Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698061139356.pdf (Liberia)
Kaldalón hf.

Financial statements for the year ended December 31, 2018 Index Board of Directors' report .....................................................................................................................
Independent Auditor's Report ............................................................................................................... Income Statement and Statement of Comprehensive Income ............................................................ Balance Sheet ......................................................................................................................................
Statement of Changes in Equity ........................................................................................................... Cash Flow Statement ........................................................................................................................... Notes to the Financial Statements .......................................................................................................

Page 2 - 3 4 - - 15 Kaldalón hf.


Identity number 490617-1320 Borgartúni 25, 105 Reykjavík 2 Board of Directors' Report Main operation The purpose of the company is investment activities.
This includes Real Estate development, the purchase, sale, operation, ownership, management and development of real estate and real estate companies, lending activities along with the purchase and sale of companies, financial instruments, various types of debt recognition (including credit agreements, all in connection with real estate transactions), real estate development or financing of construction projects and other related operations.
The company is classified as an investment company according to International Accounting Standards.

The company does not prepare consolidated financial statements, but assesses the assets of subsidiaries and associates at fair value and recognizes changes in fair value in the Profit or Loss.

Operating results Kaldalón hf.

was established in 2017.


The Company was initially registered as a Limited Partnership but its Articles of Association and therefore its legal form changed at the end of 2017 to a Limited Liability Company.

The Company's profit during the year was ISK 388.351 thousand.

The Company's equity amounted to ISK 3.255.005 thousand at year end 2018.
It is the opinion of the Board of Directors that the Financial Statements present fairly the financial position of the company at the end of the year, the results of its operations during the year and the changes in the financial position of the company.
In 2018, the Board exercised authorization in the Company's Articles of Association and decided to increase the share capital by a total of ISK 988.548 thousand, with a nominal value ISK 1, and the share capital of the company became ISK 2.842.720 thousand following the rise.

No employees were on the payroll of the company during the year.

The company has entered into an agreement on asset management and day-to-day management with Kvika Bank hf.

Future plans Kaldalón hf.


is a development company that invests in companies that invest in companies owning plots of land or buy land in their subsidiaries.

The company also invests in building-related activities.

The aim of the company is to be a leading development company in Iceland and at any time the company intends to develop well-located and sought-after construction sites.
The Board of Directors will propose at a Shareholders' Meeting to register the company on the First North market in mid- 2019.

Preparations for this are well under way.

Post Balance Sheet event In April 2019, a subsidiary of Kaldalón hf., U22 ehf., signed a contract for purchase of the property Sólvallagata 79, at Grandatorg in Reykjavik and at the same time sold to U22 ehf.

a real estate currently under construction at Urriðaholtsstræti 22 in Garðabær.
A local plan allows for 8,200 square meters of construction on the site at Grandatorg.

In 2019, the Company's Board of Directors has twice exercised its authority in the Company's Articles of Association and decided to increase the share by a total of ISK 398,851 thousand, and the Company's total share capital is now ISK 3.241.571 thousand.
Appropriation of net profit The board of directors refers to the financial statements regarding the appropriation of the year's net profit and will suggest a dividend payment at the General Meeting.

3 Board of Directors' Report Ownership There were 18 Shareholders at year end.

The ten biggest shareholders are: RES ehf.

................................................................................. Investar ehf.

........................................................................... Loran ehf.
............................................................................... Premier eignarhaldsfélag ehf.

................................................ Kvika banki hf.

........................................................................ 24 Development Holding ehf.

................................................. GG optic ehf.

..........................................................................

ET sjón ehf.
ET sjón ehf.

............................................................................ Sindrandi ehf.

......................................................................... DFT ehf.

................................................................................. Other shareholders ................................................................ 18,6% 16,2% 13,2% 13,2% 9,9% 7,0% 3,5% 3,5% 3,5% 3,5% 7,9% 100,0% Kaldalón hf.
owns its own shares with a nominal value of ISK 30.100.000 or 1.058% of issued share capital.

Financial Risk Management For the company's strategy and policy towards risk, refer to note 16.
Statement by the Board of Directors According to the best knowledge of the Board of Directors, the Company's Financial Statements are prepared in accordance with International Financial Reporting Standards as endorsed by the European Union, and it is the opinion of the Board of Directors that they give a clear picture of the Company's assets, liabilities and financial position on 31 December 2018 and operating results, changes in cash and cash equivalents and changes in the company's equity for the year 2018.
However, the main risk and uncertainty factors that the company faces are also explained.

The Board of Directors' of Kaldalón hf.

and Managing Director hereby ratify the annual report for the year 2018 with their signatures.

Reykjavík, May 17, 2019 Board of Directors: Managing Director: 4 Independent Auditor's report To the Board of Directors' and shareholders' of Kaldalón hf.
Opinion We have audited the financial statements of Kaldalón hf., which comprise the Directors Report, Statement of Financial Position as at December 31, 2018, and the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at December 31, 2018, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and that the directors report includes applicable information in accordance with Icelandic law on the annual accounts, if not presented elsewhere in the financial statements.
Basis for opinion We conducted our audit in accordance with International Standards on Auditing.

Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of financial statements in Iceland, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for as many of the internal controls as management deems necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company´s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company´s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions taken by users on the basis of these financial statements.

Independent Auditor's report 5 As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit.
We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit 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 Company´s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company´s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.

However, future events or conditions may cause the Company to cease to continue as a Going Concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Reykjavík, May 17, 2019 PricewaterhouseCoopers ehf.
Tryggvi Jónsson Certified Accountant Kristinn F. Kristinsson Certified Accountant Income Statement and Statement of Comprehensive Income for the year 2018 6 Notes 2018 2017 Operating income Operating expenses ............................................................................... Operating loss Financial income (expenses) Interest income ....................................................................................... Interest expenses ................................................................................... Fair value changes in share of associates ............................................. 6 87.081.140 17.172.625 (87.081.140) (17.172.625) 38.364.330 (14.247.402) 451.315.336 475.432.264 73.244 (77.283) 41.109.543 41.105.504 Net profit 388.351.124 23.932.879 Notes on pages 10 to 15 are an integral part of these financial statements.
Kaldalón hf.
Financial statements 2018 Amounts in Icelandic Krona Balance sheet as of December 31, 2018 7 Assets Notes 31.12.2018 31.12.2017 Fixed assets Tangible assets: Buildings and Land ................................................................................. 7 110.806.800 0 Investments: Investment in subsidiaries ...................................................................... Investments in associates ...................................................................... Loan to related companies ..................................................................... 5, 6 5, 6 9 Current assets Other receivables ................................................................................... Cash and cash equivalents .................................................................... 13, 9 Total assets Equity and liabilities 1.988.806.309 483.726.203 1.132.935.678 3.605.468.190 1.460.546.823 432.401.737 51.369.000 1.944.317.560 3.077.234 21.490.927 24.568.161 14.648 4.320.856 4.335.504 3.740.843.151 1.948.653.064 Shareholders equity Share capital .......................................................................................... Reserves ................................................................................................
Retained earnings .................................................................................. Total equity 2.842.720.837 492.424.879 (80.140.876) 3.255.004.840 1.854.172.350 41.109.543 (17.176.664) 1.878.105.229 14, 15 Liabilities Long-term liabilities: Borrowings ..............................................................................................
Liabilities to related companies .............................................................. Current liabilities: Borrowings ..............................................................................................
Liabilities to related companies .............................................................. Other liabilities ........................................................................................ 9 8, 9 9 Total liabilities Total equity and liabilities 310.631.392 109.837.229 420.468.621 0 49.628.510 15.741.180 65.369.690 0 0 0 60.015.583 8.722.019 1.810.233 70.547.835 485.838.311 70.547.835 3.740.843.151 1.948.653.064 Notes on pages 10 to 15 are an integral part of these financial statements.
Kaldalón hf.

Financial statements 2018 Amounts in Icelandic Krona 8 Statement of Changes in Equity for the year 2018 Year 2018 Share capital Reserves Retained earnings Total equity Balance at beginning of year .......................................
Paid in capital .............................................................. Comprehensive income .............................................. Balance at end of year ................................................ 1.854.172.350 988.548.487 41.109.543 0 0 451.315.336 2.842.720.837 492.424.879 (17.176.664) 1.878.105.229 988.548.487 0 (62.964.212) 388.351.124 (80.140.876) 3.255.004.840 Year 2017 Balance at beginning of year .......................................
Paid in capital .............................................................. Comprehensive income .............................................. Balance at end of year ................................................ 0 1.854.172.350 0 1.854.172.350 0 0 41.109.543 41.109.543 0 0 0 1.854.172.350 23.932.879 (17.176.664) (17.176.664) 1.878.105.229 Notes on pages 10 to 15 are an integral part of these financial statements.

Kaldalón hf.
Kaldalón hf.

Financial statements 2018 Amounts in Icelandic Krona Cash Flow Statement for the year ended December 31, 2018 9 Cash flows from operating activities Paid cost .........................................................................................

Received interest income ................................................................
Paid interest expense ...................................................................... 2018 2017 (50.763.507) 3.690.460 (2.894.365) (6.655.021) 73.244 (61.700) Net cash from Operating Activities (49.967.412) (6.643.477) Cash flows from Investing Activities Purchase of shares in subsidiaries ................................................. Purchase of tangible fixed assets ................................................... Loans to subsidiaries and associates ............................................. Cash flows from financing activities Paid in capital ..................................................................................
Proceeds from new borrowings ....................................................... Repayments of long-term liabilities .................................................
Borrowings from subsidiaries and accosiates ................................. (68.066.667) (110.806.800) (1.046.892.808) (1.225.766.275) 943.803.758 303.000.000 (60.000.000) 106.100.000 1.292.903.758 (147.000.000) 0 (51.369.000) (198.369.000) 149.333.333 60.000.000 0 0 209.333.333 Increase in cash and cash equivalents 17.170.071 4.320.856 Cash and cash equivalents at beginning of year ............................ Cash and cash equivalents at end of year 4.320.856 21.490.927 0 4.320.856 Investing and financing activites not affecting cash: Investment in shares of subsidiaries ............................................... Investments in shares of associates ............................................... Capital increase .............................................................................. (44.744.729) 0 44.744.729 (1.313.546.823) (391.292.194) 1.704.839.017 Notes on pages 10 to 15 are an integral part of these financial statements.
Kaldalón hf.

Financial statements 2018 Amounts in Icelandic Krona 10 Notes 1.

The company Kaldalón hf., referred to as the Company, is an Icelandic company with operations in Iceland.

Kaldalón hf.

's address is at Borgartún 25, Reykjavík, Iceland.

the company is investment activities.


This includes Real Estate development, The purpose of the purchase, sale, operation, ownership, management and development of real estate and real estate companies, lending activities along with the purchase and sale of companies, financial instruments, various types of debt recognition (including credit agreements, all in connection with real estate transactions), real estate development or financing of construction projects and other related operations.
The financial statements were approved by the Board of Directors of Kaldalón hf.

on May 17, 2019.

2 Basis of operation The Company's Financial Statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

The Company's Annual Accounts are also in accordance with the Annual Accounts Act and Regulation on the Presentation and Content of Annual Accounts and Consolidated Financial Statements.
The financial statements are prepared in Icelandic Krona (ISK), which is the Company´s functional currency.

To increase the disclosure value of the financial statements, explanations are published on the basis of how relevant and important they are to the reader.

This means that information that is evaluated as neither important nor relevant to the user of the financial statements will be excluded from the notes.
The company is considered an investment company according to International Accounting Standards, but the company manages its portfolio on the basis of fair value and only has income from its investments through fair value changes and other income from investments.

The annual accounts are based on cost price, with the exception that shares in subsidiaries and associated companies and current assets are recognized at fair value.

The company does not make consolidated accounts.


3 Summary of significant accounting policies The main accounting policies applied in the preparation of these financial statements are set out below.

Unless otherwise stated, these methods were applied consistently during both periods.
The Company has adopted all International Financial Reporting Standards, amendments to them and interpretations that the European Union has confirmed and has come into force as of January 1, 2018, and are applicable to its operations.

The company has not adopted standards, amendments to standards or interpretations that come into effect after December 31, 2018, but can be adopted earlier.
New accounting standards were adopted during the year On January 1, 2018, two new International Financial Reporting Standards, IFRS 9 'Financial Instruments', and IFRS 15 'Revenue from Contracts with Customers', did not affect the Company's financial statements.

The IFRS 9 Standard "Financial Instruments" specifies how the classification, valuation and derecognition of financial assets and financial liabilities should be carried out, as well as a new model for impairment of financial assets.
In the company's financial statements, the main financial instruments are shares in subsidiaries and associates, which are recognized at fair value through profit or loss according to the authorization in the IFRS 10 'Consolidated Financial Statements', as the company is an investment company.

Other financial instruments, loans to related parties, short-term receivables and current liabilities are stated at cost.
The new standard has no effect on the treatment of these financial instruments at the company, and therefore no changes are made to the company's financial statements at the beginning of the year.

New accounting standards adopted during next year On January 1, 2019, a new International Financial Reporting Standard, IFRS 16 'Leases' will come into effect, but it will not affect the financial statements of the Company.

Kaldalón hf.
Kaldalón hf.

Financial statements 2018 Amounts in Icelandic Krona 11 Notes 4 Use of estimates and judgements When preparing the financial statements, management needs to assess various issues and give themselves a basis for assessing assets, liabilities, income and expenses.

Although this is managements best judgement at the time, the real value of the items being evaluated may be different from the outcome of the assessment.
Changes in accounting estimates are recognized in the period in which the change occurs.

The company's uncertainty is largely determined by the determination of the fair value of its holdings in other companies.

Shares in other companies are accounted for and the valuation methods are explained in the notes 5 and 6.
5 Classification of financial assets and financial liabilites Financial assets and financial liabilities are categorized into specific categories that indicate how they should be measured after their initial listing.

The subsequent evaluation of each category is as follows:: • Loans and receivables, measured at amortized cost; • Financial assets designated at fair value through profit or loss, measured at fair value; • Other financial liabilities, measured at amortized cost.
The table below shows the classification of financial assets and financial liabilities of the Company in accordance with IFRS 9 and their fair value.
Year 2018 Financial assets Investment in subsidiaries ........................................ Investments in associates ......................................... Loan to related companies ....................................... Other receivables ...................................................... Cash and cash equivalents ...................................... Total Financial liabilites Borrowings ................................................................
Liabilities to related companies ................................ Other liabilities ........................................................... Total Year 2017 Other liabilites measured at amortized cost Financial assets at fair value through P&L 1.988.806.309 483.726.203 2.472.532.512 Loans and receivables 1.132.935.678 3.077.234 21.490.927 1.157.503.839 Total book value 1.988.806.309 483.726.203 1.132.935.678 3.077.234 21.490.927 3.630.036.351 0 159.465.739 15.741.180 175.206.919 0 159.465.739 15.741.180 175.206.919 Financial assets Investment in subsidiaries ........................................ Investments in associates ......................................... Loan to related companies ....................................... Other receivables ...................................................... Cash and cash equivalents ...................................... Total 1.460.546.823 432.401.737 1.892.948.560 51.369.000 14.648 4.320.856 55.704.504 1.460.546.823 432.401.737 51.369.000 14.648 4.320.856 1.948.653.064 Financial liabilites Borrowings ................................................................
Liabilities to related companies ................................ Other liabilities ........................................................... Total 60.015.583 8.722.019 1.810.233 70.547.835 60.015.583 8.722.019 1.810.233 70.547.835 Kaldalón hf.
Financial statements 2018 Amounts in Icelandic Krona 12 Notes 6 Fair value of financial assets and financial liabilites a Level of fair value Fair value is divided into three categories according to whether or not the methods used in determining fair value are based on market data.

Market data reflects market information from independent sources.

Fair value that is not based on market data is based on assumptions made by the Company.
Based on these two types of variable, the fair value step is determined as follows: • Level 1 - Prices quoted in active markets.

These are listed shares and bonds on stock exchanges.

• Level 2 - Here, the price is based on data, other than listed prices, as in Level 1, which, however, is available on the market, either directly or indirectly.

Data used in fair value calculations here may be, for example, LIBOR yield curve and counterparty credit rating.
• Level 3 - Here, the fair value of non-marketable assets and liabilites.

These are mainly shares and bonds that are valued on the basis of data that is mostly inaccessible in the market.

The following table shows the step division in determining the fair value of the financial assets recognized at fair value in the financial statements of the Company.

The Company does not disclose the fair value of other financial assets as their carrying amount is considered to reflect the fair value.
Year 2018 Investment in subsidiaries ................................................................................................................................ Investments in associates ................................................................................................................................ Year 2017 Investment in subsidiaries ................................................................................................................................ Investments in associates ................................................................................................................................ Changes in the company's financial assets that fall into Level 3 of fair value.
Year 2018 Beginning of year book value ................................................................ Purchase ................................................................................................ Fair value changes recognized in profit or loss .................................... End of year book value .......................................................................... Investments in subsidiaries 1.460.546.823 138.268.615 389.990.870 1.988.806.309 Investments in associates 432.401.737 (10.000.000) 61.324.466 483.726.203 Accumulated unrealized changes in value that have been recognized in the P&L: Year 2017 Purchase ................................................................................................ Fair value changes recognized in profit or loss .................................... End of year book value .......................................................................... Investment in subsidiaries 1.460.546.823 0 1.460.546.823 Investments in associates 391.292.194 41.109.543 432.401.737 Accumulated unrealized changes in value that have been recognized in the P&L: Level 3 1.988.806.309 483.726.203 2.472.532.512 1.460.546.823 432.401.737 1.892.948.560 Total 1.892.948.560 128.268.615 451.315.336 2.472.532.511 492.424.879 Total 1.851.839.017 41.109.543 1.892.948.560 41.109.543 Kaldalón hf.
Financial statements 2018 Amounts in Icelandic Krona 13 Notes b Investments in subsidiaries and associates Investments in subsidiaries and associates are as follows: Location Ownership % Nominal value Book value 31.12.2018 31.12.2017 Subsidiaries: U 14-20 ehf.

....................................... U22 ehf.

............................................. U24 ehf.

............................................. U26 ehf.

............................................. Þróunarfélagið Hnoðraholt ehf.
......... Vesturbugt eignarhaldsfélag ehf.

...... Fasteignastýring ehf.

......................... Steinsteypan ehf ................................ Reykjavík Reykjavík Reykjavík Reykjavík Reykjavík Reykjavík Reykjavík Reykjavík Associates: Kársnesbyggð ehf.

............................. Nes Þróunarfélag hf.
.......................... Reykjavík Reykjavík c Valuation methods and assumptions that are not based on market information The Company owns shares in ten companies that were purchased in the year 2017 and 2018.
In all of them, development the development of real estate and real estate companies, with the exception of is carried out, which consists of Steinsteypan ehf.

which manages an operation of concrete plants and Fasteignastýringar ehf.

which is not in operation.

Kaldalón hf.

values the companies based on several factors.

In cases where design, earthwork or street construciton fees have been paid, the cost is capitalized and added to the purchase price of the land.
For cases where construction work is started with plinths, progress is estimated according to project and cost estimation and the project´s overall contribution is estimated according to estimated sale price minus project and cost estimates.

Estimated sale price is based on the valuation of a certified real estate agents.

Fair value increase of each time is expected to be the total contribution from the project after taxes, and after 25% allowance.

U 14-20 ehf.

and Kárnesbyggð ehf.


are the only companies that are evaluated in such a way at year end 2018.

The fair value of the companies U22 ehf, U24 ehf., U26 ehf., Þróunarfélagið Hnoðraholt ehf., Vesturbugt eignarhaldsfélag ehf.

is estimated from the original purchase price plus the construction cost that has been incurred.

The fair value of the companies Steinsteypan ehf.

and Nes Þróunarfélag hf.


is estimated from the original price plus construction cost, which have been incurred along with the revaluation of the company's land.

Revaluation of land is base on an independent real estate agent's assesment.

The most important factor in assessing Kaldalón hf.

assets is land prices.

With a 10% reduction in the market value of land, Kaldalón hf.

's equity decreases by ISK 258.990 thousand.

and with a 10% increase in the market price of land, Kaldalón hf.
's equity increases by the same amount.

Changes in the margins of construction projects now have less effect on Kaldalón hf.

's equity, but a 10% reduction in the contribution margin reduces equity by ISK 148.003 thousand and a 10% increase in the contribution margin increases the Company´s equity by ISK 148.003 thousand.

7 Buildings and Land The Company invested in land in Vogabyggð, Iceland.

The investment is recognized at cost, ISK 110.806.000.
In the purchase agreement for the land is an obligation of payment of ISK 531 m. as the neighborhood builds up and delivery of other assets from the Companies subsidiary U14-20 ehf.

Kaldalón hf.

Financial statements 2018 Amounts in Icelandic Krona 14 Notes 8 Borrowings from financial institutions During the year, the Company refinanced its loan held by Kvika banki hf.

The loan is now due on January 1, 2020 and the principal and interests shall be paid in one on that day.
The interest terms of the loan are REIBOR 1M with a 4% interest premium.

The Company´s liabilites to financial in the real estates owned by the subsidiaries U22 ehf., U24 ehf.

og U26 ehf.

The Company has also signed a declaration on the obligation that the Company will not, except with a written consent of Kvika banki hf.

collateralize any of its current assets or assets that the Company may later acquire.
institutions are secured by colletral Borrowings from financial institutions are as follows: 2018 2017 Beginning of the year .......................................................................................................... New borrowings .................................................................................................................. Repayments ........................................................................................................................ Accured interest .................................................................................................................. 60.015.583 303.000.000 (60.015.583) 7.631.392 310.631.392 0 60.000.000 0 15.583 60.015.583 Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
Kvika banki hf.

is referred to as a related party, see further in notes 9 and 10.

9 Related party transactions Related parties include the Company's subsidiaries, associates, Board of Directors, CEO, close family members of the aforementioned entities and entities that have a significant influence as the largest shareholders in the Company.

Transactions with related parties have been conducted on a similar basis as transactions with unrelated parties.
Information regarding related parties is as follows: Year 2018 U22 ehf.

..................................................................... U24 ehf.

.................................................................... U26 ehf.

.................................................................... U14-20 ehf ................................................................ Þróunarfélagið Hnoðraholt ehf.

................................. Kársnesbyggð ehf.
.................................................... Vesturbugt eignarhaldsfélag ..................................... Kvika banki hf.

........................................................... Year 2017 U22 ehf.

..................................................................... U24 ehf.

.................................................................... U26 ehf.

.................................................................... Kvika banki hf.
........................................................... Income 3.703.307 1.869.238 1.380.999 17.585.093 10.135.233 Expenses (3.737.229) 2.623.793 37.297.663 (71.196.943) (74.934.172) 73.244 73.244 (8.797.602) (8.797.602) Assets 98.526.307 40.487.238 22.373.999 770.411.201 0 153.135.233 48.001.700 21.490.927 1.154.426.605 17.123.000 17.123.000 17.123.000 4.320.856 55.689.856 Liabilities (109.837.229) (49.628.510) (159.465.739) (68.737.602) (68.737.602) All realted parties above are subdiaries or associates except Kvika banki hf.
who is a managing party for the Company.

Borrowings between Kaldalón hf.

og and its subsidiaries have an interest reate of 7,5% and shall be paid in one payment on January 15, 2020.

Borrowings between Kaldalón hf.

and its associates with controlling interest have an interest rate of 12% and shall be paid in one payment on January 15, 2020.
10 Management fee The management party carries out the operations and management of the Company´s assets, therefore provides advice and services in accordance with the decisions of the Company´s Board of directors.

For its services, the management party recives an annual management fee of 2% on an annual basis from the total value of the Company's equity.

The management fee shall be calculated quarterly and paid at the end of each quarter.

Kaldalón hf.
Kaldalón hf.

Financial statements 2018 Amounts in Icelandic Krona 15 Notes 11 Financial income (and expenses) Financial income and expenses accounted on the Statement of Comprehensive Income are based on accrued interest income of bank deposits, interest from trade receivables and interests from borrowings.

12 Income tax The company was established as a limited company and a Non-Independent tax entity.

The Company was therefore taxed with its owners in 2017.
As of the beginning of 2018, the Company is limitied liability company and an independent tax entity.

Income taxes are calculated but not recognized as deferred tax assets in the balance sheet due to main profits, profit from shares, which are exempt from income tax.
Carry forward losses from previous years are as follows: Loss for 2018, expires end of 2028 .................................................................................................................. 62.947.112 The Company is jointly taxed with its subsidiaries.

13 Cash and cash equivalents Cash and cash equivalents comprises of cash in hand and unrestricted balances held with financial institutions.

14 Equity Ordinary shares are classified as equity.
Restricted reserves holds unrealized fair value changes of financial assets designated at fair value upon initial recognition, taking into account tax effects is recognized in other items among equity accounts.

This equity account is restricted.

Retained earnings correspond to the Companys profit or loss and can be distributed to share holders as dividends.

15 Shares Total capital at year end 2018 amounted to ISK 2.843 million.

and a negligible portion was unpaid at the end of year 2018.
The capital was paid with both cash or cash equivalents amounted to ISK1.093 million and with shares in subsidaries and other associates amounted to ISK 1.750 million.

During the year the Board of directors agreed to increase shares by issuing new shares amounted to ISK 989m, made up of nominal shares of ISK 1, therefore the total shares amount to ISK 2.843 million.
Tota share capital, approved and issued by the Company ............................................... 31.12.2018 2.842.720.837 31.12.2017 1.854.172.350 The company owns shares amounted to ISK 30.100.000 or 1,058% of the total.

The reason for holding own shares is to sell them.

16 Financial risk management The Company has exposure to the following risks in its operation: • Market risk • Securites risk • Interest rate risk Kaldalón hf.

does not defend market risk.


Market risk is the risk on fluctuations in fair value or future cash flow of financial instruments due to changes in market rates.

Market risk is the result of an open position in equities and interest bearing instruments, but such financial instruments are susceptible to general and specific market changes and market volatility, such as interest rates, debt burden and stock prices.

Kaldalón hf.

Financial statements 2018 Amounts in Icelandic Krona