- Results of the Annual General Meeting of Flaga Group hf. on Thursday, April 17th 2008

1. The following persons were elected to the Board of Directors for the next
   operating year: 

Board members:
Bogi Pálsson
Eggert Dagbjartsson
Erlendur Hjaltason
Hildur Árnadóttir
Hákon Sigurhansson

Alternates:
Helgi Jóhannesson
Sveinn Þór Stefánsson

2. The following proposal regarding election of an auditor was approved:

   KPMG endurskoðun hf., Símon Á. Gunnarsson on their behalf.

3. The following proposal on allocation of profits/loss was approved:

   The Board of Directors proposes that the Company does not pay dividends for
   the year 2007. 

4. The following proposal on remuneration to the Board of Directors was
   approved: 

It is proposed that remuneration for Board members for the year 2008 will be
ISK 600,000 and that remuneration for the Executive Chairman of the Board will
be double that amount. 

5. The following proposal on amendment of the Articles of Association was
   approved: 

Amendment to Article 4, Paragraph 3, regarding authorization to increase the
share capital by the amount which can result from the conversion of convertible
subordinated bonds issued by the Company to Kaupthing Bank hf. on 15 October
2002 which maturity can now be extended from the original maturity day to 15
January 2009. 

6. The following proposal on a Remuneration Policy was approved:

Remuneration Policy for Flaga Group hf. 

Article 1 - Objective

The object of this Remuneration Policy is to make an employment for Flaga Group
hf. a desirable choice for personnel, thereby guaranteeing the Company a
position among the best in the world. In order to do so, it is necessary that
the Board of Directors of the Company be in a position to offer competitive
wages and other benefits that are comparable to other international companies
in similar fields of business. 

Article 2 - Board of Directors - terms of employment 

Board members shall receive a fixed monthly payment in accordance with the
decision of the annual general meeting of the Company, as is stipulated in
Article 79 of the Act no. 2/1995 on Public Limited Companies. The Board of
Directors shall submit a proposal on the fee for the upcoming operating year
and shall take into account the time Board members spend on their duties, the
responsibility involved, and the Company's operations in general. 

Board members shall receive a fixed fee for each meeting they attend in the
Board's subcommittees. The fee shall be decided by the Annual General Meeting
of the Company. 

Article 3 - Chief Executive Officer - terms of employment 

A written employment contract shall be made between the Company and the Chief
Executive Officer. His terms of employment shall be competitive on an
international standard. 

The amount of the salary and other payments to the CEO shall be decided on the
basis of his education, experience and previous occupation. Other terms of
employment shall be specified in the contract, along with pension payments,
vacation rights, benefits and terms of notice. An initial payment at
recruitment is permitted. 

In general, no additional retirement or termination payments to those
stipulated in the employment contract shall be agreed upon in the case of
termination. However, special circumstances may lead to a separate termination
agreement with the CEO, the provisions of which may include retirement or
termination payments. 

Article 4 - Acknowledgements to the management 

The CEO is authorised to propose to the Board of Directors that the management
be rewarded in addition to their set terms of employment in the form of
delivery of shares, performance-based payments, stock options or any payment
having to do with company shares or the future value of such shares, loan
contracts, pension fund contributions, retirement or severance payments. 

The status of the relevant member of management or employee, responsibility and
future prospects and the main objectives of this policy shall be taken into
consideration when deciding whether he should be granted rewards in addition to
his set terms of employment. 

Article 5 - Approval of the Remuneration Policy and Board's proposals

The Remuneration Policy shall be presented to the shareholders in the Annual
General Meeting for their approval. The Remuneration Policy shall be subject to
annual review. 

The Remuneration Policy is binding for the Board of Directors with regard to
stock options and any payment under which Directors are remunerated in shares,
stock options or any other right to acquire shares or to be remunerated on the
basis of share price movements and any substantial change in such schemes as
per Article 79. a, Paragraph 2 of the Act no. 2/1995 on Public Limited
Companies. In all other aspects, the policy shall be viewed as a guideline. The
Board of Directors shall note in the minutes of its meetings any major
deviation from the Remuneration Policy and such deviation shall be well
justified. The Board of Directors shall inform the Annual General Meeting of
such a deviation. 

The BOD believes that the Company's various business units are quite valuable
and intends to continue pursuing a strategy that it believes will maximize
shareholder value.  In that respect the BOD would like to seek any comments or
more particularly some objection to this proposal at this shareholders meeting.

It will remain the new BOD's responsibility to decide if indeed it will
request the shares of the company to be delisted, but the outgoing BOD believes
that it is in the best common interest of all the shareholders to delist the
company as a part of the effort to maximize shareholder value.  I therefore
would like to ask anyone who objects to this proposal to do so now by raising
their hand, as otherwise the BOD will assume that this proposal is supported by
the shareholders who are present at this Annual General Meeting of Shareholders
of Flaga Group hf.  There were no objections at the meeting.