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Board Of Directors' Report At TORM A/S' Annual General Meeting On 11 April 2013

Bulk asset prices gradually decreased during 2012. For example, the estimated price of a five-year-old second-hand Panamax bulk carrier decreased by 30% during 2012. Piracy

Unfortunately, international shipping is still faced with the challenge of piracy. TORM's response to piracy is founded in the Best Management Practice (BMP) developed by the International Chamber of Shipping, the International Shipping Federation and national navy forces. During 2012, TORM experienced two failed attempts of hijacking. The Company will continue to monitor the risk situation and preempt hijacking by following Company security procedures, which currently means engaging armed guards on all vessels passing through High Risk Areas. During 2012, TORM completed 271 voyages with armed guards.

The international campaign against piracy is paying off, as is evidenced by the decline in the number of attempted hijackings in the Gulf of Aden area, which is down by two thirds compared with 2011.

I would like to highlight the efforts of the Danish forces on 15 December 2012, when the frigate Iver Huitfeldt came to TORM Krisitina's rescue following an attempt of hijacking. In March, TORM had the opportunity to honor the crew at a reception attended by the Minister of Defense along with representatives of TORM, the Armed Forces, the Danish Shipowners' Association and the Danish press.

Financial statements

I will now  go through the financial statements for 2012. The financial statements are extraordinary as they were materially impacted by the restructuring in a number of areas. The effects are described in detail in the listing prospectus dated 7 December 2012, as well as in the Annual Report, pp. 38 onward. In the income statement, the items charter hire, sale of vessels and financial expenses are impacted negatively by a total of USD 210 million by the restructuring. The capital increase of USD 200 million, effected by conversion of debt, was recognized as an increase in equity.

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