TAX FOOTPRINT OF BRIM AND SUBSIDIARIES

Value creation from the company’s operation in 2019 amounted to ISK 32,726m. The amount was distributed to the community in a variety of ways, such as through wage payments to employees, payments of wage-related charges, purchases of supplies from suppliers, the payment of other public charges, etc.

The tax burden of the consolidated group in 2019 amounted to ISK 3,968m, or 12.1% of its value creation. Approximately 41% of the amount is statutory dues relating to employees and 27% is income tax.

In addition to the taxes, recognised by the companies as an expense, the companies collected and paid taxes and dues not considered charges but which related, nevertheless, to their operation and the direct value they create. Such collected taxes amounted to ISK 3,617m in 2019.

The tax footprint of the Group in 2019 amounted to a total of ISK 7,585m.

The company is proud of its community contributions and the social development that takes place therein.

PROCUREMENT POLICY AND SUPPLIER ASSESSMENT

Brim’s policy is to support any activities in Vopnafjörður, Akranes and Reykjavík that in some manner relate to the company or are important to the communities in the area in question. When selecting suppliers and service entities, however, Brim demands that quality, service, competitive prices and competition viewpoints are always given precedence. If these four elements are all in place, they lead the company to the most favourable price each time, maximum quality and improved services.

SUPPLIERS IN THE LOCAL COMMUNITY

Brim defines Iceland as its local community. Goods and services from Icelandic suppliers were 95% of the total purchases of the company in 2019. This excludes the renewal of the fishing fleet. Brim has in most cases made the requirement that suppliers maintain a warehouse for the operation of the company and that the delivery is in accordance with use each time. All costs and wastage as regards supplies, therefore, are kept to a minimum. The location of the company outside the Greater Reykjavík Area means that the company sources the services on offer locally and thereby supports its local community. This is of great importance for the company and its employees.

ENVIRONMENTAL IMPACT OF SUPPLIERS

A part of the project “Cleaner value chain in fisheries” is the collection of information on the environmental impact of the services and goods that Brim purchases from its suppliers. Such information collection allows Brim to build up knowledge of the emissions of greenhouse gasses from all the company’s operating units and its entire value chain. Thus, the company can make an informed decision on doing business with the suppliers who cause the least environmental impact and thereby effectively reduce the negative environmental effects from the operation of the company.

In 2016, Brim began to include a provision on environmental issues in its largest procurement agreements. The provision is as follows:

“Brim is a party to the climate declaration of Festa, the Centre for Corporate Social Responsibility, and the City of Reykjavík that was signed by 104 companies in Höfði in 2015. By signing the declaration, the company has undertaken to reduce the release of greenhouse gases in coming years. A part of this includes mapping the effects of service providers and their operation on the operation of Brim, which will be reflected in the environmental results that the company publishes each year. To support these goals, the service providers will undertake, at the beginning of each year or on a regular basis, to provide information on their environmental impact on the operation of Brim during the preceding year.”

At present, there are seventeen agreements with the largest suppliers that contain this provision.

GOVERNANCE

The Board of Directors and Managing Directors of Brim place great importance on maintaining good management practices so as to ensure that the work of the Board, as well as the operation of the company as whole, meets the criteria that apply to good governance. The company is listed in the main market of the NASDAQ exchange in the Nordic countries and follows the communication rules that apply there. An Annual General Meeting is held every year, and investor meetings are held four times a year.

Below you can access information on the Board of Directors, the governance statement (only in Icelandic) and the rules of procedure of the Board. These contain information on the composition of the Board, division of power and decision making.

The principal decisions made by the Board of Directors in 2019 were:

• Engey RE 1 was sold to Murmansk Trawl Fleet in Russia in the spring.
• The Gjörvi ship repair workshop was purchased.
• All shares in the sales companies Icelandic Japan, Icelandic China and Icelandic Hong Kong in Asia were purchased.
• The company’s name was changed from HB Grandi to Brim.
• Extensive renewals of its groundfish operations in Reykjavík were embarked on.
• Agreement was reached for the purchase of the fish processor Kambur and the vessel operator Grábrók in Hafnarfjörður.

Sub-committees appointed by the Board of Directors were as follows:

In September 2018, Brim hf. announced its purchase of all the shares of Ögurvík. The purchase involved a process divided into stages which began in spring 2018. At the end of August 2018, Guðmundur Kristjánsson, CEO of Brim, was appointed by the Board of Directors of the company to initiate negotiations for the purchase. At that time, the information met the term conditions of Article 120 of the Act on Securities Transactions. This provision relates to insider information. Brim, however, neither published insider information nor took any decision on delaying such publication until 7 September that year. The Financial Supervisory Authority and Brim hf. reached an agreement to settle the matter by agreement. Brim hf. agreed to pay a fine of ISK 8.2 million for not having published insider information as soon as possible.

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