the date of the lock-up agreement and ending 180 days after the first day oftrading of the Shares on the MTA. In addition, we and the Selling Shareholder have agreed notto approve any increase of share capital or issuance of bonds or financial instruments that areconvertible into or exchangeable for our Shares for 180 days from the commencement of thetrading of our Shares on the MTA, without the prior written consent of the Joint GlobalCoordinators, which consent shall not be unreasonably withheld. These restrictions do not applyto (i) the Shares offered in the Offering; and (ii) the over-allotment option shares; (iii) the saleor offer of Shares or options assigned or offered to the employees of the Group pursuant toincentive stock plans; and (iv) any transfer required by law of regulation or by any competentauthority.Commissions and Costs in Respect of the OfferingWe and the Selling Shareholder will pay to the Institutional Managers and the Italian Managersa gross commission of 2.5% of the aggregate offering price in respect of the Offer Shares soldin the Offering and any Offer Shares sold pursuant to the Over-Allotment Option. In addition,we and the Selling Shareholder may pay to the Joint Global Coordinators an incentive fee of upto 0.5% of the aggregate offering price in respect of the Shares offered in the Offering, at ourdiscretion and that of the Selling Shareholder.We and the Selling Shareholder have agreed to reimburse the Joint Global Coordinators inrespect of certain expenses incurred in connection with the Offering.StabilizationIn connection with the Offering, JPMorgan as stabilizing manager (or any person acting for thestabilizing manager) may over-allot Shares or effect transactions with a view to supporting themarket price of the Shares on the MTA for a limited period at a level higher than that whichmight otherwise prevail in the open market. However, there is no assurance that the stabilizingmanager (or any agent of the stabilizing manager) will undertake stabilisation action. Any suchstabilizing, if commenced, may begin on or after the day on which trading in the Shares beginson the MTA, may be discontinued at any time and must be brought to an end after a limitedperiod. Any such stabilizing shall be in compliance with all applicable laws, regulations andrules.Selling RestrictionsItalyEach institutional manager has represented and agreed that, other than in its capacity as anItalian manager, as applicable, it has not offered or sold or distributed any offering material,and will not offer or sell or distribute any offering material, directly or indirectly, in Italy or to aresident of Italy other than to professional investors as defined in the relevant Italian regulations.Each institutional manager has further agreed that any such offer or sale or anydistribution of this Prospectus or any rendering of advice in respect of an investment in theShares within Italy must be conducted either by securities dealing firms (SIMs) or by authorisedbanks or investment firms, as described by the Unified Financial Act and Regulation No. 11522.177

United StatesThe Shares have not been and will not be registered under the U.S. Securities Act or with anysecurities regulatory authority of any state of the United States of America for offer or sale aspart of their distribution and may not be offered or sold within the United States except inaccordance with Rule 144A.Each institutional manager has represented and agreed that (a) it, through its respective sellingagents, proposes to resell the Shares in the United States of America only to qualifiedinstitutional buyers in the United States of America in reliance on Rule 144A under the U.S.Securities Act and (b) it proposes to resell the Shares outside the United States in offshoretransactions in compliance with Regulation S under the U.S. Securities Act and in accordancewith applicable law. Any offer or sale of Shares in reliance on Rule 144A will be made bybroker-dealers who are registered as such under the U.S. Exchange Act of 1934, as amended.Terms used above have the meanings given to them by Regulation S and Rule 144A under theU.S. Securities Act.In addition, until 40 days after the commencement of the offering, an offer or sale of Shareswithin the United States by any dealer whether or not participating in the offering may violatethe registration requirements of the U.S. Securities Act if such offer or sale is made otherwisethan in accordance with Rule 144A.United KingdomEach institutional manager has represented, warranted and agreed that (i) it has not offered orsold and will not offer or sell, any Shares to persons in the United Kingdom other than topersons whose ordinary activities involve them in acquiring, holding, managing or disposing ofinvestments (as principal or agent) for the purposes of their businesses or who it is reasonableto expect will acquire, hold, manage or dispose of investments (as principal or as agent) for thepurposes of their business where the issue and sale of the Shares would otherwise constitute acontravention of Section 19 of the Financial Services and Market Act 2000 (the “FSMA”) by theCompany, (ii) it has only communicated or caused to be communicated and will only communicateor cause to be communicated any invitation or inducement to engage in investment activity(within the meaning of section 21 of the FSMA) received by it in connection with the issue orsale of any Shares in circumstances in which section 21(1) of the FSMA does not apply to theCompany; and (iii) it has complied and will comply with all applicable provisions of the FSMAwith respect to anything done by it in relation to the Shares in, from or otherwise involving theUnited Kingdom.European Economic AreaIn relation to each Member State of the European Economic Area which has implemented theProspective Directive (each, a “Relevant Member State”) an offer to the public of the Sharesmay not be made in that Relevant Member State (other than in connection with the ItalianPublic Offering) except that an offer to the public in that Relevant Member State of any Sharesmay be made at any time under the following exemptions under the Prospectus Directive, ifthey have been implemented in that Relevant Member State:(a)to legal entities which are authorised or regulated to operate in the financial marketsor, if not so authorised or regulated, whose corporate purpose is solely invest insecurities;(b) to any legal entity which has two or more of (1) an average of at least 250 employeesduring the last financial year; (2) a total balance sheet of more than 343,000,000 and(3) an annual net turnover or more than 350,000,000, as shown in its last annual orconsolidated accounts;(c)by the institutional managers to fewer than 100 natural or legal persons (other thanqualified investors as defined in the Prospectus Directive) subject to obtaining the priorconsent of the Joint Global Coordinators for any such offer; or(d) in any other circumstances falling within Article 3(2) of the Prospectus Directive,provided that no such offer of Shares shall result in a requirement for the publication178

y the Company, the Selling Shareholder or any institutional manager of a prospectuspursuant to Article 3 of the Prospectus Directive.For the purposes of this provision, the expression an “offer to the public” in relation to anyshares in any Relevant Member State means the communication in any form and by any meansof sufficient information on the terms of the offer and any shares to be offered so as to enablean investor to decide to purchase any shares, as the same may be varied in that Member Stateby any measure implementing the Prospectus Directive in that Member State and the expression“Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementingmeasure in each Relevant Member State.CanadaEach manager has acknowledged and agreed that the Shares will not be sold in Canada on thebasis of a prospectus and may not be offered or sold, directly or indirectly in any province orterritory of Canada other than as permitted by virtue of an exemption from the applicableprospectus requirements and in accordance with the applicable securities legislation of theprovince or territory concerned.JapanEach manager has acknowledged and agreed that: (i) the Shares have not been and will not beregistered under the Securities and Exchange Law of Japan, or the Securities and Exchange Law;and (ii) it has not solicited, and will not, directly or indirectly, solicit offers of our Shares or offer,sell or deliver Shares in Japan, including to any resident of Japan (which term as used hereinmeans any person resident in Japan, including any corporation or other entity organised underthe laws of Japan), except pursuant to an exemption from the registration requirements of, andotherwise in compliance with, the Securities and Exchange Law and any applicable laws,regulations and ministerial guidelines of Japan.Jurisdictions other than ItalyNo action has been or will be taken by us, the Selling Shareholder, the institutional managers orthe Italian managers in any jurisdiction other than Italy that would permit a public offering ofthe Shares or the possession, circulation or distribution of this Prospectus or any other materialrelating to us or the Shares in any jurisdiction where action for that purpose is required.Accordingly, the Shares may not be offered or sold, directly or indirectly, and neither thisProspectus nor any other offering material or advertisements in connection with the Shares maybe distributed or published in or from any country or jurisdiction except under circumstancesthat will result in compliance with any applicable rules and regulations of any such country orjurisdiction.Persons into whose hands this Prospectus comes are required by us, the Selling Shareholder, andthe institutional managers to comply with all applicable laws and regulations in each country orjurisdiction in or from which they purchase, offer, sell or deliver Shares or have in theirpossession or distribute such offering material, in all cases at their own expense.179

The OfferingThe Italian Public Offering—Terms and ConditionsConditions to Which the Offering is SubjectThe Offering is conditioned only, inter alia, on the requirement that the Shares be admitted totrading by the Italian Stock Exchange.Size of the OfferingThe Offering, which is aimed at the admission to listing on the MTA—STAR segment, consists ofup to 59,979,963 Shares (up to 68,976,957 Shares assuming full exercise of the Over-AllotmentOption), up to 20,992,987 Shares of which are newly issued as a result of a capital increasewithout pre-emption rights, pursuant to Article 5 of the articles of association of the Company,to be resolved by the Board of Directors in a meeting expected to be held on 26 April 2007 andup to 38,986,976 Shares of which (or up to 47,983,970 Shares assuming full exercise of the Over-Allotment Option) are offered by the Selling Shareholder.The Offering, coordinated and managed by Capitalia and JPMorgan (the “Joint Global Coordinators”),shall be composed of:(a)(b)a public offer to subscribe for and/or purchase 5,998,500 Shares, equal to approximately10% of the Shares in the Offering, addressed to the public at large in Italy (the “ItalianPublic Offering” or “Public Offer”). The Public Offer will only take place in Italy andwill be coordinated and managed by Capitalia. Institutional Investors may not participatein the Public Offer, but may only participate in the Institutional Offering underpoint b) below; anda simultaneous private placement (the “Institutional Offering”) reserved to ProfessionalInvestors in Italy and institutional investors abroad, pursuant to Regulation S of theUnited States Securities Act of 1933, as amended, and in the United States of Americapursuant to Rule 144A as adopted by virtue of the Securities Act (see also “Plan ofDistribution”).The Joint Global Coordinators, in agreement with the Company and the Selling Shareholder,reserve the right to reduce the number of Shares offered. Notice of any such reduction shall begiven to the public in the additional notice relating to the offer price (see “—Offer Price—Notices regarding the Final Price Range, the Maximum Price and the Offer Price”); this couldentail a reduction in the number of Shares placed under the Offering, there first being areduction in the number of Shares offered for sale by the Selling Shareholder, as it will becommunicated in the additional notice.Duration of the Public Offer and Description of the Underwriting ProceduresThe Public Offer will commence at 9:00 a.m. on 16 April 2007 and will close at 1:00 p.m. on26 April 2007 (the “Offering Period”).The Joint Global Coordinators, in agreement with the Company and the Selling Shareholder,reserve the right to extend the Offering Period at any time and for any reason, by giving timelynotice thereof to the CSSF and to the public by a notice to be published on the Company’swebsite (which may not be accessible from certain jurisdictions, including the U.S.) as well as inat least one daily economic and financial newspaper, with nationwide circulation in Italy, by thelast day of the Offering Period.A copy of the translation in the Italian language of the “Summary” section of the Prospectus(the “Summary”) will be available, free of charge, to all those requesting one from thePlacement Agents, the Company and the Italian Stock Exchange, before the beginning of thePublic Offer.The Company also reserves the right to publish the Prospectus and the Summary on its ownwebsite: www.damicointernationalshipping.com, subsequent to its issue pursuant to law.180

A. Subscriptions by Retail InvestorsRetail investors may submit an application to participate in the Public Offer during the OfferingPeriod by delivering the appropriate subscription form, duly completed and signed by applicantsor their authorised agents, to a Placement Agent (subscription forms are available at PlacementAgents’ offices). Trust companies performing investment portfolio management services, includingthose doing so as nominees referred to in Article 60, paragraph 4, of Legislative DecreeNo. 415 of July 23, 1996, may participate in the Public Offer only. They must complete therelevant subscription form for each client by entering the client’s fiscal code in the appropriatebox. Trust companies should leave the space for the first and last name (company title orbusiness name) blank and insert the trust company’s name and fiscal code in the space intendedfor the registration of the Shares.Retail investors may also submit their applications to participate in the Public Offer throughpersons authorised to perform individual investment portfolio management services pursuant tothe Single Financial Act n. 58/1998 and the relevant implementing provisions (the “TestoUnico”), provided that these persons sign the appropriate form in the name and on behalf ofthe applicant, and through persons authorised to receive and transmit orders, pursuant to theTesto Unico, on the conditions provided for by the Regulations governing the activities offinancial intermediaries as approved by CONSOB Resolution No. 11522 of July 1st, 1998, assubsequently amended (“CONSOB Regulation No. 11522”).A special window will be activated on website www.damicointernationalshipping.com fromwhich the applicant may print out the Summary and the subscription form, as well as theProspectus, which is to be submitted to a Placement Agent.Retail investors who operate through Placement Agents offering on-line investment servicespursuant to Article 32 of the Testo Unico (which shall be specifically identified in the additionalnotice bearing the list of Placement Agents) may participate in the Public Offer via internet incompliance with the current provisions of law or regulations. For this purpose, PlacementAgents may set up on-line services that identify the retail investor, issue a password oridentification code and then allow the retail investor to give purchase instructions via internetunder conditions of complete awareness. The procedure to follow in order to subscribe and/orpurchase Shares offered in the Public Offer is described in the operational sites of PlacementAgents offering on-line investment services. In general, this subscription procedure involvesaccess, through the use of a personal password, to a special section within the customer area inwhich customers, on line and using their personal passwords, may give the same personal andfinancial details as those that are necessary for an application on paper without any differencewhatsoever. When the entry of this data has been confirmed, it will be summarised on thescreens of the customers, who will be required to re-confirm the correctness of the data. Thesubscription will only be considered valid after the data has been confirmed twice. Please notethat this form of subscription neither changes nor alters in any way the relationship betweenon-line Placement Agents and Capitalia, with respect to the relationships between Capitalia andthe other Placement Agents. Placement Agents using the on-line system undertake to send thenotices under the provisions applicable to persons who operate on line, without prejudice to allobligations on the part of the Placement Agents provided for by CONSOB Regulation No. 11522,where applicable. Placement Agents that use on-line systems expressly warrant to Capitalia thattheir IT procedures are suitable for the purposes of receiving remote subscriptions from theircustomers and that the Summary is available on their websites for consultation and printing.Authorised Placement Agents that intend to place the Shares through cold calling pursuant toArticle 30 of the Testo Unico will collect applications to participate in the Public Offer bothdirectly at their branches or offices and through financial promoters under Article 31 of theTesto Unico.Pursuant to Article 30, paragraph 8, of the Testo Unico, the provisions under paragraph 6 of thesame Article (under which the effectiveness of contracts entered into out of premises (“fuorisede”) through financial promoters or by cold-calling techniques pursuant to Article 32 of theTesto Unico is suspended for seven days from the date of their execution by the retail investor)shall not apply to public offers for the purchase and subscription for shares with voting rightstraded on regulated markets, as well as for shares admitted to listing but not yet traded, inaccordance with the guidelines of CONSOB.181

Applications for subscription received by the Placement Agents before 9:00 a.m. on 16 April2007 and after 1:00 p.m. on 26 April 2007 are not valid and will not be accepted.On the basis of the data provided by each Placement Agent, Capitalia reserves the right toconfirm the validity of applications submitted for the Public Offer, having regard to theprocedures and conditions laid down therefore, without prejudice to any communicationprescribed by law or applicable regulation.Suspension or Cancellation of the Public OfferShould any extraordinary circumstance arise between the date of publication of the Prospectusand the Summary and the day before the beginning of the Public Offer of the type envisagedby international market practice, such as, inter alia, exceptional events entailing adverse changesin the political, financial, economic, currency, regulatory or market situation, at either domesticor international level, or other material adverse events concerning the economic and financialposition of the Group, or in any case significant events affecting the Group that are likely toprejudice the successful outcome of, or to make it inadvisable to proceed with the Offering, orshould the Public Offer Underwriting Agreement under “—Placement and Subscription—Underwriting”below not be executed, the Joint Global Coordinators, after consultation with theSelling Shareholder, may decide not to start the Public Offer which will be deemed to have beencancelled. Such decision shall be promptly notified to CSSF and to the public by a notice to bepublished in at least one daily economic and financial newspaper, with nationwide circulation inItaly and on the Company’s website (www.damicointernationalshipping.com), no later than thedate set for the start of the Public Offer.If the Public Offer is cancelled, the Institutional Offer will not take place or will be withdrawn.The Company and the Selling Shareholder, after consultation with the Joint Global Coordinators,also reserve the right to withdraw, in whole or in part, the Public Offer and/or the InstitutionalOffer, upon timely notice to CSSF and to the public by a notice to be published in at least onedaily economic and financial newspaper, with nationwide circulation in Italy, by the PaymentDate (as defined under “—Payment and delivery of Shares” below) if (i) there are fewersubscriptions received at the end of the Offering Period than the quantity offered therein,(ii) the Institutional Offer is either partially or totally unsuccessful due to the partial or totalfailure to undertake, or owing to the termination of the effectiveness of, the underwritingcommitment regarding the Shares offered in the Institutional Offer, or (iii) if the underwritingcommitment under the Public Offer Underwriting Agreement totally or partially ceases to exist,or (iv) if extraordinary circumstances arise which are of the type envisaged by internationalmarket practice, such as, inter alia, exceptional events entailing adverse changes in the political,financial, economic, currency, regulatory or market situation, at either domestic or internationallevel, or other adverse events concerning the economic or financial position of the Group, or inany case significant events affecting the Group that are likely to prejudice the successfuloutcome of, or to make it inadvisable to proceed with, the Offer.The Public Offer will be withdrawn in any event should the Italian Stock Exchange not grantand/or should it revoke the admission to trading pursuant to Article 2.4.3, paragraph 7, of theStock Exchange Regulations.Reduction of the Subscription Amount and Procedures of ReimbursementAfter submission of the application for subscription, retail investors may not reduce the amountof their subscription.Subscription AmountRetail investors willing to participate in the Public Offer must submit their application exclusivelyto Placement Agents for minimum amounts of 900 Shares (the “Minimum Amount”) or amultiple thereof, without prejudice to the allotment criteria described under “—Allotment—Information to be disclosed before the allotment” below, or for minimum amounts equal to4,500 Shares (the “Increased Minimum Amount”) or multiple thereof, without prejudice to theallotment criteria described under “—Allotment” below. The subscription of amounts equal tothe Minimum Amount or its multiples does not rule out the subscription of amounts equal to182

the Increased Minimum Amount or its multiples, nor does the subscription of amounts equal tothe Increased Minimum Amount or its multiples rule out the subscription of amounts equal tothe Minimum Amount or its multiples, including through the use of the same subscription form.Withdrawal of SubscriptionsApplications for subscription are irrevocable and may not be made subject to conditions. In theevent of publication of a supplement to the Prospectus, investors who have already agreed topurchase or subscribe for the securities before the supplement is published shall have the right,exercisable within a time limit which shall not be shorter than two working days after thepublication of the supplement, to withdraw their acceptances.Payment and Delivery of SharesThe Shares allotted must be paid for on or about 3 May 2007 (the “Payment Date”) at the officeof the Placement Agent that has received the application, without fees or other expenses beingcharged to the applicant.In the event of an extension of the Offering Period, any change in the Payment Date will beindicated in the notice of extension of the Offering.Upon payment, the Shares allotted in the context of the Public Offer will be made available tothe assignees, in dematerialised form, by being accounted for in deposit accounts held by thePlacement Agents with Monte Titoli.Results of the OfferingWithin five days after the end of the Public Offer, a summary of the results of the Offering willbe published in at least one daily economic and financial newspaper with nationwide circulation.At the same time a copy of such notice will be transmitted to CSSF and the Italian StockExchange.Procedures for the Exercise of Possible Pre-Emption Rights, the Trading of SubscriptionRights and for the Treatment of Unexercised Subscription RightsUnder the Offering there is no provision for the exercise of pre-emption rights in relation to thenew Shares. Furthermore, no shareholder holds a right to subscribe new Shares under theOffering; nor is there any provision for procedures for the treatment of unexercised subscriptionrights.AllotmentProspective Investors to Which the Shares are Offered and MarketsThe Public Offer is addressed only to retail investors in Italy.Qualified dealers, as defined in Articles 25, letter d) and 31, paragraph 2, of CONSOB RegulationNo. 11522 (other than natural persons under Article 31, paragraph 2, of the same resolution,asset management companies authorised to perform individual investment portfolio managementservices on behalf of third parties and trust companies performing investment portfoliomanagement services, including those doing so as nominees, referred to in Article 60, paragraph4, of Legislative Decree No. 415 of July 23, 1996) (the “Professional Investors”) andforeign institutional investors (together with the Professional Investors, the “Institutional Investors”)may not participate in the Public Offer, but may participate in the Institutional Offering.Persons resident in Italy at the time of participation in the Offering who may at the same timebe considered, pursuant to U.S. Securities Laws and other relevant applicable local regulations,resident in the United States of America or in any other country in which financial instrumentsmay not be offered without permission from the competent authorities (the “Other Countries”),may not participate in the Public Offer. No financial instruments may be offered or traded inthe United States of America or in Other Countries unless specific permission is given inaccordance with the applicable provisions of law in each of these Countries, or unless anexception to such provisions is allowed. The Shares have not been, nor will they be, registeredpursuant to the United States Securities Act of 1933, as amended, or pursuant to the183

corresponding regulations in force in Other Countries. Accordingly, they may not be offered orin any case delivered, either directly or indirectly, in the United States of America or in OtherCountries.Capitalia reserves the right to take any appropriate action should it determine that residents inItaly have participated in the Public Offer in breach of the relevant provisions in force in theUnited States of America or in Other Countries.The Institutional Offering is reserved to Institutional Investors, both in Italy and abroad,pursuant to Regulation S of the United States Securities Act of 1933, as amended, including theUnited States of America, pursuant to Rule 144A adopted by virtue of the United StatesSecurities Act of 1933, excluding Australia, Canada and Japan.Principal Shareholders, the General Manager or Members of the Board of Directors ofthe Issuer, Who Intend to Participate in the Public Offer and Persons Who Intend toParticipate in the Public Offer for an Amount Exceeding 5%To the knowledge of the Company, neither the principal shareholders, nor any of the membersof the Board of Directors, intend to participate in the Public Offer.To the knowledge of the Company, no one intends to participate in the Public Offer for anamount exceeding 5% of the total number of shares in issue at the end of the Offering.Information to be Disclosed Before the Allotmenta) Claw BackThe Public Offer will consist of 5,998,500 Shares, equal to approximately 10% of the Offering .The remainder of the Shares will be allotted between the syndicates at the Joint GlobalCoordinators’ discretion, after consultation with the Company and the Selling Shareholder basedon the quantity of the applications received by the Public Offer Syndicate and the quantity andquality of the applications received by the Institutional Offer Syndicate.If there are fewer total applications for the Public Offer than the minimum reserved amount,any residual Shares may be included in the Institutional Offering and vice versa, provided thatthe demand collected in the over-subscribed offer is large enough to cover the residual Shares.A portion of not more than 30% of the Shares actually allotted to retail investors will be usedto satisfy requests from retail investors for amounts corresponding to the Increased MinimumAmount or its multiples. If there are fewer requests for amounts corresponding to the IncreasedMinimum Amount or its multiples than the amount set aside for these requests, the residualShares may be used to satisfy requests from retail investors for amounts corresponding to theMinimum Amount or its multiples. If there are fewer requests for amounts corresponding to theMinimum Amount or its multiples than the portion set aside for these requests, the residualShares may be used to satisfy requests from retail investors for amounts corresponding to theIncreased Minimum Amount or its multiples, even in excess of the maximum limit.Capitalia will make the allotment with respect to the Public Offer at a centralised level based onthe relevant mandate received by the Company and the Selling Shareholder.b) Allotment CriteriaWith regard to the Shares reserved to the Public Offer Syndicate, such Shares will be allotted toretail investors in accordance with the following criteria:A. Applications for Amounts Equal to the Minimum Amount or its MultiplesIf the Placement Agents receive applications from retail investors for amounts corresponding tothe Minimum Amount or its multiples that exceed the quota of the Offering reserved to thePublic Offer, each applicant will be allotted an amount of Shares corresponding to the MinimumAmount.184

If there are residual Shares after this allotment, such residual Shares will be allotted inaccordance with the following criteria:• Capitalia will allot the residual Shares to individual applicants in proportion to thenumber of Shares that each applicant has requested and has not been allotted, less theMinimum Amounts already allotted, but in amounts equal to the Minimum Amount orits multiples. This proportional allotment will be rounded down to the MinimumAmount; and• if there are further residual Minimum Amounts after the rounding-off has been carriedout following the allotment under the previous point, Capitalia will allot by drawingsuch Minimum Amounts to the applicants who have taken part in the proportionalallotment under the previous point. The drawing will be carried out pursuant toprocedures that comply with the criteria of fairness and equal treatment of investors andthat are subject to review.If the amount offered is insufficient to allot a Minimum Amount to each applicant, Capitaliawill allot the Minimum Amounts by drawing, to be carried out pursuant to procedures thatcomply with the criteria of fairness and equal treatment of investors and that are subject toreview.B. Applications for Amounts Equal to the Increased Minimum Amount or its MultiplesIf the Placement Agents receive applications from retail investors for amounts corresponding tothe Increased Minimum Amount or its multiples that exceed the quota of the Offering reservedto the Public Offer, each applicant will be allotted an amount of Shares corresponding to theIncreased Minimum Amount.If there are residual Shares after this allotment, such shares will be allotted in accordance withthe following criteria:• Capitalia will allot the residual Shares to individual applicants in proportion to thenumber of Shares that each has requested and has not been allotted, less the IncreasedMinimum Amounts already allotted, but in amounts equal to the Increased MinimumAmount or its multiples. This proportional allotment will be rounded down to theIncreased Minimum Amount; and• if there are further residual Increased Minimum Amounts after the rounding-off hasbeen carried out following the allotment under the previous point, Capitalia will allotthese amounts by drawings to the applicants that have taken part in the proportionalallotment under the previous point. The drawing will be carried out pursuant toprocedures that comply with the criteria of fairness and equal treatment of investors andthat are subject to review.If the amount offered is insufficient to allot an Increased Minimum Amount to each applicant,Capitalia will allot the Increased Minimum Amounts by drawings, to be carried out pursuant toprocedures that comply with the criteria of fairness and equal treatment of investors and thatare subject to review.c) Preferential treatmentNo provision is made for incentives to subscribe for or to purchase the Shares.d) Treatment of Subscriptions or of the Offers for Subscription in the Context of theAllotmentThe Placement Agent does not determine the treatment of applications for subscription.e) Minimum Allotment TargetNo minimum allotment target is set for the tranche reserved to the Public Offer.185

f) Conditions to Closing of the Public Offer and Minimum Duration of the OfferingPeriodThe Public Offer does not provide for any conditions to closing. The Offering Period must havea duration of at least two days.g) Multiple SubscriptionsThe applicants for the Public Offer are allowed to make multiple applications.Procedure to Notify the Applicants of the AllotmentsEach Placement Agent will proceed to notify the applicants of the amounts allotted to themafter receiving the notice of allotment from Capitalia, and, in any event, before the PaymentDate.Over-Allotment and Over-Allotment OptionThe Selling Shareholder shall grant JPMorgan, on behalf of the institutional managers, theoption to borrow a maximum additional amount of 8,996,994 Shares corresponding to approximately15% of the number of Shares offered under the Offering. In the event of overallotments,the Joint Global Coordinators may totally or partially exercise this option and placethe Shares so borrowed with Institutional Investors.The Selling Shareholder shall grant JPMorgan, on behalf of the institutional managers, anoption to purchase up to an additional 8,996,994 Shares at the offer price to cover overallotments,if any, in connection with the Offering, according to the procedures specified in theprevious paragraph (the so-called “Over-Allotment Option”).The abovementioned options may be exercised up to 30 days after the date of start of tradingon the MTA.Offer PriceOffer price and Expenses Charged to the ApplicantThe Company shall determine at the end of the Offering Period (subject to extension of theOffering Period), in agreement with the Selling Shareholder and the Joint Global Coordinators,the offer price based on the outcome of the Offering.The above determination shall be based on, inter alia: (i) the conditions of the domestic andinternational securities market; (ii) the quantity and quality of the applications received fromProfessional Investors in Italy and Institutional Investors abroad; and (iii) the quantity of theapplications received in the context of the Public Offer.The Company and the Selling Shareholder, also on the basis of the studies carried out by theJoint Global Coordinators, have determined, in agreement with the Joint Global Coordinators,an economic capital value of the Company ranging from a minimum of 3 386.9 million and amaximum of 3 580.3 million (excluding net financial indebtedness and net equity attributable tominority interest), corresponding to a price range (the “Price Range”) equal to a minimum of3 3.00 per Share and a maximum of 3 4.50 per Share.In determining the Price Range, consideration was given to the results and growth prospects inthe current and in the subsequent financial years of the Company and of its Group, applyingthe methods most commonly recognised by the international practice; the conditions of themarket and the results of the pre-marketing carried out with institutional investors of a highinternational standing were also taken into consideration. For the purposes of the abovedetermination the findings resulting from the application of the comparable listed companymarket multiples method were taken into particular account, subject to the application of thecash flow valuation method as the control analysis (the so-called “Discounted Cash Flow”method).The reference multipliers mainly used in applying the “Market Multiples” method were, a) theeconomic capital value, including net financial indebtedness and net equity attributable tominority interests, over EBITDA from recurring operations (EV/EBITDA), b) the economic capital186

value, excluding net financial indebtedness and net equity attributable to minority interests,over Profit Before Taxes (P/PBT).For guidance purposes only, the table below indicates the Company’s EV/EBITDA, from recurringoperations, as well as P/PBT calculated on the basis of the Price Range.EV/EBITDA* P/PBT*Multiple calculated on the basis of the lowest value of the PriceRange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 times 5.5 timesMultiple calculated based on the top value of the Price Range . . . . . . . . 9.6 times 8.2 times* Calculated on the basis of the Noon Buying Rate of the Euro on 3 April 2007 for$1.3363 = 31.00.For guidance purposes only, below are some multipliers related to a sample of comparableslisted companies operating in the shipping sector. These multipliers were calculated usingmarket capitalisations as at 30 March 2007, as well as data taken from the consolidated incomestatements for the twelve months ended 2006 and from the consolidated balance sheet as at31 December 2006.EV/EBITDA P/PBTD/S Torm A/S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9 times 10.5 timesEuronav S.A. (1) .............................................. 6.8times 8.1timesFrontline Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6 times 3.9 timesGeneral Maritime Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1 times 6.0 timesNavigazione Montanari . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0 times 10.8 timesOmi Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 times 5.4 timesOverseas Shipholding Group Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 times 6.4 timesTeekay Shipping Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1 times 14.6 timesTsakos Energy Navigation Limited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6 times 5.0 times(1) For Euronav, net financial indebtedness taken from 30 June 2006 interim report.The Company, the Selling Shareholder and the Joint Global Coordinators reserve the right topublish a further price range (the “Final Price Range”), contained within the Price Range, beforethe beginning of the Public Offer pursuant to the modalities described under “—Noticesregarding the Final Price Range, the Maximum Price and the Offer Price” below.The Final Price Range, if any, will be determined by the Company and the Selling Shareholder,in agreement with the Joint Global Coordinators before the beginning of the Public Offer, onthe basis of the capital markets’ performance and of the interest shown by Institutional Investorsin the context of the Institutional Offering, as well as in the light of the application of the“Market Multiples” measurement method, which entails the comparison of the Company withsome listed reference companies, based on indexes and multipliers of significant economic,financial and equity magnitudes.The Company, the Selling Shareholder and the Joint Global Coordinators reserve the right topublish a maximum price (the “Maximum Price”), before the beginning of the Public Offerpursuant to the modalities described under “—Notices regarding the Final Price Range, theMaximum Price and the Offer Price” below. The Maximum Price will fall within the Final PriceRange and will be determined by the Company and the Selling Shareholder, in agreement withthe Joint Global Coordinators before the beginning of the Public Offer, on the basis of thecapital markets’ performance and of the interest shown by Institutional Investors in the contextof the Institutional Offering, as well as in the light of the application of the “Market Multiples”measurement method, which entails the comparison of the Company with some listed referencecompanies, based on indexes and multipliers of significant economic, financial and equitymagnitudes.187

The offer price will be determined by the Company and by the Selling Shareholder in agreementwith the Joint Global Coordinators at the end of the Offering Period, taking account, inter alia,the conditions of the domestic and international securities markets, the quantity and quality ofthe demand received from Professional Investors in Italy and Institutional Investors abroad andthe quantity of applications received in the context of the Public Offer.The offer price will be the same for both the Public Offer and the Institutional Offering.No additional charge or expense shall be borne by the applicants under the Public Offer.Applicants not having a customer relationship with the Placement Agent to which they submittheir applications for subscription may be asked to open a current or securities account or topay a temporary non-interest-bearing deposit in an amount equal to the value of the Sharesrequested, calculated on the basis of the Maximum Price. This payment will be returned to theapplicant, without any fee or expense being charged, if the application for subscriptionsubmitted by the same is not accepted.Notices Regarding the Final Price Range, the Maximum Price and the Offer PriceA Final Price Range, if any, will be disclosed to the public by an additional notice to bepublished on the Company’s website (which may not be accessible from certain jurisdictions,including the U.S.), as well as in a daily newspaper, with nationwide circulation in Italy, as soonas it is determined and in any event within the day before the beginning of the Offering Period,and will at the same time be notified to CSSF. The notice on the Final Price Range will alsoinclude the main market multipliers of the Issuer, information on its capitalisation, the expectedproceeds from the capital increase and the value of the Offering, as well as the value of theMinimum Amount and of the Increased Minimum Amount, calculated on the basis of the FinalPrice Range.A Maximum Price, if any, will be disclosed to the public by an additional notice to be publishedon the Company’s website (which may not be accessible from certain jurisdictions, including theU.S.), as well as in a daily newspaper, with nationwide circulation in Italy, as soon as it isdetermined and in any event within the day before the beginning of the Offering Period, andwill at the same time be notified to CSSF. The notice on the Maximum Price will also include themain market multipliers of the Issuer, information on its capitalisation, the expected proceedsfrom the capital increase and the value of the Offering, as well as the value of the MinimumAmount and of the Increased Minimum Amount, calculated on the basis of the Maximum Price.The offer price will be disclosed to the public by an appropriate additional notice to bepublished on the Company’s website (which may not be accessible from certain jurisdictions,including the U.S.), as well as in a daily newspaper, with nationwide circulation in Italy, as soonas it is determined and in any event within two business days of the end of the Offering Period,and will at the same time be notified to CSSF. The notice on the offer price will also include themain market multipliers of the Issuer, information of its capitalisation, the expected proceedsfrom the capital increase and the value of the Offering, as well as the value of the MinimumAmount and of the Increased Minimum Amount, calculated on the basis of the offer price.Reasons for the Exclusion of the Pre-Emption RightsThe capital increase will be resolved by the Board of Directors in a meeting expected to be heldon or about 26 April 2007, and will exclude any pre-emption right pursuant to Article 5 of thearticles of association of the Company.The offer price will be calculated as an amount not less than the net equity per share as at2 March 2007, the date of the opening balance of d’Amico International Shipping’s accountsfollowing the contribution of d’Amico Tankers Limited, equal to $1.0 or 30.7, calculated on thebasis of the Noon Buying Rate of the Euro on 3 April 2007 for $1.3363 = 31.00.The exclusion of any pre-emption right is justified by the need to create the float necessary forthe Shares to be admitted to trading on the MTA Market, pursuant to Article 2A.2.2 of the StockExchange Regulations, as well as to satisfy the Company’s interest in accessing the equity capital188

markets to the extent required to support its corporate growth plans and its interest inacquiring more visibility on the relevant markets.Placement and SubscriptionName and Address of the Joint Global CoordinatorsThe Offering is coordinated and managed by Capitalia and JPMorgan, the latter having itsregistered office at 125 London Wall, London EC2Y5AK, in their capacity as Joint GlobalCoordinators.The Public Offer is coordinated and managed by Capitalia, with registered office in Rome, at ViaMarco Minghetti, 17.Capitalia is also acting as Sponsor and Specialist in connection with the Listing and pursuant tothe Italian securities market regulations.Under the Public Offer, Shares are offered to retail investors through an underwriting syndicate(the “Public Offer Syndicate”), a list of whose members will be made public through filings withthe CSSF, the Company’s registered office and the Placement Agents themselves, as well as by anappropriate notice to be published in at least one daily economic and financial newspaper, withnationwide circulation in Italy, before the beginning of the Offering Period.The same notice will specify the Placement Agents who will receive on-line applications fromretail investors using electronic systems (the “On-Line Placement Agents”).JPMorgan also acts as Bookrunner under the Institutional Offering.Entities in Charge of the Financial ServiceThe securities service relating to the shares will be rendered by Istifid S.p.A. on behalf of theCompany.UnderwritingThe Public Offer Syndicate will underwrite an amount of Shares equal to 5,998,500. The PublicOffer Underwriting Agreement to be entered into between the Company, the Selling Shareholderand Capitalia, for itself and in the name and on behalf of the Public Offer Syndicate,will, inter alia, envisage that the Public Offer Syndicate will not be required to fulfil theunderwriting obligations, or that these obligations may be terminated in certain circumstances,among which (i) changes in the political, financial, economic, currency, regulatory or marketsituation, at either domestic and/or international level, or changes affecting the economic orfinancial position of the Group, that are likely to prejudice, or to make it inadvisable to proceedwith, the Offering, in the joint opinion of the Joint Global Coordinators after consultation withthe Selling Shareholder; (ii) the non-compliance by the Issuer or the Selling Shareholder withany obligation under the Public Offer Underwriting Agreement; (iii) if the Institutional UnderwritingAgreement is not executed, is terminated or becomes no longer effective; (iv) if therepresentations and warranties made by the Issuer and the Selling Shareholder under the PublicOffer Underwriting Agreement are, or are no longer, true, complete or correct; (v) if the ItalianStock Exchange does not give permission for the Company’s ordinary shares to be admitted tolisting on the MTA Market, STAR Segment, revokes its permission or does not give permissionfor trading to commence.The Shares in the Institutional Offering will be placed through the Institutional OfferingSyndicate coordinated and managed by JPMorgan.The quota of the Offering not underwritten by the Public Offer Syndicate will be underwrittenby the Institutional Offering Syndicate, except as provided for in subsection “—Size of theOffer” above of this Chapter. The Company and the Selling Shareholder will execute a separateagreement with the Institutional Offering Syndicate in order to regulate the underwritingcommitments (the “Institutional Underwriting Agreement”).189

The Institutional Underwriting Agreement will be entered into between the Company, theSelling Shareholder, Capitalia as Joint Global Coordinator and JPMorgan, the latter acting foritself and in the name and on behalf of the other members of the Institutional OfferingSyndicate. The Institutional Underwriting Agreement will provide, inter alia, for the underwritingcommitment to be terminated before the Payment Date in certain circumstances, amongwhich (i) changes in the political, financial, economic, currency, regulatory or market situation,at either domestic and/or international level, or changes affecting the economic or financialposition of the Group, that are likely to prejudice, or to make it inadvisable to proceed with,the Offering, in the opinion of the Joint Global Coordinators; (ii) the non-compliance by theCompany and/or the Selling Shareholders with any obligation under the Institutional UnderwritingAgreement; (iii) if the Public Offer Underwriting Agreement is not executed, is terminatedor becomes no longer effective; (iv) if the representations and warranties made by the SellingShareholder and/or the Company under the Institutional Underwriting Agreement are, or are nolonger, true, complete or correct; (v) if the Italian Stock Exchange does not give permission forthe Company’s ordinary shares to be admitted to listing on the MTA Market STAR Segment, orrevokes its permission or does not give permission for trading to start.The Company and the Selling Shareholder on the one hand and JP Morgan on the other handmay decide not to execute the Institutional Underwriting Agreement if the demand from theInstitutional Investors does not reach a satisfactory level of quantity and quality or is not in linewith prevailing market practice in transactions of this kind, or if an agreement on the OfferPrice is not reached.The Company and the Selling Shareholder will pay the Joint Global Coordinators, for themselvesand on behalf of the other members of the Public Offer Syndicate and the Institutional OfferingSyndicate, a total, all-inclusive and global fee up to a maximum of 3% of the value of theOffering.Date of Execution of the Underwriting AgreementsThe Public Offer underwriting agreement will be executed prior to the commencement of thePublic Offer; the Institutional Underwriting Agreement will be executed following the OfferingPeriod, but prior to the Payment Date.190

RESPONSIBILITY STATEMENTSAdditional InformationExcept as set out hereafter, the Company assumes responsibility for the contents of thisProspectus and declares that the information contained in this Prospectus is, to its knowledge,in accordance with the facts and contains no omission likely to affect its import, and that it hastaken all reasonable care to ensure that the information contained in this Prospectus is inaccordance with the facts and contains no omission likely to affect its import.The Selling Shareholder, in its capacity as offeror of the Shares, assumes responsibility for therespective information given with respect to it in “Principal and Selling Shareholder” so far assuch information relates to the offering of the Shares and to the Selling Shareholder itself. TheSelling Shareholder declares that such information is, to the best of its knowledge, in accordancewith the facts and contains no omission likely to affect its import, and that the SellingShareholder has taken all reasonable care to ensure that such information is in accordance withthe facts and contains no omission likely to affect its import.CORPORATE OFFICEOur corporate offices are located at 12, rue Ste Zithe, L-2763, Luxembourg, Grand Duchy ofLuxembourg.NO INCORPORATION OF WEBSITEOur website is www.damicointernationalshipping.com. The contents of our website do not formpart of this document.INDEPENDENT AUDITORThe combined financial statements as of and for the years ended 31 December 2004, 2005 and2006, prepared in accordance with IFRS included in this Prospectus, and the opening balancesheet at 2 March 2007 of the Company have been audited by Moore Stephens S.à.r.l., a firm ofindependent auditors, which has given and not withdrawn written consent to the inclusion inthis Prospectus of its Reports, included on page F-2 and page F-25, in the form and context inwhich they are included. Moore Stephens S.à.r.l. is a réviseur d’entreprises agrée and a memberof the Luxembourg Institut des Réviseurs d’Entreprises.DOCUMENTS ON DISPLAYThe following documents shall be available on the Company’s website www.damicointernationalshipping.comand at the registered office of the Company:• restated articles of association of the Company as filed with the Luxembourg Register ofCommerce and Companies; and• audited consolidated financial statements for the financial years ended 31 December2004, 2005 and 2006 of d’Amico Tankers Limited.INFORMATION ON PARTICIPATIONSThe management report and Audited Annual Financial Consolidated Statements of d’AmicoTankers Limited in which the Company holds a controlling interest and the results of which havea significant incidence on the assessment of the assets, the financial situation or the results ofthe Company shall be available on the Company’s websitewww.damicointernationalshipping.com.SHARE CODESThe share codes of the Company’s shares are: ISIN LU0290697514, Common Code 029069751.191

Annex A — Summary of Certain Significant DifferencesBetween IFRS and U.S. GAAPOur combined financial statements are prepared in accordance with IFRS, which differ in certainaspects from U.S. GAAP. The following is a summary of certain significant differences betweenIFRS and U.S. GAAP as they relate to our combined financial statements included in thisProspectus. This summary is not intended to and does not constitute a complete analysis ofdifferences between IFRS and U.S. GAAP as they relate to our historical combined financialstatements and may not identify all differences that may be relevant with respect to our futurefinancial statements. This summary does not purport to provide a comprehensive analysis,including quantification of such differences. We have not quantified these differences, norundertaken a reconciliation of our IFRS financial statements to U.S. GAAP. Had we undertakenany such quantification of reconciliation, other potentially significant accounting and disclosuredifferences may have come to our attention compared to those identified below. Accordinglywe cannot provide any assurance that the identified differences in the summary below presentall the principal difference relating to our combined financial statements. Potential investorsshould consult their own professional advisors for an understanding of the differences betweenIFRS and U.S. GAAP and how these differences might affect the financial information herein.No attempt has been made to identify future differences between IFRS and U.S. GAAP as aresult of prescribed changes in accounting changes or any changes in our operations andactivities.Accounting Policies and Financial Statement FormatIn general, the content and components of financial statements prepared under IFRS and U.S.GAAP are quite similar. However, we have presented the income statement by function inaccordance with IFRS, as opposed to nature which would have been expected under U.S. GAAP.Under IFRS, the main condition for consolidation is control of one entity over another. UnderU.S. GAAP, generally, control must be demonstrated by ownership of more than fifty percent ofthe other entity’s voting stock. Further, IFRS does not have any specific conditions for theconsolidation of a special-purpose entity. Under U.S. GAAP, if the special-purpose entity is avariable interest entity, consolidation is based on risks and rewards. In addition, not allaccounting policies and footnote disclosures that would have been required under U.S. GAAPare presented.Joint VenturesUnder U.S. GAAP, investments in common stock of corporate joint ventures should be accountedfor under the equity method. Proportionate consolidation in an unincorporated entity is notappropriate under U.S. GAAP unless it is in the construction industry or an extractive industry.Under IFRS, the distinction is made between jointly controlled operations, jointly controlledassets and jointly controlled entities. The benchmark treatment under IFRS is to use proportionateconsolidation of the jointly controlled entity, which is what we have done for ourinvestments where we have joint control, this would therefore create a difference between IFRSand U.S. GAAP for most revenue and expense line items as well as tangible fixed assets, financiallong-term assets, current assets, non-current liabilities and current liabilities. Profit and shareholders’equity would be unchanged.RevenuesIFRS has general principles for revenue recognition and illustrative examples for specific transactions.Under U.S. GAAP, there are many individual pronouncements that cover categories oftransactions and specific industries. However, no specific pronouncements have been made forthe shipping industry. Our general revenue recognition policies under IFRS are the same as thoseapplied by shipping companies under U.S. GAAP and we are, therefore, not aware of differencesin revenue recognition.A-1

Property, Plant and EquipmentThe treatment of the costs of major inspection or overhaul could differ under IFRS and U.S.GAAP. In accordance with IFRS, we capitalise the costs of major inspections (dry-docking) whenIFRS’ recognition criteria are met. Under U.S. GAAP, the direct expensing, built-in overhaul, anddeferral (capitalisation) methods are permitted.The calculation of residual value could differ under IFRS and U.S. GAAP. In accordance with IFRSthe residual value of an asset is defined as the estimated amount that an entity would currentlyobtain from disposal of the asset, after deducting the estimated costs of disposal, if the assetwere already of the age and in the condition expected at the end of its useful life. Under U.S.GAAP, the salvage/residual value is the estimated amount of the expected value at termination.Impairment of Property, Plant and EquipmentBoth under IFRS and U.S. GAAP, an impairment review is to be carried out if events or changesin circumstances indicate that an asset’s carrying amount may not be recoverable. Under U.S.GAAP, there is a three-stage impairment review process. After having determined that indicatorsare present, a recoverability test must be performed by comparing undiscounted cash flow withcarrying amount. Only if the asset fails this recoverability test, the impairment is calculated bycomparing the fair value with carrying amount. Under IFRS, there is a two-stage process. Oncethe entity concludes that indicators are present, a direct comparison is made of the carryingamount with the recoverable amount (defined as the higher of the asset’s fair value less cost tosell and its value in use). As a result, impairments may potentially be recorded under IFRS thatwould not be required under U.S. GAAP. Under IFRS, if conditions change impairment lossesmay be reversed but this would not be allowed for U.S. GAAP.LeasesU.S. GAAP has more specific and quantifiable criteria for leases than IFRS, but the overallapproaches are very similar. However, under U.S. GAAP gains on sale and leaseback transactionsare not normally recognised in current earnings but deferred and amortised over the term ofthe lease unless the Seller retains significant use of the asset in which case the gain isrecognised. Immediate recognition of loss is required. IFRS requires immediate profit recognition,defined as the difference between the carrying value and fair value, provided the saletransaction is established at fair value. If the sale price is above fair value, IFRS requires that theover excess fair value be deferred and amortised over the period for which the asset is expectedto be used.Financial InvestmentsUnder U.S. GAAP, fair value accounting for available for sale securities is only allowed if thesales price is readily determinable. A security has a readily determinable sales price if bid-and-askquotations are available on a regulated securities exchange or over-the-counter market. UnderIFRS, evidence for fair price can be determined through other means such as prices of recenttransactions.Deferred Loan CostUnder U.S. GAAP, direct costs incurred in connection with issuance of debt is treated as adeferred charge and amortised using the effective interest rate method. Under IFRS, such costsare included as part of the amortised cost of the loan when measured at initial recognitionusing the effective interest method.ProvisionsUnder IFRS, an entity must recognise a provision when there is a present obligation (legal orconstructive) as a result of a past event and it is probable that an outflow of resourcesembodying economic benefits will be required to settle the obligation and a reliable estimatecan be made for the obligation. U.S. GAAP has similar guidance. IFRS requires that a provision ismade for the expected value of the obligation. If there are a number of possible outcomes thisis based on weighting of all possible outcomes by their associated probabilities. Under U.S.GAAP, the provision should be based on the most likely outcome, but if no amount within arange is a better estimate than any other then the minimum amount should be accrued.A-2

Annex B — Glossary of Selected TermsThe following are definitions of certain terms that are commonly used in the shipping industryand in this Prospectus.Annual surveyBareboat charterBunker fuelCharterChartererCharterhireClassification societyClean productsContract ofAffreightment or COADirty productsDouble hullDrydockingDwtmeans the inspection of a vessel pursuant to international conventions,by a classification society surveyor, on behalf of the flag state,that takes place every yearmeans a charter of a vessel under which the ship owner is usuallypaid a fixed amount of charterhire for a certain period of time duringwhich the charterer is responsible for the vessel operating expensesand voyage expenses of the vessel and for the management of thevessel, including crewing. A bareboat charter is also known as a“demise charter” or a “time charter by demise”.means heavy fuel and diesel oil used to power a vessel’s engines.means the hire of a vessel for a specified period of time or to carry acargo from a loading port to a discharging port. The contract for acharter is commonly called a charterparty.means the party that hires a vessel for a period of time or for avoyage.means a sum of money paid to the shipowner by a charterer for theuse of a vessel. Charterhire paid under a voyage charter is also knownas “freight”.means an independent society that certifies that a vessel has beenbuilt and maintained according to the society’s rules for that type ofvessel and complies with the applicable rules and regulations of thecountry of the vessel’s registry and the international conventions ofwhich that country is a member. A vessel that receives its certificationis referred to as being “in-class”.means liquid products refined from crude oil, whose colour is lessthan or equal to 2.5 on the National Petroleum Association scale.Clean products include naphtha, jet fuel, gasoline and diesel/gasoil.means an agreement between an owner and a charterer whichobliges the owner to provide a vessel to the charterer to move specificquantities of cargo over a stated time period but without designatingspecific vessels or voyage schedules, thereby providing theowner with greater operating flexibility than with voyage chartersalone.means liquid products refined from crude oil, whose colour is greaterthan 2.5 on the National Petroleum Association scale. Dirty productsusually require heating during a voyage, because their viscosity orwaxiness makes discharge difficult at ambient temperatures.means a hull construction design in which a vessel has an inner andouter side and bottom separated by void spacemeans the removal of a vessel from the water for inspection andrepair of those parts of a vessel which are below the water line. Duringdrydockings, which are required to be carried out periodically,certain mandatory classification society inspections are carried outand relevant certifications are issued. Drydockings are generallyrequired once every 30 months or twice every five years, one of whichmust be a Special Survey.means deadweight tonne, which is a unit of a vessel’s capacity forcargo, fuel, oil, stores and crew measured in metric tonnes of 1,000kilograms.B-1

FreightGross tonneHandy products tankerHullIMOIntermediate SurveyLube oilLubricantMR tankerNewbuildingOECDOil productsOff-hiremeans a sum of money paid to the ship owner by the charterer undera voyage charter, usually calculated either per tonne loaded or as alump sum amount.means a unit of measurement for the total enclosed space within avessel equal to 100 cubic feet or 2.831 cubic meters.means a tanker with capacity ranging from 27,000 to 37,999 dwt.means shell or body of a ship.means International Maritime Organisation, a United Nations agencythat issues international standards for shipping.means the inspection of a vessel by a classification society surveyorthat takes place 24 to 36 months after each Special Survey.or lubricating oil is selected fractions of refined petroleum or otheroils used to lessen friction between moving surfaces.a substance such as oil that reduces friction when applied as a surfacecoating to moving parts.means a medium-sized tanker with capacity ranging from 38,000 to54,999 dwt.means a new vessel under construction or just completed.means The Organisation for Economic Co-operation andDevelopment.means refined crude oil products, such as fuel oils, gasoline and jetfuel.means the period in which a vessel is unable to perform the servicesfor which it is immediately required under a time charter. Off-hireperiods can include days spent on repairs, drydocking and surveys,whether or not scheduled.OPA means The United States Oil Pollution Act of 1990.OPECProduct tankerProtection andindemnity insuranceScrappingSingle hullSister ship liabilitySpecial surveyMeans the Organisation of the Petroleum Exporting Countries, aninternational organisation of 11 oil-exporting nations, which coordinatesand unifies the petroleum policies of its member countries.means a tanker designed to carry a variety of liquid products varyingfrom crude oil to clean and dirty petroleum products, acids and otherchemicals, as well as edible oils. The tanks are coated to preventproduct contamination and hull corrosion. The ship may have equipmentdesigned for the loading and unloading of cargoes with a highviscosity.means insurance usually obtained through a mutual associationformed by shipowners to provide liability indemnification protectionfrom various liabilities to which they are exposed in the course oftheir business, and which spreads the liability costs of each memberby requiring contribution by all members in the event of a loss.means the sale of a vessel as scrap metal.means a hull construction design in which a vessel has only one hull.is a concept permitted by some jurisdictions whereby a claimant mayarrest both the vessel that is subject to the claimant’s maritime lienand any “associated” vessel, which is any vessel owned or controlledby the same owner.means the inspection of a vessel by a classification society surveyorthat takes place every five years.B-2

Spot marketTankerTime charter equivalentearnings per dayTime charterVessel operatingexpensesVoyage charterVoyage expensesmeans the market for the immediate chartering of a vessel, usuallyfor single voyages.means a ship designed for the carriage of liquid cargoes in bulk withcargo space consisting of tanks. Tankers carry a variety of productsincluding crude oil, refined products and liquid chemicals.is a measure of the average daily revenue performance of a vessel ona per voyage basis. Our method of calculating time charter equivalentearnings per day is consistent with industry standards and is determinedby dividing voyage revenues (net of voyage expenses) by voyagedays for the relevant time period. Time charter equivalentearnings per day is a standard shipping industry performance measureused primarily to compare period-to-period changes in a shippingcompany’s performance despite changes in the mix of chartertypes (i.e., spot charters, time charters and bareboat charters) underwhich the vessels may be employed during specific periods.means a charter under which the shipowner is paid charterhire on aper-day basis for a specified period of time. Typically, the shipowneris responsible for providing the crew and paying vessel operatingexpenses while the charterer is responsible for paying the voyageexpenses and additional voyage insurance.means the costs of operating a vessel, primarily consisting of crewwages and associated costs, insurance premiums, management fee,lubricants and spare parts, and repair and maintenance costs. Vesseloperating expenses exclude fuel cost, port expenses, agents’ fees,canal dues and extra war risk insurance, as well as commissions, whichare included in “voyage expenses”.means a charter under which a shipowner is paid freight on the basisof moving cargo from a loading port to a discharging port. The shipowneris responsible for paying both vessel operating expenses andvoyage expenses. Typically, the charterer is responsible for any delayat the loading or discharging ports.means expenses incurred due to a vessel’s travelling from a loadingport to a discharging port, such as fuel (bunkers) cost, port expenses,agents’ fees, canal dues and extra war risk insurance, as well ascommissions.B-3

Combined Financial StatementsIndexCombined Financial Statements for the years ended31 December 2004, 2005 and 2006Report of Independent Auditors Moore Stephens S.à.r.l . . . . . . F-2Combined Balance Sheet as at 31 December 2004, 2005 and2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3Combined Income Statement for the years ended 31 December2004, 2005 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4Combined Statement of Cash Flows for the years ended31 December 2004, 2005 and 2006 . . . . . . . . . . . . . . . . . . . . . F-5Combined Statement of Changes in Equity for the yearsended 31 December 2004, 2005 and 2006. . . . . . . . . . . . . . . . F-6Notes to the Combined Financial Statements for the yearsended 31 December 2004, 2005 and 2006. . . . . . . . . . . . . . . . F-7 to F-24Opening Balance Sheet of d’Amico International ShippingS.A. as at 2 March 2007Report of Independent Auditors Moore Stephens S.à.r.l . . . . . . F-25Balance Sheet of the Company as at 2 March 2007 . . . . . . . . . . F-26Notes to the Financial Information of the Company as at2 March 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-27 to F-29F-1

Independent Auditors’ ReportTo the Board of Directors of d’Amico International Shipping S.A.and the Board of Directors of d’Amico International S.A.We have audited the accompanying combined financial statements of d’Amico Tankers Limitedand its combining entities which comprise the combined balance sheet as at 31 December 2004,2005 and 2006, the combined income statement, the combined statement of changes in equityand the combined cash flow statement for the years then ended, and a summary of significantaccounting policies and other explanatory notes.This report is made solely to the Board of Directors of d’Amico International Shipping S.A. andthe Board of Directors of d’Amico International S.A., each as a body, in accordance with theterms of our engagement. Our audit work has been undertaken so that we might state to thecompanies those matters we are required to state to them in an auditors’ report and for noother purpose. To the fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the above companies each as a body, for our audit work, for this report,or for the opinions we have formed.Management’s Responsibility for the Combined Financial StatementsManagement is responsible for the preparation and fair presentation of these combinedfinancial statements in accordance with International Financial Reporting Standards as adoptedby the European Union. This responsibility includes: designing, implementing and maintaininginternal control relevant to the preparation and fair presentation of combined financialstatements that are free from material misstatement, whether due to fraud or error; selectingand applying appropriate accounting policies; and making accounting estimates that are reasonablein the circumstances.Auditors’ ResponsibilityOur responsibility is to express an opinion on these combined financial statements based on ouraudit. We conducted our audit in accordance with International Standards on Auditing. Thosestandards require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance whether the combined financial statements are free from materialmisstatement.An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the combined financial statements. The procedures selected depend on theauditors’ judgement, including the assessment of the risks of material misstatement of thecombined financial statements, whether due to fraud or error. In making those risk assessments,the auditors consider internal controls relevant to the entity’s preparation and fair presentationof the combined financial statements in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity’s internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by management, as well asevaluating the overall presentation of the combined financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.OpinionIn our opinion, the combined financial statements present fairly, in all material respects thefinancial position of the combination as at 31 December 2004, 2005 and 2006 and of its financialperformance and its cash flow for the years then ended in accordance with InternationalFinancial Reporting Standards as adopted by the European Union.MOORE STEPHENS S.à.r.l.Allée Marconi, 16L—2120 Luxembourg6 March 2007F-2

d’Amico Tankers Limited and its Combining EntitiesCombined Balance SheetAt 31 December 2004, 2005 and 2006(Expressed in Thousands of United States Dollars)Note 2004 2005 2006FIXED ASSETSTangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 206,771 317,901 365,462CURRENT ASSETSInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,360 4,463 5,213Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . 7 37,004 29,087 39,149Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7,733 10,494 13,93246,097 44,044 58,294CURRENT LIABILITIESTrade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . 9a 14,826 14,526 25,784Current tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694 381 4,344Interest bearing loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9b 112,417 123,364 52,496Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 3,722 2,748 1,365131,659 141,019 83,989Net Current Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (85,562) (96,975) (25,695)NON-CURRENT LIABILITIESInterest bearing loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9b 108,092 160,950 187,724Deferred tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5c 2,930 5,784 10,169Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 3,571 571 —114,593 167,305 197,893Net Assets ....................................... 6,616 53,621 141,874EQUITYIssued capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 205 108 159Financial instruments’ revaluation reserve . . . . . . . . . . . . . . 10 (6,389) (3,319) (536)Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,800 56,832 142,251Total Equity ...................................... 6,616 53,621 141,874The notes on the following pages form part of these combined financial statements.These financial statements were approved by the Board of Directors on 23 February 2007.F-3

d’Amico Tankers Limited and its Combining EntitiesCombined Income StatementFor the Years Ended 31 December 2004, 2005 and 2006(Expressed in Thousands of United States Dollars)Note 2004 2005 2006Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,916 253,434 299,555Voyage costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,923) (31,682) (56,286)Time charter equivalent earnings . . . . . . . . . . . . . . . . . . . . 139,993 221,752 243,269Time charter cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (80,938) (87,845) (105,929)Other direct operating costs . . . . . . . . . . . . . . . . . . . . . . . . (13,795) (23,741) (27,555)Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,260 110,166 109,785Profit on disposal of vessels . . . . . . . . . . . . . . . . . . . . . . . . 16f — — 29,978Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 (10,039) (21,346) (22,086)Reversal of impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 — — 120Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 (4,002) (6,043) (5,866)Operating Profit ................................. 31,219 82,777 111,931Net financing costs ............................... 3 (7,514) (16,893) (17,650)Profit .......................................... 23,705 65,884 94,281Taxation charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (5,548) (7,500) (8,862)Profit for the Year ................................ 18,157 58,384 85,419The notes on the following pages form part of these combined financial statements.F-4

d’Amico Tankers Limited and its Combining EntitiesCombined Statement of Cash FlowsFor the Years Ended 31 December 2004, 2005 and 2006(Expressed in Thousands of United States Dollars)Note 2004 2005 2006Cash Generated from Operations ................... 11 29,636 95,162 101,958Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,572) (15,810) (16,643)Tax paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,021) (4,862) (515)Cash Flows from Operating Activities ............... 20,043 74,490 84,800INVESTING ACTIVITIESAcquisition of fixed assets. . . . . . . . . . . . . . . . . . . . . . . . . (142,789) (131,879) (107,215)Payments for dry dock activities . . . . . . . . . . . . . . . . . . . . (1,971) (717) (1,987)Proceeds on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . — — 70,000Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 217 423Cash Flows from Investing Activities ................ (144,702) (132,379) (38,779)FINANCING ACTIVITIESBank loans drawn down . . . . . . . . . . . . . . . . . . . . . . . . . . 132,205 104,483 208,000Bank loans repaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41,287) (56,375) (184,426)d’Amico group financing movement . . . . . . . . . . . . . . . . 42,318 26,991 (66,208)Change in ordinary share capital . . . . . . . . . . . . . . . . . . . 65 (97) 51Dividends paid: by d’Amico Tankers Limited . . . . . . . . . . (5,000) (5,000) —Dividends paid: by other combining entities . . . . . . . . . . — (9,352) —Cash Flows from Financing Activities ................ 128,301 60,650 (42,583)Net Increase in Cash and Cash Equivalents . . . . . . . . . . . . 3,642 2,761 3,438Cash and Cash Equivalents at 1 January . . . . . . . . . . . . . . 4,091 7,733 10,494Cash and Cash Equivalents at 31 December. .......... 8 7,733 10,494 13,932The notes on the following pages form part of these combined financial statements.F-5

d’Amico Tankers Limited and its Combining EntitiesCombined Statement of Changes in EquityFor the Years Ended 31 December 2004, 2005 and 2006(Expressed in Thousands of United States Dollars)IssuedCapitalRetainedEarningsAccountFinancialInstruments’RevaluationReserveTotalBalance at 1 January 2004 ....................... 141 (357) (9,678) (9,894)Net profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . — 18,157 — 18,157Capital increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 — — 64Movement in revaluation reserve . . . . . . . . . . . . . . . . . — — 3,289 3,289Dividend paid by d’Amico Tankers Limited . . . . . . . . . . — (5,000) — (5,000)Balance at 31 December 2004 .................... 205 12,800 (6,389) 6,616Net profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . — 58,384 — 58,384Liquidated companies . . . . . . . . . . . . . . . . . . . . . . . . . . (97) — — (97)Movement in revaluation reserve . . . . . . . . . . . . . . . . . — — 3,070 3,070Dividend paid by d’Amico Tankers Limited . . . . . . . . . . — (5,000) — (5,000)Dividend paid by other combining entities uponliquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (9,352) — (9,352)Balance at 31 December 2005 .................... 108 56,832 (3,319) 53,621Net profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . — 85,419 — 85,419Capital increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 — — 51Movement in revaluation reserve . . . . . . . . . . . . . . . . . — — 2,783 2,783Balance at 31 December 2006 .................... 159 142,251 (536) 141,874The notes on the following pages form part of these combined financial statements.F-6

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 20061. SIGNIFICANT ACCOUNTING POLICIESThese combined financial statements have been prepared under the historical cost conventionas modified by the revaluation of financial instruments and in accordance with applicableInternational Financial Reporting Standards as adopted by the European Union (IFRSs). Thesecombined financial statements are expressed in U.S. Dollars being the functional currency of thecombination.The principal accounting policies, which have been consistently applied, are set out below:a) Basis of CombinationThese combined financial statements comprise the results and balances of d’Amico TankersLimited and its combining entities as set out in note 19 “the combination”. During the period1 January 2004 to 31 December 2006 these combining entities were all wholly owned subsidiariesof the immediate parent company, d’Amico International S.A., incorporated in Luxembourg.The ultimate holding company and controlling party is d’Amico Societa’ di Navigazione S.p.A.,incorporated in Italy. References to the d’Amico group relate to d’Amico Societa’ di NavigazioneS.p.A. and its group companies.References in the combined financial statements to fellow subsidiaries indicate group companiesnot included in the combination.The combination generates a significant proportion of its revenue from vessel pools. Thecombination’s share of pool revenue is based on its participation in the pools calculated usingavailable vessel days as adjusted by its share of pool points, where applicable.Pool companies forming part of the combination are regarded as jointly controlled operations.The combination’s share of income statement and balance sheet items are accounted for on aline by line basis.The combination’s net share of pool income arising from its participation in the HandyTankersPool is dealt with in revenue and the related balances are included under the relevant balancesheet captions.These combined financial statements include the combination’s proportionate share of its jointventure assets, liabilities, revenues and expenses on a line by line basis.Intra-combination balances and transactions, including gains and losses on intra-combinationtransactions, have been eliminated in the combined financial statements.b) RevenueRevenue represents vessel hire, voyage income (freight), demurrage, freight forward agreementresult and pool income. Hire income and the result of voyages in progress at each balance sheetdate are accrued.Demurrage revenue is recognised at the completion of the voyage and represents estimatedcompensation for additional time taken to discharge a vessel. Provision is made in respect ofdemurrage claims where full recovery is not anticipated.c) Voyage CostsVoyage costs result from undertaking voyages on the spot market. Voyage costs principallyinclude bunkers (fuel), port charges and commissions payable.F-7

d) Other Direct Operating CostsOther direct operating costs represent the operating lease rentals payable under time charteragreements and vessel operating costs. Vessel operating costs principally comprise crew, repairs,spares, stores, insurance, commercial fees, technical fees and lubricants. The cost of lubricants isbased on the estimated consumption in the period. Operating lease rentals and vessel operatingcosts are charged to income on an accruals basis.e) Disposal of VesselsProfits or losses on vessel disposals are recognised when the significant risks and rewards ofownership have been transferred to the buyer, and are measured as the sales price less costsrelating to the sale and the carrying amount of the asset.f) Taxationd’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)Income tax expense represents the sum of the current tax and deferred tax.The charge for current tax is based on the result for the year adjusted for items, which are nonassessableor disallowed. It is calculated using tax rates that have been enacted or substantivelyenacted by the balance sheet date.Deferred tax is the tax expected to be payable or recoverable on differences between thecarrying amounts of assets and liabilities in the combined financial statements and the correspondingtax bases used in the computation of taxable profit, and is accounted for using thebalance sheet liability method.Deferred tax liabilities are generally recognised for all taxable temporary differences anddeferred tax assets are recognised to the extent that it is probable that taxable profits will beavailable against which deductible temporary differences can be utilised.The carrying amounts of deferred tax assets are reviewed at each balance sheet date andreduced to the extent that it is no longer probable that sufficient taxable profits will beavailable to allow all or part of the assets to be recovered.Deferred tax is calculated at the tax rates that are expected to apply in the period when theliability is settled or the asset realised based on tax rates that have been enacted or substantivelyenacted by the balance sheet date. Deferred tax is charged or credited in the combined incomestatement, except when it relates to items charged or credited directly to equity, in which casethe deferred tax is also dealt with in equity.Deferred tax assets and liabilities are offset when they relate to income taxes levied by the sametaxation authority and the combination intends to settle its current tax assets and liabilities on anet basis.g) Fixed Assets and DepreciationThe vessels are shown at cost less accumulated depreciation and any impairment losses. Costcomprises acquisition cost and other costs directly attributable to the acquisition or constructionof the vessel. Upon acquisition, the costs are analysed into the various components being vesselcost, tank coatings and estimated dry dock element.Depreciation is provided on the vessels on a straight line basis over their expected usefuleconomic lives from the date the vessels were constructed, after allowing for a residual valuebased on current prevailing market scrap rates. The vessel tank coatings are depreciated over10 years and the estimated dry dock element is depreciated over the period to the expected firstdry dock. Provision is made for any impairment of vessels. The remaining useful economic life isestimated at the date of acquisition or delivery from the shipyard and is reassessed yearly. Thenew vessels contracted by the company are estimated to have a useful economic life of 17 years.F-8

The cost of periodic vessel dry docks are capitalised and amortised over the period to the nextdry docking, estimated at 30 months. Where dry docks are performed in a period less than30 months the balance on the original dry dock is written off.Vessels in the course of construction (new buildings) are included at cost less any identifiedimpairment losses. Cost includes progress payments to date, other vessel costs, and financingcosts. Depreciation commences upon vessel delivery.The fractional share in the aircraft is shown at cost less accumulated depreciation and impairment.Depreciation is provided on a straight line basis over a period of 5 years after allowingfor an estimated residual value.h) InventoriesInventories of fuel and lubricants on board the vessels are shown at cost calculated using thefirst in first out method.i) Foreign CurrenciesThe functional currency of all combining entities is the U.S. Dollar. This is due to the fact thatthe income of the combination and a significant proportion of its costs are denominated in U.S.Dollars.Transactions during each year in currencies other than U.S. Dollars have been translated at theappropriate rate ruling at the time of the transactions. Assets and liabilities denominated inforeign currencies have been translated into U.S. Dollars at the rate ruling at each balance sheetdate. All exchange differences have been dealt with in the retained earnings account.j) Financial InstrumentsThe combination uses derivative financial instruments to hedge its exposure to interest raterisks. Through its participation in the HandyTankers Pool, the combination has made use ofForward Freight Agreements (FFAs) to hedge future freight rates. The FFAs do not qualify forhedge accounting.Derivative financial instruments are initially recognised at fair value, and are revalued at eachbalance sheet date. The recognition of the resulting gain or loss is determined by whether thereis a qualifying hedging relationship.Interest rate swaps that are designated as cash flow hedges and qualify for hedge accountingare stated at fair value. The unrealised gain or loss on the effective part is dealt with directly inequity. Any ineffective part and the results of any other interest rate swaps are dealt with in thecombined income statement as part of net finance costs. Fair value of interest rate swaps iscalculated as the present value of the estimated future cash flow.FFAs held for trading are recorded in the combined balance sheet at fair value. The gains orlosses are dealt with in the combined income statement as part of revenue. Fair value of FFAs isdetermined by reference to values of the underlying indices at the balance sheet date.Forward currency contracts used to partially hedge exposure on the vessel purchase optionsdenominated in Japanese Yen are recorded in the combined balance sheet at fair value. Thegains or losses are dealt with in the combined income statement as part of net finance costs.Fair value of forward currency contracts are calculated using quoted forward exchange rates atthe balance sheet date.k) Dividendsd’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)Dividends are recognised as a liability in the period in which the dividend is declared by theBoard of Directors and approved by the Shareholders.F-9

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)l) Critical Accounting Judgements and Key Sources of Estimation UncertaintyAccounting estimates and judgement are based on assessments of uncertain future events andare used in the preparation of the combined financial statements. Such judgement andestimates may impact on the amounts reported as assets, liabilities, revenues and expenses.Estimates and judgement are exercised in all areas of the business. The key areas identifiedinclude the carrying value of vessels and provision for tax liabilities.Vessels’ carrying valuesThe carrying value of the vessels may be significantly different to their fair market value. Thecarrying value of the vessels is impacted by management’s assessment of remaining useful life,residual value and indicators of impairment. If the carrying value of the vessels exceeds theirrecoverable amount then an impairment charge is recognised.Provision for tax liabilitiesTax liabilities are calculated on the current understanding of the combination’s taxationsituation as impacted by the regulatory frameworks of the jurisdictions in which it operates. Theliability for tax may be impacted by changes in treatment or assessment of, in particular, tradingincome, freight tax, tonnage tax and value added tax.2. ADMINISTRATIVE EXPENSESAdministrative expenses principally represent amounts recharged to the combination for theprovision of management and other services, by d’Amico group companies (note 16 b). Theamount recharged is net of commissions and fees received by a fellow subsidiary, resulting fromthe participation of the combination’s vessels in the HandyTankers Pool. The amounts receivedby the fellow subsidiary from the HandyTankers Pool were as follows:2004(US$000’s)2005(US$000’s)2006(US$000’s)HandyTankers’ commissions and fees received by a fellowsubsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,486 1,844 1,5723. NET FINANCING COSTS2004(US$000’s)2005(US$000’s)2006(US$000’s)Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (58) (217) (423)Interest expense to fellow subsidiaries . . . . . . . . . . . . . . . . . . . . . 1,309 5,238 2,771Finance costs including interest expense on bank loans andswap contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,263 11,872 15,3027,514 16,893 17,6504. EMPLOYEES2004 2005 2006Average number of employees*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 258 2552004(US$000’s)2005(US$000’s)2006(US$000’s)Wages and salariesCharge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,452 10,394 11,748F-10

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)* The average number of employees excludes employees of third party pool participants andcrew on board vessels not directly employed by the combination.5. TAXATIONa) Analysis of Taxation Charge2004(US$000’s)2005(US$000’s)2006(US$000’s)Corporation tax at 12.5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,959 4,933 4,504Adjustment in respect of prior years. . . . . . . . . . . . . . . . . . . . . . . 659 (63) (27)Deferred taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,930 2,630 4,3855,548 7,500 8,862b) Factors Affecting the Current Tax Charge2004(US$000’s)2005(US$000’s)2006(US$000’s)Profit on ordinary activities before taxation. . . . . . . . . . . . . . . . . 23,705 65,884 94,281Notional charge at 12.5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,963 8,236 11,785Capital allowances in excess of depreciation . . . . . . . . . . . . . . . . (1,088) (2,758) (3,548)Vessel sale proceeds in excess of cost taxed in relatedcompany (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (3,095)Deferred balancing charge in relation to vessel sale . . . . . . . . . . — — (652)Higher tax rates and expenses not deductible for taxpurposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 24 74Capitalised interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (283) — —Balancing charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,305 — —Exchange differences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (312) 232Accounting profit not taxable. . . . . . . . . . . . . . . . . . . . . . . . . . . . (510) (203) (292)Tax losses utilised. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,765) (54) —Additional provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 — —Current tax charge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,959 4,933 4,504(1) A taxable gain does not arise in the combination to the extent that the proceeds of disposalof assets sold to a fellow subsidiary, Paul Maritime Company Limited, exceeded the originalcost of those assets to the combination. This is due to the fact that the companiesconcerned are members of the same Irish tax group for these purposes.c) Deferred Taxation2004(US$000’s)2005(US$000’s)2006(US$000’s)Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,930 5,784Charged to the income statement . . . . . . . . . . . . . . . . . . . . . . . . 2,930 2,630 4,385Adjustment in respect of prior years. . . . . . . . . . . . . . . . . . . . . . . — 224 —Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,930 5,784 10,169The deferred tax liability arises in respect of capital allowances in excess of depreciationcharged.F-11

6. TANGIBLE ASSETSd’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)Vessel Fleet(US$000’s)Aircraft(US$000’s)Total(US$000’s)COSTAs at 1 January 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,313 — 77,313Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,760 — 144,760As at 31 December 2004 ............................... 222,073 — 222,073Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,553 2,043 132,596Impairment provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (120) (120)Disposals during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (488) — (488)As at 31 December 2005 ............................... 352,138 1,923 354,061Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,553 — 109,553Impairment reversal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 120 120Disposals during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47,214) — (47,214)As at 31 December 2006 ............................... 414,477 2,043 416,520DEPRECIATIONAs at 1 January 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,263 — 5,263Charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,039 — 10,039As at 31 December 2004 ............................... 15,302 — 15,302Charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,324 22 21,346Disposals during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (488) — (488)As at 31 December 2005 ............................... 36,138 22 36,160Charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,978 108 22,086Disposals during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,188) — (7,188)As at 31 December 2006 ............................... 50,928 130 51,058NET BOOK VALUE31 December 2006 .................................... 363,549 1,913 365,46231 December 2005 .................................... 316,000 1,901 317,90131 December 2004 .................................... 206,771 — 206,7717. TRADE AND OTHER RECEIVABLES2004(US$000’s)2005(US$000’s)2006(US$000’s)Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,197 25,837 31,507Other debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,790 1,766 2,356Prepayments and accrued income. . . . . . . . . . . . . . . . . . . . . . . . . 1,788 1,342 4,399Amounts due from fellow subsidiaries . . . . . . . . . . . . . . . . . . . . . 9,132 142 887Current tax receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 — —37,004 29,087 39,149The amounts due from fellow subsidiaries relate to normal trading activities.F-12

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)8. CASH AND CASH EQUIVALENTS2004(US$000’s)2005(US$000’s)2006(US$000’s)Cash at bank and in hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,733 10,494 13,932Included in the 2005 cash at bank and in hand, an amount of US$1,767 is held on jointaccounts.9. a) Trade and Other Payables2004(US$000’s)2005(US$000’s)2006(US$000’s)Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,878 6,036 5,624Amount due to ultimate holding company . . . . . . . . . . . . . . . . . 153 971 764Amount due to parent company. . . . . . . . . . . . . . . . . . . . . . . . . . 17 149 —Amounts due to fellow subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 778 2,132 4,812Amounts due to pool participants . . . . . . . . . . . . . . . . . . . . . . . . — 1,249 3,568Other creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,913 1,637 1,313Accruals and deferred income. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,087 2,352 9,70314,826 14,526 25,784The amounts due to related parties are in respect of normal trading activities.9. b) Interest Bearing Loans2004(US$000’s)2005(US$000’s)2006(US$000’s)Due within one year:Amounts due to fellow subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 90,791 106,488 36,496Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,626 16,876 16,000112,417 123,364 52,496Due after one year:Amounts due to fellow subsidiaries . . . . . . . . . . . . . . . . . . . . . . . — — 2,324Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,092 160,950 185,400108,092 160,950 187,724Total ................................................ 220,509 284,314 240,220Principal Outstanding2004(US$000’s)2005(US$000’s)2006(US$000’s)Amounts due to fellow subsidiary/parent companyd’Amico Finance Limited (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,774 106,339 36,496d’Amico International S.A.:Loans (a) ........................................... 17 149 —DM Shipping Limited facility (b) . . . . . . . . . . . . . . . . . . . . . . . . . — — 2,32490,791 106,488 38,820F-13

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)a) The loans bear interest based on LIBOR and have no fixed terms of repayment.b) The loan from d’Amico International S.A., which was to partly finance the construction ofthe two product tankers, is denominated in Japanese Yen and bears interest based on TIBORplus margin of 1.0%. Details of the future commitments are set out in note 13 a).Bank Loans2004(US$000’s)2005(US$000’s)2006(US$000’s)Calyon Facility US$172,000 000(1):Tranche A and B of US$11,000,000 each . . . . . . . . . . . . . . . . . . . . — — 20,900Tranche C and D of US$13,000,000 each . . . . . . . . . . . . . . . . . . . . — — 24,700Tranche E and F of US$17,000,000 each . . . . . . . . . . . . . . . . . . . . 32,800Tranches G, H, I & J of US$18,000,000 each . . . . . . . . . . . . . . . . . — — 69,600Tranche L of US$18,000,000 each . . . . . . . . . . . . . . . . . . . . . . . . . — — 17,400Banca Intesa Facility US$18,000 000(2):Tranche 1 of US$18,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 18,000Bank of Ireland Facility US$18,000 000(3):Tranche 1 of US$18,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 18,000Calyon Facility US$114,000 000(4):Tranche 1 and 2 of US$14,650,000 each . . . . . . . . . . . . . . . . . . . . 29,300 26,100 —Tranche 3 and 4 of US$20,750,000 each . . . . . . . . . . . . . . . . . . . . 6,990 37,900 —Tranche 5 and 6 of US$21,600,000 each . . . . . . . . . . . . . . . . . . . . — 42,100 —Calyon Facility(5):Two tranches totalling US$42,502,319 . . . . . . . . . . . . . . . . . . . . . 42,503 40,486 —Scotiabank US$35,700,000(6):Four advances of US$8,925,000 each . . . . . . . . . . . . . . . . . . . . . . 8,925 — —Banca Intesa(7):Tranche I US$33,600,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,600 31,240 —Tranche II US$8,400,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,400 — —129,718 177,826 201,400Repayment terms and facility detailsCalyon Facility(1):Tranche A and B . . . . . . . . . . . . . . . . . . . . . . . . .Tranche C and D . . . . . . . . . . . . . . . . . . . . . . . . .Tranche E and F . . . . . . . . . . . . . . . . . . . . . . . . . .Tranches G, H, I & J . . . . . . . . . . . . . . . . . . . . . . .Tranche L. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Repayment terms (Per tranche):40 quarterly instalments of US$275,000.40 quarterly instalments of US$325,000.40 quarterly instalments of US$300,000 withfinal balloon payment of US$5,000,000.40 quarterly instalments of US$300,000 withfinal balloon payment of US$6,000,000.40 quarterly instalments of US$300,000 withfinal balloon payment of US$6,000,000.Facility was negotiated for the refinancing of the m/t High Spirit, m/t High Challenge, m/t Cielodi Londra, m/t Cielo di Salerno, m/t High Endurance, m/t High Endeavour, m/t High Valor, m/tHigh Courage, m/t High Progress and m/t High Performance. The loan was joint and several andsecured by first preferred mortgages on the vessels together with assignments of earnings andinsurances. A further tranche K of US$11,000,000 was drawn down to finance a vessel owned byF-14

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)a fellow subsidiary the m/t Cielo di Vaiano. This loan was secured by a first preferred mortgageover the vessel and is cross collateralised. The total amount outstanding on the Calyon facility atDecember 31, 2006 amounted to US$175,800,000.Repayment terms and facility detailsBanca Intesa Facility(2):Tranche 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Repayment terms:40 quarterly instalments of US$350,000 and aballoon payment of US$4,000,000 with thefortieth instalment.Facility was negotiated for the financing of m/t Cielo di Parigi. The loan was secured by firstpreferred mortgage on the vessel together with an assignment of earnings and insurances.Bank of Ireland Facility(3):Tranche 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Repayment terms:40 quarterly instalments of US$350,000 and aballoon payment of US$4,000,000 with thefortieth instalment.Facility was negotiated for the financing of m/t High Wind. The loan was secured by firstpreferred mortgage on the vessel together with an assignment of earnings and insurances.Calyon Facility(4):Tranche 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . .Tranche 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . .Tranche 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . .Repayment terms (per tranche):40 quarterly instalments, first 8 US$400,000,following 32 US$275,000, final balloonpayment of US$2,650,000.39 quarterly instalments, first 7 US$600,000,following 32 US$325,000, balloon payment ofUS$6,150,000.37 quarterly instalments, first 5 US$550,000,following 32 US$375,000, final balloonpayment of US$6,850,000.Facility was negotiated for the financing of the m/t Cielo di Salerno, m/t Cielo di Londra, m/tHigh Valor, m/t High Courage, m/t High Emperor and m/t High Monarch. The loan was joint andseveral and secured by first preferred mortgages and assignment of earnings and insurances onthe vessels. The facilities were repaid in May 2006.Calyon Facility(5):Two tranches (total) . . . . . . . . . . . . . . . . . . . . . .Repayment terms:19 quarterly instalments, first 3 US$497,681,next 4 US$522,564, next 4 US$548,693, next 4US$576,128, final 4 US$604,934, final balloonpayment of US$32,000,000.Facility was negotiated for the financing of the vessels m/t High Endurance and m/t HighEndeavour. The loan was joint and several and secured by first preferred mortgages andassignments of earnings on the vessels together with insurances. The facilities were repaid inMay 2006.Repayment terms and facility detailsScotiabank(6):Four advances . . . . . . . . . . . . . . . . . . . . . . . . . . .Repayment terms (per tranche):10 half yearly instalments, first 4 US$1,025,000,following 6 US$595,833, final balloon paymentof US$1,250,002.F-15

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)Facility was negotiated for the financing of the vessels m/t Cielo di Baffin, m/t Cielo di Bothniaand m/t Cielo del Baltico and the refinancing of the vessel m/t Cielo di Biscaglia. The loan wasjoint and several and secured by first preferred mortgages on the vessels together withassignments of earnings and insurances. The facilities were repaid in December 2005.Banca Intesa(7):Tranche I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tranche II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Repayment terms:20 half yearly instalments of US$1,180,000,final balloon payment of US$10,000,000.Facility drawn down in December 2004 andrepaid in January 2005.Facility was negotiated for the financing of the vessels m/t High Spirit and m/t High Challenge.The loan was joint and several and secured by first and second preferred mortgages togetherwith assignments of earnings and insurance. Tranche I was repaid in January 2006.The facilities bear interest based on US$ LIBOR plus margin. The weighted average effectiveinterest rate on the facilities amounted to 3.9% in 2004, 4.4% in 2005 and 5% in 2006.10. ISSUED CAPITAL AND RESERVESCombined Authorised Share Capital 2004 2005 2006d’Amico Tankers Limited . . . . . . . . . . . . . . . . . . . . . . . . . 31,000,000 31,000,000 3 1,000,000d’Amico Tankers UK Limited . . . . . . . . . . . . . . . . . . . . . . — — US$50,000d’Amico Tankers Singapore Pte. Ltd. . . . . . . . . . . . . . . . . — — US$1Pool CompaniesHigh Pool Tankers Limited . . . . . . . . . . . . . . . . . . . . . . . . 3 100,000 3 100,000 3 100,000Glenda International Management Limited (GIM) . . . . . 3 100,000 3 100,000 3 100,000Glenda International Shipping Limited . . . . . . . . . . . . . . — — 3 1,000,000Joint Venture CompanyDM Shipping Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3 100,000Former Vessel Owning CompaniesAniston Maritime Limited . . . . . . . . . . . . . . . . . . . . . . . . 31,000,000 — —Hampton Navigation Limited . . . . . . . . . . . . . . . . . . . . . . 31,000,000 — —High Courage Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,000,000 — —High Emperor Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,000,000 — —High Endeavour Limited. . . . . . . . . . . . . . . . . . . . . . . . . . 31,000,000 — —High Endurance Limited . . . . . . . . . . . . . . . . . . . . . . . . . . 31,000,000 — —High Monarch Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,000,000 — —High Valor Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,000,000 — —Loyalty Maritime Navigation Limited. . . . . . . . . . . . . . . . 31,000,000 — —F-16

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)Combined Issued, Called Up and Fully Paidd’Amico Tankers Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,500 107,500 107,500d’Amico Tankers UK Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —d’Amico Tankers Singapore Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . . . — — 1Pool CompaniesHigh Pool Tankers Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 2Glenda International Management Limited (GIM) . . . . . . . . . . . . . 2 2 2Glenda International Shipping Limited . . . . . . . . . . . . . . . . . . . . . . — — 117Joint Venture CompanyDM Shipping Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 51,000Former Vessel Owning CompaniesAniston Maritime Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,748 — —Hampton Navigation Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,748 — —High Courage Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,769 — —High Emperor Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,509 — —High Endeavour Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,487 — —High Endurance Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,487 — —High Monarch Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,509 — —High Valor Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,769 — —Loyalty Maritime Navigation Limited . . . . . . . . . . . . . . . . . . . . . . . 10,748 — —205,278 107,504 158,622The share capital in d’Amico Tankers UK Limited has been issued but not paid for cash.Financial instruments’ revaluation reserveThe revaluation reserve comprises the cumulative fair value adjustments in respect of the cashflow hedging instrument deemed effective.11. RECONCILIATION OF OPERATING PROFIT TO CASH GENERATED FROM OPERATIONS2004US$2005US$2006US$2004(US$000’s)2005(US$000’s)2006(US$000’s)Operating Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,219 82,777 111,931Adjustments for:Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,039 21,346 22,086Impairment of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 120 (120)Profit on disposal of fixed assets. . . . . . . . . . . . . . . . . . . . . . . . . . — — (29,978)Fair value adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 904 (904) —(Increase)/Decrease in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . (128) (3,103) (750)(Increase)/Decrease in debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,009) (1,173) (9,317)Increase/(Decrease) in creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . (389) (3,901) 8,106Cash Generated from Operations ......................... 29,636 95,162 101,95812. INTEREST IN JOINT VENTUREThe jointly controlled entity, is included on a pro rata basis in the combined financial statementsbased on the following amounts.F-17

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)2004(US$000’s)2005(US$000’s)2006(US$000’s)Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 66Expenses, depreciation, amortisation, interest, etc. . . . . . . . . . . . — — (29)Net result ............................................ — — 37Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 892Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3,809Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (4,564)Net Assets ........................................... — — 137The combination has recognised its share of commitments in respect of the joint venture, seenote 13.13. COMMITMENTSa) Capital CommitmentsThe combination has commitments in respect of vessels in course of construction as follows:2004(US$000’s)2005(US$000’s)2006(US$000’s)Less than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,631 33,840 1,909Between 2-5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 34,426At the end of 2006 the combination has capital commitments relating to the construction oftwo product tankers. The total contract price for the two vessels is US$74.91 million (¥8,925 million),the combination’s 51% share of the remaining commitment is due as follows:US$000’sAt Year EndExchange Rate¥000’s12 months after execution of the contract . . . . . . . . . . . . . . . . . . . . . . . 1,909 227,256Upon commencement of steel cutting . . . . . . . . . . . . . . . . . . . . . . . . . . 3,819 454,512Upon vessel launching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,638 909,024Vessel delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,969 2,733,70236,335 4,324,494The expected delivery dates for the vessels are; Hull No. 724: July 2009 and Hull No. 725: October2009.The combination has arranged post delivery financing for the two vessels with a companyrelated to its Joint Venturer. The facility allows for a term loan of up to ¥2,800 million(US$23.5 million) to be drawn down against each vessel. The loan will be repayable in 120 equalmonthly instalments together with a ¥280 million (US$2.35 million) balloon with the lastinstalment.b) Purchase OptionsThe combination has a number of time charter agreements, which include options to purchasethe vessel. Exercise of these options is at the discretion of the combination based on theconditions prevailing at the date of the option.F-18

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)c) Operating CommitmentsThe combination has minimum operating lease rentals payable under time charter hire agreements,as follows:2004(US$000’s)2005(US$000’s)2006(US$000’s)Less than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,604 88,492 103,549Between 2-5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296,354 311,632 500,459More than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,083 135,474 425,033574,041 535,598 1,029,041Operating lease charge during the year . . . . . . . . . . . . . . . . . . . 80,938 87,845 105,929None of the leases include contingent lease payments.d) Profit Share AgreementsThe combination entered into profit share agreements in respect of vessels fixed by thecombination, as follows:2004(US$000’s)2005(US$000’s)2006(US$000’s)Bareboat contract (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,294Time charter contracts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,643 910 464(1) Contract has a further 11 years remaining.(2) Open Contract at December 31, 2006 has a further 15 months remaining.14. FINANCIAL INSTRUMENTS2004(US$000’s)2005(US$000’s)2006(US$000’s)Fair value of interest rate swap contacts (a) . . . . . . . . . . . . . . . . . . 6,389 3,319 537Fair value of freight forward agreements (b) ................. 904 — —Fair value of forward currency contracts (c) .................. — — 8287,293 3,319 1,365Analysed as follows:Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,722 2,748 1,365Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,571 571 —7,293 3,319 1,365a) Interest Rate RiskThe combination is exposed to interest rate risk as the interest paid on variable rate loans andthe interest received on bank deposits will fluctuate due to changes in market interest rates.The combination has a number of interest rate swap contracts taken out to hedge the variablerate interest payable on the bank loans. The contracts open at December 31, 2006 had a totalnominal value of US$42.4 million, carry a weighted average interest rate of 7% and expire onMay 4, 2007.F-19

) Market RiskThe combination is exposed to market risk in respect of vessels trading on the spot marketearning market rates. The risk is reduced to the extent that certain vessels are placed on timecharter or trade under contracts of affreightment (COA) where the freight rate is fixed.Management does not hedge against market risk, however, a number of the combination’svessels participate in a pool, which utilised freight forward agreements (FFA) to partly mitigatemovements in market rates. The result of these FFA contracts was reflected in the share of poolearnings.c) Currency RiskThe combination is exposed to currency risk in respect of costs denominated in currencies otherthan U.S. Dollars, principally Euros and Yen. Management does not hedge the movement in theEuro. The Yen exposure is principally linked to the vessel purchase contracts denominated inYen. A number of forward currency contracts were contracted to partly hedge the Yenexposure.The contracts open at December 31, 2006 had a total nominal value of ¥3,720 million andmature on February 15, 2007.d) Credit RiskThe combination is exposed to credit risk resulting from the possible non performance of any ofits counterparties. To minimise the risk, the combination only deals with creditworthy counterparties.Due to the nature of the oil industry the combination is exposed to significantconcentrations of credit risk arising from the small number of oil majors and trading housesactive in the product tanker market.e) Other Financial InstrumentsOther than the interest rate swaps, FFA and forward currency contracts, the combination hasother financial instruments including cash and balances arising directly from its operations.Substantially all of the combination’s activities and cash balances are denominated in U.S.Dollars so there is no significant exposure to currency risk. Surplus group cash is fixed on termdeposits, return is linked to bank interest rates. Management does not hedge against themovement in these rates.15. CONTINGENCIESa) ClaimsThe Group is involved in a number of claims arising from its normal activities. The Directorsconsider that adequate provision has been made in the combined financial statements.b) Tonnage Taxd’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)The charge for, and liability in respect of, both current and deferred tax have been calculatedon the basis of tax law enacted at the combined balance sheet date.However, the Irish Government has applied to the European Union for approval of a tonnagetax regime, which, if approved in the form proposed, would be effective as of 1 January 2006. Ifapproval is obtained then the effect could be to reduce the current tax charge for the period byapproximately US$4.3 million and the deferred tax charge for the period by approximatelyUS$4.4 million. In addition, there could also be potential reductions in deferred taxationliabilities in future periods due to the transitional provisions on the clawback of tax depreciationclaimed prior to the date of effective entry into the tonnage tax regime. The amount of thereduction would depend upon the period for which vessels taken into the tonnage tax regimeF-20

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)are retained by the group, but the maximum amount of the reduction would be US$5.7 million.This reduction would be reflected over five years, being the period of the proposed transitionalprovisions.16. RELATED PARTY TRANSACTIONSa) Dividends2004(US$000’s)2005(US$000’s)2006(US$000’s)d’Amico Tankers Limited dividend . . . . . . . . . . . . . . . . . . . . . . . 5,000 5,000 —Dividend per share (in US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$ 50 US$ 50 US$—b) Management FeesFees paid to d’Amico group companies under service and management agreements were asfollows:2004(US$000’s)2005(US$000’s)2006(US$000’s)Fellow subsidiaries:COGEMA S.A.M. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,840 2,713 —d’Amico Ireland Limited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 244 7,897d’Amico Shipping U.K. Limited . . . . . . . . . . . . . . . . . . . . . . . . . — 280 —Ultimate Holding Company:d’Amico Societa’ di Navigazione S.p.A. . . . . . . . . . . . . . . . . . . 2,373 4,397 —Company associated with d’Amico Societa’ di NavigazioneS.p.A.:Sirius Shipmanagement S.r.l . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 487 476c) Commissions and Other FeesBroker commission is paid to d’Amico group companies on gross freight and hire where theyhave fixed the vessel, other amounts are payable under the relevant agreement. Amounts paidwere as follows:2004(US$000’s)2005(US$000’s)2006(US$000’s)Fellow subsidiaries:COGEMA S.A.M. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 499 1,949d’Amico Shipping U.K. Limited . . . . . . . . . . . . . . . . . . . . . . . . . 260 281 748d’Amico Shipping Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,058 465 162Comarfin S.A.M. (arrangement fee) . . . . . . . . . . . . . . . . . . . . . 45 89 —Ultimate Holding Company:d’Amico Societa’ di Navigazione S.p.A. (supervision fees) . . . . 673 — —Company associated with d’Amico Societa’ di NavigazioneS.p.A.:Comp. Gen. Telemar (telecommunications) . . . . . . . . . . . . . . . . 414 558 1,206F-21

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)During the year 2006, the company used the group bunkering service performed by fellowsubsidiaries for a total of 86,658 metric tonnes for which an average margin of US$3 per metrictonne is charged.d) Interest on Group LoansThe combination paid/(received) interest to/(from) fellow subsidiaries on loans, as follows:2004(US$000’s)2005(US$000’s)2006(US$000’s)d’Amico International S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 — 5d’Amico Finance Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 929 5,238 1,915d’Amico Dry Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,082Medbulk Maritime Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (226)e) Vessel Charter Agreements2004(US$000’s)2005(US$000’s)2006(US$000’s)Time charter agreements with Ultimate Holding Companyd’Amico Societa’ di Navigazione S.p.A. . . . . . . . . . . . . . . . . . . 14,823 14,783 18,204Fellow Subsidiary Paul Maritime Company Limited . . . . . . . . . . . — — 1,394f) Vessel Acquisitions and Disposalsd’Amico Tankers Limited disposed of four vessels in 2006 to a fellow subsidiary for a totalconsideration of US$70 million. The Company realised a gain of US$29.9 million on the disposal.g) Pool Incomed’Amico Tankers Limited contributes vessels to pools operated by companies whose results andbalances have been included in the combined financial statements and to a partnership in whicha fellow subsidiary has a 33.3% holding. The company’s share of pool earnings is included inrevenue. The amounts due from the pools represents the net of the pool amounts uncollectedand unpaid at the combined balance sheet date.2004(US$000’s)2005(US$000’s)2006(US$000’s)Income from pool operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,108 81,551 121,529Amount due from the pools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,564 14,894 6,859F-22

d’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)h) Transactions Between Combining Entitiesd’Amico Tankers Limited entered into agreements with combining entities as follows:2004(US$000’s)2005(US$000’s)2006(US$000’s)i) Bareboat agreements:Aniston Maritime Limited . . . . . . . . . . . . . . . . . . . . . . . . . 3,809 — —Hampton Navigation Limited . . . . . . . . . . . . . . . . . . . . . . 3,462 — —Loyalty Maritime Navigation . . . . . . . . . . . . . . . . . . . . . . . 3,527 — —High Endurance Limited . . . . . . . . . . . . . . . . . . . . . . . . . . 1,436 — —High Endeavour Limited . . . . . . . . . . . . . . . . . . . . . . . . . . 1,118 — —ii)Vessel acquisitions:Existing vessels* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178,100 — —Vessels in the course of construction. . . . . . . . . . . . . . . . . 29,601 — —* The individual companies recognised a profit of US$5 million on the disposals and wroteback US$8.7 million of accumulated depreciation. The depreciation charge in the combinedaccounts in 2005 and 2006 is based on the net book value prior to transfer.These transactions have been eliminated in the combined financial statements. The netimpact of these adjustments on the combination at December 31, 2006, amounted to areduction in equity of US$12.1 million.17. SUBSEQUENT EVENTSOn February 16, 2007, a new revolving facility of US$350 million was signed with a syndicate ofbanks headed by Calyon for the refinancing of the m/t High Spirit, m/t High Challenge, m/t HighWind, m/t Cielo di Londra, m/t Cielo di Parigi, m/t Cielo di Salerno, m/t High Endurance, m/tHigh Endeavour, m/t High Valor, m/t High Courage, m/t High Progress, m/t High Performance, m/t High Venture and the financing of the m/t High Trust. The facility has a 10 year term and bearsinterest at US Dollar LIBOR plus margin.Effective January 2, 2007 d’Amico International S.A. sold its interest in DM Shipping Limited,Glenda International Management Limited, Glenda International Shipping Limited and HighPool Tankers Limited to d’Amico Tankers Limited. On February 23, 2007, the Board of d’AmicoInternational Shipping S.A. approved the contribution of d’Amico Tankers Limited by theexisting parent in exchange for shares. On completion of the transaction, d’Amico TankersLimited will be a wholly owned subsidiary of d’Amico International Shipping S.A.The Directors have recommended a further final dividend for 2006 of US$25 million (US$250 pershare). An interim dividend of US$25 million (US$250 per share) was paid on January 30, 2007.18. FORTHCOMING STANDARDSThe International Accounting Standards Board had published International Financial ReportingStandard N7 (“IFRS 7”)—Financial Instruments Disclosure Requirements. IFRS 7 will apply to thegroup combined financial statements for the periods ending 31 March 2008 onwards. Onimplementation of IFRS 7, there will be no impact on reported results, assets and liabilities,however, financial statements will include additional disclosure on risk and financial positionand performance. In particular, details will be required to present additional quantitative dataabout risk exposure and a sensitivity analysis showing the impact of changes, which werereasonably possible at the reporting date.F-23

In addition, International Accounting Standard 1 (“IAS 1”)—Presentation of Financial Statementshas been revised and will apply to the group financial statements from the same accountingperiod. The revisions to this standard will require additional disclosures, both qualitative andquantitative, concerning the capital of the group, but, there is not expected to be any impacton the reported results, assets and liabilities of the group.19. COMBINING ENTITIESThe following entities, which were all under common management and control during theperiod, are included in the combined financial statements, as follows:Company Named’Amico Tankers Limited and its Combining EntitiesNotes to the Combined Financial StatementsFor the Years Ended 31 December 2004, 2005 and 2006—(continued)EffectiveInterest %Place ofIncorporation 2004 2005 2006d’Amico Tankers Limited . . . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „ „d’Amico Tankers UK Limited . . . . . . . . . . . . . . . . . . . 100% U.K. „d’Amico Tankers Singapore Pte. Ltd. . . . . . . . . . . . . 100% Singapore „Vessel owning companies whose vessels weretransferred to d’Amico Tankers LimitedAniston Maritime Limited . . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „*Hampton Navigation Limited . . . . . . . . . . . . . . . . . . 100% Ireland „ „*High Courage Limited . . . . . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „*High Emperor Limited . . . . . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „*High Endeavour Limited . . . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „*High Endurance Limited . . . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „*High Monarch Limited . . . . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „*High Valor Limited . . . . . . . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „*Loyalty Maritime Navigation Limited . . . . . . . . . . . . 100% Ireland „ „*Pool CompaniesHigh Pool Tankers Limited. . . . . . . . . . . . . . . . . . . . . 100% Ireland „ „ „Glenda International Management Limited (GIM) . . 100% Ireland „ „ „Glenda International Shipping Limited. . . . . . . . . . . 100% Ireland „Joint Venture CompanyDM Shipping Limited. . . . . . . . . . . . . . . . . . . . . . . . . 51% Ireland „* The single purpose vessel owning companies were liquidated in 2005 after the vessels hadbeen transferred to d’Amico Tankers Limited. The distributions upon liquidation are reflectedas dividends in 2005 in the combined statement of changes in equity.F-24

Independent Auditors’ ReportTo the Board of Directors of d’Amico International Shipping S.A.and the Board of Directors of d’Amico International S.A.We have audited the balance sheet as at 2 March 2007 of d’Amico International Shipping S.A.which also comprises a summary of significant accounting policies and other explanatory notes.This report is made solely to the Board of Directors of d’Amico International Shipping S.A. andthe Board of Directors of d’Amico International S.A., each as a body, in accordance with theterms of our engagement. Our audit work has been undertaken so that we might state to thecompanies those matters we are required to state to them in an auditors’ report and for noother purpose. To the fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the above companies each as a body, for our audit work, for this report,or for the opinions we have formed.Management’s ResponsibilityManagement is responsible for the preparation and fair presentation of this financial informationin accordance with International Financial Reporting Standards as adopted by the EuropeanUnion. This responsibility includes: designing, implementing and maintaining internal controlsrelevant to the preparation and fair presentation of the financial information and is free frommaterial misstatement, whether due to fraud or error; selecting and applying appropriateaccounting policies; and making accounting estimates that are reasonable in the circumstances.Auditors’ ResponsibilityOur responsibility is to express an opinion on this financial information based on our audit. Weconducted our audit in accordance with International Standards on Auditing. Those standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance whether the financial information is free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial information. The procedures selected depend on the auditors’judgement, including the assessment of the risks of material misstatement of the financialinformation, whether due to fraud or error. In making those risk assessments, the auditorsconsider internal controls relevant to the entity’s preparation and fair presentation of thefinancial information in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by management, as well as evaluatingthe overall presentation of the financial information.We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.OpinionIn our opinion, the balance sheet presents fairly, in all material respects the financial position ofthe company as at 2 March 2007 in accordance with International Financial Reporting Standardsas adopted by the European Union.MOORE STEPHENS S.à.r.l.Allée Marconi, 16L—2120 Luxembourg7 March 2007F-25

d’Amico International Shipping S.A.Balance SheetAs at 2 March 2007(Expressed in United States Dollars)Note2 March 2007US$FIXED ASSETSInvestment in subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 128,921,920CURRENT ASSETSCash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,363CURRENT LIABILITIESAmount due to parent company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (10,363)Net Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,956,920CAPITAL AND RESERVESIssued capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 128,956,920Equity Shareholder’s Funds ....................................... 128,956,920Approved by Marco Fiori (Chief Executive Officer)on behalf of the Board of Directors on 7 March 2007F-26

1. SIGNIFICANT ACCOUNTING POLICIESd’Amico International Shipping S.A.Notes to the Financial InformationAs at 2 March 2007(Expressed in United States Dollars)This company is domiciled in Luxembourg. The principal activity of the company is to act as theholding company for d’Amico Tankers Limited and its subsidiaries (note 9).This balance sheet has been prepared under the historical cost convention and in accordancewith applicable International Financial Reporting Standards as adopted by the European Union(IFRSs). The balance sheet is expressed in U.S. Dollars being the functional currency of thecompany.The principal accounting policies which have been consistently applied by the company are setout below:a) Investment in SubsidiariesInvestment in subsidiaries are shown at the lower of cost and net realisable value.b) Foreign CurrenciesTransactions in currencies other than U.S. Dollars are translated at the appropriate rate ruling atthe time of the transactions. Assets and liabilities denominated in foreign currencies aretranslated into U.S. Dollars at the rate ruling at the balance sheet date.c) Critical Accounting Judgements and Key Sources of Estimation UncertaintyAccounting estimates and judgement are based on assessments of uncertain future events andare used in the preparation of the financial information. Such judgement and estimates mayimpact on the amounts reported as assets and liabilities.2. EMPLOYEESThe company has no employees.3. INVESTMENT IN SUBSIDIARY2 March 2007US$d’Amico Tankers Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,921,920On 2 March 2007, the share capital of d’Amico International Shipping S.A. was increased fromUS$35,000 to US$128,956,920 by the issuance of 128,921,920 new shares with no nominal value.On the same day, the 128,921,920 new shares were issued to d’Amico International S.A. inconsideration for the contribution in kind of the entire issued share capital of d’Amico TankersLimited consisting of 100,000 shares of 1 Euro each.At its Annual General Meeting on 22 February 2007, the shareholders of d’Amico TankersLimited approved the payment of a dividend of US$25 million. This amount had not been paidat the balance sheet date of the company.4. AMOUNT DUE TO PARENT COMPANYThe amount due to the parent company is interest free and unsecured.F-27

5. ISSUED SHARE CAPITALd’Amico International Shipping S.A.Notes to the Financial InformationAs at 2 March 2007(Expressed in United States Dollars)—(continued)2 March 2007Authorised 200,000,000 shares of no par value. . . . . . . . . . . . . . . . . . . . . . . . . . .Issued, called up and fully paid 128,956,920 shares of no par value . . . . . . . . . .US$200,000,000US$128,956,9206. FINANCIAL INSTRUMENTSThe company has no financial instruments except cash and balances arising directly from itsoperations. The company’s cash balances are denominated in United States Dollars so there is noexposure to currency risk. Surplus cash is fixed on term deposits, return is linked to bank interestrates. Management does not hedge against the movement in these rates.7. ULTIMATE HOLDING COMPANYThe company’s immediate parent company is d’Amico International S.A., incorporated inLuxembourg.The ultimate holding company and controlling party is d’Amico Società di Navigazione S.p.Aincorporated in Italy.8. FORTHCOMING STANDARDSThe International Accounting Standards Board had published International Financial ReportingStandard N7 (“IFRS 7”)—Financial Instruments Disclosure Requirements. IFRS 7 will apply tofinancial statements for the periods ending 31 March 2008 onwards. On implementation of IFRS7, there will be no impact on reported results, assets and liabilities, however, the financialstatements will include additional disclosure on risk and financial position and performance. Inparticular, the company will be required to present additional quantitative data about riskexposure and a sensitivity analysis showing the impact of changes which were reasonablypossible at the reporting date.In addition, International Accounting Standard 1 (“IAS 1”)—Presentation of Financial Statementshas been revised and will apply to the group financial statements from the same accountingperiod. The revisions to this standard will require additional disclosures, both qualitative andquantitative, concerning the capital, but, there is not expected to be any impact on the reportedresults, assets and liabilities of the group.F-28

d’Amico International Shipping S.A.Notes to the Financial InformationAs at 2 March 2007(Expressed in United States Dollars)—(continued)9. INVESTMENTSCompany NameEffectiveInterest %Place ofIncorporationActivityHeld directly:d’Amico Tankers Limited . . . . . . . . . . . . . . . . . . . . . . . . . 100% Ireland ShippingHeld by d’Amico Tankers Limited:d’Amico Tankers UK Limited . . . . . . . . . . . . . . . . . . . . . . 100% U.K. Servicesd’Amico Tankers Singapore Pte. Ltd. . . . . . . . . . . . . . . . 100% Singapore Servicesd’Amico Tankers Monaco S.A.M. . . . . . . . . . . . . . . . . . . 100% Monaco ServicesHigh Pool Tankers Limited . . . . . . . . . . . . . . . . . . . . . . . 100% Ireland Pool companyGlenda International Management Limited . . . . . . . . . . 100% Ireland Pool companyGlenda International Shipping Limited . . . . . . . . . . . . . 100% Ireland DormantHandyTankers K/S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33% Denmark Pool companyDM Shipping Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . 51% Ireland ShippingF-29

Registered Office of the Company and the Principal and Selling Shareholder12, rue Ste. ZitheL-2763 LuxembourgGrand Duchy of LuxembourgInstitutional ManagersJ.P. Morgan Securities Ltd.125 London WallLondon EC2Y 5AJEnglandCapitalia S.p.A.Via Minghetti, 1700187 RomeItalyLegal Advisors to the Company and the Principal and Selling ShareholderAs to U.S. and English LawSkadden, Arps, Slate, Meagher & Flom(UK) LLP40 Bank Street Canary WharfLondon, E14 5DSEnglandAs to Irish LawA&L GoodbodyInternational Financial Services Centre,North Wall Quay, Dublin 1IrelandAs to Italian LawStudio Legale Ughi e NunzianteVia Venti Settembre, 100187 RomeItalyAs to Luxembourg LawLinklaters Loesch35, avenue John-F Kennedy 35L-1855 LuxembourgGrand Duchy of LuxembourgLegal Advisors to the Institutional ManagersAs to U.S. LawLatham & WatkinsCorso Giacomo Matteotti, 820121 MilanItalyAs to English LawLatham & Watkins99 BishopsgateLondon EC2M 3XFEnglandAs to Italian LawGianni, Origoni, Grippo &PartnersPiazza Belgioioso, 220121 MilanItalyStatutory AuditorFiduciaire Sàrl12, rue Ste. ZitheL-2763 LuxembourgGrand Duchy of LuxembourgIndependent Auditor to the CompanyMoore Stephens S.à.r.l.16, allée Marconì,L-2120 LuxembourgGrand Duchy of LuxembourgFinancial Advisor to the CompanyTamburi Investment Partners S.p.A.Via Pontaccio 1020121 MilanItaly