UNITED STATES
                         SECURITIES 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, 2004

                                       OR

[_]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from ____ to ____

                         Commission file number 0-29106
                          KNIGHTSBRIDGE TANKERS LIMITED
             (Exact name of Registrant as specified in its charter)
                               ISLANDS OF BERMUDA
                 (Jurisdiction of incorporation or organization)

                               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:
None

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

                         Common Shares, $0.01 Par Value
                                (Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None 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.

                    17,100,000 Common Shares, $0.01 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 the Form 20-F

                                                                          PAGE
PART I

Item 1.    Identity of Directors, Senior Management and Advisers ..........1
Item 2.    Offer Statistics and Expected Timetable ........................1
Item 3.    Key Information.................................................1
Item 4.    Information on the Company......................................8
Item 5.    Operating and Financial Review and Prospects....................17
Item 6.    Directors, Senior Management and Employees......................24
Item 7.    Major Shareholders and Related Party Transactions...............26
Item 8.    Financial Information...........................................26
Item 9.    The Offer and Listing...........................................27
Item 10.   Additional Information..........................................28
Item 11.   Quantitative and Qualitative Disclosures about Market Risk......30
Item 12.   Description of Securities other than Equity Securities..........31

PART II

Item 13.   Defaults, Dividend Arrearages and
           Delinquencies...................................................32
Item 14.   Material Modifications to the Rights of Security Holders
           and Use of Proceeds.............................................32
Item 15.   Controls and Procedures.........................................32
Item 16A.  Audit Committee Financial Expert................................32
Item 16B.  Code of Ethics..................................................32
Item 16C.  Principal Accountant Fees.......................................32

PART III

Item 17.   Financial Statements............................................34
Item 18.   Financial Statements............................................34
Item 19.   Exhibits........................................................34
<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.

Knightsbridge Tankers Limited 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, as
a result of 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 Knightsbridge Tanker Limited 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 consolidated income statement data of Knightsbridge Tankers Limited
and its subsidiaries (the "Company") with respect to the fiscal years ended
December 31, 2004, 2003, and 2002 and the selected consolidated balance sheet
data of the Company with respect to the fiscal years ended December 31, 2004 and
2003 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 consolidated income statement data with respect to
the fiscal years ended December 31, 2001 and 2000 and the selected consolidated
balance sheet data with respect to the fiscal years ended December 31, 2002,
2001 and 2000 has been derived from consolidated financial statements of the
Company not included herein. The following table should also be read in
conjunction with Item 5 "Operating and Financial Review and Prospects" and the
Company's Consolidated Financial Statements and Notes thereto included herein.

<TABLE>
<CAPTION>
                                                                   Fiscal Year Ended December 31,
                                                       2004           2003          2002           2001          2000
<S>                                                 <C>             <C>           <C>            <C>           <C>
(in thousands of $, except share data and ratios)
Income Statement Data:
Total operating revenues                            135,695         75,246        40,276         61,534        76,336
Total operating expenses                             42,441         18,457        18,398         18,393        36,793
Net operating income                                 93,254         56,789        21,878         43,141        57,936
Net income                                           85,839         47,461        12,552         33,915        48,724
Earnings  per common share
- basic and diluted                                    5.02           2.78          0.73           1.98          2.85
Cash dividends paid                                  77,805         46,854        30,951         33,858        48,735

Balance Sheet Data (at end of year):
Cash and cash equivalents                            31,653          6,312           228            278           247
Restricted cash                                      10,000              -             -              -             -
Vessels and equipment, net                          301,500              -             -              -             -
Vessels under capital lease, net                          -        319,408       337,001        354,594       372,187
Total assets                                        365,554        348,443       347,825        366,204       404,740
Short-term portion of long-term debt                 11,309          8,400             -              -             -
Long-term debt                                      120,400        116,997       125,397        125,397       125,397
Stockholders' equity                                228,871        215,527       208,639        229,077       277,218
Common shares                                       171,000        171,000       171,000        171,000       171,000
Common shares outstanding                        17,100,000     17,100,000    17,100,000     17,100,000    17,100,000

Cash Flow Data
Cash provided by operating activities               106,588         52,940        30,899         72,535        47,344
Cash used in investing activities                   (9,310)              -             -              -             -
Cash used in financing activities                  (71,937)       (46,854)      (30,951)       (72,504)      (47,168)

Other Financial Data
Equity to assets ratio (1)                            62.6%          61.9%         60.0%          62.6%         68.5%
Debt to equity ratio (2)                                0.6            0.6           0.6            0.6           0.5
Price earnings ratio (3)                                6.7            4.5          20.5            8.1           7.7
</TABLE>

Notes:
1.   Equity to assets ratio is calculated as total stockholders' equity divided
     by total assets.
2.   Debt to equity ratio is calculated as total interest bearing current and
     long-term liabilities, including obligations under capital leases, divided
     by stockholders' equity.
3.   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

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 which may adversely affect our earnings

Our charters with Shell International Petroleum Company Limited, or Shell
International, expired in the first quarter of 2004. 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. The charter rates payable under time charters or in the spot
market 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 tanker vessels 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

If the number of new ships delivered exceeds the number of tankers being
scrapped and lost, tanker capacity will increase. If the supply of tanker
capacity increases and the demand for tanker capacity does not increase
correspondingly, the charter rates paid for our tankers could materially
decline.

Any decrease in shipments of crude oil from the Arabian Gulf may adversely
affect our financial performance

The demand for our very large crude carrier, or VLCC, oil tankers derives
primarily from demand for Arabian Gulf crude oil, which, in turn, primarily
depends on the economies of the world's industrial countries and competition
from alternative energy sources. A wide range of economic, social and other
factors can significantly affect the strength of the world's industrial
economies and their demand for Arabian Gulf crude oil. One such factor is the
price of worldwide crude oil. The world's oil markets have experienced high
levels of volatility in the last 25 years. If oil prices were to rise
dramatically, the economies of the world's industrial countries may experience a
significant downturn.

Any decrease in shipments of crude oil from the Arabian Gulf would have a
material adverse effect on our financial performance. Among the factors which
could lead to such a decrease are:

     o    increased crude oil production from non-Arabian Gulf areas;
     o    increased refining capacity in the Arabian Gulf area;
     o    increased use of existing and future crude oil pipelines in the
          Arabian Gulf area;
     o    a decision by Arabian Gulf oil-producing nations to increase their
          crude oil prices or to further decrease or limit their crude oil
          production;
     o    armed conflict in the Arabian Gulf and political or other factors; and
     o    the development and the relative costs of nuclear power, natural gas,
          coal and other alternative sources of energy.

Some of our vessels operate on a spot charter basis and any decrease in spot
charter rates in the future may adversely affect our earnings

Beginning in 2004, some of our vessels operate on a spot charter basis. 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 minimizing, to the extent possible, time spent waiting for charters
and time spent traveling 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 of
our spot chartered vessels, and generally reflect prevailing oil prices, are
subject to sharp fluctuations.

The value of our vessels may fluctuate and adversely affect our liquidity and
may result in breaches under our financial arrangements and sales of our vessels
at a loss.

Tanker values have generally experienced high volatility. Investors can expect
the fair market value of our VLCC oil tankers to fluctuate, depending on general
economic and market conditions affecting the tanker industry and competition
from other shipping companies, types and sizes of vessels, and other modes of
transportation. In addition, as vessels grow older, they generally decline in
value. While we have refinanced our previous secured debt during 2004, declining
tanker values could affect our ability to raise cash by limiting our ability to
refinance vessels in the future and thereby adversely impact our liquidity. If
we determine at any time that a tanker's future limited useful life and earnings
require us to impair its value on our financial statements, that could result in
a charge against our earnings and the reduction of our shareholders' equity. Due
to the cyclical nature of the tanker market, if for any reason we sell tankers
at a time when tanker prices have fallen, the sale may be at less than the
tanker's carrying amount on our financial statements, with the result that we
would also incur a loss and a reduction in earnings. Based on the closing price
for our common shares on May 15, 2005, taking into account our total
indebtedness of $128.8 million, and assuming no other factors, such as liquidity
premiums, our cash position, or expectations of future performance, the implied
value of each of our vessels was $128.1 million. The market value of a similar
vessel may be significantly lower than the implied value of our vessels.

Our operating results may fluctuate seasonally

We operate our tankers in markets that have historically exhibited seasonal
variations in tanker demand and, as a result, in charter rates. Tanker markets
are typically stronger in the fall and winter months (the fourth and first
quarters of the calendar year) in anticipation of increased oil consumption in
the northern hemisphere during the winter months. Unpredictable weather patterns
and variations in oil reserves disrupt vessel scheduling.

We operate in the highly competitive international tanker market and we may not
be able to effectively compete which would negatively affect our results of
operations

The operation of tanker vessels and transportation of crude and petroleum
products and the other businesses in which we operate are extremely competitive.
Competition arises primarily from other tanker owners, including major oil
companies as well as independent tanker companies, some of whom have
substantially greater resources than we do. Competition for the transportation
of oil and oil products can be intense and depends on price, location, size,
age, condition and the acceptability of the tanker and its operators to the
charterers. Following the expiration of the Shell International charters in
2004, we compete with other tanker owners, including major oil companies as well
as independent tanker companies for charterers. Due in part to the fragmented
tanker market, competitors with greater resources could enter and operate larger
fleets through acquisitions or consolidations and may be able to offer better
prices and fleets, which could result in our achieving lower revenues from our
VLCC oil tankers.

Future distributions to shareholders are dependent on tanker rates and future
charter arrangements

The Company has historically paid distributions to shareholders. For the periods
for which the Company's vessels were under charters to Shell International, the
base rate charterhire was sufficient to pay a distribution of approximately
$1.80 per share per year. The Company paid higher distributions when additional
charterhire was received from Shell International. The Company expects that
charterhire paid for time charters or in the spot market now that the charters
to Shell International have expired will be sufficient sources of income for the
Company to continue to pay ordinary recurring expenses including installments
due under its financing facility. The Company also expects that it will be able
to continue to make distributions to its shareholder under the new employment
regime for its vessels. These distributions are expected to be a minimum of
$1.00 dollar per share per year. However, the amounts distributed will be
dependent on spot market rates and any future charter arrangements that the
Company enters into.

Compliance with environmental laws or regulations may adversely affect our
operations

The shipping industry in general, our business and the operation of our tankers
in particular, are affected by a variety of governmental regulations in the form
of numerous international conventions, national, state and local laws and
national and international regulations in force in the jurisdictions in which
such tankers operate, as well as in the country or countries in which such
tankers are registered. These regulations include:

     o    the U.S. Oil Pollution Act of 1990, or OPA, which imposes strict
          liability for the discharge of oil into the 200-mile United States
          exclusive economic zone, the obligation to obtain certificates of
          financial responsibility for vessels trading in United States waters
          and the requirement that newly constructed tankers that trade in
          United States waters be constructed with double-hulls;

     o    the International Convention on Civil Liability for Oil Pollution
          Damage of 1969 entered into by many countries (other than the United
          States) relating to strict liability for pollution damage caused by
          the discharge of oil;

     o    the International Maritime Organization, or IMO, International
          Convention for the Prevention of Pollution from Ships with respect to
          strict technical and operational requirements for tankers;

     o    the IMO International Convention for the Safety of Life at Sea of
          1974, or SOLAS, with respect to crew and passenger safety;

     o    the International Convention on Load Lines of 1966 with respect to the
          safeguarding of life and property through limitations on load
          capability for vessels on international voyages; and

     o    the U.S. Marine Transportation Security Act of 2002.

More stringent maritime safety rules are also more likely to be imposed
worldwide as a result of the oil spill in November 2002 relating to the loss of
the m.t. Prestige, a 26-year old single-hull tanker owned by a company not
affiliated with us. Additional laws and regulations may also be adopted that
could limit our ability to do business or increase the cost of our doing
business and that could have a material adverse effect on our operations. In
addition, we are required by various governmental and quasi-governmental
agencies to obtain certain permits, licenses and certificates with respect to
our operations. In the event of war or national emergency, our tankers may be
subject to requisition by the government of the flag flown by the tanker without
any guarantee of compensation for lost profits. We believe our tankers are
maintained in good condition in compliance with present regulatory requirements,
are operated in compliance with applicable safety/environmental laws and
regulations and are insured against usual risks for such amounts as our
management deems appropriate. The tankers' operating certificates and licenses
are renewed periodically during each tanker's required annual survey. However,
government regulation of tankers, particularly in the areas of safety and
environmental impact may change in the future and require us to incur
significant capital expenditures on our ships to keep them in compliance.

Shipping is an inherently risky business and we may not have adequate insurance

There are a number of risks associated with the operation of ocean-going
vessels, including mechanical failure, collision, human error, war, terrorism,
property loss, cargo loss or damage and business interruption due to political
circumstances in foreign countries, hostilities and labor strikes. Any of these
events may result in loss of revenues, increased costs and decreased cash flows.
In addition, following the terrorist attack in New York City on September 11,
2001, and the military response of the United States, the likelihood of future
acts of terrorism may increase, and our vessels may face higher risks of attack.
Future hostilities or other political instability, as shown by the attack on the
Limburg in Yemen in October 2002, could affect our trade patterns and adversely
affect our operations and our revenues, cash flows and profitability. In
addition, the operation of any vessel is subject to the inherent possibility of
marine disaster, including oil spills and other environmental mishaps, and the
liabilities arising from owning and operating vessels in international trade.

We cannot assure investors that we will adequately insure against all risks and
we may not be able to obtain adequate insurance coverage at reasonable rates for
our fleet in the future and the insurers may not pay particular claims. For
example, a catastrophic spill could exceed our insurance coverage and have a
material adverse effect on our financial condition. In addition, we may not be
able to procure adequate insurance coverage at commercially reasonable rates in
the future and we cannot guarantee that any particular claim will be paid. In
the past, new and stricter environmental regulations have led to higher costs
for insurance covering environmental damage or pollution, and new regulations
could lead to similar increases or even make this type of insurance unavailable.
Furthermore, even if insurance coverage is adequate to cover our losses, we may
not be able to timely obtain a replacement ship in the event of a loss. We may
also be subject to calls, or premiums, in amounts based not only on our own
claim records but also the claim records of all other members of the protection
and indemnity associations through which we receive indemnity insurance coverage
for tort liability. Our payment of these calls could result in significant
expenses to us that could reduce our cash flows and place strains on our
liquidity and capital resources.

Our revenues may be adversely affected if we do not successfully employ our
tankers

Following the expiration of the Shell International charters in 2004, we have
determined to deploy our tankers between spot market voyage charters and time
charters. Currently, three of our tankers are contractually committed to time
charters, with the remaining terms of these charters expiring on dates between
2007 and 2009. Although these time charters generally provide reliable revenues,
they also limit the portion of our fleet available for spot market voyages
during an upswing in the tanker industry cycle, when spot market voyages might
be more profitable.

The spot charter market is highly competitive, and spot market voyage charter
rates may fluctuate dramatically based on tanker and oil supply and demand and
other factors. We cannot assure you that future spot market voyage charters will
be available at rates that will allow us to operate our tankers profitably.

Incurrence of expenses or liabilities may reduce or eliminate distributions

Our policy has been to pay out available cash, less reserves for contingencies,
as distributions to stockholders, and we currently intend to continue that
policy. However, we could incur other expenses or contingent liabilities that
would reduce or eliminate the cash available for distribution by us as
dividends. Our loan agreement prohibits the declaration and payment of dividends
if we are in default under such loan agreement. In addition, the declaration and
payment of dividends is subject at all times to the discretion of our Board. We
cannot assure you that we will pay dividends.

We have a limited business purpose which limits our flexibility

Our Bye-Laws limit our business to engaging in the acquisition, disposition,
ownership, leasing and chartering of our five VLCC oil tankers. As a result, we
expect that the only source of operating revenue from which we may pay
distributions will be from operating the five VLCCs we currently own under time
charter or on the spot market.

Arrests of our tankers by maritime claimants could cause a significant loss of
earnings for the related off hire period

Crew members, suppliers of goods and services to a vessel, shippers of cargo and
other parties may be entitled to a maritime lien against a vessel for
unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien
holder may enforce its lien by "arresting" or "attaching" a vessel through
foreclosure proceedings. The arrest or attachment of one or more of our tankers
could result in a significant loss of earnings for the related off-hire period.

In addition, in jurisdictions where the "sister ship" theory of liability
applies, 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. In countries with "sister ship" liability laws,
claims might be asserted against us, any of our subsidiaries or our tankers for
liabilities of other vessels that we own.

Governments could requisition our vessels during a period of war or emergency
without adequate compensation, resulting in a 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. This amount could be materially less than
the charterhire that would have been payable otherwise. In addition, we would
bear all risk of loss or damage to a vessel under requisition for hire.

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 has increased the likelihood of acts of terrorism worldwide. Acts of
terrorism, regional hostilities or other political instability, as shown by the
attack on the Limburg in Yemen in October 2002, attacks on oil pipelines during
and subsequent to the Iraq war in 2003 and attacks on expatriate workers in the
Middle East 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 Memorandum of Association and Bye-Laws and the
Bermuda Companies Act 1981, as amended, govern our affairs. Investors may have
more difficulty in protecting their interests in the face of actions by
management, directors or controlling shareholders than would shareholders of a
corporation incorporated in a United States jurisdiction. Under Bermuda law a
director generally owes a fiduciary duty only to the company; not to the
company's shareholders. Our shareholders may not have a direct course of action
against our directors. In addition, Bermuda law does not provide a mechanism for
our shareholders to bring a class action lawsuit under Bermuda law. Further, our
Bye-Laws provide for the indemnification of our directors or officers against
any liability arising out of any act or omission except for an act or omission
constituting fraud, dishonesty or illegality.

Because our offices and most of our assets are outside the United Sates, you may
not be able to bring suit against us, or enforce a judgment obtained against us
in the United States.

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 not be exempt from U.S. taxation on our U.S. source shipping income,
which would reduce our net income and cash flow by the amount of the applicable
tax

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
United States, 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, 2004.

However, due 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 2% United States federal income tax on the income we or our
subsidiaries derive during the year from United States sources. The imposition
of this taxation could have an adverse effect on our net income and cash flow.

<PAGE>

ITEM 4. INFORMATION ON THE COMPANY

A. HISTORY AND DEVELOPMENT OF THE COMPANY

Knightsbridge Tankers Limited was incorporated in Bermuda on September 18, 1996.
The Company's 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) 295-0182. References herein to the Company include
the Company and all of its subsidiaries, unless otherwise indicated. The Company
was incorporated for the purpose of the acquisition, disposition, ownership,
leasing and chartering of, through wholly-owned subsidiaries (the "Original
Subsidiaries"), five very large crude oil carriers ("VLCCs") (the "Vessels").
The Company used the net proceeds of its initial public offering and bank debt
to fund the purchase by the Original Subsidiaries of the Vessels. Upon their
purchase from their previous owners on February 27, 1997 until March 2004, the
Company chartered its Vessels to Shell International on long-term "hell and high
water" bareboat charters (the "Charters"). The term of each of these Charters
was a minimum of seven years, with an option for Shell International to extend
the period for each Vessel's Charter for an additional seven year term, to a
maximum of approximately 14 years per Charter. Shell International did not
extend the bareboat charters for any of the Vessels for a second seven year
period. Consequently, the Charters expired for all five Vessels, in accordance
with their terms, during March 2004 and the Vessels were redelivered to the
Company. Following the redelivery, the Company has entered into a five year time
charter for one of its vessels while two of the Company's vessels have each been
time chartered for a period of three years. The Company's remaining two vessels
are trading on the spot market.

The business of the Company is limited by its Bye-Laws to the transactions
described above and related activities including the ownership of subsidiaries
engaged in the acquisition, disposition, ownership, leasing and chartering of
the Vessels following the termination of the Charters in 2004, and engaging in
activities necessary, suitable or convenient to accomplish, or in connection
with or incidental to, the foregoing, including refinancing its original debt
obligation related to its initial public offering (the "Credit Facility"). The
Company expects that its only source of operating revenue, from which the
Company may pay distributions to shareholders of its common shares, par value
$0.01 per share, will be cash payments from subsidiaries to the Company. The
Company's Bye-Laws may be amended only upon the affirmative vote of 66-2/3% of
the outstanding common shares.

In connection with the purchase of the original Vessels, the Company had entered
into conditional sale arrangements with a third party banking institution (the
"UK Lessor"). Under the arrangements (the "Conditional Sale Agreements"), each
of the Company's vessel-owning subsidiaries agreed with the UK Lessor that the
UK Lessor was entitled to purchase the Vessels from the subsidiaries, by payment
of the purchase price in installments over a period of twenty-five years,
subject to certain conditions described below. For the duration of the Charters,
the vessels were leased back to the Company's subsidiaries. The lease agreements
did not encumber or obligate the Company's current or future cash flows and had
no effect on the Company's financial position.

The U.K. Lessor's obligation under each Conditional Sale Agreement to pay the
first instalment of the purchase price for the vessel was subject to the
following conditions: (i) the UK Lessor had not terminated the related
Conditional Sale Agreement prior to the Vessel being delivered by the subsidiary
or a representative of the UK Lessor; (ii) the Company's subsidiary had not
terminated the Agreement prior to giving notice of delivery of the Vessel; (iii)
the UK Lessor had received notice of delivery of the Vessel from the subsidiary;
(iv) the UK Lessor had received an invoice for the first instalment of the
purchase price; (v) the representations and warranties by the subsidiary in the
Conditional Sale Agreement (regarding capital expenditures of the subsidiary and
the purchase price of the vessel) continued to be true; and (vi) the Vessel had
not suffered a loss. Upon termination of the Charters in 2004, each of the
Company's subsidiaries had the right as the UK Lessor's sales agent to arrange
for the disposition of the Conditional Sale Agreement (and the right to take
title to the related Vessel), or to arrange for the sale of the related Vessel,
for an amount equal to the fair market value of that Vessel. In connection with
the termination of the Charters, the Company's subsidiaries arranged for newly
formed subsidiaries (the "New Subsidiaries") to purchase the Conditional Sale
Agreements from the UK Lessor by way of novation for fair market value
consideration, thereby transferring the right to take title to the Vessels under
the Conditional Sale Agreements to the Company's New Subsidiaries. The New
Subsidiaries took title to the Vessels during the first half of March 2004 and
the Conditional Sale Agreements are no longer in effect. There was no gain or
loss booked by the Company on the transaction as the fair market value
consideration was deemed equal to the Vessel book value at the date of
acquisition.

Each Vessel was registered in the Republic of the Marshall Islands by the
relevant New Subsidiary. The Company also repaid its existing loans and together
with the New Subsidiaries entered into a new loan agreement (the "Loan
Agreement") with The Royal Bank of Scotland plc (the "Lender"), pursuant to
which the Company borrowed $140.0 million in the form of five loans of $28
million each in respect of a Vessel (together, the "Loan"). The Company is
obligated to repay the Loan in twenty-eight quarterly installments of $2.8
million and a final installment of $61.6 million on the last payment date. The
Loan Agreement provides for payment of interest on the outstanding principal
balance of the Loan, quarterly in arrears, at the annual rate of 1% plus LIBOR.
If a New Subsidiary sells or disposes of the related Vessel, the Company will be
obligated to make a loan prepayment which will be applied against the principal
balance of the Loan relating to the Vessel. The Loan Agreement is secured by,
among other things, a guarantee from each New Subsidiary, a mortgage on each
Vessel and an assignment of any charter with respect to a Vessel. The failure by
the Company to make payments due and payable under the Loan Agreement could
result in the acceleration of all principal and interest on the Loan Agreement,
the enforcement by the Lender of its rights with respect to the security
therefore, and the consequent forfeiture by the Company of one or more of the
Vessels. The Loan Agreement also provides for other customary events of default.

The Loan Agreement contains a number of covenants made by the Company and each
of the New Subsidiaries that, among other things, restrict the ability of the
Company to incur additional indebtedness, pay dividends if the Company is in
default, create liens on assets or dispose of assets. In addition, the Company
and the relevant New Subsidiary is subject to additional covenants pursuant to
the Loan Agreement pertaining primarily to the maintenance and operation of each
of the Vessels.

B. BUSINESS OVERVIEW

We are an international tanker company and our primary business activity is the
international seaborne transportation of crude oil. Our fleet consists of five
double-hull very large crude oil carriers, one of which was built in 1996 and
four of which were built in 1995.

Expired Long-Term Charters

Pursuant to the Charters, Shell International paid a daily charterhire
commencing on the Delivery Date at a rate comprised of two primary components:
(i) the Base Rate, a fixed minimum rate of charterhire equal to $22,069 per
Vessel per day, payable quarterly in arrears, and (ii) Additional Hire, an
additional charterhire equal to the excess, if any, of a weighted average of the
daily time charter rates for three round-trip trade routes traditionally served
by VLCCs, less an agreed amount of $10,500, representing daily operating costs
over the Base Rate. This charterhire computation enabled the Company to receive
the greater of (i) an average of prevailing spot charter rates for VLCCs trading
on such routes after deducting daily operating costs of $10,500 during the
initial term of the Charters.

New Operations

Each of the Vessels is now owned by a New Subsidiary and has been renamed and
reflagged in the Marshall Islands and is currently deployed either on time
charters or in the spot market, operating on routes between the Arabian Gulf and
the Far East, Northern Europe, the Caribbean and the Louisiana Offshore Oil
Port. The following chart provides information on the current deployment of our
Vessels:

Vessel Name                    Employment                       Expiration Date

Camden                          Time charter                    March, 2009
Chelsea                         Spot market                     n/a
Hampstead                       Time charter                    April, 2007
Kensington                      Time charter                    April, 2007
Mayfair                         Spot Market                     n/a

We believe that operating our Vessels between time charter and the spot market
will enable us to take advantage of higher charter rates in the spot market,
while maintaining stability through long-term charters.

Management Agreement

Upon expiration of the Charters in 2004, we amended our agreement with ICB
Shipping (Bermuda) Ltd. (the "Manager") pursuant to which the Manager now
assumes operational responsibility for the Vessels and has agreed to recharter
the Vessels, subject to the approval of the Board of Directors. Under the
Management Agreement the Manager is required to manage the day-to-day business
of the Company subject, always, to the objectives and policies of the Company as
established from time to time by the Board. All decisions of a material nature
concerning the business of the Company are reserved to the Company's Board of
Directors. The Management Agreement will terminate in 2012, unless earlier
terminated pursuant to the terms thereof, as discussed below.

For its services under the Management Agreement during the period of the
Charters, the Manager was entitled to a Management Fee equal to $750,000 per
annum. In view of the increase in expenses to be borne directly by the Company
due to the Company undertaking to perform certain operational responsibilities
with respect to the Vessels since the termination of the Charters, the
Management Fee has been reduced to $630,000 per year. The Company is now
responsible for paying its own administrative expenses including such items as
audit fees, legal and professional fees, registrars fees, and directors and
officers fees and expenses. The Company believes that these management fees are
substantially on the same terms that would be obtained from a non-affiliated
party. The Manager was not affiliated with the Company, the Charterer or
Guarantors at the time these fees were negotiated.

Upon the expiration of the Charters in 2004 and the Company's shareholders'
decision to continue the Company in business and not sell the Vessels, the
Manager became obligated under the Management Agreement to attempt to recharter
each Vessel on an arms-length basis upon such terms as the Manager deems
appropriate, subject to the approval of the Board. The Manager will receive a
commission equal to 1.25% of the gross freight earned from such rechartering
(which is the standard industry commission). The Manager, on behalf of the
Company, may utilize the services of brokers and lawyers, and enter into such
compensation arrangements with them, subject to the Board's approval, as the
Manager deems appropriate.

The Company may terminate the Management Agreement at any time upon 30 days'
notice to the Manager for any reason, provided that any such termination shall
have been approved by a resolution duly adopted by the affirmative vote of the
holders of at least 66-2/3% of the Company's outstanding Common Shares. The
Company may terminate the Management Agreement at any time upon five business
days' prior written notice to the Manager in the event of the Manager's material
breach thereof, the failure of the Manager to maintain adequate authorization to
perform its duties thereunder, the Manager's insolvency, in the event that it
becomes unlawful for the Manager to perform its duties thereunder or if the
Manager ceases to be wholly-owned, directly or indirectly, by ICB Shipping
Aktiebolag (publ) or its successor as ultimate parent of the Manager. Frontline
Ltd., a Bermuda company listed on the New York Stock Exchange, London Stock
Exchange and the Oslo Stock Exchange, with its acquisition of ICB Shipping
Aktiebolag (publ), is ICB's successor as ultimate parent of the Manager. The
Manager may terminate the Management Agreement upon ten business days' prior
written notice to the Company in the event that the Company undergoes a "change
of control" which is the election of any director whose election was not
recommended by the then current Board. The Company believes that in the case of
any termination of the Management Agreement, the Company could obtain an
appropriate alternative arrangement for the management of the Company, although
there can be no assurance that such alternative arrangement would not cause the
Company to incur additional cash expenses.

Industry Conditions

The oil tanker industry has been highly cyclical, experiencing volatility in
charterhire rates and vessel values resulting from changes in the supply of and
the demand for crude oil and tanker capacity. The demand for tankers is
influenced by, among other factors, the demand for crude oil, global and
regional economic conditions, developments in international trade, changes in
seaborne and other transportation patterns, weather patterns, oil production,
armed conflicts, port congestion, canal closures, embargoes and strikes. In
addition, the Company anticipates that the future demand for VLCCs, such as the
Vessels, will also be dependent upon continued economic growth in the United
States, Continental Europe and the Far East and competition from pipelines and
other sizes of tankers. Adverse economic, political, social or other
developments in any of these regions could have an adverse effect on the
Company's business and results of operations. In addition, even if demand for
crude oil grows in these areas, demand for VLCCs may not necessarily grow and
may even decline. Demand for crude oil is affected by, among other things,
general economic conditions, commodity prices, environmental concerns, taxation,
weather and competition from alternatives to oil. Demand for the seaborne
carriage of oil depends partly on the distance between areas that produce crude
oil and areas that consume it and their demand for oil. The incremental supply
of tanker capacity is a function of the delivery of new vessels and the number
of older vessels scrapped, in lay-up, converted to other uses, reactivated or
lost. Such supply may be affected by regulation of maritime transportation
practices by governmental and international authorities. All of the factors
influencing the supply of and demand for oil tankers are outside the control of
the Company, and the nature, timing and degree of changes in industry conditions
are unpredictable.

VLCCs are specifically designed for the transportation of crude oil and, due to
their size, are used to transport crude oil primarily from the Arabian Gulf to
the Far East, Northern Europe, the Caribbean and the Louisiana Offshore Oil Port
("LOOP"). While VLCCs are increasingly being used to carry crude oil from other
areas, any decrease in shipments of crude oil from the Arabian Gulf would have a
material adverse effect on the Company.

Among the factors which could lead to such a decrease are (i) increased crude
oil production from non-Arabian Gulf areas, (ii) increased refining capacity in
the Arabian Gulf area, (iii) increased use of existing and future crude oil
pipelines in the Arabian Gulf area, (iv) a decision by Arabian Gulf
oil-producing nations to increase their crude oil prices or to further decrease
or limit their crude oil production, (v) armed conflict in the Arabian Gulf or
along VLCC trading routes, (vi) political or other factors and (vii) the
development and the relative costs of nuclear power, natural gas, coal and other
alternative sources of energy.

VLCC demand is primarily a function of demand for Arabian Gulf crude oil, which
in turn is primarily dependent on the economies of the world's industrial
countries and competition from alternative energy sources. A wide range of
economic, political, social and other factors can significantly affect the
strength of the world's industrial economies and their demand for Arabian Gulf
crude oil. One such factor is the price of worldwide crude oil. The world's oil
markets have experienced high levels of volatility in the last 25 years. If oil
prices were to rise dramatically, the economies of the world's industrial
countries may experience a significant downturn. See Item 5. Operating and
Financial Review and Prospects -- Operating Results -- The Tanker Market.

Vessel Values

Tanker values have generally experienced high volatility. The fair market value
of oil tankers, including the Vessels, can be expected to fluctuate, depending
upon general economic and market conditions affecting the tanker industry and
competition from other shipping companies, types and sizes of vessels, and other
modes of transportation. In addition, as vessels grow older, they may be
expected to decline in value.

Since the mid-1970s, during most periods there has been a substantial worldwide
oversupply of crude oil tankers, including VLCCs. In addition, the market for
secondhand VLCCs has generally been weak since the mid-1970s. Notwithstanding
the aging of the world tanker fleet and the adoption of new environmental
regulations which will result in a phase-out of many single hull tankers,
significant deliveries of new VLCCs would adversely affect market conditions.

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.

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 ship owner fleets. In
addition, several owners and operators pool their vessels together on an ongoing
basis, and such pools are available to customers to the same extent as
independently owned and operated fleets. Many major oil companies and other oil
trading companies, the primary charterers of the vessels owned or controlled by
the Company, also operate their own vessels and use such vessels not only to
transport their own crude oil but also to transport crude oil for third party
charterers in direct competition with independent owners and operators in the
tanker charter market. Competition for charters is intense and is based upon
price, location, size, age, condition and acceptability of the vessel and its
manager. Competition is also affected by the availability of other size vessels
to compete in the trades in which the Company engages.

Risk of Loss and Insurance

There are a number of risks associated with the operation of ocean-going
vessels, including mechanical failure, collision, property loss, cargo loss, or
damage and business interruption due to political circumstances in foreign
countries, hostilities and labor strikes. In addition, the operation of any
vessel is subject to the inherent possibility of marine disaster, including oil
spills and other environmental mishaps, and the liabilities arising from owning
and operating vessels in international trade. The United States Oil Pollution
Act of 1990, or OPA, which imposes virtually unlimited liability upon owners,
operators and demise charterers of any vessel trading in the United States
exclusive economic zone for certain oil pollution accidents in the United
States, has made liability insurance more expensive for ship owners and
operators trading in the United States market and has also caused insurers to
consider reducing available liability coverage. We bear all risks associated
with the operation of the Vessels, including, without limitation, any total loss
of one or more Vessels.

The Manager is responsible for arranging for the insurance of our vessels in
line with standard industry practice. In accordance with that practice, we
maintain hull and machinery and war risks insurance, which include the risk of
actual or constructive total loss, and protection and indemnity insurance with
mutual assurance associations. Our protection and indemnity insurance, or P&I
insurance, covers third-party liabilities and other related expenses from, among
other things, injury or death of crew, passengers and other third parties,
claims arising from collisions, damage to cargo and other third-party property,
and pollution arising from oil or other substances. Our current P&I insurance
coverage for pollution is the maximum commercially available amount of $1.0
billion per tanker per incident and is provided by mutual protection and
indemnity associations. Each of the Vessels is entered in a protection and
indemnity association which is a member of the International Group of Protection
and Indemnity Mutual Assurance Associations. The 14 protection and indemnity
associations that comprise the International Group insure approximately 90% of
the world's commercial tonnage and have entered into a pooling agreement to
reinsure each association's liabilities. Each protection and indemnity
association has capped its exposure to this pooling agreement at $4.3 billion.
As a member of protection and indemnity associations, which are, in turn,
members of the International Group, we are subject to calls payable to the
associations based on its claim records as well as the claim records of all
other members of the individual associations and members of the pool of
protection and indemnity associations comprising the International Group.

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

Inspection by Classification Societies

Every commercial vessel's hull and machinery is "classed" by a classification
society authorised by its country of registry. The classification society
certifies that the vessel has been built and maintained in accordance with the
rules of such classification society and complies with applicable rules and
regulations of the country of registry of the vessel and the international
conventions to which that country is a member. Our vessels have all been
certified as "in class." Each vessel is inspected by a surveyor of the
classification society every year, every two and a half years and every four to
five years. Should any defects be found, the classification surveyor will issue
a "recommendation" for appropriate repairs which have to be made by the
shipowner within the time limit prescribed.

Environmental and Other Regulations

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

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

Environmental Regulation--IMO

The International Maritime Organization, or IMO, (the United Nation's agency for
maritime safety and the prevention of marine pollution by ships) has adopted
regulations that set forth pollution prevention requirements for tankers. These
regulations, which have been implemented in many jurisdictions in which our
tankers operate, provide, in part, that:

     o    tankers between 25 and 30 years old must be of double-hull
          construction or of a mid-deck design with double-sided construction,
          unless:

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

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

     o    tankers 30 years old or older tankers must be of double-hull
          construction or mid-deck design with double-sided construction; and

     o    all tankers are subject to enhanced inspections.

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

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

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

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

The IMO recently adopted regulations that require the phase-out of most single
hull tankers by 2015 or earlier, depending on the age of the vessel and whether
or not it complies with requirements for protectively located segregated ballast
tanks. Under these new regulations, which became effective in September 2002,
the maximum permissible age for single hull tankers after 2007 will be 26 years.
The new regulations also provide for increased inspection and verification
requirements. However, as a result of the oil spill in November 2002 relating to
the loss of the m.t. Prestige, which was owned by a company not affiliated with
us, in December 2003 the Marine Environmental Protection Committee of the IMO
adopted a proposed amendment to the International Convention for the Prevention
of Pollution from Ships to accelerate the phase out of single hull tankers from
2005 to 2010 unless the relevant flag states extend the date to 2015. This
amendment became effective in April 2005. All of our vessels are double hull
tankers that were built in 1995 or later and will not be subject to this
accelerated phase-out.

The IMO has also negotiated international conventions that impose liability for
oil pollution in international waters and a signatory's territorial waters. In
September 1997, the IMO adopted Annex VI to the International Convention for the
Prevention of Pollution from Ships to address air pollution from ships. Annex VI
was ratified in May 2004, and became effective in May 2005. Annex VI sets limits
on sulfur oxide and nitrogen oxide emissions from ship exhausts and prohibits
deliberate emissions of ozone depleting substances, such as chlorofluorocarbons.
Annex VI also includes a global cap on the sulfur content of fuel oil and allows
for special areas to be established with more stringent controls on sulfur
emissions. The Manager has formulated a plan to comply with the Annex VI
regulations. Compliance with these regulations may require the installation of
expensive emission control systems and may have an adverse financial impact on
the operation of our vessels. Additional or new conventions, laws and
regulations may be adopted that could adversely affect the Manager's ability to
manage our ships.

The IMO's International Safety Management Code for the Safe Operation of Ships
and Pollution Prevention, or ISM Code, also affects our operations. The ISM Code
requires the party with operational control of a vessel to develop a safety
management system that includes, among other things, the adoption of a safety
and environmental protection policy setting forth instructions and procedures
for operating its vessels safely and describing procedures for responding to
emergencies. The Manager will rely upon the safety management system that the
Manager and its third party technical managers have developed.

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

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

The IMO continues to review and introduce new regulations. It is impossible to
predict what additional regulations, if any, may be passed by the IMO and what
effect, if any, such regulations might have on the operation of oil tankers.

Environmental Regulation--OPA/CERCLA

The United States 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 United
States or its territories or possessions, or whose vessels operate in the waters
of the United States, which include the United States territorial waters and the
200 nautical mile exclusive economic zone of the United States. The
Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA,
which also impacts our operations, applies to the discharge of hazardous
substances (other than oil) whether on land or at sea.

Under OPA, vessel owners, operators and bareboat or "demise" charterers are
"responsible parties" who are liable regardless of fault, individually and as a
group, for all containment costs, clean-up costs and for other damages arising
from oil spills from their vessels. These other damages may include natural
resources damages and related assessment costs, real and personal property
damages, loss of subsistence use of natural resources, the loss of taxes, rents,
royalties, profits and earnings capacity resulting from an oil spill and the
cost of public services necessitated by an oil spill. OPA limits a responsible
party's liability to the greater of $1,200 per gross ton or $10 million per
vessel over 3,000 gross tons, subject to adjustment for inflation. 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 that have
enacted this type of legislation have not yet issued implementing regulations
defining tanker owners' responsibilities under these laws.

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

OPA requires owners and operators of vessels to establish and maintain with the
United States Coast Guard evidence of financial responsibility sufficient to
meet the limit of their aggregate potential strict liability under OPA and
CERCLA. The United States 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 must demonstrate evidence of financial responsibility for the
entire fleet in an amount equal only to the financial responsibility requirement
of the tanker having the greatest maximum liability under OPA/CERCLA. The
Manager has provided requisite guarantees and received certificates of financial
responsibility from the United States Coast Guard for each of our tankers
required to have one.

Under OPA, with limited exceptions, all newly built or converted tankers
operating in United States 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 United States waters are limited to
discharging at the Louisiana Offshore Oil Port or unloading with the aid of
another vessel, a process referred to as "lightering," within authorized
lightering zones more than 60 miles off-shore.

OPA also amended the Federal Water Pollution Control Act to require owners or
operators of tankers operating in the waters of the United States to file vessel
response plans with the United States Coast Guard, and their tankers are
required to operate in compliance with their United States Coast Guard approved
plans. These response plans must, among other things:

     o    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";

     o    describe crew training and drills; and

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

Vessel response plans for our tankers operating in the waters of the United
States have been approved by the United States Coast Guard. In addition, the
United States Coast Guard has announced it intends to propose similar
regulations requiring certain vessels to prepare response plans for the release
of hazardous substances. The Manager is responsible for ensuring our Vessels
comply with any additional regulations.

Environmental Regulation--Other

Although the United States is not a party to these conventions, many countries
have ratified and follow the liability plan adopted by the IMO and set out in
the International Convention on Civil Liability for Oil Pollution Damage of 1969
and the Convention for the Establishment of an International Fund for Oil
Pollution of 1971. Under these conventions, and depending on whether the country
in which the damage results is a party to the 1992 Protocol to the International
Convention on Civil Liability for Oil Pollution Damage, a vessel's registered
owner is strictly liable for pollution damage caused in the territorial waters
of a contracting state by discharge of persistent oil, subject to certain
complete defenses. Under an amendment that became effective November 1, 2003 for
vessels of 5,000 to 140,000 gross tons (a unit of measurement for the total
enclosed spaces within a vessel), liability will be limited to approximately
$6.7 million plus approximately $942 for each additional gross ton over 5,000.
For vessels of over 140,000 gross tons, liability will be limited to
approximately $134.0 million. As the convention calculates liability in terms of
a basket of currencies, these figures are based on currency exchange rates on
May 19, 2005. The right to limit liability is forfeited under the International
Convention on Civil Liability for Oil Pollution Damage where the spill is caused
by the owner's actual fault and under the 1992 Protocol where the spill is
caused by the owner's intentional or reckless conduct. Vessels trading to states
that are parties to these conventions must provide evidence of insurance
covering the liability of the owner. In jurisdictions where the International
Convention on Civil Liability for Oil Pollution Damage has not been adopted,
various legislative schemes or common law governs, and liability is imposed
either on the basis of fault or in a manner similar to that convention. We
believe that our P&I insurance covers the liability under the plan adopted by
the IMO.

In July 2003, in response to the m.t. Prestige oil spill in November 2002, the
European Union adopted legislation that prohibits all single hull tankers from
entering into its ports or offshore terminals by 2010. The European Union has
also banned all single hull tankers carrying heavy grades of oil from entering
or leaving its ports or offshore terminals or anchoring in areas under its
jurisdiction. Commencing in 2005, certain single hull tankers above 15 years of
age will also be restricted from entering or leaving European Union ports or
offshore terminals and anchoring in areas under European Union jurisdiction. The
European Union is considering legislation that would: (1) ban manifestly
sub-standard vessels (defined as those over 15 years old that have been detained
by port authorities at least twice in a six month period) from European waters
and create an obligation of port states to inspect vessels posing a high risk to
maritime safety or the marine environment; and (2) provide the European Union
with greater authority and control over classification societies, including the
ability to seek to suspend or revoke the authority of negligent societies. The
sinking of the m.t. Prestige and resulting oil spill in November 2002 has lead
to the adoption of other environmental regulations by certain European Union
nations, which could adversely affect the remaining useful lives of all of our
tankers and our ability to generate income from them. For example, Italy
announced a ban of single-hull crude oil tankers over 5,000 dwt from most
Italian ports, effective April 2001. Spain has announced a similar prohibition.
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.

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

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001, there have been a variety of
initiatives intended to enhance vessel security. On November 25, 2002, the
Maritime Transportation Security Act of 2002, or MTSA, came into effect. To
implement certain portions of the MTSA, in July 2003, the United States Coast
Guard issued regulations requiring the implementation of certain security
requirements aboard vessels operating in waters subject to the jurisdiction of
the United States. Similarly, in December 2002, amendments to the International
Convention for the Safety of Life at Sea, or SOLAS, created a new chapter of the
convention dealing specifically with maritime security. The new chapter came
into effect in July 2004 and imposes various detailed security obligations on
vessels and port authorities, most of which are contained in the newly created
International Ship and Port Facilities Security, or ISPS, Code. Among the
various requirements are:

     o    on-board installation of automatic information systems, or AIS, to
          enhance vessel-to-vessel and vessel-to-shore communications;

     o    on-board installation of ship security alert systems;

     o    the development of vessel security plans; and

     o    compliance with flag state security certification requirements.

The United States Coast Guard regulations, intended to align with international
maritime security standards, exempt non-U.S. tankers from MTSA vessel security
measures provided such vessels have on board a valid International Ship Security
Certificate, or ISSC, that attests to the vessel's compliance with SOLAS
security requirements and the ISPS Code. The Manager has implemented the various
security measures addressed by the MTSA, SOLAS and the ISPS Code and ensure that
our tankers attain compliance with all applicable security requirements within
the prescribed time periods. We do not believe these additional requirements
have a material financial impact on our operations.

C.   ORGANIZATIONAL STRUCTURE

See Exhibit 8.1 for a list of our subsidiaries.

D.   PROPERTY, PLANT AND EQUIPMENT

We operate a modern fleet of five tankers. The Vessels meet all material
existing regulatory requirements affecting the Vessels and their operations. The
name, deadweight tonnage ("Dwt"), hull type, flag and date of original delivery
from the Builder's yard are set forth below.

                  Approximate
Vessel name       Dwt              Hull type      Flag                Year Built

Camden            298,000          Double         Marshall Islands    1995
Chelsea           298,000          Double         Marshall Islands    1995
Mayfair           298,000          Double         Marshall Islands    1995
Kensington        298,000          Double         Marshall Islands    1995
Hampstead         298,000          Double         Marshall Islands    1996

The Vessels are modern, high-quality double hull tankers designed for enhanced
safety and reliability and for relatively low operating and maintenance costs.
Design features include a cargo system designed for optimum port performance, a
high grade anti-corrosion paint system and pipeline materials which have been
specified with a view to long service, an efficient power generation system
including shaft generator, additional fire fighting and safety equipment over
and above minimum standards and improved structural design.

Other than its interests in the Vessels, the Company has no interest in any
other property.

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.

In February 1997, the Company's five Original Subsidiaries each purchased one
VLCC. From their purchase in February 1997 until March 2004, the Company
chartered the Vessels to Shell International on long-term "hell and high water"
bareboat charters (the "Charters"). The term of each of these Charters was a
minimum of seven years, with an option for Shell International to extend the
period for each Vessel's Charter for an additional seven year term. Shell
International did not extend the Charters for any of the Vessels for the second
seven year period. Consequently, the Charters expired for all five Vessels, in
accordance with their terms, in March 2004 and the Vessels were redelivered to
the Company. Following the redelivery, the Company has entered into a five year
time charter for one of the Vessels while two of the Company's Vessels have each
been time chartered for a period of three years each. The Company's remaining
two Vessels are trading on the spot market.

The daily charterhire rate payable by Shell International was comprised of two
primary components: (i) the base rate, which is a fixed minimum rate of
charterhire equal to $22,069 per Vessel per day, payable quarterly in arrears
("Base Rate"), and (ii) additional hire, which is additional charterhire
(determined and paid quarterly in arrears) that would equal the excess, if any,
of a weighted average of the daily time charter rates for three round-trip trade
routes traditionally served by VLCCs, less an agreed amount of $10,500 during
the initial term of the Charters, representing daily operating costs over the
Base Rate. The current five year time charter agreement provides revenue of
approximately $31,000 per day for the duration of the charter, while the three
year time charters provide a rate of $30,000 per day plus a 50:50 profit sharing
arrangement for earnings in excess of $30,000 per day calculated by reference to
the Baltic International Trading Route (BITR) Index.

The calculated spot market related rates for the period up until the redelivery
of the Vessels in 2004, and each of the years ended December 31, 2003, and 2002
were:

(in $ per day)                2004                 2003                  2002
First Quarter               90,513               61,713                16.327
Second Quarter                                   53,186                13,057
Third Quarter                                    25,063                 9,093
Fourth Quarter                                   59,688                31,347

Factors Affecting Our 2004 and Future Results

The principal factors that are expected to affect our future results of
operations and financial position include:

     o    the earnings of our vessels in the charter market;

     o    vessel expenses;

     o    administrative expenses;

     o    depreciation; and

     o    interest expense.

Prior to 2004, we derived our historical earnings from the Charters with Shell
International. In the future our Vessels may be operated under bareboat
charters, time charters, voyage charters and contracts of affreightment. A
bareboat charter is a contract for the use of a vessel for a specified period of
time where the charterer pays substantially all of the vessel voyage costs and
operating costs. A time charter is a contract for the use of a vessel for a
specific period of time during which the charterer pays substantially all of the
vessel voyage costs but the vessel owner pays the operating costs. A voyage
charter is a contract for the use of a vessel for a specific voyage in which the
vessel owner pays substantially all of the vessel voyage costs and operating
costs. A contract of affreightment is a form of voyage charter in which the
owner agrees to carry a specific type and quantity of cargo in two or more
shipments over an agreed period of time. 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. In order to compare vessels trading under different types of charters, it
is standard industry practice to measure the revenue performance of a vessel in
terms of average daily time charter equivalent earnings, or TCEs. For voyage
charters, this is calculated by dividing net operating revenues by the number of
days on charter. Days spent offhire are excluded from this calculation.

The tanker industry has historically been highly cyclical, experiencing
volatility in profitability, vessel values and freight rates. In particular,
freight and charter rates are strongly influenced by the supply of tanker
vessels and the demand for oil transportation services. We will be exposed to
such volatility with our Vessels operating on the spot market and it will affect
the profit sharing arrangement that we have for our Vessels on time charter to
OSG.

Operating costs are the direct costs associated with running a vessel and
include crew costs, vessel supplies, repairs and maintenance, drydockings,
lubricating oils and insurance. We bear the operating costs for our Vessels that
are operating on the spot market and for the three Vessels that have been fixed
under time charters.

Administrative expenses are composed of general corporate overhead expenses,
including audit fees, directors fees and expenses, registrars fees, investor
relations and publication expenses, legal and professional fees and other
general administrative expenses.

Depreciation, or the periodic cost charged to our income for the reduction in
usefulness and long-term value of our vessels, is also related to the number of
vessels we own. We depreciate the cost of our vessels, less their estimated
residual value, over their estimated useful life on a straight-line basis.

Interest expense depends on our overall borrowing levels and will change with
prevailing interest rates, although the effect of these changes may be reduced
by interest rate swaps or other derivative instruments. As at December 31, 2004,
all of our debt was floating rate debt. We may enter into interest rate swap
arrangements if we believe it is advantageous to do so.

Although inflation may have an impact on our vessel operating 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 in the event of a downturn.

Market Overview

Following the termination of the Charters, our vessels are operated under time
charters and voyage charters Under a bareboat charter the charterer pays
substantially all of the vessel voyage and operating costs. Under a time
charter, the charterer pays substantially all of the vessel voyage costs. Under
a voyage charter, the vessel owner pays such costs. Vessel voyage costs are
primarily fuel and port charges. Accordingly, charter income from a voyage
charter would be greater than that from an equally profitable time charter to
take account of the owner's payment of vessel voyage costs. In order to compare
vessels trading under different types of charters, it is standard industry
practice to measure the revenue performance of a vessel in terms of average
daily time charter equivalent earnings, or TCEs. For voyage charters, this is
calculated by dividing net voyage revenues by the number of days on charter.
Days spent off-hire are excluded from this calculation.

A summary of average time charter equivalent earnings per day for our fleet is
as follows:

(in $ per day)       2004           2003         2002         2001          2000
VLCCs              68,698         51,731       32,569       44,217        52,328

Net voyage revenues, a non-GAAP measure, provides more meaningful information to
us than voyage revenues, the most directly comparable GAAP measure. Net voyage
revenues are also widely used by investors and analysts in the tanker shipping
industry for comparing financial performance between companies and to industry
averages. The following table reconciles our net voyage revenues to voyage
revenues in 2004 for our vessels trading in the spot market.

(in thousands of $)                                                         2004
Voyage revenues                                                           54,009
Voyage expenses and commission                                            11,925
--------------------------------------------------------------------------------
Net voyage revenues                                                       42,084
--------------------------------------------------------------------------------

The oil tanker industry has been highly cyclical, experiencing volatility in
charterhire rates and vessel values resulting from changes in the supply of and
demand for crude oil and tanker capacity. See Item 4. Information on the Company
- Business Overview - Industry Conditions.

The tanker market experienced a good year in 2004 as freight rates increased
dramatically compared to 2003, mainly due to limited fleet growth and strong
growth in the demand for oil, and implicitly for oil tankers.

The world supply of oil increased with 3.39 mbd from 2003 to a total of 83.03
mbd in 2004. The rapid economic growth in China led to a large growth in imports
of oil into China during the year. In addition, hurricane Ivan that hit the US
Gulf, led to the shut down of oil production in the area that had to be replaced
by additional imports. The result was a strong demand for VLCCs, and a very
healthy market for most of the year. The continuing unrest in Iraq kept the
output from that country to about 1.9 mbd. compared with a pre-war level of
about 2.2 mbd. However, the shortfall in production from Iraq was replaced by
increased production in the rest of the OPEC countries.

The size of the world VLCC fleet increased by 2.5% in 2004 from 433 vessels to
452 vessels. A total of 11 VLCC's were scrapped during the year and 30 were
delivered. The total order book for VLCCs was at 84 vessels at the end of 2004,
of which 43 were ordered during the year. This order book for VLCCs represents
19.1% of the existing fleet.

Critical Accounting Policies and Estimates

The preparation of our 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 us that are considered to involve a higher degree of
judgement in their application. See Note 2 to our audited Consolidated Financial
Statements included herein for details of all of our material accounting
policies.

Revenue Recognition

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

Vessels, Depreciation and Impairment

Prior to the termination of the capital leases with the U.K. Lessor, the cost of
our vessels were depreciated on a straight-line basis over the vessels'
remaining economic useful lives. When the capital leases were terminated and the
vessels were transferred to new wholly owned subsidiaries, our estimate for
depreciation was revised to include an estimate for the residual value of the
vessels at the end of their useful life. As a result, the vessels are now being
depreciated based on cost less estimated residual value over their useful life.
Management estimates the useful life of the Company's vessels to be 25 years.
This is a common life expectancy applied in the shipping industry. If the
estimated economic useful life is incorrect, or circumstances change and the
estimated economic useful life has to be revised, an impairment loss could
result in future periods and/or annual depreciation expense could be increased.
Our vessels are reviewed for impairment whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable.
Factors we consider important that could affect recoverability and trigger
impairment include significant underperformance relative to expected operating
results, new regulations that change the estimated useful economic lives of our
vessels and significant negative industry or economic trends. In assessing the
recoverability of the vessels' carrying amounts when an indicator of impairment
is present, we must make assumptions regarding estimated future cash flows.
These assumptions include assumptions about the spot market rates for vessels,
the revenues the vessel could earn under time charter, voyage charter or
bareboat charter, the operating costs of our vessels and the estimated economic
useful life of our vessels. In making these assumptions, the Company refers to
historical trends and performance as well as any known future factors. If our
review indicates impairment, an impairment charge is recognized based on the
difference between carrying value and fair value. Fair value is typically
established using an average of three independent valuations.

Recently Issued Accounting Standards

In December 2004, the FASB issued Statement of Financial Accounting Standards
153 Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 ("SFAS
153"). APB Opinion No. 29 Accounting for Nonmonetary Transactions ("APB 29")
provides that accounting for nonmonetary transactions should be measured based
on the fair value of the assets exchanged but allows certain exceptions to this
principle. SFAS 153 amends APB 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a general exception
for exchanges of nonmonetary assets that don't have commercial substance. A
nonmonetary exchange has commercial substance if the future cash flows of the
entity are expected to change significantly as a result of the exchange. SFAS
153 is effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005 and shall be applied prospectively.

Results of Operations

Year ended December 31, 2004 compared with year ended December 31, 2003

Operating revenues

(in thousands of $)                        2004            2003          Change
Time charter revenues                    42,113               -             n/a
Bareboat charter revenues                29,770          75,246          -60.4%
Voyage charter revenues                  63,812               -             n/a
--------------------------------------------------------------------------------
Total operating revenues                135,695          75,246           80.3%
--------------------------------------------------------------------------------

In March 2004, our long-term bareboat Charters with Shell International expired
and the Vessels commenced trading under new employment regimes. The decrease in
bareboat charter revenue from 2003 is explained by the expiration of the
Charters. Following the expiration of the Charters, three of our Vessels have
been contracted under medium-term time charters, two of which include market
related profit sharing arrangements and the remaining two Vessels are trading in
the spot market. Total operating revenues increased significantly in 2004 as
freight rates increased dramatically compared to 2003.

Operating expenses

(in thousands of $)                        2004            2003          Change
Voyage expenses and commission           14,240               -             n/a
Ship operating expenses                   9,868               -             n/a
Administrative expenses                   1,114             864           28.9%
Depreciation and amortization            17,219          17,593           -2.1%
--------------------------------------------------------------------------------
Total operating expenses                 42,441          18,457          129.9%
--------------------------------------------------------------------------------

Under the Charters, all ship operating costs were paid by Shell International.
Following the redelivery of the Vessels in March 2004, we are now required to
fund the Vessels' operating expenses. 83.7% of the voyage expenses and
commission are generated by the two Vessels which trade in the spot market, as
substantially all of the vessel voyage costs associated with time charters are
covered by the charterer. Ship operating expenses consist mainly of crewing,
repairs and maintenance, spare parts, insurance, stores and lubricants.
Additional operating costs were incurred in 2004 in conjunction with the
redelivery of the Vessels and familiarisation of the new crews.

In February 2004 we amended our agreement with ICB Shipping (Bermuda) Ltd. The
management fee was reduced to $0.63 million per annum from $0.75 million per
annum. We are now responsible to pay for our administrative expenses, which in
previous years were covered by the Manager. Of the $0.63 million, 39% is
included in administrative expenses while the remainder is classified as a ship
operating expense. In 2004 we incurred administration costs related to
insurance, directors' fees, shareholder and public relations, legal fees, audit
fees and other professional services. The significant portion of administration
costs relates to directors' fees, shareholder and public relations, and
management fees at $0.19, $0.55, and $0.28 million respectively.

In March 2004, the capital leases were terminated and Vessels were transferred
to new vessel owning subsidiaries and classified as owned vessels. Depreciation
for owned vessels is calculated based on the stated costs less estimated
residual value on a straight-line basis over the estimated useful life.
Depreciation for vessels under capital lease was calculated based on the stated
costs on a straight-line basis over the estimated useful life.

Interest income and expenses

(in thousands of $)                         2004            2003          Change
Interest income                              449              55            716%
Interest expense                         (7,877)         (9,332)           15.6%
--------------------------------------------------------------------------------
Net interest income (expenses)           (7,428)         (9,277)           19.9%
--------------------------------------------------------------------------------

The increase in interest income in 2004 reflects the increased cash balance in
2004 due to the increase in operating revenues in the year. Additionally, the
company is no longer paying out all available cash as dividends, as cash
reserves are being held to fund future operations.

Interest expense consists of interest paid in relation to the primary loans made
to us under the Credit Facility net of the hedging effects of the Company's
interest rate swap agreement, interest paid in relation to the new $140.0
million loan facility, and also the amortisation of deferred financing charges
incurred in connection with the drawdown of debt. Interest expense decreased in
2004 with the refinancing of the $125.4 million Credit Facility and the maturity
of the interest rate swap which effectively fixed interest at a rate of 7.13%
per annum. Under the new $140.0 million loan facility, in 2004 we paid interest
at a rate of LIBOR + 1% margin.

Year ended December 31, 2003 compared with year ended December 31, 2002

Operating revenues

(in thousands of $)                        2003           2002           Change
Bareboat charter revenues                75,246         40,276              87%

In 2002, the conditions prevailing in the tanker market meant that only the base
rate charterhire of $22,069 per day per vessel was received. In the fourth
quarter of 2002 the market began to strengthen and this continued into 2003. In
2003, the Company benefited from this continued strengthening, and in accordance
with the terms of the charters to Shell International, received Additional Hire.
The Additional Hire, which is calculated on a quarterly basis, totalled $34.97
million for 2003.

Operating expenses

(in thousands of $)                        2003           2002           Change
Administrative expenses                     864            805             7.3%
Depreciation and amoritsation            17,593         17,593               0%
--------------------------------------------------------------------------------
Total operating expenses                 18,457         18,398             0.3%
--------------------------------------------------------------------------------

Operating expenses increased in 2003 due to an increase in administrative
expenses. This was the result of an increase in the premium paid for the
Company's directors' and officers' liability insurance. During the term of the
charters to Shell International, the Company did not incur significant
administrative expenses apart from premiums in respect of the Company's
directors' and officers' and general liability insurance, which the Company
prepays on an annual basis. Due to the expiration of the charters to Shell
International and the change in the Company's operations in 2004, however, the
Company's operating expenses will increase starting in the year 2004 due to
vessel operating expenses, which mainly consist of crewing, repairs and
maintenance, spare parts, insurance, stores and lubricants.

Interest income and expenses

(in thousands of $)                         2003           2002           Change
Interest income                               55             33            66.7%
Interest expense                         (9,332)        (9,310)             0.2%
--------------------------------------------------------------------------------
Total other  income (expenses)           (9,277)        (9,277)               0%
--------------------------------------------------------------------------------

The increase in interest income in 2003 reflects the increased cash in 2003 due
to the Additional Hire revenues in this period. In addition, the Board made the
decision to withhold cash reserves for new operations to commence after the
expiration of the Charters, which resulted in an increase in interest income
from funds on short term deposit.

Interest expense consists of interest paid in relation to the primary loans made
to the us under the Credit Facility net of the hedging effects of the Company's
interest rate swap agreement, and also the amortisation of deferred financing
charges incurred in connection with the drawdown. The interest rate swap
effectively fixed our interest rate obligations at approximately 7.13% per
annum.

Liquidity and Capital Resources

The Company operates in a capital intensive industry and has historically
financed its purchase of tankers through a combination of equity capital and
borrowings from commercial banks. Our ability to generate adequate cash flows on
a short and medium term basis depends substantially on the trading performance
of our vessels in the market. Market rates for charters of our vessels have been
volatile historically. Periodic adjustments to the supply of and demand for oil
tankers causes the industry to be cyclical in nature. We expect continued
volatility in market rates for our vessels in the foreseeable future with a
consequent effect on our short and medium term liquidity.

During the term of the Charters, the Company had fixed base rate charterhire for
all of its Vessels. In each quarter where the spot market related rate was
higher than the base rate, the spot market related rate was paid. The Company
had a fixed management fee and its administrative expenses were comprised
principally of directors' and officers' liability insurance. Due to the
expiration of the Charters and the change in the Company's operations in 2004,
the Company's revenues will be more exposed to fluctuations in earnings in the
spot market. These fluctuations may increase or decrease revenues compared to
revenues under the Charters depending on prevailing spot market rates. This
applies to the two Vessels trading in the spot market and the two Vessels that
are on medium term time charters that include 50:50 profit sharing arrangements
for earnings in excess of $30,000 per day calculated by reference to the Baltic
International Trading Route Index.

The Company's operating expenses have increased in the year following the
expiration of the Charters as vessel operating expenses are now the
responsibility of the Company. Administrative expenses, including audit fees,
directors' fees and expenses, registrar's fees, investor relations and
publication expenses, legal and professional fees and other general
administrative expenses, have also increased since, in accordance with the terms
of the Company's Management Agreement with ICB Shipping (Bermuda) Ltd. (the
"Manager"), as amended, the Company is responsible for such costs from February
1, 2004.

At December 31, 2004 we estimated the cash breakeven average daily TCE rate of
$15,365 for our VLCCs. This represents the daily rate our Vessels must earn to
cover payment of budgeted operating costs (including corporate overheads),
estimated interest and scheduled loan principal repayments. These rates do not
take into account loan balloon repayments at maturity. Based on the current
strength of the tanker market, the Company believes that working capital is
sufficient for the Company's present requirements.

Short-term liquidity requirements of the Company relate to servicing our debt,
payment of operating costs, funding working capital requirements and maintaining
cash reserves against fluctuations in operating cash flows. Sources of
short-term liquidity include cash balances, restricted cash balances, short-term
investments and receipts from our customers. Revenues from time charters and are
generally received monthly or fortnightly in advance while revenues from voyage
charters are received upon completion of the voyage.

The Company's funding and treasury activities are conducted within corporate
policies to maximise investment returns while maintaining appropriate liquidity
for the Company's requirements. Cash and cash equivalents are held primarily in
U.S. dollars.

Long-term liquidity requirements of the Company include funding the replacement
of Vessels and the repayment of long-term debt balances. The Company's sources
of capital have been the proceeds of its initial public offering, bank loans and
the finance leases. The Company has had sufficient sources of income through the
payment of charterhire by the Shell International during the term of the
Charters to pay ordinary recurring expenses that are not borne by the Manager
and the Company expects that charterhire paid for time charters or in the spot
market now that the Charters have expired will be sufficient sources of income
for the Company to continue to pay ordinary recurring expenses including
instalments due under the Loan Agreement. However, there can be no assurance
that the Company will be able to pay or refinance its borrowings when the Loan
becomes due, or that it will not incur extraordinary expenses.

As of December 31, 2004, 2003 and 2002, the Company had cash and cash
equivalents of $31.7 million, $6.3 million and $0.2 million, respectively. As of
December 31, 2004, 2003 and 2002, the Company had restricted cash balances of
$10.0 million, $ nil and $ nil respectively. The restricted cash balance is a
result of a `Minimum Liquidity Balance' which we are required to maintain at all
times in conjunction with our new $140.0 million loan facility with the Royal
Bank of Scotland.

During the year ended December 31, 2004 we paid total cash dividends of $77.8
million. In the first quarter of 2005, we declared a cash dividend of $1.75 per
share for a total cash payment of $29.9 million.

In March 2004, the Company refinanced its Credit Facility of $125.4 million with
the Loan of $140.0 million, incurring expenses of $0.01 million on the debt
extinguishment. The Credit Facility did not have principal installments and was
due for repayment in its entirely in August 2004. At the time of entering into
the Credit Facility, the Company entered into an interest rate swap agreement
that provided for a fixed rate payment of 6.74% on notional principal of $125.4
million, which matured in August 2004. The Company is obligated to repay the
Loan in twenty-eight quarterly installments of $2.8 million and a final
installment of $61.6 million on the last payment date. The Loan Agreement
provides for payment of interest on the outstanding principal balance of the
Loan, quarterly in arrears at the annual rate of 1% plus LIBOR. The Company has
not entered into any interest rate swap agreements in respect to the variable
rate on the Loan Agreement.

Although the Company's activities are conducted worldwide, the international
shipping industry's functional currency is the United States Dollar and
virtually all of the Company's operating revenues and most of its anticipated
cash expenses are expected to be denominated in United States Dollars.
Accordingly, the Company's operating are not expected to be adversely affected
by movements in currency exchange rates or the imposition of currency controls
in the jurisdictions in which the vessels operate.

Tabular disclosure of contractual obligations

At December 31 2004, the Company had the following contractual obligations:

<TABLE>
<CAPTION>
                                                                Payment due by period
                                       Less than 1
                                              year  1 - 3 years   3 - 5 years     After 5 years     Total
                                       ------------------------------------------------------------------
<S>                                        <C>           <C>           <C>             <C>        <C>
(In thousands of $)

Long-term debt obligations                 11,200        22,400        22,400          75,600     131,600
                                       ------------------------------------------------------------------
Total contractual cash obligations         11,200        22,400        22,400          75,600     131,600
                                       ------------------------------------------------------------------
</TABLE>

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT

Set forth below are the names and positions of the directors and executive
officers of the Company.

The Company

Name                  Age    Position
----                  ---    ---------

Ola Lorentzon         55     Director and Chairman
Tor Olav Tr0im        42     Director, Chief Executive Officer and Vice-Chairman
Douglas C. Wolcott    73     Director and Audit Committee member
David M. White        64     Director and Audit Committee Chairman
Timothy J. Counsell   46     Director
Kate Blankenship      40     Chief Financial Officer and Secretary

Pursuant to the Management Agreement with the Company, the Manager provides
management, and advisory services to the Company. Set forth below are the names
and positions of the directors and executive officers of the Manager.

Name                   Age   Position
----                   ---   --------

Kate Blankenship       40    Director, Chairman and Secretary
Tom E. Jebsen          47    Director and Vice-Chairman
Cora Lee Starzomski    32    Director

Directors of both the Company and the Manager are elected annually, and each
director elected holds office until a successor is elected. Officers of both the
Company and the Manager are elected from time to time by vote of the respective
board of directors and hold office until a successor is elected. Certain
biographical information with respect to each director and executive officer of
the Company and the Manager is set forth below.

Ola Lorentzon has been a director of the Company since September 18, 1996 and
Chairman since May 26, 2000. Mr. Lorentzon was also Managing Director of
Frontline Management AS, a subsidiary of Frontline, from April 2000 until
September 2003. Mr. Lorentzon was a director of the United Kingdom Protection
and Indemnity Club until 2002. 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.

Tor Olav Tr0im has been a director, Vice-Chairman and Chief Executive Officer of
the Company since May 26, 2000. Mr. Tr0im has been a director of Frontline since
July 1, 1996. Since May 2001, Mr. Tr0im has served as a director of Golar LNG
Limited, a Bermuda company listed on the Oslo Stock Exchange and the NASDAQ
National Market.He is a director of Aktiv Inkasso ASA, a Norwegian Oslo Stock
Exchange listed company, and Golden Ocean Group Limited, a Bermuda company
listed on the Oslo Stock Exchange. He is also Chief Executive Officer and a
director of Ship Finance International Limited a Bermuda company listed on the
New York 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.

Douglas C. Wolcott has been a director of the Company since September 18, 1996.
Mr. Wolcott has also served as President of Chevron Shipping Corporation until
1994. Mr. Wolcott previously served as Deputy Chairman and Director of the
United Kingdom Protection and Indemnity Club and as a director of London &
Overseas Freighters Limited. He is currently a director of the American Bureau
of Shipping.

David M. White has been a director of the Company since September 18, 1996. Mr.
White was Chairman of Dan White Investment Limited which is now closed. Mr.
White has also served as a director of NatWest Equity Primary Markets Limited
from January 1992 to March 1996, and was previously a director of both NatWest
Markets Corporate Finance Limited and NatWest Markets Securities Limited until
December 1991.

Timothy J. Counsell has been a director of the Company since March 27, 1998. Mr.
Counsell is a partner of the law firm of Appleby Spurling Hunter, Bermudian
counsel to the Company and has been with that firm since 1990.

Kate Blankenship has been Chief Financial Officer of the Company since April 17,
2000 and Secretary of the Company since December 27, 2000. Mrs. Blankenship has
been a director and Chairman of the Manager since March 2000 and Secretary of
the Manager since December 28, 2000. Mrs. Blankenship has been Chief Accounting
Officer and Secretary of Frontline since 1994. Mrs. Blankenship also serves as a
director of Golar LNG Limited, Ship Finance International Limited and Golden
Ocean Group Limited. She is a member of the Institute of Chartered Accountants
in England and Wales.

Tom E. Jebsen has been a director of the Manager since March 2000. Mr. 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 Asuranceforeningen Skuld, Unitas, a mutual hull and machinery
club, and Hugin AS, an internet company.

Cora Lee Starzomski has been a director of the Manager since December 2004. Ms.
Starzomski has been a Corporate Accountant with Frontline since November 2001.
She is a member of the Institute of Chartered Accountants in Canada.

B.   COMPENSATION

Pursuant to the amended Management Agreement, the Company paid directors' fees
for 2004 of $190,000 in aggregate. In 2003, the Manager paid from the Management
Fee the annual directors' fees of the Company of $82,000 in the aggregate. No
separate compensation was paid to the Company's officers.

C.   BOARD PRACTICES

As provided in the Company's Bye-Laws, each Director shall hold office until the
next Annual General Meeting following his election or until his successor is
elected. 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.

The Company has established an audit committee comprised of Messrs. White and
Wolcott, independent directors of the Company.

D.   EMPLOYEES

The Company has not had any employees since inception as the Manager is
responsible for the management and administration of the Company.

E.   SHARE OWNERSHIP

As of May 25, 2005, none of the directors or officers of the Company owned any
Common Shares of the Company.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. MAJOR SHAREHOLDERS

The Company is not directly or indirectly controlled by another corporation, by
a foreign government or by any other natural or legal person.

The Company is not aware of any person who owns more than five per cent of the
Company's outstanding common shares as of May 25, 2005.

As of May 25, 2005, none of the directors or officers of the Company owned any
Common Shares of the Company.

B. RELATED PARTY TRANSACTIONS

Not Applicable

C. INTERESTS OF EXPERTS AND COUNSEL

Not Applicable

ITEM 8. FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See Item 18.

Legal Proceedings

To the best of the Company's knowledge, there are no legal or arbitration
proceedings existing or pending which have had or may have, significant effects
on the Company's financial position or profitability and no such proceedings are
pending or known to be contemplated by governmental authorities.

Dividend Policy

Prior to the termination of the Charters, the Company's policy was to pay
quarterly distributions to holders of record of Common Shares in each January,
April, July and October in amounts substantially equal to the charterhire
received by the Company under the Charters, less cash expenses and less any
reserves required in respect of any contingent liabilities. Subsequent to the
redelivery from Shell International, our policy continues to be to make
quarterly distributions to shareholders based on the Company's earnings and cash
flow. These distributions are expected to be a minimum of $1.00 dollar per share
per year. However, the amount and timing of dividends will depend on the
Company's earnings, financial condition, cash position, Bermuda law affecting
the payment of distributions and other factors. The Company may not be able to
make distributions in quarters where earnings are low and where cash flow is
insufficient. The Company's financing may also restrict distributions in certain
circumstances.

There can be no assurance that the Company will not have expenses, including
extraordinary expenses, which could include costs of claims and related
litigation expenses or that the Company will not have contingent liabilities for
which reserves are required. As an "exempted" Bermuda company, the Company does
not expect to pay any income taxes in Bermuda. The Company also does not expect
to pay any income taxes in the Republic of Liberia (the jurisdiction of
organization of the New Subsidiaries) or the Republic of the Marshall Islands
(the jurisdiction in which the Vessels are registered).

In 2004, 2003 and 2002, the Company paid the following distributions to
shareholders.

RECORD DATE                      PAYMENT DATE                AMOUNT PER SHARE

2004
January 23, 2004                 February 10, 2004               $0.80
May 24, 2004                     June 7, 2004                    $2.00
August 13, 2004                  August 27, 2004                 $0.75
November 15, 2004                November 29, 2004               $1.00

2003
January 27, 2003                 February 7, 2003                $0.45
April 25, 2003                   May 8, 2003                     $1.19
July 25, 2003                    August 8, 2003                  $0.65
October 25, 2002                 November 10, 2003               $0.45

2002
January 25, 2002                 February 8, 2002                $0.46
April 25, 2002                   May 8, 2002                     $0.45
July 25, 2002                    August 7, 2002                  $0.45
October 25, 2002                 November 7, 2002                $0.45

B. SIGNIFICANT CHANGES

Not applicable

ITEM 9. THE OFFER AND LISTING

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

The following table sets forth, for the five most recent fiscal years during
which the Company's Common Shares were traded on the NASDAQ National Market, the
annual high and low closing prices for the Common Shares as reported by the
NASDAQ National Market.

FISCAL YEAR ENDED DECEMBER 31                   HIGH                LOW

2004                                          $39.25             $12.52
2003                                          $17.56              $8.45
2002                                          $18.85             $11.51
2001                                          $27.80             $14.32
2000                                          $25.25             $11.94

The following table sets forth, for the two most recent fiscal years, the high
and low closing prices for the Common Shares as reported by the NASDAQ National
Market.

FISCAL YEAR ENDED DECEMBER 31, 2004             HIGH                 LOW

First quarter                                 $21.29              $12.52
Second quarter                                $29.67              $16.65
Third quarter                                 $33.26              $24.50
Fourth quarter                                $39.25              $29.06

FISCAL YEAR ENDED DECEMBER 31, 2003              HIGH                LOW

First quarter                                  $17.56             $13.59
Second quarter                                 $14.60              $9.10
Third quarter                                   $9.92              $8.45
Fourth quarter                                 $13.29              $8.63

The following table sets forth, for the most recent six months, the high and low
closing prices for the Common Shares as reported by the NASDAQ National Market.

Month                                            HIGH                LOW

April 2005                                     $44.81             $37.90
March 2005                                     $40.43             $33.81
February 2005                                  $41.74             $34.24
January 2005                                   $34.70             $28.00
December 2004                                  $39.25             $32.41
November 2004                                  $38.94             $32.32

The Company's Common Shares have been quoted on the NASDAQ National Market under
the symbol "VLCCF" since its initial public offering in February 1997.

ITEM 10. ADDITIONAL INFORMATION

A. SHARE CAPITAL

Not Applicable

B. MEMORANDUM AND ARTICLES OF ASSOCIATION

Incorporated by reference to "Description of Capital Stock" in the prospectus
contained in the Company's Registration Statement on Form F-1, filed December
13, 1996 (File No. 333-6170).

C. MATERIAL CONTRACTS

On March 2, 2004, the Company, as borrower, and the New Subsidiaries, as new
owners, entered into the Loan Agreement with The Royal Bank of Scotland plc, as
lender (the "Lender"), pursuant to which the Company borrowed $140.0 million, in
the form of five loans of $28 million each in respect of a Vessel (together, the
"Loan"). The Company is obligated to repay the Loan in twenty-eight quarterly
instalments of $2.8 million and a final instalment of $61.6 million on the last
payment date. The Loan Agreement provides for payment of interest on the
outstanding principal balance of the Loan, quarterly in arrears, at the annual
rate of 1% plus LIBOR. If a New Subsidiary sells or disposes of the related
Vessel, the Company will be obligated to make a loan prepayment which will be
applied against the principal balance of the Loan relating to the Vessel. The
Loan Agreement is secured by, among other things, a guarantee from each New
Subsidiary, a mortgage on each Vessel and an assignment of any charter with
respect to a Vessel. The failure by the Company to make payments due and payable
under the Loan Agreement could result in the acceleration of all principal and
interest on the Loan Agreement, the enforcement by the Lender of its rights with
respect to the security therefore, and the consequent forfeiture by the Company
of one or more of the Vessels. The Loan Agreement also provides for other
customary events of default.

The Loan Agreement contains a number of covenants made by the Company and each
of the New Subsidiaries that, among other things, restrict the ability of the
Company to incur additional indebtedness, pay dividends if the Company is in
default, create liens on assets or dispose of assets. In addition, the Company
and the relevant New Subsidiary is subject to additional covenants pursuant to
the Loan Agreement pertaining primarily to the maintenance and operation of each
of the Vessels.

D. EXCHANGE CONTROLS

The Company has been designated as a non-resident of Bermuda for exchange
control purposes by the Bermuda Monetary Authority, whose permission for the
issue of the Common Shares was obtained prior to the offering thereof.

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

Subject to the foregoing, there are no limitations on the rights of owners of
the Common Shares to hold or vote their shares. Because the Company has been
designated as 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 United States residents who are holders of the Common Shares, other
than in respect of local Bermuda currency.

In accordance with Bermuda law, share certificates may be issued only in the
names of corporations or individuals. In the case of an applicant acting in a
special capacity (for example, as an executor or trustee), certificates may, at
the request of the applicant, record the capacity in which the applicant is
acting. Notwithstanding the recording of any such special capacity, the Company
is not bound to investigate or incur any responsibility in respect of the proper
administration of any such estate or trust.

The Company will take no notice of any trust applicable to any of its shares or
other securities whether or not it had notice of such trust.

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, but as an
exempted company, the Company may not participate in certain business
transactions including: (i) the acquisition or holding of land in Bermuda
(except that required for its business and held by way of lease or tenancy for
terms of not more than 21 years) without the express authorization of the
Bermuda legislature; (ii) the taking of mortgages on land in Bermuda to secure
an amount in excess of $50,000 without the consent of the Minister of Finance of
Bermuda; (iii) the acquisition of securities created or issued by, or any
interest in, any local company or business, other than certain types of Bermuda
government securities or securities of another "exempted company, exempted
partnership or other corporation or partnership resident in Bermuda but
incorporated abroad; or (iv) the carrying on of business of any kind in Bermuda,
except in so far as may be necessary for the carrying on of its business outside
Bermuda or under a license granted by the Minister of Finance of Bermuda.

There is a statutory remedy under Section 111 of the Companies Act 1981 which
provides that a shareholder may seek redress in the Bermuda courts as long as
such shareholder can establish that the Company's affairs are being conducted,
or have been conducted, in a manner oppressive or prejudicial to the interests
of some part of the shareholders, including such shareholder. However, this
remedy has not yet been interpreted by the Bermuda courts.

The Bermuda government actively encourages foreign investment in "exempted"
entities like the Company that are based in Bermuda but do not operate in
competition with local business. In addition to having no restrictions on the
degree of foreign ownership, the Company is subject neither to taxes on its
income or dividends nor to any exchange controls in Bermuda. In addition, there
is no capital gains tax in Bermuda, and profits can be accumulated by the
Company, as required, without limitation. There is no income tax treaty between
the United States and Bermuda pertaining to the taxation of income other than
applicable to insurance enterprises.

E. TAXATION

The Company is incorporated in Bermuda. Under current Bermuda law, the Company
is not subject to tax on income or capital gains, and no Bermuda withholding tax
will be imposed upon payments of dividends by the Company to its shareholders.
No Bermuda tax is imposed on holders with respect to the sale or exchange of
Common Shares. Furthermore, the Company has received from the Minister of
Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966, as
amended, an assurance that, in the event that Bermuda enacts any legislation
imposing any tax computed on profits or income, including any dividend or
capital gains withholding tax, or computed on any capital asset, appreciation,
or any tax in the nature of an estate, duty or inheritance tax, then the
imposition of any such tax shall not be applicable. The assurance further
provides that such taxes, and any tax in the nature of estate duty or
inheritance tax, shall not be applicable to the Company or any of its
operations, nor to the shares, debentures or other obligations of the Company,
until March 2016.

There are no provisions of any reciprocal tax treaty between Bermuda and the
United States affecting withholding.

It is expected that any cash distributions by the Company will exceed the
Company's earnings and profits for U.S. tax purposes, with the result that for
each full year that the Charters are in place a portion of such distributions
may be treated as a return of the "basis" of a U.S. holder's Common Shares. The
Company was a passive foreign investment company ("PFIC") in the year 2003. In
2004, the Company became an operating company after the expiration of the Shell
International charters on February 27, 2004. Due to the change to an operating
company, the Company was not a PFIC for U.S. federal income tax purposes in the
year 2004. Therefore, dividends paid by the Company to a non-corporate U.S.
shareholder beginning in 2005 will generally be treated as "qualified dividend
income" that is taxable to such shareholders at preferential U.S. federal income
tax rates (currently through 2008) provided that the non-corporate U.S.
shareholder satisfies certain holding period and other requirements. Any
dividends paid by the Company which are not eligible for these preferential
rates will be taxed as ordinary income to a U.S. shareholder.

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 we file
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 and are also available on our website located at
www.knightsbridgetankers.com. 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 market risk from changes in interest rates primarily
resulting from the floating rate of the Company's borrowings. The Company does
not currently utilise interest rate swaps to manage such interest rate risk. The
Company has not entered into any financial instruments for speculative or
trading purposes.

The Company's borrowings under its loan facility at December 31, 2004 of $131.6
million (December 31, 2003: $125.4 million) bear interest at an annual rate of
LIBOR plus a margin of one per cent. A one per cent change in interest rates
would increase or decrease interest expense by $1.3 million per year as of
December 31, 2004. The fair value of the loan facility at December 31, 2004 was
equal to the carrying amount of the facility at the same date.

Prior to the refinancing of its $125.7 million credit facility in February 2004,
the Company had entered into an interest rate swap transaction to hedge the
interest rate variability on the credit facility. The swap effectively resulted
in a fixed borrowing rate to the Company of 7.13% for the year ended December
31, 2003. The swap matured in August, 2004.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY 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

Not Applicable

ITEM 15. CONTROLS AND PROCEDURES

As of December 31, 2004, the Company carried out an evaluation, under the
supervision and with the participation of the Company's manager ICB Shipping
Bermuda, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon that evaluation, the principal executive officer and principal financial
officer concluded that the Company's disclosure controls and procedures are
effective in alerting them timely to material information relating to the
Company required to be included in the Company's periodic SEC filings.

There have been no changes in internal controls over financial reporting
(identified in connection with management's evaluation of such internal controls
over financial reporting) that occurred during the year covered by this annual
report that has materially affected, or is reasonably likely to materially
affect, the Company's internal controls over financial reporting.

ITEM 16 A. AUDIT COMMITTEE FINANCIAL EXPERT

The Company's Board of Directors has determined that the Company's Audit
Committee has one Audit Committee Financial Expert. Mr. David White is an
independent director and is the Audit Committee Financial Expert.

ITEM 16 B. CODE OF ETHICS

The Company has adopted a Code of Ethics that applies to all entities controlled
by the Company and all employees, directors, officers and agents of the Company,
including representatives and agents of the Company's manager, ICB Shipping
(Bermuda) Limited. The Code of Ethics has previously been filed as Exhibit 11.1
to the Company's Annual Report on Form 20-F for the fiscal year ended December
31 2003, filed with the Securities and Exchange Commission on June 2, 2004, and
is hereby incorporated by reference into this Annual Report.

The Company has posted a copy of its Code of Ethics on its website at
www.knightsbridgetankers.com. The Company will provide any person, free of
charge, a copy of its Code of Ethics upon written request to the Company's
registered office.

ITEM 16 C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal accountant for 2004 was Moore Stephens P.C. and for 2003 was
Deloitte & Touche AB. The following table sets forth for the two most recent
fiscal years the fees paid or accrued for audit and services provided by our
principal accounts in each year respectively.

     ---------------------------------------------------------------------------
     (in $)                                                 2004            2003
     ---------------------------------------------------------------------------

     Audit Fees (a)                                       100,000         50,000
     Audit-Related Fees (b)                                    --             --
     Tax Fees (c)                                           5,500          5,500
     All Other Fees (d)                                        --             --
     Total                                                105,500         55,500

(a) Audit Fees

Audit fees represent professional services rendered for the audit of the
Company's annual financial statements and services provided by the principal
accountant in connection with statutory and regulatory filings or engagements.

(b) Audit -Related Fees

Audit-related fees consisted of assurance and related services rendered by the
principal accountant related to the performance of the audit or review of the
Company's financial statements which have not been reported under Audit Fees
above.

(c) Tax Fees

Tax fees represent fees for professional services rendered by the principal
accountant for tax compliance, tax advice and tax planning.

(d) All Other Fees

All other fees include services other than audit fees, audit-related fees and
tax fees set forth above.

The Company's Audit Committee has adopted pre-approval policies and procedures
in compliance with paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X that
require the Audit Committee to approve the appointment of the independent
auditor of the Company before such auditor is engaged and approve each of the
audit and non-audit related services to be provided by such auditor under such
engagement by the Company. All services provided by the principal auditor in
2004 were approved by the Audit Committee pursuant to the pre-approval policy.
<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-14 are filed as part of this annual report:

Financial Statements for Knightsbridge Tankers Limited

Index to Consolidated Financial Statements of Knightsbridge
Tankers Limited                                                              F-1

Report of Independent Registered Public Accounting Firm                      F-2

Report of Independent Registered Public Accounting Firm                      F-3

Consolidated Statements of Operations                                        F-4
for the years ended December 31, 2004, 2003 and 2002

Consolidated Balance Sheets as of                                            F-5
December 31, 2004 and 2003

Consolidated Statements of Cash Flows                                        F-6
for the years ended December 31, 2004, 2003 and 2002

Consolidated Statements of Changes in                                        F-7
Stockholders' Equity for the years ended December 31, 2004,
2003 and 2002

Notes to Consolidated Financial Statements                                   F-8

ITEM 19. EXHIBITS

Number    Description of Exhibit
------    ---------------------------------------------------

1         Underwriting Agreement among Knightsbridge Tankers Limited (the
          "Company"), Cedarhurst Tankers LDC ("Cedarhurst"), Hewlett Tankers LDC
          ("Hewlett"), Inwood Tankers LDC ("Inwood"), Lawrence Tankers LDC
          ("Lawrence") and Woodmere Tankers LDC ("Woodmere") (each of
          Cedarhurst, Hewlett, Inwood, Lawrence and Woodmere a "Subsidiary" and
          collectively the "Subsidiaries"), Lazard Freres & Co. LLC and Goldman,
          Sachs & Co., as representatives for the U.S. underwriters (the
          "Representatives"), ICB Shipping (Bermuda) Limited (the "Manager") and
          ICB International Ltd. ("ICB International")**

4.1       Memorandum of Association of the Company*

4.2       Bye-Laws of the Company *

4.2.1     Execution version of Bareboat Charter dated February 12, 1997 between
          Woodmere and Shell International Petroleum Company Limited ("SIPC")
          relating to the M.T. Myrina.**

4.2.2     Execution version of Bareboat Charter dated February 12, 1997 between
          Hewlett and SIPC relating to the M.T. Megara.**

4.2.3     Execution version of Bareboat Charter dated February 12, 1997 between
          Inwood and SIPC relating to the M.T. Murex.**

4.2.4     Execution version of Bareboat Charter dated February 12, 1997 between
          Lawrence and SIPC relating to the M.T. Macoma.**

4.2.5     Execution version of Bareboat Charter dated February 12, 1997 between
          Cedarhurst and SIPC relating to the M.T. Magdala.**

4.3.1     Execution version of Charter Guaranty dated February 12, 1997 made by
          Shell Petroleum N.V. ("SPNV") and The Shell Petroleum Company Limited
          ("SPCo") (collectively the "Guarantors") in favor of Woodmere relating
          to the M.T. Myrina.**

4.3.2     Execution version of Charter Guaranty dated February 12, 1997 made by
          the Guarantors in favor of Hewlett relating to the M.T. Megara.**

4.3.3     Execution version of Charter Guaranty dated February 12, 1997 made by
          the Guarantors in favor of Inwood relating to the M.T. Murex.**

4.3.4     Execution version of Charter Guaranty dated February 12, 1997 made by
          the Guarantors in favor of Lawrence relating to the M.T. Macoma.**

4.3.5     Execution version of Charter Guaranty dated February 12, 1997 made by
          the Guarantors in favor of Cedarhurst relating to the M.T. Magdala.**

4.3.6     Execution version of Pooling Agreement dated February 27, 1997 among
          the Subsidiaries as owners, and Shell International Trading and
          Shipping Company Limited on behalf of SIPC (collectively the
          "Charterers") relating to the fleet spares.**

4.4       Execution version of Charter Guaranty dated February 12, 1997 made by
          the Guarantors in favor of the Company.**

4.5.1     Execution version of Management Agreement dated February 12, 1997
          between the Manager and the Company (incorporated by reference from
          Exhibit 10.5 of the Registration Statement).**

4.5.2     Execution version of Amendment No. 1 to Management Agreement and
          Accession Agreement dated [March 1, 2004] between the Manager and the
          Company.

4.6.1     Memorandum of Agreement dated October 24, 1996 among Ocala Shipping
          Limited ("Ocala"), the Charterers and Shell Tankers (UK) Limited
          ("STUK"), as buyer, relating to the M.T. Myrina (incorporated by
          reference from Exhibit 10.6 of the Registration Statement).**

4.6.2     Memorandum of Agreement dated October 24, 1996 among Kerbela Shipping
          Corp. ("Kerbela") the Charterers and STUK relating to the M.T. Megara
          (incorporated by reference from Exhibit 10.7 of the Registration
          Statement).**

4.6.3     Memorandum of Agreement dated October 24, 1996 among Trevose Shipping
          Corp. ("Trevose"), the Charterers and STUK relating to the M.T. Murex
          (incorporated by reference from Exhibit 10.8 of the Registration
          Statement).**

4.6.4     Memorandum of Agreement dated October 24, 1996 among Tourmaline
          Shipping Limited ("Tourmaline"), the Charterers and STUK relating to
          the M.T. Macoma (incorporated by reference from Exhibit 10.9 of the
          Registration Statement).**

4.6.5     Memorandum of Agreement dated October 24, 1996 among Fluid Navigation
          Ltd. ("Fluid"), the Charterers and STUK relating to the M.T. Magdala
          (incorporated by reference from Exhibit 10.10 of the Registration
          Statement).**

4.7.1     Assignment Agreement dated November 25, 1996 from STUK and Shell
          International Trading & Shipping Company Limited to the Company and
          the Subsidiaries relating to the relevant Memorandum of Agreement
          (incorporated by reference from Exhibit 10.11 of the Registration
          Statement).**

4.7.2     Assignment of Rights dated February 27, 1997 between Ocala as seller
          and Woodmere as buyer relating to the M.T. Myrina.**

4.7.3     Assignment of Rights dated February 27, 1997 between Kerbela as seller
          and Hewlett as buyer regarding the M.T. Megara.**

4.7.4     Assignment of Rights dated February 27, 1997 between Trevose as seller
          and Inwood as buyer regarding the M.T. Murex.**

4.7.5     Assignment of Rights dated February 27, 1997 between Tourmalene as
          seller and Lawrence as buyer regarding the M.T. Macoma.**

4.7.6     Assignment of Rights dated February 27, 1997 between Fluid as seller
          and Cedarhurst as buyer regarding the M.T. Magdala.**

4.8.1     Execution version of Letter Agreement dated February 6, 1997 among the
          Company, SIPC, ICB International, the Subsidiaries and the Manager
          (incorporated by reference from Exhibit 10.12.1 of the Registration
          Statement).**

4.8.2     Execution version of Letter Agreement dated February 6, 1997 among the
          Company, the Manager, ICB International, SIPC and the Guarantors
          (incorporated by reference from Exhibit 10.12.2 of the Registration
          Statement).**

4.9       U.K. Finance Lease Transaction Offer Letter dated November 12, 1996
          made by National Westminster Bank Plc in favor of the Company and SIPC
          (incorporated by reference from Exhibit 10.13 of the Registration
          Statement).**

4.10.1    Conditional Sale Agreement dated November 25, 1996 between NatWest
          Leasing (GB) Limited ("NLL") and Woodmere relating to the M.T. Myrina
          (incorporated by reference from Exhibit 10.14 of the Registration
          Statement).**

4.10.2    Conditional Sale Agreement dated November 25, 1996 between NLL and
          Hewlett relating to the M.T. Megara (incorporated by reference from
          Exhibit 10.15 of the Registration Statement).**

4.10.3    Conditional Sale Agreement dated November 25, 1996 between NLL and
          Inwood relating to the M.T. Murex (incorporated by reference from
          Exhibit 10.16 of the Registration Statement).**

4.10.4    Conditional Sale Agreement dated November 25, 1996 between NLL and
          Lawrence relating to the M.T. Macoma (incorporated by reference from
          Exhibit 10.17 of the Registration Statement).**

4.10.5    Conditional Sale Agreement dated November 25, 1996 between NLL and
          Cedarhurst relating to the M.T. Magdala (incorporated by reference
          from Exhibit 10.18 of the Registration Statement).**

4.11.1    Execution version of Charterparty by way of Demise dated February 12,
          1997 between NLL as lessor and Woodmere as leasee relating to the M.T.
          Myrina.**

4.11.2    Execution version of Charterparty by Way of Demise dated February 12,
          1997 between NLL as lessor and Hewlett as leasee relating to the M.T.
          Megara.**

4.11.3    Execution version of Charterparty by Way of Demise dated February 12,
          1997 between NLL as lessor and Inwood as leasee relating to the M.T.
          Murex.**

4.11.3(a) Amendment Agreement to the Charterparty by Way of Demise dated
          February 27, 1997 among NLL, Inwood and SIPC.**

4.11.4    Execution version of Charterparty by Way of Demise dated February 12,
          1997 between NLL as lessor and Lawrence as leasee relating to the M.T.
          Macoma.**

4.11.5    Execution version of Charterparty by Way of Demise dated February 12,
          1997 between NLL as lessor and Cedarhurst as leasee relating to the
          M.T. Magdala.**

4.12.1    Execution version of Direct Support Agreement dated February 12, 1997
          among NLL as lessor, SIPC and Woodmere as leasee.**

4.12.2    Execution version of Direct Support Agreement dated February 12, 1997
          among NLL as lessor, SIPC and Hewlett as leasee.**

4.12.3    Execution version of Direct Support Agreement dated February 12, 1997
          among NLL as lessor, SIPC and Inwood as leasee.**

4.12.4    Execution version of Direct Support Agreement dated February 12, 1997
          among NLL as lessor, SIPC and Lawrence as leasee.**

4.12.5    Execution version of Direct Support Agreement dated February 12, 1997
          among NLL as lessor, SIPC and Cedarhurst as leasee.**

4.13      Execution version of Lessor Direct Agreement dated February 12, 1997
          among the Company as borrower, the Subsidiaries as leasees, NLL as
          lessor and GSI.**

4.13(a)   Amendment Agreement to the Lessor Direct Agreement dated February 27,
          1997 among the Company as borrower, the Subsidiaries as leasees, NLL
          as lessor and The Royal Bank of Scotland Plc ("RBS") as agent.**

4.14.1    Execution version of Lessor Mortgage and Assignment dated February 12,
          1997 from NLL as chargor to Woodmere as chargee.**

4.14.2    Execution version of Lessor Mortgage and Assignment dated February 12,
          1997 from NLL as chargor to Hewlett as chargee.**

4.14.3    Execution version of Lessor Mortgage and Assignment dated February 12,
          1997 from NLL as chargor to Inwood as chargee.**

4.14.4    Execution version of Lessor Mortgage and Assignment dated February 12,
          1997 from NLL as chargor to Lawrence as chargee.**

4.14.5    Execution version of Lessor Mortgage and Assignment dated February 12,
          1997 from NLL as chargor to Cedarhurst as chargee.**

4.15.1    Execution version of Deposit Agreement and Deposit Charge dated
          February 12, 1997 between Woodmere as leasee and Midland Bank PLC as a
          letter of credit issuing bank ("Midland").**

4.15.2    Execution version of Deposit Agreement and Deposit Charge dated
          February 12, 1997 between Hewlett as leasee and Midland.**

4.15.3    Execution version of Deposit Agreement and Deposit Charge dated
          February 12, 1997 between Inwood as leasee and Royal Bank of Canada
          Europe Limited as a letter of credit issuing bank ("RBC").**

4.15.4    Execution version of Deposit Agreement and Deposit Charge dated
          February 12, 1997 between Lawrence as leasee and National Australia
          Bank Limited as a letter of credit issuing bank ("NAB").**

4.15.5    Execution version of Deposit Agreement and Deposit Charge dated
          February 12, 1997 between Cedarhurst as leasee and NAB.**

4.16.1    Execution version of Irrevocable Standby Letter of Credit by Midland
          in favor of Woodmere as leasee.**

4.16.2    Execution version of Irrevocable Standby Letter of Credit by Midland
          in favor of Hewlett as leasee.**

4.16.3    Execution version of Irrevocable Standby Letter of Credit by RBC in
          favor of Inwood as leasee.**

4.16.4    Execution version of Irrevocable Standby Letter of Credit by NAB in
          favor of Lawrence as leasee.**

4.16.5    Execution version of Irrevocable Standby Letter of Credit by NAB in
          favor of Cedarhurst as leasee.**

4.17.1    Execution version of Reimbursement Agreement dated February 12, 1997
          between Woodmere as leasee and Midland.**

4.17.2    Execution version of Reimbursement Agreement dated February 12, 1997
          between Hewlett as leasee and Midland.**

4.17.3    Execution version of Reimbursement Agreement dated February 12, 1997
          between Inwood as leasee and RBC.**

4.17.4    Execution version of Reimbursement Agreement dated February 12, 1997
          between Lawrence as leasee and NAB.**

4.17.5    Execution version of Reimbursement Agreement dated February 12, 1997
          between Cedarhurst as leasee and NAB.**

4.18.1    Execution version of Residual Obligation Agreement dated February 12,
          1997 between SIPC as obligor and Midland relating to Woodmere as
          lessee.**

4.18.2    Execution version of Residual Obligation Agreement dated February 12,
          1997 between SIPC as obligor and Midland relating to Hewlett as
          lessee.**

4.18.3    Execution version of Residual Obligation Agreement dated February 12,
          1997 between SIPC as obligor and RBC relating to Inwood as lessee.**

4.18.4    Execution version of Residual Obligation Agreement dated February 12,
          1997 between SIPC as obligor and NAB relating to Lawrence as lessee.**

4.18.5    Execution version of Residual Obligation Agreement dated February 12,
          1997 between SIPC as obligor and NAB relating to Cedarhurst as
          lessee.**

4.19      Execution version of Term Loan Facility Agreement dated February 6,
          1997 among the Company as borrower, the Subsidiaries as guarantors,
          GSI as arranger and as agent, Goldman Sachs Capital Partners L.P. as
          bank ("GSCP") and Goldman Sachs Capital Markets L.P. as swap
          counterparty ("GSCM").**

4.19(a)   Amendment Agreement to Term Loan Facility Agreement dated February 27,
          1997 among the Company as borrower, the Subsidiaries as guarantors,
          GSI as arranger and retiring agent, Goldman Sachs International Bank
          as bank ("GSIB"), GSCM as swap counterparty and RBS as successor
          agent.**

4.19(b)   Side Letter to the Term Loan Facility Agreement dated February 27,
          1997 among the Company, the Subsidiaries, SIPC, NLL and GSI.**

4.20.1    Vessel Mortgage dated February 27, 1997 granted by Woodmere in favor
          of GSI relating to the M.T. Myrina.**

4.20.2    Vessel Mortgage dated February 27, 1997 granted by Hewlett in favor of
          GSI relating to the M.T. Megara.**

4.20.3    Vessel Mortgage dated February 27, 1997 granted by Inwood in favor of
          GSI relating to the M.T. Murex.**

4.20.4    Vessel Mortgage dated February 27, 1997 granted by Lawrence in favor
          of GSI relating to the M.T. Macoma.**

4.20.5    Vessel Mortgage dated February 27, 1997 granted by Cedarhurst in favor
          of GSI relating to the M.T. Magdala.**

4.21.1    Execution version of Floating Charge dated February 12, 1997 between
          Woodmere as chargor and GSI as agent.**

4.21.2    Execution version of Floating Charge dated February 12, 1997 between
          Hewlett as chargor and GSI as agent.**

4.21.3    Execution version of Floating Charge dated February 12, 1997 between
          Inwood as chargor and GSI as agent.**

4.21.4    Execution version of Floating Charge dated February 12, 1997 between
          Lawrence as chargor and GSI as agent.**

4.21.5    Execution version of Floating Charge dated February 12, 1997 between
          Cedarhurst as chargor and GSI as agent.**

4.22      Execution version of Floating Charge dated February 12, 1997 between
          the Company as chargor and GSI as agent.**

4.23      Execution version of Mortgage of Shares dated February 12, 1997
          between the Company as chargor and GSI as agent.**

4.24      Execution version of Borrower Assignment dated February 12, 1997
          between the Company as assignor and GSI as agent.**

4.25.1    Execution version of Guarantor (Subsidiary) Assignment dated February
          12, 1997 between Woodmere as assignor and GSI as agent.**

4.25.2    Execution version of Guarantor (Subsidiary) Assignment dated February
          12, 1997 between Hewlett as assignor and GSI as agent.**

4.25.3    Execution version of Guarantor (Subsidiary) Assignment dated February
          12, 1997 between Inwood as assignor and GSI as agent.**

4.25.4    Execution version of Guarantor (Subsidiary) Assignment dated February
          12, 1997 between Lawrence as assignor and GSI as agent.**

4.25.5    Execution version of Guarantor (Subsidiary) Assignment dated February
          12, 1997 between Cedarhurst as assignor and GSI as agent.**

4.26      Execution version of ISDA Master Agreement dated February 6, 1997
          between GSCM and the Company.**

4.27      Execution version of Intercreditor Agreement dated February 12, 1997
          among the Company as borrower, the Subsidiaries as leasees
          (collectively with the Company as Obligors), GSI as arranger and as
          agent, GSCP as bank and GSCM as swap bank and SIPC, SPCo, SPNV and the
          Manager, each as a subordinated creditor.**

4.27(a)   Amendment Agreement dated February 27, 1997 to the Intercreditor
          Agreement among the Company as borrower, the Subsidiaries as leasees
          (collectively with the Company as Obligors), GSI as arranger, RBS as
          agent, GSIB as bank, GSCM as swap bank and SIPC, SPCo, SPNV and the
          Manager, each as a subordinated creditor.**

4.27(b)   Finance Party Accession/Designation Agreement dated February 27, 1997
          among the Company and the Subsidiaries as obligors, GSI as existing
          party and arranger, RBS as new party, NLL as lessor, GSIB as bank,
          GSCM as swap bank and SIPC, SPCo, SPNV and the Manager, each as a
          subordinated creditor.**

4.28      Execution version of Multipartite Agreement dated February 12, 1997
          among the Company as borrower, the Subsidiaries as guarantors, SIPC as
          charterer, GSI as arranger and agent, GSCP as bank and GSCM as swap
          bank.**

4.29      Execution version of Subordination Agreement dated February 12, 1997
          among the Company, the Subsidiaries, ICB International, the Manager,
          the Guarantors, SIPC and Goldman, Sachs & Co. as representative of the
          U.S. Underwriters, and GSI as representative of the International
          Underwriters.**

4.31      Execution version of Share Purchase Agreement dated February 12, 1997
          between the Company and ICB International (incorporated by reference
          from Exhibit 10.37 of the Company's Registration Statement on Form
          F-1, filed December 13, 1996 (File No. 333-6170).***

4.32.1    Execution version of Novation Agreement dated March 3, 2004 between
          Inwood, Calico Leasing (GB) Limited ("Calico") and KTL Camden, Inc.
          ("Camden"). ***

4.32.2    Execution version of Novation Agreement dated March 3, 2004 between
          Lawrence, Calico and KTL Chelsea, Inc. ("Chelsea"). ***

4.32.3    Execution version of Novation Agreement dated March 3, 2004 between
          Cedarhurst, Calico and KTL Mayfair, Inc. ("Mayfair"). ***

4.32.4    Execution version of Novation Agreement dated March 3, 2004 between
          Hewlett, Calico and KTL Hampstead, Inc. ("Hampstead"). ***

4.32.5    Execution version of Novation Agreement dated March 3, 2004 between
          Woodmere, Calico and KTL Kensington, Inc. ("Kensington"). ***

4.33.1    Execution version of a Deed of Release dated March 3, 2004 between
          Inwood, Calico and RBS relating to a Lessor Mortgage and Assignment
          dated February 27, 1997. ***

4.33.2    Execution version of a Deed of Release dated March 3, 2004 between
          Lawrence, Calico and RBS relating to a Lessor Mortgage and Assignment
          dated February 27, 1997. ***

4.33.3    Execution version of a Deed of Release dated March 3, 2004 between
          Cedarhurst, Calico and RBS relating to a Lessor Mortgage and
          Assignment dated February 27, 1997. ***

4.33.4    Execution version of a Deed of Release dated March 3, 2004 between
          Hewlett, Calico and RBS relating to a Lessor Mortgage and Assignment
          dated February 27, 1997. ***

4.33.5    Execution version of a Deed of Release dated March 3, 2004 between
          Woodmere, Calico and RBS relating to a Lessor Mortgage and Assignment
          dated February 27, 1997. ***

4.34      Form of Loan Agreement between the Company as borrower, the New
          Subsidiaries as new owners and RBS as lender. ***

4.35      Form of ISDA Master Agreement dated March 3, 2004 between the Company
          and RBS. ***

4.36.1    Execution version of General Assignment dated March 3, 2004 between
          Camden as owner and RBS as lender. ***

4.36.2    Execution version of General Assignment dated March 3, 2004 between
          Chelsea as owner and RBS as lender. ***

4.36.3    Execution version of General Assignment dated March 3, 2004 between
          Hampstead as owner and RBS as lender. ***

4.36.4    Execution version of General Assignment dated March 3, 2004 between
          Kensington as owner and RBS as lender. ***

4.36.5    Execution version of General Assignment dated March 3, 2004 between
          Mayfair as owner and RBS as lender. ***

4.37      Execution version of Account Security Deed between the Company as
          borrower, each of Camden, Chelsea, Hampstead, Kensington and Mayfair
          as a new owner, and RBS as bank. ***

4.38      Execution version of Manager's Undertaking by Frontline Management AS
          to RBS. ***

4.39      Execution version of Master Agreement Security Deed dated March 3,
          2004 between the Company and RBS. ***

4.40.1    Execution version of First Preferred Marshall Islands Mortgage dated
          March 15, 2004 between Camden as owner and RBS as mortgagee. ***

4.40.2    Execution version of First Preferred Marshall Islands Mortgage dated
          March 5, 2004 between Chelsea as owner and RBS as mortgagee. ***

4.40.3    Execution version of First Preferred Marshall Islands Mortgage dated
          March 11, 2004 between Hampstead as owner and RBS as mortgagee. ***

4.40.4    Execution version of First Preferred Marshall Islands Mortgage dated
          March 29, 2004 between Kensington as owner and RBS as mortgagee. ***

4.40.5    Execution version of First Preferred Marshall Islands Mortgage dated
          March 18, 2004 between Mayfair as owner and RBS as mortgagee. ***

4.41.1    Execution version of Deed of Release dated March 3, 2004 relating to a
          Floating Charge dated February 12, 1997 between the Company as the
          chargor and RBS as the Agent. ***

4.41.2    Execution version of Deed of Release dated March 3, 2004 relating to a
          Floating Charge dated February 12, 1997 between Camden as the chargor
          and RBS as the Agent. ***

4.41.3    Execution version of Deed of Release dated March 3, 2004 relating to a
          Floating Charge dated February 12, 1997 between Chelsea as the chargor
          and RBS as the Agent. ***

4.41.4    Execution version of Deed of Release dated March 3, 2004 relating to a
          Floating Charge dated February 12, 1997 between Hampstead as the
          chargor and RBS as the Agent. ***

4.41.5    Execution version of Deed of Release dated March 3, 2004 relating to a
          Floating Charge dated February 12, 1997 between Kensington as the
          chargor and RBS as the Agent. ***

4.41.6    Execution version of Deed of Release dated March 3, 2004 relating to a
          Floating Charge dated February 12, 1997 between Mayfair as the chargor
          and RBS as the Agent. ***

4.42.1    Execution version of Deed of Release and Reassignment relating to a
          Guarantor Assignment dated February 12, 1997 dated March 3, 2004
          between Camden as the assignor and RBS as the Agent. ***

4.42.2    Execution version of Deed of Release and Reassignment dated March 3,
          2004 relating to a Guarantor Assignment dated February 12, 1997
          between Chelsea as the assignor and RBS as the Agent. ***

4.42.3    Execution version of Deed of Release and Reassignment dated March 3,
          2004 relating to a Guarantor Assignment dated February 12, 1997
          between Hampstead as the assignor and RBS as the Agent. ***

4.42.4    Execution version of Deed of Release and Reassignment dated March 3,
          2004 relating to a Guarantor Assignment dated February 12, 1997
          between Kensignton as the assignor and RBS as the Agent. ***

4.42.5    Execution version of Deed of Release and Reassignment dated March 3,
          2004 relating to a Guarantor Assignment dated February 12, 1997
          between Mayfair as the assignor and RBS as the Agent. ***

4.42.6    Execution version of Deed of Release and Reassignment dated March 3,
          2004 relating to a Borrower Assignment dated February 12, 1997 between
          the Company as the assignor and RBS as the Agent. ***

4.43      Execution version of Deed of Release dated March 3, 2004 relating to a
          Mortgage of Shares dated February 12, 1997 between the Company as the
          assignor and RBS as the Agent. ***

4.44.1    Execution version of Daylight Overdraft Facility dated March 3, 2004
          between Mayfair as borrower, Cedarhurst as lessee, each of Lawrence
          and the Company as shareholders and RBS as lender. ***

4.44.2    Execution version of Daylight Overdraft Facility dated March 3, 2004
          between Kensington as borrower, Woodmere as lessee, each of Hewlett
          and the Company as shareholders and RBS as lender. ***

4.44.3    Execution version of Daylight Overdraft Facility dated March 3, 2004
          between Chelsea as borrower, Lawrence as lessee, each of Inwood and
          the Company as shareholders and RBS as lender. ***

4.44.4    Execution version of Daylight Overdraft Facility dated March 3, 2004
          between Hampstead as borrower, Hewlett as lessee, each of Cedarhurst
          and the Company as shareholders and RBS as lender. ***

4.44.5    Execution version of Daylight Overdraft Facility dated March 3, 2004
          between Camden as borrower, Inwood as lessee, each of Woodmere and the
          Company as shareholders and RBS as lender. ***

8.1       List of subsidiaries of the Company.

11.1*     Code of Ethics, incorporated by reference to Exhibit 11.1 of the
          Company's Annual Report on Form 20-F for the fiscal year ended
          December 31, 2003.

31.1      Certification of the Principal Executive Officer

31.2      Certification of the Principal Financial Officer

32.1      Certifications under Section 906 of the Sarbanes-Oxley act of 2002 of
          the Principal Executive Officer

32.2      Certifications under Section 906 of the Sarbanes-Oxley act of 2002 of
          the Principal Financial Officer

*    Incorporated by reference to same Exhibit No. in the Company's Registration
     Statement on Form F-1, filed December 13, 1996 (File No. 333-6170)

**   Incorporated by reference to same Exhibit No. in the Company's Report on
     Form 6-K, filed March 20, 1997 (File No. 0-29106)

***  Incorporated by reference to same Exhibit No. in the Company's Annual
     Report on Form 20-F for the fiscal year ended December 31, 2003.
<PAGE>

                                   SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused and authorized the undersigned to sign this
annual report on its behalf.

KNIGHTSBRIDGE TANKERS LIMITED


By: /s/Kate Blankenship
-----------------------

Kate Blankenship
Chief Financial Officer

Dated: May 26, 2005

<PAGE>

Index to Consolidated Financial Statements of Knightsbridge
Tankers Limited

Report of Independent Registered Public Accounting Firm                      F-2

Report of Independent Registered Public Accounting Firm                      F-3

Consolidated Statements of Operations                                        F-4
for the years ended December 31, 2004, 2003 and 2002

Consolidated Balance Sheets as of                                            F-5
December 31, 2004 and 2003

Consolidated Statements of Cash Flows                                        F-6
for the years ended December 31, 2004, 2003 and 2002

Consolidated Statements of Changes in                                        F-7
Stockholders' Equity for the years ended December 31, 2004,
2003 and 2002

Notes to Consolidated Financial Statements                                   F-8

<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of
Knightsbridge Tankers Limited

We have audited the accompanying consolidated balance sheet of Knightsbridge
Tankers Limited and subsidiaries (the "Company"), as of December 31, 2004, and
the related consolidated statements of operations, changes in stockholders'
equity, and cash flows 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 these consolidated financial
statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. We were not
engaged to perform an audit of the Company's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall consolidated financial
statement presentation. We believe that our audit provides 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
Knightsbridge Tankers Limited and subsidiaries as of December 31, 2004, and the
consolidated results of their operations and their cash flows for the year then
ended, in conformity with U.S. generally accepted accounting principles.


MOORE STEPHENS, P. C.
Certified Public Accountants.

New York, New York
February 11, 2005
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of
Knightsbridge Tankers Limited

We have audited the accompanying consolidated balance sheet of Knightsbridge
Tankers Limited and subsidiaries (the "Company") as of December 31, 2003 and the
related consolidated statements of operations, cash flows and changes in
shareholders' equity for the years ended December 31, 2003 and 2002. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of Knightsbridge Tankers
Limited and subsidiaries as of December 31, 2003 and the results of their
operations and their cash flows for the years ended December 31, 2003 and 2002
in conformity with accounting principles generally accepted in the United States
of America.


Deloitte & Touche AB
Stockholm, Sweden
May 17, 2004
<PAGE>

Knightsbridge Tankers Limited
Consolidated Statements of Operations for the years ended
December 31, 2004, 2003 and 2002
(in thousands of $, except per share data)

                                                 2004         2003         2002

Operating revenues
     Time charter revenues                     42,113           --           --
     Bareboat charter revenues                 29,770       75,246       40,276
     Voyage charter revenues                   63,812           --           --
-------------------------------------------------------------------------------
     Total operating revenues                 135,695       75,246       40,276
-------------------------------------------------------------------------------
Operating expenses
     Voyage expenses and commission            14,240           --           --
     Ship operating expenses                    9,868           --           --
     Administrative expenses                    1,114          864          805
     Depreciation and amortisation             17,219       17,593       17,593
-------------------------------------------------------------------------------
     Total operating expenses                  42,441       18,457       18,398
-------------------------------------------------------------------------------
Net operating income                           93,254       56,789       21,878
-------------------------------------------------------------------------------
Other income (expenses)
     Interest income                              449           55           33
     Interest expense                          (7,877)      (9,334)      (9,310)
     Other financial items, net                    13          (49)         (50)
-------------------------------------------------------------------------------
     Net other income (expenses)               (7,415)      (9,328)      (9,327)
-------------------------------------------------------------------------------
Net income                                     85,839       47,461       12,551
===============================================================================

Earnings per share:                             $5.02        $2.78        $0.73
===============================================================================

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

Knightsbridge Tankers Limited
Consolidated Balance Sheets as of December 31, 2004 and 2003
(in thousands of $)

                                                                2004        2003

ASSETS

Current Assets
     Cash and cash equivalents                                31,653      6,312
     Restricted cash                                          10,000         --
     Trade accounts receivable                                13,232     22,626
     Other receivables                                           608         --
     Inventories                                               1,631         --
     Voyages in progress                                       6,122         --
     Prepaid expenses and accrued income                         416         39
--------------------------------------------------------------------------------
     Total current assets                                     63,662     28,977

Vessels, net                                                 301,500         --
Vessels under capital lease, net                                  --    319,408
Deferred charges                                                 392         58
--------------------------------------------------------------------------------
     Total assets                                            365,554    348,443
================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
     Short-term debt and current portion of long-term debt    11,309      8,400
     Trade accounts payable                                      465         --
     Accrued expenses                                          2,730      2,209
     Derivative instruments liability                             --      5,310
     Other current liabilities                                 1,779         --
--------------------------------------------------------------------------------
     Total current liabilities                                16,283     15,919

Long-term liabilities
     Long-term debt                                          120,400    116,997
     Total liabilities                                       136,683    132,916
--------------------------------------------------------------------------------

Stockholders' equity
     Share capital                                               171        171
     Contributed capital surplus account                     220,059    220,059
     Accumulated other comprehensive income (loss)                --     (5,310)
     Retained earnings                                         8,641        607
--------------------------------------------------------------------------------
     Total stockholders' equity                              228,871    215,527
--------------------------------------------------------------------------------
     Total liabilities and stockholders' equity              365,554    348,443
================================================================================

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

<TABLE>
Knightsbridge Tankers Limited
Consolidated Statements of Cash Flows for the years ended December 31, 2004,
2003 and 2002
<CAPTION>
(in thousands of $)                                        2004        2003        2002
<S>                                                    <C>          <C>         <C>
Operating activities
Net income                                               85,839      47,461      12,552
Adjustments to reconcile net income to net cash
provided by operating activities:
     Depreciation and amortisation                       17,219      17,593      17,593
     Amortisation of deferred charges                       110         372         372
     Changes in operating assets and liabilities:
       Trade accounts receivable                          9,393     (12,497)        362
       Other receivables                                   (608)         --          --
       Inventories                                       (1,631)         --          --
       Voyages in progress                               (6,122)         --          --
       Prepaid expenses and accrued income                 (377)         --          --
       Trade accounts payable                               465          --          --
       Accrued expenses                                     521          11          21
       Other, net                                         1,779          --          --
---------------------------------------------------------------------------------------
     Net cash provided by operating activities          106,588      52,940      30,899
---------------------------------------------------------------------------------------
Investing activities
     Placement of restricted cash                       (10,000)         --          --
     Compensation on vessel redelivery                      690          --          --
---------------------------------------------------------------------------------------
     Net cash used in investing activities               (9,310)         --          --
---------------------------------------------------------------------------------------
Financing activities
     Proceeds from long-term debt                       140,000          --          --
     Repayments of long-term debt                      (133,688)         --          --
     Debt fees paid                                        (444)         --          --
     Cash dividends paid                                (77,805)    (46,854)    (30,951)
---------------------------------------------------------------------------------------
     Net cash used in financing activities              (71,937)    (46,854)    (30,951)
---------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents     25,341       6,086         (52)
Cash and cash equivalents at beginning of year            6,312         226         278
---------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                 31,653       6,312         226
=======================================================================================

Supplemental disclosure of cash flow information:
     Interest paid                                        9,631       8,952       8,917
</TABLE>

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

Knightsbridge Tankers Limited
Consolidated Statements of Changes in Stockholders' Equity for the years ended
December 31, 2004, 2003 and 2002 (in thousands of $, except number of shares)

                                              2004           2003          2002

NUMBER OF SHARES OUTSTANDING
Balance at beginning and end of year    17,100,000     17,100,000    17,100,000
-------------------------------------------------------------------------------

SHARE CAPITAL
Balance at beginning of year                   171            171           171
Shares issued                                   --             --            --
Shares bought back and cancelled                --             --            --
-------------------------------------------------------------------------------
Balance at end of year                         171            171           171
-------------------------------------------------------------------------------

CONTRIBUTED CAPITAL SURPLUS ACCOUNT
Balance at beginning of year               220,059        220,059       238,459
Distributions to shareholders                   --             --       (18,400)
-------------------------------------------------------------------------------
Balance at end of year                     220,059        220,059       220,059
-------------------------------------------------------------------------------

ACCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS)
Balance at beginning of year                (5,310)       (11,590)       (9,552)
Other comprehensive income (loss)               --          6,280        (2,038)
De-designation of interest rate swap         5,310
-------------------------------------------------------------------------------
Balance at end of year                          --         (5,310)      (11,590)
-------------------------------------------------------------------------------

RETAINED EARNINGS
Balance at beginning of year                   607             --            --
Net income                                  85,839         47,461        12,551
Dividends paid                             (77,805)       (46,854)      (12,551)
-------------------------------------------------------------------------------
Balance at end of year                       8,641            607            --
-------------------------------------------------------------------------------
Total Stockholders' Equity                 228,871        215,527       208,639
-------------------------------------------------------------------------------

COMPREHENSIVE INCOME (LOSS)
Net income                                  85,839         47,461        12,551
  Unrealised gains (losses) from
  derivative instruments                        --          6,280        (2,038)
-------------------------------------------------------------------------------
  Other comprehensive income (loss)             --          6,280        (2,038)
-------------------------------------------------------------------------------
Comprehensive income                        85,839         53,741        10,513
-------------------------------------------------------------------------------

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

Knightsbridge Tankers Limited
Notes to Consolidated Financial Statements

1. DESCRIPTION OF BUSINESS

Knightsbridge Tankers Limited (the "Company") was incorporated in Bermuda in
September, 1996, for the purpose of the acquisition, disposition, ownership,
leasing and chartering of five very large crude oil carriers (the "Vessels"),
and certain related activities. The Vessels are owned through wholly-owned
subsidiaries (the "Subsidiaries"). The Company's shares are listed on the NASDAQ
National Market.

From February 1997 until March 2004, the Company chartered its Vessels to Shell
International Petroleum Company Limited ("Shell") on long-term "hell and high
water" bareboat charters (the "Charters"). The term of each of these Charters
was a minimum of seven years, with an option for Shell to extend the period for
each Vessel's Charter for an additional seven year term, to a maximum of
approximately 14 years per Charter. Shell did not extend the bareboat charters
for any of the Vessels for a second seven year period. Consequently, the
bareboat charters to Shell expired for all five Vessels, in accordance with
their terms, during March 2004 and the Vessels were redelivered to the Company.
Following the redelivery, the Company has entered into a five year time charter
for one of its vessels while two of the Company's vessels have each been time
chartered for a period of three years. The Company's remaining two vessels are
trading on the spot market.

The daily charterhire rate payable by Shell was comprised of two primary
components: (i) the base rate, which is a fixed minimum rate of charterhire
equal to $22,069 per Vessel per day, payable quarterly in arrears ("Base Rate"),
and (ii) additional hire, which is additional charterhire (determined and paid
quarterly in arrears) that would equal the excess, if any, of a weighted average
of the daily time charter rates for three round-trip trade routes traditionally
served by VLCCs, less an agreed amount of $10,500 during the initial term of the
Charters, representing daily operating costs over the Base Rate. The current
five year time charter agreement provides revenue of approximately $31,000 per
day for the duration of the charter, while the three year time charters provide
a rate of $30,000 per day plus a 50:50 profit sharing arrangement for earnings
in excess of $30,000 per day calculated by reference to the Baltic International
Trading Route (BITR) Index.

The business of the Company is managed by ICB Shipping (Bermuda) Limited (the
"Manager"), an indirect wholly-owned subsidiary of Frontline Ltd., a Bermuda
publicly traded oil tanker owning and operating company.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America. The consolidated
financial statements include the assets and liabilities of Knightsbridge Tankers
Limited and its wholly-owned subsidiaries. All intercompany balances and
transactions have been eliminated upon consolidation.

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 comparative figures have been reclassified to conform with the
presentation adopted in the current period. Effective December 31, 2004 we have
reclassified amortisation of deferred charges as a component of interest
expense.

Reporting currency

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 reports in U.S. dollars. The Company's subsidiaries
report in U.S. dollars.

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
translation gains or losses are included in the consolidated statements of
operations.

Revenue and expense recognition

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

Comprehensive income

Comprehensive income is defined as the change in the Company's equity during the
year from transactions and other events and circumstances from non-owner
sources. Comprehensive income of the Company includes not only net income but
also unrealized losses on derivative instruments used in cash flow hedges of
future variable-rate interest payments on the Company's debt. Such items are
reported as accumulated other comprehensive income (loss), a separate component
of shareholders' equity, until such time as the amounts are included in net
income.

Leases

In connection with the original Vessels purchase transaction, the Company
entered into conditional sale arrangements with a third party banking
institution (the "UK Lessor"). Under the arrangements (the "Conditional Sale
Agreements"), each of the Company's vessel-owning subsidiaries agreed with the
UK Lessor that the UK Lessor was entitled to purchase the Vessels from the
subsidiaries, by payment of the purchase price in installments over a period of
twenty-five years, subject to certain conditions described below. For the
duration of the Charters, the vessels were leased back to the Company's
subsidiaries. The lease agreements did not encumber or obligate the Company's
current or future cash flows and had no effect on the Company's financial
position. The leasebacks were classified as capital leases by the Company.
Accordingly, during the term of the leases, the Vessels remained on the
Company's consolidated balance sheet and the relevant subsidiaries retained
title to the respective Vessels.

The U.K. Lessor's obligation under each Conditional Sale Agreement to pay the
first instalment of the purchase price for the vessel was subject to the
following conditions: (i) the UK Lessor had not terminated the related
Conditional Sale Agreement prior to the Vessel being delivered by the subsidiary
or a representative of the UK Lessor; (ii) the Company's subsidiary had not
terminated the Agreement prior to giving notice of delivery of the Vessel; (iii)
the UK Lessor had received notice of delivery of the Vessel from the subsidiary;
(iv) the UK Lessor had received an invoice for the first instalment of the
purchase price; (v) the representations and warranties by the subsidiary in the
Conditional Sale Agreement (regarding capital expenditures of the subsidiary and
the purchase price of the vessel) continued to be true; and (vi) the Vessel had
not suffered a loss. Upon termination of the Charters in the first and second
quarters of 2004, each of the Company's subsidiaries had the right as the UK
Lessor's sales agent to arrange for the disposition of the Conditional Sale
Agreement (and the right to take title to the related Vessel), or to arrange for
the sale of the related Vessel, for an amount equal to the fair market value of
that Vessel. In connection with the termination of the Charter, the Company's
subsidiaries arranged for newly formed subsidiaries to purchase the Conditional
Sale Agreements from the UK Lessor by way of novation for fair market value
consideration, thereby transferring the right to take title to the Vessels under
the Conditional Sale Agreements to the Company's new subsidiaries. The new
subsidiaries took title to the Vessels during the first half of March 2004 and
the Conditional Sale Agreements are no longer in effect. There was no gain or
loss booked by the Company on the transaction as the fair market value
consideration was deemed equal to the Vessels book values at the date of
acquisition.

The Charters to Shell were classified as operating leases by the Company. The
current five year and three year time charters for three of the Company's
vessels are also classified as operating leases by the Company.

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 maturities of three
months or less at the date of purchase are considered equivalent to cash.

Restricted cash

Restricted cash consists of bank deposits which must be maintained in accordance
with contractual loan arrangements.

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.

Derivative instruments and hedging activities

Interest rate swap agreements are contractual agreements between the Company and
other parties to exchange the net difference between a fixed and variable
interest rate periodically over the life of the contract without the exchange of
the underlying principal amount of the agreement. The Company executed interest
rate swaps as integral elements of the Company's original financing transactions
and risk management policies to achieve specific interest rate management
objectives. At the time of obtaining its original financing, the Company entered
into pay-fixed, receive-floating interest rate swap agreements to hedge its
exposure to future cash flow variability resulting from variable interest rates
on the Company's debt.

All derivative instruments are recorded on the balance sheet at their fair
value. Changes in the fair value of each derivative is recorded each period in
current earnings or other comprehensive income, depending on whether the
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction.

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 long-term debt, standard market conventions and techniques 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.

Vessels under capital lease and Vessels

Vessels under capital lease and Vessels are stated at costs less accumulated
deprecation. Depreciation is calculated based on cost less estimated residual
value, using the straight-line method, over the useful life of each vessel. The
useful life of each vessel is deemed to be 25 years.

In connection with the termination of the Charters and the Conditional Sale
Agreements and the redelivery of the Vessels to the Company in 2004 as described
above, the Vessels have been reclassified from Vessels under Capital Lease to
Vessels. Concurrently, the Company revised its estimate of the estimated
residual value of the Vessels and changed it from zero to $6.4 million per
vessel. The Company believes that this revised estimated is in line with current
standard industry practise. A change in accounting estimate was recognised to
reflect this decision, resulting in a decrease in depreciation expense and
consequently increasing net income by $0.4 million and basic and diluted
earnings per share by $0.02, for 2004.

Deferred charges

Loan costs, including debt arrangement fees, are capitalised and amortised on a
straight-line basis over the term of the loan. Amortisation of loan costs is
included in interest expense. If the loan is repaid early, any unamortized
portion of the related deferred charges is charged against income in the period
in which the loan is repaid.

Earnings per share

Earnings per share are based on the weighted average number of common shares
outstanding for the period presented. For all periods presented, the Company had
no potentially dilutive securities outstanding and therefore basic and dilutive
earnings per share are the same.

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 by sale are reported at the lower of their carrying
amount or fair value less estimated costs to sell.

Distributions to shareholders

Distributions to shareholders are applied first to retained earnings. When
retained earnings are not sufficient, distributions are applied to the
contributed capital surplus account.

Recently issued accounting standards

In December 2004, the FASB issued Statement of Financial Accounting Standards
153 Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 ("SFAS
153"). APB Opinion No. 29 Accounting for Nonmonetary Transactions ("APB 29")
provides that accounting for nonmonetary transactions should be measured based
on the fair value of the assets exchanged but allows certain exceptions to this
principle. SFAS 153 amends APB 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a general exception
for exchanges of nonmonetary assets that do not have commercial substance. A
nonmonetary exchange has commercial substance if the future cash flows of the
entity are expected to change significantly as a result of the exchange. SFAS
153 is effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005 and shall be applied prospectively.

3. TAXATION

The Company is incorporated in 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.

4. LEASES

The minimum future revenues to be received on time charters which are accounted
for as operating leases as of December 31, 2004 are as follows:

--------------------------------------------------------------------------------
Year ending December 31,                                                   Total

(in thousands of $)
--------------------------------------------------------------------------------

2005                                                                      33,215
2006                                                                      33,215
2007                                                                      18,275
2008                                                                      11,315
2009                                                                       2,201
2010 and later                                                                --
--------------------------------------------------------------------------------
Total minimum lease revenues                                              98,221
================================================================================

5. TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are presented net of allowance for doubtful accounts
amounting to $0.2 million for the year ended December 31, 2004 (December 31,
2003: $nil).

6. VESSELS UNDER CAPITAL LEASE

--------------------------------------------------------------------------------
(in thousands of $)                                           2004          2003
--------------------------------------------------------------------------------

Cost                                                            --      439,822
Accumulated depreciation                                        --     (120,414)
--------------------------------------------------------------------------------
Net book value at end of year                                   --      319,408
--------------------------------------------------------------------------------

At December 31, 2003 the Company held five vessels under capital leases. These
leases were for a term of 25 years and upon expiration of the Charters in March
2004, the leases were terminated and the vessels were redelivered to the
Company. Depreciation expense was $3.1 million, $17.6 million and 17.6 million
respectively for the years ended December 31, 2004, 2003, and 2002.

7. VESSELS

--------------------------------------------------------------------------------
(in thousands of $)                                                 2004    2003
--------------------------------------------------------------------------------

Cost                                                             439,822      --
Accumulated depreciation                                        (138,322)     --
--------------------------------------------------------------------------------
Net book value at end of year                                    301,500      --
--------------------------------------------------------------------------------

Depreciation expense was $14.1 million for the year ended December 31, 2004.

8. 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 $)                                          2004           2003
--------------------------------------------------------------------------------

Capitalised financing fees and expenses                       444         2,601
Accumulated amortisation                                      (52)       (2,543)
--------------------------------------------------------------------------------
Net book value at end of year                                 392            58
================================================================================

9. DEBT

--------------------------------------------------------------------------------
(in thousands of $)                                            2004         2003
--------------------------------------------------------------------------------

Variable rate credit facility (2003: 1.55%)                      --     125,397
US dollar denominated floating rate debt (LIBOR + 1%)       131,600          --
--------------------------------------------------------------------------------
                                                            131,600     125,397
Credit facilities                                               109          --
--------------------------------------------------------------------------------
Total debt                                                  131,709     125,397
Less: short-term and current portion of long-term debt      (11,309)     (8,400)
================================================================================
                                                            120,400     116,997
================================================================================

The weighted average interest rate for the floating rate debt was 6.46% for the
year ended December 31, 2004.

$125.4 million credit facility

In February 1997, the Company entered into a $125.4 million credit facility
repayable in full in August, 2004. This facility was repaid in March 2004 from
the proceeds of new long-term borrowings discussed below. At the time of
entering into the credit facility, the Company entered into an interest rate
swap agreement to hedge the future variable rate interest payments. The cash
flow hedge effectively fixed the Company's interest rate obligations on the
credit facility at the rate of approximately 7.13% per annum. The interest rate
swap matured in August 2004, and as a result 100% of the debt is now floating
rate.

$140.0 million loan facility

In March 2004, the Company refinanced its existing credit facility with a $140.0
million facility in the form of five loans of $28.0 million each, in respect of
a Vessel. This facility is repayable in eight quarterly instalments of $2.8
million and a final instalment of $61.6 million on the last payment date. The
facility is secured by, amount other things, a mortgage on each Vessel and an
assignment of any charter in respect of a Vessel.

The outstanding debt as of December 31, 2004 is repayable as follows:

--------------------------------------------------------------------------------
Year ending December 31,
(in thousands of $)
--------------------------------------------------------------------------------

2005                                                                      11,309
2006                                                                      11,200
2007                                                                      11,200
2008                                                                      11,200
2009                                                                      11,200
2010 and later                                                            75,600
--------------------------------------------------------------------------------
Total debt                                                               131,709
================================================================================

10. SHARE CAPITAL

     Authorised share capital:

--------------------------------------------------------------------------------
                                                                  2004      2003
--------------------------------------------------------------------------------
17,100,000 ordinary shares of $0.01 each                       171,000   171,000
================================================================================

     Issued and fully paid share capital:

--------------------------------------------------------------------------------
                                                                  2004      2003
--------------------------------------------------------------------------------
17,100,000 ordinary shares of $0.01each                        171,000   171,000
================================================================================

11. 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 does
not hold or issue instruments for speculative or trading purposes. As at
December 31, 2004, the Company has not entered into any interest rate swaps to
hedge interest rate exposure (December 31, 2003: notional principal subject to a
swap agreement was $125.4 million).

As a consequent of the repayment of the $125.4 million credit facility, the cash
flow hedge was de-designated in March 2004 and cash flow accounting was
discontinued. As a result of the de-designation, the fair value adjustments in
accumulated other comprehensive income arising from the swap and the
discontinued hedging relationship was reclassified to the income statement as at
the date of de-designation.

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. There is no
significant risk that currency fluctuations will have a negative effect of the
value of the Company's cash flows.

Fair values

The carrying value and estimated fair value of the Company's financial
instruments at December 31, 2004 and 2003 are as follows:

--------------------------------------------------------------------------------
                                              2004      2004      2003      2003
                                              Fair  Carrying      Fair  Carrying
(in thousands of $)                          Value     Value     Value     Value
--------------------------------------------------------------------------------

Non-Derivatives:
Cash and cash equivalents                   31,653    31,653     6,312     6,312
Restricted cash                             10,000    10,000        --        --
Floating rate debt and credit facilities   131,709   131,709   125,397   125,397
Derivatives:
Interest rate swap transactions payable         --        --     5,310     5,310

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

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.

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
Skandinaviska Enskilda Banken, and The Royal Bank of Scotland plc. However, the
Company believes this risk is remote as these banks are high credit quality
financial institutions. .The Company does not require collateral or other
security to support financial instruments subject to credit risk.

In 2004, two customers accounted for 46% of gross revenue, while in 2003 one
customer accounted for 100% of gross revenue.

12. MANAGEMENT OF COMPANY

On February 12, 1997, the Company entered into a management agreement with the
Manager under which the Manager provided certain administrative, management and
advisory services to the Company for an amount of $750,000 per year. Effective
February 2004, the Company entered into an amendment to the agreement with the
Manager. The management fee has been amended to $630,000 per year, in addition
to a commission of 1.25% on gross freight revenues. Pursuant to the terms of the
amendment, the Company is now responsible for paying its own administrative
expenses.

13. SUPPLEMENTAL INFORMATION

Non-cash investing and financing activities included the following:

--------------------------------------------------------------------------------
(in thousands of $)                                                 2004    2003
--------------------------------------------------------------------------------
Termination of vessels under capital leases:
Termination of vessels under capital leases, net                (316,363)     --

Acquisition of vessels:
Additions to vessels, net                                        316,363      --

01655.0002 #574642