UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 20-F

(Mark One)
[_]          REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

[X]              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended       December 31, 2002
                         -------------------------------------------------------

                                       OR

[_]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
                              --------------------------------------------------

Commission file number                 0-22704
                      ----------------------------------------------------------
                                  Frontline Ltd
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

                                 Frontline Ltd.
--------------------------------------------------------------------------------
                 (Translation of Registrant's name into English)

                                     Bermuda
--------------------------------------------------------------------------------
                 (Jurisdiction of incorporation or organisation)

       Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to section 12(b) of the Act.

             Title of each class                 Name of each exchange
                                                  on which registered
      Ordinary Shares, $2.50 Par Value          New York Stock Exchange
      --------------------------------          -----------------------

Securities registered or to be registered pursuant to section 12(g) of the Act.

--------------------------------------------------------------------------------
                                (Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

                        Ordinary Shares, $2.50 Par Value
--------------------------------------------------------------------------------
                                (Title of class)

Indicate  the number of  outstanding  shares of each of the  issuer's  classes
of capital or common stock as of the close of the period covered by the
annual report.

                   76,466,566 Ordinary Shares, $2.50 Par Value
--------------------------------------------------------------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                   Yes      [X]              No      [_]

Indicate by check mark which financial statement item the registrant has elected
to follow.

                   Item 17     [_]         Item 18      [X]
<PAGE>

                          INDEX TO REPORT ON FORM 20-F

PART I                                                                      PAGE

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.................4

ITEM 2.  OFFER STATISTICS AND EXPECTED
         TIMETABLE.............................................................4

ITEM 3.  KEY INFORMATION.......................................................4

ITEM 4.  INFORMATION ON THE COMPANY...........................................11

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS.........................28

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES...........................36

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY
         TRANSACTIONS.........................................................39

ITEM 8.  FINANCIAL INFORMATION................................................41

ITEM 9.  THE OFFER AND LISTING................................................41

ITEM 10. ADDITIONAL INFORMATION...............................................43

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES
         ABOUT MARKET RISK....................................................45

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN
         EQUITY SECURITIES....................................................46

                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES......................47

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
         AND USE OF PROCEEDS..................................................47

ITEM 15. CONTROLS AND PROCEDURES..............................................47

ITEM 16. RESERVED

                                    PART III

ITEM 17. FINANCIAL STATEMENTS.................................................48

ITEM 18. FINANCIAL STATEMENTS.................................................48

ITEM 19. EXHIBITS ............................................................49

<PAGE>

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Matters  discussed in this document may constitute  forward-looking  statements.
The  Private  Securities  Litigation  Reform Act of 1995  provides  safe  harbor
protections for  forward-looking  statements in order to encourage  companies to
provide prospective information about their business. Forward-looking statements
include  statements  concerning plans,  objectives,  goals,  strategies,  future
events or performance,  and underlying  assumptions and other statements,  which
are other than statements of historical facts.

Frontline  Ltd.,  or the Company,  desires to take  advantage of the safe harbor
provisions  of the  Private  Securities  Litigation  Reform  Act of 1995  and is
including  this  cautionary  statement  in  connection  with  this  safe  harbor
legislation.  This document and any other written or oral  statements made by us
or on our behalf may  include  forward-looking  statements,  which  reflect  our
current views with respect to future events and financial performance. The words
"believe,"  "anticipate,"  "intends," "estimate," "forecast," "project," "plan,"
"potential,"  "will," "may," "should," "expect" and similar expressions identify
forward-looking statements.

The  forward-looking   statements  in  this  document  are  based  upon  various
assumptions,  many of which  are  based,  in  turn,  upon  further  assumptions,
including without limitation,  management's  examination of historical operating
trends,  data  contained  in our  records  and other data  available  from third
parties.  Although we believe that these  assumptions were reasonable when made,
because these  assumptions are inherently  subject to significant  uncertainties
and  contingencies  which are  difficult or impossible to predict and are beyond
our  control,  we cannot  assure you that we will  achieve or  accomplish  these
expectations, beliefs or projections.

In addition to these important factors and matters  discussed  elsewhere herein,
important  factors  that,  in our view,  could  cause  actual  results to differ
materially from those discussed in the  forward-looking  statements  include the
strength of world  economies,  fluctuations  in currencies  and interest  rates,
general market  conditions,  including  fluctuations  in  charterhire  rates and
vessel  values,  changes in demand in the tanker  market,  including  changes in
demand  resulting from changes in OPEC's petroleum  production  levels and world
wide oil consumption and storage,  changes in the Company's  operating expenses,
including bunker prices, drydocking and insurance costs, changes in governmental
rules and  regulations  or actions  taken by regulatory  authorities,  potential
liability from pending or future litigation,  general domestic and international
political  conditions,  potential disruption of shipping routes due to accidents
or political events,  and other important factors described from time to time in
the reports filed by the Company with the Securities and Exchange Commission.
<PAGE>

                                     PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable

ITEM 3. KEY INFORMATION

A. SELECTED FINANCIAL DATA

The  selected  income  statement  data of the Company with respect to the fiscal
years ended December 31, 2002, 2001 and 2000 and the selected balance sheet data
of the Company with respect to the fiscal years ended December 31, 2002 and 2001
have been derived from the Company's  Consolidated Financial Statements included
herein  and should be read in  conjunction  with such  statements  and the notes
thereto.  The selected  income  statement  data with respect to the fiscal years
ended  December  31,  1999 and 1998 and the  selected  balance  sheet  data with
respect to the fiscal  years ended  December  31,  2000,  1999 and 1998 has been
derived  from  consolidated  financial  statements  of the Company not  included
herein.  The  selected  financial  data with  respect to the fiscal  years ended
December  31,  2001 and 2000  has been  restated  to  reflect  the  adoption  of
Financial  Accounting  Standard  144 by the  Company on  January  1,  2002.  The
selected financial data with respect to the fiscal years ended December 31, 1998
has been restated to reflect the treatment of ICB Aktiebolag  (publ), or ICB, as
an investment  accounted for in accordance with the equity method. Our treatment
of ICB is  discussed  in more  detail  in Item 4.A of this  Annual  Report.  The
following  table should also be read in conjunction  with Item 5. "Operating and
Financial  Review  and  Prospects"  and  the  Company's  Consolidated  Financial
Statements and Notes thereto included herein.

<TABLE>
<CAPTION>
                                                                               Fiscal Year Ended December 31,
                                                          -----------------------------------------------------------------------
                                                                 2002          2001            2000           1999           1998
                                                                          (restated)     (restated)                    (restated)
(in thousand of $, except Ordinary Shares, per Ordinary Share data and ratios)
<S>                                                       <C>            <C>            <C>            <C>            <C>
Income Statement Data:
Net operating revenues                                    $   416,521    $   628,186    $   595,401    $   253,214    $   203,860
Net operating income (loss)                               $    95,676    $   375,420    $   374,269    $   (12,210)   $    72,455
Net income (loss) from continuing operations before
    income taxes and minority interest                    $     7,150    $   330,551    $   305,951    $   (91,150)   $    31,883
Net income (loss) from continuing operations before
    cumulative effect of change in accounting principle   $     7,172    $   330,107    $   305,910    $   (86,896)   $    31,853
Discontinued operations                                   $    (1,929)   $    21,076    $     7,957    $        --    $        --
Cumulative effect of change in accounting principle       $   (14,142)   $    31,545    $        --    $        --    $        --
Net (loss) income                                         $    (8,899)   $   382,728    $   313,867    $   (86,896)   $    31,853
Earnings (loss) from continuing operations before
    cumulative effect of change in accounting principle
    per Ordinary Share
 - basic                                                  $      0.09    $      4.30    $      4.17    $     (1.76)   $      0.69
 - diluted                                                $      0.09    $      4.29    $      4.16    $     (1.76)   $      0.69
Earnings (loss) per Ordinary Share
 - basic                                                  $     (0.12)   $      4.99    $      4.28    $     (1.76)   $      0.69
 - diluted                                                $     (0.12)   $      4.98    $      4.27    $     (1.76)   $      0.69
Cash dividends paid per Ordinary Share                    $      0.25    $      1.50    $        --    $        --    $        --

Balance Sheet Data (at end of year):
Cash and cash equivalents                                 $    92,078    $   178,176    $   103,514    $    65,467    $    74,034
Newbuildings and vessel purchase options                  $    27,405    $   102,781    $    36,326    $    32,777    $    75,681
Vessels and equipment, net                                $ 2,373,329    $ 2,196,959    $ 2,254,921    $ 1,523,112    $ 1,078,956
Vessels under capital lease, net                          $   264,902    $   317,208    $   108,387    $        --    $        --
Investments in associated companies                       $   119,329    $   109,898    $    27,361    $    16,274    $   239,887
Total assets                                              $ 3,034,743    $ 3,033,774    $ 2,780,988    $ 1,726,793    $ 1,505,414
Short-term debt and current portion of long-term debt     $   167,807    $   227,597    $   212,767    $   116,814    $   170,551
Current portion of obligations under capital lease        $    13,164    $    17,127    $     7,888    $        --    $        --
Long-term debt                                            $ 1,277,665    $ 1,164,354    $ 1,331,372    $   962,880    $   712,470
Obligations under capital lease                           $   259,527    $   283,663    $   101,875    $        --    $        --
Share capital                                             $   191,166    $   191,019    $   195,172    $   152,405    $   115,267
Stockholders' equity                                      $ 1,226,973    $ 1,252,401    $ 1,029,490    $   557,300    $   583,574
Ordinary Shares outstanding                                76,466,566     76,407,566     78,068,811     60,961,860     46,106,860

Cash Flow Data
Cash provided by operating activities                     $   142,025    $   477,607    $   271,582    $    46,486    $    69,592
Cash provided by (used in) investing activities           $  (222,893)   $  (103,782)   $  (508,938)   $   175,532    $  (143,955)
Cash provided by (used in) financing activities           $    (5,230)   $  (299,163)   $   275,403    $  (230,585)   $    61,527

Other Financial Data
Return on capital employed (percentage) (1)                       2.9%          14.7%          18.2%           0.1%           6.5%
Equity to assets ratio (percentage) (2)                          40.5%          41.3%          37.0%          32.3%          38.8%
Debt to equity ratio (3)                                          1.4            1.4            1.6            1.9            1.5
Price earnings ratio (4)                                          neg.           2.1            3.3            neg.           2.8
</TABLE>

Footnotes

(1)  Return on  capital  employed  is  calculated  as net income  (loss)  before
     cumulative effect of change in accounting  principle,  interest expense and
     foreign  exchange  gains  (losses),  as a  percentage  of  average  capital
     employed.

(2)  Equity to assets ratio is calculated as total stockholders'  equity divided
     by total assets.

(3)  Debt to equity ratio is calculated as total  interest  bearing  current and
     long-term liabilities,  including obligations under capital leases, divided
     by stockholders' equity.

(4)  Price earnings  ratio is calculated  using the closing year end share price
     divided by basic Earnings per Share.

B. CAPITALIZATION AND INDEBTEDNESS

Not Applicable

C. REASONS FOR THE OFFER AND USE OF PROCEEDS

Not Applicable

D. RISK FACTORS

We are  engaged  primarily  in  transporting  crude  oil and oil  products.  The
following  summarises some of the risks that may materially affect our business,
financial  condition or results of  operations.  Please note,  in this  section,
"we", "us" and "our" all refer to the Company and its subsidiaries.

The  cyclical  nature of the tanker  industry  may lead to  volatile  changes in
charter rates and vessel values which may adversely affect our earnings

Historically,  the tanker industry has been highly cyclical,  with volatility in
profitability  and asset  values  resulting  from  changes  in the supply of and
demand for tanker capacity.  If the tanker market is depressed in the future our
earnings and  available  cash flow may  decrease.  Our ability to recharter  our
vessels on the expiration or termination of their current spot and time charters
and the charter  rates payable  under any renewal or  replacement  charters will
depend upon,  among other  things,  economic  conditions  in the tanker  market.
Fluctuations  in charter  rates and vessel  values  result  from  changes in the
supply and demand for tanker  capacity  and changes in the supply and demand for
oil and oil products.

The factors  affecting  the supply and demand for oil tankers are outside of our
control, and the nature, timing and degree of changes in industry conditions are
unpredictable. The factors that influence demand for tanker capacity include:

o    demand for oil and oil products;
o    global and regional economic conditions;
o    the distance oil and oil products are to be moved by sea; and
o    changes in seaborne and other transportation patterns.

The factors that influence the supply of tanker capacity include:

o    the number of newbuilding deliveries;
o    the scrapping rate of older vessels;
o    the number of vessels that are out of service; and
o    national or international regulations that may effectively cause reductions
     in the carrying capacity of vessels or early obsolescence of tonnage.

We are  highly  dependent  on spot oil voyage  charters.  Any  decrease  in spot
charter rates in the future may adversely affect our earnings

The majority of our vessels  currently  operate on a spot charter basis or under
contracts of affreightment under which we carry an agreed upon quantity of cargo
over a specified  route and time period.  Although spot  chartering is common in
the tanker  industry,  the spot charter  market is highly  competitive  and spot
charter rates may fluctuate  significantly  based upon tanker and oil supply and
demand.  The  successful  operation  of our vessels in the spot  charter  market
depends  upon,  among other  things,  obtaining  profitable  spot  charters  and
minimising,  to the extent  possible,  time spent  waiting for charters and time
spent travelling unladen to pick up cargo. We cannot assure you that future spot
charters will be available at rates  sufficient to enable our vessels trading in
the spot market to operate profitably. In addition,  bunkering, or fuel, charges
that account for a  substantial  portion of the operating  costs,  and generally
reflect prevailing oil prices, are subject to sharp fluctuations.

Our revenues experience seasonal variations that may affect our income

We operate  our tankers in markets  that have  historically  exhibited  seasonal
variations in demand and, therefore, charter rates. Tanker markets are typically
stronger in the winter  months in the northern  hemisphere  due to increased oil
consumption.  In addition,  unpredictable  weather patterns in the winter months
tend to disrupt vessel scheduling. The oil price volatility resulting from these
factors has historically led to increased oil trading  activities and demand for
vessels.  The change in demand for vessels may affect the charter  rates that we
receive.

Because  the market  value of our vessels may  fluctuate  significantly,  we may
incur losses when we sell vessels which may adversely affect our earnings

The fair market  value of vessels may  increase  and  decrease  depending on the
following factors:

o    general economic and market conditions affecting the shipping industry;
o    competition from other shipping companies;
o    types and sizes of vessels;
o    other modes of transportation;
o    cost of newbuildings;
o    governmental or other regulations;
o    prevailing level of charter rates; and
o    technological advances.

If we sell a vessel at a time when ship prices have  fallen,  the sale may be at
less than the vessel's  carrying  amount on our financial  statements,  with the
result that we could incur a loss and a reduction in earnings.  In addition,  if
we determine at any time that a vessel's future limited useful life and earnings
require us to impair its value on our financial statements, that could result in
a charge against our earnings and the reduction of our shareholder's  equity. It
is possible that the market value of our vessels will decline in the future.

If we violate  environmental  laws or regulations,  the resulting  liability may
adversely affect our earnings and financial condition

Our  operations are subject to extensive  regulation  designed to promote tanker
safety,  prevent  oil spills  and  generally  protect  the  environment.  Local,
national and foreign laws, as well as  international  treaties and  conventions,
can subject us to material  liabilities  in the event that there is a release of
petroleum or other hazardous substances from our vessels.

For example,  the United States Oil Pollution Act of 1990, or OPA, provides that
owners,  operators and bareboat charterers are strictly liable for the discharge
of oil in U.S. waters, including the 200 nautical mile zone off the U.S. coasts.
OPA provides for  unlimited  liability in some  circumstances,  such as a vessel
operator's gross negligence or willful  misconduct.  However,  in most cases OPA
limits  liability  to the  greater  of $1,200 per gross ton or $10  million  per
vessel.  OPA also permits  states to set their own penalty  limits.  Most states
bordering  navigable  waterways impose unlimited liability for discharges of oil
in their waters. The International Maritime Organization,  or IMO, has adopted a
similar  liability scheme that imposes strict liability for oil spills,  subject
to limits  that do not apply if the  release  is  caused by the  vessel  owner's
intentional or reckless conduct.

U.S. law, the law in many of the nations in which we operate,  and international
treaties and conventions that impact our operations, also establish strict rules
governing  vessel  safety  and  structure,  training,   inspections,   financial
assurance for potential cleanup liability and other matters.  These requirements
can limit our ability to  operate,  and  substantially  increase  our  operating
costs. The U.S. has established strict deadlines for phasing-out single-hull oil
tankers,  and both the IMO and the European Union have adopted similar phase-out
periods.

Under OPA, with certain limited exceptions, all newly built or converted tankers
operating in United States waters must be built with double hulls  conforming to
particular specifications.  Tankers that do not have double hulls are subject to
structural  and  operational  measures  to reduce oil spills and the  ability to
operate  these  vessels in United  States waters will be phased out between 1995
and 2015  according  to size,  age,  hull  configuration  and place of discharge
unless  retrofitted  with  double  hulls.  In  addition,  OPA  specifies  annual
inspections,  vessel manning, equipment and other construction requirements that
are in various stages of development, applicable to new and to existing vessels.

The IMO has approved an accelerated  time-table for the phase-out of single-hull
oil tankers.  The new regulations,  which took effect in September 2002, require
the phase-out of most  single-hull oil tankers by 2015 or earlier,  depending on
the age of the tanker and whether it has segregated ballast tanks. Under the new
regulations, the maximum permissible age for single-hull tankers after 2007 will
be 26 years,  as opposed  to 30 years  under  current  regulations.  Also,  more
stringent maritime safety rules are also more likely to be imposed world-wide as
a result  of the oil spill in  November  2002  relating  to the loss of the m.t.
Prestige.  The m.t.  Prestige  was a 26-year old  single-hull  tanker owned by a
company  not  affiliated  with us.  The m.t.  Prestige  disaster  could  lead to
proposals to accelerate the phasing out of single-hull tankers.

These  requirements  can affect the resale value or useful lives of our vessels.
In addition,  violations of applicable  requirements  or a catastrophic  release
from one of our vessels  could have a material  adverse  impact on our financial
condition and results of operations.

Competition

The operation of tankers and  transportation of crude and petroleum products and
the other businesses in which we operate are extremely competitive.  Through our
operating  subsidiaries  we compete  with other oil tanker and dry bulk  carrier
owners (including major oil companies as well as independent companies), and, to
a lesser  extent,  owners of other size vessels.  Our market share  currently is
insufficient to enforce any degree of pricing discipline in the markets in which
we  compete.  It is possible  that our  competitive  position  will erode in the
future.

Our debt  service  obligations  could  affect our  ability  to incur  additional
indebtedness or engage in certain transactions

Our existing financing agreements impose operational and financing  restrictions
on us which may significantly limit or prohibit, among other things, our ability
to  incur  additional  indebtedness,   create  liens,  sell  capital  shares  of
subsidiaries,  make  certain  investments,  engage in mergers and  acquisitions,
purchase and sell vessels, enter into time or consecutive voyage charters or pay
dividends  without  the consent of our  lenders.  In  addition,  our lenders may
accelerate  the maturity of  indebtedness  under our  financing  agreements  and
foreclose on the  collateral  securing the  indebtedness  upon the occurrence of
certain  events of  default,  including  our  failure to comply  with any of the
covenants  contained  in our  financing  agreements,  not  rectified  within the
permitted time. For instance,  declining vessel values could lead to a breach of
covenants under our financing agreements.  If we are unable to pledge additional
collateral or obtain waivers from our lenders,  our lenders could accelerate our
debt and foreclose on our vessels.

An  increase  in  interest  rates  could  materially  and  adversely  affect our
financial performance

At  December  31,  2002 we had total  long-term  debt  outstanding  of  $1,445.5
million,  of which  $1,424.9  million is floating  rate debt.  The Company  uses
interest  rate swaps to manage  interest  rate risk. As at December 31, 2002 the
Company's interest rate swap arrangements effectively fix the Company's interest
rate exposure on $352.7 million of floating rate debt.  The maximum  exposure to
the interest  rate  fluctuations  is $1,072.2  million at December 31, 2002.  If
interest rates rise  significantly,  that could  materially and adversely affect
our results of operations.

Fluctuations in the yen could affect our earnings

Certain of our vessels  obtained  through our  acquisition of Golden Ocean Group
Limited in 2000, have charters and financing  arrangements that require payments
of principal and interest or charter hire in Yen. While many of the charters for
the  dry  bulk  vessels  that we  acquired  through  Golden  Ocean  require  the
charterers  to pay in Yen so as to cover related Yen  denominated  debt service,
the charterers  may also pay a significant  part of the charter hire in Dollars.
As we have not hedged our Yen  exposure  against the  Dollar,  a rise in the Yen
could  have  an  adverse  impact  on our  financial  condition  and  results  of
operations.

We may be unable to attract and retain key  management  personnel  in the tanker
industry,  which may negatively  impact the  effectiveness of our management and
our results of operation

Our success  depends to a  significant  extent upon the abilities and efforts of
our senior executives,  and particularly John Fredriksen, our Chairman and Chief
Executive Officer, and Tor Olav Troim, our Vice-President, for the management of
our  activities  and  strategic  guidance.  While  we  believe  that  we have an
experienced  management team, the loss or  unavailability  of one or more of our
senior  executives,  and  particularly  Mr.  Fredriksen  or Mr.  Troim,  for any
extended period of time could have an adverse effect on our business and results
of operations.

Risks involved with operating  ocean-going vessels could affect our business and
reputation, which would adversely affect our revenues

The operation of an  ocean-going  vessel  carries  inherent  risks.  These risks
include the possibility of:

o    marine disaster;
o    piracy;
o    environmental accidents;
o    cargo and property losses or damage; and
o    business  interruptions  caused by mechanical  failure,  human error,  war,
     terrorism,  piracy, political action in various countries,  labour strikes,
     or adverse weather conditions.

Any of these  circumstances  or  events  could  increase  our costs or lower our
revenues.  The involvement of our vessels in an oil spill or other environmental
disaster may harm our reputation as a safe and reliable tanker operator.

We may not have  adequate  insurance to compensate us if our vessels are damaged
or lost

We procure  insurance  for our fleet  against  those  risks that we believe  the
shipping  industry commonly insures against.  These insurances  include hull and
machinery  insurance,   protection  and  indemnity  insurance,   which  includes
environmental  damage and pollution insurance coverage,  and war risk insurance.
We can give no assurance that we are adequately  insured  against all risks.  We
may not be able to obtain adequate  insurance  coverage at reasonable  rates for
our fleet in the  future.  Additionally,  our  insurers  may not pay  particular
claims.  Our  insurance  policies  contain  deductibles  for  which  we  will be
responsible,  limitations and exclusions which, although we believe are standard
in the  shipping  industry,  may  nevertheless  increase  our costs or lower our
revenue.

An  increase  in costs  could  materially  and  adversely  affect our  financial
performance

Our vessel  operating  expenses  depend on a variety of factors  including  crew
costs,  provisions,   deck  and  engine  stores,   lubricating  oil,  insurance,
maintenance  and  repairs,  many of which are beyond our  control and affect the
entire shipping industry.  Some of these costs,  primarily insurance and enhance
security  measures  implemented  after September 11, 2001, are  increasing.  The
terrorist  attack of the VLCC Limburg in Yemen during  October 2002 has resulted
in even more  emphasis on security  and pressure on  insurance  rates.  If costs
continue to rise,  that could  materially  and  adversely  affect our results of
operations.

Maritime claimants could arrest our tankers, which could interrupt our cash flow

Crew members, suppliers of goods and services to a vessel, shippers of cargo and
other  parties  may be  entitled  to a maritime  lien  against  that  vessel for
unsatisfied  debts,   claims  or  damages.  In  many  jurisdictions  a  maritime
lienholder  may  enforce  its lien by  arresting  a vessel  through  foreclosure
proceedings.  The  arrest  or  attachment  of one or more of our  vessels  could
interrupt our cash flow and require us to pay a  significant  amount of money to
have the arrest lifted.

In addition,  in some  jurisdictions,  such as South  Africa,  under the "sister
ship"  theory of  liability,  a  claimant  may arrest  both the vessel  which is
subject to the claimant's  maritime lien and any "associated"  vessel,  which is
any vessel owned or controlled by the same owner.  Claimants could try to assert
"sister ship"  liability  against one vessel in our fleet for claims relating to
another of our ships.

Governments  could  requisition our vessels during a period of war or emergency,
resulting in loss of earnings

A government could  requisition for title or seize our vessels.  Requisition for
title occurs when a government  takes control of a vessel and becomes her owner.
Also, a government could requisition our vessels for hire.  Requisition for hire
occurs when a government  takes control 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 more of our vessels
would negatively impact our revenues.

Our  operations  outside the United  States expose us to global risks that may
interfere with the operation of our vessels

We are an international  company and primarily conduct our operations outside of
the United States.  Changing  economic,  regulatory,  political and governmental
conditions  in the  countries  where we are  engaged  in  business  or where our
vessels are registered affect us. Hostilities or other political  instability in
regions  where our vessels  trade could affect our trade  patterns and adversely
affect our operations and performance.  The terrorist attacks against targets in
the United States on September 11, 2001 and the military  response by the United
States may  increase the  likelihood  of acts of  terrorism  worldwide.  Acts of
terrorism,  regional hostilities or other political instability, as shown by the
attack on the Limburg in Yemen in October 2002,  could adversely  affect the oil
trade and reduce our revenue or increase our expenses.

Terrorist  attacks,  such as the attacks on the United  States on September  11,
2001, and other acts of violence or war may affect the financial markets and our
business, results of operations and financial condition.

Terrorist attacks such as the attacks on the United States on September 11, 2001
and the United  States'  continuing  response to these  attacks,  as well as the
threat of future terrorist attacks,  continues to cause uncertainty in the world
financial  markets.  The recent  conflict in Iraq may lead to additional acts of
terrorism and armed conflict  around the world,  which may contribute to further
economic  instability  in the global  financial  markets,  including  the energy
markets.  These  uncertainties could also adversely affect our ability to obtain
additional financing on terms acceptable to us or at all.

Future  terrorist  attacks,  such as the  attack on the m.t.  Limburg in October
2002, may also  negatively  affect our  operations  and financial  condition and
directly  impact our vessels or our customers.  Future  terrorist  attacks could
result in increased volatility of the financial markets in the United States and
globally and could result in an economic  recession in the United  States or the
world.  Any of these  occurrences  could have a material  adverse  impact on our
operating results, revenue, and costs.

Because we are a foreign  corporation,  you may not have the same  rights that a
shareholder in a U.S. corporation may have

We are a Bermuda corporation. Our memorandum of association and bye-laws and the
Bermuda Companies Act 1981, as amended,  govern our affairs.  Investors may have
more  difficulty  in  protecting  their  interests  in the  face of  actions  by
management,  directors or controlling  shareholders than would shareholders of a
corporation  incorporated  in a United  States  jurisdiction.  In addition,  our
executive officers, administrative activities and assets are located outside the
United  States.  As a result,  it may be more  difficult for investors to effect
service of process  within the United  States upon us, or to enforce both in the
United States and outside the United States judgments  against us in any action,
including actions predicated upon the civil liability  provisions of the federal
securities laws of the United States.

We may have to pay tax on United  States source  income,  which would reduce our
earnings

Under the United States Internal Revenue Code of 1986, or the Code, a portion of
the gross shipping income of a vessel owning or chartering corporation,  such as
ourselves and our  subsidiaries,  may be subject to a 4% United  States  federal
income  tax  on 50% of  the  gross  shipping  income  that  is  attributable  to
transportation that begins or ends, but that does not both begin and end, in the
U.S.,  unless that  corporation is entitled to a special tax exemption under the
Code  which  applies  to the  international  shipping  income  derived  by  some
non-United States corporations.  We believe that we and each of our subsidiaries
qualify for this statutory tax exemption for the year ended December 31, 2002.

However,  due to the absence of final Treasury  regulations or other  definitive
authority  concerning  some  aspects of this tax  exemption  under the  relevant
provisions of the Code and to the factual nature of the issues involved,  we can
give no assurances on our tax-exempt status or that of any of our subsidiaries.

If we or our  subsidiaries  are not entitled to this statutory tax exemption for
any taxable year, we or our subsidiaries  could be subject for those years to an
effective 4% United States federal income tax on the portion of the income we or
our  subsidiaries  derive  during  the year  from  United  States  sources.  The
imposition of this taxation could have an adverse effect on our profitability.

ITEM 4. INFORMATION ON THE COMPANY

A.   HISTORY AND DEVELOPMENT OF THE COMPANY

The Company

We are  Frontline  Ltd.,  a  Bermuda  based  shipping  company  that is  engaged
primarily in the ownership and operation of oil tankers. We were incorporated in
Bermuda on June 12, 1992 (Company No.  EC-17460).  Our  registered and principal
executive  offices are located at  Par-la-Ville  Place,  14  Par-la-Ville  Road,
Hamilton, HM 08, Bermuda, and our telephone number is +1 (441) 295-6935.

We are  engaged  primarily  in  the  ownership  and  operation  of oil  tankers,
including  oil/bulk/ore,  or OBO carriers. We operate tankers of two sizes: very
large crude carriers, or VLCCs, which are between 200,000 and 320,000 deadweight
tons, or dwt, and Suezmaxes,  which are vessels between 120,000 and 170,000 dwt.
In  addition,  through a corporate  acquisition  completed in October  2000,  we
acquired a fleet of ten dry bulk carriers that  included  Capesize,  Panamax and
Handymax size bulkers. We operate through  subsidiaries and partnerships located
in Bermuda,  Liberia, Norway, Panama, Singapore and Sweden. We are also involved
in the charter,  purchase and sale of vessels.  Since 1996, we have emerged as a
leading tanker company within the VLCC and Suezmax size sectors of the market.

We have our origin in  Frontline  AB,  which was founded in 1985,  and which was
listed on the Stockholm Stock Exchange from 1989 to 1997. In May 1997, Frontline
AB was redomiciled from Sweden to Bermuda and its shares were listed on the Oslo
Stock  Exchange.  The change of domicile was executed  through a share for share
exchange offer from the then newly formed  Frontline Ltd., or Old Frontline,  in
Bermuda.  Old Frontline was incorporated  under the laws of Bermuda on April 29,
1997  for the  purpose  of  succeeding  to the  business  of  Frontline  AB and,
commencing in June 1997, the shares in Frontline AB were exchanged for shares in
Old Frontline.  The ordinary shares of Old Frontline were  thereafter  listed on
the Oslo Stock Exchange and delisted from the Stockholm Stock Exchange.

In  September  1997,  Old  Frontline  initiated  an  amalgamation  with London &
Overseas  Freighters Limited ("LOF"),  also a Bermuda company.  This process was
completed in May 1998. In the business combination (discussed below), which left
LOF as  the  surviving  company,  Old  Frontline's  shareholders  exchanged  Old
Frontline shares for LOF shares and LOF was subsequently  renamed Frontline Ltd.
As a result of this  transaction,  Frontline  became  listed on the London Stock
Exchange and on the NASDAQ National  Market (in the form of American  Depositary
Shares,  or ADSs,  represented  by  American  Depositary  Receipts,  or ADRs) in
addition to its listing on the Oslo Stock Exchange.

In July 2001 the Company gave notice of  termination of the ADR program to the
Bank of New York as  Depositary.  The ADR program was terminated on October 5,
2001 and the ADSs were delisted from the Nasdaq  National  Market on August 3,
2001.  The  Company's  Ordinary  Shares began trading on the NYSE on August 6,
2001. With this listing, Frontline became one of the few companies to list its
shares directly on three international securities exchanges.

Business Acquisitions and Combinations

Amalgamation with London & Overseas Freighters Limited

On September 22, 1997, LOF and Frontline announced that they had entered into an
Agreement  and  Plan of  Amalgamation,  that  we  refer  to as the  Amalgamation
Agreement,  providing for a business combination in a three-step transaction. On
September 29, 1997, pursuant to the Amalgamation Agreement,  Frontline commenced
a cash  tender  offer  for at  least  50.1 per cent and up to 90 per cent of the
outstanding  LOF  Ordinary  Shares and ADSs for a price of $15.91  per  Ordinary
Share.  The tender offer expired on October 28, 1997, and effective  November 1,
1997 Frontline  acquired  approximately  79.74 per cent of the  outstanding  LOF
Ordinary Shares.

In the second  step,  Frontline  amalgamated  with  Dolphin  Limited,  a Bermuda
subsidiary  of  LOF.   Each  ordinary   share  of  Frontline  was  cancelled  in
consideration  for which the  stockholders  of  Frontline  received  (i) 0.32635
Ordinary  Shares of LOF and (ii) 0.01902 of a newly  issued  warrant to purchase
one LOF  Ordinary  Share.  In the  third  step of the  combination,  in order to
combine the assets and liabilities,  LOF purchased the assets and liabilities of
Frontline which were vested in the  amalgamated  company at fair market value in
exchange  for a promissory  note.  LOF is the legally  surviving  entity in this
business  combination  and has been renamed  Frontline Ltd. with effect from May
11, 1998.  Frontline is treated as the accounting  acquirer and the  transaction
treated as a reverse  acquisition.  The stockholders'  equity of the Company has
been restated accordingly to reflect the transaction.

Acquisition of ICB

In September 1997, Frontline made a public offer to acquire all of the shares of
ICB  Shipping  AB  (publ),  or ICB.  Through a tender  offer,  by  October  1997
Frontline  acquired 51.7 per cent of the outstanding shares of ICB at a purchase
price of approximately  $215 million.  The shares purchased  provided  Frontline
with only 31.4 per cent of the ICB voting rights. On January 8, 1998,  Frontline
withdrew  its bid for the  remaining  outstanding  shares of ICB.  During  1998,
Frontline made further purchases of ICB Shares in the market and at December 31,
1998 had 34.2 per cent of the voting power.

In  September  1999,  pursuant  to an  agreement,  that we  refer  to as the ICB
Agreement,  Frontline  acquired ICB Shares  previously owned by the so-called "A
group"  consortium  including  those  controlled by board members of ICB and ICB
shares  controlled  by the  Angelicoussis  family.  In  connection  with the ICB
Agreement,  four of the VLCCs owned by ICB, were sold to companies controlled by
the Angelicoussis  family. As a result of the acquisitions,  Frontline increased
its  shareholding in ICB to  approximately 90 per cent of the capital and 93 per
cent of the  voting  rights.  In  October  1999,  a new Board of  Directors  was
appointed in ICB and is consequently  controlled by Frontline. In December 1999,
Frontline commenced a compulsory acquisition for the remaining shares in ICB and
ICB was delisted from the Stockholm Stock Exchange.

In the two year period prior to September 1999, Frontline was unable to control,
or exercise significant influence over, ICB. Accordingly, the Company previously
accounted  for  its  investment  in ICB  as an  available-for-sale  security  in
accordance with SFAS 115. As a result of Frontline  acquiring  control over ICB,
the  Company's  financial  statements  have been  restated.  For the years ended
December 31, 1997 and 1998, the investment in ICB is accounted for in accordance
with the equity method.

Through the acquisition of ICB, Frontline,  through an indirect subsidiary,  has
taken over  responsibility for the management of Knightsbridge  Tankers Limited,
or  Knightsbridge,  a company  whose  shares are  listed on the Nasdaq  National
Market under the symbol "VLCCF".  Knightsbridge  owns five VLCCs (built 1995-96)
which  are  chartered  to  Shell   International   Petroleum   Company  Limited.
Knightsbridge  reports to the US Securities and Exchange  Commission pursuant to
Section 13 of the Securities  Exchange Act of 1934. The Company has an ownership
interest  of less  than  half of one per cent in  Knightsbridge  as of April 30,
2003.

Acquisition of Golden Ocean Group Limited

In October 2000, Frontline took control of Golden Ocean Group Limited, or Golden
Ocean,  a  shipping  group  which  then held  interests  in 14 VLCCs and 10 bulk
carriers. On the same date Golden Ocean emerged from bankruptcy protection under
Chapter 11 of the U.S. Bankruptcy Code.

In January 2000, Golden Ocean and its fellow subsidiaries,  Golden Ocean Tankers
Limited and Channel Rose Holdings Inc.,  which we refer to  collectively  as the
Debtors, filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy
Code with the Clerk of the United  States  Bankruptcy  Court for the District of
Delaware (the "Bankruptcy Court"). In July 2000, Frontline filed a proposed plan
of reorganisation (the "Plan of Reorganisation")  and disclosure  statement (the
"Disclosure  Statement") with the Bankruptcy Court which set forth the manner in
which claims  against and equity  interests in the Debtors would be treated.  On
August 4, 2000 the Bankruptcy Court approved  Frontline's  Disclosure  Statement
and on August 14, 2000  approved  the  appointment  of  Frontline  as manager of
Golden Ocean's  operations with immediate effect. The Plan of Reorganisation was
approved by an  overwhelming  majority of holders of claims entitled to vote and
was confirmed at a hearing on September 15, 2000.

On October 10, 2000 the Plan of  Reorganisation  became  effective and Frontline
acquired the entire share capital of Golden Ocean. The total  acquisition  price
paid,  including amounts paid to settle allowed claims, was approximately  $63.0
million,  including  1,245,998  Frontline  ordinary  shares issued at a price of
$15.65 per share.  The  acquisition of Golden Ocean has been accounted for using
the purchase method.

Acquisition of Mosvold Shipping Limited

In April 2001,  the Company  announced an offer for all of the shares of Mosvold
Shipping Limited,  or Mosvold, a Bermuda company whose shares were listed on the
Oslo Stock Exchange. Through a combination of shares acquired and acceptances of
the  offer,  Frontline  acquired  97 per  cent of the  shares  of  Mosvold.  The
remaining  three per cent of the shares of Mosvold  were  acquired  during  2001
through a  compulsory  acquisition.  Through the purchase of Mosvold the Company
acquired two mid-70s built VLCCs and three newbuilding  contracts for VLCCs. The
two mid-70s built VLCCs have  subsequently  been sold by the Company.  The first
two of the newbuildings were delivered in 2002 and the third is due for delivery
in July 2003.

B.   BUSINESS OVERVIEW

We are a world leader in the international seaborne transportation of crude oil.
Our tanker  fleet,  which is one of the  largest  and most  modern in the world,
consists of 32 owned, part-owned or controlled VLCCs and 28 owned, part-owned or
controlled  Suezmax tankers,  of which 8 are Suezmax OBOs. In addition,  we have
three wholly owned dry bulk  carriers,  being two Capesize and one Handymax size
carriers.  We also charter in eleven modern VLCCs and one modern Suezmax tanker.
At May 31, 2003 we also have one  newbuilding  VLCC on order and have a purchase
option to acquire a further VLCC.

In 2002, we took delivery of five wholly-owned  double-hulled VLCC newbuildings,
and two new double-hulled  VLCCs in which we have a 33.33 per cent interest.  We
also acquired five dry bulk carriers that we had  previously  chartered in under
capital leases.  These five dry bulk carriers were subsequently sold in 2002. We
also sold our 50 per cent  interest in two joint  ventures that each owned a dry
bulk carrier. In addition, in 2002 we sold and leased back one of the 2002 built
VLCCs that we took delivery of earlier in the year.

In 2003 to date, we have acquired two Suezmax  tankers,  built in 1979 and 1978,
respectively, in which we previously held 40 per cent and 35 per cent interests,
respectively. These vessels have subsequently been sold.

The fleet that we operate has a total tonnage of  approximately  17 million dwt,
and our tanker vessels have an average age of 7 years compared with an estimated
industry  average of over 10 years.  We believe that our vessels comply with the
most stringent of generally applicable environmental regulations for tankers.

We own various vessel owning and operating  subsidiaries.  Our  operations  take
place substantially  outside of the United States. Our subsidiaries,  therefore,
own and operate vessels which may be affected by changes in foreign  governments
and other  economic  and  political  conditions.  We are  engaged  primarily  in
transporting  crude oil products and, in addition,  raw materials  like coal and
iron ore. Our VLCCs are specifically  designed for the  transportation  of crude
oil and, due to their size, are primarily  used to transport  crude oil from the
Middle  East  Gulf to the Far  East,  Northern  Europe,  the  Caribbean  and the
Louisiana Offshore Oil Port, or LOOP. Our Suezmax tankers are similarly designed
for worldwide trading, but the trade for these vessels is mainly in the Atlantic
Basin.  Historically,  the  tanker  industry  has  been  highly  cyclical,  with
attendant volatility in profitability and asset values resulting from changes in
the supply of and demand for tanker capacity.  Our OBO carriers are specifically
designed  to carry oil or dry cargo and may be used to  transport  either oil or
dry  cargo on any  voyage.  When  freight  rates  in both the oil and dry  cargo
markets are  equivalent OBO carriers are operated most  profitably  transporting
oil on one leg of the  voyage  and dry cargo on the  other leg of a voyage.  The
supply of tanker and OBO  capacity  is  influenced  by the number of new vessels
built, the number of older vessels  scrapped,  converted,  laid up and lost, the
efficiency  of the  world  tanker  or OBO  fleet  and  government  and  industry
regulation of maritime transportation  practices.  The demand for tanker and OBO
capacity is influenced by global and regional economic conditions, increases and
decreases  in  industrial  production  and  demand  for crude oil and  petroleum
products,  the  proportion  of world oil output  supplied by middle  eastern and
other producers,  political  changes and armed conflicts  (including wars in the
Middle  East) and changes in seaborne  and other  transportation  patterns.  The
demand for OBO capacity is, in addition,  influenced  by increases and decreases
in the  production  and demand for raw  materials  such as iron ore and coal. In
particular,  demand for our tankers and our services in  transporting  crude oil
and  petroleum  products  and dry  cargoes  has been  dependent  upon  world and
regional  markets.  Any decrease in  shipments of crude oil or raw  materials in
world   markets  could  have  a  material   adverse   effect  on  our  earnings.
Historically,  these  markets  have been  volatile  as a result of,  among other
things, general economic conditions, prices, environmental concerns, weather and
competition from alternative  energy sources.  Because many factors  influencing
the supply of and demand for tankers and OBO  carriers  are  unpredictable,  the
nature,   timing  and  degree  of  changes  in  industry   conditions  are  also
unpredictable.

We are  committed to  providing  quality  transportation  services to all of our
customers and to developing and  maintaining  long term  relationships  with the
major  charterers  of tankers.  Increasing  global  environmental  concerns have
created a demand in the  petroleum  products/crude  oil seaborne  transportation
industry  for vessels  that are able to conform to the  stringent  environmental
standards  currently  being imposed  throughout  the world.  Our fleet of modern
single hull VLCCs may discharge  crude oil at LOOP until the year 2015,  and our
modern  single hull Suezmax  tankers may call at U.S.  ports until the year 2010
under the phase-in schedule for double hull tankers  presently  prescribed under
OPA.

The  tanker   industry   is  highly   cyclical,   experiencing   volatility   in
profitability,  vessel  values and freight  rates.  Freight  rates are  strongly
influenced   by  the   supply  of  tanker   vessels   and  the  demand  for  oil
transportation.

The charter rates for tankers started to decline in the second half of 2001 as a
result of a general  slowdown  in the global  economy  and as a result of OPEC's
decision to cut  production  levels in order to maintain  oil prices in the OPEC
band of $22 to $28 per barrel.  The negative trend continued into 2002 and rates
remained  low  through a large  part of the year.  The tanker  market  showed no
improvement  in 2002  until the  beginning  of fourth  quarter  when a  seasonal
increase in demand and a requirement  for  restocking  enticed OPEC countries to
increase  production.  The strike in Venezuela in December 2002, resulted in the
loss of short-haul oil to the United States and this lost  production  needed to
be replaced from more distant  suppliers.  Rates ended the year at above $50,000
per day for Suezmaxes and approximately  $100,000 per day for VLCCs. Despite the
rate  improvement  in the last  quarter,  average time charter  equivalent  spot
earnings  in the market for the entire  year for  Suezmaxes  were  approximately
$20,000 per day  compared  with just over  $30,000 per day in 2001 and for VLCCs
were  approximately  $22,000 per day compared with $34,000 per day in 2001.  The
weak market in 2001 and 2002 resulted in the scrapping, conversion or total loss
of 48 elderly Suezmaxes and 78 VLCCs in that two year period.

The Company's  three remaining dry bulk vessels are fixed on medium to long-term
bareboat or time charters, which expire in 2003, 2005 and 2014.

Our business strategy is primarily based upon the following principles:

o    emphasising  operational  safety  and  quality  maintenance  for all of our
     vessels;
o    complying with all current and proposed environmental regulations;
o    outsourcing technical operations and crewing;
o    controlling operational costs of vessels;
o    owning  one of the most  modern  and  homogeneous  fleets of tankers in the
     world;
o    achieving high utilisation of our vessels;
o    achieving competitive financing arrangements; and
o    developing  and  maintaining  relationships  with major oil  companies  and
     industrial charterers.

After having  delivered their cargo,  spot market vessels  typically  operate in
ballast, meaning that they are not carrying cargo until they are rechartered. It
is the time element  associated with these ballast legs that we seek to minimise
by  efficiently  chartering  our OBO carriers  and tankers.  We seek to maximise
earnings in employing  vessels in the spot market,  under time charters or under
Contracts of Affreightment, or COAs.

In December 1999, the Company, together with A.P. Moller, Euronav Luxembourg SA,
Osprey Maritime Ltd., Overseas  Shipholding Group, Inc and Reederei "Nord" Klaus
E. Oldendorff agreed to form Tankers  International  LLC, or Tankers to pool the
commercial operation of the participating companies' modern VLCC fleets. Tankers
mainly  employs  vessels in the spot market,  although it also from time to time
enters into COAs and time charters.  Revenues to each shipowner who participates
in Tankers are  calculated  on the basis of the pool's  total  earnings  and the
tonnage  committed into Tankers by the shipowner.  In July 2002 we withdrew from
Tankers and only the VLCCs in certain of the joint ventures to which the Company
is a party, remain in the pool. The commercial operations of our other VLCCs has
been brought back in-house under our direct management.

Since  1998  Frontline  and  OMI  Corporation,  a major  international  shipping
company, have combined Suezmax tanker fleets for commercial purposes and created
Alliance  Chartering  LLC, or Alliance.  Alliance  currently  markets 41 Suezmax
tankers,  the majority of which are employed in the Atlantic  Basin.  Alliance's
control of this large  modern fleet of  Suezmaxes  has enabled it to  strengthen
relationships with a number of customers.  These arrangements may allow Alliance
the opportunity to increase its Suezmax fleet utilisation through backhauls when
cargo is available (that is,  transporting  cargo on the return trip when a ship
would normally be empty) which would improve vessel  earnings.  Alliance  mainly
employs  vessels in the spot  market,  although it also from time to time enters
into COAs and time  charters.  Revenues to each  shipowner who  participates  in
Alliance  are based on the  actual  earnings  from the  vessels  contributed  to
Alliance by the shipowner.

Similar to structures commonly used by other shipping companies, our vessels are
all owned by, or chartered to, separate  subsidiaries  or associated  companies.
Frontline  Management  AS, or Frontline  Management,  and  Frontline  Management
(Bermuda) Limited, both wholly-owned  subsidiaries of the Company, support us in
the implementation of our decisions. Frontline Management is responsible for the
commercial management of our shipowning  subsidiaries,  including chartering and
insurance.  Each vessel  owned by the Company is  registered  under the Bahamas,
French, Hong Kong, Liberian, Philippines, Singaporean, Norwegian, Isle of Man or
Panamanian flag.

Frontline has a strategy of extensive outsourcing. Ship management,  crewing and
accounting  services  are  provided  by a number of  independent  and  competing
suppliers.

o    Our vessels are managed by independent ship management companies.  Pursuant
     to management agreements, each of the independent ship management companies
     provides operations, ship maintenance, crewing, technical support, shipyard
     supervision  and  related  services  to  Frontline.  A central  part of our
     strategy is to benchmark operational performance and cost level amongst our
     ship managers.
o    Independent ship managers provide crewing for our vessels.  Currently,  our
     vessels are crewed with  Russian,  Ukranian,  Baltic,  Indian and  Filipino
     officers and crews, or combinations of these nationalities.
o    The accounting management services for each of our shipowning  subsidiaries
     are provided by the ship managers.

Importance of Fleet Size

We believe  that fleet size in the  industrial  shipping  sector is important in
negotiating  terms with major clients and  charterers.  We believe that a large,
high-quality  VLCC  and  Suezmax  fleet  will  enhance  our  ability  to  obtain
competitive terms from suppliers and shipbuilders and to produce cost savings in
chartering and operations.

Seasonality

Historically, oil trade and therefore charter rates increased in the winter
months and eased in the summer months as demand for oil in the Northern
Hemisphere rose in colder weather and fell in warmer weather. The tanker
industry in general is less dependent on the seasonal transport of heating oil
than a decade ago as new uses for oil and oil products have developed, spreading
consumption more evenly over the year.

Customers

Our  customers  include  major  oil  companies,   petroleum   products  traders,
government  agencies and various other entities.  During each of the years ended
December 31, 2002, 2001 and 2000, no single  customer  accounted for 10 per cent
or more of our consolidated freight revenues.

Competition

The market for  international  seaborne  crude oil  transportation  services  is
highly fragmented and competitive.  Seaborne crude oil  transportation  services
generally are provided by two main types of operators: major oil company captive
fleets (both private and  state-owned)  and  independent  shipowner  fleets.  In
addition, several owners and operators pool their vessels together on an ongoing
basis,  and  such  pools  are  available  to  customers  to the same  extent  as
independently  owned and operated fleets. Many major oil companies and other oil
trading companies,  the primary charterers of the vessels owned or controlled by
the  Company,  also  operate  their own vessels and use such vessels not only to
transport  their own crude oil but also to  transport  crude oil for third party
charterers in direct  competition with  independent  owners and operators in the
tanker  charter  market.  Competition  for charters is intense and is based upon
price,  location,  size, age,  condition and acceptability of the vessel and its
manager.  Competition is also affected by the availability of other size vessels
to compete in the trades in which the Company engages.

Risk of Loss and Insurance

Our business is affected by a number of risks,  including  mechanical failure of
the vessels, collisions,  property loss to the vessels, cargo loss or damage and
business  interruption  due to  political  circumstances  in foreign  countries,
hostilities  and labour strikes.  In addition,  the operation of any ocean-going
vessel is subject to the inherent  possibility of catastrophic  marine disaster,
including  oil  spills  and other  environmental  mishaps,  and the  liabilities
arising from owning and operating vessels in international trade.

Frontline  Management  is  responsible  for  arranging  for the insurance of our
vessels  in line  with  standard  industry  practice.  In  accordance  with that
practice,  we maintain marine hull and machinery and war risks insurance,  which
includes  the risk of actual or  constructive  total loss,  and  protection  and
indemnity  insurance with mutual  assurance  associations.  From time to time we
carry  insurance  covering the loss of hire resulting from marine  casualties in
respect of some of our vessels.  Currently, the amount of coverage for liability
for pollution,  spillage and leakage available to us on commercially  reasonable
terms  through  protection  and indemnity  associations  and providers of excess
coverage  is $1 billion  per vessel per  occurrence.  Protection  and  indemnity
associations  are mutual marine indemnity  associations  formed by shipowners to
provide  protection  from large  financial  loss to one  member by  contribution
towards that loss by all members.

We believe that our current insurance coverage is adequate to protect us against
the  accident-related  risks involved in the conduct of our business and that we
maintain  appropriate  levels of  environmental  damage and pollution  insurance
coverage,  consistent  with standard  industry  practice.  However,  there is no
assurance that all risks are  adequately  insured  against,  that any particular
claims  will be paid or  that  we  will be able to  procure  adequate  insurance
coverage at commercially reasonable rates in the future.

Inspection by a Classification Society

Every  commercial  vessel's hull and machinery is "classed" by a  classification
society  authorised  by its  country of  registry.  The  classification  society
certifies that the vessel has been built and  maintained in accordance  with the
rules of such  classification  society and complies  with  applicable  rules and
regulations  of the  country of  registry  of the  vessel and the  international
conventions  to which  that  country  is a  member.  Our  vessels  have all been
certified as "in class."

Each vessel is inspected by a surveyor of the classification society every year,
every two and a half years and every four to five  years.  Should any defects be
found, the classification surveyor will issue a "recommendation" for appropriate
repairs which have to be made by the shipowner within the time limit prescribed.

Environmental and Other Regulations

International  conventions and national, state and local laws and regulations of
the jurisdictions where our fleet operates or is registered significantly affect
the  ownership  and  operation  of our vessels.  We believe we are  currently in
substantial  compliance  with  applicable   environmental  and  regulatory  laws
regarding the ownership and operation of our vessels.  However, because existing
laws may change or new laws may be  implemented,  we cannot predict the ultimate
cost of complying with all applicable  requirements or the impact they will have
on the resale value or useful lives of our vessels.  Future non-compliance could
require us to incur substantial costs or to temporarily suspend operation of our
vessels.

We believe  the  heightened  environmental  and quality  concerns  of  insurance
underwriters,  regulators and  charterers are leading to greater  inspection and
safety  requirements on all vessels and creating an increasing demand for modern
vessels that are able to conform to the  stricter  environmental  standards.  We
maintain high operating  standards for our vessels that  emphasizes  operational
safety,  quality maintenance,  continuous training of our crews and officers and
compliance  with United States and  international  regulations.  Our vessels are
subject  to  both  scheduled  and  unscheduled   inspections  by  a  variety  of
governmental and private entities,  each of which may have unique  requirements.
These  entities  include  the local port  authorities  such as the Coast  Guard,
harbour   master   or   equivalent,   classification   societies,   flag   state
administration  or country of registry,  and charterers,  particularly  terminal
operators and major oil companies  which conduct  frequent  vessel  inspections.
Each of these entities may have unique requirements that we must comply with.

Environmental Regulation--IMO

The United Nation's  International  Maritime  Organization,  or IMO, has adopted
regulations that set forth pollution prevention  requirements for tankers. These
regulations,  which have been  implemented  in many  jurisdictions  in which our
tankers operate, provide, in part, that:

     o    25-year  old  tankers  must  be of  double-hull  construction  or of a
          mid-deck design with double-sided construction unless:

          (1) they  have wing  tanks or  double-bottom  spaces  not used for the
          carriage  of oil which  cover at least 30% of the  length of the cargo
          tank section of the hull or bottom; or

          (2) they are  capable of  hydrostatically  balanced  loading,  which
          means  that  they  are  loaded  in such a way  that  if the  hull is
          breached,  water  flows  into the  tanker,  displacing  oil  upwards
          instead of into the sea

     o    30-year old tankers must be of  double-hull  construction  or mid-deck
          design with double-sided construction.

Also under IMO  regulations,  a tanker must be of double-hull  construction or a
mid-deck design with double-sided construction, or be of another approved design
ensuring the same level of protection against oil pollution, if the tanker:

     o    is the  subject  of a  contract  for a major  conversion  or  original
          construction on or after July 6, 1993;

     o    commences a major  conversion or has its keel laid on or after January
          6, 1994; or

     o    completes a major conversion or is a newbuilding delivered on or after
          July 6, 1996.

The IMO recently  adopted  regulations that require the phase-out of most single
hull tankers by 2015 or earlier,  depending on the age of the vessel and whether
or not it complies with requirements for protectively located segregated ballast
tanks.  Under these new  regulations,  which became effective in September 2002,
the maximum permissible age for single hull tankers after 2007 will be 26 years.
The new  regulations  also provide for  increased  inspection  and  verification
requirements.

The IMO's  International  Safety  Management Code, or ISM Code, also affects our
operations. The ISM Code requires the party with operational control of a vessel
to develop a safety  management  system that includes,  among other things,  the
adoption  of  a  safety  and  environmental   protection  policy  setting  forth
instructions  and  procedures  for operating its vessels  safely and  describing
procedures  for  responding  to  emergencies.  All of our  vessel  managers  are
certified as approved ship managers under the ISM Code.

The  ISM  Code  requires  that  vessel  operators  obtain  a  safety  management
certificate for each vessel they operate.  This certificate evidences compliance
by a vessel's  management  with ISM Code  requirements  for a safety  management
system. No vessel can obtain a certificate unless its manager has been awarded a
Document of  Compliance,  issued by each flag state,  under the ISM Code. All of
our vessels and their operators have received ISM certification.

Non-compliance  with the ISM Code and  other IMO  regulations  may  subject  the
vessel  owner  or a  bareboat  charterer  to  increased  liability,  may lead to
decreases in available insurance coverage for affected vessels and may result in
a tankers denial of access to, or detention in, some ports.  Both the U.S. Coast
Guard  and  European  Union  authorities  have  indicated  that  vessels  not in
compliance with the ISM Code by the applicable deadlines will be prohibited from
trading in U.S. and European Union ports, as the case may be.

The IMO continues to review and introduce new  regulations.  It is impossible to
predict what additional  regulations,  if any, may be passed by the IMO and what
effect, if any, such regulations might have on the operation of oil tankers.  As
a result of the oil spill in November  2002 from the loss of the m.t.  Prestige,
it is likely that more  stringent  maritime  safety rules will be imposed by the
IMO and other regulatory agencies in the future. The m.t. Prestige was a 26 year
old single hulled tanker owned and operated by a company that is not  affiliated
with us.

Environmental Regulation--OPA/CERCLA

The U.S. Oil Pollution Act of 1990, or OPA,  established an extensive regulatory
and liability regime for environmental protection and cleanup of oil spills. OPA
affects  all owners  and  operators  whose  vessels  trade with the U.S.  or its
territories or possessions,  or whose vessels operate in the waters of the U.S.,
which  include the U.S.  territorial  waters and the two hundred  nautical  mile
exclusive  economic zone of the U.S. The Comprehensive  Environmental  Response,
Compensation  and Liability Act, or CERCLA,  which also impacts our  operations,
applies to the discharge of hazardous substances whether on land or at sea.

Under OPA,  vessel  owners,  operators and bareboat or "demise"  charterers  are
"responsible parties" who are liable regardless of fault,  individually and as a
group, for all containment  costs,  clean-up costs and for other damages arising
from oil spills from their  vessels.  These other damages may include  injury to
natural  resources and real and personal  property,  loss of subsistence  use of
natural resources,  the loss of taxes,  rents,  royalties,  profits and earnings
capacity   resulting  from  an  oil  spill  and  the  cost  of  public  services
necessitated by an oil spill. These  "responsible  parties" are not liable under
OPA if the spill  results  solely from the act or omission of a third party,  an
act of God or an act of war. OPA limits a responsible  party's  liability to the
greater of $1,200 per gross ton or $10 million per vessel over 3,000 gross tons,
subject to adjustment for inflation.

CERCLA,  which applies to owners and operators of vessels,  contains a liability
regime  similar to OPA and provides for  cleanup,  removal and natural  resource
damages.  Liability under CERCLA is limited to the greater of $300 per gross ton
or $5  million.  These  limits of  liability  do not apply,  however,  where the
incident is caused by violation of applicable U.S. federal safety,  construction
or operating  regulations,  or by the  responsible  party's gross  negligence or
wilful  misconduct.  These limits do not apply if the responsible party fails or
refuses to report the incident or to co-operate  and assist in  connection  with
the  substance  removal  activities.  OPA and CERCLA each  preserve the right to
recover damages under existing law, including maritime tort law. We believe that
we are in  substantial  compliance  with OPA,  CERCLA and all  applicable  state
regulations in the ports where our vessels will call.

OPA requires  owners and operators of vessels to establish and maintain with the
Coast Guard evidence of financial responsibility sufficient to meet the limit of
their  aggregate  potential  strict  liability  under OPA and CERCLA.  Under the
regulations,  evidence  of  financial  responsibility  may  be  demonstrated  by
insurance,  surety bond,  self-insurance or guaranty. Under OPA regulations,  an
owner or operator of more than one tanker must demonstrate evidence of financial
responsibility  for the entire  fleet in an amount  equal only to the  financial
responsibility  requirement of the tanker having the greatest maximum  liability
under OPA/CERCLA.  Owners or operators of tankers operating in the waters of the
U.S.  must also file  vessel  response  plans  with the Coast  Guard,  and their
tankers are required to operate in  compliance  with their Coast Guard  approved
plans.

Under  OPA,  with  limited  exceptions,  all newly  built or  converted  tankers
operating in U.S. waters must be built with double-hulls.  Existing vessels that
do not comply with the double-hull requirement must be phased out over a 20-year
period  beginning  in 1995  based on size,  age and place of  discharge,  unless
retrofitted  with  double-hulls.   Notwithstanding  the  phase-out  period,  OPA
currently permits existing single-hull tankers to operate until the year 2015 if
their operations  within U.S. waters are limited to discharging at the Louisiana
Offshore  Oil  Port or  unloading  with the aid of  another  vessel,  a  process
referred to as lightering, within authorized lightering zones more than 60 miles
off-shore.

Environmental Regulation--Other

Although the United States is not a party to these  conventions,  many countries
have  ratified and follow the  liability  plan adopted by the IMO and set out in
the International Convention on Civil Liability for Oil Pollution Damage of 1969
and the  Convention  for the  Establishment  of an  International  Fund  for Oil
Pollution of 1971. Under these conventions, and depending on whether the country
in which the damage results is a party to the 1992 Protocol to the International
Convention on Civil Liability for Oil Pollution  Damage,  a vessel's  registered
owner is strictly liable for pollution  damage caused in the territorial  waters
of a  contracting  state by  discharge  of  persistent  oil,  subject to certain
complete  defenses.  Under an amendment  that will come into effect  November 1,
2003 for vessels of 5,000 to 140,000 gross tons (a unit of  measurement  for the
total  enclosed   spaces  within  a  vessel),   liability  will  be  limited  to
approximately  $6.1 million plus $858 for each additional  gross ton over 5,000.
For  vessels  of  over  140,000  gross  tons,   liability  will  be  limited  to
approximately  $122.1 million. The current maximum amount is approximately $81.2
million.  The right to limit  liability  is  forfeited  under the  International
Convention on Civil Liability for Oil Pollution Damage where the spill is caused
by the  owner's  actual  fault and under  the 1992  Protocol  where the spill is
caused by the owner's  intentional or reckless conduct.  In jurisdictions  where
the International Convention on Civil Liability for Oil Pollution Damage has not
been adopted,  various legislative schemes or common law governs,  and liability
is  imposed  either  on the  basis  of  fault  or in a  manner  similar  to that
convention.  We believe that our P&I insurance  covers the  liability  under the
plan adopted by the IMO.

Partly  in  response  to the oil  spill  caused  by the  sinking  of the  tanker
Prestige,  a single hulled tanker owned by an entity that is not affiliated with
us, in November 2002,  the European  Union proposed new  regulations in March of
2003 that would, among other things,  place a ban on the transportation of heavy
oil grades in all  single-hull  tankers loading or discharging at European Union
ports.  These  regulations also accelerate the phase-out  schedule of all single
hull vessels.  The European Union  Parliament is scheduled to meet in July 2003,
to ratify these new  regulations.  Several  European  Union nations have already
implemented  an absolute ban on single hull tankers  carrying fuel oil and heavy
oil grades.  Spain has banned  single hull  tankers  over 5,000 dwt and carrying
such cargo from  entering her ports as of January 1, 2003.  Italy has  announced
that  similar  measures  applicable  to single hull tankers over 15 years of age
will be  implemented  during  the first  half of 2003,  and  Spain,  France  and
Portugal have prohibited  single hull tankers carrying such cargoes from passing
through their 200-mile economic exclusion zones since December, 2002.

In addition, most U.S. states that border a navigable waterway have enacted laws
that impose strict  liability for clean-up  costs and damages  resulting  from a
discharge  of oil or a release of a hazardous  substance.  As  permitted by OPA,
these state laws may provide for unlimited  liability  for oil spills  occurring
within their boundaries.

C.   ORGANIZATIONAL STRUCTURE

Our vessels are all owned by, or chartered to, separate subsidiaries, associated
companies or joint  ventures.  The  following  table sets out the details of our
significant subsidiaries and equity interests as of May 31, 2003:

<TABLE>
<CAPTION>
                                                                  Country of     Ownership
Name                                        Vessel/Activity    Incorporation    Percentage
<S>                                      <C>                     <C>                <C>
Granite Shipping Co. Ltd.                     Front Granite          Bahamas          100%

Frontline Management (Bermuda) Ltd       Management company          Bermuda          100%
ICB Shipping (Bermuda) Limited           Management company          Bermuda          100%
Mosvold Shipping Limited                    Holding company          Bermuda          100%

Golden Current Limited                               Opalia      Isle of Man          100%

Ariake Transport Corporation                         Ariake          Liberia        33.33%
Bonfield Shipping Ltd.                         Front Driver          Liberia          100%
Dundee Navigation SA                                 Dundee          Liberia         50.1%
Edinburgh Navigation SA                           Edinburgh          Liberia         50.1%
Fourways Marine Limited                        Front Spirit          Liberia          100%
Front Ardenne Inc.                            Front Ardenne          Liberia          100%
Front Brabant Inc.                            Front Brabant          Liberia          100%
Front Eagle Corporation                         Front Eagle          Liberia          100%
Front Falcon Inc                               Front Falcon          Liberia          100%
Front Glory Shipping Inc.                       Front Glory          Liberia          100%
Front Pride Shipping Inc.                       Front Pride          Liberia          100%
Front Saga Inc                                   Front Page          Liberia          100%
Front Serenade Inc.                          Front Serenade          Liberia          100%
Front Splendour Shipping Inc.               Front Splendour          Liberia          100%
Front Stratus Inc.                            Front Stratus          Liberia        33.33%
Front Tobago Inc.                              Front Tobago          Liberia           40%
Golden Aquarian Corporation                        Cos Hero          Liberia          100%
Golden Bayshore Shipping Corporation           Navix Astral          Liberia          100%
Golden Channel Corporation                  Front Commodore          Liberia          100%
Golden Estuary Corporation                   Front Comanche          Liberia          100%
Golden Fjord Corporation                     Front Commerce          Liberia          100%
Golden Fountain Corporation                 Golden Fountain          Liberia           50%
Golden Hilton Shipping Corporation        Channel Navigator          Liberia          100%
Golden Lagoon Corporation                    Pacific Lagoon          Liberia           50%
Golden Ocean Tankers Limited                Holding Company          Liberia          100%
Golden President Shipping Corporation      Channel Alliance          Liberia          100%
Golden Seaway Corporation                      New Vanguard          Liberia          100%
Golden Sound Corporation                          New Vista          Liberia          100%
Golden Strait Corporation                    Golden Victory          Liberia          100%
Golden Stream Corporation                     Golden Stream          Liberia          100%
Golden Tide Corporation                       New Circassia          Liberia           50%
Hitachi Hull # 4983 Corporation                      Hakata          Liberia        33.33%
Ichiban Transport Corporation                       Ichiban          Liberia        33.33%
Katong Investments Ltd.                       Front Breaker          Liberia          100%
Kea Navigation Ltd                             Front Melody          Liberia          100%
Langkawi Shipping Ltd.                          Front Birch          Liberia          100%
Millcroft Maritime SA                        Front Champion          Liberia          100%
Neon Shipping SA                                  Front Sun          Liberia          100%
Otina Inc.                                       Front Tina          Liberia          100%
Optimal Shipping SA                          Front Symphony          Liberia          100%
Pablo Navigation SA                             Front Chief          Liberia          100%
Patrio Shipping Ltd.                           Front Hunter          Liberia          100%
Quadrant Marine Inc.                              Front Sky          Liberia          100%
Rakis Maritime SA                             Front Fighter          Liberia          100%
Ryan Shipping Corporation                     Front Warrior          Liberia          100%
Saffron Rose Shipping Limited                   Front Crown          Liberia          100%
Sakura Transport Corporation                       Sakura I          Liberia        33.33%
Sea Ace Corporation                               Front Ace          Liberia          100%
Sibu Shipping Ltd.                              Front Maple          Liberia          100%
South West Tankers Inc                          Front Sunda          Liberia          100%
Tokyo Transport Corporation                          Tanabe          Liberia        33.33%
Tidebrook Maritime Corporation              Front Commander          Liberia          100%
Ultimate Shipping Ltd.                        Front Century          Liberia          100%
West Tankers Inc.                               Front Comor          Liberia          100%

Frontline Management AS                  Management company           Norway          100%

Puerto Reinosa Shipping Co SA                   Front Lillo           Panama          100%

Aspinall Pte Ltd.                              Front Viewer        Singapore          100%
Blizana Pte Ltd.                                Front Rider        Singapore          100%
Bolzano Pte Ltd.                                   Mindanao        Singapore          100%
Cirebon Shipping Pte Ltd.                     Front Vanadis        Singapore          100%
Fox Maritime Pte Ltd.                          Front Sabang        Singapore          100%
Front Dua Pte Ltd.                            Front Duchess        Singapore          100%
Front Empat Pte Ltd.                         Front Highness        Singapore          100%
Front Enam Pte Ltd.                              Front Lord        Singapore          100%
Front Lapan Pte Ltd.                          Front Climber        Singapore          100%
Front Lima Pte Ltd.                              Front Lady        Singapore          100%
Front Tiga Pte Ltd.                              Front Duke        Singapore          100%
Front Tujuh Pte Ltd.                          Front Emperor        Singapore          100%
Front Sembilan Pte Ltd.                        Front Leader        Singapore          100%
Rettie Pte Ltd.                               Front Striver        Singapore          100%
Transcorp Pte Ltd.                             Front Guider        Singapore          100%
</TABLE>

D.   PROPERTY, PLANT AND EQUIPMENT

The Company's Vessels

We operate a  substantially  modern fleet of tankers  consisting of 43 VLCCs, 21
Suezmax  tankers  and eight  Suezmax  OBO  carriers.  In  addition,  we have one
newbuilding  contract and a purchase option to acquire one VLCC tanker.  We also
have three dry bulk carriers.  The following  table sets forth the fleet that we
operate:

<PAGE>

<TABLE>
<CAPTION>
TANKER FLEET
Owned Tonnage
                                      Approximate                                                  Type of
Vessel                      Built            Dwt.          Construction     Flag                Employment
------                      -----     -----------          ------------     ----                ----------
<S>                          <C>          <C>               <C>              <C>          <C>
VLCCs
-----
Front Sabang                 1990         286,000           Single-hull       SG               Spot market
Front Vanadis                1990         286,000           Single-hull       SG               Spot market
Front Highness               1991         284,000           Single-hull       SG               Spot market
Front Lady                   1991         284,000           Single-hull       SG               Spot market
Front Lord                   1991         284,000           Single-hull       SG               Spot market
Front Duke                   1992         284,000           Single-hull       SG               Spot market
Front Duchess                1993         284,000           Single-hull       SG               Spot market
Front Tobago (40%)           1993         261,000           Single-hull      LIB              Tankers Pool
Front Edinburgh (50.1%)      1993         302,000           Double-side      LIB              Tankers Pool
Front Dundee (50.1%)         1993         302,000           Double-side      LIB              Tankers Pool
Front Ace                    1993         275,000           Single-hull      LIB               Spot market
Golden Fountain (50%)        1995         302,000           Single-hull      PAN               Spot market
Golden Stream                1995         276,000           Single-hull      PAN               Spot market
Navix Astral                 1996         276,000           Single-hull      PAN          Bareboat Charter
New Vanguard                 1998         300,000           Double-hull       HK          Bareboat Charter
New Vista                    1998         300,000           Double-hull       HK          Bareboat Charter
New Circassia (50%)          1999         306,000           Double-hull      PAN               Spot market
Opalia                       1999         302,000           Double-hull      IoM          Bareboat Charter
Pacific Lagoon (50%)         1999         306,000           Double-hull      PAN               Spot market
Front Comanche               1999         300,000           Double-hull      FRA              Time Charter
Front Commerce               1999         300,000           Double-hull      LIB              Time Charter
Front Tina                   2000         298,000           Double-hull      LIB               Spot market
Front Commodore              2000         299,000           Double-hull      LIB               Spot market
Ichiban (33.33%)             2000         299,000           Double-hull       BA              Tankers Pool
Ariake (33.33%)              2001         299,000           Double-hull       BA              Tankers Pool
Sakura I (33.33%)            2001         299,000           Double-hull       BA              Tankers Pool
Front Serenade               2002         299,000           Double-hull      LIB               Spot market
Tanabe (33.33%)              2002         296,000           Double-hull       BA              Tankers Pool
Hakata (33.33%)              2002         296,000           Double-hull       BA              Tankers Pool
Front Stratus                2002         299,000           Double-hull      LIB               Spot market
Front Falcon                 2002         308,000           Double-hull       BA               Spot market
Front Page                   2002         299,000           Double-hull      LIB               Spot market
Hull No. 1412                2003         308,000           Double-hull       BA

Suezmax OBO Carriers
--------------------
Front Breaker                1991         169,000           Double-hull      NIS               Spot market
Front Climber                1991         169,000           Double-hull       SG               Spot market
Front Driver                 1991         169,000           Double-hull      NIS               Spot market
Front Guider                 1991         169,000           Double-hull       SG               Spot market
Front Leader                 1991         169,000           Double-hull       SG               Spot market
Front Rider                  1992         169,000           Double-hull       SG               Spot market
Front Striver                1992         169,000           Double-hull       SG               Spot market
Front Viewer                 1992         169,000           Double-hull       SG               Spot market

Suezmaxes
---------
Front Lillo                  1991         147,000           Single-hull      NIS               Spot market
Front Birch                  1991         152,000           Double-side      NIS               Spot market
Front Maple                  1991         152,000           Double-side      NIS               Spot market
Front Granite                1991         142,000           Single-hull      NIS               Spot market
Front Emperor                1992         147,000           Single-hull       SG               Spot market
Front Sunda                  1992         142,000           Single-hull      NIS               Spot market
Front Spirit                 1993         147,000           Single-hull      NIS               Spot market
Front Comor                  1993         142,000           Single-hull      NIS               Spot market
Front Pride                  1993         150,000           Double-hull      NIS               Spot market
Front Glory                  1995         150,000           Double-hull      NIS               Spot market
Front Splendour              1995         150,000           Double-hull      NIS               Spot market
Front Ardenne                1997         153,000           Double-hull      NIS               Spot market
Front Brabant                1998         153,000           Double-hull      NIS              Time charter
Mindanao                     1998         158,000           Double-hull       SG               Spot market
Front Fighter                1998         153,000           Double-hull      NIS               Spot market
Front Hunter                 1998         153,000           Double-hull      NIS               Spot market
Front Sun                    2000         160,000           Double-hull      NIS               Spot market
Front Sky                    2000         160,000           Double-hull      NIS               Spot market
Front Melody                 2001         150,000           Double-hull      NIS               Spot market
Front Symphony               2001         150,000           Double-hull      NIS               Spot market
</TABLE>

<TABLE>
<CAPTION>
Chartered In Tonnage
                                      Approximate                                                  Type of
Vessel                      Built             Dwt          Construction     Flag                Employment
------                      -----     -----------          ------------     ----                ----------
<S>                          <C>          <C>               <C>              <C>              <C>
VLCCs
-----
Front Century                1998         311,000           Double-hull       BA               Spot market
Front Champion               1998         311,000           Double-hull       BA               Spot market
Front Chief                  1999         311,000           Double-hull       BA              Time charter
Front Commander              1999         311,000           Double-hull       BA               Spot market
Front Crown                  1999         311,000           Double-hull       BA               Spot market
Golden Victory               1999         305,000           Double-hull      PAN               Spot market
British Pioneer              1999         307,000           Double-hull      IoM               Spot market
British Pride                2000         307,000           Double-hull      IoM               Spot market
British Progress             2000         307,000           Double-hull      IoM               Spot market
British Purpose              2000         307,000           Double-hull      IoM               Spot market
Front Eagle                  2002         309,000           Double-hull      LIB               Spot market

Suezmax
-------
Front Warrior                1998         153,000           Double-hull       BA               Spot market
</TABLE>

<PAGE>

DRY BULK FLEET
Owned Tonnage

<TABLE>
<CAPTION>
                                      Approximate                                                  Type of
Vessel                      Built            Dwt.          Construction     Flag                Employment
------                      -----     -----------          ------------     ----                ----------
<S>                          <C>          <C>               <C>              <C>          <C>
Capesize
Channel Alliance             1996         172,000           Single-hull      PHI              Time Charter
Channel Navigator            1997         172,000           Single-hull      PHI              Time Charter

Handymax
Cos Hero                     1999          46,000           Single-hull      PAN          Bareboat Charter
</TABLE>

Key to Flags:

BA - Bahamas, HK - Hong Kong, IoM - Isle of Man, LIB - Liberia, NIS - Norwegian
International Ship Register, PAN - Panama, PHI - Philippines, SG - Singapore,
FRA - France.

Other than its interests in the vessels described above, we do not own any
material physical properties. We lease office space in Hamilton, Bermuda from an
unaffiliated third party. Frontline Management leases office space, at market
rates, in Oslo, Norway from Sea Shipping AS, a company indirectly affiliated
with Hemen Holding Ltd, or Hemen, our principal shareholder. One of our
subsidiaries leases office space in London, England from an unaffiliated third
party.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Overview

The following  discussion  should be read in  conjunction  with Item 3 "Selected
Financial Data" and the Company's audited Consolidated  Financial Statements and
Notes thereto included herein.

The Company's  principal  focus and expertise are to serve major  integrated oil
companies and other customers that require  transportation  of crude oil and oil
products  cargoes.  The Company's tanker fleet,  which is one of the largest and
most modern in the world,  consists of 32 owned,  part-owned or controlled VLCCs
and 28 owned,  part-owned or controlled Suezmax tankers,  of which 8 are Suezmax
OBOs.  In addition,  the Company has three wholly owned dry bulk  carriers.  The
Company also  charters in seven modern  VLCCs and one modern  Suezmax  tanker on
medium-term  charters and four modern VLCCs on short-term  charters.  At May 31,
2003, the Company also has one newbuilding contract and has a purchase option to
acquire one VLCC tanker.

In 2002, the Company took delivery of five wholly-owned  newbuilding double-hull
VLCCs and two newbuilding  double-hulled  VLCCs in which the Company has a 33.33
per cent interest. In addition, the Company acquired five dry bulk carriers that
it had  previously  chartered in under capital  leases;  these dry bulk carriers
were  subsequently  sold in 2002.  In 2002 the Company sold a portion of its dry
bulk operations.  These disposals have been recorded as discontinued  operations
in 2002 and the  consolidated  statements  of  operations  for the  years  ended
December  31,  2001  and  2000  have  been  restated  in  accordance   with  the
requirements of Statement of Financial Accounting Standard No. 144.

In 2002, the Company also sold one VLCC to a German KG structure and leased this
vessel  back on a charter  for a period of eight  years  with the  option on the
buyer's  side to extend the  charter  for a further  three  years  followed by a
further  two years.  The  charter  provides  that the  Company has the option to
acquire the relevant  vessel at certain  dates in the future and gives the buyer
the option to sell the vessel to the  Company in 2014.  This sale and  leaseback
transaction  has been  accounted  for as a  capital  lease  and the  vessel  and
associated lease liability has been recognised on the Company's balance sheet.

In 2001, the Company took delivery of two wholly-owned Suezmax newbuildings, and
three  new  double-hulled  VLCCs  in  which  the  Company  has a 33.33  per cent
interest.  In 2001,  the Company also took  delivery of four 1999 and 2000 built
VLCCs on which had it had purchase options. In addition, through its acquisition
of  Mosvold,  it  acquired  two mid 1970s  built  VLCCs  and  three  newbuilding
contracts for VLCCs. The two mid-1970s built VLCCs have  subsequently  been sold
by the Company. The first two newbuildings were delivered in January and October
2002, respectively and the third is due for delivery in July 2003.

In 2001, the Company sold two 1993-built  VLCCs and a 2000 built Suezmax tanker.
The  Company  also sold three  VLCCs to German KG  structures  and leased  these
vessels back on charters each for a period of eight years with the option on the
buyer's  side to extend the  charter  for a further  three  years  followed by a
further  two years.  Each  charter  provides  that the Company has the option to
acquire the relevant  vessels at certain dates in the future and gives the buyer
the option to sell the vessel to the Company in 2014.  These sale and  leaseback
transactions  have been  accounted  for as capital  leases and the  vessels  and
associated  lease  liabilities  have been  recognised on the  Company's  balance
sheet.

The  Company's  vessels  are  operated  under  either  time  charters,  bareboat
charters, voyage charters or COAs. A time charter is a contract for the use of a
vessel for a specific period of time. A voyage charter is a contract for the use
of a vessel for a specific  voyage.  Under a time charter,  the  charterer  pays
substantially  all of the vessel  voyage  costs.  Under a bareboat  charter  the
charterer pays substantially all of the vessel voyage and operating costs. Under
a voyage  charter,  the vessel  owner pays such costs.  Vessel  voyage costs are
primarily  fuel and port charges.  Accordingly,  for  equivalent  profitability,
charter  income under a voyage  charter  would be greater than that under a time
charter to take  account of the  owner's  payment  of the vessel  voyage  costs.
However,  net operating  revenues  would be equal.  In order to compare  vessels
trading under different types of charters,  it is standard  industry practice to
measure  the  revenue  performance  of a vessel in terms of  average  daily time
charter equivalent earnings, or TCEs. For voyage charters, this is calculated by
dividing  net  operating  revenues by the number of days on charter.  Days spent
offhire are excluded from this calculation.

In  December  1999,   Frontline  entered  into  an  agreement  with  five  other
shipowners,  A.P. Moller,  Euronav Luxembourg SA, Osprey Maritime Ltd., Overseas
Shipholding  Group Inc. and Reederei  "Nord" Klaus E.  Oldendorff to establish a
Marshall Islands corporation,  Tankers International LLC ("Tankers"), to operate
a pool of their respective VLCC fleets. Tankers mainly employs ships in the spot
market,  although it also from time to time enters into COAs and time  charters.
Revenues to each  shipowner who  participates  in Tankers are  calculated on the
basis of the pool's total  earnings and the tonnage  committed to Tankers by the
shipowner. In July 2002, the Company withdrew from Tankers and only the VLCCs in
certain of the joint  ventures  to which the  Company is a party,  remain in the
pool.

In 1998, in order to increase the Company's  market share in the Suezmax  trades
and  increase  trading  flexibility,  the Company and OMI  Corporation,  a major
international  shipping  company,  combined Suezmax tanker fleets for commercial
purposes and created Alliance  Chartering LLC, or Alliance.  Alliance  currently
markets 41 Suezmax  tankers.  Alliance  mainly employs ships in the spot market,
although it also from time to time enters into COAs and time charters.  Revenues
to each shipowner who  participates in Alliance are based on the actual earnings
from the ships contributed into Alliance by the shipowner.

Market Overview

The  tanker   industry   is  highly   cyclical,   experiencing   volatility   in
profitability,  vessel  values and freight  rates.  In  particular,  freight and
charter rates are strongly  influenced  by the supply of tanker  vessels and the
demand for oil transportation.

The charter rates for tankers started to decline in the second half of 2001 as a
result of a general  slowdown  in the global  economy  and as a result of OPEC's
decision to cut  production  levels in order to maintain  oil prices in the OPEC
band of $22 to $28 per barrel.  The negative trend continued into 2002 and rates
remained  low  through a large  part of the year.  The tanker  market  showed no
improvement  in 2002  until the  beginning  of fourth  quarter  when a  seasonal
increase in demand and a requirement  for  restocking  enticed OPEC countries to
increase  production.  The strike in Venezuela in December 2002, resulted in the
loss of short-haul oil to the United States and this lost  production  needed to
be replaced from more distant  suppliers.  Rates ended the year at above $50,000
per day for Suezmaxes and approximately  $100,000 per day for VLCCs. Despite the
rate  improvement  in the last  quarter,  average time charter  equivalent  spot
earnings in the general  tanker  market for the entire year for  Suezmaxes  were
approximately  $20,000 per day  compared  with just over $30,000 per day in 2001
and for VLCCs were  approximately  $22,000 per day compared with $34,000 per day
in 2001. The weak market in 2001 and 2002 resulted in the scrapping,  conversion
or total loss of 48 elderly Suezmaxes and 78 VLCCs in that two year period.

The following table sets out the daily TCEs earned by the Company's tanker fleet
over the last five years:

                                    2002      2001      2000      1999      1998
(in $ per day)
VLCC                              22,500    40,800    46,300    20,000    31,800
Suezmax                           18,400    30,700    35,500    16,700    22,400
Suezmax OBO                       17,700    28,900    33,300    16,800    21,800

The  Company's  fleet of dry bulk  carriers are all fixed on medium to long-term
bareboat or time charters.  These arrangements  provide sufficient cash flows to
cover the debt service on this fleet.

Inflation

Although inflation has had a moderate impact on operating  expenses,  drydocking
expenses and corporate overheads, management does not consider inflation to be a
significant  risk to  direct  costs  in the  current  and  foreseeable  economic
environment. In addition, in a shipping downturn, costs subject to inflation can
usually be controlled  because  shipping  companies  typically  monitor costs to
preserve liquidity and encourage  suppliers and service providers to lower rates
and prices. It is expected that insurance costs,  which have risen  considerably
in 2002, will continue to increase in the next few years.  However,  the Company
expects to be  protected  against the full impact of such  increases  due to the
fact that it has fixed certain parts of its premium for multiple  years.  In the
event  that  inflation  becomes  a  significant  factor  in the  world  economy,
inflationary pressures could result in increased operating and financing costs.

Change in Accounting Policies

In 2001, the Company  changed its accounting  policy for  drydockings.  Prior to
2001, provisions for future drydockings were accrued and charged to expense on a
pro-rata basis over the period to the next scheduled drydockings.  Since January
1, 2001 the  Company has  recognised  the cost of a  drydocking  at the time the
drydocking takes place, that is it applies the "expense as incurred" method. The
expense as incurred  method is  considered  by  management to be a more reliable
method  of  recognising  drydocking  costs  as  it  eliminates  the  uncertainty
associated  with  estimating  the cost and  timing  of future  drydockings.  The
cumulative effect of this change in accounting  principle is shown separately in
the  consolidated  statements of operations for the year ended December 31, 2001
and  resulted  in a credit to income of $31.5  million in 2001.  The  cumulative
effect  of this  change as of  January  1,  2001 on the  Company's  consolidated
balance sheet was to reduce total  liabilities  by $32.3  million.  Assuming the
"expense  as  incurred"  method had been  applied  retroactively,  the pro forma
income before cumulative  effect of change in accounting  principle for 2000 and
1999 would have been  increased by $6.3 million and $7.0  million,  or $0.09 and
$0.14 per basic and diluted share, respectively.

In June 2001,  the FASB  approved SFAS No. 142,  "Goodwill and Other  Intangible
Assets"  ("SFAS 142").  SFAS No. 142 applies to all acquired  intangible  assets
whether acquired singly, as part of a group, or in a business combination.  SFAS
No. 142 superseded APB Opinion No. 17,  "Intangible  Assets".  This statement is
effective  for fiscal years  beginning  after  December  15, 2001.  SFAS No. 142
requires that goodwill and indefinite lived intangible  assets will no longer be
amortized but will be reviewed  annually for impairment.  Intangible assets that
are not deemed to have an  indefinite  life will  continue to be amortised  over
their useful lives. At December 31, 2001, the Company had  unamortised  goodwill
of $14.1  million.  The Company  adopted SFAS 142 effective  January 1, 2002 and
recorded an impairment  charge of $14.1 million for the unamortised  goodwill on
that date that is shown separately in the  consolidated  statement of operations
as a cumulative effect of change in accounting  principle.  The valuation of the
fair value of the reporting unit used to assess the  recoverability  of goodwill
was a combination  of independent  third party  valuations and the quoted market
price.

As of January 1, 2001,  the Company  adopted  Statement of Financial  Accounting
Standard ("SFAS") No. 133,  "Accounting for Derivatives and Hedging  Activities"
("SFAS 133").  Certain hedge  relationships met the hedge criteria prior to SFAS
133,  but do not meet the  criteria  for hedge  accounting  under SFAS 133.  The
Company  adopted  SFAS 133 in the first  quarter  of  fiscal  year 2001 and upon
initial adoption  recognised the fair value of its derivatives as assets of $0.4
million and  liabilities of $0.6 million.  A gain of $0.3 million was recognised
in income and a charge of $0.5 million made to other  comprehensive  income.  On
January 1, 2002, the Company discontinued hedge accounting for two interest rate
swaps previously  accounted for as cash flow hedges.  This resulted in a balance
of $4.1 million being frozen in  accumulated  other  comprehensive  income as at
that date and this will be reclassified to the income statement over the life of
the underlying instrument.

Recently Issued Accounting Standards

In August 2001, the FASB approved SFAS No. 143, "Accounting for Asset Retirement
Obligations"  ("SFAS  143").  SFAS No.  143  requires  the fair value of a legal
liability related to an asset retirement be recognized in the period in which it
is incurred.  The associated  asset retirement costs must be capitalized as part
of the  carrying  amount  of  the  related  long-lived  asset  and  subsequently
amortized to expense.  Subsequent  changes in the liability will result from the
passage of time (interest  cost) and revision to cash flow  estimates.  SFAS No.
143 is effective  for  financial  statements  issued for fiscal years  beginning
after June 15, 2002, effective January 1, 2003 for the Company.  Management does
not expect that the adoption of SFAS No. 143 will have a material  effect on the
Company's results of operations or financial position.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities." SFAS No. 146 nullifies  Emerging Issues Task
Force Issue No. 94-3 and requires that a liability for a cost associated with an
exit or disposal  activity be recognized  when the  liability is incurred.  This
statement  also  establishes  that  fair  value  is the  objective  for  initial
measurement  of the  liability.  SFAS No. 146 is effective  for exit or disposal
activities  that are  initiated  after  December 31, 2002.  Management  does not
expect  that the  adoption  of SFAS No. 146 will have a  material  effect on the
Company's results of operations or financial position.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure  an amendment of FASB  Statement No.
123". This Statement amends FASB Statement No. 123,  "Accounting for Stock-Based
Compensation",  to provide  alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee  compensation.  This Statement also amends the disclosure provisions of
FASB  Statement  No. 123 to require  prominent  disclosure  about the effects on
reported net income of an entity's  accounting  policy decisions with respect to
stock-based  employee  compensation.  This Statement also amends APB Opinion No.
28, "Interim Financial Reporting",  to require disclosure about those effects in
interim  financial  statements.  This  statement is  effective  for fiscal years
ending after December 15, 2002 and interim periods  beginning after December 15,
2002.  The  Company  does not  expect  the  adoption  of SFAS No.  148 to have a
material effect on the Company's results of operations or financial position.

In November 2002, the FASB issued Interpretation 45, Guarantor's  Accounting and
Disclosure  Requirements  for  Guarantees,   Including  Indirect  Guarantees  of
Indebtedness of Others. The Interpretation elaborates on the existing disclosure
requirements  for most  guarantees,  including loan  guarantees  such as standby
letters  of  credit.  It also  clarifies  that at the  time a  company  issues a
guarantee,  the company must recognize an initial  liability for the fair value,
or market  value,  of the  obligations  it assumes  under the guarantee and must
disclose that  information in its interim and annual financial  statements.  The
provisions  related to recognizing a liability at inception of the guarantee for
the fair  value  of the  guarantor's  obligations  does  not  apply  to  product
warranties  or  to  guarantees   accounted  for  as  derivatives.   The  initial
recognition and initial  measurement  provisions apply on a prospective basis to
guarantees  issued or modified after December 31, 2002. The Company is currently
evaluating  the  impact  of  Interpretation  45  on  the  Company's  results  of
operations and financial position.

In January 2003, the FASB issued  Interpretation 46, Consolidation of Variable
Interest  Entities.  In general,  a variable interest entity is a corporation,
partnership,  trust, or any other legal  structure used for business  purposes
that either (a) does not have equity  investors  with voting rights or (b) has
equity investors that do not provide  sufficient  financial  resources for the
entity to  support  its  activities.  Interpretation  46  requires  a variable
interest  entity to be consolidated by a company if that company is subject to
a majority of the risk of loss from the variable interest entity's  activities
or entitled to receive a majority of the  entity's  residual  returns or both.
The  consolidation  requirements  of  Interpretation  46 apply  immediately to
variable  interest  entities created after January 31, 2003. The consolidation
requirements  apply to older  entities  in the first  fiscal  year or  interim
period beginning after June 15, 2003.  Certain of the disclosure  requirements
apply in all financial statements issued after January 31, 2003, regardless of
when the variable interest entity was established. The Company has a number of
arrangements  which may be variable  interest entities under the provisions of
FIN 46. The company has entered  into  agreements  to lease  certain  vessels.
These five VLCCs are held by special purpose entities,  which were established
and are owned by independent  third parties who provide financing through debt
and equity participation.  These leases are accounted for as operating leases,
and the  lease  payments  are  charged  to  operating  income.  Under  current
accounting  principles generally accepted in the United States, the assets and
the related  obligations  are excluded from the  consolidated  balance  sheet,
and the special purpose entities are not  consolidated.  At December 31, 2002,
the  original  cost to the lessor of the assets  under such  arrangements  was
approximately  $360 million.  Certain of these leases  contain  residual value
guarantees  that give the third  party  owners the option to put the vessel to
the company.  The price of these put options are significantly  lower than the
expected  market value of the vessels on the exercise  date however  under FIN
46,  certain  conditions  exist which may indicate these entities are variable
interest  entities.  At  December  31,  2002,  the  company's  residual  value
guarantees  associated with these leases, which represent the maximum exposure
to loss, are $56.8  million.  The Company has both an obligation and an option
to purchase  the VLCC  Oscilla on expiry of a five-year  time  charter,  which
commenced in March 2000. Oscilla is owned and operated by an unrelated entity.
If the Company has exercised its option at December 31, 2002,  the cost to the
Company of the  Oscilla  would have been  approximately  $57  million  and the
maximum  exposure to loss is $18.6  million.  On July 1, 2003,  the  Company's
subsidiary Golden Ocean Group Limited,  purchased a call option to acquire all
of the shares of Independent  Tankers  Corporation  ("ITC") from Hemen Holding
Ltd, a related  party,  for a total  consideration  of $4.0 million plus 4 per
cent  interest  per year.  ITC  operates a total of six VLCCs and four Suezmax
tankers, which are on long-term charters to BP and Chevron.  Golden Ocean paid
$10.0 million for the option,  which  expires on July 1, 2010.  The total book
value of ITC's consolidated assets at December 31, 2002 was approximately $960
million and the Company's maximum exposure to loss is $10 million. The Company
is in the process of making the determination as to whether the aforementioned
arrangements are variable interest entities.

Critical Accounting Policies

The  preparation  of the  Company's  financial  statements  in  accordance  with
accounting  principles  generally  accepted in the United  States  requires that
management  make  estimates and  assumptions  affecting the reported  amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the  reporting  period.  The  following is a discussion  of the
accounting  policies  applied by the Company  that are  considered  to involve a
higher  degree of judgement in their  application.  See Note 2 to the  Company's
audited Consolidated  Financial Statements included herein for details of all of
the Company's material accounting policies.

Revenue Recognition

Revenues are generated from freight billings,  time charter and bareboat charter
hires.  Time charter and bareboat charter revenues are recorded over the term of
the charter as service is  provided.  Under a voyage  charter the  revenues  and
associated voyage costs are recognised  rateably over the estimated  duration of
the voyage. The operating results of voyages in progress at a reporting date are
estimated and recognised pro-rata on a per day basis. Probable losses on voyages
are  provided  for in full at the time such  losses  can be  estimated.  Amounts
receivable or payable arising from profit sharing arrangements are accrued based
on the estimated results of the voyage recorded as at the reporting date.

The  operating  revenues  and voyage  expenses of the vessels  operating  in the
Tankers pool, and certain other pool arrangements,  are pooled and net operating
revenues,  calculated on a time charter  equivalent  basis, are allocated to the
pool participants  according to an agreed formula. The same revenue and expenses
principles  stated  above are applied in  determining  the pool's net  operating
revenues.

Vessels and Depreciation

The cost of the Company's  vessels is depreciated on a straight-line  basis over
the vessels'  remaining economic useful lives.  Management  estimates the useful
life of the Company's  vessels to be 25 years.  This is a common life expectancy
applied  in the  shipping  industry.  With  effect  from  April  2001,  the  IMO
implemented new regulations  that result in the accelerated  phase-out of single
hull vessels.  As a result of this, the Company has  re-evaluated  the estimated
useful life of its single hull vessels and determined this to be either 25 years
or the vessel's  anniversary  date in 2017,  whichever comes first. As a result,
the estimated  useful lives of six of the Company's  vessels were reduced in the
fourth quarter of 2001. If the estimated  economic useful life is incorrect,  or
circumstances  change  such that the  estimated  economic  useful life has to be
revised, an impairment loss could result in future periods.

The vessels held and used by the Company are reviewed  for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. In assessing the recoverability of the vessels' carrying
amounts,  the Company  must make  assumptions  regarding  estimated  future cash
flows.  These  assumptions  include  assumptions about the spot market rates for
vessels,  the operating  costs of our vessels and the estimated  economic useful
life  of our  vessels.  In  making  these  assumptions  the  Company  refers  to
historical  trends and performance as well as any known future factors.  Factors
we consider  important which could effect  recoverability and trigger impairment
include significant underperformance relative to expected operating results, new
regulations  that change the estimated  useful economic lives of our vessels and
significant negative industry or economic trends.

Results of Operations

Year ended  December  31, 2002  compared  with the year ended  December 31, 2001
Total net operating  revenues decreased by 34 per cent to $416.5 million in 2002
compared with $628.2 million in 2001. In 2002, the Company took delivery of five
wholly-owned  double-hulled  VLCCs  and two  double-hulled  VLCCs in  which  the
Company has a 33.33 per cent  interest.  In addition,  the Company sold five dry
bulk  carriers  and sold its 50 per cent  interest in two joint  ventures,  each
owning a dry bulk  carrier.  However,  the  decrease in net  operating  revenues
primarily  reflects the significantly  weaker tanker market experienced in 2002.
The annual average daily TCEs earned by the Company's  VLCCs,  Suezmax  tankers,
and Suezmax  OBO  carriers  for 2002 year were  $22,500,  $18,400  and  $17,700,
respectively, compared with $40,800, $30,700 and $28,900, respectively in 2001.

Vessel operating  expenses,  which include  drydocking costs,  decreased six per
cent to $109.3 million from $116.3 million in 2001. This decrease is a result of
a cost saving  exercise in 2002. The average daily  operating  costs,  including
drydockings,  of the Company's  VLCCs,  Suezmax tankers and Suezmax OBO carriers
was $6,300,  $5,600 and $5,700  respectively  compared  with $6,300,  $5,700 and
$9,000 in 2001. In 2001, 12 of our vessels drydocked compared with 15 in 2002.

Charterhire  expenses  increased to $60.6  million in 2002 from $41.9 million in
2001,  principally  due to the  inclusion in the second half of the year of four
additional  vessels on short-term  charters from BP Shipping  Ltd., the shipping
arm of BP Plc.

Administrative  expenses  decreased  two per cent to $12.8  million in 2002 from
$13.0 million in 2001. Administrative expenses are reported net of fee income of
$3.6 million and $3.2 million for 2002 and 2001,  respectively.  Included in fee
income was $0.8 million and $0.5 million  received from related parties for 2002
and 2001, respectively.  In 2001, the Company recorded a non-cash charge of $1.2
million in connection  with employee  stock  options.  In 2002,  this charge was
reduced to $0.5 million. Offsetting this reduction were increased administrative
expenses due to an increase in the number of employees.

Depreciation and amortisation  increased 17 per cent from $117.2 million in 2001
to $136.9 million in 2002. The increase  relates to the  acquisition of five new
vessels in 2002 and the impact for a full year of the  reduced  expected  useful
life  for six of the  Company's  vessels  following  the  implementation  of IMO
regulations in 2001.

Net  interest  expense  for 2002 was $58.3  million,  a decrease  of 24 per cent
compared  with $77.0  million in 2001.  Interest  income was  unchanged at $13.0
million for both 2001and 2002.  Interest expense decreased from $90.0 million in
2001 to $71.3  million in 2002.  At December  31, 2002 the Company had  $1,424.9
million of floating rate debt and the decrease in the interest  expense reflects
the benefit of lower interest rates throughout 2002.

The share in result of  associated  companies  decreased  from earnings of $22.3
million in 2001 to a loss of $10.7  million in 2002.  Certain of the  associated
companies in which the Company has investments,  have Yen denominated  long-term
debt.  In 2002 the loss is due to a  combination  of lower  revenues and the Yen
strengthened  against the U.S.  Dollar  with the  resulting  unrealised  foreign
exchange loss included within the share in results of associated companies.

The Company incurred a foreign  currency  exchange loss of $10.9 million in 2002
compared with a gain of $15.5 million in 2001, as a result of the  strengthening
of the Yen against  the US Dollar from 131.14 at December  31, 2001 to 118.54 at
December 31, 2002. At December 31, 2002, the Company has Yen debt (including Yen
denominated capital leases) of Yen 13.1 billion,  compared with Yen 25.7 billion
at December 31, 2001.

The charge for other financial items increased from $5.7 million in 2001 to $8.6
million in 2002. In both years,  other  financial  items  consists  primarily of
market value adjustment on derivatives following the adoption of SFAS No. 133 on
January 1, 2001.  In  September  2001 the  Company  established  a twelve  month
facility for a Stock  Indexed  Total  Return Swap  Programme or Equity Swap Line
with the Bank of Nova Scotia,  or BNS, whereby the latter acquires shares in the
Company,  and the Company carries the risk of fluctuations in the share price of
those acquired  shares.  In 2001 the mark to market valuation of the Equity Swap
Line resulted in a credit to income of $4.4 million. This was offset by a charge
of $9.8  million in  connection  with the market value  adjustments  on interest
rates swaps. In 2002 the Company  incurred a $4.0 million charge relating to the
market value  adjustment  on the  Company's  Equity Swap Line and a $3.0 million
charge relating to the market value adjustments for interest rate swaps.

Net  income  from  continuing  operations  before  income  taxes and  before the
cumulative  effect of change in  accounting  principle  was $7.2 million in 2002
compared with $330.6 million in 2001. In 2002, the Company sold a portion of its
dry bulk  operations and these  disposals have been recorded as a charge of $1.9
million for discontinued operations.

The  Company  adopted  FAS 142  effective  January  1,  2002 and  recognised  an
impairment  loss on goodwill of $14.1  million that is shown  separately  in the
consolidated  statement  of  operations  as a  cumulative  effect  of  change in
accounting principle. Net income for 2002 before the cumulative effect of change
in accounting principle was $5.2 million and earnings per share were $0.07.

Year ended  December  31, 2001  compared  with the year ended  December 31, 2000
Total net  operating  revenues  increased by five per cent to $628.2  million in
2001 compared with $595.4 million 2000.  This reflects an increase due to a full
years  contribution  in 2001 from the vessels  acquired  through the purchase of
Golden  Ocean.  In 2000,  Golden  Ocean was only  consolidated  with effect from
October 2000.  Offsetting the increase due to the expanded fleet, was a decrease
due to lower average  earnings in the tanker  market.  The annual  average daily
TCEs earned by the VLCCs,  Suezmax tankers,  and Suexmaz OBO carriers trading in
the spot market were $40,800, $30,700 and $28,900 in 2001 respectively, compared
with $46,300, $35,500 and $33,300 in 2000.

Vessel operating expenses, which include drydocking costs, increased 34 per cent
to $116.3 million from $86.8 million in 2000.  This increase is explained by the
inclusion of Golden Ocean for the full year in 2001. The average daily operating
costs,  including  drydockings,  of the  Company's  VLCCs,  Suezmax  tankers and
Suezmax OBO carriers was $6,300,  $5,700 and $9,000  respectively  compared with
$6,900, $5,500 and $6,200 in 2000. The increase in daily operating costs for the
Suezmax  OBO  carriers  in 2001 is due to seven of the eight  vessels  being dry
docked during 2001. Fluctuations in the other vessel size operating expenses are
within expected ranges.

Charterhire  expenses  increased to $41.9  million in 2001 from $34.4 million in
2000,  again due to the  inclusion of vessels  acquired  through the purchase of
Golden Ocean for the full year in 2001.

Administrative expenses have increased 39 per cent to $13.0 million in 2001 from
$9.3  million in 2000.  This  reflects an  increase in the number of  employees,
general corporate activity and also a $1.2 million non-cash charge in connection
with employee stock options.

Depreciation and  amortisation  increased 28 per cent from $91.8 million in 2000
to $117.2  million  in 2001.  The  increase  relates to the  acquisition  of new
vessels  and the  inclusion  of  Golden  Ocean  for the full  year in 2001.  The
implementation  of IMO  regulations  reduced the expected useful life for six of
the Company's vessels,  which resulted in increased depreciation of $0.5 million
in 2001 for those vessels.

Net interest  expense for 2001 was $77.0 million  compared with $88.8 million in
2000,  a decrease of 13 per cent.  This  decrease  reflects the benefit of lower
interest  expense on debt as  interest  rates  fell  during  2001 and  increased
interest income arising from higher average cash balance.  The Company had total
long-term debt  outstanding of $1,391.2  million at December 31, 2001,  compared
with $1,544.1  million at December 31, 2000. In addition the Company had a total
amount of $300.8  million of  obligations  under capital  leases at December 31,
2001, compared with $109.8 million at December 31, 2000.

The share in result of  associated  companies  increased  74 per cent from $12.8
million  in  2000  to  $22.3  million  due to the  inclusion  of the  associated
companies acquired as part of Golden Ocean for the full year in 2001. Certain of
the  associated  companies  in  which  the  Company  has  investments,  have Yen
denominated  long-term  debt. In 2001, the Yen weakened  against the U.S. Dollar
and the resulting  unrealised foreign exchange gain is included within the share
in results of associated companies.

The  increase in the foreign  exchange  gain from $7.9  million in 2000 to $15.5
million in 2001 also  reflects the  weakening  of the Yen and the $15.5  million
represents  the  unrealised  gain in  subsidiaries  that  have  Yen  denominated
long-term debt.

The charge for other financial items increased from $0.2 million in 2000 to $5.7
million  in  2001  that  is  attributable  to the  market  value  adjustment  on
derivatives  following  the adoption of SFAS No. 133 on January 1, 2001. In 2001
the Company has incurred a charge of $9.8 million in connection  with the market
value adjustments on interest rates swaps and a credit to income of $4.4 million
for the mark to market valuation of the Equity Swap Line.

Net  income  from  continuing  operations  before  income  taxes and  before the
cumulative  effect of change in accounting  principle was $330.6 million in 2001
compared with $306.0 million in 2000. The net result of discontinued  operations
was net income of $21.1 million in 2001 compared with $8.0 million in 2000.

In 2001, the Company  changed its accounting  policy for  drydockings.  Prior to
2001, provisions for future drydockings have been accrued and charged to expense
on a pro-rata basis over the period to the next scheduled drydockings. Effective
January 1, 2001 the Company  recognised the cost of a drydocking at the time the
drydocking takes place, that is, we apply the "expense as incurred" method.  The
expense as incurred  method is  considered  by  management to be a more reliable
method  of  recognising  drydocking  costs  as  it  eliminates  the  uncertainty
associated  with  estimating  the cost and  timing  of future  drydockings.  The
cumulative effect of this change in accounting principle resulted in a credit to
income of $31.5  million in 2001.  The  cumulative  effect of this  change as of
January 1, 2001 on the Company's  consolidated balance sheet was to reduce total
liabilities by $32.3 million.

Liquidity and Capital Resources

The  Company  operates  in a capital  intensive  industry  and has  historically
financed  its  purchase  of tankers  and other  capital  expenditures  through a
combination  of cash generated  from  operations,  equity capital and borrowings
from  commercial  banks.  The liquidity  requirements  of the Company  relate to
servicing  its debt,  funding  the equity  portion of  investments  in  vessels,
funding  working capital  requirements  and  maintaining  cash reserves  against
fluctuations  in operating cash flows.  Revenues from time charters and bareboat
charters are received  monthly or  fortnightly  in advance  while  revenues from
voyage charters are received upon completion of the voyage.

The Company's  funding and treasury  activities are conducted  within  corporate
policies to maximise investment returns while maintaining  appropriate liquidity
for the Company's requirements.  Cash and cash equivalents are held primarily in
U.S.  dollars  with  some  balances  held in  Japanese  Yen,  British  Pound and
Norwegian Kroner.

As of  December  31,  2002,  2001  and  2000,  the  Company  had  cash  and cash
equivalents of $92.1 million,  $178.2 million and $103.5 million,  respectively.
The Company  generated cash from operations of $142.0 million in 2002,  compared
with  $477.6  million  in 2001 and  $271.6  million  in 2000.  Net cash  used in
investing  activities in 2002 was $222.9 million compared with $103.8 million in
2001.  In 2000 the  Company  used net cash in  investing  activities  of  $509.0
million. In 2002 investing activities consisted primarily of $376.8 million paid
for vessel  acquisitions and $21.8 million  investment in associated  companies.
The latter  related  principally  to joint  ventures  through  which the Company
acquired one third interests in two vessels.  Offsetting  these invested amounts
was  proceeds  of $177.9  million  arising  on the sale of  assets.  In 2002 the
Company  sold  five  1997-1999  built  dry  bulk  carriers  and its 50 per  cent
interests in two joint ventures,  each owning a 1998-built dry bulk carrier. The
Company also sold one VLCC to a German KG  structure  and leased the vessel back
on charter for a period of eight  years with the option on the  buyer's  side to
extend the charter for a further three years followed by a further two years. In
2001,   investing   activities   consisted  primarily  of  payments  for  vessel
acquisitions,  totalling  $386.1  million,  $64.7 million to acquire Mosvold and
$60.0 million investment in associated companies. The latter related principally
to joint ventures through which the Company acquired one-third interests in five
vessels and 50.1 per cent  interest in two vessels.  Offsetting  these  invested
amounts was proceeds of $400.1  million  arising on the sale of assets.  In 2001
the Company sold two 1993-built VLCCs and a 2000 built Suezmax tanker.  In 2001,
the Company sold three VLCCs to German KG  structures  and leased these  vessels
back on charters each for a period of eight years with the option on the buyer's
side to extend the charter for a further  three years  followed by a further two
years. In 2000,  investing activities consisted primarily of payments for vessel
acquisitions,  totalling $436.0 million,  the investment in Golden Ocean and the
investment of $38.6 million in debt of companies connected with Golden Ocean.

In the  Company's  opinion,  working  capital is  sufficient  for the  Company's
present requirements.

Cash used in financing  activities  was $5.2 million in 2002  compared with cash
used in  financing  activities  of $299.2  million in 2001 and cash  provided by
financing activities of $275.4 million in 2000. In 2002 there was $341.9 million
in principal  repayments,  $24.7 million payment for capital lease  obligations,
$19.1 million paid as dividends and $383.8 million proceeds from long-term debt.
In 2001 there was $460.7 million in principal repayments,  $10.3 million payment
for capital lease obligations,  $115.2 million paid as dividends,  $44.8 million
for the  repurchase of the Company's  shares,  $8.5 million from the issuance of
new equity and $324.9 million proceeds from long-term debt. At December 31, 1999
the Company had  outstanding  a specific  loan of $54.0  million  from  Metrogas
Holdings,  or Metrogas,  a company  related to the Company's  Chairman.  In 2000
proceeds from long-term debt were $384.7 million, repayments of debt were $209.7
million,  of which $24 million related to repayment of the amount outstanding on
the  Metrogas  Loan and the balance  related to  traditional  bank  financing of
vessels. The Company generated $104.6 million in 2000 through private placements
of its equity and through the exercise of warrants.

The Company had total long-term debt outstanding of $1,445.5 million at December
31, 2002 compared  with  $1,392.0  million at December 31, 2001. At December 31,
2002 $11.5  million of this debt was at a fixed rate of 8 per cent (2001 - $31.5
million).  The Company is exposed to various  market risks,  including  interest
rates and foreign currency fluctuations. The Company uses interest rate swaps to
manage  interest rate risk. As at December 31, 2002 the Company's  interest rate
swap arrangements effectively fix the Company's interest rate exposure on $352.7
million of floating  rate debt (2001 - $362.8  million).  The interest rate swap
agreements expire between February 2003 and August 2008.

The Company has entered into forward freight  agreements for trading purposes in
order to manage its  exposure  to the risk of  movements  in the spot market for
certain  trade routes and, to some  extent,  speculative  purposes.  Market risk
exists to the extent that spot market fluctuations may have a negative effect on
the Company's cash flows and consolidated statements of operations. See Item 11.
"Quantitative and Qualitative Disclosures about Market Risk".

In February  2002 and July 2002 the Company  acquired a 33 per cent  interest in
each of two  joint  ventures,  each of  which  acquired  a  2002-built  VLCC for
approximately  $78.5 million. At the same time, $52.5 million bank financing was
secured for each of the joint ventures.

In 2002 the Company took delivery of five vessels,  Front Eagle, Front Serenade,
Front  Stratus,  Front Page and Front  Falcon.  In  January  2002,  the  Company
obtained bank financing for Front Eagle,  for a total amount of $50 million.  In
March 2002 the Company  obtained bank  financing for a total sum of $170 million
for the Front  Serenade,  Front  Straus  and Front  Falcon.  In August  2002 the
Company obtained bank financing for a total sum of $50 million for Front Page.

In February  2001 the Company  acquired a 50.1 per cent  interest in each of two
joint ventures, each of which acquired a 1993-built VLCC for approximately $53.0
million.  At the same time,  $70 million  financing  was secured for these joint
ventures.

In 2001 the Company took  delivery of four vessels that it had acquired  through
the  exercise  of purchase  options;  Front  Commerce,  Front  Commodore,  Front
Comanche and Opalia.  In April 2001,  the Company  obtained  bank  financing for
Front Commerce and Front Commodore,  for a total amount of $110 million.  In May
2001 the Company  obtained bank financing for a total sum of $59 million for the
Front  Comanche and in July 2001 obtained bank  financing for a total sum of $50
million for Opalia.

In August 2001,  bank financing of $75.0 million was secured for the delivery of
the two newbuilding Suezmax tankers, Front Melody and Front Symphony.

During  2000,  2001  and  2002,  the  Company  issued  equity  in  a  number  of
transactions.  In February 2000, the Company issued 3,500,000 ordinary shares in
a private placement at NOK 57.50 per share to raise approximately $24 million in
equity.  At the same time $30  million of the  Metrogas  Loan was  converted  to
equity through the issuance of 4,350,000 ordinary shares at NOK 57.50 per share,
leaving $24 million plus interest  outstanding.  The outstanding  balance on the
Metrogas Loan was repaid in full in August 2000.

In March 2000, the Company  issued  2,957,500  ordinary  shares at NOK 90.00 per
share to finance part of the acquisition of two VLCCs from Wilh. Wilhelmsen ASA.
In May 2000, the Company issued 3,000,000 ordinary shares at $10.15 per share in
a private placement to raise  approximately $30 million in equity.  The proceeds
of the issue were used to part finance the  acquisition  of a newbuilding  VLCC,
Front Tina.  In June,  2000,  the Company  raised  approximately  $46.8  million
through the issuance of 4,000,000  ordinary  shares at a price of NOK 104.50 per
share  in  a  private  placement  to  a  group  of  international  institutional
investors.  The proceeds  from these  equity  issues have been used for specific
vessel acquisitions and general corporate working capital requirements.

In 2000, the Company issued 124,558  ordinary shares  pursuant to  subscriptions
under  warrants  that could be exercised at any time up to December 31, 2003 and
issued a total of 8,211 ordinary shares pursuant to subscriptions under warrants
that could be exercised at any time up to May 11, 2001. During 2001, the Company
issued 129,500 shares in connection  with the exercise of employee share options
and issued 416,555 ordinary shares pursuant to subscriptions under warrants that
could be  exercised at any time up to May 11,  2001.  During  2002,  the Company
issued 59,000 shares in connection with the exercise of employee share options.

In September 2000, the Company bought back and cancelled 430,000 of its ordinary
shares at NOK 39.45 per  share.  These  shares  were  related  to an option  the
Company   secured  in  connection   with  issuing   1,910,000   shares  as  part
consideration for a Suezmax newbuilding contract. Further, in 2000 and 2001, the
Company bought back and cancelled a total of another  1,719,845 and 2,207,300 of
its ordinary shares, respectively,  in a number of separate market transactions.
The total consideration paid was NOK 200 million and NOK 295 million in 2000 and
2001,  respectively  (equivalent to $21.9 million and $32.8 million converted at
the rates on the transaction dates).

As of December  31,  2002,  2001 and 2000,  the Company  complied  with the debt
covenants of its various debt  agreements.  The  acquisition of Golden Ocean was
conducted  so  that  the  loans  held  by  Golden  Ocean's   subsidiaries   were
non-recourse  to  Frontline.  This  implies that any  guarantees  on behalf of a
Golden  Ocean  subsidiary  were issued only by either  Golden Ocean and or other
Golden  Ocean  subsidiaries.  Frontline's  exposure to Golden Ocean is therefore
limited to $15  million  injected as equity,  a $50 million  term loan and a $10
million  revolving credit facility  provided by Frontline to Golden Ocean. As of
December  31, 2002 the  amounts  outstanding  under the term loan and  revolving
credit facility were $nil and $nil, respectively.

At December 31, 2001, a 100 per cent owned  subsidiary of Golden  Ocean,  Golden
Stream Corporation, was party to a loan agreement with Griffin Shipping Inc., or
Griffin.  The amount  outstanding  under this loan  agreement was $48.1 million,
which was fully repayable on March 30, 2002. Golden Stream Corporation failed to
repay the loan on the due date. This situation gave rise to substantial doubt as
to the ability of Golden  Ocean to continue to operate as a going  concern as at
December 31, 2001.  Griffin did not declare a default  under the loan  agreement
and in the fourth  quarter of 2002, a  satisfactory  agreement  was reached with
Griffin,   Golden  Stream  Corporation  was  restructured  and  the  vessel  was
refinanced.  As a result of the  restructuring  and  refinancing,  Golden Stream
Corporation  is  owned  in  a  non-recourse   subsidiary   where  Frontline  has
guaranteed, and partly provided, the first $28 million of debt.

The Company has guaranteed the yen and dollar long-term borrowings of associated
companies for amounts of $176.4 million,  including  (Y)14.3  billion,  which is
equivalent to $121.0 million at December 31, 2002.

In  2001,   the  Company   received  an  adverse   decision   from  the  Swedish
Administrative  Court of Appeal with  respect to a tax dispute  with the Swedish
tax authorities  relating to ICB. The dispute arises from a limited  partnership
in which ICB  invested,  and which sold a vessel on the  exercise  of a purchase
option by a third party in 1990. The Swedish tax authorities  assessed an "exit"
tax on ICB and the other members of the limited  partnership  and also sought to
tax ICB and the other  members  for income  earned by the  partnership.  ICB has
contested these assessments. The Swedish Administrative Court of Appeal upheld a
decision  by  a  County  Administrative  Court  finding  ICB  liable  for  these
assessments.  Including accrued interest, the taxes found due by the court total
approximately  SEK 93 million,  or $10.6 million at the exchange rate prevailing
at December 31, 2002. ICB is appealing this judgement.

Contractual Commitments

Through  the  purchase  of Mosvold  Shipping  Limited in May 2001,  the  Company
acquired three VLCC  newbuilding  contracts.  The first two of the  newbuildings
were   delivered   in  2002  and  at  December   31,  2002  the  Company  had  a
non-cancellable  contract for the  construction of the remaining one newbuilding
tanker,  scheduled for delivery in July 2003.  The total contract price for this
newbuilding  is $74.2  million.  At  December  31,  2002,  the  Company had paid
contractual  instalments  of $14.8  million  and is  committed  to make  further
instalments of $59.4 million, of which it is estimated approximately $12 million
will be financed from working capital. Bank financing has been arranged for this
vessel.

At December 31 2002, the Company had outstanding  debt of $1,445.5 million which
is repayable as follows:

     Year ending December 31,
     (in thousands of $)
     2003                                                          167,807
     2004                                                          169,529
     2005                                                          266,080
     2006                                                          312,142
     2007                                                          134,871
     2008 and later                                                395,043
     ----------------------------------------------------------------------
     Total debt                                                  1,445,472
     ======================================================================

At December 31 2002, the Company had eight vessels that were sold by the Company
at various times during the period from November 1999 to December 31, 2002,  and
leased  back on  charters  that  range for  periods  of eight to ten years  with
options on the lessors' side to extend the charters for periods that range up to
five years. Four of these vessels are accounted for as operating leases and four
as capital leases a discussed below. The Company has purchase options at certain
specified  dates and the lessor has options to put the vessels to the Company at
the end of the lease terms for all of these eight vessels. The total amount that
the Company would be required to pay under these put options with respect to the
operating leases is $56.8 million.

At December 31 2002,  the  outstanding  obligations  for the four vessels  under
capital leases are payable as follows:

     Year ending December 31,
     (in thousands of $)
     2003                                                           33,359
     2004                                                           33,576
     2005                                                           34,479
     2006                                                           35,078
     2007                                                           35,077
     2008 and later                                                248,150
     ---------------------------------------------------------------------
     Minimum lease payments                                        419,719
     ---------------------------------------------------------------------
     Less imputed interest                                        (147,028)
     ---------------------------------------------------------------------
     Present value of obligations under capital leases             272,691
     =====================================================================

Off-Balance Sheet Financing

In 1998 and 1999, the Company entered into a total of three sale and leaseback
transactions  with  German KG  structures.  In  addition,  one of the  vessels
obtained through the acquisition of Golden Ocean was also sold and leased back
prior to the Company's acquisition of Golden Ocean. The minimum terms of these
leases  range  up to eight  years.  The  leases  of these  vessels  are  being
accounted  for  as  operating  leases.  The  Company  has  also  entered  into
short-term  charters for four VLCCs,  each for a period of  approximately  one
year. The future minimum rental  payments under the Company's  non-cancellable
operating leases, are as follows:

     Year ending December 31,
     (in thousands of $)
     2003                                                          66,639
     2004                                                          36,400
     2005                                                          36,958
     2006                                                          37,058
     2007                                                          18,551
     2008 and later                                                    --
     --------------------------------------------------------------------
     Total minimum lease payments                                 195,606
     ====================================================================

<PAGE>

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.   DIRECTORS AND SENIOR MANAGEMENT

Information concerning each director and executive officer of the Company is set
forth below.

Name                     Age   Position

John Fredriksen           59   Chairman, Chief Executive Officer, President and
                               Director
Tor Olav Troim            40   Vice-President and Director
A. Shaun Morris           43   Director
Tammy Richardson          31   Director
Kate Blankenship          38   Chief Accounting Officer and Company Secretary
Ola Lorentzon             53   Managing Director of Frontline Management
Tom E. Jebsen             45   Chief Financial Officer of Frontline Management
Jon Christian Syvertsen   41   Deputy Managing Director of Frontline Management
Oscar Spieler             42   Technical Director of Frontline Management

Certain  biographical  information  about each of the  directors  and  executive
officers of the Company is set forth below.

John  Fredriksen has been the Chairman of the Board,  Chief  Executive  Officer,
President  and a  director  of  the  Company  since  November  3,  1997.  He was
previously  the  Chairman  and Chief  Executive  Officer of Old  Frontline.  Mr.
Fredriksen  has  served  for  over  eight  years  as a  director  of  Seatankers
Management Co. Ltd. ("Seatankers"), a ship operating company and an affiliate of
the Company's principal  shareholder.  Mr. Fredriksen indirectly controls Hemen.
Mr.  Fredriksen is a director of Golar LNG Limited,  a Bermuda company listed on
the Oslo Stock  Exchange and the NASDAQ  National  Market,  which is  indirectly
controlled by Mr. Fredriksen.

Tor Olav Troim has been  Vice-President  and a  director  of the  Company  since
November 3, 1997. He previously served as Deputy Chairman of Frontline from July
4, 1997,  and was a director of Old  Frontline  from July 1, 1996.  Until April,
2000 Mr.  Troim was the Chief  Executive  Officer  of  Frontline  Management,  a
company which  supports the Company in the  implementation  of decisions made by
the Board of Directors.  Mr. Troim also serves as a consultant to Seatankers and
since May 2000, has been a director and Vice-Chairman of Knightsbridge.  He is a
director of Aktiv  Inkasso ASA and Northern Oil ASA, both  Norwegian  Oslo Stock
Exchange listed  companies and Northern  Offshore Ltd., a Bermuda company listed
on the Oslo Stock Exchange.  Prior to his service with  Frontline,  from January
1992,  Mr.  Troim  served  as  Managing  Director  and a member  of the Board of
Directors of DNO AS, a Norwegian oil company. Mr. Troim has served as a director
of Golar LNG Limited since May 2001.

A. Shaun Morris has been a non-executive  director of the Company since November
3, 1997. Mr. Morris has been a Partner at Appleby,  Spurling & Kempe since April
1995,  after joining the firm in 1988 as an associate,  where he  specialises in
corporate/commercial law.

Tammy Richardson has been a non-executive director of the Company since June 21,
2002. Ms. Richardson has been an attorney at Appleby Spurling & Kempe since 1998
where she specialises in corporate/commercial law.

Kate Blankenship is Chief Accounting Officer and Secretary of the Company.  Mrs.
Blankenship joined the Company in 1994. Prior to joining the Company,  she was a
Manager with KPMG Peat Marwick in Bermuda.  She is a member of the  Institute of
Chartered  Accountants  in England and Wales.  Mrs.  Blankenship  has been Chief
Financial   Officer  of   Knightsbridge   since  April  2000  and  Secretary  of
Knightsbridge since December 2000.

Ola  Lorentzon has been Managing  Director of Frontline  Management  since April
2000. Mr.  Lorentzon has also been a director of  Knightsbridge  since September
18, 1996. He was Vice Chairman of  Knightsbridge  from  September 18, 1996 until
May 2000 when he took over as Chairman. Until 2000, Mr. Lorentzon was a director
of The Swedish Protection and Indemnity Club (SAAF), Swedish Ships Mortgage Bank
and  The  Swedish  Shipowners'  Association,  Deputy  Chairman  of the  Liberian
Shipowners  Council  and a member  of the  International  Association  of Tanker
Owners (Intertanko) Council.

Tom E.  Jebsen has served as Chief  Financial  Officer of  Frontline  Management
since June 1997.  From December 1995 until June 1997, Mr. Jebsen served as Chief
Financial  Officer of Tschudi & Eitzen Shipping ASA, a publicly traded Norwegian
shipowning  company.  From 1991 to  December  1995,  Mr.  Jebsen  served as Vice
President  of Dyno  Industrier  ASA,  a  publicly  traded  Norwegian  explosives
producer. Mr. Jebsen is also a director of  Assuranceforeningen  Skuld and Hugin
ASA, an internet company.

Jon  Syvertsen  has served as Deputy  Managing  Director and head of  commercial
activities of Frontline  Management  AS since August 2001.  From July 2000 until
July 2001, Mr.  Syvertsen  served as Chief  Investment  Officer of  Ulltveit-Moe
Gruppen AS, a Norwegian based  shipowning and marine  equipment  producer.  From
August 1997 until June 2001, Mr. Syvertsen  served as Managing  director of Umoe
Technology  Services.  Mr Syvertsen  has served as Chairman of the Board of Umoe
Schat Harding AS , world leader in life boats and cruise tender boats.

Oscar Spieler has served as Technical Director of Frontline  Management AS since
November  1999.  From 1995 until 1999,  Mr.  Spieler served as Fleet Manager for
Bergesen,  a major  Norwegian gas tanker and VLCC owner.  From 1986 to 1995, Mr.
Spieler worked with the Norwegian  classification society DNV, working both with
shipping and offshore assets.

B.   COMPENSATION

During the year ended  December 31, 2002,  the Company paid to its directors and
executive  officers (nine persons) aggregate cash compensation of $1,362,655 and
an aggregate amount of $163,889 for pension and retirement benefits.

During the year ended  December 31, 2002,  the Company  granted to the Directors
and officers options to acquire,  in the aggregate 80,000 Ordinary Shares of the
Company.  These  options have an exercise  price of $11.75 at March 31, 2003 and
expire on June 3, 2007.  These options were granted  under the Bermuda  Employee
Share Option Plan described below.

C.   BOARD PRACTICES

In accordance  with the Bye-laws of the Company the number of Directors shall be
such  number not less than two as the Company by  Ordinary  Resolution  may from
time to time determine and each Director shall hold office until the next annual
general  meeting  following his election or until his successor is elected.  The
Company has four Directors. The Board does not have any committees.

The  officers of the Company  are elected by the Board of  Directors  as soon as
possible  following each Annual  General  Meeting and shall hold office for such
period and on such terms as the Board may determine.

There are no service  contracts  between the  Company  and any of our  Directors
providing for benefits upon termination of their employment or service.

D.   EMPLOYEES

As of December 31, 2002, the Company and its subsidiaries employed approximately
40 people in their respective offices in Bermuda and Oslo. The Company contracts
with independent ship managers to manage and operate its vessels.

E.   SHARE OWNERSHIP

The beneficial interests of our Directors and officers in the Ordinary Shares of
the Company as of June 30, 2003, were as follows:

                                                                Percentage of
                              Ordinary Shares of              Ordinary Shares
Director or Officer                   $2.50 each                  Outstanding
-------------------         --------------------          -------------------
John Fredriksen*                      35,079,053                       45.87%
Tor Olav Troim                           194,934                           **
Tammy Richardson                              --                           --
A. Shaun Morris                               --                           --
Kate Blankenship                          14,000                           **
Ola Lorentzon                                 --                           --
Tom E. Jebsen                             22,057                           **
Jon Christian Syvertsen                       --                           --
Oscar Spieler                             14,000                           **

*    Includes  Ordinary  Shares held by Hemen  Holding Ltd. and other  companies
     indirectly controlled by Mr. John Fredriksen.
**   Less than one per cent

Details of share  options held by the  Company's  Directors and officers at June
30, 2003 are set out in the following table:

<TABLE>
<CAPTION>
                      Number of Ordinary         Exercise Price per
Director or Officer   Shares Subject to Option       Ordinary Share    Expiration Date
-------------------   ------------------------   ------------------    ---------------
<S>                              <C>                      <C>         <C>
John Fredriksen                      --                          --                 --
Tor Olav Troim                       --                          --                 --
Tammy Richardson                     --                          --                 --
A. Shaun Morris                      --                          --                 --
Kate Blankenship                  2,000                      $10.92   November 8, 2004
                                  1,000                      $10.58   October 31, 2005
                                  1,000                       $8.83   February 5, 2007
                                  9,000                   NOK 96.33   January 22, 2006
                                 15,000                      $10.70       June 3, 2007
Ola Lorentzon                    40,000                   NOK 35.33     March 15, 2004
                                 18,000                   NOK 96.33   January 22, 2006
                                 20,000                      $10.70       June 3, 2007
Tom E. Jebsen                     7,500                   NOK 96.33   January 22, 2006
                                 15,000                      $10.70       June 3, 2007
Jon Syvertsen                    15,000                      $10.70       June 3, 2007
Oscar Spieler                     9,000                   NOK 96.33   January 22, 2006
                                 15,000                      $10.70       June 3, 2007
</TABLE>

At  June  30,  2003  the  Norwegian  Kroner:US  Dollar  exchange  rate  was  NOK
7.2537:$1.00

The options held by the  directors  and officers have all been granted under the
Bermuda Employee Share Option Plan discussed below.

As of June 30, 2003, 470,300 of the authorised and unissued Ordinary Shares were
reserved for issue  pursuant to  subscription  under  options  granted under the
Company's share option plans.

The Company maintains a Bermuda Employee Share Option Plan, the Bermuda Plan and
a United Kingdom  Employee Share Option Plan, the U.K. Plan.  Under the terms of
the plans,  the exercise  price for the options may not be less than the average
of the fair market  value of the  underlying  shares for the three  dealing days
before the date of grant.  The number of shares  granted under the plans may not
exceed  seven  per  cent  of  the  issued  share  capital  of  the  Company.  No
consideration is payable for the grant of an option. The exercise prices for the
options are reduced by any dividends declared after the date of grant.

Under the Bermuda  Plan,  options may be granted to any  director or employee of
the Company or any  subsidiary.  Options are only  exercisable  during a maximum
period of nine years following the first  anniversary  date of the grant or upon
the termination of the option holder from employment with the Company.

Under the U.K.  Plan,  options  may be  granted  to any  full-time  director  or
employee of the Company or any subsidiary.  Options are only exercisable  during
the period of seven years following the third  anniversary  date of the grant or
upon the termination of the option holder from employment with the Company.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.   MAJOR SHAREHOLDERS

The Company is indirectly  controlled by another  corporation  (see below).  The
following table presents certain information  regarding the current ownership of
the Ordinary  Shares with respect to (i) each person who is known by the Company
to own more than five per cent of the Company's outstanding Ordinary Shares; and
(ii) all directors and officers as a group as of June 30, 2003.

                                                               Ordinary Shares
Owner                                                        Amount     Per cent

Hemen Holding Ltd. and associated companies (1)            35,079,053     47.74%
All Directors and Officers as a group (nine persons) (2)   35,324,044     48.08%

(1)  Hemen Holding Ltd. is a Cyprus holding company indirectly controlled by Mr.
     John  Fredriksen,  who is the Chairman and Chief  Executive  Officer of the
     Company.
(2)  Includes  Ordinary  Shares  held  by  Hemen  Holding  Ltd.  and  associated
     companies indirectly controlled by Mr. John Fredriksen.

At both June 2002 and June 2001 Hemen Holding Ltd. and associated companies held
45.22% of the Company's Ordinary Shares.

The  Company's  major   shareholders  have  the  same  voting  rights  as  other
shareholders of the Company.

As at April 30, 2003, 3,406,409 of the Company's Ordinary Shares were held by 36
holders of record in the United States.

No  corporation  or  foreign  government  owns  more  than 50% of the  Company's
outstanding Ordinary Shares.

The Company is not aware of any  arrangements,  the  operation of which may at a
subsequent date result in a change in control of the Company.

B.   RELATED PARTY TRANSACTIONS

Management believes transactions with related parties are under terms similar to
those that would be arranged with other parties.

In  February  2001,  the  Company   acquired   newbuilding   contracts  for  the
construction and purchase of three VLCC tankers at the Hitachi shipyard in Japan
for delivery in 2002 from  Seatankers,  a company  affiliated with Hemen.  These
contracts were acquired for the original contract price of $72 million each plus
$0.5 million per contract.  The first two of the newbuildings  were delivered in
2002.

In the years ended December 31, 2002 and 2001,  Frontline  provided  services to
Seatankers.   These  services  include  management  support  and  administrative
services  including  services  to a  newbuilding  project  known as the  Uljanik
Project.  In the years ended  December 31, 2002 and 2001, the Company has earned
management fee income from Seatankers of $253,762 and $277,855, respectively. As
at December  31, 2002 and 2001 amounts of $141,359  and  $314,923,  respectively
were due from Seatankers in respect of these fees and for the  reimbursement  of
costs incurred on behalf of Seatankers.

In the year ended December 31, 2002, Frontline has provided management support
and  administrative  services to Osprey.  In the year ended 31  December  2002
management fees of $42,000 have been earned from Osprey and as at December 31,
2002 an amount of $18,000 was due from Osprey in respect of these fees and for
the  reimbursement  of costs  incurred on the Company's  behalf by Osprey.  At
December  31,  2002,  an amount of  $103,838  was due to Osprey in  respect of
Tankers pool distributions due to Osprey that were received by the Company.

In the years ended December 31, 2002 and 2001,  Frontline has provided  services
to Golar LNG Limited.  Osprey,  which is controlled by World Shipholding,  holds
50.01 per cent of Golar LNG. The services provided include  management  support,
corporate services and administrative  services.  In the years ended 31 December
2002 and  2001,  management  fees  from  Golar  LNG of  $391,153  and  $258,960,
respectively  have been earned by the Company.  As at December 31 2002 and 2001,
an amount of  $86,343  and  $547,966,  respectively  were due from  Golar LNG in
respect of these fees and for the  reimbursement  of costs incurred on behalf of
Golar LNG.

In the year ended December 31, 2002, Frontline has provided management support
and administrative services to Northern Offshore Limited, Northern Offshore is
controlled by Osprey.  In the year ended 31 December 2002  management  fees of
$173,724 have been earned from  Northern  Offshore and as at December 31, 2002
an amount of $31,071 was due from Northern Offshore.

C.   INTERESTS OF EXPERTS AND COUNSEL

Not Applicable

ITEM 8. FINANCIAL INFORMATION

A.   CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See Item 18.

Legal Proceedings

The  Company is a party,  as  plaintiff  or  defendant,  to several  lawsuits in
various  jurisdictions  for  demurrage,  damages,  off-hire and other claims and
commercial  disputes arising from the operation of its vessels,  in the ordinary
course  of  business  or in  connection  with its  acquisition  activities.  The
Company's management believes that the resolution of such claims will not have a
material adverse effect on the Company's operations or financial condition.

Dividend Policy

Prior  to May  2001,  the  Company  had not paid  regular  quarterly  or  annual
dividends since 1997 and it had been the Company's policy since that time to pay
dividends only when considered  appropriate by the Company's Board of Directors.
On May 8, 2001, the Company announced a dividend of $1.00 per share,  payable to
holders of record as of May 21,  2001 and has paid the  following  dividends  in
2001, 2002 and 2003.

Record Date                  Payment Date           Amount per Share

May 21, 2001                 June 7, 2001                      $1.00
August 23, 2001         September 5, 2001                      $0.40
November 22, 2001        December 5, 2001                      $0.10
March 13, 2002             March 20, 2002                      $0.20
May 31, 2002                June 12, 2002                      $0.05
March 10, 2003             March 24, 2003                      $0.15
May 20, 2003                 June 6, 2003                      $1.00

On May 8, 2003, the Company announced that it was seeking to adopt a policy that
provided a more predictable minimum dividend stream and has consequently adopted
a dividend  policy  whereby  the  Company  will seek to have a future  quarterly
dividend of $0.25 per share,  equivalent to $1.00 per share per annum. On May 8,
2003 the Company also  announced a dividend of $1.00 per share,  representing  a
$0.25 ordinary dividend and a $0.75 special  dividend,  payable June 6, 2003. On
June 9, 2003 the  Company  announced  a  special  dividend  of $1.00 per  share,
payable July 7, 2003.

The  timing  and  amount  of  dividends,  if any,  is at the  discretion  of the
Company's  Board of  Directors  and will  depend upon the  Company's  results of
operations,  financial condition,  cash requirements,  restrictions in financing
arrangements and other relevant factors.

B.   SIGNIFICANT CHANGES

Not Applicable

ITEM 9. THE OFFER AND LISTING

Not applicable except for Item 9.A. 4. and Item 9. C.

The  Company's  Ordinary  Shares  are  traded  on the New  York  Stock  Exchange
("NYSE"),  the Oslo Stock  Exchange  ("OSE")  and on the London  Stock  Exchange
("LSE") under the symbol "FRO".

The Company's ADSs, each of which represents one Ordinary Share,  were traded on
the Nasdaq  National  Market under the symbol  "FRONY" until August 3, 2001 when
the ADSs were  delisted.  In March 2001 the Company  announced  its intention to
list the  Ordinary  Shares on the New York Stock  Exchange and in July 2001 gave
notice of  termination of the ADR program to the Bank of New York as Depositary.
The ADR program was terminated on October 5, 2001. The Company's Ordinary Shares
began trading on the NYSE on August 6, 2001.

The New York Stock Exchange is the Company's "primary  listing".  As an overseas
company  with a secondary  listing on the LSE,  the  Company is not  required to
comply with certain listing rules applicable to companies with a primary listing
on the LSE. The listing on the OSE is also a secondary  listing.  The  Company's
Ordinary Shares have been thinly traded on the London Stock Exchange since 1999.

The following table sets forth,  for the five most recent fiscal years, the high
and low prices for the Ordinary  Shares on the NYSE and OSE and the high and low
prices for the ADSs as reported by the Nasdaq National Market.

<TABLE>
<CAPTION>
                                     NYSE                 OSE                  NASDAQ
                                  High   Low         High        Low       High       Low
Fiscal year ended December 31
<S>                             <C>      <C>      <C>         <C>         <C>       <C>
2002                            $13.05   $3.19    NOK 108.50   NOK 25.90         --        --
2001                            $15.45   $6.55    NOK 215.50   NOK 59.50     $24.50   $11.563
2000                                --      --    NOK 164.00   NOK 37.00    $18.250    $3.938
1999                                --      --    NOK  45.00   NOK 16.00     $4.250    $3.000
1998                                --      --    NOK  92.00   NOK  8.00    $14.500    $3.125
</TABLE>

The following table sets forth, for each full financial quarter for the two most
recent fiscal years,  the high and low prices of the Ordinary Shares on the NYSE
and the OSE,  and the high and low prices for the ADSs as reported by the Nasdaq
National Market.

<TABLE>
<CAPTION>
                                     NYSE                  OSE                 NASDAQ
                                High     Low         High        Low      High        Low
Fiscal year ended December 31, 2002
<S>                             <C>      <C>      <C>         <C>         <C>       <C>
First quarter                   $12.50   $9.05    NOK 108.50  NOK  81.50        --         --
Second quarter                  $13.05   $8.79    NOK 108.50  NOK  64.00        --         --
Third quarter                    $9.76   $3.19    NOK  73.50  NOK  25.90        --         --
Fourth quarter                   $9.41   $4.06    NOK  69.00  NOK  28.50        --         --

Fiscal year ended December 31, 2001
First quarter                       --      --    NOK 159.50  NOK 104.00    $18.188   $11.563
Second quarter                      --      --    NOK 215.50  NOK 157.00     $24.50    $17.00
Third quarter                   $15.45   $8.85    NOK 176.00  NOK  78.50     $19.05    $14.35
Fourth quarter                  $10.50   $6.55    NOK  93.00  NOK  59.50         --        --
</TABLE>

The following table sets forth, for the most recent six months, the high and low
prices for the Ordinary Shares on the NYSE and OSE.

                              NYSE                   OSE
                          High      Low          High        Low
May 2003                $14.80   $10.00     NOK 100.00   NOK 69.50
April 2003              $12.51   $10.50     NOK  93.00   NOK 73.50
March 2003              $11.70    $9.75     NOK  86.00   NOK 71.50
February 2003           $10.89    $8.93     NOK  76.00   NOK 61.50
January 2003            $12.54    $9.14     NOK  87.50   NOK 61.00
December 2002            $9.41    $6.90     NOK  69.00   NOK 49.60

ITEM 10. ADDITIONAL INFORMATION

A.   SHARE CAPITAL

Not Applicable

B.   MEMORANDUM AND ARTICLES OF ASSOCIATION

The  Memorandum  of  Association  of the  Company has  previously  been filed as
Exhibit 3.1 to the Company's  Registration  Statement on Form F-1, (Registration
No.  33-70158) filed with the Securities and Exchange  Commission on October 13,
1993, and is hereby incorporated by reference into this Annual Report.

On October 26, 2001, the Company  adopted  revised  Bye-laws.  These Amended and
Restated  Bye-Laws of the Company as adopted by shareholders on October 26, 2001
are filed as Exhibit  1.4 to the  Company's  Annual  Report on Form 20-F for the
year ended December 31, 2001.

The  action  necessary  to change  the  rights of  holders  of the stock and the
conditions   governing  the  manner  in  which  annual   general   meetings  and
extraordinary meetings if shareholders are invoked,  including the conditions of
admission, are described in the Company's Bye-laws.

The  Company's  Bye-laws  contain  certain  restrictions  with  respect  to  the
registration of shares which are summarised below:

(i)  The Board may decline to register  the  transfer of any share held  through
     the  Verdipapirsentralen,  or VPS, the computerised  central share registry
     maintained in Oslo,  Norway,  for bodies  corporate whose shares are listed
     for  trading on the OSE,  if the  registration  of such  transfer  would be
     likely, in the opinion of the Board, to result in fifty per cent or more of
     the aggregate  issued share capital of the Company or shares of the Company
     to which are attached  fifty per cent or more of the votes  attached to all
     outstanding  shares  of  the  Company  being  held  or  owned  directly  or
     indirectly, (including, without limitation, through the VPS) by a person or
     persons resident for tax purposes in Norway (or such other  jurisdiction as
     the Board may nominate from time to time).

(ii) If fifty per cent or more of the  aggregate  issued  share  capital  of the
     Company or shares to which are attached fifty per cent or more of the votes
     attached to all  outstanding  shares of the Company are found to be held or
     owned directly or indirectly  (including,  without limitation,  through the
     VPS) by a person or persons  resident  for tax  purposes in Norway (or such
     other jurisdiction as the Board may nominate from time to time), other than
     the  Registrar  in respect of those  shares  registered  in its name in the
     Register as nominee of persons whose interests in such shares are reflected
     in the VPS, the Board shall make an announcement to such effect through the
     OSE,  and the Board and the  Registrar  shall  thereafter  be entitled  and
     required to dispose of such  number of shares of the  Company or  interests
     therein held or owned by such persons as will result in the  percentage  of
     the  aggregate  issued  share  capital  of the  Company  held or  owned  as
     aforesaid being less than fifty per cent.

The Company has in place a  Shareholders  Rights Plan that would have the effect
of  delaying,  deferring,  preventing  a change in control of the  Company.  The
Shareholders  Rights  Plan has been filed as part of the Form 8-A filed with the
Securities  and  Exchange   Commission  on  December  9,  1996,  and  is  hereby
incorporated by reference into this Annual Report.

C.   MATERIAL CONTRACTS

None

D.   EXCHANGE CONTROLS

The Company is classified by the Bermuda Monetary Authority as a non-resident of
Bermuda for exchange control purposes.

The transfer of Ordinary  Shares between  persons  regarded as resident  outside
Bermuda for exchange  control  purposes may be effected without specific consent
under  the  Exchange  Control  Act of 1972 and  regulations  thereunder  and the
issuance of Ordinary Shares to persons  regarded as resident outside Bermuda for
exchange  control  purposes may be effected  without  specific consent under the
Exchange Control Act of 1972 and regulations thereunder. Issues and transfers of
Ordinary  Shares  involving  any person  regarded  as  resident  in Bermuda  for
exchange  control  purposes  require  specific prior approval under the Exchange
Control Act of 1972.

The owners of Ordinary  Shares who are ordinarily  resident  outside Bermuda are
not subject to any  restrictions  on their rights to hold or vote their  shares.
Because the Company has been designated as a non-resident  for Bermuda  exchange
control purposes,  there are no restrictions on its ability to transfer funds in
and out of Bermuda or to pay  dividends  to U.S.  residents  who are  holders of
Ordinary Shares, other than in respect of local Bermuda currency.

As an "exempted company", the Company is exempt from Bermuda laws which restrict
the percentage of share capital that may be held by non-Bermudians.

E.   TAXATION

Bermuda  currently  imposes no tax  (including a tax in the nature of an income,
estate  duty,  inheritance,  capital  transfer or  withholding  tax) on profits,
income,  capital  gains or  appreciations  derived  by,  or  dividends  or other
distributions  paid  to  U.S.  Shareholders  of  Ordinary  Shares.  Bermuda  has
undertaken not to impose any such Bermuda taxes on U.S. Shareholders of Ordinary
Shares  prior to the year 2016  except in so far as such tax  applies to persons
ordinarily resident in Bermuda.

There is no income tax treaty  between the United States and Bermuda  pertaining
to the  taxation of income  except in the case of insurance  enterprises.  There
also is no estate tax treaty between the United States and Bermuda.

F.   DIVIDENDS AND PAYING AGENTS

Not Applicable

G.   STATEMENT BY EXPERTS

Not Applicable

H.   DOCUMENTS ON DISPLAY

The  Company is  subject to the  informational  requirements  of the  Securities
Exchange Act of 1934, as amended.  In  accordance  with these  requirements  the
Company files reports and other  information  with the  Securities  and Exchange
Commission.  These materials,  including this annual report and the accompanying
exhibits,  may be  inspected  and  copied  at the  public  reference  facilities
maintained by the Commission at 450 Fifth Street,  N.W., Room 1024,  Washington,
D.C. 20549. You may obtain  information on the operation of the public reference
room by calling 1 (800) SEC-0330,  and you may obtain copies at prescribed rates
from the Public  Reference  Section of the Commission at its principal office in
Washington,  D.C. 20549. The SEC maintains a website  (http://www.sec.gov.) that
contains  reports,  proxy  and  information  statements  and  other  information
regarding  registrants  that  file  electronically  with the SEC.  In  addition,
documents  referred to in this annual  report may be inspected at the  Company's
headquarters at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, Bermuda.

I.   SUBSIDIARY INFORMATION

Not Applicable

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various market risks, including interest rates, spot
market rates for vessels and foreign currency  fluctuations.  The Company uses
interest rate swaps to manage interest rate risk. The Company has entered into
forward freight agreements and futures for trading purposes in order to manage
its  exposure to the risk of  movements  in the spot market for certain  trade
routes and, to some  extent,  for  speculative  purposes.  The Company has not
entered into any other derivative instruments for speculative purposes.

The  exposure to interest  rate risk  relates  primarily to its debt and related
interest  rate swaps.  The majority of this  exposure is the floating rate debt,
which totalled $1,424.9 million at December 31, 2002 (2001:  $1,348.6  million).
The  Company  has  entered  into  interest  rate swap  agreements  to manage its
exposure with interest  rates by locking in fixed  interest  rates from floating
rates.  At  December  31,  2002,  there were eight  swaps with a total  notional
principal  of $352.7  million  (2001 - eight swaps with  notional  principal  of
$362.8  million).  The swap agreements have various maturity dates from February
2003 to August 2008, and the Company would have an expense of $4.1 million if it
were to terminate the agreements as of December 31, 2002 (2001 - expense of $4.9
million).  The maximum  exposure to the interest rate  fluctuations  is $1,072.2
million at December 31, 2002 (2001:  $985.8  million).  A one per cent change in
interest rates would increase  (decrease) the interest  expense by $10.7 million
per year as of December 31, 2002 (2001: $9.8 million).

The fair  market  value of the fixed  rate debt on the  balance  sheet was $13.3
million as of December 31, 2002 (2001: $33.5 million).  If the interest rate was
to  increase  (decrease)  by one per cent  with all  other  variables  remaining
constant,  the market value of the fixed rate debt would decrease  (increase) by
approximately $0.1million (2001: $0.6 million).

In September  2001 the Company  established a facility for a Stock Indexed Total
Return Swap Programme or Equity Swap Line with BNS,  whereby the latter acquires
shares in the Company and the Company  carries the risk of  fluctuations  in the
share  price of those  acquired  shares.  BNS is  compensated  at their  cost of
funding  plus a  margin.  At  December  31,  2002  BNS had  acquired  a total of
2,695,000  shares under the  Programme.  A ten per cent change in the  Company's
share price would increase  (decrease) the other financial items expense by $2.4
million as of December 31, 2002 (2001: $2.5 million).

Market risk in relation to forward freight  agreements and futures exists to the
extent that spot market  fluctuations  have a negative  effect on the  Company's
cash flows and consolidated  statements of operations.  As at December 31, 2002,
the notional  principal  amounts subject to such forward  freight  contracts and
futures  contracts was $31.3  million.  A ten per cent change in the market rate
would increase  (decrease)  other  financial items expense by $3.4 million as of
December 31, 2002.

The  majority  of  the  Company's  transactions,   assets  and  liabilities  are
denominated in U.S. dollars, the functional currency of the Company.  Certain of
the  Company's  subsidiaries  report in  Sterling,  Swedish  kronor or Norwegian
kroner and risks of two kinds arise as a result:  a transaction  risk,  that is,
the risk that currency  fluctuations will have a negative effect on the value of
the Company's cash flows; and a translation risk, which is the impact of adverse
currency  fluctuations  in the  translation  of foreign  operations  and foreign
assets  and  liabilities  into  U.S.  dollars  for  the  Company's  consolidated
financial  statements.  Certain of the Company's  subsidiaries,  and  associated
companies in which the Company has investments,  have Yen denominated  long-term
debt and charter  contracts  denominated  in Yen.  There is a risk that currency
fluctuations  will  have a  negative  effect  on  the  value  of  the  Company's
cashflows. At December 31, 2002, the Company had Yen denominated long-term debt,
including  capital  leases,  of (Y)13.1 billion and its share of Yen denominated
long-term debt in associate companies was (Y)7.2 billion (2001 - (Y)25.7 billion
and (Y)9.8  billion,  respectively).  The Company has not entered  into  forward
contracts for either  transaction or translation risk, which may have an adverse
effect on the Company's financial condition and results of operations.

ITEM 12. DESCRIPTION OF SECURITIES

Not Applicable
<PAGE>
                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None

ITEM 14.  MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY  HOLDERS AND USE OF
          PROCEEDS

On December 6, 1996,  the  Company's  Board of Directors  adopted a  Shareholder
Rights Plan (the "Plan").  The Company adopted the Plan to protect  shareholders
against unsolicited attempts to acquire control of the Company that do not offer
an adequate price to all shareholders or are otherwise not in the best interests
of the Company and its shareholders.  Under the Plan, each shareholder of record
on December 20, 1996 received one right for each Ordinary  Share held,  and each
registered  holder of outstanding  warrants received one right for each Ordinary
Share for which they are entitled to subscribe.  In addition, in connection with
the  Amalgamation,  the Company  issued in the  aggregate  47,212,536  rights to
Frontline's  shareholders  (44,612,536  of which were  attached to the  Ordinary
Shares  issued and  2,600,000  of which were  attached  to the  Ordinary  Shares
underlying the New Warrants  issued).  The rights  generally may not detach from
the related Ordinary Shares. Each right entitles the holder to purchase from the
Company  one-quarter of an Ordinary Share at an initial purchase price of $1.50.
The rights will become  exercisable  and will detach from the Ordinary  Shares a
specified  period of time after any person has become the beneficial owner of 20
per cent or more of the Company's  Ordinary  Shares.  The Plan was amended as of
October  29,  1997 to provide  that  Frontline's  purchase  of  Ordinary  Shares
pursuant to its tender offer in connection with its acquisition of LOF would not
result in the rights becoming exercisable.

If any  person  becomes  the  beneficial  owner  of 20 per  cent  or more of the
Company's  Ordinary Shares,  each right will entitle the holder,  other than the
acquiring  person,  to purchase for the purchase price,  that number of Ordinary
Shares having a market value of eight times the purchase price.

If,  following an acquisition  of 20 per cent or more of the Company's  Ordinary
Shares,  the  Company is  involved in certain  amalgamations  or other  business
combinations or sells or transfers more than 50% of its assets or earning power,
each right will entitle the holder to purchase for the purchase  price  ordinary
shares  of the other  party to the  transaction  having a market  value of up to
eight times the purchase price.

The  Company  may  redeem  the rights at a price of $0.001 per right at any time
prior to a  specified  period of time after a person  has become the  beneficial
owner of 20 per cent or more of its Ordinary  Shares.  The rights will expire on
December 31, 2006, unless earlier exchanged or redeemed.

In  connection  with the  Company's  one-for-ten  reverse stock split in October
1998, the rights were adjusted pursuant to the Plan, so that there are currently
ten rights attached to each outstanding Ordinary Share.

ITEM 15. CONTROLS AND PROCEDURES

(a)  Evaluation of disclosure controls and procedures.

     Within the 90 days prior to the date of this  report,  the Company  carried
     out an evaluation of the  effectiveness  of the design and operation of the
     Company's  disclosure controls and procedures pursuant to Exchange Act Rule
     13a-14.  Based upon that evaluation,  the principal  executive officers and
     principal  financial  officers  concluded  that  the  Company's  disclosure
     controls and  procedures  are effective in alerting them timely to material
     information  relating  to  the  Company  required  to be  included  in  the
     Company's periodic SEC filings.

(b)  Changes in internal controls

     There have been no significant changes in our internal controls or in other
     factors that could have significantly affected those controls subsequent to
     the date of our most recent evaluation of internal controls,  including any
     corrective  actions with regard to  significant  deficiencies  and material
     weaknesses.

ITEM 16. RESERVED

<PAGE>
                                    PART III

ITEM 17. FINANCIAL STATEMENTS

Not Applicable

ITEM 18. FINANCIAL STATEMENTS

The  following  financial  statements  listed  below  and set forth on pages F-1
through F-35 are filed as part of this annual report:

Financial Statements for Frontline Ltd.

Index to Consolidated Financial Statements                                   F-1

Report of Independent Auditors                                               F-2

Report of Independent Accountants                                            F-3

Report of Independent Accountants                                            F-4

Consolidated Statements of Operations for the years ended
December 31, 2002, 2001 and 2000                                             F-5

Consolidated Balance Sheets as of
December 31, 2002 and 2001                                                   F-6

Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000                                             F-7

Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 2002, 2001 and 2000                                 F-8

Notes to Consolidated Financial Statements                                   F-9
<PAGE>

Report of Independent Auditors

To the Board of Directors
and Stockholders of Frontline Ltd.

In our  opinion,  based on our  audit  and the  report  of other  auditors,  the
accompanying  consolidated balance sheet and the related consolidated statements
of operations, cash flows and changes in stockholders' equity present fairly, in
all  material  respects,  the  financial  position  of  Frontline  Ltd.  and its
subsidiaries at December 31, 2002 and the results of their  operations and their
cash  flows for the year then ended in  conformity  with  accounting  principles
generally accepted in the United States of America.  These financial  statements
are the  responsibility of the Company's  management;  our  responsibility is to
express an opinion on these financial  statements based on our audit. We did not
audit the financial  statements of Golden Ocean Group  Limited,  a  wholly-owned
subsidiary,  which statements  reflect total assets of $87.9 million at December
31, 2002 and total revenues of approximately  $22.3,  million for the year ended
December 31, 2002.  The financial  statements of Golden Ocean Group Limited were
audited by other auditors whose report thereon has been furnished to us, and our
opinion  expressed  herein,  insofar as it relates to the amounts  included  for
Golden Ocean Group Limited, is based solely on the report of the other auditors.
We conducted our audit of these statements in accordance with auditing standards
generally  accepted in the United States of America,  which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit and the report of other auditors  provide a reasonable
basis for our opinion.

As  discussed  in  Note 2 to the  financial  statements  the  company  adopted
Statement of  Financial  Accounting  Standard  No. 142 on January 1, 2002.  As
discussed  in  Note  27 to  the  financial  statements,  the  Company  adopted
Statement of Financial Accounting Standard No. 144 on January 1, 2002.

PricewaterhouseCoopers
Hamilton, Bermuda

June 24,  2003,  except  for Notes 3, 27 and 28 for which the date is July 14,
2003
<PAGE>

Report of Independent Accountants

To the Board of Directors
and Stockholders of Frontline Ltd.

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
accompanying consolidated balance sheets and the related consolidated statements
of operations, cash flows and changes in stockholders' equity present fairly, in
all  material  respects,  the  financial  position  of  Frontline  Ltd.  and its
subsidiaries at December 31, 2001 and the results of their  operations and their
cash flows for each of the two years in the period  ended  December  31, 2001 in
conformity with accounting principles generally accepted in the United States of
America.  These  financial  statements are the  responsibility  of the Company's
management;  our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  We did not audit the  financial  statements of
Golden Ocean Group Limited, a wholly-owned subsidiary,  which statements reflect
total assets of approximately $283.9 and $535.1 million at December 31, 2001 and
2000 and total revenues of approximately  $82.1 and $23.1 million for the period
ended  December  31,  2001 and for the period  from  October  10,  2000 (date of
acquisition)  to December 31, 2000.  The  financial  statements  of Golden Ocean
Group  Limited were  audited by other  auditors  whose report  thereon have been
furnished to us, and our opinion expressed herein,  insofar as it relates to the
amounts  included for Golden Ocean Group Limited,  is based solely on the report
of the other auditors.  The report of the auditors of Golden Ocean Group Limited
includes an explanatory paragraph regarding substantial doubt about Golden Ocean
Group Limited's ability to continue as a going concern.  We conducted our audits
of these statements in accordance with auditing standards  generally accepted in
the United  States of America,  which require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits and the  reports of other  auditors  provide a  reasonable  basis for our
opinion.

As  discussed in Note 2 to the  financial  statements,  the Company  changed its
method of accounting for drydocking costs in 2001.

PricewaterhouseCoopers DA

Oslo, Norway
June 28, 2002, except for Note 27 for which the date is July 14, 2003
<PAGE>

Golden Ocean Group Limited
Report of Independent Accountants

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF GOLDEN OCEAN GROUP LIMITED

We have audited the  accompanying  consolidated  balance  sheets of Golden Ocean
Group Limited and  subsidiaries as of December 31, 2002 and 2001 and the related
consolidated statements of operations,  changes in stockholders' equity and cash
flows for the years ended December 31, 2002 and 2001 and the period from October
10, 2000 to December 31, 2000. These consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of Golden
Ocean Group Limited and  subsidiaries  as of December 31, 2002 and 2001, and the
consolidated  results  of their  operations  and their  cash flows for the years
ended  December  31,  2002 and 2001 and the  period  from  October  10,  2000 to
December 31, 2000, in conformity with accounting  principles  generally accepted
in the United States of America.

As discussed in note 20 to the financial statements, the Company ceased accruing
drydock costs with effect from January 1, 2001

Moore Stephens
Chartered Accountants
London, England
February 19, 2003
<PAGE>

Frontline Ltd.
Consolidated Statements of Operations for the years ended
December 31, 2002, 2001 and 2000
(in thousands of $, except per share data)

<TABLE>
<CAPTION>
                                                                     2002         2001         2000
                                                                            (restated)   (restated)
<S>                                                             <C>          <C>          <C>
Operating revenues
        Time charter revenues                                      30,385       44,655       27,047
        Bareboat charter revenues                                  31,924       32,016        8,753
        Voyage charter revenues                                   489,286      639,807      656,917
        Voyage expenses and commission                           (135,074)     (88,292)     (97,316)
---------------------------------------------------------------------------------------------------
        Net operating revenues                                    416,521      628,186      595,401
---------------------------------------------------------------------------------------------------
Gain (loss) on sale of assets                                      (1,228)      35,620        1,160
Operating expenses
        Ship operating expenses                                   109,286      116,291       86,848
        Charterhire expenses                                       60,634       41,858       34,351
        Administrative expenses                                    12,806       13,012        9,326
---------------------------------------------------------------------------------------------------
        Total operating expenses                                  182,726      171,161      130,525
---------------------------------------------------------------------------------------------------
Net operating income before depreciation and amortisation         232,567      492,645      466,036
---------------------------------------------------------------------------------------------------
        Depreciation and amortisation                             136,891      117,225       91,767
---------------------------------------------------------------------------------------------------
Net operating income after depreciation and amortisation           95,676      375,420      374,269
---------------------------------------------------------------------------------------------------
Other income (expenses)
        Interest income                                            13,042       12,951        6,857
        Interest expense                                          (71,311)     (89,952)     (95,631)
        Share in results from associated companies                (10,711)      22,317       12,817
        Foreign currency exchange gain (loss)                     (10,932)      15,524        7,887
        Other financial items, net                                 (8,614)      (5,709)        (248)
---------------------------------------------------------------------------------------------------
        Net other expenses                                        (88,526)     (44,869)     (68,318)
---------------------------------------------------------------------------------------------------
Net income from continuing operations before income taxes           7,150      330,551      305,951
Income taxes                                                          (22)         444           41
---------------------------------------------------------------------------------------------------
Net  income  from  continuing  operations  before  cumulative       7,172      330,107      305,910
effect of change in accounting principle
---------------------------------------------------------------------------------------------------
Discontinued operations                                            (1,929)      21,076        7,957
---------------------------------------------------------------------------------------------------
Cumulative effect of change in accounting principle               (14,142)      31,545           --
---------------------------------------------------------------------------------------------------
Net (loss) income                                                  (8,899)     382,728      313,867
===================================================================================================

Earnings (loss) per share:
Basic earnings per share from  continuing  operations  before       $0.09        $4.30        $4.17
cumulative effect of change in accounting principle
Diluted earnings per share from continuing  operations before       $0.09        $4.29        $4.16
cumulative effect of change in accounting principle
Basic earnings per share before  cumulative  effect of change       $0.07        $4.57        $4.28
in accounting principle
Diluted  earnings  per  share  before  cumulative  effect  of       $0.07        $4.56        $4.27
change in accounting principle
Basic earnings per share                                           $(0.12)       $4.99        $4.28
Diluted earnings per share                                         $(0.12)       $4.98        $4.27
===================================================================================================
</TABLE>

See accompanying Notes that are an integral part of these Consolidated Financial
Statements

<PAGE>

Frontline Ltd.
Consolidated Balance Sheets as of December 31, 2002 and 2001
(in thousands of $)

<TABLE>
<CAPTION>
                                                                      2002          2001
<S>                                                             <C>           <C>
ASSETS
Current Assets
        Cash and cash equivalents                                   92,078       178,176
        Restricted cash                                              8,220        11,101
        Marketable securities                                           42         1,159
        Trade accounts receivable                                   37,091        55,157
        Other receivables                                           10,898         4,920
        Inventories                                                 28,723        11,310
        Voyages in progress                                         49,221         8,293
        Prepaid expenses and accrued income                          6,342         3,391
        Derivative instruments receivable amounts                      390         4,411
----------------------------------------------------------------------------------------
        Total current assets                                       233,005       277,918
Newbuildings and vessel purchase options                            27,405       102,781
Vessels and equipment, net                                       2,373,239     2,196,959
Vessels and equipment under capital lease, net                     264,902       317,208
Investment in associated companies                                 119,329       109,898
Deferred charges                                                     5,659         5,061
Other long-term assets                                              11,204         9,900
Goodwill                                                                --        14,049
----------------------------------------------------------------------------------------
        Total assets                                             3,034,743     3,033,774
========================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
        Short-term debt and current portion of long-term debt      167,807       227,597
        Current portion of obligations under capital leases         13,164        17,127
        Trade accounts payable                                       7,717         6,994
        Accrued expenses                                            40,324        35,543
        Deferred charter revenue                                     1,067         1,567
        Mark to market valuation of derivatives                     17,442        14,723
        Other current liabilities                                   12,300        11,505
----------------------------------------------------------------------------------------
        Total current liabilities                                  259,821       315,056
Long-term liabilities
        Long-term debt                                           1,277,665     1,164,354
        Obligations under capital leases                           259,527       283,663
        Other long-term liabilities                                 10,757        11,478
----------------------------------------------------------------------------------------
        Total liabilities                                        1,807,770     1,774,551
Commitments and contingencies
Minority interest                                                       --         6,822
Stockholders' equity
        Share capital                                              191,166       191,019
        Additional paid in capital                                 552,241       552,166
        Accumulated other comprehensive loss                        (9,498)      (11,864)
        Retained earnings                                          493,064       521,080
----------------------------------------------------------------------------------------
        Total stockholders' equity                               1,226,973     1,252,401
----------------------------------------------------------------------------------------
        Total liabilities and stockholders' equity               3,034,743     3,033,774
========================================================================================
</TABLE>

See accompanying Notes that are an integral part of these Consolidated Financial
Statements
<PAGE>

Frontline Ltd.
Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000
(in thousands of $)

<TABLE>
<CAPTION>
                                                                         2002        2001        2000
<S>                                                                  <C>         <C>         <C>
Operating activities
Net income (loss)                                                      (8,899)    382,728     313,867
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
        Depreciation and amortisation                                 139,855     121,725      92,880
        Amortisation of deferred charges                                2,299       2,233       1,005
        (Gain) loss from sale of assets                                 4,337     (35,620)     (1,160)
        Share in results from associated companies                     10,711     (22,321)    (12,817)
        Unrealised foreign exchange gain                               14,176     (29,148)    (14,794)
        Change in accounting principle                                 14,142     (32,339)         --
        Adjustment of derivatives to market value                       7,495       5,404          --
        Other, net                                                      1,968      (2,297)     (1,552)
        Changes in operating assets and liabilities, net of effect
        of acquisitions:
        Trade accounts receivable                                      18,066      40,612     (80,758)
        Other receivables                                              (6,118)     25,921     (19,489)
        Inventories                                                   (17,413)       (120)      3,560
        Voyages in progress                                           (40,928)     13,966      (7,847)
        Prepaid expenses and accrued income                            (2,951)      4,979      (1,903)
        Trade accounts payable                                            723       1,290      (7,866)
        Accrued expenses                                                4,781      (5,234)      2,972
        Deferred charter revenue                                         (500)     (1,010)     (2,019)
        Provisions for drydocking                                          --          --       6,858
        Other, net                                                        281       6,838         645
-----------------------------------------------------------------------------------------------------
        Net cash provided by operating activities                     142,025     477,607     271,582
-----------------------------------------------------------------------------------------------------
Investing activities
        Maturity (placement) of restricted cash                         2,881       1,479      (4,648)
        Additions to newbuildings, vessels and equipment             (376,844)   (386,130)   (435,980)
        Proceeds from sale of vessels and equipment                   177,902     400,111       1,315
        Acquisition of businesses (net of cash acquired)                   --     (64,656)    (41,912)
        Investment in associated companies                            (21,790)    (60,003)     (3,993)
        Investment in marketable securities                                --          --        (983)
        Investment in debt                                                 --          --     (38,553)
        Dividends received from associated companies                    1,780       2,314       2,346
        Purchase of minority interest                                  (6,822)         --     (12,020)
        Proceeds from sales of other assets                                --       3,103      25,490
-----------------------------------------------------------------------------------------------------
        Net cash provided by (used in) investing activities          (222,893)   (103,782)   (508,938)
-----------------------------------------------------------------------------------------------------
Financing activities
        Proceeds from long-term debt                                  383,828     324,890     384,690
        Repayments of long-term debt and debentures                  (341,959)   (460,725)   (209,711)
        Payment of obligations under capital leases                   (24,671)    (10,337)     (1,990)
        Debt fees paid                                                 (3,534)     (1,459)     (2,161)
        Cash dividends paid                                           (19,117)   (115,206)         --
        Repurchase of shares and warrants                                  --     (44,814)         --
        Proceeds from issuance of equity                                  223       8,488     104,575
-----------------------------------------------------------------------------------------------------
        Net cash (used in) provided by financing activities            (5,230)   (299,163)    275,403
-----------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                  (86,098)     74,662      38,047
Cash and cash equivalents at beginning of year                        178,176     103,514      65,467
Cash and cash equivalents at end of year                               92,078     178,176     103,514
=====================================================================================================
Supplemental disclosure of cash flow information:
        Interest paid, net of capitalised interest                     73,161      96,202      92,954
        Income taxes paid                                               2,203          11          26
=====================================================================================================
</TABLE>

See accompanying Notes that are an integral part of these Consolidated Financial
Statements
<PAGE>

Frontline Ltd.
Consolidated Statements of Changes in Stockholders' Equity for the years ended
December 31, 2002, 2001 and 2000
(in thousands of $, except number of shares)

<TABLE>
<CAPTION>
                                                              2002           2001           2000
<S>                                                    <C>            <C>            <C>
NUMBER OF SHARES OUTSTANDING
Balance at beginning of year                            76,407,566     78,068,811     60,961,860
Shares issued                                               59,000        546,055     19,256,967
Shares bought back                                              --     (2,207,300)    (2,150,016)
------------------------------------------------------------------------------------------------
Balance at end of year                                  76,466,566     76,407,566     78,068,811
------------------------------------------------------------------------------------------------

SHARE CAPITAL
Balance at beginning of year                               191,019        195,172        152,405
Shares issued                                                  147          1,365         48,142
Shares bought back                                              --         (5,518)        (5,375)
------------------------------------------------------------------------------------------------
Balance at end of year                                     191,166        191,019        195,172
------------------------------------------------------------------------------------------------

ADDITIONAL PAID IN CAPITAL
Balance at beginning of year                               552,166        576,677        462,474
Shares issued                                                   75          7,123        134,005
Shares bought back and warrants exercised or expired            --        (31,634)       (19,802)
------------------------------------------------------------------------------------------------
Balance at end of year                                     552,241        552,166        576,677
------------------------------------------------------------------------------------------------

WARRANTS AND OPTIONS
Balance at beginning of year                                    --          7,662          9,333
Options and warrants exercised or expired                       --         (7,662)        (1,671)
------------------------------------------------------------------------------------------------
Balance at end of year                                          --             --          7,662
------------------------------------------------------------------------------------------------

ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at beginning of year                               (11,864)        (3,579)        (6,603)
Other comprehensive income (loss)                            2,366         (8,285)         3,024
------------------------------------------------------------------------------------------------
Balance at end of year                                      (9,498)       (11,864)        (3,579)
------------------------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of year                               521,080        253,558        (60,309)
Net income (loss)                                           (8,899)       382,728        313,867
Dividends paid                                             (19,117)      (115,206)            --
------------------------------------------------------------------------------------------------
Balance at end of year                                     493,064        521,080        253,558
------------------------------------------------------------------------------------------------
Total Stockholders' Equity                               1,226,973      1,252,401      1,029,490
------------------------------------------------------------------------------------------------

COMPREHENSIVE INCOME (LOSS)
Net income (loss)                                           (8,899)       382,728        313,867
 Unrealised holding gains (losses)                           1,553         (8,255)         3,138
 Foreign currency translation and other                        813            (30)          (114)
------------------------------------------------------------------------------------------------
 Other comprehensive income (loss)                           2,366         (8,285)         3,024
------------------------------------------------------------------------------------------------
Comprehensive income (loss)                                 (6,533)       374,443        316,891
------------------------------------------------------------------------------------------------
</TABLE>

See accompanying Notes that are an integral part of these Consolidated Financial
Statements
<PAGE>

1.   GENERAL

     Frontline Ltd. (the "Company" or  "Frontline")  is a Bermuda based shipping
     company  engaged  primarily in the  ownership and operation of oil tankers,
     including  oil/bulk/ore  ("OBO") carriers.  The Company operates tankers of
     two sizes:  very large crude carriers  ("VLCCs")  which are between 200,000
     and 320,000  deadweight  tons  ("dwt"),  and  Suezmaxes,  which are vessels
     between  120,000  and  170,000  dwt.  In  addition,   through  a  corporate
     acquisition  completed in October 2000, the Company acquired a fleet of dry
     bulk carriers that included Capesize,  Panamax and Handymax bulkers as well
     as interests in 14 VLCCs.  The Company  operates  through  subsidiaries and
     partnerships  located in Bermuda,  Isle of Man,  Liberia,  Norway,  Panama,
     Singapore and Sweden. The Company is also involved in the charter, purchase
     and sale of vessels.

     The Company has its origin in Frontline AB, which was founded in 1985,  and
     which was listed on the Stockholm  Stock Exchange from 1989 to 1997. In May
     1997, a decision was made to redomicile Frontline AB from Sweden to Bermuda
     and to list its shares on the Oslo Stock  Exchange.  The change of domicile
     was executed  through a share for share  exchange offer from the then newly
     formed Frontline Ltd. in Bermuda. Frontline Ltd. was incorporated under the
     laws of Bermuda on April 29,  1997 for the  purpose  of  succeeding  to the
     business  of  Frontline  AB and,  commencing  in June  1997,  the shares in
     Frontline AB were exchanged for shares in Frontline. The ordinary shares of
     Frontline  were  thereafter  listed on the Oslo Stock Exchange and delisted
     from the Stockholm Stock Exchange.

     In September 1997, Frontline initiated an amalgamation (the "Amalgamation")
     with  London &  Overseas  Freighters  Limited  ("LOF").  This  process  was
     completed in May 1998. In the business  combination,  which left LOF as the
     surviving company,  Frontline's shareholders exchanged Frontline shares for
     LOF shares and LOF was subsequently  renamed  Frontline Ltd. As a result of
     this transaction,  Frontline became listed on the London Stock Exchange and
     on the NASDAQ  National Market in addition to its listing on the Oslo Stock
     Exchange.  LOF originally  commenced  operations in 1948 as a U.K.  company
     ("LOF plc") and was listed on the London  Stock  Exchange in 1950.  LOF was
     incorporated  under the laws of Bermuda on June 12, 1992 for the purpose of
     succeeding  to the  business  of LOF plc.  On August  3,  2001 the  Company
     delisted its ADSs from the Nasdaq  National  Market and the ADR program was
     terminated on October 5, 2001. The Company's ordinary shares were listed on
     the New York Stock Exchange on August 6, 2001.

     In December  1999,  Frontline  entered  into an  agreement  with five other
     shipowners,  A.P.  Moller,  Euronav  Luxembourg  SA, Osprey  Maritime Ltd.,
     Overseas  Shipholding Group Inc. and Reederei "Nord" Klaus E. Oldendorff to
     establish  a  Marshall  Islands  corporation,   Tankers  International  LLC
     ("Tankers"),  to operate a pool of their  respective  VLCC fleets.  Tankers
     commenced operations on February 1, 2000 with an initial fleet of 39 modern
     VLCCs.  In July 2002, the Company  withdrew from Tankers and only the VLCCs
     in certain of the joint ventures to which the Company is a party, remain in
     the pool.

     Business combinations and Acquisitions

     ICB Shipping AB (publ)

     In  September  1997,  Frontline  made a public  offer to acquire all of the
     shares of ICB  Shipping AB (publ)  ("ICB").  Through the tender  offer,  by
     October 1997 Frontline  acquired 51.7 per cent of the outstanding shares of
     ICB at a purchase price of approximately $215 million. The shares purchased
     provided  Frontline  with only 31.4 per cent of the ICB voting  rights.  On
     January 8, 1998,  Frontline withdrew its bid for the remaining  outstanding
     shares of ICB. During 1998,  Frontline made further purchases of ICB Shares
     in the  market  and at  December  31,  1998 had 34.2 per cent of the voting
     power. In the latter half of 1999 Frontline  increased its  shareholding in
     ICB to  approximately  90 per  cent of the  capital  and 93 per cent of the
     voting  rights.  In October 1999, a new Board of Directors was appointed in
     ICB and ICB  consequently  was  controlled by Frontline.  In December 1999,
     Frontline  commenced a compulsory  acquisition for the remaining  shares in
     ICB and ICB was delisted from the Stockholm Stock Exchange.

     Golden Ocean Group Limited

     In October  2000,  Frontline  took  control of Golden  Ocean Group  Limited
     ("Golden Ocean"),  a shipping group which held interests in 14 VLCCs and 10
     bulk  carriers.  On the same date  Golden  Ocean  emerged  from  bankruptcy
     protection under Chapter 11 of the U.S. Bankruptcy Code.

     In January  2000,  Golden Ocean and its fellow  subsidiaries,  Golden Ocean
     Tankers  Limited and Channel Rose  Holdings Inc.  (together the  "Debtors")
     filed for  bankruptcy  protection  under Chapter 11 of the U.S.  Bankruptcy
     Code with the Clerk of the United States  Bankruptcy Court for the District
     of Delaware  (the  "Bankruptcy  Court").  In July 2000,  Frontline  filed a
     proposed  plan  of  reorganisation  (the  "Plan  of  Reorganisation")   and
     disclosure statement (the "Disclosure Statement") with the Bankruptcy Court
     which set forth the manner in which claims against and equity  interests in
     the  Debtors  would be  treated.  On August 4,  2000 the  Bankruptcy  Court
     approved  Frontline's  Disclosure Statement and on August 14, 2000 approved
     the  appointment of Frontline as manager of Golden Ocean's  operations with
     immediate  effect.   The  Plan  of   Reorganisation   was  approved  by  an
     overwhelming  majority  of  holders  of  claims  entitled  to vote  and was
     confirmed at a hearing on September 15, 2000.

     On  October  10,  2000  the Plan of  Reorganisation  became  effective  and
     Frontline  acquired the entire  share  capital of Golden  Ocean.  The total
     acquisition  price paid,  including  amounts paid to settle allowed claims,
     was  approximately  $63.0 million,  including  1,245,998 shares issued at a
     price of $15.65 per share.  The  acquisition  of Golden Ocean was accounted
     for  using  the  purchase  method.  (See  Note 11 and  Note  24).  Eighteen
     employees  of  Golden  Ocean  were  made  redundant  as the  result  of the
     acquisition by Frontline and severance costs of approximately  $2.1 million
     were  incurred by Golden Ocean in the year ended  December 31, 2000.  These
     costs were included in the  determination of the reorganised  balance sheet
     and not in the determination of the purchase price.

     Mosvold Shipping Limited

     In April  2001,  the  Company  announced  an offer for all of the shares of
     Mosvold Shipping Limited  ("Mosvold"),  a Bermuda company whose shares were
     listed on the Oslo Stock Exchange. Through a combination of shares acquired
     and acceptances of the offer,  Frontline acquired 97 per cent of the shares
     of Mosvold. The remaining 3 per cent of the shares of Mosvold were acquired
     during 2001  through a  compulsory  acquisition.  Through  the  purchase of
     Mosvold the Company acquired two mid-70s built VLCCs and three  newbuilding
     contracts  for VLCCs.  The two mid-70s built VLCCs have  subsequently  been
     sold by the Company.  The first two of the  newbuildings  were delivered in
     2002 and third is due for delivery in July 2003.

     The total  acquisition  price  paid for  Mosvold  was  approximately  $70.0
     million  and the  acquisition  has been  accounted  for using the  purchase
     method.  (See Note 24). Thirty  employees of Mosvold were made redundant as
     the  result  of  the  acquisition  by  Frontline  and  severance  costs  of
     approximately  $0.3  million  were  incurred  by  Mosvold in the year ended
     December 31, 2001.  These  severance costs are included in the statement of
     operations and not in the determination of the purchase price of Mosvold.

2.   ACCOUNTING POLICIES

     Basis of accounting

     The  consolidated  financial  statements  are prepared in  accordance  with
     accounting   principles  generally  accepted  in  the  United  States.  The
     consolidated financial statements include the assets and liabilities of the
     Company and its subsidiaries. Investments in companies in which the Company
     directly or  indirectly  holds more than 50 per cent of the voting  control
     are consolidated, unless the Company is unable to control the investee. For
     the year ended December 31, 2000,  Golden Ocean has been  consolidated with
     effect from October 10, 2000. For the year ended December 31 2001,  Mosvold
     has been  consolidated  with effect  from May 15,  2001.  All  intercompany
     balances and transactions have been eliminated on consolidation.

     Investments in companies in which the Company holds between 20 per cent and
     50 per cent of an ownership interest,  and over which the Company exercises
     significant  influence,  are  accounted  for using the equity  method.  The
     Company  records  its  investments  in   equity-method   investees  on  the
     consolidated balance sheets as "Investment in associated companies" and its
     share of the investees'  earnings or losses in the consolidated  statements
     of operations as "Share in results from associated companies".  The excess,
     if any, of the  purchase  price over the book value basis of the  Company's
     investment  in an equity  method  investee is included in the  accompanying
     consolidated  balance sheets in "Investment in associated  companies".  Two
     companies in which the Company owns 50.1 per cent have been  accounted  for
     using the equity method as the Company is not able to exercise control.

     The  preparation  of financial  statements  in  accordance  with  generally
     accepted accounting  principles requires that management make estimates and
     assumptions  affecting the reported  amounts of assets and  liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Certain of the comparative  figures have been  reclassified to conform with
     the presentation adopted in the current period.

     Cash and cash equivalents

     For the purposes of the  consolidated  statements of cash flows, all demand
     and time deposits and highly  liquid,  low risk  investments  with original
     maturities of three months or less are considered equivalent to cash.

     Marketable Securities

     Marketable  equity  securities  held by the  Company are  considered  to be
     available-for-sale  securities  and as such are  carried at fair value with
     resulting  unrealised  gains  and  losses,  net of  deferred  taxes if any,
     recorded  as  a  separate  component  of  other  comprehensive   income  in
     stockholders' equity.

     Inventories

     Inventories,  which comprise  principally of fuel and lubricating oils, are
     stated at the  lower of cost and  market  value.  Cost is  determined  on a
     first-in, first-out basis.

     Vessels and equipment

     The cost of the vessels less  estimated  residual value is depreciated on a
     straight-line  basis over the vessels' estimated  remaining economic useful
     lives.  The estimated  economic  useful life of the  Company's  double hull
     vessels is 25 years and for single  hull  vessels is either 25 years or the
     vessel's  anniversary date in 2017,  whichever comes first. Other equipment
     is depreciated over its estimated remaining useful life, which approximates
     five years.

     With  effect  from April  2001,  the  International  Maritime  Organisation
     implemented  new regulations  that result in the  accelerated  phase-out of
     single hull vessels.  As a result of this, the Company has re-evaluated the
     estimated  useful life of its single hull vessels and determined this to be
     either 25 years or the vessel's  anniversary  date in 2017 whichever  comes
     first.  As a result,  the  estimated  useful lives of six of the  Company's
     vessels were reduced in the fourth  quarter of 2001. A change in accounting
     estimate was recognised to reflect this decision,  resulting in an increase
     in  depreciation  expense and  consequently  decreasing  net income by $0.5
     million and basic and diluted earnings per share by $0.01, for 2001.

     Vessels and equipment under capital lease

     The Company bareboat  charters in certain vessels under agreements that are
     classified as capital  leases.  Depreciation of vessels under capital lease
     is included within  depreciation and amortisation  expense in the Statement
     of   Operations.   Vessels  under  capital  lease  are   depreciated  on  a
     straight-line  basis over the vessels'  remaining  economic  useful  lives,
     based on a 25 year useful life, or on a  straight-line  basis over the term
     of the lease. The method applied is determined by the criteria by which the
     lease has been assessed to be a capital lease.

     Newbuildings and vessel purchase options

     The  carrying  value of the  vessels  under  construction  ("Newbuildings")
     represents  the  accumulated  costs to the  balance  sheet  date  which the
     Company has had to pay by way of  purchase  instalments  and other  capital
     expenditures together with capitalised loan interest and associated finance
     costs.  No charge  for  depreciation  is made  until the vessel is put into
     operation.

     Vessel purchase  options are  capitalised at the time option  contracts are
     acquired or entered into. The Company  reviews  expected future cash flows,
     which would result from  exercise of each option  contract on a contract by
     contract  basis to determine  whether the  carrying  value of the option is
     recoverable.  If the expected  future cash flows are less than the carrying
     value of the option plus further  costs to  delivery,  provision is made to
     write down the carrying value of the option to the recoverable  amount. The
     carrying  value  of each  option  payment  is  written  off as and when the
     Company  adopts a formal plan not to exercise  the option.  Purchase  price
     payments are capitalised  and the total of the option payment,  if any, and
     purchase price payment is transferred to cost of vessels,  upon exercise of
     the option and delivery of the vessel to the Company.

     Impairment of long-lived assets

     The  carrying  value  of  long-lived  assets  that are held and used by the
     Company are reviewed  whenever events or changes in circumstances  indicate
     that the  carrying  amount of an asset may no  longer  be  appropriate.  We
     assess  recoverability of the carrying value of the asset by estimating the
     future net cash flows expected to result from the asset, including eventual
     disposition.  If the future net cash flows are less than the carrying value
     of the  asset,  an  impairment  loss is  recorded  equal to the  difference
     between the asset's carrying value and fair value. In addition,  long-lived
     assets to be disposed of are  reported at the lower of carrying  amount and
     fair value less estimated costs to sell.

     Deferred charges

     Loan costs,  including debt arrangement fees, are capitalised and amortised
     on a  straight-line  basis over the term of the relevant loan. The straight
     line basis of amortisation  approximates  the effective  interest method in
     the  Company's  statement  of  operations.  Amortisation  of loan  costs is
     included in interest expense.

     Revenue and expense recognition

     Revenues and expenses are  recognised  on the accrual  basis.  Revenues are
     generated from freight  billings,  time charter and bareboat charter hires.
     The  operating  results of voyages in progress are  estimated  and recorded
     pro-rata on a per day basis in the  consolidated  statements of operations.
     Probable losses on voyages are provided for in full at the time such losses
     can be estimated.  Time charter and bareboat  charter revenues are recorded
     over the term of the charter as service is provided.  Amounts receivable or
     payable arising from profit sharing  arrangements  are accrued based on the
     estimated results of the voyage recorded as at the reporting date.

     The operating  revenues and voyage expenses of the vessels operating in the
     Tankers  pool,  and  certain  other pool  arrangements,  are pooled and net
     operating  revenues,  calculated on a time charter  equivalent  basis,  are
     allocated to the pool participants according to an agreed formula. The same
     revenue and expenses principles stated above are applied in determining the
     pool net operating revenues.

     Drydocking provisions

     Normal  vessel  repair and  maintenance  costs are charged to expense  when
     incurred.

     In 2001, the Company changed its accounting  policy for drydockings.  Prior
     to 2001,  provisions  for future  drydockings  were  accrued and charged to
     expense  on a  pro-rata  basis  over  the  period  to  the  next  scheduled
     drydockings. Effective January 1, 2001 the Company recognises the cost of a
     drydocking at the time the drydocking  takes place,  that is it applies the
     "expense as incurred" method.  The expense as incurred method is considered
     by management to be a more reliable method of recognising  drydocking costs
     as it eliminates the  uncertainty  associated  with estimating the cost and
     timing of  future  drydockings.  The  cumulative  effect of this  change in
     accounting principle is shown separately in the consolidated  statements of
     operations for the year ended December 31, 2001 and resulted in a credit to
     income of $31.5 million in 2001. The cumulative effect of this change as of
     January 1, 2001 on the Company's  consolidated  balance sheet was to reduce
     total liabilities by $32.3 million.

     Assuming the "expense as incurred"  method had been applied  retroactively,
     the pro forma income and earnings  per share  before  cumulative  effect of
     change in accounting principle for 2000 would have been as follows:

     ---------------------------------------------------------------------------
     (in thousands of $)                                                    2000
     ---------------------------------------------------------------------------
     Net income (loss) as previously reported                            313,867
     ---------------------------------------------------------------------------
     Pro forma effect of retroactive application of
       change in accounting principle                                      6,281
     ---------------------------------------------------------------------------
     Pro forma net income (loss)                                         320,148
     ---------------------------------------------------------------------------

     Basic earnings per share as previously reported                       $4.28
     Diluted earnings per share as previously reported                     $4.27
     Pro forma effect of retroactive application of change
       in accounting principle                                             $0.09
     Pro forma basic earnings per share                                    $4.37
     Pro forma diluted earnings per share                                  $4.36
     ===========================================================================

     Goodwill

     Goodwill represents the excess of the purchase price over the fair value of
     assets acquired in business  acquisitions  accounted for under the purchase
     method.  Goodwill is presented net of  accumulated  amortisation  and until
     December 31, 2001 was being  amortised  over a period of  approximately  17
     years. As of January 1, 2002, the Company  adopted SFAS No. 142,  "Goodwill
     and Other Intangible Assets" ("SFAS 142") and recorded an impairment charge
     of $14.1  million for the  unamortised  goodwill on that date that is shown
     separately  in the  consolidated  statement of  operations  as a cumulative
     effect of change in accounting  principle.  The valuation of the fair value
     of the reporting unit used to assess the recoverability of goodwill,  was a
     combination  of  independent  third party  valuations and the quoted market
     price of the Company's shares.  Supplemental  comparative  disclosure as if
     this accounting change had been retroactively applied is as follows:

     ---------------------------------------------------------------------------
     (in thousands of $, except per share data)        2002       2001      2000
     ---------------------------------------------------------------------------
     Net income (loss)
       As reported                                   (8,899)   382,728   313,867
       Goodwill amortisation                             --        764     1,090
       Adjusted net income (loss)                    (8,899)   383,492   314,957

     Basic earnings (loss) per share
       As reported                                   $(0.12)     $4.99     $4.28
       Goodwill amortisation                         $   --      $0.01     $0.01
       Adjusted basic earnings (loss) per share      $(0.12)     $5.00     $4.29

     Diluted earnings (loss) per share
       As reported                                   $(0.12)     $4.98     $4.27
       Goodwill amortisation                         $   --      $0.01     $0.01
       Adjusted diluted earnings (loss) per share    $(0.12)     $4.99     $4.28

     Derivatives

     The Company enters into interest rate swap  transactions  from time to time
     to hedge a portion  of its  exposure  to  floating  interest  rates.  These
     transactions involve the conversion of floating rates into fixed rates over
     the life of the transactions  without an exchange of underlying  principal.
     Hedge  accounting  is used to  account  for these  swaps  provided  certain
     hedging  criteria  are met.  As of  January 1, 2001,  the  Company  adopted
     Statement of Financial  Accounting  Standard ("SFAS") No. 133,  "Accounting
     for  Derivatives  and  Hedging  Activities"  ("SFAS  133").  Certain  hedge
     relationships met the hedge criteria prior to SFAS 133, but do not meet the
     criteria for hedge  accounting under SFAS 133. The Company adopted SFAS 133
     in the first quarter of fiscal year 2001 and upon initial adoption recorded
     certain transition  adjustments  resulting in recognising the fair value of
     its  derivatives as assets of $0.4 million and liabilities of $0.6 million.
     A gain of $0.3  million  was  recognised  in  income  and a charge  of $0.5
     million made to other comprehensive income. On January 1, 2002, the Company
     discontinued  hedge  accounting  for two  interest  rate  swaps  previously
     counted for as cash flow hedges. This resulted in a balance of $4.1 million
     being frozen in accumulated other comprehensive  income as at that date and
     this will be  reclassified  to the  income  statement  over the life of the
     underlying hedged instrument.

     Pre-SFAS 133 Adoption

     Hedge  accounting is applied where the  derivative  reduces the risk of the
     underlying  hedged  item and is  designated  at  inception  as a hedge with
     respect to the hedged item.  Additionally,  the  derivative  must result in
     payoffs that are expected to be inversely correlated to those of the hedged
     item.  Derivatives are measured for effectiveness  both at inception and on
     an ongoing  basis.  When hedge  accounting  is  applied,  the  differential
     between  the  derivative  and the  underlying  hedged  item is  accrued  as
     interest rates change and recognized as an adjustment to interest  expense.
     The related amount receivable from or payable to counterparties is included
     in accrued  interest income or expense,  respectively.  Prior to January 1,
     2001,  the fair values of the interest rate swaps are not recognized in the
     financial statements.

     If a  derivative  ceases to meet the  criteria  for hedge  accounting,  any
     subsequent  gains and  losses are  currently  recognized  in  income.  If a
     hedging  instrument  is sold or  terminated  prior to  maturity,  gains and
     losses continue to be deferred until the hedged instrument is recognized in
     income. Accordingly,  should a swap be terminated while the underlying debt
     remains  outstanding,  the  gain or loss is  adjusted  to the  basis of the
     underlying debt and amortized over its remaining useful life.

     Post-SFAS 133 Adoption

     SFAS 133, as amended by SFAS 137 "Accounting for Derivative Instruments and
     Hedging Activities-Deferral of the Effective Date of FASB Statement No.133"
     and SFAS 138  "Accounting  for Certain  Derivative  Instruments and Certain
     Hedging  Activities an amendment of FASB  Statement  No. 133",  requires an
     entity to recognize all  derivatives as either assets or liabilities on the
     balance sheet and measure these  instruments at fair value.  Changes in the
     fair value of derivatives  are recorded each period in current  earnings or
     other comprehensive income, depending on whether a derivative is designated
     as  part  of a  hedge  transaction  and,  if  it  is,  the  type  of  hedge
     transaction.  In order to  qualify  for hedge  accounting  under  SFAS 133,
     certain criteria and detailed documentation requirements must be met.

     The Company has from time to time entered into forward freight contracts in
     order to hedge  exposure to the spot market for certain trade routes and in
     some cases, for speculative  purposes.  These transactions involve entering
     into a contract to provide a theoretical voyage at an agreed rate. The fair
     values  of the  forward  freight  contracts  are  recognised  as  assets or
     liabilities  with the change in fair values  recognised in the consolidated
     statements of operations.

     The Company has  established  a facility for a Stock  Indexed  Total Return
     Swap  Programme  or Equity Swap Line (See Note 20) whereby the  conterparty
     acquires  shares  in the  Company,  and the  Company  carries  the  risk of
     fluctuations in the share price of those acquired shares. The fair value of
     the Equity Swap is recognised  as an asset or liability  with the change in
     fair values recognised in the consolidated statements of operations.

     Other than the forward freight  contracts  discussed above, the Company has
     not  entered  into any  derivative  contracts  for  speculative  or trading
     purposes.

     Financial Instruments

     In determining fair value of its financial instruments,  the company uses a
     variety of methods and assumptions that are based on market  conditions and
     risks  existing at each balance  sheet date.  For the majority of financial
     instruments  including most derivatives and long-term debt, standard market
     conventions  and  techniques  such as  options  pricing  models are used to
     determine  fair value.  All  methods of  assessing  fair value  result in a
     general  approximation  of value,  and such  value may  never  actually  be
     realised.

     Foreign currencies

     The  Company's  functional  currency is the U.S.  dollar as the majority of
     revenues  are  received in U.S.  dollars  and a majority  of the  Company's
     expenditures are made in U.S. dollars.  The Company's reporting currency is
     U.S. dollars.  Most of the Company's  subsidiaries  report in U.S. dollars.
     For subsidiaries that maintain their accounts in currencies other than U.S.
     dollars,  the Company uses the current  method of  translation  whereby the
     statements of operations are translated using the average exchange rate and
     the assets and liabilities are translated using the year end exchange rate.
     Foreign  currency  translation  gains or losses are  recorded as a separate
     component of other comprehensive income in stockholders' equity.

     Transactions in foreign currencies during the year are translated into U.S.
     dollars at the rates of exchange in effect at the date of the  transaction.
     Foreign currency monetary assets and liabilities are translated using rates
     of exchange at the balance sheet date. Foreign currency non-monetary assets
     and liabilities are translated using historical rates of exchange.  Foreign
     currency  transaction  gains or losses  are  included  in the  consolidated
     statements of operations.

     Stock-based compensation

     In accordance  with Accounting  Principles  Board Opinion No. 25 ("APB 25")
     "Accounting for Stock Issued to Employees" the compensation  cost for stock
     options is  recognised  as an expense over the service  period based on the
     excess,  if any, of the quoted  market price of the stock at the grant date
     of the award or other  measurement date, over the exercise price to be paid
     to acquire the stock.

     In 2002 and 2001,  the Company has  recorded  compensation  expense of $0.5
     million and $1.2 million,  respectively  in  connection  with share options
     issued in 2002 and prior  years.  The  Company had  previously  recorded no
     compensation  expense for the  issuance of share  options in 2000.  Had the
     compensation costs for these plans been determined consistent with the fair
     value method recommended in SFAS 123, the Company's net income and earnings
     per share would have been  reduced to the  following  pro forma  amounts in
     2002, 2001 and 2000:

     --------------------------------------------------------------------------
     (in thousands, except per share data)           2002       2001       2000
     --------------------------------------------------------------------------

     Net income (loss)
        As reported                                (8,899)   382,728    313,867
        Add: Compensation expenses as reported        481      1,184         --
        Compensation expense determined under      (1,711)    (1,314)       (49)
        fair value based method for all awards
        Adjusted net income (loss), fair value    (10,129)   382,598    313,818
        based method for all awards

     Basic earnings (loss) per share
        As reported                                $(0.12)     $4.99      $4.28
        SFAS 123 adjusted                          $(0.13)     $4.99      $4.28

     Diluted earnings (loss) per share
        As reported                                $(0.12)     $4.98      $4.27
        SFAS 123 adjusted                          $(0.13)     $4.98      $4.27

     Earnings per share

     Basic  EPS is  computed  based on the  income  (loss)  available  to common
     stockholders  and the weighted  average  number of shares  outstanding  for
     basic EPS.  Diluted EPS  includes the effect of the assumed  conversion  of
     potentially dilutive instruments (see Note 6).

3.   RECENTLY ISSUED ACCOUNTING STANDARDS

     In August  2001,  the FASB  approved  SFAS No. 143,  "Accounting  for Asset
     Retirement  Obligations" ("SFAS 143"). SFAS No. 143 requires the fair value
     of a legal  liability  related to an asset  retirement be recognized in the
     period in which it is incurred.  The associated asset retirement costs must
     be  capitalized  as part of the carrying  amount of the related  long-lived
     asset and  subsequently  amortized  to expense.  Subsequent  changes in the
     liability will result from the passage of time (interest cost) and revision
     to cash flow estimates.  SFAS No. 143 is effective for financial statements
     issued for fiscal years beginning after June 15, 2002, effective January 1,
     2003 for the Company.  Management does not expect that the adoption of SFAS
     No. 143 will have a material effect on the Company's  results of operations
     or financial position.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
     Associated  with  Exit or  Disposal  Activities."  SFAS No.  146  nullifies
     Emerging Issues Task Force Issue No. 94-3 and requires that a liability for
     a cost associated with an exit or disposal  activity be recognized when the
     liability is incurred.  This statement also  establishes that fair value is
     the objective for initial  measurement  of the  liability.  SFAS No. 146 is
     effective for exit or disposal activities that are initiated after December
     31, 2002. Management does not expect that the adoption of SFAS No. 146 will
     have a material effect on the Company's  results of operations or financial
     position.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
     Compensation - Transition and Disclosure an amendment of FASB Statement No.
     123".  This  Statement  amends  FASB  Statement  No. 123,  "Accounting  for
     Stock-Based Compensation", to provide alternative methods of transition for
     an entity  that  voluntarily  changes  to the fair  value  based  method of
     accounting  for  stock-based  employee  compensation.  This  Statement also
     amends  the  disclosure  provisions  of FASB  Statement  No. 123 to require
     prominent  disclosure  about  the  effects  on  reported  net  income of an
     entity's  accounting policy decisions with respect to stock-based  employee
     compensation.  This  Statement  also amends APB  Opinion  No. 28,  "Interim
     Financial Reporting",  to require disclosure about those effects in interim
     financial  statements.  This statement is effective for fiscal years ending
     after December 15, 2002 and interim  periods  beginning  after December 15,
     2002.  The Company  does not expect the  adoption of SFAS No. 148 to have a
     material  effect  on the  Company's  results  of  operations  or  financial
     position.

     In November 2002, the FASB issued Interpretation 45, Guarantor's Accounting
     and Disclosure  Requirements for Guarantees,  Including Indirect Guarantees
     of Indebtedness of Others.  The  Interpretation  elaborates on the existing
     disclosure requirements for most guarantees, including loan guarantees such
     as standby letters of credit.  It also clarifies that at the time a company
     issues a guarantee, the company must recognize an initial liability for the
     fair  value,  or market  value,  of the  obligations  it assumes  under the
     guarantee  and must  disclose  that  information  in its interim and annual
     financial statements.  The provisions related to recognizing a liability at
     inception  of  the  guarantee  for  the  fair  value  of  the   guarantor's
     obligations does not apply to product warranties or to guarantees accounted
     for  as  derivatives.  The  initial  recognition  and  initial  measurement
     provisions  apply on a prospective  basis to guarantees  issued or modified
     after December 31, 2002. The Company's disclosure of guarantees is included
     in Note 25 of the Notes to Financial  Statements.  The Company is currently
     evaluating  the impact of  Interpretation  45 on the  Company's  results of
     operations and financial position.

     In January 2003,  the FASB issued  Interpretation  46,  Consolidation  of
     Variable Interest  Entities.  In general, a variable interest entity is a
     corporation,  partnership,  trust,  or any other legal structure used for
     business  purposes  that either (a) does not have equity  investors  with
     voting rights or (b) has equity investors that do not provide  sufficient
     financial   resources   for  the  entity  to  support   its   activities.
     Interpretation  46 requires a variable interest entity to be consolidated
     by a company if that company is subject to a majority of the risk of loss
     from the variable interest  entity's  activities or entitled to receive a
     majority of the  entity's  residual  returns or both.  The  consolidation
     requirements of  Interpretation 46 apply immediately to variable interest
     entities created after January 31, 2003. The  consolidation  requirements
     apply to older  entities  in the  first  fiscal  year or  interim  period
     beginning  after June 15, 2003.  Certain of the  disclosure  requirements
     apply  in  all  financial  statements  issued  after  January  31,  2003,
     regardless  of when the variable  interest  entity was  established.  The
     Company  has a number  of  arrangements  which may be  variable  interest
     entities  under the  provisions  of FIN 46. The company has entered  into
     agreements to lease certain vessels. These five VLCCs are held by special
     purpose  entities,  which were  established  and are owned by independent
     third   parties   who   provide   financing   through   debt  and  equity
     participation.  These leases are accounted for as operating  leases,  and
     the lease  payments  are  charged  to  operating  income.  Under  current
     accounting principles generally accepted in the United States, the assets
     and the related  obligations are excluded from the  consolidated  balance
     sheet, and the special purpose entities are not consolidated. At December
     31,  2002,  the  original  cost to the  lessor of the  assets  under such
     arrangements  was  approximately  $360  million.  Certain of these leases
     contain  residual value  guarantees  that give the third party owners the
     option to put the vessel to the  company.  The price of these put options
     are significantly  lower than the expected market value of the vessels on
     the exercise date however under FIN 46,  certain  conditions  exist which
     may indicate these entities are variable interest  entities.  At December
     31, 2002, the company's  residual value guarantees  associated with these
     leases,  which represent the maximum exposure to loss, are $56.8 million.
     The Company  has both an  obligation  and an option to purchase  the VLCC
     Oscilla on expiry of a five-year time charter,  which  commenced in March
     2000.  Oscilla  is owned and  operated  by an  unrelated  entity.  If the
     Company has  exercised  its option at December 31, 2002,  the cost to the
     Company of the Oscilla would have been  approximately $57 million and the
     maximum exposure to loss is $18.6 million. On July 1, 2003, the Company's
     subsidiary Golden Ocean Group Limited, purchased a call option to acquire
     all of the shares of Independent  Tankers  Corporation ("ITC") from Hemen
     Holding Ltd, a related party,  for a total  consideration of $4.0 million
     plus 4 per cent interest per year.  ITC operates a total of six VLCCs and
     four Suezmax tankers,  which are on long-term charters to BP and Chevron.
     Golden Ocean paid $10.0 million for the option,  which expires on July 1,
     2010. The total book value of ITC's  consolidated  assets at December 31,
     2002 was approximately $960 million and the Company's maximum exposure to
     loss  is $10  million.  The  Company  is in the  process  of  making  the
     determination as to whether the aforementioned  arrangements are variable
     interest entities.

4.   SEGMENT INFORMATION

     The Company has two reportable  segments:  tankers,  including oil bulk ore
     carriers,  and dry bulk carriers.  Prior to the acquisition of Golden Ocean
     in 2000,  the  Company  had one  reportable  segment.  Segment  results are
     evaluated  based on  income  from  vessel  operations  before  general  and
     administrative  expenses.  The  accounting  policies used in the reportable
     segments are the same as those followed in the preparation of the Company's
     consolidated financial statements.

     Information about the Company's  reportable  segments as of and for each of
     the years ended December 31, 2002, 2001 and 2000 follows:

<TABLE>
<CAPTION>
     (in thousands of $ )                                               Dry Bulk
                                                              Tankers    Carriers       Total
<S>                                                         <C>         <C>         <C>
     2002
     Net operating revenues                                   405,668      10,597     416,265
     Ship operating expenses                                  106,255       3,031     109,286
     Depreciation and amortisation                            133,486       3,331     136,817
     Share in results from associated companies                 9,855         856      10,711
     Discontinued operations                                       --       1,929       1,929
     Vessels and equipment, net                             2,300,875      71,065   2,371,940
     Vessels under capital lease                              264,902          --     264,902
     Investment in associated companies                       119,328          --     119,328
     Total assets                                           2,852,029      73,975   2,926,004
     Expenditure for vessels                                  376,844          --     376,844

<CAPTION>
     (in thousands of $ )                                               Dry Bulk
                                                              Tankers    Carriers       Total
<S>                                                         <C>         <C>         <C>
     2001
     Net operating revenues                                   614,961      13,225     628,186
     Ship operating expenses                                  113,812       2,477     116,289
     Depreciation and amortisation                            112,200       3,331    115,5311
     Share in results from associated companies                17,494       3,519      21,013
     Discontinued operations                                       --      21,074      21,074
     Vessels and equipment, net                             2,121,356      74,396   2,195,752
     Vessels under capital lease                              213,320     103,887     317,207
     Investment in associated companies                       102,683       4,459     107,142
     Total assets                                           2,776,814     185,751   2,962,565
     Expenditure for vessels                                  396,841          --     396,841

<CAPTION>
     (in thousands of $ )                                               Dry Bulk
                                                              Tankers    Carriers       Total
<S>                                                         <C>         <C>         <C>
     2000
     Net operating revenues                                   591,805       3,522     595,327
     Ship operating expenses                                   85,868         522      83,390
     Depreciation and amortisation                             90,297         839      91,136
     Share in results from associated companies                11,273       1,544      12,817
     Discontinued operations                                       --       7,956       7,956
     Vessels and equipment, net                             2,176,303      77,727   2,254,030
     Vessels under capital lease                                   --     108,387     108,387
     Investment in associated companies                        26,420         941      27,361
     Total assets                                           2,451,589     192,808   2,644,397
     Expenditure for vessels                                  468,575          --     468,575
</TABLE>

     Reconciliations  of  reportable  segments   information  to  the  Company's
     consolidated totals follows:

<TABLE>
<CAPTION>
     (in thousands of $)                                         2002        2001        2000
<S>                                                         <C>         <C>         <C>
     Net operating revenues
     Total net operating revenues for reportable segments     416,265     628,186     595,327
     Other net operating revenues                                 256          --          74
     Total consolidated net operating revenues                416,521     628,186     595,401
     Assets
     Total assets for reportable segments                   2,926,004   2,962,565   2,644,397
     Assets not attributed to segments                        108,739      71,209     136,591
     Total consolidated assets                              3,034,743   3,033,774   2,780,988
</TABLE>
================================================================================

5.   TAXATION

     Bermuda

     Under  current  Bermuda  law,  the Company is not  required to pay taxes in
     Bermuda on either income or capital gains. The Company has received written
     assurance from the Minister of Finance in Bermuda that, in the event of any
     such taxes being imposed,  the Company will be exempted from taxation until
     the year 2016.

     United States

     The Company  does not accrue U.S.  income  taxes as, in the opinion of U.S.
     counsel,  the  Company is not engaged in a U.S.  trade or  business  and is
     exempted  from a gross  basis tax under  Section  883 of the U.S.  Internal
     Revenue Code.

     A reconciliation between the income tax expense resulting from applying the
     U.S. Federal  statutory income tax rate and the reported income tax expense
     has not been  presented  herein as it would not provide  additional  useful
     information  to users of the  financial  statements  as the  Company's  net
     income is subject to neither Bermuda nor U.S. tax.

     Other Jurisdictions

     Certain of the  Company's  subsidiaries  in other  jurisdictions  including
     Norway, Singapore, Sweden and the United Kingdom are subject to taxation in
     their respective jurisdictions. The tax paid by subsidiaries of the Company
     which are subject to taxation is not material.

     The tax charge for the year comprises:

     (in thousands of $)                         2002          2001         2000
     Current tax                                  (22)          444           41
     Deferred tax                                  --            --           --
     ---------------------------------------------------------------------------
                                                  (22)          444           41
     ===========================================================================

     Temporary  differences  and  carryforwards  which give rise to deferred tax
     assets, liabilities and related valuation allowances are as follows:

     (in thousands of $)                                      2002         2001
     Deferred tax asset - non current                          156          116
     Pension liabilities                                        --           --
     Tax loss carryforwards                                  5,828       11,207
     Valuation allowance                                    (5,672)     (11,091)
     --------------------------------------------------------------------------
     Net deferred tax asset (liability)                         --           --
     ==========================================================================

     As of December  31,  2002,  2001 and 2000,  the  Company  had  $20,815,000,
     $39,610,000   and   $68,875,000  of  net  operating   loss   carryforwards,
     respectively.  In 2002 and  2001,  the tax  loss  carryforwards  have  been
     utilised to offset taxable income in Sweden.  The loss  carryforward can be
     utilised only against future taxable income for the respective  subsidiary.
     Frontline  AB accounts for a total of  $19,385,000  as at December 31, 2002
     and ICB Shipping AB accounts for a total of  $1,212,000  as of December 31,
     2002.  These net  operating  losses  do not have an  expiration  date.  The
     Company's deferred tax assets are reduced by a valuation allowance when, in
     the opinion of management,  it is more likely than not that some portion or
     all of the deferred tax assets will not be realised in the future.

6.   EARNINGS PER SHARE

     The  computation  of basic EPS is based on the weighted  average  number of
     shares  outstanding during the year. The computation of diluted EPS assumes
     the  foregoing  and the exercise of stock  options and  warrants  using the
     treasury stock method (see Note 21).

     The  components  of the  numerator  for the  calculation  of basic  EPS and
     diluted EPS for net income from continuing operations and net income are as
     follows:
<TABLE>
<CAPTION>
     (in thousands of $)                                                2002       2001      2000
<S>                                                                  <C>        <C>       <C>
     Net  income  from  continuing  operations  after  tax  before     7,172    330,107   305,910
     cumulative effect of change in accounting principle
     Discontinued operations                                          (1,929)    21,076     7,957
     Cumulative effect of change in accounting principle             (14,142)    31,545        --
     --------------------------------------------------------------------------------------------
     Net income (loss) available to stockholders                      (8,899)   382,728   313,867
     ============================================================================================
</TABLE>
     The  components of the  denominator  for the  calculation  of basic EPS and
     diluted EPS are as follows:
<TABLE>
<CAPTION>
     (in thousands )                                                    2002       2001      2000
<S>                                                                  <C>        <C>       <C>
     Basic earnings per share:
     Weighted average number of ordinary shares outstanding           76,456     76,714    73,391
     ============================================================================================

     Diluted earnings per share:
     Weighted average number of ordinary shares outstanding           76,456     76,714    73,391
     Warrants and stock options                                           52        181       173
     --------------------------------------------------------------------------------------------
                                                                      76,508     76,895    73,564
     ============================================================================================
</TABLE>
     Basic EPS and diluted EPS for  discontinued  operations and basic EPS for
     the cumulative effect of change in accounting principle are as follows:
<TABLE>
    <S>                                                             <C>          <C>        <C>
     Basic  and  diluted   earnings  per  share  for
     discontinued operations                                         $(0.02)      $0.27     $0.11

     Basic  earnings per share for  cumulative  effect
     of change in accounting principle                               $(0.19)      $0.42     $  -

</TABLE>
7.   LEASES

     Rental expense

     Charter hire  payments to third parties for certain  contracted-in  vessels
     are accounted  for as operating  leases.  The Company is also  committed to
     make rental payments under operating leases for office premises. The future
     minimum  rental  payments  under the  Company's  non-cancellable  operating
     leases, are as follows:

     ---------------------------------------------------------------------------
     Year ending December 31,
     (in thousands of $)
     ---------------------------------------------------------------------------
     2003                                                                 66,639
     2004                                                                 36,400
     2005                                                                 36,958
     2006                                                                 37,058
     2007                                                                 18,551
     2008 and later                                                           --
     ---------------------------------------------------------------------------
     Total minimum lease payments                                        195,606
     ===========================================================================

     Total rental expense for operating leases was $61,429,000,  $42,376,000 and
     $34,823,000  for  the  years  ended  December  31,  2002,  2001  and  2000,
     respectively.

     Rental income

     The minimum  future  revenues to be  received  on time  charters,  bareboat
     charters and other  contractually  committed income as of December 31, 2002
     are as follows:
<TABLE>
<CAPTION>
     --------------------------------------------------------------------------------------------
     Year ending December 31,       Yen revenues                   Dollar revenues          Total
     --------------------------------------------------------------------------------------------
     (in thousands of(Y)and $)           (in(Y))     ($ equivalent)
     --------------------------------------------------------------------------------------------
     <S>                                 <C>                  <C>           <C>            <C>
     2003                                992,800              8,375         41,923         50,298
     2004                                995,520              8,398         35,741         44,139
     2005                                992,800              8,375         34,313         42,688
     2006                                992,800              8,375         31,003         39,378
     2007                                992,800              8,375         19,790         28,165
     2008 and later                    3,829,780             32,308          8,300         40,608
     --------------------------------------------------------------------------------------------
     Total minimum lease revenues      8,796,500             74,206        171,070        245,276
     ============================================================================================
</TABLE>
     The cost and  accumulated  depreciation  of the  vessels  leased to a third
     party at December  31,  2002 were  approximately  $432.7  million and $37.2
     million,  respectively,  and at December 31, 2001 were approximately $354.2
     million and $14.6 million, respectively.

8.   MARKETABLE SECURITIES

     Marketable  securities held by the Company are equity securities considered
     to be available-for-sale securities.

     --------------------------------------------------------------------------
     (in thousands of $)                                  2002             2001
     --------------------------------------------------------------------------
     Cost                                                   51            1,874
     Gross unrealised gain                                  --                2
     Gross unrealised loss                                  (9)            (717)
     --------------------------------------------------------------------------
     Fair value                                             42            1,159
     ==========================================================================

     The net unrealised loss on marketable securities,  including a component of
     foreign currency translation, included in comprehensive income increased by
     $6,000  for the year  ended  December  31,  2002  (2001 -  increase  in net
     unrealised loss of $1,010,000).

     --------------------------------------------------------------------------
     (in thousands of $ )                             2002       2001      2000
     --------------------------------------------------------------------------
     Proceeds from sale of available-for-sale
       securities                                       --      3,101    10,089
     Realised gain (loss)                             (984)       717    (1,186)
     ==========================================================================

     The cost of sale of available-for-sale  marketable securities is calculated
     on an average costs basis.

9.   TRADE ACCOUNTS RECEIVABLE

     Trade  accounts  receivable  are presented  net of allowances  for doubtful
     accounts  amounting  to $800,000  for each of the years ended  December 31,
     2002 and 2001, respectively.

10.  OTHER RECEIVABLES

     ---------------------------------------------------------------------------
     (in thousands of $)                                     2002           2001
     ---------------------------------------------------------------------------
     Agent receivables                                      5,773          1,973
     Due from related parties                                 179             --
     Other receivables                                      4,946          2,947
     ---------------------------------------------------------------------------
                                                           10,898          4,920
     ===========================================================================

     Other  receivables  are presented net of allowances  for doubtful  accounts
     amounting to $nil for each of the years ended December 31, 2002 and 2001.

11.  NEWBUILDINGS AND VESSEL PURCHASE OPTIONS

     ---------------------------------------------------------------------------
     (in thousands of $)                                    2002            2001
     ---------------------------------------------------------------------------
     Newbuildings                                         19,035          94,411
     Vessel purchase options                               8,370           8,370
     ---------------------------------------------------------------------------
                                                          27,405         102,781
     ===========================================================================

     The carrying value of newbuildings  represents the accumulated costs to the
     balance  sheet  date,  which  the  Company  has  paid  by way  of  purchase
     installments, and other capital expenditures together with capitalised loan
     interest.  Interest  capitalised  in the cost of  newbuildings  amounted to
     $1,902,000 and $3,035,000 in 2002 and 2001, respectively.  The Company took
     delivery of five newbuildings during 2002.

     The  Company  has both an  obligation  and an option to  purchase  the VLCC
     Oscilla on expiry of a five-year  time  charter,  which  commenced in March
     2000.  The purchase price is equal to the  outstanding  mortgage debt under
     four loan agreements between lenders and the vessel's owning company. As at
     December 31, 2002 the  outstanding  mortgage debt of the  Oscilla's  owning
     company  amounted  to  $43,013,215  plus   (Y)759,454,316   (equivalent  to
     $6,406,735).   (2001  -  $44,372,526  plus  (Y)763,259,970  (equivalent  to
     $5,820,192).  Included  in this  amount  at  December  31,  2002 is debt of
     $10,191,000 due to the Company (2001 - $9,103,000). The fair value assigned
     to this option and  obligation in the purchase  accounting for Golden Ocean
     was  $8,370,000.  The fair value was  calculated at the time of purchase as
     the  difference  between the fair value of the vessel and the mortgage debt
     outstanding.

12.  VESSELS AND EQUIPMENT, NET

     --------------------------------------------------------------------------
     (in thousands of $)                                    2002           2001
     --------------------------------------------------------------------------
     Cost                                              3,117,687      2,692,512
     Accumulated depreciation                            744,448       (495,553)
     --------------------------------------------------------------------------
     Net book value at end of year                     2,373,239      2,196,959
     ==========================================================================

     Included in the above amounts as at December 31, 2002 and 2001 is equipment
     with  a  net  book  value  of  $1,459,000   and   $836,000,   respectively.
     Depreciation  expense for vessels and equipment was $139.9 million,  $115.6
     million and $90.7 million for the years ended  December 31, 2002,  2001 and
     2000, respectively, including amounts recorded in discontinued operations.

13.  VESSELS UNDER CAPITAL LEASE, NET

     At December 31 2002,  the Company had four  vessels  under  capital  leases
     (2001 - eight vessels under capital  lease,  of which four were acquired by
     the Company and subsequently sold in 2002). These leases are for terms that
     range from eight to ten years. One of these vessels was sold by the Company
     in 2002 and leased  back on a charter  for a period of eight years with the
     option on the lessor's side to extend the charter for a further three years
     followed by a further two years.  Three of the vessels under capital leases
     were sold by the  Company in 2001 and leased  back on  charters  each for a
     period of eight  years with the option on the  lessor's  side to extend the
     charter  for a further  three years  followed  by a further two years.  The
     Company has purchase options at certain  specified dates and the lessor has
     options to put the vessels on the Company at the end of the lease terms for
     all of the four vessels under capital lease.

     --------------------------------------------------------------------------
     (in thousands of $)                                    2002           2001
     --------------------------------------------------------------------------
     Cost                                                282,325        323,659
     Accumulated depreciation                            (17,423)        (6,451)
     --------------------------------------------------------------------------
     Net book value at end of year                       264,902        317,208
     ==========================================================================

     Depreciation  expense for vessels under  capital  lease was $16.6  million,
     $5.3 million and $1.1 for the years ended December 31, 2002, 2001 and 2000,
     respectively.

     The outstanding obligations under capital leases are payable as follows:

     --------------------------------------------------------------------------
     Year ending December 31,
     (in thousands of $)
     --------------------------------------------------------------------------
     2003                                                                33,359
     2004                                                                33,576
     2005                                                                34,479
     2006                                                                35,078
     2007                                                                35,077
     2008 and later                                                     248,150
     --------------------------------------------------------------------------
     Minimum lease payments                                             419,719
     --------------------------------------------------------------------------
     Less imputed interest                                             (147,028)
     --------------------------------------------------------------------------
     Present value of obligations under capital leases                  272,691
     ==========================================================================

14.  INVESTMENT IN ASSOCIATED COMPANIES

     At  December  31,  2002,  the Company has the  following  participation  in
     investments that are recorded using the equity method:

                                                                      Percentage

     K/S Rasmussen Teamship A/S III                                       35.00%
     K/S Rasmussen Teamship A/S II                                        40.00%
     Front Tobago Inc                                                     40.00%
     Golden Lagoon Corporation                                            50.00%
     Golden Fountain Corporation                                          50.00%
     Golden Tide Corporation                                              50.00%
     Alliance Chartering LLC                                              50.00%
     Dundee Navigation SA                                                 50.10%
     Edinburgh Navigation SA                                              50.10%
     Ariake Transport Corporation                                         33.33%
     Sakura Transport Corporation                                         33.33%
     Ichiban Transport Corporation                                        33.33%
     Tokyo Transport Corporation                                          33.33%
     Hitachi Hull No 4983 Ltd.                                            33.33%

     With the exception of Alliance  Chartering LLC, the equity method investees
     are  engaged in the  ownership  and  operation  of oil  tankers or dry bulk
     carriers.

     Summarised  balance  sheet  information  of  the  Company's  equity  method
     investees is as follows:

     ---------------------------------------------------------------------------
     (in thousands of $)                                    2002            2001
     ---------------------------------------------------------------------------
     Current assets                                       54,347          40,242
     Noncurrent assets                                   637,543         546,868
     Current liabilities                                  67,158          45,855
     Non current liabilities                             602,807         491,396

     Summarised  statement of operations  information  of the  Company's  equity
     method investees is as follows:

     ---------------------------------------------------------------------------
     (in thousands of $ )                        2002          2001         2000
     ---------------------------------------------------------------------------
     Net operating revenues                    68,694        62,338       54,722
     Net operating income                      22,481        32,050       32,093
     Net income (loss)                        (14,250)       40,004       43,843

     Summarised   balance  sheet  information  of  the  Company's   subsidiaries
     accounted for using the equity method is as follows:

     ---------------------------------------------------------------------------
     (in thousands of $)                                       2002         2001
     ---------------------------------------------------------------------------
     Current assets                                           8,377        6,557
     Noncurrent assets                                       93,397       99,341
     Current liabilities                                     53,296       12,475
     Non current liabilities                                 44,948       87,996

     Summarised   statement  of   operations   information   of  the   Company's
     subsidiaries accounted for using the equity method is as follows:

     ---------------------------------------------------------------------------
     (in thousands of $)                                  2002        2001  2000
     ---------------------------------------------------------------------------
     Net operating revenues                             13,947      19,948    --
     Net operating income                                3,259      10,587    --
     Net income (loss)                                  (1,899)      5,428    --

15.  DEFERRED CHARGES

     Deferred  charges  represent debt arrangement fees that are capitalised and
     amortised on a straight-line basis to interest expense over the life of the
     debt  instrument.  The  deferred  charges are  comprised  of the  following
     amounts:

     --------------------------------------------------------------------------
     (in thousands of $)                                   2002            2001
     --------------------------------------------------------------------------
     Debt arrangement fees                               17,436          14,190
     Accumulated amortisation                           (11,777)         (9,129)
     --------------------------------------------------------------------------
                                                          5,659           5,061
     ==========================================================================

16.  OTHER LONG-TERM ASSETS

     ---------------------------------------------------------------------------
     (in thousands of $)                                     2002           2001
     ---------------------------------------------------------------------------
     Long-term debt receivable                             10,191          9,025
     Other                                                  1,013            875
     ---------------------------------------------------------------------------
                                                           11,204          9,900
     ===========================================================================

     Included in long-term  debt  receivable are amounts due to the Company from
     third party  entities  that own vessels over which the Company has purchase
     options or obligations (see Note 11).

17.  GOODWILL

     Goodwill is stated net of related accumulated amortisation as follows:

     --------------------------------------------------------------------------
     (in thousands of $)                                   2002            2001
     --------------------------------------------------------------------------
     Goodwill                                            14,142          17,561
     Accumulated amortisation                           (14,142)         (3,512)
     --------------------------------------------------------------------------
                                                             --          14,049
     ==========================================================================

     The Company  adopted  SFAS 142  effective  January 1, 2002 and  recorded an
     impairment  charge of $14.1  million for the  unamortised  goodwill on that
     date (see Note 2).

18.  ACCRUED EXPENSES

     ---------------------------------------------------------------------------
     (in thousands of $)                                     2002           2001
     ---------------------------------------------------------------------------
     Voyage expenses                                        3,258          3,667
     Ship operating expenses                               27,501         18,591
     Administrative expenses                                3,948          1,979
     Interest expense                                       5,483          6,044
     Taxes                                                    134          2,233
     Other                                                     --          3,029
     ---------------------------------------------------------------------------
                                                           40,324         35,543
     ===========================================================================

19.  DEBT

     --------------------------------------------------------------------------
     (in thousands of $)                                     2002          2001
     --------------------------------------------------------------------------
     US Dollar denominated floating rate debt           1,314,183     1,238,952
     (LIBOR + 0.485% to 2.75%) due through 2011
     Yen denominated floating rate debt (LIBOR +          110,718       109,640
     1.125% to 1.313%) due through 2011
     Fixed rate debt 0% due through 2005                    2,000         2,000
     Fixed rate debt 8.00% due through 2005                11,250        31,500
                                                        -----------------------
                                                        1,438,151     1,382,092
     Credit facilities                                      7,321         9,859
     --------------------------------------------------------------------------
     Total debt                                         1,445,472     1,391,951
     Less: short-term and current portion of
     long-term debt                                      (167,807)     (227,597)
     --------------------------------------------------------------------------
                                                        1,277,665     1,164,354
     ==========================================================================

     The outstanding debt as of December 31, 2002 is repayable as follows:

     Year ending December 31,
     (in thousands of $)

     2003                                                                167,807
     2004                                                                169,529
     2005                                                                266,080
     2006                                                                312,142
     2007                                                                134,871
     2008 and later                                                      395,043
     ---------------------------------------------------------------------------
     Total debt                                                        1,445,472
     ===========================================================================

     The weighted  average  interest rate for the floating rate debt denominated
     in US dollars  was 3.93 per cent as of  December  31, 2002 (2001 - 4.41 per
     cent).  The  weighted  average  interest  rate for the  floating  rate debt
     denominated  in Yen was 1.27 per cent as of December  31, 2002 (2001 - 1.37
     per cent). These rates take into consideration related interest rate swaps.

     Certain   of  the  fixed  rate  debt  and  the   floating   rate  debt  are
     collateralised by ship mortgages and, in the case of some debt,  pledges of
     shares by each  guarantor  subsidiary.  The  Company's  existing  financing
     agreements impose operation and financing restrictions on the Company which
     may  significantly  limit or prohibit,  among other  things,  the Company's
     ability to incur additional indebtedness, create liens, sell capital shares
     of  subsidiaries,   make  certain   investments,   engage  in  mergers  and
     acquisitions,  purchase and sell  vessels,  enter into time or  consecutive
     voyage  charters or pay  dividends  without the consent of our lenders.  In
     addition, our lenders may accelerate the maturity of indebtedness under our
     financing  agreements  and  foreclose  upon  the  collateral  securing  the
     indebtedness  upon the occurrence of certain  events of default,  including
     our failure to comply with any of the covenants  contained in our financing
     agreements.   Various  debt  agreements  of  the  Company  contain  certain
     covenants which require  compliance  with certain  financial  ratios.  Such
     ratios include equity ratio covenants,  minimum value clauses,  and minimum
     free cash  restrictions.  As of  December  31,  2002 and 2001,  the Company
     complied with all the debt covenants of its various debt agreements.

     The  acquisition  of Golden  Ocean was  conducted so that the loans held by
     Golden Ocean's  subsidiaries  are  non-recourse to Frontline.  This implies
     that any guarantees on behalf of a Golden Ocean  subsidiary are issued only
     by either Golden Ocean and or other Golden Ocean subsidiaries.  Frontline's
     exposure to Golden  Ocean is therefore  limited to $15 million  injected as
     equity, a $50 million term loan and a $10 million revolving credit facility
     provided by Frontline to Golden Ocean.  As of December 31, 2002 the amounts
     outstanding  under the term loan and revolving credit facility was $nil and
     $nil, respectively (2001 - $2.49 million and $nil, respectively).

     At December  31,  2001, a 100 per cent owned  subsidiary  of Golden  Ocean,
     Golden  Stream  Corporation  was  party to a loan  agreement  with  Griffin
     Shipping Inc. ("Griffin"). The amount outstanding under this loan agreement
     was $48,068,000, which was fully repayable on March 30, 2002. Golden Stream
     Corporation  failed to repay the loan on the due date.  This situation gave
     rise to substantial  doubt as to the ability of Golden Ocean to continue to
     operate as a going concern as at December 31, 2001. Griffin did not declare
     a default  under the loan  agreement  and in the fourth  quarter of 2002, a
     satisfactory agreement was reached with Griffin,  Golden Stream Corporation
     was  restructured  and  the  vessel  was  refinanced.  As a  result  of the
     restructuring and refinancing in 2002,  Golden Stream  Corporation is owned
     in a non-recourse  subsidiary of Frontline  where Frontline has guaranteed,
     and partly provided, the first $28 million of debt.

20.  SHARE CAPITAL

     Authorised share capital:

     ---------------------------------------------------------------------------
     (in thousands of $)                                        2002        2001
     ---------------------------------------------------------------------------
     125,000,000 ordinary shares of $2.50 each               312,500     312,500
     ===========================================================================

     Issued and fully paid share capital:

     ---------------------------------------------------------------------------
     (in thousands of $, except share numbers)                  2002        2001
     ---------------------------------------------------------------------------
     76,466,566 ordinary shares of $2.50 each                191,166     191,019
     (2001 - 76,407,566)
     ===========================================================================

     The Company's  ordinary  shares are listed on the New York Stock  Exchange,
     the Oslo  Stock  Exchange  and the London  Stock  Exchange.  The  Company's
     ordinary  shares traded on the Nasdaq  National  Market in the form of ADSs
     until August 3, 2001. Each ADS represented one ordinary share. On August 3,
     2001 the Company  delisted its ADSs from the Nasdaq National Market and the
     ADR program  was  terminated  on October 5, 2001.  The  Company's  ordinary
     shares were listed on the New York Stock Exchange on August 6, 2001.

     Of the  authorised  and  unissued  ordinary  shares at December  31,  2002,
     546,800 are  reserved  for issue  pursuant to  subscription  under  options
     granted  under the Company's  share option plans.  As at December 31, 2002,
     except for the shares which would be issued on the exercise of the options,
     no  unissued   share   capital  of  the  Company  is  under  option  or  is
     conditionally or unconditionally to be put under option.

     On August 21,  2000,  at the Annual  General  Meeting of the  Company,  the
     stockholders approved an increase in the Company's authorised share capital
     from  100,000,000  Ordinary  Shares of $2.50 par value each to  125,000,000
     Ordinary Shares of $2.50 par value each.

     In 2002 the Company issued 59,000 shares in connection with the exercise of
     employee  share  options.  During 2001 the Company issued 129,500 shares in
     connection  with the exercise of employee  share options and issued 416,555
     ordinary  shares  pursuant to  subscriptions  under  warrants that could be
     exercised at any time up to May 11, 2001 (see Note 21).

     In 2000  and  2001,  the  Company  bought  back  and  cancelled  a total of
     1,719,845 and 2,207,300 of its Ordinary Shares,  respectively,  in a number
     of separate  market  transactions.  These share buybacks were made within a
     Board of Directors  authority to buy back up to 7,500,000  ordinary shares.
     In 2000 the Company also acquired 430,000 of its Ordinary Shares over which
     it held a call option acquired in 1999.

     In September  2001 the Company  established  a twelve month  facility for a
     Stock Indexed Total Return Swap Programme or Equity Swap Line with the Bank
     of Nova Scotia ("BNS"),  whereby the latter acquires shares in the Company,
     and the  Company  carries  the risk of  fluctuations  in the share price of
     those acquired  shares.  BNS is compensated at their cost of funding plus a
     margin.  In 2002,  the term of the  Equity  Swap  Line was  extended  until
     February  2004. At December 31, 2002 and 2001,  BNS had acquired a total of
     2,695,000 and 2,100,000 Frontline shares under the Programme, respectively.

     A number of the Company's bank loans contain a clause that permit  dividend
     payments  subject to the  Company  meeting  certain  equity  ratio and cash
     covenants immediately after such dividends being paid.

     On December 6, 1996, the Company's Board of Directors adopted a Shareholder
     Rights  Plan  (the  "Plan").  The  Company  adopted  the  Plan  to  protect
     shareholders against unsolicited attempts to acquire control of the Company
     that do not offer an adequate  price to all  shareholders  or are otherwise
     not in the best  interests of the Company and its  shareholders.  Under the
     Plan,  each  shareholder  of record on December 20, 1996 received one right
     for each Ordinary  Share held,  and each  registered  holder of outstanding
     warrants  received  one right for each  Ordinary  Share for which  they are
     entitled to subscribe.  Each right entitles the holder to purchase from the
     Company  one-quarter of an Ordinary  Share at an initial  purchase price of
     $1.50. The rights will become exercisable and will detach from the Ordinary
     Shares  a  specified  period  of time  after  any  person  has  become  the
     beneficial owner of 20 per cent or more of the Company's Ordinary Shares.

     If any person  becomes the  beneficial  owner of 20 per cent or more of the
     Company's Ordinary Shares,  each right will entitle the holder,  other than
     the acquiring  person,  to purchase for the purchase price,  that number of
     Ordinary Shares having a market value of eight times the purchase price.

     If,  following  an  acquisition  of 20 per  cent or  more of the  Company's
     Ordinary Shares, the Company is involved in certain  amalgamations or other
     business  combinations or sells or transfers more than 50% of its assets or
     earning  power,  each right will  entitle  the holder to  purchase  for the
     purchase price ordinary shares of the other party to the transaction having
     a market value of up to eight times the purchase price.

     The  Company  may  redeem  the rights at a price of $0.001 per right at any
     time  prior to a  specified  period of time  after a person  has become the
     beneficial owner of 20 per cent or more of its Ordinary Shares.  The rights
     will expire on December 31, 2006, unless earlier exchanged or redeemed.

     In connection  with the  Company's  one-for-ten  reverse  stock split,  the
     rights were adjusted  pursuant to the Plan, so that there are currently ten
     rights attached to each outstanding Ordinary Share.

21.  WARRANTS AND SHARE OPTION PLANS

     Pursuant to the terms of the Amalgamation  Agreement,  warrants to purchase
     2,600,000  shares (restated from 26,000,000) in the Company were granted on
     the date of Amalgamation. These warrants were recorded at an estimated fair
     value at November 1, 1997 using the  Black-Scholes  option  pricing  model.
     These  warrants  entitled the holder to subscribe for one ordinary share in
     the Company at a price of $15.91 and were exercisable at any time up to May
     11, 2001. On May 11, 2001 any warrants that had not been exercised expired.

     The following summarises the warrant transactions:

     --------------------------------------------------------------------------
                                                                         Number
                                                                      of Shares
     --------------------------------------------------------------------------
     Warrants outstanding at December 31, 2000                        2,591,732
          Exercised or cancelled                                     (2,591,732)
     Warrants outstanding at December 31, 2001                               --
          Exercised or cancelled                                             --
     --------------------------------------------------------------------------
     Warrants outstanding at December 31, 2002                               --
     ==========================================================================

     The Company has in place a Bermuda Share Option Plan (the  "Bermuda  Plan")
     and a United Kingdom Share Option Plan (the "U.K.  Plan").  Under the terms
     of the plans,  the exercise price set on the grant of share options may not
     be less than the average of the fair market value of the underlying  shares
     for the three  dealing days before the date of grant.  The number of shares
     granted under the plans may not in any ten year period exceed 7 per cent of
     the issued share capital of the Company.  No  consideration  is payable for
     the grant of an option.  In 2001,  the Bermuda  Plan was amended to provide
     that the exercise  price set on the grant can  subsequently  be adjusted so
     that  dividends  paid  after the date of grant  will be  deducted  from the
     exercise price.

     Under the Bermuda Plan,  options may be granted to any director or eligible
     employee  of the  Company or  subsidiary.  Options  are  exercisable  for a
     maximum period of nine years  following the first  anniversary  date of the
     grant.

     The following  summarises  the share options  transactions  relating to the
     Bermuda Plan:

     ---------------------------------------------------------------------------
     (in thousands, except per share data)                Shares        Weighted
                                                                         average
                                                                        exercise
                                                                           price
     ---------------------------------------------------------------------------
     Options outstanding at December 31, 1999                413           $7.89
          Granted                                             15           $6.92
          Cancelled                                         (109)         $14.77
     Options outstanding at December 31, 2000                319           $5.50
          Granted                                            194          $11.76
          Exercised                                         (130)          $3.49
          Cancelled                                          (23)         $11.76
     Options outstanding at December 31, 2001                360           $7.71
          Granted                                            252          $11.90
          Exercised                                          (59)          $4.47
          Cancelled                                           (6)         $11.90
     ---------------------------------------------------------------------------
     Options outstanding at December 31, 2002                547          $11.24
     ===========================================================================

     Options exercisable at:
     December 31, 2000                                         4          $13.21
     ===========================================================================
     December 31, 2001                                       190           $4.07
     ===========================================================================
     December 31, 2002                                       187           $8.09
     ===========================================================================

     Under the U.K.  Plan,  options may be granted to any full-time  director or
     employee of the Company or subsidiary.  Options are only exercisable during
     the  period of seven  years  following  the third  anniversary  date of the
     grant.

     At December 31, 2002 and 2001 there were no options  remaining  outstanding
     under the U.K. Plan.

     The weighted  average fair value of options  granted under the Bermuda Plan
     in the year ended  December  31, 2002,  2001 and 2000 was $6.80,  $6.79 and
     $3.27,  respectively.  The fair value of each option  grant is estimated on
     the date of grant using the  Black-Scholes  option  pricing model using the
     following weighted average assumptions:

                                                    2002        2001        2000
     Risk free interest rate                        2.8%        4.9%        6.6%
     Expected life                               5 years     5 years     3 years
     Expected volatility                             64%         60%         63%
     Expected dividend yield                          0%          0%          0%

     The options outstanding under the Bermuda Plan as at December 31, 2002 have
     exercise  prices between $4.12 and $14.97.  The exercise prices are reduced
     by any dividends  declared  after the date of grant.  The options that were
     not  exercisable at December 31, 2002, vest over a period from January 2003
     to June 2005. The options outstanding under the Bermuda Plan as at December
     31, 2002 have a weighted average contractual life of 4.85 years.

22.  FINANCIAL INSTRUMENTS

     Interest rate risk management
     In certain situations,  the Company may enter into financial instruments to
     reduce the risk associated with fluctuations in interest rates. The Company
     has a portfolio of swaps that swap  floating  rate  interest to fixed rate,
     which from a  financial  perspective  hedge  interest  rate  exposure.  The
     Company  does not hold or issue  instruments  for  speculative  or  trading
     purposes.  The  counterparties  to such  contracts  are J.P.  Morgan Chase,
     Nordea Bank Norge, Credit Agricole Indosuez, Deutsche Schiffsbank,  Midland
     Bank (HSBC), Den norske Bank and Skandinaviska Enskilda Banken. Credit risk
     exists to the extent that the  counterparties  are unable to perform  under
     the contracts.

     The Company  manages its debt portfolio with interest rate swap  agreements
     in U.S.  dollars  to  achieve  an  overall  desired  position  of fixed and
     floating  interest  rates.  The  Company  has  entered  into the  following
     interest  rate swap  transactions  involving  the payment of fixed rates in
     exchange for LIBOR:

     Principal                                 Inception      Maturity     Fixed
                                                    Date          Date  Interest
                                                                            Rate
     (in thousands of $)
     $50,000                                January 2001   January 2006   5.635%
     $50,000                               February 1998  February 2003   5.685%
     $25,000                                 August 1998    August 2003   5.755%
     $25,000                                 August 1998    August 2003   5.756%
     $50,000                               February 1998  February 2003   5.775%
     $50,000                                  March 1998     March 2003   5.885%
     $49,338 reducing monthly to $29,793      March 1998     March 2006   7.288%
     $53,352 reducing monthly to $17,527  September 1998    August 2008   7.490%

     As at December 31, 2002,  the notional  principal  amounts  subject to such
     swap agreements was $352,690,000 (2001 - $362,828,000).

     Foreign currency risk

     The majority of the  Company's  transactions,  assets and  liabilities  are
     denominated  in U.S.  dollars,  the  functional  currency  of the  Company.
     Certain of the Company's subsidiaries report in Sterling, Swedish kronor or
     Norwegian  kroner and risks of two kinds arise as a result:  a  transaction
     risk,  that is, the risk that  currency  fluctuations  will have a negative
     effect on the value of the Company's  cash flows;  and a translation  risk,
     the impact of adverse  currency  fluctuations in the translation of foreign
     operations and foreign  assets and  liabilities  into U.S.  dollars for the
     Company's  consolidated  financial  statements.  Certain  of the  Company's
     subsidiaries  have Yen denominated  long-term debt which as of December 31,
     2002 stood at Yen 8,026,764,056  and charter  contracts  denominated in Yen
     with  contracted  payments  as set  forth  in  Note 7.  Certain  associated
     companies also have Yen denominated  debt, the Company's share of this debt
     amounted to Yen  7,172,940,136  as December 31, 2002.  There is a risk that
     currency  fluctuations  will  have a  negative  effect  on the value of the
     Company's cashflows.  The Company has not entered into derivative contracts
     for either transaction or translation risk. Accordingly, such risk may have
     an adverse  effect on the  Company's  financial  condition  and  results of
     operations.

     Forward freight contracts

     The Company may enter into forward freight  contracts and futures contracts
     in order to manage its exposure to the risk of movements in the spot market
     for certain trade routes. Market risk exists to the extent that spot market
     fluctuations  have a  negative  effect  on the  Company's  cash  flows  and
     consolidated statements of operations.

     As at December 31, 2002,  the notional  principal  amounts  subject to such
     forward freight contracts and futures contracts was $31,264,000.

     Fair Values

     The carrying  value and  estimated  fair value of the  Company's  financial
     instruments at December 31, 2002 and 2001 are as follows:

<TABLE>
<CAPTION>
                                                   2002         2002         2001         2001
     (in thousands of $)                       Carrying   Fair Value     Carrying   Fair Value
                                                  Value                     Value
<S>                                           <C>          <C>          <C>          <C>
     Non-Derivatives:
     Cash and cash equivalents                   92,078       92,078      178,176      178,176
     Restricted cash                              8,220        8,220       11,101       11,101
     Marketable securities                          262          262        1,159        1,159
     Short-term debt and current portion of     167,807      167,807      227,597      227,597
     long-term debt
     Long-term debt                           1,277,665    1,277,665    1,164,354    1,164,354

     Derivatives:
     Interest rate swap transactions           (16,894)     (16,894)     (14,723)     (14,723)
     Equity swap Line                               390          390        4,412        4,412
     Forward freight contracts                    (548)        (548)            -            -
</TABLE>

     The carrying value of cash and cash  equivalents,  which are highly liquid,
     is a reasonable estimate of fair value.

     The estimated  fair value of  marketable  securities is based on the quoted
     market price of these or similar instruments when available.

     The estimated  fair value for floating rate long-term debt is considered to
     be equal to the  carrying  value since it bears  variable  interest  rates,
     which are reset on a quarterly  basis.  The estimated  fair value for fixed
     rate  long-term debt is considered to be equal to the carrying value due to
     its company specific nature and the lack of a market in such debt.

     The fair value of interest  rate swaps is  estimated by taking into account
     the cost of  entering  into  interest  rate swaps to offset  the  Company's
     outstanding swaps.

     The fair value of the Equity Swap Line (see Note 20) is based on the quoted
     market price of the Company's  shares held by the Bank of Nova Scotia minus
     the acquisition cost of those shares.

     The fair value of forward  freight  contracts  is  estimated by taking into
     account the cost of entering into forward  freight  contracts to offset the
     Company's outstanding contracts.

     Concentrations of risk

     There is a  concentration  of  credit  risk with  respect  to cash and cash
     equivalents to the extent that substantially all of the amounts are carried
     with the Bank of America N.A.,  Skandinaviska Enskilda Banken, BNP Paribas,
     Den norske Bank and Nordea Bank Norge.  However,  the Company believes this
     risk  is  remote  as  these  banks  are  high  credit   quality   financial
     institutions.

     The majority of the vessels' gross earnings are receivable in U.S. dollars.
     In 2002,  2001 and 2000,  no customer  accounted for 10 per cent or more of
     freight revenues.

23.  RELATED PARTY TRANSACTIONS

     During 1996, 1997 and January 1998,  Frontline  received  options to assume
     newbuilding  contracts  for the  construction  and purchase of five Suezmax
     tankers at the Hyundai Heavy  Industries  Co. Ltd.  shipyard in South Korea
     for delivery in 1998 and 2000 from single-ship owning companies  affiliated
     with  Hemen  Holding  Ltd.  ("Hemen").   Hemen  is  the  Company's  largest
     shareholder and is indirectly  controlled by Mr. John Fredriksen,  Chairman
     and Chief Executive Officer of the Company.  The first three of the Suezmax
     tankers  were  delivered  during  1998.  The  remaining  two  vessels  were
     delivered in February and April, 2000.

     In June 1998,  the Company  obtained a loan of $87.5 million from Metrogas,
     the Metrogas  Loan,  to finance the  acquisition  of five VLCC  newbuilding
     contracts.  At December 31, 1998, an amount of $89 million was  outstanding
     in respect of the Metrogas Loan,  including  interest accrued  thereon.  On
     September  30,  1999,  $35  million of the $89  million  Metrogas  Loan was
     converted to equity by the  issuance of 8,230,000  shares at an issue price
     of NOK 33.00 per  share.  In  connection  with  this  conversion,  Metrogas
     offered $15 million of the resulting  ordinary shares to existing Frontline
     shareholders and warrant holders,  excluding US persons. In connection with
     this secondary  offering by Metrogas,  Frontline bore costs of the offering
     of  $15,000.  At  December  31,  1999,  an  amount  of  $56.7  million  was
     outstanding in respect of the Metrogas  Loan,  including  interest  accrued
     thereon.  On  February  25,  2000,  $30  million of the  Metrogas  Loan was
     converted to equity, resulting in the issuance of 4,350,000 ordinary shares
     at an  issue  price  of NOK  57.50  per  share.  In  connection  with  this
     conversion,  Metrogas offered 2,000,000 of the resulting ordinary shares to
     existing Frontline shareholders and warrant holders,  excluding US persons.
     In August 2000, the outstanding  principal  amount of $24.0 on the Metrogas
     Loan was  repaid in full,  together  with  $4.3  million  interest  accrued
     thereon.  In the year ended  December  31,  2000,  the  Metrogas  Loan bore
     interest at the rate of 8.0 per cent and the  Company  incurred an interest
     cost of $1.6 million.

     In addition to the lending  arrangement  described above,  Hemen affiliated
     parties  have,  during  1998  and  1999,  provided  additional  short  term
     financing to the Company. Such financing bore interest at a rate of between
     6.75 and 8.8 per cent per annum in 2000.  Interest  expense recorded by the
     Company in 2000 in respect of such financing was $1,095,380.

     In September 2000  Frontline  acquired a 1993-built  VLCC,  which was named
     Front Ace from a company  affiliated  with Hemen.  This vessel was acquired
     for a price of $53 million which was based on three independent  valuations
     less a $1 million discount compared to appraised market value.

     On December 5, 2000, a subsidiary  of Frontline  made a short-term  loan of
     $20 million to World  Shipholding  Ltd., a company  affiliated  with Hemen.
     This loan was repaid in full on  February  6, 2001  together  with fees and
     interest of $349,680, of which $115,000 was recorded by the Company in 2000
     and $234,680 was recorded in 2001.

     On December 28, 2000, the Company and Overseas Shipholding Group Inc. (OSG)
     entered into an  agreement  with Osprey  Maritime  Limited.  ("Osprey")  to
     acquire the two VLCCs Golar  Edinburgh and Golar Dundee.  The agreement was
     signed on behalf of a joint  venture  company  to be owned 50.1 per cent by
     the Company and 49.9 per cent by OSG. The  purchase  price for the vessels,
     which were  delivered in the first quarter of 2001 was $53 million each. At
     December 31, 2000, World Shipholding Ltd. held more than 50 per cent of the
     shares in Osprey.  In February 2001, World Shipholding Ltd. took control of
     Osprey.

     In  February  2001,  the Company  acquired  newbuilding  contracts  for the
     construction  and purchase of three VLCC tankers at the Hitachi shipyard in
     Japan for delivery in 2002 from  Seatankers  Management  Co. Ltd, a company
     affiliated  with Hemen.  These  contracts  were  acquired  for the original
     contract  price of $72 million each plus $0.5 million per  contract.  These
     three newbuildings were delivered in 2002.

     In the years ended December 31, 2002 and 2001,  Frontline provided services
     to Seatankers. These services include management support and administrative
     services including  services to a newbuilding  project known as the Uljanik
     Project.  In the years ended  December  31, 2002 and 2001,  the Company has
     earned  management fee income from Seatankers Ltd of $253,762 and $277,855,
     respectively.  As at December  31, 2002 and 2001 an amount of $141,359  and
     $314,923,  respectively  were due from  Seatankers  Ltd in respect of these
     fees and for the  reimbursement  of costs  incurred on behalf of Seatankers
     Ltd.

     In the year ended  December  31, 2002, Frontline  has  provided  management
     support  and  administrative  services  to  Osprey.  In the  year  ended 31
     December 2002  management  fees of $42,000 have been earned from Osprey and
     as at December 31, 2002 an amount of $18,000 was due from Osprey in respect
     of these fees and for the  reimbursement of costs incurred on the Company's
     behalf by Osprey.  At December 31,  2002,  an amount of $103,838 was due to
     Osprey in respect of Tankers  pool  distributions  due to Osprey  that were
     received by the Company.

     In the years ended  December  31,  2002 and 2001,  Frontline  has  provided
     services  to  Golar  LNG  Limited.  Osprey,  which is  controlled  by World
     Shipholding,  holds  50.01 per cent of Golar  LNG.  The  services  provided
     include management support, corporate services and administrative services.
     In the years ended 31 December  2002 and 2001,  management  fees from Golar
     LNG of $391,153 and $258,960, respectively have been earned by the Company.
     As at  December  31 2002 and  2001,  an  amount of  $86,343  and  $547,966,
     respectively  were due from  Golar LNG in respect of these fees and for the
     reimbursement of costs incurred on behalf of Golar LNG.

     In the year ended  December  31, 2002, Frontline  has  provided  management
     support and administrative services to Northern Offshore Limited,  Northern
     Offshore  is  controlled  by  Osprey.  In the year ended 31  December  2002
     management fees of $173,724 have been earned from Northern  Offshore and as
     at December 31, 2002 an amount of $31,071 was due from Northern Offshore.

24.  ACQUISITIONS

     In April  2001,  the  Company  announced  an offer for all of the shares of
     Mosvold Shipping Limited  ("Mosvold"),  a Bermuda company whose shares were
     listed on the Oslo Stock Exchange. Through a combination of shares acquired
     and  acceptances of the offer, as at May 31 2001,  Frontline  controlled 97
     per cent of the shares of Mosvold.  The  remaining 3 per cent of the shares
     of Mosvold were acquired during 2001 through a compulsory acquisition.  The
     total  acquisition  price  paid  was  approximately   $70.0  million.   The
     difference between the purchase price and the net assets acquired, has been
     assigned to the identifiable long-term assets of Mosvold.

     On October 10, 2000,  Frontline  took control of Golden Ocean pursuant to a
     Plan of  Reorganisation  (See Note 1). The total  acquisition  price  paid,
     including amounts paid to settle allowed claims,  was  approximately  $63.0
     million,  including 1,245,998 shares issued at a price of $15.65 per share.
     The cash  component of the  acquisition  was funded  primarily from working
     capital.  The  acquisition of Golden Ocean has been accounted for using the
     purchase method.  Prior to the effective date of acquisition,  Golden Ocean
     adopted  fresh-start   reporting  in  accordance  with  the  provisions  of
     Statement   of  Position   90-7   "Financial   Reporting   by  Entities  in
     Reorganization  Under the Bankruptcy Code" ("SOP 90-7"). The application of
     the  provisions  of SOP 90-7 resulted in the  preparation  of a reorganised
     balance  sheet at October 10,  2000,  concurrent  with the  emergence  from
     bankruptcy  protection.  The difference  between the purchase price and the
     net assets acquired, has been recorded as goodwill.

     The  following  table  reflects  unaudited  pro-forma  combined  results of
     operations of the Company on the basis that the  acquisition of Mosvold had
     taken place at January 1, 2000:

     (in thousands of $, except per share data)             2001           2000
                                                     (unaudited)    (unaudited)
     Net operating revenues                              655,527        616,367
     Net income                                          384,453        319,883
     Basic earnings per share                              $5.01          $4.36
     Diluted earnings per share                            $5.00          $4.35

     In  management's  opinion,  the adoption of  fresh-start  accounting in the
     financial  statements  of  Golden  Ocean  means  that the  presentation  of
     unaudited  pro-forma  combined  results  of  operations  would not  provide
     meaningful  information to the readers of these financial statements and no
     presentation has been made accordingly.

25.  COMMITMENTS AND CONTINGENCIES

     Assets Pledged

     (in thousands of $)                                     2002          2001
     Ship mortgages                                     2,238,905     2,195,752
     Restricted bank deposits                               8,220        11,101
     ---------------------------------------------------------------------------
                                                        2,247,125     2,206,853
     ===========================================================================

     Other Contractual Commitments

     The Company insures the legal liability risks for its shipping activities
     with  Assuranceforeningen  SKULD,   Assuranceforeningen  Gard  Gjensidig,
     Britannia  Steam  Ship  Insurance  Association  Limited,  and the  United
     Kingdom Mutual  Steamship  Assurance  Association  (Bermuda),  all mutual
     protection  and  indemnity  associations.  As a member  of  these  mutual
     associations, the Company is subject to calls payable to the associations
     based on the Company's claims record in addition to the claims records of
     all other members of the associations.  A contingent  liability exists to
     the extent that the claims records of the members of the  associations in
     the aggregate show significant deterioration,  which result in additional
     calls on the members.

     The Company  has  guaranteed  the yen and dollar  long-term  borrowings  of
     associated  companies  for  amounts of $176.4  million,  including  (Y)14.3
     billion, which is equivalent to $121.0 million at December 31, 2002.

     Certain  of  the  Company's   subsidiaries   have  contractual   rights  to
     participate  in the  profits of the  vessels  New  Vanguard,  New Vista and
     Channel  Alliance.  Revenues  arising  from  these  arrangements  have been
     accrued to the balance sheet date.

     The charterers of three of the Company's vessels have contractual rights to
     participate in the profits on sale of those vessels. In the case of the Cos
     Hero,  the  charterer is entitled to 50 per cent of the profit  realised on
     any qualifying  sale. The Cos Hero may only be sold if the profit from sale
     will  exceed $3.0  million.  Profit is defined as sale  proceeds  less debt
     outstanding in the relevant profit share agreements. If the New Vanguard or
     New Vista are sold,  the charterer is entitled to claim up to $1 million to
     cover losses incurred on subcharters of the vessel. Any remaining profit is
     to be split 60:40 in favour of the owner.

     The  charterer of the  Company's  vessel,  Navix  Astral,  holds a purchase
     option  denominated  in yen to purchase  the vessel.  The  purchase  option
     reduces on a sliding scale over the term of the related charter and is at a
     strike  price  that is in excess of the  related  debt on the  vessel.  The
     option is  exercisable at any time after the end of the seventh year of the
     charter.

     At December 31, 2002,  the Company had eight  vessels that were sold by the
     Company at various  times during the period from  November 1999 to December
     31,  2002,  and leased back on charters  that range for periods of eight to
     ten years with  options on the  lessors'  side to extend the  charters  for
     periods that range up to five years.  Four of these  charters are accounted
     for as capital leases and four are accounted for as operating  leases.  The
     Company has purchase options at certain  specified dates and the lessor has
     options to put the vessels on the Company at the end of the lease terms for
     all of these eight  vessels.  The total  amount  that the Company  would be
     required  to pay under  these put  options  with  respect to the  operating
     leases is $56.8 million.

     At December  31, 2002 the Company had a  non-cancellable  contract  for the
     construction  of one  newbuilding  tanker,  scheduled  for delivery in July
     2003.  At December  31,  2002,  the Company is  committed  to make  further
     instalments of $59.4 million under this contract,  of which it is estimated
     approximately  $12 million  will be financed  from  working  capital.  Bank
     financing has been arranged for this vessel.

     In 2001,  the  Company  received  an  adverse  decision  from  the  Swedish
     Administrative  Court of Appeal  with  respect  to a tax  dispute  with the
     Swedish tax authorities  relating to ICB. The dispute arises from a limited
     partnership in which ICB invested,  and which sold a vessel on the exercise
     of a purchase  option by a third party in 1990. The Swedish tax authorities
     assessed  an  "exit"  tax on ICB  and  the  other  members  of the  limited
     partnership  and also  sought to tax ICB and the other  members  for income
     earned by the partnership. ICB has contested these assessments. The Swedish
     Administrative Court of Appeal upheld a decision by a County Administrative
     Court finding ICB liable for these assessments. Including accrued interest,
     the taxes found due by the court  total  approximately  SEK 90 million,  or
     $10.6  million at the exchange  rate  prevailing at December 31, 2002 ($8.5
     million at the  exchange  rate  prevailing  at December 31,  2001).  ICB is
     appealing this  judgement.  In the event that the appeal is not successful,
     the tax will be accounted  for as an  adjustment  to the purchase  price of
     ICB.

26.  SUPPLEMENTAL INFORMATION

     Non-cash investing and financing activities included the following:

     (in thousands of $)                           2002        2001       2000

     Unrealised appreciation (depreciation)
       on investments
     Recorded directly to equity                   (54)     (7,960)        295

     In connection with purchase of fixed
       assets:
     Shares issued                                  --          --      28,000

     Acquisition of businesses:
     Assets acquired, including goodwill            --      83,403     533,685
     Liabilities assumed and incurred               --      14,033     470,674
     Minority interest recorded                     --       1,152          --
     Shares issued                                  --          --      20,350

27.  DISCONTINUED OPERATIONS

     During the year ended  December 31, 2002, the Company sold a portion of its
     dry bulk  operations  which has been recorded as  discontinued  operations.
     These  activities  have  been  previously  been  reported  in the dry  bulk
     carriers segment (See Note 4).

     The following table presents the information required by FAS 144 in respect
     of discontinued operations:

     (in thousands of $)                               2002       2001      2000
     Carrying amount of assets disposed of           95,548         --        --
     Carrying amount of debt or lease retired        70,215         --        --

     Amounts recorded in discontinued operations
        Net operating revenues                       12,505     19,159     4,543
        Net income (loss) before cumulative effect   (1,929)    20,280     7,957
          of change in accounting principle
        Gain (loss) on disposal                      (3,109)        --        --

     ===========================================================================

28. SUBSEQUENT EVENTS

     On February 24, 2003, the Board declared a dividend of $0.15 per share,  to
     be paid on or about March 24, 2003.

     In January 2003, the Company acquired the Suezmax  tankers,  Polytrader and
     Polytraveller.  These vessels were owned by K/S  Rasmussen  Teamship A/S II
     and K/S  Rasmussen  Teamship  A/S III in which the Company has a 40 percent
     and 35 per cent interest,  respectively.  The Company subsequently sold the
     two vessels at the end of March 2003.

     On May 8, 2003,  the  Company  declared a dividend of $1.00 per share to be
     paid on or about June 6, 2003.

     On June 9, 2003, the Company  announced that it had agreed to sell two 2000
     built Suezmax  tankers,  the Front Sun and the Front Sky to OMI Corporation
     ("OMI"),  for $49.25 million per vessel,  consisting of $43.25 million cash
     and one million shares of OMI common stock valued at $6.00 per share,  with
     a  share  price  guarantee  from  OMI at  $5.70  over a six  month  period.
     Frontline will pay to OMI any shortfall of time charter equivalent earnings
     per vessel below an average of $20,000 per day for one year from  delivery.
     Delivery of the vessels to OMI is expected to occur in the third quarter of
     2003.

     On June 9, 2003,  the Company  announced  that it had agreed to sell two of
     the  Company's  2001  built  Suezmax  tankers,  the Front  Melody and Front
     Symphony,  to two German K/Gs promoted by Dr. Peters GmbH.  The vessels are
     expected  delivered  to their new owners in June 2003.  The vessels will be
     chartered back on 12.5 years time charter  arrangement,  including  options
     for the Company to buy back the vessels at the end of the charter period.

     On June 9, 2003,  the Company  announced  that it had agreed with  partners
     Euronav  Luxembourg  SA (Euronav)  and  Overseas  Shipholding  Group,  Inc.
     ("OSG") to swap interests in six joint venture companies,  which each own a
     VLCC. The agreements will result in the Company selling its interest in the
     vessel Pacific Lagoon to Euronav;  acquiring,  jointly with OSG,  Euronav's
     interest in the Ariake and Sakura I increasing its share in such vessels to
     50.1 per cent each;  and  exchanging its interest in the Ichiban (33.33 per
     cent) with  Euronav for a portion of  Euronav's  interest in the Tanabe and
     Hakata increasing its interest in these vessels to 50.1 per cent each.

     On June 9, 2003, the Company  announced that it had decided to exercise the
     Company's  call  option on the  Frontline  shares  held by the Bank of Nova
     Scotia (see Note 20). The transaction involves 3,070,000 shares, which will
     be acquired at a cost of $8.97 per share.  The shares  acquired as a result
     will   immediately  be  cancelled,   bringing  the  number  of  issued  and
     outstanding  ordinary shares of the Company to 73,473,066.  The transaction
     effectively terminates the current BNS facility.

     On June 9, 2003,  the Company  declared a dividend of $1.00 per share to be
     paid on or about July 7, 2003.

     On July 1,  2003 the  Company's  subsidiary  Golden  Ocean  Group  Limited,
     entered into an option  agreement with Hemen.  The option  agreement  gives
     Golden Ocean the right to acquire all of the shares of Independent  Tankers
     Corporation  ("ITC") from Hemen for a total  consideration  of $4.0 million
     plus 4 per cent  interest per year.  ITC owns a total of six VLCCs and four
     Suezmax tankers, which are on long-term charters to BP and Chevron.  Golden
     Ocean paid $10.0 million for the option, which expires on July 1, 2010. The
     total book value of ITC's  consolidated  assets at  December  31,  2002 was
     approximately $960 million.

<PAGE>

ITEM 19.          EXHIBITS

Number            Description of Exhibit

1.1*              Memorandum of  Association of the Company,  incorporated  by
                  reference  to  Exhibit  3.1  of the  Company's  Registration
                  Statement on Form F-1,  Registration  No.  33-70158 filed on
                  October 12, 1993 (the "Original Registration Statement").

1.4*              Amended and  Restated  Bye-Laws of the Company as adopted by
                  shareholders on October 26, 2001,  incorporated by reference
                  to the  Company's  Annual  Report  on Form 20-F for the year
                  ended December 31, 2001, filed on July 1, 2002.

2.1*              Form  of  Ordinary  Share   Certificate,   incorporated   by
                  reference  to  Exhibit  4.1  of  the  Original  Registration
                  Statement.

2.2*              Form of Deposit  Agreement  dated as of November  24,  1993,
                  among  Frontline  Ltd.  (F/K/A London & Overseas  Freighters
                  Limited),  The  Bank  of New  York  as  Depositary,  and all
                  Holders  from time to time of American  Depositary  Receipts
                  issued  thereunder,  including form of ADR,  incorporated by
                  reference  to  Exhibit  4.2  of  the  Original  Registration
                  Statement.

2.3*              Form of Deposit  Agreement dated as of November 24, 1993, as
                  amended and  restated as of May 29,  2001,  among  Frontline
                  Ltd. (F/K/A London & Overseas Freighters Limited),  The Bank
                  of New York as Depositary, and all Holders from time to time
                  of American Depositary Receipts issued thereunder, including
                  form of ADR,  incorporated  by reference to Exhibit 2 of the
                  Company's Annual Report on Form 20-F, filed on June 13, 2001
                  for the fiscal year ended December 31, 2000.

2.4*              Rights  Agreement  (the  "Rights   Agreement")  between  the
                  Company and the Bank of New York  incorporated  by reference
                  to Exhibit 1.3 of the  Company's  Registration  Statement on
                  Form 8-A, File No.0-22704 filed on December 9, 1996.

2.5*              Amendment  No. 1 to the  Rights  Agreement  incorporated  by
                  reference  to Exhibit 4.3 of the  Amalgamation  Registration
                  Statement.

2.6*              The  Subregistrar  Agreement  related to the registration of
                  certain securities issued by Frontline Ltd. in the Norwegian
                  Registry  of   Securities   between   Frontline   Ltd.   and
                  Christiania  Bank og Kreditkasse  ASA together with the Form
                  of Warrant  Certificate  and Conditions  attaching  thereto,
                  incorporated  by reference  to Exhibit 1.1 of the  Company's
                  Annual  Report  on Form  20-F  for  the  fiscal  year  ended
                  December 31, 1998.

4.1*              Form of United  Kingdom Share Option Plan,  incorporated  by
                  reference  to  Exhibit  10.1  of the  Original  Registration
                  Statement.

4.2*              Form of Bermuda Share Option Plan, incorporated by reference
                  to Exhibit 10.2 of the Original Registration Statement.

4.3*              The  Subordinated  Convertible  Loan Facility  Agreement USD
                  89,000,000  dated July 13, 1999,  between  Frontline Ltd. as
                  Borrower and Metrogas Holdings Inc. as Lender,  incorporated
                  by reference to Exhibit 2.1 of the  Company's  Annual Report
                  on Form 20-F for the fiscal year ended December 31, 1998.

4.4*              Master Agreement,  dated September 22, 1999, among Frontline
                  AB and Frontline Ltd (collectively  "FL"), Acol Tankers Ltd.
                  ("Tankers"), ICB Shipping AB ("ICB"), and Ola Lorentzon (the
                  "Agent"),  incorporated  by  reference to Exhibit 3.1 of the
                  Company's  Annual  Report on Form 20-F for the  fiscal  year
                  ended December 31, 1999.

8.1               Subsidiaries of the Company.

99.1              Certification of the Principal Executive Officer

99.2              Certification of the Principal Financial Officer

99.3              Certification of the Principal Accounting Officer

99.4              Certifications under Section 906 of the Sarbanes-Oxley act of
                  2002

* Incorporated herein by reference.
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements  of Section 12 of the  Securities  Exchange Act of
1934, the registrant  certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused  this annual  report to be signed on its behalf
by the undersigned, thereunto duly authorised.

                                                  Frontline Ltd.
                               -------------------------------------------------
                                                   (Registrant)


Date July 15, 2003             By              /s/ Kate Blankenship
     -------------------       -------------------------------------------------
                                                   Kate Blankenship
                                  Company Secretary and Chief Accounting Officer

02089.0009 #416646