11Management
The executive management of the Group is the responsibility of the Management Board of Viru Keemia Grupp, which consists of five members.
Three Management Board Members – Ahti Asmann, Meelis Eldermann and Jaanis Sepp – manage the activities of the Group as a whole and are also Supervisory Board Members of subsidiaries. The Group’s Management Board adopts all the important decisions concerning economic activities. Two Management Board members – Margus Kottise and Nikolai Petrovitš – are the heads of the strategically most important subsidiaries of the Group, VKG Kaevandused and VKG Oil. There were no changes in the members of the Management Board during the year.
In all legal procedures of the Group, an enterprise is always represented by two Management Board Members together, whereas one of them must be the Chair or Deputy Chair of the Management Board.
The Management Board Members are paid a monthly remuneration consisting of the pay for performing the duties of a Management Board Member and the pay for keeping business secrets and for respecting the competition prohibition. The duties of the Management Board Members are stated in service contracts signed with the Management Board Members. According to the service contracts, the Management Board Members can get additional monetary remuneration which is paid according to the relevant decisions of the Supervisory Board.
Ahti Asmann
Chairman of the Management Board
Time of appointment
21.09.2015
Meelis Eldermann
Vice Chairman of the Board / Technical Director
Time of appointment
06.03.2008
Jaanis Sepp
Member of the Board / Financial Director
Time of appointment
15.04.2016
Margus Kottise
Member of the Board / Member of the Board VKG Kaevandused
Time of appointment
09.05.2000
Nikolai Petrovitš
Member of the Board / Member of the Board VKG Oil
Time of appointment
26.04.1999
Legal structure as of 31.12.2022
The main keywords for the Group in 2022 were restructuring and reorganisation, mainly driven by developments in the economic environment.
In 2022, the following changes took place in the structure of VKG:
- As of 30 June 2022, the division of Viru Keemia Grupp AS took place and resulted in the creation of a new company, Viru Keemia Grupp AS, which is engaged in the production of shale oil and concentrates all the activities related to oil production. The old Viru Keemia Grupp AS was renamed as Kirde Varad AS, whose main focus is industrial real estate investments. In addition, Kirde Varad retained the ownership of VKG Elektrivõrgud OÜ and VKG Soojus AS, regulated companies not directly related to shale oil production.
- On 20 September 2022, a new subsidiary – VKG Solar OÜ – was established with the aim to expand VKG’s electricity production portfolio by developing renewable production capacities.
- On 6 December 2022, the Group’s structure was simplified by dividing VKG Oil, as a result of which VKG Energia that had been a subsidiary of VKG Oil gained a new parent company, VKG Energiatootmise OÜ. VKG Energia OÜ and VKG Enegiatootmise OÜ merged in an event after the balance sheet date, as a result of which Viru Keemia Grupp OÜ now has seven subsidiaries of equal level and specific areas of activity.
The main keywords for the Group in 2022 were restructuring and reorganisation, mainly driven by developments in the economic environment.
In 2022, the following changes took place in the structure of VKG:
- As of 30 June 2022, the division of Viru Keemia Grupp AS took place and resulted in the creation of a new company, Viru Keemia Grupp AS, which is engaged in the production of shale oil and concentrates all the activities related to oil production. The old Viru Keemia Grupp AS was renamed as Kirde Varad AS, whose main focus is industrial real estate investments. In addition, Kirde Varad retained the ownership of VKG Elektrivõrgud OÜ and VKG Soojus AS, regulated companies not directly related to shale oil production.
- On 20 September 2022, a new subsidiary – VKG Solar OÜ – was established with the aim to expand VKG’s electricity production portfolio by developing renewable production capacities.
- On 6 December 2022, the Group’s structure was simplified by dividing VKG Oil, as a result of which VKG Energia that had been a subsidiary of VKG Oil gained a new parent company, VKG Energiatootmise OÜ. VKG Energia OÜ and VKG Enegiatootmise OÜ merged in an event after the balance sheet date, as a result of which Viru Keemia Grupp OÜ now has seven subsidiaries of equal level and specific areas of activity.
General corporate management
We believe that efficient general corporate management is the basis of good business activities. Efficient general management allows the enterprise to work smoothly, ensuring that everyone has a clear understanding of the distribution of roles, obligations, rights and responsibilities.
The activities of the Management Board of the parent company is supervised by a five-member Supervisory Board which includes:
Toomas Tamme
(Chairman)
Priit Piilmann*
Margus Kangro
Ants Laos
Elar Sarapuu
* Following the passing away of Priit Piilmann, a founder and major shareholder of Viru Keemia Grupp, in November 2022, his son Kristjan Piilmann took his place on the Group’s Supervisory Board.
Audit Committee
Pursuant to the Authorised Public Accountants Act of the Republic of Estonia, VKG is considered to be an entity subject to the public interest and is thus required to have an Audit Committee.
According to the Statutes, the Audit Committee is an advisory body for the Supervisory Board of VKG in the fields of accountancy, auditing, risk management, internal audits, supervision and budgeting and the legality of activities. The members of the Audit Committee of VKG are Ants Laos (Chair of the Committee), Priit Piilmann (until November 2022), Margus Kangro and Elar Sarapuu.
Shares and share capital
As of 01.01.2022, the nominal value of the share capital of VKG was 6,391,164.21 euros. There were no changes in the share capital in the years 2008– 2021. VKG’s shares are not noted on the securities market.
The Group has four shareholders with the following holdings as of 31.12.2022:
- OÜ Tristen Trade 38,91%,
- OÜ Alvekor 25,49%,
- OÜ Revellis Invest 19,53%,
- OÜ Sergos Invest 16,07%.
Combating the risk of corruption
The fight against corruption has always been important for the Group.
VKG has identified three major risks of corruption together with the methods used for hedging these risks:
- Giving bribes to achieve the interests of the Group – VKG is a responsible and transparent enterprise that has established zero tolerance for corruption and bribery.
- Accepting bribes in the selection of suppliers and cooperation partners – VKG has established a procurement policy aimed at avoiding skewed procurements and always choosing the most favourable cooperation partner for the Group. Compliance with the procurement policy is supervised by internal audit via regular monitoring.
- Conflicts of interest of executive employees in representing the interests of the enterprise – VKG has developed a procedure for submitting statements of economic interests, in the course of which executive employees have to report their holdings and connections in external companies. The members of the Management Board are prohibited from competing in any area of activity of VKG without the prior written consent of the Supervisory Board.
There is a special confidential channel (vihje@vkg.ee) functioning in the Group, which can be used by employees or people outside of the Group to send a notice about various violations related to the activities of the Group, let it be the issues related to professional activities, corporate management and corporate ethics, human rights, work organisation, social aspects, industrial and environmental safety, protection at the workplace, quality of goods and services, or any other issues, including the matters related to corruption.
Prevention of Possible Conflict of Interests
The corporate management system of the Group incorporates a set of norms and procedures, which are aimed at prevention of the conflict of interests between control bodies within the Group.
If the conflict arises, there are certain mechanisms aimed at implementing required measures for the complete resolution of the conflict, and for creating the conditions that would prevent the occurrence of such conflicts in the future.
The Internal Audit Service and other competent subdivisions of the Group deal with the prevention of conflicts of interest within the Group by cooperating with each other. In order to prevent possible conflicts of interest, there are certain limitations existing in the Group as well as the requirements for the Council and the member of the Board. Management Board Members are prohibited from competing with Viru Keemia Grupp AS in its field of activities, unless having the prior consent of the Supervisory Board.
Within the reporting year, no conflicts of interest between the members of the Council or the Board occurred.
In order to avoid conflicts of interest, all Management Board Members and middle-level managers of the business associations belonging to the Group are required to submit upon any changes a declaration in the approved format, stating their holdings in legal entities and/or membership in management bodies of legal entities and/or activities as self-employed persons.