Corporate governance 2015

CORPORATE GOVERNANCE STATEMENT OF UUTECHNIC GROUP FOR THE FINANCIAL YEAR 2015

Applicable regulations 

Corporate governance of Uutechnic Group is based on the Finnish legislation and the articles of Association of the Group’s parent company, Plc Uutechnic Group Oyj.

The company follows the NASDAQ Helsinki Oyj’s corporate governance code 2010 for Finnish listed companies. Uutechnic Group deviates from the Finnish Corporate Governance Code Recommendation 8: Mikko Laakkonen has a specific but limited right to appoint a member of the Board of Directors as described below. Recommendation 9 concerning the gender parity of the Board. Suitable candidates as a Board member to meet the recommendations of the Corporate Governance Code has so far not found. In addition the company deviates from the recommendation 15 so that the majority of the members of the board is not independent of the company and its significant shareholders.

The governance code issued by the Securities Market Association took effect on 1 October 2010, and it is publicly available, e.g., on the Securities Market Association’s Web site via the address www.cgfinland.fi.

Administration of Uutechnic Group

In accordance with the Companies Act, the Group’s business operations and administration are the responsibility of the following bodies: the Annual General Meeting, which elects the members of the Board of Directors of the parent company, and the CEO, appointed by the Board.

Plc Uutechnic Group Oyj’s highest decision-making body is the Annual General Meeting, where the shareholders exercise their authority. The Board of Directors is responsible for the company’s administration and appropriate operation. As the parent company of the Group, Plc Uutechnic Group Oyj is responsible for the management, strategic planning, IT, financial administration and financing, and human resources management of the Group.

The activities and results of Group’s business operations are on the responsibility of the Group’s Management Team, CEO and the Board of Directors.

Annual General Meeting 

The company’s highest decision-making body is the Annual General Meeting. An Extraordinary General Meeting is arranged when necessary. This is called by the Board of Directors. Shareholders are invited to the Annual General Meeting through a meeting invitation published on the company’s Web site. The invitation provides the shareholders with the necessary information on the issues to be addressed at the meeting. The meeting notice is also published as a stock exchange release and to any other way decided by the Board of Directors.

The Annual General Meeting must be held no more than six months after the end of the company’s financial year. The AGM makes decisions on the issues falling under its mandate as determined by the Companies Act, including the verification of the financial statements, the payment of dividends, the discharge from liability of the Board members and the CEO, and the selection and fees of the Board members and the auditors.

The Annual General Meeting is attended by the CEO and a majority of the Board members. A person running for a position on the Board for the first time attends the AGM that decides on the selection.

 

Board of Directors 

Activities of the Board 

The Board of Directors of the parent company, which also acts as that of the Group, is responsible for the Group’s administration and appropriate operation, and it decides on issues that are highly significant in light of the scope of the Group’s operations.

Some of the key responsibilities of the Board are to

  • confirm the Group’s strategy and objectives, monitor their implementation, and commence corrective measures if these should be necessary
  • decide on significant investments as well as acquisitions and real-estate transactions
  • handle and approve the interim management statements, interim reports, and financial statements
  • decide on the Group’s financial policies and financing methods
  • approve the dividend policy and make a proposal to the AGM concerning distribution of dividends
  • be in charge of arrangement of the Group’s risk management and internal monitoring
  • appoint and relieve the CEO, and decide on the terms of the CEO’s employment
  • confirm the Group’s strategy and decide on the central principles governing the Group’s compensation system

The Board of Directors regularly evaluates its own activities and work methods.

Issues are handled at Board meetings in accordance with an agenda prepared for each meeting. The Group’s chief executive officer acts as secretary of the Board. The minutes of each Board meeting are commented upon and accepted at the next meeting.

The Board meets regularly, once a month, and at other times, if necessary. During the 2015 financial period, the Board met 39 times. There was 100 % attendance by the Board members.

The presenter at Board meetings is the company’s CEO or one of the Group’s personnel authorized by the CEO. The CEO is responsible for providing the Board with sufficient information for assessing the Group’s operations and financial situation. The CEO is also responsible for implementing the Board’s decisions and reports on this to the Board.

The Board members are obliged to provide the Board with sufficient information for assessment of their qualifications and level of independence and to report any changes to this information.

Composition of the Board 

According to the Articles of Association, the Board of Directors has a minimum of three and a maximum of six members, whose term of office ends at the end of the first full Annual General Meeting following the election. The Board members are selected by the Annual General Meeting. The chairman and vice-chairman of the Board are selected by the Board from among its members.  

The names of candidates proposed for Board positions are published in the invitation to the Annual General Meeting where the candidate is supported by shareholders holding a minimum of 10% of the votes as determined by the number of shares and if the candidate has accepted the candidacy. Names of candidates nominated after publication of the AGM invitation are published separately. A person selected as a Board member must meet the qualifications for the position and have the opportunity to allocate enough time to handle the position.

The Annual General Meeting on 15 April 2014 confirmed that the Board shall have four members. Sami Alatalo, Reijo Järvinen, Topi Karppanen and Mikko Vaahto were elected for the Board. The Board elected Reijo Järvinen as a chairman and Sami Alatalo as a vice-chairman.

In the Extraordinary General Meeting on 30 October 2015 Sami Alatalo, Jouko Peräaho and Timo Lindström were elected for the Board. The Board elected Jouko Peräaho as a chairman and Sami Alatalo as a vice-chairman.

Related to the corporate arrangement announced on October 30, 2015 in the 2016 and 2017 General Meetings of Plc Uutechnic Group Oyj, Hannu Laakkonen, HML Finance Oy and the previous owners of Uutechnic Oy have committed to vote the person proposed by Mikko Laakkonen for the member of the Board of Directors.  The obligation to vote is only if the persons committed to vote are present in the General Meeting and if Mikko Laakkonen owns over 10 % of the shares of Plc Uutechnic Group Oyj.

Information about Board Members 

Jouko Peräaho

Chairman of the Board of the Plc Uutechnic Group Oyj Board of Directors since October 30, 2015

Chairman of the subsidiaries of Plc Uutechnic Group Oyj since October 30, 2015

Chairman of Uutechnic Oy since 1993 and chairman of the board since 2013

Most significant positions of trust:

FC TPS Oy, member of the board since 2014

 

Sami-Jussi Alatalo, b. 1971, Master of Laws

Vice-chairman of the Board of the Plc Uutechnic Group Oyj Board of Directors since June 19, 2012

Ultivista Group, CEO

Previous work experience:

Ultivista Group, CFO

Nordea Group, managerial and specialist positions in Corporate Banking

Most significant positions of trust:

Westpro cc Oy, member of the Board

 

Timo Lindström

Member of the Plc Uutechnic Group Oyj Board of Directors since October 30, 2015

Member of the Board of directors of subsidiaries of Plc Uutechnic Group Oyj since October 30, 2015

Most significant positions of trust:

Vakka-Suomen Puhelin Oy, member of the supervisory board

 

Finished memberships in 2015

 

Chairman Reijo Järvinen, b. 1948, M.Sc.(Chem.)

Attorneys Krogerus Oy, Senior Advisor

Chairman and member of the Vaahto Group Plc Oyj Board of Directors since 2010-2015

Previous work experience:

Finnvera Oyj, regional director

Most significant positions of trust:

Festivo Finland Oy, chairman of the board

Suomen Kotikylmiö Oy, member of the board

Delipap Oy, member of the board

Jomet Oy, member of the board

 

Topi (Toivo) Karppanen, b. 1956, M.Sc.(Tech.)

CEO of Vaahto Group September 1, 2014 –March 31, 2015

Member of the Vaahto Group Plc Oyj Board of Directors since 2010-2015

CONINOR LTD, Managing Partner

IMP Industrial Marketing Ltd, Managing Partner

Previous work experience:

Larox Oyj and Larox Group, President & CEO, 2000 – 2009

Larox Oyj and Larox Group, Executive Vice President, Marketing & Sales, 1991 – 2000

 

Mikko Kilpinen, s. 1971, KTM

Member of Vaahto Group Plc Oyj Board of Directors 14.4.-30.10.2015

 

Mikko Vaahto, b. 1963,

with vocational qualifications in business and administration

Member of the Vaahto Group Plc Oyj Board of Directors since 1994-2015

Compensation of Board members 

The compensation for Board members is determined each year by the Annual General Meeting. The Board members have not received shares in the company as compensation. The company currently has no stock option plan.

The Annual General Meeting of 15 April 2014, decided to pay Board members the following attendance fees as annual compensation amounts: 36,000 euros to the chairman, 33,000 euros to the vice-chairman and 22,000 euros to each of the members.

In addition, Board members are entitled to a per diem and travel allowance in accordance with the Group’s general travel regulations. No attendance fees are paid to persons employed by Uutechnic Group for membership of a subsidiary’s board of directors.

Fees paid to Board members in the 2015 financial year for Board duties:

Reijo Järvinen, chairman                         12.000,00 euros

Sami Alatalo, vice-chairman                    33.000,00 euros

Topi Karppanen                                        16.833,00 euros

Mikko Kilpinen                                          11.000.00 euros

Lindström Timo                                          3.666.66 euros

Peräaho Jouko                                           6.000,00 euros

Mikko Vaahto                                             7.333.32 euros

 

Board committees  

The Board has no committees.

Supervisory Board 

The company has no Supervisory Board.

CEO 

The Board appoints the parent company’s CEO, who acts as the Group’s president. The CEO is responsible for day-to-day management of the Group in accordance with the Finnish Companies Act, the Articles of Association, and instructions from the Board of Directors. The CEO is neither chairman nor vice-chairman of the Board.

Toivo (Topi) Karppanen has served as acting CEO until 30.3.2015. 1.4. – 30.11.2015 Kalle Rasinmäki has served as CEO. Since 1.12.2015 Martti Heikkilä has served as CEO of Plc Uutechnic Group Oyj.

 

Information about the CEO 

Martti Heikkilä, b. 1960, DI

Plc Uutechnic Group Oyj, CEO since 1.12.2015 –

Japrotek Oy Ab, AP-Tela Oy and Steva Oy, managing director since 1.12.2015

Uutechnic Oy, managing director 2013 –

Kumera Drives Oy, managing director. 2005 – 2013

Sulzer Pumps Finland Oy, different management positions 2000 – 2005

Ahlstöm Oy, Salon sekoitintehdas, different management positions 1988 – 2000

 

In 2015 finished contracts of CEO’s

Kalle Rasinmäki, b. 1974, M.Sc. (Tech.)

Vaahto Group Plc Oyj, CEO 1.4. – 30.11.20156

Japrotek Oy Ab, Managing Director 15.10.2014 – 30.11.2015

Executive Vice President of Business Area Japrotek Vessels 2014-2015

Vaahto Group Plc Oyj, Vice President Sales and Marketing 2011 – 2014

 

Topi (Toivo) Karppanen, b. 1956, M.Sc.(Tech.)

CEO of Vaahto Group since September 1, 2014

Member of the Vaahto Group Plc Oyj Board of Directors since 2010

CONINOR LTD, Managing Partner

IMP Industrial Marketing Ltd, Managing Partner

Previous work experience:

Larox Oyj and Larox Group, President & CEO, 2000 – 2009

Larox Oyj and Larox Group, Executive Vice President, Marketing & Sales, 1991 – 2000

 

Business organization 

The activities and results of Group’s business operations are on the responsibility of the managing directors of the companies, with the support of management teams, Group’s CEO and the Board of Directors.

Information about the managing directors of the subsidiaries:

Martti Heikkilä, b. 1960, DI

Plc Uutechnic Group Oyj, CEO since 1.12.2015 –

Japrotek Oy Ab, AP-Tela Oy and Steva Oy, managing director since 1.12.2015

Uutechnic Oy, managing director 2013 –

Kumera Drives Oy, managing director. 2005-2013

Sulzer Pumps Finland Oy, different management positions 2000-2005

Ahlstöm Oy, Salon sekoitintehdas, different management positions 1988-2000

 

Christian Kessen, b. 1963, M.Sc. (Tech.)

Stelzer Rührtechnik International GmbH, CEO 2007 –

Stelzer Rührtechnik International GmbH, Manager of Engineering 1991 – 2006

 

Compensation of the CEO and other members of the company’s management 

The CEO’s salary and other financial benefits are decided by the Board. Compensation for other members of the management is decided upon by the CEO and the chairman of the Board. The Group currently has no stock option plan.

No special conditions for retirement or pension benefits have been specified for the members of the Group’s management. According to the employment contract of CEO Martti Heikkilä the notice period of the contract is three months for both sides. If the company terminates the contract, the CEO will receive 100,000.00 euros deducted of the sum paid for the termination period. From the beginning of the year 2016 in addition to the monthly salary the CEO is will receive a yearly bonus, 1,25 % of the Group’s EBIT from the financial year.

Salaries paid to CEO in the 2015 financial year:

Martti Heikkilä                      12.425,00 euros

Toivo (Topi) Karppanen       61.359,00 euros

Kalle Rasinmäki                 147.253,00 euros

Body responsible for the duties of the audit committee 

The company has no audit committee; instead, the duties of the audit committee are attended to by the Board of Directors of the company. 

Internal monitoring, risk management and internal audit 

Internal monitoring:

The Group’s business and administration are primarily monitored and controlled by means of the Group’s management system. The Group has a financial reporting system whose purpose is to provide the Group and profit center management with sufficient information for planning, control, and monitoring of operations.

Risk management:

The objective of the Group’s risk management process is to identify any risks that pose a threat to the business operations, evaluate them, and develop the necessary risk management methods. Business-related risks of material, consequential, and liability losses are covered by appropriate insurance policies.

Internal auditing:

With regard to the nature and scope of its business operations, the Group has not deemed it appropriate to establish a separate internal auditing organization. Rather, its tasks are included in the duties of the business organization.

Insider administration

Plc Uutechnic Group Oyj follows the NASDAQ Helsinki Oy’s Insider Guidelines. The public insider register includes statutory insiders and insiders as determined by the Board of Directors of the company. In accordance with the Securities Markets Act, permanent insiders comprise the company’s Board members, CEO, and auditors. In addition, the company has defined as insiders those members of the company’s top management who regularly receive insider information and are entitled to make decisions concerning developments and business arrangements related to the issuer of shares. Subsidiary-specific insider registers include persons who regularly receive insider information in the course of their duties.

Plc Uutechnic Group Oyj’s public and subsidiary-specific insider registers are maintained by the company. The insider register can be seen at the company’s head office.

The company’s insiders are not allowed to trade in shares of the company within the 21 days before publication of a financial statement or interim report.

 

Audit 

In accordance with the Articles of Association, the company’s statutory audit is performed by one or two qualified auditors, who must be auditors or auditing firms certified by Finland’s Central Chamber of Commerce. The auditors’ term ends at the end of the first full Annual General Meeting after the election.

The Board’s proposal for auditor(s) is indicated in the invitation to the Annual General Meeting, or, if an auditor candidate is not known to the Board at the time the invitation is published, the name of the candidate(s) shall be published separately.

The Annual General Meeting of 15 April 2015, selected public auditing firm Ernst & Young Oy as the company’s auditor, with Erkka Talvinko, CPA, as chief auditor.

Auditors’ fees from the Group in the 2015 financial period totaled 334,113.00 euros, of which audit fees accounted for 98,099.00 euros, with consulting and other fees accounting for the remaining 237,014.00 euros.

Information 

Each year, the company publishes an annual report and an interim report in both Finnish and English. The interim report is published for the first six months of the financial period. For Q1 and for Q1–Q3 of the financial period, the company has been published the interim management statement instead. Since 2016 interim management statements will not be published any more.

Information about financial statements and interim reports is published in exchange reports. The annual report and interim report are published on the company’s Web site www.uutechnicgroup.fi. The company’s other press releases are also available on the Web site.