1、 ANNUAL REPORT 2019 TORM ANNUAL REPORT 2019 CONTENTS 2 STRATEGIC REPORT AT A GLANCE Financial Highlights 4 CSR Highlights 5 One TORM, A Strong Platform 6 Chairmans Statement 7 RESULTS Key Figures 9 The Year in Review 11 Outlook 2020 14 Statement by the Executive Director 17 STRATEGY Strategic Ambiti

2、ons and Business Model 19 MARKET Value Chain in Oil Transportation 22 The Product Tanker Market 23 IMO 2020 Sulfur Regulaltion 28 Key Performance Indicators 31 The TORM Fleet 32 RISK consequently, the market risk related to freight rates and bunker prices remains high. RISK MANAGEMENT TORM ANNUAL RE

3、PORT 2019 RISK thus, a ballast voyage will give 0 (zero) in ton- nm. CO2 emission per ton-nm is the full CO2 emissions on board all vessels divided by the ton-nm for all voyages; thus, it includes emissions from ballast voyages, electricity production, inserting, cargo operations, etc. ENVIRONMENT -

4、 REPORTING TORM ANNUAL REPORT 2019 OUR RESPONSIBILITY 53 GREEN HOUSE GAS EMISSIONS DATA 2019 2018 VESSEL EMISSIONS AND INDICATORS Number of vessels in operation at the end of the year (in technical management) 73 72 Number of vessel months (one vessel one year equals 12 vessel months) 891 932 Used h

5、eavy fuel oil (ton) 348,972 375,196* Used low-sulfur heavy fuel oil (ton) 12,174 152 Used marine gas oil (ton) 55,374 64,255* Generated CO2 emissions from vessels (ton) 1,301,722 1,374,835* Distance sailed (nautical miles) 4,045,457 4,129,589* Average cargo on board (ton) 36,628 36,914* Cargo transp

6、ort work (ton-nautical miles) 114,715,104,800 112,462,924,810* CO2 emissions in grams per ton-nautical miles (one ton of cargo transported one nautical mile) 11.35 12.22* OFFICE EMISSIONS AND INDICATORS (ELECTRICITY AND HEATING) Electricity used in office locations (kWh) 702,850 823,844 District hea

7、ting (Gj) 1,423 1,326 Generated CO2 emissions from office locations (ton) 488 525 Number of office employees at the end of the year 341 309 CO2 emissions per employee (ton) 1.4 1.7 FLIGHT EMISSIONS AND INDICATORS Air mileage (km) 56,173,910 80,192,490 Number of travels 10,263 13,401 * Numbers adjust

8、ed due to increased data quality and verification process. TORM ANNUAL REPORT 2019 OUR RESPONSIBILITY 54 TORM is a long-standing supporter of maritime education in Denmark, India and the Philippines, and it is therefore natural for the Company to support SDG no. 4 Quality Education. This commitment

9、reflects the Companys ties to local communities and has a positive effect on the needs of the societies in which TORM operates and where many of the Companys seafarers come from. In addition, TORM believes that supporting education has positive effects on its core business in terms of developing the

10、 pipeline of competences in the industry and in terms of higher employee retention and a positive brand recognition. TORM is therefore dedicated to supporting SDG no. 4 Quality Education and cooperates with several educational institutions and universities internationally. In Denmark and Singapore,

11、the efforts include offering trainee positions in TORMs offices to students from Copenhagen Business School, the Copenhagen School of Marine Engineering however, the Board of Directors considered the benefit of the Companys combined shareholder and stakeholder base and decided at that time that the

12、continued modernization of the fleet through newbuildings, purchase of modern second-hand tonnage and scrubber installations provided for the optimal capital allocation, and therefore a decision not to distribute dividends for the first six months of 2019 was taken. The Board of Directors has decide

13、d to recommend a dividend of USD 7.4m, equivalent to USD 0.10 per share, for approval at the AGM on 15 April 2020. Should the dividend be approved, payment is expected on 6 May 2020 with ex-dividend date on 17 April 2020. In addition, the Board has decided to conduct share repurchases up to a maximu

14、m of USD 1.4m during the first six months of 2020 in open-market transactions on Nasdaq in Copenhagen. The total distribution of up to USD 8.8m is in line with the Companys Distribution Policy and corresponds to a maximum of 50% of net income adjusted for the impairment reversal of USD 120m for the

15、six months ended 31 December 2019. CONCLUSION It is important for the Board of Directors that TORM maintains a transparent governance structure and operational set-up with all elements of the operating platform integrated under the One TORM strategy. The Board of Directors believes this is in the be

16、st interest of all key stakeholders and will continue to support TORM as the Reference Company in the product tanker industry. Mr. Christopher H. Boehringer Chairman of the Board CHAIRMANS INTRODUCTION TORM ANNUAL REPORT 2019 GOVERNANCE INTRODUCTION 65 THE BOARD OF DIRECTORS The Board of Directors i

17、s entrusted with the overall responsibility for the Company. The duties of the Directors include establishing policies for strategy, accounting, organization, finance and the appointment of executive officers. The Board of Directors governs the Company in accordance with the limits prescribed by the

18、 Articles of Association or by any special resolution of the shareholders. In accordance with the Corporate Governance Code, the Board of Directors is also overall responsible for the Companys internal controls and risk assessment. This is described in further detail in the “Risk Management” section

19、 and in the “Audit and Risk Committee Reports”. The Board is confident that it has in place the Rules of Procedure, internal board policies, time and resources in order to function effectively and efficiently. Directors have access to advice and services from the Company Secretary who is responsible

20、 to the Board of Directors for keeping all statutory minutes and records. The Board delegates day-to-day responsibility for running the Company to the Executive Director and certain responsibilities to various Board committees. The Board of Directors has six prescheduled meetings on an annual basis

21、held in connection with the quarterly result announcements, the approval of the annual budget and the Annual General Meeting. The actual meeting frequency is in general higher, as extraordinary meetings are held to account for specific matters. In 2019, the Board of Directors had 10 meetings. TORM h

22、as a one-tier management system in place. This means that Executive Director Mr. Jacob Meldgaard serves on TORM plcs Board of Directors and as the Chief Executive Officer of TORM A/S the main subsidiary within the TORM Group. The Board of Directors of TORM plc consists of Mr. Christopher H. Boehring

23、er as Chairman and Non- Executive Director, Mr. David N. Weinstein as Deputy Chairman, Senior Independent Director, Minority Director and Non-Executive Director, Mr. Torben Janholt as Non-Executive Director, Mr. Gran Trapp as Non-Executive Director and Mr. Jacob Meldgaard as Executive Director. In l

24、ine with the Corporate Governance Code, TORMs Chairman will be a different position to any Chief Executive Officer (CEO) or sole Executive Director appointed from time to time. The division of responsibilities between the Chairman and any CEO or sole Executive Director is stated in the Rules of Proc

25、edure for the Board. All Directors have committed to allocating enough time to fulfill his/her responsibilities towards the Company. The non-Executive Directors have undertaken that they have enough time to carry out their duties. Any significant commitments of each non-Executive Director are disclo

26、sed to the Board before appointment. Changes to such commitments are reported to the Board as they arise, and details of these commitments are included in the Annual Report. In addition, TORM plc has four Board Observers who attend most Board meetings. The Board Observers are Mr. Lars Bjrn Rasmussen

27、, Mr. Rasmus J. Skaun Hoffmann (both employee-elected in TORM A/S), Mr. Jeffrey S. Stein (Deputy Minority Director) and Ms. Annette Malm Justad, who was appointed at the 14 August 2019 Board meeting. CORPORATE GOVERNANCE COMPOSITION OF THE BOARD OF DIRECTORS Members and attendance at meetings held d

28、uring 2019 Board of Directors Meetings attended/held Mr. Christopher H. Boehringer (Chairman) 9/10 Mr. David N. Weinstein (Deputy Chairman and Senior Independent Director) 10/10 Mr. Gran Trapp 9/10 Mr. Torben Janholt 9/10 Mr. Jacob Meldgaard (Executive Director) 10/10 Mr. David Weinstein, Mr. Gran T

29、rapp and Mr. Torben Janholt are considered Independent Directors. TORM ANNUAL REPORT 2019 GOVERNANCE INTRODUCTION 66 All the Companys Directors are briefed on the duties they owe as Directors of an English public company when they join the Board, including their statutory duties under the Companies

30、Act 2006. The Directors, with the exception of the B-Director who is not appointed for a specified term but will continue until removed by the B-shareholder, all retired and were re-elected for a period of two years at TORM plcs Annual General Meeting on 12 April 2018. Mr. Christopher H. Boehringer,

31、 Mr. Torben Janholt and Mr. Gran Trapp were all elected for a two-year period until 2020. BOARD EVALUATION In compliance with the Corporate Governance Code, the Board of Directors conducted a self-evaluation. The evaluation focused on Board accountability and composition, the Boards role in setting

32、strategy, risk management, cyber security, crisis management, gender diversity, talent strategy and succession planning and the effectiveness of the Board committees. The evaluation is in the form of a survey. The overall conclusion was that the Board worked well and continued to function in an open

33、 and collaborative way with a high level of trust and respect. The Board of Directors agreed that no further follow-up was required. In addition to the formal Board evaluation, the Board Chairman scheduled to meet each Non- Executive Director individually during the year to discuss their contributio

34、n to the Board. The Board will continue to perform an evaluation on an annual basis. CORPORATE GOVERNANCE TORM ANNUAL REPORT 2019 GOVERNANCE INTRODUCTION 67 BOARD COMMITTEES The Board of Directors has established four committees for which formal Terms of Reference have been approved by the Board of

35、Directors and can be found on TORMs website. The Audit Committee assists the Board of Directors in supervising and enhancing financial reporting, internal controls and auditing processes. The Risk Committee is responsible for supervisory oversight and monitors responsibilities with respect to intern

36、al controls and risk management. The Remuneration Committee assists the Board of Directors in reviewing Managements performance and remuneration as well as the Companys general remuneration policies. The Nomination Committee is responsible for maintaining and developing a number of governance proced

37、ures and evaluation processes in relation to the Board of Directors. Further details on the work in the four committees can be found in the individual committee reports. MANAGEMENT STRUCTURE AND DELEGATION OF AUTHORITY TORMs Board sets the strategy of the Company and ensures that Management operates

38、 the business in accordance with this strategy. Details of the strategy and purpose are set out in the strategic report on pages 3-61. The Board of Directors has delegated the day-to-day management of the business to the Executive Director, Mr. Jacob Meldgaard. This includes the Companys operational

39、 development and responsibility for implementing the strategies and overall decisions approved by the Board of Directors. The Executive Director also serves as Chief Executive Officer in the Groups largest subsidiary, TORM A/S. Transactions of an unusual nature or of major importance may only be eff

40、ected by the Executive Director based on a special authorization granted by the Board of Directors. If certain transactions cannot await approval by the Board of Directors due to their urgency, the Executive Director shall, taking into consideration the interests of the Company to the extent possibl

41、e, obtain the approval by the Chairman and ensure that the Board of Directors is subsequently informed. Any transaction shall always be subject to the authorizations stated in the Companys Articles of Association, including any required approvals by the Minority Director. The Executive Director is a

42、ssisted by the Senior Management Team in the day-to-day management of the business. The Senior Management Team consists of the following employees in TORM A/S (in addition to the Executive Director): Mr. Kim Balle (Chief Financial Officer - CFO), Mr. Lars Christensen (Senior Vice President and Head

43、of Projects) and Mr. Jesper S. Jensen (Senior Vice President and Head of Technical Division). The Senior Management Team holds weekly meetings. In December 2018, Mr. Christian Sgaard- Christensen tendered his resignation as CFO in TORM A/S; however, he continued his normal duties as CFO until June 2

44、019, when he left the Company. The transition period until Mr. Kim Balle joined TORM in December 2019 was covered by Mr. Jacob Melgaard CEO, as acting CFO. The Senior Management Team members are individually responsible for further authority delegation within the organization. TORM maintains an over

45、view of mandates and authorities for different levels within the organization. SHAREHOLDER COMMUNICATION To ensure consistent communication to all investors, quarterly and annual financial statements and other stock exchange announcements are the main vehicles of communication. TORM maintains regula

46、r capital CORPORATE GOVERNANCE TORM ANNUAL REPORT 2019 GOVERNANCE INTRODUCTION 68 market contact through analyst and industry presentations, investor meetings and conference calls. Investor meetings are primarily held in Copenhagen and in the major European and US financial centers. SELECTED MINORIT

47、Y PROTECTION PROVISIONS IN TORMS ARTICLES OF ASSOCIATION TORMs central corporate governance provisions aim to ensure appropriate minority shareholder protection. The key provisions include: The appointment of a Minority Trustee who shall hold a B-share giving the Minority Trustee the right to appoin

48、t a Minority Director, namely the Deputy Chairman of the Board. The Minority Director has approval rights over Reserved Matters such as related party transactions, larger business acquisitions and the issuance of certain share, warrant or convertible debt instruments The appointment of a Board Obser

49、ver and alternates for the Minority Director The B-share has no other rights than the right to elect one member of the Board of Directors and one Board Observer in TORM. The Minority Trustee will exercise this voting right on behalf of all A-shareholders other than Oaktree Capital Management (Oaktree) and its affiliates. Further, a single redeemable and non- transferable C-share has been issued to Oaktree in