Equity

30. The Company‘s share capital amounts to ISK 1,000 million as decided in its Articles of
    Association. The holders of ordinary shares are entitled to receive dividends as declared
    from time to time and are entitled to one vote per share of one ISK.
    On a shareholders meeting 29 December 2006 the Board of Directors received authority
    to purchase own shares of maximum 10% of the total nominal value of the ordinary shares
    for a 18 month period. Furthermore the meeting agreed upon authorisation to the Board
    of Directors to increase the share capital by 6% for issue against share option plan to
    employees. Early January 2007 the Board of Directors granted options to key employees
    amounting to ISK 60 millions with the exercise price 27.5.

    Share premium
    Share premium represents excess of payment 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 value of share capital must be held in reserve which can not be
    paid out as dividend to shareholders.
    
    Hedging reserve
    The hedging reserve comprises the effective portion of the cumulative net change in the
    fair value of cash flow hedging instruments related to hedged transactions that have not yet
    occurred.
    
    Translation reserve
    The translation reserve comprises all foreign currency differences arising from the translation
    of the financial statements of foreign operations as well as from the translation of
    liabilities that hedge net investment in a foreign subsidiary.

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