Bakkavör Group

2

Our Mission

Bakkavör’s mission is to become an

international leader in the production,

sale and distribution of fresh and chilled

food products under its own brand

names and under the private labels of

retail chains.

Business Objectives

Bakkavör is an integrated food

production company, specialising in

chilled prepared food. We intend to

expand substantially through organic

growth and strategic acquisitions. The

critical success factor for Bakkavör´s

operation is commitment to excellence in

our service to the major European

supermarket chains which we maintain

through high quality customer

relationships. These relationships are

maintained through close co-operation

on distribution, new product

development and support for their own-

label strategies.

General Strategy

Our focus is on the chilled prepared food

market, one of the fastest growing

segments of the food industry in Europe.

We aim to create an influential group of

independent companies in different

regional markets, maximising synergy

effects in key areas and thereby creating

competitive advantages.

We will provide quality service to our

customers in all their regional markets by

offering a broad but specialised product

range, continuous new product

development, guaranteed quality and

efficient distribution at competitive

prices.

Products

The principal products of Bakkavör are high-quality

chilled prepared foods and chilled value-added

seafood. The chilled prepared foods market is a fast-

growing market in which the vast majority of the

products carry the brand names of major food

retailers. These retailers are our customers.

Prepared Chilled Food

• Ready Meals

• Meal Accompaniments

• Ethnic Snacks

Dips, Dressings and Sauces

• Dips

• Fresh salad dressings

• Spreads in tubes

• Sauces

Chilled, Value-Added Seafood• Roe and Caviar Products

• Herring Products

• Shellfish

• Smoked Salmon

3

The Group

Bakkavör Group was founded in 1986 in Iceland

by two brothers, Ágúst and L‡dur Gudmundsson.

Today, the Company comprises a parent company

and eight subsidiaries in Europe, together with an

associated company in Chile. The Group operates

sales and production enterprises in four European

Countries, Iceland, France, Sweden and the United

Kingdom, in addition to a plant in Chile. The

Group also has sales and distribution companies

in Germany, Finland and Poland. Each of these

subsidiaries is operated as an independent

company.

The principal customers of the Group are the

major supermarket chains of Europe. We do not

normally enter into contracts to supply our

customers. Our business relations are based on

the combination of service, quality, innovation

and value that we offer.

We make nearly 350 different products. Most of

them are freshly prepared every day, and will

typically be comsumed within days of leaving us.

4

The Board of Directors of the Group has

defined five areas which are closely

monitored. These areas give an indication of

the direction of the Group and the priorities

of the Board of Directors.

They are:

Growth

The Group has been characterised by

substantial growth in recent years, both

through organic growth and through

acqusitions, and this trend will continue.

It is important to sustain productivity

levels, secure access to raw materials and

maintain adequate production capacity.

Customers

The Group focuses on a small number of

key customer relationships. Our products

are manufactured under the names of

these customers and we work closely

with them. It is therefore extremely

important to maintain our services to

them at the highest possible level of

quality.

Innovation and ProductDevelopment

We attach great importance to innovation

and new product development, which

enables us to offer a wide range of

products and a steady flow of new

products for consumers who are constantly

demanding improved quality and

convenience.

Safety

Every day, vast numbers of people consume

our products. The safety of our products for

consumers is therefore of critical importance.

Shareholder Value

The principal goal of Bakkavör is to ensure

good returns to shareholders. The key to

attaining this goal is a clear vision and talented

management.

Board Agenda

5

6

Delivering Results in Growing MarketsChairman’s and Managing Director’s Address

7The fresh food sector has been experiencing the

greatest growth in Europe and is projected to

have the highest growth rate in the foreseeable

future. Consumers appreciate fresh, ready-made

products for their convenience, quality and

diversity, not to mention the time saved in cook-

ing. The organic growth of this part of Bakkavör’s

activities was 19% over the year, which is in line

with the Company’s expectations.

Chilled, Value-Added Seafood

Chilled seafood accounts for approximately 15% of

the Company’s turnover. These products are made

in our plants in Iceland, Sweden, France and Chile.

Chilled seafood includes, for example, caviar and

herring in jars. Apart from chilled seafood, our

plants also produce dips such as tarama and

spreads in tubes. These products are mostly sold

in Scandinavia and Continental Europe. The

Company’s principal markets for chilled seafood are

Sweden and France. Sales of chilled seafood were

according to plan during the year; performance in

this area of the Company’s business was good and

in line with projections. The organic growth of this

part of the Company’s activities was 17%.

In addition to five sales and manufacturing

companies, the Group has sales and distribution

companies in Poland, Germany and Finland.

The year 2001 was a good year for the Bakkavör Group. The

Company showed record profits, expansion and growth. The

most important event of the year was the acquisition of the

U.K. food manufacturer, Katsouris Fresh Foods Ltd. (KFF),

which substantially enlarged Bakkavör.

The Year’s Results

The profit for the year amounted to £ 3.6 million before

taxes, which represents an increase of 117% between years,

and the EBITDA was £ 6.3 million. Return on equity was in

line with goals, and in the operation of all subsidiaries

either met or surpassed expectations. Bakkavör’s turnover

was £ 41 million, and at year-end the Company employed

1900 people.

However, these figures give a limited picture of the oper-

ation of the Company, as the KFF acquisition did not take

effect until 1 December, so that Bakkavör’s accounts include

only one month’s turnover figures from KFF. If we look at

the projected turnover of Bakkavör for the year 2002, it rises

to £ 130 million and the projected EBITDA will be close to

£ 26 million. These figures give a much better picture of the

current operation and strength of Bakkavör.

Fresh Food

The take-over of KFF was in line with our strategy of in-

creasing the weight of fresh foods in the company’s line of

products. The two Bakkavör U.K. subsidiaries account for

78% of the production value of the Company. This value

derives from fresh food, such as Ready Meals, Dips and

Dressings. Two years ago a strategic decision was made to

increase the weight of this production line within the

Company, and for this purpose the Company took over the

U.K. dips and dressings manufacturer Wine & Dine, now

Bakkavör Birmingham. These two acquisitions have radically

changed Bakkavör’s position in the United Kingdom, and the

U.K. market, the most developed in Europe for fresh, ready-

made meals, is now Bakkavör’s principal market.

Quality and Food Safety

In the operation of a food manufacturing

company like Bakkavör, product quality

and safety are of paramount importance.

In order to guarantee the safety of our

products, we employ stringent quality

systems. The food industry imposes part-

icularly strict quality requirements, which

Bakkavör meets in every respect. It is of

the utmost importance for us to be able,

at all times, to offer safe, high-quality

products, made from the best raw mater-

ials.

Our People

The good performance of Bakkavör, and

its substantial growth in recent years, is

largely owed to the excellence of our

employees and on behalf of the Board of

Directors we would like to thank them

for their important contribution to the

Company’s operations. There are now

seven members of the Board of Directors

of Bakkavör, as two new seats were add-

ed during the year. The Board of Direct-

ors was joined by Antonios Yerolemou,

Managing Director of KFF, and Panikos

Katsouris, Financial Director of KFF. They

were among the founders of KFF two

decades ago, and played a key role in

the development and success of KFF. It

gives us great pleasure to welcome such

qualified and experienced men to the Bo-

ard of Directors, and the Group will

benefit greatly from their participation.

Dividends

The Board of Directors has decided not

to recommend payment of any dividends

in 2001, due to the recent acquisition of

KFF. Last year, Bakkavör paid a dividend

of ISK 0.2 per share and the general

policy of the Company is to pay

dividends to shareholders.

Shareholders

The principal objective of the operation

of Bakkavör is to maximise shareholder

value. We have over four thousand

shareholders. The return on shares for

the year 2001, taking account of

dividends, came to 37.6%. The price of

the Company’s stock rose 33.9% over

the year, which is an excellent result

considering the fact that the general

stock price index fell 11.3% during the

same period. The stocks rose steeply

following the announcement of the

acquisition of KFF. We are pleased with

these good results, as they reflect the

principal objective of the Company to

give shareholders a good return on their

investment.

The Company launched two public offer-

ings during the year. The first offering,

amounting to £ 6.6 million, had the

result that some of the main institutional

and professional investors in Iceland

placed their trust in the Company and

joined us as shareholders. In the second

offering, amounting to £ 24.2 million,

Bakkavör’s shareholders were joined by

the former owners of KFF, who now own

19% of the Company’s shares. A total of

44% of the shares in the Company are

now held by directors and key

employees, including the 29% held by

the founding brothers of Bakkavör. About

27% of the Company’s stock is held by

investors outside Iceland, mostly as a

result of the offering in connection with

the acquisition of KFF.

Following the acquisition of KFF, the

Company underwent refinancing with the

assistance of three banks, the Halifax

Bank of Scotland, the Royal Bank of

Scotland and HSBC. The loans taken to

finance the acquisition have a term of

seven years, and, in addition, the

Company now has access to a revolving

credit facility of £ 10 million.

We are now in the process of exploring

the potential advantages of listing the

Company on a stock exchange outside

Iceland. We will report on this in further

detail as the decision process moves

forward.

Our Customers

Since Bakkavör primarily manufac-

tures under the brand names of supermar-

ket chains, as most other companies in

our line of work do, we concentrate on

few, large customers. Our products carry

these customers’ names, which means that

our work does not simply involve serving

customers, but working closely with them.

It is extremely important to us for all

relations with customers and all services

to be of the highest achievable quality.

In recent years, supermarket chains have

become fewer and larger, but although

this trend can entail risks for companies

like Bakkavör, it can also create

opportunities. We already operate in eight

European countries, where we pursue a

strategy of catering to local tastes and

needs. This places us in an excellent

position to draw on our core expertise,

adaptability to local markets and close

customer relationships with international

supermarket chains to establish footholds

in new and emerging markets. We believe

that our strength in the future will lie in

our ability to serve the supermarket chains

in the countries where their outlets are

located.

Innovation and ProductDevelopment

We attach great importance to product

development and innovation, which is

mostly conducted in close co-operation

with our main customers. In a normal year,

the Company develops over 200 new vari-

eties of fresh foods, but less than a quart-

er of these products are launched. It is

extremely important for us to be at the

forefront in product development in order

to serve our customers better. Consumers

are expecting new products and new vari-

eties on a regular basis. There are now 25

people working on product development in

the Company, and our strategy is to keep

this aspect of our work localised by clos-

ely monitoring local market tastes and

customer response.

8

9

Prospects

Bakkavör’s growth in recent years has been

rapid, and we believe that this growth will con-

tinue as the market for the Company’s products

is steadily growing. As the Company starts to

outgrow its current production capacity, we have

invested in a new plant on the Company’s oper-

ating location in the London area with a floor

space of 60,000 square feet. The plant, which

will increase the Company’s production capability

in London by 30-40%, will come next autumn,

generating 300 new jobs. A total investment of

£ 12.8 million is planned for the current operat-

ing year.

Ahead is a future of continued growth in rapidly

growing markets. As before, our long-term goals

are clear. We intend to grow at an average annu-

al rate of 20-30% without sacrificing profits. We

will work on enlarging the Company at the same

time that we work on further co-ordination of

the operations of KFF with other Bakkavör sub-

sidiaries.

This year has begun well, and operations are in

line with our expectations. The Company has

never been better prepared for future growth

than it is right now.

Ágúst Gudmundsson & L‡dur Gudmundsson

10

The purpose of this section is to describe

briefly the markets in which Bakkavör

operates and their structure. Also, the section

will explore the substantial growth of these

markets and look at some of the drivers of

growth in this sector.

General MarketDescription

The chilled prepared food market has a strong

competitive position in the European retail

food market, which reflects the increasing

demand for convenience, the drive to mass

merchandising and a new pattern of social

trends, due to changing society, the evolution

towards a larger number of small households

and the growing participation by women in

the workforce. The increasing demand for

ready-prepared, portion-controlled, easy-to-

serve convenience foods, particularly chilled

prepared foods, is, at least in part, driven by

the diminishing availability of time to spend

preparing and cooking food.

Over 90% of Bakkavör’s products are sold on

the European chilled prepared foods market.

The total market in Europe may not easily be

quantified, owing to the undeveloped nature

of some markets. The U.K. chilled food market

is a good benchmark as it is well developed

and its description illustrates what many

analysts expect to be the future segmentation

of the European food market.

Market Report

Others 13%

Germany 18%

France 24%

U.K. 38%

Spain 3%

Netherlands 4%

Regional Segmentation

11

Value-added Poultry & Sliced Meats 17%

Sandwiches(multiple retailers & stores) 16%

Quiche, Flan & Pies 15%

Cold Eating Desserts, Cake & Breads 8%

2000

Prepared Salads 11%

Other 9%

Dips 1%Fresh Sauce 1%

Value Added Seafood 5%

Ready Meals & Meal Accompaniments 17%

Frozen 11%

Ambient 30%

Fresh/Chilled 45%

2000

2000

Meat 23%

Fresh Produce 27%Dairy 23%

Fresh Bread 7%

Fish 3%

Chilled Prepared 17%

The bold sectors in the chart for chilled prepared food are

sectors in which Bakkavör is delivering products today.

Despite the difficulty of quantifying the total market in

Europe, the world-wide food market analyst, Leatherhead

Food RA, has estimated that the Western European market

for chilled prepared foods had a volume of around 3

million tonnes in 2000. U.K., France and Germany are by

far the largest regional markets in Europe. The chart to

the left shows the share of each country in the total

volume of 3 million tonnes.

The European market was valued at over EUR 10.6 billion

(excluding prepared sandwiches) in 2000, having grown

by 9.8% from EUR 9.7 billion in 1999. The market growth

is projected at just under 15% p.a. over the next 3 years

and the value should reach EUR 16.0 billion by 2003.

Source: TNS, The U.K. Chilled Food Association.

Retail Food Market

Fresh/Chilled Foods

Chilled Prepared Food

12

Market Trends

A number of market reports indicate that the

requirement for convenience has boosted

demand for pre-packed and prepared products,

with these foods increasingly chosen over their

delicatessen counterparts. In comparison with

ambient and frozen food, chilled prepared

foods have the advantage of being fresher,

better and quicker to prepare and therefore

more convenient. Chilled prepared food also

benefits from stronger retail support.

Some of these trends have yet to make a

significant impact on countries in Continental

Europe and the Nordic Region. However,

market analysts, including Leatherhead Food

RA, believe that habits are beginning to change

in these regions, with convenience foods such

as ready meals now gaining wider acceptance,

especially among the younger generation,

following trends similar to those already

evident in the U.K. and some other northern

European countries, such as France.

The overall European chilled prepared foods

industry can be described as very fragmented,

with a number of different manufacturers

supplying the markets in individual countries,

ranging from multinationals to regional and

national companies. Branding remains strong in

the Continental European market, unlike the U.K.

market, where the market is dominated by

retailer own-labels and very few branded

products.

Many chilled food products have been developed

in the wake of maturity and stagnation in the

frozen, dried and ambient food sectors. Most of

the chilled prepared food products supplied in

the U.K. are premium lines, featuring high-quality

and luxury ingredients. The range of flavours and

fillings is increasing constantly, with ethnic,

American and Continental styles being

particularly popular. This trend is mainly due to

relatively affluent and more adventurous

consumers demanding a greater variety.

In the U.K., chilled prepared food producers

have also sought diversification into the snack

food and lunch box markets, as consumers

demand more convenience food for

consumption on the move. A similar trend is

emerging in other Continental European

markets, albeit at a slower pace.

13

Bakkavör sees good potential for growth in Europe,

but actual growth rates are likely to vary widely by

country and product category. In the more

developed markets, such as the U.K. and France,

there is still good potential for growth, especially in

new, innovative products and in the niche market

segments. Nevertheless, despite continuing growth,

chilled prepared food is still in its infancy in some

markets. In southern Europe, where formal family

eating habits remain strong, chilled prepared foods

manufacturers are struggling to gain recognition and

acceptance. However, as convenience foods in

general and chilled foods in particular become

increasingly accepted, the market is likely to follow

similar trends as in the U.K. and France, showing

higher growth rates, but from a comparatively small

base. Even some countries with food consumption

habits similar to those of France and the U.K., like

Sweden, do not seem to have developed a market

for chilled food yet. The Swedish ready meals

market, for example, was estimated at approximately

EUR 556 million in 2000, with chilled products

accounting for only about 10% of that figure, about

EUR 55.6 million. In comparison, about half of the

U.K. ready meals market, totalling about EUR 2.8

billion in 2000, is chilled foods.

Cheese SnacksSaucesReady MealsSoupPastaSandwiches (in retailers)Dips and DressingsMeal AccompanimentsEthnic Snacks

Non-diary dessertsQuichesDressed saladsDairy salads

Pre-packed pizzasPies, pasties

Ove

r 8%

per

yea

rOve

r 4%

Und

er 4

%

Growth Categories

14

Retail Market

Supermarkets have been dominant players in

many segments of the chilled prepared food

market in the U.K., and almost exclusive

players in the case of Bakkavör products.

The industry structure and trends are

therefore of great importance to the

Company. The European retail market is

characterised by ever fewer and larger

chains, trend which is likely to continue. At

the same time the retail chains are becoming

increasingly international. Concentration in

the industry is justified by the need to

develop economies of scale in purchasing

and other operations, a decisive factor in

future competitiveness.

The main reason for this consolidation of

food retail chains is that further growth is

limited in their local markets. This may be

because of tough competition and/or

because planning regulations prevent retail

chains from increasing their number of

outlets. The latter applies, for instance, in

most countries in Western Europe. Size is

becoming increasingly important in

purchasing, and in order to expand,

supermarket chains have to look across

borders. Consolidation in the industry also

calls for a change in the way purchasing is

organised, and most market participants

have set up purchasing entities, either in co-

operation with other retail chains or on their

own. This has led to new supplier business

models and strategies. To be competitive,

the suppliers must offer new products,

competitive prices, reliable service and

constant quality.

Bakkavör’s AddressableMarket

Bakkavör divides its market into three

regional markets: the U.K., the Nordic Region

(Sweden, Finland, Norway, Denmark and

Iceland) and Continental Europe. The

Company generates over 99% of all its sales

in these three regional markets. Sales

outside these three markets are marginal and

include North America and Oceania.

The largest proportion of Bakkavör’s sales

derives from the U.K. market, with

approximately 78% of sales. Today, Bakkavör

mainly serves two product segments in the

U.K.: first, fresh dips, dressings and sauces,

and second, ready meals, ethnic snacks, and

meal accompaniments. In the Nordic Region,

generating approximately 13% of sales, the

Company has mainly focused its efforts on

the chilled value-added seafood and chilled

dips. 8% of sales are generated in

Continental Europe, where the Company has

been supplying products in several marginal

chilled value-added seafood and chilled dips

segments.

Others 1%

Continental Europe 8%UK 78%

Nordic Religion 13%

Sales by Region

15

Competitive Position ofChilled Prepared Foods

In comparison with ambient and frozen food,

chilled prepared food has the advantage of

being fresher, of higher quality and quicker

to prepare, therefore more convenient. For

this reason, owing to strong retailer support,

chilled dips and ready meals have outgrown

their ambient and frozen rivals significantly.

From 1994 to 1999, chilled-dip sales

increased by 16.8% annually and ambient

dips sales by 9.2%. From 1995 to 2000

chilled ready meals sales increased by 10.7%

annually, while frozen meals sales increased

by 1.4%.

Market Drivers

Chilled prepared food is convenience food

and, as such, competes with other

convenience food, such as restaurant food

and frozen foods. Increased purchasing

power and greater convenience should

benefit the restaurant alternative, but the

convenience of eating at home and the

inconvenience of having to bring food home

before it gets cold is benefiting chilled

convenience food over takeaway food

products. In the period from 1995 to 1999,

the eating-out market showed a compound

annual growth rate of 4.7%, while chilled

ready meals showed a compound annual

growth rate of 10.9%, according to Mintel.

0

100

200

300

400

500

600

Chilled Frozen

700

800

20001999199819961995 1997

Source: TNS, The U.K. Chilled Food Association.

Chilled and frozen ready meals sales

Ambient and chilled dips sales

16 Bakkavör’s profits before taxes for the

year 2001 amounted to £ 3.6 million,

which represents an increase of 117% in

profits from 2000, when earnings before

taxes came to £ 1.7 million. Operating

revenues increased by 82% between

years, from £ 22.5 million to £ 41.0 milli-

on. Earnings before depreciation and fin-

ancial activities (EBITDA) amounted to £

6.3 million, as compared to £ 3.5 million

in 2000. The increase between years was

80%, the best operating result returned

by the Company since its foundation.

The impact of Bakkavör’s acquisition of

the U.K. food production company

Katsouris Fresh Foods Ltd. (KFF) is now

felt for the first time in the Group’s

accounts, although since the acquisition

only took effect on 1 December, only a

single month is represented in Bakka-

vör’s consolidated financial statement.

Bakkavör’s entire product line can be

divided into two principal categories. On

the one hand, we produce fresh prepared

convenience foods (ready meals, meal

accompaniments, ethnic snacks, dips,

salad dressings, and sauces) in two U.K.

subsidiaries, and, on the other hand, we

produce chilled value-added seafood and

dips (marinated herring, roe and caviar

products, smoked salmon, spreads and

shellfish) in the Company’s subsidiaries

in Iceland, Sweden, France and an

associated company in Chile. In addition,

the Group has sales and logistics sub-

sidiaries in Finland, Germany and Poland.

The operation of all Bakkavör subsidi-

aries either met or surpassed projections

in 2001. The greatest proportional in-

crease in sales was in Iceland, at almost

93%. Bakkavör Sweden‘s turnover in-

creased by 16%, Bakkavör France’s by

almost 12%, Bakkavör Birmingham’s by

over 25%, and Bakkavör Poland’s by

10%. KFF’s turnover increased by over

19% from December 2000 to December

2001. These increases in the turnover of

the subsidiaries are calculated in the cur-

rencies of their respective countries of

operation.

The most important event of the year

2001 for Bakkavör was the acquisition of

KFF, which completely transformed the

Company’s scope of activities. Bakkavör

now ranks among the largest companies

on the Iceland Stock Exchange.

Progress Report

17

United Kingdom

The acquisition of KFF was in line with

our strategy of increasing the share of

fresh prepared convenience foods in

Bakkavör’s product line. The acquisition

has completely changed Bakkavör’s

market position in the United Kingdom,

which now represents the Company’s

principal market area, with the Bakkavör

subsidiaries in the United Kingdom, KFF

and Bakkavör Birmingham, accounting for

78% of the Company’s production value.

The Company’s U.K. fresh prepared con-

venience foods production falls into four

sub-categories: ready meals, dips,

dressings and sauces, ethnic snacks, and

meal accompaniment. In 2001, we out-

performed the market in all our sub-

categories. Our growth in ready meals

was 30%, in dips, dressings, and sauces,

15%, in ethnic snacks, 9.5%, and in meal

accompaniments, 9.6%.

The market analysts Burlington Con-

sultants have projected the compound

growth of the market segments in which

Bakkavör operates for the years 2002-

2004. They predict growth in the sales of

ready meals at 6-12% annually, dips,

dressings and sauces at 12-15%, ethnic

snacks at 10-14% and, finally, meal

accompaniments at 15-25%.

18

The Nordic Region

2001 was a good year for Bakkavör in the Nordic

countries. Bakkavör Iceland almost doubled its sales

and the increase in Bakkavör Sweden’s sales was just

over 16%. These two companies account for most of the

Company’s production of chilled value-added seafood,

and the Nordic Region now accounts for 13% of our

total sales following the acquisition of KFF.

Bakkavör Iceland’s main product categories are cod roe,

lumpfish roe and capelin roe, in addition to herring. The

Icelandic plant processes a substantial quantity of raw

material for export and further processing in the

Company’s plants in Sweden and France. Bakkavör

Iceland has also become one of the major buyers of

herring in Iceland, with thousands of tons bought and

processed for shipment to Bakkavör Sweden where

further processing takes place.

Bakkavör Sweden maintained its position as Sweden’s

second largest manufacturer of chilled value-added

seafood. The principal products of Bakkavör Sweden are

marinated herring, spreads in tubes and roe-products.

All of the main product categories showed a healthy

growth in the year.

In the course of the year, a subsidiary was established

in Finland, Bakkavör Finland, which will be responsible

for distribution and logistics relating to Bakkavör’s prod-

ucts in Finland. Bakkavör has been selling its products

in Finland for years, but sales and marketing were previ-

ously handled mostly by Finnish agents.

19

Continental Europe

As before, continental Europe remains Bakkavör’s

smallest market area, accounting for approxima-

tely 8% of the Company’s revenues following the

acquisition of KFF. Bakkavör operates three subsi-

diaries in continental Europe: Bakkavör France,

Bakkavör Polska and Bakkavör Germany, with

Bakkavör France as the largest of the three.

Bakkavör France’s performance was in line with

forecasts. The company’s sales value increased by

12% between years. The principal products of the

Company are roe-products, tarama, shellfish and

smoked salmon. In the course of the year, preparations

were begun for enlargement of the Company’s plant,

which is scheduled for 2002. Bakkavör France’s subsi-

diary, Bakkavör Chile, owns a 42% interest in Pesquera

Isla Del Rey (PIDR), which also had a successful year.

PIDR owns four fishing vessels and operates a product-

ion plant in Chile. Its principal products are smoked

scallops, king crab and salmon, which is processed for

consumer packaging in the Bakkavör plant in France.

Bakkavör Poland is responsible for sales and

logistics of Bakkavör’s products in Poland. The

company increased its sales value by 10% and

continued to strengthen its relations with

international supermarket chains operating in

Poland. The company primarily sells products

from Bakkavör Iceland and Bakkavör Sweden.

Bakkavör Germany, established in 2000,

made its first sales contracts with German

supermarkets last year. There is much at

stake in the marketing of Bakkavör’s prod-

ucts in Germany, as the German market for

chilled value-added seafood is significant in

both size and value.

20

ANTONIOS YEROLEMOU (59)

Antonios is Managing Director

of KFF. He was one of the

founders of Katsouris Fresh

Foods Ltd. and has been

Managing Director since the

beginning. He took a seat on

the board of Bakkavör in the

year 2001. Antonios came to

England from Cyprus, where

he was born, in 1960.

L†DUR GUDMUNDSSON (34)

L‡dur is the Managing

Director of Bakkavör. He

founded Bakkavör with his

brother, Ágúst, at the age of

19 and has devoted his

energy to the company since

then. Together with Ágúst,

L‡dur has successfully

managed the Group’s growth

from its inception.

BRYNJÓLFUR BJARNASON (55)

Brynjolfur is Vice-Chairman of the

Board. He has been Managing

Director of Grandi, one of Iceland's

largest fishing companies, since

1985. Brynjólfur has a B.Sc. degree

in business studies and an MBA.

Brynjólfur took a seat on the

board of Bakkavör in 1995. He has

been a board member of various

companies in Iceland, Chile,

Mexico, U.S.A and France.

Board of Directors

21

ÁSGEIR THORODDSEN (59)

Ásgeir is a lawyer and has

been a partner in Reykjavík

Law Firm since 1977. Ásgeir

took a seat on the board of

Bakkavör in the year 2000.

He has been a board member

of various companies and is

currently Chairman of the

Icelandic Bar Association.

HREINN JAKOBSSON (40)

Hreinn has been Managing

Director of Sk‡rr hf., one of

Iceland's largest IT

companies, since 1997.

Hreinn has a B.Sc. degree in

business studies. He took a

seat on the board of

Bakkavör in the year 2000.

He has been a board member

of various companies,

including companies in

information technology and

other industries.

ÁGÚST GUDMUNDSSON (37)

Ágúst is Chairman of the

Board. He founded Bakkavör,

with his brother, L‡dur, at the

age of 22. Since then, he has

dedicated himself to the

company and is the acting

Chairman of the Board of

Bakkavör Group. In the 15

years that Bakkavör has been

in existence, Ágúst, has

played a key role in the rapid

but secure growth of the

Company.

PANIKOS KATSOURIS (51)

Panikos is Finance Director of

KFF. After graduating in

Economics in 1974, he joined

the family business, Katsouris

Brothers Ltd. Panikos was one

of the founders of Katsouris

Fresh Foods Ltd. in 1982 and

has served the company as

Finance Director from the

beginning. He took a seat on

the board of Bakkavör in

2001. Panikos is also

Managing Director of Katsouris

Brothers Ltd.

More than 200 new products are developed in our

development kitchens each year. These products are

often prepared in response to an approach from a

supermarket customer, although many products are

tested on the Company’s own initiative. Frequent visits

from supermarket chain representatives are scheduled to

taste new products and decide which ones should be

taken forward into full production and supply. Historically,

approximately 30-40 new products have passed this stage

each year and moved forward. The time from conception

to launch of a new product varies between the companies

in the Group, but in the U.K., Bakkavör’s largest market,

the entire process normally takes 3-4 months.

We attach great importance to innovation and

product development, which enables us to offer

a wide range of products and a steady flow of

new products for consumers who are constantly

demanding improved quality and convenience.

We have adopted the strategy of conducting

new product development within each subsidi-

ary. Each subsidiary has its own new product

development strategy, designed in the context

of its own regional market. A total of 25

employees are currently engaged in new prod-

uct development at Bakkavör.

22

Innovation and Product Development

23

Name No. of Shares %

1 Bakkabræ›ur S.a.r.l. 434.424.954 28,66%

2 Bankastræti 7 Pension Funds 75.858.824 5,00%

3 Antonios Prodromou Yerolemou 74.534.353 4,92%

4 Kaupthing Luxembourg S.A. 66.084.038 4,36%

5 Eleni Pishiris 52.336.471 3,45%

6 Panikos Joannou Katsouris 52.336.471 3,45%

7 Stella Andreou 52.336.470 3,45%

8 Demos Habeshis 52.336.470 3,45%

9 Íslandsbanki-FBA hf. 38.222.626 2,52%

10 Mills DA 37.956.868 2,50%

11 Commerce Pension Fund 35.705.882 2,36%

12 Kaupthing Bank hf. 29.895.785 1,97%

13 Frams‡n Pension Fund 29.586.146 1,95%

14 Seamen's Pension Fund 28.884.779 1,91%

15 Landssjó›ur hf. Investment Fund 23.997.270 1,58%

16 Landsbanki Íslands hf. 23.109.069 1,52%

17 Au›lind hf. Equity Fund 20.086.620 1,33%

18 Austurland Pension Fund 15.668.263 1,03%

19 VVÍB hf, Investment Fund 6 14.965.343 0,99%

20 Straumur Investment hf. 14.487.152 0,96%

4345 other shareholders 343.016.148 22,63%

Total 1.515.830.002 100,00%

Managers 44%

Investment banks 8%

Mutual funds 10%

Others 20%

Pension funds 18%

A total of 44% of the shares in Bakkavör are now

held by directors and key employees, including the

29% held by the two founders of Bakkavör, Ágúst

and L‡dur Gudmundsson. About 27% of the

Company’s stock is held by investors outside Iceland,

mostly as a result of the offering in connection with

the acquisition of KFF. Below is a list of the 20

largest shareholders as at 22 February, 2002.

Princpal Shareholders

Shareholders

24

Product Quality

All of Bakkavör’s production facilities have

received quality standard certifications, in most

cases ISO certification or compliance with the

British Retail Consortium Standards, in order to

audit production. The Company complies with

the technical and regulatory food production

standards in each of the countries in which it

operates. It is of the utmost importance for us

to be able, at all times, to offer safe, high-

quality products, made from the best raw

materials.

Our People

Motivated and committed management

represents Bakkavör’s strongest asset, and

these employees will form the foundation for

the Company’s further development. With

the significant expansion process that

Bakkavör has gone through in the last

couple of years, it has been of strategic

importance that management and owners

of acquired companies have maintained their

ties with the Company through

employment contracts and bonus schemes.

25

2001200019991998

0

2000

1600

1400

1200

1000

800

600

400

200

1800

Number of Employees

26 Head Office:

Bakkavör Group hf.

Hamraborg 10

200 Kópavogur

Iceland

Copenhagen Office:

Bakkavör Group hf.

Linnésgade 14

1361 Köbenhavn K

Denmark

Principal bankers:

Halifax Bank of Scotland

HSBC

The Royal Bank of Scotland

Investment bankers:

Kaupthing Bank

Ármúli 13

108 Reykjavík

Iceland

Auditor:

Deloitte & Touche hf.

Stórhöfdi 23

110 Reykjavík

Iceland

General Annual Meeting:

8 March 2002

Annual Report:

www.bakkavor.com

Corporate Information

Bakkavör Group hf.

Financial Highlights & Review

28

Bakkavör Group's Progress

Profit and Loss Account 2001 2000 Change %

Operating revenues 41,036,093 22,496,462 82.41%

Operating expenses 34,750,436 18,996,086 82.93%

EBITDA 6,285,657 3,500,375 79.57%

Depreciation and amortisation 2,024,105 1,089,257 85.82%

Financial items 684,091 761,677 -10.19%

Net income from regular operating activities 3,577,460 1,649,442 116.89%

Taxes 1,016,590 494,660 105.51%

Net Profit 2,560,870 1,154,782 121.76%

Working capital from operating activities 4,140,485 2,515,936 64.57%

Balance Sheet

Fixed assets 124,139,411 17,147,166 623.96%

Current assets 36,207,536 18,360,606 97.20%

Total assets 160,346,947 35,507,772 351.58%

Equity 46,974,823 8,419,576 457.92%

Subordinated convertible loan 15,944,450

Tax liability 720,786 522,412 37.97%

Long-term Liabilities 71,031,704 9,855,282 620.75%

Short-term liabilities 25,675,183 16,710,502 53.65%

Liabilities 113,372,124 27,088,196 318.53%

Total liabilities and Equity 160,346,947 35,507,772 351.58%

Key ratios

Current ratio 1.41 1.10

Equity ratio 29.30% 23.71%

Equity ratio incl. subordinated bond 39.24%

Figures in GBP

2000 2001

Million GBP

20021999

0

5

10

15

20

25

2000 2001

Million GBP

20021999

0

5

10

15

2000 2001

Million GBP

20021999

0

5

10

15

20

25

30

2000 2001

0

20

40

60

80

100

120

140

Million GBP

20021999

29

Financial Highlights

Bakkavör’s profits before taxes amounted to £ 3.6 million, an increase of 117% in profits between years.

The ratio of EBITDA to operating income was 15.3%.

The operating income of the Company increased by 82% between years.

Equity rose from £ 8.4 million to £ 62.9 million, including a convertible subordinated bond in the amount of £ 15.9 million.

The Bakkavör’s plans for 2002 assume a turnover of £ 130 millionand earnings before financial items and depreciation (EBITDA) of £ 26 million. Earnings after taxes are projected at £ 11 million.

Turnover EBITDA EBITDA% Net Profit

(F) (F) (F) (F)

30

Financial Review

Summary

This section summarises our financial policies and

practices. The Chairman’s and Managing Directors

statement and the Operating Review outline our overall

business performance.

Earnings before interest, tax, depreciation and

amortization (EBITDA) amounted to £6.3 million, as

compared to £3.5 million in 2000. This represents an

increase of 80% between years. The ratio of EBITDA to

operating income was 15.3%, which is similar to last

year when the ratio was 15.5%. Our earnings before

financial items (EBIT) increased by 77%, from £2.4

million to £4.3 million. Financial costs amounted to £0.7

million over the year. Taxes for the year came to £1.0

million, as compared to £0.5 million in the preceding

year, bringing the bottom line of the profit and loss

account to £2.6 million after taxes, as compared to £1.2

million in the preceding year, an increase of 122%. With

a strong cash inflow from operating activities and

increased committed banking facilities, Bakkavör is in an

good position to finance its future investment plans and

take advantage of opportunities that become available.

31Cash flow andcapital investment

Cash flow for the year was strongly

positive and the group met all of its

announced goals, in line with market

expectation. Net income for 2001 was

£2.6 million, up 122% on the

previous year’s figure of £1.2 million.

Working capital from operating

activities in 2001 amounted to £4.1

million, representing a 64% rise over

£2.5 million generated in 2000.

Capital expenditure for the year was

at £1.6 million, the same as in 2000.

Excluded is the cost of the

acquisitions of KFF and FPL in

December 2001, in total an

investment of £101.8 million. Net

funds outflow for 2001 was £116.1

million and financing activities

generated a net inflow of £116.4

million, raised by debt financing and

equity offering used to finance the

above acquisitions. Tax and dividend

payments totaled £1.0 million

Net debt and funding

The group has consolidated and is

looking to decrease debt. Net debt at

the year-end stood at £60.4 million.

Bakkavör has secured a £10 million

revolving credit facility for 7 years

and a 7 year term loan with a group

of banks: Halifax Bank of Scotland,

HSBC and Royal Bank of Scotland.

This ensures that medium-long term

funding is in place to support our

continued growth requirements. Net

interest for the year was £0.7 million

falling from £0.8 million in 2000.

Tax

Tax charges for the year were £1.0

million resulting in an effective rate

of tax of 28.4% compared to

standard U.K. corporation tax of 30%.

The group has been active in tax

planning and in the U.K. effective use

has been made of offset losses. In

Iceland effects of changing tax rates

have been minimised with the

effective tax rate remaining relatively

constant. In 2002 the corporation tax

rate will fall from 30% down to 18%

and efficient use of this low rate will

be part of our future tax initiatives.

Accounting standardsGroup accounts are in Icelandic

Krónur but are also available in Euro

and Sterling. Group accounting is

based around the principal of

transparency of business and all

subsidiaries are included in group

accounts. For the year 2001, 17.5% of

Group business is in eurozone

countries so the group is well

prepared for future conversion of

accounts in the U.K.

Earnings per share and dividend

Earnings per share stood at 50.3%

for the year. Due to the recent

acquisition of KFF, no dividends will

be allocated from operations in 2001.

However it is the company’s policy to

pay dividends and in 2000 dividends

were 20% of nominal value,

significantly above expectations.

32

Interest ratemanagement

Bakkavör manages exposure to

interest rate fluctuations though

capped rate agreements for 80% of

debt with floating rates. At year end

2001 Bakkavör’s borrowings were at

£71.2 million, and from January 2002,

interest rates on 80% of our

borrowings are capped for 3 years.

Foreign currencyrisk

Revenue generated within the UK is

expected to comprise 78% of Group

revenue for 2002. Our currency

management strategy is to control

risk within set parameters and

therefore full hedging of currencies

through forwards is exploited. In

order to protect our U.K. balance

sheet from the effect of currency

fluctuations on our European assets,

an appropriate level of borrowings

are denominated in Euros. Foreign

currency payment risks are eliminated

through the use of forward exchange

contracts.

Risk management

We annually review our insurance

requirements and risks. Business

continuity contingencies include

assessment of our ability to maintain

production capabilities. Information

systems are maintained and

protected as fail-safe facilities at a

secure location.

Liquidity risk

Liquidity is good and the group

currently has sufficient headroom with

7 year funding of loans. Committed

bank facilities include a convertible

loan of £15.9 million.

Treasury policies

Internal treasury uses global cash

pooling to centralise cash control.

Group treasury activities are carefully

monitored by the Group Finance

Controller, part of a five-strong team

based in Copenhagen. The purpose

of the treasury policies is to ensure

that adequate cost effective funding

is secured for Bakkavör and that

exposure to financial risk is

minimized. All foreign exchange risk

is hedged through the purchase of

forward contracts however no

speculative trading is permitted

within the group.

The treasury group has a tightly

controlled reporting structure and

clearly defined policies. Internal

audits are conducted on a regular

basis.

33

2001 2000

Turnover 41,036,093 22,496,462

Cost of sales (29,924,749) (14,842,485)

Depreciation (2,024,105) (1,089,257)

Other operating expenses (4,825,687) (4,153,601)

Operating profit before financial items 4,261,551 2,411,119

Net financial expenses (684,091) (761,677)

Income before taxes 3,577,460 1,649,442

Income tax (1,016,590) (494,660)

Profit on ordinary activities after taxation 2,560,870 1,154,782

Dividends paid (668,880) (300,883)

Retained profit carried forward 1,891,990 853,898

Consolidated profit and loss account 2001

Financial Statement, Summary GBP

Figures in GBP

34

Figures in GBP

31.12. 2001 31.12. 2000

Fixed assets

Intangible assets 103,294,649 8,685,014

Tangible assets 20,283,043 7,838,380

Investments 561,719 623,772

124,139,411 17,147,166

Current assets

Stocks 9,521,420 8,761,328

Debtors due within one year 18,428,753 7,415,357

Cash 8,257,364 2,183,921

36,207,536 18,360,606

Creditors

Due within one year (25,675,183) (16,710,502)

(25,675,183) (16,710,502)

Net current assets 10,532,353 1,650,104

Total assets less current liabilities 134,671,764 18,797,270

Creditors: due after one year

Borrowings (71,031,704) (9,855,282)

(71,031,704) (9,855,282)

Provisions for liabilities and charges (720,786) (522,412)

Net assets 62,919,273 8,419,576

Capital and reserves

Called up share capital 10,165,611 3,344,403

Share premium 35,805,065 3,369,559

Other equity 1,004,147 1,705,615

Equity shareholders funds 46,974,823 8,419,576

Subordinated convertible loan 15,944,450

62,919,273 8,419,576

Balance Sheet as at December 31 2001

35

Consolidated cash flow statement 2001

2001 2000

Cash inflow from operating activities

Group operating profit 3,244,961 1,916,458

Depreciation 2,024,105 1,089,257

Loss on sale of assets 28,226 5,922

Deferred income tax liability (169,237) 200,368

Affiliated companies (39,574) (131,115)

Stocks, change 1,908,684 (2,128,577)

Current receivables, change (4,134,761) (1,285,123)

Current liabilities, change (1,362,739) 487,590

Cash inflow from operating activities 1,499,667 154,780

Net financial expenses (947,997) (564,954)

Purchase of tangible assets (1,651,828) (1,623,147)

Purchase of shares (114,629,942) (6,902,393)

Dividends paid (668,880) (300,883)

Cash flow before use of liquid resources and financing (116,398,981) (9,236,598)

Financing

Issue of ordinary share capital 39,256,714 1,993,071

Increase in debt 77,991,999 8,321,435

Increase in cash in the period 849,733 1,077,908

Cash from acquired companies 5,223,709 399

Cash at beginning of year 2,183,921 1,105,615

Cash at end of year 8,257,364 2,183,921

Bakkavör Group hf.

Financial Statement 2001

38

Director´s Endorsement

Auditor´s ReportTo the board of directors and shareholders of Bakkavör Group hf.

We have audited the accompanying balance sheet of Bakkavör Group hf. as of 31 December 2001, and the related statement

of income for the year then ended. These financial statements are the responsibility of the Company’s management. Our

responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan

and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

In our opinion, the financial statements give a true and fair view of the financial position of Bakkavör Group hf. as of 31

December 2001 and of the results of its operations and its cash flows for the year then ended in accordance with generally

accepted accounting principles applied on a consistent basis.

Reykjavík, 25 February 2002

The board and director of Bakkavör Group hf. are of the opinion that the annual accounts contain all the information

necessary to form a clear picture of the company’s standing at the year end, the year’s operating results and the year’s

financial developments.

Operating profits amounted to roughly EUR 4.1 million. The board of the company proposes that no dividend will be paid

out to shareholders in the year 2002, but otherwise refers to the annual accounts regarding changes in the company’s net

worth and disposal of profits.

At the year end number of shareholders were 4,549 but at the beginning of year they were 4,942. One shareholder holds

more than 10% of stock, Bakkabræ›ur with 28.66%.

The board and director of Bakkavör Group hf. hereby confirm with their signature, the company´s annual accounts for the

year 2001.

Reykjavík, 25 February 2002

Ágúst Gudmundsson

Chairman

L‡dur Gudmundsson

Managing Director

Brynjólfur Bjarnason

Ásgeir Thoroddsen Hreinn Jakobsson

Antonios P. Yerolemou Panikos Joannou Katsouris

Deloitte & Touche hf.

Hilmar A. Alfredsson

State Authorized Accountant

Gudlaugur Gudmundsson

State Authorized Accountant

Members of the board

39

Statement of Income 2001

Notes 2001 2000

Operating income

Sold production 67,033,807 45,495,268

Other operating income 98,141 815,492

67,131,948 46,310,760

Operating expenses

Production cost 48,954,629 30,554,439

Other operating expenses 7,894,459 8,550,520

Depreciation 4 3,311,283 2,242,321

60,160,371 41,347,280

Operating profit before financial items 6,971,576 4,963,480

Financial expenses

Net financial expenses 21 (1,119,122) (1,567,972)

Income before taxes 5,852,455 3,395,508

Income tax

Income tax (1,663,065) (1,018,298)

Net income 4,189,390 2,377,210

Figures in EUR

40

Balance Sheet

AssetsNotes 31.12. 2001 31. 12. 2000

Fixed assets

Intangible assets 3

Capitalised development expenses 925,657 1,355,401

Goodwill 168,056,585 16,523,392

168,982,243 17,878,794

Tangible assets 4

Real estate 12,074,069 8,408,063

Vehicles 620,862 266,133

Equipments 20,486,594 7,461,734

33,181,526 16,135,930

Shareholdings 6

Shareholdings in affiliated companies 917,150 1,281,843

Shareholdings in other companies 1,781 2,241

918,931 1,284,084

Total fixed assets 203,082,699 35,298,808

Current assets

Stocks 7

Raw material and packaging 12,837,384 12,605,748

Goods 2,738,939 5,430,143

15,576,323 18,035,891

Current receivables 8

Accounts receivables 25,283,890 14,107,824

Other current receivables 4,864,158 1,157,279

30,148,047 15,265,103

Cash

Bank deposits 13,508,423 4,495,776

13,508,423 4,495,776

Total current assets 59,232,794 37,796,771

Total assets 262,315,493 73,095,579

Figures in EUR

41

December 31 2001

Equity and liabilitiesNotes 31.12. 2001 31. 12. 2000

Equity 9,10

Common stock 16,630,171 6,884,720

Reserve fund 58,574,381 6,936,505

Other equity 1,642,709 3,511,144

Total equity 76,847,262 17,332,369

Subordinated convertible loan 11 26,083,916 0

Obligations

Deferred income tax liability 12 1,179,152 1,075,427

Obligations 1,179,152 1,075,427

Liabilities

Long-term liabilities 13

Loans in foreign currencies 124,079,427 21,125,247

Other loans 0 219,551

124,079,427 21,344,799

Current maturities (7,876,924) (1,056,915)

116,202,503 20,287,883

Current liabilities

Current maturities of long-term debt 7,876,924 1,056,915

Bank loans 504,955 17,891,909

Accrued taxes 4,791,574 513,033

Other current liabilities 28,829,206 14,938,043

42,002,660 34,399,900

Liabilities and obligations 159,384,314 55,763,210

Total equity and liabilities 262,315,493 73,095,579

42

Statement of Cash flow 2001

2001 2000

Cash flow from operating activities

Net income 4,189,390 2,377,210

Items not affecting working capital

Depreciation 3,311,283 2,242,321

Calculated inflation adjustments (680,328) (601,627)

Indexation on long term debt 248,598 1,006,597

Loss on sale of assets 46,176 12,190

Deferred income tax liability, change (276,858) 412,473

Affiliated companies (64,740) (269,911)

Working capital from operations 6,773,521 5,179,254

Change in current assets and liabilities

Stocks 3,122,463 (4,381,846)

Current receivables (6,764,156) (2,645,528)

Current liabilities (2,229,338) 1,003,744

Total 902,490 (844,376)

Investing activities

Tangible assets (2,702,265) (3,341,378)

Shareholdings (187,525,927) (14,209,127)

Investing activities (190,228,192) (17,550,505)

Financing activities

Bank loans (12,509,516) 16,203,844

New long term-debt 126,968,008 1,548,450

Subordinated loan 26,083,916 0

Payments of long-term debt (12,953,388) (621,957)

Dividends paid (1,094,238) (619,392)

Proceeds from issue of capital stock 64,221,019 4,102,895

Financing activities 190,715,801 20,613,840

Net increase in cash 1,390,099 2,218,960

Cash from acquired companies 8,545,594 821

Cash at beginning of year 3,572,731 2,275,996

Cash at end of year 13,508,423 4,495,776

Figures in EUR

43

Notes

Accounting policies

1. The consolidated financial statements are prepared in accordance with the law and generally accepted accounting

principles. In all material respects, the same accounting policies have been used in financial statements as in the

previous year, except that a change is made in the entry of exchange rate difference. With reference to IAS 21 and

39, the exchange rate difference on foreign loans taken to finance the takeover of foreign subsidiaries is entered in

the equity section against the exchange rate calculations relating to the subisidiaries operations and assets. Foreign

exchange losses, after taxes and the effects of price-level changes, amount to EUR 2.2 million.

The financial statements for the Icelandic subsidiaries are prepared according to the cost method, taking into account

the effects of general price level changes. The income statement is intended to present the year's earnings at average

price level, while the figures in the balance sheet are based on the price level at the end of the year. Calculation

is based on the changes in the consumer price index, which rose by 8.61% in 2001. The book value of intangible

and tangible assets are revalued to 2001 year-end prices. The effects of general price-level changes on monetary

assets and liabilities at the beginning of the year and their changes within the year have been calculated and are

accounted for in the financial statements, with the resulting inflation adjustments amounting to EURO 680,330.

The increase in book value of fixed assets and revenue entry due to price level changes are credited to the

revaluation account under the equity section of the balance sheet.

Assets and liabilities linked to an index or denominated in foreign currencies are entered into accounts at the year-

end price level or exchange rate.

The accounts for the other subsidiaries are prepared according to the cost method. The income statement is calculated

at the year's average price level, while the balance sheet is based on the price level at the end of the year.

Other accounting methods used for individual items in the accounts are noted below.

For the convenience of the reader the annual accounts have been translated from Icelandic krónur to EUR based on

the historic ISK/EUR exchange rate at the end of 2000 and 2001.

Subsidiaries

2. The consolidated financial statements of Bakkavör Group hf. include these subsidiaries.

Interest

Bakkavör Ísland hf. 100%

Bakkavör ITC ehf. av 100%

Bakkavör Holding ApS 100%

Bakkavör UK Ltd 100%

Bakkavör Birmingham Ltd 100%

Bakkavör Sweden AB 100%

Bakkavör Germany GmbH 100%

Bakkavör London Ltd 100%

Katsouris Fresh Foods Ltd 100%

Fillo Pastry Ltd 100%

Bakkavör Finland oy 100%

Bakkavör France SA 100%

Bakkavör Chile SA 100%

Bakkavör Polska s.p.a. 75%

The consolidated financial statements are prepared according to equity method.

44

Notes

Intangible assets

3. Intangible assets consist of capitalised development cost and goodwill resulting from from premiums paid for shares in

subsidiaries. Product development costs entered as assets during the year amounted to EUR 95,520.

Intangible assets are revalued and depreciated as follows

Restated cost 1/1 14,208,027

Additions in 2001 153,675,157

Revaluation 2001 2,373,917

Depreciation in 2001 (1,274,859)

Book value 31/12 168,982,243

Fixed assets and depreciation

4. Fixed assets are revalued and depreciated as follows:

Real estate Transport Equipments Total

equipments

Restated cost 1/1 16,139,405 1,081,871 49,301,693 66,522,969

Depreciation 1/1 (4,527,115) (503,513) (30,403,634) (35,434,261)

Book value 1/1 11,612,291 578,358 18,898,059 31,088,708

Restatement in 2001 746,913 29,964 793,755 1,570,632

Purchased in 2001 262,455 154,717 2,688,930 3,106,101

Sold in 2001 (221,298) (59,642) (266,551) (547,491)

Depreciated 2001 (326,290) (82,535) (1,627,599) (2,036,424)

Book value 31/12 12,074,069 620,862 20,486,594 33,181,526

Depreciation rates 4% 15% 8-20%

Depreciation of fixed assets is calculated on a straight-line basis (at a fixed rate), for the period of ownership over the

year, based on the restated original cost. Depreciation is recorded at the average price level for the year. Depreciation

according to the income statement is as follows.

Depreciation of fixed tangible assets 2,036,425

Depreciation of intangible assets note 3. 1,274,859

3,311,283

5. The insurance value of tangible assets at the end of year is EUR 78.3 million.

Figures in EUR

45

Notes

Shareholdings

6. The company's shares in subsidiaries and affiliated companies (where it holds more than a 20% share) are accounted

for according to the equity method. Shares in other companies are accounted for by the cost method.

Par value Book value

Shares in affiliated companies:

Pesquera Isla Del Rey in Chile 42.07% share 917,150

917,150

Shareholdings in other companies:

Búna›arbanki Íslands 41 89

SÍF hf. 739 739

Frumherji hf. 299 299

Fiskmarka›ur Su›urnesja hf. 231 231

Fiskmarka›ur Íslands hf. 662 423

1,973 1,781

Stocks

7. Goods are valued at cost. Raw materials and packaging are valued at cost.

Insurance value of goods at the end of year is EUR 20.9 million.

Current receivables

8. Current receivables are valued at face value and allowance is made for doubtful receivables.

Equity

9. Total capital stock is EURO 16,642,841 as required by the articles of association. At the end of year, the company's own

shares amounted to EUR 12,670.

Total capital stock at end of year according to the annual accounts was EUR 16,642,841 as follows.

Total capital stock under articles of association 16,642,841

Own shares (12,670)

16,630,171

46

Notes

10. Equity is further differentiated as follows:

Capital stock Reserve Other Total

fund equity

Balance brought forward 5,471,190 5,512,343 2,790,257 13,773,791

New capital stock 11,158,981 53,062,038 64,221,019

Revaluation of fixed assets 424,348 424,348

Exchange differences of foreign shares (3,884,939) (3,884,939)

Gain on net montary assets (782,109) (782,109)

Net profit 4,189,390 4,189,390

Dividend (1,094,238) (1,094,238)

16,630,171 58,574,381 1,642,709 76,847,262

Subordinated convertible loan

11. A subordinated convertible loan is owed to financing institutions. The loan is in GBP, with the balance amounting to EUR

26,083,916 at year-end 2001. The loan is payable in 2009. In 2001-2005, the lenders can convert the loan to share

capital, at a rate of 20% of the loan's principal each year.

Obligations

12. Deferred income tax liability is calculated and entered in the annual accounts. The liability is calculated from the

difference in accounting items according to tax returns, on the one hand, and the company's annual accounts, on

the other.

Changes in the tax liability during the year are as follows

Income tax liability at the beginning of 2001 1,454,473

Computed indexation 103,544

Tax effect of exchange rate difference entry in equity section (788,452)

Income tax payable in 2002 (1,253,479)

Computed income tax for the year 2001 1,663,065

Income tax liability at the end of year 1,179,152

Long term liabilities

13. Long-term liabilities are as follows:

Indexation and denomination

GBP 119,118,166

EUR 4,547,303

USD 202,367

SEK 157,161

JPY 54,431

124,079,427

Figures in EUR

47

Notes

14. Annual maturities on the company's long-term liabilities were as follows

2002 7,876,926

2003 14,631,511

2004 18,556,698

2005 18,336,644

2006 20,594,451

Subsequent 124,079,427

Taxes

15. Taxes on taxable income to be paid in 2002 have been calculated and entered in the annual accounts and amount to

EUR 4.8 million. Pre-paid taxes have been deducted in the balance sheet.

Mortages and commitments

16. According to a loan agreement with Bank of Scotland, all the company's fixed assets, including shares in subsidiaries, and

the company's liquid assets, including stocks and receivables, are put up as security for the company's debts to the bank

at any given time. The balance of the debt amounted to EUR 123,404,795 at year end.

Other matters

17. The company has purchased a work stoppage insurance to the amount of EUR 137.9 million.

18. Assets bought by a lease contract are capitalized and depreciated as other assets and a liability amounting to EUR 0.93

million at the end of year is recorded in the balance sheet.

19. The company has made rental agreements in Iceland, United Kingdom and Danmark, with the reamaining period being

up to 25 years.

20. Payroll and related expenses

Payroll 8,057,368

Related expenses 1,606,536

9,663,903

Average number of employees 408

21. Financial expenses are as follows:

2001 2000

Interest income 637,067 252,630

Interest expenses and currency difference (2,436,519) (2,422,229)

Calculated inflation adjustment 680,331 601,627

(1,119,122) (1,567,972)

Bakkavör Group hf.

Ársreikningur 2001

A› áliti stjórnar og forstjóra Bakkavarar Group hf. koma fram í ársreikningi flessum allar uppl‡singar sem

nau›synlegar eru til a› glöggva sig á stö›u félagsins í árslok, rekstrarárangri ársins og fjárhagslegri flróun á árinu.

Hagna›ur af rekstri félagsins var rúmar 381,5 milljónir króna. Stjórn félagsins leggur til a› ekki ver›i greiddur

ar›ur til hluthafa á árinu 2002 en vísar a› ö›ru leyti í ársreikninginn um breytingar á eigin fé félagsins og

rá›stöfun hagna›ar.

Í lok ársins voru hluthafar í félaginu 4.549 en voru 4.942 í upphafi árs. Einn hluthafi á meira en 10% hlutafjárins

en fla› eru Bakkabræ›ur sem eiga 28,66%.

Stjórn og forstjóri Bakkavarar Group hf. sta›festa hér me› ársreikning félagsins fyrir ári› 2001 me› undirritun

sinni.50

Til stjórnar og hluthafa í Bakkavör Group hf.

Vi› höfum endursko›a› ársreikning Bakkavarar Group hf. fyrir ári› 2001. Ársreikningurinn hefur a› geyma sk‡rslu

stjórnar, rekstrarreikning, efnahagsreikning, sjó›streymi og sk‡ringar. Ársreikningurinn er lag›ur fram af

stjórnendum félagsins og á ábyrg› fleirra í samræmi vi› lög og reglur. Ábyrg› okkar felst í flví áliti sem vi› látum

í ljós á ársreikningnum á grundvelli endursko›unarinnar.

Endursko›a› var í samræmi vi› gó›a endursko›unarvenju en samkvæmt henni skal skipuleggja og haga

endursko›uninni flannig a› nægjanleg vissa fáist um a› ársreikningurinn sé í meginatri›um annmarkalaus.

Endursko›unin felur í sér greiningara›ger›ir, úrtakskannanir og athuganir á gögnum til a› sannreyna fjárhæ›ir og

a›rar uppl‡singar sem koma fram í ársreikningnum. Endursko›unin felur einnig í sér athugun á fleim

reikningsskilaa›fer›um og matsreglum sem nota›ar eru vi› ger› ársreikningsins og mat á framsetningu hans í

heild. Vi› teljum a› endursko›unin sé nægjanlega traustur grunnur til a› byggja álit okkar á.

fia› er álit okkar a› ársreikningurinn gefi glögga mynd af afkomu félagsins á árinu 2001, efnahag fless 31.

desember 2001, og breytingu á handbæru fé á árinu 2001, í samræmi vi› lög, samflykktir félagsins og gó›a

reikningsskilavenju.

Reykjavík, 25. febrúar 2002

Deloitte & Touche hf.

Áritun endurskoðenda

Skýrsla stjórnar

Hilmar A. Alfre›sson

endursko›andi

Gu›laugur Gu›mundsson

endursko›andi

Panikos Joannou Katsouris

Í stjórn

Ágúst Gu›mundssonStjórnarforma›ur

Brynjólfur Bjarnason

Ásgeir Thoroddsen Hreinn Jakobsson

Antonios P. Yerolemou

L‡›ur Gu›mundssonForstjóri

Reykjavík, 25. febrúar 2002

51

Sk‡r. 2001 2000

Rekstrartekjur

Seldar afur›ir 6.105.439.102 3.292.947.465

A›rar rekstrartekjur 8.938.704 59.025.311

6.114.377.806 3.351.972.776

Rekstrargjöld

Framlei›slukostna›ur 4.458.787.646 2.211.530.268

Annar rekstrarkostna›ur 719.027.305 618.886.611

Afskriftir 4 301.591.685 162.299.226

5.479.406.636 2.992.716.105

Hagna›ur fyrir fjármagnsli›i 634.971.170 359.256.671

Fjármunatekjur og (fjármagnsgjöld)

Fjármunatekjur og (fjármagnsgjöld) samtals 21 (101.929.599) (113.489.828)

Hagna›ur fyrir skatta 533.041.571 245.766.843

Tekjuskattur

Tekjuskattur (151.471.930) (73.704.397)

Hagna›ur 381.569.641 172.062.446

Rekstrarreikningur ársins 2001

Fjárhæ›ir í íslenskum krónum

52

Eignir

Sk‡r. 31. 12. 2001 31. 12. 2000

Fastafjármunir

Óefnislegar eignir 3

Langtímakostna›ur 84.308.881 98.103.955

Vi›skiptavild 15.306.593.784 1.195.963.138

15.390.902.665 1.294.067.093

Varanlegir rekstrarfjármunir 4

Fasteignir 1.099.706.239 608.575.600

Flutningatæki 56.548.143 19.262.699

Vélar og áhöld 1.865.918.968 540.080.339

3.022.173.350 1.167.918.638

Áhættufjármunir og langtímakröfur 6

Eignarhlutar í hlutdeildarfélögum 83.534.022 92.779.802

Eignarhlutar í ö›rum félögum 162.183 162.183

83.696.205 92.941.985

Fastafjármunir 18.496.772.220 2.554.927.716

Veltufjármunir

Vörubirg›ir 7

Hráefni og umbú›ir 1.169.228.966 912.404.043

Afur›ir 249.462.540 393.033.776

1.418.691.506 1.305.437.819

Skammtímakröfur 8

Vi›skiptakröfur 2.302.856.661 1.021.124.325

A›rar skammtímakröfur 443.027.485 83.763.835

2.745.884.146 1.104.888.160

Handbært fé

Bankainnstæ›ur 1.230.347.209 325.404.298

1.230.347.209 325.404.298

Veltufjármunir 5.394.922.861 2.735.730.277

Efnahagsreikningur

Eignir 23.891.695.081 5.290.657.993

Fjárhæ›ir í íslenskum krónum

Eigið fé og skuldir

Sk‡r. 31.12. 2001 31.12. 2000

Eigið fé 9,10

Hlutafé 1.514.676.002 498.316.002

Varasjó›ur 5.334.954.663 502.064.218

Anna› eigi› fé 149.617.972 254.136.626

Eigi› fé 6.999.248.637 1.254.516.846

Víkjandi breytanlegt lán 11 2.375.723.088 0

Skuldbindingar

Tekjuskattsskuldbinding 12 107.397.130 77.839.388

Skuldbindingar 107.397.130 77.839.388

Skuldir

Langtímaskuldir 13

Lán í erlendum gjaldmi›lum 11.301.154.195 1.529.045.397

Lán í íslenskum krónum 0 15.891.125

11.301.154.195 1.544.936.522

Næsta árs afborganir (717.430.267) (76.499.533)

10.583.723.928 1.468.436.989

Skammtímaskuldir

Næsta árs afborganir langtímaskulda 717.430.267 76.499.533

Skuldir vi› lánastofnanir 45.991.344 1.295.016.396

Reikna›ir skattar ársins 436.416.575 37.133.294

A›rar skammtímaskuldir 2.625.764.112 1.081.215.547

3.825.602.298 2.489.864.770

Skuldir og skuldbindingar 14.516.723.356 4.036.141.147

Eigi› fé og skuldir 23.891.695.081 5.290.657.993

53

31. desember 2001

54

Sk‡r. 2001 2000

Rekstrarhreyfingar

Hagna›ur ársins 381.569.641 172.062.446

Rekstrarli›ir sem ekki hafa áhrif á fjárstreymi

Afskriftir 301.591.685 162.299.226

Ver›breytingarfærsla (61.964.255) (43.545.764)

Ver›bætur og gengismunur 22.642.329 72.857.496

Sölutap 4.205.696 882.344

Tekjuskattsskuldbinding breyting (25.216.249) 29.854.819

Hlutdeild í hagna›i hlutdeildarfélaga (5.896.552) (19.536.144)

Veltufé frá rekstri 616.932.295 374.874.423

Breyting á rekstrartengdum eignum og skuldum

Vörubirg›ir, lækkun (hækkun) 284.393.968 (317.158.004)

Skammtímakröfur, hækkun (616.079.364) (191.483.322)

Skammtímaskuldir, (lækkun) hækkun (203.048.081) 72.650.970

Handbært fé frá (til) rekstri 82.198.818 (61.115.933)

Fjárfestingarhreyfingar

Fastafjármunir (246.122.326) (241.848.945)

Hlutabréf (17.079.861.430) (1.028.456.585)

Fjárfestingarhreyfingar (17.325.983.756) (1.270.305.530)

Fjármögnunarhreyfingar

Skuldir vi› lánastofnanir (1.139.366.713) 1.172.834.217

N‡jar langtímaskuldir 11.564.246.136 112.076.807

Víkjandi lán 2.375.723.088

Afborganir langtímaskulda (1.179.794.604) (45.017.215)

Greiddur ar›ur (99.663.182) (44.831.600)

Innborga› hlutafé 5.849.250.445 296.967.559

Fjármögnunarhreyfingar 17.370.395.170 1.492.029.768

Hækkun handbærs fjár 126.610.232 160.608.305

Handbært fé frá keyptum félögum 778.332.679 59.410

Handbært fé í upphafi árs 325.404.298 164.736.583

Handbært fé í lok tímabils 1.230.347.209 325.404.298

Sjóðstreymi ársins 2001

Fjárhæ›ir í íslenskum krónum

55

Reikningsskilaa›fer›ir

1. Ársreikningur samstæ›u Bakkavarar Group hf. er í samræmi vi› lög og gó›a reikningsskilavenju. Vi› ger› ársreikningsins

er í öllum meginatri›um fylgt sömu reikningsskilaa›fer›um og á fyrra ári a› flví undanskyldu a› ger› er breyting á færslu

gengismunar. Me› vísan til IAS 21 og 39 er gengismunur á erlendum lánum sem tekin voru til fjármögnunar á kaupum á

erlendum dótturfélögum fær›ur yfir eigi› fé til mótvægis vi› gengisumreikning af rekstri og eignum dótturfélaganna.

Gengistapi› a› teknu tilliti til skattáhrifa og áhrifa ver›lagsbreytinga er kr. 207,5 milljónir.

Ársreikningurinn er ger›ur eftir kostna›arver›sa›fer› a› teknu tilliti til áhrifa ver›lagsbreytinga.

Í íslenskum félögum samstæ›unnar er notu› kostna›arver›sa›fer› a› teknu tilliti til áhrifa ver›lagsbreytinga. fiannig er

rekstrarreikningi ætla› a› s‡na afkomu á me›alver›lagi en fjárhæ›ir í efnahagsreikningi eru á ver›lagi í lok ársins. Mi›a›

er vi› breytingu á neysluver›svísitölu en hún hækka›i um 8,61% á árinu. Varanlegir rekstrarfjármunir og óefnislegar eignir

eru endurmetnar me› flví a› framreikna upphaflegt stofnver› fleirra og afskriftir til ársloka 2001. fieir varanlegu rekstrar-

fjármunir og flær óefnislegu eignir sem vi› bættust e›a voru seld eru endurmetin mi›a› vi› eignarhaldstíma. Áhrif ver›-

lagsbreytinga á peningalegar eignir og skuldir eins og flær voru í byrjun reikningsársins og á breytingu fleirra á árinu eru

reiknu› og mynda reikna›ar tekjur vegna ver›lagsbreytinga a› fjárhæ› kr. 61.964.255. Endurmatshækkun varanlegra

rekstrarfjármuna og reikna›ar tekjur vegna ver›lagsbreytinga er fær› á endurmatsreikning me›al eiginfjárli›a í

efnahagsreikningi.

Eignir og skuldir sem bundnar eru vísitölu e›a gengi erlendra gjaldmi›la eru fær›ar upp mi›a› vi› ver›lag e›a gengi í árslok.

Í ö›rum félögum samstæ›unnar er notu› kostna›arver›sa›fer›. Rekstrarli›ir eru reikna›ir í íslenskar krónur á me›algengi

tímabilsins en efnahagsli›ir eru reikna›ir í íslenskar krónur á árslokagengi.

A›rar reikningsskilaa›fer›ir sem snerta einstök efnisatri›i ársreikningsins eru tilgreindar í sk‡ringum hér á eftir.

Samstæ›a

2. Samstæ›ureikningsskil Bakkavarar Group hf. taka til flessara dótturfélaga:

Eignarhluti

Bakkavör Ísland hf. 100%

Bakkavör ITC ehf. av 100%

Bakkavör Holding ApS 100%

Bakkavör UK Ltd 100%

Bakkavör Birmingham Ltd 100%

Bakkavör Sweden AB 100%

Bakkavör Germany GmbH 100%

Bakkavör London Ltd 100%

Katsouris Fresh Foods Ltd 100%

Fillo Pastry Ltd 100%

Bakkavör Finland oy 100%

Bakkavör France SA 100%

Bakkavör Chile SA 100%

Bakkavör Polska s.p.a 75%

Samstæ›an er samin í samræmi vi› kaupver›sreglu.

Skýringar

56

Óefnislegar eignir

3. Óefnislegar eignir samanstanda annars vegar af langtímakostna›i vegna vöruflróunar frá fyrri árum og hins vegar af

vi›skiptavild sem er vegna yfirver›s af kaupum á hlutabréfum í dótturfélögum. Eignfær› vöruflróun á árinu var 8,7

milljónir króna.

Nánar greinast óefnislegar eignir flannig:

Stofnver› í ársbyrjun 1.294.067.093

Vi›bót á árinu, stofnver› 13.996.733.315

Endurmat og gengismunur á árinu 216.216.380

Afskrifa› á árinu (116.114.123)

Bókfært ver› í árslok 15.390.902.665

Varanlegir rekstrarfjármunir og afskriftir

4. Varanlegir rekstrarfjármunir greinast flannig:

Fasteignir Flutninga- Vélar og Samtals

tæki áhöld

Stofnver› 1.1. og vi›bót á árinu 1.469.977.033 98.536.811 4.490.398.174 6.058.912.018

Afskrifa› á›ur og vi›bót á árinu (412.329.600) (45.859.952) (2.769.162.945) (3.227.352.497)

Bókfært ver› 1/1 1.057.647.433 52.676.859 1.721.235.229 2.831.559.521

Endurmat á árinu 68.028.796 2.729.152 72.295.207 143.053.155

Keypt á árinu 23.904.372 14.091.583 244.907.767 282.903.722

Selt á árinu (20.155.856) (5.432.177) (24.277.487) (49.865.520)

Afskrifa› á árinu (29.718.506) (7.517.274) (148.241.748) (185.477.528)

Bókfært ver› í árslok 1.099.706.239 56.548.143 1.865.918.968 3.022.173.350

Afskriftarhlutföll 4% 15% 8-20%

Afskriftir eru reikna›ar sem fastur árlegur hundra›shluti af framreiknu›u kostna›arver›i mi›a› vi› eignarhaldstíma á

árinu og fær›ar til gjalda á me›alver›lagi ársins. Afskriftir samkvæmt rekstrarreikningi greinast flannig:

Afskrift varanlegra rekstrarfjármuna 185.477.562

Afskriftir óefnislegra eigna sbr. sk‡ringu 3 116.114.123

301.591.685

5. Vátryggingamat

Vátryggingamat fastafjármuna nam í árslok um 7.135 milljónum króna.

Skýringar

Fjárhæ›ir í íslenskum krónum

57

Eignarhlutar í félögum

6. Eignarhlutar félagsins í fleim félögum flar sem eignarhlutdeildin er umfram 20% eru fær›ir samkvæmt hlutdeildara›fer›.

Eignarhlutar í ö›rum félögum eru bókfær›ir á kostna›arver›i.

Nafnver› Bókfært ver›

Eignarhlutar í hlutdeildarfélögum:

Pesquera Isla Del Rey í Chile, 42,07% hlutdeild 83.534.022

83.534.022

Eignarhlutar í ö›rum félögum:

Búna›arbanki Íslands 3.760 8.084

SÍF hf. 67.326 67.326

Frumherji hf. 27.273 27.273

Fiskmarka›ur Su›urnesja hf. 21.000 21.000

Fiskmarka›ur Íslands hf. 60.300 38.500

179.659 162.183

Birg›ir

7. Afur›ir eru metnar vi› kostna›arver›i.

Hráefni og rekstrarvörur eru metnar á kostna›arver›i.

Vátryggingamat birg›a nemur í árslok um 1.903 milljónir króna.

Skammtímakröfur

8. Skammtímakröfur eru fær›ar á nafnver›i a› teknu tilliti til ni›urfærslu krafna sem kunna a› tapast.

Eigi› fé

9. Heildarhlutafé félagsins er kr. 1.515.830.002 eins og kve›i› er á um í samflykktum fless. Í lok tímabils voru í eigu

félagsins hlutir a› nafnver›i kr. 1.154.000.

Hlutafé samkvæmt ársreikningi nemur kr. 1.514.676.002 og greinist fla› flannig:

Heildarhlutafé samkvæmt samflykktum félagsins 1.515.830.002

Eigin hlutir (1.154.000)

1.514.676.002

Skýringar

58

10. Yfirlit yfir eiginfjárreikninga:

Hlutafé Varasjó›ur Anna› Samtals

eigi› fé eigi› fé

Yfirfært frá fyrra ári 498.316.002 502.064.218 254.136.626 1.254.516.846

N‡tt hlutafé 1.016.360.000 4.832.890.445 5.849.250.445

Endurmat fastafjármuna 38.649.656 38.649.656

fi‡›ingarmismunur á erlendum eignarhlutum (353.840.252) (353.840.252)

Reikna›ar tekjur vegna ver›lagsbreytinga (71.234.517) (71.234.517)

Hagna›ur ársins 381.569.641 381.569.641

Greiddur ar›ur (99.663.182) (99.663.182)

1.514.676.002 5.334.954.663 149.617.972 6.999.248.637

Víkjandi breytanlegt lán

11. Víkjandi breytanlegt lán er vi› lánastofnanir. Láni› er í breskum pundum. og a› eftirstö›vum kr. 2.375.723.088 í árslok

2001 Láni› er til grei›slu á árinu 2009. Á árunum 2001 til 2005 geta lánveitendur breytt láninu í hlutafé, 20% árlega af

höfu›stól láns.

Skuldbindingar

12. Tekjuskattsskuldbinding er reiknu› og fær› í ársreikninginn. Tekjuskattsskuldbindingin stafar af mismun efnahagsli›a í

skattauppgjöri annars vegar og ársreikningi hins vegar. Mismunurinn stafar af flví a› tekjuskattsstofn félagins er mi›a›ur

vi› a›rar forsendur en reikningsskil fless.

Breyting tekjuskattskuldbindingarinnar á árinu greinist flannig:

Tekjuskattskuldbinding í ársbyrjun og vi›bót 132.473.444

Ver›bætur og gengismunur 9.430.800

Skattaáhrif af færslu gengismunar yfir eigi› fé (71.812.191)

Tekjuskattur til grei›slu á árinu 2002 (114.166.853)

Tekjuskattur vegna ársins 2001 151.471.930

Tekjuskattsskuldbinding í árslok 107.397.130

Langtímaskuldir

13. Yfirlit um langtímaskuldir

Gengis- og ver›trygging

GBP 10.849.282.526

EUR 414.168.314

USD 18.431.559

SEK 14.314.252

JPY 4.957.544

11.301.154.195

Skýringar

Fjárhæ›ir í íslenskum krónum

59

14. Afborganir af langtímaskuldum félagsins í lok ársins greinast flannig á næstu ár:

Næsta árs afborganir 717.430.416

Afborganir 2003 1.332.638.035

Afborganir 2004 1.690.144.035

Afborganir 2005 1.670.101.555

Afborganir 2006 1.875.742.617

Afborganir sí›ar 4.015.097.537

11.301.154.195

Skattamál

15. Skattar á hagna› ársins og eignir sem ver›a lag›ir á félagi› á árinu 2002 hafa veri› reikna›ir og fær›ir í ársreikninginn

og nema fleir kr. 436,4 milljónum. Til frádráttar reiknu›um sköttum ársins í efnahagsreikningi hafa veri› fær›ar

fyrirframgrei›slur.

Ábyrg›ir og ve›setningar

16. Samkvæmt lánasamningi vi› Bank of Scotland eru allir fastafjármunir félagsins, flar me› talin hlutabréf í dótturfélögum

og lausafé félagsins, flar me› taldar vörubirg›ir og almennar kröfur ve›settar til tryggingar skuldum félagsins vi›

bankann hverju sinni. Eftirstö›var skulda árslok voru kr. 11.239.982.000.

Önnur mál

17. Félagi› hefur keypt rekstrarstö›vunartryggingu vegna bruna- og vatnstjóns og nemur bótafjárhæ›in allt a› 12.559

milljónum króna.

18. Ger›ir hafa veri› nokkrir fjármögnunarleigusamningar vegna kaupa á vélum og vélbúna›i. firátt fyrir eignarréttarfyrirvara

leigusala eru flessir leigufjármunir fær›ir til eignar í ársreikningi me›al varanlegra rekstrarfjármuna og endurmetnir og

afskrifa›ir á sama hátt. Skuld vi› leigusala er fær› me›al langtímaskulda og eru eftirstö›var um 84,8 milljónir króna í

árslok 2001.

19. Félagi› hefur gert samninga um húsaleigu á Íslandi, Bretlandi og Danmörku og er leigutími allt a› 25 árum.

20. Laun og tengd gjöld greinast flannig:

Laun 733.865.033

Launatengd gjöld 146.323.260

880.188.293

Me›alfjöldi starfa 408

Heildarlaun og flóknanir til helstu stjórnenda félagsins á árinu 2001 námu 132,3 milljónum króna.

21. Fjármunatekjur og (fjármagnsgjöld) greinast flannig:

2001 2000

Vaxtatekjur 58.024.020 18.285.328

Vaxtagjöld og gengismunur (221.918.126) (175.320.950)

Reikna›ar tekjur vegna áhrifa ver›lagsbreytinga 61.964.507 43.545.794

(101.929.599) (113.489.828)

Skýringar