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, 2001
                         --------------------------------------------------

                                     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
------------------------------------     ----------------------------------
                None

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

                      American Depositary Shares each
             representing one Ordinary Share, $2.50 Par Value
---------------------------------------------------------------------------
                              (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.
                  76,407,566 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 ADVISORS........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...................................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.    RESERVED....................................................

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,"  "except,"  "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 and in the documents  incorporated  by reference  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 and  currencies,  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 ADVISORS

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,  2001,  2000 and 1999 and the  selected
balance  sheet data of the Company  with  respect to the fiscal years ended
December  31,  2001  and  2000  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, 1998 and
1997 and the selected  balance  sheet data with respect to the fiscal years
ended December 31, 1999,  1998 and 1997 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, 1998 and
1997 has been  restated to reflect the treatment of ICB  Aktiebolag  (publ)
("ICB")  as an  investment  accounted  for in  accordance  with the  equity
method.  (See  Item  4.  A  "Information  on  the  Company  -  History  and
development  of the Company").  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>
                                                                       Fiscal Year Ended December 31,
                                                       ---------------------------------------------------------------
                                                               2001         2000         1999       1998          1997
                                                                                               (restated)   (restated)
                                                       (in thousands, except Ordinary Shares, per Ordinary Share data and ratios)
<S>                                                      <C>          <C>          <C>         <C>            <C>
Income Statement Data:
----------------------
Net operating revenues                                   $  647,345   $  599,944   $ 253,214   $ 203,860    $  197,197
Net operating (loss) income after depreciation           $  384,754   $  376,092   $ (12,210)  $  72,455    $   55,476
Net income (loss) before cumulative effect
    of change in accounting principle                    $  350,389   $  313,867   $ (86,896)  $  31,853    $   22,794
Net (loss) income                                        $  382,728   $  313,867   $ (86,896)  $  31,853    $   22,794
Earnings (loss) per Ordinary Share
 - basic                                                 $     4.99   $     4.28   $   (1.76)  $    0.69    $     0.63
 - diluted                                               $     4.98   $     4.27   $   (1.76)  $    0.69    $     0.63
Cash dividends per Ordinary Share                        $     1.50   $        -   $        -  $       -    $        -

Balance Sheet Data (at end of year):
------------------------------------
Cash and cash equivalents                                $  178,176   $  103,514   $   65,467  $  74,034    $   86,870
Newbuildings and vessel purchase options                 $  102,781   $   36,326   $   32,777  $  75,681    $   48,474
Vessels and equipment, net                               $2,196,959   $2,254,921   $1,523,112  $1,078,956   $  970,590
Vessels under capital lease, net                         $  317,208   $  108,387   $        -         $-    $        -
Total assets                                             $3,033,774   $2,780,988   $1,726,793  $1,505,414   $1,369,849
Long-term debt (including current portion)               $1,391,951   $1,544,139   $1,079,694  $ 883,021    $  773,150
Obligations under capital lease (including
  current portion)                                       $  300,790      109,763            -          -    $        -
Stockholders' equity                                     $1,252,401    1,029,490      557,300    583,574    $  556,010
Ordinary Shares outstanding                                                                                 46,106,860

Cash Flow Data
--------------
Cash provided by operating activities                    $  477,607   $  271,582   $   46,486  $  69,592    $   67,449
Cash provided by (used in) investing activities          $(103,782)   $(496,918)   $  175,532  $(143,955)   $(283,299)
Cash provided by (used in) financing activities          $(299,163)   $  263,383   $(230,585)  $  61,527    $  244,717

Other Financial Data
--------------------
EBITDA (1)                                               $  528,796     $481,789      $82,292    $137,099     $116,795
Cash Earnings (2)                                        $  443,796     $392,184       $5,662     $82,843      $74,278
Return on capital employed (percentage) (3)                   14.7%        18.2%         0.1%        6.5%         6.2%
Equity to assets ratio (percentage) (4)                       41.3%        37.0%        32.3%       38.8%        40.6%
Debt to equity ratio (5)                                        1.4          1.6          1.9         1.5          1.4
Price earnings ratio (6)                                        2.1          3.3         neg.         2.8         19.8

</TABLE>


Footnotes

(1) EBITDA  represents net income (loss) before  interest  expense,  income
    taxes,  depreciation and amortisation expenses.  EBITDA is not required
    by US  generally  accepted  accounting  principles  and  should  not be
    considered as an  alternative  to net income or any other  indicator of
    the Company's  performance required by US generally accepted accounting
    principles.
(2) Cash earnings  represents net income (loss) before cumulative effect of
    change in accounting  principle,  foreign  exchange  gains (losses) and
    depreciation and amortisation expense. Cash earnings is not required by
    US  generally  accepted   accounting   principles  and  should  not  be
    considered as an  alternative  to net income or any other  indicator of
    the Company's  performance required by US generally accepted accounting
    principles.
(3) 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.
(4) Equity to  assets  ratio is  calculated  as total stockholders'  equity
    divided by total assets.
(5) Debt to equity ratio is calculated as total  interest  bearing  current
    and long-term liabilities,  including obligations under capital leases,
    divided by stockholders' equity.
(6) 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.  Recent
market  conditions  in the industry have  unfavourably  affected the market
values of our vessels.  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  recently  approved  a revised  timetable  for the  phasing  out of
single-hull  oil  tankers by 2015,  or with the  consent of the  country of
registry of the vessel and subject to certain operational restrictions,  by
2017. The proposal  identifies  three  categories of tankers based on cargo
carrying  capacity  and the  presence  or absence of  protectively  located
segregated  ballast  tanks.  Under the new IMO  proposal,  single-hull  oil
tankers with  carrying  capacities of 20,000  deadweight  tons, or dwt, and
above carrying crude oil, fuel oil, heavy diesel oil or lubricating  oil as
cargo, and of 30,000 dwt and above carrying other oils, which do not comply
with IMO  requirements for protectively  located  segregated  ballast tanks
will be phased out no later than 2007. Single-hull oil tankers with similar
carrying  capacities which do comply with IMO requirements for protectively
located  segregated  ballast  tanks  are to be  phased  out by 2015,  or in
certain  cases 2017,  depending on the date the vessel was  delivered.  All
other  single-hull  oil tankers with  carrying  capacities of 5,000 dwt and
above,  and not  falling  into one of the  above  categories,  will also be
phased out by 2015, depending on the date the was delivered vessel.

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.

Our  earnings  could suffer if we do not  successfully  employ our dry bulk
vessels when their bareboat charters and time charters terminate

Most of the vessels (nine of the ten vessels) in the dry bulk fleet that we
acquired through our purchase of Golden Ocean Group Limited in 2000 operate
under long-term charters.  Although these long-term charters provide steady
streams of revenue,  the vessels that are subject to these charters may not
be  available  for spot  voyages  during an upswing in the dry bulk  market
cycle,  when spot voyages  might be more  profitable.  Additionally,  if we
cannot  recharter those vessels on long term charters or employ them in the
spot market profitably when their current charters expire,  this could have
a  material  adverse  impact on our  financial  condition  and  results  of
operations.

Competition

The  operation  of  tanker  vessels  and the  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.

Newbuildings

We placed orders for five VLCCs, of which four are expected to be delivered
in 2002 and the final  one is  expected  to be  delivered  in 2003.  We are
required  to make  progress  payments  during  the  construction  of  these
vessels,  but we will not derive any revenue from these vessels until after
their delivery. If the shipyards are unable to complete the contracts or if
we are unable to obtain the  financing  required to pay for the delivery of
the vessels,  we may forfeit all or a portion of the instalments  that have
been paid..

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

Our  existing   financing   agreements   impose   operation  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.

Fluctuations in the yen could affect our earnings

Some of our vessels  obtained through our acquisition of Golden Ocean Group
Limited, or Golden Ocean, 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 a material
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 Tr0im, 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. Tr0im,  for any extended period of time could have an adverse effect on
our business and results of operations.

Our vessels may suffer damage and we may face unexpected  drydocking  costs
which could affect our cash flow and our ability to service our debt

If our vessels suffer damage,  they may need to be repaired at a drydock or
other type of ship repair facility. The costs of drydock and/or repairs are
unpredictable  and can be  substantial.  We may have to pay  drydocking and
repair  costs  that our  insurance  does not  cover.  This  would  decrease
earnings.  Repairs may involve long periods of inactivity  which may have a
negative effect on earnings and our ability to service our debt.

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.

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 lot 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  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

As a result of the  September  11, 2001  terrorist  attacks and  subsequent
events,  there has been  considerable  uncertainty  in the world  financial
markets.  The full effect of these events, as well as concerns about future
terrorist  attacks,  on the financial  markets is not yet known,  but could
include,  among  other  things,   increased  volatility  in  the  price  of
securities.  These uncertainties could also adversely affect our ability to
obtain  additional  financing on terms  acceptable to us or at all.  Future
terrorist  attacks 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 articles of incorporation  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, 2001.

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  would 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 its telephone
number is +1 (441) 295-6935.

We are engaged  primarily in the  ownership  and  operation of oil tankers,
including  oil/bulk/ore  ("OBO") carriers.  We operatetwo sizes of tankers:
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,  we  acquired  a fleet of dry bulk  carriers  that  includes
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,
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. ("Old  Frontline")  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 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
addition to its listing on the Oslo Stock Exchange.

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 (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 (the  "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 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 (the "Amalgamation") 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  ("Frontline  Warrants") 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 share capital 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)  ("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  September  1999,  pursuant  to  an  agreement  (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  (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 June 14, 2002.

Acquisition of Golden Ocean Group Limited
In October  2000,  Frontline  took  control of Golden  Ocean Group  Limited
("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.  (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  on  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
On April 23,  2001,  Frontline  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 to be  delivered.  The two  mid-70s  built  VLCCs have
subsequently  been sold by the Company.  The first of the  newbuildings was
delivered  in January  2002,  the second and third are due for  delivery in
September 2002 and June 2003, respectively.

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 29 owned,  part-owned or controlled VLCCs and 30 owned,
part-owned or controlled  Suezmax tankers,  of which 8 are Suezmax OBOs. In
addition,  the we  have  a  fleet  of 8  wholly  owned  dry  bulk  carriers
consisting of 3 Capesize,  2 Panamax and 3 Handymax size carriers and has a
fifty per cent  interest in a further two Handymax size bulk  carriers.  We
also charter in six modern VLCCs and two modern  Suezmax  tankers.  At June
14,  2002 we also had five  newbuilding  VLCCs on order,  including  one in
which we have a 33.33  per cent  interest,  and have a  purchase  option to
acquire a further VLCC.

In 2001, we took delivery of two  wholly-owned  Suezmax  newbuildings,  and
three new  double-hulled  VLCCs in which we have a 33.33 per cent interest.
In 2001,  we also took  delivery of four VLCCs built in 1999 and 2000 which
we had  purchase  options  on. In  addition,  through  our  acquisition  of
Mosvold, we acquired two VLCCs built in the mid 1970s and three newbuilding
contracts for VLCCs. We have subsequently sold the two mid-70s built VLCCs.
The first of the newbuildings was delivered in January 2002, the second and
third are due for delivery in August 2002 and June 2003,  respectively.  In
2001, we also sold two 1993-built VLCCs and a 2000 built Suezmax tanker.

In 2002 to date, we have taken delivery of three newbuilding  VLCCs, two of
which are wholly owned and one in which we have a 33.33 per cent interest.

The fleet that we operate has a total tonnage of approximately 17.7 million
dwt, and its tanker  vessels have an average age of 6.4 years compared with
an  estimated  industry  average of over 11.0  years.  We believe  that our
vessels   comply  with  the  most   stringent   of   generally   applicable
environmental  regulations  for tankers.  Our dry bulk fleet has an average
age of 4.2 years.

We own various ship 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 normally used
only to  transport  crude  oil from the  Middle  East Gulf to the Far East,
Northern  Europe,  the  Caribbean  and  the  Louisiana  Offshore  Oil  Port
("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 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
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 the Oil  Pollution Act of
1990 ("OPA 90"). See "Regulation".

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.

Freight  rates  started  to  improve  in spring  2000 after a period of low
activity in 1999. Continuing increases in oil demand through 2000, together
with modest tanker fleet growth due to relatively low newbuilding activity,
resulted in extremely strong market  conditions in the winter of 2000/2001.
In spring 2001, rates started to decline  following a slow down in economic
growth combined with high crude oil prices. OPEC made large cutbacks in oil
production  quotas to avoid a build-up of oil inventories  which would have
lead to a collapse  in oil  prices.  During  2001,  seaborne  oil trade and
overall  transport  distances  declined  resulting  in  decrease in tonnage
demand and tanker fleet utilisation.

The decrease in transport distances was attributable to a relative increase
in  non-OPEC  production  which  necessitated   significant  cuts  in  OPEC
production  to support  crude oil  prices.  The  developments  in 2001 have
continued  to date  and VLCC  rates  in  particular  have  been  negatively
affected in 2002  whereas the Suezmax  market has been partly  supported by
increasing  oil  exports  from the Russian  Black Sea where  VLCC's are not
allowed to trade.

The VLCC spot market rates started 2001 at a very high level of $70,000 per
day  to  average  around  $40,000  for  the  year,   which  was  down  from
approximately  $46,000 for the year before.  Suezmaxes likewise started the
year at high rates,  $60,000 per day and  finished  the year at $20,000 per
day averaging  slightly over $30,000 per day for the year.  Declining rates
combined with  continuously  increasing  quality  demands caused removal of
approximately 40 VLCCs and 31 Suezmax - through scrappings,  conversions or
total losses,  in 2001.  This trend has continued into 2002. The VLCC fleet
currently consists of 6 per cent fewer vessels than 18 months ago.

All of the  Company's  dry bulk  vessels  are fixed on medium to  long-term
bareboat or time charters.

Our plan is to create one of the world's  largest  publicly traded shipping
companies, with a modern, high quality VLCC and Suezmax fleet. 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  carryin  cargo,  until  they are
rechartered. It is the time element associated with these ballast legs that
the 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 ("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,  orTankers,  to pool the  commercial  operation  of the  participating
companies'  modern VLCC fleets (the  "Tankers  Pool").  As at December  31,
2001, Tankers managed a fleet of approximately 55 modern VLCCs, of which we
contributed 26. Tankers mainly employ 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  to Tankers by the
shipowner.  In May 2002, it was announced  that the Company would leave the
Tankers Pool. The  commercial  operations of our VLCCs will be brought back
in-house under our direct management.

In 1998,  in order to increase our 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 42 Suezmax tankers,  of which the majority 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.  The part-owned  Suezmax
tanker  "Polytraveller",  which is employed  outside of Alliance,  has been
chartered to Navion ASA until January 2003. Since April 2001, "Polytrader",
which was  chartered to Navion ASA until April of 2001,  has been traded in
the spot market.

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 ("Frontline Management") and
Frontline Management (Bermuda) Limited, both wholly-owned subsidiary 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 Bahamas,  Bermuda, 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 us. 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,
   most of our vessels are crewed with full  Russian  crews,  while  others
   have full  Indian  or full  Filipino  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, 2001, 2000 and 1999, 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 that we own or control,  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 we engage.

Risk of Loss and Insurance

Our business is affected by a number of risks, including mechanical failure
of the vessels,  collisions,  property  loss to our 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 for 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 to cover 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
against the accident-related  risks involved in the conduct of our business
and that we  maintains  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.

Regulations

Government regulation  significantly affects the ownership and operation of
the Company's  vessels.  The various types of governmental  regulation that
affect our vessels include international  conventions,  national, state and
local laws and  regulations  in force in the countries in which our vessels
may  operate or where our  vessels are  registered.  We cannot  predict the
ultimate cost of complying with these requirements,  or the impact of these
requirements  on the resale value or useful  lives of our vessels.  Various
governmental and quasi-governmental  agencies require us to obtain permits,
licenses and  certificates  for the  operation of our vessels.  Although we
believe  that  we  are   substantially   in  compliance   with   applicable
environmental  and  regulatory  laws  and have all  permits,  licenses  and
certificates   necessary  for  the  conduct  of  our   operations,   future
non-compliance or failure to maintain  necessary permits or approvals could
require us to incur substantial  costs or temporarily  suspend operation of
one or more of our vessels.

We believe  that the  heightened  environmental  and  quality  concerns  of
insurance  underwriters,  regulators  and charterers are leading to greater
inspection  and safety  requirements  on all vessels and may accelerate the
scrapping   of  older   vessels   throughout   the   industry.   Increasing
environmental  concerns  have created a demand for modern  vessels that are
able to conform to the stricter environmental  standards.  We maintain high
operating  standards  for all of our  vessels  that  emphasize  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.

Environmental Regulation--IMO.

In April 2001, the International Maritime Organization,  or IMO, the United
Nations'  agency for maritime  safety,  revised its  regulations  governing
tanker design and inspection requirements.  The proposed regulations, which
are expected to become  effective in 2002,  provided that they are ratified
by the IMO member states, provide for a more aggressive phase-out of single
hull  oil  tankers  as  well  as  increased   inspection  and  verification
requirements.  They  provide  for the  phase-out  of most  single  hull oil
tankers by 2015 or earlier,  depending on the age of the vessel and whether
or not the vessel  complies  with  requirements  for  protectively  located
segregated  ballast tanks.  Segregated ballast tanks use ballast water that
is completely  separate from the cargo oil and oil fuel system.  Segregated
ballast  tanks  are  currently  required  by the IMO on crude  oil  tankers
constructed after 1983. The changes,  which will likely increase the number
of tankers that are scrapped  beginning in 2004, are intended to reduce the
likelihood of oil pollution in international waters.

The proposed  regulations  identify  three  categories  of tankers based on
cargo carrying capacity and the presence or absence of protectively located
segregated  ballast tanks.  Under the new IMO regulations,  single-hull oil
tankers with  carrying  capacities of 20,000  deadweight  tons, or dwt, and
above carrying crude oil, fuel oil, heavy diesel oil or lubricating  oil as
cargo, and of 30,000 dwt and above carrying other oils, which do not comply
with IMO  requirements for protectively  located  segregated  ballast tanks
will be phased out no later than 2007. Single-hull oil tankers with similar
carrying  capacities which do comply with IMO requirements for protectively
located  segregated ballast tanks are to be phased out by 2015, or with the
consent of the  country of  registry  of the vessel and  subject to certain
operational restrictions, by 2017, depending on the date of delivery of the
vessel. All other single-hull oil tankers with carrying capacities of 5,000
dwt and above and not falling into one of the above categories will also be
phased out by 2015, depending on the date of delivery of the vessel.

The requirements  contained in the International Safety Management Code, or
ISM  Code,  promulgated  by the  IMO,  also  our  operations.  The ISM Code
requires  the party  with  operational  control  of a vessel to  develop an
extensive 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. 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 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, or by
an appointed classification society, under the ISM Code. All of our vessels
and their operators have received ISM Certification.

Noncompliance  with the ISM Code and other IMO  regulations may subject the
shipowner  or a bareboat  charterer  to  increased  liability,  may lead to
decreases in  available  insurance  coverage  for affected  vessels and may
result in the 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.

All of our vessels delivered since 1997 are of double hull construction and
comply with the IMO regulations upon their effective date. We cannot at the
present time  evaluate the  likelihood of whether  compliance  with the new
regulations  regarding inspections of all vessels will adversely affect our
operations, or the magnitude of any such adverse effect, due to uncertainty
of interpretation of the IMO regulations.

The IMO has negotiated international  conventions that impose liability for
oil pollution in international waters and a signatory's territorial waters.
Additional or new  convention,  laws and  regulations  may be adopted which
could  limit our  ability to do  business  and which  could have a material
adverse effect on our business and results of operations.

Environmental Regulation--United States

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, applies
to the  discharge of hazardous  substances  whether on land or at sea. Both
OPA and CERCLA impact our operations.

Under OPA, vessel owners, operators and bareboat or "demise" charterers are
"responsible parties" who are all liable regardless of fault,  individually
and as a group,  for all  containment  and clean-up costs and other damages
arising from oil spills from their  vessels.  These  "responsible  parties"
would not be liable if the spill results solely from the act or omission of
a third party, an act of God or an act of war. The other damages aside from
clean-up and containment costs are defined broadly to include:

      -   natural resource damages and related assessment costs;

      -   real and personal property damages;

      -   net  loss  of  taxes,  royalties,   rents,  profits  or  earnings
          capacity;

      -   net cost of public  services  necessitated  by a spill  response,
          such as protection from fire, safety or health hazards; and

      -   loss of subsistence use of natural resources.

OPA limits the  liability of  responsible  parties to the greater of $1,200
per gross ton or $10  million  per  tanker.  This is  subject  to  possible
adjustment for inflation.  OPA specifically  permits  individual  states to
impose their own liability  regimes with regard to oil pollution  incidents
occurring within their boundaries, and some states have enacted legislation
providing for unlimited  liability for discharge of pollutants within their
waters. In some cases, states which have enacted their own legislation have
not  yet  issued   implementing   regulations   defining   tanker   owners'
responsibilities under these laws.

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 LOOP; or

      -   unloading with the aid of another vessel,  a process  referred to
          in the industry as  "lightering,"  within  authorized  lightering
          zones more than 60 miles off-shore.

CERCLA,  which  applies  to owners and  operators  of  vessels,  contains a
similar  liability  regime 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 willful misconduct. These limits do
not apply if the responsible  party fails or refuses to report the incident
or to  cooperate  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 U.S.  Coast Guard  evidence of financial  responsibility  sufficient to
meet the limit of their  potential  strict  liability  under OPA.  The U.S.
Coast  Guard  has  enacted  regulations  requiring  evidence  of  financial
responsibility in the amount of $1,500 per gross ton for tankers,  coupling
the OPA  limitation  on  liability  of $1,200 per gross ton with the CERCLA
liability limit of $300 per gross ton. 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 will be required to 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.  We currently  maintain  evidence of
financial responsibility through Shoreline Mutual (Bermuda) Ltd.

We currently  insure and,  provided such insurance  remains  available at a
commercially  reasonable  cost,  plan to insure  each of our  vessels  with
pollution,  spillage  and leakage  liability  insurance in the amount of $1
billion per vessel per occurrence.  This is the amount currently  available
to us in  the  insurance  market  on  commercially  reasonable  terms.  The
liability  resulting from a  catastrophic  spill could exceed the insurance
coverage available, in which event there could be a material adverse effect
on us.  Additionally,  under OPA,  the  liability of  responsible  parties,
United States or foreign, with regard to oil pollution damage in the United
States is not pre-empted by any international convention.



Owners or  operators of tankers  operating  in the waters of the U.S.  must
file vessel response plans with the U.S. Coast Guard, and their tankers are
required to operate in  compliance  with their U.S.  Coast  Guard  approved
plans. These response plans must, among other things:

      -   address a "worst case" scenario and identify and ensure,  through
          contract or other approved means,  the  availability of necessary
          private   response   resources   to  respond  to  a  "worst  case
          discharge";

      -   describe crew training and drills; and

      -   identify a qualified  individual with full authority to implement
          removal actions.

Our tankers that call in the U.S. meet this requirement.

In addition to federal laws and regulation,  most U.S. states that border a
navigable  waterway have enacted  environmental  pollution laws that impose
strict liability on a person for removal costs and damages resulting from a
discharge of oil or a release of a hazardous  substance.  These laws may be
more stringent than U.S. federal law. OPA specifically  permits  individual
states to impose their own  liability  regimes with regard to oil pollution
incidents  occurring within their boundaries,  and many states have enacted
legislation providing for unlimited liability for oil spills.

Several of our vessels  currently  carry  cargoes to United  States  waters
regularly  and we believe  that all of our vessels are suitable to meet OPA
requirements  and that thjey would also  qualify for trade if  chartered to
serve U.S. ports.

It is impossible  to predict what  additional  legislation,  if any, may be
promulgated by the United States or any other country or authority.

Environmental Regulation--CLC

Although the U.S. is not a party to these conventions,  many countries have
ratified and follow the liability  scheme adopted by the IMO and set out in
the  International  Convention on Civil Liability for Oil Pollution Damage,
1969,  or CLC.  Under  this  convention,  a  vessel's  registered  owner is
strictly liable for pollution damage caused in the territorial  waters of a
contracting  state by discharge of oil, subject to some complete  defenses.
Liability  is limited to  approximately  $270 per gross  registered  ton or
approximately $28.3 million, whichever is less. If, however, the country in
which the damage  results is a party to the 1992  Protocol to the CLC,  the
maximum liability rises to $74.9 million. The limit of liability is tied to
a unit of account  which varies  according to a basket of  currencies.  The
right to limit  liability  is  forfeited  under  the CLC 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.  Vessels
trading to states which are party to this convention must provide  evidence
of insurance  covering the limited liability of the owner. In jurisdictions
where the CLC has not been adopted,  various  legislative schemes or common
law govern,  and liability is imposed  either on the basis of fault or in a
manner similar to the CLC.

Environmental Regulations -- EU

The  International   Maritime  Organization  has  approved  an  accelerated
timetable  for  the   phase-out  of  single  hull  oil  tankers.   The  new
regulations, expected to take effect in 2002, provided they are ratified by
the IMO member  states,  require  the  phase-out  of most  single  hull oil
tankers by 2015 or earlier,  depending on the age of the tanker and whether
or not 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.  The amendments to
the  International  Convention for the Prevention of Marine  Pollution from
Ships  1973,  as  amended  in  1978,  accelerates  the  phase-out  schedule
previously  set by the IMO in 1992. We expect that the European  Union will
incorporate the IMO regulations so that port states may enforce them.

The  sinking of the oil tanker  "Erika" off the coast of France on December
12, 1999 polluted more than 250 miles of French  coastline  with heavy oil.
Following the spill, the European  Commission  adopted a "communication  on
the safety of oil transport by sea," also named the "Erika communication."

As a part of this,  the Commission has adopted a proposal for a general ban
on single-hull  oil tankers.  The timetable for the ban shall be similar to
that set by the United  States  under OPA in order to prevent  oil  tankers
banned from U.S. waters from shifting their trades to Europe. The ban plans
for a gradual phase-out of tankers depending on vessel type:

      -   Single-hull oil tankers larger than 20,000 dwt without protective
          ballast  tanks around the cargo tanks.  This category is proposed
          to be phased out by 2005.

      -   Single-hull oil tankers larger than 20,000 dwt in which the cargo
          tank area is partly  protected by segregated  ballast tank.  This
          category is proposed to be phased out by 2015.

      -   Single-hull  tankers  below 20,000 dwt. This category is proposed
          to be phased out by 2015.

In  addition,  Italy  announced a ban of single hull crude oil tankers over
5,000 dwt from most Italian ports,  effective  April 2001,  which has since
been delayed.  This ban will be placed on oil product  carriers,  effective
December  1,  2003.  It  is  impossible  to  predict  what  legislation  or
additional regulations, if any, may be promulgated by the European Union or
any other country or authority.


<PAGE>



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 the Company's  significant  subsidiaries and equity interests as
of June 14, 2002:

<TABLE>
                                                                          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%
Bandama Ltd.                           Polytrader and Polytraveller          Liberia          100%
Bonfield Shipping Ltd.                                 Front Driver          Liberia          100%
Dundee Navigation SA                                         Dundee          Liberia         50.1%
Edinburgh Navigation SA                                   Edinburgh          Liberia         50.1%
Fourways Marine                                        Front Spirit          Liberia          100%
Front Ardenne Inc.                                    Front Ardenne          Liberia          100%
Front Barbant Inc.                                    Front Barbant          Liberia          100%
Front Eagle Corporation                                 Front Eagle          Liberia          100%
Front Glory Shipping Inc.                               Front Glory          Liberia          100%
Front Pride Shipping Inc.                               Front Pride          Liberia          100%
Front Serenade Inc.                                  Front Serenade          Liberia          100%
Front Splendour Shipping Inc.                       Front Splendour          Liberia          100%
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 Door Corporation                               Golden Nerina          Liberia          100%
Golden Estuary Corporation                           Front Comanche          Liberia          100%
Golden Fjord Corporation                             Front Commerce          Liberia          100%
Golden Fountain Corporation                         Golden Fountain          Liberia           50%
Golden Gulf Corporation                                 Golden Aloe          Liberia          100%
Golden Hilton Shipping Corporation                Channel Navigator          Liberia          100%
Golden Key Corporation                                  Golden Disa          Liberia          100%
Golden Lagoon Corporation                            Pacific Lagoon          Liberia           50%
Golden Loch Corporation                               Golden Protea          Liberia          100%
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%
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%
Middleburg Properties Ltd.                             Golden Daisy          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%
Reese Development Inc.                                  Golden Rose          Liberia           50%
Ryan Shipping Corporation                             Front Warrior          Liberia          100%
Sable Navigation SA                                 Channel Poterne          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%
Touracous Pte Ltd.                                        Kim Jacob        Singapore          100%
Transcorp Pte Ltd.                                     Front Guider        Singapore          100%

</TABLE>


D. PROPERTY, PLANTS AND EQUIPMENT

The Company's Vessels

We operate a substantially  modern fleet of tankers consisting of 35 VLCCs,
24 Suezmax tankers and eight Suezmax OBO carriers. In addition we have five
newbuilding  contracts and have a purchase  option to acquire a further one
VLCC tanker.  We also have a fleet of 10 dry bulk  carriers.  The following
table sets forth the fleet that we operate as of June 14, 2002:


<PAGE>


<TABLE>
TANKER FLEET
Owned Tonnage

                                      Approximate                                                  Type of
                                      -----------                                                  -------
Vessel                      Built            Dwt.          Construction     Flag                Employment
------                      -----            ----          ------------     ----                ----------
<S>                         <C>           <C>              <C>              <C>           <C>
VLCCs
-----
Front Sabang                 1990         285,000           Single-hull       SG              Tankers Pool
Front Vanadis                1990         285,000           Single-hull       SG              Tankers Pool
Front Highness               1991         284,000           Single-hull       SG              Tankers Pool
Front Lady                   1991         284,000           Single-hull       SG              Tankers Pool
Front Lord                   1991         284,000           Single-hull       SG              Tankers Pool
Front Duke                   1992         284,000           Single-hull       SG              Tankers Pool
Front Duchess                1993         284,000           Single-hull       SG              Tankers Pool
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              Tankers Pool
Golden Fountain (50%)        1995         302,000           Single-hull      PAN              Time Charter
Golden Stream                1995         276,000           Single-hull      PAN              Time Charter
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          Bareboat Charter
Opalia                       1999         302,000           Double-hull      IoM          Bareboat Charter
Pacific Lagoon (50%)         1999         306,000           Double-hull      PAN              Time Charter
Front Comanche               1999         300,000           Double-hull      FRA              Time Charter
Front Commerce               1999         300,000           Double-hull      LIB              Tankers Pool
Front Tina                   2000         298,000           Double-hull      LIB              Time Charter
Front Commodore              2000         299,000           Double-hull      BDA              Tankers Pool
Ichiban                      2000         296,000           Double-hull       BS              Tankers Pool
Ariake                       2001         296,000           Double-hull       BS              Tankers Pool
Sakura I                     2001         296,000           Double-hull       BS              Tankers Pool
Front Eagle                  2002         308,000           Double-hull       BA              Tankers Pool
Front Serenade               2002         298,500           Double-hull      LIB              Tankers Pool
Tanabe (33.33%)              2002         286,000           Double-hull       BA              Tankers Pool
Hull No. 4979                2002         299,000           Double-hull      LIB
Hull No. 4980                2002         299,000           Double-hull      LIB
Hull No. 4983 (33.33%)       2002         308,000           Double-hull       BA
Hull No. 1402                2002         308,000           Double-hull       BA
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

</TABLE>




<PAGE>

<TABLE>

<S>                         <C>           <C>              <C>              <C>           <C>
Suezmaxes
---------
Polytrader (40%)             1978         126,000           Single-hull      NIS               Spot market
Polytraveller (35%)          1979         126,000           Single-hull      NOR              Time charter
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               Spot market
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         153,000           Double-hull      NIS               Spot market
Front Sky                    2000         153,000           Double-hull      NIS               Spot market
Front Melody                 2001         150,000           Double-hull      NIS               Spot market
Front Symphony               2001         150,000           Double-hull      LIB               Spot market

Chartered In Tonnage
                                      Approximate                                                  Type of
                                      -----------                                                  -------
Vessel                      Built             Dwt          Construction     Flag                Employment
------                      -----             ---          ------------     ----                ----------

VLCCs
-----
Front Century                1998         311,000           Double-hull       BA              Tankers Pool
Front Champion               1998         311,000           Double-hull       BA              Tankers Pool
Front Chief                  1999         311,000           Double-hull       BA              Tankers Pool
Front Commander              1999         311,000           Double-hull       BA              Tankers Pool
Front Crown                  1999         311,000           Double-hull       BA              Tankers Pool
Golden Victory               1999         305,000           Double-hull      PAN              Tankers Pool


Suezmax
-------
Front Warrior                1998         153,000           Double-hull       BA               Spot market
Kim Jacob                    1998         158,000           Double-hull       SG               Spot market

</TABLE>


<PAGE>


<TABLE>

DRY BULK FLEET
Owned Tonnage

                             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
Channel Poterne      1997          172,000  Single-hull   PHI   Time Charter

Panamax
-------
Golden Disa          1999          75,000   Single-hull   PHI   Time Charter
Golden Nerina        1999          75,000   Single-hull   PHI   Time Charter

Handymax
--------
Golden Rose (50%)    1998          47,000   Single-hull   PHI   Time Charter
Golden Daisy (50%)   1998          47,000   Single-hull   PHI   Time Charter
Golden Aloe          1998          46,000   Single-hull   PHI   Time Charter
Golden Protea        1998          46,000   Single-hull   PHI   Time Charter
Cos Hero             1999          48,000   Single-hull   PAN   Bareboat Charter

</TABLE>


Key to Flags:
BA - Bahamas,  BDA -  Bermuda,  HK - Hong  Kong,  IoM - Isle of Man,  LIB -
Liberia, NOR - Norway, 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 29 owned,  part-owned or
controlled VLCCs and 30 owned, part-owned or controlled Suezmax tankers, of
which 8 are Suezmax OBOs. In addition,  the Company has a fleet of 8 wholly
owned dry bulk carriers consisting of 3 Capesize,  2 Panamax and 3 Handymax
size  carriers and has a fifty per cent  interest in a further two Handymax
size bulk  carriers.  The Company also charters in six modern VLCCs and two
modern  Suezmax  tankers.  At June  14,  2002  the  Company  also  has five
newbuilding VLCCs on order,  including one in which it has a 33.33 per cent
interest, and has a purchase option to acquire a further one VLCC.

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-70s built
VLCCs and three  newbuilding  contracts  for VLCCs.  The two mid-70s  built
VLCCs  have  subsequently  been  sold  by the  Company.  The  first  of the
newbuildings  was delivered in January  2002,  the second and third are due
for delivery in September 2002 and June 2003, respectively.

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
year  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 on 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 ("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,  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  ("Tankers")  to pool the  commercial  operation  of the  participating
companies'  modern VLCC fleets (the  "Tankers  Pool").  As at December  31,
2001,  Tankers managed a fleet of  approximately  55 modern VLCCs, of which
the  Company  contributed  26.  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 into Tankers by the shipowner. In May 2002, it was announced that
the Company would leave the Tankers Pool. The commercial  operations of the
Company's  VLCCs will be brought back in-house  under the Company's  direct
management.

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  ("Alliance").
Alliance  currently  markets 42 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. The part-owned Suezmax "Polytraveller," which is
employed  outside  of  Alliance,  has been  chartered  to Navion  ASA until
January 2003.  Since April 2001, the  "Polytrader,"  which was chartered to
Navion ASA until April of 2001,  has been  traded in the spot market  since
April 2001.

Market Overview

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

Freight  rates  started  to  improve  in spring  2000 after a period of low
activity in 1999. Continuing increases in oil demand through 2000, together
with modest tanker fleet growth due to relatively low newbuilding activity,
resulted in extremely strong market  conditions in the winter of 2000/2001.
In spring 2001, rates started to decline  following a slow down in economic
growth combined with high crude oil prices. OPEC made large cutbacks in oil
production  quotas to avoid a build-up of oil inventories  which would have
lead to a collapse in oil prices.  Over the year 2001,  seaborne  oil trade
and overall transport  distances  declined resulting in decrease in tonnage
demand and tanker fleet utilisation.

The decrease in transport distances was attributable to a relative increase
in  non-OPEC  production  which  necessitated   significant  cuts  in  OPEC
production  to support  crude oil  prices.  The  developments  in 2001 have
continued  to date  and VLCC  rates  in  particular  have  been  negatively
affected in 2002  whereas the Suezmax  market has been partly  supported by
increasing  oil  exports  from the Russian  Black Sea where  VLCC's are not
allowed to trade.

The VLCC spot market rates started 2001 at a very high level of $70,000 per
day  to  average   around   $40,000  for  the  year  which  was  down  from
approximately  $46,000 for the year before.  Suezmaxes likewise started the
year at high rates,  $60,000 per day and  finished  the year at $20,000 per
day averaging  slightly over $30,000 per day for the year.  Declining rates
combined with  continuously  increasing  quality  demands caused removal in
2001 of  approximately  40  VLCCs  and 31  Suezmax  -  through  scrappings,
conversions  or total losses.  This trend has continued into 2002. The VLCC
fleet currently consists of 6 per cent fewer vessels than 18 months ago.

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

                     2001     2000     1999     1998      1997
                     ----     ----     ----     ----      ----
(in $ per day)
VLCC               40,800   46,300   20,000   31,800    32,700
Suezmax            30,700   35,500   16,700   22,400    24,800
Suezmax OBO        28,900   33,300   16,800   21,800    25,500

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 2001, 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 $32.3 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.

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.

Recently Issued Accounting Standards

In June 2001, the Financial  Accounting  Standards Board ("FASB")  approved
SFAS No. 141,  "Accounting  for Business  Combinations"  which requires the
application  of the purchase  method  including the  identification  of the
acquiring enterprise for each transaction.  SFAS No. 141 supercedes APB No.
Opinion 16 and applies to all business  combinations  initiated  after June
30, 2001 and all business combinations accounted for by the purchase method
that are completed after June 30, 2001. The adoption of SFAS No. 141 by the
Company  on June  30,  2001  did  not  have  any  impact  on the  Company's
consolidated results of operations or financial position.

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 will  supersede  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 $14.0 million.
Amortisation expense related to goodwill was $1.9 million, $1.1 million and
$0.5  million  for the  years  ended  December  31,  2001,  2000 and  1999,
respectively.  The Company has not yet determined  what effect the adoption
of SFAS No.  142 will have on its  consolidated  results of  operations  or
financial position.

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  October  2001,  the FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets" ("SFAS 144").  The objectives
of  SFAS  144  are  to  address   significant   issues   relating   to  the
implementation of FASB Statement No. 121, "Accounting for the Impairment of
Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed  Of",  and to
develop a single  accounting  model based on the framework  established  in
SFAS 121,  for  long-lived  assets to be disposed of by sale.  The standard
requires  that  long-lived  assets  that are to be  disposed  of by sale be
measured  at the  lower of book  value  or fair  value  less  cost to sell.
Additionally,  the standard expands the scope of discontinued operations to
include  all  components  of  an  entity  with   operations   that  can  be
distinguished  from the rest of the entity and will be eliminated  from the
ongoing operations of the entity in a disposal transaction.  This statement
is  effective  for fiscal years  beginning  after  December  15, 2001,  and
generally,  its provisions are to be applied prospectively.  The Company is
currently  evaluating  the impact of this statement and does not expect the
adoption of SFAS No. 144 to have a material effect on the Company's results
of operations or financial position.

In April 2002, the FASB issued SFAS No. 145,  "Rescission  of FASB  Statements
No.  4,  44,  and 64,  Amendment  of FASB  Statement  No.  13,  and  Technical
Corrections".  This Statement  rescinds FASB Statement No. 4, Reporting  Gains
and Losses from  Extinguishment  of Debt, and an amendment of that  Statement,
FASB Statement No. 64,  Extinguishments  of Debt Made to Satisfy  Sinking-Fund
Requirements.  This Statement also rescinds FASB Statement No. 44,  Accounting
for Intangible Assets of Motor Carriers.  This Statement amends FASB Statement
No. 13,  Accounting  for Leases,  to  eliminate an  inconsistency  between the
required   accounting  for   sale-leaseback   transactions  and  the  required
accounting  for certain lease  modifications  that have economic  effects that
are similar to sale-leaseback transactions.   This Statement also amends other
existing  authoritative  pronouncements to make various technical corrections,
clarify meanings,  or describe their  applicability  under changed conditions.
This  statement is generally for  transactions  occurring  after May 15, 2002.
The Company is currently evaluating the impact of this statement.

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 and
Notes thereto included herein for details of all of the Companys'  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
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.

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.

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 and 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
four of the Company's  vessels were reduced in the fourth  quarter of 2001.
If the  estimated  economic  useful life is incorrect,  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.  Factors we consider important which
could effect  recoverability  and trigger  impairment  include  significant
underperformance  relative to expected  operating  results and  significant
negative industry or economic trends.

Results of Operations

Year ended December 31, 2001 compared with the year ended December 31, 2000
Total net operating  revenues  increased by 8 per cent to $647.3 million in
2001 compared with $599.9 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 37 per
cent to $ 121.5  million  from $88.5  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 sizes are within expected ranges.

Charterhire  expenses increased to $41.9 million in 2001 from $34.4 million
in 2000 due to the inclusion of Golden Ocean for the full year in 2001.

Administrative expenses have increased 41 per cent to $13.2 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.

In 2001,  earnings before interest,  tax,  depreciation  and  amortisation,
including  earnings  from  associated  companies  increased  10 per cent to
$528.8 million from $481.8 in 2000.

Depreciation and  amortisation  increased 31 per cent from $92.9 million in
2000 to $121.7 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 has reduced the expected useful life
for four of the Company's vessels,  which result in increased  depreciation
of $0.5 million in 2001 for those vessels.

Net interest expense for 2001 was $78.8 million compared with $89.3 million
in 2000, a decrease of 12 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  94 per cent from
$12.8 million in 2000 to $22.3 million due to the inclusion 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 US 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 $14.6 million in
2000 to $28.3  million in 2001 also  reflects the  weakening of the Yen and
the $28.3 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 which 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 rate swaps. 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.  In 2001 the mark to  market  valuation  of the  Equity  Swap  Line
resulted in a credit to income of $4.4 million.

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 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  resulted  in a credit to income of $32.3  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.

Year ended  December 31, 2000,  compared  with the year ended  December 31,
1999  Total  net  operating  revenues  increased  by 137  per  cent in 2000
compared with 1999.  This is due to a combination of the strong increase in
TCE rates earned by the Company's tanker fleet in 2000, the increase in the
size of this  tanker  fleet  and the  contribution  of the dry  bulk  fleet
acquired as part of the Golden Ocean acquisition.  The annual average daily
TCEs earned by the VLCCs, Suezmax tankers, and Suezmax OBO carriers trading
in the spot market were $46,300, $35,500 and $33,300 respectively, compared
with $20,000, $16,700 and $16,800 in 1999.

In 2000,  earnings before interest,  tax,  depreciation  and  amortisation,
including  earnings from associated  companies  increased 485 per cent from
1999  to  $481.8   million.   In  addition  to  the  tanker   market  being
significantly weaker in 1999, the prior year results included the Company's
share  of the  loss on the  sale of  four  VLCCs  in  connection  with  the
acquisition of ICB.

Ship  operating  expenses  decreased  from  $92.7  million in 1999 to $88.5
million in 2000 despite the continued expansion of the fleet as the Company
successfully  maintained its low operating  costs during 2000. In addition,
the Golden Ocean vessels acquired and operating under bareboat  charters do
not have operating  costs borne by the owner.  The average daily  operating
costs of the Company's VLCCs, Suezmax tankers, and Suezmax OBO carriers was
$6,900,  $5,500 and $6,200,  respectively  compared with $6,800, $6,000 and
$6,400 in 1999.

Administrative expenses have decreased 21 per cent in 2000, principally due
to the closure of the office of ICB in Stockholm in early 2000.

Depreciation and amortisation  increased 2 per cent from 1999 to 2000. This
relatively  small  increase  reflects  the  fact  that  while  depreciation
increased  due to the inclusion of the results of Golden Ocean from October
10, 2000 and the other  additional  vessels acquired in 2000, this increase
was  partially  offset by the change in the  estimated  remaining  economic
useful lives of the vessels acquired in the ICB acquisition and the sale of
four ICB vessels late in 1999.  In the fourth  quarter of 1999,  management
determined  that the useful life of these  vessels was 25 years rather than
20 years, as previously  estimated,  and a reduced  depreciation charge has
consequently been applied throughout 2000.

The share in results of associated companies increased 318 per cent in 2000
due to the  Company's  acquisition  of a 40 per cent interest in the vessel
"Front  Tobago"  and the five joint  ventures  obtained  through the Golden
Ocean acquisition. In 2000, the Company recorded a foreign exchange gain of
$14.6 million  arising  primarily in  connection  with the Yen financing of
certain vessels in the Golden Ocean fleet.

Net interest expense was $89.3 million compared with $81.2 million in 1999,
an  increase  of  10  per  cent.  The  Company  had  total  long-term  debt
outstanding  of $1,544  million at December 31, 2000  compared  with $1,080
million at December 31, 1999. In addition the Company had a total amount of
$110 million of obligations  under capital lease. All of this latter amount
and $314 million of the total debt  outstanding  at the end of 2000 related
to the Golden Ocean fleet and these have only impacted the interest expense
in the  last  quarter  of 2000.  At  December  31,  1999  the  Company  had
outstanding  a  specific  loan of  $54.0  million  from  Metrogas  Holdings
("Metrogas"),  a company related to the Company's  Chairman.  This loan was
repaid in full during 2000 through the  conversion to shares in the Company
in an amount equal to $30 million and the remainder through cash repayment.
In 2000,  the Company  benefited  from the  repayment of  high-margin  debt
related to ICB in late  1999,  and the low  interest  rate on Yen debt from
Golden Ocean.  This partly offset the increased average interest rate on US
dollar denominated debt in 2000 compared to 1999.

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 and  maintaining  cash reserves  against
fluctuations  in  operating  cash flows.  Revenues  from time  charters and
bareboat  charters  are received  monthly in advance  while  revenues  from
voyage  charters are received upon  completion  of the voyage.  The Company
receives  distributions  from the  Tankers  International  Pool on a weekly
basis.

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 US dollars with some  balances  held in
Japanese Yen, British Pound and Norwegian Kroner.

As of  December  31,  2001,  2000 and 1999,  the  Company had cash and cash
equivalents   of  $178.2   million,   $103.5  million  and  $65.5  million,
respectively.  The Company generated cash from operations of $477.6 million
in 2001,  compared  with $271.6  million in 2000 and $46.5 million in 1999.
Net cash used in investing  activities in 2001 was $103.8 million  compared
with $497.0  million in 2000.  In 1999 the Company  generated net cash from
investing  activities  of  $175.5  million.  In 2001  investing  activities
consisted primarily of $386.1 million paid for vessel  acquisitions,  $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 tow 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.  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 year  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 1999,  investing  activities  consisted  primarily of
payments for vessel acquisitions,  totalling $200.7 million,  proceeds from
the sale of four VLCCs and one Suezmax of $239.0  million and net  proceeds
from acquisition of ICB of $126.0 million.

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

Cash used in financing  activities was $299.2 million in 2001 compared with
cash provided by financing  activities  of $263.4  million in 2000 and used
net cash in financing  activities totalling $230.6 million in 1999. 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. In 2000
proceeds from long-term  debt were $384.7 million (1999 - $505.9  million).
Repayments of debt were $209.7 million in 2000 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 $1,392.0  million at
December 31, 2001 compared  with $1,544.1  million at December 31, 2000. At
December  31, 2001 $31.5  million of this debt was at a fixed rate of 8 per
cent (2000 - $91.25  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, 2001 the Company's interest rate swap arrangements effectively
fix the Company's interest rate exposure on $362.8 million of floating rate
debt. The interest rate swap  agreements  expire between  February 2003 and
August 2008. The Company has not entered into any financial instruments for
speculative or trading purposes. See Item 11. "Quantitative and Qualitative
Disclosures about Market Risk".

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  VLLC  for
approximately  $53.0 million. At the same time, a $70 million financing was
secured for the 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 US$50 million for Opalia.

In August  2001,  bank  financing  of $75.0  million  was  secured  for the
delivery of the two newbuildings  Suezmax  tankers,  Front Melody and Front
Symphony.  In May 2000 the Company  issued $36 million in commercial  paper
which was used to retire $50.8 million in yard debt.

During  2000 and  2001,  the  Company  has  issued  equity  in a number  of
transactions. The Company issued 4,715,000 ordinary shares at NOK 33.00 per
share to raise  approximately  $20  million  in  equity  through  a private
placement in September  1999.  At the same time $35 million of the Metrogas
Loan was  converted  to  equity in  exchange  for  8,230,000  shares in the
Company issued at NOK 33.00 per share.

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  another  $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  part  finance  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 104.5 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.

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 in 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, 2001, 2000 and 1999, 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  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, 2001 the amounts  outstanding  under the
term  loan and  revolving  credit  facility  was  $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. Repayment of
the loan is secured by a first  mortgage on the vessel  Golden  Stream,  an
assignment  of  earnings  and a pledge  of the  Company's  shares in Golden
Stream  Corporation  and a  performance  guarantee  issued by Golden Ocean.
Golden  Stream  Corporation  failed  to  repay  the  loan on the due  date.
Non-payment  constitutes  a default  under the loan  agreement and entitles
Griffin to exercise its rights  under the loan  security  documents,  which
include taking  possession of the vessel Golden  Stream,  taking control of
Golden Stream  Corporation  and claiming  under the  performance  guarantee
issued by Golden Ocean.

Griffin has not declared a default under the loan  agreement but is working
with the Company's  management to renegotiate payment terms and re-schedule
payment  of the  outstanding  amount of  $48,068,000.  If  Griffin  were to
declare a  default,  cross  default  provisions  in other  loan  agreements
related to Golden  Ocean and its  subsidiaries  could cause all loans to be
repayable  immediately.   The  Golden  Ocean  management  is  confident  of
achieving  a  satisfactory  agreement  with  Griffin,  which  will  involve
re-scheduling  payment  of the  outstanding  amount in line with  projected
cashflows.  There is no guarantee,  however, that a satisfactory  agreement
with Griffin will be achieved and in the event that it is not, Golden Ocean
would be forced to sell assets to pay any shortfall  due to Griffin.  There
is no guarantee that Golden Ocean would be able to raise sufficient capital
through asset sales to pay any shortfall due to Griffin.  These  conditions
give  rise to  substantial  doubt  as to the  ability  of  Golden  Ocean to
continue to operate as a going concern.

At December 31, 2001, Frontline's exposure in the event of a liquidation of
Golden  Ocean is a maximum of $15  million  in equity and $2.49  million in
debt due from Golden Ocean. At June 30, 2002,  Frontline's  exposure in the
event of a  liquidation  of Golden  Ocean is a maximum  of $15  million  in
equity.

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
$8.5 million at the  exchange  rate  prevailing  at December 31, 2001 ($9.8
million at the exchange rate prevailing at June 30, 2002). ICB is appealing
this judgement. In the event that the appeal is not successful, the tax and
accrued  interest  will be accounted  for as an  adjustment to the purchase
price of ICB.

Contractual Commitments
In February 2001, the Company entered into five newbuilding contracts.  Two
Suezmaxes were ordered with Sasebo Shipyard in Japan for delivery in August
and October,  2001. In addition,  three VLCCs were ordered with Hitachi for
delivery in April,  August and October 2002. In connection  with  acquiring
Mosvold  Shipping  Limited in May 2001,  the Company  secured  control over
another  three VLCC  newbuilding  contracts  scheduled  for  delivery  from
Samsung  in 2001,  2002  and 2003  respectively.  The  aforementioned  2001
delivery was  subsequently  delayed until 2002. In addition,  in June 2001,
Frontline  announced that two joint ventures in which  Frontline owns 33.33
per cent of the share capital, had acquired two newbuilding  contracts from
Bergesen. At December 31, 2001, all eight VLCCs were still to be delivered.
Total  contract  amount for the eight vessels were $591.9  million on a 100
per cent  basis or  adjusting  for  other  owners  shares  in the two joint
ventures,  $487.2  million.  By December  31, 2001 $115.1  million  ($102.8
million  adjusted  for  other  owners)  had  been  paid  to  the  yards  as
instalments  in  accordance  with the  respective  contracts.  The  Company
expects to finance the  remaining  commitments  of $476.8  million  ($384.4
million  adjusted for the other owners shares)  through its working capital
and by obtaining bank loans.

At December 31 2001, the Company had outstanding  debt of $1,392.0  million
which is repayable as follows:

   Year ending December 31,
   (in thousands of $)
   2002                                                         227,597
   2003                                                         294,122
   2004                                                         119,374
   2005                                                         106,291
   2006                                                         245,906
   2007 and later                                               398,661
   ---------------------------------------------------------------------
   Total debt                                                  1,391,951
   =====================================================================

At December 31 2001,  the Company had eight vessels  under capital  leases.
The outstanding obligations under capital leases are payable as follows:

     Year ending December 31,
     (in thousands of $)
     -------------------
     2002                                                        227,597
     2003                                                        294,122
     2004                                                        119,374
     2005                                                        106,291
     2006                                                        245,906
     2007 and later                                              398,661
     --------------------------------------------------------------------
     Total debt                                                1,391,951
     ====================================================================

In March 2001, the Company  acquired from a third party, two companies that
owned four drybulk  carriers  that were  chartered in by the Company  under
capital leases.  These drybulk carriers were then refinanced by traditional
bank financing.

Off-Balance Sheet Financing
In 1998  and  1999,  the  Company  entered  into a total  of four  sale and
leaseback  transactions with German KG structures.  In addition, one of the
vessels  obtained  through the  acquisition of ICB was also sold and leased
back prior to the Company's  acquisition of ICB. The minimum terms of these
leases range up to eight years.  The leases of these five vessels are being
accounted for as operating leases. The future minimum rental payments under
the Company's non-cancellable operating leases, are as follows:

     Year ending December 31,
     (in thousands of $)
     -------------------
     2002                                                          40,971
     2003                                                          24,516
     2004                                                          24,123
     2005                                                          24,628
     2006                                                          24,638
     2007 and later                                                 6,023
     --------------------------------------------------------------------
     Total minimum lease payments                                 144,899
     ====================================================================


<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        58       Chairman, Chief Executive Officer,
                                President and Director
Tor Olav Tr0im         39       Vice-President and  Director
A. Shaun Morris        42       Director
Tammy Richardson       30       Director
Kate Blankenship       37       Chief Accounting Officer and
                                Company Secretary
Ola Lorentzon          52       Managing Director of
                                Frontline Management
Tom E. Jebsen          44       Chief  Financial Officer 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 seven  years as a  director  of Sea  Tankers
Management  Co.  Ltd.  ("Sea  Tankers"),  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  which is indirectly  controlled by
Mr. Fredriksen.

Tor Olav Tr0im 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.  Tr0im  was the  Chief  Executive  Officer  of  Frontline
Management,  which company  supports the Company in the  implementation  of
decisions  made by the  Board of  Directors.  Mr.  Tr0im  also  serves as a
consultant  to Sea  Tankers  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. Tr0im
served as Managing  Director  and a member of the Board of Directors of DNO
AS, a Norwegian  oil  company.  Mr. Tr0im 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.

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.  Mr.  Lorentzon  has
been a director and President of ICB since 1987.  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. Since 2001
Mr.  Lorentzon  has been a director  of The UK P&I Club and a member of Den
Norske Veritas 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.

B. COMPENSATION

During the year ended  December 31, 2001, the Company paid to its directors
and executive  officers  (seven  persons)  aggregate cash  compensation  of
$717,513  and an  aggregate  amount of $64,649 for  pension and  retirement
benefits.

During  the year  ended  December  31,  2001,  the  Company  granted to the
Directors  and officers  options to acquire an  aggregate  amount of 34,500
ordinary  shares of the Company.  These  options have an exercise  price of
Norwegian  Kroner  104.56 at March 31, 2002 and expire on January 22, 2006.
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  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 at December  31,  2001,  the Company  and its  subsidiaries  employed 37
people in their respective offices in Bermuda, London and Oslo. The Company
contracts  with the  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 14, 2002, were as follows:

                                                           Percentage of
                              Ordinary Shares of         Ordinary Shares
Director or Officer                   $2.50 each             Outstanding
-------------------           ------------------         ---------------
John Fredriksen*                     34,579,054                45.22%
Tor Olav Tr0im                           84,934                    **
Tammy Richardson                            - -                   - -
A. Shaun Morris                             - -                   - -
Kate Blankenship                          1,000                    **
Ola Lorentzon                               - -                   - -
Tom E. Jebsen                             2,057                    **

*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 14, 2002 are set out in the following table:


<TABLE>
                      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                    $ 12.07         November 8, 2004
                               1,000                    $ 11.73         October 31, 2005
                               1,000                     $ 9.98         February 5, 2007
                              13,000                  NOK 28.66           March 15, 2004
                               9,000                 NOK 104.16         January 22, 2006
                              15,000                     $11.90             June 3, 2007
Ola Lorentzon                 40,000                  NOK 43.16           March 15, 2004
                              18,000                 NOK 104.16         January 22, 2006
                              20,000                     $11.90             June 3, 2007
Tom E. Jebsen                 20,000                  NOK 28.66           March 15, 2004
                               7,500                 NOK 104.16         January 22, 2006
                              15,000                     $11.90             June 3, 2007

</TABLE>

At June  14,  2002  the  Norwegian  Kroner:US  Dollar  exchange  rate  was NOK
7.8594:$ 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 14, 2002, 561,300 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 7 per cent of the issued  share  capital of
the Company. No consideration is payable for the grant of an option.

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 5 per  cent  of the  Company's
outstanding Ordinary Shares; and (ii) all directors and officers as a group
as of June 14, 2002.

                                                             Ordinary Shares
Owner                                                       Amount    Per cent

Hemen   Holding   Ltd.  and 34,579,054                 45.22%
associated companies (1)
All  Directors and Officers 34,666,545                 45.34%
as a group (seven  persons) (2)

(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 June 2001 and June 2000 Hemen Holding Ltd. and associated companies held
45.22% and 44.90% of the Company's Ordinary Shares, respectively.

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

As at June 27, 2002, 7,756,114 of the Company's Ordinary Shares are held by
65 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

During 1996, 1997 and January of 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.,  or  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.

During  1997,   Frontline  received  options  to  assume  five  newbuilding
contracts for the construction and purchase of five VLCC tankers from other
Hemen affiliated  parties.  These options were exercised in March 1998. The
first two VLCC  newbuildings  were  delivered in 1998, the third in January
1999 and the remaining two were delivered in mid 1999.

In May 1998,  the  Company  acquired  control  of three  shipowning  and/or
leasing   structures   which  are  organised  in  a  non-recourse   entity,
Independent Tankers Corporation,  or ITC. The Company acquired ITC for $9.5
million. The Company's investment in ITC was subsequently sold to Hemen for
$9.5 million with effect from July 1, 1998. The Company has remained as the
manager of the  underlying  assets and has  received a five year fair value
call option to buy back ITC.

In June 1998,  the Company  obtained a loan of $87.5 million from Metrogas,
the Metrogas Loan, to finance the acquisition of the five VLCC  newbuilding
contracts  described  above. 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 accrued thereon. In the
years ended  December 31, 2000 and 1999, the Metrogas Loan bore interest at
the rate of 8.0 per cent and the Company  incurred  interest  costs of $1.6
million and $5.4 million,  respectively, of which $2.7 million was expensed
in 1999.

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 and 6.75 per cent in 1999. Interest
expense  recorded by the Company in 2000 in respect of such  financing  was
$1,095,380 (1999 - $428,291).

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., or
OSG, entered into an agreement with Osprey Maritime Limited,  or 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.

In the year ended 31 December, 2001, a subsidiary of Frontline Ltd provided
services to Seatankers Ltd, a company affiliated with Hemen. These services
include management support and administrative  services.  In the year ended
December 31, 2001, the Company has earned  management  fees from Seatankers
Ltd. of $277,855 as income.  As at December  31, 2001 an amount of $266,930
was  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 31 December,  2001,  Frontline  has  provided  management
support and administrative  services to a newbuilding  project known as the
Uljanik Project. As at December 31, 2001, an amount of $47,993 was due from
the Uljanik Project.  The Uljanik Project is owned by Seatankers,  which is
affiliated with Hemen.

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

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 has not paid  regular  quarterly  or annual
dividends since 1997, and it has 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:

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

The timing and amount of dividends,  if any, 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".  Prior to the  transfer of  Frontline  to
Bermuda and subsequent listing of its ordinary shares on the OSE, Frontline
AB's shares were listed on the Stockholm Stock Exchange ("SSE").

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 during 1999, 2000 and 2001.

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.
In 1997 the  Company's  Ordinary  Shares traded on the SSE and the high and
low closing prices were SEK89 and SEK70, respectively.

<TABLE>
                                  NYSE                       OSE                    NASDAQ
                           High          Low          High          Low         High      Low
Fiscal year ended
December 31
<S>                      <C>           <C>       <C>           <C>           <C>      <C>

2001                     $15.45        $6.55     NOK215.50     NOK59.50       $24.50  $11.563
2000                          -            -     NOK164.00     NOK37.00      $18.250   $3.938
1999                          -            -      NOK45.00     NOK16.00       $4.250   $3.000
1998                          -            -      NOK92.00      NOK8.00      $14.500   $3.125
1997                          -            -     NOK121.00     NOK86.00      $16.000  $11.750

</TABLE>

The following table sets forth, for each full financial quarter for the two
most recent fiscal years,  the high and low prices for 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>

                                  NYSE                       OSE                  NASDAQ
                           High          Low          High          Low         High      Low
Fiscal year ended
December 31, 2001
<S>                      <C>           <C>       <C>           <C>           <C>      <C>
First quarter                 -            -     NOK159.50    NOK104.00      $18.188  $11.563
Second quarter                -            -     NOK215.50    NOK157.00       $24.50   $17.00
Third quarter            $15.45        $8.85     NOK176.00     NOK78.50       $19.05   $14.35
Fourth quarter           $10.50        $6.55      NOK93.00     NOK59.50            -        -

Fiscal       year
ended    December
31, 2000
First quarter                 -            -      NOK82.50     NOK37.00       $9.785   $3.938
Second quarter                -            -     NOK106.00     NOK64.00       $12.50   $5.688
Third quarter                 -            -     NOK163.00     NOK98.00      $17.875  $14.750
Fourth quarter                -            -     NOK164.00    NOK103.00      $18.250   $11.37

</TABLE>


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

                                NYSE                      OSE
                         High         Low           High         Low
May 2002             $13.05           $10.81        NOK108.50     NOK90
April 2002           $11.75           $10.19        NOK104.00     NOK87.50
March 2002           $12.50           $10.75        NOK108.00     NOK97.00
February 2002        $11.25           $9.41         NOK97.50      NOK83.50
January 2002         $10.25           $9.05         NOK90.50      NOK82.00
December 2001        $10.50           $8.45         NOK93.00      NOK76.00


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 this Annual Report.

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 filed as
Exhibit 1.4 to this Annual Report.

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  ("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

As described in Item 4., "Information on the Company",  in 2000 the Company
sponsored a plan of  reorganisation,  ir the Plan,  for Golden Ocean in the
United  States  Bankruptcy  Court for the  District of  Delaware.  The Plan
became  effective on October 10, 2000,  at which time the Company  acquired
Golden Ocean. As part of the Plan, the Company paid an aggregate  amount of
approximately  $63 million and issued an aggregate  of  1,245,998  Ordinary
Shares to holders of allowed claims against Golden Ocean.

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 ADSs or  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  (including
shares to be represented by ADSs) 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 ADSs or  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 ADSs or 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 ADSs,  or  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 US Shareholders  of ADSs or Ordinary  Shares.
Bermuda  has  undertaken  not  to  impose  any  such  Bermuda  taxes  on US
Shareholders of ADSs or 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 and at 500 West Madison Street,  Suite 1400,
Northwestern  Atrium  Center,  Chicago,  Illinois  60661.  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
and foreign currency fluctuations.  The Company uses interest rate swaps to
manage  interest rate risk.  The Company has not entered into any financial
instruments for speculative or trading 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  $1,348.6  million at December  31, 2001 (2000:
$1,439.5  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, 2001,  there were eight
swaps with a total notional  principal of $362.8 million (2000 - nine swaps
with  notional  principal  of $373.5  million).  The swap  agreements  have
various  maturity  dates from February 2003 to August 2008, and the Company
would have a loss $4.9 million if it were to terminate the agreements as of
December 31, 2001 (2000 - loss of $0.2  million).  The maximum  exposure to
the  interest  rate  fluctuations  is $985.8  million at December  31, 2001
(2000:  $1,066.0  million).  A one per cent change in interest  rates would
increase  (decrease)  the  interest  expense by $9.8 million per year as of
December 31, 2001 (2000: $10.7 million).

The fair market value of the fixed rate debt on the balance sheet was $33.5
million as of December 31, 2001 (2000: $93.3 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 $0.6 million (2000: $1.5 million).

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.  As a result,  the  Company's  equity is  exposed to
fluctuations in the share price of marketable  securities  considered to be
available-for-sale.  A ten per  cent  change  in the  market  value of such
securities would increase  (decrease) equity by $0.1 million as of December
31, 2001 (2000 - $0.4 million).

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,   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,
2001, the Company had Yen denominated  long-term debt of  (Y)14,378,176,587
and its share of Yen denominated  long-term debt in associate companies was
(Y)9,778,862,882   (2000   -   (Y)15,587,000,000   and   (Y)17,152,359,010,
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

Not Applicable

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  rights were  attached to the  Ordinary
Shares  issued and  2,600,000 of which rights 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,  the
rights were adjusted  pursuant to the Plan, so that there are currently ten
rights attached to each outstanding Ordinary Share.


ITEM 15.    RESERVED


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-33 are filed as part of this annual report:

Financial Statements for Frontline Ltd.
---------------------------------------

Index to Consolidated Financial Statements                                 F-1

Report of Independent Accountants                                          F-2

Report of Independent Accountants                                          F-3

Report of Independent Accountants                                          F-4

Consolidated Statements of Operations for the years ended
December 31, 2001, 2000 and 1999                                           F-5

Consolidated Balance Sheets as of
December 31, 2001 and 2000                                                 F-6

Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999                                           F-7

Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 2001, 2000 and 1999                               F-8

Notes to Consolidated Financial Statements                                 F-9



<PAGE>


Index to Consolidated Financial Statements of Frontline Ltd.
------------------------------------------------------------

Report of Independent Accountants

Report of Independent Accountants

Report of Independent Accountants

Consolidated  Statements of Operations  for the years ended December 31, 2001,
2000 and 1999

Consolidated Balance Sheets as of December 31, 2001 and 2000

Consolidated  Statements of Cash Flows for the years ended  December 31, 2001,
2000 and 1999

Consolidated Statements Changes in Stockholders' Equity for the years ended
December 31, 2001, 2000 and 1999

Notes to Consolidated Financial Statements


<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 2000 and the
results  of their  operations  and their  cash  flows for each of the three
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. In addition,  we did not
audit  the  financial   statements  of  ICB  Shipping  AB,  a  wholly-owned
subsidiary,  for the year ended December 31, 1999. The financial statements
of ICB Shipping AB reflect total revenues of  approximately  $125.8 million
for the year ended December 31, 1999, in conformity with generally accepted
accounting  principles in Sweden. We have audited adjustments  necessary to
convert  the  1999 ICB  Shipping  AB  financial  statements  to  accounting
principles   generally   accepted  in  the  United  States.  The  financial
statements  of Golden Ocean Group  Limited and ICB Shipping AB were audited
by other auditors whose reports  thereon have been furnished to us, and our
opinion expressed herein, insofar as it relates to the amounts included for
Golden  Ocean Group  Limited and ICB  Shipping  AB, is based  solely on the
reports of the other  auditors and our audit of the  adjustments  necessary
for  a  presentation  in  accordance  with  generally  accepted  accounting
principles in the United States. 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

<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, 2001 and 2000 and
the related consolidated statements of operations, changes in stockholders'
equity and cash flows for the year ended  December  31, 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.  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,
2001 and 2000, and the  consolidated  results of their operations and their
cash flows for the year ended December 31, 2001 and the period from October
10, 2000 to December 31, 2000, in  conformity  with  accounting  principles
generally accepted in the United States.

The  accompanying  consolidated  financial  statements  have been  prepared
assuming that the Company will continue as a going concern. As discussed in
note 1 to the consolidated financial statements,  the Company has failed to
repay a loan of $ 48,068,000,  which was fully repayable on March 30, 2002.
Non-payment  constitutes a default under the loan  agreement,  and entitles
the  creditor to exercise  its rights  under the loan  security  documents,
which include  taking  possession of the secured vessel taking control of a
subsidiary  and  claiming  under the  performance  guarantee  issued by the
Company.  In the event that the creditor  declares a default under the loan
agreement,  cross default  provisions in agreements  with other lenders are
such  that  all  of  the  Company's   secured  debt  could  become  payable
immediately.  Management plans in this regard are also disclosed in note 1.
There is substantial  doubt about the ability of the Company to continue as
a going concern.  The financial  statements do not include any  adjustments
that might result from the outcome of this uncertainty.




Moore Stephens
Chartered Accountants
London, England
February 15, 2002
(June 28, 2002 - notes 1 and 21)



<PAGE>


Report of Independent Accountant's Report


To the Board of Directors and Stockholders
ICB Shipping AB


We have audited the accompanying consolidated balance sheet of ICB Shipping
AB and  subsidiaries as of December 31, 1999, and the related  consolidated
statements  of income and changes in  financial  position for the year then
ended.  These consolidated  financial  statements are the responsibility of
the Company's  management.  Our  responsibility is to express an opinion on
the consolidated financial statements based on our audits.

We conducted our audits in accordance  with  auditing  standards  generally
accepted in Sweden that are substantially  equivalent to auditing standards
generally  accepted in the United States.  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 financial  position of ICB
Shipping AB and  subsidiaries  as of  December  31, 1999 and the results of
their operations and their changes in financial  position for the year then
ended in  conformity  with  accounting  principles  generally  accepted  in
Sweden.

Stockholm, Sweden
March 30, 2000

Per Bergman
Authorized Public Accountant
KPMG



<PAGE>

<TABLE>

Frontline Ltd.
Consolidated  Statements  of  Operations  for the years ended  December 31,
2001, 2000 and 1999 (in thousands of $, except per share data)

                                                                              2001            2000           1999
<S>                                                                       <C>             <C>           <C>
Operating revenues
        Time charter revenues                                               63,817          31,590         29,880
        Bareboat charter revenues                                           32,016           8,753              -
        Voyage charter revenues                                            639,807         656,917        339,996
        Voyage expenses and commission                                    (88,295)        (97,316)      (116,662)
------------------------------------------------------------------------------------------------------------------
        Net operating revenues                                             647,345         599,944        253,214
------------------------------------------------------------------------------------------------------------------
Gain (loss) on sale of assets                                               35,620           1,160       (37,779)
Operating expenses
        Ship operating expenses                                            121,452          88,455         92,708
        Charterhire expenses                                                41,858          34,351         31,719
        Administrative expenses                                             13,176           9,326         11,783
------------------------------------------------------------------------------------------------------------------
        Total operating expenses                                           176,486         132,132        136,210
------------------------------------------------------------------------------------------------------------------
Net operating income before depreciation and amortisation                  506,479         468,972         79,225
------------------------------------------------------------------------------------------------------------------
        Depreciation and amortisation                                      121,725          92,880         91,435
------------------------------------------------------------------------------------------------------------------
Net operating income (loss) after depreciation and amortisation            384,754         376,092       (12,210)
------------------------------------------------------------------------------------------------------------------
Other income (expenses)
        Interest income                                                     12,953           6,858          7,561
        Interest expense                                                  (91,800)        (96,174)       (88,728)
        Share in results from associated companies                          22,317          12,817          3,067
        Foreign currency exchange gain (loss)                               28,318          14,563        (1,123)
        Other financial items, net                                         (5,709)           (248)            283
------------------------------------------------------------------------------------------------------------------
        Net other expenses                                                (33,921)        (62,184)       (78,940)
------------------------------------------------------------------------------------------------------------------
Net  income  (loss)  before  income  taxes  and  minority                  350,833         313,908       (91,150)
interest
Minority interest                                                                -               -          4,245
Income taxes                                                                   444              41            (9)
------------------------------------------------------------------------------------------------------------------
Net income (loss) before  cumulative  effect of change in                  350,389         313,867       (86,896)
accounting principle
------------------------------------------------------------------------------------------------------------------
Cumulative effect of change in accounting principle                         32,339               -              -
------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                          382,728         313,867       (86,896)
==================================================================================================================

Earnings (loss) per share
        Basic   earnings  per  share  before   cumulative                    $4.57          $ 4.28       $ (1.76)
        effect of change in accounting principle
        Diluted  earnings  per  share  before  cumulative                    $4.56          $ 4.27       $ (1.76)
        effect of change in accounting principle
        Cumulative   effect  of   change  in   accounting                    $0.42             $ -            $ -
        principle
        Basic earnings per share                                             $4.99          $ 4.28       $ (1.76)
        Diluted earnings per share                                           $4.98          $ 4.27       $ (1.76)
==================================================================================================================

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


<PAGE>


<TABLE>

Frontline Ltd.
Consolidated Balance Sheets as of December 31, 2001 and 2000
(in thousands of $)

                                                               2001      2000
ASSETS
<S>                                                         <C>        <C>
Current Assets
     Cash and cash equivalents                              178,176    103,514
     Restricted cash                                         11,101     12,580
     Marketable securities                                    1,159      3,713
     Trade accounts receivable                               55,157     95,769
     Other receivables                                        9,331     35,252
     Inventories                                             11,310     11,190
     Voyages in progress                                      8,293     22,259
     Prepaid expenses and accrued income                      3,391      8,372
-------------------------------------------------------------------------------
     Total current assets                                   277,918    292,649
Newbuildings and vessel purchase options                    102,781     36,326
Vessels and equipment, net                                2,196,959  2,254,921
Vessels and equipment under capital lease, net              317,208    108,387
Investment in associated companies                          109,898     27,361
Deferred charges                                              5,061      5,836
Other long-term assets                                        9,900     41,123
Goodwill                                                     14,049     14,385
-------------------------------------------------------------------------------
     Total assets                                         3,033,774  2,780,988
===============================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
     Short-term  debt and current  portion of  long-term    227,597    212,767
     debt
     Current portion of obligations under capital leases     17,127      7,888
     Trade accounts payable                                   6,994     10,610
     Accrued expenses                                        35,543     40,777
     Deferred charter revenue                                 1,567      2,577
     Provisions for drydocking                                    -     11,440
     Mark to market valuation of derivatives                 14,723          -
     Other current liabilities                               11,505      4,332
-------------------------------------------------------------------------------
     Total current liabilities                              315,056    290,391
Long-term liabilities
     Long-term debt                                       1,164,354  1,331,372
     Obligations under capital leases                       283,663    101,875
     Provisions for drydocking                                    -     19,727
     Other long-term liabilities                             11,478      2,063
-------------------------------------------------------------------------------
     Total liabilities                                    1,774,551  1,745,428
Commitments and contingencies
Minority interest                                             6,822      6,070
Stockholders' equity
     Share capital                                          191,019    195,172
     Additional paid in capital                             552,166    576,677
     Warrants and options                                         -      7,662
     Accumulated other comprehensive income (loss)         (11,864)    (3,579)
     Retained earnings                                      521,080    253,558
-------------------------------------------------------------------------------
     Total stockholders' equity                           1,252,401  1,029,490
-------------------------------------------------------------------------------
     Total liabilities and stockholders' equity           3,033,774  2,780,988
===============================================================================

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

</TABLE>


<PAGE>

<TABLE>

Frontline Ltd.
Consolidated  Statements  of Cash Flows for the years  ended  December  31,
2001, 2000 and 1999 (in thousands of $)
                                                    2001       2000      1999
<S>                                              <C>        <C>      <C>
Operating activities
Net income (loss)                                382,728    313,867  (86,896)
Adjustments to reconcile net income (loss) to
net cash
provided by operating activities:
     Depreciation and amortisation               121,725     92,880    91,435
     Amortisation of deferred charges              2,233      1,005     2,922
     (Gain) loss from sale of assets            (35,620)    (1,160)    37,199
     Share in results from associated companies (22,321)   (12,817)   (3,067)
     Unrealised foreign exchange gain           (29,148)   (14,794)         -
     Change in accounting principle             (32,339)          -         -
     Adjustment of financial derivatives to        5,404          -         -
     market value
     Other, net                                  (2,297)    (1,552)         -
     Changes in operating assets and
     liabilities, net of effect of
     acquisitions:
     Trade accounts receivable                    40,612   (80,758)   (2,676)
     Other receivables                            25,921   (19,489)     1,521
     Inventories                                   (120)      3,560   (4,915)
     Voyages in progress                          13,966    (7,847)   (1,153)
     Prepaid expenses and accrued income           4,979    (1,903)     2,049
     Trade accounts payable                        1,290    (7,866)   (1,824)
     Accrued expenses                            (5,234)      2,972     2,805
     Deferred charter revenue                    (1,010)    (2,019)         -
     Provisions for drydocking                         -      6,858     7,158
     Other, net                                    6,838        645     1,928
------------------------------------------------------------------------------
     Net cash provided by operating activities   477,607    271,582    46,486
------------------------------------------------------------------------------
Investing activities
     Maturity (placement) of restricted cash       1,479    (4,648)     1,116
     Additions to newbuildings, vessels and     (386,130) (435,980) (200,736)
     equipment
     Proceeds from sale of vessels and           400,111      1,315   239,043
     equipment
     Acquisition of businesses (net of cash     (64,656)   (41,912)   126,000
     acquired)
     Investment in associated companies         (60,003)    (3,993)     4,210
     Investment in marketable securities               -      (983)         -
     Investment in debt                                -   (38,553)         -
     Dividends received from associated            2,314      2,346     3,246
     companies
     Proceeds from sales of other assets           3,103     25,490     2,653
------------------------------------------------------------------------------
     Net cash provided by (used in) investing   (103,782) (496,918)   175,532
     activities
------------------------------------------------------------------------------
Financing activities
     Proceeds from long-term debt                324,890    384,690   505,875
     Repayments of long-term debt and           (460,725) (209,711) (679,210)
     debentures
     Payment of obligations under capital       (10,337)    (1,990)         -
     leases
     Debt fees paid                              (1,459)    (2,161)   (3,068)
     Cash dividends paid                        (115,206)         -   (4,714)
     Purchase of minority interest                     -   (12,020) (104,148)
     Repurchase of shares and warrants          (44,814)          -         -
     Proceeds from issuance of equity              8,488    104,575    54,680
------------------------------------------------------------------------------
     Net cash (used in) provided by financing   (299,163)   263,383 (230,585)
     activities
------------------------------------------------------------------------------
Net  increase (decrease) in cash and cash         74,662     38,047   (8,567)
equivalents
Cash and cash equivalents at beginning of year   103,514     65,467    74,034
Cash and cash equivalents at end of year         178,176    103,514    65,467
==============================================================================
Supplemental disclosure of cash flow
information:
     Interest paid, net of capitalised interest   96,202     92,954    94,633
     Income taxes paid                                11         26         -
==============================================================================
See  accompanying  Notes  that  are an  integral  part of  these  Consolidated
Financial Statements

</TABLE>


<PAGE>


Frontline Ltd.
Consolidated  Statements of Changes in  Stockholders'  Equity for the years
ended December 31, 2001, 2000 and 1999 (in thousands of $, except number of
shares)

<TABLE>
                                                                 2001             2000            1999

NUMBER OF SHARES OUTSTANDING
<S>                                                       <C>              <C>             <C>
Balance at beginning of year                               78,068,811       60,961,860      46,106,860
Shares issued                                                 546,055       19,256,967      14,855,000
Shares bought back                                        (2,207,300)      (2,150,016)               -
-------------------------------------------------------------------------------------------------------
Balance at end of year                                     76,407,566       78,068,811      60,961,860
-------------------------------------------------------------------------------------------------------

SHARE CAPITAL
Balance at beginning of year                                  195,172          152,405         115,267
Shares issued                                                   1,365           48,142          37,138
Shares bought back                                            (5,518)          (5,375)               -
-------------------------------------------------------------------------------------------------------
Balance at end of year                                        191,019          195,172         152,405
-------------------------------------------------------------------------------------------------------

ADDITIONAL PAID IN CAPITAL
Balance at beginning of year                                  576,677          462,474         435,932
Shares issued                                                   7,123          134,005          26,542
Shares bought back and warrants exercised or expired         (31,634)         (19,802)               -
-------------------------------------------------------------------------------------------------------
Balance at end of year                                        552,166          576,677         462,474
-------------------------------------------------------------------------------------------------------

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

ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at beginning of year                                  (3,579)          (6,603)         (3,545)
Other comprehensive income (loss)                             (8,285)            3,024         (3,058)
-------------------------------------------------------------------------------------------------------
Balance at end of year                                       (11,864)          (3,579)         (6,603)
-------------------------------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of year                                  253,558         (60,309)          26,587
Net income (loss)                                             382,728          313,867        (86,896)
Dividends paid                                              (115,206)                -               -
-------------------------------------------------------------------------------------------------------
Balance at end of year                                        521,080          253,558        (60,309)
-------------------------------------------------------------------------------------------------------
Total Stockholders' Equity                                  1,252,401        1,029,490         557,300
-------------------------------------------------------------------------------------------------------

COMPREHENSIVE INCOME (LOSS)
Net income (loss)                                             382,728          313,867        (86,896)
 Unrealised holding gains (losses)                            (8,255)            3,138         (2,843)
 Foreign currency translation                                    (30)            (114)           (215)
-------------------------------------------------------------------------------------------------------
 Other comprehensive income (loss)                            (8,285)            3,024         (3,058)
-------------------------------------------------------------------------------------------------------
Comprehensive income (loss)                                   374,443          316,891        (89,954)
-------------------------------------------------------------------------------------------------------

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

</TABLE>


<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 has
   acquired a fleet of dry bulk carriers that  includes  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.

   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.  With  the  exception  of the  VLCCs  committed  to  term
   charters,  all of the  Company's  VLCCs are  currently  operated  in the
   Tankers 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  September  1999,  pursuant to an  agreement  (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
   prior to 1999  have  been  restated  to  reflect  Frontline's  equity in
   earnings of ICB.

   For the year ended  December 31, 1999,  ICB has been  consolidated  with
   effect from January 1, 1999. In connection with the ICB Agreement,  four
   of the VLCCs  owned by ICB,  were sold to  companies  controlled  by the
   Angelicoussis  family. This sale has resulted in Frontline recognising a
   loss on sale of vessels of $37.9 million in its  consolidated  statement
   of operations for the year ended December 31, 1999.  Twenty employees of
   ICB have  been  made  redundant  as the  result  of the  acquisition  by
   Frontline and severance  costs of  approximately  $1.4 million have been
   incurred in the year ended  December 31, 1999.  These costs are included
   in the determination of the purchase price of ICB.

   Golden Ocean Group Limited
   In October  2000,  Frontline  took control of Golden Ocean Group Limited
   ("Golden Ocean"),  a shipping group which holds interest 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 on 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 has been
   accounted  for using  the  purchase  method.  (See Note 11 and Note 24).
   Eighteen  employees  of Golden  Ocean  have been made  redundant  as the
   result  of  the   acquisition  by  Frontline  and  severance   costs  of
   approximately  $2.1  million  have been  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 of the newbuildings was
   delivered in January 2002,  the second and third are due for delivery in
   September 2002 and June 2003, respectively.

   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  have been made
   redundant as the result of the  acquisition  by Frontline  and severance
   costs of approximately $0.3 million have been 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 1, 1999, ICB has been consolidated
   with effect from January 1, 1999.  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.   Other  equipment  is  depreciated  over  its  estimated
   remaining useful life, which approximates five years.

   The  vessels   obtained   through  the  acquisition  of  ICB  have  been
   depreciated  on  a  straight-line  basis  over  the  vessels'  remaining
   economic  useful  lives,  which was  determined  to be 20 years.  In the
   fourth quarter of 1999,  management  determined  that the useful life of
   these  vessels  was  25  years  rather  than  20  years,  as  previously
   estimated.  A change in  accounting  estimate was  recognised to reflect
   this  decision,  resulting  in a decrease  in  depreciation  expense and
   consequently increasing net income by $1.8 million and basic and diluted
   earnings per share by $0.04, for 1999.

   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 four 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,  net upon  exercise  of the option and  delivery of the
   vessel to the Company.

   Impairment of long-lived assets
   Long-lived assets that are 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  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 deferred 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.

   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 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 will recognise the cost
of a drydocking  at the time the  drydocking  takes place,  that is it will
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  is  shown  separately  in  the
consolidated  statements of operations for the year ended December 31, 2001
and resulted in a credit to income of $32.3 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 and 1999  would  have  been as
follows:

<TABLE>

     (in thousands of $)                                                                    2000           1999
     ----------------------------------------------------------------------------------------------------------
     <S>                                                                                 <C>           <C>

     Net income (loss) as previously reported                                            313,867       (86,896)
     Pro forma effect of retroactive application of change in accounting principle         6,281          7,010
     ----------------------------------------------------------------------------------------------------------
     Pro forma net income (loss)                                                         320,148       (79,886)
     ----------------------------------------------------------------------------------------------------------

     Basic earnings per share as previously reported                                      $ 4.28       $ (1.76)
     Diluted earnings per share as previously reported                                    $ 4.27       $ (1.76)
     Pro forma effect of retroactive application of change in accounting principle        $ 0.09         $ 0.14
     Pro forma basic earnings per share                                                   $ 4.37       $ (1.62)
     Pro forma diluted earnings per share                                                 $ 4.36       $ (1.62)
     ==========================================================================================================

</TABLE>

   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 is being amortised over a period of approximately 17 years. See Note
   3.

   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.

   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.
   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 twelve month 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 all 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.

   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 June 2001, the Financial Accounting Standards Board ("FASB") approved
   SFAS No. 141, "Accounting for Business  Combinations" which requires the
   application of the purchase method including the  identification  of the
   acquiring  enterprise for each transaction.  SFAS No. 141 supercedes APB
   No. Opinion 16 and applies to all business combinations  initiated after
   June  30,  2001  and  all  business  combinations  accounted  for by the
   purchase  method that are completed after June 30, 2001. The adoption of
   SFAS No. 141 by the  Company on June 30, 2001 did not have any impact on
   the Company's consolidated results of operations or financial position.

   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 will  supersede 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 $14.0 million.  Amortisation expense related to goodwill was
   $1.9 million, $1.1 million and $0.5 million for the years ended December
   31,  2001,  2000  and  1999,  respectively.  The  Company  has  not  yet
   determined  what  effect the  adoption  of SFAS No. 142 will have on its
   consolidated results of operations or financial position.

   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 October  2001,  the FASB  issued SFAS No.  144,  "Accounting  for the
   Impairment  or  Disposal  of  Long-Lived   Assets"  ("SFAS  144").   The
   objectives of SFAS 144 are to address significant issues relating to the
   implementation of FASB Statement No. 121, "Accounting for the Impairment
   of Long-Lived  Assets and for Long-Lived  Assets to Be Disposed Of", and
   to develop a single accounting model based on the framework  established
   in SFAS 121,  for  long-lived  assets  to be  disposed  of by sale.  The
   standard  requires that long-lived  assets that are to be disposed of by
   sale be  measured  at the lower of book value or fair value less cost to
   sell.  Additionally,  the  standard  expands  the scope of  discontinued
   operations to include all components of an entity with  operations  that
   can be distinguished  from the rest of the entity and will be eliminated
   from the  ongoing  operations  of the entity in a disposal  transaction.
   This  statement is effective for fiscal years  beginning  after December
   15, 2001, and generally, its provisions are to be applied prospectively.
   The Company is currently  evaluating  the impact of this  statement  and
   does not expect the  adoption of SFAS No. 144 to have a material  effect
   on the Company's results of operations or financial position.

   In  April  2002,  the FASB  issued  SFAS No.  145,  "Rescission  of FASB
   Statements  No. 4, 44, and 64,  Amendment of FASB  Statement No. 13, and
   Technical  Corrections".  This Statement  rescinds FASB Statement No. 4,
   Reporting Gains and Losses from Extinguishment of Debt, and an amendment
   of that Statement,  FASB Statement No. 64,  Extinguishments of Debt Made
   to Satisfy Sinking-Fund Requirements.  This Statement also rescinds FASB
   Statement No. 44,  Accounting for Intangible  Assets of Motor  Carriers.
   This Statement amends FASB Statement No. 13,  Accounting for Leases,  to
   eliminate  an   inconsistency   between  the  required   accounting  for
   sale-leaseback  transactions  and the  required  accounting  for certain
   lease  modifications  that have  economic  effects  that are  similar to
   sale-leaseback  transactions.  This Statement also amends other existing
   authoritative  pronouncements  to make  various  technical  corrections,
   clarify  meanings,   or  describe  their   applicability  under  changed
   conditions. This statement is generally for transactions occurring after
   May 15,  2002.  The Company is currently  evaluating  the impact of this
   statement.


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, 2001 and 2000 follows:

<TABLE>

<S>                                                          <C>                <C>          <C>

     (in thousands of $ )                                                       Dry Bulk
                                                               Tankers          Carriers         Total
     2001
     Net operating revenues                                    615,109            32,236       647,345
     Ship operating expenses                                   113,812             7,638       121,450
     Depreciation and amortisation                             112,200             7,831       120,031
     Share in results from associated companies                 17,494             3,518        21,012
     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


     (in thousands of $)                                                        Dry Bulk
                                                               Tankers          Carriers         Total
     2000
     Net operating revenues                                    591,805             8,065       599,870
     Ship operating expenses                                    85,868             2,129        87,997
     Depreciation and amortisation                              90,297             1,952        92,249
     Share in results from associated companies                 11,273             1,544        12,817
     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


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

     (in thousands of $)                                                            2001          2000
     Net operating revenues
     Total net operating revenues for reportable segments                        647,345       599,870
     Other net operating revenues                                                -                  74
     Total consolidated net operating revenues                                   647,345       599,944
     Assets
     Total assets for reportable segments                                      2,962,565     2,644,397
     Assets not attributed to segments                                            71,209       136,591
     Total consolidated assets                                                 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 $)                            2001       2000         1999
   Current tax                                     444         41         (9)
   Deferred tax                                      -          -          -
   ---------------------------------------------------------------------------
                                                   444         41         (9)
   ===========================================================================

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

   (in thousands of $)                                        2001      2000
   Deferred tax asset - non current                            116        -
   Pension liabilities                                           -       13
   Tax loss carryforwards                                   11,207   19,285
   Valuation allowance                                     (11,091) (19,298)
   --------------------------------------------------------------------------
   Net deferred tax asset (liability)                            -        -
   ==========================================================================

   As of December 31,  2001,  2000 and 1999,  the Company had  $39,610,000,
   $68,875,000  and  $62,485,000  of  net  operating  loss   carryforwards,
   respectively.  In 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 $27,840,000 as at December 31, 2001
   and ICB AB accounts for a total of  $11,944,000 as of December 31, 2001.
   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).

<TABLE>

   The components of the numerator for the calculation of basic EPS and diluted EPS are as follows:

   <S>                                                                   <C>            <C>           <C>

   (in thousands of $)                                                      2001           2000           1999
   -----------------------------------------------------------------------------------------------------------
   Net income (loss) available to stockholders                           382,728        313,867       (86,896)
   ===========================================================================================================

   The components of the denominator for the calculation of basic EPS and diluted EPS are as follows:

   (in thousands )                                                          2001           2000            1999
   -----------------------------------------------------------------------------------------------------------
   Basic earnings per share:
   Weighted average number of ordinary shares outstanding                 76,714         73,391         49,486
   ===========================================================================================================

   Diluted earnings per share:
   Weighted average number of ordinary shares outstanding                 76,714         73,391         49,468
   Warrants and stock options                                                181            173              -
   -----------------------------------------------------------------------------------------------------------
                                                                          76,895         73,564         49,468
   ===========================================================================================================

</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 $)
   ------------------------------------------------------------------------
     2002                                                       40,971
     2003                                                       24,516
     2004                                                       24,123
     2005                                                       24,628
     2006                                                       24,638
     2007 and later                                              6,023
   ------------------------------------------------------------------------
     Total minimum lease payments                              144,899
   ========================================================================

   Total rental expense for operating leases was  $42,376,000,  $34,823,000
   and  $31,912,000  for the years ended December 31, 2001,  2000 and 1999,
   respectively.

   Rental income
   The minimum future  revenues to be received on time  charters,  bareboat
   charters  and other  contractually  committed  income as of December 31,
   2001 are as follows:

   Year ending                             Yen              Dollar     Total
   December 31,                          revenues          revenues
   (in thousands of(Y)and $)       (in(Y)) ($ equivalent)
   -------------------------------------------------------------------------
   2002                           2,398,050     18,286      68,652    86,938
   2003                           2,398,050     18,286      65,110    83,396
   2004                           2,404,620     18,336      62,745    81,081
   2005                           2,398,050     18,286      61,585    79,871
   2006                           2,398,050     18,286      58,492    76,778
   2007 and later                 11,043,780    84,214      98,297   182,511
   --------------------------------------------------------------------------
   Total minimum lease revenues   23,040,600   175,694     414,881   590,575
   ==========================================================================

   The cost and  accumulated  depreciation of the vessels leased to a third
   party at December 31, 2001 were  approximately  $354.2 million and $14.6
   million,  respectively,  and at  December  31,  2000 were  approximately
   $518.3 million and $27.4 million, respectively.

8. MARKETABLE SECURITIES

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

   (in thousands of $)                                     2001     2000
   ---------------------------------------------------------------------
   Cost                                                   1,874     3,418
   Gross unrealised gain                                      2       702
   Gross unrealised loss                                  (717)     (407)
   ----------------------------------------------------------------------
   Fair value                                             1,159     3,713
   ======================================================================

   The net unrealised loss on marketable securities,  including a component
   of  foreign  currency  translation,  included  in  comprehensive  income
   increased  by  $1,010,000  for the year ended  December 31, 2001 (2000 -
   increase in net unrealised gain of $295,000).

   (in thousands )                                2001       2000      1999
   ------------------------------------------------------------------------
   Proceeds  from sale of  available-for-sale    3,101     10,089    2,653
     securities
   Realised gain (loss)                            717    (1,186)      580
   ========================================================================

   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,
   2001 and 2000, respectively.

10.   OTHER RECEIVABLES

     (in thousands of $)                              2001            2000
     ---------------------------------------------------------------------
     Agent receivables                               1,973          1,761
     Due from related party                              -         20,000
     Due on sale of marketable securities                -          4,101
     Short-term debt receivable                          -          6,418
     Mark to market valuation of derivatives         4,411              -
     Other receivables                               2,947          2,972
    ---------------------------------------------------------------------
                                                     9,331         35,252
    =====================================================================

   Other  receivables are presented net of allowances for doubtful accounts
   amounting  to $nil for each of the years  ended  December  31,  2001 and
   2000.

11.   NEWBUILDINGS AND VESSEL PURCHASE OPTIONS

   (in thousands of $)                                      2001      2000
   -----------------------------------------------------------------------
   Newbuildings                                           94,411         -
   Vessel purchase options                                 8,370    36,326
   ------------------------------------------------------------------------
                                                         102,781    36,326
   ========================================================================

   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 $3,034,669 and $400,000 in 2001 and 2000, respectively.

   In connection with the acquisition of Golden Ocean, the Company obtained
   certain  options and  obligations  to acquire  vessels.  The Company had
   options to purchase the VLCCs Stena  Commerce  and Stena  Comanche for a
   purchase  price for each vessel equal to 50 per cent of the  outstanding
   mortgage debt under three joint loan agreements  between lenders and the
   vessels'  owning  companies.  As at December  31,  2000 the  outstanding
   mortgage  debt  of  the  Stena  Commerce  and  Stena  Comanche's  owning
   companies amounted to $116,400,439 plus (Y)6,019,417,615  (equivalent to
   $52,585,111). Of this total debt outstanding, $25,774,680 was due to the
   Company at December 31, 2000. This amount is included in other long-term
   assets  (see  Note  16).  This  debt  was  acquired  at  a  discount  of
   approximately 50 per cent from one of the lenders in September 2000. The
   fair value  assigned to these  options in the  purchase  accounting  for
   Golden Ocean was $27,956,000,  calculated by reference to the discounted
   debt acquired by the Company. The Company also had an option to purchase
   the vessel Stena Commodore for a purchase price equal to the outstanding
   mortgage  debt  under  three loan  agreements  between  lenders  and the
   vessel's owning  company.  The fair value assigned to this option in the
   purchase  accounting  for  Golden  Ocean  was  $nil.  The fair  value is
   calculated  as the  difference  between  the fair of the  vessel and the
   mortgage debt outstanding.

   On October 24, 2000 the Company simultaneously  exercised its options to
   acquire the Stena Commerce,  Stena Comanche and Stena Commodore and took
   delivery of the three vessels during May and June 2001.

   The Company had an obligation to purchase the VLCC Opalia for a purchase
   price equal to 100 per cent of the outstanding mortgage debt under three
   loan agreements  between  lenders and the vessel's  owning company.  The
   fair value assigned to this option in the purchase accounting for Golden
   Ocean was $nil. The fair value is calculated as the  difference  between
   the fair value of the vessel and the mortgage debt outstanding.  In July
   2001, the Company acquired the VLCC Opalia.

   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, 2001 the  outstanding  mortgage  debt of the  Oscilla's
   owning company amounted to $44,372,526 plus  (Y)763,259,970  (equivalent
   to $5,820,192). (2000 - $60,005,600 plus (Y)1,247,525,412 (equivalent to
   $10,898,274)).  Included in this amount at December  31, 2001 is debt of
   $9,103,000  due to the  Company  (2000 -  $12,475,000).  The fair  value
   assigned to this option and  obligation in the purchase  accounting  for
   Golden  Ocean  was  $8,370,000.  The  fair  value is  calculated  as the
   difference  between the fair value of the vessel and the  mortgage  debt
   outstanding.

12.   VESSELS AND EQUIPMENT, NET

     (in thousands of $)                                2001           2000
     ----------------------------------------------------------------------
     Cost                                          2,692,512      2,684,603
     Accumulated depreciation                      (495,553)      (429,682)
     ----------------------------------------------------------------------
     Net book value at end of year                 2,196,959      2,254,921
     ======================================================================

   Included  in the  above  amounts  as at  December  31,  2001 and 2000 is
   equipment with a net book value of $836,000 and $904,000,  respectively.
   Depreciation expense for vessels and equipment was $115.6 million, $90.7
   million and $90.9  million for the years ended  December 31, 2001,  2000
   and 1999, respectively.

13.   VESSELS UNDER CAPITAL LEASE, NET

   At December 31 2001, the Company had eight vessels under capital leases.
   These leases are for terms that range from eight to ten years.  For five
   of these  vessels,  there is an  obligation to purchase the vessels from
   the lessor at the expiration of the leases.  These leases expire between
   2007 and 2009. The Company has the option to purchase the vessels at any
   time during the lease.  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 year  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.


   (in thousands of $)                                      2001      2000
   -----------------------------------------------------------------------
   Cost                                                  323,659   109,500
   Accumulated depreciation                              (6,451)   (1,113)
   ------------------------------------------------------------------------
   Net book value at end of year                         317,208   108,387
   ========================================================================

   Depreciation  expense for vessels  under capital lease was $5.3 million,
   $1.1 million and $nil for the years ended  December  31, 2001,  2000 and
   1999, respectively.

   The outstanding obligations under capital leases are payable as follows:

     Year ending December 31,
     (in thousands of $)
     ---------------------------------------------------------------------
     2002                                                           34,409
     2003                                                           34,517
     2004                                                           34,792
     2005                                                           35,859
     2006                                                           35,980
     2007 and later                                                255,757
     ---------------------------------------------------------------------
     Minimum lease payments                                        431,314
     ---------------------------------------------------------------------
     Less imputed interest                                         130,524
     ---------------------------------------------------------------------
     Present value of obligations under capital leases             300,790
     =====================================================================


   Included in the  outstanding  obligations  under  capital  leases in the
   table above are the  following  amounts in Japanese Yen and U.S.  dollar
   equivalent.

     Year ending December 31,
     (in thousands of $ and (Y))                   (in (Y))  ($ equivalent)
     ---------------------------------------------------------------------
     2002                                        1,209,574          9,224
     2003                                        1,223,815          9,332
     2004                                        1,238,338          9,443
     2005                                        1,253,163          9,556
     2006                                        1,268,303          9,671
     2007 and later                              6,471,098         49,345
     ---------------------------------------------------------------------
     Minimum lease payments                     12,664,291         96,571
     ---------------------------------------------------------------------
     Less imputed interest                       1,303,359          9,939
     ---------------------------------------------------------------------
     Present value of obligations under
       capital leases                           11,360,931         86,632
     =====================================================================

14.   INVESTMENT IN ASSOCIATED COMPANIES

   At December 31, 2001,  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%
     Middleburg properties Ltd.                                      50.00%
     Reese Development Inc.                                          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 $)                                       2001      2000
   ------------------------------------------------------------------------
   Current assets                                          46,799    25,614
   Noncurrent assets                                      646,208   280,872
   Current liabilities                                     58,330    16,750
   Non current liabilities                                579,391   229,242

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

   (in thousands )                                2001      2000       1999
   ------------------------------------------------------------------------
   Net operating revenues                       82,287    54,722     14,432
   Net operating income                         42,637    32,093      9,846
   Net income                                   45,431    43,843      8,686

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 $)                                       2001      2000
   ------------------------------------------------------------------------
   Debt arrangement fees                                   14,190    12,971
   Accumulated amortisation                               (9,129)   (7,135)
   ------------------------------------------------------------------------
                                                            5,061     5,836
   ========================================================================

16.   OTHER LONG-TERM ASSETS

   (in thousands of $)                                       2001      2000
   ------------------------------------------------------------------------
   Long-term debt receivable                                9,025    38,533
   Other                                                      875     2,590
   ------------------------------------------------------------------------
                                                            9,900    41,123
   ========================================================================

   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 $)                                       2001      2000
   ------------------------------------------------------------------------
   Goodwill                                                17,561    16,009
   Accumulated amortisation                               (3,512)   (1,624)
   ------------------------------------------------------------------------
                                                           14,049    14,385
   ========================================================================

   Amortisation expense was $0.7 million, $1.1 million and $0.5 million for
   the years ended December 31, 2001, 2000 and 1999, respectively.

18.   ACCRUED EXPENSES

   (in thousands of $)                                       2001      2000
   ------------------------------------------------------------------------
   Voyage expenses                                          3,667     8,689
   Ship operating expenses                                 18,591    13,631
   Administrative expenses                                  1,979       786
   Interest expense                                         6,044    12,446
   Taxes                                                    2,233        43
   Other                                                    3,029     5,182
   ------------------------------------------------------------------------
                                                           35,543    40,777
   ========================================================================

19.   DEBT

<TABLE>

     (in thousands of $)                                                                     2001          2000
     ----------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>           <C>

     US  Dollar  denominated  floating  rate debt  (LIBOR + 0.485%  to  1.75%)  due     1,238,952     1,303,307
     through 2011
     Yen denominated floating rate debt (LIBOR + 1.125% to 1.313%) due through 2011       109,640       136,172
     Fixed rate debt 0% due through 2005                                                    2,000         2,000
     Fixed rate debt 8.00% due through 2005                                                31,500        91,250
                                                                                        1,382,092     1,532,729
     Credit facilities                                                                      9,859        11,410
     Total debt                                                                         1,391,951     1,544,139
     Less: short-term and current portion of long-term debt                             (227,597)     (212,767)
                                                                                        1,164,354     1,331,372
</TABLE>

   The outstanding debt as of December 31, 2001 is repayable as follows:

     Year ending December 31,
     (in thousands of $)
     2002                                                           227,597
     2003                                                           294,122
     2004                                                           119,374
     2005                                                           106,291
     2006                                                           245,906
     2007 and later                                                 398,661
     ----------------------------------------------------------------------
     Total debt                                                   1,391,951
     ======================================================================

   The  weighted   average   interest  rate  for  the  floating  rate  debt
   denominated  in US dollars  was 4.41 per cent as of  December  31,  2001
   (2000 - 7.67 per  cent).  The  weighted  average  interest  rate for the
   floating rate debt  denominated  in Yen was 1.37 per cent as of December
   31,  2001 (2000 - 2.74 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,  2001 and 2000,  the  Company  complied  with all the debt
   covenants of its various debt agreements.

   Metrogas  Holdings  ("Metrogas"),  a company  related  to the  Company's
   Chairman,  had  outstanding  as of December 31, 1999 a specific  loan of
   $54.0  million  (the  "Metrogas  Loan")  provided  to the  Company.  The
   Metrogas Loan was converted to a separate  long-term  financing facility
   during 1999.  The Metrogas loan was repaid in two tranches  during 2000.
   In February 2000 $30 million were  converted into shares in the Company,
   as described in Note 20. In August 2000 the  remaining  $24 million plus
   interest accrued was repaid.

   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,  2001 the  amounts  outstanding  under the term  loan and  revolving
   credit facility was $2.49 million and $nil, respectively.

   In  connection  with the transfer of the share  capital,  or part of the
   share capital, in six single purpose entities,  each an owner of a VLCC,
   from Golden Ocean to the direct ownership of Frontline Ltd in late 2001,
   the Company has issued guarantees which replaced  guarantees  previously
   issued by Golden Ocean.

   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.
   Repayment  of the loan is  secured  by a first  mortgage  on the  vessel
   Golden  Stream,  an assignment of earnings and a pledge of the Company's
   shares in Golden Stream  Corporation and a performance  guarantee issued
   by Golden Ocean.  Golden Stream  Corporation failed to repay the loan on
   the due date. Non-payment constitutes a default under the loan agreement
   and  entitles  Griffin to exercise  its rights  under the loan  security
   documents,  which include taking possession of the vessel Golden Stream,
   taking  control of Golden  Stream  Corporation  and  claiming  under the
   performance guarantee issued by Golden Ocean.

   Griffin  has not  declared  a default  under the loan  agreement  but is
   working with the Company's  management to renegotiate  payment terms and
   re-schedule payment of the outstanding amount of $48,068,000. If Griffin
   were to  declare a  default,  cross  default  provisions  in other  loan
   agreements  related to Golden Ocean and its subsidiaries could cause all
   loans to be  repayable  immediately.  The  Golden  Ocean  management  is
   confident of achieving a satisfactory agreement with Griffin, which will
   involve  re-scheduling  payment of the  outstanding  amount in line with
   projected cashflows. There is no guarantee, however, that a satisfactory
   agreement with Griffin will be achieved and in the event that it is not,
   Golden Ocean would be forced to sell assets to pay any  shortfall due to
   Griffin.  There is no guarantee that Golden Ocean would be able to raise
   sufficient  capital  through  asset  sales to pay any  shortfall  due to
   Griffin.  These  conditions  give  rise to  substantial  doubt as to the
   ability of Golden  Ocean to continue to operate as a going  concern.  At
   December 31, 2001, Frontline's exposure in the event of a liquidation of
   Golden Ocean is a maximum of $15 million in equity and $2.49  million in
   debt due from Golden Ocean.

20.   SHARE CAPITAL

   Authorised share capital:

   (in thousands of $)                                     2001        2000
   ------------------------------------------------------------------------
   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)                2001       2000
   ------------------------------------------------------------------------
   76,407,566 ordinary shares of $2.50 each              191,019    195,172
   (2000 - 78,068,811)
   ========================================================================

   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, 2001,
   360,300 are reserved for issue  pursuant to  subscription  under options
   granted under the Company's share option plans. As at December 31, 2001,
   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.

   On December 20, 1999 the Company issued  1,910,000  ordinary shares at a
   price of NOK 37.00 per share in  connection  with the  acquisition  of a
   Suezmax  newbuilding.  Frontline  had a one year call option to buy back
   430,000  of  these  shares  for NOK  37.00  per  share  plus 10 per cent
   interest per annum compensation.  In September 2000, Frontline exercised
   its call option and bought back these 430,000 shares. In accordance with
   Bermuda law, these shares were cancelled on acquisition by the Company.

   On February 25, 2000, the Company issued  3,500,000  ordinary  shares at
   NOK  57.50  per  share  in  a   private   placement   to   institutional
   shareholders.  At the same time,  $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.

   On March  30,  2000  Frontline  entered  into an  agreement  with  Wilh.
   Wilhelmsen ASA to buy the two 1993-built  VLCCs,  Tartar and Tarim.  The
   agreed purchase price of $45 million per ship was paid by $62 million in
   cash and through the issuance of 2,957,500  Frontline shares. The shares
   were issued at NOK 80.00 per share.

   On May 25, 2000 the Company issued  3,000,000  ordinary shares at $10.15
   per  share  in  a  private   placement  to  a  group  of   international
   institutional  investors.  The  proceeds  of the issue were used to part
   finance the acquisition of a newbuilding VLCC,  subsequently named Front
   Tina.

   On June 20, 2000,  the Company  issued  4,000,000  ordinary  shares at a
   price of NOK  104.5  per  share  in a  private  placement  to a group of
   international institutional investors. Part of the proceeds of the issue
   were used to part  finance the  acquisition  of two  secondhand  Suezmax
   tankers, subsequently named Front Ardenne and Front Brabant.

   On  July  17,  2000,  the  Company  issued  68,700  ordinary  shares  in
   connection  with the  acquisition of Golden Ocean Bonds.  On October 16,
   2000, the Company issued  1,245,998  ordinary  shares in connection with
   the acquisition of Golden Ocean.

   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 can be exercised at any time up to
   May 11,  2001 (see Note 21).  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 can 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  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.

   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.  At December 31, 2001 BNS had acquired a total of
   2,100,000 Frontline shares under the Programme.

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

21.   WARRANTS AND SHARE OPTION PLANS

   At the effective date of the Amalgamation,  Frontline  recorded warrants
   to purchase  124,558 shares (restated from 1,245,588) of LOF and options
   to purchase  288,000  shares  (restated  from  2,880,000) of LOF.  These
   warrants and share options have been recorded at fair value,  calculated
   using the  Black-Scholes  option pricing model,  as an adjustment to the
   purchase price on the  acquisition  of LOF.  These warrants  entitle the
   holder to subscribe for one ordinary  share in the Company at a price of
   (pound)4.00  and are  exercisable  at any time up to December  31, 2003.
   During 2000, all of these warrants were exercised.

   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 have been recorded
   at an estimated  fair value at November 1, 1997 using the  Black-Scholes
   option pricing model. These warrants entitle 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, 1999                    2,724,558
          Exercised or cancelled                                  (132,826)
     Warrants outstanding at December 31, 2000                    2,591,732
          Exercised or cancelled                                (2,591,732)
     ----------------------------------------------------------------------
     Warrants outstanding at December 31, 2001                            -
     ======================================================================

   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, 1998             129       $ 14.45
          Granted                                         300       $  5.53
          Cancelled                                      (16)       $ 12.58
     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
     ======================================================================

     Options exercisable at:
     December 31, 1999                                    113       $ 14.71
     ======================================================================
     December 31, 2000                                      4       $ 13.21
     ======================================================================
     December 31, 2001                                    190       $  4.07
     ======================================================================

   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.

   The  weighted  average fair value of options  granted  under the Bermuda
   Plan in the year ended December 31, 2001, 2000 and 1999 was $6.79, $3.27
   and  $2.61,  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:

   (in thousands )                               2001       2000       1999
   ------------------------------------------------------------------------
   Risk free interest rate                       4.9%       6.6%       6.6%
   Expected life                              5 years    3 years    3 years
   Expected volatility                            60%        63%        63%
   Expected dividend yield                         0%         0%         0%

   The options  outstanding  under the Bermuda Plan as at December 31, 2001
   have exercise prices between $3.41 and $12.32. The options that were not
   exercisable  at  December  31,  2001,  vested on January 22,  2002.  The
   options  outstanding under the Bermuda Plan as at December 31, 2001 have
   a weighted average contractual life of 4.01 years.

   At  December  31,  2001  and  2000  there  were  no  options   remaining
   outstanding under the U.K. Plan.

   In 2001, the Company has recorded  compensation  expense of $1.2 million
   in connection  with share  options  issued in 1999,  2000 and 2001.  The
   Company had previously recorded no compensation expense for the issuance
   of  share  options  in 2000 and  1999.  The  share  options  assumed  in
   connection  with  the  Amalgamation  with LOF have  been  treated  as an
   adjustment to the purchase price. 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 2001, 2000 and 1999:

     (in thousands, except per share data)       2001     2000         1999
                                                                 (restated)
     ----------------------------------------------------------------------
     Net income
          As reported                         382,728  313,867     (86,896)
          Pro-forma                           382,598  313,818     (87,679)

     Basic earnings (loss) per share
          As reported                          $ 4.99   $ 4.28     $ (1.76)
          Pro-forma                            $ 4.99   $ 4.28     $ (1.77)

     Diluted earnings (loss) per share
          As reported                          $ 4.98   $ 4.27     $ (1.76)
          Pro-forma                            $ 4.98   $ 4.27     $ (1.77)

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 The Chase
   Manhattan  Bank  (J.P.  Morgan),  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:

<TABLE>

     Principal                                     Inception        Maturity       Fixed
                                                        Date            Date    Interest
                                                                                    Rate
     -----------------------------------------------------------------------------------
     <S>                                           <C>              <C>         <C>
     (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%
     $54,585 reducing monthly to $29,793          March 1998      March 2006      7.288%
     $58,243 reducing monthly to $17,527      September 1998     August 2008      7.490%

</TABLE>

   As at December 31, 2001, the notional  principal amounts subject to such
   swap agreements was $362,828,000 (2000 - $373,476,000).

   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,  2001 stood at Yen  14,378,176,578  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  9,778,862,882 as
   December 31, 2001. 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 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.

   Fair Values
   The carrying value and estimated  fair value of the Company's  financial
   instruments at December 31, 2001 and 2000 are as follows:

<TABLE>
                                                   2001          2001          2000          2000
     (in thousands of $)                 Carrying Value    Fair Value      Carrying    Fair Value
                                                                              Value
     --------------------------------------------------------------------------------------------
<S>                                          <C>            <C>           <C>           <C>
     Non-Derivatives:
     Cash and cash equivalents                  178,176       178,176       103,514       103,514
     Restricted cash                             11,101        11,101        12,580        12,580
     Marketable securities                        1,159         1,159         3,713         3,713
     Short-term debt                            227,597       227,597       212,767       212,767
     Long-term debt                           1,164,354     1,164,354     1,331,372     1,331,372

     Derivatives:
     Interest rate swap transactions           (14,723)      (14,723)             -         (210)
     Equity Swap Line                             4,412         4,412             -             -

</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 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.

   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.

   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,
   Nordlandsbanken,  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 2001, 2000 and 1999, no customer accounted for more than 10
   per cent or more of freight revenues.

23.   RELATED PARTY TRANSACTIONS

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

   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.

   During  1997,  Frontline  received  options to assume  from other  Hemen
   affiliated parties,  five newbuilding contracts for the construction and
   purchase of five VLCC  tankers.  These  options were  exercised in March
   1998. The first two VLCC  newbuildings were delivered in 1998, the third
   in January 1999 and the remaining two were delivered in mid 1999.

   In May 1998, the Company  acquired  control of three  shipowning  and/or
   leasing  structures  which  are  organised  in  a  non-recourse  entity,
   Independent  Tankers Corporation  ("ITC").  The Company acquired ITC for
   $9.5 million.  The Company's  investment in ITC was subsequently sold to
   Hemen for $9.5  million  with effect from July 1, 1998.  The Company has
   remained as the manager of the underlying assets and has received a five
   year fair value call option to buy back ITC.

   In June  1998,  the  Company  obtained  a loan  of  $87.5  million  from
   Metrogas, the Metrogas Loan, to finance the acquisition of the five VLCC
   newbuilding  contracts  described above. 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 accrued thereon. In
   the years ended  December  31,  2000 and 1999,  the  Metrogas  Loan bore
   interest at the rate of 8.0 per cent and the Company  incurred  interest
   costs of $1.6  million  and $5.4  million,  respectively,  of which $2.7
   million was expensed in 1999.

   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 and 6.75 per cent in
   1999.  Interest  expense  recorded  by the Company in 2000 in respect of
   such financing was $1,095,380 (1999 - $428,291).

   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  pirce of $72  million  each  plus $0.5  million  per
   contract.

   In the year ended  December  31, 2001,  a  subsidiary  of Frontline  Ltd
   provided  services to Seatankers  Ltd, a company  affiliated with Hemen.
   These services include management  support and administrative  services.
   In the year ended December 31, 2001,  the Company has earned  management
   fees from Seatankers Ltd of $277,855 as income.  As at December 31, 2001
   an amount of $266,930  was 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, 2001,  Frontline has provided  management
   support and  administrative  services to a newbuilding  project known as
   the Uljanik  Project.  As at December 31, 2001, an amount of $47,993 was
   due  from  the  Uljanik  Project.   The  Uljanik  Project  is  owned  by
   Seatankers, which is affiliated with Hemen.

   In the year ended  December  31, 2001,  a  subsidiary  of Frontline  Ltd
   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 year ended 31 December 2001, management
   fees from Golar LNG of $258,960  have been earned by the Company.  As at
   December  31 2001,  an  amount  of  $547,966  was due from  Golar LNG in
   respect of these fees and for the  reimbursement  of costs  incurred  on
   behalf of Golar LNG.


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.  This goodwill is being  amortised over the average  remaining
   life  of  the   identifiable   long-term   assets   acquired   which  is
   approximately 22 years.

   In  September  1999,  Frontline  acquired  shares in ICB  sufficient  to
   provide  voting  control of the  company.  This  acquisition  followed a
   tender offer which commenced in September, 1997 and further acquisitions
   of ICB  Shares in 1998 and in the first  half of 1999 (see Note 1).  The
   acquisition  of ICB was  primarily  funded  by  loans  from  Chase.  The
   investment  in ICB in 1997 and 1998 was  originally  accounted for as an
   available-for-sale  security  in  accordance  with SFAS  115.  Following
   Frontline  obtaining  control of ICB, the financial  statements for 1997
   and 1998 have been restated and the  investment  accounted for using the
   equity  method.  The results of ICB have been  consolidated  with effect
   from January 1, 1999. For the period from the initial acquisition of ICB
   Shares in 1997 to September 30, 1999,  the  principles  of  step-by-step
   acquisition   accounting  have  been  applied.   At  each  step  of  the
   acquisition,  the  purchase  price has been  allocated to the net assets
   acquired based on their  estimated fair values.  The difference  between
   the purchase price at each step, and the net assets  acquired,  has been
   assigned  to the  identifiable  long-term  assets  of  ICB  or has  been
   recorded as goodwill, as appropriate.

   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 any  presentation  of
   unaudited pro-forma combined results of operations would not provide any
   meaningful  information to the readers of these financial statements and
   no presentation has been made accordingly.  In management's opinion, the
   unaudited pro-forma combined results of operations are not indicative of
   the actual  results that would have occurred had the  acquisition of ICB
   been consummated at the beginning of 1998 or of future operations of the
   combined companies.

25.   COMMITMENTS AND CONTINGENCIES

   Assets Pledged

   (in thousands of $)                                     2001        2000
   ------------------------------------------------------------------------
   Ship mortgages                                     2,195,752   1,569,848
   Restricted bank deposits                              11,101      12,580
   ------------------------------------------------------------------------
                                                      2,206,853   1,582,428
   ========================================================================

   Other Contractual Commitments
   The  Company   insures  the  legal  liability  risks  for  its  shipping
   activities with Assuranceforeningen  SKULD, Sveriges Angfartygs Assurans
   Forening (The Swedish Club),  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's subsidiary, Golden Ocean Group Limited, has guaranteed the
   yen and dollar long-term  borrowings of associated companies for amounts
   of (Y)17,152,359,010, which is equivalent to $28,904,000 at December 31,
   2001.

   Certain of the Company's  subsidiaries  have contractual  commitments to
   participate   in  the  profits  and  losses  of  the  time   charterer's
   subcharters of the vessel Channel Poterne and in the profits only of the
   vessels New  Vanguard,  New Vista and Channel  Alliance.  An  associated
   company  participates  in the time  charterer's  profits  and  losses on
   subcharters of the vessel Pacific  Lagoon.  Another  associated  company
   participates in the charterer's profits on subcharters of the vessel New
   Circassia.  Revenues or expenses  arising from these  arrangements  have
   been accrued to the balance sheet date.

   The charterers of four of the Company's vessels have contractual  rights
   to participate  in the profits on sale of those vessels.  In the case of
   the Channel  Poterne and 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.

   Certain  charterers  of the  Company's  vessels  hold  purchase  options
   denominated in yen to purchase the Channel Poterne, Golden Daisy, Golden
   Rose, Golden Aloe,  Golden Protea,  Golden Disa, Golden Nerina and Navix
   Astral.  All of the purchase  options reduce on a sliding scale over the
   term of the related charter and are at strike prices which are in excess
   of the related  debt on the vessel.  The option to purchase  the Channel
   Poterne is exercisable at any time. All other options are exercisable at
   any time after the end of the seventh  year of the  charter.  The Golden
   Daisy and Golden Rose are owned by associated companies.

   At December 31, 2001 the Company had  non-cancellable  contracts for the
   construction of eight  newbuilding  tankers,  including two in which the
   Company has a 33.33 per cent interest. These eight vessels are scheduled
   for delivery between early 2002 and June 2003. At December 31, 2001, the
   Company is committed to make further  instalments  under these contracts
   of $356.6  million  in  connection  with the  wholly  owned  newbuilding
   contracts  and $120.2  million in  connection  with the  interest in the
   joint  venture  vessels.  Bank  financing  of  $105.0  million  has been
   arranged for the joint venture  vessels and $50 million for the first of
   the six wholly-owned vessels.

   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  $SEK90  million,  or  $8.5  million  at the
   exchange rate  prevailing at December 31, 2001 ($ at the at the exchange
   rate prevailing at June 30, 2002).  ICB is appealing this judgement.  In
   the  event  that  the  appeal  is not  successful,  the tax and  accrued
   interest 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:

<TABLE>

    (in thousands of $)                                              2001      2000         1999
                                                                                      (restated)
    --------------------------------------------------------------------------------------------
   <S>                                                            <C>           <C>      <C>
    Unrealised appreciation (depreciation) on investments
    Recorded directly to equity                                   (7,960)       295      (2,843)

    In connection with purchase of fixed assets:
    Shares issued                                                       -    28,000        9,000

    Acquisition of businesses:
    Assets acquired, including goodwill                            83,403   533,685      652,008
    Liabilities assumed and incurred                               14,033   470,674      391,257
    Conversion of equity method investment in ICB                       -         -      236,051
    Minority interest recorded                                      1,152         -      150,700
    Shares issued                                                       -    20,350            -

</TABLE>


27. SUBSEQUENT EVENTS

   In the first quarter of 2002, Frontline acquired from a third party, two
   companies that owned four drybulk carriers that were chartered in by the
   Company under capital leases.  These drybulk carriers were refinanced by
   traditional bank financing.

   In the first  quarter of 2002,  the  Company  took  delivery of two VLCC
   newbuildings,  Front  Eagle  and  Front  Serenade.  These  vessels  were
   financed by traditional bank financing.

   In the first  quarter of 2002,  the Company  together with joint venture
   partners,  took delivery of one VLCC  newbuilding,  Tanabe, in which the
   Company's has a 33.33 per cent interest.

   In May 2002, it was  announced  that the Company would leave the Tankers
   Pool. The commercial  operations of the Company's  VLCCs will be brought
   back in-house under the Company's direct management.

   In June 2002,  the Company issued a total of 260,000 stock options under
   the Bermuda Plan to employees at an exercise price of $11.90.


<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").

1.2         Amended  and  Restated  Bye-Laws  of the  Company as adopted by
            shareholders on October 26, 2001.

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.

10.1*       The  Company's  Plan of  Reorganization  for Golden Ocean Group
            Limited, Golden Ocean Tankers Limited and Channel Rose Holdings
            Inc.  under  Chapter 11 of the United  States  Bankruptcy  Code
            dated as of July 7, 2000, as amended.

* 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        June 28, 2002                 By      /s/ Kate Blankenship
                                                    Kate Blankenship
                                                    Company Secretary





02089.0009 #334399