Annual Report • Ársskýrsla 2006 - Icelandic Group

Annual Report • Ársskýrsla 2006

Icelandic Group Plc. on 31 December 2006
Employees 4,600
Stock ISK 2,893,248,244
Number of shareholders 21,122
Share price 7.6
Ten largest shareholders on 31 December 2006
FAB 20.2%
Fjárfestingarfélagid Grettir* 13.5%
Blátjörn 12.9%
ISP 12.3%
Magnús Thorsteinsson* 10.8%
Hf. Eimskipafélag Íslands 7.5%
Straumur – Burdarás Investment bank 3.8%
BOM fjárfestingar 3.7%
KP fjárfestingarfélag 3.0%
Landsbanki Luxembourg* 2.6%
Total 10 largest 90.3%
* According to the shareholder’s register, Landsbanki Luxembourg
holds 22.6% of all shares as a custodian bank. In the table the
shareholdings have been reallocated according to notifications to
OMX Nordic Exchange in Iceland.
Board
Magnús Thorsteinsson, Chairman
Jón Kristjánsson, Vice Chairman
Adalsteinn Helgason
Baldur Örn Gudnason
Gunnlaugur S. Gunnlaugsson
Management
Executive Board:
Björgólfur Jóhannsson, CEO of Icelandic Group
Ellert Vigfússon, CEO of Icelandic USA & Asia
Finnbogi Baldvinsson, CEO of Icelandic Europe
CEOs of subsidiaries
Coldwater Seafood Anita Barker
Fiskval Ingvar Eyfjörd
Icelandic Asia S.A. Park
Icelandic France Jean-Max Martel
Icelandic Iberica Hjörleifur Ásgeirsson
Icelandic Japan/Marinus Jón Magnús Kristjánsson
Icelandic Northwest Peter Trost
Icelandic Norway Jón Gardar Helgason
Icelandic Services Valdimar Óskarsson
Icelandic UK Magni Thor Geirsson
Icelandic USA Aevar Agnarsson
Jeka Fisk Halldór Arnarson
Pickenpack Gelmer Gudmundur Stefansson
Pickenpack H&H Wolfgang Kohls
Seachill Mike Walker
Financial Calendar 2007
Interim results for the year 2007 will be published
on the following dates:
Q-1 Week 21
Q-2 Week 33
Q-3 Week 47
Q4 and Annual Financial Statements Week 10 2008
Market price of shares in Icelandic Group
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Sept 05
Stock Exchange
Icelandic Group’s shares are quoted on
the OMX Nordic Exchange in Iceland (www.icex.is)
Symbol: IG
Trading currency: ISK
Principal banks of Icelandic Group
Iceland
Glitnir
Landsbanki Íslands
UK
Glitnir
Landsbanki Íslands
Royal Bank of Scotland
Yorkshire Bank
USA
Bank of America
Brown Brothers
Israel Discount Bank
Peoples Bank
Rabobank
Germany
Bankhaus Lampe
Deutsche Bank
HSH Nordbank
Rabobank
Spain
Banco Sabadell-Atlántico
BBVA
France
Fortis Bank
Landsbanki Íslands
Société Générale
Jan 06
Apr 06
Jun 06
Sept 06
Jan 07

Annual Report 2006

Contents
The Chairman’s statement …………………………… 5
CEO’s address ………………………………………… 7
Outlook and future vision …………………………… 9
Milestones …………………………………………… 10
Highlights of the year ………………………………… 11
Board of Directors …………………………………… 12
Shareholders issues …………………………………… 13
Structure & organisation ……………………………… 16
Food trends …………………………………………… 18
Products ……………………………………………… 20
Markets & customers ………………………………… 21
Product development ………………………………… 22
Trademarks …………………………………………… 23
Icelandic Europe ……………………………………… 25
United Kingdom …………………………………… 25
Germany …………………………………………… 27
France ……………………………………………… 29
Spain ………………………………………………… 30
Denmark …………………………………………… 31
Icelandic USA & Asia ………………………………… 33
USA ………………………………………………… 33
Asia ………………………………………………… 34
Japan ………………………………………………… 35
Financial review ……………………………………… 36
Corporate governance ……………………………… 41
Risk management …………………………………… 43
Corporate responsibility ……………………………… 45
Financial Statements 2006 ………………………… 47
Endorsement by the Board of Directors …………… 49
Auditors’ Report ……………………………………. 50
Income Statement ……………………………………. 51
Balance Sheet ………………………………………… 52
Statement of Changes in Equity …………………… 53
Statement of Cash Flow ……………………………. 54
Notes to the Financial Statements …………………… 55
3

The Chairman’s statement
It was with a certain pleasure and pride that I accepted the role
of Chairman of the Board of Icelandic Group Plc. last year after
being approached. Every Icelander has it in his or her blood to
take part in harvesting, processing or selling seafood one way or
another. This is how the historical ties to the sea and its harvest
affect Icelanders. Historical values are good by themselves, but
at the same time, we must all realise that we do not live in the
past, and the future is today. Therefore, it is of great importance
that we, the board members and management of Icelandic Group,
move on with the times and adapt our business model to what
our customers need and want to buy.
Advancing value-added business
It is with that in mind that the constant work of restructuring the
operations of Icelandic Group went on in 2006. Our various
divisions have been restructured with the single most important
goal in mind of increasing efficiency and profitability. This is a
task that will not be accomplished overnight, and it can
sometimes be a painful process for those concerned. A wise man
once said that an end is not an end but a new beginning.
Therefore, we should not resist change but rather embrace it and
use it to our advantage.
Our vision is to continue advancing our business in the
production of value-added products and build up our brands in
the marketplace. At the same time we want to use every
opportunity to get closer to the source but not shy away from
opportunities that may arise in primary production of seafood.
This policy is already starting to bear fruit, and we will see the
returns increase further during the year.
Eventful year
The year 2006 was in many ways, an eventful one. We have
continued the restructuring process of the chilled and frozen
seafood production in the United Kingdom. The operations of
three plants in Grimsby have been merged into two, and there is
a greater emphasis on chilled, value-added products, such as
ready meals and other convenience products, whereas the frozen
products have fallen back.
Acquisition of Pickenpack H&H and Delpierre’s Gelmer
On the continent we have seen new, important, companies
joining the Group. The acquisition of Pickenpack Hussmann &
Hahn was finalised in January. The investment was in line with
Icelandic Group’s strategy to be a global leader in the production
and sale of seafood products. The summer saw the acquisition of
Delpierre’s frozen seafood plant in Gelmer, France. It is now
operated as Pickenpack Gelmer.
With the acquisition, Icelandic Group’s operations have been
substantially strengthened in Europe, where a great many
synergistic opportunities exist. The Pickenpack experience has
shown that achieving acceptable operating results in the
manufacture of frozen products for the consumer market requires
substantial volume and large batches. In the United Kingdom we
have been turning out about 16,000 tons of frozen products
annually, while at Delpierre in France, the production has been
about 17,000 tons per year, and at Pickenpack production is at
70,000 tons. It is our opinion that the acquisition will enable us
to improve the use of our production capacity, enlarge our
production batches and increase specialisation, which will pay off
in improved operating results. Still further concentration is
foreseeable in this sector, and Icelandic Group intends to play a
key role.
Saltfish production and strong sourcing
In Denmark the Group acquired Jeka Fish and its subsidiary
Atlantic Cod. Again, the investment is in line with Icelandic
Group’s strategy of leading the market in the manufacture and
sale of seafood products in the world, this time in saltfish
products intended for the Mediterranean markets.
The importance of sourcing and primary production is not to be
undervalued. Our staff has done a good job of strengthening the
co-operation between Asia and our other markets, with the USA
paving the way. The Group has built up its own production in
China, and last year a tilapia farming operation was added to
other activities. All this will bring greater value into the Group as
we progress into 2007.
Final steps in the USA merger
The final steps of the merger between Icelandic USA and
Samband of Iceland are now ahead, highlighted by the closure of
the former Icelandic USA plant in Cambridge, Maryland.
This really reflects the overcapacity in the industry and
underutilisation of our plants in the US. Thus, the merger will
result in greater efficiency of our Newport News plant and help
to drive further consolidation in the industry in which Icelandic
Group will take part.
Leadership in the seafood business
There is still a lot of work ahead for the company to reach an
acceptable level of profitability. The goals are quite clear, and the
board and management are both very focused on the tasks at
hand. It is therefore with great enthusiasm that we close 2006
and greet a new year with all its challenges. I know that our
Group enjoys having a large number of excellent employees, and
I would like to thank them for their contribution during the year.
Together, we will move Icelandic Group closer to undisputed
leadership in the seafood business.
Magnús Thorsteinsson
Chairman of the Board
5

CEO’s address
A year of activities
With this Annual Report we bid farewell to the eventful year of
2006. Many decisions were made to change the Group companies
that have not been producing acceptable results. We have seen a
new management team put in place in France, where constant
operating losses and rising inventory levels have been the rule.
The new management has succeeded in turning the business
around and reducing the inventory during the second half of the
year.
At Coldwater UK a number of measures have been taken in order
to improve and simplify the operations. Now, the emphasis is on
the production of convenience items, such as ready meals, both
chilled and frozen. Production of other items is being moved to
France and Germany. These measures have had a positive impact
on operational results during the last months of the year.
At year-end a decision was made to close one of the two plants in
the USA during the first quarter of 2007. This represents a final
step in the merger process of Icelandic USA and Samband of
Iceland that began in July 2005. These measures, along with
those of other companies, will contribute to enhanced Group
operations in the future.
Deviations from budget
Warm summer weather in major markets, Europe and USA
resulted in reduced demand which was not anticipated. High raw
material prices have had a negative impact on contribution as the
increased costs were not reflected soon enough in the sales price
of value-added products.
The Group’s operational results in 2006 showed some deviations
from the original budget. To a large extent these are due to four
Group companies: Icelandic USA, Pickenpack, Coldwater UK and
Icelandic France. We incurred one-time costs owing to plant
closure in the USA and longer and more costly transitions than
anticipated at Coldwater UK, Icelandic Germany and France.
Ever-changing company
Icelandic Group acquired Jeka Fish in Denmark in April. Jeka Fish
produces salted fish, and it is the first time that such production
takes place within Icelandic Group. The company is well-managed
and strong in its field. The plan is to grow and strengthen the
operations further in conjunction with other marketing efforts in
Italy and Spain.
Icelandic Group has undergone substantial changes in the past
few years. The roots are in Icelandic Freezing Plant Corporation.
That is where the comparison ends, however. Today, Icelandic
Group consists of production and marketing companies that have
managed to build up a strong presence at most markets and team
up with most of the major retail chains in Europe and North
America.
Food trends
The trends are shifting in the consumption patterns of food.
While these used to be heavily driven by practicality only a
decade ago, we have seen a shift towards issues like enjoyment
and health. Enjoying a meal encompasses factors like eating out,
culinary culture and organic food. Fish products are becoming
increasingly popular as the centrepiece of a healthy meal. When
it comes to meals eaten at home, convenience plays an important
role. Increased convenience means getting the final product
ready for the consumer’s plate. Icelandic Group plays an active
role in this process. The restructuring at Coldwater UK last year is
an example. Now, the emphasis is increasingly on ready meals in
chilled or frozen form. This is an ongoing process where the
company and the retail chains join forces in developing the
product of tomorrow. In this process the Group benefits from the
profound expertise and know-how of its experienced staff, and it
intends to continue to build on this for future prosperity.
Not to be forgotten
When a business is underperforming, there is a tendency for all
the discussion to focus on the negative things and on the actions
that must be taken. The businesses that are doing well are hardly
mentioned and are in fact mixed up with everything else. Many
Group companies did very well last year and stayed within
budget. The operations in Spain, Asia, Denmark, Germany and
part of UK did well in 2006, and the companies are wellpositioned
for strong growth in the future. Following the
restructuring process in 2006, we expect all companies to turn a
profit in 2007. This allows us to utilise the strength of each
company for the benefit of the whole Group. The executives of
Icelandic Group believe that the present infrastructure will lead
to improved results in 2007 and to steady improvements in the
years to come.
I would like to express my thanks to the Icelandic Group
employees all over the world for their great contribution.
Björgólfur Jóhannsson
CEO of Icelandic Group
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Outlook and future vision
The Icelandic Group consists of an international network of
production and marketing companies selling seafood products on
global markets. In several markets the company enjoys a
prominent position with its brand ICELANDIC, especially within
the food service sector. The company is also a major supplier to
the retail sector through its branded or private label production.
Our mission is to maximize long-term shareholder value by
acquiring, restructuring and managing companies in the food
processing industry, while providing our people with
opportunities for growth and accomplishment
We aim to support a 21st century lifestyle by supplying healthy
and affordable food, both fresh and frozen. Retailers,
restaurants, distributors and organisations will recognize us as an
industry leader based on our efficiency, superior service and
products.
The Group’s ambition is to be a leader in its field and a provider
of expert knowledge on seafood for its customers in all market
areas. Icelandic Group will continue to focus on its strong points:
production and sale of seafood in the most important markets
worldwide. The company defines itself as a seafood expert, and
that is how it operates for its customers who rely on it as a
specialized supplier. Icelandic Group is focused on widening its
product range in order to fulfil customer needs.
Icelandic Group is an international network of companies, each
operating in its own market in the processing and marketing of
seafood. The Group employs about 4,600 people. The personnel
includes renowned experts in the fields of fishing and primary
processing, product innovation and value-added processing, and
in the worldwide marketing of seafood products.
Icelandic Group has emerged in recent years as a supplier of fresh
and chilled seafood. This category is rapidly expanding in the
retail business, fulfilling customer expectations for fresh, natural
and convenient food. The company has invested in a number of
concerns in order to fully participate in this development, which
is most advanced in the UK. A new chapter in the Group’s story
began with its investment in the saltfish company Jeka Fish, and
the plan is to strengthen these operations further in conjunction
with other marketing efforts in Italy and Spain.
Restructuring is well underway at Coldwater UK, Icelandic France
and Icelandic USA. Products are being shifted from Coldwater
UK to Pickenpack in Lüneburg and in Gelmer as Coldwater will
focus on the production of ready meals. In the USA, one of the
two plants is being closed down, which will in time create great
synergies.
Up until now, Icelandic Group companies have operated as
completely independent units, with practically negligible
synergies and co-operation in purchasing, marketing and
operation of support divisions. The restructuring currently
underway is aimed at taking increasing advantage of the Group’s
strength and size to achieve more favourable purchasing,
increase the cost efficiency of support divisions and thereby
improve performance.
The company has also set five-year operating targets,
anticipating a substantial increase in both the scope and
profitability of its activities. The company expects to achieve this
through cost-cutting measures, organic growth and acquisitions.
In the near term, consolidation is expected of companies
processing and marketing seafood products. Icelandic Group aims
at being an active participant in this development in Europe and
North America. The Group has announced a target operating
turnover of € 1,560 million for 2007 and € 1,740 million for 2008.
Icelandic Group is moving towards being the undisputed leader in
the seafood business.
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10
Milestones
1942 Founding of the Company
1945 Sales office opened in the USA
1946 First sales office opened in Europe
1954 Value-added processing plant opened in the USA
1967 New value-added processing plant opened in Cambridge, Maryland, USA
1981 Sales and marketing company established in Hamburg, Germany
1982 New value-added processing plant opened in Grimsby, UK
1988 Sales company established in France
1989 Sales agency established in Tokyo, Japan
1996 Merger with Faeroe Seafood in Grimsby, UK
1996 Sales company established in Barcelona, Spain
1996 Changes in company charter, a limited liability company is formed
1997 Sales and procurement company established in Norway
1998 Icelandic UK established in Lincoln, UK
1998 Company shares registered on the Iceland Stock Exchange
2002 Acquisition of chilled processing plant in Redditch, UK
2003 Acquisition of Ocean to Ocean (OTO) in the US
2003 Acquisition of Barogel in Marseilles, France
2003 Acquisition of Neptune Fisheries in the US
2004 Icelandic China established
2004 Acquisition of Seachill in Grimsby, UK
2004 Acquisition of Comigro Geneco in Paris, France
2004 Acquisition of the seafood division of Cavaghan & Gray in Grimsby and Aberdeen, UK
2005 Acquisition of Ecomsa in southern Spain
2005 Merger of Blue Ice Group and Icelandic Group
2005 Acquisition of Dalian Three Star, China
2005 Acquisition of Fiskval, Iceland
2005 Acquisition of Pickenpack H&H Seafood in Germany
2006 Acquisition of Jeka Fish in Denmark
2006 Acquisition of Delpierre’s Gelmer in France
Icelandic Group was formerly known as the Icelandic Freezing
Plants Corporation (IFPC). Founding 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 limited liabilty 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 has expanded its operations rapidly in past decades,
especially in the most important markets for Icelandic seafood. In
an era of new ownership, the company has invested significantly
in the production and marketing of fresh and chilled seafood, in
addition to its investment in the marketing of frozen products.
Icelandic Group now defines its operations more widely than ever
before.

Highlights of the year
January: Acquisition of Pickenpack H&H finalised. With the acquisition,
Icelandic Group strengthened its market position in Europe substantially.
Addition of 70,000 tons and almost € 200 million in sales.
March: Björgólfur Jóhannsson appointed CEO. Björgólfur joined Icelandic
Group early in 2006 as Head of Business Development. Other professional
experience includes chief executive positions in the fishing industry.
April: Acquisition of Jeka Fish in Denmark. Through the acquisition, Icelandic
Group entered the saltfish production sector for the first time. Annual
turnover is € 40 million.
July: Acquisition of Delpierre’s Gelmer in France. Greater efficiency in the
production of frozen seafood will result from specialisation and cooperation
between the Pickenpack plant in Germany and the Coldwater plants in
Grimsby.
July: New Managing Director, Anita Barker, appointed at Coldwater UK.
Anita has 15 years’ experience in the food business, having held a variety of
senior financial and operational roles, the most recent one with Geest Ltd.
July: New Managing Director at Icelandic France. Jean Max Martel, who had
been one of the managers of Icelandic France, took over as head of the
company. Mr. Martel was the owner of Comigro Geneco and chief executive
officer of that company for 23 years, until its acquisition by Icelandic Group
in 2004.
September: Pickenpack H&H’s centenary. The company threw a great party
in Lüneburg where between 300 and 400 guests showed up to pay their
compliments to the company and its staff.
November: New Chairman steps in. Due to recent changes in the ownership
of Icelandic Group, Gunnlaugur S. Gunnlaugsson resigned as Board Chairman.
He will continue as a Board Member. The Board elected Magnús Thorsteinsson
as Chairman, but he had served as a Board Member since October 2005.
Sales
Net Profit (loss) in million EUR
EBITDA in million EUR
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Board of Directors
The present Board of Directors was elected at the Annual General Meeting on 23 March 2006. Following the meeting, the new
Board elected Gunnlaugur S. Gunnlaugsson Chairman. In November 2006, Gunnlaugur resigned as Board Chairman due to
changes in the ownership of Icelandic Group. He continued as a Board Member. The Board elected Magnús Thorsteinsson as
Chairman, but he had served as a Board Member since October 2005. The Board has five members and two alternate members.
The alternate members are Páll Thor Magnússon and Steingrímur Pétursson.
Magnús Thorsteinsson
Chairman
Magnús Thorsteinsson became a member of
the Board in October 2005. He is the Board
Chairman of Hf. Eimskipafélag Íslands. Magnús
is an entrepreneur and investor, chiefly in the
area of transport and the financial sector. His
first major investment was in Russia, where he
was one of the founders of the Bravo brewery
in St. Petersburg. After ten years of successful
operations, the company was sold to Heineken
BV. Magnús is a board member of Actavis, the
pharmaceutical conglomerate. Magnús is a
graduate of the Bifröst School of Business.
Jón Kristjánsson
Vice-Chairman of the Board
Jón Kristjánsson became a Board member at a
shareholders’ meeting on 30 May 2005 and
was elected Chairman at the same time, serving
in that capacity until October 2005. Jón is a
major owner of Sund investment company and
is its Executive Board Chairman.
Adalsteinn Helgason
Board Member
Adalsteinn Helgason has held a seat on the
Board since March 2006. He has served as CEO
of Síldarvinnslan, a fishing and fish processing
company, since the beginning of 2006.
Adalsteinn has held various senior management
positions through his career. In the years 1992-
2005 Adalsteinn was part of Samherji’s
management team in Akureyri. Adalsteinn
graduated in business administration from the
University of Iceland in 1976.
Baldur Örn Gudnason
Board Member
Baldur Örn Gudnason has been a Board
member since 2003. He has been the CEO of
Eimskip since 2004. He was the owner and
manager of Sjöfn chemical company 2001-
2004 and a senior manager of Samskip 1987-
2000. Baldur graduated with an MBA from
Reykjavík University in 2002.
Gunnlaugur S. Gunnlaugsson
Board Member
Gunnlaugur S. Gunnlaugsson has been a Board
member since 2002 and Chairman of the Board
2004-2006, except for the period June-
October 2005. Gunnlaugur was the Managing
Director of the Representative Council of the
Reykjavík Independence Party Associations
1984-1988. He was the CEO of Faxamjöl
1988-2000, and CEO of Iceland Genomics
Corporation 2000-2004. He is also Board
Chairman of TM Insurance, Ísfélag Vestmannaeyja
(fish processing), Thormódur Rammi-
Saeberg (fish processing), ÍV (investment
company) and Lysi Ltd. In addition, he is
Chairman of the Council of the Icelandic
National Broadcasting Service and a member
of the board of ISP Investments. Gunnlaugur
obtained a law degree from the University of
Iceland in 1986.

Shareholders issues
Our shareholders
Icelandic Group is constantly aiming at increasing the shareholder
value. It has set the course for further growth by taking the lead in the
world’s seafood market. The growth process and new focus on
product selection have resulted in substantial reorganisation
throughout the organisation. The Company expects that these
measures will soon become evident through enhanced operations.
Our aim is to build a better company for our shareholders.
Issues of shares
A shareholders’ meeting of Icelandic Group Plc., held on 14 December
2005, approved authorising the Board of Directors to increase the
company’s share capital by up to 2,000,000,000 shares through the
sale of new shares. The shareholders agreed to waive their preemptive
rights to the increase in share capital, as provided for in
Article 34 of the Act on Public Limited Companies, No. 2/1995. The
offer price and sales rules are determined by the Board in accordance
with Chapter V of the Act on Public Limited Companies, No. 2/1995.
The authorisation may be utilised all at once or in parts, at the
discretion of the Board. No restrictions may be placed on transactions
with the new shares, which shall confer rights in the company from the
date of listing and are subject to the company’s Articles of
Association. Part of this authorised increase, 201,747,829 shares, was
used to issue shares for Pickenpack’s shareholders, and 135,000,000
shares was used to issue shares for Saltur’s shareholders. The
remaining amount of the authorisation was 1,663,252,171 shares. The
authorisation is valid until 14 December 2008.
A shareholders’ meeting held 16 January 2007 approved the Board’s
proposition regarding authorization to take on credit up to the
amount of ISK 5.0 billion, with special conditions providing the
creditor a right to convert his claim to shares in the company in
accordance with Chapter VI of the Act on Public Limited Companies,
No. 2/1995. The exchange rate shall be the weighed average sales
price of shares in Icelandic Group hf. as listed in the OMX Nordic
Exchange in Iceland during the period from 11 January to 15 January
2007, calculated by the company’s auditors.
The Board of Directors is authorized to increase the share capital by
1,100,000,000 shares to fulfil the above-mentioned obligation. The
shareholders’ priority right shall not apply to the increase, according
to this authorization. The new shares shall grant rights in the company
from the registration date of the increase.
Shareholding summary
Board member shares*
Adalsteinn Helgason 19,603,718
Baldur Gudnason 325,210,844
Gunnlaugur S. Gunnlaugsson 463,362,547
Jón Kristjánsson 762,520,269
Magnús Thorsteinsson 529,726,493
* Includes shares of financially related parties
13

14
Shareholders issues
Market price of shares
in Icelandic Group
Ten largest shareholders
at 31 December 2006
FAB 20.2%
Fjárfestingarfélagid Grettir* 13.5%
Blátjörn 12.9%
ISP 12.3%
Magnús Thorsteinsson* 10.8%
Hf. Eimskipafélag Íslands 7.5%
Straumur – Burdarás Investment bank 3.8%
BOM fjárfestingar 3.7%
KP fjárfestingarfélag 3.0%
Landsbanki Luxembourg * 2.6%
Total 10 largest 90.3%
* According to shareholder’s register Landsbanki
Luxembourg holds 22.6% of all shares as custodian
bank. In the table the shareholdings have been
relocated according to notifications to OMX Nordic
Exchange in Iceland.
Price of shares
Icelandic Group’s shares were listed on the OMX Nordic Exchange in Iceland (then
Iceland Stock Exchange) on 17 February 1998. The market value of Icelandic Group as
of 31 December 2006 was € 233.1 million. The accompanying figure shows Icelandic
Group’s share price over the past 36 months.
Market making
Icelandic Group has concluded an agreement with Landsbanki and Glitnir Bank for
market making in the company’s shares. The banks are each obliged to quote bid and
ask prices for a minimum of 500,000 shares nominal par. The maximum total amount
which each bank is obliged to trade each day is 5,000,000 shares. The bid and offer
spread must not exceed 3% while the agreement is in force. The market-making
agreement may be terminated by either party with one month’s notice.
Major shareholders and relations to management
The number of shareholders at year-end was 21,122. The number greatly increased
early in the year as Straumur-Burdarás Investment Bank paid part of dividends to its
shareholders in the form of shares in Icelandic Group.
FAB GmbH owns 20.2% of Icelandic Group’s share capital, which it acquired as a result
of Icelandic Group’s acquisition of Pickenpack. Finnbogi Baldvinsson, CEO of Icelandic
Europe, holds a predominant share in FAB GmbH. He also holds shares through Eldar
ehf., registered owner of 0.7% of Icelandic Group’s shares.
Blátjörn ehf. and Fjárfestingarfélagið Grettir ehf. own a total of 26.4% of Icelandic
Group’s share capital. These are investment companies owned by Sund ehf. and other
investors. Jón Kristjánsson, one of the principal owners of Sund and Chairman of the
Board of Sund, is Vice-Chairman of the Board of Icelandic Group. Páll Magnússon,
Sund’s Managing Director, is an alternate director of Icelandic Group.

ISP ehf. is an investment company wholly owned by TM
Insurance. Gunnlaugur S. Gunnlaugsson, Chairman of the Board
of TM Insurance, is a Director of Icelandic Group.
Magnús Thorsteinsson, Chairman of the Board of Icelandic
Group, owns 10.8% of Group shares; Hf. Eimskipafélag Íslands
owns 7.5%, and Baldur Gudnason owns 3.7% of Icelandic Group
through BOM fjárfestingar ehf. Magnús Thorsteinsson is the
Chairman of the Board and a major owner of Hf. Eimskipafélag
Íslands. Baldur Gudnason is CEO of Eimskip and a Director of
Icelandic Group.
Dividends
The Company’s Annual general meeting, held on 23 March 2006,
approved a motion that no dividends would be paid to
shareholders on 2005 operations.
Icelandic Group does not have a fixed policy concerning
dividends. The company has grown rapidly with investments in
other companies and aims at continuing to do so. While this
strategy is followed, we can expect dividends to be moderate.
The Board of Directors recommends that no dividends be paid in
2007.
Employee stock options
Icelandic Group has no existing general stock option plans.
In August 2004, the Company’s Board approved an increase of
55 million shares, in accordance with an authorisation in the
Company’s Articles of Association. The new share capital was
Dividends 2002-2005
Year Dividend as share Share
of nominal amount Paid dividends (ISK) of profits
2005 0% 0 0%
2004 10% 145,262,127 20%
2003 7% 104,591,154 21%
2002 15% 223,978,934 36%
Dividend payments for the operating years 2002-2004 were made in 2003-2005
sold to 11 Managing Directors and the CEO at a share price of
6.4, which was the market price at the time. In parallel to the
sale, the company granted its Managing Directors put options for
their shares at the same price plus financing costs. The Managing
Directors are obliged to hold their shares for three years from the
date of purchase, or until August 2007. At year-end 2006, the
remaining put option agreements included 15 million shares at a
share price of 6.4.
Compliance
Icelandic Group employs strict rules on compliance, insider
information and insider trading in accordance with regulations
and rules by the Financial Supervisory Authority. For further
information see page 45.
Investor relations
Financial results are issued quarterly, together with regulatory
announcements, they are first published on the OMX Nordic
Exchange in Iceland website: www.icex.is and on the company
website: www.icelandic.is. In addition the website contains
various additional items of information that can be valuable in
becoming better acquainted with the Company and its
operations.
Icelandic Group has a policy of ensuring that the flow of
information to shareholders and other investors contributes to
the fair valuation of the Company. Do not hesitate to contact us
for further information about shareholder and investor issues at:
investor@icelandic.is.
15

16
Structure & organisation
The Group in short
Building on strong historical roots, Icelandic Group has
developed, during the last few years, from having a product line
limited to frozen fish, most of which came from Iceland, into an
international seafood company able to offer its customers a
selection of marine and aquaculture products from around the
world.
Icelandic Group Plc. is a holding and investment company,
controlling an international network of production and marketing
companies selling seafood products on international markets.
The Group’s activities are carried out by its 33 subsidiaries,
located in 12 countries.
The role of the holding company is to formulate the Group’s
strategy, supervise its subsidiaries, co-ordinate planning and
budgeting and take decisions on investment in new companies.
The holding company is responsible for supervising its
subsidiaries’ operations. It co-ordinates various aspects of their
activities, such as information disclosure, financing and
publications, and provides various types of support. The holding
company looks after relations with shareholders, investors and
other market actors and is responsible for all information
disclosure in this connection. The holding company has five
employees.
Icelandic USA
USA
OTO
USA
Icelandic Services
Iceland
VGI
Iceland
Icelandic Services
Rotterdam
Icelandic Europe – Icelandic USA & Asia
At the end of October 2005, Icelandic Group announced
restructuring measures. The main change was the division of the
Group’s overseas operations into two units, Icelandic USA & Asia
and Icelandic Europe. Icelandic USA & Asia took over operations
in the US and Asia and related activities in Iceland.
The reason for the structural change was that with the division of
the Company into two principal sections gives a clearer picture of
the Company’s operations. External growth will be easier as
companies, for example, in Europe, often have limited interest in
operations in America and vice versa.
The Board of Directors envisages that there will be considerable
consolidation of the processing and sale of seafood in the USA
and in Europe. The number of companies will decrease, and the
remaining companies will correspondingly grow in size. Icelandic
Group intends to become a leading company in this development.
Icelandic Group
Icelandic USA / Asia Icelandic Europe
Sjóvík
Iceland
Icelandic N-West
USA
Dalian Three Star
China
Icelandic China Trad.
China
Icelandic Asia
S-Korea
Icelandic Japan
Japan
Marinus
Iceland
Icelandic
Norway
Icelandic Iberica
Spain
Ecomsa
Spain
Icelandic France
France
Jeka Fish
Denmark
Fiskval
Iceland
Pickenpack H&H
Germany
Pickenpack Gelmer
France
Icelandic Group
UK
Seachill
UK
Coldwater Seafood
UK
Icelandic UK
UK
IFP Trading
UK

Executive Board of Icelandic Group
Ellert Vigfússon
CEO of Icelandic USA & Asia
On 1 January 2006, a four-member Executive Board of Icelandic
Group took over the day-to-day operation of the Group,
reporting directly to the Board of Directors. The Executive Board
is now composed of the following three members:
Björgólfur Jóhannsson, CEO of Icelandic Group
Björgólfur Jóhannsson was engaged as CEO of Icelandic Group in
March 2006, after serving as the Company’s Managing Director
of business development since January 2006. Since 1999, he had
been CEO of Síldarvinnslan hf., prior to which he was Managing
Director of Samherji’s innovation and development division since
1996. From 1992 to 1996 Björgólfur was CFO of Útgerðarfélag
Akureyringa hf. and prior to that had worked since 1980 for
Endurskoðun Sig. Stefánsson and Endurskoðun Akureyri hf. Since
2003, Björgólfur Jóhannsson has been Chairman of the
Federation of Icelandic Vessel Owners (LÍU). He graduated with a
degree in business administration from the University of Iceland
in 1983 and became a certified public accountant in 1985.
Björgólfur Jóhannsson
CEO Finnbogi Baldvinsson
CEO of Icelandic Europe
Ellert Vigfússon, CEO of Icelandic USA & Asia
Ellert Vigfússon joined Icelandic Group when it merged with
Blue Ice Group (Sjóvík) in May 2005. He serves concurrently
as Managing Director of Blue Ice Group, which he established
in 1996. Prior to that he had served, since 1992, in various
capacities in connection with fisheries, including the
harvesting and processing of sea urchins. He graduated from
the State Police College in 1977 and worked for some time in
law enforcement.
Finnbogi Baldvinsson, CEO of Icelandic Europe
Finnbogi Baldvinsson began working for Icelandic Group in
2006. Finnbogi was Managing Director at Hussmann & Hahn
since 2000 and at DFFU in Cuxhaven 1995-2000. He worked
as a consultant for Framleidni and later as Managing Director
at Strýta, Söltunarfélag Dalvíkur and Hradfrystihús
Ólafsfjardar. He studied fisheries science at the University of
Tromso, Norway 1983-1988.
17

18
Eating at home:
Decision factors
11
34
55
Health
Enjoyment
Practicality
21
40
39
1995 2005
Health
BSE • Foot & mouth • Sudan1 • Child obesity
Jamie Oliver • Bird flue • Supersize me
Salt & sugar • Functional food • 5 a day
Fruit for schools
Enjoyment
Organics/premium • Taste the difference
Sharing • Café culture • Eating out
Debet/credit • Treating
Practicality
Ready meals • Light meals • Snacking
Budget • Microwave • Individual portions
Quick to cook
Food trends
in major markets
Eating out or at home
In the USA restaurant and bar sales growth continues to exceed that of the grocery
store sector, according to preliminary figures from the U.S. Census Bureau. Restaurant
and bar sales grew at a robust 8.2 percent rate on a year-to-date basis through
October 2006. By contrast, grocery store sales advanced at a modest 4.1 percent rate
during the same period.
In the UK there have been significant changes in food consumption style. Eating out is
declining as it is perceived as unhealthy at least for the fast food sector. Only fishbased
products and fruits are showing growth in the category of eating out. Looking
deeper into the market shows that while sit-in sales are declining (including burgers),
sales of food to go are growing. On the whole the value of meals eaten out of house is
growing at the same time as volume is declining, which indicates that people are
looking for higher quality at higher prices.
Taste, form and price are decisive factors distinguishing seafood consumption in the
UK. There has been a slight decline in the volume of natural fish for the first time. This
is due to steep increases in fish prices, especially for salmon in 2006. The traditional
breaded and battered products continue to decline, while shellfish and prawns/scampi
are the strongest growing sectors in both frozen and chilled seafood. Main meals and
ready meals are growing in both chilled and frozen form.
In Germany an upwards mainstream trend towards conscious and healthy living and
eating still stimulates Pickenpack’s H&H constant development of low-fat, healthier
and more nutritious products. The company agenda for 2007 also includes ready meals
based on organic fish and organic vegetables, to suit the conscious healthy life style.
Furthermore, the product development department is working very hard at getting
suitable products ready for presentation at the upcoming European Seafood
Exhibition in Brussels in April. Besides new high-convenience products combined with
specially developed packaging concepts, the focus will be on new trendy fish species.
An enlarged assortment will be presented with natural fillets, but also with lightbreading
systems, glazing and marinades. The aquaculture segment combined with
certifications to ecological standards will also play an important role.
Eating at home
Looking broadly at markets, world panel surveys show some shift in the decision
factors behind consumption at home. Although practicality is still an important factor
behind the decision of what to consume, with a score 39%, a significant increase is
evident for health issues, which score 21%, and enjoyment that scores 40%. While
there is demand for convenience products, these must also take into consideration
meal enjoyment and health consciousness as important issues.
The graph demonstrates the change in trend and shows some cues as to what
influences the trend or behaviour.

USA looking for convenience
Aside from the taste of a product, convenience is the next most important attribute.
The American tradition of 3 meals a day is now moving to 4 or 5 rushed meals that are
“grab and go.” Many homes are dual-income so there is no one and no time to cook,
and therefore single-appliance foods, i.e. microwave, are in demand. The young Gen
“Y” view food experiences like a perfectly networked computer; they want food that
tastes better, cooks faster, and costs less. They grew up eating out, in time-stressed
households, and now eat out for the experience/social occasion, not just simply to eat.
Seafood consumption continues to rise in the USA, and it is imperative to understand
the complex set of emerging consumer trends, desires and dynamics to capitalize on
this growth.
The three major trends changing the U.S. consumer landscape are: aging population,
growth of minority groups, and income stratification. Aging baby boomers have more
disposable income to spend at restaurants, which is where seafood is eaten most. The
growth of ethnic groups, particularly Asian and Hispanic, is excellent for seafood as it
is an established part of both cultures’ daily menus. Opportunities for growth need to
be exploited here. More good news is that consumers are looking for more balance
between foods to indulge in and better-for-you foods like seafood. On the health
front, terms like fresh, natural, functional, zero trans-fat and organic are growing in
importance.
Industry trends
It is not surprising that consolidation is the key word in the seafood business as in
most other businesses. Retail chains have become larger and increasingly international
at the same time. The sourcing is more global than before, and increasing competition
between retailers leads to higher pressure on price. Retail chains that are busy growing
and competing in the marketplace with one another have less time and skill to
specialize when it comes to the goods they offer. There is a demand for integrated
solutions from their suppliers.
There has been a similar trend amongst supply companies, albeit it has lagged
somewhat behind. The suppliers have become larger, which has allowed them to grow
not only in size but quality. Larger companies have an advantage when it comes to
being able to offer constant quality, continuous product supply and higher service
level. The companies are better prepared to engage in intensive product development
and become a seafood specialist with the requested variety of items.
Icelandic Group has taken an active part in the consolidation process and has become
a seafood specialist for many of its customers.
19

20
Products
Primary processing
Primary processing determines product quality, whether it takes
place in land-based plants or on board freezer vessels. Further
processing must depend on primary quality. This fact has always
been recognised by Icelandic Group whose specialists have
guided processing plants and provided product and processing
specifications in line with market requirements. ‘Cool, swift and
adept’ may well be the defining words for processing in all
companies working for the Icelandic Group worldwide.
In recent years Icelandic Group has built up its own processing
facility in China, focusing on the re-processing of whole frozen
products from the North Pacific and the North Atlantic areas.
Fish processing in Asia is increasing rapidly, with expertise from
Icelandic Group playing a significant part in this development.
Product specifications are issued by the Group and are required
in all areas of processing.
Frozen and fresh primary products, such as whole fillets and fillet
portions, are marketed directly in food service and at retail, or
they may be further processed into value-added convenience
products for use in all major markets.
Whatever the channels for primary products, there are no
exceptions to the quality and safety standards of Icelandic Group.
Value-added production
Icelandic Group offers a very extensive range of products based
on a wide variety of fish, shrimp and shellfish. Value addition
often involves the breading or battering of fish, but it also means
the preparation of whole ready meals and other convenience
products.
Icelandic USA focuses on frozen, value-added products for the
food service market. Convenience and product quality are key
concepts among chefs in restaurants and catering
establishments, and the Group’s brands are very well known.
Coldwater UK processes frozen and chilled convenience products,
largely under private (customer) labels for the retail market. The
chilled value-added seafood market is developing especially well
in the UK.
Pickenpack H&H and Pickenpack Gelmer chiefly produce shaped
and coated frozen products for the retail market but also various
products for the food service market. Products are sold under
the Group’s brands but mainly under private labels of customers.
Fresh, frozen and salted
Icelandic Group offers a wide selection of seafood products from
a large number of species, such as all major whitefish species,
shrimp and other crustaceans, cephalopods and other molluscs.
The processing of these products, as well as whether they are
sold fresh or frozen, depends on the market and customer
demands.
In the food service sector, Icelandic Group focuses on frozen
products sold to professional chefs in restaurants and catering
establishments that recognise the quality of frozen fish products
and appreciate the convenience of being able to use them as
needed. In this sector Icelandic Group has emphasised its
principal brand, ICELANDIC. The brand has an extremely strong
position in the USA, on the basis of its quality image and
performance for over 50 years. In recent years the brand has also
achieved significant footholds in other markets. Samband of
Iceland is another principal brand of the Group, well known in
general distribution in the USA.
Icelandic Group entered the marked for fresh or chilled seafood
in 2002. Since then the Group has expanded in this field within
the United Kingdom where Seachill is constantly growing their
production of fresh fillets and portions, and Coldwater is now
emphasising the development of ready meals. The latest addition
also marks a new era for Icelandic Group. In 2006 it acquired
Jeka Fish in Denmark, a company specialising in salted fish for
the Mediterranean markets.
Value-added 32%
Fillets and other 68%
Division of sales in 2006 by
processing level. Value-added
products were 32% of sales.
Frozen 80%
Fresh & chilled 20%
Frozen products make up 80% of
sales. Looking a few years back,
fresh and chilled products were
non-existent.

Retail 43%
Food service 42%
Industry and other 15%
Division of sales 2006.
The retail and food service
sectors are similar in size.
Sales intended for industrial
customers are decreasing.
Markets and customers
Icelandic Group subsidiaries are not only active in sales on their domestic markets but
also in neighbouring countries. The value-added processing companies are in the
United States, United Kingdom, France, Denmark and Germany, while the marketing
and sales companies are in the USA, UK, France, Spain, Denmark, Japan, Canada and
South Korea. Extensive primary processing takes place in China and Thailand as well as
Iceland with sales to other concerns in the Group.
Icelandic Group is active in sales to both the retail and food service sectors. In 2006
43% of sales were destined for retail chains where the Group sells primarily under
private label. In the UK and Germany the bulk of the Group’s business is based on
production and sales for retail chains. Other Icelandic Group companies also provide
various products for retail. Among significant customers are Tesco, Marks & Spencer,
Carrefour, Wal-Mart/ASDA, Morrisons, Aldi, Rewe, Netto and Kaufland.
Food service accounted for 42% of all sales in 2006. The customers are typically
distribution companies of all sizes that resell or distribute the products directly to
restaurants, canteens and other food operators. Icelandic Group has emphasised the
ICELANDIC brand in food service. The brand has an extremely strong position in the
USA, on the basis of its quality image and performance for over 50 years.
The brand has also gained a firm foothold in other markets of the Group. Samband of
Iceland® is another principal brand of the Group in general distribution in USA.
The third category is sales to industrial customers, such as other food processors or
large wholesalers of seafood. Sales to this group amounted to 15% of all sales.
Another way to look at markets is by geographical region. In 2006 the main market
regions of Icelandic Group were the UK, which accounted for 30% of the Group’s total
turnover, the USA 25%, Asia 14% and Continental Europe 31%.
Group sales are quite dispersed by geographical regions and customer type. Some of
the companies also have a few very large customers that they depend on at the same
time as the customer depends on the constant deliveries from its supplier.
Size % of Group’s Number of
Class turnover customers
< 1% 26% 5,795
1-5% 22% 220
5-10% 11% 34
10-20% 10% 13
> 20% 31% 6
100% 6,068
The table shows that six customers
absorb over 20% of total sales in
individual Group companies and for
the Group as a whole they stand for
31% of sales. 59% of sales are to
customers that buy less than 10% of
the respective company’s sales.
21

22
Product development
Icelandic Group endeavours to maintain and strengthen its
position as a trusted partner by making every effort to ensure
that its products and services fulfil customer expectations.
As a food producer the company heavily emphasises product
quality. Icelandic Group defines itself as a leader in the seafood
business regarding quality of products and services expected in
the markets. The market constantly demands products that are
innovative, of consistent high quality and convenient. At the
same time there is an increasing emphasis on information about
the origin of the seafood. The company’s employees have
knowledge spanning the entire spectrum from fishing and basic
processing to further processing of finished products and readyto-serve
meals and their sale to customers. This makes Icelandic
Group unique.
Markets differ
In the USA, product development focuses chiefly on products
sold under Icelandic Group’s own trademarks to restaurants that
cook in their kitchens. Market developments are monitored to
assess what products are most suitable for customers. There are
hundreds of types of products, and renewal is frequent. Sales to
retail chains have been increasing in North America, and in these
instances product development is carried out in partnership with
the client.
In the UK, the principal emphasis is on the retail market. This
means co-operation between the development and market
divisions of the retailers on the one hand, and Icelandic Group
companies on the other. Groups of specialists in various fields
meet and compare notes. There is extensive product
development in chilled products, where the entire process is very
rapid and the product lifetime short, making the need for
innovation greater.
In Germany and in the new processing plant in France,
development centres on frozen products. The majority of
production is sold under retailers’ own brands, although the
Group does use its own trademarks. Products are of various
types, fish sticks and shaped products, adapted to market tastes.
There is considerable product development, with major emphasis
placed on consultation with customers.
Three main areas
In Asia, headed and gutted fish is processed into various
products, usually fillets and fillet pieces. These products are
suitable for both further processing and direct sale. Product
development in this case involves achieving the highest
consistent quality possible, and also adapting products to
customers’ needs and maximising raw material utilisation.
Sales and marketing companies do not themselves manufacture
products, but resell others’ production according to the
instructions of primary producers or special contractors. Product
development in these companies aims at offering products
suiting the relevant markets and customers.
Manufacturing companies receive seafood from primary
processors, transform them and manufacture products ready to
cook or serve. The Company’s plants on both sides of the Atlantic
produce goods which are breaded, dipped in batter, or combined
with sauces, fillings and vegetables. The outcome can be
anything from a raw product for restaurant kitchens to a
complete meal, ready to serve.
Product development
200
160
120
80
40
0
Re-enginered
production
New product
development
A total of 300 products were developed by
the Group in 2006

Trademarks
Icelandic Group has for a long time emphasised its own
trademark, ICELANDIC, in restaurant services on all markets. This
is the Group’s leading trademark. The brand has a very strong
position in the USA, where it has been developed over several
decades. The trademark has also gained a foothold on the
Group’s other markets, such as in the UK, France, Spain, Germany
and Japan. Another of the principal trademarks in general use in
the USA is SAMBAND OF ICELAND.
The trademark ICELANDIC represents consistent product quality,
sales and service to customers. The trademark stands for a
variety of seafood of the highest quality in each product class on
the various markets. The trademark may represent products of
varying origin but is only used for goods produced in accordance
with Icelandic Group’s quality and environmental standards.
Icelandic Group has compiled its own quality standards for
handling raw material, which it has its producers follow. It should
be clear to the buyer what sort of products will be delivered
when purchasing goods with the ICELANDIC trademark.
In addition to ICELANDIC, the trademark SEA STAR has been
used for products complying with standards other than those
applying to the ICELANDIC trademark. The MARKET BAY
trademark is used for products sold at retail in the USA which are
not packaged as customers’ in-house brands. The BLUE ICE
trademark has been used on products manufactured in the Far
East and on retail products in Scandinavia. These products go
mainly to large buyers or producers.
ICELANDIC, SEA STAR and MARKET BAY are registered and
protected trademarks in the USA, while in Europe and elsewhere,
the name Icelandic is not protected, although the design of the
trademark is. The countries involved are: Austria, the Benelux
countries, the UK, Denmark, Estonia, Finland, France, Greece,
Ireland, Italy, Japan, China, South Korea, Latvia, Lithuania,
Norway, Portugal, Poland, Spain, Switzerland, Sweden and
Germany. SAMBAND OF ICELAND is a registered trademark in
North America.
PICKENPACK is a registered trademark in the EU. Following the
merger of Pickenpack and Hussmann & Hahn in 2004, the
trademark PICKENPACK HUSSMANN & HAHN was also
registered. The Pickenpack trademarks represent a long history
and tradition of quality – ever since 1906. Pickenpack is well
known in Europe for excellent product quality, first-class raw
material and the ability to adapt its production to conform to the
needs and tastes of individual markets. This has made Pickenpack
one of the most important producers of retailers’ in-house
brands.
On the retail market, Icelandic Group produces and sells its
products primarily under the trademarks of the retail chains. In
the UK and Germany, Icelandic Group bases its operations to a
major extent on sales to retailers. On most other markets,
Icelandic Group companies also provide retailers with a variety of
products. Among its major retail customers are Tesco, M&S,
Carrefour, WalMart/ASDA, Morrisons, Aldi, Rewe, Netto and
Kaufland.
The acquisition of Saltur in Denmark added to Icelandic Group’s
trademark collection. Jeka Fish’s products are sold under the
trademarks JEKA FISH and ATLANTIC COD. JEKA FISH is the
leading trademark for salt cod on the Italian market, known for
its consistent high quality, reliable delivery and competitive price.
JEKA FISH is also known on saltfish markets as a leading
trademark for fish produced from frozen-thawed raw materials.
Jeka Fish’s subsidiary, Atlantic Cod, produces under the
trademark ATLANTIC COD.
Group brands 44%
Customer brands 56%
Group brands account for 44% of
sales, mostly to food service
companies. Customers’ own
brands stand for 56%; these are
mostly retail customers.
23 23

Icelandic Europe
Icelandic Europe embraces the operations of all companies in Europe with the
exception of the sourcing and service companies Marinus, Icelandic Norway, Icelandic
Services and Icelandic Services Rotterdam. Fiskval, the primary producer in Iceland
that sources into Group companies, belongs to Icelandic Europe. The CEO of Icelandic
Europe is Finnbogi A. Baldvinsson.
United Kingdom
Coldwater Seafood
Coldwater Seafood completed a Strategic Review of its operations in the UK in 2006,
following disappointing results in 2005. The Company published its strategy late in
2006: To Become the UK’s leading producer of chilled and frozen ready meals. To
realise this strategy, the following actions have been put in place.
To deliver the focus on ready meals and chilled fish, capacity has to be released in
Grimsby. This is achieved by transferring the majority of frozen production to France,
which will deliver space for increased investment and consolidation at the Grimsby site.
Coldwater will then move on to developing centres of excellence in its manufacturing
strategy by specialising in ready meals and chilled fish at two separate locations. The
facility at Redditch will continue to be dedicated to a major UK retailer.
The retailer strategy will remain as it was in 2005, with Coldwater continuing to service
the UK retail market; the business will supply food service products via an arrangement
with one of its sister companies in the UK. The senior team was reorganised in 2006
and new members recruited, so the company is now positioned to deliver significant
improvement in 2007.
Sales fell by 3% in 2006. This was as a direct result of customer re-organisation that
was agreed following the acquisition and consolidation of the Cavaghan and Gray
business. Like for like sales of existing customers grew by over 6%.
EBITDA fell year on year, largely impacted by the accelerated fish prices in the industry
and also difficulties encountered during integration of the Cavaghan and Gray
business. All of this was not recovered through price inflation as there continues to be
retail resistance to increasing prices across the market place. In reality, if the inflation
experienced across the fish sector in the last two years were fully passed on, this would
probably seriously damage the long-term potential of the business.
The company incurred significant re-organisation costs in 2006, amounting to nearly
£1 million.
The growing awareness of healthy eating continues to impacted the market in the UK
for seafood products. With the current focus on low-salt and low-fat along with a
growing move towards additive-free products, the growth opportunities for fish in this
climate are very positive.
Icelandic Group UK
- turnover in million GBP
Coldwater Seafood UK
- turnover in million GBP
25

26
Icelandic Europe
Seachill
The turnover of total chilled fish has grown by 5%, but the
volume in the market has declined by 2.2%. Seachill has grown
by 25% in turnover and 10% in volume, beating the market.
Seachill achieved an average weekly output of 350 tons of
finished product per week.
A lot of this growth has been driven by long-term offers on
salmon, and this growth was curtailed towards the end of the
year due to raw material inflation. Seachill was protected to a
large extent by having contracts in place for a high proportion of
their salmon purchases. During 2006 there was increased
consolidation of the supply base due to the acquisition of Marine
Harvest by the Panfish Group. This is hopefully the final stage in
what has been a long period of consolidation within the industry.
White fish has also been difficult with double-digit inflation.
Sustainability has been high on the agenda in this sector, with
increasing pressure from the retail sector. This has led to changes
favouring sustainable sources. The market for line-caught
material increased both fresh and frozen categories due to the
perceived sustainability benefits. In recent years due to the
demand for service level and commerciality, demand has
increased in the retail sector for ‘refreshed’ products in the
chilled section; this trend is now reversing, accelerated by the
high inflation of frozen raw material prices relative to fresh,
driven by demand from the Far East.
New product development has been restricted to process
development rather than added value. Seachill has invested in
new technology delivering yield benefits in a number of areas as
well as updating packaging technology in an attempt to mitigate
some raw material inflation.
Customer awareness regarding the wholesomeness of food has
heightened this year, with increased sales of organic products. In
fish sales, this was largely led by organic salmon, where Seachill
have seen their sales increase by 73% in volume terms.
The retail market is currently being driven by margin rather than
volume; this will hopefully change during 2007. Multi-sourcing
for competitive advantage continues to be a challenge. Farmed
cod specifically will most likely increase in acceptability in the
next few years as the wild-caught cod continues to suffer from
poor environmental credentials. Sustainability will continue to be
key, and this issue has to be addressed going forward in order to
protect market share.
Icelandic UK
The UK foodservice market for seafood remained relatively stable
in 2006 despite price increases on most species. Sea-frozen cod
fillets saw an average increase in price of almost 20%, compared
with 2005. This was mostly due to less supplies overall, mainly
noticeable through better control of illegal fishing. Although the
UK market strongly favours cod and haddock as the main species
for consumption, market players are starting to take to other
cheaper alternatives, thereby helping to recoup some of their
falling margins. This is noticed even in the biggest market sector
in food service, “Fish and Chips”. Cold- and warm water prawns
continue to feature highly in IUK’s sales but the market showed
an increase in demand on the warm water front but somewhat
reduced consumption in coldwater prawns.
Icelandic UK managed to improve its results over 2005, but many
challenges lie ahead for 2007. By the end of 2006 the company
moved to Grimsby and will, as well as continuing with existing
trade, take on new tasks in selling more value-added products
into the UK food service market. To manage that task well, the
company’s sales force has been strengthened.
Seachill - turnover in million GBP Icelandic UK - turnover in million GBP

Germany
German consumers are eating more fish. The average per capita
consumption increased from 13.8 to 14.8 kg, and a further
increase to 15 kg in 2007 can be assumed. This may be partly due
to the many food scandals, such as BSE, swine fever, avian flu, or
just due to the stimulation of demand by the variety and quality
of seafood products. It is becoming more and more apparent that
consumers are looking for added value fish products. Seafood is
mainly sold as deep frozen product, namely via hard discounts
(49% in quantity) and supermarkets (36% in quantity).
Pickenpack Hussmann & Hahn Seafood GmbH is involved in the
production and sale of deep-frozen fish and caviar. The main
products are still fish fingers, both breaded and batter dipped,
and products with toppings, where the market share is 26% in
Germany.
Total production of finished goods in 2006 was about 64,000
tons, a little less than planned. The reason was the market
situation being coloured by a warm summer and raw material
prices increasing, which led to temporarily reduced volumes. The
price of the main raw material, Alaska pollock, increased by 10%,
and alternative raw materials were hardly available. Due to
aggressive offers in the competitive market, the additional cost
was not fully absorbed in the product’s price.
In 2007, growth in Germany is essentially expected from the
launch of new products. In 2006 Pickenpack H&H succeeded in
establishing the product range “Fine Food” on the German
market (produced by Coldwater Seafood, UK). There will also be
an increase of volume due to the transfer of production from
Pickenpack Gelmer and Coldwater and the full-year effect of the
trading department (formerly Icelandic Germany), which was
totally integrated into Pickenpack H&H in 2006. After some
difficult months in the beginning, the company succeeded in
providing a basis for further business. Due to good cooperation
with its big retail trade partners in Germany, Pickenpack H&H will
continue to gain ground in this business segment as well.
The export activities of Pickenpack H&H amounted to € 58
million, a share of 32.5% of the entire company turnover.
Compared with 2005, the export team achieved an increase
of 3.5%.
The UK’s fish and seafood industry is enjoying strong growth,
benefiting from the consumer’s focus on healthy eating and
convenience. Fish grows in popularity and goes head-to-head with
red meat. Fish is a firm favourite, but traditional choices still
dominate.
A drop in supply and a significant increase in the price of cod, the
most popular species of whitefish in the UK, prompted a proposed
switch to Alaskan Pollock. New product ideas and necessary
innovations (like the steam concept) will make the UK a major
potential market also in 2007.
In France Pickenpack H&H sells to all the major retailers as well as
to almost all discounters. In 2006 there was an 8% increase in
turnover, with a decrease in volume of 1.5%. Necessary price
increases were already achieved in the first half of 2006 and were
continued in the second half to show a positive effect in 2007.
In spite of a difficult market situation in the Netherlands,
Pickenpack H&H was able to keep all its customers while achieving
the same volume as in 2006, but with a decrease of 17% in
turnover.
In Italy, Pickenpack H&H saw an increase of 11% in volume and
31% in turnover. The big sellers in the frozen fish sector are the
basic lines, such as fish fingers (mainly minced material), breaded
portions and cotolette di mare.
At the end of 2006, and based on rocketing raw material prices,
Pickenpack H&H succeeded in increasing sales prices. Due to the
lack of fish material, high prices as well as higher costs of energy
and packaging material, the company will be obliged to continue
along that route in 2007.
27

France
The seafood market in France was a dynamic one in 2006, characterised by increasing
demand, price increases and growing scarcity of some raw materials. Icelandic France
was able to source the raw materials in demand or substitute other species. Elaborated
products, such as ready meals, showed good growth in the marketplace in general.
The operational results in 2006 were unsatisfactory and far below plan for a number
of reasons. Turnover is being reduced from the year before as a result of refocusing
the efforts on special, strategic products and customers. At the same time, measures
were taken to reduce stock levels, reform stock management and improve the margin
of low-yielding products. Company overheads are being attacked by merging the
offices in Paris, Evry and Marseille and reducing staff. It is estimated that the full
results of the measures taken will be evident in the second quarter of 2007.
Pickenpack Gelmer entered the group at the beginning of September 2006. The
former frozen Division of Delpierre was the leader on the French private label market.
The position of Icelandic Group is now strong on the market, with the combined force
of Pickenpack Gelmer, Icelandic France and Pickenpack H&H. The main market sectors
for the company are retail, including home service, and freezer centres and the food
service market. Retail and home service account for about 50% of the turnover and
food service for about 30%; other markets, including export from France, generate
about 20% of the turnover.
During the first four months of Pickenpack Gelmer’s operation, the main focus was on
increasing sales prices to compensate for increased raw material prices as well as on
the transfer of production from the Coldwater plant in Grimsby to the factory in
Wimille. A total of 10,000 tons of production will be transferred. The start-up of UK
production in France will be finished during the first quarter of 2007. After this
transfer the UK market will be as important for Pickenpack Gelmer as the French
market is today.
Icelandic Europe
Icelandic France - turnover in million EUR
29

30
Icelandic Iberica - turnover in million EUR
Spain
The year 2006 was favourable for Icelandic Group in Spain. Sales surpassed 19,000
tons, and the total turnover of Icelandic Iberica and its subsidiary Ecomsa amounted to
€ 91.7 million, representing 6% internal growth from 2005.
Icelandic Iberica has a strong position on the Mediterranean food service market.
The main market is Spain, but sales to Italy, Portugal, and Greece are significant. The
company has a staff of 120 and operates sales offices and/or production/distribution
outlets in Barcelona, Malaga, Seville, Madrid, Vigo, Valencia and Genoa, Italy.
It has a large customer base of about 800 that are specialized in distribution to
restaurants and hotels. Icelandic Iberica S.A. is the market leader in sales of light
salted cod products from Iceland and very well known for its ICELANDIC brand quality
products.
In recent years the company has increased its product range to include seafood from
all over the world. Today, approximately 50% of the company’s purchases come from
the North Atlantic, and the other half comes from such distant seafood sources as
South America, Oceania, Asia and Africa. This is necessary to be able to meet
customer demand, regarding not only product quality but also supply stability for the
current product range and new product development.
In 2006 Icelandic Iberica launched several new products, such as light salted saithe
fillets and portions from the North Atlantic, green shell mussels from New Zealand and
warm-water shrimp from Ecuador.
In general, the supply of seafood was short in 2006, and the prices of many important
species increased steeply. Icelandic Iberica has excellent relationships with its key
suppliers in Iceland, and it enjoyed an 18% increase in the supply volume from Iceland.
Ecomsa is a subsidiary of Icelandic Iberica. The company is located in Malaga and
operates in the region of Andalusia, which is the most populated region in Spain.
Ecomsa is specialized in seafood distribution to hotels and restaurants in the tourist
area of the Costa del Sol. The main operation is located in the city of Malaga where
the company has its central cold store and packing facilities. The company operates its
own fleet of trucks, serving more than 2,000 customers. The main products of Ecomsa
are white fish, such as kingklip and cod, cephalopods, such as squid and cuttlefish,
and crustaceans, such as warm-water shrimp, lobsters and scampi.

Denmark
Icelandic Scandinavia ApS is a holding company covering the Danish operations that in
2006 consisted of Jeka Fish AS. Jeka Fish specialises in the production of salted
products, mainly wet-salted cod fillets, and the main markets are in Southern Europe,
with Italy being the most important market.
Jeka Fish has been the single largest producer of wet-salted cod fillets in the world for
the last decade. The consumption of salted fish is based on an old tradition. The
overall market size is rather stable. The majority of the products is still traditional, but
they are slowly being adjusted to the demand for more convenience, which can be an
opportunity to increase consumption. The markets are rather fragmented, and Jeka’s
customers are importers that add value to the fillets by further processing and/or
distribution.
Jeka Fish’s production of chilled cod increased substantially in 2006. It counted for
17% of the turnover in 2006, after being zero in 2004. The main markets are in
Central and Northern Europe. This part of operations is expected to continue to grow.
Jeka Fish imports all raw materials for processing, the majority from the Pacific Ocean
and the rest from the Barents Sea. Raw material markets for whole white fish are
becoming more and more global. The overall supply is less, while demand has remained
strong. This has resulted in increased prices. The processing business is consolidating,
resulting in fewer but stronger competitors. For Jeka Fish it is important to adjust
operations accordingly.
2006 was a year of change for Jeka Fish. Icelandic Group acquired the company on 1
April, and at the same time, Jeka Fish finalised its acquisition of Atlantic Cod, one of
its main competitors. The process of merging with Atlantic Cod took a lot of effort in
2006, but it was an important step for the future as the company is now in a better
position to further develop operations. The Atlantic Cod factory is located just across
the road (40 meters), and the main focus has been on rationalising the operations in
the merged company. This will still be one of the main issues in operations in 2007,
which will better ensure the Company’s future competitiveness.
The results of the operations in 2006 were in line with plan, which is an achievement
in itself, taking into account the trend of raw material prices as well as the merger
process. The environment in 2007 seems to be similar to that in 2006. Raw material
prices are still extremely high. The turnover of Jeka Fish is expected to grow, and the
operational results are expected to be similar to those in 2006.
Icelandic Europe
31
31

Icelandic USA & Asia
Icelandic USA & Asia is the other main arm of Icelandic Group. As the name suggests,
it covers all operations in North America and Asia. In addition, Icelandic Norway, and
Marinus in Iceland belong to the arm, mostly due to strong sourcing ties. The CEO of
Icelandic USA & Asia is Ellert Vigfússon.
North America
Record-breaking and continuing raw material price increases, short supply and a weak
US dollar were the biggest challenges for the North American operations in 2006.
That plus merger-related activities and restructuring of Ocean to Ocean resulted in
disappointing results for Icelandic USA Group. The first quarter was on budget in terms
of sales and margins. The second quarter proved to be the most difficult for the
Ground Fish operations, as sales traditionally slow down after Lent, and the Company
was burdened with an unusual cost structure as products were being shipped out of
three locations (Cambridge, Everett and Newport News). Inventory had to be trucked
at added cost to all locations to keep customers supplied. This was done while a new
distribution centre was being built in Newport News. At the end of June, Icelandic
sold its Everett freezer facility and opened a new distribution centre in Newport News.
This new facility is 140,000 square feet with 22,000 pallet locations. The new
distribution centre operates 7 days a week, 24 hours a day. For the year, sales and
margins for ground fish were on plan, but cost-related to merger activities, like
warehouse consolidation, was greatly higher than planned.
Ocean to Ocean’s results for 2006 were disappointing as the shrimp industry struggled
to make the needed margins. The board of directors decided in March that further
restructuring was needed, and as a result the manpower for US operations was cut in
half and moved into a smaller office space in Virginia Beach. In June the CEO of OTO
stepped down, and all management was moved under Canadian management out of
the Montreal office. The focus was on cutting costs and lowering inventory. The new
management of OTO made great strides in that direction, but more work is being done
to change this operation from a commodity to a value-added orientation, where
margins are higher, and Ocean to Ocean’s profitability will therefore increase.
With the cost of raw materials increasing and no relief in sight, it was clear that the
ground fish business of Icelandic USA, Inc., with its cost structure, could not produce
the expected returns. It was clear that the cost structure of the Cambridge plant was
vastly different from the Newport News plant, and tremendous investments were
needed to get the aging plant up to standard. The Board of Directors therefore
approved moving all Cambridge’s production to Newport News and closing the
Cambridge plant in 2007. In December negotiations were started with the local union
and other employees, which ended in a settlement on 15 December 2006. The plan is
Icelandic USA - turnover in million USD
33

34
Icelandic USA & Asia
to run both plants through the first quarter of 2007. In April the
Cambridge plant will shut down all but one line that will remain
open to fulfil a contract obligation. All operations will be closed
at the end of December 2007.
The focus in 2007 will be on selling only items that will enable
the company to achieve the needed margins. It will relinquish
some low-margin accounts to accommodate all of the quantity
that will come to Newport News after the closing of Cambridge.
Thus 2007 will not be a year of extravagant new product
launches but rather a year to ”right size” the product offerings
and “right size” the customer base.
The company did not have the proper inventory of finished
goods nor fillets going into Lent 2006, and sales suffered as a
result. This year a finished goods inventory has been built up,
and there are very decent inventories of fillets from around the
globe. This will help with the year over year sales comparison.
Better topline sales are expected and, more importantly, better
margins from the Foodservice Distribution department. That
trend will likely continue as well, and the strength of the biggest
business unit, namely Foodservice Distribution, will be regained.
National Accounts, the second biggest business unit, grew their
business by 12% over 2005. Some key new accounts will be
added for 2007, most notably Red Robin, with over $ 5 million in
Asia
2006 took off with huge price increases for raw material. It took
some time to pass the increases through to the customers,
resulting in margin cuts until this could be levelled out late in the
year.
The markets in Asia were fairly stable in terms of species, and no
drastic changes are expected. Due to the best part of Asian sales
being headed and gutted raw material, the price increases went
straight through to the customers. However, the Company
intentionally reduced its trading activities in Asia due to the low
margins and high raw material prices. Primary processing
increased regarding both quantity and species, and this is where
growth along with value-added processing is expected.
In terms of sales and margins Asia was in line with budgets.
sales expected, and few accounts have been surrendered due
to pricing.
As for retail, there was 8% growth in 2006, and for double
digits are forecast for 2007. There was a breakthrough year
with Costco Club Stores, where five new items were placed
into all stores, with expectations for good business in 2007,
and ALDI continues to develop as one of the top accounts in
the entire company.
A Sales and Marketing agreement with Marlees scallops was
entered into that will produce $ 16 million in topline revenues.
The 2007 operations will be dramatically improved over the
last two years as most of the merger-related activities are past.
Estimated sales for ground fish are $ 360 million and shrimp
sales for Ocean to Ocean are estimated to be $ 111 million, for
a total of just over $ 470 million.
The North American industry is consolidating through mergers
and acquisitions, and this is expected to be the trend in the
coming months and years. After a costly merger between
Icelandic USA and former Samband of Iceland Corporation,
Icelandic USA Inc. is in a strong position, with a strong brand
name, to move forward in the coming years as a leading
company in its sector, providing value to its customers and
shareholders.
The formal opening of an extension to the Three Star factory in
Dalian, China was an important event for the Company. The
factory was acquired in 2005 to put new technology in place
and increase the value-added processing. Another important
fact going forward is that there is full control of the factory
and how it operates. There is control of how and when new
technology is installed, and it will be possible to put more
effort into research and development and to dedicate
processing lines to valued customers.
The factory will employ about 1,000 workers and process
annually up to 15,000 tons of finished products. This will save
costs as processing in China will be more consolidated. It will
also be easier to enter the Chinese domestic market with valueadded
products.

For the last two years the Group has been developing a retail line with the Blue Ice
brand in the Scandinavian market in cooperation with the company Andreasen Sales.
Last year this project took a huge leap, and the quantity increased considerably. This
trend is likely to continue in 2007.
The outlook is for growth in primary processing in Asia in the years to come, and the
production of value-added products is also expected to increase considerably in 2007
and onwards. Over the next five years, the sales growth in Asia is expected to be
around 6-7% annually.
Japan
The sales were influenced by lower volumes of capelin products from Iceland due to a
poor season in general. This was met with an increase in the sales of redfish and
Greenland halibut. In total sales grew by 3% even though the market situation was
not very favourable, with price increases high enough to affect demand. This situation
also affected the operational results, which were below plan.
The company has entered new market segments, with accompanying expenses and
lower margins. Traditionally, Icelandic Japan has sold its products for further
processing in the Asian countries. Lately, the emphasis has shifted somewhat towards
increased production and sale of processed seafood, mainly for the food service
sector. Nonetheless, the traditional products, such as headed redfish, Greenland
halibut and whole frozen capelin, herring and mackerel, will continue to be the
foundation of business looking forward.
The Japanese market for food will continue to be very competitive; the consumers
want to spend less of their income on food. Icelandic Japan is ready to meet increased
competition. It has a long-standing reputation, and it offers both popular species and
good service to its customers.
Marinus in Iceland works in close cooperation with Icelandic Japan by taking care of
sourcing activities of many species for its sister company. It specializes in the North
Atlantic species intended for the Asian market, such as redfish, Greenland halibut and
capelin, but it also gets involved in totally different species: Nile perch from Africa and
salmon from South America. The company had a good year with record sales
increasing 16% year on year.
Icelandic Japan - turnover in billion JPY
35

36
Sales by geographical location
Sales by market segments
Financial review
Net sales
Net sales in 2006 amounted to € 1,471 million which is an increase of 23% compared
with 2005 sales of 1,200 million. Growth in sales is all external and is mostly due to
the acquisition of Pickenpack H&H, Icelandic Scandinavia and Pickenpack Gelmer.
Despite the fact that on Group level all growth is external, all the UK growth is
organic, amounting to 6%. The growth in the UK is mostly due to increased sales of
fresh/chilled products from Seachill to the retail chain Tesco.
Most of the Group’s income originates from production companies, 73.8% compared
to 65.9% in 2005. Income from the sales and marketing companies constituted 24.3%
compared to 33.0% in 2005. Income from holding and service companies constituted
1.9% compared to 1.1% in 2005.
Operating expenses
Profit before financial items totalled € 5.5 million compared to € 2.4 million in the
previous year. Items that the company considers to be one-off expenses totalled € 17.1
million during the year. EBITDA as a proportion of sales was 2.5% compared to 1.4% in
2005. Considering the one-off expenses the EBITA as a proportion of sales would be
3.7%. € 31.5 million was charged as depreciation during the year, as compared to
€ 14.0 million in 2005. The change between years is mostly due to the impairment in
the USA
Share of profit of equity accounted investees
Share of profit of equity accounted investees amounted to € 0.7 million compared to
€ 0.2 million in 2005.
Financial expenses
Financial expenses increased by 10%, totalling € 24.0 million, as opposed to € 21.7
million in 2005. € 2.3 million was recognised as income due to fair value changes on
shares in other companies compared to a charge of € 3.4 million in 2005. Currency
gain amounted to € 5.9 million compared with € 0.4 million in 2005.
Income tax
Income tax income during the year 2006 amounted to € 7.1 million compared to 4.2
million in 2005. This is equivalent of an effective tax rate of 38.4%. In 2005 the
effective tax rate was 21.9%.
Results for the year
Loss for the year totalled € 11.4 million, compared to a loss of € 15.1 million in 2005.
EBITDA totalled € 36.9 million, compared to € 16.2 million in 2005.
Icelandic USA Inc., subsidiary of Icelandic Group, has decided to close the company’s
Cambridge, Maryland, production facility by year end 2007. The decision to close the
plant is based on its ability to fill projected product manufacturing and distribution
needs using the company’s Newport News, Virginia, production facility and a newly

completed distribution center also located in Newport News. Looking to the future,
the closure is expected to provide critical production and distribution efficiencies.
Due to the closing of the factory in Cambridge, € 12.7 million is charged to the income
statement. The closing will result in a much improved cost structure for Icelandic USA.
The production of frozen products has been transferred to Pickenpack Gelmer, France,
from Coldwater Seafood UK in Grimsby, which from now on will specialise in the
manufacture of chilled and frozen ready meals. Due to the restructuring of Coldwater
€ 1.6 million has been charged to the income statement.
Icelandic France SAS has gone through a restructuring process in the year 2006.
The company had three offices in France; in Paris, Evry and Marseille. A decision was
made to close all offices and move the operation solely to Paris. Cost due to the
closures as well as inventory write down amount to € 2,8 million in the year 2006.
Loss per share
Basic loss per share amounted to € 0.0040 compared to a loss per share amounting to
€ 0.0075 in 2005.
Assets
The Group´s total assets amounted to € 906.8 million at year end 2006 compared with
€ 690.4 million at year end 2005. The increase is mostly a result of the acqusition of
companies.
Property, plant and equipment totalled € 124.4 million at year end compared to € 85.0
million and increased by 46.3 % from the beginning of the year mostly due to the
acquisition of Pickenpack H&H
Intangible assets totalled € 256.1 million at year end compared to € 171.0 million.
According to International Financial Reporting Standards (IFRS), goodwill should be
tested at least annually for impairment. Goodwill suffered no impairment losses.
Current assets totalled € 499.5 million. Of that total, inventories totalled € 299.2
million, as opposed to € 238.6 million at the beginning of the year. Current ratio was
0,99 compared to 0.96 in 2005.
Liabilities
Total liabilities amounted to € 730.5 million at the end of 2006, compared to € 573.7
million in the beginning of the year. Net liabilities (total liabilities less current assets)
amounted to € 231.0 million, in comparison with € 158.5 million at the beginning of
the year. Interest-bearing borrowings totalled € 562.2 million at year-end, but € 434.1
million at the beginning of the year. At year-end, 39% of the interest-bearing
borrowings was in EUR, 25% in US dollars, 23% in pounds sterling and 13% in other
currencies.
Net profit (loss) in million EUR
EBITDA in million EUR
37

38 38
Financial review
Equity ratio
Return on equity
Equity
At the end of 2006, equity amounted to € 176.2 million, compared to € 116.7 million
at the beginning of the year. In March 2006, the share capital was increased by 585
million shares in connection with the acquisition of Pickenpack Hussmann & Hahn
GmbH, 135 million with the acqusition of Saltur Holding Aps and 5 million shares with
the acqusition of Mat Pacific. The equity ratio was 19.4% at the end of 2006, but
16.9% at the beginning of the year. The number of shares at the end of the year 2006
numbered 2,893 million. The market value of the company at year-end 2006
amounted to € 233.1 million compared to € 279.4 million in 2005. Share prices of
Icelandic Group decreased by 20.8% during the year 2006 in Icelandic kronas.
Statement of Cash Flows
Cash used in operations before taxes and interest payments totalled € 14.7 million, as
opposed to € 40.3 million from operations before taxes and interest for the previous
year. After payment of interest and income tax, cash used in operations totalled € 42.8
million, while the previous year yielded a total of € 18.5 million of net cash from
operations. Net investment activities totalled € 12.6 million. Net cash provided by
financing activties totalled € 48.2 million. Cash and cash equivalents at the end of the
year totalled € 21.2 million.
Investments in 2006
Icelandic Group acquired Pickenpack-Hussmann & Hahn Seafood GmbH at year end
2005. Icelandic Group took control over Pickenpack-H&H operations on 1 January
2006. Purchase price amounted to 78.8 million paid with 585 million shares in
Icelandic Group.
Icelandic Group acquired all the shares in Saltur Holding ApS, Denmark, which owns all
the shares in Jeka Fish A/S, also in Denmark. The name of Saltur was changed to
Icelandic Scandinavia ApS. The acquisition price was paid 135 million shares in
Icelandic Group equivalent of € 13.4 million. Icelandic Scandinavia is a part of
Icelandic Group’s consolidated financial statements as of 1st of April 2006.
Icelandic Group Plc. issued 5 million new shares in exchange for the operations of MAT
Pacific in Seattle USA. The operation of Mat Pacific was taken over by a newly
founded Company in Seattle, Icelandic Northwest Inc., where Icelandic Group owns
85% of shares. Icelandic Northwest is a part of Icelandic Group´s consolidated financial
statements as of May 2006.
On 13 July 2006 Icelandic Group acquired plant premises, equipment, current assets
and business contacts of Delpierre frozen division (previously Alfesca now Pickenpack
Gelmer SAS). The acquisition price was € 13.7 million. Formal takeover of the plant was
4 September 2006 and the company is included in Icelandic Group’s consolidated
financial statements from that date.

Operational prospects
Following the acquisition of the Pickenpack Gelmer plant in France work is on the way
of restructuring Icelandic Group’s manufacturing operations in Europe. The production
of frozen products has been transferred to France from Coldwater Seafood UK in
Grimsby, which now specialises in the manufacture of chilled and frozen ready meals.
The Icelandic Group plants in Germany and France will be responsible for frozen fish
products, and the output of the French plant will be increased from 17,000 to 26,000
tons in the first stage. On the whole, Icelandic Europe’s plants will produce over
100,000 tons of frozen products.
Icelandic USA Inc. will close the company’s Cambridge, Maryland, production facility
by year end 2007. The decision to close the plant is based on its ability to fill projected
product manufacturing and distribution needs using the company’s Newport News,
Virginia, production facility and a newly completed distribution center also located in
Newport News. Looking to the future, the closure is expected to provide critical
production and distribution efficiencies. The closing will result in a much improved
cost structure for Icelandic. Annual improvement in EBITDA is estimated at € 11
million to be fully realized in the year 2008.
Icelandic France took drastic measures during the second half of the year to improve
future performance. The turnaround involves reduction in inventory, relocation of all
the company’s operations in Paris and severance agreements with former employees
were expensed over the year.
A number of companies within the Group performed well during the year, such as
Icelandic Iberica, Jeka Fish, Icelandic Asia, Seachill, Icelandic UK, Icelandic Norway and
Fiskval. The Company management is optimistic as regards these companies will
continue to perform well.
39

Corporate governance
Icelandic Group Plc. is controlled by shareholders’ meetings, the
company’s Board of Directors, its CEO and the Executive Board.
Final authority in all company dealings, within the limits set by its
Articles of Association and national law, rests with a duly
constituted shareholders’ meeting.
Emphasising good governance
The Board of Directors of Icelandic Group emphasises good
corporate governance, as outlined in the Guidelines on Corporate
Governance issued by OMX Nordic in Iceland, the Icelandic
Chamber of Commerce and the Confederation of Icelandic
Employers. The Board has adopted internal rules defining the
respective tasks and authority of the Board and of the CEO. They
include rules on meeting procedure, on the eligibility of Board
members to participate in dealing with specific issues, on
confidentiality, the disclosure obligations of the CEO towards the
Board, etc. The Board’s rules make specific reference to
regulations on insider trading and the treatment of inside
information, as provided for in the Act on Securities Transactions,
Guidelines of the Financial Supervisory Authority and the
Company’s internal rules. The Board’s rules also contain detailed
provisions on information disclosure to the Board cf. Section 2.3
in the 2nd edition of the Guidelines on Corporate Governance
issued by OMX Nordic in Iceland, the Iceland Chamber of
Commerce and the Confederation of Icelandic Employers.
Board of Directors
The company is controlled by a five-member Board of Directors,
elected each year at the company’s Annual General Meeting. The
Board elects a Chairman and Vice-chairman and divides
responsibility for other tasks between members as deemed
necessary. The Board has supreme authority in the company’s
affairs between shareholders’ meetings, setting the company’s
operating objectives with its interests and those of its
shareholders in mind, in accordance with the company’s purpose.
The Board engages the CEO, determines his/her terms of
employment and provides a formal statement of his/her duties.
From October 2005 until March 2006, the Chairman of the Board
of Icelandic Group fulfilled the CEOs responsibilities. As this
arrangement was regarded as only temporary, Björgólfur
Jóhannsson was engaged as CEO of Icelandic Group in March
2006.
A minority of the Directors is independent of the Company as
specified in Section 2.6 of the 2nd edition of the Guidelines on
Corporate Governance issued by OMX Nordic in Iceland, the
Iceland Chamber of Commerce and the Confederation of
Icelandic Employers. The Board of Directors of Icelandic Group
has no subcommittees.
In view of the above, corporate governance at Icelandic Group
does not fully comply with the Guidelines on Corporate
Governance.
Board meetings
Board meetings are generally called by the Chairman of the Board
but can be convened at the request of any director or the CEO. It
may be held by electronic communications or telephone. The
meetings are presided over by the Chairman or alternatively the
Vice-Chairman. The proceedings and all decisions are recorded in
the minutes and signed by those attending the meeting. In 2006
the Board of Directors convened 14 times.
Responsibilities of the Board
The Board is responsible for the overall management of the
Group, and it ensures that the activities of the Group comply
with good practice. The Board has adopted written working rules
specifying its responsibilities.
The Board’s tasks and responsibilities include:
– Setting the Group’s strategy and goals and approving budgets
– Engaging the Group’s CEO and determining his/her salary
– Monitoring the work of the CEO
– Monitoring company performance against set goals
– Setting criteria in governance issues
– Overseeing risk management issues
– Approving financial statements of the Group
Responsibilities of the Chairman
The Company’s Board set operating rules for itself in June 2003.
Each year, at the conclusion of the AGM, the Board divides its
tasks and elects a Chairman and Vice-Chairman. The Chairman of
the Board speaks and acts on the Board’s behalf regarding the
Company’s affairs. He also acts on the Board’s behalf in respect
of the CEO. The Chairman decides when Board meetings shall be
held and directs these meetings, or the Vice-Chairman in the
Chairman’s absence. The Chairman sees to it that a book of
minutes is kept about what happens at Board meetings and
about the Board’s decisions.
41

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Remuneration of the Board of Directors
A new Board of Directors was elected at Icelandic Group’s AGM
on 23 March 2006. The same AGM approved a motion determining
the monthly remuneration to each Director of ISK 100,000 for
the coming operating year and double that amount for the Chairman.
Alternates receive ISK 30,000 for each meeting they attend, up
to a maximum of ISK 100,000 per month. No extraordinary transactions
have taken place between Icelandic Group and its Directors.
Directors hold no call or put options on the Company’s shares,
nor have they received loans or guarantees from the Company.
Executive Board
At the end of October 2005, Icelandic Group announced
restructuring measures. The main change was the division of
the Group’s overseas operations into two units, Icelandic USA
& Asia and Icelandic Europe. Icelandic USA & Asia took over
operations in the US and Asia and related activities in Iceland.
Ellert Vigfússon was appointed CEO of Icelandic USA & Asia.
Group activities in Europe are the purview of Icelandic Europe.
Finnbogi Baldvinsson was engaged as CEO of Icelandic Europe in
January 2006.
As of 1 January 2006, a four-person Executive Board took over
the direction of Icelandic Group. It is responsible for the Group’s
daily operations and reports directly to the Board. The Executive
Board now consists of the Group CEO and the two CEOs of
Icelandic Europe and Icelandic USA & Asia.
Tasks of the CEO
The CEO oversees day-to-day operations and ensures that they
meet the strategy and policy set out by the Board. The CEO
chairs the board of most subsidiaries and is responsible for their
operations complying with the Group’s policy, goals and
standards. Decisions on major issues need the approval of the
Board unless they are necessary to prevent the Group from
incurring losses. The CEO provides the auditors with appropriate
documents and information, as deemed necessary, and signs
financial statements together with the Board.
Annual General Meeting
The Annual General Meeting will take place on 23 March 2007 at
16:00 GMT at Hotel Nordica.
Shareholder Meetings
Shareholder meetings are the highest authority in the Group’s
affairs. The main shareholder meeting is the Annual General
Meeting, which is held once a year. All shareholders or their
representatives have the right to attend shareholder meetings.
The meetings are also open to the media and representatives of
the OMX Nordic Exchange in Iceland.
The Annual General Meeting in 2006 was held on 23 March. The
annual accounts for the year 2005 were approved, and it was
resolved that no dividend should be paid to stockholders for the
year 2005. The Board of Directors and auditors were elected, and
the Board’s remuneration was decided.
The results and other issues covered at shareholder meetings can
be viewed on the Group’s website: www.icelandic.is and on OMX
Nordic Exchange in Iceland, website: www.icex.is.
Auditing
An independent auditor is appointed annually by the
shareholders at the Annual General Meeting. At Icelandic Group’s
AGM on 23 March 2006, a motion was passed to tender auditing
for Icelandic Group, with the meeting authorising the Board of
Directors to select an auditing company following the tender. A
contract whereby KPMG were assigned as Group auditors was
signed in October. The auditors of Icelandic Group Plc. are KPMG
hf., 590975-0449, Borgartún 27, Reykjavík, represented by
Saemundur Valdimarsson and Alexander Edvardsson.
Remuneration paid to all Group’s auditors in 2006 was € 1.2 million.
Compliance
Icelandic Group Plc. complies with the Rules on Treatment of
Insider Information and Insider Trading (The Rules) issued by the
Financial Supervisory Authority. The Group employs a special
Compliance Officer, who is directly responsible to the CEO. The
Compliance Officer ensures that the Rules are adhered to, and
that they are regularly distributed and presented within the Group.
The Compliance Officer updates and maintains the register of
insiders, primary insiders and financially related parties. Primary
insiders are members of the Board, the CEO, the members of the
Executive Board, the CEOs of subsidiaries, the auditors and other
nominated persons in legal, financial and consulting functions. A
list of primary insiders can be viewed on the Financial
Supervisory Authority’s website: www.fme.is.
Insiders of Icelandic Group are not permitted to trade during
defined closed periods. The closed period begins four weeks
prior to an announced publication date for the next interim or
annual statements and lasts until the statements have been
published.

Risk management
The business environment, both operational and financial, encompasses a number of
risks. The purpose of risk management is to determine which factors are influential to
the Group’s success.
Market Risk
Icelandic Group manufactures products both under its own brands, which are sold to
restaurants, and products sold to retail chains under their private labels. The
operations can thus be said to rest on two main pillars, which together reach most
buyers on the market for seafood products. By selling to both these markets, the
company limits its market risk.
Market regions Icelandic Group’s largest markets in 2006 were the UK, which
accounted for 30% of the Group’s total turnover, the USA 25%, Asia 14% and
Continental Europe 31%.
Main product classes. In line with its growth in recent years, Icelandic Group’s
product line has expanded substantially, and the risk attached to sales in individual
product classes has decreased. In 2006 frozen fish comprised around 80% of the
products sold and fresh and chilled fish 20%.
Suppliers. Icelandic Group has grown rapidly in recent years. By broadening its
product line at the same time, the company has been able to offer its suppliers better
service by purchasing most of the products they have to sell. Icelandic producers were
traditionally at the core of the Group’s purchasing, providing a majority of its supplies.
In recent years, purchases from other countries have grown rapidly so that total
purchases are now more evenly spread over the continents. Of total purchases 24%
originate in Iceland, 28% in other European countries and 30% in Asia.
Inventories. Maintaining inventory is an integral part of the operations of the Group’s
sales and marketing companies. Ensuring that a varied selection of products is always
available for delivery on short notice is an important aspect of their service.
Management continually monitor the age and market value of inventories, which are
regularly assessed at real value.
Raw material prices. From a long-term perspective, gradual fluctuations in prices on
raw material markets have little effect on Icelandic Group’s operations. By cooperating
closely with parties on the retail and restaurant markets, prices for the
Company’s products are adjusted to the market situation. Sudden price changes, on
the other hand, can have a substantial impact on the performance of individual Group
companies, especially if these companies have large inventories.
Quality assurance. Icelandic Group emphasises and demands that the products it
sells fulfil the quality standards adopted by the Group. To enforce its quality and
purchasing standards, Icelandic Group has an extensive database system which is
accessible on the Internet to its subsidiaries and producers. Icelandic Group also does
its utmost to ensure that its service to customers is exemplary. By doing so, the Group
can maintain its strong position on its markets.
43

44
Currency Risk
Currency risk is risk resulting from currency fluctuations, which
can substantially affect Icelandic Group’s operations. As a result,
hedging currency risk is an important aspect of Icelandic Group’s
operations. The Group’s strategy is to limit currency risk by
ensuring that the currency composition of the assets and
liabilities of individual Group companies reflects their cash flow
from operations. Interest rates on part of the group’s long-term
liabilities have been fixed by concluding swaps with credit
institutions. From 1 January 2006, Icelandic Group adopted the
Euro as its reporting currency instead of the Icelandic krona. The
change primarily reflects the fact that the Group’s operations in
Iceland are a minor part of its total operations. The company uses
derivatives to hedge the interest rate and currency risk in the
Group’s operations and from its financing. Forward contracts are
concluded to hedge currency risk arising from business in foreign
currencies, and interest rate swaps, converting variable to fixed
interest rates, to hedge the company’s interest rate risk.
Management and Personnel Risk
Management risk is the risk involved in the management,
organisation and expertise within the Company. Icelandic Group
emphasises the administrative independence of its subsidiaries
and divisions, decentralisation and clearly demarcated
responsibility of managers of individual subsidiaries and divisions.
Icelandic Group has highly capable employees, with extensive
knowledge of the Company’s various operating sectors. The
company endeavours to hire suitably qualified and well-educated
employees.
Icelandic’s subsidiaries operate in 13 countries, all of which vary
in terms of employment environment. In each country, Icelandic
Group has at its disposal both expertise and experience of the
national culture, labour market and relations with trade unions.
Legal Risk
Laws and regulations adopted by public authorities on fisheries
management and customs duties can have a substantial impact
on the Company’s performance. Government regulations on
fisheries management are intended to encourage rational
exploitation of fish stocks and may thus limit allocated catch
quotas, which make a decisive difference in acquiring raw
material. Thus, a change in the allocation of catch quotas and
limits on or elimination of their transfer could have a decisive
impact on the operating premises for fisheries companies.
Decisions by governments in individual countries to which
Icelandic Group exports to levy protective duties can also
substantially affect the company’s performance.
Icelandic Group has to face the risk of dissatisfied customers and
consumers bringing legal suit against the company. The company
could also face litigation resulting from violations of health,
pollution or environmental regulations, or other laws and
regulations which may apply in each location where companies in
the Group have their activities. The company could also face
litigation due to disputes with employees or their organisations,
for instance, concerning unlawful dismissals, discrimination
between employees, etc. It is difficult to evaluate these risk
factors and their possible magnitude. An unfavourable verdict in
connection with the above could have a considerably negative
impact on the Icelandic Group’s reputation and performance.
Icelandic Group and its subsidiaries are not involved in litigation
which could have a substantial impact on the Company’s
performance, financial position or value. The Company is not
faced with risk factors concerning patents, trademarks,
production methods, business contracts or loan contracts.
Insurance
In addition to all mandatory insurance, Icelandic Group has
transport insurance for the Group covering transport from
primary producers to buyers or plants. Products being processed
by primary producers are also insured. All goods in warehouses
are insured. The usual insurance also covers employees and
management. The manufacturing plants have all the normal
insurance, as well as product liability insurance. Credit insurance
is used on many markets, especially where the customers consist
of small companies. The insurance will normally cover around 85-
90% of the relevant receivables.

Corporate responsibility
Fishery management and sustainable fisheries
In laying down its principles for fishing and fishery management, Icelandic Group takes
note of the FAO Code of Conduct for Responsible Fisheries (1995), and the
international laws and regulations, which the Icelandic government has ratified.
Icelandic Group endeavours to base its business on the sale of products from stocks of
fish, utilised in a sustainable and responsible manner, by means of a proper fishery
management system. This shall be based on scientific assessment, and administered
by governmental or inter-governmental bodies. Icelandic Group will collect data to the
effect that the part of its business, which is based on international sources, also
conforms to these considerations, while taking into account the different fishery
management systems in many parts of the world.
Icelandic Group will take special care not to encourage production or sell products of
endangered species. It will not sell products of protected species as specified by
scientists, and by the legislation of nations, and the international organisations, to
which Iceland is a party. This applies to fishing within the Icelandic EEZ, in
international waters, and in areas under the jurisdiction of other nations.
It is clearly against Icelandic Group’s environmental principles to trade with fish that is
caught from illegal, unreported and unregulated fisheries, but Icelandic Group is fully
aware that there may be sensitive raw materials involved in some areas of the world,
for example there are not always clear quota allocations in place for all fish stocks
exploited.
Wholesomeness of products
An important part of Icelandic Group’s activities is to ensure that fish products sold by
the company are wholesome, i.e., are of normal nutritional value and are free from
pollution, caused by microbial or chemical contamination.
The wholesomeness of seafood products is best secured by means of a clean marine
environment and good manufacturing practices, which include correct sanitation
procedures in handling and processing and a thorough understanding of the factors
causing contamination of the product.
Icelandic Group is on guard against circumstances threatening the purity of fishing
areas and thereby the wholesomeness of the fish products, and for this purpose keeps
abreast of the work of Icelandic scientists and environmental specialists.
Icelandic Group emphasises that products sold by the company meet its uniform
quality standards, as detailed in the company’s product specifications. Icelandic
Group’s quality system also incorporates specifications for good manufacturing
practices, which are intended to prevent contamination by foreign material, as well as
chemical or microbial contamination.
All Icelandic producers for Icelandic Group have installed quality assurance systems,
based on Hazards Analysis Critical Control Point (HACCP) principles.
45

46
Health and safety
It is said that most accidents occur at home. The home is outside the jurisdiction of
Icelandic Group. When it comes to the working place, the Group strives to minimize
occupational illness and injuries among the employees. It is in our interest as well as
the employee’s to work towards this goal. Lost working hours due to illness or injury
will lead to higher costs, and the employee suffers.
In order to achieve its goals the Group companies monitor the number and origin of
accidents to be able to prevent them from recurring in a similar way. An active health
and safety policy is promoted throughout the organization, and the Group is
committed to promoting and preserving safe working conditions for all employees and
visitors for short or long periods.
Our customers
The Group plays an important role in the value chain to ensure that the chain does not
break. It must keep every link at full strength. Icelandic Group takes part in fishing and
primary production of seafood, and it further manufactures products into the form
required by restaurants or consumers. The Group represents a number of links in the
value-added chain.
The Group has built up long-term relationships with its suppliers and its customers.
Such relations are the core of a strong business model. The Group works with the
suppliers to produce in accordance with the quality standards established by the
Group to ensure that the customer and the consumer receive the wholesome and safe
product that they expect and deserve.
Our shareholders
It is of importance to provide shareholders as well as potential investors with equal
access to transparent information about corporate affairs and performance. The Group
issues its financial statement on a quarterly basis and follows up with investor
presentation in person and on its website. All events and news that could affect the
valuation of the company and its shares are announced to the stock exchange and
published on the Group’s website.
The Group issues an elaborate Annual Report, which is an important instrument of
communicating and sharing information with the shareholders, investors and, in fact,
all stakeholders. It gives a comprehensive overview of the many aspects of the
business and is valuable in facilitating a thorough understanding of the business and
the operations. A hard copy is available upon request, and the report can also be
downloaded from the Group’s website.

Financial Statements 2006
47

Endorsement by the Board of Directors and the CEO
Icelandic Group´s consolidated financial statements for the year 2006
have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by EU. The financial statements comprise
the consolidated financial statements of Icelandic Group Plc. (the
“Company”) and its subsidiaries (the “Group”), which were 33 at 31
December 2006. The financial statements of the Group are reported in
euro as of 1 January 2006.
Icelandic Group Plc. is a holding company for manufacturing and
marketing companies specialising in seafood on international markets.
On 1 November 2005 Icelandic Group Plc. purchased all shares in
Pickenpack-Hussmann & Hahn Seafood GmbH (Pickenpack), Germany.
Shareholders in Pickenpack received 585 million shares in Icelandic
Group Plc. equivalent to 21.25% of total shares in Icelandic Group Plc.
after the issue. Icelandic Group Plc. controlled Pickenpack´s operation
from 1 January 2006 and included the company in the consolidated
financial statements from that date.
Icelandic Group Plc. acquired all the shares in Saltur Holding ApS,
Denmark, which owns all the shares in Jeka Fish A/S, also in Denmark.
The acquisition price was paid with 135 million new shares in Icelandic
Group Plc. Atlantic Cod A/S merged with Jeka Fish A/S as of 1 April
2006. Saltur Holding ApS is a part of Icelandic Group´s consolidated
financial statements as of 1 April 2006. Saltur Holding ApS name was
changed to Icelandic Scandinavia ApS.
Icelandic Group Plc. issued 5 million new shares in exchange for the
operations of MAT Pacific in Seattle USA. The operation of MAT Pacific
was taken over by a newly founded Company in Seattle, Icelandic
Northwest Inc., where Icelandic Group owns 85% of shares. Icelandic
Northwest is a part of Icelandic Group´s consolidated financial
statements as of May 2006.
On 13 July 2006 Icelandic Group acquired plant premises, equipment,
current assets and business contacts of Delpierre frozen division
(previously Alfesca, now Pickenpack Gelmer SAS). The acquisition price
was € 13,650 thousand. Formal takeover of the plant was 4 September
2006 and the company is included in Icelandic Group´s consolidated
financial statements from that date.
The acquisition of the plant is part of a plan to restructure Icelandic
Group’s manufacturing operations in Europe. The production of frozen
products has been transferred to Pickenpack Gelmer from Coldwater
Seafood UK in Grimsby, which from now on will specialise in the
manufacture of chilled and frozen ready meals. Due to the restructuring
of Coldwater € 1,614 thousand has been charged to the income
statement.
Reference is made to note 6 concerning the effects of the investments
above on the balance sheet of Icelandic Group Plc.
Following a resolution at the Annual General Meeting of Icelandic
Group Plc. held on 23 March 2006 the audit of the Group and its
subsidiaries was submitted for tender. As a result KPMG was chosen the
sole auditor of the Group.
Icelandic USA Inc., subsidiary of Icelandic Group plans to close the
company’s Cambridge, Maryland, production facility by year end 2007.
The decision to close the plant is based on its ability to fill projected
product manufacturing and distribution needs using the company’s
Newport News, Virginia, production facility and a newly completed
distribution center also located in Newport News. The closure is
expected to provide critical production and distribution efficiencies. €
12,733 thousand is charged to the income statement due to the
restructuring.
Icelandic France SAS has gone through a restructuring process in the
year 2006. The company had three offices in France; in Paris, Evry and
Marseille. A decision was made to close all offices and move the
operation solely to Paris. Cost due to the closures as well as inventory
writedown amount to € 2,800 thousand in the year 2006.
Blue-Ice (Sjóvík ehf.) sold it´s share in a Russian shipping company
during the year 2006. Loss due to the sale amounts to € 1,516 thousand.
According to the income statement loss amounted to € 11.4 million for
the year The Group’s income amounted to € 1,481.9 million for the
year. According to the balance sheet total assets at year end amounted
to € 906.7 million and stockholders´equity amounted to € 176.2 million.
The equity ratio of the Group was 19.4%.
Shareholders at the year end numbered 21,122, up from 245 at the
beginning of the year. At the end of the year four shareholders held
over 10% of outstanding shares, they are:
Share
Landsbanki Luxembourg S.A., Luxembourg ....................... 22.55%
FAB GmbH, Germany ......................................................... 20.22%
Blátjörn ehf., Reykjavík ...................................................... 12.85%
Isp ehf., Reykjavík ............................................................. 12.35%
Magnús Thorsteinsson held 10.81% share at year-end, included in the
share of Landsbanki Luxembourg S.A. above, which acts as custodian
bank.
The Board of Directors proposes that no dividend will be paid to
shareholders. Reference is made to the financial statements regarding
deployment of net loss and other changes in equity.
The Board of Directors of Icelandic Group Plc. hereby confirm the
Company’s consolidated financial statements for the year 2006 by
means of their signatures.
Reykjavík, 1 March 2007.
Board of Directors:
Magnús Thorsteinsson
Jón Kristjánsson
Aðalsteinn Helgason
Baldur Gudnason
Steingrímur Pétursson
CEO:
Björgólfur Jóhannsson
49

50
Independent Auditors’ Report
To the Board of Directors and Shareholders of Icelandic Group Plc.
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial
statements of Icelandic Group Plc. and its subsidiaries (“the Group”),
which comprise the consolidated balance sheet as at 31 December
2006, and the consolidated income statement, consolidated
statement of changes in equity and consolidated cash flow statement
for the year then ended, and a summary of significant accounting
policies and other explanatory notes.
Management’s Responsibility for the Consolidated 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.
This responsibility includes: designing, implementing and
maintaining internal control relevant to the preparation and fair
presentation of financial statements that are free from material
misstatements, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates
that are reasonable in the circumstances.
Auditor’s 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 relevant ethical requirements
and plan and perform the audit to obtain reasonable assurance
whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on our judgement, including the assessment of the risks
of material misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, we consider 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
policies 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 opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair
view of the consolidated financial position of Icelandic Group Plc. as of
31 December 2006, 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.
Reykjavík, 1 March 2007.
KPMG hf.
Saemundur Valdimarsson
Alexander G. Edvardsson

Consolidated Income Statement for the Year 2006
The notes on pages 55 to 78 are integral part of these consolidated financial statements
Notes 2006 2005
Sales ................................................................................................................ 1,471,316 1,200,257
Cost of goods sold ........................................................................................... ( 1,316,606 ) ( 1,084,702 )
___________ ___________
Gross profit ................................................................................................... 154,710 115,555
Other operating income ................................................................................... 7 10,587 4,761
Operating expenses .......................................................................................... 8 ( 160,533 ) ( 118,057 )
Share of profit of equity accounted investees ................................................. 700 154
___________ ___________
Operating profit ........................................................................................... 5,464 2,413
Finance income ............................................................................................... 2,098 ( 2,014 )
Finance expenses ............................................................................................. ( 26,103 ) ( 19,726 )
___________ ___________
Net finance costs ............................................................................................. 13 ( 24,005 ) ( 21,740 )
___________ ___________
Loss before income tax ................................................................................ ( 18,541 ) ( 19,327 )
Income tax ....................................................................................................... 14, 15 7,118 4,235
___________ ___________
Loss for the year ........................................................................................... ( 11,423 ) ( 15,092 )
___________ ___________
___________ ___________
Attributable to:
Equity holders of the Company ............................................................... ( 11,373 ) ( 15,092 )
Minority interest ...................................................................................... ( 50 ) 0
___________ ___________
Loss for the year ..................................................................................... ( 11,423 ) ( 15,092 )
___________ ___________
Earnings per share:
Basic and diluted loss per share (each share is 1 Icelandic króna) ............ 31 ( 0.0040 ) ( 0.0075 )
All amounts are in thousands of euro
51

52
Consolidated Balance Sheet as at 31 December 2006
Assets:
Equity:
Notes 2006 2005
Property, plant and equipment ............................................................... 16-20 124,403 85,032
Intangible assets ..................................................................................... 21 256,077 171,043
Investments in equity accounted investees ............................................. 22 2,057 859
Other investments .................................................................................. 23 11,062 8,954
Bonds and other long-term receivables .................................................. 3,936 7,947
Deferred tax assets .................................................................................. 34 9,747 1,396
___________ ___________
Total non-current assets 407,282 275,231
___________ ___________
Inventories ............................................................................................... 24 299,157 238,596
Trade and other receivables .................................................................... 25, 26 179,089 146,705
Cash and cash equivalents ....................................................................... 21,222 29,883
___________ ___________
Total current assets 499,468 415,184
___________ ___________
Total assets 906,750 690,415
___________ ___________
___________ ___________
Share capital ........................................................................................... 27 36,912 27,570
Share premium ........................................................................................ 28 151,892 84,873
Reserves (deficit) .................................................................................... 29, 30 ( 12,564 ) 3,377
Retained earnings .................................................................................. 0 882
___________ ___________
Total equity attributable to equity holders of the Company 176,240 116,702
Minority interest ..................................................................................... 1 39
___________ ___________
Total equity 176,241 116,741
___________ ___________
Liabilities:
Loans and borrowings ............................................................................ 32, 33 219,752 137,642
Deferred income tax liability ................................................................... 34 8,430 5,195
___________ ___________
Total non-current liabilities 228,182 142,837
___________ ___________
Loans and borrowings ............................................................................. 32, 33 342,460 296,416
Trade and other payables ........................................................................ 36 159,867 134,421
___________ ___________
Total current liabilities 502,327 430,837
___________ ___________
Total liabilities 730,509 573,674
___________ ___________
Total equity and liabilities 906,750 690,415
___________ ___________
___________ ___________
The notes on pages 55 to 78 are integral part of these consolidated financial statements All amounts are in thousands of euro

Consolidated Statement of Changes in Equity for the Year 2006
2005
Share Share Reserves Retained Minority Total
capital premium (deficit) earnings interest equity
Equity as at 1.1.2005 ........................... 18,678 11,105 ( 11,803 ) 17,779 0 35,759
__________ __________ __________ __________ __________ __________
Currency fluctuations on subsidiaries
not reporting in euros ....................... 12,575 12,575
Loss for the year .................................. ( 15,092 ) ( 15,092 )
__________ __________ __________ __________
Total recognised income and
expense ............................................. 12,575 ( 15,092 ) 0 ( 2,517 )
Dividends paid ..................................... ( 1,805 ) ( 1,805 )
Own shares sold ................................... 1,227 10,189 11,416
Issued share capital .............................. 7,665 63,579 71,244
Own shares with put options
not excercised ................................... 2,605 2,605
Minority interest, change ..................... 39 39
__________ __________ __________ __________ __________ __________
Equity as at 31.12.2005 ................... 27,570 84,873 3,377 882 39 116,741
__________ __________ __________ __________ __________ __________
2006
Equity as at 1.1.2006 ........................... 27,570 84,873 3,377 882 39 116,741
__________ __________ __________ __________ __________ __________
Currency fluctuations on subsidiaries
not reporting in euros ....................... ( 16,535 ) ( 16,535 )
Loss for the year .................................. ( 11,373 ) ( 50 ) ( 11,423 )
__________ __________ __________ __________
Total recognised income and
expense ............................................. ( 16,535 ) ( 11,373 ) ( 50 ) ( 27,958 )
Transferred from share premium .......... ( 10,491 ) 10,491 0
Issued share capital .............................. 9,342 77,510 86,852
Own shares with put options
not excercised ................................... 594 594
Minority interest, change ..................... 12 12
__________ __________ __________ __________ __________ __________
Equity as at 31.12.2006 .................... 36,912 151,892 ( 12,564 ) 0 1 176,241
__________ __________ __________ __________ __________ __________
The notes on pages 55 to 78 are integral part of these consolidated financial statements
All amounts are in thousands of euro
53

54
Consolidated Statement of Cash Flows for the Year 2006
Cash flows from operating activities:
Notes 2006 2005
Operating profit ..................................................................................................
Difference between operating profit and cash from operations:
5,464 2,413
(Gain) loss on sale of assets .............................................................................. ( 5,682 ) 719
Depreciation, amortisation and impairment losses ............................................. 11 31,482 13,963
Share of profit of equity accounted investees ................................................... ( 700 ) ( 154 )
Change in operating assets and liabilities .......................................................... 39 ( __________ 45,304 ) __________ 23,319
Cash (used in) generated from operations ( 14,740 ) 40,260
Interest income received .................................................................................... 1,565 1,014
Interest expenses paid ........................................................................................ ( 26,888 ) ( 18,814 )
Income tax paid .................................................................................................. ( 2,770 ) ( 3,941 )
__________ __________
Net cash (used in) from operating activities ( 42,833 ) 18,519
__________ __________
Cash flows from investing activities:
Investment in property, plant and equipment ..................................................... ( 26,654 ) ( 12,051 )
Proceeds from sale of property, plant and equipment ........................................ 6,649 2,118
Investment in intangible assets .......................................................................... ( 15 ) ( 2,849 )
Acquisition of subsidiaries, net of cash acquired ................................................. 6 3,484 ( 1,848 )
Proceeds from sale of subsidiaries ..................................................................... 557 0
Investment in shares in associated companies .................................................... ( 3,126 ) 0
Proceeds from sale of shares in associated companies ....................................... 2,649 0
Investment in shares in other companies ............................................................ 0 ( 462 )
Proceeds from sale of other companies ............................................................. 183 0
Dividends received from equity accounted investees ......................................... 0 26
Proceeds from sale of shares in other companies ............................................... 0 3,067
Increase (decrease) in bonds and other receivables ............................................ 3,706 ( 10,062 )
__________ __________
Net cash used in investing activities ( 12,567 ) ( 22,061 )
__________ __________
Cash flows from financing activities:
Minority share in capital stock ........................................................................... ( 12 ) 0
Dividends paid .................................................................................................. 0 ( 1,805 )
Long-term debt proceeds .................................................................................. 68,445 5,146
Long-term debt repaid ...................................................................................... ( 39,773 ) ( 20,880 )
Short-term debt proceeds .................................................................................. __________ 19,534 __________ 31,994
Net cash from financing activities __________ 48,194 __________ 14,455
(Decrease) increase in Cash and Cash Equivalents ................................ ( 7,206 ) 10,913
Effect of Exchange Rate Fluctuations of Cash Held ............................ ( 1,455 ) 1,883
Cash and Cash Equivalents at the beginning of the year ..................... __________ 29,883 __________ 17,087
Cash and Cash Equivalents at the end of the year ................................ __________
21,222 __________
29,883
Investing and financing activities not affecting cash flows .............. 41
The notes on pages 55 to 78 are integral part of these consolidated financial statements All amounts are in thousands of euro

Notes to the Financial Statements
1. Reporting entity
Icelandic Group Plc. is a company domiciled in Borgartún 27, Reykjavík, Iceland. The consolidated financial statements of the Company
as at and for the year ended 31 December 2006 comprise the Company and its subsidiaries (together referred to as the “Group”) and
the Group´s interest in associates. The Group is involved in manufacturing and marketing of seafood in international markets (see
note 5).
2. Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs)
as adopted by EU.
The financial statements were approved by the Board of Directors on 1 March 2007.
(b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following:
• Shares in listed companies are measured at fair value.
• Derivative financial instruments are measured at fair value .
The methods used to measure fair values are discussed further in note 4.
(c) Functional and presentation currency
The consolidated financial statements are prepared in euro, which is the Company´s functional currency for the year 2006. All
financial information presented in euro has been rounded to the nearest thousand.
The Company´s functional currency for the year 2005 was the Icelandic krona. The change in functional currency from Icelandic
krona to euro was made as of 1 January 2006 because of changes in the focus of the Company´s operations and primary economic
environment in which the Company operates. The comparative figures for the year 2005 have been translated to euro.
(d) Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies
that have the most significant effect on the amount recognised in the financial statements are described in the following notes:
• Note 6 - business combinations.
• Note 21 - measurement of the recoverable amounts of cash-generating units.
All amounts are in thousands of euro
55

56
Notes to the Financial Statements
3. Significant accounting policies
a. Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently
are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases.
(ii) Associates (equity accounted investees)
Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies.
Associates are accounted for using the equity method (equity accounted investees). The consolidated financial statements include
the Group’s share of the income and expenses of equity accounted investees, after adjustments to align the accounting policies
with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When
the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest is reduced to
nil and recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments
on behalf of the investee.
(iii) Transactions eliminated on consolidation
Intra-group balances and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated
against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
b. Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated at the respective functional currencies of Group entities at exchange rates at the
dates of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to
the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference
between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments
during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Nonmonetary
assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation
are recognised in profit or loss.
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated
to euro at exchange rates at the reporting date. The income and expenses of foreign operations are translated to euro at exchange
rates at the date of transations.
Foreign currency differences are recognised directly in equity. Since 1 January 2004, the Group´s date of transition to IFRSs, such
differences have been recognised in the foreign currency translation reserve (FCTR). When a foreign operation is disposed of, in
part or in full, the relevant amount in the FCTR is transferred to profit or loss.
c. Financial instruments
(i) Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash
equivalents, loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit and
loss, any directly attributable translation costs, except as described below. Subsequent to initial recognition non-derivative financial
instruments are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets
are derecognised if the Group´s contractual rights to the cash flows from the financial assets expire or if the Group transfers the
financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases
All amounts are in thousands of euro

3. c. continued
and sales of financial assets are accounted for at trade date, i.e. the date that the Group commits itself to purchase or sell the asset.
Financial liabilities are derecognised if the Group´s obligations specified in the contract expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and call deposits.
Accounting for finance income and expenses is discussed in note 1 l.
Held-to-maturity investments
If the Group has the positive intent and ability to hold debt securities to maturity, then they are classified as held-to-maturity.
Held-to-maturity investments are measured at amortised cost using the effective interest method, less any impairment losses.
Investments at fair value through profit or loss
An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such upon initial
recognition. Financial instruments are designated at fair value through profit or loss if the Group manages such investments and
makes purchases and sale decision based on their fair value. Upon initial recognition, attributable translation costs are recognised
in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes
therein are recognised in profit or loss.
Other
Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment
losses.
(ii) Derivative financial instruments
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives
are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and
the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet
the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred.
Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described
below.
(iii) Economic hedges
Hedge accounting is not applied to derivative financial instruments that economically hedge monetary assets and liabilites
denominated in foreign currencies. Changes in the fair value of such derivatives are recognised in profit or loss as part of foreign
currency gains and losses.
(iv) Share capital
Ordinary shares
Incremental costs directly attributable to issue of ordinary shares and share options are recognised as a deduction from equity.
Repurchase of share capital
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs,
is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction
from total equity.
Put option agreements
When the Company sells treasury shares to its employees with put options, i.e. the right to sell the shares back to the Company at
the purchase price, the equity is not increased. The equity will be increased if the put option is not exercised. In the financial
statements the nominal value of share capital and share premium is increased, but other reserves decreased. Respectively a liability
is recognised among other liabilities, amounting to the sales price of the shares in question.
Purchase of shares in the Company by employees
Some employees of the Group received 29 million shares in the Company in 2005. When the shares were purchased the employees
signed promissory notes which will expire if the employees will continue to work for the Company for five years. The cost is
expensed during the same period.
All amounts are in thousands of euro
Notes to the Financial Statements
57

58
Notes to the Financial Statements
3. c. continued
(v) Dividends
Dividends are recognised as a decrease in equity in the period in which they are approved by the Company’s shareholders.
d. Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes
expenditures that are directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality
of the related equipment is capitalised as part of that equipment.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably.
The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of
property, plant and equipment. Leased assets are depreciated over the shorter of the lease term or their useful lives. Land is not
depreciated. The estimated useful lives for the current and comparative periods are as follows:
Useful lives
Buildings ................................................................................................................................................. 10-50 years
Ships ....................................................................................................................................................... 15 years
Other fixed assets ................................................................................................................................... 5-10 years
Depreciation methods, useful lives and residual values are reassessed at the reporting date.
e. Intangible assets
(i) Goodwill
Goodwill (negative goodwill) arises on the acquisition of subsidiaries and associates.
Acquisitions prior to 1 January 2004
The classification and accounting for of business combinations that occurred prior to 1 January 2004 has not been restated in
preparing the Group’s opening IFRS balance sheet as at 1 January 2004. In respect of acquisitions prior to this date, goodwill
represents the amount recognised under the Group´s previous accounting framework, Icelandic GAAP.
Acquisitions on or after 1 January 2004
For acquisitions on or after 1 January 2004, goodwill represents the excess of the cost of the acquisition over the Group´s interest
in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess is negative
(negative goodwill), it is recognised immediately in profit or loss.
Acquisitions of minority interests
Goodwill arising on the acquisition of a minority interest in a subsidiary represents the excess of the cost of the additional investment
over the carrying amount of the net assets acquired at the date of exchange.
Subsequent measurements
Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of
goodwill is included in the carrying amount of the investment.
(ii) Other intangible assets
Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated
amortisation and accumulated impairment losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit and loss
when incurred.
All amounts are in thousands of euro

3. e. continued
(iv) Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than
goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as
follows:
Useful lives
Business relationship .............................................................................................................................. 5-15 years
Patents .................................................................................................................................................... 3 years
Software ................................................................................................................................................. 3 - 5 years
f. Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in-first-out
principle, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.
In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based
on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses.
g. Impairment
(i) Financial assets
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on
the estimated future cash flows of that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying
amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.
Individually significant assets are tested for impairment on a individual basis. The remaining financial assets are assessed collectively
in groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial assets measured at amortised cost the reversal is recognised in profit or loss.
(ii) Non financial assets
The carrying amount of the Group´s non-financial assets, other than inventories and deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset´s recoverable
amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, recoverable
amount is estimated at each reporting date.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A
cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other
assets and groups. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying
amount of the other assets in the unit (group of units) on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods
are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset´s carrying amount does no exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
All amounts are in thousands of euro
Notes to the Financial Statements
59

60
Notes to the Financial Statements
h. Employee benefits
(i) Share-based payment transactions
The Company entered into an agreement with some of the Group’s key personnel allowing them to buy shares in the Company
from the Company at market price. The agreements state that the personnel involved have the right to sell the shares back to the
Company. The fair value of the agreements has been calculated according to IFRS 2 and recognised among salary and salaryrelated
expenses and as a liability. The fair value is initially measured at grant date and spread over the period during which the
employees earn the aforementioned right to sell.
i. Provisions
A provision is recognised in the balance sheet if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability.
(i) Restructuring
A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the
restructuring either has commenced or has been announced publicly. Future operating costs are not provided for.
j. Revenue
(i) Goods sold
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and
allowances, trade discounts and volume rebates. Revenues is recognised when the significant risks and rewards of ownership have
been transferred to the buyer, recovery of the consideration is probable, the associated costs or the possible return of goods can
be estimated reliably, and there is no continuing management involvement with the goods.
Transfers of risks and rewards vary depending on the individual terms of the contract of sale.
(ii) Other operating revenue
Other operating revenue comprises the gain on the sale of property, plant and equipment, commissions and other revenue.
k. Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expenses and the reduction of the
outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic
rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum
lease payments over the remaining term of the lease when the lease adjustment is confirmed.
l. Finance income and expense
Finance income comprises interest income on funds invested, dividend income, changes in the fair value of financial assets at fair
value through profit or loss, foreign currency gains, and gains on hedging instruments that are recognised in profit or loss. Interest
income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the
Group´s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, foreign currency losses,
changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets,
and losses on hedging instruments that are recognised in profit or loss. All borrowing costs are recognised in profit or loss using
the effective interest method.
m. Income tax expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent
that it relates to items recognised directly in equity, in which case it is recognised in equity.
All amounts are in thousands of euro

3. m. continued
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised
for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets and liabilities in a
translation that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to
investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at
the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend is recognised.
n. Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
o. Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business
segment), or in providing products or services within a particular economic environment (geographical segment), which is subject
to risks and rewards that are different from those of other segments. The Group´s primary format for segment reporting is based
on business segments.
p. New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December
2006, and have not been applied in preparing these consolidated financial statements:
• IFRS 7 Financial Instruments: Disclosures and the Amendment to IAS 1 Presentation of Financial Statements: Capital Disclosures
requires extensive disclosures about the significance of financial instruments for an entity´s financial position and performance,
and qualitative and quantitative disclosures on the nature and extent of risks. IFRS 7 and amended IAS 1, which become
mandatory for the Group´s 2007 financial statements, will require extensive additional disclosures with respect to Group´s
financial instruments and share capital.
• IFRS 8 Operating Segments sets out requirements for disclosure of information about an entity’s operating segments and also
about the entity’s products and services, the geographical areas in which it operates, and its major customers. If adopted by the
EU, IFRS 8, which becomes mandatory for the Group’s 2009 financial statements, is not expected to have any impact on the
consolidated financial statements.
• IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies addresses the
application of IAS 29 when an economy first becomes hyperinflationary and in particular the accounting for deferred tax. IFRIC
7, which becomes mandatory for the Group’s 2007 financial statements, is not expected to have any impact on the consolidated
financial statements.
• IFRIC 8 Scope of IFRS 2 Share-based Payment addresses the accounting for share-based payment transactions in which some or
all of goods or services received cannot be specifically identified. IFRIC 8 will become mandatory for the Group’s 2007 financial
statements, with retrospective application required. The Group has not yet determined the potential effect of the
interpretation.
All amounts are in thousands of euro
Notes to the Financial Statements
61

62
Notes to the Financial Statements
3. p. continued
• IFRIC 9 Reassessment of Embedded Derivatives requires that a reassessment of whether embedded derivative should be
separated from the underlying host contract should be made only when there are changes to the contract. IFRIC 9, which
becomes mandatory for the Group’s 2007 financial statements, is not expected to have any impact on the consolidated financial
statements.
• IFRIC 10 Interim Financial Reporting and Impairment prohibits the reversal of an impairment loss recognised in a previous
interim period in respect of goodwill, an investment in an equity instrument or a financial asset carried at cost. IFRIC 10 will
become mandatory for the Group’s 2007 financial statements.
• IFRIC 11 IFRS 2 Group and Treasury Share Transactions deals with how certain types of agreements on securities related
payments shall be recognized in the financial statements of a company and its subsidiaries. If adopted by the EU, IFRIC 11
applies for accounting periods starting as of March 1, 2007.
• IFRIC 12 Service Concession Arrangements. If adopted by the EU, IFRIC 12 will become mandatory for the Group’s 2007
financial statements. IFRIC 12 is not expected to have any impact on the consolidated financial statements of the Group.
4. Determination of fair values
A number of the Group´s accounting policies and disclosures require the determination of fair value, for both financial and nonfinancial
assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following
methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes
specific to that asset or liability.
(i) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The
market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a
willing buyer and a willing seller in an arm´s length transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion. The market value of items of plant, equipment, fixtures and fittings is based
on the quoted market prices for similar items.
(ii) Intangible assets
The fair value of patents and trademarks acquired in a business combination is based on the discounted estimated royalty payments
that have been avoided as a result of the patent or trademark being owned. The fair value of other intangible assets is based on
the discounted cash flows expected to be derived form the use and eventually sale of the assets.
(iii) Inventory
The fair value of inventory acquired in a business combination is determined based on its estimated selling price in the ordinary
course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to
complete and sell the inventory.
(iv) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate
of interest at the reporting date.
(v) Derivatives
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not
available, the fair value is estimated by discounting the difference between the contractual forward price and the current forward
price for the residual maturity of the contract using a risk-free interest rate (based on government bonds).
The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting
estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar
instrument at the measurement date.
(vi) Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest
cash flows, discounted at the market rate of interest at the reporting date. In respect of the liability component of convertible
notes, the market rate of interest is determined by reference to similar liabilities that do not have a conversion option. For finance
leases the market rate of interest is determined by reference to similar lease agreements.
All amounts are in thousands of euro

4. continued
(vii) Share-based payment transactions
The fair value of employee stock options is measured using a binomial lattice model. The fair value of share appreciation rights is
measured using the Black-Scholes formula. Measurement inputs include share price on measurement date, excercise price of the
instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly
available information), weighted average expected life of the instruments (based on historical experience and general option
holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market
performance conditions attached to the transactions are not taken into account in determining fair value.
Segment Reporting
5. Segment information is presented in respect of the Group’s business and geographical segments. The primary format, business
segments, is based on the Group´s management and internal reporting structure.
Inter-segment pricing is determined on an arm’s length basis.
Segment results, assets, liabilities and cash flow include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly investments and related revenue, loans and borrowings and related expenses,
head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible
assets other than goodwill.
Business segments
Companies that process seafood into value added products are grouped as production companies. Sales- and marketing companies are
companies that handle the sales and marketing of seafood without further processing. Holding and service companies are the parent
company and companies that provide logistic and quality service to other group companies.
Geographical segments
In presenting information on the basis of geographical segments, segment revenues and segment assets are based on the geographical
location of the assets.
Business segments
Sales and Holding and
Production marketing servicing
2006 companies companies companies Eliminations Consolidated
Sales to external customers ............................. 1,085,135 357,870 28,311 0 1,471,316
Inter-segment sales ......................................... __________ 121,173 __________ 130,983 __________ 7,021 ( __________ 259,177 ) __________ 0
Total segment sales ......................................... __________ 1,206,308 __________ 488,853 __________ 35,332 ( __________ 259,177 ) __________ 1,471,316
Segment result ................................................ ( 172 ) 4,306 630 4,764
Net finance costs ............................................. ( 20,981 ) ( 5,670 ) 2,646 0 ( 24,005 )
Share of profit of equity accounted investees .. __________ 32 __________ 0 __________ 668 __________ 0 __________ 700
(Loss) profit before income tax ........................ ( 21,121 ) ( 1,364 ) 3,944 0 ( 18,541 )
Income tax ....................................................... __________ 7,396 ( __________ 199 ) ( __________ 79 ) __________ __________ 7,118
(Loss) profit for the year ................................. ( 13,725 ) ( 1,563 ) 3,865 0 ( 11,423 )
Segment assets ................................................ 545,785 167,729 380,918 ( 187,682 ) 906,750
Segment liabilities ........................................... 556,612 174,975 163,113 ( 164,191 ) 730,509
Capital expenditure ......................................... 17,037 2,655 230 0 19,922
Depreciation .................................................... 28,492 1,119 305 0 29,916
Amortisation of intangible assets ..................... 1,540 26 0 0 1,566
All amounts are in thousands of euro
Notes to the Financial Statements
63

64
Notes to the Financial Statements
5. continued
Sales and Holding and
Production marketing servicing
2005 companies companies companies Eliminations Consolidated
Sales to external customers .............................. 790,952 395,521 13,784 0 1,200,257
Inter-segment sales ......................................... __________ 21,073 __________ 133,624 __________ 8,522 ( __________ 163,219) __________ 0
Total segment sales ......................................... __________ 812,025 __________ 529,145 __________ 22,306 ( __________ 163,219 ) __________ 1,200,257
Segment results ............................................... 3,311 257 ( 1,309 ) 0 2,259
Net finance costs ............................................. ( 12,539 ) ( 2,477 ) ( 6,724 ) 0 ( 21,740 )
Share of profit of equity accounted investees .. __________ 0 __________ 0 __________ 154 __________ 0 __________ 154
Loss before income tax .................................... ( 9,228 ) ( 2,220 ) ( 7,879 ) 0 ( 19,327 )
Income tax ...................................................... __________ 4,107 ( __________ 655 ) __________ 783 __________ 0 __________ 4,235
Loss for the year .............................................. ( __________ 5,121 ) ( __________ 2,875 ) ( __________ 7,096 ) __________ 0 ( __________ 15,092 )
Segment assets .............................................. 437,550 193,435 268,492 ( 209,062 ) 690,415
Segment liabilities ........................................... 349,617 165,781 144,462 ( 86,186 ) 573,674
Capital expenditure ......................................... 13,925 639 336 0 14,900
Depreciation .................................................... 8,504 1,386 159 0 10,049
Amortisation of intangible assets ..................... 483 85 48 0 616
Impairment losses on intangible assets ............ 321 2,977 0 0 3,298
Geographical segments
2006 USA UK
Europe
without UK Asia Eliminations Consolidated
Sales ...................................... 368,880 487,006 539,229 335,378 ( 259,177 ) 1,471,316
Segment assets ...................... 149,643 195,578 658,472 90,739 ( 187,682 ) 906,750
Capital expenditure ................ 4,684 6,557 6,941 1,740 0 19,922
2005
Sales ...................................... 335,498 419,135 277,130 331,713 ( 163,219 ) 1,200,257
Segment assets ...................... 179,836 213,183 379,944 126,514 ( 209,062 ) 690,415
Capital expenditure ................ 1,853 11,930 991 126 0 14,900
Changes within the Group
6. On 1 November 2005 Icelandic Group Plc. purchased all shares in Pickenpack-Hussmann & Hahn Seafood GmbH (Pickenpack),
Germany. Shareholders in Pickenpack received 585 million shares in Icelandic Group Plc., equivalent to 21.25% of total shares in
Icelandic Group Plc. after the issue. The fair value of these shares amounted to € 72,804 thousand, based on quoted shares. Icelandic
Group Plc. controlled Pickenpack´s operation from 1 January 2006 and included the company in the consolidated financial statements
from that date.
The subsidiary Icelandic Packaging ehf. purchased in March all shares in Valdimar Gíslason hf. The purchase price amounted to € 2,694
thousand, taking into consideration cash and cash equivalents. The companies were merged under the name VGI ehf. at 1 April
2006.
At the beginning of April 2006 Icelandic Group Plc. purchased all shares in Saltur Holdings ApS (now Icelandic Scandinavia ApS),
Denmark. Shareholders in Saltur Holdings ApS received 135 million shares in Icelandic Group Plc. The fair value of these shares
amounted to € 13,558 thousand, based on quoted shares. Saltur Holdings ApS is included in the consolidated financial statements
from 1 April 2006.
All amounts are in thousands of euro

6. continued
Icelandic Group Plc. issued 5 million new shares in exchange for the operations of MAT Pacific in Seattle USA. The fair value of these
shares amounted to € 490 thousand, based on quoted shares. The operation of MAT Pacific was taken over by a newly founded
Company in Seattle, Icelandic Northwest Inc., where Icelandic Group owns 85% of shares. Icelandic Northwest is a part of Icelandic
Group´s consolidated financial statements as of May 2006.
On 13 July 2006 Icelandic Group acquired plant premises, equipment, current assets and business contacts of Delpierre frozen division
(previously Alfesca now Pickenpack Gelmer SAS). The total acquisition price is € 13,650 thousand. Formal takeover of the plant took
place 4 September 2006 and the company is included in Icelandic Group´s consolidated financial statements from that date.
In the table below are shown the effects of the purchase of Pickenpack - Hussmann & Hahn Seafood GmbH, Pickenpack Gelmer SAS,
Icelandic Scandinavia ApS (earlier Saltur Holding ApS), Valdimar Gíslason ehf. and Icelandic Northwest Inc. on the Group’s balance
sheet. The goodwill recognised on the acquisition is attributable mainly to the skills and technical talent of the business´s work force
and the synergies expected to be achieved from integrating the companies into the Group´s existing business.
Pre-acq. Recognised
carrying Fair value values on
Pickenpack Hussmann & Hahn GmbH amounts adjustments acquisition
Property, plant and equipment ................................................................... 21,861 18,321 40,182
Intangible assets ......................................................................................... 440 30,329 30,769
Inventories ................................................................................................. 25,345 25,345
Trade and other receivables ........................................................................ 31,099 31,099
Cash and cash equivalents .......................................................................... 4,452 4,452
Non-current liabilities ................................................................................. ( 7,852 ) ( 6,840 ) ( 14,692 )
Current liabilities ........................................................................................ ( __________ 89,708 ) __________ ( __________ 89,708 )
Net identifiable assets and liabilities ........................................................... ( __________ 14,363 ) __________ 41,810 27,447
Goodwill on aquisition ................................................................................. 46,038
Consideration paid, settled with shares ....................................................... ( 72,804 )
Cash aquired ............................................................................................... ( __________ 4,452 )
Acquisition of subsidiaries, net of cash acquired .......................................... ( __________ 3,771 )
Valdimar Gíslason ehf.
Property, plant and equipment ................................................................... 58 58
Inventories .................................................................................................. 812 812
Trade and other receivables ........................................................................ 799 799
Cash and cash equivalents ........................................................................... 263 263
Non-current liabilities ................................................................................. ( 821 ) ( 821 )
Current liabilities ......................................................................................... ( __________ 780 ) __________ ( __________ 780 )
Net identifiable assets and liabilities ........................................................... __________ 331 __________ 0 331
Goodwill on aquisition ................................................................................. 2,363
Purchase price ............................................................................................ 2,694
Short term borrowings ................................................................................. ( 2,677 )
Cash aquired ............................................................................................... ( __________ 263 )
Acquisition of subsidiaries, net of cash acquired ......................................... ( __________ 246 )
All amounts are in thousands of euro
Notes to the Financial Statements
65

66
Notes to the Financial Statements
6. continued
Pre-acq. Recognised
carrying Fair value values on
Icelandic Scandinavia ApS amounts adjustments acquisition
Property, plant and equipment .................................................................... 4,199 542 4,741
Intangible assets .......................................................................................... 8,176 6,404 14,580
Inventories ................................................................................................. 9,387 9,387
Trade and other receivables ........................................................................ 5,914 5,914
Cash and cash equivalents .......................................................................... 71 71
Non-current liabilities ................................................................................. ( 9,950 ) ( 9,950 )
Current liabilities ......................................................................................... ( __________ 16,900 ) __________ ( __________ 16,900 )
Net identifiable assets and liabilities ........................................................... __________ 897 __________ 6,946 7,843
Goodwill on aquisition ................................................................................. 5,740
Purchase price ........................................................................................... 13,583
Consideration paid, settled with shares ....................................................... ( 13,558 )
Cash aquired .............................................................................................. ( __________ 71 )
Acquisition of subsidiaries, net of cash acquired ......................................... ( __________ 46 )
Icelandic Northwest Inc.
Intangible assets .......................................................................................... 0 1,033 1,033
Trade and other receivables ......................................................................... __________ 51 __________ 0 __________ 51
Net identifiable assets and liabilities ............................................................ __________ 51 __________ 1,033 1,084
Minority interest .......................................................................................... ( 14 )
Purchase price ............................................................................................. 1,084
Settled with shares ...................................................................................... ( __________ 490 )
Acquisition of subsidiaries, net of cash acquired .......................................... __________ 580
Pickenpack Gelmer SAS
Property, plant and equipment .................................................................... 7,250 2,272 9,522
Inventories ................................................................................................... 12,221 12,221
Non-current liabilities ................................................................................. 0 ( 743 ) ( 743 )
Current liabilities ......................................................................................... ( __________ 5,821 ) __________ ( __________ 5,821 )
Net identifiable assets and liabilities ........................................................... __________ 13,650 __________ 1,529 15,179
Negative goodwill ........................................................................................ ( 1,529 )
Purchase price ............................................................................................. 13,650
Short term borrowings ................................................................................. ( __________ 13,650 )
Acquisition of subsidiaries, net of cash acquired .......................................... __________ 0
Other income
7. Other income is specified as follows:
2006 2005
Gain on sale of assets ........................................................................................................... 3,528 205
Recognition of negative goodwill .......................................................................................... 1,789 0
Commission and other revenues ........................................................................................... __________ 5,270 __________ 4,556
Other operating income, total .............................................................................................. __________ 10,587 __________ 4,761
All amounts are in thousands of euro

Operating expenses
8. Operating expenses are specified as follows:
2006 2005
Salaries and salary-related expenses ..................................................................................... 59,765 46,586
Other operating expenses ..................................................................................................... 84,382 66,171
Depreciation of operating assets, amortisation and impairment losses ................................. __________ 16,386 __________ 5,300
Total operating expenses ..................................................................................................... __________ 160,533 __________ 118,057
9. Salaries and salary-related expenses are specified as follows:
Salaries ................................................................................................................................. 139,753 93,789
Salary-related expenses ....................................................................................................... __________ 21,141 __________ 15,015
Total salaries and salary-related expenses ............................................................................ __________ 160,894 __________ 108,804
Average number of employees (full year equivalents) ........................................................... 4,781 3,172
Positions with the Group at the end of the year ................................................................... 4,638 3,293
Salaries and salary-related expenses are allocated as follows on items in the income statement:
Cost of goods sold ................................................................................................................ 101,129 62,218
Operating expenses .............................................................................................................. __________ 59,765 __________ 46,586
Total salaries and salary-related expenses ............................................................................ __________ 160,894 __________ 108,804
10. Salaries and fringe benefits paid to the Board of Directors and key management for their work for companies within the group and
ownership in the Company are specified as follows:
Number of
shares at year-
Salaries and end, in
Board of Directors:
benefits million
Magnús Thorsteinson, Chairman of the Board ....................................................................... 15.4 312.9
Gunnlaugur S. Gunnlaugsson, former Chairman of the Board .................................................. 25.7
Adalsteinn Helgason, Board Member .................................................................................... 10.6
Baldur Örn Gudnason, Board Member .................................................................................... 13.7 108.4
Jón Kristjánsson, Board Member .......................................................................................... 13.7
Páll Magnússon, alternitive Board Member .......................................................................... 2.4
Steingrímur H. Pétursson, alternitive Board Member ............................................................ 2.1
Illugi Gunnarsson, former Board Member ............................................................................. 10.3
Managing Directors:
Björgólfur Jóhannsson, CEO ................................................................................................. 289.0
Ellert Vigfússon, CEO of Icelandic USA/Asia ....................................................................... 210.9
Finnbogi Baldvinsson, CEO of Icelandic Europe .................................................................... 350.0 604.6
Ævar Agnarsson, CEO of Icelandic USA Inc. ......................................................................... 209.6 6.9
Agnar Friðriksson, former CEO of Icelandic Group UK Ltd. .................................................. 122.2
Gunnar Svavarsson, former CEO ........................................................................................... 264.0
Magnús Gústafsson, former CEO of Icelandic USA Inc. ......................................................... 312.9
Þórólfur Árnason, former CEO .............................................................................................. 239.9
Included in the above list of shares held by management and directors are shares held by spouse and dependent children, as well as
shares held by companies controlled by them.
All amounts are in thousands of euro
Notes to the Financial Statements
67

68
Notes to the Financial Statements
10. continued
Several employees of the Group have received 29 million shares in the Company. When the shares were purchased the employees
signed promissory notes which will expire if the employees will continue to work for the Company for five years.
Two CEO´s quit their position with the Company during the year 2005. The Company entered into a retirement agreement with Gunnar
Svavarsson. According to the agreement Gunnar will be paid his base salary until the end of May 2007. Þórólfur Árnason left his
position in October 2005. According to his employment agreement he kept his base salary until the end of October 2006. A salary
commitment due to the retirements amounts to € 89 thousand at year end.
The Company has concluded put option agreements with key employees which obligates the Company to buy back these shares from
10 August 2007 to 10 September 2007 at the rate of ISK 6.4, if the employees so wish.
11. The Group’s depreciation charge in the income statement is specified as follows:
2006 2005
Depreciation of operating assets, see note 16 .................................................................... 29,916 10,049
Amortisations of intangible assets, see note 21 ................................................................... 1,566 616
Impairment of intangible assets, see note 21 ........................................................................ __________ 0 __________ 3,298
Total ..................................................................................................................................... __________ 31,482 __________ 13,963
Depreciation is allocated as follows on operating items:
Cost of goods sold ............................................................................................................... 15,096 8,663
Operating expenses .............................................................................................................. __________ 16,386 __________ 5,300
Total ..................................................................................................................................... __________ 31,482 __________ 13,963
Auditors’ Fees
12. Auditors’ fees are specified as follows: 2006 2005
Audit of the financial statements ......................................................................................... 933 578
Review of interim financial statements ................................................................................. 133 218
Other services ....................................................................................................................... __________ 142 __________ 282
Total auditors’ fees ............................................................................................................... __________ 1,208 __________ 1,078
Thereof remuneration to others than KPMG in Iceland ...................................................... 1,089 937
Net finance costs
13. Net finance costs are specified as follows:
Interest income ................................................................................................................... 1,277 1,232
Dividend income .................................................................................................................. 56 116
Fair value changes on shares in other companies .................................................................. 2,280 ( 3,362 )
Loss on sale of shares ........................................................................................................... ( __________ 1,515 ) __________ 0
Finance income, total ........................................................................................................... __________ 2,098 ( __________ 2,014 )
Interest expenses ................................................................................................................. ( 31,964 ) ( 20,098 )
Currency gain ....................................................................................................................... __________ 5,861 __________ 372
Finance expenses, total ........................................................................................................ ( __________ 26,103 ) ( __________ 19,726 )
Net finance expenses, total .................................................................................................. ( 24,005 ) ( 21,740 )
__________ __________
All amounts are in thousands of euro

Income tax
14. Income tax recognised in the income statement are specified as follows:
Income tax payable for the year ............................................................................................ 3,912 616
__________ __________
Deferred income tax expense:
Origination and reversal of temporary differences ................................................................ ( 6,124 ) 2,208
Benefit of tax losses recognized ........................................................................................... ( __________ 4,906 ) ( __________ 7,059 )
Deferred tax expense total ..................................................................................................... ( __________ 11,030 ) ( __________ 4,851 )
Total income tax in the income statement ........................................................................... ( 7,118 ) ( 4,235 )
__________ __________
15. Effective tax rate is specified as follows:
Loss before income tax ....................................................... ( 18,541 ) ( 19,237 )
__________ __________
Income tax using Icelandic corporation tax rate ................... 18.0% 3,337 18.0% 3,463
Effect of tax rate in foreign juridictions ............................... 23.0% 4,265 10.7% 2,058
Impact of associates ............................................................ 0.0% 0 0.2% 39
Non-deductable expenses ................................................... ( 2.8% ) ( 522 ) ( 8.0% ) ( 1,517 )
Other items ......................................................................... __________ 0.2% __________ 38 __________ 1.0% __________ 192
Effective tax rate ................................................................. __________ 38.4% __________ 7,118 __________ 21.9% __________ 4,235
Property, plant and equipment
16. Property, plant and equipment and their depreciation is specified as follows:
Buildings
Other
operating
Gross carrying amount
and land assets Total
Balance at 1 January 2005 ......................................................................... 35,760 88,267 124,027
Acquisition and purchases during the year .................................................. 6,276 19,443 25,719
Disposals ..................................................................................................... ( 1,835 ) ( 5,942) ( 7,777 )
Exchange rate differences .......................................................................... __________ 12,223 __________ 14,945 __________ 27,168
Balance at 31 December 2005 ..................................................................... 52,424 116,713 169,137
Purchases during the year ............................................................................ 10,551 16,103 26,654
Disposals ..................................................................................................... ( 8,889 ) ( 16,700 ) ( 25,589 )
Acquisition .................................................................................................. 25,978 26,742 52,720
Exchange rate differences ............................................................................ ( __________ 2,101 ) ( __________ 3,667 ) ( __________ 5,768 )
Balance at 31 December 2006 ..................................................................... __________ 77,963 __________ 139,191 __________ 217,154
Depreciation and impairment losses
Balance at 1 January 2005 .......................................................................... 9,582 54,923 64,505
Acquisitions through business combinations ............................................... 26 1,630 1,656
Depreciation ................................................................................................ 1,283 8,766 10,049
Disposals ...................................................................................................... ( 308 ) ( 5,159 ) ( 5,467 )
Exchange rate differences ........................................................................... __________ 3,688 __________ 9,674 __________ 13,362
Balance at 31 December 2005 ..................................................................... 14,271 69,834 84,105
Acquisitions through business combinations ............................................... 673 2,459 3,132
Depreciation ............................................................................................... 12,813 17,103 29,916
Disposals ..................................................................................................... ( 6,590 ) ( 14,311 ) ( 20,901 )
Exchange rate differences ........................................................................... ( __________ 1,106 ) ( __________ 2,395 ) ( __________ 3,501 )
Balance at 31 December 2006 .................................................................... __________ 20,061 __________ 72,690 __________ 92,751
All amounts are in thousands of euro
Notes to the Financial Statements
69

70
Notes to the Financial Statements
16. continued
Carrying amounts
1.1.2005 .................................................................................................... __________ 26,178 __________ 33,344 __________ 59,522
31.12.2005 ................................................................................................. __________ 38,153 __________ 46,879 __________ 85,032
31.12.2006 ................................................................................................. __________ 57,902 __________ 66,501 __________ 124,403
Depreciation ratios ...................................................................................... 2-10% 10-20%
Financing leases
17. Equipment and machinery for which the company has concluded lease agreements are capitalized despite the ownership right of the
lessor according to the agreements. The remaining balance of the lease agreements amounted to € 1,645 thousand at year-end 2006
(2005: € 7,450 thousand).
Operating leases
18. The company has entered into operating lease contracts for machinery and production equipment. Commitments from these contracts
amount to € 19,136 thousand at year-end (2005: € 1,745 thousand) and they are not included in the balance sheet.
The increase in due to Icelandic USA´s restructuring its cold store and distribution logistics.
Mortgages and Guarantees
19. Mortages and guarantees for debt with a remaining balance of € 115,848 thousand (2005: € 94,402 thousand) were registered against
the Group´s assets at year-end 2006.
Insurance value
20. Insurance and book value at year-end 2006 were as follows:
2006 2005
Insurance value of buildings ........................................................................................................ 122,819 77,782
Book value of buildings ................................................................................................................ 57,902 38,153
Insurance value of other operating assets .................................................................................... 161,830 85,340
Book value of other operating assets ........................................................................................... 66,501 46,879
Intangible assets
21. The Group’s intangible assets are specified as follows: Other
Business intangible
Cost
Goodwill Trademarks relationships assets Total
Balance at 1.1 2005 ......................................... 65,887 12 180 2,271 68,350
Acquisitions during the year ............................ 90,991 6,443 2,297 937 100,668
Disposals .......................................................... ( 154 ) 0 0 ( 667 ) ( 821 )
Exchange rate differences ................................ __________ 6,869 __________ 325 __________ 127 __________ 213 __________ 7,534
Balance at 31.12.2005 ..................................... 163,593 6,780 2,604 2,754 175,731
Purchases during the year ............................... 15 15
Acquisitions during the year ............................. 59,486 22,791 14,817 1,367 98,461
Disposals .......................................................... ( 5,316 ) ( 4 ) 12 ( 155 ) ( 5,463 )
Exchange rate differences ............................... ( __________ 8,113 ) ( __________ 688 ) ( __________ 267 ) ( __________ 146 ) ( __________ 9,214 )
Balance at 31.12.2006 ..................................... __________ 209,650 __________ 28,894 __________ 17,166 __________ 3,820 __________ 259,530
All amounts are in thousands of euro

21. continued
Amortisations and impairment losses
Other
Business intangible
Goodwill Trademarks relationships assets Total
Balance at 1.1.2005 ......................................... 120 0 48 1,081 1,249
Amortisation for the year ................................. 0 0 193 423 616
Impairment loss ............................................... 3,298 0 0 0 3,298
Disposals .......................................................... 164 0 15 114 293
Exchange rate difference ................................. ( __________ 51 ) __________ 0 __________ 0 ( __________ 717 ) __________ ( 768 )
Balance at 31.12.2005 ..................................... 3,531 0 256 901 4,688
Amortisation for the year ................................. 0 2 1,038 526 1,566
Disposals .......................................................... ( 3,200 ) 6 2 501 ( 2,691 )
Exchange rate differences ............................... ( __________ 34 ) __________ 0 ( __________ 46 ) ( __________ 30 ) ( __________ 110 )
Balance at 31.12.2006 ..................................... __________ 297 __________ 8 __________ 1,250 __________ 1,898 __________ 3,453
Carrying amounts
1.1.2005 .......................................................... __________ 65,767 __________ 12 __________ 132 __________ 1,190 __________ 67,101
31.12.2005 ....................................................... __________ 160,062 __________ 6,780 __________ 2,348 __________ 1,853 __________ 171,043
31.12.2006 ....................................................... __________ 209,353 __________ 28,886 __________ 15,916 __________ 1,922 __________ 256,077
Depreciations ratios ........................................ 10-20% 4-15%
Impairment test
For the purpose of impairment testing, goodwill is allocated to the Group’s operating entity’s which represent the lowest level within
the Group, at which the goodwill is monitored for internal management purposes. The Goodwill is tested annually for impairment, or
more frequently if there are indications that goodwill might be impaired.
The aggregate carrying amounts of goodwill allocated to each unit are as follows:
Pickenpack Hussmann & Hahn GmbH ........................................................................................................... 44,639
Seachill Ltd. .................................................................................................................................................. 58,553
Icelandic USA Inc. ......................................................................................................................................... 51,607
Sjóvík ehf. ..................................................................................................................................................... 28,796
Icelandic Scandinavia ApS ............................................................................................................................. 12,971
Coldwater UK Ltd. ......................................................................................................................................... 10,025
VGI ehf. ........................................................................................................................................................ 2,432
Fiskval ehf. .................................................................................................................................................... __________ 330
Total goodwill ................................................................................................................................................ __________ 209,353
The operating value of each unit in use was determined by discounting the future cash flow generated from the continuing use of the
unit and was based on the following key assumptions:
Cash flows were projected based on five year business plan for each unit approved by management. Cash flows for future periods are
extrapolated using a constant growth rate.
The anticipated annual real revenue growth rate in the cash flow projection was 2% to 10% for the years 2007 to 2011 and 2% for the
future growth rate.
The discount rate of 7% to 11% was applied in determining the value of the cash flow. The discount rate was estimated based on the
companies weighted average cost of capital which was based on an industry average of debt leveraging.
Impairment tests for cash-generating units containing goodwill and trademarks
All the carrying amount of goodwill is related to the production companies.
Trademarks purchased and aquired are capitalised by the Group´s production companies.
All amounts are in thousands of euro
Notes to the Financial Statements
71

72
Notes to the Financial Statements
Equity accounted investees
22. The carrying amount of the Group’s investments in equity accounted investees are specified as follows:
Share 2006 Share 2005
Maru Seafood P/F, Faroe Islands ................................................ 33.0% 1,879 50.0% 859
Coldwater Shellfish Ltd., UK ....................................................... 50.0% 0 50.0% 0
Clarke Icelandic Partners Ltd., Canada ........................................ 50.0% __________ 178 - __________ 0
Total investments in associates .................................................. __________ 2,057 __________ 859
At year-end the Group’s accumulated share in the loss of Coldwater Shellfish Ltd. is higher than the carrying amount, there for the
carrying amount is reduced to nil. The difference reduces a loan to the company.
Financial informations on equity accounted investees 2006 - 100%:
Profit
Assets Liabilities Equity Income (loss)
Maru Seafood P/F, Faroe Islands ................... 36,226 ( 30,632 ) 5,594 26,202 ( 162 )
Coldwater Shellfish Ltd., UK ............................ 1,810 ( 2,793 ) ( 983 ) 4,626 64
Clarke Icelandic Partners Ltd. Canada .............. __________ 781 ( __________ 425 ) __________ 356 __________ 2,025 __________ 1,575
Total ................................................................ __________ 38,817 ( __________ 33,850 ) __________ 4,967 __________ 32,853 __________ 1,477
Financial informations on equity accounted investees 2005 - 100%:
Assets Liabilities Equity Income Profit
Maru Seafood P/F, Faroe Islands ................... 4,551 ( 2,779 ) 1,772 12,051 205
Coldwater Shellfish Ltd., UK ........................... __________ 2,054 ( __________ 3,101 ) ( __________ 1,047 ) __________ 5,159 __________ 92
Total ............................................................... __________ 6,605 ( __________ 5,880 ) __________ 725 __________ 17,210 __________ 297
Investments in other companies
23. The Group’s investments in other companies is specified as follows:
2006 2005
Carrying Carrying
Share amount Share amount
Fishery Product International Ltd., Canada ................................. 15.8% 10,868 14.9% 8,592
Other companies (7/7) ............................................................... __________ 194 __________ 362
Total investments in other companies ......................................... __________ 11,062 __________ 8,954
Inventories
24. Inventories are specified as follows:
2006 2005
Raw material and work in process ......................................................................................... 154,857 119,506
Finished goods ..................................................................................................................... __________ 144,300 __________ 119,090
Total inventories .................................................................................................................. __________ 299,157 __________ 238,596
Trade and other receivables
25. Trade and other receivables are specified as follows:
Trade receivables ................................................................................................................. 159,291 124,862
Other receivables ................................................................................................................ 15,686 16,767
Prepaid expenses ................................................................................................................. __________ 4,112 __________ 5,076
Total trade and other receivables ......................................................................................... __________ 179,089 __________ 146,705
All amounts are in thousands of euro

26. Provision for losses on trade and other receivables are specified as follows:
2006 2005
Provision at 1 January .......................................................................................................... 2,054 1,501
Actual losses during the year ................................................................................................ ( 266 ) ( 128 )
Provision for the year ............................................................................................................ 656 501
Exchange rate difference ..................................................................................................... ( __________ 84 ) __________ 180
Provision at 31 December .................................................................................................... __________ 2,360 __________ 2,054
Equity
27. Issued shares
The Company’s total number of shares according to its Articles of Association are 2,893 million (2005: 2,168 million). Issued shares
at year-end numbered 2,893 million (2005: 2,168 million) and is all paid for. The holders of ordinary shares are entitled to dividends
as declared from time to time and are entitled to one vote per share of one ISK at meetings of the Company.
The Company concluded put option agreements with key employees in the year 2004. The agreements allowed the employees to
purchase shares in the Parent Company at market value from the Company. The employees have put option on the shares which allows
them to sell them back to to Company according to clauses in the agreements. The total number of shares in question amounts to 15
million (2005: 26 million) at the rate of ISK 6.4. The price of the put option amounts to € 853 thousand (2005: € 2,000 thousand) and
therefore equity is reduced by this amount and a liability is recognized.
28. Share premium
Share premium represents excess of payments above nominal value (ISK 1 per share) that shareholders have paid for shares sold by the
Company. According to Icelandic Companies Act, 25% of the nominal share capital must be held in reserve which can not be paid out
as dividend to shareholders.
29. Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign
operations.
30. Other reserves
Other reserves are specified as follows:
2006 2005
Own shares sold with put options ........................................................................................ ( 852 ) ( 1,446 )
Translation reserve ................................................................................................................ ( 12,085 ) 4,450
Statutory reserve ................................................................................................................. __________ 373 __________ 373
Other reserves total ............................................................................................................. ( __________ 12,564 ) __________ 3,377
Earnings per share
31. The calculation of basic earnings per share was based on the profit attributable to shareholders of the parent company and a weighted
average number of shares outstanding during the year calculated as follows:
Basic earnings per share:
Loss for the year attributable to equity holders of the parent ............................................. ( __________ 11,373 ) ( __________ 15,092 )
Shares at the beginning of the year ...................................................................................... 2,168,091 1,452,621
Effect of purchased and sold own shares .............................................................................. 0 49,381
Share increase in January, April and May 2006 / March 2005 .............................................. __________ 689,488 __________ 513,923
Weighted average number of ordinary shares ...................................................................... __________ 2,857,579 __________ 2,015,925
Loss per share of ISK 1 ........................................................................................................ ( 0.0040 ) ( 0.0075 )
Diluted earnings per share is equal to basic earnings per share as the company has not entered into share options agreements and has
no convertible loans.
All amounts are in thousands of euro
Notes to the Financial Statements
73

74
Notes to the Financial Statements
Loans and borrowings
32. Loans and borrowings are specified as follows:
Non-current Current Currency
2006 liabilities liabilities Total
EUR ................................................................................................................ 128,681 92,225 220,906
USD ................................................................................................................ 11,375 127,230 138,605
GBP ................................................................................................................ 92,424 36,256 128,680
DKK ................................................................................................................ 13,913 11,089 25,002
JPY ................................................................................................................ 3,930 17,945 21,875
CHF ................................................................................................................ 802 11,140 11,942
CAD ................................................................................................................ 0 8,567 8,567
NOK ........................................................................................................... 0 3,370 3,370
ISK ........................................................................................................... 1,697 84 1,781
SEK ........................................................................................................... __________ 0 __________ 1,484 __________ 1,484
Loans and borrowings, total ........................................................................ 252,822 309,390 562,212
Current maturities of non-current liabilities ................................................ ( __________ 33,070 ) __________ 33,070 __________ 0
Loans and borrowings according to the balance sheet ................................ __________ 219,752 __________ 342,460 __________ 562,212
2005
USD ........................................................................................................... 48,637 117,184 165,821
GBP ........................................................................................................... 96,141 33,978 130,119
EUR ........................................................................................................... 7,516 63,807 71,323
JPY ........................................................................................................... 336 30,326 30,662
ISK ........................................................................................................... 2,867 17,036 19,903
CAD ........................................................................................................... 0 9,075 9,075
CHF ........................................................................................................... 335 2,765 3,100
NOK ........................................................................................................... 0 2,631 2,631
SEK ........................................................................................................... __________ 0 __________ 1,424 __________ 1,424
Loans and borrowings, total ....................................................................... 155,832 278,226 434,058
Current maturities of non-current liabilities ................................................. ( __________ 18,190 ) __________ 18,190 __________ 0
Loans and borrowings according to the balance sheet ............................... __________ 137,642 __________ 296,416 __________ 434,058
33. Non-current loans and borrowings are payable as follows:
2006 2005
Year 2006 ........................................................................................................................... - 18,190
Year 2007 ........................................................................................................................... 33,070 12,157
Year 2008 ........................................................................................................................... 14,837 18,320
Year 2009 ........................................................................................................................... 27,742 23,696
Year 2010 ........................................................................................................................... 63,721 21,288
Year 2011 ........................................................................................................................... 40,654 21,288
Subsequent .......................................................................................................................... __________ 72,798 __________ 40,893
Non-current loans and borrowings including current maturities .......................................... __________ 252,822 __________ 155,832
All amounts are in thousands of euro

Deferred tax asset and liabilities
34. Deferred tax asset and liabilities are specified as follows:
Deferred tax Deferred tax
assets liability Total
Balance at 1.1.2005 .................................................................................... 0 3,122 3,122
Deferred tax liability acquired ...................................................................... 0 3,144 3,144
Income tax .................................................................................................. ( 1,283 ) ( 2,952) ( 4,235)
Income tax payable 2006 on 2005 activities ............................................... 0 ( 631 ) ( 631 )
Exchange rate difference, prepaid tax and other changes ........................... ( __________ 113 ) __________ 2,513 __________ 2,400
Balance at 31.12.2005 ................................................................................. ( 1,396 ) 5,196 3,800
Deferred tax liability acquired ..................................................................... 0 7,646 7,646
Income tax .................................................................................................. ( 8,309 ) 1,191 ( 7,118 )
Income tax payable 2007 on 2006 activities ............................................... 0 ( 3,912 ) ( 3,912 )
Exchange rate difference, prepaid tax and other changes ........................... ( __________ 42 ) ( __________ 1,691 ) ( __________ 1,733 )
Balance at 31.12.2006 ................................................................................ ( __________ 9,747 ) __________ 8,430 ( __________ 1,317 )
The deferred income tax liability is attributable to the following items:
2006 2005
Property, plant and equipment ............................................................................................ 9,335 7,464
Intangible assets .................................................................................................................. 2,856 3,249
Shares in other companies ................................................................................................... 0 ( 671 )
Tax losses carried forward .................................................................................................... ( 8,830 ) ( 5,558 )
Other items ........................................................................................................................... ( __________ 4,678 ) ( __________ 684 )
Net income tax (asset) liability at year-end ......................................................................... ( __________ 1,317 ) __________ 3,800
Restructuring
35. Icelandic USA Inc., subsidiary of Icelandic Group, has decided to close the company’s Cambridge, Maryland, production facility by year
end 2007. The decision to close the plant is based on its ability to fill projected product manufacturing and distribution needs using the
company’s Newport News, Virginia, production facility and a newly completed distribution center also located in Newport News.
Looking to the future, the closure is expected to provide critical production and distribution efficiencies. € 12,733 thousand is charged
to the income statement. The closing will result in a much improved cost structure for Icelandic USA.
The production of frozen products has been transferred to Pickenpack Gelmer, France, from Coldwater Seafood UK in Grimsby, which
from now on will specialise in the manufacture of chilled and frozen ready meals. Due to the restructuring of Coldwater € 1,614
thousand has been charged to the income statement.
Icelandic France SAS has gone through a restructuring process in the year 2006. The company had three offices in France; in Paris,
Evry and Marseille. A decision was made to close all offices and move the operation solely to Paris. Cost due to the closures as well as
inventory write down amount to 2,800 thousand in the year 2006.
Trade and other payables
36. Trade and other payables are specified as follows:
2006 2005
Trade payables ..................................................................................................................... 114,710 102,363
Taxes for the year ................................................................................................................. 256 631
Other payables .................................................................................................................... __________ 44,901 __________ 31,427
Total trade and other payables ........................................................................................... __________ 159,867 __________ 134,421
All amounts are in thousands of euro
Notes to the Financial Statements
75

76
Notes to the Financial Statements
Risk management
37. Risk due to inventories, receivables, interest rate and currency risk is a part of normal operations of the Group’s. Derivative financial
instruments are used to hedge exposure to fluctuations in foreign exchange rates and interest rates.
Inventory risk
Management constantly monitors the ageing and the market value of inventories. Inventories are regularly valued at net realisable
value.
Credit risk
Management monitors credit risk on an ongoing basis. Credit evaluations are performed periodically and necessary provisions are
recognized if believed that receivables are not collectible.
Foreign currency risk
The Company´s policy is to limit its foreign currency risk by having each group company conducting their currency combinations of
assets and liabilities according to the cash flows from operating activities.
Interest rate risk
Part of the Group long-term interest rates have been fixed by using financial derivatives.
Financial instruments and fair values
38. The fair values of financial assets and liabilities is not significantly different than the carrying amounts shown in the balance sheet.
Statement of Cash Flows
39. Changes in operating assets and liabilities in the statement of cash flows are specified as follows:
2006 2005
Inventories, increase ............................................................................................................. ( 17,844 ) ( 8,393 )
Trade and other receivables, decrease ................................................................................. 15,170 11,371
Trade and other payables, (decrease) increase .................................................................... ( __________ 42,630 ) __________ 20,341
Net changes in working capital ............................................................................................ ( __________ 45,304 ) __________ 23,319
40. Cash flows from operating activities are specified as follows:
Loss for the year ..................................................................................................................
Difference between loss and cash flows from operations:
( 11,423 ) ( 15,092 )
Profit (loss) from sales of assets ........................................................................................ ( 3,857 ) 719
Depreciations, amortisation and impairment losses .......................................................... 31,482 13,963
Profit of equity accounted investees ................................................................................ ( 700 ) ( 154 )
Income tax ........................................................................................................................ ( 12,784 ) ( 4,890 )
Other items ...................................................................................................................... ( __________ 3,823 ) __________ 1,733
Net changes in working capital ......................................................................................... ( __________ 1,105 ) ( __________ 3,721 )
41. Investing and financing activities not affecting cash flows:
Investments in subsidiaries .................................................................................................. ( 104,496 ) ( 82,660 )
Issue of share capital ........................................................................................................... 86,852 82,660
Short-term borrowings .......................................................................................................... 17,644 0
All amounts are in thousands of euro

Related parties
42. Identity of related parties
The Group has a related party relationship with its subsidiaries, associates, and with its directors and executive officers.
Transactions with key management personnel
Directors of the Company and their relatives control 20.5% of the voting shares of the Company. Members of the Group’s key
management hold options to sell 15 million (2005: 29 million) shares to the Company.
Other related party transactions
Associates
During the year ended 31 December 2006, associates purchased goods from the Group in the amount of € 843 thousand (2005: € 821
thousand) and at 31 December 2006 associates owed the Group € 3,931 thousand (2005: € 2,108 thousand) and the Group owed
associates € 898 thousand (2005: € 1,705 thousand). The Group purchased goods and services from associates in the amount of €
10,356 thousand (2005: € 8,650 thousand). Transactions with associates are priced on an arm’s length basis. During the year ended
31 December 2006, the associated companies paid no dividend (2005: € 26 thousand) to the Group.
Group entities
43. Subsidiaries numbered 33 at year-end (2005: 26) and are all included in the consolidated financial statements. They are:
Share Share
Coldwater Seafood (UK) Ltd., UK .......................... 100% Icelandic UK Ltd., UK ........................... 100%
Dalian Three Star Seafood Co. Ltd. China ............. 98% Icelandic USA Inc., USA ......................... 100%
Danberg ehf., Iceland ........................................... 100% IFP Trading Ltd., UK ............................. 100%
Ecomsa S.A., Spain ................................................. 100% Jeka Fish AS, Denmark .......................... 100%
Fiskval ehf., Iceland .............................................. 100% Marinus ehf., Iceland ............................. 100%
Gadus B.V., The Netherlands ................................ 100% OTO L.L.C., USA ................................... 100%
Icelandic Asia Inc., S-Korea .................................... 100% Pickenpack Assets GmbH, Germany ...... 100%
Icelandic China Trading Co. Ltd., China ................. 100% Pickenpack Gelmer SAS, France ............ 100%
Icelandic France S.A.S., France .............................. 100% Pickenpack H&H GmbH, Germany ........ 100%
Icelandic Group UK Ltd., UK ................................. 100% Pickenpack H&H S.a.r.l., France ........... 100%
Icelandic Holding Germany GmbH, Germany ......... 100% Seachill Ltd., UK ................................... 100%
Icelandic Iberica S.A., Spain ................................... 100% Sjóvík ehf. (Blue-Ice), Iceland ............... 100%
Icelandic Japan K.K., Japan .................................. 100% Unifish ehf. a.v., Iceland ....................... 100%
Icelandic Norway AS, Norway ................................ 100% VGI ehf., Iceland .................................. 100%
Icelandic Northwest Inc., USA ............................... 85% Verwaltungg. HFP GmbH, Germany ...... 100%
Icelandic Scandinavia ApS, Denmark ..................... 100% Westfalia-Strenz F. GmbH, Germany ..... 100%
Icelandic Services ehf., Iceland .............................. 100%
Icelandic Germany GmbH was merged with Pickenpack Hussmann & Hahn Seafood GmbH as of 1 September 2006.
The name of Saltur Holding ApS was changed to Icelandic Scandinavia ApS during the period.
Other issues
44. The Board of Directors of Icelandic Group Plc. emhasizes on maintaining good corporate governance according to the guidelines issue
by the Icelandic Stock Exchange. The Board of Directors has set guidelines regarding corporate governance with regard to its operations
laying down the sphere of competence of the board of directors and its scope of work vis-à-vis the managing director. These
guidelines contain i.a. rules regarding the procedure at Board meetings, rules regarding the competence of directors to participate in
discussion and handling matters, confidentiality rules, rules regarding the divulging of information by the managing director to the
directors etc. The guidelines include specific clauses with reference to rules on insider trading and the treatment of insider information
All amounts are in thousands of euro
Notes to the Financial Statements
77

78
Notes to the Financial Statements
44. continued
according to laws on securities trading, the rules of the Financial Supervisory Authorities in Iceland and internal Company rules. The
Board’s guidelines also include detailed clauses regarding the flow of information to the Board and performance measurement in
accordance with article 2.3. in the guidelines issued by the Icelandic Stock Exchange.
Minority of the board members of the company is considered independent towards the Company as defined by the Icelandic Stock
Exchange, article 2.6. Minority of the board members is also independent of large shareholders in the Company according to article
2.5.
No sub-committees are organised with the Company’s board of directors.
A formal share option programme has not been put in place and therefore such a programme has not been approved by shareholders
meeting. During the year 2004 the board of directors decided to sell shares in the Company at market price but with a put option to
several of the Company´s key management. As this transaction was directed at specific individuals but not a part of a general share
option scheme, as according to article 3.1.B.2. in the Icelandic Stock Exchange guidelines.
In light of the above-mentioned it is clear that operations of Icelandic Group Plc. is not in full coordination with the guidelines issued
by the Icelandic Stock Exchange regarding corporate governance.
Financial Ratios
45. Financial ratios for the consolidated financial statements:
2006 2005
Current ratio ........................................................................................................................ 0.99 0.96
Equity ratio .......................................................................................................................... 19.4% 16.9%
Return on equity .................................................................................................................. ( 5.70% ) ( 14.0% )
Internal value ....................................................................................................................... 4.77 4.23
Change in price per share from the beginning of the year ................................................... ( 20.8% ) 11.6%
Price per share (ISK) ............................................................................................................. 7.60 9.60
Market value of the company .............................................................................................. 233,054 279.407
EBITDA ................................................................................................................................ 36,946 16,222
EBITDA ratio ........................................................................................................................ 2.5% 1.4%
All amounts are in thousands of euro

Design and layout: Hvita husid. Printing: Prentmet
ICELANDIC GROUP PLC
Borgartún 27, 105 Reykjavík, Iceland
Tel: +354 560 7800
Fax: +354 562 1252
E-mail: info@icelandic.is
www.icelandic.is
BLUE ICE LTD / SJÓVÍK EHF
Borgartún 27, 105 Reykjavík, Iceland
Tel: +354 590 0870
Fax: +354 590 0866
Email: blueice@blueice.is
COLDWATER SEAFOOD (UK) LTD
Main office: Estate Road, No.2, South Humberside,
Industrial Estate, Grimsby DN31 2TG, England
Tel: +44 1472 321 100
Fax: +44 1472 321 220
E-mail: sales@coldwater.co.uk
DALIAN THREE STAR SEAFOOD CO. LTD
31 Taihang Street, Dalian, China
Tel : 86 411 89318 988
Fax : 86 411 89318 988
E-mail: blueice@blueice.is
FISKVAL LTD
Idavellir 13, 230 Keflavík, Iceland
Tel: +354 421 4815
Fax: +354 421 7815
E-mail: fiskval@fiskval.is
ICELANDIC ASIA INC
Post Code: 602-030, 2F, Asia Coldstorage, No.736,
Amnam-Dong, Seo-Ku, Pusan, S-Korea
Tel: +82 51 712 3300~20
Fax: +82 51 638 8016~7
E- mail: blueice@blueice.is
ICELANDIC CHINA TRADING CO. LTD
New World Cyber Port Zhao Yin Tower
1109 Xiang Gang Zhonglu 36, Qingdao China
Tel: +86 532 8667 9860/61/62/63
Fax: +86 532 8667 9866
E-mail: blueice@blueice.is
ICELANDIC FRANCE
11 Boulevard Malesherbes, 75008 PARIS, France
Tel. + 33 (0) 1 55 27 05 00
Fax + 33 (0) 1 55 27 05 01
E-mail: info@icelandic.fr
ICELANDIC IBERICA SA
C/Bergueda, Prima Muntadas,
08820 El Prat de Llobregat, Barcelona, Spain
Tel: +34 93 478 80 00
Fax Barcelona: +34 93 478 80 01
Fax Vigo: +34 986 45 35 25
E-mail: iberica@icelandic.is
ICELANDIC JAPAN KK
Landic Toranomon Bldg. 6F, 3-7-10 Toranomon,
Minato-ku, Tokyo 105-0001, Japan
Tel: +81 3 5472 0450
Fax: +81 3 5472 0451
E-mail: ifp.japan@icelandic.is
ICELANDIC NORTHWEST INC
14615 NE North Woodinville Way, Suite 207,
P.O. Box 611, Woodinville, WA 98072, USA
Tel: +1 425 398 9246
Fax: +1 425 398 9252
E-mail: ptrost@icelandic.com
ICELANDIC NORWAY AS
Beddingen 14, 7014 Trondheim, Norway
Tel: +47 7387 9200
Fax: +47 7387 9201
E-mail: icelandic@icelandic.no
ICELANDIC SERVICES LTD
Borgartún 27, 105 Reykjavik, Iceland
Tel: +354 560 7800
Fax: +354 562 9163
E-mail: icelandic@icelandic.is
ICELANDIC SERVICES ROTTERDAM /GADUS BV
P.O.Box 880, 3160 AB Rhoon
Visiting Address: Abel Tasmanstraat 1 (2nd floor),
3165 AM Rotterdam, The Netherlands
Tel: +31 10283 9350
Fax: +31 10283 9349
E-mail: icelandic@icelandic.nl
ICELANDIC SEAFOOD THAILAND CO. LTD.
Galaxy Place Bldg, 5th Fl, Room 5/5,
149 Nonsee Road, Chong Nonsee,
Yannawa, Bangkok 10120, Thailand
Tel: +66 2 681 2250/1
Fax: +66 2 681 2252
E-mail: blueice@blueice.is
ICELANDIC UK LTD
Estate Road, No.2, South Humberside Industrial Estate,
Grimsby DN31 2TG, England
Tel: +44 1472 582 900
Fax: +44 1472 582 920
E-mail: iuk@icelandic.is
ICELANDIC USA INC
190 Enterprise Drive, Newport News,
Virginia 23603, USA
Tel: +1 757 820 4000
Fax: +1 757 888 6250
E-mail: icelandic@icelandic.com
JEKA FISH A/S
Havnen 70, 7630 Lemvig, Denmark
Tel: +45 9781 1700
Fax: +45 97 81 1701
E-mail: jekafish@jekafish.dk
MARINUS SEAFOOD
Borgartún 27, 105 Reykjavík, Iceland
Tel: +354 540 7750
Fax: +354 540 7755
OCEAN TO OCEAN
(Canada & USA)
423 Lynnhaven Road, Suite 107,
Virginia Beach, VA 23452, USA
Tel: +1 757 893 9200
Fax: +1 757 893 9227
E-mail: icelandic@icelandic.com
PICKENPACK GELMER SAS
Z.l de la Trésorerie, Rue Jean Gutenberg, B.P. 49,
F-62126 Wimille, France
Tel: +33 321 87 95 00
Fax: +33 321 87 95 09
E-mail: info@pickenpack.fr
PICKENPACK - HUSSMANN & HAHN SEAFOOD GmbH
Lüner Rennbahn 9, 21339 Lüneburg, Germany
Tel: +49 4131 987 339
Fax: +49 4131 987 788
E-mail: info@phhs.de
SEACHILL LTD
Laforey Road, Great Grimsby Business Park, Grimsby,
NE Lincolnshire DN37 9TG, England
Tel: +44 1472 502 300
Fax: +44 1472 502 346
E-mail: Sales@seachill.co.uk / buyer@seachill.co.uk
VGI Ltd.
Austurhraun 7, 210 Gardabær, Iceland
Tel: +354 575 8000
Fax: +353 575 8001
E-mail: vgi@vgi.is

Borgartún 27
105 Reykjavík, Iceland
Tel +354 560 7800
Fax +354 562 1252
www.icelandic.is