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

In the bulk segment, the first quarter of 2013 began on a weaker note than the same period in 2012 for handymax and panamax. TORM remains cautious about the prospects for the dry bulk market in 2013 due to the relatively high level of newbuilding deliveries expected across all segments. Freight rates are expected to remain under pressure due to the oversupply of tonnage and the market's significant dependence on China coupled with seasonal demand fluctuations.

TORM's outlook for 2013

TORM expects a loss before tax for 2013 of USD 100-150 million excluding any vessel sales and impairment losses. Given that 24,676 earning days remained open at the end of 2012, profit/loss before tax would be impacted by USD 25 million by a change in freight rates of USD/day 1,000. As described in the Annual Report, TORM expects to remain in compliance with the financial covenants in 2013.

One TORM

TORM has now succeeded in stabilizing the Company's situation and in strengthening the organization with fresh resources. Under the "One TORM" heading, the Company has launched a number of measures to support TORM's strong operational platform and ensure optimal value creation for all stakeholders. I will now briefly give some examples of these measures, focusing on four common goals.

Customers first

Even under difficult conditions, TORM has consistently generated earnings above market level. One reason for this is the Company's strong customer focus.

In the period since the restructuring, the organization has managed to fully re-establish its close relations with all core customers.

In order to strengthen the proximity to customers, TORM re-organized the structure of the Tanker Division into supporting all vessel segments depending on the geographical location of the customers. By doing so, the Company mirrors the organization of individual customers, thereby enhancing customer relationships.

TORM has rejected the traditional pool models with their broadly based decision-making process in favor of strategic partnerships and so-called Revenue Sharing Schemes, which provide far greater flexibility and faster decision-making as well as a better cost structure.

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