Exhibit 15.1

ICA AB and Subsidiaries

Consolidated Financial Statements

Years Ended December 31, 2006 (unaudited), 2005 and 2004 (unaudited)



1



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ICA AB and Subsidiaries

Index

Years Ended December 31, 2006 (unaudited), 2005 and 2004 (unaudited)



|                                                                                                                         |  |     
|------------------------------------------------------------------------------------------------------------------------ |  | ----
|                                                                                                                         |  | Page
|Report of Independent Registered Public Accounting Firm Financial Statements of ICA AB (1)                               |  | 3   
|                                                                                                                         | 
|Consolidated Income Statements Years Ended December 31, 2006 (unaudited), 2005 and 2004 (unaudited)                      |  | 4   
|                                                                                                                         | 
|Consolidated Balance Sheets December 31, 2006 (unaudited) and 2005                                                       |  | 5-6 
|                                                                                                                         | 
|Consolidated Statements of Shareholders Equity Years Ended December 31, 2006 (unaudited), and 2005 and 2004 (unaudited) |  | 7   
|                                                                                                                         | 
|Consolidated Statements of Cash Flows Years Ended December 31, 2006 (unaudited), 2005 and 2004 (unaudited)               |  | 8   
|                                                                                                                         | 
|Notes to Consolidated Financial Statements                                                                               |  | 9-59



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|(1) | The consolidated financial statements of ICA AB, an investee of Royal Ahold N.V., are included in this Annual Report on Form 20-F of Royal Ahold N.V. to comply with Rule 3-09 of
Regulation S-X of the U.S. Federal Securities Laws.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2



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Report of Independent Registered Public Accounting Firm

To the board of Directors and Shareholders of ICA AB

We have audited the
accompanying consolidated balance sheet of ICA AB (the Company) as of December 31, 2005, and the related consolidated statements of income, shareholders equity and cash flows for the year then ended (all expressed in Swedish
Kronor). These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financing
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, we express no such opinion. 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, such consolidated financial statements present fairly, in all material respects, the financial position of ICA AB and subsidiaries as of
December 31, 2005, and the results of their operations and their cash flows for the year then ended in conformity with International Financial Reporting Standards as adopted by the European Union.

International Financial Reporting Standards as adopted in the European Union vary in certain significant respects from accounting principles generally accepted in the
United States of America. Information relating to the nature and effect of such differences is presented in Note 28 to the consolidated financial statements.

As discussed in Note 17 to the consolidated financial statements, the accompanying financial statements have been retrospectively adjusted for discontinued operations

Deloitte AB

Malmö, Sweden

April 12, 2006 (March 27, 2007 as to Note 17)



3



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ICA AB and Subsidiaries

Consolidated Income Statements (Amounts in millions of SEK)

Years Ended December 31, 2006 (unaudited), 2005 and 2004 (unaudited)



|                                                                     |  |               |  |             |  |         |  |            
|-------------------------------------------------------------------- |  | ------------- |  | ----------- |  | ------- |  | -----------
|                                                                     |  | Note          |  | 2006        |  | 2005    |  | 2004       
|                                                                     |  |               |  | (unaudited) |  |         |  | (unaudited)
|Net sales                                                            |  | 2, 3          |  | 67,395      |  | 66,096  |  | 68,440     
|Cost of sales                                                        |  | 4             |  | -57,640     |  | -56,933 |  | -59,106    
|                                                                     |  |               |  |             |  |         |  |            
|Gross profit                                                         |  |               |  | 9,755       |  | 9,163   |  | 9,334      
|Selling expenses                                                     |  | 4             |  | -4,521      |  | -4,573  |  | -5,244     
|Administrative expenses                                              |  | 4             |  | -3,658      |  | -2,869  |  | -2,662     
|Other operating income                                               |  | 7             |  | 805         |  | 303     |  | 171        
|Share of associated companies and joint ventures net profit (loss) |  | 14            |  | -84         |  | -84     |  | 426        
|                                                                     |  |               |  |             |  |         |  |            
|Operating income                                                     |  | 2, 5, 6, 8, 9 |  | 2,297       |  | 1,940   |  | 2,025      
|Results from financial investments:                                  |  |               |  |             |  |         |  |            
|Interest income and similar profit/loss items                        |  |               |  | 107         |  | 103     |  | 113        
|Interest expenses and similar profit/loss items                      |  |               |  | -358        |  | -376    |  | -337       
|                                                                     |  |               |  |             |  |         |  |            
|Income from continuing operations before income taxes                |  |               |  | 2,046       |  | 1,667   |  | 1,801      
|Income taxes                                                         |  | 11            |  | -12         |  | -147    |  | -243       
|Income from continuing operations                                    |  |               |  | 2,034       |  | 1,520   |  | 1,558      
|Income (loss) from discontinued operations, net of income taxes      |  | 17            |  | 367         |  | -2      |  | -46        
|NET INCOME                                                           |  |               |  | 2,401       |  | 1,518   |  | 1,512      
|Of which attributable to Parent Companys shareholders               |  |               |  | 2,393       |  | 1,531   |  | 1,511      
|Of which attributable to minority                                    |  |               |  | 8           |  | -13     |  | 1          

The accompanying notes are an integral part of these consolidated financial statements



4



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ICA AB and Subsidiaries

Consolidated Balance Sheets (Amounts in millions of SEK)

Years Ended December 31, 2006 (unaudited), 2005 and 2004 (unaudited)



|                                                  |  |      |  |             |  |       
|------------------------------------------------- |  | ---- |  | ----------- |  | ------
|                                                  |  | Note |  | 2006        |  | 2005  
|                                                  |  |      |  | (unaudited) |  |       
|ASSETS                                            |  |      |  |             |  |       
|NON-CURRENT ASSETS                                |  |      |  |             |  |       
|Intangible fixed assets                           |  | 12   |  | 3,447       |  | 1,914 
|Tangible fixed assets                             |  | 13   |  |             |  |       
|Buildings and land                                |  |      |  | 8,148       |  | 6,944 
|Investment properties                             |  |      |  | 997         |  | 1,541 
|Leasehold improvements                            |  |      |  | 564         |  | 552   
|Equipment                                         |  |      |  | 2,833       |  | 2,336 
|Construction in progress                          |  |      |  | 690         |  | 1,068 
|                                                  |  |      |  |             |  |       
|                                                  |  |      |  | 13 232      |  | 12 441
|Financial fixed assets                            |  | 23   |  |             |  |       
|Shares in associated companies and joint ventures |  | 14   |  | 63          |  | 687   
|Receivables from associated companies             |  | 21   |  | 320         |  | 583   
|Other financial fixed assets                      |  |      |  | 108         |  | 138   
|ICA Bankens receivables                          |  | 16   |  | 2,810       |  | 2,558 
|Long-term receivables                             |  |      |  | 658         |  | 948   
|                                                  |  |      |  |             |  |       
|                                                  |  |      |  | 3 959       |  | 4 914 
|Deferred tax assets                               |  | 11   |  | 181         |  | 49    
|                                                  |  |      |  |             |  |       
|Total non-current assets                          |  |      |  | 20,819      |  | 19,318
|CURRENT ASSETS                                    |  | 23   |  |             |  |       
|Inventory                                         |  | 15   |  | 3,550       |  | 3,228 
|Current receivables                               |  |      |  |             |  |       
|Accounts receivable                               |  |      |  | 2,554       |  | 2,931 
|Tax assets                                        |  |      |  | 132         |  | 215   
|ICA Bankens receivables                          |  | 16   |  | 1,679       |  | 1,553 
|Receivables from related parties                  |  | 21   |  | 10          |  | 26    
|Other receivables                                 |  |      |  | 18          |  | 113   
|Prepaid expenses and accrued income               |  |      |  | 1,849       |  | 1,753 
|Cash and cash equivalents                         |  |      |  | 3,749       |  | 2,920 
|Assets held for sale                              |  | 17   |  | 1,146       |  | 674   
|                                                  |  |      |  |             |  |       
|Total current assets                              |  |      |  | 14,687      |  | 13,413
|TOTAL ASSETS                                      |  |      |  | 35,506      |  | 32,731

The accompanying notes are an integral part of these consolidated financial statements



5



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ICA AB and Subsidiaries

Consolidated Balance Sheets (Amounts in millions of SEK)

Years Ended December 31, 2006 (unaudited), 2005 and 2004 (unaudited)



|                                                                   |  |      |  |             |  |       
|------------------------------------------------------------------ |  | ---- |  | ----------- |  | ------
|                                                                   |  | Note |  | 2006        |  | 2005  
|                                                                   |  |      |  | (unaudited) |  |       
|Shareholders equity                                               |  | 18   |  |             |  |       
|Share capital                                                      |  |      |  | 500         |  | 500   
|Other paid-in capital                                              |  |      |  | 12,557      |  | 12,557
|Hedging, translation and revaluation reserves                      |  |      |  | 354         |  | 273   
|Accumulated deficit                                                |  |      |  | -3,208      |  | -4,978
|                                                                   |  |      |  |             |  |       
|Shareholders equity related to shareholders in the Parent Company |  |      |  | 10,203      |  | 8,352 
|Minority interest in shareholders equity                          |  |      |  | 13          |  | 19    
|                                                                   |  |      |  |             |  |       
|Total shareholders equity                                         |  |      |  | 10,216      |  | 8,371 
|Long-term liabilities                                              |  | 23   |  |             |  |       
|Provisions for pensions                                            |  | 19   |  | 760         |  | 783   
|Deferred tax liabilities                                           |  | 11   |  | 648         |  | 519   
|Liabilities to credit institutions                                 |  |      |  | 3,366       |  | 5,068 
|Other provisions                                                   |  |      |  | 104         |  | 105   
|Other liabilities                                                  |  |      |  | 2,764       |  | 2,430 
|                                                                   |  |      |  |             |  |       
|Total long-term liabilities                                        |  |      |  | 7,642       |  | 8,905 
|Current liabilities                                                |  | 23   |  |             |  |       
|Liabilities to credit institutions                                 |  |      |  | 941         |  | 368   
|Accounts payable                                                   |  |      |  | 5,690       |  | 4,914 
|Deposits, ICA Banken                                               |  | 16   |  | 6,394       |  | 5,930 
|Liabilities to associated companies                                |  | 21   |  | 20          |  | 32    
|Income tax liabilities                                             |  |      |  | 6           |  | 91    
|Short-term loans                                                   |  |      |  | 1,089       |  | 1,091 
|Other liabilities                                                  |  |      |  | 1,363       |  | 963   
|Provisions                                                         |  |      |  | 72          |  | 43    
|Accrued expenses and deferred income                               |  |      |  | 2,073       |  | 2,023 
|                                                                   |  |      |  |             |  |       
|Total current liabilities                                          |  |      |  | 17,648      |  | 15,455
|TOTAL SHAREHOLDERS EQUITY AND LIABILITIES                         |  |      |  | 35,506      |  | 32,731

The accompanying notes are an integral part of these consolidated financial statements



6



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ICA AB and Subsidiaries

Consolidated Statements of Shareholders Equity (Amounts in millions of SEK)

Years Ended December 31, 2006 (unaudited), 2005
and 2004 (unaudited)



|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|---------------------------------------------------------------------------- |  | ------------ |  | --------------------- |  | -------- |  | ---------------- |  | --------------------------------------------------------- |  | ----------------- |  | ------------------------
|                                                                             |  | Sharecapital |  | Other paid-in capital |  | Reserves |  | Retainedearnings |  | Shareholdersequity relatedtoshareholdersin parentcompany |  | Minority interest |  | Totalshareholdersequity
|Opening balance, December 31, 2003, as previously reported (unaudited)       |  | 500          |  | 12,557                |  | 0        |  | -1,180           |  | 11,877                                                    |  | 34                |  | 11,911                  
|Change in accounting principle (Note 1) (unaudited)                          |  |              |  |                       |  |          |  | -6               |  | -6                                                        |  |                   |  | -6                      
|Opening balance, shareholders equity, after change in principle (unaudited) |  | 500          |  | 12,557                |  | 0        |  | -1,186           |  | 11,871                                                    |  | 34                |  | 11,905                  
|Currency translation differences (unaudited)                                 |  |              |  |                       |  | -61      |  |                  |  | -61                                                       |  |                   |  | -61                     
|Changes in market value of derivatives, net of tax (unaudited)               |  |              |  |                       |  | -43      |  |                  |  | -43                                                       |  |                   |  | -43                     
|Net income (unaudited)                                                       |  |              |  |                       |  |          |  | 1,512            |  | 1,512                                                     |  | -1                |  | 1,511                   
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|Dividends (unaudited)                                                        |  |              |  |                       |  |          |  | -6,228           |  | -6,228                                                    |  |                   |  | -6,228                  
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|Balance, December 31, 2004 (unaudited)                                       |  | 500          |  | 12,557                |  | -104     |  | -5,902           |  | 7,051                                                     |  | 33                |  | 7,084                   
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|Currency translation differences                                             |  |              |  |                       |  | 395      |  |                  |  | 395                                                       |  |                   |  | 395                     
|Changes in market value of derivatives, net of tax                           |  |              |  |                       |  | -18      |  |                  |  | -18                                                       |  |                   |  | -18                     
|Acquisition of minority interest                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  | -1                |  | -1                      
|Net income                                                                   |  |              |  |                       |  |          |  | 1,531            |  | 1,531                                                     |  | -13               |  | 1,518                   
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|Dividends                                                                    |  |              |  |                       |  |          |  | -607             |  | -607                                                      |  |                   |  | -607                    
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|Balance, December 31, 2005                                                   |  | 500          |  | 12,557                |  | 273      |  | -4,978           |  | 8,352                                                     |  | 19                |  | 8,371                   
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|Change in accounting principle (Note 1) (unaudited)                          |  |              |  |                       |  |          |  | -13              |  | -13                                                       |  |                   |  | -13                     
|Opening balance, shareholders equity, after change in principle (unaudited) |  | 500          |  | 12,557                |  | 273      |  | -4,991           |  | 8,339                                                     |  | 19                |  | 8,358                   
|Currency translation differences (unaudited)                                 |  |              |  |                       |  | -455     |  |                  |  | -455                                                      |  |                   |  | -455                    
|Changes in market valuation of derivatives, net of tax (unaudited)           |  |              |  |                       |  | 38       |  |                  |  | 38                                                        |  |                   |  | 38                      
|Revaluation reserve related to acquisition of Rimi Baltic (unaudited)        |  |              |  |                       |  | 498      |  |                  |  | 498                                                       |  |                   |  | 498                     
|Acquisition of minority interest (unaudited)                                 |  |              |  |                       |  |          |  |                  |  |                                                           |  | -14               |  | -14                     
|Net income (unaudited)                                                       |  |              |  |                       |  |          |  | 2,393            |  | 2,393                                                     |  | 8                 |  | 2,401                   
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|Dividends (unaudited)                                                        |  |              |  |                       |  |          |  | -610             |  | -610                                                      |  |                   |  | -610                    
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         
|Balance, December 31, 2006 (unaudited)                                       |  | 500          |  | 12,557                |  | 354      |  | -3,208           |  | 10,203                                                    |  | 13                |  | 10,216                  
|                                                                             |  |              |  |                       |  |          |  |                  |  |                                                           |  |                   |  |                         

The accompanying notes are an integral part of these consolidated financial statements.



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ICA AB and Subsidiaries

Consolidated Statements of Cash Flows (Amounts in millions of SEK)

Years Ended December 31, 2006 (unaudited), 2005 and 2004
(unaudited)



|                                                                     |  |      |  |             |  |        |  |            
|-------------------------------------------------------------------- |  | ---- |  | ----------- |  | ------ |  | -----------
|                                                                     |  | Note |  | 2006        |  | 2005   |  | 2004       
|                                                                     |  |      |  | (unaudited) |  |        |  | (unaudited)
|Operating activities                                                 |  |      |  |             |  |        |  |            
|Income from continuing operations before income taxes                |  |      |  | 2,046       |  | 1,667  |  | 1,801      
|Adjustments for non-cash items                                       |  | 24   |  | 679         |  | 1,368  |  | 1,151      
|Income tax paid                                                      |  |      |  | -220        |  | -348   |  | -226       
|                                                                     |  |      |  |             |  |        |  |            
|Cash flow from operating activities before change in working capital |  |      |  | 2,505       |  | 2,687  |  | 2,726      
|Changes in working capital                                           |  |      |  |             |  |        |  |            
|Inventory (increase - / decrease +)                                  |  |      |  | -165        |  | 105    |  | 79         
|Loan portfolio ICA Banken (increase + / decrease -)                  |  |      |  | -378        |  | -1,084 |  | -1,889     
|Short-term receivables (increase - / decrease +)                     |  |      |  | -146        |  | -250   |  | 84         
|Short-term liabilities (increase + / decrease -)                     |  |      |  | 1,228       |  | 881    |  | -308       
|                                                                     |  |      |  |             |  |        |  |            
|Cash flow from operating activities                                  |  |      |  | 3,044       |  | 2,339  |  | 692        
|Investing activities                                                 |  |      |  |             |  |        |  |            
|Purchases of fixed assets                                            |  |      |  | -2,423      |  | -2,547 |  | -2,843     
|Proceeds from sale of fixed assets                                   |  |      |  | 2,196       |  | 489    |  | 767        
|Loans to franchises                                                  |  |      |  | -131        |  | -162   |  |           
|Repayment of loans from franchises                                   |  |      |  | 465         |  | 575    |  | 215        
|Acquisitions of businesses                                           |  | 25   |  | -1,420      |  |       |  |           
|Proceeds from sale of assets held for sale                           |  |      |  | 924         |  | 523    |  | 137        
|Investments in financial fixed assets                                |  |      |  | -29         |  | -110   |  |           
|Proceeds from sale of financial fixed assets                         |  |      |  | 130         |  | 83     |  | 90         
|Investment in associated companies                                   |  |      |  | 24          |  | -76    |  | -63        
|Divestment of associated companies                                   |  |      |  | -125        |  | 149    |  | 2,461      
|                                                                     |  |      |  |             |  |        |  |            
|Cash flow from investing activities                                  |  |      |  | -389        |  | -1,076 |  | 764        
|Financing activities                                                 |  |      |  |             |  |        |  |            
|Change in minority share in equity                                   |  |      |  | -13         |  | 0      |  | 1          
|Repayments of borrowings                                             |  |      |  | -2,046      |  | -5,933 |  |           
|Proceeds from borrowings                                             |  |      |  | 797         |  | 5,130  |  | 3,508      
|Dividends paid                                                       |  |      |  | -610        |  | -607   |  | -6,228     
|                                                                     |  |      |  |             |  |        |  |            
|Cash flow from financing activities                                  |  |      |  | -1,872      |  | -1,410 |  | -2,719     
|Cash flow of the year                                                |  |      |  | 783         |  | -147   |  | -1,263     
|Cash and cash equivalents at beginning of year                       |  |      |  | 2,920       |  | 3,198  |  | 4,541      
|Exchange rate differences                                            |  |      |  | 46          |  | -131   |  | -80        
|                                                                     |  |      |  |             |  |        |  |            
|Cash and cash equivalents at end of year                             |  |      |  | 3,749       |  | 2,920  |  | 3,198      

The accompanying notes are an integral part of these consolidated financial statements



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ICA AB and Subsidiaries

Notes to consolidated Financial Statements (Amounts in millions of SEK)

Years Ended December 31, 2006 (unaudited), 2005 and 2004
(unaudited)

Basis of presentation and significant accounting policies

Formation of the company and purpose of these financial statements

ICA AB (formerly known as ICA Ahold
AB, also referred to as the Company, ICA or Group) began operations in 1917 in Sweden. ICA Ahold AB was created in December 1999 shortly after the signing of the preliminary partnership agreement between ICA
Förbundet Invest AB (ICA Förbundet) of Sweden, Canica AS of Norway, and Royal Ahold of the Netherlands contemplating their investment in the operations of ICA AB, the then parent of the operations of ICA. ICA Ahold AB was
created to act as a holding company, facilitating this partnership structure. Both Canica AS and ICA Förbundet contributed their shares in ICA AB to ICA Ahold AB in exchange for share ownership in ICA Ahold AB. Cash contributed by Royal Ahold
to ICA Ahold AB, in exchange for ownership in ICA Ahold AB, was largely used to fund an offer to the remaining 3,900 shareholders of ICA AB for outstanding B and C shares in ICA AB. Upon the acceptance by more than 99 percent of the remaining
shareholders at the end of April 2000, Royal Ahold funded its investment in ICA Ahold AB and ICA Ahold AB purchased the shares from the remaining shareholders. Accordingly, operations of the partnership in this form of ownership commenced
May 1, 2000. For the purposes of these financial statements, ICA Ahold AB is referred to as ICA AB.

The formation of the Company and its
subsidiaries, in its present ownership structure, was not accounted for using the purchase method of accounting. Instead, the transaction on May 1, 2000 was deemed a reorganization of the business between shareholders, none of which controlled
the Company, to allow a new investor, Royal Ahold, to acquire through a tender offer a less-than-majority portion of the shares in the business, largely from investors who ceased being shareholders in the Company. All of the outstanding assets and
liabilities of ICA AB became assets and liabilities of the Company, which maintained its management, employees, and offices and continued the same business. Accordingly, ICA Ahold recognized the assets and liabilities transferred at their carrying
amounts in the accounts of ICA AB at May 1, 2000.

According to the Shareholders Agreement among Royal Ahold, Canica AS and ICA Förbundet,
Canica AS held a put option. During 2004, Canica AS exercised its put option, which forced Royal Ahold to purchase all of Canica ASs shares. Subsequently, Royal Ahold entered into an agreement with ICA Förbundet to purchase from Royal
Ahold half of the shares of ICA AB that Royal Ahold acquired as a result of the exercise of Canica ASs put option. The exercise of the option in conjunction with the sale of Canica ASs shares to ICA Förbundet resulted in Royal Ahold
holding 60 percent of ICA ABs shares while ICA Förbundet holds 40 percent. The Shareholders Agreement does not allow Royal Ahold to acquire control as a result of the transaction. On November 4, 2004 ICA AB paid a special
divided of SEK 5,500 to ICA Förbundet and Royal Ahold.



9



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These consolidated financial statements of ICA AB have been prepared to assist Royal Ahold in satisfaction of its
periodic reporting requirements with the Securities and Exchange Commission of the United States of America (SEC) pursuant to rule 3-09 of regulations S-X of U.S. Federal Securities Laws.

The Companys business

The Companys primary
businesses are located in Sweden and Norway. Until December 18, 2006 the businesses in the Baltic countries were operated through a joint venture. On December 18, 2006, ICA acquired the remaining 50% of the shares in Rimi Baltic AB from
Kesko Livs Ab and Rimi Baltic AB became a wholly owned subsidiary.

In Sweden, the Company operates extensive wholesale, retail and real estate businesses
that support the more than 1,400 retail stores in Sweden, most of which are operated as franchises. The Company also sells and develops financial services for private individuals in Sweden.

In Norway, the Company operates extensive wholesale, retail and real estate businesses that support more than 700 retail stores in Norway, most of which are
Company-owned.

On January 3, 2005 ICA and Kesko formed a joint venture by merging their Baltic operations. The company, Rimi Baltic AB, is one of the
leading and most modern food retail chains in the region. Upon formation of Rimi Baltic AB, ICA and Kesko each owned 50% of the business. Rimi Baltic is reported according to the equity method for 2006, but as of December 31, 2006 is
consolidated in the ICA group. In 2004 ICA reported the Baltic store operations as a subsidiary, ICA Baltic, which meant that its sales were included in those of the Group. Since Rimi Baltic AB was a joint venture until December 18, 2006 the
operations were reported according to the equity method, which means that only ICAs share of its after-tax income is reported in the consolidated income statement for 2006.

Reporting currency

These consolidated financial statements have been prepared in SEK. References to
SEK, Swedish krona or Swedish kronor are to the lawful currency of Sweden.

Note 1 Accounting principles

These consolidated accounts are prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU Commission and
the interpretations of the International Financial Reporting Interpretation Committee (IFRIC). All standards and interpretations issued by the International Accounting Standards Board (IASB) and the IFRIC effective for 2006 have been adopted by the
EU, except that the EU carved out certain hedge accounting provisions of IAS 39. The Company does not utilize this carve out permitted by the EU. Consequently, the accounting policies applied by the Company also comply fully with IFRS. The company
also follows the Swedish Accounting Standards Boards recommendation RR 30:05 Supplementary accounting rules for groups, which specifies additional disclosure requirements in accordance with the Annual Accounts Act.

The following standards and interpretations had been published but not yet effective at the time this annual report was approved:



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IFRS 7 Financial instruments: Disclosures and amendments to IAS 1 Presentation of Financial Statements

IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies

IFRIC 8 Scope of IFRS 2

IFRIC 9 Reassessment of Embedded
Derivatives

IFRIC 10 Interim Financial Reporting and Impairment

IFRS 7 does not necessitate any changes in the recognition and valuation of financial instruments, although disclosure requirements have changed compared with IAS 32 and IAS 30. IFRS 7 changes the disclosure
requirements in IAS 1. IFRS 7 will be applied in 2007 in accordance with the standard. IFRS 7 is expected to have little effect on the financial reports when it is applied. None of the pronouncements that have been issued have an effect on the
Companys financial statements when it is applied.

Accounting principles applied

Changes in accounting principles

According to an amendment to IAS 39 published in August 2005, financial
guarantees are initially recognized at fair value, subsequent to which they are recognized at the higher of the amount according to IAS 37 Provisions, Contingent Liabilities and Contingent Assets and the amount according to IAS 39. The new principle
has applied since January 1, 2006, in accordance with IAS 39. The effect on shareholders equity as of January 1, 2006 is SEK 13 million, net of tax.

The annual fee that ICA Banken charges for its bank cards was previously recognized as revenue when the customer was charged. According to the amended principle, the annual fee is divided evenly over the course of the
year. The amended principle affected the Groups shareholders equity by SEK -6 million, net of tax, as of January 1, 2004.

Reclassifications

ICA Bankens net interest income is now recognized in net sales together with its net commission income. Net
interest income had previously been recognized as other operating income. Net interest income amounts to SEK 278 million (215 and 145). The comparative years have been reclassified to conform to the current year presentation.

Certain other reclassifications have been made to prior periods to conform to the current period presentation.

Basis of accounting

The consolidated accounts are based on
historical acquisition costs, with the exception of financial derivatives and certain financial assets, which are recognized at fair value.

The
consolidated accounts comprise the Parent Company, ICA AB, and its subsidiaries. The Parent Companys functional currency is the Swedish kronor, which is also the reporting currency for the Parent Company and the Group.

The preparation of the financial statements in conformity with IFRS requires that management make use of judgments, estimates and assumptions that affect the application
of the



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accounting principles and the carrying amounts in the income statement and the balance sheet. Estimates and assumptions are based on historical experience
and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates and judgments.

IFRS 1, First-time adoption of International Financial Reporting Standards

The accounting and valuation of assets and liabilities in the opening balance sheet as of January 1, 2004 has been applied retrospectively according to the
accounting principles listed below except for the following exceptions allowed by IFRS 1:



| |  |  | IFRS 3, Business Combinations,allows for prospective application for acquisitions and business combinations that took place after January 1, 2004
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Actuarial gains and losses attributable to the period prior to January 1, 2004 are reported in their entirety as part of equity in the balance sheet
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Translation differences accumulated prior to January 1, 2004 are accounted for as retained earnings
| | - |  | ---------------------------------------------------------------------------------------------------

Consolidated accounts

A subsidiary is included in the
consolidated accounts as of the date the Parent Company secures a controlling influence over the company and is no longer included as of the date the Parent Companys controlling influence over the company ceases.

The minority interest initially consists of the minoritys share of the fair value of the net assets and is recognized in shareholders equity separately from
the Parent Companys equity. The income or loss from the minority interest is recognized in the income statement separately from the Parent Companys results as an allocation of results for the period.

The purchase accounting method is applied to the acquisition of subsidiaries. The acquisition cost of an acquisition consists of the fair value on the acquisition date
of the assets and liabilities and contingent liabilities plus direct purchase costs. Acquired identifiable assets, liabilities and obligations are recognized at fair value. The difference between acquisition cost and fair value is recognized as
goodwill. If the acquisition cost is less than the fair value of acquired identifiable assets, liabilities and contingent liabilities, the difference is recognized directly through profit or loss.

In incremental acquisitions, each transaction is treated individually. Goodwill is determined for each acquisition based on fair value on the acquisition date and the
consideration paid for the acquisition. Changes in the fair value of shares that had already been owned are recognized as a revaluation in shareholders equity.

For all subsidiaries included in the consolidated accounts, uniform accounting principles are applied. This also applies to companies reported according to the equity method. All intra-Group transactions are
eliminated.

Investments in associated companies

Holdings in associated companies are reported according to the equity method. An associated company is a unit in which the Group has a significant but not controlling influence. Application of the equity method means that investments in
associated companies are



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recognized in the balance sheet at cost plus any changes in the Groups share of the associated companys net assets less any impairments and
dividends. The income statement reflects the Groups share of associated companies income or loss after tax.

The difference between the
acquisition cost of the acquired shares and the fair value of the Groups share of the identifiable assets and liabilities in the associate is accounted as goodwill (excess value) or in case of a negative difference is recognized directly
through profit or loss. The Groups investments in associated companies comprise goodwill, which is dealt with in accordance with the accounting principles for goodwill described below. Impairment testing is conducted on reported shares in
associated companies when there are indications of diminished value.

For transactions between Group companies and associated companies, the portion of
unrealized gains corresponding to the Groups share of the associated company is eliminated. Unrealized losses are also eliminated as long as there is no indication of impairment.

Investments in joint ventures

A joint venture is a contractual arrangement whereby two or more parties
undertake an economic activity subject to joint control. ICA reports joint ventures according to the equity method of accounting.

In transactions between
Group companies and joint ventures, the portion of unrealized gains corresponding to the Groups share of the jointly controlled company is eliminated. Unrealized losses are eliminated correspondingly as long as there is no indication of
impairment.

Transactions in foreign currency

Transactions in foreign currency are remeasured to the functional currency at the exchange rate on the transaction date. Monetary assets and liabilities expressed in foreign currency are remeasured to the functional currency at the exchange
rate on the balance sheet date with exchange rate differences recognized through profit or loss. Non-monetary assets and liabilities are recognized at historical acquisition costs translated at the exchange rate on the transaction date. All Group
companies with a functional currency other than the reporting currency are translated as follows:



| |  |  | Assets and liabilities including goodwill and consolidated surpluses and deficits are translated from the foreign operations functional currency to the
Groups reporting currency, Swedish kronor, at the balance sheet date.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Revenue and expenses in foreign operations are translated to Swedish kronor at the average exchange rate for the period.
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | All exchange rate differences that arise through translation are recognized directly in shareholders equity as a currency translation reserve.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------

When foreign operations are divested, the cumulative exchange rate differences are recognized through profit or loss together with the
gain or loss on the sale.

Revenue

Revenues
from the sale of wholesale products and from the Companys food service business are recognized when inventory is delivered to the third-party retailer, as wholesale revenue is not subject to the successful retail sale. Revenues from the sale
of retail products from



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Company-owned retail stores are recognized when products are purchased by the consumer (point of sale in the retail store). Revenue is measured at the fair
value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the Company. Revenue is recorded net of any value-added taxes or selective purchase taxes for alcoholic beverages
that are to be remitted to the government.

Revenue from the sale of services includes royalties, franchise fees and revenue from various forms of
consulting services. Revenue from franchise sales is recognized when all material services relating to the contract have been substantially performed.

ICA
Banken commissions from bank cards or mediated mortgages, net interest income and other services are recorded as net sales as they are earned.

Other
income

Dividends are recognized through profit or loss when the right to receive payment has been determined.

Other income from the sale of real estate (or shares in companies that hold real estate as a sole or primary asset) is normally recognized when legal title of the real
estate (or shares in companies that hold real estate as a sole or primary asset) passes to the buyer. However, in some jurisdictions the equitable interest in a property may vest in the buyer before legal title passes and therefore the risks and
rewards of ownership have been transferred at that stage. In such cases, provided that the Company has no further substantial acts to complete under the contract, other income is recognized. In instances where the Company has not received full
payment of the selling price from the buyer, the Company delays recognition of other income if there is insufficient evidence of the buyers commitment to complete payment.

Sale and leaseback

In cases where a property has been sold and then leased back, an overall assessment is
made of whether the buyer-lessor or seller-lessee controls the significant risks and rewards associated with the property and whether the Group has retained a controlling interest in the property. A controlling interest exists, for example, if a
leaseback property is leased to an independent ICA retailer.

If the assessment shows that the significant risks and rewards as a whole remain in the
Group, the sale is not recognized on the transaction date, but rather when these risks and rewards are later transferred to the buyer. If the Group has retained a controlling interest, a sale is not recognized until this interest ceases.

If the risks and rewards are retained by the Group, or the Group retains an interest in the property, the Group continues to recognize the property in the balance
sheet as if no sale had taken place, and it is still depreciated based on its estimated useful life. The proceeds received from the sale are treated as a loan and recognized as a liability. Leasing fees are split between interest expenses and
amortization of the liability.

Goodwill and brand names

Goodwill represents the portion of the acquisition cost exceeding the fair value of the acquired share of the subsidiarys net assets on the acquisition date. Net assets refer to the difference



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between identifiable assets, liabilities and contingent liabilities in an acquired subsidiary, associated company or joint venture. In accordance with IFRS
3, it is assumed that the goodwill has an indefinite useful life. Intangible assets with an indefinite economic life are not amortized. Goodwill is recognized at acquisition cost less any accumulated impairment.

The goodwill arising from business acquisitions is attributed at the time of the acquisition to the cash-generating units that benefit from the acquisition.

Brand names have an indefinite useful life. Impairment testing is conducted annually or when there is an indication of diminished value.

Other intangible assets

Other intangible assets consist
primarily of information technology systems and are recognized in the balance sheet at acquisition cost less accumulated amortization and impairment losses. Amortization is recorded on a straight-line basis over the estimated economic life of the
assets.

Tangible fixed assets

Tangible fixed
assets are recognized at acquisition cost less accumulated depreciation and any impairment. Acquisition cost includes the acquisition price and direct expenses. The cost of tangible fixed assets is depreciated to its estimated residual value.
Depreciation is recorded on a straight-line basis over the estimated economic life of the assets.

Investment properties

Properties used by the Group or leased to ICA retailers are reported as operating properties. Other properties, which are leased to third parties, are reported as
investment properties. Investment properties are recognized at acquisition cost less accumulated depreciation and any impairment. Depreciation is recorded on a straight-line basis over the estimated economic life of the assets to estimated residual
value.

Assets held for sale

Assets are
classified as assets held for sale if they are available for immediate sale, a decision has been made to sell them and it is likely that a sale will be made within 12 months. Assets held for sale are valued when the reclassification is made, in
accordance with IFRS 5, at the lower of book value and estimated sales value less selling expenses. Once an asset held for sale is classified as held for sale, depreciation is not recorded.

Discontinued operations are part of a company that has either been disposed of or is classified as held for sale and:



| |  |  | represents a separate line of business or geographical area of operations,
| | - |  | --------------------------------------------------------------------------



| |  |  | is part of a coordinated plan to dispose of separate line of business or geographical area of operations or
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | is a subsidiary acquired exclusively with a view to resale.
| | - |  | -----------------------------------------------------------

The classification as discontinued operations is made upon a sale or an earlier date when the operations meet the criteria to be classified as held for sale.



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Depreciation and amortization

Depreciation and amortization are calculated on the acquisition cost of the assets. Depreciation and amortization schedules are based on the following estimated economic lives:



|                           |  |  |  |              
|-------------------------- |  |  |  | -------------
|Buildings                  |  |  |  | 20  40 years
|Investment properties      |  |  |  | 20  40 years
|Leasehold improvements     |  |  |  | 6  20 years 
|Store equipment and trucks |  |  |  | 7  10 years 
|IT systems                 |  |  |  | 3  5 years  
|Other equipment            |  |  |  | 3  10 years 

An assets residual value and economic life are estimated annually.

Impairment

The carrying amount of tangible fixed assets is
tested for impairment when events or other circumstances indicate that the carrying amount cannot be recovered. In the test, the carrying amount is compared with the higher of the assets fair value less selling expenses and the value in use.
Value in use consists of the present value of the future net cash flow the asset generates. If a single asset does not generate a cash flow independent of other assets, cash flow is calculated for the group of assets, i.e., a cash-generating unit.
The value in use calculation of future net cash flows uses a discounting factor before tax that reflects the markets current estimate of the time value of money and the risks associated with the asset. If the carrying amount exceeds the higher
of the assets net realizable value and value in use, the asset is written down to the higher of its net realizable value and value in use.

Goodwill,
assets with an indefinite economic life and intangible assets that are not yet taken in use are tested annually for impairment. Testing for impairment can take place more often when events or other circumstances indicate that the reported valued may
not be recoverable.

Impairment losses are recognized through profit or loss if the recoverable amount is lower than the assets book value.
Impairment losses other than goodwill can be reversed if the assumptions used in the calculation that led to the original impairment have changed. Impairment reversal is limited to the depreciated amount that would have been recognized had the
original impairment not occurred. Reversal of impairment is recognized through profit or loss.

Inventory

Inventory is valued at the lower of acquisition cost and net realizable value. Acquisition cost is determined using the first-in, first-out (FIFO) method. Acquisition
cost consists of all purchase costs after deducting supplier allowances related to products in stock.

Net realizable value corresponds to the estimated
sales price under normal conditions less estimated costs to finish the product and the costs required to make the sale.

ICA receives supplier allowances
in the form of discounts and other types of payments that effectively reduce the companys purchase cost from suppliers or costs for sales-promoting activities performed by ICA to the benefit of the supplier. The most common allowances vendors
offer are (i) volume allowances, which are off-invoice or amounts billed back to vendors based on the quantity of products sold to customers or purchased from the vendor and (ii) promotional allowances, which relate to cooperative
advertising and market development efforts. Volume allowances are recognized as a reduction of the cost of the related products as



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they are sold. Promotional allowances are recognized as a reduction of the cost of the related products when the activities specified in the contract are
performed by the Company for the vendor. If the contract does not specify any performance criteria the allowance is recognized over the term of the contract. Vendor allowances are generally deducted from cost of sales, unless there is clear evidence
that they should be classified as revenue or a reimbursement of costs. ICA recognizes vendor allowances only where there is evidence of a binding arrangement with the vendor and receipt is both probable and estimable.

Financial instruments

A financial asset or financial
liability is recognized in the balance sheet when the Company becomes party to the instruments contractual conditions. A financial asset is removed from the balance sheet when the rights in the agreement are realized, expire or the company
loses control over them. A financial liability is removed from the balance sheet when the obligation in the agreement is fulfilled or otherwise extinguished.

For spot purchases and spot sales of financial assets, settlement date accounting is applied.

Financial instruments are recognized at amortized
cost or fair value depending on the initial categorization according to IAS 39.

Calculation of fair value of financial instruments

The fair value of derivatives is determined using the official market quotes on the balance sheet day. If such quotes are unavailable, generally accepted methods are used
such as discounting of future cash flows to listed market interest rates for each maturity. Translation to Swedish kronor is made at the quoted rate on the balance sheet date.

All derivatives are recognized at fair value in the balance sheet and are included in other short-term receivables or other short-term or long-term liabilities depending on maturity. For derivatives not reported as
hedges and those included in a fair value hedge, changes in value are recognized through profit or loss. For derivatives that meet the requirements for cash flow hedges, changes in value are recognized in equity until the hedged item is recognized
through profit or loss. The Group applies hedging accounting for interest rate risk. The amount in the hedging reserve is recognized through profit or loss as interest payments are made.

Amortized cost

Amortized cost is calculated using the effective interest method, which means that any premiums and
discounts as well as directly attributable expenses and revenue are accrued over the maturity of the contract in accordance with the estimated effective interest rate. The effective interest rate is the rate that produces the instruments
acquisition cost as a result of the present value calculation of future cash flows.

Netting of financial assets and liabilities

Financial assets and liabilities are offset and recognized net in the balance sheet when there is a legal right of set-off and when the intent is to settle the items with
a net amount or to realize the asset and settle the liability at the same time.

Interest

Interest income is recognized as it is earned. Interest income is calculated on the basis of the underlying assets yield according to the effective interest rate.
Loan expenses and interest are recognized in profit or loss in the period to which they are attributable.



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Interest expenses associated with new construction or major renovations or additions are capitalized as part of the
production cost of the fixed asset.

Other long-term receivables

Other long-term receivables mainly consist of loans recognized at amortized cost. If the expected holding period is more than one year, they are considered long-term receivables, and if they are less than one year,
they are considered other receivables. These receivables are categorized in accordance with IAS 39 as Loans and receivables. Assets in this category are carried at amortized cost.

Short-term receivables

Accounts receivable and other
receivables are categorized as Loans and receivables, which means that they are reported at cost. Accounts receivable with short anticipated maturities, usually due for payment after 10-45 days, are initially reported at the invoiced
amount without discounting according to the amortized cost method. An estimation of doubtful accounts is made when it is no longer likely that the full amount will be collected.

Interest-bearing receivables

Interest-bearing receivables mainly consist of ICA Bankens lending in the
form of unsecured credits and card credits to customers. The amount outstanding is carried at amortized cost on the payment date and subsequently after taking into account established and probable credit losses. Loans are recognized in the balance
sheet after deducting probable credit losses.

Cash and cash equivalents

Cash and cash equivalents comprise cash, bank balances and other short-term investments with an original maturity of no more than three months as well as bank overdraft facilities. In the balance sheet, overdraft
facilities are recognized as borrowings among current liabilities. Cash and bank balances are recognized at nominal amounts and other short-term investments at their fair value with changes in value recognized through profit or loss.

Liabilities to credit institutions, other liabilities and borrowings ICA Banken

Liabilities to credit institutions, deposits in ICA Banken and other liabilities are carried at amortized cost. Any gain or loss that arises when the loan is repaid is recognized through profit or loss. Long-term
liabilities have an anticipated maturity of more than one year, while short-term liabilities have a maturity of less than one year.

Accounts payable

Accounts payable are categorized as Other liabilities, which means they are recognized at amortized cost. The anticipated maturity of
accounts payable is short, due to which the liability is recognized at nominal amount without discounting.

Provisions

Provisions are recognized in the balance sheet when the Group has a legal or constructive obligation resulting from an event that has occurred and it is more likely than
not that an outflow of resources associated with the economic benefits will be required to fulfill the obligation and the amount can be reliably estimated. If the effect of the time value of the future payment is considered significant, the value of
the provision is determined by estimating the present value of the expected future cash flow with a discounting factor (before tax) that reflects the markets current valuation of the time value. The gradual increase in the



18



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allocated amount necessitated by the present value calculation is recognized as interest expense through profit or loss.

Provisions for restructuring are recognized when the Group has established a detailed, formal restructuring plan and the restructuring has either begun or been publicly
announced.

A provision for contract losses is recognized when the benefits the Group expects to receive from a contract are lower than the unavoidable
costs to fulfill the contracts obligations.

Pensions and other post-employment benefits

The Group has both defined-contribution and defined-benefit pension plans. In the latter, the Company bears the risk for the benefits as agreed to be provided to the
plans participants. In a defined-contribution plan, the Company does not have any obligation beyond paying the contractual fees to the plan.

Fees
for defined-contribution plans are recognized as a cost through profit or loss as the right is earned.

The Groups obligation with respect to
defined-benefit pension plans is calculated separately for each plan annually. The calculation is an estimate of the present value of future entitlements that employees have earned through service to the company. The fair value of plan assets is
deducted from the present value of the pension obligation. The calculation is based on a number of actuarial assumptions. The discount rate used to measure the obligation is the rate on measurement date for government bonds with a maturity
corresponding to the estimated maturities of the obligation. The calculation is performed by a qualified actuary using the projected unit credit method.

Actuarial gains and losses arise either as a result of a difference between an assumption and the actual outcome or because an assumption has changed. For actuarial gains and losses arising after the transition date for IFRS,
January 1, 2004, the so-called corridor rule is applied. This means that when the cumulative actuarial gain or loss exceeds a limit corresponding to 10 percent of the greater of the present value of the obligation and the fair value of plan
assets, the net gain or loss is recognized over the employees expected remaining working lives.

When there is a difference between how the pension
cost is determined in a legal entity and the Group, a provision or receivable is recognized for the special employers contribution based on this difference. No present value calculation is made for the provision or receivable.

Leasing

Leases are classified in the Group as either
operating or finance. A lease agreement that according to managements judgment, transfers substantially all of the benefits and risks of ownership to the Company is accounted for as a financial lease. All other leases are operating.

ICA as lessee

Leasing fees for operating leases are
recognized through profit or loss and recognized on a straight-line basis over the life of the lease.



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Finance leases are recognized as fixed assets and liabilities in the balance sheet, while in the income statement the
cost is recognized among operating expenses and interest.

ICA as lessor

Assets subject to a finance lease are recognized in the balance sheet as a receivable at an amount equal to the net investment in accordance with the lease. Lease
payments received are recognized as amortization of the receivable or financial income. This income is allocated based on a pattern reflecting a constant periodic return over the lease term.

Assets subject to an operating lease are presented according to the nature of the asset. Lease revenue from operating leases is recognized in income on a straight-line
basis over the lease term. Direct costs incurred at the start of the lease are expensed on a straight-line basis over the lease term.

Income tax

Income taxes consist of current and deferred tax. Income taxes are recognized through profit or loss except when the underlying transaction is
recognized directly against shareholders equity, in which case the associated income tax is recognized directly in shareholders equity.

Current income taxes are recorded for the amounts of taxes due to the appropriate taxing authorities related to the current periods taxable income. Taxable income differs from reported income before tax in the income statement as
certain revenues are not taxable and certain costs are not deductible in the current period.

Deferred income tax assets and liabilities are recorded for
the estimated future tax consequences of events attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured using enacted rates in effect in the year the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in
the Companys consolidated income statement in the period of the enactment of the change in tax rates. A deferred tax liability is reported in the balance sheet for all taxable temporary differences, except in cases where a temporary difference
relates to goodwill or to an asset or liability in a transaction other than a business combination and which, at the time of the transaction, affects neither the reported nor taxable gain or loss during the period and when the temporary difference
is attributable to investments in subsidiaries, associated companies and interests in joint ventures, when the Group can influence when the reversal of the temporary difference will take place and it is probable that the temporary difference will
not be reversed for the foreseeable future.

Deferred tax assets are reported for all deductible temporary differences and unutilized tax loss
carryforwards to the extent it is probable that future taxable gains will be available. The reported value of deferred tax assets is evaluated on each balance sheet date and reduced to the extent it is no longer probable that sufficient taxable
gains will be available to offset wholly or in part the deferred tax assets.



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Segment reporting

A segment is a distinguishable component of the Group that provides goods and services (operating area) within a particular economic environment (geographical area) and that is subject to the risks and returns that differ from other
segments.

For ICA, business areas are considered its primary segments and countries its secondary segments.

Important assumptions and estimates

The consolidated accounts
are based on various assumptions and estimates made by the Board of Directors. These assumptions affect the carrying amounts of assets and liabilities, of income and expenses, and of pledged assets and contingent liabilities. Estimates may deviate
from future results. The assumptions and estimates that the Board of Directors feels are most important and where there is the greatest risk of future changes in the values of assets and liabilities are as follows.

Sale and leasebacks

Each year ICA AB builds a number of stores in
attractive locations. At the same time it sells older properties, which are leased back by ICA AB and sublet to the ICA retailer on identical leasing terms. ICA has determined that in such sale and leaseback arrangements the significant risks and
benefits are retained within the Group. The combined transaction is therefore treated as a financing and as such, the properties continue to be recognized in the consolidated balance sheet and depreciation continues over their estimated useful life.
The proceeds received are accounted as a long-term liability, while the lease fee is split between interest expenses and amortization of the liability.

Sale of loan portfolio and ending of store financing by ICA

In November 2005 ICA signed a cooperation agreement with Nordea related to the
financing of certain stores. At the same time Nordea took over the Swedish portfolio of operating loans to ICA retailers. In accordance with the agreement, ICA will compensate Nordea for future credit losses. The sale is part of ICAs focus on
its core business. As of December 31, 2006 outstanding operating loans amount to SEK 230 million (410) and the maximum compensation from ICA for credit losses amounts to SEK 22 million (39).

According to IAS 39, an asset shall continue to be recognized in the balance sheet if the majority of the risks associated with the asset are retained by the seller. As
ICA essentially retains the risk of future credit losses after the sale, the loans continue to be recognized in the balance sheet. The nominal value of the loan portfolio is included in long-term receivables and the selling proceeds received are
reflected as other liabilities.

Consolidation according to IFRS

In accordance with IAS 27, ICA AB consolidates companies in which it exercises has the power to govern the financial and operating policies of those entities. All store companies in which ICA has more than 50 percent
of the votes have been consolidated. ICA has analyzed other store companies to determine whether it exercises a controlling influence even if ICA owns less than 50 percent of the votes. In accordance with IAS 27 and SIC 12, one indication that ICA
could be considered to exercise a controlling influence over a store company is if ICA has retained a majority of the risks and economic benefits. Before selling the loan portfolio, as described above, ICA was the principal financial backer for
approximately100



21



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stores and therefore retained certain risks related to these store companies. This relationship ceased, however, when the loan portfolio was sold to Nordea.
Based on a review of agreements and financial information, it has been determined that ICA retailers and franchisees do not have the ability to govern the financial and operating policies of these store companies. Consequently, ICA AB has not
consolidated these store companies.

Impairment of fixed assets

The determination whether a fixed asset has been impaired or not requires an assessment of its recoverable value. Recoverable value is the higher of the assets value in use and fair value less selling expenses. The calculation of
value in use requires an assessment of future cash flows and discount rates. A change in assumptions regarding, among other things, future cash flows and discount rates could change the carrying amount of fixed assets.

Pensions

The calculation of defined-benefit pension obligations
requires assumptions with regard to future payroll trends and interest rates. Because of the long maturity of the pensions in these plans, the uncertainty of these assumptions is high and may necessitate corrections in the future that affect future
liabilities and expenses.

Damages and provisions

ICA
AB and its subsidiaries are involved in a number of disputes related to the Groups operations. These disputes have a built-in uncertainty. The Board of Directors assessments of the outcome of these disputes are based on assessments made
by external and internal attorneys. If management assesses the likelihood of loss in these disputes to be greater than 50%, a provision is recorded. No provisions have been made regarding ongoing disputes.

Supplier allowances

There are a number of different types of
contracts governing supplier allowances. To calculate allowances, certain types of contracts require assumptions about future sales and purchasing volumes. If these assumptions change, it could lead to a different calculation of the allowances.

Credit losses ICA Banken

ICA Bankens credit
losses consist of allocations for anticipated and established credit losses. If the financial situation of ICA Bankens customers changes, it could affect the level of credit losses.

Taxes

One of the duties of the Swedish tax authority is to review
the Companys operations to determine whether it has managed its taxes according to current law. If the tax authority were to determine that the Company has not done so, it could lead to a different tax expense.

Note 2 Segment reporting

The Groups continuing operations are
divided into the following business areas: ICA Sverige, ICA Norge, ICA Baltic and ICA Banken. ICA Sverige, ICA Norge and ICA Baltic relate to retail operations in each respective geographical region. ICA Banken conducts banking operations. ICA Meny
is reported as a discontinued operation. See also Note17. As a result of the presentation of discontinued operations, comparative information has been restated.



22



---

In 2004 the ICA Baltic operation was a consolidated subsidiary as the joint venture with Kesko was established
January 3, 2005. ICA Baltic operated as joint venture in 2005 and 2006, but as of December 18, 2006 has been recorded as a wholly owned subsidiary.

All internal transactions are based on market prices



|                                          |  |             |  |           |  |            |  |            |  |        |  |           |  |           |  |       |  |           |  |           |  |       |  |          
|----------------------------------------- |  | ----------- |  | --------- |  | ---------- |  | ---------- |  | ------ |  | --------- |  | --------- |  | ----- |  | --------- |  | --------- |  | ----- |  | ---------
|                                          |  | ICA Sverige |  | ICA Norge |  | ICA Baltic |  | ICA Banken
|                                          |  | 2006        |  | 2005      |  | 2004       |  | 2006       |  | 2005   |  | 2004      |  | 2006      |  | 2005  |  | 2004      |  | 2006      |  | 2005  |  | 2004     
|                                          |  | unaudited   |  |           |  | unaudited  |  | unaudited  |  |        |  | unaudited |  | unaudited |  |       |  | unaudited |  | unaudited |  |       |  | unaudited
|External net sales                        |  | 47,927      |  | 46,325    |  | 44,646     |  | 18,359     |  | 19,036 |  | 19,020    |  | 0         |  | 15    |  | 3,307     |  | 458       |  | 316   |  | 198      
|Internal net sales                        |  | 374         |  | 427       |  | 393        |  | 2          |  | 3      |  |          |  |           |  |       |  |           |  |          |  |      |  |          
|Share of associated companies net profit |  | 8           |  | 1         |  | 0          |  | 5          |  | 24     |  | 20        |  | -12       |  | -8    |  | 5         |  |          |  |      |  |          
|Operating income                          |  | 2,557       |  | 1,607     |  | 1,774      |  | 114        |  | 534    |  | 399       |  | -12       |  | 42    |  | -99       |  | 11        |  | -82   |  | -128     
|Assets                                    |  | 14,187      |  | 13,532    |  | 12,268     |  | 9,252      |  | 10,754 |  | 9,787     |  | 5,182     |  | 1,020 |  | 2,400     |  | 7,365     |  | 6,660 |  | 5,917    
|Liabilities incl. provisions              |  | 12,094      |  | 12,114    |  | 10,712     |  | 5,346      |  | 6,589  |  | 6,215     |  | 4,538     |  | 800   |  | 2,563     |  | 6,733     |  | 6,047 |  | 5,313    
|Investments in fixed assets               |  | 1,260       |  | 1,064     |  | 1,108      |  | 1,003      |  | 1,221  |  | 1,213     |  |          |  |      |  | 207       |  | 7         |  | 15    |  | 19       
|Depreciation                              |  | 379         |  | 412       |  | 363        |  | 614        |  | 587    |  | 608       |  |          |  |      |  | 125       |  | 71        |  | 69    |  | 65       
|Impairment losses                         |  | 1           |  | 22        |  |            |  | 68         |  | 95     |  |           |  |           |  |       |  |           |  |           |  |       |  |          
|Other non-cash items                      |  | -536        |  | 71        |  |            |  | -175       |  | 21     |  |           |  | 12        |  |       |  |           |  |           |  |       |  |          
|Average number of employees               |  | 4,752       |  | 4,917     |  | 6,010      |  | 4,043      |  | 4,052  |  | 5,437     |  |          |  |      |  | 5,286     |  | 174       |  | 154   |  | 121      



|                                          |  |           |  |             |  |              |  |                                        |  |      |  |           |  |           |  |        |  |           |  |           |  |        |  |          
|----------------------------------------- |  | --------- |  | ----------- |  | ------------ |  | -------------------------------------- |  | ---- |  | --------- |  | --------- |  | ------ |  | --------- |  | --------- |  | ------ |  | ---------
|                                          |  | Corporate |  | ICA Danmark |  | Eliminations |  | Total continuing operations, ICA Group
|                                          |  | 2006      |  | 2005        |  | 2004         |  | 2006                                   |  | 2005 |  | 2004      |  | 2006      |  | 2005   |  | 2004      |  | 2006      |  | 2005   |  | 2004     
|                                          |  | unaudited |  |             |  | unaudited    |  | unaudited                              |  |      |  | unaudited |  | unaudited |  |        |  | unaudited |  | unaudited |  |        |  | unaudited
|External net sales                        |  | 651       |  | 404         |  | 258          |  |                                       |  |     |  | 1,011     |  |           |  |        |  |           |  | 67,395    |  | 66,096 |  | 68,440   
|Internal net sales                        |  | 463       |  | 443         |  | 258          |  |                                       |  |      |  |           |  | -839      |  | -873   |  | -651      |  | 0         |  | 0      |  | 0        
|Share of associated companies net profit |  | -85       |  | -101        |  | 401          |  |                                       |  |      |  |           |  |           |  |        |  |           |  | -84       |  | -84    |  | 426      
|Operating income                          |  | -373      |  | -163        |  | 337          |  |                                       |  | 2    |  | -258      |  |           |  |        |  |           |  | 2,297     |  | 1,940  |  | 2,025    
|Assets                                    |  | 19,180    |  | 18,998      |  | 18,567       |  |                                       |  | 25   |  | 98        |  | -19,660   |  | -19485 |  | -18,826   |  | 35,506    |  | 31,504 |  | 30,211   
|Liabilities incl. provisions              |  | 10,194    |  | 11,185      |  | 20,019       |  |                                       |  | 1    |  | 78        |  | -13,615   |  | -13549 |  | -21,744   |  | 25,290    |  | 23,187 |  | 23,156   
|Investments in fixed assets               |  | 101       |  | 182         |  | 52           |  |                                       |  |     |  | 1         |  |           |  |        |  |           |  | 2,371     |  | 2,482  |  | 2,600    
|Depreciation                              |  | 115       |  | 80          |  | 92           |  |                                       |  |     |  | 9         |  |           |  |        |  |           |  | 1,179     |  | 1,148  |  | 1,262    
|Impairment losses                         |  |          |  | 4           |  |              |  |                                       |  |     |  | 257       |  |           |  |        |  |           |  | 69        |  | 121    |  | 257      
|Other non-cash items                      |  | -2        |  | 32          |  |              |  |                                       |  |     |  |          |  |           |  |        |  |           |  | -701      |  | 124    |  |         
|Average number of employees               |  | 2,041     |  | 1,417       |  | 474          |  |                                       |  |     |  | 451       |  |           |  |        |  |           |  | 11,010    |  | 10,540 |  | 17,779   



|                                          |  |                                    |  |       |  |          
|----------------------------------------- |  | ---------------------------------- |  | ----- |  | ---------
|                                          |  | Discontinued operations (ICA Meny)
|                                          |  | 2006                               |  | 2005  |  | 2004     
|                                          |  | unaudited                          |  |       |  | unaudited
|External net sales                        |  | 4,383                              |  | 5,775 |  | 5,034    
|Internal net sales                        |  |                                    |  |       |  |          
|Share of associated companies net profit |  |                                    |  |       |  |          
|Operating income                          |  | 38                                 |  | 11    |  | -53      
|Assets                                    |  |                                   |  | 1,227 |  | 877      
|Liabilities incl. provisions              |  |                                   |  | 1,173 |  | 838      
|Investments in fixed assets               |  | 52                                 |  | 65    |  | 22       
|Depreciation                              |  | 17                                 |  | 25    |  | 18       
|Impairment losses                         |  |                                   |  |      |  |         
|Other non-cash items                      |  |                                   |  |      |  |         
|Average number of employees               |  | 688                                |  | 1,016 |  | 1,002    



23



---

|          |           |                         |                  |        |      |           |      |           |      |       |      |          
|--------- | --------- | ----------------------- | ---------------- | ------ | ---- | --------- | ---- | --------- | ---- | ----- | ---- | ---------
|Country   |           | Continuing operations  
|          | Net sales |                         | Operating income
|          | 2006      |                         | 2005             |        | 2004 |           | 2006 |           | 2005 |       | 2004
|          |           | unaudited               |                  |        |      | unaudited |      | unaudited |      |       |      | unaudited
|Sweden    |           | 49,036                  |                  | 47,045 |      | 46,991    |      | 2,206     |      | 1,404 |      | 2,075    
|Norway    |           | 18,359                  |                  | 19,036 |      | 17,132    |      | 91        |      | 534   |      | 435      
|Denmark   |           |                         |                  |        |      | 1,011     |      |           |      | 2     |      | -394     
|Estonia   |           |                         |                  |        |      | 265       |      |           |      |       |      | -26      
|Latvia    |           |                         |                  | 15     |      | 1,849     |      |           |      |       |      | -7       
|Lithuania |           |                         |                  |        |      | 1,192     |      |           |      |       |      | -58      
|Total     |           | 67,395                  |                  | 66,096 |      | 68,440    |      | 2,297     |      | 1,940 |      | 2,025    
|          |          
|Country   |           | Discontinued operations
|          | Net sales |                         | Operating income
|          | 2006      |                         | 2005             |        | 2004 |           | 2006 |           | 2005 |       | 2004
|          |           | unaudited               |                  |        |      | unaudited |      | unaudited |      |       |      | unaudited
|Sweden    |           | 3,044                   |                  | 4,294  |      | 4,355     |      | 26        |      | 10    |      | -36      
|Norway    |           | 1,339                   |                  | 1,481  |      | 679       |      | 12        |      | 1     |      | -17      
|Denmark   |           |                         |                  |        |      |           |      |           |      |       |      |          
|Estonia   |           |                         |                  |        |      |           |      |           |      |       |      |          
|Latvia    |           |                         |                  |        |      |           |      |           |      |       |      |          
|Lithuania |           |                         |                  |        |      |           |      |           |      |       |      |          
|Total     |           | 4,383                   |                  | 5,775  |      | 5,034     |      | 38        |      | 11    |      | -53      

According to balance sheet:



|          |      |           |      |                            |      |           |      |      
|--------- | ---- | --------- | ---- | -------------------------- | ---- | --------- | ---- | -----
|Country   |      | Assets    |      | Investments in fixedassets
|          | 2006 |           | 2005 |                            | 2006 |           | 2005
|          |      | unaudited |      |                            |      | unaudited |      |      
|Sweden    |      | 22,616    |      | 20,990                     |      | 1,357     |      | 1,299
|Norway    |      | 9,771     |      | 11,716                     |      | 1,014     |      | 1,248
|Denmark   |      | 24        |      | 25                         |      |          |      |     
|Estonia   |      | 860       |      |                           |      |          |      |     
|Latvia    |      | 1,177     |      |                           |      |          |      |     
|Lithuania |      | 1,059     |      |                           |      |          |      |     
|Total     |      | 35,506    |      | 32,731                     |      | 2,371     |      | 2,547

Note 3 Net sales by revenue source



|                                                 |  |             |  |        |  |            
|------------------------------------------------ |  | ----------- |  | ------ |  | -----------
|                                                 |  | 2006        |  | 2005   |  | 2004       
|                                                 |  | (unaudited) |  |        |  | (unaudited)
|Wholesale sales                                  |  | 43,427      |  | 41,377 |  | 41,351     
|Retail sales                                     |  | 18,803      |  | 18,424 |  | 21,127     
|Rental revenue                                   |  | 1,648       |  | 1,623  |  | 1,622      
|Net interest income and commissions ICA Banken   |  | 459         |  | 316    |  | 198        
|Other services for ICA retailers and franchisees |  | 3,058       |  | 4,356  |  | 4,142      
|                                                 |  |             |  |        |  |            
|Net sales                                        |  | 67,395      |  | 66,096 |  | 68,440     

Net interest income and commissions in ICA Banken are recognized as of 2006 as net sales. In the annual report for
2005 and 2004, net interest income for ICA Banken was included on the line other operating revenue.



24



---

Note 4 Expenses by nature of expense



|                                      |  |             |  |        |  |            
|------------------------------------- |  | ----------- |  | ------ |  | -----------
|                                      |  | 2006        |  | 2005   |  | 2004       
|                                      |  | (unaudited) |  |        |  | (unaudited)
|Cost of sales-merchandise             |  | 51,275      |  | 51,107 |  | 52,268     
|Personnel expenses                    |  | 5,877       |  | 5,514  |  | 5,964      
|Administrative expenses               |  | 1,703       |  | 1,486  |  | 1,591      
|Cost of premises                      |  | 2,164       |  | 2,084  |  | 2,272      
|Depreciation/amortization/impairments |  | 1,248       |  | 1,270  |  | 1,519      
|Other expenses                        |  | 3,552       |  | 2,914  |  | 3,398      
|                                      |  |             |  |        |  |            
|Total expenses                        |  | 65,819      |  | 64,375 |  | 67,012     

Note 5 Personnel expenses, pensions, etc.

Average number of employees

The number of employees is calculated on the basis of the Groups measure of normal
working hours (1,800 hours).



|             |  |             |  |         |  |        |  |       |  |       |  |       
|------------ |  | ----------- |  | ------- |  | ------ |  | ----- |  | ----- |  | ------
|             |  | 2006 1)     |  | 2005 1)
|             |  | (unaudited) |  |         |  |        |  |      
|             |  | Women       |  | Men     |  | Total  |  | Women |  | Men   |  | Total 
|Sweden       |  | 2,659       |  | 4,401   |  | 7,060  |  | 2,381 |  | 4,486 |  | 6,867 
|Norway       |  | 2,344       |  | 2,294   |  | 4,638  |  | 2,322 |  | 2,367 |  | 4,689 
|             |  |             |  |         |  |        |  |       |  |       |  |       
|Total, Group |  | 5,003       |  | 6,695   |  | 11,698 |  | 4,703 |  | 6,853 |  | 11,556



| | 1) | Figures include the discontinued operations of ICA Meny
| | -- | -------------------------------------------------------

Salaries and
other remuneration to Board, President and EVP



|                                          |  |             |  |      |  |            
|----------------------------------------- |  | ----------- |  | ---- |  | -----------
|                                          |  | 2006        |  | 2005 |  | 2004       
|                                          |  | (unaudited) |  |      |  | (unaudited)
|Salaries and similar remuneration         |  | 52          |  | 41   |  | 43         
|Cost of pensions and similar remuneration |  | 18          |  | 11   |  | 11         

Of the salaries and other remuneration, 12 (8) relates to bonuses.

Gender distribution of Board of Directors and Management



|                   |  |             |  |     
|------------------ |  | ----------- |  | ----
|                   |  | 2006        |  | 2005
|                   |  | (unaudited) |  |     
|Board of Directors |  |             |  |     
|Men                |  | 39          |  | 40  
|Women              |  | 8           |  | 9   
|                   |  |             |  |     
|Total              |  | 47          |  | 49  
|                   |  |            
|                   |  | 2006        |  | 2005
|                   |  | (unaudited) |  |     
|Management         |  |             |  |     
|Men                |  | 68          |  | 57  
|Women              |  | 29          |  | 23  
|                   |  |             |  |     
|Total              |  | 97          |  | 80  



25



---

Benefits to Senior Executives

No fees were paid to the Board members appointed by the Annual General Meeting. Employee representatives received a fee of SEK 4,000 per meeting, to which Board members received background material, with decision points on the agenda,
prior to the meetings.

The salary paid to the Companys President amounted to SEK 11 million (9 and 9) during the year, including a bonus of SEK
5 million (4 and 4). The employment contract of the President of the Parent Company stipulates a 12-month term and severance pay for two years if terminated by the Company. If the President resigns, the term of notice is six months. The
President is entitled to receive pension benefits from age 60. The Company covers the obligation by annually paying pension premiums to insurance companies corresponding to 35 percent of the Presidents salary. The Group does not have other
post-employment obligations to the President.

Note 6 Audit expenses



|                  |  |             |  |      |  |            
|----------------- |  | ----------- |  | ---- |  | -----------
|                  |  | 2006        |  | 2005 |  | 2004       
|                  |  | (unaudited) |  |      |  | (unaudited)
|Audit fees        |  |             |  |      |  |            
|Deloitte          |  | 12          |  | 15   |  | 16         
|Other audit firms |  | 2           |  | 2    |  | 3          
|                  |  |             |  |      |  |            
|Total             |  | 14          |  | 17   |  | 19         
|Other fees        |  |             |  |      |  |            
|Deloitte          |  | 5           |  | 1    |  | 4          
|Other audit firms |  |            |  |     |  | 4          
|                  |  |             |  |      |  |            
|Total             |  | 5           |  | 1    |  | 8          

Note 7 Other operating income



|                                  |  |             |  |      |  |            
|--------------------------------- |  | ----------- |  | ---- |  | -----------
|                                  |  | 2006        |  | 2005 |  | 2004       
|                                  |  | (unaudited) |  |      |  | (unaudited)
|Profit shares and share dividends |  | 148         |  | 128  |  | 79         
|Capital gains                     |  | 657         |  | 175  |  | 92         
|                                  |  |             |  |      |  |            
|Total                             |  | 805         |  | 303  |  | 171        



26



---

Note 8 Leases

Finance leases

Receivables related to finance leases with ICA as lessor.



|                                                          |  |                      |  |                                      |  |             |  |     
|--------------------------------------------------------- |  | -------------------- |  | ------------------------------------ |  | ----------- |  | ----
|                                                          |  | Minimum leasing fees |  | Present value ofminimum leasing fees
|                                                          |  | 2006                 |  | 2005                                 |  | 2006        |  | 2005
|                                                          |  | (unaudited)          |  |                                      |  | (unaudited) |  |     
|Maturity date within 1 year                               |  | 97                   |  | 80                                   |  | 92          |  | 76  
|Maturity date later than within 1 year but within 5 years |  | 204                  |  | 372                                  |  | 169         |  | 302 
|Maturity date later than 5 years                          |  | 7                    |  | 13                                   |  | 5           |  | 9   
|                                                          |  |                      |  |                                      |  |             |  |     
|Total                                                     |  | 308                  |  | 465                                  |  | 266         |  | 387 
|Less: Unearned interest                                   |  | -42                  |  | -78                                  |  |             |  |     
|                                                          |  |                      |  |                                      |  |             |  |     
|Present value of minimum leasing fees                     |  | 266                  |  | 387                                  |  |             |  |     
|Receivables are recognized in the following items:        |  |                      |  |                                      |  |             |  |     
|Long-term receivables                                     |  | 174                  |  | 311                                  |  |             |  |     
|Prepaid expenses and accrued income                       |  | 92                   |  | 76                                   |  |             |  |     

ICA enters into finance leases on store equipment. The average lease period is seven years. Interest is variable
with an average rate of 3.95% (3.65). Variable fees included in income for the period amount to SEK 6 million (4).

The non-guaranteed carrying amount
of assets under finance leases as of December 31, 2006 is estimated at SEK 0 million (0).

The fair value of receivables with respect to finance
leases as of December 31, 2006 are estimated at SEK 266 million (387), based on the estimated present value of anticipated cash flows at current market interest rates, i.e., the present value rate.

Operating leases

ICA as
lessee

The Group leases buildings and equipment. Leasing fees are contracted over an average period of 10 years. Rents change in accordance with index
clauses in the agreements. Contractual leasing expenses under existing agreements fall due for payment as follows:



27



---

|                                                           |  |             |  |        |  |            
|---------------------------------------------------------- |  | ----------- |  | ------ |  | -----------
|                                                           |  | 2006        |  | 2005   |  | 2004       
|                                                           |  | (unaudited) |  |        |  | (unaudited)
|Leasing expense                                            |  | 2,200       |  | 2,202  |  | 2,189      
|Of which minimum leasing fees                              |  | 2,088       |  | 2,183  |  | 2,128      
|Of which variable fees                                     |  | 112         |  | 19     |  | 61         
|Leasing revenue from sublet assets                         |  | -1,146      |  | -1,096 |  | -1,167     
|Future contractual minimum leasing fees:                   |  |             |  |        |  |            
|Maturity date within 1 year                                |  | 2,317       |  | 2,466  |  |            
|Between 1-5 years                                          |  | 7,143       |  | 6,166  |  |            
|Later than 5 years                                         |  | 6,127       |  | 8,439  |  |            
|                                                           |  |             |  |        |  |            
|Total                                                      |  | 15,587      |  | 17,071 |  |            
|                                                           |  |             | 
|Future minimum leasing fees for contracts on sublet assets |  | 4,502       |  | 7,586  |  |            

ICA as lessor

The Group leases out buildings and equipment. Rents are primarily fixed, although variable rents based on revenues do occur. Leasing fees are contracted over an average lease period of 10 years. Rents change in accordance with index clauses
in the agreements.

Contractual leasing expenses under existing agreements fall due for payment as follows:



|                                         |  |             |  |     
|---------------------------------------- |  | ----------- |  | ----
|                                         |  | 2006        |  | 2005
|                                         |  | (unaudited) |  |     
|Future contractual minimum leasing fees: |  |             |  |     
|Maturity date within 1 year              |  | 36          |  | 17  
|Between 1-5 years                        |  | 241         |  | 205 
|Later than 5 years                       |  | 222         |  | 210 
|                                         |  |             |  |     
|Total                                    |  | 499         |  | 432 
|                                         |  |            
|Variable fees included in results        |  | 495         |  | 477 

Note 9 Exchange rate differences in operating income

Purchases of goods and services in foreign currencies have produced exchange rate differences on the following levels of operating income.



|                        |  |             |  |      |  |            
|----------------------- |  | ----------- |  | ---- |  | -----------
|                        |  | 2006        |  | 2005 |  | 2004       
|                        |  | (unaudited) |  |      |  | (unaudited)
|Net sales               |  | 0           |  | 0    |  | 0          
|Cost of sales           |  | -22         |  | -24  |  | -14        
|Administrative expenses |  |            |  | -1   |  | 0          
|                        |  |             |  |      |  |            
|Total                   |  | -22         |  | -25  |  | -14        



28



---

Note 10 Results from financial investments



|                                               |  |             |  |      |  |            
|---------------------------------------------- |  | ----------- |  | ---- |  | -----------
|                                               |  | 2006        |  | 2005 |  | 2004       
|                                               |  | (unaudited) |  |      |  | (unaudited)
|Interest income and similar profit/loss items  |  |             |  |      |  |            
|Interest income                                |  | 107         |  | 78   |  | 113        
|Market valuation of financial derivatives      |  |            |  | 18   |  |           
|Exchange rate differences                      |  |            |  | 7    |  |           
|                                               |  |             |  |      |  |            
|Total                                          |  | 107         |  | 103  |  | 113        
|Interest expense and similar profit/loss items |  |             |  |      |  |            
|Interest expenses                              |  | -338        |  | -376 |  | -318       
|Market valuation of financial derivatives      |  | -6          |  |     |  | -3         
|Exchange rate differences                      |  | -14         |  |     |  | -16        
|                                               |  |             |  |      |  |            
|Total                                          |  | -358        |  | -376 |  | -337       

Note 11 Income Taxes



|                                                              |  |             |  |       |  |            
|------------------------------------------------------------- |  | ----------- |  | ----- |  | -----------
|                                                              |  | 2006        |  | 2005  |  | 2004       
|                                                              |  | (unaudited) |  |       |  | (unaudited)
|Current income tax                                            |  |             |  |       |  |            
|Current tax on income for the year from continuing operations |  | -266        |  | -172  |  | -293       
|Deferred tax on temporary differences                         |  | 254         |  | 25    |  | 50         
|                                                              |  |             |  |       |  |            
|Reported income tax expense for continuing operations         |  | -12         |  | -147  |  | -243       
|                                                              |  |             | 
|Reconciliation between current tax rate and effective tax     |  |             |  |       |  |            
|Current tax rate, %                                           |  | 28.0        |  | 28.0  |  | 28.0       
|Tax-exempt income                                             |  | -29.4       |  | -21.5 |  | -13,5      
|Difference in tax rates in countries of operation             |  |            |  |      |  | -0.9       
|Losses in companies where deferred tax is not reported        |  |            |  |      |  | 1.0        
|Non-deductible goodwill impairment                            |  |            |  |      |  | 4.2        
|Result from associated companies net income                  |  | 1.1         |  | 1.4   |  | -6.9       
|Other non-deductible expenses and tax-exempt income           |  | 0.9         |  | 1.0   |  | 1.1        
|                                                              |  |             |  |       |  |            
|Effective tax rate for continuing operations                  |  | 0.6         |  | 8.9   |  | 13.0       



29



---

Reported deferred tax assets and tax liabilities



|                                   |  |             |  |     
|---------------------------------- |  | ----------- |  | ----
|                                   |  | 2006        |  | 2005
|                                   |  | (unaudited) |  |     
|Fixed assets                       |  | -79         |  | 61  
|Inventory                          |  | 6           |  | 3   
|Provisions                         |  | -66         |  | 79  
|Tax loss carryforwards             |  | 96          |  | 41  
|Untaxed reserves                   |  | -413        |  | -644
|Financial derivatives              |  | -11         |  | -10 
|                                   |  |             |  |     
|Total net deferred tax liabilities |  | -467        |  | -470
|As reported in balance sheet:      |  |             |  |     
|Long-term deferred tax assets      |  | 181         |  | 49  
|Current deferred tax liabilities   |  | -648        |  | -519

The Group has no unreported deferred tax liabilities or tax assets on temporary differences. Capitalized tax
assets from tax loss carryforwards are more likely than not to be offset against future profits, since taxable surpluses have been generated historically and taxable surpluses are very likely to arise in the future.

Change in deferred tax in temporary differences and tax loss carryforwards



|                       |  |                      |  |                                |  |                                      |  |                                 |  |                      
|---------------------- |  | -------------------- |  | ------------------------------ |  | ------------------------------------ |  | ------------------------------- |  | ---------------------
|                       |  | Balance,Jan. 1, 2005 |  | Recognizedthroughprofit orloss |  | Recognizedthroughshareholdersequity |  | Businessacquisition/ divestment |  | Balance,Dec. 31, 2005
|Fixed assets           |  | 48                   |  | -14                            |  |                                      |  | 27                              |  | 61                   
|Inventory              |  | 2                    |  | 1                              |  |                                      |  |                                 |  | 3                    
|Provisions             |  | 88                   |  | -9                             |  |                                      |  |                                 |  | 79                   
|Tax loss carryforwards |  | 67                   |  | -26                            |  |                                      |  |                                 |  | 41                   
|Untaxed reserves       |  | -720                 |  | 76                             |  |                                      |  |                                 |  | -644                 
|Financial derivatives  |  | 0                    |  | -3                             |  | -7                                   |  |                                 |  | -10                  
|                       |  |                      |  |                                |  |                                      |  |                                 |  |                      
|Total                  |  | -515                 |  | 25                             |  | -7                                   |  | 27                              |  | -470                 
|                       |  |                      |  |                                | 
|                       |  | Balance,Jan. 1, 2006 |  | Recognizedthroughprofit orloss |  | Recognizedthroughshareholdersequity |  | Businessacquisition/ divestment |  | Balance,Dec. 31, 2006
|Fixed assets           |  | 61                   |  | 110                            |  |                                      |  | -250                            |  | -79                  
|Inventory              |  | 3                    |  | 3                              |  |                                      |  |                                 |  | 6                    
|Provisions             |  | 79                   |  | -145                           |  |                                      |  |                                 |  | -66                  
|Tax loss carryforwards |  | 41                   |  | 55                             |  |                                      |  |                                 |  | 96                   
|Untaxed reserves       |  | -644                 |  | 231                            |  |                                      |  |                                 |  | -413                 
|Financial derivatives  |  | -10                  |  | 0                              |  | -1                                   |  |                                 |  | -11                  
|                       |  |                      |  |                                |  |                                      |  |                                 |  |                      
|Total                  |  | -470                 |  | 254                            |  | -1                                   |  | -250                            |  | -467                 

Tax assets are denoted by (+) and tax liabilities by (-) in the table above.



30



---

Note 12 Intangible fixed assets



|                               |  |          |  |              |  |            |  |      
|------------------------------ |  | -------- |  | ------------ |  | ---------- |  | -----
|Cost                           |  | Goodwill |  | Trade- marks |  | IT systems |  | Other
|Balance-beginning of year 2005 |  | 1,665    |  |             |  | 412        |  | 203  
|Purchases                      |  | 67       |  |              |  | 74         |  | 21   
|Sales/disposals                |  | -195     |  |              |  | -12        |  | -23  
|Exchange rate difference       |  | 68       |  |              |  | 1          |  |     
|                               |  |          |  |              |  |            |  |      
|Balance-end of year 2005       |  | 1,605    |  |             |  | 475        |  | 201  
|                               |  |          |  |             
|Balance-beginning of year 2006 |  | 1,605    |  |             |  | 475        |  | 201  
|Purchases                      |  | 998      |  | 673          |  | 75         |  | 99   
|Sales/disposals                |  | -37      |  |             |  | -25        |  | -29  
|Exchange rate difference       |  | -52      |  | -1           |  | -2         |  | -2   
|                               |  |          |  |              |  |            |  |      
|Balance-end of year 2006       |  | 2,514    |  | 672          |  | 523        |  | 269  
|                               |  |          |  |             
|Accumulated amortization       |  | Goodwill |  | Trade-marks  |  | IT systems |  | Other
|Balance-beginning of year 2005 |  |          |  |              |  | -176       |  | -40  
|Amortization for the year      |  |          |  |              |  | -95        |  | -42  
|Exchange rate difference       |  |          |  |              |  |           |  | 1    
|                               |  |          |  |              |  |            |  |      
|Balance-end of year 2005       |  |          |  |              |  | -271       |  | -81  
|                               |  |          |  |              |  |            |  |      
|Balance-beginning of year 2006 |  |          |  |              |  | -271       |  | -81  
|Amortization for the year      |  |          |  |              |  | -109       |  | -55  
|                               |  |          |  |              |  |            |  |      
|Balance-end of year 2006       |  |          |  |              |  | -380       |  | -136 
|                               |  |          |  |             
|Accumulated impairment losses  |  | Goodwill |  | Trade-marks  |  | IT systems |  | Other
|Balance-beginning of year 2005 |  | 0        |  |             |  |           |  |     
|Impairment losses for the year |  | -15      |  |             |  |           |  |     
|                               |  |          |  |              |  |            |  |      
|Balance-end of year 2005       |  | -15      |  |             |  |           |  |     
|                               |  |          |  |             
|Balance-beginning of year 2006 |  | -15      |  |             |  |           |  |     
|Impairment losses for the year |  |         |  |             |  |           |  | 0    
|                               |  |          |  |              |  |            |  |      
|Balance-end of year 2006       |  | -15      |  |             |  |           |  | 0    
|                               |  |          |  |             
|Net carrying amount            |  |          |  |              |  |            |  |      
|As of December 31, 2005        |  | 1,590    |  |             |  | 204        |  | 120  
|As of December 31, 2006        |  | 2,499    |  | 672          |  | 143        |  | 133  



31



---

Amortization of intangible fixed assets is included in the following income statement items.



|                        |  |             |  |      |  |            
|----------------------- |  | ----------- |  | ---- |  | -----------
|                        |  | 2006        |  | 2005 |  | 2004       
|                        |  | (unaudited) |  |      |  | (unaudited)
|Selling expenses        |  | -55         |  | -137 |  | -84        
|Administrative expenses |  | -109        |  |     |  |           
|                        |  |             |  |      |  |            
|Total                   |  | -164        |  | -137 |  | -84        

Impairment losses for intangible fixed assets are included in the following income statement items.



|                 |  |             |  |      |  |            
|---------------- |  | ----------- |  | ---- |  | -----------
|                 |  | 2006        |  | 2005 |  | 2004       
|                 |  | (unaudited) |  |      |  | (unaudited)
|Selling expenses |  |            |  | 15   |  | 257        
|                 |  |             |  |      |  |            
|Total            |  |            |  | 15   |  | 257        

Useful life of intangible assets

Brand names refer to what was acquired in connection with the acquisition of Rimi Baltic AB. The useful life is indefinite and impairment testing is conducted annually or when there is an indication of diminished
value.

IT systems relate to capitalized development expenditures for IT systems. The useful life is calculated for each system and amounts to between
three and five years. Amortization is booked on a straight-line basis over the useful life of the assets. The remaining amortization schedule for IT systems is approximately 2 years.

Other intangible assets consist of tenancy rights and other intangible surplus values in connection with the acquisition of store operations. Amortization is booked over the estimated useful life of the assets.

Impairment testing of goodwill

In the consolidated
balance sheet, goodwill is distributed among the Groups cash-generating units identified by segment as follows:



|           |  |             |  |      
|---------- |  | ----------- |  | -----
|           |  | 2006        |  | 2005 
|           |  | (unaudited) |  |      
|ICA Norge  |  | 1,501       |  | 1,556
|ICA Baltic |  | 998         |  |     
|ICA Meny   |  |            |  | 34   
|           |  |             |  |      
|Total      |  | 2,499       |  | 1,590

Goodwill is distributed among cash-generating units. Goodwill impairment tests are conducted annually and when
there is an indication of impairment loss. The recoverable amount for a cash-generating unit is determined based on calculations of value in use. The calculations are based on the estimated future cash flow in budgets and forecasts for the upcoming
three years. Cash flows beyond this period are extrapolated based on inflation, which in no case exceeds 3%. The need for working capital is expected to remain at the same level as in year 3. The discount rate is 7.1% before tax. ICA has elected not
to allocate goodwill to a level lower than segments, but for impairment testing groups of cash-generating units are analyzed as well.



32



---

Other impairment testing

For intangible assets other than goodwill, a recoverable amount is determined when there is an indication that the asset has decreased in value. During the year no circumstances have occurred that would motivate impairment testing.

Note 13 Tangible fixed assets



|                                           |  |             |  |       
|------------------------------------------ |  | ----------- |  | ------
|                                           |  | 2006        |  | 2005  
|                                           |  | (unaudited) |  |       
|Buildings and land                         |  |             |  |       
|Cost, opening balance                      |  | 8,741       |  | 8,882 
|Purchases                                  |  | 1,642       |  | 129   
|Sales/disposals                            |  | -30         |  | -1,056
|Reclassifications                          |  | 138         |  | 632   
|Exchange rate differences                  |  | -140        |  | 154   
|                                           |  |             |  |       
|Cost, closing balance                      |  | 10,351      |  | 8,741 
|                                           |  |            
|Depreciation, opening balance              |  | -1,797      |  | -1,933
|Sales/disposals                            |  | 0           |  | 405   
|Reclassifications                          |  | -173        |  |      
|Impairment losses for the year             |  | -9          |  | -38   
|Depreciation for the year                  |  | -224        |  | -218  
|Exchange rate differences                  |  | 0           |  | -13   
|                                           |  |             |  |       
|Accumulated depreciation, closing balance  |  | -2,203      |  | -1,797
|                                           |  |            
|Net book value- closing balance            |  | 8,148       |  | 6,944 
|Thereoff land                              |  | 1,240       |  | 1,067 
|                                           |  |            
|Tax assessment value of Swedish properties |  |             |  |       
|Land                                       |  | 480         |  | 476   
|Buildings                                  |  | 2,590       |  | 2,551 
|                                           |  |             |  |       
|Total                                      |  | 3,070       |  | 3,027 



33



---

|                                           |  |       |  |      
|------------------------------------------ |  | ----- |  | -----
|Investment properties                      |  |       |  |      
|Cost, opening balance                      |  | 1,987 |  | 2,667
|Purchases                                  |  | 156   |  | 59   
|Sales/disposals                            |  | -327  |  | -228 
|Reclassifications                          |  | -547  |  | -660 
|Exchange rate differences                  |  | -105  |  | 149  
|                                           |  |       |  |      
|Cost, closing balance                      |  | 1,164 |  | 1,987
|                                           |  |      
|Depreciation, opening balance              |  | -446  |  | -580 
|Sales/disposals                            |  | 312   |  | 203  
|Impairment losses for the year             |  | -8    |  | -16  
|Depreciation for the year                  |  | -40   |  | -53  
|Exchange rate differences                  |  | 15    |  |     
|                                           |  |       |  |      
|Accumulated depreciation, closing balance  |  | -167  |  | -446 
|                                           |  |      
|Net book value- closing balance            |  | 997   |  | 1,541
|Thereoff land                              |  | 157   |  | 221  
|                                           |  |      
|Tax assessment value of Swedish properties |  |       |  |      
|Land                                       |  | 12    |  | 12   
|Buildings                                  |  | 23    |  | 25   
|                                           |  |       |  |      
|Total                                      |  | 35    |  | 37   

An internal valuation of all investment properties shows that their fair value exceeds book value by SEK
286 million (322).

The following amounts have been recognized through profit or loss for investment properties:



|                                                                |  |             |  |     
|--------------------------------------------------------------- |  | ----------- |  | ----
|                                                                |  | 2006        |  | 2005
|                                                                |  | (unaudited) |  |     
|Rental income                                                   |  | 140         |  | 186 
|Direct costs for properties that generated rental income        |  | 21          |  | 26  
|Direct costs for properties that did not generate rental income |  | 0           |  | 0   



34



---

Leasehold improvements



|                                          |  |             |  |       
|----------------------------------------- |  | ----------- |  | ------
|                                          |  | 2006        |  | 2005  
|                                          |  | (unaudited) |  |       
|Cost, opening balance                     |  | 861         |  | 565   
|Purchases                                 |  | 222         |  | 193   
|Sales/disposals                           |  | -67         |  | -69   
|Reclassifications                         |  | -32         |  | 149   
|Exchange rate differences                 |  | -28         |  | 23    
|                                          |  |             |  |       
|Cost, closing balance                     |  | 956         |  | 861   
|                                          |  |            
|Depreciation, opening balance             |  | -309        |  | -222  
|Sales/disposals                           |  | 19          |  |      
|Reclassifications                         |  |            |  | -8    
|Impairment losses for the year            |  |            |  | -10   
|Depreciation for the year                 |  | -99         |  | -67   
|Exchange rate differences                 |  | -3          |  | -2    
|                                          |  |             |  |       
|Accumulated depreciation, closing balance |  | -392        |  | -309  
|                                          |  |            
|Net book value- closing balance           |  | 564         |  | 552   
|                                          |  |            
|Equipment                                 |  |             |  |       
|Cost, opening balance                     |  | 6,602       |  | 6,987 
|Purchases                                 |  | 1,239       |  | 849   
|Reclassifications                         |  | 98          |  | -121  
|Sales/disposals                           |  | -185        |  | -1,253
|Exchange rate differences                 |  | -112        |  | 140   
|                                          |  |             |  |       
|Cost, closing balance                     |  | 7,642       |  | 6,602 
|                                          |  |            
|Depreciation, opening balance             |  | -4,266      |  | -4,404
|Sales/disposals                           |  | 128         |  | 888   
|Impairment losses for the year            |  | -6          |  | -36   
|Depreciation for the year                 |  | -669        |  | -699  
|Exchange rate differences                 |  | 4           |  | -15   
|                                          |  |             |  |       
|Accumulated depreciation, closing balance |  | -4,809      |  | -4,266
|                                          |  |            
|Net book value- closing balance           |  | 2,833       |  | 2,336 



35



---

Construction in progress



|                                     |  |       |  |      
|------------------------------------ |  | ----- |  | -----
|Opening balance                      |  | 1,068 |  | 713  
|Expenses capitalized during the year |  | 1,130 |  | 1,175
|Reallocations during the year        |  | -755  |  | -838 
|Reclassifications                    |  | -717  |  | -7   
|Impairment loss for the year         |  |      |  | -1   
|Exchange rate differences            |  | -36   |  | 26   
|                                     |  |       |  |      
|Closing balance                      |  | 690   |  | 1,068

Expenses capitalized during the year include SEK 32 million (20) in interest based on an average
interest rate of 2.9% (2.3%).

Impairment losses for tangible fixed assets are included in the following income statement items:



|                        |  |             |  |      |  |            
|----------------------- |  | ----------- |  | ---- |  | -----------
|                        |  | 2006        |  | 2005 |  | 2004       
|                        |  | (unaudited) |  |      |  | (unaudited)
|Cost of sales           |  | -23         |  | -25  |  |           
|Selling expenses        |  |            |  | -72  |  | -73        
|Administrative expenses |  |            |  | -4   |  |           
|                        |  |             |  |      |  |            
|Total                   |  | -23         |  | -101 |  | -73        

Note 14 Shares in joint ventures, associated companies and subsidiaries

Joint ventures



|                                                |  |             |  |     
|----------------------------------------------- |  | ----------- |  | ----
|                                                |  | 2006        |  | 2005
|                                                |  | (unaudited) |  |     
|Carrying amount, joint ventures                 |  |             |  |     
|Carrying amount, opening balance                |  | 657         |  | 31  
|New share issues and shareholders contribution |  | 125         |  | 76  
|Group change                                    |  | -613        |  | 639 
|Share of profit (losses)                        |  | -98         |  | -109
|Exchange rate differences                       |  | -25         |  | 20  
|                                                |  |             |  |     
|Carrying amount, closing balance                |  | 46          |  | 657 
|                                                |  |            
|Goodwill and other consolidated surplus values  |  | 0           |  | 0   
|Share of shareholders equity                   |  | 46          |  | 657 
|                                                |  |             |  |     
|Total                                           |  | 46          |  | 657 

Shares in joint ventures



|                           |  |             |  |           
|-------------------------- |  | ----------- |  | ----------
|                           |  | 2006        |  | 2005      
|                           |  | (unaudited) |  |           
|                           |  | Interest %  |  | Interest %
|Netto Market, ICA & DSG AB |  | 50          |  | 50        
|Rimi Baltic AB             |  | 100         |  | 50        

In 2005 ICA AB and Kesko Livs Ab formed a jointly owned food retail business in the Baltic countries. ICAs
food retail operations in the Baltic region thereby changed from that of a subsidiary to a joint venture with a 50% interest for ICA. Operations were financed jointly by the two owners and with external loans. Both owners provided equal guarantees
for the



36



---

operations. On December 18, 2006 ICA AB acquired the remaining 50% of Rimi Baltic AB from Kesko Livs Ab, and Rimi Baltic has since been a wholly owned
subsidiary of the ICA Group. In the income statement Rimi Baltic AB is recognized as a joint venture for the full-year 2006, but in the balance sheet Rimi Baltic AB is consolidated as of December 31, 2006.

ICA AB and Dansk Supermarket each own 50% of Netto Marknad AB, which operates the Netto discount concept in Sweden. Both companies have contributed a share of the
capital. Furthermore, the owners finance operations with loans. ICA has not provided any guarantees for the Netto Marknad AB. In December 2006 an agreement was reached by the owners whereby ICA would reduce its interest to 5%. The transaction was
approved by competition authorities on February 5, 2007 and finalized on February 15, 2007. As part of the agreement, ICA is taking over 21 stores in the Mälardal area, which will be converted to ICA stores or shut down.

The following table summarizes ICAs share of the revenue, expenses, assets and liabilities of its joint ventures. The table includes income statement and
balance sheet information for Rimi Baltic and Netto for both 2005 and 2006. Even though Rimi Baltic was consolidated at December 31, 2006, the disclosures below present the income statement and balance sheet for both years.



|                                     |  |             |  |       
|------------------------------------ |  | ----------- |  | ------
|                                     |  | 2006        |  | 2005  
|                                     |  | (unaudited) |  |       
|Revenue                              |  | 5,622       |  | 4,785 
|Expenses                             |  | -5,719      |  | -4,882
|                                     |  |             |  |       
|Loss                                 |  | -98         |  | -97   
|                                     |  |            
|Fixed assets                         |  | 1,355       |  | 1,387 
|Current assets                       |  | 821         |  | 680   
|                                     |  |             |  |       
|Total assets                         |  | 2,176       |  | 2,067 
|                                     |  |            
|Shareholders equity                 |  | 661         |  | 675   
|Long-term liabilities                |  | 713         |  | 727   
|Current liabilities                  |  | 802         |  | 665   
|                                     |  |             |  |       
|Shareholders equity and liabilities |  | 2,176       |  | 2,067 



37



---

Associated companies



|                                                        |  |             |  |     
|------------------------------------------------------- |  | ----------- |  | ----
|                                                        |  | 2006        |  | 2005
|                                                        |  | (unaudited) |  |     
|Carrying amount, associated companies                   |  |             |  |     
|Cost, opening balance                                   |  | 49          |  | 166 
|Purchases                                               |  | 0           |  | 3   
|Undistributed share of associated companies net income |  | 13          |  | 19  
|Disposals                                               |  | -44         |  | -149
|Exchange rate differences                               |  | -1          |  | 10  
|                                                        |  |             |  |     
|Cost, closing balance                                   |  | 17          |  | 49  
|                                                        |  |            
|Impairment losses, opening balance                      |  | -19         |  | -19 
|Impairment losses disposed companies                    |  | +19         |  |    
|                                                        |  |             |  |     
|Accumulated impairment losses, closing balance          |  | 0           |  | -19 
|                                                        |  |            
|Net book value- closing balance                         |  | 17          |  | 30  

Shares in associated companies

The following table summarizes the most significant holdings of shares in associated companies:



|                           |  |                              |  |                  |  |                  |  |                  |  |                 
|-------------------------- |  | ---------------------------- |  | ---------------- |  | ---------------- |  | ---------------- |  | ----------------
|                           |  | 2006 (unaudited)Ownership, % |  | 2005Ownership, % |  | Profit share2006 |  | Profit share2005 |  | Profit share2004
|                           |  |                              |  |                  |  | (unaudited)      |  |                  |  | (unaudited)     
|HB Luntmakaren             |  | 50                           |  | 50               |  | 0                |  | 0                |  | 0               
|HB Näringshuset            |  |                             |  | 50               |  | 7                |  | 1                |  | 0               
|Berg Senteret AS           |  |                             |  | 49               |  |                 |  | 7                |  | 1               
|KS Oti-Senteret AS         |  |                             |  |                 |  |                 |  | 23               |  | 2               
|Myra Senter AS             |  | 34                           |  | 34               |  | 0                |  | 2                |  | 0               
|Kremmergården ANS          |  |                             |  |                 |  |                 |  | -8               |  | 1               
|Rensvik Sentrum AS         |  |                             |  | 50               |  | 0                |  | -6               |  | 0               
|Other associated companies |  |                              |  |                  |  | 7                |  | 6                |  | 22              
|                           |  |                              |  |                  |  |                  |  |                  |  |                 
|Total                      |  |                              |  |                  |  | 14               |  | 25               |  | 26              

The ownership percentages above refer to votes, which in every case is the identical to the share of capital.



38



---

Shares in subsidiaries

Holdings in subsidiaries directly and indirectly owned by ICA AB. The list is limited to operating companies



|                              |  |                 |  |                  |  |             
|----------------------------- |  | --------------- |  | ---------------- |  | ------------
|                              |  | Reg. office     |  | 2006 (unaudited) |  | 2005        
|                              |  |                 |  | Ownership, %     |  | Ownership, %
|Direct holdings               |  |                 |  |                  |  |             
|ICA AS                        |  | Oslo            |  | 100              |  | 100         
|ICA Baltic AB                 |  | Stockholm       |  | 100              |  | 100         
|ICA Banken AB                 |  | Stockholm       |  | 100              |  | 100         
|ICA Danmark A/S               |  | Copenhagen      |  | 100              |  | 100         
|ICA Detalj AB                 |  | Stockholm       |  | 100              |  | 100         
|ICA Fastigheter AB            |  | Stockholm       |  | 100              |  | 100         
|ICA International Services BV |  | Zaandam,Holland |  | 100              |  | 100         
|ICA Reinsurance S.A           |  | Luxembourg      |  | 99               |  | 99          
|ICA Ahold Trading AB          |  | Stockholm       |  | 100              |  | 100         
|                              |  |                 | 
|Indirect holdings             |  |                 |  |                  |  |             
|ETOS AB                       |  | Nacka           |  | 100              |  | 100         
|ICA Norge AS                  |  | Oslo, Norway    |  | 100              |  | 100         
|ICA Sverige AB                |  | Stockholm       |  | 100              |  | 100         
|ICA Eiendom Norge AS          |  | Oslo, Norway    |  | 100              |  | 100         
|ICA Fastigheter Sverige AB    |  | Västerås        |  | 100              |  | 100         
|ICA Sourcing and Services BV  |  | Zaandam,Holland |  | 100              |  | 100         
|Rimi Baltic AB                |  | Stockholm       |  | 100              |  | 100         

In addition to the companies listed above, the ICA Group comprises 216 operating and dormant companies. A complete
list of all Group companies can be obtained from ICAs corporate communications department.

Note 15 Inventory



|                                        |  |             |  |      
|--------------------------------------- |  | ----------- |  | -----
|                                        |  | 2006        |  | 2005 
|                                        |  | (unaudited) |  |      
|Inventory of goods for resale           |  | 3,598       |  | 3,258
|Deduction for obsolescence in inventory |  | -48         |  | -30  
|                                        |  |             |  |      
|Inventory                               |  | 3,550       |  | 3,228

Note 16 ICA Banken

ICA Banken conducts banking operations, including card operations as well as savings and lending. Lending consists of customer loans (loans without security) and second mortgages. In addition, the bank offers mortgages through SBAB.

Since ICA Bankens lending is almost exclusively to a large number of private persons, there is no concentration of credit risks. Savings and lending
carry variable interest rates with the exception of a small portion of lending with a fixed 3-month rate. This means that the total interest rate risk is marginal. The banks surplus liquidity is invested in short-term government securities and
other low-risk investments. The bank carries very small amounts in foreign currency, due to which its currency risk is also marginal. The fair value of financial assets and liabilities corresponds to their carrying amount.

ICA Bankens lending to private persons matures as follows:



39



---

|                                        |  |             |  |      
|--------------------------------------- |  | ----------- |  | -----
|                                        |  | 2006        |  | 2005 
|                                        |  | (unaudited) |  |      
|Less than 3 months                      |  | 1,237       |  | 913  
|More than 3 months but less than 1 year |  | 442         |  | 640  
|More than 1 year but less than 5 years  |  | 2,131       |  | 2,558
|More than 5 years                       |  | 679         |  |     
|                                        |  |             |  |      
|Total lending                           |  | 4,489       |  | 4,111

ICA Banken has as a principle to classify a receivable as impaired when payments of interest or principal are
overdue by more than 60 days. Impaired loans, net, amounted to 1.19% (1.09%) of lending. The provision ratio is a reserve for credit losses in relation to total impaired loans. The provision ratio for impaired loans amounted to 62% (59%).

Note 17 Assets held for sale and discontinued operations

Results from discontinued operations



|                                                                         |  |             |  |        |  |           
|------------------------------------------------------------------------ |  | ----------- |  | ------ |  | ----------
|                                                                         |  | 2006        |  | 2005   |  | 2004      
|                                                                         |  | (unaudited) |  |        |  | (unaudited
|Net sales                                                                |  | 4,383       |  | 5,775  |  | 5,034     
|Cost of sales                                                            |  | -4,063      |  | -5,472 |  | -4,802    
|Selling expenses                                                         |  | -204        |  | -197   |  | -200      
|Administrative expenses                                                  |  | -78         |  | -95    |  | -85       
|Financial items                                                          |  | -11         |  | -14    |  | -11       
|                                                                         |  |             |  |        |  |           
|Income (loss) before income taxes                                        |  | 27          |  | -3     |  | -64       
|Income taxes                                                             |  | -9          |  | 1      |  | 18        
|                                                                         |  |             |  |        |  |           
|Result after tax but before result from disposal                         |  | 18          |  | -2     |  | -46       
|                                                                         |  |             | 
|Gain on disposal of discontinued operations before income taxes          |  | 349         |  |        |  |           
|Income taxes attributable to gain on disposal of discontinued operations |  | 0           |  |        |  |           
|                                                                         |  |             |  |        |  |           
|Gain on disposal of discontinued operations after tax                    |  | 349         |  |        |  |           
|                                                                         |  |             |  |        |  |           
|Income (loss) from discontinued operations, net of income taxes          |  | 367         |  | -2     |  | -46       

In September 2006 the holding in ICA Meny was sold. ICA Meny is a supplier to restaurants, the foodservice sector
and convenience stores. ICA Meny constituted a separate line of business and is recognized as a discontinued operation as of June 2006. At the time ICA Meny was classified as a discontinued operation, no gain or loss arose in connection with its
valuation at fair value less costs to sell.

In 2006 ICA Meny reported cash flow from operating activities of SEK 14 million (47 and 19), with cash
flow from investing activities of SEK -15 million (-46 and -19) and cash flow from financing activities of SEK 0 million (0 and 0).



40



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The effect on individual assets and liabilities in the group attributable to the disposal is as follows:



|                                     |  |            
|------------------------------------ |  | -----------
|                                     |  | 2006       
|                                     |  | (unaudited)
|Tangible fixed assets                |  | 144        
|Inventory                            |  | 335        
|Accounts receivable                  |  | 819        
|Other receivables                    |  | 57         
|Liquid assets                        |  | 0          
|Provisions                           |  | -102       
|Accounts payable                     |  | -399       
|Other liabilities                    |  | -797       
|                                     |  |            
|Disposed assets and liabilities, net |  | 57         

Assets held for sale:



|                      |  |             |  |     
|--------------------- |  | ----------- |  | ----
|                      |  | 2006        |  | 2005
|                      |  | (unaudited) |  |     
|Tangible fixed assets |  | 1,146       |  | 674 

A process is under way in the Group to ensure an efficient capital structure. As an element in this process, the
Group is selling buildings and land that in certain cases are leased back. Fixed assets held for sale relate to buildings and land in Norway and Sweden that in certain cases are sold and in other cases are sold and leased back through operating
leases.

Impairment losses of SEK 46 million (45) were reported during the year when these assets were classified as held for sale.

Note 18 Shareholders equity

For a summary of
shareholders equity, refer to the report, Changes in shareholders equity.

Reserves

Translation reserve

The translation reserve comprises all exchange
rate differences that arise through the translation of financial reports from foreign operations that have prepared their reports in a currency other than one in which the Groups financial reports are presented. The Parent Companys and
Groups reports are presented in Swedish kronor.

Hedging reserve

The hedging reserve comprises the effective share, net of income taxes, of the cumulative net change in the fair value of cash flow hedging instruments attributable to hedging transactions that have not yet occurred.

Revaluation reserve

The revaluation reserve comprises
changes in value attributable to tangible and intangible fixed assets. In incremental acquisitions, the revaluation of the previously owned interest in the assets is recognized in the revaluation reserve.



41



---

Specification of the reserves in shareholders equity is as follows:



|                                     |  |             |  |      |  |            
|------------------------------------ |  | ----------- |  | ---- |  | -----------
|                                     |  | 2006        |  | 2005 |  | 2004       
|                                     |  | (unaudited) |  |      |  | (unaudited)
|Translation reserve                  |  |             |  |      |  |            
|Translation reserve, opening balance |  | 334         |  | -61  |  | 0          
|Translation differences for the year |  | -455        |  | 395  |  | -61        
|                                     |  |             |  |      |  |            
|Translation reserve, closing balance |  | -121        |  | -334 |  | -61        
|                                     |  |             | 
|Hedging reserve                      |  |             |  |      |  |            
|Hedging reserve, opening balance     |  | -61         |  | -43  |  | 0          
|Change in hedging reserve            |  | 38          |  | -18  |  | -43        
|                                     |  |             |  |      |  |            
|Hedging reserve, closing balance     |  | -23         |  | -61  |  | -43        
|                                     |  |             | 
|Revaluation reserve                  |  |             |  |      |  |            
|Revaluation reserve, opening balance |  |            |  |     |  |           
|Change in revaluation reserve        |  | 498         |  |     |  |           
|                                     |  |             |  |      |  |            
|Revaluation reserve, closing balance |  | 498         |  |     |  |           

Total reserves



|                                 |  |             |  |      |  |            
|-------------------------------- |  | ----------- |  | ---- |  | -----------
|                                 |  | 2006        |  | 2005 |  | 2004       
|                                 |  | (unaudited) |  |      |  | (unaudited)
|Reserves, opening balance        |  | 273         |  | -104 |  | 0          
|Changes in reserves for the year |  |             |  |      |  |            
|                                 |  |             |  |      |  |            
|Translation reserve              |  | -455        |  | 395  |  | -61        
|Hedging reserve                  |  | 38          |  | -18  |  | -43        
|Revaluation reserve              |  | 498         |  |     |  |           
|                                 |  |             |  |      |  |            
|Reserves, closing balance        |  | 354         |  | 273  |  | -104       

As of December 31, 2006 the share capital consists of 5,000,000 shares (5,000,000) with a nominal value
of SEK 100.

Other paid-in capital

Other paid in
capital relates to shareholders equity contributed by the owners. The principal contribution from the owners took place in connection with the implementation of ICAs new structure in 2000.

Retained earnings including net income for the year

Retained
earnings including net income for the year include earnings in the Parent Company and its subsidiaries and associated companies. Earlier provisions to the statutory reserve, excluding transferred share premium reserves, are included in this
shareholders equity item.

Dividend

Shareholders
received a total dividend of SEK 610 million (607), or SEK 122 (121) per share.

The Board of Directors has proposed a total dividend of SEK
958 million, or SEK 192 per share. The dividend proposal will be presented to the Annual General Meeting in May 2007 for resolution.



42



---

Note 19 Pensions

Practically all employees in Sweden receive pension benefits in accordance with collective agreements. Salaried employees receive defined-benefit pensions according to the Individual Added Pension (Individuell Tilläggs Pension) plan
(ITP). Pension obligations are secured through provisions in the balance sheet and insurance premiums. Union employees receive defined-contribution pensions according to the STP plan through AMF pension.

Commitments for retirement pensions and family pensions for white-collar employees in Sweden are secured by insurance through Alecta. In accordance with a pronouncement
from the Swedish Accounting Standards Boards Emerging Issues Task Force, URA 42, this a defined-benefit plan covering multiple employers. For the fiscal year the Company did not have access to information that would make it possible to
recognize it as a defined-benefit plan. The ITP pension plan secured through insurance from Alecta is therefore recognized as a defined-contribution plan. Annual pension premiums covered by Alecta amount to SEK 31 million (32). Alectas
surplus can be divided between policy-holders and/or insureds. As of September 30, 2006 Alectas surplus in the consolidation level was 141 percent (128 percent as of December 31, 2005), based on a fair value calculation of
Alectas assets as a percentage of insurance obligations calculated using Alectas actuarial assumptions, which does not agree with IFRS 19.

All
employees in Norway are covered by occupational pension agreements. Although defined-benefit pensions are used, the majority of employees in Norway receive defined-contribution pensions. The defined-benefit plans are secured through both the payment
of fees to insurance companies and provisions in the balance sheet. In addition to occupational pensions, unionized employees have the opportunity to retire at age 62. This is secured in part through the payment of fees and in part through
provisions in the balance sheet.

There are no healthcare costs in the Groups plans that significantly affect the reported obligation for
defined-benefit plans.



|                                               |  |             |  |      |  |            
|---------------------------------------------- |  | ----------- |  | ---- |  | -----------
|                                               |  | 2006        |  | 2005 |  | 2004       
|                                               |  | (unaudited) |  |      |  | (unaudited)
|Cost of defined-benefit pensions               |  |             |  |      |  |            
|Cost of vested benefits during the period      |  | 57          |  | 65   |  | 47         
|Interest expense                               |  | 38          |  | 48   |  | 39         
|Assumed rate of return on plan assets          |  | -3          |  | -4   |  | -4         
|Reported actuarial gains (-) losses (+)        |  | 10          |  | 6    |  |           
|                                               |  |             |  |      |  |            
|Pension cost for defined-benefit pensions      |  | 102         |  | 115  |  | 82         
|                                               |  |             | 
|Pension cost for defined-contribution pensions |  | 119         |  | 95   |  | 97         
|                                               |  |             |  |      |  |            
|Total pension costs                            |  | 221         |  | 210  |  | 179        

Of the total pension cost, SEK 154 million (138, 117) is included in the cost of sales and SEK
67 million (72, 62) in administrative expenses.



43



---

|                                      |  |             |  |      
|------------------------------------- |  | ----------- |  | -----
|                                      |  | 2006        |  | 2005 
|                                      |  | (unaudited) |  |      
|Carrying amount in balance sheet      |  |             |  |      
|Present value of funded obligations   |  | 134         |  | 84   
|Fair value of plan assets             |  | -68         |  | -72  
|                                      |  |             |  |      
|                                      |  | 66          |  | 12   
|Present value of unfunded obligations |  | 955         |  | 1,024
|Unrecognized actuarial losses         |  | -261        |  | -253 
|                                      |  |             |  |      
|Carrying amount                       |  | 760         |  | 783  

The amount is recognized in its entirety in the balance sheet under the long-term liability caption of Provisions
for pensions.



|                                                   |  |             |  |      
|-------------------------------------------------- |  | ----------- |  | -----
|                                                   |  | 2006        |  | 2005 
|                                                   |  | (unaudited) |  |      
|Change in pension obligations                      |  |             |  |      
|Opening balance, present value pension obligations |  | 1,108       |  | 969  
|Cost of vested benefits during the period          |  | 57          |  | 65   
|Interest expense                                   |  | 38          |  | 48   
|Actuarial gains (-) losses (+)                     |  | 63          |  | 93   
|Pension disbursements                              |  | -28         |  | -32  
|Changes in exchange rates                          |  | -6          |  |     
|Effects of disposals and business acquisitions     |  | -143        |  | -35  
|                                                   |  |             |  |      
|Closing balance, present value pension obligations |  | 1,089       |  | 1,108



|                                               |  |             |  |     
|---------------------------------------------- |  | ----------- |  | ----
|                                               |  | 2006        |  | 2005
|                                               |  | (unaudited) |  |     
|Change in plan assets                          |  |             |  |     
|Opening balance, plan assets                   |  | 72          |  | 76  
|Assumed return on plan assets                  |  | 3           |  | 5   
|Actuarial gains (+) losses (-)                 |  | 13          |  |    
|Pension disbursements from plan assets         |  | -28         |  | -31 
|Contributions                                  |  | 31          |  | 44  
|Changes in exchange rates                      |  | -4          |  |    
|Effects of disposals and business acquisitions |  | -19         |  | -22 
|                                               |  |             |  |     
|Closing balance, plan assets                   |  | 68          |  | 72  
|                                               |  |            
|Actual return on plan assets                   |  | 16          |  | 5   
|                                               |  |            
|                                               |  | 2006        |  | 2005
|                                               |  | (unaudited) |  |     
|Plan assets distributed by asset class         |  |             |  |     
|Bonds and other interest-bearing securities    |  | 40          |  | 50  
|Equities                                       |  | 18          |  | 14  
|Real estate                                    |  | 8           |  | 5   
|Other assets                                   |  | 2           |  | 3   
|                                               |  |             |  |     
|Total plan assets                              |  | 68          |  | 72  

The assumed return on plan assets is based on long-term expectations regarding the return for each asset class.
This return is based on an inflation assumption and historical data on returns for various asset classes. The assumed return for each asset class, together with the mix of assets expected to be held long-term, produces a total assumed return on plan
assets.



44



---

|                                    |  |             |  |     
|----------------------------------- |  | ----------- |  | ----
|                                    |  | 2006        |  | 2005
|                                    |  | (unaudited) |  |     
|Important actuarial assumptions (%) |  |             |  |     
|Discount rate                       |  | 4.0         |  | 4.0 
|Inflation                           |  | 1.5         |  | 1.5 
|Rate of salary increase             |  | 3.0         |  | 3.0 
|Assumed return on plan assets       |  | 5.5         |  | 5.5 



|                                              |  |             |  |        |  |            
|--------------------------------------------- |  | ----------- |  | ------ |  | -----------
|                                              |  | 2006        |  | 2005   |  | 2004       
|                                              |  | (unaudited) |  |        |  | (unaudited)
|Amounts for current year and comparative year |  |             |  |        |  |            
|Present value defined-benefit obligations     |  | -1,089      |  | -1,108 |  | -966       
|Plan assets                                   |  | 68          |  | 72     |  | 76         
|                                              |  |             |  |        |  |            
|Deficit (-) surplus (+)                       |  | -1,021      |  | -1,036 |  | -890       
|Experience-based adjustments for obligations  |  | -68         |  |        |  |            
|Experience-based adjustments for plan assets  |  | 13          |  |        |  |            

In accordance with the transitional rules for IAS 19 Employee Benefits, comparative information is not provided
for all items in the table above.

Note 20 Pledged assets and contingent liabilities



|                                       |  |             |  |     
|-------------------------------------- |  | ----------- |  | ----
|                                       |  | 2006        |  | 2005
|                                       |  | (unaudited) |  |     
|Pledged assets                         |  |             |  |     
|Chattel mortgages                      |  |            |  |    
|Real estate mortgages                  |  | 585         |  | 360 
|Restricted cash                        |  | 5           |  | 5   
|                                       |  |             |  |     
|Total                                  |  | 590         |  | 365 
|Contingent liabilities                 |  |             |  |     
|Guarantees for subsidiaries            |  |            |  |    
|Liability associated with partnerships |  | 1           |  | 1   
|Guarantees and contingent liabilities  |  | 173         |  | 900 
|                                       |  |             |  |     
|Total                                  |  | 174         |  | 901 

The primary reason for the reduction in guarantees and contingent liabilities is related to the Rimi Baltic AB
transaction discussed in Note 14. As the assets and liabilities Rimi Baltic AB are consolidated by the Company at December 31, 2006, the guarantee of Rimi Baltic ABs loans is no longer listed as a contingent liability.

In connection with an extensive reorganization that took effect in January 1990, shareholders in the three regional companies ICA Eol AB, ICA Essve AB and ICA Hakon AB
were offered the opportunity to tender their shares in the regional companies in exchange for shares in ICA AB (publ) or cash. ICA AB (publ) subsequently called for a compulsory redemption and obtained preferential possession of the regional
companies. A protracted arbitration process relating to the three cases concluded in June 1997, when ICAs claim regarding the redemption amount gained full approval. However, the administrators chose to appeal the



45



---

arbitration ruling to the district court, which in April 2004 came down on the side of the arbitration ruling. The administrators appealed to the court of
appeal, which in 2006 affirmed the district courts judgment. The administrators have petitioned the Supreme Court. ICA has recognized a liability in accordance with the court of appeals ruling. If the final ruling falls in favor of the
administrators, the Company will have to pay approximately SEK 150 million more than it has recognized as a liability. The Company and its legal advisers are of the opinion that there is no reason to recognize a liability exceeding the court of
appeals ruling.

Note 21 Related-party transactions

Transactions between ICA AB and subsidiaries affiliated with the company have been eliminated in the consolidated accounts and are not indicated in this note. Transactions between the Group and other related parties are indicated below.

ICA has signed a number of commercial agreements with its owners, joint venture partners and associated companies. The scope of these transactions is
indicated in the tables below



|                       |  |                         |  |                               |  |                                |  |                              
|---------------------- |  | ----------------------- |  | ----------------------------- |  | ------------------------------ |  | -----------------------------
|2006 (unaudited)       |  | Sales to relatedparties |  | Purchases fromrelated parties |  | Receivablesfrom relatedparties |  | Liabilities torelated parties
|Owners:                |  |                         |  |                               |  |                                |  |                              
|Royal Ahold            |  | 52                      |  | 25                            |  | 8                              |  | 7                            
|Hakon Invest AB (publ) |  | 20                      |  | 87                            |  | 3                              |  | 9                            
|Joint ventures:        |  |                         |  |                               |  |                                |  |                              
|RIMI Baltic AB         |  |                        |  |                              |  |                               |  |                             
|Netto Market AB        |  | 1                       |  |                              |  | 293                            |  | 3                            
|Associated companies   |  | 1                       |  | 8                             |  | 26                             |  | 1                            
|                       |  |                         |  |                               |  |                                |  |                              
|Total                  |  | 74                      |  | 120                           |  | 330                            |  | 20                           
|                       |  |                         |  |                              
|2005                   |  | Sales to relatedparties |  | Purchases fromrelated parties |  | Receivablesfrom relatedparties |  | Liabilities torelated parties
|Owners:                |  |                         |  |                               |  |                                |  |                              
|Royal Ahold            |  | 4                       |  | 20                            |  | 23                             |  | 12                           
|Hakon Invest AB (publ) |  | 1                       |  | 45                            |  | 1                              |  | 19                           
|Joint ventures:        |  |                         |  |                               |  |                                |  |                              
|RIMI Baltic AB         |  | 15                      |  |                              |  | 255                            |  |                             
|Netto Market AB        |  | 0                       |  |                              |  | 288                            |  |                             
|Associated companies   |  |                        |  |                              |  | 42                             |  | 1                            
|                       |  |                         |  |                               |  |                                |  |                              
|Total                  |  | 20                      |  | 65                            |  | 609                            |  | 32                           



46



---

|                       |  |                         |  |                              
|---------------------- |  | ----------------------- |  | -----------------------------
|2004 (unaudited)       |  | Sales to relatedparties |  | Purchases fromrelated parties
|Owners:                |  |                         |  |                              
|Royal Ahold            |  | 0                       |  | 38                           
|Hakon Invest AB (publ) |  | 0                       |  | 111                          
|Joint ventures:        |  |                         |  |                              
|RIMI Baltic AB         |  |                        |  |                             
|Netto Market AB        |  |                        |  |                             
|Associated companies   |  |                        |  |                             
|                       |  |                         |  |                              
|Total                  |  | 0                       |  | 149                          

The ICA Group has had daily transactions with the board members who are ICA retailers. This is a natural part of
their role as ICA retailers. All transactions were made on market terms and refer to the sale of goods, consulting services and rent for premises.

The
management of the ICA Group and the Board of Directors of ICA AB have received the following amounts:



|                             |  |                 |  |      |  |                
|---------------------------- |  | --------------- |  | ---- |  | ---------------
|                             |  | 2006(unaudited) |  | 2005 |  | 2004(unaudited)
|Short-term compensation      |  | 52              |  | 41   |  | 43             
|Post-employment compensation |  | 18              |  | 11   |  | 11             
|                             |  |                 |  |      |  |                
|Total                        |  | 70              |  | 52   |  | 54             

In total, this group has been granted loans and credits from ICA Banken of SEK 1 million (0).

Note 22 Principles of financial risk management

The Group has a
central function for financial management whose primary purpose is to ensure that the Group has secured financing through loans and lines of credit, to handle cash management and to actively manage and control financial exposure in line with the
Groups financial policy.

The financial instruments managed by the finance department consist of bank credits, short- and long-term loans, short-term
investments and derivatives. The Group also has other financial instruments such as accounts receivable and payable, which are directly tied to the ICA Groups operations.

ICAs principal risk exposure relates to interest rates, liquidity, foreign currencies and credits.

Interest rate
risk

Interest rate risk is defined as the risk that changes in market interest rates will affect cash flow or the fair value of financial assets and
liabilities. The financial policy states that the Group will fix its interest rates for 18 months with a mandate to deviate from this norm by +/- 6 months. Interest rate swaps are used to adjust interest rate exposure.

Liquidity risk

Liquidity risk is defined as the risk that the Group
cannot fulfill its short-term payment obligations. ICAs financial policy states that the liquidity reserve must amount to a level where the reserve can handle the fluctuations that can be expected in day-to-day liquidity



47



---

within a 12-month period. To ensure this, the Group has bank overdraft facilities and unutilized credit facilities. Its strong cash flow and unutilized loan
facilities enabled the Group to meet its liquidity needs without difficulty in 2006. At year-end 2006 borrowings amounted to SEK 5,715 million (6,474) and the liquidity reserve to SEK 7,353 million (5,416).

Foreign currency risk

Foreign currency risk is defined as the risk
that changes in exchange rates will affect cash flow. The primary foreign currency risk in the ICA Group is the transaction exposure that arises due to the import of goods paid in foreign currency. The risk norm in the financial policy is that 100%
of the outstanding transaction exposure will be hedged. This exposure is hedged for the next 3-6 months. Currency hedges are arranged on the order date. For non-foods, the currency hedge is based on projected volumes. According to the financial
policy, borrowings in foreign currency are hedged. The foreign currency risk that arises because the Group has invested in foreign subsidiaries is not actively hedged in the financial market.

Credit risk

Credit risk is defined as the risk that a counterparty
in a financial transaction cannot fulfill its obligations according to a contract and that any security does not cover the companys claim. The banks and financial institutions that the Group works with must have a creditworthiness
corresponding to at least A from Standard & Poors or A2 from Moodys Investor Service. For commercial counterparties with which the company has a large exposure, individual assessments are made. The
maximum credit exposure corresponds to the book value of financial assets. The credit risk that arises through ICA Bankens lending to the public is managed by performing credit checks on all loan applicants.

Note 23 Financial instruments

Interest rate risks

Following is a summary of the Groups interest-bearing assets and liabilities together with their effective interest rates. Long-term financial liabilities
include the effect of interest rate swaps that convert the liability to a fixed interest rate.



|                            |  |                           |  |                  |  |                           |  |                 
|--------------------------- |  | ------------------------- |  | ---------------- |  | ------------------------- |  | ----------------
|                            |  | 2006 (unaudited)          |  | 2005            
|                            |  | Effectiveinterest rate, % |  | Total SEKmillion |  | Effectiveinterest rate, % |  | Total SEKmillion
|Financial assets            |  |                           |  |                  |  |                           |  |                 
|Long-term interest-bearing  |  | 6.6                       |  | 3,558            |  | 5.7                       |  | 3,600           
|Short-term interest-bearing |  | 2.4                       |  | 5,353            |  | 1.4                       |  | 4,643           
|                            |  |                           |  |                 
|Financial liabilities       |  |                           |  |                  |  |                           |  |                 
|Long-term interest-bearing  |  | 4.3                       |  | 6,993            |  | 4.0                       |  | 8,386           
|Short-term interest-bearing |  | 1.6                       |  | 8,570            |  | 1.3                       |  | 7,388           

Foreign currency risks

One hundred percent of the Groups major foreign currency exposures from operations-related transactions is hedged with forward exchange contracts. As a result, there are no significant exposures in foreign currencies as of
December 31, 2006 over and above the Groups functional currencies (SEK and NOK).



48



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Fair value of financial assets and liabilities

The Groups interest-bearing assets and liabilities, excluding derivatives, carry a fixed interest rate of up to 3 months, which means that their carrying amount essentially corresponds to their fair value.

The fair value of financial instruments classified as financial assets held for sale is as follows:



|                           |  |                  |  |           |  |       |  |          
|-------------------------- |  | ---------------- |  | --------- |  | ----- |  | ---------
|Financial derivatives      |  | 2006 (unaudited) |  | 2005     
|                           |  | Asset            |  | Liability |  | Asset |  | Liability
|Interest rate swaps        |  | 28               |  |          |  | 13    |  | 38       
|Forward exchange contracts |  | 8                |  | 17        |  | 10    |  | 0        

Short-term investments in ICA Banken have a short maturity, which means that their fair value corresponds to their
carrying amount.

Note 24 Statement of cash flows



|                                                 |  |                 |  |       |  |                
|------------------------------------------------ |  | --------------- |  | ----- |  | ---------------
|Adjustments for non-cash items                   |  | 2006(unaudited) |  | 2005  |  | 2004(unaudited)
|Depreciation/amortization                        |  | 1,196           |  | 1,175 |  | 1,210          
|Impairment losses                                |  | 69              |  | 119   |  | 309            
|Undistributed earnings from associated companies |  | 85              |  | 90    |  | -301           
|Interest received                                |  | -90             |  | -104  |  | -113           
|Interest paid                                    |  | 205             |  | 392   |  | 337            
|Capital gains/losses                             |  | -613            |  | -175  |  | -92            
|Provisions                                       |  | 5               |  | 16    |  | 2              
|Sale and leaseback effects                       |  | -178            |  | -145  |  | -201           
|                                                 |  |                 |  |       |  |                
|Total non-cash items                             |  | 679             |  | 1,368 |  | 1,151          

Values in the statement of cash flows for 2005 include discontinued operations. For a disclosure of cash flows for
discontinued operations, see the Note 17 Non-current assets held for sale and discontinued operations.

Other than interest associated with ICA Banken
activities which remain in operating cash flows, interest paid is recognized under financing activities and interest received under investing activities. Adjustments for this are made in the item Adjustments for non-cash items.

Note 25 Business combinations

On December 18 the Group acquired
the remaining 50% of Rimi Baltic AB from Kesko Livs AB. In the income statement Rimi Baltic AB is recognized as a joint venture for the full-year 2006, but in the balance sheet Rimi Baltic AB is consolidated as of December 31, 2006. Rimi Baltic
is engaged food retail operations through 205 stores in Estonia, Latvia and Lithuania. The purchase price was SEK 1,756 million. The contribution to consolidated income after tax for 2006 for the acquired 50% was SEK -12 million.

During the year the Group acquired two store operations in Sweden. The operations were acquired from ICA retailers, who managed them under the ICA agreement, which
stipulates



49



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how valuations are made in connection with such sales. The acquired stores will be sold to new ICA retailers. The Group will only own and run the stores for
a short period. The total purchase price for the store operations was SEK 12 million. The contribution to consolidated income after tax for 2006 was SEK 2 million.

If all store acquisitions had taken place as of January 1, 2006, consolidated net sales would have increased by SEK 9,073 million and income after tax would have decreased by SEK -8 million.

The net assets of the acquired companies on their acquisition dates were as follows:



|                                               |  |                                             |  |                                                      
|---------------------------------------------- |  | ------------------------------------------- |  | -----------------------------------------------------
|                                               |  | Rimi Baltic                                
|                                               |  | 100% of thecarrying amountbeforeacquisition |  | Value accordingto acquisitionanalysis foracquired 50%
|Tangible fixed assets                          |  | 1,470                                       |  | 1,026                                                
|Intangible fixed assets                        |  | 629                                         |  | 194                                                  
|Inventory                                      |  | 576                                         |  | 288                                                  
|Accounts receivable and other receivables      |  | 483                                         |  | 243                                                  
|Cash and cash equivalents                      |  | 346                                         |  | 173                                                  
|Long-term liabilities                          |  | -849                                        |  | -468                                                 
|Accounts payable and other current liabilities |  | -1,403                                      |  | -698                                                 
|                                               |  |                                             |  |                                                      
|Net identifiable assets and liabilities        |  | 1,252                                       |  | 758                                                  
|Group goodwill                                 |  |                                             |  | 998                                                  
|                                               |  |                                             |  |                                                      
|Purchase price paid 1)                         |  |                                             |  | 1,756                                                
|Cash (acquired)                                |  |                                             |  | -346                                                 
|                                               |  |                                             |  |                                                      
|Net cash outlay                                |  |                                             |  | 1,410                                                



|                                               |  |                                                      
|---------------------------------------------- |  | -----------------------------------------------------
|                                               |  | Store operationsValue accordingto acquisitionanalysis
|Tangible fixed assets                          |  | 7                                                    
|Inventory                                      |  | 5                                                    
|Accounts receivable and other receivables      |  | 11                                                   
|Liquid assets                                  |  | 2                                                    
|Long-term liabilities                          |  | 0                                                    
|Accounts payable and other current liabilities |  | -13                                                  
|                                               |  |                                                      
|Net identifiable assets and liabilities        |  | 12                                                   
|Purchase price paid 1)                         |  | 12                                                   
|Cash (acquired)                                |  | -2                                                   
|                                               |  |                                                      
|Net cash outlay                                |  | 10                                                   

---

|1) | The amount includes fees for legal services of SEK 1 million related to Rimi Baltic and SEK 0 million related to store operations.
|-- | ----------------------------------------------------------------------------------------------------------------------------------

Goodwill from the acquisition of Rimi Baltic relates to the value of being represented in a geographical market with strong economic growth and for an established,
efficient logistics organization.

Note 26 Investment commitments

In 2006 the Group entered into agreements to acquire tangible fixed assets for SEK 2,004 million (1,077).



50



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Note 27 Other information

In 2000 ICA Ahold AB issued an offer to the shareholders in ICA AB (publ) to tender their class B and C shares in the company for SEK 821.31 per share. The offer was accepted by more than 99 percent of the shareholders. The former ICA
Ahold AB subsequently called for the compulsory redemption of the outstanding shares and obtained preferential possession of the shares. ICA Ahold AB and ICA AB (publ) were merged in 2002. The purchase of outstanding shares will not impact
ICAs financial position as Ahold, in accordance with the shareholder agreement, finances this through shareholders contributions.

Note 28
Reconciliation to US GAAP

Rule 3-09 of Regulation S-X of U.S. Federal Securities Laws requires that the Company provide a reconciliation of the
differences in accounting principles, practices and methods used in preparing the IFRS financial statements from those in the United States of America (US GAAP). IFRS varies in certain respects from US GAAP as described in the
reconciliation below.

The following statements summarize the adjustments to ICA ABs net income and total shareholders equity that would have
to be made if ICA AB was to report in accordance with US GAAP.

Reconciliation of net income to US GAAP



|                                                                         |  |       |  |                 |   |  |       |   |  |                 |  
|------------------------------------------------------------------------ |  | ----- |  | --------------- | - |  | ----- | - |  | --------------- | -
|                                                                         |  | Notes |  | 2006(unaudited) |   |  | 2005  |   |  | 2004(unaudited) |  
|Net income under IFRS                                                    |  |       |  | 2,401           |   |  | 1,518 |   |  | 1,512           |  
|Adjustments for:                                                         |  |       |  |                 |   |  |       |   |  |                 |  
|- Recognition and impairment of goodwill                                 |  | 28a   |  |                |   |  |      |   |  | (27             | )
|- Impairment of non-current assets                                       |  | 28b   |  | (78             | ) |  | 1     |   |  | 4               |  
|- Sale and leaseback of real estate resulting in an operating lease      |  | 28c   |  | (165            | ) |  | 81    |   |  | 107             |  
|- Sale and leaseback of real estate assessment of continuing involvement |  | 28d   |  | (33             | ) |  | 1     |   |  | (4              | )
|- Pensions                                                               |  | 28e   |  | (3              | ) |  | (4    | ) |  | 8               |  
|- Restructuring provisions                                               |  | 28f   |  |                 |   |  |       |   |  |                 |  
|- Recorded expenses                                                      |  |       |  | (9              | ) |  | (21   | ) |  | (5              | )
|- Reversed provision                                                     |  |       |  | 24              |   |  | 4     |   |  | 12              |  
|- Guarantees                                                             |  | 28g   |  | 4               |   |  | (9    | ) |  | 0               |  
|- Embedded derivatives                                                   |  | 28h   |  | (9              | ) |  | (48   | ) |  | 47              |  
|- Minority interest                                                      |  | 28i   |  | (8              | ) |  | 13    |   |  | (1              | )
|- Deferred income taxes                                                  |  | 28j   |  | 7               |   |  | 1     |   |  | (7              | )
|- Other                                                                  |  |       |  | (4              | ) |  | 14    |   |  | 8               |  
|                                                                         |  |       |  |                 |   |  |       |   |  |                 |  
|Net income in accordance with US GAAP                                    |  |       |  | 2,127           |   |  | 1,551 |   |  | 1,654           |  



51



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Reconciliation shareholders equity to US GAAP



|                                                                         |  |                 |  |                    |      |  |       |  
|------------------------------------------------------------------------ |  | --------------- |  | ------------------ | ---- |  | ----- | -
|                                                                         |  | Notes           |  | As of December 31, |     
|                                                                         |  | 2006(unaudited) |  |                    | 2005 | 
|Shareholders equity under IFRS                                          |  |                 |  | 10,216             |      |  | 8,371 |  
|Adjustments for:                                                         |  |                 |  |                    |      |  |       |  
|- Recognition and impairment of goodwill                                 |  | 28a             |  | 533                |      |  | 568   |  
|- Impairment of non-current assets                                       |  | 28b             |  | 93                 |      |  | 159   |  
|- Sale and leaseback of real estate resulting in an operating lease      |  | 28c             |  | (1,009             | )    |  | (845  | )
|- Sale and leaseback of real estate assessment of continuing involvement |  | 28d             |  | (119               | )    |  | (80   | )
|- Pensions                                                               |  | 28e             |  | (188               | )    |  | (101  | )
|- Restructuring provisions                                               |  | 28f             |  | 17                 |      |  | 9     |  
|- Guarantees                                                             |  | 28g             |  | (3                 | )    |  | (7    | )
|- Embedded derivatives                                                   |  | 28h             |  | 25                 |      |  | 34    |  
|- Minority interest                                                      |  | 28i             |  | (13                | )    |  | (19   | )
|- Revaluation reserve                                                    |  | 28j             |  | (498               | )    |  |       |  
|- Other                                                                  |  |                 |  | 3                  |      |  | 12    |  
|                                                                         |  |                 |  |                    |      |  |       |  
|Shareholders equity in accordance with US GAAP                          |  |                 |  | 9,057              |      |  | 8,101 |  
|                                                                         |  |                 |  |                    |      |  |       |  

Change in accounting principle

As discussed in Note 1, ICA Banken changed its accounting for bank cards. The change in accounting principle under IFRS has also been applied under US GAAP. As a result, the US GAAP net income reported previously
for 2005 and 2004 was reduced by 5 and 4, respectively. In addition, the previously reported US GAAP equity balance at December 31, 2005 was reduced by 15 as a result of this change.

Significant balance sheet differences not noted in the equity reconciliation

During 2005, the Company sold the Swedish portfolio of operating loans related to ICA retailers totaling SEK 440 million to Nordea. In accordance with the agreement, Nordea will be compensated by the Company for future credit losses up
to SEK 39. As discussed more thoroughly in Note 1, under IFRS the loans remain as an asset as the majority of the risks connected to the asset remain with ICA. However, under US GAAP, SFAS No. 140, Accounting for Transfers and Servicing
of Financial Assets, requires an asset to be derecognized if the entity has surrendered control over the assets transferred. As the Company has surrendered control over the assets, they are derecognized under US GAAP and therefore
approximately SEK 230 million at end of 2006 would be reduced from other long-term receivables and other long-term liabilities.

28a Recognition
and impairment of goodwill

Pursuant to the exemption available under IFRS 1, the Company elected not to restate the carrying amount of goodwill
arising from business combinations and investments in joint ventures and associates completed prior to January 1, 2004 from its previous balance under Swedish GAAP. In accordance with IFRS 3, amortization of goodwill ceased as of
January 1,



52



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2004 and the goodwill amortization reported as an expense in 2004, in accordance with the previous accounting principles used, has been added back in the
comparative figures for 2004. Goodwill is as of January 1, 2004 tested annually for impairment irrespective of whether there is an indication of impairment. Any write-downs are reported in the income statement.

Under previously used Swedish GAAP, goodwill was amortized on a straight-line basis not exceeding 20 years. Prior to 2002, under US GAAP, goodwill was amortized on
a straight-line basis over its estimated useful life not to exceed 40 years. As a result of the difference in amortization periods, goodwill amortization for Swedish GAAP prior to 2002 was greater than the goodwill amortization under US GAAP
and, as a result, certain goodwill amortization recorded for Swedish GAAP would have been reversed for US GAAP. With the adoption of US GAAP, SFAS 142 Goodwill and Other Intangible Assets, amortization of goodwill existing as of
June 30, 2001 for US GAAP purposes ceased beginning January 1, 2002. Under IFRS the amortization on goodwill ceased on January 1, 2004. As a result, all goodwill amortization recorded for Swedish GAAP in 2002 and 2003 is reversed
for US GAAP.

Under US GAAP, goodwill must be tested for impairment at least annually. Under US GAAP, impairments are calculated based on a two
step process. The initial step is designed to identify the potential goodwill impairment by comparing an estimate of the fair value of the applicable reporting unit to its carrying value, including goodwill. If the carrying value exceeds fair value,
a second step is performed which compares the implied fair value of the applicable reporting units goodwill (based on a fair value allocation to all assets and liabilities) with the carrying amount of the goodwill, to measure the amount of
goodwill impairment to be recorded. As a result of the different amortization periods discussed above and the required impairment testing methodologies under US GAAP and IFRS, the recorded impairments differ under Swedish GAAP, IFRS and US
GAAP.

28b Impairment of non-current assets

Under IFRS, tangible and intangible fixed assets are subject to impairment tests when circumstances indicate that an impairment may exist. In determining whether or not an impairment exists, the Company groups its assets at the lowest level
of identifiable cash flows. If the carrying amount of an asset (or asset group) exceeds its recoverable amount, which is the greater of its net selling price and value in use (value in use is generally measured based on discounted cash flows), an
impairment loss is recognized in an amount equal to the difference. In addition, under IFRS, impairments of tangible and intangible fixed assets (other than goodwill) whose recoverable amount improves and subsequently exceeds its carrying value can
be reversed to the lower of the pre-impairment carrying value or the new recoverable amount.

Under US GAAP, long-lived assets to be
held and used in the Companys business are subject to impairment tests when circumstances indicate that an impairment may exist. The Company groups its assets at the lowest level of identifiable cash flows. Only if an assets carrying
amounts exceeds the sum of the undiscounted cash flows that are expected to be generated from the use and eventual disposition of the asset, is an impairment loss recognized in an amount equal to the amount by which the assets carrying amount
exceeds its fair value, which is generally measured based on discounted cash flows.



53



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As a result of the difference between IFRS and US GAAP, measurement differences have arisen primarily due to the
impairment losses recognized under IFRS that were not initially allowed under US GAAP as the undiscounted cash flows were in excess of the carrying amount of the assets. In addition, losses have subsequently been required under US GAAP
that were previously recognized under IFRS causing differences in the income statement between years.

28c Sale and leaseback of real estate
resulting in an operating lease

Under IFRS the Company enters into sale and leaseback arrangements with various third parties, whereby the Company
sells real estate and simultaneously leases it back from the purchaser for the Companys own active use (typically a warehouse or a Company-owned retail store). The leaseback arrangements are classified as operating leases for IFRS. Under IFRS
if a sale and leaseback transaction results in an operating lease and if the transaction is established at fair value, the gain or loss on the sale is recognized immediately and rent expense is recognized as incurred in the consolidated income
statement.

Under US GAAP, if the criteria for sale and leaseback accounting are met, any profit or loss on a sale consummated at fair value is
generally deferred and amortized in proportion to the related gross rental charges for an operating lease.

As a result of the differences between IFRS and
US GAAP described above, certain gains that were recognized at the date of sale under IFRS have been deferred and amortized under US GAAP.

As
described previously, differences in impairments and depreciation of real estate between IFRS and US GAAP could affect the carrying amounts of real estate and amounts of gains and losses on sales of real estate, which is deferred under
US GAAP until the criteria above have been met.

28d Sale and leaseback of real estate assessment of continuing involvement

Under IFRS, as discussed in note 1, the Company enters into sale and leaseback arrangements with various third parties, whereby the Company sells real estate and
simultaneously partially leases it back from the purchaser. In general, the Company has applied the principles of SFAS 98, Accounting for Leases, within IFRS. However, under US GAAP, the Company has determined that
continuing involvement in regards of these transactions should be performed for each individual property in a single transaction only if the sections of properties are clearly functionally and legally independent. As a result of the
interpretation of functionally and legally independent under US GAAP, certain transactions were not bifurcated when analyzing whether they represented one or multiple individual properties. However, under IFRS the Company believes
that determination of functionally and legally independent is not required in determining whether bifurcation of whether a sale of a property has occurred.

The sale and leaseback arrangements for which a partial gain is recognized immediately under IFRS do not qualify for sale and leaseback accounting under US GAAP as described above and therefore they are required to be
accounted for as a financing whereby: (i) the real estate remains on the Companys balance sheet subject to normal depreciation policies of the Company (ii) the proceeds received by the Company for the transaction are
recorded as a loan which accrues interest, (iii) and the Company recognizes rental income and cash received



54



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on the portion of the building not derecognized for US GAAP purposes that it is then redirected to the lender as cash paid over the term of the
transaction is allocated to interest and principal payments on the recorded loan.

As a result of the difference between IFRS and US GAAP
described above, certain gains that were recognized at the date of sale under IFRS have been deferred under US GAAP as it was deemed a single sale and leaseback transaction for US GAAP purposes. Additionally, during the lease term the
Company recognizes the net impact of certain costs, such as depreciation and interest expense that continue to be incurred and related rental income from assumed subleases are recognized over the lease term under US GAAP , that under IFRS are
not recognized as the partial property was derecognized.

28e Pensions

According to IFRS, pensions are accounted for under IAS 19. Under IFRS, defined benefit obligations and expenses are actuarially determined in a similar manner to US GAAP under SFAS 87, Employers
accounting for pensions, using the projected credit unit method. However, as described in Note 1, the actuarial gains and losses were reset by the Company upon adoption of IFRS on January 1, 2004, while under US GAAP unrecognized
gains and losses continue to be amortized. As a result, net periodic pension expense under US GAAP differs from net periodic pension expense under IFRS due to differences in the amortization of unrecognized actuarial gains and losses.

Additionally, under US GAAP in 2004 and 2005, an additional minimum pension liability must be recognized and charged to equity when the accumulated
benefit obligation exceeds the sum of the fair value of plan assets and unrecognized prior service cost, if any, and this excess is not covered by the liability recognized on the balance sheet. Effective December 31, 2006, the Company has
applied SFAS 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132 R, for US GAAP purposes. SFAS 158 is being applied prospectively
and therefore does not affect the 2005 and 2004 financial statements. Under SFAS No. 158, this minimum liability was replaced by the requirement for the Company to recognize the funded status as an asset or liability in its
statement of financial position. The funded status is determined as the difference between the fair value of plan assets and the projected benefit obligation. There was no effect on the income statement as a result of the adoption of SFAS 158. Such
minimum liability or requirement to fully recognize the funded status of benefit plan is not required under IFRS.

As a result of the
differences between IFRS and US GAAP described above, timing differences arise between IFRS and US GAAP regarding the recognition of pension expenses and pension liabilities.

28f Restructuring provisions

Under US GAAP, restructuring costs are measured at fair value and are
recorded in the period in which the liability is incurred rather than at the date of commitment to a plan by management. For involuntary employee termination benefits, if employees are not required to render services until they are terminated in
order to receive the termination benefits or if employees will not be retained to render service beyond the minimum retention period, a liability for the termination benefits is recognized and measured at its fair value at the date that the plan is
communicated to the employees. If employees are required to render services



55



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until they are terminated in order to receive the termination benefits and will be retained to render service beyond the minimum retention period, the
liability for the termination benefits is measured initially at the communication date, based on the fair value of the liability as of the termination date, and then recognized ratably over the future service period.

A liability for costs to terminate a contract before the end of its term is recognized and measured at its fair value when the entity terminates the contract. A
liability for costs that will continue to be incurred under a contract for its remaining term without economic benefit to the entity is recognized and measured at its fair value when the entity ceases using the right conveyed by the contract. A
liability for other costs of a restructuring plan is recognized and measured at its fair value in the period in which the liabilities are incurred (generally, when goods or services associated with the activity are received). The liability is not
recognized before it is incurred, even if the costs are incremental to other operating costs and will be incurred as a direct result of a plan.

IFRS
allows restructuring provisions, including both voluntary and involuntary benefits, and other costs associated with the restructuring to be recorded when a commitment to the plan is demonstrated via a public announcements, sufficient details are
available, and the amounts can be reasonably estimated. However, if there is a requirement for service in connection with termination benefits, the costs associated with such benefits are recognized over the service period similar to US GAAP.

As a result of the differences between IFRS and US GAAP described above, timing differences have arisen between IFRS and US GAAP regarding the
recognition of certain restructuring costs as liabilities in the consolidated balance sheets and expenses in the consolidated income statements.

28g
Guarantees

Under IFRS prior to January 1, 2006, the Company did not record a liability pursuant to a guarantee granted by the Company to a
third party unless (i) the entity has a present obligation (legal or constructive) as a result of a past event and (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.
Rather, the Company recorded such amounts in an off-balance sheet account called contingent liabilities. As discussed in Note 1 and according to an amendment to IAS 39, financial guarantees are now recorded under IFRS as of January 1, 2006.

Prior to 2003, under US GAAP the Company would not record a liability pursuant to a guarantee granted by the Company to a third party unless it was
probable that payments would be required under that guarantee and the amount of the payments could be reasonably estimated. In November 2002, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN 45). FIN 45 requires that the Company recognize, at the inception of a guarantee, a
liability measured at fair value for the obligations it has undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or
conditions occur. The fair value of the guarantee is recognized even if it not probable that payments will be required under the guarantee. Subsequent to the recognition of the obligation for the guarantee at fair value, the liability is amortized
to



56



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earnings over the term of the guarantee. FIN 45 was applicable on a prospective basis to certain guarantees issued or modified after 2002.

As a result of the differences between IFRS and US GAAP described above, certain liabilities were recognized in the consolidated balance sheets as of
December 31, 2005 and 2004 under US GAAP but not under IFRS. In addition, the timing of adoption of the amendment to IAS 39 under IFRS has resulted in certain liabilities being recorded under IFRS in 2006 with a corresponding charge
directly in equity. Subsequent amortization of the guarantee obligation to earnings also creates differences between IFRS and US GAAP.

28h Embedded
derivatives

The embedded derivatives are related to lease agreements in Rimi Baltic denominated in US dollars. Under US GAAP these agreements
are considered to have embedded foreign currency derivatives that are required to be separately accounted for at fair value with gains and losses recognized in the income statement. Under IFRS, because the lease payments are denominated in a
currency that is commonly used in the economic environment in which the transactions take place, the embedded feature is not accounted for separately.

28i Minority interest

In accordance with IFRS minority interests are presented as an item within equity and the profit attributable
to minority interests is specified below the net income line. Under US GAAP, minority interests are shown as a separate category from equity and liabilities in the balance sheet and the share of profit attributable to minority interests is
shown as a separate line in the income statement.

28j Deferred income taxes

Adjustments for deferred income taxes in the reconciliation to US GAAP are attributable to the taxable differences described above based on the effective tax rate for each period.

28k Revaluation reserve

On December 18, 2006, the
Company acquired the remaining 50% of Rimi Baltic AB. In accordance with IFRS 3, the Company adjusted previously held interests of Rimi Baltic ABs identifiable assets and liabilities to fair value as an in increase to the revaluation reserve
in equity. Under US GAAP, the previously held interests in Rimi Baltic AB remain at their original costs and would not be recorded at fair value through equity.

Accounting standards adopted in 2006

In September 2006, the FASB issued SFAS No. 158,
Employers Accounting for Defined Pension and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106 and 132 (R). This Statement requires recognition of the funded status of a single-employer defined benefit
postretirement plan as an asset or liability in its statement of financial position. For pension plans, the funded status is determined as the difference between the fair value of plan assets and the projected benefit obligation. Changes in that
funded status will be recognized in other comprehensive income, net of tax. Amounts recognized in accumulated other comprehensive income, including the gains or losses, prior service costs or credits, and the transition obligation remaining from the
initial application of SFAS No. 106, are adjusted as they are subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of those Statements. SFAS No. 158 will also require



57



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measurement of defined-benefit plan assets and obligations as of the balance sheet date. The Company has adopted the requirement to recognize the funded
status as of December 31, 2006. The measurement date requirement is effective for fiscal year 2008. The Company has not yet determined the effect that the adoption of this measurement provision will have effect on the consolidated financial
statements. Refer to the section above titled pensions for further information on the adoption of SFAS 158 in 2006.

In October 2005, the FASB issued FSP
No. FAS 13-1, Accounting for Rental Costs Incurred during a Construction Period (FSP No. FAS 13-1). FSP No. FAS 13-1 requires rental costs associated with operating leases that are incurred during a construction period to be
recognized as rental expense. The Company adopted the guidance of FSP No. FAS 13-1 on January 1, 2006. The adoption of FSP No. 13-1 did not have a material effect on the Companys consolidated financial statements.

In November 2004, the FASB issued SFAS No. 153, Exchanges of Non-monetary AssetsAn Amendment of APB No. 29 (SFAS No. 153).
The provisions of SFAS No. 153 are effective for asset exchanges occurring in financial periods beginning after June 15, 2005. SFAS No. 153 eliminates the exception to the fair value requirements, which applied to exchanges of similar
productive assets and replaces it with a general exception for exchange transactions that do not have commercial substance (i.e., transactions that are not expected to result in significant changes in the cash flows of the reporting entity). The
adoption of SFAS No. 153 did not have a material effect on the Companys consolidated financial statements.

In September 2006, the Securities
and Exchange Commission issued Staff Accounting Bulletin (SAB) No.108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in the Current Year Financial Statements. SAB No. 108 addresses
how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in the current year financial statements. SAB No. 108 requires an entity to quantify misstatements using a balance sheet and income
statement approach and to evaluate whether either approach results in quantifying an error that is material when considering the relevant quantitative and qualitative factors. The Company has applied SAB No. 108 in the current year and there
was no effect on the consolidated financial statements as a result.

Recent US GAAP accounting pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value
under US GAAP and expands disclosures about fair value measurements. This statement describes fair value as being the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. In addition, fair value should be viewed as a market-based measurement, not an entity-specific measurement. Therefore, fair value should be determined based on the assumptions that market participants would use
in pricing an asset or liability, including all risks associated with that asset or liability. SFAS 157 will be effective for the Company beginning in fiscal year 2008. The Company is currently assessing the effect of this pronouncement on the
consolidated financial statements.

In February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities, which permits an entity to measure certain financial assets



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and financial liabilities at fair value. Under Statement 159, entities that elect the fair value option will report unrealized gains and losses in earnings
at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with a few exceptions, as long as it is applied to the instrument in its entirety. The fair value option election is irrevocable,
unless a new election date occurs. Statement 159 is effective as of January 1, 2008. The Company is currently assessing the effect of this pronouncement on the consolidated financial statements.

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation 48, Accounting for Uncertainty in Income Taxes - an Interpretation of FASB
Statement No 109. The Interpretation provides a comprehensive model for the financial statement recognition, measurement and presentation of uncertain tax positions taken or expected to be taken in income tax returns. The Interpretation also
requires expanded disclosures with respect to the uncertainty in income tax positions. FIN 48 will be effective beginning in fiscal year 2007 for the Company. The Company is currently assessing the effect of this interpretation on the consolidated
financial statements.



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