Annual Report 2011

A Year of Restructuring ................................... 3

Chairman's Address ......................................... 4

CEO's Address ................................................. 6

Overview of Group Structure ........................... 8

Milestones ....................................................... 8

Icelandic at a Glance ...................................... 10

Icelandic Group Companies ........................... 11

Seachill .......................................................... 12

Coldwater ...................................................... 14

Icelandic UK .................................................. 16

Fiskval ........................................................... 17

Icelandic Iberica ............................................. 18

Icelandic Japan .............................................. 20

Icelandic Norway ........................................... 22

Icelandic Services .......................................... 24

Commitment to Responsible Fisheries ........... 26

Board of Directors ......................................... 28

Financial Summary ......................................... 29

Contents

3

A Year of Restructuring

In 2011, Icelandic Group posted comprehensive income of ¤61.9 million. The Company's total revenues from continuing operations were ¤524.7 million during the year. The Company's equity was ¤178.1 million at year-end, and equity ratio stood at 48%. The Company has a strong cash position, with ¤109.3 million cash on hand and ¤38.5 million restricted cash. The Company's comprehensive income can primarily be attributed to asset sales.

In 2011, Icelandic Group sold its operations in France and Germany, in addition to its manufacturing operations in the US and related assets in China. Following these sales, the Company has extensive manufacturing operations servicing the retail sector in the UK, manufacturing and service operations in Iceland, and marketing offices in the UK, Norway, Spain and Japan. EBITDA was ¤13.2 million in 2011, compared to EBITDA of comparable operations of ¤15.8 million in 2010. The Company has a total of approximately 1,600 employees following the changes. Icelandic Group is owned by the Icelandic Enterprise Investment Fund.

A Year of Restructuring

2010 20110

10

20

30

40

50

%47.8%

32.7%

Equity ratio

2010 2011

13.215.8

0

5

10

15

20

EUR million

EBITDA

EUR million

2010 2011

515.3 524.7

0

100

200

300

400

500

600

Revenues

Icelandic Group celebrates an important milestone in 2012 as it marks the Company's 70th anniversary. The Company's historical importance to the Icelandic fishing industry is unquestionable, and we owe a debt of gratitude to the pioneers who built the Company from the ground up in a time when international commerce was very different from today. When the Company was owned by its members, it sold their products on the basis of mutual undertakings concerning product delivery and sales. The Company was reformed as a limited liability company in 1996 and listed on the stock market two years later before eventually being delisted, in 2008. The mutual obligation concerning delivery and sales was eventually discontinued and arm's-length business with producers introduced in its place. Thanks to the changes in international commerce, the access of Icelandic seafood to foreign markets has vastly improved; as a result, the role of a company such as Icelandic Group is entirely different from what it was seventy years ago.

Different times – different strategiesIn 2010, following a period of substantial growth in the years prior to the financial collapse, the Company had become a global enterprise, with plants in the US, France, Germany, Spain and the UK and extensive manufacturing operations in China and Thailand in addition to Iceland. It also had marketing offices in the UK, France, Japan, Norway, Spain, Portugal, the US, China and Iceland. After undergoing changes in ownership in 2011, Icelandic Group is now fully owned by the Enterprise Investment Fund. The new ownership implemented a strategy that involved streamlining operations, reducing debt, increasing profitability and minimising operating risks. As part of this strategy, the decision was made to begin the process of disposing part of the Company's assets.

Chairman's Address

A Year of Important Changes

4

Annual Report 2011

In 2011, Icelandic Group disposed of its operations in France and Germany to an investor group led by the seafood company Pacific Andes International Holdings Ltd from Hong Kong. The operating plants in these countries had very little value for the Icelandic fishing industry and were not strategically important to the Group. The disposal represented an important step in the restructuring of Icelandic Group, resulting in more focused operations and debt reduction.

Icelandic Group also sold its operations in the US along with related procurement and manufacturing businesses to the Canadian seafood company High Liner Foods Inc.

During the sales process, it was always clear and essential for Icelandic Group to keep the ownership of the brand, IcelandicTM. In relation to the sale process, Icelandic Group made a brand license agreement with High Liner Foods, as well as a distribution agreement. Under the agreements, High Liner is allowed to use the brand IcelandicTM for primary products by following certain rules with strict clauses and monitoring rights by Icelandic Group. This means that Icelandic Group maintains full control over the quality aspects under which products are being sold and marketed and that the market access for Icelandic producers selling to the USA is not only protected, but also opens up an opportunity for greater sales channels through High Liner Foods' strong presence in retail in the USA and Canada.

Current status and prospects Following the sale of assets, Icelandic Group is a very different business, with a strong balance sheet. Year-end equity is more than ISK 29 billion despite repurchases of own shares totalling about ISK 6 billion in 2011. EBITDA from continuing operations was

approximately EUR 13 million in 2011. The Company currently has manufacturing operations in the UK, Spain and Iceland and sales and marketing operations in Europe and Asia. The Company further relies on its long-standing business relationship with Icelandic fishing companies in various parts of the country. These foundations allow us to build a trustworthy and profitable seafood company which will continue to service Icelandic producers and operate strong businesses in other countries.

I would like to take this opportunity to thank the management and staff of the Company for their excellent work in 2011. I would also like to thank the Board of Directors and former Board Directors for their support and co-operation.

Herdis Fjeldsted

Chairman of the Board of Directors

5

Chairman's Address 2011

Bringing freshly caught fish from Icelandic waters to shops and restaurants around the world is a complex process in which every link in the chain matters. Maintaining high standards of quality in the processing, packaging, transportation and delivery of fish products is what separates successful seafood companies from the rest. For seventy years, fishermen, commercial fishing operators and consumers have been able to rely on Icelandic Group's outstanding service quality in all areas. We at Icelandic Group are proud of this legacy but are also keenly aware that we must live up to that trust on a daily basis.

Long-term visionIcelandic Group has reached a turning point and is facing exciting challenges and opportunities. After a period of rapid growth, the Company has strengthened its financial position considerably with the disposal of some of the Company's operations and assets. We want to further sharpen the focus of the Group and continue to build on the extensive knowledge and vast experience of the employees of the Company. We will carefully choose the geographical markets in which we operate, focusing on long-term prospects. Currently, the Group has a very strong position in the UK as the second biggest supplier of fish to the retail sector, and its market share there has increased despite difficult market conditions. Clearly, the Company's key UK businesses, Seachill and Coldwater, are an important platform in the UK, and we will continue to focus on this market.

Icelandic Group sales and marketing offices in Norway, Spain, Japan and the UK form the basis for our extensive geographical reach and are an important part of our services to the Icelandic fishing industry. With new species becoming part of our product offering, the sales and marketing offices will be an integral part of our future operations.

CEO's Address

Commitment to Quality and Services

6

Annual Report 2011

The brands developed by the Company over the years have an excellent reputation in our markets. Obviously, IcelandicTM is the flagship brand. We believe that the essence of the Icelandic brand – quality and reliability – will become even more valuable in the future. Therefore, we will continue to support the Icelandic brand, maintaining and further strengthening the position it has in the marketplace. When Icelandic Group sold the operations in the US last year, it was very important to keep the ownership of the Icelandic brand, maintaining full control over the quality aspects under which products are being sold and marketed.

Under the Group's latest consumer brand, The Saucy Fish CoTM, Seachill offers high-quality ready-to-cook seafood dishes. Saucy Fish got off to an excellent start and is already the number one chilled fish brand in the UK. Saucy Fish meets new demands from consumers for high-quality seafood that is easy to cook, and it is encouraging to see the positive reaction, even though we are still at an early stage with this product.

Commitment to responsible fisheriesIn recent years, public awareness of the importance of healthy food produced in a sustainable manner has increased substantially. Icelandic Group has been a staunch supporter of the new Iceland Responsible Fisheries certification programme and also began the process of having all its cod and haddock fishing in Icelandic waters certified by the Marine Stewardship Council (MSC). We are very pleased that this certification has now been obtained, which will assist greatly in ensuring continued access to global markets for Icelandic seafood products. Consumers have a clear demand: the natural resources of the sea must be protected. The country of Iceland welcomes such demands, as it has built up a modern and competitive seafood industry of a high standard, based on sustainable harvesting and market principles. Iceland has managed to

create a management system that follows strict principles of sustainable utilisation. Sourcing of quality seafood is at the core of Icelandic Group business. For decades, Icelandic Group has worked with fishing vessel operators and fishermen to bring their products to some of the most demanding markets in an efficient way while serving as a link between producers and buyers globally.

Reliability and qualityThe consumption of seafood has increased in recent years and decades, and the seafood business is an exciting business to be in. Our aim is to continue to be a leading player in the market. We know that the key to the Company's strong market position is providing reliable, high-quality services to our customers. At the end of the day, our relationship with our valued customers as well as dedicated workforce are the most valuable assets of the Company.

Larus Asgeirsson

CEO

7

CEO Address 2011

2011 Restructuring completed; Icelandic Group wholly owned

by Enterprise Investment Fund

2011 Sale of Icelandic US and related manufacturing operations

2011 Icelandic Hong Kong established

2011 Sale of Pickenpack H&H and Gelmer incl.

the France sales office

2010 Enterprise Investment Fund acquires 81% of

Icelandic Group from NBI

2009 Sale of Jeka Fish in Denmark

2008 NBI acquires 100% and becomes owner of IG

2007 Sale of VGI in Iceland

2007 Acquisition of Beihai Beilian Foods Industrial in China

2007 Acquisition of Sirius in Iceland

2006 Acquisition of Delpierre's Gelmer in France

2006 Acquisition of Jeka Fish in Denmark

2005 Acquisition of Pickenpack H&H Seafood in Germany

2005 Acquisition of Fiskval in Iceland

2005 Acquisition of Dalian Three Star in China

2005 Merger of Blue Ice Group and Icelandic Group

2005 Acquisition of Ecomsa in southern Spain

2004 Acquisition of the seafood division of Cavaghan & Gray

in Grimsby and Aberdeen, UK

2004 Acquisition of Comigro Geneco in Paris, France

2004 Acquisition of Seachill in Grimsby, UK

2004 Icelandic China established

2003 Acquisition of Neptune Fisheries in the US

2003 Acquisition of Barogel in Marseilles, France

2003 Acquisition of Ocean to Ocean (OTO) in the US

2002 Acquisition of chilled processing plant in Redditch, UK

1998 Company shares registered on the Iceland Stock Exchange

1998 Icelandic UK established in Lincoln, UK

1997 Sales company established in Norway

Milestones

Board of Directors

CEO

FinanceGroup Accounts, Treasury, Financing, Budgeting, Risk Management

Business DevelopmentOrganisation Development New Business Development

OperationsOpCo Liaison, Best Practices, Branding, Business ProcessesProcurement, Marketing

ColdwaterProcessing, sales and marketing

SeachillProcessing, sales and marketing

FiskvalProcessing, sales and marketing

EcomsaProcessing, sales and marketing

Icelandic UKSales and marketing

Icelandic IbericaSales and marketing

Icelandic NorwaySales and marketing

Icelandic Japan

Sales and marketing

Icelandic Hong Kong

Sales and marketing

Icelandic China

Logistics and servicing

Icelandic Services

Logistics and servicing

Production Sales & Marketing Logistics & Services

8

Annual Report 2011

Overview of Group Structure

Strategic developmentIcelandic Group was formerly known as the Icelandic Freezing Plants Corporation (IFPC). Founded in 1942 by a number of fishing and processing companies, the purpose of IFPC was to sell frozen seafood from the plants in foreign markets, purchase packaging and other goods for their needs, explore new markets and develop new products and processing technology. IFPC was for most of its history owned by fish-processing companies and sold their products by mutual obligations of delivery and sales. The Company structure was changed in 1996 when it became a Public Limited Company, and two years later, it was registered on the Iceland Stock Exchange. The former owners gradually sold their shares, and new shareholders emerged. The mutual obligations in delivery and sales were lifted, and the business developed in line with contracts between unrelated companies. Icelandic Group has therefore grown from strong roots. The Company expanded its operations in past decades. In 2011, however, Icelandic Group disposed of its operations in France and Germany in addition to its manufacturing operations in the US and related assets in China. This was part of extensive operational and financial restructuring of the Group. Icelandic Group is owned by the Enterprise Investment Fund.

1996 Changes in company charter; a Public Limited

Company is formed

1996 Sales company established in Barcelona, Spain

1996 Merger with Faroe Seafood in Grimsby, UK

1989 Sales agency established in Tokyo, Japan

1988 Sales company established in France

1982 New value-added processing plant opened in Grimsby, UK

1981 Sales and marketing company established in

Hamburg, Germany

1967 New value-added processing plant opened in

Cambridge, Maryland, USA

1954 Value-added processing plant opened in the US

1946 First sales office opened in Europe

1945 Sales office opened in the US

1942 Foundation of the Company

Board of Directors

CEO

FinanceGroup Accounts, Treasury, Financing, Budgeting, Risk Management

Business DevelopmentOrganisation Development New Business Development

OperationsOpCo Liaison, Best Practices, Branding, Business ProcessesProcurement, Marketing

ColdwaterProcessing, sales and marketing

SeachillProcessing, sales and marketing

FiskvalProcessing, sales and marketing

EcomsaProcessing, sales and marketing

Icelandic UKSales and marketing

Icelandic IbericaSales and marketing

Icelandic NorwaySales and marketing

Icelandic Japan

Sales and marketing

Icelandic Hong Kong

Sales and marketing

Icelandic China

Logistics and servicing

Icelandic Services

Logistics and servicing

Production Sales & Marketing Logistics & Services

9

Overview of Group Structure | Milestones

Icelandic at a Glance

Icelandic GroupIceland

FiskvalIceland

Icelandic ServicesIceland

Icelandic Norway ASNorway

Coldwater SeafoodUK

SeachillUK

IcelandicUK

Icelandic Iberica S.A.Spain

Ecomsa S.A.Spain

Icelandic Asia

Icelandic China Trad.China

Icelandic Hong Kong LtdChina

Icelandic Japan KKJapan

Icelandic GroupIceland

FiskvalIceland

Icelandic ServicesIceland

Icelandic Norway ASNorway

Coldwater SeafoodUK

SeachillUK

IcelandicUK

Icelandic Iberica S.A.Spain

Ecomsa S.A.Spain

Icelandic Asia

Icelandic China Trad.China

Icelandic Hong Kong LtdChina

Icelandic Japan KKJapan

Icelandic GroupIceland

FiskvalIceland

Icelandic ServicesIceland

Icelandic Norway ASNorway

Coldwater SeafoodUK

SeachillUK

IcelandicUK

Icelandic Iberica S.A.Spain

Ecomsa S.A.Spain

Icelandic Asia

Icelandic China Trad.China

Icelandic Hong Kong LtdChina

Icelandic Japan KKJapan

10

Annual Report 2011

Icelandic Group is an international seafood company with a rich history that spans seventy years in Icelandic fisheries. The Company is uniquely positioned in the seafood sector with its international network of independent production and marketing companies in the UK, Norway, Iceland, Spain, China and Japan. The Company employs 1,600 people and offers a wide variety of fresh, chilled and frozen value-added seafood products and services on a global scale.

Icelandic Group Companies

Icelandic GroupIceland

FiskvalIceland

Icelandic ServicesIceland

Icelandic Norway ASNorway

Coldwater SeafoodUK

SeachillUK

IcelandicUK

Icelandic Iberica S.A.Spain

Ecomsa S.A.Spain

Icelandic Asia

Icelandic China Trad.China

Icelandic Hong Kong LtdChina

Icelandic Japan KKJapan

11

Icelandic Group Companies

12

Annual Report 2011

Seachill

Seachill focuses on supplying UK retailers with added-value loose and prepacked chilled fish, both for the fish counter and the prepack fish categories. Founded in 1998, the business has grown to be one of the largest chilled fish processors in the UK, with well-invested facilities and a well-established supply chain. Following a successful launch, the Saucy Fish Co. has become the largest chilled fish brand in the UK in just two years, and the range is now available in 70% of the UK retail supermarkets.

The Company, which became part of Icelandic Group in 2004, occupies two sites in Grimsby – its main processing and packing site and the Russells, a traditional 100-year-old curing house on the dockside. This year, the Russells business was awarded a PGI status for traditional cured fish from Grimsby. Seachill's main site employs around 720 people and has a capacity of over 450 m.t. per week of chilled fish production, working to a seven-day production schedule.

13

Seachill

At the forefront of marketing and innovationSeachill has been at the forefront of consumer marketing and innovation, with its expertise in the field driving a step change in packaging in the entire UK prepack market. This is a result of investment in consumer understanding over the past three years which has led to several significant category initiatives including a market leading move to 'Darfresh' packaging, a format that most retailers have moved to over the past two years.

Saucy Fish Co. – UK's largest chilled fish brandThe Saucy Fish Co. has gained a strong market position, supported by a significant consumer media, digital and TV advertising campaign. First launched in January 2010 following an intensive period of consumer research and development, Saucy Fish is now the fastest growing chilled seafood brand in the UK. Strong product benefits driving convenience and inspiration, coupled with brand design and messages that resonate with consumers, have ensured continued growth and store listings across the range in the majority of UK supermarket retailers. During October 2011, a successful TV consumer advertising test pilot was run, leading to a national TV campaign in January 2012. This prompted a significant increase in brand trial and repeat purchase. With UK sales now running at around £25 million, Seachill is currently in discussions with a number of parties globally about licensing of the brand. In February 2011, The Saucy Fish Co. collected a Design Business Association award in recognition of its innovative and iconic packaging design, beating the likes of Guinness.

Chilled fish sector remains resilientThe market remains highly competitive, although there has been some acquisition and consolidation during the year. The overall market has seen value growth and volume decline driven by inflation, although in the latter part of the year, the inflationary trend began to ease, leading to an increasingly promotional retail environment. The UK economy continues to be challenging, and consumer confidence remains low. Despite this, chilled fish remains resilient, with retailers focusing on quality and added-value products faring best. The 'To Cook' subsector, which includes The Saucy Fish Co., is growing at 42% year-on-year.

Seachill's operating focus centred around continued investment in best-in-class, low-cost processing and packing, whilst continuing to drive excellence in consumer understanding. Its new packaging technology, in addition to targeted promotional offers, were key drivers of sales growth within the Company's customer base in 2011.

Malcolm Eley has been Managing Director at

Seachill for the last four years and part of

the Seachill Executive team for 13 years. He

has been in the fish processing industry for

the majority of his working years, during

which time he has gained global experience

not only in fresh and frozen production, but

also in global sourcing. Prior to his

appointment as MD at Seachill, he was the

Operations Director.

14

Annual Report 2011

Coldwater Seafood

Coldwater Seafood is an added-value seafood company, located in Grimsby, United Kingdom, which has long been one of Europe's main fishing and fish processing centres.

Coldwater was established in the 1950s, and the first site was built by the Icelandic Freezing Plants in 1982. Since then, Coldwater has grown with a combination of organic growth and acquisitions, and today, it is one of the UK market leaders in coated fish, seafood convenience meals and ready-to-eat seafood. Coldwater operates from two sites in Grimsby and employs over 500 people.

15

Coldwater Seafood

UK – the global leader in seafood sustainability and added-value convenience foods The UK continues to be one of the leading developers of added-value convenience foods. The UK retail market for seafood is valued at £1.9 billion and continues to grow. Coldwater supplies the major leading UK food retailers.

As with other Icelandic Group entities, sustainability is critical on the Coldwater agenda, and the Company aims to work exclusively with suppliers with access to MSC-certified seafood or those in a fisheries improvement programme. Coldwater sources nearly 10,000 tonnes of seafood each year from Iceland, Scotland, Norway, the Netherlands and Canada, to name a few. All suppliers must comply with the highest technical standards.

Opportunities despite challenging environmentThe world of seafood was challenging in 2011. At the top of many manufacturers' and retailers' agenda was the availability of product, and 2011 saw the highest fish prices for many years. Some species saw inflation in excess of 30%. This inflation drove an increased price to the consumer and in some instances resulted in reduced volumes. These price increases impacted Coldwater's growth and profitability in 2011. However, the levels of inflation experienced in 2011 are expected to ease in 2012.

Coldwater did benefit positively in 2011 from significant growth with new retailers within its core categories as a result of changes across its UK supply base. This new business strengthened Coldwater's position in the sector.

Innovation is key in a challenging market, and Coldwater placed a strong emphasis on new product development in 2011. The Company's most successful innovations were in coated fish where it was first to market in a number of areas, in addition to new initiatives with its principal customers, such as Topped Fish and Quick to Cook products.

Well placed for future growth Coldwater concluded a three-year investment programme in 2011, which included an investment in a state-of-the-art innovation centre in 2008. This investment reflects the Company's clear commitment to the important food credentials needed to supply UK retailers. During this time, two separate factories were created, one specialising in coatings and the other in sauces, potato processing and ready meals. The result is a well-invested business model that ensures that Coldwater is well placed to exploit new opportunities in the UK seafood sector.

Anita Barker has been the Managing

Director of Coldwater Seafood since 2006.

Anita has served 20 years in the food

industry, holding a variety of senior

operational positions with companies such as

Northern Foods, Greencore and Bakkavor.

Prior to that, she worked for Boots

Pharmaceuticals. Anita has a BA (Hons) in

Accounting and Finance from Nottingham

Trent University and is a qualified ACA.

16

Annual Report 2011

Icelandic UK specialises in the supply of frozen seafood to the UK retail and foodservice markets. Established in 1998, the Company employs 19 people in the UK and key sourcing places.

The Company's strengths include extensive knowledge of sourcing and production for the uncoated, natural frozen fish and shellfish markets. Furthermore, it has excellent technical expertise, a good understanding and access to the market, and a sound reputation in the marketplace. The driving force behind its success is its team of skilled and knowledgeable employees together with an established customer and supplier base.

With fish and shellfish mostly sourced from Iceland and Norway, Icelandic UK can guarantee full traceability of its raw materials, ensuring top quality and sustainable and legal sourcing. The Company participates in Ethical Trade schemes and conformance to BRC (Global Standards for Consumer Products) accreditation as well as key customer approval.

Changing consumer behaviour in the UK marketThe retail fish sector market (fresh, frozen and ambient) has grown by 4% in value, of which the frozen category grew by 1.5% in 2011. However, volume within this sector has fallen by 1.5% due to decreased consumption of fresh and ambient products. The frozen market volume has in the meantime remained static. This indicates that prices have risen in the year on a reduced volume. Within the frozen natural share, the frozen market has grown in terms of both value and volume. The current economic climate means less disposable income, and as retail sales of frozen prepared meals have decreased, consumers are buying the natural products to prepare more meals at home.

Good sales growth in 2011Icelandic UK saw a solid year in 2011. The Company's food service sales were also good in a tough economic market. Sales into the UK Fish and Chip sector, for example, increased in 2011 in a market suffering from a declining level of traffic.

One of the Company's main challenges in 2011 was the negotiated price increases with its long-term customers following a period of continuous raw material price increases, which did affect margins. However, its customer relationships remain strong, and Icelandic UK continues strengthening its market share in the UK market.

One of the Company's key developments in 2011 was the investment in its IT infrastructure. Icelandic UK has developed efficient planning systems for fish purchasing and production to ensure continuity of supply and to work with producers to develop new products.

The tough economic conditions are expected to continue into 2012, but Icelandic UK is committed to maintaining its level of business and improving profitability by reducing costs and operating efficiently.

Icelandic UK

The Managing Director of Icelandic UK is

Magni Thor Geirsson. He established the

Company in 1998 after having served as

Head of Sales for Icelandic Germany from

1993. Prior to that, he was Marketing

Manager for shellfish products at Icelandic

Group from 1990. Magni Thor has a degree

in Fisheries Technology from the Technical

College of Iceland and a Master's degree in

Fisheries Studies from the University of

Tromso in Norway.

17

Fiskval

Fiskval specialises in the production and export of fresh and frozen products from Icelandic sea catch. The Company's main production is flatfish and haddock for the retail markets in the US, UK, Germany and Ireland, but also catfish, redfish, salmon and trout. Fiskval is based near Reykjavik and employs 23 people.

From its foundation in 1985, Fiskval's main focus has been on the production of fresh flatfish. It became part of Icelandic Group in 2006 and then started expanding its operations by selling fish to other fish processing companies in Iceland as well as commencing its export activities.

Key markets – UK, Ireland, Germany and the USThe UK is the largest market for fresh Icelandic seafood and accounts for around 40% of Fiskval's export. This market has remained relatively stable in recent years. Sustainability is high on the UK customers' agenda, and Icelandic Group's new MSC sustainable seafood certification is expected to present new opportunities for Fiskval within this market.

Ireland accounts for around 25% of Fiskval's export and consists of a number of smaller customers. The Irish market was challenging in 2011, especially in terms of price negotiations. This trend is expected to continue in 2012, although Fiskval's export is expected to stay at similar levels as in recent years.

The German market has remained strong, and Fiskval's export, mainly of catfish and redfish, has remained at similar levels in recent years. However, the Company has been working towards developing its business in this market and expects to increase its export activities in Germany in 2012.

The Company's export to the US has been decreasing in recent years, especially of flatfish and haddock. However, this seems to be changing, as demand for fresh fish, including salmon and trout, is increasing again, which is expected to present further export opportunities for Fiskval in the near future.

Opportunities from new business developmentThe year 2011 was challenging for Fiskval. The main reason for this was decreased sales to a UK customer as well as loss of a large retailer business in the UK. This, coupled with around 25% increase in raw material costs, affected operational performance and profitability in 2011. Fiskval has been focusing on new business development which has resulted in new customers that, with time, will make up for the lost business for the most part.

The Company remains focused on various business improvement activities, such as cutting costs in all areas of purchasing. In order to strengthen the business in the long run, Fiskval places strong emphasis on new product development and has, for example, started the processing of cod.

Fiskval

The Company is led by Elfar Bergthorsson,

who has served as Managing Director since

2008. He joined the Company as Director of

Sales in 2006 after having served as Director

of Sales at the seafood company Tros hf.

between 2000 and 2006 and Production

Manager at Jon Erlings hf. from 1998 to

2000.

18

Annual Report 2011

Icelandic Iberica

19

Icelandic Iberica S.A.

Icelandic Iberica was founded in 1996 and specialises in wholesale distribution of a variety of frozen fish products, mostly sourced in Iceland, to the food service industry. Its customer base includes around 800 distributors focusing on catering to hotels and restaurants in the Mediterranean area.

Icelandic Iberica's headquarters are in Barcelona, but the Company also operates sales offices in Vigo, Malaga, Madrid and Genova in Italy. Its primary markets are Spain, Italy, Portugal and Greece, although it also serves clients on fringe markets in the Mediterranean area.

Market leader in Icelandic salted codThe Company places strong emphasis on promoting the Icelandic brand as synonymous with quality, reliability and stability. The brand has a strong position, and today, Icelandic Iberica is a market leader in the sales of light salted cod products from Iceland. Its product portfolio also includes other product ranges of Icelandic origin, such as redfish, saithe, lobster and cold-water shrimp, in addition to various other species sourced from South America, Asia, Africa and New Zealand.

EcomsaIn 2005, Icelandic Iberica S.A. acquired all the share capital of the Elaboracion de Congelados Malaga S.A. (Ecomsa). Ecomsa is a production and distribution company specialising in seafood distribution to hotels and restaurants in southern Spain. The Company operates its own fleet of trucks serving more than 2,000 customers. The main products of Ecomsa are white fish, such as kingclip and hake, cephalopods, such as squid and cuttlefish and crustaceans, such as warm-water shrimp, lobster and scampi.

Good performance despite tough environmentThe year 2011 was a good year for Icelandic Iberica despite a challenging economic environment in the Company's operating markets. Sales reached 15,500 tonnes, and the outlook for 2012 is positive. Hjorleifur Asgeirsson has been Managing

Director of Icelandic Iberica S.A. since

establishing the Company on behalf of

Icelandic Group in 1996. Prior to that, he

worked at Icelandic France from 1992, where

he was responsible for sales to the Spanish

market. Hjorleifur studied Fisheries Sciences

at the University of Tromso in Norway

between 1986–1991.

20

Annual Report 2011

21

Icelandic Japan

Icelandic Japan is one of the largest companies that trades with Icelandic seafood in Japan. Since its foundation in 1989, the Company has focused on the Japanese market but has in recent years expanded into other Asian markets, such as China, South Korea and Taiwan. Icelandic Japan trades mostly with species originating from the North Atlantic, such as Greenland halibut, redfish, capelin, capelin roe and mackerel. Icelandic Japan is based in Tokyo and employs 23 people.

Asia – one of the largest seafood markets in the worldAsia is one of the world's largest and fastest growing seafood markets. Yearly consumption per person is high – 61 kg per person in Japan, 53 kg in South Korea and 26 kg in China, compared to 87 kg per person in Iceland, 55 kg in Portugal, 40 kg in Spain and 20 kg in the UK. Seafood consumption in China increases every year, and that trend is predicted to continue, resulting in vast opportunities for development and expansion in China in the years to come.

Improvements in trading – restructuring process completedIcelandic Japan completed a restructuring process at the end of the year which had been ongoing since 2010. The main focus of this process was on stock control and stock movement and implementing all necessary procedural and system factors to achieve maximum efficiencies despite the challenge of geographical distances.

Trading in 2011 was good. Sales were in line with budgeted sales in terms of volume and better than budgeted in terms of value. The most significant increase was in mackerel sales, where Icelandic Japan traded considerably more than in 2010. Growth was in sales to China compared to 2010, and other markets remained close to the previous year.

Positive outlook for 2012The markets for Icelandic Japan's main products are expected to remain stable in 2012, with good growth potential for new products in markets outside of Japan such as China and Korea. There are significant opportunities for development and growth within the Asian markets in terms of increasing the breadth of seafood products exported from Iceland to Asia, such as the continued expansion into the large mackerel market.

Icelandic Japan

Jonas Engilbertsson has been Managing

Director since November 2008. He joined

Icelandic Group in 1999 and worked for the

Group in East Africa until 2001 when he

became Purchasing Manager for Icelandic

Germany in Hamburg. He then served as

Sales Manager for Marinus from 2006 until

he took over as Managing Director of

Icelandic Japan.

22

Annual Report 2011

23

Icelandic Norway

Icelandic Norway focuses on sourcing seafood for trading as well as supplying to sister companies within the Icelandic Group. The Company also serves the catering and the retail markets in Northern Europe with fish products from the Group or from Icelandic Group's network around the world. Icelandic Norway is located in Trondheim and employs 10 people.

The Company sources over 15,000 metric tonnes of fish and seafood per year. The product range includes headed and gutted fish, industrial blocks, interleaved fillets, individually quick frozen (IQF) portions, fillets, breaded and battered products, and different types of ready meals. Its main species in 2011 were cod, salmon, haddock and saithe – which accounted for approximately 80% of its annual turnover.

Sourcing from Atlantic fishing groundsIcelandic Norway started in 1997 as a procurement and sales company. It was founded in Trondheim, Norway, with the aim of obtaining better access to the source of the raw materials in Norway, which has one of the richest fishing grounds in the northern hemisphere. Norway is also the world's largest producer of Atlantic salmon. In the beginning, most of its sales were to the other companies of Icelandic Group, as well as sourcing into the Asian market. Since then, Icelandic Norway has gradually been developed into a regular trading company. Today, 80–90% of its sales is to external customers and consists mostly of raw material for the industry, but in 2011, additional focus was placed on fillet products for the foodservice and retail markets. Furthermore, Icelandic Norway has started custom-processing in Lithuania and Poland and is increasing its efforts in the Scandinavian, German and the Eastern European foodservice and retail markets.

Changes in 2011 In 2011, turnover increases from 2010 were on budget despite considerable changes for the Company as a result of Icelandic Group's restructuring during the year. In addition to this, Icelandic Norway started to invest more into the foodservice markets in Northern Europe as a part of its long-term strategy.

The margins in 2011 were good, and gross profit was better than budgeted. As a consequence of the Company's focus on new markets and increased activity, operational costs increased, as additional manpower was needed both in its sales and support functions.

Financial performance in 2011 was affected by highly volatile currency markets and the strong position for the Norwegian krona, which affected the Company's cash position and caused both its interest costs and loss on currency to be higher than budgeted.

Outlook, however, is positive, and the Company is well placed for new challenges and opportunities.

Icelandic Norway

Jon Gardar Helgason has been Managing

Director of Icelandic Norway since 1997.

Before joining the Company, he worked as an

expert in the Processing and Product

Development Division of the Norwegian

Fisheries Laboratories from 1994 to 1997.

Prior to that, Jon worked on fishing vessels, in

fish farming and the fish processing industry,

in addition to engaging in research at the

Icelandic Fisheries Laboratories in Reykjavik.

Jon Gardar graduated with an MSc degree in

Fisheries from the University of Tromso in

1995.

24

Annual Report 2011

Icelandic Services is a division within Icelandic Group that focuses on providing the Group's subsidiaries with support in terms of quality control, purchasing, shipping, documentation, product inspections, auditing, labelling, inventory management and IT services. Icelandic Services is based in Reykjavik and employs 9 people.

Icelandic Services assists the Group's subsidiaries with purchasing of seafood from Iceland and elsewhere if needed. This includes collecting purchased goods, arranging pre-carriage, setting up container loadings and organising export of seafood products from Iceland, managing export documentation and any certification needed.

Central quality control and food safety managementIcelandic Services also develops and manages the implementation of Icelandic Group's joint global quality policy, ensuring that the Group's products meet its quality goals and all legal requirements for food safety. As part of this, Icelandic Services publishes and distributes quality manuals across the Group, which include specifications and codes of practice. In addition, a part of its offer is to conduct quality audits of suppliers to the Group. Furthermore, a growing part of its services is product inspections and quality control for selected customers outside Icelandic Group.

One of Icelandic Services new projects in 2011 was to support the increased export of mackerel from Iceland. This involved assisting producers to develop the appropriate quality standards in the production of mackerel, especially for the Japanese market.

Icelandic Services

Hans Agust Einarsson has been Managing

Director of Icelandic Services since

September 2010. He has worked with

Icelandic Group since 1985 in various roles in

the field of quality control and production

management. Hans holds a degree in

Fisheries from the Icelandic College of

Fisheries.

25

26

Annual Report 2011

With consumers becoming more health-conscious and environmentally aware in recent years, the demand for healthy food, made of high-quality raw materials and sourced in a sustainable way, has increased significantly.

As a global processor and trader in seafood, Icelandic Group has taken a pioneering role in sustainability matters and responsible fisheries. The Group's vision is to secure healthy marine and freshwater resources to provide high-quality nutritious food for today's consumers and future generations.

MSC certification for all cod and haddock fisheries in IcelandIcelandic Group has recently obtained the full certification of all Icelandic cod and haddock fisheries by the Marine Stewardship Council (MSC) – an internationally renowned benchmark for well-managed fisheries. The certification applies to all vessels and gear types and ensures fair market access for Icelandic cod and haddock globally.

Icelandic Group is already part of the Iceland Responsible Fisheries (IRF) certification programme and views these programmes as complementary on the global seafood market. In addition, Icelandic Group offers a range of certified seafood from ACC (Aquaculture Certification Council) and GLOBALGAP.

Strengthening position globally while meeting consumer demandThe MSC certification is a significant achievement, with the total annual allowed catch of 180,000 tonnes of cod and 50,000 tonnes of haddock now qualifying to feature the blue MSC ecolabel.

The MSC certification is part of Icelandic Group's continued investment in the Iceland fisheries and strengthens its position in the international marketplace by adapting to changing market demands. It provides its customers with the peace of mind that the fish they are buying comes from a well-managed and sustainable source. In turn, they are able to pass these benefits on to their customers and consumers – supermarket shoppers and those eating out in restaurants – all of whom are becoming increasingly focused on sustainability and seeking the MSC ecolabel, which is the most widely recognised and trusted indicator of seafood sustainability.

The MSC has developed standards for sustainable fishing and seafood traceability and is the only certification and eco-labelling programme for wild-capture fisheries consistent with the ISEAL Code of Good Practice for Setting Social and Environmental Standards and the United Nations' Food and Agricultural Organisation guidelines for fisheries certification.

Commitment to Responsible Fisheries

27

Commitment to Responsible Fisheries

The Icelandic Responsible Fisheries Certification ProgrammeThe Icelandic Responsible Fisheries (IRF) certification programme was initiated in 2009 and indicates Icelandic origin of fish catches in Icelandic waters and responsible fisheries management. The programme provides opportunities for stakeholders in the value chain of Icelandic seafood, Icelandic fishing vessels owners, processing plants as well as other stakeholders to highlight Icelandic origin. Icelandic Group sees the IRF and MSC schemes as complementary to each other, promoting Iceland's fisheries to global markets that have different requirements. The IRF is appropriate for promoting responsible fisheries combined with the provenance and quality of Icelandic fish.

Corporate Social and Environmental ResponsibilityResponsible and sustainable fisheries are at the centre of Icelandic Group's corporate social and environmental responsibility policy. However, we are equally committed to food safety matters as well as socially responsible and ethical practices.

•AvoidingillegallycaughtandendangeredfishWe ensure our suppliers comply with the certification standards demanded by the EU and encourage all countries to utilise these certificates. Icelandic Group will not sell products of endangered or protected species.

•SourcingfromsustainablefisheriesandfarmsWe are an expert supplier of seafood from sustainable sources utilising responsible fishing and farming techniques assessed using independent scientific advice. We offer a range of certified seafood from MSC fisheries and ACC or GLOBALGAP farms including our own tilapia farms.

•Foodsafety/TraceabilityWe demand that products sold under our brands meet high quality standards. Our quality inspectors visit suppliers factories, vessels and farms. Our systems ensure traceability of product back from our factories to the farm or the boats that supplied the fish.

•Energyuse/Carbonfootprint/PackagingandwastereductionWe have programmes to reduce the energy used to make our products and support research into carbon footprint reduction. Our companies are tasked with annual reductions in waste. We continually increase recycling and reduce the weight of packaging.

•EthicalandsocialstandardswithinoursupplybaseWe take a precautionary approach and only trade with companies that are committed to achieving their ethical social and environmental responsibilities.

28

Annual Report 2011

Board of Directors and Key ManagementHerdis Drofn Fjeldsted – Chairman Herdis is Investment Manager at the Enterprise Investment Fund, which she joined in 2010, following a career in the private equity industry. Most recently, Herdis was a member of the investment team at Thule Investments, where her responsibilities included investment analysis, negotiations and active participation in various activities of the individual companies owned by the Fund. Herdis is the Chairman of the Board of Wave Operations, Board Director of Icelandair Group and Board Director of Promens. She holds a BSc degree in Business Administration and an MSc degree in Corporate Finance from Reykjavik University. She is also a Certified Securities Broker.

Arni Geir PalssonArni works as an independent management consultant and has extensive experience in management and corporate governance both in Iceland and internationally. In 2006–2008, he was CEO of Median Llc., a software and processing company in the international credit card industry. In 2005–2006, he was CEO of the entertainment company LazyTown. In the years 2000–2005, Arni was VP of Corporate Development of Icelandic Group. Prior to that, he was Head of Development of FF-Media Group, CEO and owner of the advertising agency M&D, Marketing Manager of the shipping company Samskip and Head of Custody and Wealth Management of Islandsbanki Securities. Arni holds a Cand. Oecon. degree in Business Administration from the University of Iceland and an MSc degree in International Marketing and Management from Copenhagen Business School.

Ingunn B. Vilhjalmsdottir Ingunn is a co-owner of Attentus – Human Resource Consultancy. She worked in Human Resources for Eimskip from 1998–2006, was Executive Vice President of Human Resources and a member of the Management Board of the company. She has worked as Human Resources consultant for Avion Group, Excel Airways and Air Atlanta and has extensive experience in the fields of change management and company mergers. In addition, she has taught courses in Management, Human Resources Management and Change Management at the University of Iceland and Reykjavik University. Ingunn has worked for companies and organisations in strategic planning of human resources, leadership training, management consulting, HR outsourcing and HR due diligence. She was a member of the Board of the City of Reykjavik Education Council. Ingunn holds a BA degree in Work Sociology from the University of Iceland and an MBA from Reykjavik University.

Magnus BjarnasonMagnus is Head of Marketing and Business Development of Landsvirkjun, an energy company owned by the Icelandic State. Prior to that, he was Managing Director of Capacent Glacier and Managing Director of the International Banking Division of Glitnir Bank. Magnus worked at the Ministry for Foreign Affairs for a number of years, first as a Trade Commissioner to the United States and Canada and then as a Minister Councellor and Deputy to the Ambassador at the Icelandic Embassy in China. Magnus holds a BSc degree in Business Administration and an MBA from Thunderbird School of Global Management.

Jon Thorgeir EinarssonJon Thorgeir is a Partner at the accounting firm Endurskodun Vestfjarda ehf., which is located in the Westfjords in Iceland, and works in close co-operation with Deloitte in Reykjavik. Prior to that, he worked at an accounting firm in Reykjavik from 1984–1990. Furthermore, Jon Thorgeir is one of the owners of a fishing company in the Westfjords in Iceland. Jon Thorgeir holds a Cand. Oecon. degree in Business Administration from the University of Iceland and is a State-Authorised Public Accountant.

Larus Asgeirsson, CEOLarus joined the Company in 2011 and has extensive experience from the Icelandic and international business community. From 1991–2006 he was Director of Sales and Marketing of Marel hf. Iceland. He was Managing Director of Scanvaegt International, a subsidiary of Marel in Denmark from 2006–2008 and Corporate Director of Sales and member of the Management Board of Marel Food Systems from 2008–2009. Furthermore, he was deputy CEO of Marel from 2006–2009. Most recently, he worked as the CEO of Sjova Almennar insurance company from 2009–2011. Larus holds a BSc degree in Mechanical Engineering from the University of Iceland and an MSc degree in Mechanical Engineering from Oklahoma State University. He has served on various Boards in Iceland and abroad.

Johann Gunnar Johannsson, CFOPrior to holding the position of Chief Financial Officer, Johann was Group Financial Controller for the Group. From 2004–2008 he was Finance Director for Bakkavor Group, where his responsibilities included total Group accounting. Prior to that, he worked for DeCode Genetics and KPMG. Johann is a State-Authorised Public Accountant and holds a Cand. Oecon. degree from the University of Iceland.

29

Icelandic Group hf.Financial Summary

Year Ended 31 December 2011

For more information on the Consolidated Financial Statements (including notes), please visit www.icelandic.is

30

Annual Report 2011

Icelandic Group's consolidated financial statements for the year 2011 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The financial statements are composed of the consolidated financial statements of Icelandic Group hf. (the “Company”) and its subsidiaries (the “Group”), which numbered 19 at 31 December 2011.

Icelandic Group hf. is a holding company for manufacturing and marketing companies specialising in seafood on international markets.

According to the statement of comprehensive income, total comprehensive income amounted to ¤61.9 million for the year. The Group's income from continuing operations amounted to ¤524.8 million for the year. According to the statement of financial position, total assets at year-end amounted to ¤373.0 million and equity amounted to ¤178.1 million. The equity ratio of the Group was 47.8%.

The Board of Directors will submit a proposal to the Annual General Meeting on dividend to shareholders. Reference is made to the financial statements regarding deployment of net profit and other changes in equity.

Restructuring of the Group In the first half of the year, the Company's Board of Directors decided to restructure its operations. In June, the Company reached an agreement on the sale of subsidiaries in Germany and France. The sale was concluded at the end of August. In September, the Company reached an agreement to sell part of its operations in China. The sale was concluded in October. In November, the Company reached an agreement on the sale of subsidiaries in the USA, Iceland and China. The sale was completed on 19 December 2011. Profit on the sales of these operations amounted to ¤68.0 million and is included in discontinued operation. The Company's operation in Germany, France, China, Iceland and the US is classified as discontinued operation and recognised as a specific item in the profit or loss in addition to comparative figures for the year 2010. Note no. 7 includes information on income, expenses and profit on discontinued operation. Comparative figures in the statement of financial position have not been adjusted, as the decision of restructuring the operation was made in the year 2011.

Share capital and Articles of AssociationAt the end of November 2011 a shareholders' meeting accepted that the Company could purchase 32.2%, or 929.0 million, of its own shares for ¤38.4 million. The Company's Articles of Association were changed, and the number of shares decreased from 2,793.9 million to 2,072.0 million, or by 721.9 million. Treasury shares numbered 207.1 million at year-end 2011. The share capital amounted to ¤11.2 million according to the statement of financial position. The share capital is divided into shares of ISK 1, each with equal rights within a single class of shares.

Five members comprise the Board of Directors elected at the annual general meeting for a term of one year. Those persons willing to stand for election must give formal notice thereof to the Board of Directors at least five days before the Annual General Meeting. The Company's Articles of Association may only be amended at a legitimate shareholders' meeting, provided that amendments and their main aspects are clearly stated in the invitation to the meeting. A resolution will only be valid if it is approved by at least 2/3 of votes cast and is approved by shareholders controlling at least 2/3 of the share capital represented at the shareholders' meeting.

There were two shareholders at year-end. At the end of the year, the majority shareholder was The Iceland Enterprise Investment Fund, with 99.99%.

Further information on matters related to share capital is disclosed in note 25.

Statement by the Board of Directors and the CEOThe annual consolidated financial statements for the year ended 31 December 2011 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional Icelandic disclosure requirements for consolidated financial statements.

Endorsement and Statement by the Board of Directors and the CEO

31

Endorsement and Statement by the Board of Directors and the CEO

According to our best knowledge, it is our opinion that the annual consolidated financial statements give a true and fair view of the consolidated financial performance of the Company for the financial year 2011, its assets, liabilities and consolidated financial position as at 31 December 2011 and its consolidated cash flows for the financial year 2011.

Further, in our opinion, the consolidated financial statements and the endorsement of the Board of Directors and the CEO give a fair view of the development and performance of the Group's operations and its position and describes the principal risks and uncertainties faced by the Group.

The Board of Directors and the CEO have today discussed the annual consolidated financial statements of Icelandic Group hf. for the year 2011 and confirm them by means of their signatures. The Board of Directors and the CEO recommend that the consolidated financial statements will be approved at the Annual General Meeting of Icelandic Group hf.

Reykjavik, 19 March 2012.

Board of Directors:

Herdis Drofn Fjeldsted

Arni Geir Palsson

Egill Tryggvason

Ingunn B. Vilhjalmsdottir

Steinthor Baldursson

CEO:

Larus Asgeirsson

32

Annual Report 2011

To the Board of Directors and Shareholders of Icelandic Group hf.We have audited the accompanying consolidated financial statements of Icelandic Group hf., which are composed of the consolidated statement of financial position as at 31 December 2011, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, which are composed of a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of Icelandic Group hf. as at 31 December 2011 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU.

Report on the Board of Directors reportPursuant to the legal requirement under Article 106, Paragraph 1, Item 5 of the Icelandic Financial Statement Act No. 3/2006, we confirm that, to the best of our knowledge, the report of the Board of Directors accompanying the financial statements includes the information required by the Financial Statement Act if not disclosed elsewhere in the financial statements.

Reykjavik, 19 March 2012.

KPMG ehf.

Saemundur Valdimarsson

Margret G. Flovenz

Independent Auditors' Report

33

Consolidated Statement

Consolidated Statement of Comprehensive Income for the year 2011

2011 2010

Restated*

Continuing operations

Sales .................................................................................................................................................. 524,731 515,278

Cost of goods sold ............................................................................................................................. ( 480,201) ( 461,873)

Gross profit 44,530 53,405

Other operating income .................................................................................................................... 32 5

Operating expenses ........................................................................................................................... ( 43,444) ( 43,064)

Share of profit of equity-accounted investees, net of income tax .................................................... 3 ( 2)

Operating profit 1,121 10,344

Finance income ................................................................................................................................. 1,957 761

Finance costs ..................................................................................................................................... ( 5,312) ( 3,963)

Net finance costs ............................................................................................................................... ( 3,355) ( 3,202)

(Loss) profit before income tax ( 2,234) 7,142

Income tax ......................................................................................................................................... ( 1,893) ( 1,670)

(Loss) profit for the year from continuing operations ............................................................. ( 4,127) 5,472

Discontinued operations

Profit from discontinued operation, net of income tax ..................................................................... 48,319 612

Profit for the year ........................................................................................................................... 44,192 6,084

Other comprehensive income

Foreign currency translation differences for foreign operation ........................................................ 2,501 8,587

Foreign currency translation differences reclassified to profit or loss ............................................... 15,220 0

Cash flow hedge ................................................................................................................................ 0 ( 374)

Income tax relating to cash flow hedge ............................................................................................. 0 112

Other comprehensive income for the year, net of income tax ................................................. 17,721 8,325

Total comprehensive income for the year ................................................................................... 61,913 14,409

* The comparative figures have been re-presented to show the discontinued operations separately from continuing operations. All amounts are in thousands of euro.

34

Annual Report 2011

* The comparative figures have been re-presented to show the discontinued operations separately from continuing operations. All amounts are in thousands of euro.

Consolidated Statement of Comprehensive Income for the year 2011

2011 2010

Restated*

Profit for the year attributable to

Equity holders of the Company ......................................................................................................... 44,172 6,097

Non-controlling interest .................................................................................................................... 20 ( 13)

Profit for the year .......................................................................................................................... 44,192 6,084

Total comprehensive income attributable to

Equity holders of the Company ......................................................................................................... 61,913 14,139

Non-controlling interest .................................................................................................................... 0 270

Total comprehensive income for the year .................................................................................. 61,913 14,409

Earnings per share

Basic and diluted earnings per share (each share is 1 Icelandic krona) ................................ 0.0162 0.0022

Earnings per share – continuing operations

Basic and diluted (loss) earnings per share (each share is 1 Icelandic krona) ..................... ( 0.0015) 0.0020

35

Consolidated Statement

Consolidated Statement of Financial Position as at 31 December 2011

2011 2010

Assets

Property, plant and equipment .......................................................................................................... 34,355 103,947

Intangible assets ................................................................................................................................. 47,466 64,864

Other investments .............................................................................................................................. 3,269 1,400

Deferred tax assets ............................................................................................................................. 381 3,710

Total non-current assets 85,471 173,921

Inventories .......................................................................................................................................... 85,553 168,029

Trade and other receivables ............................................................................................................... 54,257 111,393

Restricted cash ................................................................................................................................... 38,463 0

Cash and cash equivalents ................................................................................................................. 109,295 26,084

Total current assets 287,568 305,506

Total assets 373,039 479,427

Equity

Share capital ....................................................................................................................................... 11,169 16,733

Share premium ................................................................................................................................... 108,296 141,095

Reserves (deficit) ................................................................................................................................ 2,761 ( 14,980)

Retained earnings ............................................................................................................................... 55,903 11,731

Total equity attributable to equity holders of the Company 178,129 154,579

Non-controlling interest ..................................................................................................................... 0 2,357

Total equity 178,129 156,936

Liabilities

Loans and borrowings ........................................................................................................................ 38,366 101,663

Deferred income tax liability .............................................................................................................. 2,057 8,321

Total non-current liabilities 40,423 109,984

Loans and borrowings ........................................................................................................................ 73,236 110,224

Trade and other payables ................................................................................................................... 81,251 102,283

Total current liabilities 154,487 212,507

Total liabilities 194,910 322,491

Total equity and liabilities 373,039 479,427

All amounts are in thousands of euro.

36

Annual Report 2011

Consolidated Statement of Changes in Equity for the year 2011

Share capital

Share premium

Reserves (deficit)

Retained earnings

Non con-trolling interest

Total equity

Changes in equity in 2010

Equity as at 1.1.2010 .................................. 16,733 141,095 (23,022) 5,634 2,087 142,527

Total comprehensive income for the year .... 8,042 6,097 270 14,409

Equity as at 31.12.2010 .......................... 16,733 141,095 (14,980) 11,731 2,357 156,936

Changes in equity in 2011

Equity as at 1.1.2011 .................................. 16,733 141,095 (14,980) 11,731 2,357 156,936

Purchase of own shares .............................. (5,564) (32,799) (38,363)

Total comprehensive income for the year .... 17,741 44,172 0 61,913

Acquisition of non-controlling interest ...... (219) (219)

Disposal of non-controlling interests ......... (2,138) (2,138)

Equity as at 31.12.2011 ........................... 11,169 108,296 2,761 55,903 0 178,129

No dividends were paid in 2011 and 2010.

All amounts are in thousands of euro.

37

Consolidated Statement of Cash Flows for the year 2011

2011 2010

Cash flows from operating activities

Operating profit ............................................................................................................................. 8,860 25,608

Difference between operating profit and cash from operations:

Net loss (gain) on sale of assets ........................................................................................................ 30 ( 425)

Depreciation and amortisation .......................................................................................................... 12,915 16,256

Share of profit of equity-accounted investees .................................................................................. ( 12) ( 31)

Change in operating assets and liabilities ......................................................................................... ( 16,487) ( 1,375)

Cash generated from operations 5,306 40,033

Interest income received ................................................................................................................... 447 938

Interest and finance costs paid ......................................................................................................... ( 6,712) ( 10,812)

Income tax paid ................................................................................................................................. ( 1,242) ( 5,330)

Net cash (used in) provided by operating activities ( 2,201) 24,829

Cash flows from investing activities

Investment in property, plant and equipment ................................................................................... ( 13,312) ( 20,923)

Proceeds from sale of property, plant and equipment ..................................................................... 369 653

Investment in intangible assets ......................................................................................................... ( 2,132) ( 735)

Net cash inflow on disposal of subsidiary .......................................................................................... 151,314 0

Restricted cash .................................................................................................................................. ( 37,438) 0

Decrease in bonds and other receivables .......................................................................................... ( 1,309) 460

Net cash provided by (used in) investing activities 97,492 ( 20,545)

Cash flows from financing activities

Purchase of own shares ..................................................................................................................... ( 38,363) 0

Long-term debt proceeds .................................................................................................................. 897 7,757

Long-term debt repaid ...................................................................................................................... ( 14,224) ( 15,556)

Short-term debt proceeds ................................................................................................................. 39,364 2,581

Net cash used in financing activities ( 12,326) ( 5,218)

Increase (decrease) in cash and cash equivalents ..................................................................... 82,965 ( 934)

Effect of exchange rate fluctuations on cash held ................................................................... 246 1,768

Cash and cash equivalents at 1 January ..................................................................................... 26,084 25,250

Cash and cash equivalents at 31 December ............................................................................... 109,295 26,084

All amounts are in thousands of euro.

Consolidated Statement

38

Icelandic Group

Borgartun 27

IS-105 Reykjavik

Iceland

www.icelandic.is

info@icelandic.is

www.icelandic.is