Annual Report 2011

1 March 2012

“TORM A/S is in a very difficult situation at the release of the 2011 Annual Report, as the deterioration in the global economy and excess tonnage capacity severely impact the product tanker freight market for the third year running. Therefore, TORM A/S is pursuing a long-term comprehensive financing solution that will enable the Company to operate efficiently through the global crisis and restore profitability. This is possible if a sequence of preconditions are met. We hope that TORM and its important stakeholders reach a clarification shortly. As a consequence of the situation we have highlighted the uncertainty in the statement by management, says Chairman of the Board, N.E. Nielsen.”

• In 2011, the Company incurred a loss before tax of USD 451 million. The result is unsatisfactory and impacted by an impairment loss of USD 200 million and a net loss from sale of vessels of USD 53 million.

• Throughout 2011, the Tanker Division’s earnings were negatively impacted by low freight rates. The global product tanker market was marked by the continued tonnage influx in 2011. Demand growth was affected by global economic uncertainty affecting the refined product consumption negatively, a general absence of arbitrage opportunities and events occurring in among others Japan and the Arab countries.

• The dry bulk freight rates were under pressure, and volatility prevailed during 2011 driven by seasonality and the adverse effects of the Japanese earthquake and Australian floodings. Moreover, the net growth of the global bulk fleet reached an unprecedented level in 2011, which negated the growth in demand.

• The Company’s 2011 performance was negatively impacted by a USD 53 million net loss from the sale of vessels. This amount consists of a net loss of USD 12 million from the sale of six product tankers sold during 2011 and the cancellation of one product tanker plus a total loss of USD 41 million from sale of two bulk newbuilding contracts.

• As stated in announcement no. 19 dated 17 November 2011, TORM is pursuing a long-term comprehensive financing solution. One cornerstone is an amended and extended repayment schedule of the Company’s vessel financing of USD 1,872 million. TORM and the Company’s bank group agreed on a temporary deferral of installments and covenant standstill, which most recently has been extended until 1 March 2012.

• As of 31 December 2011, cash and cash equivalents amounted to USD 86 million and undrawn credit facilities to USD 53 million.

• As of 31 December 2011, outstanding CAPEX relating to the order book amounted to USD 82 million.

• In accordance with IFRS, TORM has tested the carrying amount of its assets to determine if there is any impairment as of 31 December 2011. As a consequence, TORM has recognized an impairment loss of USD 200 million, which is related to tanker fleet values (USD 187 million) and the investment in FR8 (USD 13 million). Based on brokers’ valuations, TORM’s fleet including the order book had a market value of USD 1,797 million as of 31 December 2011. This is USD 612 million less than the impaired book value.

• As of 31 December 2011, equity amounted to USD 644 million (DKK 3,703 million), corresponding to USD 9 per share (DKK 53) excluding treasury shares, giving TORM an equity ratio of 23%. Thereby, the Company was in breach on its financial covenant relating to an equity ratio of minimum 25% as of 31 December 2011. Accordingly, the Company’s mortgage debt and bank loans have been reclassified as current liabilities.

• With the current freight rate level and the fact that the debt is payable on demand, TORM is required to conclude a long-term comprehensive financing solution shortly to ensure the Company’s operations and liquidity throughout 2012. The statement by management on the annual report reflects the uncertainty regarding the completion of a voluntary long-term comprehensive solution.

• As a consequence of the uncertainty with respects to going concern, the independent auditors have issued a disclaimer of opinion.

• As of 31 December 2011, 14% of the total earning days in the Tanker Division for 2012 had been covered at USD/day 15,002 and 87% of the total earning days in the Bulk Division at a rate of USD/day 13,906. Announcement no. 6 / 1 March 2012 Annual Report 2011 2 of 5

• The financial result for 2012 is subject to considerable uncertainty given TORM’s situation and the changes to the Company’s business model that may follow. Consequently, TORM has decided not to provide earnings guidance for 2012 before a long-term comprehensive financing solution is in place.

• The Board of Directors proposes that no dividend be distributed for 2011.

About TORM
TORM is one of the world’s leading carriers of refined oil products as well as a significant player in the dry bulk market. The Company runs a fleet of approximately 160 modern vessels in cooperation with other respected shipping companies sharing TORM’s commitment to safety, environmental responsibility and customer service.

TORM was founded in 1889. The Company conducts business worldwide and is headquartered in Copenhagen, Denmark. TORM’s shares are listed on NASDAQ OMX Copenhagen (ticker: TORM) and on NASDAQ in New York (ticker: TRMD). For further information, please visit www.torm.com.

TORM, press release