• Veritas gives extra weight to transparency, integrity, and ethical practices when doing business. We also uphold the values adopted for our group of companies as a whole: reliability, candour, and progress. Veritas adheres to the Corporate Governance Guidelines published, inter alia, by The Icelandic Chamber of Commerce. Those guidelines include recommendations to adopt standards which exceed legal requirements aiming at strengthen our infrastructure and dependability.

  Please click on the link below to review the Code of Conduct, Human Resources Policy, board by-laws, Corporate Governance Policy, and Data Safety Policy adopted by Veritas and subsidiaries.

• www.veritas.is/en/csr/corporate-governance/ 

The operations of our group of companies are contingent on a variety of circumstances. The most substantial influencing factors are as follows:

• Fluctuations in the exchange rate of the Icelandic króna (ISK) significantly impact our gross earnings, as the medicinal products we import and distribute are priced in foreign currencies. Several contracts entered into by and between our group of companies and government organisations are also anchored to currency exchange rates in one way or another. In addition to that, procurement by our group of companies almost completely involves products quoted in foreign currencies. The same applies to several service agreements between our subsidiaries and international suppliers. Therefore, any steep fluctuations in króna's exchange rates may have a diverse impact on our businesses and operations.

• To a great degree, our group of companies' operations qualify as part of the Icelandic health care system. For this reason, our operations are subjected to the applicable laws, regulations, and vigilance by regulatory authorities in many ways. Hence, our group of companies is dependent on political and administrative decision-making which are often unforeseeable, with scarce opportunities to present any objections or counter opinions.

The core business of our group of companies is the import and marketing of medicinal products, which demand a robust and thorough modus operandi. Veritas Code of Conduct, which also applies to Veritas subsidiaries, were adopted in 2018, and include specific standards for interactions with health care professionals. We also operate pursuant an international code of conduct and relationships between pharmaceutical companies and health care professionals (The EFPIA Code). The objective of those standards is to ensure a professional modus operandi in the marketing of medicinal products, and that all decisions made by public officials are sound and indubitable. The EFPIA Code was adopted as required by Directive 2001/83/EC of the European Parliament and of the Council, and its amendments.

The Code of Ethics adopted by Veritas and its subsidiaries also regulate interactions with all parties other than health care professionals.

Veritas management focus on adopting best practices in corporate governance and having transparency, integrity, and high ethical standards as beacons. Our management team also upholds the values adopted for our group of companies as a whole: reliability, candour, and progress. In order to boost corporate governance quality, Veritas’ management endeavours to adhere to the Corporate Governance Guidelines approved, among others, by The Icelandic Chamber of Commerce, either strictly following those guidelines or clarifying any deviations in this corporate governance statement.

Every year, Veritas’ management publishes a corporate governance statement as part of our annual report. Veritas’ Board of Directors takes pains to make sure that the organisation and operations are in good shape at all times in order to safeguard the interests of all shareholders. The board retains ultimate power and is responsible for the governance of Veritas’ business interests and matters between shareholders meetings. The board of directors, in coordination with Veritas’ CEO, takes the lead in the strategic planning and definition of business goals for the company. As the entity ultimately responsible for corporate governance, the board focuses on keeping a panoramic view of the Veritas operations, providing the executive board with reasonable support and supervision.

The corporate governance statement describes the board composition and practices during respective fiscal year. Click here to review our corporate governance statement.

Veritas has a board of directors for each of its subsidiaries. When appointing members to the board of each subsidiary, we take pains to select a mix of both external directors with expertise and experience in the respective fields, and in-house managers.

Our boards of directors consist of 3 to 4 members, and we take pains to make sure that gender equality is served within each individual board, in compliance with the Corporate Governance Guidelines. Each board adopts their own by-laws and conducts periodical assessments of their own corporate governance practices. The members of the board disclose, as a minimum at a yearly basis, any potential conflicts of interest. The periodicity of board meetings varies for each subsidiary. Board meetings take place as often as needed, with a minimum of four (4) meetings per year. No corporate governance committees are appointed within our group of companies.

Each board of directors sets their own regularly updated business plans, observing a balance between financial and non-financial matters (such as equality, social responsibility, and environment).

In the beginning of 2022, a personal incident emerged concerning Veritas’ owner and member of the board, Hreggviður Jónsson, resulting in his resignation from the boards of both the parent company and its subsidiaries. In the wake of that occurrence, the Veritas board has reviewed its operational procedures in place aiming at promoting a successful closure for cases as such one. Said incident took place prior to the period covered in this report, however, as it was considered significant, it is fair to mention it here. The course of corrective measures adopted will be further reported in the next annual report.

The executive board is responsible for the decision marking regarding economic, environmental, and social responsibility aspects. The executive board has entrusted Veritas Environment Committee to conduct our main environmental projects, Veritas Human Resources Manager to cover the social responsibility agenda, and Veritas CEO to respond for corporate governance practices.

Below is a summary of all members of boards within our group of companies. Veritas Chair of the Board is also company's largest shareholder.

Shareholders:

Veritas is owned by three (3) shareholders: Stormtré, Trausttak, and Stjánkur:

• Stormtré ehf, 90%, owned by Hreggvidur Jónsson and Jóhann Jónsson, member of the board of Distica
• Trausttak ehf. – 6%
• Stjánkur ehf. – 4%, owned by Hrund Rudolfsdóttir, Veritas CEO

Veritas operates in compliance with the provisions contained in current collective agreements signed by and between The Confederation of Icelandic Enterprise (SA) and respective labour unions. The majority among Veritas group of companies' staff (about 70%) are members of The Store and Office Workers’ Union (VR), while other employees are members of professional labour unions such as The Icelandic Pharmaceutical Society (LfÍ), The Association of Chartered Engineers in Iceland (VFÍ), The Icelandic Nurses' Association (FÍH), The Union of Natural Scientists in Iceland (FÍN), and The Union of Icelandic Electrical Workers (Rafís), to mention but a few. Some employees have opted out of labour union membership.

Veritas Human Resources Policy‘s main objectives are:

• To always optimize employee satisfaction aiming at boosting team unity and our business output
• To pay competitive wages based on what employees are paid for comparable jobs in the Icelandic marketplace
  · To uphold equality in words and deeds
  · To promote a healthy work-life balance
  · To ensure that the flow of information fulfil the staff's and company's needs
  · To ensure that employees periodically receive candid and constructive feedback regarding their performance
  · To thoroughly fulfil the needs and requirements set forth by our suppliers and the legal framework applicable to our business operations
  · To ensure work development by providing continuous education to the staff
  · To ensure that the staff endeavour to boost team unity and share their expertise and experience to the best benefit of their colleagues and themselves

Click here to read the unabridged Veritas Human Resources Policy.

Veritas and its subsidiaries provide services to approximately 350 international suppliers, many which sometimes are fierce competitors between themselves, and hence have their own very stringent requirements regarding confidentiality and data protection. As a parent company to its subsidiaries, Veritas is responsible for the management of IT systems for our entire group of companies. For this reason, Veritas adopted and works pursuant its own Data Safety Policy which is based on and certified according to ISO/IEC 27001 standards.

Veritas holds the certificate No. IS 607526 issued by BSI (The British Standards Institution) vouching for the fact that our company operates a data protection control system which meets the ISO/IEC 27001:2013 standards. Veritas and its subsidiaries adhere a data safety policy based on ISO/IEC 27002 Code of Practice for Information Security Controls.

This is the second edition of Veritas Social Responsibility Report and covers the fiscal year 2021. This report will be published annually. Key performance indicators for 2019 and 2020 are also exhibited to some extent as 2021 was an atypical year for several reasons. This report was compiled pursuant the Global Reporting Initiative (GRI) Standards: Core. Staff from all divisions of our group of companies took part in this report's compilation. All data included in this report originates from Veritas IT systems, and reflects the facts known to us at the time this report was compiled. The Environment Committee has compiled data on environmental issues and calculated our group of companies' carbon footprint. Part of the data originates from interviews taken with key employees for whom sustainability is an extensive part of their work.

Veritas is reported as a group of companies, and all figures presented in this report refer to the combined performance of Veritas and its subsidiaries, i.e., individual indicators are extrapolated. In specific cases, we decided to also consider Veritas sister company Hávarðsstaðir, which owns and keeps a large portion of the real state Veritas has at their disposal. Any such cases are expressly mentioned, whenever applicable.

Contact persons for any information regarding this report and its contents are Hrund Rudolfsdóttir, Pétur Veigar Pétursson, Kjartan Steinsson, and Dagmar Ýr Sigurjónsdóttir. Podium ehf. provided guidance and conducted a quality review of this report.